Expenditures on territorial defense

In Odesa, protests against non-priority use of city and regional budgets during wartime have continued for eight months. One question troubling Odesa residents is how much money Odesa City Council allocated in 2024 to meet military needs. Green Leaf will try to clarify this. As previously noted, expenditures on territorial-defense measures and works are reflected in the city budget decision under program classification code 8240. These expenditures appeared in the 2024 city budget from the outset and are shown under the following chief spending units, in hryvnias:

More information on how these funds are to be spent is provided by the “Municipal Target Program for Supporting the Development of Territorial Defense Units and Volunteer Formations of the Odesa City Territorial Community for 2022–2025,” whose latest version can be viewed at this link. For convenience, expenditures provided by the program for 2024 have been placed in a separate table available at the link “Program 8240.xlsx”.

Analysis of the program indicators raises several questions

1. There are doubts about the appropriateness of spending UAH 120 million on building repairs this year for buildings provided to the Territorial Defense Forces. According to some assessments, under the guise of repairs for territorial defense, these buildings are simply being prepared for privatization. This is especially questionable given that UAH 121.6 million was allocated for similar purposes in 2023.

2.The “fragmentation” of expenditures among different chief spending units of the city budget is unclear. For example, item 4.2 of the Program will be implemented simultaneously by both the Department of Municipal Security and the Executive Committee of Odesa City Council, even though they are tasked with the same objectives.

3.A major question is raised by item 5.1 of the Program, under which UAH 50 million is allocated to civic and charitable organizations to address issues related to supplying Odesa’s Territorial Defense Forces. In effect, functions are duplicated: procurement for the city’s Territorial Defense Forces is carried out simultaneously by executive bodies of Odesa City Council and by civil-society institutions. This indicates either that the City Council’s executive bodies are unable to provide the Territorial Defense Forces with what they need in a timely manner, or that the leadership of the Territorial Defense Forces is unable to forecast its needs in advance.

Expenditures to support the Armed Forces of Ukraine

Understanding city-budget expenditures for the Armed Forces of Ukraine is more difficult than for the Territorial Defense Forces. First, the Municipal Target Program “Safe City Odesa,” whose latest version can be viewed at this link, includes expenditures for water rescue measures, other public-order and security activities, and specifically subventions from the local budget to the state budget under program classification code 9800. Under that same code there are separate expenditures of UAH 8,500 thousand for implementation of the Municipal Target Program for Civil Protection of the Population and Territories from Man-Made and Natural Emergencies and for Fire Safety in Odesa for 2022–2026, as well as expenditures for implementation of the “Safe City Odesa” program amounting to UAH 131,743.67 thousand. It is this latter amount that interests us.These expenditures were not included in the original 2024 city budget decision and appeared only through amendments to the city budget adopted on February 21, 2024. For convenience, we placed the expenditures provided by the program for 2024 under code 9800 in a separate table, available at the link “Safe City Odesa 9800.xlsx”. We note that the indicators are shown in thousands of hryvnias, as in the program itself.

What can be learned from these indicators

1. It appears that when the draft budget was prepared, the city authorities did not intend to allocate funds to Armed Forces units at all and decided to do so only later.

2. Of the UAH 131.7 million allocated, at least UAH 46 million is not going to combat units, namely:2.1. Items 8.1 and 8.3 of the Program, under which funds go to National Guard units engaged in maintaining public order and citizen safety in Odesa, for a total of UAH 37.0 million. A simple question arises: what, then, are the National Police of Ukraine and Trukhanov’s personal “guard” in the form of the municipal institution “Municipal Guard” doing, given that its authorized staffing level is 450 people and more than UAH 117 million is provided for its maintenance in the 2024 budget?

2.2. Item 9.1 of the Program provides more than UAH 4.0 million to the Odesa Regional Territorial Recruitment and Social Support Center not only for computers and office equipment, but also for the vague item “payment for the production of insignia and other products.” What these insignia and other products are, how urgent such spending is, and how it will bring victory over Russian aggression any closer — the Program does not say.

2.3. Item 19.1 of the Program provides expenditures of UAH 5.0 million for current repairs to the administrative building housing the Territorial Department of the State Bureau of Investigation.

3.Only one military unit with its subordinate units received funding with wording covering “surveillance and fire-adjustment equipment, unmanned aircraft systems (UAVs), weapons, military equipment, electronic-warfare systems and other needs.” As far as we know, combat units urgently need UAVs, buggies or quad bikes, and boats. There is no mention of engineering equipment, boats, medicines and many other items whose provision falls almost entirely on volunteers.

In summary

In 2024, Odesa’s city budget provides no more than UAH 85.7 million to finance combat units of the Armed Forces of Ukraine and UAH 552.6 million for the Territorial Defense Forces. At the same time, UAH 120 million in expenditures planned for repairs of buildings supposedly provided to the Territorial Defense Forces raises doubts about efficiency — is all municipal property in Odesa really in such poor condition? — as does the UAH 50 million allocated to civic and charitable organizations to address supply issues for Odesa’s Territorial Defense Forces. At the same time, there are many questions about insufficient funding for Armed Forces combat units and the absence of certain territorial-defense expenditures. At present, Russian forces can launch 20–30 Shahed-131/136 drones at Odesa in a single night to terrorize the civilian population. Specialists say this should be countered by increasing the density of mobile fire teams around the city. A key component of such mobile fire systems is air-defense searchlight systems. Given the number of casualties from hostile UAV attacks in Odesa, financing additional mobile air-defense groups should have become the number-one priority from the standpoint of civilian safety. It is also much cheaper to shoot these drones down than later allocate city-budget funds to repair and restore infrastructure. Yet the documents reviewed do not show that the city is doing this. Green Leaf previously wrote that the city budget contains UAH 1.1 billion in undistributed — effectively hidden — balances from previous periods.