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Pentagon overvalued Ukraine money by $3 billion says report

Secretary of Defense Lloyd J. Austin III during a virtual meeting with 26 different military and veteran service organizations the Pentagon, May 5, 2021 (DoD photo by Chad J. McNeeley)
May 25, 2023

According to Defense Department officials, the United States overestimated military aid, including weapons and ammunition, sent to Ukraine by at least $3 billion due to an accounting error made by the Pentagon, Reuters reported.

The newly revealed accounting mistake may allow the Biden administration to postpone seeking additional aid authorization from Congress for Ukraine in the near future.

According to The Hill, Pentagon spokeswoman Sabrina Singh explained that the mistake occurred because the Pentagon mistakenly used a higher value cost, equivalent to the replacement cost, rather than the actual value of the weaponry at the time of purchase and depreciation. This led to an overestimation of the value of certain military equipment taken from U.S. stocks and sent to Ukraine.

“During our regular oversight process of presidential drawdown packages, the Department discovered inconsistencies in equipment valuation for Ukraine. In some cases, ‘replacement cost’ rather than ‘net book value’ was used, therefore overestimating the value of the equipment drawn down from U.S. stocks,” said Singh.

The Defense Department did not disclose the specific date of the accounting error discovery or provide detailed information regarding which weapons were inaccurately overestimated.

According to officials cited by The Hill, the Pentagon is currently assessing the extent of the overestimation but estimates it to be a minimum of $3 billion. However, this figure may increase as further analysis is conducted.

The acknowledgment was made following mounting pressure from Congress on the Pentagon to demonstrate transparency regarding the billions of dollars in weapons, ammunition and equipment sent to Ukraine. Some lawmakers have raised concerns about the ongoing level of support.

Since Russia’s invasion in February 2022, the U.S. has furnished Ukraine with billions in military aid. Members of Congress have consistently pressed Defense Department leaders to ensure close monitoring of the aid provided to Ukraine, aiming to prevent fraud or misuse. The Pentagon asserts that it has implemented a program to track the aid as it enters Ukraine and maintain oversight once it is in the country, with the level of scrutiny based on the sensitivity of each weapons system.