Pentagon Photo: depositphotos
The U.S. Department of Defense has uncovered additional accounting errors in the valuation of ammunition, missiles, and other equipment provided to Ukraine, totaling $2 billion.
Issues with Valuation
According to liga, the Pentagon faced difficulties in accurately assessing the defense materials sent to Ukraine due to unclear accounting definitions. The report states that in 2023, Department of Defense employees used “replacement cost” instead of “depreciated cost” to calculate the price of the weapons. This error resulted in a miscalculation of $6.2 billion, creating an opportunity for additional aid to Ukraine.
Increase in Misvalued Amount
As a result of discovering new errors, the total amount of misvalued materials has increased to $8.2 billion. This means that Ukraine may receive an additional $2 billion in weaponry to cover the aid amount approved by President Joe Biden’s administration.
Valuation Problems
The U.S. Government Accountability Office (GAO) noted that unclear definitions of value in the Foreign Assistance Act and the lack of specific guidelines for valuation have led to discrepancies in reporting the cost of military aid. For instance, the report highlights a case where 10 vehicles were valued at $7 million, while supporting documentation indicated they should be valued at zero, reflecting their residual value.
Recommendations for Congress and the Pentagon
The GAO recommended that Congress clarify the definition of value in the context of defense goods under the President’s drawdown authority. Additionally, the GAO provided several recommendations to the Pentagon for updating relevant guidelines.
Previously Discovered Errors
On May 18, 2023, it was reported that the Pentagon’s accounting had overestimated military aid to Ukraine by approximately $3 billion. On June 21, the Pentagon announced it had overestimated the military aid provided to the Armed Forces of Ukraine by $6.2 billion. The department stated that the accounting error discovered in May was more significant than initially thought.
Thus, the new accounting errors in the Pentagon will allow Ukraine to receive an additional $2 billion in weaponry, providing substantial support for Ukrainian troops in their fight for the country’s independence and security.
