Ukraine Assistance: Actions Needed to Properly Value Defense Articles Provided Under Presidential Drawdown Authority
Fast Facts
Presidential Drawdown Authority allows the President to provide defense items such as ammunition and missiles from DOD's inventories to respond to foreign crises. In 2023, DOD notified Congress that it had misvalued items given to Ukraine in FYs 22 and 23 by about $6.2 billion.
The law that includes this authority doesn't clearly define "value" as it relates to the authority. Also, DOD doesn't have valuation guidance specific to this authority, so it can't be assured that it will value these items accurately.
Our recommendations include that Congress consider clarifying the definition of "value" in this context and that DOD update its guidance.
Highlights
What GAO Found
Presidential Drawdown Authority (PDA), as authorized in the Foreign Assistance Act of 1961, enables the President to direct the drawdown of defense articles and services from U.S. agencies' stocks to respond to foreign crises. Drawdown defense articles are primarily supplied by the Department of Defense (DOD) and may include articles such as ammunition, vehicles, clothing, and medical equipment. From August 2021 through March 2024, the President used PDA to authorize almost $24 billion in drawdowns for Ukraine.
GAO found that DOD's efforts to properly value defense articles for drawdown are hampered because the Foreign Assistance Act does not clearly define certain terms and DOD lacks PDA-specific valuation guidance. First, the Foreign Assistance Act is not clear on the definition of “value” or the purpose of the maximum aggregate value as they relate to articles provided under PDA. This affects DOD's ability to establish clear guidance for valuing defense articles under PDA. Second, though DOD has accounting policy for valuing defense articles, it is not specific to valuation for PDA purposes. Not having specific guidance on methods for valuing articles provided under PDA affects the values given to those articles (see figure). As a result, DOD cannot have assurance that the articles will be valued accurately, which may result in a miscalculation of the remaining presidential determination authorization amount.
Comparison of Values Derived from Different Valuation Methods
At the DOD component level, GAO found that some components did not consistently follow DOD's accounting policy as instructed when valuing defense articles for PDA. GAO estimates that about 12 percent of all defense articles provided to Ukraine under PDA were valued using methods that did not comply with DOD guidance and may need to be revalued. Moreover, GAO estimates that about 61 percent of the reported values do not have appropriate supporting documentation, which leads to the inability to verify the valuation. Without component-specific procedures to ensure that the methods used comply with DOD guidance and are appropriately documented, DOD cannot ensure that the values are accurately calculated across the components for PDA purposes.
Why GAO Did This Study
In 2023, DOD notified Congress that it had misvalued certain defense articles provided under PDA to Ukraine by about $6.2 billion, in total. This amount was subsequently still available for use as PDA assistance.
The Consolidated Appropriations Act, 2023 included a provision for GAO to conduct oversight, including audits and investigations, of amounts appropriated in response to the war-related situation in Ukraine. Also, we were asked to review DOD's accounting of all defense articles provided to Ukraine under PDA. This report examines the extent to which the methods DOD used to value defense articles provided to Ukraine under PDA have been consistent with DOD guidance, among other objectives.
GAO reviewed DOD guidance and interviewed DOD officials. GAO also selected a statistical sample of line-item records of defense articles provided to Ukraine under PDA to estimate the extent to which the valuation methods used aligned with DOD guidance.
Recommendations
GAO is recommending that Congress consider clarifying the definition of “value” as it relates to defense articles provided under PDA. GAO is also making seven recommendations to DOD, including that it update guidance to include a PDA-specific valuation section and develop component-specific valuation procedures for PDA. DOD concurred with all seven recommendations and cited actions it will take to address them.
Matter for Congressional Consideration
Matter | Status | Comments |
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Congress should consider clarifying the definition of "value" as it relates to defense articles provided under PDA, as described in the Foreign Assistance Act of 1961, to help ensure appropriate application of statutory aggregate value caps. (Matter for Congressional Consideration 1) | As of February 2025, no legislation has been enacted to address this Matter. |
Recommendations for Executive Action
Agency Affected | Recommendation | Status |
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Department of Defense | The Secretary of Defense should ensure that the Under Secretary of Defense (Comptroller) (1) identifies PDA-specific method(s) to value defense articles and (2) updates existing guidance to include a PDA-specific section on valuation. (Recommendation 1) |
The Department of Defense (DOD) concurred with this recommendation. DOD issued a policy memorandum dated June 18, 2024, requiring the military departments to reconcile their records of past transfers of defense articles to the Government of Ukraine using Presidential Drawdown Authority (PDA), following its updated valuation guidance-Valuation and Reconciliation of Defense Articles Provided Under the Presidential Drawdown Authority. DOD is currently in the process of updating existing guidance to include a PDA-specific section on valuation, with the expected completion date of December 2025. We will continue to follow-up with DOD on the status of this recommendation.
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Department of Defense | The Secretary of Defense should ensure that the Secretary of the Army develops and documents policies and procedures for the Army to (1) calculate values for defense articles provided under PDA that comply with DOD guidance and (2) maintain supporting documentation for the valuation methods used and the values calculated. (Recommendation 2) |
The Department of Defense (DOD) concurred with this recommendation. The Army is currently in the process of updating its policies and regulations to value defense articles provided under the Presidential Drawdown Authority (PDA) in accordance with the Office of Under Secretary of Defense (Comptroller) updated valuation guidance. The estimated completion date for this recommendation is May 2025. We will continue to follow-up with DOD on the status of this recommendation.
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Department of Defense | The Secretary of Defense should ensure that the Secretary of the Navy develops and documents policies and procedures for the Navy to (1) calculate values for defense articles provided under PDA that comply with DOD guidance and (2) maintain supporting documentation for the valuation methods used and the values calculated. (Recommendation 3) |
The Department of Defense (DOD) concurred with this recommendation. The Navy provided GAO with its closure documentation to address the recommendation in February 2025. GAO is currently reviewing the policy memorandum to determine if the memorandum addressed the recommendation and if needed, will follow-up with Navy on any questions regarding the closure documentation.
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Department of Defense | The Secretary of Defense should ensure that the Secretary of the Air Force develops and documents policies and procedures for the Air Force to (1) calculate values for defense articles provided under PDA that comply with DOD guidance and (2) maintain supporting documentation for the valuation methods used and the values calculated. (Recommendation 4) |
The Department of Defense (DOD) concurred with this recommendation. In response to this recommendation, the Air Force is in the process of developing procedures to ensure controls are in place over valuing defense articles provided under Presidential Drawdown Authority (PDA), including developing individual component-specific guidance and procedures for PDA valuation that are consistent with DOD policy. The estimated completion date for this recommendation is September 2025. We will continue to follow-up with DOD on the status of this recommendation.
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Department of Defense | The Secretary of Defense should ensure that the Secretary of the Navy together with the Commandant of the Marine Corps develop and document policies and procedures for the Marine Corps to (1) calculate values for defense articles provided under PDA that comply with DOD guidance and (2) maintain supporting documentation for the valuation methods used and the values calculated. (Recommendation 5) |
The Department of Defense (DOD) concurred with this recommendation. In response to this recommendation, the Marine Corps stated that it has developed and documented policy to calculate values for defense articles provided under the Presidential Drawdown Authority (PDA) that comply with DOD guidance. The estimated completion date of this recommendation was January 2025. In February 2025, GAO requested the closure documents for this recommendation. We will continue to follow-up with DOD on the status of the closure documentation or for an updated completion date.
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Department of Defense | The Secretary of Defense should ensure that the Commander of the United States Special Operations Command develops and documents policies and procedures for the Special Operations Command to (1) calculate values for defense articles provided under PDA that comply with DOD guidance and (2) maintain supporting documentation for the valuation methods used and the values calculated. (Recommendation 6) | The Department of Defense (DOD) concurred with this recommendation. In response to this recommendation, the United States Special Operation Command (USSOCOM) stated that it had performed reconciliation of defense articles provided to Ukraine under the Presidential Drawdown Authority (PDA) to ensure the articles are valued in accordance with the new DOD valuation policy. Also, USSOCOM has revised internal policies and procedures to comply with recently clarified DOD guidance for maintaining supporting documentation for valuation methods used to calculate the value of articles provided in support of PDA. The estimated completion date of this recommendation was January 2025. In February...
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Department of Defense | The Secretary of Defense should ensure that the Under Secretary of Defense for Policy documents procedures for maintaining PDA valuation data, such as in the PD Tracker, including steps for (1) compiling, entering, reviewing, verifying, and validating the data and (2) how the DOD components should perform their reviews. (Recommendation 7) | The Department of Defense (DOD) concurred with this recommendation. In response to this recommendation, the Defense Security Cooperation Agency stated that it has documented procedures for maintaining and updating Presidential Drawdown Authority (PDA) valuation data in the Presidential Drawdown Tracker, including automated data integration, weekly updates, cross-checks for accuracy, and regular audits to ensure data integrity, security, and compliance with DOD review requirements. The estimated completion date of this recommendation was January 2025. In February 2025, GAO requested the closure documents for this recommendation. We will continue to follow-up with DOD on the status of the...
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