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Pentagon Says Multi-Billion Dollar Accounting Mistake Means More Arms Funding for Ukraine

TOPSHOT-UKRAINE-RUSSIA-CONFLICT-WAR
TOPSHOT-UKRAINE-RUSSIA-CONFLICT-WAR

Ukrainian servicemen of the 95th Separate Air Assault Brigade prepare to fire a 120mm mortar towards Russian positions on a frontline in Donetsk region, on April 5, 2023. Credit - Genya Savilov—AFP/Getty Images

The Pentagon said Thursday that it had overcounted the value of weapons and other equipment sent to Ukraine by roughly $3 billion, an error that means more U.S. defense funds will be available to support the Ukrainian effort to beat back the Russian invasion.

The mistake, which the Defense Department discovered after an internal audit in March, occurred because the military services were using cost estimates based on new hardware, rather than the depreciated older equipment that was pulled from U.S. stockpiles.

“The department discovered inconsistencies in equipment value for Ukraine,” Pentagon Spokeswoman Sabrina Singh said in a statement. “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.”

Using a so-called presidential drawdown authority (PDA), President Joe Biden has transferred weapons and equipment from U.S. stocks totaling about $21.1 billion since Russia’s invasion in Feb. 2022. The true cost is now estimated to be roughly $18 billion, officials said, which means the Administration has roughly doubled the $2.7 billion Congressionally authorized funds that were remaining to support Ukraine.

Read More: Inside the Race to Arm Ukraine.

When the miscalculation was discovered, the Pentagon’s comptroller re-issued guidance clarifying how to value equipment to ensure the services use the most accurate accounting methods, a Defense official said. The process is now underway, meaning there’s a possibility additional savings could be found.

But Singh maintained the error has not hindered deliveries. “This over-valuation has not constrained our support to Ukraine nor impacted our ability to flow capabilities to the battlefield,” Singh said.

The race to supply Ukraine with the weapons it needs to win the war against Russia has taken on increased urgency as the Ukrainian military prepares to launch a counteroffensive against occupying Russian forces in the east and south. The Administration believes what happens in the coming months could shape the outcome of the war.

Read More: What to Expect From Ukraine’s Counteroffensive.

The Pentagon’s discovery drew fire 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 revelation of a $3 billion accounting error discovered two months ago and only today shared with Congress is extremely problematic, to say the least,” the statement said. “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 Republicans urged the Administration to “make up for this precious lost time” by using funds to provide Ukraine with more advanced weapons and systems that can tip the conditions on the battlefield in their favor.