Inspector General Robert P. Storch announced today that the Department of Defense Office of Inspector General (DoD OIG) released the “Audit of the DoD’s Execution of Funds to Assist Ukraine.” This audit determined whether the DoD used assistance funds in accordance with the Ukraine Supplemental Appropriations Acts and DoD policies.
“Robust internal controls are the backbone for efficiency and accountability,” said IG Storch. “Without fully effective controls, the DoD could jeopardize its ability to fulfill its financial responsibilities and achieve its mission.”
The DoD OIG found that the DoD did not have adequate internal controls to ensure supporting documentation was available and accurate in accordance with federal laws and DoD policies. The audit also identified that the DoD Financial Management Regulation did not require DoD Components to document the justification of payments that use supplemental funds for a specific purpose, such as documentation supporting the use of the Disaster Emergency Fund Code value. The DoD OIG examined disbursement transactions executed from January to December 2022 totaling $2.1 billion. The DoD OIG audit revealed that the DoD did not provide sufficient documentation to support the justification or accuracy of half that total—$1.1 billion.
As a result, the DoD lacks assurance that $1.1 billion of Ukraine supplemental funds were used as intended, and the DoD OIG considers them questioned costs because, at the time of the audit, the purpose and the accuracy of the costs were not supported by adequate documentation. Without sufficient documentation to justify and verify these payments, the DoD cannot provide assurance or transparency to the public, DoD leadership, or Congress regarding using the Ukraine assistance funds. Additionally, if the DoD does not implement the recommendations in this report, the control issues identified could also apply to the more than $76 billion of additional Ukraine supplemental funding appropriated after 2022.
The DoD OIG made five recommendations to DoD management, including that the Under Secretary of Defense (Comptroller)/Chief Financial Officer, in coordination with the Under Secretary of Defense for Policy, develop and implement guidance that requires DoD Components to document the justification of payments that use supplemental funding appropriated for a specific purpose. The DoD OIG also recommended a review of the supporting documentation for the questioned costs to determine whether the payments were accurate and supported the Ukraine assistance mission.
The DoD OIG will continue to monitor the DoD’s implementation of the recommendations in this report.