The Pentagon has admitted a significant accounting error, revealing that it overestimated the value of weapons sent to Ukraine by $6.2 billion over the past two years. The final calculation of the accounting error is far higher than the Pentagon previously estimated in May when it first revealed the miscalculation as $3 billion. The new figure is approximately double the initial estimates, leading to a purported surplus that will be allocated to future security packages.
Pentagon spokeswoman Sabrina Singh explained that a detailed review of the error showed that military services used replacement costs instead of the book value of the military equipment pulled from U.S. stocks and sent to Ukraine. The miscalculation amounted to $3.6 billion in the current fiscal year and $2.6 billion in the 2022 fiscal year. Singh said:
In a significant number of cases, services used replacement costs rather than net book value, thereby overestimating the value of the equipment drawn down from US stocks and provided to Ukraine.
We have confirmed that for FY23, the final calculation is $3.6 billion, and for FY22 it is $2.6 billion, for a combined total of $6.2 billion. These valuation errors in no way limit or restricted the size of any of our PDAs or impacted the provision of support to Ukraine.
The Pentagon has previously utilized presidential drawdown authority to expedite the delivery of weapons, ammunition, and equipment to Ukraine, bypassing the traditional purchase process. Previous estimates indicated that the United States had committed over $40 billion in security assistance to Ukraine since Russia’s invasion. However, with the new calculation that reveals the accounting error, the number sits at less than $34 billion provided in security aid.
Last month, it was reported that the cumulative amount of U.S. foreign aid directed to Ukraine, designated for humanitarian, financial, and military support, reached $75 billion since the initiation of the war.
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The United States has approved four rounds of aid to Ukraine, with Congress approving the latest aid package of around $45 billion for Ukraine and NATO allies in December. While the package was intended to last through the end of the fiscal year in September, its sustainability depends on the evolving situation on the ground as the new counteroffensive gains momentum.
Singh said:
It’s just going to go back into the pot of money that we have allocated for the future Pentagon stock drawdowns.
Members of Congress have repeatedly raised questions regarding the transparency and efficacy of tracking the aid to prevent fraud or diversion. The Pentagon’s assurance of a “robust program” is cold comfort when billions of dollars of weapons are mistakenly overvalued, casting doubt on the overall effectiveness of financial controls. Despite the accounting mistake, Singh stated that the ongoing delivery of aid to Ukraine would not be affected.
House Foreign Affairs Chairman Michael McCaul and House Armed Services Chairman Mike Rogers, both Republicans, wrote in a statement last month when the first $3 billion accounting error was publicly disclosed:
These funds could have been used for extra supplies and weapons for the upcoming counteroffensive, instead of rationing funds to last for the remainder of the fiscal year.
The updated calculation is expected to mitigate the possibility of Congress passing an additional assistance package, which the White House said it would not seek before the fiscal year ends in September. However, some lawmakers and congressional staffers are concerned that the funds may run out by mid-summer.