The Audit Office has flagged irregularities in the €1.7 million contract for the government’s Digital Citizen mobile application, citing a direct award without an open tender, a lack of cost transparency and work beginning months before the agreement was formally signed.
In a report titled Audit of the Digital Citizen Project, the watchdog raised concerns over the deal awarded to Greece’s Ministry of Digital Governance and, through it, to the private contractor behind Greece’s gov.gr wallet application. The arrangement bypassed a competitive procurement process.
Cyprus agreed to pay up to €1.5 million for the development of the app, while Greece contributed €200,000 to integrate electronic signatures and digital identity into its existing gov.gr wallet. However, the Audit Office found that no cost estimate or detailed pricing breakdown existed for the €1.5 million at the time the contract was signed.
Work on the project began in March 2024 — months before a memorandum of understanding between Cyprus and Greece was signed in June 2024 and before the formal contract was concluded in October 2024. A legal opinion from the Attorney General’s office was delivered just three days before the agreement was signed.
The Audit Office warned that bilateral state agreements of this nature risk becoming mechanisms for circumventing public procurement rules. It questioned whether the process complied with the principles of transparency and equal treatment of economic operators, noting that Cyprus has no direct contractual relationship with the private contractor implementing the project.
Hosting and data oversight concerns
The hosting of the application — described as critical digital state infrastructure — was also flagged. The app was placed on the same cloud infrastructure used by the Greek contractor without the ministry first assessing whether this was the most suitable option in light of data security and personal data protection requirements.
Technical oversight of the infrastructure is exercised by Greece, while the Cypriot ministry receives only the results of checks, raising concerns about operational dependence.
Additional costs push spending higher
The overall cost of the Digital Citizen project is expected to exceed the €1.5 million contract value.
Additional spending includes €156,000 for project management services provided by a private firm, €267,832 on promotional campaigns up to May 2025, €3,200 for integration with the Road Transport Department and €12,503 for QR code scanners at citizen service centres. These expenditures were not examined as part of the current audit.
Questions over EU Digital Wallet alignment
The report also raised strategic questions over whether the Digital Citizen app will function as a stepping stone towards the forthcoming EU Digital Wallet, or whether that transition would require a new system to be developed.
The ministry has argued that the app will retain value for national-only documents, such as MOT certificates and fan cards, even after the EU Digital Wallet is introduced.
Pattern of procurement concerns
The Audit Office noted that the Digital Citizen case is not isolated. The ministry previously abandoned a National Wallet project after awarding work verbally and without proper procedures to private companies and the University of Cyprus.
The watchdog estimated that episode could expose the public purse to claims of up to €1,373,544 plus VAT, pursued by the affected firms through legal action. Cyprus also withdrew from a co-funded European project after failing to follow required procedures.
Recommendations
The Audit Office recommended that future intergovernmental cooperation fully comply with transparency and procurement rules, that the ministry develop a comprehensive digital transformation strategy aligned with EU Digital Wallet requirements, and that dependence on specific contractors be reduced through open tender procedures.
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