Latvia’s government is due to hear a Finance Ministry report on conflicts of interest in procurements for nationally significant information technology systems. The audit found no conflicts in the cases examined, while identifying conditions that could allow dishonest conduct and weaknesses in oversight.
No conflict identified in the review
The Finance Ministry used analytical procedures and data from the State Revenue Service’s data warehouse to examine possible conflicts involving more than 1,600 people connected with procurements organised by the State Digital Development Agency, or people linked to them. The review found no signs of a conflict at that level. It also examined information submitted about possible conflicts involving information-system procurement committees for systems overseen by the agency. Under the Public Procurement Law, the ministry assessed the possible conflict-of-interest risk as medium. The report does not establish that fraud occurred; it says the checks can identify indicators rather than prove fraud.
How the conflict check was conducted
The audit selected nine companies that had won procurements for projects financed by European Union funds. It examined owners, legal entities holding at least 10% of a company’s capital, officials, commercial proxies and historical information in the Enterprise Register from 2019 onwards. The review then compared owners, officials and other authorised people, together with first- and second-degree relatives, against employees of the State Digital Development Agency and the Ministry of Smart Administration and Regional Development. In total, links involving 642 company officials and their relatives were checked against more than 1,000 agency and ministry employees who worked during 2019-2025 and could have served on procurement committees.
Fragmented systems add governance pressure
The ministry also found that information-system development and its oversight had been fragmented. Each government institution has tended to create its own development model, while institutions differ considerably in their IT maturity. The report says departments are reluctant to share databases and may invoke personal-data protection without sufficient grounds, making access agreements, legal changes and secure channels with developers harder to arrange. This matters for procurement governance because fragmented ownership can make it harder to see relationships, share control information and apply consistent checks across projects. A more joined-up system would not replace conflict declarations or investigation, but could make preventive oversight more effective.
Oversight can identify signs, not prove fraud
The audit says the State Digital Development Agency has had substantial influence over public procurements, including information-system development and improvement contracts. However, information supplied by the agency indicates that oversight of its information-system procurements effectively began only towards the end of 2025. During the previous five years, the ministry carried out only process and internal-control oversight, with one check a year. The Finance Ministry considers that insufficient for such a high-risk field, and says recommendations from the limited audits remain in progress. Controllers and auditors work periodically and by sampling; only investigative authorities can obtain real evidence using stronger methods. The report therefore favours reducing opportunities for fraud rather than attempting impossible absolute control.
| Fact | Detail |
|---|---|
| Authority preparing the report | Latvia’s Finance Ministry |
| People reviewed | More than 1,600 |
| Companies selected | Nine |
| Company officials and relatives checked | 642 |
| Public employees compared | More than 1,000 |
| Employment period examined | 2019-2025 |
| Conflict-of-interest risk assessment | Medium under the Public Procurement Law |
The audit found no conflicts, but recognised conditions for all three elements of the classic fraud triangle: opportunity, pressure and justification.
WHY IT MATTERS
A clean conflict-of-interest finding is not the same as proof that procurement risks are absent. For buyers and suppliers, the transferable lesson is that governance depends on linked ownership, family and employment checks, consistent oversight and information-sharing arrangements. Periodic sampling can reveal warning signs, while investigative authorities are needed to establish fraud.
Reported from pmo.ee, 2026-09-15. The Tender Wire is published by Otnox.
