Pentagon reveals accounting errors in $2 billion in aid to Ukraine

The Pentagon has discovered an additional $2 billion worth of errors in its calculations for ammunition, missiles, and other equipment sent to Ukraine, bringing the mispriced materials to $8.2 billion.

This is reported by RBC-Ukraine with reference to Reuters.

The US Department of Defense has had difficulty accurately valuing defense items sent to Ukraine due to unclear accounting definitions, a new report by the Government Accountability Office (GAO) has found.

In 2023, the Pentagon said that employees used “replacement cost” instead of “depreciated value” to calculate billions of materials sent to Ukraine. The $6.2 billion error created an opportunity for billions more to be sent to Kyiv.

The Pentagon told the GAO that another $2 billion in overstatements have since been identified. As a result, an additional $2 billion worth of weapons could be sent to Ukraine to cover the amount of aid approved by President Joe Biden's administration.

According to the GAO, the vague definition of cost in the Foreign Assistance Act and the lack of specific guidance on how to evaluate presidential authority to reduce the number of personnel have led to inconsistencies in the data on the cost of military assistance.

In one example cited in the GAO report, 10 vehicles were valued at $7,050,000, while supporting documentation showed that they should have been valued at zero, their net book value.

GAO recommended that the US Congress clarify the definition of value in the context of defense items as part of the President's force reduction authority.

In addition, the GAO issued seven recommendations to the Department of Defense, urging it to update its manual to include a section on estimating for PDAs and to develop component-specific estimating procedures. The agency stated that it agreed with all recommendations and has outlined actions to address these issues.

Author - Dmitriy Levchenko, 26/07/2024