Polish Ministry of Defence Spends Almost 100 bn. Criticism of Auditors and in Parliament

The first meeting took place in a budget subcommittee of Polish Parliamentary Defence Committee on Monday, while the second on Wednesday in the full Committee. The subcommittee did provide a positive assestment of the budget execution, but the full committee made a negative assesment following the Supreme Audit Office remarks, by the vote of 16-15 with two abstentions.

The Polish Ministry of Defence adopted the following primary areas of activity for past year:

• Reinforcement of the operational capabilities of the military units stationed in the east, by forming and equipping the organizational structures of the 18th and 16th Mechanized Divisions;
• Achieving operational readiness for the cyber defence component command, and the subordinated units;
• Achieving full crisis response readiness by the Territorial Defence Forces, along with readiness to cooperate with operational units;
• Increased number of troops in the Polish Armed Forces;
• Establishing conditions for increasing the number of US troops stationed in Poland;
• Conducting training for the Polish Armed Forces, especially within the framework of international exercises.

Execution of the Budget

The income for the Polish Ministry of Defence was 203% higher than the planned income for 2023. The budget allocation was 97.115 bn. zlotys, including:

• Subsidies and subventions - almost PLN 4 bn.
• Allowances - PLN 12.7 bn.
• Ongoing expenditure - PLN 37.9 bn.
• Capital expenditure - PLN 42.5 bn.

The budget execution was at almost 100%. The spending in Part 29. (National Defence) was divided as follows:

• Central material plans expenditure - PLN 39.1 bn. - almost 100% of the preliminary plan;
• Polish Armed Forces modernization expenditure - PLN 28.7 bn., 29.6% of total expenditure;
• Capital expenditure in this section was PLN 42.5 bn., translating into 43.8% of the total expenditure.
• Expenditure tied to US government-Polish government agreement on increased defence cooperation - PLN 498 million, primarily within the framework of the provided infrastructure;

Number of Troops

Based on the data provided by the committee, the number of troops in the Polish Armed Forces in late 2023 was as follows:

• 134,362 professional soldiers were serving in the Polish Armed Forces in late 2023 (16,022 troops more than in 2022);
• 34,384 troops volunteered for general military service;
• 14,384 soldiers were listed in general military service;
• 34,945 soldiers served in the Territorial Defence Component, as of 31st December 2023.

Average monthly spending on salary, allowances, and payments was as follows:

• PLN 7,848 for professional troops;
• PLN 6,664 for the employees at the MoD;
• PLN 5,281 for retirement allowances.

Findings Made by the Supreme Audit Office

The Supreme Audit Office indicated the following breaches or doubts, regarding the expenditure, during the subcommittee meeting:

• 1.732 bn. zlotys was spent erroneously (12% of the sampled expenditure), along with PLN 262 thousand spent in a non-economic manner;
• Execution of State Budget in Part 29. (National Defence) has been assessed negatively. This was influenced by the assessment of the individual managers of the budget, the high value of discrepancies within the sample audited by the Chamber, and the systemic profile of discrepancies spotted;
• The increase in the income of the Polish Ministry of Defence stems from a better collection of charges, which did not occur in 2022.
• Income was recorded, from returns associated with previous years;
• Advance payments for multi-year contracts were as high as PLN 1.8 bn., whereas 1.3 bn. zlotys advance payment was associated with foreign business partners. This, as the Supreme Audit Office claims, is a testimony to the insufficient overwatch by the Head of the Polish Ministry of Defence, in the area of expenditure;

Major delays in some projects, and delays in the extension of the satellite data-using monitoring system;

The Supreme Audit Office also noted several improvements:

• Polish business partners were the majority of the parties receiving the spent funds;
• At the Armament Agency alone, 80% of spending was allocated to Polish business partners; Increased number of professional troops.

The advance payments matter was referred to by the Head of the Armament Agency, General Kuptel - “Advance Payments were made regarding the Wisła air/missile defence system, or the F-35 multi-role combat aircraft - procured within the framework of the FMS programme. In Poland, the payment was associated with the Regina squadron-level fire module. This was a deliberate action, but the deliberate nature of that action could not have been proven over a 12 months timeline, it is a long-term plan”. The advance payments made will make it possible to meet the US payment schedule, and they will also lessen the burden imposed on the MoD’s budget in the upcoming years, once the deliveries are planned.

As stated previously, the subcommittee did provide a positive assestment of the budget execution, but the full committee made a negative assesment following the Supreme Audit Office remarks, by the vote of 16-15 with two abstentions.