Jul 26, 2023
The Pentagon reported in late June that it overestimated the value of the weapons it supplied to Ukraine by a whopping $6.2 billion over the past two years.
The revelation came just four weeks after the Pentagon initially admitted to an accounting error of at least $3 billion — about half the current estimate. Lawmakers have been pressing the Department of Defense to ensure the funds don’t get diverted into the wrong hands or become subject to fraud.
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This new (and apparently final) estimate means the U.S. can provide more arms to Ukraine as it mounts its counteroffensive against Russia.
Here’s what happened
Pentagon spokeswoman Sabrina Singh explained in a news briefing that a detailed review of the accounting error found the military services used replacement costs instead of the book value of equipment that was drawn from U.S. stocks and provided to Ukraine.
This miscalculation inflated the cost of each new aid package, resulting in an error of $3.6 billion in the current fiscal year and $2.6 billion in the 2022 fiscal year, which ended Sept. 30.
Singh said the error in no way “impacted the provision of support to Ukraine.”
But when the Pentagon publicly disclosed the initial $3 billion accounting error in May, some Republican lawmakers believed the mistake may have reduced the amount of support for Ukraine leading up to the counteroffensive.
“The revelation of a three-billion-dollar accounting error discovered two months ago and only today shared with Congress is extremely problematic, to say the least,” wrote House Foreign Affairs Chairman Michael McCaul and House Armed Services Chairman Mike Rogers in a joint statement.
“These funds could have been used for extra supplies and weapons for the upcoming counter-offensive, instead of rationing funds to last for the remainder of the fiscal year.”
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What the US plans to do with the surplus
While Ukraine has been calling for more aid and President Joe Biden has repeatedly said the U.S. will provide support as long as needed, support has been waning, particularly among Republicans.
Concerns have been raised regarding the costs and indefinite timeline of the Russia-Ukraine war, and a recent survey from the Pew Research Center revealed 44% of Republicans and Republican-leaning independents believe the U.S. is giving too much to Ukraine.
But the revision frees up extra funds in the department’s coffers for further aid, adding to the $34 billion in security assistance the U.S. has already provided to Ukraine since 2021 through June 13.
"It’s just going to go back into the pot of money that we have allocated for the future Pentagon stock drawdowns,” Singh said.
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Serah Louis is a reporter with Moneywise.com. She enjoys tackling topical personal finance issues for young people and women and covering the latest in financial news.
