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Ray Bogan

Political Correspondent

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Politics

Sens. want Pentagon to stop accounting method that sends more Ukraine aid

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Ray Bogan

Political Correspondent

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Sens. Josh Hawley, R-Mo., and J.D. Vance, R-Ohio, have introduced legislation to prevent the Defense Department from making more accounting errors when sending aid to Ukraine. In June, the Pentagon revealed it had overvalued aid it provided by $6.2 billion, allowing the DOD to send more. 

The Pentagon said the accounting errors can be attributed to using the replacement cost of the equipment, not its book value. The book value is depreciated because the equipment is used and sitting in storage. The replacement cost is higher because everything has to be purchased brand new. 

“The so-called ‘valuation errors’ around U.S. aid to Ukraine is a transparent attempt to bypass Congress for additional funds, while continuing to prioritize Ukraine over more vital U.S. interests, including deterring China in the Pacific,” Sen. Hawley said in a statement.

The bill would require the Biden administration to calculate the cost of aid by using the equipment’s purchase price plus any improvements, modifications, or how much it costs to replace, whichever is greater. 

“You realize that we’re spending way more money than I think the Biden administration or the American people are fully aware of. So that’s a problem. Because if we don’t know how much we’re spending, how can we possibly evaluate whether the cost benefit calculus makes sense for the American people,” Sen. Vance told Straight Arrow News. 

In a letter to Defense Secretary Lloyd Austin, Hawley, Vance and other Republican senators said, “By using creative accounting to conceal the actual cost of supporting Ukraine, you appear to be circumventing the American people’s elected representatives. Congress, not DOD, possesses the power of the purse.” 

They asked him to answer questions including: 

  • How does DOD justify the use of net book value vice replacement costs when the equipment given to Ukraine must be replaced with new equipment?
  • How is DOD calculating the net book value of equipment given to Ukraine?

The senators want the answers by Aug. 10. 

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Sens. Josh Hawley, R-Mo., and JD Vance, R-Ohio, have introduced legislation to prevent the Defense Department from making more accounting errors when sending aid to Ukraine. In June, the Pentagon revealed it had overvalued aid it sent to Ukraine by 6.2 billion dollars, allowing the DOD to send more. 

 

The Pentagon said the accounting errors can be attributed to using the replacement cost of the equipment, not its book value. The book value is depreciated because the equipment is used and sitting in storage. The replacement cost is higher because everything is purchased brand new. 

 

(this is what i wanted, but having second thoughts, so line above is what i replaced) 

So in other words, if the Pentagon is allowed to send 10,000,000 dollars worth of equipment and the item costs one million dollars a piece, they can send ten. But if the Pentagon calculates that the items have been sitting in storage and depreciated to 500,000, they can send 20. But buying new ones to replace the stockpile still costs 1 million each. 

 

Senator Hawley said in a statement: “The so-called ‘valuation errors’ around U.S. aid to Ukraine is a transparent attempt to bypass Congress for additional funds, while continuing to prioritize Ukraine over more vital U.S. interests, including deterring China in the Pacific.”

 

The bill would require the Biden Administration to calculate the cost of aid by using the equipment’s purchase price plus any improvements or modifications, or how much it costs to replace, whichever is greater. 

 

“you realize that we’re spending way more money than I think the Biden administration or the American people are fully aware of. So that’s a problem. Because if we don’t know how much we’re spending, how can we possibly evaluate whether the cost benefit calculus makes sense for the American people,” Sen. Vance told Straight Arrow News. 

 

In a letter to Defense Secretary Lloyd Austin, Hawley, Vance and other Republicans Senators said: “By using creative accounting to conceal the actual cost of supporting Ukraine, you appear to be circumventing the American people’s elected representatives. Congress, not DOD, possesses the power of the purse.” 

 

They asked him to answer questions including: 

  1. How does DOD justify the use of net book value vice replacement costs when the equipment given to Ukraine must be replaced with new equipment?
  2. How is DOD calculating the net book value of equipment given to Ukraine?

They want those answers by August 10.