Accounting mistakes mean $3 billion more funds for Ukraine

TThe Pentagon said Thursday it overestimated the value of the weapons and other equipment sent to Ukraine by about $3 billion. This blunder means more US defense funds will be available to support Ukraine’s efforts to repel the Russian invasion.

The error, which the Department of Defense discovered after an internal audit in March, arose because the military services used cost estimates based on new hardware rather than depreciated older equipment pulled from US inventories.

“The ministry has identified discrepancies in the value of equipment for Ukraine,” Pentagon spokeswoman Sabrina Singh said in a statement. “In some cases, ‘replacement cost’ was used instead of ‘net book value,’ thereby overestimating the value of equipment removed from US inventories.”

Since the Russian invasion in February 2022, President Joe Biden has used a so-called Presidential Drawdown Authority (PDA) to transfer weapons and equipment from US stocks totaling around US$21.1 billion. The actual cost is now estimated at about $18 billion, officials said. This means the administration has roughly doubled the $2.7 billion in funds approved by Congress that remains to support Ukraine.

Continue reading: In the race to arm Ukraine.

When the miscalculation was discovered, the Pentagon’s Comptroller reissued guidance clarifying how to value equipment to ensure services are using the most accurate accounting methods, a defense official said. The process is now underway, which means there’s a chance additional savings could be made.

But Singh claimed the error did not hamper deliveries. “This overstatement has not diminished our support for Ukraine, nor has it impacted our ability to bring capabilities to the battlefield,” Singh said.

The race to provide Ukraine with the weapons it needs to win the war against Russia has increased in urgency as the Ukrainian military prepares a counter-offensive against occupying Russian forces in the east and south. The government assumes that the events of the coming months could influence the outcome of the war.

Continue reading: What to expect from Ukraine’s counteroffensive.

The Pentagon’s discovery sparked fierce criticism from Republicans. House Armed Services Committee Chairman Mike Rogers of Alabama and House Foreign Affairs Committee Chairman Michael McCaul of Texas released a joint statement on the news. “The exposure of a $3 billion accounting error discovered two months ago and just reported to Congress today is extremely problematic, to say the least,” the statement said. “These funds could have been used for additional supplies and weapons for the upcoming counteroffensive rather than rationing funds for the remainder of the fiscal year.”

Republicans called on the administration to “make up for this valuable lost time” by funding Ukraine with more advanced weaponry and systems that can turn battlefield conditions in its favor.

write to WJ Hennigan at [email protected]