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The audit of the Northern Office of the State Audit Service revealed significant financial irregularities in the activities of the Economic Development Department of the Lviv City Council. The total amount of funds not received by the city budget is over UAH 214 million.
Main violations
The auditors found that these funds were to be received as mandatory equity participation of developers in the development of urban infrastructure. These contributions are intended for:
- modernization of engineering and transport infrastructure
- development of the city’s social infrastructure
- Increasing the investment attractiveness of Lviv
- creating a comfortable environment for residents and businesses
A detailed analysis revealed three main categories of violations:
- UAH 151.2 million – unpaid contributions for 115 construction projects due to the absence of requests from developers to determine the amount of equity participation
- UAH 57.2 million – funds not paid by developers due to violation of contractual terms
- UAH 5.7 million – contributions paid late after the facilities were put into operation
Public control and initiative
The discovery of these violations became possible due to the active position of the public, in particular the People’s Anti-Corruption Bureau NGO led by Andrii Petryshyn. In October 2023, the organization initiated an appeal to the State Audit Service of Ukraine to conduct a comprehensive audit of the city council’s activities for the period 2007-2023.
Public reaction
The Lviv media asked A. Petryshyn, head of the People’s Anti-Corruption Bureau, whether he was satisfied with the position and actions of the State Audit Service of Ukraine and the fact that the audit of the Lviv City Council, which he had initiated, had finally begun.
“Partly yes. The fact that inspections are already underway is good. This is what we have been trying to achieve. But I want to draw people’s attention to the fact that certain circumstances are alarming. Namely. In our appeal, we raised the issue of conducting a comprehensive inspection of the Lviv City Council and its departments. And the response we received refers to an audit of the Economic Development Department. I have a question to the State Audit Service of Ukraine: where is the audit of the Department of Housing and Infrastructure, the Department of Natural Resources, Construction and Community Development? After all, the main corruption schemes are being implemented there. Or the Department of Urban Mobility and Street Infrastructure. Which, in particular, includes the notorious Transport Department. This is also a very tasty morsel for corrupt officials. In our appeal, we also emphasized that the audit should not cover only the last year or two. It is necessary to investigate the activities of the entire apparatus of the Lviv City Council from 2007 to 2023,” says Andriy Petryshyn.
He continues: “After all, we all remember well how in the period 2010-2014, Andriy Sadovyi went to the birthday party of the then President Yanukovych with flowers and gifts to beg for impunity. At that time, when the Party of Regions members were talking about Lviv, they often noted that Andriusha was doing well there. One can only imagine what kind of economic and financial lawlessness was going on within the walls of the Lviv City Council at that time! We also absolutely reject the position of the State Audit Service of Ukraine on not allowing members of the public to join the audit team to exercise public control for the purpose of transparency and coverage of the audit. The explanations they provided us with are nothing more than a response. I would also like to emphasize that Lviv City Council is not a secret military facility, but a public body, and the finances they manage there are taxpayers’ money. And the public has the right to know how city officials manage the money of Lviv residents. But I want to assure you that this whole situation around the audit of the State Audit Service of Ukraine in Lviv City Council will be under our close control. And we will regularly inform Lviv residents about the events surrounding this audit,” emphasized Andriy Petryshyn.
Andriy Petryshyn, commenting on the audit results, expressed concern about:
- Limited coverage of the audit by only one department
- Lack of inspections of other key departments where corruption schemes are possible
- Refusals to involve public representatives in the audit process
- Limited inspection period compared to the initially requested one
Further actions
The audit materials were transferred to the SSU Office in Lviv region for further investigation. The People’s Anti-Corruption Bureau will continue to exercise public control and inform the public about the course of the investigation.
Background information
The People’s Anti-Corruption Bureau has been operating since 2018, focusing on protecting the rights of Lviv residents in matters of ecology and municipal property. At the end of 2023, the organization launched the Lviv Audit project aimed at identifying violations in the city council’s activities and bringing those responsible to justice.
