Pentagon Faces Pressure Over $6.2 Billion Accounting ‘Error’ as House Panel Demands Accountability

Secretary of Defense Lloyd Austin at the Pentagon in Arlington, Va., on Nov. 29, 2022. Kevin Dietsch/Getty Images

The Pentagon is facing calls for accountability from House lawmakers over a multibillion-dollar accounting error relating to military aid to Ukraine.

“Our committee is alarmed by the Pentagon’s financial management practices, particularly regarding the recent overestimation in the value of weapons sent to Ukraine by $6.2 billion,” the Republican-led House Oversight Committee said in a statement on July 7.

Earlier in June, the Department of Defense (DoD) said it had overcounted the value of the weapons it sent to Ukraine over the past two years by $6.2 billion, calling the incident a series of “valuation errors.”

Now the Pentagon is facing more scrutiny over the error as lawmakers in Congress are demanding a briefing to grill Pentagon officials on how these accounting mistakes occurred and what improvements should be made to the DOD’s financial management systems to prevent similar problems in the future.

“DOD’s recently discovered ‘accounting error’ of $6.2 billion is yet another example of the failures within DOD’s financial management systems, and raises more concerns about DOD’s ability to protect taxpayer funds,” House Oversight Committee Chairman Rep. James Comer (R-Ky.) and Subcommittee on National Security Chairman Rep. Glenn Grothman (R-Wi.) wrote in a letter to Secretary of Defense Lloyd Austin (pdf).

The two lawmakers demanded a briefing from the Pentagon on how it plans to use the $6.2 billion in taxpayer funds that are now available and what kind of accountability mechanisms are in place within the DOD to make sure that taxpayer funds “are spent properly and similar errors do not occur in the future.”

Comer and Grothman added that they would also demand to learn during the briefing how the Pentagon is making sure that weapons stockpiles that are vital for America’s national security are being replenished.

The Pentagon did not immediately respond to a request for comment from The Epoch Times.

The Pentagon building is seen in Washington in a file photograph. AFP via Getty Images

The letter follows the July 6 announcement of a joint hearing by the Oversight Committee and the Subcommittee on National Security, which aims to examine the financial practices of the Pentagon.

“For too long the Department of Defense has operated on its own terms and has clearly failed to ensure taxpayer dollars are not lost to waste, fraud, or abuse,” Subcommittee Chairmen Grothman and Rep. Pete Sessions (R-Texas) said in a statement.

“It’s time to examine how a lack of accountability within DoD has resulted in failed audits and consider meaningful solutions to make sure DoD has the tools necessary to ensure fiscal responsibility,” they added.

More Details

When the Pentagon announced the accounting error in June, a spokesperson said that the mistake occurred because U.S. military officials didn’t count the actual value of depleted weapons stockpiles but instead used the value of the replacing the weapons.

“In a significant number of cases, services used replacement costs rather than net book value, thereby overestimating the value of the equipment drawn down from U.S. stocks and provided to Ukraine,” said deputy Pentagon press secretary Sabrina Singh.

Specifically, there was an error of $2.6 billion in the 2022 fiscal year and $3.6 billion in the current fiscal year, which ends on Sept. 30.

“We have confirmed that for FY23, the final calculation is $3.6 billion, and for FY22 it is $2.6 billion, for a combined total of $6.2 billion,” Ms. Singh added. “These valuation errors in no way limit or restricted the size of any of our PDAs or impacted the provision of support to Ukraine.”

Presidential drawdown authority, or PDA, is a mechanism the Biden administration is using to expedite the transfer of weapons and other equipment to Ukraine.

The final calculation of the accounting error was almost twice as high as what the Pentagon estimated in May.

Ukraine Counteroffensive

Ukraine’s counter-offensive against Russian forces is going more slowly than some expected, but it remains too early to draw conclusions about Kyiv’s prospects for battlefield gains, a senior Pentagon official said on Friday.

The United States and other allies have spent months building Ukraine a so-called “mountain of steel” of weaponry and training Ukrainian forces in combined arms techniques to help Kyiv pierce formidable Russian defenses during its counter-offensive.

Ukrainian servicemen ride on a tank not far from the front line in the Kharkiv region, on July 6, 2023, amid the Russian invasion of Ukraine. Sergey Bobok/AFP via Getty Images

But Russia also spent months digging into defensive positions, surrounding them with landmines and building heavily armed fortifications that have made Ukrainian advances in the east and south slow and bloody.

Colin Kahl, the Pentagon’s top policy advisor, told reporters Russia was more successful digging in “than perhaps was fully appreciated.”

He expressed confidence Kyiv was doing its best in a difficult fight.

“It’s too early to judge how the counter offensive is going one way or the other because we’re at the beginning of the middle,” Mr. Kahl said at the Pentagon.

“They are still probing Russian lines (and) Russian areas for weak spots. And the real test will be when they identify those, how rapidly they’re able to exploit those weak spots.”

Mr. Kahl’s remarks came as he announced the provision of cluster munitions that the Pentagon hopes will help ensure Ukraine has enough firepower.

Bill Pan and Reuters contributed to this report.