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In the Kherson region, the restoration of war-damaged educational facilities is accompanied not only by payments running into millions, but also by signs of perfunctory technical supervision. An analysis of procurement contracts, media reports, and transactions carried out by the Department of Territorial Development of the Kherson Regional State Administration reveals a systematic pattern: the contractor and the technical supervisor are working on the same objects, completion certificates are issued in batches, and payments are often made on the same day or almost simultaneously.
This suggests not merely isolated coincidences, but signs of a well-established model in which technical supervision may serve not as a means of control, but as a means of providing documentary support for payments.
Two projects have come under particular scrutiny: the major refurbishment of the Nursery School "Sonechko" in Kyselivka and the refurbishment of the School in Mala Oleksandrivka.
According to our sample of 2025 payments from the Spending portal, for Nursery School ‘Sonechko’, TOV ‘ATLAS BUD-PRO’ (TOV - limited liability company under the laws of Ukraine) received UAH 10.38 million for the work carried out, whilst TOV ‘BUDEKODOR’ received UAH 122,200 for technical supervision of the work. For the work at the School in Mala Oleksandrivka, ‘ATLAS BUD-PRO’ received UAH 12.8 million, whilst ‘BUDEKODOR’ received UAH 195,700 for technical supervision. All these payments were channeled through the Department of Territorial Development of the Kherson Regional State Administration.
The consistent presence of the same pair of companies – the contractor and the technical supervision firm – across various sites suggests a closed ‘ecosystem’ in which execution and supervision are effectively part of a single process. This undermines the very concept of independent technical supervision.
The public context surrounding the contractor was not neutral either. Back in November 2024, the Center for Public Investigations reported that the contract for the renovation of the School in Mala Oleksandrivka had been awarded to TOV ‘ATLAS BUD-PRO’ as the sole bidder, and that the company itself had already been implicated in allegations of possible overpricing of works and materials. According to Prozorro data, procurement for the school and the Nursery School ‘Sonechko’ took place separately; in both tenders, only one bidder, TOV ‘ATLAS BUD-PRO’, submitted a bid and won.
The role of TOV ‘BUDEKODOR’ is particularly noteworthy. Resolution of the Cabinet of Ministers of Ukraine No. 903 defines technical supervision as a mechanism for monitoring the scope, quality, and cost of construction works. In other words, technical supervision should not be a mere ‘supporting administrative service’, but a separate control tool for the client.
However, the recorded transactions and their synchronization give reason to suspect that, in certain cases, technical supervision may act not as an independent controller, but as part of the process of formalizing works and payments that have already been agreed.
At the transaction level, these two entities share a common structure: the main construction payments are made to ‘ATLAS BUD-PRO’, whilst technical supervision for the same works is registered under ‘BUDEKODOR’. The final sample recorded 20 payments to the contractor and 20 payments for technical supervision for the Nursery School "Sonechko" in Kyselivka, as well as 24 payments to the contractor and 18 payments for technical supervision for the School in Mala Oleksandrivka.
Such a pattern suggests a likely well-established scheme whereby the Department organized both the funding and the acceptance of works at these sites in parallel.
Such a volume of synchronous or mirror payments is not typical of independent auditing. It is more in line with the ‘batch closure’ model for financial statements, where financial transactions and supporting documents are reconciled simultaneously.
Technical supervision following payment
The most telling aspect is the synchronization of payments. The summary table of combined payments (which we developed during our analysis) reveals dozens of instances in which payments for construction work and technical supervision occurred on the same day for the same project.
According to standard practice, technical supervision should precede payments or serve as an independent inspection of the work carried out. Instead, in the recorded cases, it often occurs simultaneously with payments, suggesting it is merely a formality.
For example, on 23 April 2025, in relation to the ‘Sonechko’ nursery, the Department paid TOV ‘ATLAS BUD-PRO’ for work under contract No. №07-09/19Р [1]; [2], and on the same day made several payments to TOV ‘BUDEKODOR’ for technical supervision of the same project under contracts No. №14-11/151ТН [1]; [2] and No. 25-07/132ТН [1]; [2]. The payment references explicitly state the same project, the same certificate dates, and a reference to Resolution of the Cabinet of Ministers of Ukraine No. 590. At the same time, the resolution on the special regime for treasury services under martial law does not eliminate the need for a substantive inspection of the works. It merely establishes a special procedure for treasury services under exceptional circumstances.
A similar pattern can be seen on 13 June 2025, when the contractor was paid UAH 3.56 million in four installments for the nursery school ‘Sonechko’ [1];[2];[3];[4], whilst the technical supervision firm received UAH 43,800, also in four installments [1];[2];[3];[4].
We see another similar instance on 30 December 2025. The contractor was paid UAH 688.7 thousand in four installments [1];[2];[3];[4] for the nursery, whilst the technical supervision firm received a further UAH 8.9 thousand, also in four installments [1];[2];[3];[4].
Formally, this can be explained by the completion of work stages. However, the problem is that, in this model, technical supervision appears not as an independent check before payment, but as part of the very same set of documents accompanying the payment. If the supervisor and the contractor finalize their accounts simultaneously, this calls into question the very purpose of the supervision.
This creates the impression that supervision does not verify the performance of the work retrospectively, but is synchronized with financial transactions, effectively legitimizing them.
Batch payments and ‘spending’ at the end of the year
Another sign of systematic behavior is the batch processing of payments. The monitoring identified 16 instances where, within a single day and for a single project, either several payments were made to the contractor, several payments were made to the technical supervision body, or large sums were paid out in one go.
The most striking example occurred on 30 December 2025, when ‘ATLAS BUD-PRO’ received UAH 2.87 million in six payments for the School in Mala Oleksandrivka [1];[2];[3];[4];[5];[6]. This was the day with the largest number of ‘bulk’ payments among schools in our sample. Such a year-end settlement is not, in itself, proof of a breach, but it is a strong indicator of risk. When a large number of payments are processed on a single day at the end of the financial year, oversight of the actual volume of work performed is almost always compromised.
A similar pattern is evident on other dates. On 17 April 2025, ‘ATLAS BUD-PRO’ received UAH 2.19 million in two payments from the nursery school ‘Sonetchko’ [1];[2]. On 25 April 2025, for the School in Mala Oleksandrivka — nearly 1.98 million hryvnias in two installments [1];[2]. On 16 July 2025, for the school — 2.53 million hryvnias in four installments [1];[2];[3];[4]. On 12 November 2025, the nursery will receive a further 1.66 million hryvnias in four installments [1];[2];[3];[4].
Taken together, all this suggests that the Department of Territorial Development did not operate according to the principle of a phased, independent audit, but rather according to the principle of periodically ‘closing’ documents and payments in batches.
Taken together, all these facts suggest that TOV ‘BUDEKODOR’ may act as a specialized ‘satellite’ firm, brought in to construction sites precisely when details of the building work need to be concealed.
In Kherson, TOV ‘BUDEKODOR’ ‘oversees the Kharkiv-based TOV ‘ATLAS BUD-PRO’ at schools and nurseries (where we observed synchronized payments made on the same day).
As reported by the publication ‘Vchasno’, in the Donetsk region, this very same entity was entrusted with technical supervision of restricted-access sites, the total value of which amounts to 400 million hryvnias.
Thus, we see that the same little-known firm from Kherson has suddenly become a key supervisor in two different regions, overseeing sites at the highest risk of corruption.
This suggests that the company is being used not as an independent market participant, but as a tool within a broader scheme for organizing work and exercising control. In this model, technical supervision may not serve a control function, but rather act as a means of legitimizing expenditure.
Why is this specifically the department’s problem?
In this case, the key question is not directed solely to the contractor or solely to the technical supervision body.
The main question concerns the client, namely the Department of Territorial Development of the Kherson Regional State Administration.
It was the department that drew up the contracts; appointed the technical supervision body; accepted the certificates of completion; made payments to the Treasury; and, most importantly, established the rhythm whereby the work and supervision were paid for simultaneously.
Therefore, even if some of the work was indeed carried out properly, this does not resolve the issue of the quality of process management. If technical supervision is merely a formality, then the department is effectively failing to fulfill one of its core duties — ensuring proper control over budget funds and the quality of the restoration work.
And here, the public context mentioned earlier is important: even before some of these payments were made, there were media reports about risks surrounding TOV ‘ATLAS BUD-PRO’. Despite this, the department not only continued to work with the contractor but also processed payments in a manner that does not demonstrate enhanced control; rather, it shows that such control has been reduced to a mere formality.
Similar approaches, as documented in case law and law enforcement materials
Case No. 1
The practice documented in this analysis is consistent with the approaches set out in the judgment in Case No. 761/33475/16-к, which was heard by the Shevchenkivskyi District Court of Kyiv. In this case, the client — the municipal enterprise ‘Engineering Center’ — and the contractor — TOV ‘ASP-TRANSBUD’ — were acting under a construction contract. An official of the client responsible for production activities and technical supervision (PERSON_1) signed the acceptance certificates for completed works (KB-2v), which formed the basis for subsequent payments. Whilst formally adhering to procedures, the parties ensured that the works were documented and paid for; however, this in itself did not guarantee effective control over their scope and quality.
The court found that PERSON_1, as an official of the client, had committed professional negligence (Article 367(2) of the Criminal Code of Ukraine), as he failed to verify the actual performance of the work, but signed the certificates based on which financial documents were drawn up and budgetary payments made to the contractor, leading to the unjustified transfer of funds. Following the outcome of the case, PERSON_1 was held criminally liable for the improper performance of his official duties in supervising construction works. This model effectively reduces the supervisory function to a mere formality and creates conditions for the transfer of funds for works that do not correspond to the declared scope or are not completed in full.
Case No. 2
The practice established in the judgment in Case No. 175/812/19, heard by the Dnipro District Court of Dnipropetrovsk Oblast (Slobozhanske), is directly consistent with the signs of formal technical supervision identified during the monitoring. In this case, the client was the Gorkivska Village Council, the contractor was SK Flagman Ltd, and technical supervision was carried out by Hydromontazh-Bud Ltd, with technical supervisor PERSON_1 as the direct supervisor. The supervision and execution of the works were carried out within a single document-flow process: the KB-2v certificates were signed by the technical supervisor and the client and formed the basis for budgetary payments, whilst the client itself lacked technical expertise and effectively relied on the technical supervisor’s signature.
The court established that PERSON_1, as a technical supervision engineer, deliberately signed certificates of completed works containing knowingly false information about their scope, without conducting a proper on-site inspection, thereby leading to the unjustified transfer of budget funds amounting to millions of hryvnias. His actions were classified, in particular, under Part 2 of Article 358 and Part 3 of Article 365-2 of the Criminal Code of Ukraine, namely as the issuance of forged official documents and abuse of authority to obtain an unlawful benefit. In effect, technical supervision in this model served not as a control mechanism but as a key element in legitimizing payments, with the technical supervisor’s signature providing sufficient grounds for payment, regardless of the actual progress of the work.
Case No. 3
The situation in the Sumy region, as described by the Okhtyrka District Prosecutor’s Office, illustrates a practice consistent with the patterns identified during monitoring. In this case, the client (the city council department), the main contractor, the subcontractor, and the person carrying out technical supervision all acted within a single process to formalize the completed works. In particular, the technical supervisor certified the acceptance certificates for the work carried out and the accompanying documents, despite what the investigation claims was a discrepancy between the declared and actual volumes. These circumstances indicate a risk that the supervisory function may have been largely a formality and did not fully ensure an independent verification.
At the same time, according to the investigation materials, the client transferred significant budgetary funds to the contractor based on these documents, part of which, according to the expert report, may have been paid out without justification. The pre-trial investigation points to a possible collusion between the parties involved in the process, including the technical supervisor; however, the final conclusions regarding the legal assessment of these actions rest with the court. In the context of the monitoring carried out, this case may be regarded as an example of a high-risk model, in which the technical supervisor’s signature is a key condition for payment, even in the absence of complete certainty regarding the actual performance of the works.
Case No. 4
The case described, which took place in the Cherkasy region and relates to the reconstruction of a residential building in Uman, illustrates an approach whereby the contractor drew up certificates of completion stating volumes that, according to the investigation, did not correspond to the work actually carried out; these documents were then used as the basis for the transfer of budget funds. A key point is that these certificates were signed and certified, thereby conferring on them the status of official documents and allowing them to be used in financial settlements.
Separately, the case file states that the technical supervision engineer has been notified of a suspicion of professional negligence regarding the improper performance of his supervisory duties. This suggests that technical supervision failed to fully verify the correspondence between the declared and actual volumes of work, potentially affecting subsequent approval and payment. In the context of monitoring, this case can be viewed as an example of a risk in which documents play a key role in verifying the work, and the effectiveness of the control function depends on proper verification before signing.
Conclusion
An analysis of the transactions carried out by the Department of Territorial Development of the Kherson Regional State Administration reveals not an isolated anomaly, but a systematic pattern: a single contractor carries out the work, a single technical supervision body oversees these very same projects, and the acceptance certificates and payments are concentrated on specific dates, whilst oversight appears not as a safeguard but as part of the payment mechanism.
That is precisely why the primary responsibility in this case lies not only with the contractors, but also with the Department as the client. After all, when a client makes payments in a system where the technical supervision body loses its independence, this indicates not weak management, but a deliberate disregard for the duty to oversee budgetary funds.
The report was prepared by the Kherson Regional Charitable Foundation “Union” with the support of the European Endowment for Democracy (EED). Its content does not necessarily reflect the official position of the EED. The information and views expressed in this material are the sole responsibility of the author(s).
