NEW REPORT: Pentagon’s Ukraine Aid Accounting Errors Reach $8.2 Billion

Guest Post by: Miriam Judith

On July 25, the U.S. Government Accountability Office (GAO) released a damning report revealing an additional $2 billion in accounting errors related to the Pentagon’s aid to Ukraine.

This discovery compounds the $6.2 billion overestimation previously disclosed, bringing the total to an alarming $8.2 billion in misallocated funds.

The discrepancies arose from the Pentagon’s use of “replacement value” instead of “depreciated value” in calculating the aid provided under the Presidential Drawdown Authority (PDA). The PDA, authorized by the Foreign Assistance Act of 1961, allows the President to direct the transfer of defense articles and services from U.S. stocks to address foreign crises. Since August 2021, this authority has enabled nearly $24 billion in drawdowns for Ukraine.

In 2023, the Department of Defense (DOD) acknowledged that it had misvalued certain defense articles by approximately $6.2 billion. This amount, still available for use under PDA, was a major issue highlighted by the GAO. The Consolidated Appropriations Act of 2023 mandated the GAO to audit and investigate the valuation of defense articles provided to Ukraine.

The recent GAO report scrutinized the methods used by the DOD to value these articles and found that the existing guidance was inconsistent and insufficient.

The GAO’s investigation uncovered that approximately 12 percent of defense articles provided under PDA were valued using methods not in compliance with DOD guidance. Additionally, about 61 percent of the reported values lacked appropriate supporting documentation, making it difficult to verify their accuracy.

The report indicates that the Foreign Assistance Act does not clearly define key terms such as “value,” which complicates the DOD’s ability to establish precise valuation methods.

To address these issues, the GAO has recommended that Congress consider clarifying the definition of “value” in relation to PDA and that the DOD update its guidance to include specific valuation procedures for PDA.

The DOD has concurred with these recommendations and outlined actions to rectify the deficiencies.

The continued revelation of these errors raise critical questions about where the misallocated funds have gone. As the U.S. government struggles to manage its expenditures, the substantial overestimations in aid funding underscore the need for greater accountability and precision in financial reporting.

The mismanagement of these taxpayer dollars not only represents a failure in fiscal responsibility but also comes at a time when many Americans are facing economic difficulties.