The State Management of Affairs (SMA) is a special institution that deals with the needs of other state bodies, particularly the President’s Office, the Verkhovna Rada, the Cabinet of Ministers, and the NSDC. It is the SMA that owns and administers sanatoriums, hospitals for government employees, and state residencies. “Koncha-Zaspa” and “Feofaniia”, and more than 60 other state-owned enterprises belong to the SMA. Until recently, the SMA even owned the Zhytomyr Liquor and Vodka Distillery Factory. It is this Management that owned the hotel “Dnipro”, as well. In general, there are billions of hryvnias allocated from the budget to maintain the State Management of Affairs: UAH 2.64 billion—in 2018, UAH 2.4 billion—in 2019. The financial report 2020 has not been published yet, however, UAH 2.4 billion had been planned to spend on the SMA back then, while UAH 3.1 billion has already been budgeted for 2021. Accordingly, the SMA spends a lot of money, as well.

According to Prozorro, in 2020 the State Management of Affairs has made 360 purchases, which resulted in 357 contracts for UAH 97.2 million. In comparison, in 2019 the SMA has signed procurement contracts for UAH 131 million, and for UAH 212 million in 2018.

In 2020 91% of the purchases made by the SMA (almost 84% of the total) has resulted in the contracts with suppliers of the field—without auctions. It is due to the current procedures of the Ministry of Economy which state that procurement items are chosen separately (as if from scratch) for each event or official reception with the participation of the President, the Chairman of the Verkhovna Rada, or the Prime Minister. Therefore, costs are mainly below the threshold. During the year, the SMA has held only 21 tenders. Under competitive procedures, the SMA mostly purchased various software and office supplies:

  • UAH 3 million—antivirus software;
  • UAH 5 million—programs for electronic document management;
  • UAH 2 million—computer components;
  • UAH 8 million—consumables for photocopying equipment;

From 2 to 6 participants participated in competitive procedures, and the price for them decreased by UAH 885 thousand.

The biggest expenditures of the SMA

The SMA deals with the purchases of very different goods and services: from office paper to repairs and air transportation. Air transportation was the largest item of expenditure of the SMA. In March, the Management signed an agreement with the Ukraine Air Enterprise to provide air transportation services to the President. And although the amount of the contract was UAH 55.6 million, the actual costs amounted to only UAH 21.2 million. Of these, UAH 9.7 million was spent on the President’s visits abroad, and UAH 11.5 million was spent on air transportation within Ukraine. COVID-19 has probably been one of the factors that has led to the decrease in flight costs.

In 2019, the actual costs for air transportation were twice as high as the costs in 2020 (UAH 42.2 million); the price of contracts amounted to UAH 89.5 million.

In second place in 2020 were the procurement of state awards — UAH 13.4 million. The SMA spent almost UAH 7.9 million on various software, including UAH 3.3 million on antivirus software.

How much does a presidential press conference cost?

According to our calculations, the Management spent at least UAH 269 thousand on the press conference of Volodymyr Zelensky in the Mariinsky Palace, which took place on May 20, 2020, in particular:

  • UAH 46 thousand—electrical construction services
  • UAH 43 thousand—the installation of platforms
  • UAH 5 thousand—thematic place settings services
  • UAH 6 thousand—video equipment
  • UAH 4 thousand—professional lighting
  • UAH 3 thousand—sound equipment.

Incidentally, Maryna Andriivna Hrytsuliak, a private entrepreneur, designed the venue for the press conference. According to the NACP, in 2019 she received almost UAH 1 million from the party “Servant of the People”. At that time, she also provided event decoration services.

Essential goods

A significant part of the expenditures made by the SMA are various state awards, bouquets, gifts and souvenirs.

For instance, last year the Management bought flowers for UAH 556 thousand. They were purchased from 5 suppliers, and more than half of the money went to the private entrepreneur Iryna Volodymyrivna Mahdych. It is peculiar that she registered her private enterprise in 2014, however, she took part in public procurement in 2020 for the first time. All 36 direct contracts she concluded with the SMA.

Another UAH 938 thousand the SMA paid for watches, they bought a total of 226 items. Prices for chronometers ranged from UAH 3.5 to 4.5 thousand.

More than UAH 490 thousand the SMA spent on souvenirs and the paraphernalia for events and official receptions attended by the President. The Management purchased:

  • men’s and women’s vyshyvankas for UAH 31 thousand
  • 20 gift souvenir painted plates for UAH 62 thousand
  • 100 souvenir ties for UAH 25 thousand
  • a silk handkerchief for UAH 2 thousand
  • 4 “Blue flowers” vases and 14 “White blossom” candles-birds for UAH 35 thousand
  • the vase painted with flowers, for UAH 7 thousand
  • 2 glass bird candlesticks for UAH 8 thousand
  • 3 “Hetman with a mace mounted on a horse” statuettes for UAH 33 thousand
  • 6 “Cossack with a falcon” statuettes for UAH 34 thousand
  • and 4 painted vases for UAH 29

The SMA is also responsible for the purchase of state awards, which are then awarded by the President. In 2020, UAH 9 million was spent on them. Incidentally, the Management purchased:

  • 5 sets of the Order “Gold Star” with the title of Hero of Ukraine for UAH 67 thousand
  • 5 sets of the Order of Prince Yaroslav the Wise, grade I for UAH 48 thousand
  • 20 sets of the Order of Merit, grade I for UAH 12.5 thousand
  • 100 awards of the President of Ukraine of the medal “For Labor and Valor” for UAH 2.2 thousand

They also purchased badges with the honorary titles of Ukraine:

  • 50 “People’s Artist” badges for UAH 1.6 thousand
  • 150 “Merited Artist” badges for UAH 1.9 thousand
  • 50 “Merited Figure of Science and Technology” badges for UAH 1.9 thousand
  • 50 “Merited Journalist” badges for UAH 1.9 thousand
  • The Orders of Princess Olga, grade I, II and III for UAH 4.3 to 5.1 thousand
  • badges to the honorary title of Ukraine “Merited Doctor” for UAH 1.7 thousand, etc.

Almost UAH 640 thousand was paid for the document forms that certify the awarding of state honors. The SMA also purchased almost 3 thousand cases for the award packages for UAH 611 thousand.

In almost 21 years of the existence of the State Management of Affairs there were five terms of four presidents: L. Kuchma, V. Yushchenko, V. Yanukovych and P. Poroshenko. And each of the presidents promised, if not to privatize part of the property of the State Management of Affairs, then at least to reduce funding for this structure. Volodymyr Zelensky also supported the large-scale privatization of SMA facilities. Although the first step has already been taken since the Hotel “Dnipro” had been sold, billions of hryvnias of taxpayers are spent on the maintenance of the entire management structure every year. In 2021, the biggest sum of money has been budgeted for the SMA in recent times, even though the expected costs of all purchases made by the institution have been reducing since 2018. And given that even in Prozorro the SMA spends money on mainly direct contracts, budget savings are not to be expected.