Thu, Oct 12, 2017 - Page 3 News List

US to return overpaid arms money via interest

By Lo Tien-pin and William Hetherington  /  Staff reporter, with staff writer

Following the discovery of overpayments to the US government for arms purchases, the US has agreed to adjust withdrawals and return the funds through interest payments, the National Audit Office said in a report.

The adjustment to withdrawals from the Taiwanese military’s account in the US Federal Reserve used for arms purchases will result in US$656,502 in annual interest income, the report said.

The adjustment was made after auditors found that withdrawals from the account between 2010 and 2015 exceeded the amounts of initial purchase agreements.

The office informed the Ministry of National Defense, which contacted US authorities, the report said.

The US military’s Financial Management Policy Manual stipulates that funds for weapons procurement should be transferred from the Fed to the Foreign Military Sales Trust Fund on a monthly basis, the report said, adding that once transferred, the funds no longer generate interest.

The audit discovered that from 2010 to 2015 the Defense Security Cooperation Agency, the agency that facilitates foreign arms purchases in the US, had been using roughly 60-day calculations for the monthly withdrawals.

Monthly payments over the five-year period amounted to between US$94 million and US$254 million, the report said, adding that upcoming payments would be corrected by adjusting both the amounts and times for transfers to the trust fund.

Speaking at the Legislative Yuan yesterday, ministry spokesman Major General Chen Chung-chi (陳中吉) said that interest from the ministry’s account will be transferred to government coffers, adding that the ministry is not being a “generous fool.”

Comptroller Bureau Director Lieutenant General Chen Kuo-sheng (陳國勝) said the US in April last year promised to deliver monthly financial statements to the ministry, adding that there would be no overpayments in the future.

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