A U.S. accounting error could bring Kyiv billions of dollars more in weapons

The Pentagon overestimated by about $3 billion the value of the ammunition, missiles, and other equipment it sent to Ukraine, a Senate aide and a defense official said Thursday. This is a mistake that could lead to more weapons being sent to Kyiv for the Ukrainian defense, Reuters reported exclusively.

The mistake was the result of overvaluing weapons that were taken from U.S. warehouses and then shipped to Ukraine, two senior defense officials said Thursday.

“We found inconsistencies in the way we evaluated the equipment we gave” to Ukraine, one senior defense official told Reuters. The Senate staff and aide spoke on condition of anonymity. Congress will be notified of the accounting adjustment on Thursday, the sources said.

The defense official said it’s possible the gap in the weapons overestimation could grow to more than $3 billion as the Pentagon investigates the situation more thoroughly.

The explanation is that in its accounting when evaluating military aid, the Pentagon uses the price at which the inventory should be restored, instead of the current value of the weapon, when it has already been depreciated at the time of purchase, senior defense officials said.

In the case of the 155mm howitzer ammunition, more than 1.5 million of which were shipped to Ukraine, each costs about $800 today. But the actual cost of each projectile, which has been delivered to the U.S. military every year for several decades, can average out to a much lower cost, one senior defense official said.

As of August 2021, the United States has sent approximately $21.1 billion worth of weapons from its stockpile to Ukraine.

While it’s uncertain how Congress will react to the news, the equipment rating change could delay the need for the Biden administration to ask Congress for more funds for Ukraine as the battle to raise the U.S. debt ceiling before June 1 intensifies.

The US has sent a wide variety of equipment to Ukraine in 37 packages thanks to a presidential stockpile order, including launchers for the High Mobility Artillery Missile System (HIMARS), Javelin anti-tank weapons, and the Patriot surface-to-air missile system.

“The individual branches of the armed forces — the Army, the Navy, the Air Force, the Marine Corps — used the current replacement cost of the item,” said one senior defense official.

A March 31 memo seen by Reuters explains to senior accountants in each branch of the armed forces which method should be used, citing existing regulations.

It will take time to work out the accounting for billions of dollars worth of equipment sent to Ukraine, senior defense officials said.