Appealing the act of inspection of the State Audit Service

The State Audit Service is a body whose powers lie in the area of ​​monitoring public procurement. Representatives of the State Audit Service check to what extent the legislation on public procurement is observed. By the way, this body can check the activities of different business entities in the specified direction, regardless of what their form of ownership is.

If you are faced with an inspection by the State Audit Service and do not agree with the act drawn up by it, you can contact the lawyers of the Prikhodko & Partners law office. Consulting clients on these issues and appealing acts of the State Audit Service is our focus of practice.

What legislation regulates the activities of the State Audit Service?

The main relevant law in this direction is the Law of Ukraine № 2939-ХІІ “On the basic principles of state financial control in Ukraine”, adopted on January 26, 1993. To date, its edition has many amendments, the latest of which date back to 2022. One of the key by-laws regulating the activities of this service is Resolution of the Cabinet of Ministers of February 3, 2016 № 43.

There are several areas of work of the State Audit Service that provide the opportunity for it to exercise state financial control. This is about:

• audit of government procurement;
• state financial audit;
• inspection.

For example, a state financial audit consists of checking by the State Audit Service the actual state of affairs in matters of the legal and effective use of state and municipal property, as well as funds. In addition, the powers of this body include checking:

• Are accounting records maintained correctly;
• Is the reporting reliable;
• Does the enterprise have an internal control system for its activities;

One of the forms of work of the State Audit Service in relation to controlled entities is a planned on-site audit, which can be carried out no more than once a year.

The duration of such an audit should not exceed 30 working days. In exceptional cases, it may be extended for another 15 days. Also, the already mentioned Law № 2939-XII contains a list of grounds on which an unscheduled audit can be carried out. The main features of this revision are the following aspects:

• the controlled entity is not informed about its implementation;
• it can be carried out no more often than once a quarter;
• such an audit is carried out solely on the basis of a court decision.

Representatives of the State Audit Service can check financial documentation, reports, estimates, and the actual availability of material assets. They have the right to freely enter warehouses, storage facilities and other utility premises. And within the framework of its powers, the State Audit Service can stop budget allocations and transactions with public funds.

How are the test results reported?

The fact of the audit and its results are recorded in the relevant act. A controlled enterprise may not agree with the conclusion of the State Audit Service, since there are cases when violations of the law or abuse are seen where in fact there is no such problem. The document drawn up by representatives of the State Audit Service may indicate the following requirements:

• termination of the purchase agreement (it may also be declared invalid);
• termination of obligations arising under the contract;
• ensuring that those who commit violations are held accountable.

If you do not agree with the inspection report, you have the following rights and options in this context:

• appeal the conclusion of the State Audit Service within 10 days from the moment it was published (this happens in court);
• contact the State Audit Service with a written request for clarification on the basis of which its representatives made such conclusions;
• submit written objections to the State Audit Service regarding its conclusion (within 5 working days).

As you can see, the current legislation provides a sufficient range of legal levers for appealing an act of the State Audit Service. However, the time frame for this is quite tight.

In order not to waste precious time, contact competent lawyers who can truly professionally represent and protect your rights and legitimate interests. You will meet such professionals in the team of the Prikhodko & Partners law office.