US miscalculation in defense item valuation yields $2 bn more for Ukraine aid

The US Department of Defense has uncovered an additional $2 billion in funds available for military assistance to Ukraine due to accounting errors, according to according to a US Government Accountability Office report released on July 25. As reported by RFE/RL and Reuters, this discovery will allow for the provision of extra weaponry to Ukraine.

This situation mirrors a similar occurrence last year when the Pentagon reported an overvaluation of weapons supplied to Ukraine in 2022-2023. That error resulted in an additional $6.2 billion becoming available for further deliveries. Reuters says the US Department of Defense revealed that staff had used “replacement value” instead of “depreciated value” to calculate the billions in materials sent to Ukraine, resulting in the error.

The Government Accountability Office (GAO) report highlights that since then, the Pentagon has discovered $2 billion more in overstatements. This miscalculation allows for an additional $2 billion worth of arms to be sent to Ukraine within the aid amount approved by the Biden administration.

The Government Accountability Office issued seven recommendations to the Pentagon to improve valuation methods for Presidential Drawdown Authority, including specific guidelines and procedures, all of which the Pentagon has accepted. They also suggested Congress clarify the value definition for defense articles, as vague terms have caused inconsistencies in reporting military aid values, particularly with items sent to Ukraine where replacement costs were mistakenly used instead of purchase prices and depreciation.

On 20 April this year, the US House of Representatives approved a national security bill allocating $95 billion in military aid for Ukraine, Israel, and other US allies. Approximately $61 billion of this amount was earmarked for Ukraine.

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