Pentagon finds another $2 billion of accounting errors for Ukraine aid
- In Reports
- 11:23 AM, Jul 26, 2024
- Myind Staff
On July 25, a US Government Accountability Office (GAO) report revealed that the U.S. Defense Department has identified an additional $2 billion in accounting errors related to its estimations of military aid sent to Ukraine. This follows the Pentagon's announcement on June 21, 2023, that it had overestimated the value of arms sent to Ukraine over the past two years by $6.2 billion. The discovery of these additional errors now brings the total unspent sum to $8.2 billion.
According to a new Government Accountability Office (GAO) report, the U.S. Department of Defense has encountered difficulties in accurately valuing defense articles sent to Ukraine, primarily due to unclear accounting definitions.
In 2023, the Pentagon reported that staff used "replacement value" rather than "depreciated value" to account for the billions of dollars in materials sent to Ukraine. This $6.2 billion error inadvertently facilitated the transfer of additional funds to Kyiv.
The Pentagon has since informed the GAO that another $2 billion in overstatements have been discovered. Consequently, this allows for an additional $2 billion worth of arms to be sent to Ukraine to match the amount of aid approved by the Biden administration.
The GAO reported that vague definitions of value in the Foreign Assistance Act and the lack of specific valuation guidance for the Presidential Drawdown Authority have resulted in inconsistencies in the reported value of military aid. For instance, the report highlighted an example where 10 vehicles were valued at $7,050,000, while supporting documentation indicated they should have been valued at zero, their net book value.
The GAO has recommended that Congress clarify the definition of value in relation to defense articles under the Presidential Drawdown Authority to address these discrepancies.
Additionally, the GAO has issued seven recommendations to the Defense Department, urging it to update its guidance to include a section specifically for Presidential Drawdown Authority (PDA) valuation and to develop component-specific valuation procedures. The department has agreed with all of these recommendations and has outlined actions to address the identified issues.
Image source: Reuters
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