The National Audit Office has asked the Ministry of National Defense to consider offering the US standby letters of credit or other means acceptable to Washington so that Taiwan can free up billions in military purchase funds.
The audit office made the suggestion in its general budget evaluation report for this year, released on Thursday.
The ministry has mainly dealt with the US in its efforts to modernize its equipment and arms, having signed 419 ongoing or expected military purchases worth US$54.23 billion, or about NT$1.68 trillion according to December last year’s exchange rate of NT$30.98 to the US dollar, the audit office said in the report.
Photo courtesy of Ministry of National Defense via CNA
Of the NT$1.68 trillion in purchases, the US had delivered munitions and equipment worth NT$850.39 billion as of December last year, it said.
The audit office also urged the Ministry of National Defense to try to settle accounts with Washington and regain NT$5.2 billion (US$165.66 million at the current exchange rate) in funds set aside in accounts in the US for military purchases made before 2011.
As of December, the ministry needed to clear the accounts for 25 projects dating back to 2011, the report said, adding that delivery has been completed for these projects and all extraneous costs have been paid, the report said.
The funds that have yet to be regained from these accounts have been held back due to reasons such as disputes between the US and contractors or purchases that were awaiting approval from the US Defense Contract Audit Agency, it said.
The audit office requested that the ministry contact the US and ask for the money back, while providing written assurances that the ministry would pay for any additional costs incurred during the account settlement process.
It also said that the ministry could offer to have the US return the funds after it has deducted a sum for administrative or legal costs.
The ministry said the US Defense Contract Audit Agency could only complete remuneration for about 25 projects simultaneously due to a lack of personnel and the complexity of the projects.
The ministry cited US agency as saying that it could prioritize returning the funds for accounts that do not involve disputes and have been settled, which would come to US$7.07 million.
The US agency said it would continue to assess how much funding from the other projects could be returned, the ministry said.
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