Forensic Economic Examination under Art. 191 CC of Ukraine

Cases under Article 191 of the Criminal Code of Ukraine (KK) often collapse not because no wrongdoing occurred, but because the amount of loss was never proven on paper. The prosecution rests on an audit report; beneath that report there are no primary accounting documents; and the figure is left hanging. A forensic economic examination answers two narrow but decisive questions: did funds or property really leave the organisation without legal grounds — and in exactly what amount? Below I explain how I approach these questions in my expert practice, and what is worth attending to even before an examination is ordered.

What economic examination establishes — and what it does not

In cases under Art. 191 KK (“Misappropriation, embezzlement of property or taking it through abuse of official position”), a forensic economist is usually asked two kinds of question:

• whether the departure (shortfall) of funds or material assets is documentarily confirmed;
• what the amount of that ungrounded departure is, in monetary terms, as of a given date.

Let me mark the boundary of competence straight away. The expert does not establish:

• guilt, intent or a self-interested motive — these are for the investigation and the court to prove;
• the legal classification of the act (whether it is misappropriation, embezzlement or abuse);
• the specific culpable person.

The expert works with documents and figures. The conclusion reads: “according to the primary documents provided, funds in the amount of X departed without proper grounds,” or “the expenditure is not documentarily confirmed.” That is narrow — but it is precisely this narrowness that makes the conclusion durable at trial. When an expert steps beyond the documents and begins reasoning about “intentions,” the opinion becomes easy to overturn.

Three mechanisms in one article

Article 191 KK combines three ways of taking someone else’s property that differ in their economic nature. Drawing the line between them is a lawyer’s task, but the picture in the documents differs in each case — and that is what the expert sees.

Misappropriation

Property was entrusted to a person or was in their charge, and they unlawfully retained it for their own benefit. In the documents this appears as a shortfall: the assets should be on hand, they are not, and no lawful departure (sale, write-off, transfer) has been recorded.

Embezzlement

Entrusted property is unlawfully spent, disposed of, consumed or handed to third parties. Here documents on the departure usually do exist, but they are either drawn up with violations or have no real economic basis behind them — payment for goods never received, fictitious business trips, ungrounded payouts.

Taking through abuse of official position

An official uses their powers to take property that was not directly entrusted to them. The documentary trail consists of decisions, signatures and orders that exceed the person’s authority or do not correspond to real transactions.

Mechanism	What the documents show	Key source of evidence
Misappropriation	Shortfall with no recorded departure	Inventory
Embezzlement	Departure exists, but with no real basis	Primary documents, contracts
Abuse of position	Transactions beyond the scope of authority	Orders, bank statements

Inventory — the foundation for proving a shortfall

The most common reason the amount of loss is “left hanging” is the absence of a proper inventory (inventaryzatsiia — a physical stock-count reconciled against the accounting records). Without it, the fact of a shortfall is legally hard to prove: there is no way to compare what should be present under the books with what is actually there.

The procedure for conducting an inventory is set out in the Regulation on the Inventory of Assets and Liabilities, approved by Order of the Ministry of Finance of Ukraine No. 879 of 2 September 2014 (Regulation No. 879). In my practice, compliance with this document is the first thing I check. What I look at:

• whether the inventory commission was created by a proper administrative order;
• whether the financially responsible person was present, and whether a receipt was taken from them before the count began;
• whether the inventory lists were drawn up from actual balances, rather than copied from the accounting data;
• whether comparison statements were prepared, setting the book balances against the actual ones;
• whether the financially responsible person’s written explanations of the discrepancies were documented.

If the inventory was carried out formally or with gross violations, its results cannot serve as the basis for a conclusion on the size of the shortfall. This is not “nit-picking”: without a clean starting point, any figure for the loss will be open to dispute.

Documents the expert works with

The conclusion is built not on the audit report, but on primary documents. Depending on the facts, the minimum set I request includes:

• inventory lists and comparison statements — to establish the fact and scope of the shortfall;
• advance reports (reports on the use of accountable funds), with attached receipts, invoices and tickets — to check accountable-sum transactions;
• outgoing and incoming goods invoices — the movement of inventory items;
• cash receipt and disbursement orders and the cash book — the movement of cash;
• payroll statements — payments to staff, “dead souls,” inflated accruals;
• bank statements and payment orders — non-cash movement of funds;
• contracts, work-completion acts and invoices — to assess whether the business transactions were real.

The rule is simple: every figure in the total loss must rest on at least one primary document. Where there is no document, the correct expert answer is “cannot be established” or “not documentarily confirmed” — not “probably.”

The amount of loss and the parts of Art. 191

The parts of Article 191 KK are distinguished by several features: repetition, commission by a group acting on prior conspiracy, use of official position, and — crucially — the amount of loss caused, large and especially large.

The amount is measured in tax-free minimum incomes of citizens (neopodatkovuvanyi minimum dokhodiv hromadian, NMDH), under the rules of the note to Art. 185 KK, which extends across the whole group of property crimes, Art. 191 included. Importantly, for the purposes of criminal-law classification the NMDH does not equal the nominal figure used for other purposes but is tied to the tax social allowance (50% of the subsistence minimum for an able-bodied person as of 1 January of the relevant year); so the threshold sums, expressed in hryvnias, change each year. The current NMDH value and the boundaries between the size categories should be verified against the version of the KK in force and the subsistence-minimum figure on the date of the act.

Here again the boundary of competence matters: the expert determines the amount in hryvnias, while comparing it with the NMDH thresholds and choosing the part of the article is a legal classification carried out by the investigator, the prosecutor and the court. That is why it is correct to ask the expert to establish the amount, not to “classify it under a particular part.”

Typical mistakes that destroy the case

Over the years, the same problems recur. Knowing about them saves time for both the defence and the prosecution.

1. Relying on the audit report without primary documents. The most frequent error. An audit or inspection report is someone else’s conclusion, not a piece of primary evidence. The expert cannot simply “copy over” its total: they are obliged to work with the documents on which that report supposedly rests. If there is no primary record, there are no grounds for a conclusion on the amount.
2. A missing or purely formal inventory — the shortfall is recorded “by eye,” with no lists and no comparison statements.
3. Putting legal questions to the expert — about guilt, intent or classification. Such questions fall outside specialised economic knowledge, and the court will not accept the answers.
4. Mixing book and actual data — when the list is generated from the accounting software rather than from the actual stock. The shortfall then “disappears” mathematically.
5. An incomplete set of documents — the expert is handed a selection convenient to one side. A conclusion based on incomplete data is always vulnerable.

Expert examination or a State Audit Service inspection: the difference

These two instruments are often confused, yet they differ in nature and in evidentiary weight.

• An inspection by the State Audit Service (Derzhaudytsluzhba) is a form of state financial control. Its report records breaches of financial discipline, but in itself it is not an expert conclusion in the procedural sense. Likewise, materials from State Tax Service (DPS) inspections, or reports from the State Financial Monitoring Service (Derzhfinmonitorynh), may prompt proceedings but do not replace an expert study.
• A forensic economic examination is a procedural act. It is ordered under the Criminal Procedure Code of Ukraine (KPK), conducted by qualified forensic experts under the Law of Ukraine “On Forensic Expertise” and the Instruction on Ordering and Conducting Forensic Examinations, approved by Order of the Ministry of Justice of Ukraine No. 53/5 of 8 October 1998. The expert’s conclusion is a distinct source of evidence.

The practical consequence: an inspection report is not binding on the expert and does not replace their study. Where the amount of loss has evidentiary significance in criminal proceedings, what is needed is precisely an examination grounded in primary documents — not a retelling of an audit report.

Practical steps for the parties

• For managers and business owners: at the first signs of a shortfall, conduct an inventory strictly under Regulation No. 879 and preserve the primary documents — this is your evidentiary base, whichever way the dispute later moves.
• For lawyers: check whether the charged sum rests on primary records rather than on the audit report alone; challenge any conclusion built on a formal inventory.
• For investigators and BEB detectives (the Bureau of Economic Security of Ukraine): frame the expert’s questions around the fact and the amount, not the classification; provide a complete, not a selective, set of documents.

If you are facing a dispute over a shortfall, embezzlement or ungrounded payments and need to understand the real, documentarily confirmed size of the loss, get in touch for a consultation or a forensic economic examination. Sorting out the documents at an early stage is almost always cheaper than repairing shaky conclusions once the matter is already in court.