The Pentagon has discovered another $2 billion in errors in calculations for ammunition, missiles and other military equipment sent to Ukraine. Now the total amount of errors in assessing aid has reached $8.2 billion.
Reuters reports this.
The problem of accurately assessing defense aid to Ukraine
In 2023, for example, the Pentagon said that the U.S. Department of Defense used replacement cost (the initial cost incurred during the life of an item/assets, as of the appraisal date) instead of depreciated cost (the difference between the cost of a specific item and its liquidation value – the amount a company expects to receive for the asset at the end of its useful life) to calculate billions of dollars in materials shipped to Ukraine.
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A $6.2 billion miscalculation paved the way for billions more in aid to be sent to Kiev.
The Pentagon said that another $2 billion in overvaluation has since been discovered. As a result, weapons worth exactly this amount may still be sent to Ukraine.
The US Government Accountability Office notes that the vague definition of value in the Foreign Assistance Act and the lack of specific guidance have led to discrepancies in reporting the cost of military aid.
In one example cited by the US Government Accountability Office, 10 vehicles were valued at $7,050,000, while the accompanying documentation indicates that they should have been valued at zero — at their residual value (the difference between the original cost and the amount of its accumulated depreciation (wear and tear).
The US Government Accountability Office has recommended that the US Congress clarify the definition of the cost of defense goods.
The Pentagon said that it agreed with all the recommendations and will work to resolve these issues.
