Pentagon’s Accounting Error Grows To $6.2 Billion

ByAdam Andrzejewski
July 10, 2023

 

 

A previously-reported Pentagon accounting error has more than doubled, as new reports show what was thought to be a $3 billion error in aid to Ukraine now totals $6.2 billion, according to Reuters.

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The error resulted from overvaluing some of the equipment the Department of Defense sent to Ukraine, valuing older equipment as if it were brand new. This column previously quoted a Pentagon spokesperson, who explained, “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.”

This time, a Pentagon spokesperson said the additional funding was uncovered as Pentagon officials researched the situation more thoroughly and clarified protocols for valuing equipment based on Financial Management Regulation and Department of Defense policy.

The error amounts to a $2.6 billion overvaluation in 2022 and a $3.6 billion overvaluation in 2023, meaning the DoD has another $6.2 billion in military aid that it can send to Ukraine. This helps the Biden administration continue to send more money to Ukraine despite Congressional resistance to further funding.

The Pentagon is notorious for its poor financial controls. It has yet to receive a clean audit opinion, and the Government Accountability Office often cites Pentagon processes and controls as “high risk areas” for waste, fraud, and abuse. Just a few months ago, this column reported it lost track of $220 billion in equipment.

With a budget of $842 billion, and a total of $75 billion sent to support Ukraine, taxpayers can only brace themselves for additional errors that are coming.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com

This article was originally published by RealClearInvestigations and made available via RealClearWire.