The U.S. Department of Defense has been grappling with accurately valuing defense articles sent to Ukraine due to ambiguous accounting definitions.
In 2023, the Pentagon confessed that its staff used “replacement value” instead of “depreciated value” to calculate the billions in materials sent to Ukraine. This $6.2 billion error led to additional billions being dispatched to Kyiv.
Pentagon Finds Another $2 Billion Of Accounting Errors For Ukraine Aid
July 25, 2024
- By Reuters
The Pentagon has found $2 billion worth of additional errors in its calculations for ammunition, missiles, and other equipment sent to Ukraine, a U.S. government report revealed on July 25.
- The Government Accountability Office report showed that the U.S. Department of Defense has faced challenges in valuing defense articles sent to Ukraine due to unclear accounting definitions.
- That correction uncovered a $6.2 billion error, and the Pentagon now says $2 billion more in overstatements have been found.
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Pentagon Finds Another $2B Accounting Error In Ukraine Aid, Bringing Total to $8.2B
Uploaded: Jul 26, 2024
The U.S. Department of Defense has been grappling with accurately valuing defense articles sent to Ukraine due to ambiguous accounting definitions. This information was revealed in a new Government ...
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This $6.2 billion error led to additional billions being dispatched to Kyiv. . .
The GAO highlighted that a vague definition of value in the Foreign Assistance Act and the absence of specific valuation guidance for the Presidential Drawdown Authority have led to inconsistencies in the reported value of military aid. For example, the GAO report mentioned a case where 10 vehicles were valued at $7,050,000, while the 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 the context of defense articles under Presidential Drawdown Authority. It has also issued seven recommendations to the Defense Department, urging it to update its guidance to include a PDA-specific valuation section and develop component-specific valuation procedures. The department has agreed with all recommendations and outlined actions to address these issues.
Why It Matters: Amid escalating tensions with Russia, Ukraine has been the recipient of significant military aid from the U.S., with the NATO summit in July focusing on providing long-term support for Ukraine in the war against Russia.
Details:The US Department of Defense said it had used "replacement value" instead of "depreciated value" to calculate billions in materiel sent to Ukraine in 2023, causing a US$6.2 billion miscalculation that was later used to send new aid.
The Pentagon has announced that it has again undervalued ammunition, missiles and other military equipment provided to Ukraine, opening the door to supplying $2 billion in new military support for Kyiv.
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The latest revision in the estimated value of U.S. equipment comes at a critical time for the Ukrainian government, as the continuation of large-scale deliveries of U.S. weaponry is in doubt not only due to divisions in Congress but due to the possibility of an aid cutoff should Donald Trump win this fall’s presidential election.
In the meantime, the Government Accountability Office has argued that there needs to be a clarification of how weapons provided from U.S. stocks should be valued, a move that would preclude the kind of accounting shuffle that has once again opened the way to additional billions in aid to Ukraine.
DoD finds another $2B accounting 'error' to boost Ukraine aid
It will take more than a little budgetary sleight-of-hand to set the stage for a settlement
Jul 26, 2024
It’s hard to begrudge Ukraine additional assistance in its effort to defend against further Russian territorial gains, but arms alone, on whatever scale, will not be enough to resolve the conflict in a way that allows that nation to rebuild itself from the devastation caused by the Russian invasion. Nor will it enable Ukraine to construct an economically viable democracy. The best hope for salvaging such an outcome is a diplomatic initiative, as challenging as that may be.
Ultimately, the Pentagon’s statistical maneuvering to free up funding for Ukraine is likely to have a limited impact on the outcome of the war. It is important that Kyiv get the support it needs to defend itself. But the notion that Ukraine can win a decisive military victory, if only there were a steadier flow of weapons aid, is dangerously misguided.
It will take more than a little budgetary sleight-of-hand to set the stage for a settlement of the conflict on terms acceptable to Ukraine. It’s long past time to abandon the approach of providing weapons to Ukraine and hoping for the best, as a number of key U.S. officials are coming to recognize.
They now believe that the purpose of military aid should be to strengthen Ukraine’s hand in negotiations to end the war, not to subsidize “total victory” on the battlefield. In this context, a one-time tranche of $2 billion in military aid, while useful in the short-term, will ultimately have a modest impact on the outcome of the conflict. The Pentagon and the administration need to focus on the big picture — how to end the conflict in Ukraine — rather than cooking the books to provide a one-time infusion of military support
Ultimately, the Pentagon’s statistical maneuvering to free up funding for Ukraine is likely to have a limited impact on the outcome of the war. It is important that Kyiv get the support it needs to defend itself. But the notion that Ukraine can win a decisive military victory, if only there were a steadier flow of weapons aid, is dangerously misguided.
It will take more than a little budgetary sleight-of-hand to set the stage for a settlement of the conflict on terms acceptable to Ukraine. It’s long past time to abandon the approach of providing weapons to Ukraine and hoping for the best, as a number of key U.S. officials are coming to recognize.
They now believe that the purpose of military aid should be to strengthen Ukraine’s hand in negotiations to end the war, not to subsidize “total victory” on the battlefield. In this context, a one-time tranche of $2 billion in military aid, while useful in the short-term, will ultimately have a modest impact on the outcome of the conflict. The Pentagon and the administration need to focus on the big picture — how to end the conflict in Ukraine — rather than cooking the books to provide a one-time infusion of military support
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