Waste of the Day: Navy Spent More Than Allowed On Ukraine War

Topline: Three times during 2022, the Navy accidentally spent more in Ukraine than was approved, totaling $399 million in excess spending.

Navy overspending

Key facts: A new inspector general audit reviewed funds awarded by three 2022 spending bills that gave the Department of Defense $34.4 billion to spend in Ukraine. The Navy received $1.7 billion of that money.

Because of poor oversight, the Navy spent $2.1 billion — 24% more than allowed.

Most of the overspending came in June 2022. The errors were not caught until July, so the Navy altered its records to move money into its Ukraine account.

The Defense Finance and Accounting Service quickly contacted the Navy to ask if systems were in place to prevent further overspending. The Navy admitted that its financial system had no automated way to stop overspending and it could occur again.

That’s exactly what happened in September 2022, when the Navy overspent by $61.3 million and had to adjust its accounting records two more times.

Each time, the Navy pulled money from its operations and maintenance account to make up the $399 million difference. The account contained almost $65 billion in 2022, per budget documents, and should have been spent on U.S. defense.

The inspector general said the mistakes happened because the Navy still has not fixed an accounting issue identified in 2018 that may cause transactions to be recorded incorrectly. The Navy does not plan to fix the problem until 2026, according to the audit.

No audit

Background: The Navy has never passed a full financial audit, even though it’s required to by law. It received a “disclaimer of opinion” in 2023, meaning its accounting is so poor that auditors could not determine if the Navy’s financial statements are accurate.

Sixteen of the Pentagon’s 25 subcomponents received disclaimers last year, auditors at OpenTheBooks.com found.

The Navy’s goal is to pass an audit by 2028, the inspector general report says.

The Pentagon also previously failed to track $1 billion of weapons in Ukraine.

Critical quote: The inspector general wrote that “The Navy does not have the proper visibility of the execution of funds to prevent the over-execution of funds or a potential Antideficiency Act violation. This lack of controls also increases the likelihood that the Navy’s reporting of its execution of the Ukraine supplemental funds will be unreliable.”

The Antideficiency Act bans agencies from spending funds before they have been appropriated.

Summary: Spending $399 million on an overseas war without Congressional approval is a startling and illegal use of taxpayer money.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com.

This article was originally published by RealClearInvestigations and made available via RealClearWire.