Pentagon
Uncovers Additional $2 Billion in Accounting Errors for Ukraine Aid
WASHINGTON –According to a U.S. government report released on Thursday, the Pentagon has identified an additional $2 billion in accounting discrepancies related to ammunition, missiles, and other equipment dispatched to Ukraine, escalating the total improperly valued material to $8.2 billion.
A recent Government Accountability Office (GAO) report highlighted the challenges faced by the U.S. Department of Defense in accurately valuing defense articles sent to Ukraine. These challenges stem from ambiguous accounting definitions.
In 2023, the Pentagon admitted that staff had used replacement values instead of depreciated values to calculate the billions in materials sent to Ukraine. This $6.2 billion error subsequently allowed for billions more in aid to be sent to Kyiv. The Pentagon informed the GAO that an additional $2 billion in overstatements has since been uncovered. Consequently, an extra $2 billion worth of arms can now be sent to Ukraine to fulfill the aid approved by President Joe Biden’s administration.
The GAO report pointed to the vague definition of value in the Foreign Assistance Act and the lack of specific valuation guidance for the Presidential Drawdown Authority, which led to inconsistencies in the reported value of military aid. One example cited involved 10 vehicles valued at $7.05 million, though supporting documentation indicated their net book value should have been zero.
The GAO has recommended that Congress clarify the definition of value concerning defense articles under the Presidential Drawdown Authority. Additionally, the GAO issued seven recommendations to the Defense Department. These include updating its guidance to incorporate a PDA-specific valuation section and developing component-specific valuation procedures. The department has concurred with all recommendations and has outlined actions to address these issues.
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