Filenews 24 February 2026 - by Despina Psyllou
The Audit Office blames opacity in costs, direct assignment of work and many other serious issues to the Deputy Ministry of Research, Innovation and Digital Policy for the "Digital Citizen".
In a report entitled "Audit of the project "Digital Citizen"", the Audit Office indicates a lack of transparency regarding the project contract, a lack of transparency regarding the cost of the contract, the start of work before the legality check by the Legal Service and even before the signing of the Cyprus-Greece memorandum, additional expenses from €1.5 million. of the project, opacity as to the cost of hosting the application, a critical state infrastructure of Cyprus, the technical supervision of which is held by Greece.
Specifically, it finds:
A) Direct award. Lack of transparency regarding the contract of the project, which was awarded after the signing of a memorandum to the Ministry of Digital Governance of Greece and by extension to the private contractor of the corresponding Greek project (gov.gr). "Our Service expresses concern in general, that such interstate agreements will not evolve as "smart" ways to circumvent the procedures provided for public procurement.
B) Lack of transparency in the cost of the Contract. The total cost of the Contract amounts to €1.7 million. Of these, €1.5 million. to be given by Cyprus for the creation of the Digital Citizen application and the €200,000 to be given by Greece for the integration of electronic signature and identity into their existing electronic wallet "gov.gr wallet", where Cyprus will provide the know-how. "However, for the amount of €1.5 million. which will be paid by Cyprus as well as for the individual activities there was no cost estimate or detailed costing at the signing of the Contract".
C) Issues of transparency and cost assessment. The lack of data on the cost of developing the "gov.gr wallet" in Greece makes it difficult to estimate the real economic benefit for Cyprus through the process in question, which will pay up to €1.5 million. for the "Digital Citizen" application.
D) The legality check was carried out after the start of the works and shortly before the signing of the contract. "The final opinion (legality) was given by a letter from the Legal Service three days before the signing of the Contract, in which it finally considered Article 39(4) of the same Directive, which allows transnational cooperation between contracting authorities, to be the most appropriate legal basis."
E) Start of work before the signing of the Memorandum. Despite the fact that the Memorandum of Cooperation with Greece was signed in June 2024 and the official Agreement in October 2024, data from the correspondence we found in the electronic archiving system of the Deputy Ministry show that the work on the "Digital Citizen" had already started in March 2024.
F) Lack of transparency for the hosting of the application – Under the supervision of Greece, a critical state infrastructure. The implementation of the "Digital Citizen" was directly assigned to the same contractor that developed the corresponding application in Greece, de facto determining the hosting of the application in the same cloud, without prior evaluation by the Deputy Ministry for the most appropriate hosting option, in accordance with its policies on the type of data it handles and its security and privacy requirements.
In addition, technical supervision is exercised by Greece, while the Deputy Ministry only receives the results of the audits, which does not ensure full technical supervision and responsibility of the Cypriot side for the critical state digital infrastructure. The lack of transparency also includes the fact that there is no data on hosting costs.
G) Comments on the strategy for the European Digital Wallet. The Deputy Ministry started the effort with the "National Wallet" (which was eventually abandoned with all that this entails in terms of time and cost), is now implementing the Digital Citizen (in stages) and in the near future it will have to implement the European Digital Citizen.
It is therefore reasonable to ask whether the actions taken today regarding the Digital Citizen will be a useful vehicle for the transition to the European Digital Wallet, or should the effort for the European Digital Wallet essentially start from the beginning.
The Deputy Ministry expresses the belief that the European Digital Wallet will not negate the usefulness of the Digital Citizen, and more specifically its usefulness for various documents at national level only, such as the MOT, the fan card and match tickets.
H) Additional costs for the project. The final total cost of the implementation of the "Digital Citizen" project is expected to exceed the maximum amount of €1.5 million. relating to the Contract under consideration, as it includes additional costs, such as €156,000 for project management by a private company, €3,200 for the interconnection of the application with the Department of Road Transport, €267,832 for promotional campaigns and €12,503 for the supply of QR-Code Scanners for the Citizen Service Centers (KEP) / Citizen Centers (KEPO). These costs were not further audited, as they are not the subject of this audit.
Transnational cooperation
The implementation of the project, the Audit Office points out, was carried out through a Memorandum of Cooperation and Contract between the Republic of Cyprus and the Hellenic Republic, with the legal basis of Article 39(4) of Directive 2014/24/EU. The implementation was assigned by the competent Ministry of Greece, to the existing private contractor of the corresponding Greek project (gov.gr), through a negotiation process.
Our Service did not have the authority to examine the procedures followed by the competent Ministry in Greece. However, the choice of this procedure, at a time after the implementation of the Greek project and without prior joint planning and joint announcement by the two states, raises questions as to whether this procedure served the principles of transparency and equal treatment of candidate economic operators.
«Without our Service being able to control the procedures for awarding the award by the Hellenic Republic to the specific contractor, the concern is expressed as to whether this procedure fully serves the principles of transparency and equal treatment of economic operators since no timely actions were taken for cooperation between the two states", it is stated.
Although cooperation between Member States can bring benefits mainly through the exchange of know-how, our Service points out that such agreements cannot act as a mechanism for indirectly circumventing public procurement procedures, at the risk of favouring specific economic operators.
We also note that although such an approach gives some speed to the initial stages of implementation (since a "ready-made" solution is applied), along the way it can lead to serious inhibition and/or disproportionate dependence since the Republic of Cyprus does not have direct contact with the private contractor.
What is the Digital Citizen app
"Digital Citizen" is the official mobile application of the Government of Cyprus, through which the citizen can create and maintain in digital form official documents fully equivalent to paper documents, for any legal use within the Republic of Cyprus.
Please note that the digital documents generated through the application are not international travel documents. As of December 5, 2024, the Digital Citizen app is available on the Google Play and Apple Store web platforms. At this stage, citizens can issue and save their Identity Card, Driver's License, Vehicle Fitness Certificate (MOT) and Fan Card in the application.
Subject: From the Digital Wallet to the Digital Citizen
The effort to implement the National Wallet of Cyprus was unsuccessful, as the Deputy Ministry orally and without the prescribed procedures assigned its creation to private companies and the University of Cyprus.
The Audit Office had identified direct awards, non-transparent procedures and a potential financial burden for the state, which is estimated at €1,373,544 + VAT. This amount concerns payments claimed by these companies through their lawyers, for work that they claim they had performed.
Also, the participation of Cyprus in a co-financed European project was interrupted, as the country did not comply with the prescribed procedures, as detailed in the previous relevant Special Report of our Service no. YTEEKPSP/02/2024.
The Deputy Ministry then proceeded with the development of the "Digital Citizen" application, through a Contract signed between the Deputy Ministry and the Ministry of Greece with a total cost of up to €1.5 million. for the Cypriot side and up to €200,000 for the Greek side. However, although the Contract was signed between the aforementioned two parties, the implementation is carried out by the same contractor (individual) who implemented the corresponding project in Greece which is called "gov.gr wallet".
This means that the Deputy Ministry, although it will pay the agreed amount to the Ministry of Defence of Greece, in practice the money will end up in the private company that will implement the project. It is noted that, in addition to the amount of €1.5 million (maximum) that has been agreed to be paid to the YPSD for the implementation of the "Digital Citizen", the total cost of the project is higher as it also includes a series of additional costs.
Specifically, it includes project management costs, which have been assigned to a private company at a cost of €156,000, as well as an expense of €3,200 for the interconnection with the Department of Road Transport.
In addition, a significant amount of €267,832 has already been spent until May 2025 to inform the public through EU-EY SPECIAL REPORT 07/2026 10 promotional campaigns, which continue with each new service/certificate added to the Digital Citizen. Finally, the cost of €12,503.57 for the supply of QR-Code Barcode Scanners for the needs of KEP/KEPO is also included. These costs were not further audited, as they are not the subject of this audit.
Recommendations of the Audit Office:
1. Transparency and Legality: Cooperation between states must adhere to the principles of transparency, legality and equal treatment of economic operators, while ensuring the protection of the public interest. Exemption from Public Procurement procedures must be made only under strict conditions and with full documentation.
2. Strategic planning: The Deputy Ministry must develop a comprehensive strategy for digital transformation, taking into account the European specifications for the European Digital Wallet (EUDI) and carrying out a cost-benefit study for the intermediate solutions.
3. Independence from Contractors: The Deputy Ministry must reduce reliance on specific contractors and ensure that future contracts are conducted through open tenders, unless there are fully documented reasons for using different procedures, ensuring transparency and equal treatment of all stakeholders.
