The Department of Defense Office of Inspector General will begin auditing the valuation of equipment and other assets used to support Ukraine during its war with Russia.
This month’s Audit of the Valuation of Assets Provided Under Presidential Drawdown Authority to Ukraine aims to investigate policy compliance among DOD components involved in estimating and updating the value of such items, DOD IG Robert Storch said Wednesday.
The review follows DOD’s press statements in March and June, disclosing that equipment sent to Ukraine were overvalued by $2.6 billion in fiscal year 2022 and $3.6 billion in FY 2023. The agency attributed the discrepancy to the interchanging use of the term “replacement cost” with “net book value” in the estimation process.
The audits will be conducted at the following DOD divisions:
- Assistant Secretary of the Air Force, Financial Management and Comptroller
- Defense Security Cooperation Agency
- Office of the Assistant Secretary of the Army (Acquisition, Logistics, and Technology)
- Office of the Assistant Secretary of the Army for Financial Management and Comptroller
- Office of the Assistant Secretary of the Navy, Financial Management and Comptroller
- Office of the Undersecretary of Defense (Comptroller)/Chief Financial Officer
- U.S. Marine Corps Financial Operations
“The DoD OIG has concerns that the DoD’s valuation policy for equipment, munitions, and inventory provided under PDA is not being consistently applied,” Storch explained. “The use of PDA has rapidly expanded to support Ukraine, from $100 million to $14.5 billion per fiscal year. DoD policy must comply with Federal laws and regulations, and it is important that it be consistently applied across the DoD.”
Storch added that the audit could also inform the government’s approach regarding the use of PDA for other allies moving forward.