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Agency paid US for defense equipment despite discrepancies in papers

The Defense Ministry's Acquisition, Technology and Logistics Agency (ATLA) has settled payments for defense equipment it procured from the United States despite major discrepancies between the delivery slips and settlement notes, the Board of Audit of Japan has found.

    The ATLA's failure to closely examine the documents provided by the U.S. for the procurement under the Foreign Military Sales (FMS) arrangement, and its compliance with the latter's potential asking price may spark criticism at home.

    The U.S. has sent to the ATLA delivery slips and quarterly settlement notes, which each list the names of procured items, numbers and volumes of the items, as well as identification numbers. The Board of Audit checked the statements regarding 64 cases of contracts for Aegis vessels, early-warning aircraft and other equipment, whose purchase costs totaling 67.1 billion yen were finalized in fiscal 2014 and 2015.

    As a result, it emerged that in 48 of those contracts, none of the three entries on the delivery slips -- names of procured items, their numbers and volumes and their identification numbers -- matched those in the settlement notes. In the remaining 16 cases, those items matched only partially. The revelation suggests that the ATLA has been involved in the kind of deals that are impossible in ordinary business transactions.

    The ATLA was quoted as explaining to the Board of Audit, "We have asked the U.S. to provide as much explanation as possible to try to get to the bottom of the allegations, but it would be difficult to reveal the whole picture." Because the ATLA has not kept related documents such as its inquiries to the U.S., the Board of Audit complains that it is unclear whether sufficient efforts have been made to clarify the cases.

    On Oct. 26, the Board of Audit instructed the ATLA to probe the cause of those discrepancies by asking for cooperation from the U.S. and to record and preserve the processes of checking the relevant papers against each other.

    "There were cases in which the U.S. gave us no answers to our inquiries, and we've been trying to confirm by comparing the delivered equipment against the documents," an ATLA representative told the Mainichi Shimbun. "We have previously requested the U.S. to make improvements, but we'll step up our requests upon accusations by the Board of Audit."

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