Pentagon discovers additional $2 billion accounting error in Ukraine aid
What's the story
The Pentagon has unearthed an additional $2 billion accounting error related to the valuation of ammunition, missiles, and equipment sent to Ukraine, a United States government report released on Thursday said. This raises the total improperly valued material to $8.2 billion—likely paving the way for billions more in aid for Kyiv. The Pentagon admitted in 2023 that staff had used "replacement value" instead of "depreciated value" in their calculations for materials sent to Ukraine, resulting in a $6.2 billion error.
Valuation issues
Valuation challenges
The Government Accountability Office (GAO) report highlighted the difficulties faced by the US Department of Defense in accurately valuing defense articles sent to Ukraine due to ambiguous accounting definitions. The GAO pointed out an instance where 10 vehicles were valued at $7,050,000 when supporting documentation indicated they should have been valued at zero. The report has led to recommendations for Congress to clarify the definition of value in the Foreign Assistance Act and specific valuation guidance for Presidential Drawdown Authority.
Recommendations accepted
Defense Department agrees to implement GAO recommendations
The Defense Department has agreed with all the recommendations made by the GAO, including updating its guidance with a Presidential Drawdown Authority-specific valuation section and developing component-specific valuation procedures. The department has outlined actions to address these issues, thereby ensuring more accurate valuations in future aid dispatches.