Experimental Project for Comprehensive Restoration of Settlements Fell Short of Its Goals: Accounting Chamber Audit

In April 2023, the government launched an experimental project to restore a number of settlements damaged by the war. Its defining feature was meant to be a comprehensive approach — not merely rebuilding individual buildings or infrastructure, but planning and transforming the affected settlements, or parts of them, as a whole.

TI Ukraine has been analyzing the project, taking stock of its implementation each year. Our study of the first year concluded that the poor start stemmed from regulatory gaps, an opaque and politicized selection of objects, funding delays, and problems with transferring the rights of the construction contracting authority; at that point, only one of the more than 300 planned objects had been fully completed. Last year, we recorded no meaningful progress: the list of objects and the estimated value of restoring them both grew, yet only about 8% of the total number were completed.

In early April, the Accounting Chamber approved a report on its compliance audit “Restoration of Settlements Damaged by the Armed Aggression of the Russian Federation.” The audit set out to assess whether restoration in the settlements covered by the experimental project complied with the legislation governing it.

The report covers the period from the project’s launch through September 2025 and is, in effect, the first official public document to record the results of the experimental project for comprehensive restoration of settlements. It confirmed that the project has not achieved its stated goals.

At the same time, it should be noted that the audit had limitations: facilities in Sumy, Kharkiv, and Kherson oblasts were not included in the sample because they are located in areas of potential hostilities. The audit therefore covered the Ministry for Development, the Agency for Restoration, the restoration services in Kyiv and Chernihiv oblasts, and the Department for Regional Development of the Kyiv Oblast State Administration. For this reason, the Accounting Chamber’s report should be viewed as a snapshot of the experimental model for managing the comprehensive restoration of settlements rather than a full assessment of the project’s implementation.

So let us look at what the audit established and how its findings square with the problems TI Ukraine has identified.

Summary

Positive aspects of the audit:

It was the first official public audit of the experimental comprehensive restoration project.
It documented systemic problems previously highlighted by TI Ukraine, including the lack of strategic planning, the non-transparent selection of participating settlements and restoration facilities, and funding delays.
It went beyond documenting individual violations and identified systemic shortcomings in the project management model itself.

Limitations of the audit:

The audit covered only the central level of the experimental project’s management—the implementation of restoration measures in three of the five settlements participating in the experiment was not included in the sample.
The procurement findings are incomplete because they were based on incomplete source data and did not consider additional indicators relevant to assessing the respective aspects of procurement.
The assessment of the actual state of restoration of facilities under the project could have been more detailed. To provide a more comprehensive account of the results, it would have been appropriate to present not only the minimum and maximum levels of construction readiness but also the distribution of facilities by readiness level.

Recommendations

After the experimental project is completed, it is important that the comprehensive restoration of settlements remain a priority for the state and that the experience gained and problems identified be taken into account in future recovery policy. To enable a more comprehensive assessment of the project’s results in the future, it would be advisable to:

assess not only compliance with established procedures but also the actual achievement of the planned results, the quality of project management, and whether the decisions made meet the needs of communities;
ensure that the largest possible number of restoration facilities under the experimental project is covered, including through the remote analysis of documents and data where on-site control measures in the relevant settlements are not possible;
apply a comprehensive approach to procurement analysis, taking into account the full range of indicators relevant to assessing competitiveness, transparency, and efficiency;
regulate approaches to implementing experimental projects at the legislative level, including by requiring the authorities responsible for their implementation to assess the results achieved and by establishing a mechanism for independent/external assessment by a higher-level authority.

Selection of restoration objects

The audit’s key finding on the selection of objects is that the experimental project was launched without a proper system of strategic planning, which left the declared comprehensiveness of restoration largely on paper. The Ministry for Development of Communities and Territories failed to submit the draft plan for the restoration and development of the regions on time, and comprehensive restoration measures began without a clear strategic and planning foundation. The ministry submitted the detailed schedule of pilot projects for six settlements seven months late. As a result, there was no clear system of priorities, no criteria for selecting objects, no sequencing of restoration, and no division of responsibility among those involved.

Looking at the outcomes of selection, the audit found that the lists drawn up by RMAs lacked any transparent logic of prioritization and often failed to reflect what communities had actually proposed. The Accounting Chamber established that proposals from three communities covering 126 objects — including 108 in Moshchun — were disregarded, while 332 objects made it onto the lists without any proposal from local self-government bodies; 95% of these came from the Kherson and Kharkiv RMAs. The selection mechanism was thus not merely vague: it effectively allowed decisions to bypass the real needs and proposals of communities.

Equally revealing is the finding that two different approaches—the comprehensive and the facility-by-facility approaches—were applied in parallel in the same settlements. In Borodianka and Trostianets, some facilities were selected according to the experimental project’s comprehensive restoration approach, while others were selected under separate government decisions as part of facility-by-facility reconstruction. This contradicted the very idea of the experiment: instead of ensuring the comprehensive restoration of the territories, the project’s implementation was effectively reduced to a collection of fragmented construction projects.

Another fundamental problem the Accounting Chamber pointed to was the systemic failure to observe basic requirements for compiling the lists of objects to be restored. The lists included property that had not even been entered in the Register of Damaged and Destroyed Property: 118 such objects in 2023 and another 41 in 2024. The RMAs submitted lists without key information about the objects. Not one administration provided full descriptions, justifications for restoring them, or an assessment of whether they could be financed from sources other than the state budget. The absence of financial calculations made matters worse: information on the estimated value of works was supplied for only 40 of 627 objects. The project effectively started without proper preparation, which greatly complicated the launch of restoration works and led to delays across the experiment.

Moshchun in Kyiv Region is a telling illustration — the village ultimately dropped out of the experimental project altogether. As the Accounting Chamber established, of the 108 objects submitted for the list in May 2023, 21 were excluded at first and later all the rest, with no alternative restoration mechanism offered. Only from 2024 was the restoration of the village’s private housing stock shifted to the compensation mechanism.

The Accounting Chamber’s findings on the selection of objects under the experimental project largely confirm the problems TI Ukraine has highlighted in earlier studies. We noted that the mechanism for including settlements in the experiment was opaque and inconsistent: some communities entered the project on an RMA submission, others effectively after intervention by the country’s top political leadership. Approving the objects dragged on for more than three months, prioritization criteria remained unclear, and selection approaches were uneven — the same types of objects were included in the lists in some communities but not in others. Moshchun became a telling example, dropping out of the experiment precisely because there was no single, consistent approach to selecting objects.

Funding

The financial part of the audit exposed one of the key systemic problems in the project: the inability to use the funds earmarked for restoration effectively.

Because approvals dragged on between the Ministry for Development of Communities and Territories, the Ministry of Finance, and the Ministry of Economy, decisions on allocating funding were made with considerable delay. In 2023, nearly UAH 3 billion, or 88.3% of the annual funding, was allocated only on December 4. The picture repeated in 2024, when the Agency for Restoration distributed UAH 1.65 billion, or 74.3% of annual appropriations, only on December 2. Spending such sums before the end of the budget period was effectively impossible, and unused funds were returned to the state budget. Over the two years, more than UAH 4.5 billion went back: UAH 2.8 billion in 2023 and UAH 1.7 billion in 2024. Trostianets is a case in point: of the UAH 284.8 million earmarked, UAH 154.6 million was never used. As of the end of September 2025, almost UAH 1.7 billion remained undistributed and unused.

Here the Accounting Chamber draws attention to the problem of dividing powers and responsibility in the management of budget funds. After amendments to the relevant government resolution in August 2024, the Agency for Restoration remained the chief spending unit yet effectively lost any influence over how expenditures were shaped. The Ministry for Development, in turn, gained the power to determine funding volumes but exercised no direct control over how the money was used or whether the project delivered results. This model severed the link between planning expenditures and answering for their implementation.

Protracted approvals of government decisions on project lists and funding volumes compounded the problem: roughly two months in 2023 and six in 2024. Funds reached implementers with substantial delay, which directly affected when works could start and how they proceeded. In October–November 2024, for instance, the restoration services had only 3.8% to 28.4% of their approved appropriations available. Much of the funding arrived when the scope for using it fully and effectively within the budget year was already sharply limited.

TI Ukraine has also flagged problems with the release of funding. Although the state formally financed the experimental project to the tune of UAH 10.82 billion, or 93% of its estimated value, only UAH 2.23 billion — roughly 20% of the project’s estimated value — had actually been used as of May 2025. By our calculations, over almost two years the contracting authorities had a real opportunity to pay for works during only about six months. We linked this not only to procedural delays, in particular the drawn-out selection of restoration objects, but also to political instability and changes in the leadership of the Ministry for Development of Communities and Territories and the Agency for Restoration.

Against this backdrop, the audit’s finding that the project’s planned performance indicators were not met because the budget process was organized without regard to the real timelines of restoration projects is an important one.

Regarding irregularities in the use of funds for the experimental project, the Accounting Chamber also identified isolated cases in which budget resources were used for purposes not permitted by law, although these cases are not a determining factor in the overall structure of the project’s problems. In 2023–2024, UAH 106.2 million from the Fund for the Elimination of the Consequences of Armed Aggression went toward developing design documentation, even though such spending was not among the permitted uses of the fund. In Yahidne, a further UAH 2.1 million was spent on technical inspection of residential buildings, which likewise fell outside the funding purposes set by law.

Procurement

In the context of procurement conducted under the experimental project, the Accounting Chamber assessed exclusively whether contracting authorities complied with the statutory principles of openness and transparency when procuring works and services. Among the key problems, the auditors identified a low level of competition and a significant share of procurement conducted outside the electronic procurement system. In their view, this created risks of market monopolization and limited opportunities for budgetary savings.

The audit found that the Restoration Service in Kyiv Region conducted more than 70% of its procurement (27 of 37) without using the electronic system. Although this formally complied with the law, the Accounting Chamber points to the attendant risks to the competitive environment. In 5 of the 9 audited Kyiv RSA objects, open tenders drew a single bidder, which likewise limited potential savings. In all five cases the bidders did offer a price below the estimated value, though the reduction was slight — between 0.1% and 1%.

These findings, however, need more context and do not fully reflect the overall structure of procurement under the experimental project.

TI Ukraine’s analysis shows that, of the 610 procurements conducted by all contracting authorities under the project, 404, or 66%, were indeed non-competitive. But these were mostly procurements of services for developing design documentation and for technical and designer supervision of construction — services for which direct contracts are common practice in urgent restoration.

In value terms, the share of such procurement was relatively small — around UAH 350 million, or just 2.75% of the total estimated value of procurement under the project. The bulk of the funding — almost UAH 8.11 billion, or 97% — went through special open tenders. The key construction contracts were therefore awarded through competitive procedures, so the conclusion that non-competitive approaches dominated calls for a more balanced assessment.

On competition, TI Ukraine’s analysis likewise does not bear out the claim that it was critically low. In the first year of the experimental project, special open tenders attracted an average of 3.6 bidders. In the second year the figure fell to 2.25 per procurement, but even so it was nearly double the average level of competition in construction tenders across Prozorro.

Competition was highest in the procurement of the Restoration Service in Kyiv Region, which averaged more than three bidders per lot. The lowest figure was in Sumy Region, at roughly two bidders per procurement.

Competition also delivered an economic effect. Over the two years of the project, notional savings — the difference between the estimated value of a procurement and the price of the contract signed — averaged 14.25%. The highest figure was at the Restoration Service in Sumy Region, where savings on competitive procurement reached 22.6% of the estimated value.

This underscores the key shortcoming of the Accounting Chamber’s audit. Security constraints kept it away from objects in Sumy, Kharkiv, and Kherson Regions — three of the experimental project’s settlements at once — which accounted for roughly UAH 2 billion in funding. That substantially narrows the representativeness of the audit’s conclusions, particularly on procurement, competition, and the efficiency of spending across the experimental project as a whole.

Construction

The Accounting Chamber’s report confirmed the absence of meaningful progress in the experimental project: most objects whose restoration began in 2023–2024 were not completed within the set deadlines. From the project’s launch through September 2025, only three objects in Borodianka, Kyiv Region, and Yahidne, Chernihiv Region, were completed and commissioned.

At the same time, the actual number of facilities completed under the experimental project is higher than reflected in the audit, which may be explained by the fact that not all participating settlements were covered. According to data available to TI Ukraine and taking into account the audit findings, after more than two years of the experimental project’s implementation, construction and repair works had been fully completed at no fewer than 58 facilities across the five settlements, representing approximately 8% of their total number. Meanwhile, the project’s implementation in Tsyrkuny, Kharkiv Oblast, was effectively suspended due to the security situation.

The Accounting Chamber separately recorded a number of problems at the contract performance and construction stage. Auditors identified breaches of contract terms and of urban planning legislation, including:

contractors’ late return of advance payments under terminated contracts;
insufficient effort to pursue claims for penalties;
overstatement of the cost and volume of completed works, in particular by including unperformed works or surplus materials in acceptance certificates, or paying for fictitious use of construction machinery;
construction works carried out without the requisite permits.

The irregularities identified by the Accounting Chamber were neither systemic nor widespread. At the same time, due to the sample of facilities covered by the audit, the report’s findings may not fully reflect the overall state of the project’s implementation.

Conclusion

The compliance audit of the experimental project for the comprehensive restoration of settlements found that the project had failed to achieve its stated objectives. At the same time, its significance lies primarily in the fact that it was the first official public audit of the experiment and confirmed what civil society has been saying since at least 2024: the experiment never became an effective model for comprehensive restoration.

The audit’s value is in documenting systemic problems TI Ukraine had already flagged: the absence of strategic planning, the opaque and inconsistent selection of objects, problems with budget planning and the allocation of funds, and funding delays. It is also important that the audit did not stop at individual violations but exposed systemic flaws in the project’s management model.

At the same time, despite its generally relevant and timely findings, the audit of the experimental project had certain limitations. Due to security factors, it did not cover facilities in Sumy, Kharkiv, and Kherson oblasts—that is, three settlements participating in the experimental project, whose restoration accounted for approximately one-third of the funding actually used, or around UAH 2 billion. This reduced the representativeness of the audit findings, particularly with regard to the assessment of procurement processes and actual restoration results.

Moreover, some findings were based on incomplete source data and did not take into account indicators relevant to assessing the respective aspects of the experiment. In particular, a low level of competition and a high share of procurement conducted outside the electronic procurement system were identified as key problems. However, this finding was based exclusively on quantitative indicators—the number of procedures. In terms of value, by contrast, approximately 97% of the total funding—almost UAH 8.11 billion—was used through open tender procedures with special conditions. Given that the audit assessed procurement based on contracting authorities’ compliance with the statutory principles of openness and transparency, the failure to consider that the vast majority of the allocated funding was used through competitive procedures makes it impossible to form a complete and objective view of procurement under the experimental project.

One of the questions addressed by the audit was whether the measures applied had ensured the restoration of facilities in the settlements covered by the experimental project. However, the use of broad ranges of construction readiness in the report—from 3% to 100%, or from 1.2% to 64.8%—makes it difficult to assess the actual state of implementation of the facilities. These ranges reflect only the extreme values and do not provide a complete picture of how facilities are distributed by readiness level, including the number of facilities that are nearly completed or have only recently entered the construction stage.

Despite the shortcomings identified in the experimental project, its implementation may provide the state with valuable practical experience by highlighting key problems in the planning, budgeting, coordination, and organization of restoration processes. Taking these lessons into account is an important prerequisite for developing effective state policy and implementing future post-war reconstruction programs.

In our view, the next audit of the project, which will be implemented as a public investment program over the next four years, should be comprehensive and should:

cover the largest possible number of restoration facilities under the experimental project;
apply remote analysis of documents and data where the physical presence of auditors is not possible;
separately assess not only compliance with procedures but also the achievement of results, the quality of management, and the impact of decisions on community needs.

This would make it possible to formulate comprehensive practical recommendations for improving the state restoration policy.

Importantly, in addition to the problems directly related to the implementation of the experimental project for the comprehensive restoration of settlements, the audit also highlighted a broader systemic need—to regulate by law the approaches to implementing experimental projects in general. In particular, it would be advisable to require the authorities responsible for implementing such projects to assess the results achieved and to establish a mechanism for higher-level authorities to conduct an external assessment of experimental project implementation. A corresponding measure is already included in the draft Anti-Corruption Strategy for 2026–2030, which is currently under consideration by Parliament.