Cooperative Threat Reduction: DOD's 1997-98 Reports on Accounting for Assistance Were Late and Incomplete (Letter Report, 03/15/2000, GAO/NSIAD-00-40)
Pursuant to a legislative requirement, GAO reviewed the Department of
Defense's (DOD) calendar years 1997 and 1998 accounting reports for the
Cooperative Threat Reduction (CTR) program, which provides assistance to
the former Soviet Union, focusing on each report's: (1) compliance with
its respective deadline for submission to Congress; and (2) accuracy and
completeness.
GAO noted that: (1) DOD was 16 months late in submitting its CTR
accounting report for 1997 to Congress and more than 10 months late in
submitting its report for 1998 to Congress; (2) the delays associated
with both reports were primarily due to DOD's prolonged review of the
draft reports and the relatively low priority that its officials placed
on ensuring the reports' timely submission; (3) the 1998 report's
submission was also delayed because DOD did not clearly communicate to
the Department of State the type of information State needed to provide
DOD for the report and the deadline for its submission; (4) these delays
denied Congress information concerning the status of previous assistance
provided to the former Soviet states while Congress considered the
appropriation of fiscal year 1999 and 2000 funds for the CTR program;
(5) DOD did not provide complete and fully accurate information in its
1997 and 1998 accounting reports; and (6) the reports: (a) failed to
list more than $27 million of CTR equipment that DOD provided to
recipient states during a 3-month period in 1997; (b) listed only a
single form of CTR assistance--equipment transferred to recipient
states, (that represented less than 19 percent of the program's
1997-1998 expenditures)--rather than all assistance provided; (c)
described where the equipment was located at the time of its transfer to
the recipients' custody (rather than where it was actually located at
the time of the reports) and failed to describe the location or
condition of other forms of assistance, such as contractor-provided
services; (d) contained either unsupportable or overstated estimates of
the percentage of equipment that DOD had audited in determining that
assistance was being used as intended; (e) did not include complete
information on how State and the Department of Energy (DOE) used CTR
funds, largely because DOD did not clearly communicate its information
needs to those agencies; and (f) the 1998 report did not include
specific information on Russia's arsenal of tactical nuclear warheads.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: NSIAD-00-40
TITLE: Cooperative Threat Reduction: DOD's 1997-98 Reports on
Accounting for Assistance Were Late and Incomplete
DATE: 03/15/2000
SUBJECT: Nuclear weapons
Nuclear proliferation
Federal aid to foreign countries
International cooperation
International relations
Arms control agreements
Noncompliance
Reporting requirements
Foreign aid programs
IDENTIFIER: DOD Cooperative Threat Reduction Program
Soviet Union
Russia
Ukraine
Kazakhstan
Belarus
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO Testimony. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
******************************************************************
GAO/NSIAD-00-40
Appendix I: Equipment Transferred by the Department of
Defense to Recipient States From October 1, 1997, Through
December 31, 1997
24
Appendix II: Department of Defense Projects for Which No
Information Was Given on the Condition of Assistance
Provided
27
Appendix III: Department of Defense Projects for Which No
Determination Was Made About the Usage of Assistance
Provided for the Intended Purposes
29
Appendix IV: Comments From the Department of Defense
31
Figure 1: Lateness of Department of Defense Cooperative
Threat Reduction Accounting Reports, 1994-98 7
Figure 2: Percent of Cooperative Threat Reduction
Expenditures Spent on Equipment Transferred to
Former Soviet States, 1993-98 10
Figure 3: Cooperative Threat Reduction Expenditures
Compared to the Value of Equipment Transferred, 1993-98 11
DOD Department of Defense
National Security and
International Affairs Division
B-284030
March 15, 2000
Congressional Committees
Since 1992, Congress has authorized the Department of Defense (DOD) to
obligate almost $3.2 billion for DOD's Cooperative Threat Reduction program.
This program is intended to help former Soviet states (1) destroy their
weapons of mass destruction, (2) safely store and transport such weapons in
connection with their destruction, and (3) reduce the risk of their
proliferation. The program provides most of its assistance in the form of
goods and services, including equipment, logistics support, training, and
integrated project management.
To help guard against the possibility that recipient states could misuse
this assistance, Congress directed the Secretary of Defense to prepare an
annual report on U.S. efforts to account for the assistance and ensure its
proper use.1 The Secretary is required to submit an accounting report to
Congress by January 31st of each year.2 The report is to include (1) a list
of Cooperative Threat Reduction assistance provided, (2) a description of
the current location and condition of the assistance provided, (3) a
determination of whether the assistance has been used for its intended
purpose, and (4) a description of the activities planned for the next year
to ensure that the assistance is fully accounted for and used for its
intended purpose. In addition, reports submitted after September 30, 1999,
are to include specific information regarding Russia's arsenal of tactical
nuclear warheads.3
To date, DOD has provided Congress with five reports on Cooperative Threat
Reduction assistance. In each case, DOD summarized its auditing and
examinations activities and concluded that the former Soviet states were
using the assistance as intended. DOD's two most recently submitted reports
covered calendar years 1997 and 1998.
Congress has directed the Comptroller General of the United States to assess
each of DOD's accounting reports after DOD submits them to Congress.4
Accordingly, this report assesses DOD's two most recent accounting reports
in terms of
· each report's compliance with its respective deadline for submission to
Congress; and
· the accuracy and completeness of each report, specifically the extent to
which it lists all of the assistance provided; describes the assistance's
location and condition; provides a determination regarding whether the
assistance was used for its intended purpose; includes DOD's plans to
account for the assistance during the following year; and, for the 1998
report, contains specific information on Russia's arsenal of tactical
nuclear warheads.5
DOD was 16 months late in submitting its Cooperative Threat Reduction
accounting report for 1997 to Congress and more than 10 months late in
submitting its report for 1998 to Congress. The delays associated with both
reports were primarily due to DOD's prolonged review of the draft reports
and the relatively low priority that its officials placed on ensuring the
reports' timely submission. The 1998 report's submission was also delayed
because DOD did not clearly communicate to the Department of State the type
of information State needed to provide DOD for the report and the deadline
for its submission. These delays denied Congress information concerning the
status of previous assistance provided to the former Soviet states while
Congress considered the appropriation of fiscal year 1999 and 2000 funds for
the Cooperative Threat Reduction program.
DOD did not provide complete and fully accurate information in its 1997 and
1998 accounting reports. For example, the reports
· failed to list more than $27 million of Cooperative Threat Reduction
equipment that DOD provided to recipient states during a 3-month period in
1997;
· listed only a single form of Cooperative Threat Reduction
assistance−equipment transferred to recipient states (that represented
less than 19 percent of the program's 1997-98 expenditures)--rather than all
assistance provided;
· described where the equipment was located at the time of its transfer to
the recipients' custody (rather than where it was actually located at the
time of the reports) and failed to describe the location or condition of
other forms of assistance, such as contractor-provided services;
· contained either unsupportable or overstated estimates of the percentage
of equipment that DOD had audited in determining that assistance was being
used as intended; and
· did not include complete information on how the Departments of State and
Energy used Cooperative Threat Reduction funds, largely because DOD did not
clearly communicate its information needs to those agencies.
In addition, the 1998 report did not include specific information on
Russia's arsenal of tactical nuclear warheads.
Our report recommends that the Secretary of Defense establish
(1) mechanisms to ensure that future reports are submitted to Congress by
January 31 of each year, (2) quality controls and processes to ensure that
future reports contain more complete and accurate information, and
(3) clear guidance to other executive branch agencies concerning the type of
information that DOD needs and the deadline for submitting such information
for future accounting reports.
The 1991 collapse of the Soviet Union left Russia, Ukraine, Kazakhstan, and
Belarus with a legacy of about 30,000 nuclear weapons, 2,500 strategic
nuclear delivery systems, and at least 40,000 metric tons of chemical
weapons. In response, Congress authorized DOD to initiate a cooperative
program to reduce the threat of former Soviet weapons of mass destruction.
To date, DOD has obligated about $2.2 billion of the almost $3.2 billion
that Congress has authorized for Cooperative Threat Reduction projects and
expended about $1.7 billion. Most of these funds have been allocated for
destroying and dismantling weapons and delivery systems and for improving
controls over nuclear weapons and materials.
DOD rarely provides Cooperative Threat Reduction funds directly to Russia,
Ukraine, Kazakhstan, Belarus, and other recipient states.6 Instead, it
generally hires contractors to perform specified tasks or obtains equipment
for transfer to the custody of former Soviet states. DOD also uses
Cooperative Threat Reduction funds to support activities managed by other
executive branch agencies. For example, it has provided Cooperative Threat
Reduction funds to the Department of Energy to help protect, control, and
account for former Soviet nuclear materials. DOD has also provided
Cooperative Threat Reduction funds to the Departments of State and Energy
and to the Civilian Research and Development Foundation7 to help support
former Soviet weapons scientists who are now conducting peaceful research.
The Department of State disperses its share of these funds through two
international science and technology centers in Russia and Ukraine.8 DOD
officials told us that the Russian center will receive about $57 million in
Cooperative Threat Reduction funds from the year 2000 through 2005 to help
reduce the threat of biological weapons proliferation.
DOD relies on multiple methods to account for Cooperative Threat Reduction
assistance and to ensure that it is used as intended. In addition to
overseeing its contractors, DOD inspectors audit and examine equipment
transferred to the custody of recipient states. DOD also sends Cooperative
Threat Reduction program and project managers to review the progress of
projects on-site. It relies on the Departments of Energy and State to ensure
that Cooperative Threat Reduction funds provided to those agencies are being
used as intended. For its program to help protect, control, and account for
former Soviet nuclear materials, the Department of Energy has instituted a
system that relies primarily on project managers to certify that the
assistance it provides is being executed effectively and used for its
intended purposes. For its grant program to former Soviet weapon scientists,
the Department of Energy ensures that the terms of the grant agreements are
being fulfilled through the receipt of specified deliverables, such as
progress reports. The Department of State ensures that its science center
grants are being used as intended through financial and program audits by
the Defense Contract Audit Agency.
Under the terms of section 1206 of the National Defense Authorization Act
for Fiscal Year 1996, DOD was required to submit its accounting report for
1997 by January 31, 1998, and its accounting report for 1998 by January 31,
1999. However, DOD was 16 months late in submitting its report for 1997 and
more than 10 months late in submitting its report for 1998 (see fig. 1).
Figure 1: Lateness of Department of Defense Cooperative Threat Reduction
Accounting Reports, 1994-98
Source: GAO analysis of DOD reports.
The reports for 1997 and 1998 were delayed primarily because they underwent
numerous reviews at various levels in multiple offices within DOD. DOD
officials noted that the length of the internal review process for both
reports was compounded by the relatively low priority that the reviewers
placed on ensuring the reports' timely submission, given other competing
demands. In addition, DOD officials cited the number of other reports that
they must provide Congress concerning the Cooperative Threat Reduction
program as a factor delaying the accounting reports. Our review of routing
slips and other documents confirmed that some reviewing offices held the
draft reports for months as they identified and addressed concerns.
In addition, DOD officials informed us that DOD was delayed in submitting
the 1997 and 1998 reports because it had to wait while other agencies,
particularly the Department of State, prepared needed information concerning
their use of Cooperative Threat Reduction funds. However, our review of DOD
routing slips for the 1997 report indicated that waiting for other agencies
delayed DOD's submission of the 1997 report by no more than 2 months. Our
review of DOD routing slips for the 1998 report and discussions with DOD
officials indicated that DOD waited approximately
6 months for information from other agencies--including over 2 months spent
waiting solely for the Department of State's information. Once it decided to
proceed without the Department of State's information in July 1999, DOD
reviewed the draft for another 5 months before submitting it to Congress on
December 13, 1999.
We found no evidence that DOD had provided the Department of State with
clear guidance as to when it should give DOD the information needed for the
1998 accounting report. Department of State officials informed us that they
had been unclear about DOD's information needs and were unaware DOD had
delayed submitting a report to Congress while waiting for information from
them.
However, DOD officials have informed us that subsequent accounting reports
should be submitted in a more timely fashion. They told us that they would
no longer delay a future report's submission to Congress while they awaited
information from other agencies. Instead, DOD will submit information from
these agencies separately or as an addendum to the accounting report. DOD
officials also noted that Congress has changed the reporting period of
future accounting reports from a calendar year basis to a fiscal year
basis.9 This change will allow DOD an additional 3 months (October,
November, and December) to prepare accounting reports for submission on
January 31.
According to section 1206 of the Defense Authorization Act for Fiscal Year
1996, the Secretary of Defense's annual accounting reports for Cooperative
Threat Reduction must include (1) a list of assistance provided before the
date of the report, (2) information on the location and condition of the
assistance provided, (3) a determination regarding whether or not the
assistance was used for the purposes intended, and (4) information on future
activities to account for assistance. In its reports for calendar years 1997
and 1998, DOD addressed each of these required topics. However, we found
that both reports contained some incomplete, inaccurate, or vague
information.
Section 1206 states that each report must contain "a list of cooperative
threat reduction assistance that has been provided before the date of the
report." Accordingly, we assessed both reports in terms of whether the lists
that they included (1) were cumulative and (2) encompassed all Cooperative
Threat Reduction assistance provided.
Although DOD had provided cumulative lists in all of its previous reports,
we found that it did not do so in its reports for 1997 and 1998.
Notwithstanding statements in both reports that the lists that they included
were "cumulative," the 1997 report's list covered only fiscal year 1997 and
the 1998 report's list covered only calendar year 1998.
Moreover, we also found that neither report included all of the assistance
that was provided. Because the 1997 report's list ends on September 31,
1997, and the 1998 report's list begins on January 1, 1998, neither list
included assistance provided during the 3-month period that separates them.
During that time, DOD sent approximately $27 million of equipment to former
Soviet states (see app. I)--more than a third of all the equipment DOD sent
to these states during calendar year 1997.
We also found that the lists included only one type of
assistance−equipment that the U.S. government has transferred to the
custody of the recipient governments. While such equipment may be more
vulnerable to misuse or diversion than other types of assistance, it has
constituted a diminishing fraction of Cooperative Threat Reduction
expenditures since 1996. As figure 2 shows, transferred equipment
represented no more than 25 percent ($72.5 million) of the $288 million that
the Cooperative Threat Reduction program expended in 1997 and only 12.5
percent ($37 million) of the $296 million expended in 1998.
Figure 2: Percent of Cooperative Threat Reduction Expenditures Spent on
Equipment Transferred to Former Soviet States, 1993-98
Source: GAO analysis of DOD data.
Because DOD focused on equipment transfers, it omitted contractor-provided
services--a major type of Cooperative Threat Reduction assistance. Such
services include setting up computer systems and providing training on the
systems, conducting environmental assessments, and performing heavy
construction. DOD has also hired contractors to manage large, highly
technical projects and to provide logistical support and maintenance for
equipment provided. According to Department officials, the Cooperative
Threat Reduction program has increasingly used contractors to provide
assistance to former Soviet states. In part because DOD did not attempt to
capture contractor-provided services in the lists, there is a notable
disparity between the values of the assistance included in the list and
total Cooperative Threat Reduction expenditures (see fig. 3).
Figure 3: Cooperative Threat Reduction Expenditures Compared to the Value of
Equipment Transferred, 1993-98
Source: GAO analysis of DOD data.
In its 1997 and 1998 reports, DOD also did not list all of the Cooperative
Threat Reduction assistance provided by other agencies. We found a similar
problem during our assessment of DOD's 1996 accounting report. At that time,
we recommended that the Secretary of Defense provide more complete
information on the other agencies' projects, including the values and types
of assistance provided.10 In response, DOD concurred and stated that it
would (1) convey our findings to the Departments of State and Energy and (2)
undertake measures with the other departments to improve future reporting on
their use of Cooperative Threat Reduction funds.
However, our review of DOD's 1997 and 1998 accounting reports indicates that
DOD has not effectively implemented such measures. DOD did not present in
either report the degree of financial support it had given to the
Departments of State and Energy and to the Civilian Research and Development
Foundation. Nor did either report explain exactly how these entities used
the Cooperative Threat Reduction funds that DOD transferred to them.
Furthermore, the reports did not list all of the equipment or other forms of
assistance provided by the other agencies using Cooperative Threat Reduction
funds.11
DOD did not implement procedures for obtaining all needed information from
the other agencies and ensuring that it is incorporated into the accounting
reports. Department of State officials told us that they did not furnish DOD
with such information because DOD had not provided them with clear guidance
on its informational needs and that they were unaware that DOD required this
information. Department of Energy officials stated that they provided
information to DOD in accordance with the guidelines DOD gave them. DOD
officials currently responsible for preparing the accounting reports
informed us that they were not aware of any established procedures for
obtaining needed data from other agencies.
and Sometimes Inaccurate
Section 1206 of the legislation states that the annual accounting reports
must include "a description of the current location of the assistance
provided." In reviewing the 1997 and 1998 reports, we assessed whether DOD
provided complete and accurate location information on all Cooperative
Threat Reduction assistance. We found that DOD did not do so in either
report.
DOD included location information for some of the assistance as part of each
report's list of equipment transferred to recipient states. However, it did
not include location information for much of the assistance that was not
included in the lists, such as assistance provided through other agencies.
In addition, the location information included elsewhere in the reports
could not be clearly linked to specific pieces of equipment. The reports
noted that DOD officials had visited certain sites associated with
particular projects. However, the reports did not identify the specific
pieces of equipment the officials saw at these sites.12 DOD officials
explained to us that they do not necessarily visit all of the sites where
equipment may be located. Moreover, they do not attempt to account for all
of the equipment that is located at each visited site.
In addition, DOD's lists did not always accurately reflect the location of
the equipment during the periods covered. The locations identified in the
lists indicated where DOD delivered and transferred the equipment. However,
these locations were not necessarily where the equipment was located after
the transfers were completed. DOD officials informed us that some equipment
was shipped to its final location by the recipient government or a U.S.
contractor after the transfer of custody had taken place. Department
officials who maintain the equipment database informed us that such
movements of equipment are not reflected in the database. Department
officials were not able to quantify what proportion of transferred equipment
was moved after the transfer of custody.
In commenting on a draft of this report, DOD stated that it was preparing to
make major revisions to the database that would enable DOD to identify the
most current location of all assistance. DOD also stated that it would not
include a cumulative list of assistance provided in future reports but would
instead limit the list to the assistance rendered during the fiscal year
covered by the report. Past reports in conjunction with future reports would
provide Congress with a complete list of assistance provided. However, if
DOD does not include cumulative lists of assistance in future accounting
reports, these reports will not reflect changes to the location of
assistance provided before the fiscal year covered in the reports.
Incomplete
Section 1206 requires that the annual accounting reports include "a
description of the current condition" of Cooperative Threat Reduction
assistance provided. In evaluating the 1997 and 1998 reports for this
information, we assessed whether the reports clearly stated the condition of
all assistance provided through the end of 1997 and 1998, respectively.
We found that DOD provided incomplete and sometimes vague information in
both reports on the condition of the assistance. For some Cooperative Threat
Reduction projects managed by DOD, the reports included a statement to the
effect that all of the equipment provided under the project was in working
order, noting any specific exceptions. However, DOD did not provide
information on the condition of the equipment it provided for about 33
percent of its projects described in the 1997 report and for more than 40
percent of its projects described in the 1998 report.13 These projects
included the heavy bomber elimination project in Russia in the 1997 report
and the SS-24 silo launcher and missile elimination project in Ukraine in
the 1998 report (see app. II). Furthermore, in neither report did DOD
provide clear assessments of the condition of assistance provided through
DOD contractors, the Departments of State and Energy, or the Civilian
Research and Development Foundation.
as Intended
According to section 1206, the reports shall include "a determination of
whether the assistance has been used for its intended purpose." We therefore
assessed whether the reports included such a determination and whether DOD
presented reasonable evidence to support its conclusions. We found that DOD
included an overall determination in the reports that the assistance had
been used as intended. However, DOD's presentation of these determinations
and its supporting evidence raised questions regarding DOD's ability to
support the determinations.
We found that DOD officials were unable to substantiate a statement in the
1997 report's cover letter that DOD had accounted for two-thirds of the
equipment transferred through 1997. In the cover letter, DOD stated that it
had delivered equipment valued at $298 million through 1997 and that it had
accounted for about $200 million of this amount during 1997. However, DOD
officials informed us that they could not identify the source of these
figures or determine the actual value of the equipment that the audits
accounted for. They attributed their inability to provide supporting
documentation to personnel changes that have occurred in DOD since the 1997
report was initially drafted.
DOD officials subsequently revised their methodology for this calculation.
DOD stated in the 1998 report's cover letter that approximately 54 percent
($177 million) of the equipment transferred (approximately $327 million) had
been subject to audit and examination during 1998. However, DOD officials
acknowledged that this calculation included at least some equipment--such as
consumables and small value items--for which its auditors did not actually
account.
In some cases, DOD also included individual determinations that assistance
provided through specific DOD-managed projects had been used as intended.
However, DOD did not include such determinations for about 33 percent of its
projects in 1997 and for more than 40 percent of its projects in 1998. These
projects included Russian intercontinental ballistic missile launcher
elimination in the 1997 report and Kazakhstani strategic bomber elimination
in the 1998 report (see app. III).
The reports also contained relatively little information regarding other
agencies' use of Cooperative Threat Reduction funds to support DOD's blanket
assertion that the assistance was being used as intended. We found that in
some cases additional information regarding this assistance could have been
included in the reports if there had been clearer communication between the
agencies involved.
· Neither report included information to support a determination that funds
provided to the Department of Energy for former Soviet weapons scientists
were being used as intended.14 Instead, the reports contained erroneous
assertions that the Department of Energy audits its support for these
scientists. Department of Energy officials informed us that rather than
conduct audits of these projects, the Department only remits payment for
projects after researchers have sent it the deliverables specified in the
grant agreements, such as progress reports. We found that DOD could have
included detailed information about this program. Department of Energy
officials informed us that they had provided DOD with reports on the program
as requested by DOD. Cooperative Threat Reduction officials told us that
they had received these reports but had not been instructed to forward them
to the officials responsible for preparing the 1998 report. The officials
responsible for preparing the 1998 report later told us that they were
unaware that the Department of Energy reports existed.
· The 1998 report did not provide information that would support a
determination that the Department of State was using Cooperative Threat
Reduction funds as intended at the international science and technology
centers. Unlike the 1997 report, the 1998 report did not include financial
audits of each science center or a summary of Defense Contract Audit Agency
audits of individual projects using Cooperative Threat Reduction funds.
Instead, it included only an annual report for the science center based in
Russia and no information for the science center located in Ukraine. DOD
officials stated that differences in the science centers' auditing cycles
and DOD's accounting report deadlines precluded them from including such
information in DOD's 1998 report. However, we found that by September 1999,
the Department of State could have provided DOD with 26 Defense Contract
Audit Agency reports15--each describing an audit of a science center project
using Cooperative Threat Reduction funds--almost 3 months before DOD
submitted the report to Congress. DOD officials responsible for drafting the
1998 report informed us that they were unaware that these audit reports
existed.
· The reports' discussion of the Civilian Research and Development
Foundation was limited to financial audits of the Foundation. These audits
made no determination of whether the assistance provided had been used for
the purposes intended. Moreover, DOD included the Foundation's 1996
financial audit in its 1997 report and the Foundation's 1998 financial audit
in its 1998 report. Neither report included the Foundation's 1997 financial
audit.
The 1997 and 1998 reports did provide clear supporting evidence regarding
the Department of Energy's program to help protect, control, and account for
former Soviet nuclear materials. Each report included Department of Energy
assertions that the assistance provided through this program had been used
for the purposes intended and summaries of the Department's supporting
evidence.
Section 1206 requires DOD to report on future activities that will be
undertaken to account for Cooperative Threat Reduction assistance. We
therefore assessed whether DOD included such information in the reports.
We found that both reports included audit plans that were outdated at the
time that DOD submitted the reports to Congress. In the 1997 report, which
DOD submitted 5 months after 1998 ended, DOD stated that during 1998 it
planned to carry out 20 audits and examinations. However, we found that
during 1998 DOD had actually executed only 17 of the 20 originally planned
audits and examinations.16 In the 1998 report, DOD indicated that it
intended to perform 24 audits and examinations during 1999. However, we
found that DOD had completed only 22 audits by December 13, 1999, when it
submitted the 1998 report to Congress.17 DOD had canceled two audits
scheduled for October 1999 and rescheduled them during the year 2000. DOD
did not annotate either report to reflect these discrepancies.
Nuclear Warhead Arsenal
Under the terms of section 1312 of the National Defense Authorization Act
for Fiscal Year 2000, DOD is required to include information on Russia's
arsenal of tactical nuclear warheads in each accounting report submitted to
Congress after fiscal year 1999, which ended on September 30, 1999. Since
the 1998 report was submitted on December 13, 1999, we assessed whether it
included the information required under section 1312.
We found that DOD did not provide the required information concerning
Russia's arsenal of tactical nuclear warheads. DOD officials explained to us
that they did not include this information in the report because they had
expected the 1998 report to be submitted to Congress before the end of
fiscal year 1999. In commenting on a draft of this report, DOD also noted
that it had interpreted section 1312 to apply to future accounting reports,
starting with the fiscal year 2000 report (which is due to Congress on
January 31, 2001).
DOD failed to submit timely, complete, or accurate reports to Congress on
assistance provided through the Cooperative Threat Reduction program for
1997 and 1998. DOD's failure to submit the reports on time denied Congress
timely information regarding efforts to ensure that Cooperative Threat
Reduction assistance was not being diverted or misused. As a result,
Congress lacked the information contained in the 1997 report for 16 months
as it considered and enacted the Cooperative Threat Reduction program's
fiscal year 1999 budget and began considering the program's fiscal year 2000
budget. Congress also lacked the information in the 1998 report for over 10
months while it considered and enacted the program's fiscal 2000 budget.
While congressional action has provided DOD with an additional 3 months to
prepare and review future reports, the extent of DOD's recent delays
indicates that DOD should take additional actions to address the timeliness
of its Cooperative Threat Reduction accounting reports.
DOD also provided incomplete, and in some instances, inaccurate information
on assistance provided through the Cooperative Threat Reduction program in
its 1997 and 1998 accounting reports. These deficiencies erode the reports'
credibility and undermine their usefulness to Congress. The lack of
sufficient information on assistance provided through other agencies,
particularly through the Department of State, indicates that DOD has not
taken the steps necessary to ensure that it obtains key information when
needed from these agencies. Continued miscommunication between DOD and the
Department of State could erode the value of future accounting reports,
given DOD's plans to obligate about $57 million through 2005 to projects at
the science centers overseen by the Department of State.
In order to ensure that Congress receives timely and accurate information on
assistance provided to former Soviet states through the Cooperative Threat
Reduction program, we recommend that the Secretary of Defense
· establish procedures to facilitate the collection of information required
in section 1206 of the National Defense Authorization Act for Fiscal Year
1996 so that this information is submitted to Congress by January 31 of each
year, as specified in the legislation;
· establish quality controls and processes to improve the report's
information on the location, condition, and value of all assistance
provided; and
· provide clear guidance to the Departments of State and Energy on the
nature and timing of information that DOD requires of them for future
accounting reports.
We requested comments on a draft of this report from the Departments of
Defense, State, and Energy. DOD's written comments and our evaluation of
them are in appendix IV. The Department of State provided oral comments
through the Political-Military Officer in the Office of Proliferation Threat
Reduction. The Department of Energy did not provide comments.
DOD and the Department of State generally concurred with our report and its
recommendations. For example, DOD agreed with our assessment of the reasons
it was late in submitting its 1997 and 1998 Cooperative Threat Reduction
accounting reports and noted that better procedures and controls must be
developed to assure the timeliness of future reports. Moreover, with regard
to tasking other agencies for input to the reports, DOD noted that it would
formally notify these agencies of the information it required by letter.
DOD also stated it believes that our report implies DOD does not have high
confidence that Cooperative Threat Reduction assistance is being properly
used and that this implication is unwarranted. DOD further noted that it
uses a wide variety of other methods and sources to account for assistance
provided. For example, DOD commented that it had recently provided
information to Congress on the procedures it uses to account for
contractor-provided services. Regarding DOD's comment, our review did not
assess the adequacy of DOD's overall efforts to assure that the assistance
was being used as intended. Rather, as we stated in our report, our
objective was to determine the extent to which the 1997 and 1998 accounting
reports contained complete and timely information as specified in section
1206 of the National Defense Authorization Act for Fiscal Year 1996 and
included sufficient evidence to support the reports' conclusions. In this
regard, we found that DOD's reports omitted information in several key
areas, such as services provided to former Soviet states. We continue to
believe that the reports should have included information on all forms of
Cooperative Threat Reduction assistance--including services--irrespective of
whether this information was provided to Congress in other, unrelated
reports.
In assessing whether DOD complied with the two most recent reports' (1997
and 1998) mandated submission date to Congress, we reviewed routing sheets
and various draft versions of the reports. We also interviewed some DOD
officials who were involved in the process of reviewing the reports. We were
not able to interview certain key officials involved early in the process
for developing the 1997 report because they have since left DOD.
In assessing the extent to which the reports provided the information called
for by Congress, we reviewed the reports and the information sources used to
compile them. In order to assess information originating from DOD, we
interviewed Department officials who are currently responsible for
accounting for Cooperative Threat Reduction assistance, those who maintain
the equipment deliveries database, and project managers. We also interviewed
Department of Defense inspectors who conduct audits and examinations. We did
not travel to former Soviet states to observe inspectors conducting an audit
and examination.
In order to assess information originating from the Department of Energy, we
spoke to officials responsible for managing the Department's system that
ensures that its program to protect, control, and account for former Soviet
nuclear materials is being executed effectively and that the assistance is
being used for its intended purposes. We also spoke to officials responsible
for managing the Department's program to support peaceful research by former
Soviet weapons scientists. In order to assess information originating from
the Department of State, we spoke to officials responsible for managing U.S.
involvement in the two international science and technology centers. We also
interviewed auditors from the Defense Contract Audit Agency who are involved
with program audits of the international science centers.
To determine the percentage of Cooperative Threat Reduction funds spent on
equipment transferred to the custody of former Soviet states, we used
figures on the value of equipment transferred and total Cooperative Threat
Reduction disbursements provided by DOD. We did not attempt to verify the
accuracy of this data.
We conducted our review from July 1999 through January 2000 in accordance
with generally accepted government auditing standards.
We are providing copies of this report to other interested committees; the
Honorable William Cohen, Secretary of Defense; the Honorable Madeleine K.
Albright, Secretary of State; the Honorable William Richardson, Secretary of
Energy; and the Honorable Jacob Lew, Director, Office of Management and
Budget. We will also make copies available to others upon request.
Please contact me at (202) 512-4128 if you or your staff have any questions
concerning this report. Key contributors to this assignment were Boris
Kachura, Pierre Toureille, and Valérie Leman Nowak.
Harold J. Johnson
Associate Director
International Relations and Trade Issues
List of Congressional Committees
The Honorable John Warner
Chairman
The Honorable Carl Levin
Ranking Minority Member
Committee on Armed Services
United States Senate
The Honorable Ted Stevens
Chairman
The Honorable Robert Byrd
Ranking Minority Member
Committee on Appropriations
United States Senate
The Honorable Floyd D. Spence
Chairman
The Honorable Ike Skelton
Ranking Minority Member
Committee on Armed Services
House of Representatives
The Honorable C.W. Bill Young
Chairman
The Honorable David R. Obey
Ranking Minority Member
Committee on Appropriations
House of Representatives
Equipment Transferred by the Department of Defense to Recipient States From
October 1, 1997, Through December 31, 1997
Continued
Delivery
Country Project Delivery Items Value (in date
location dollars)
(1997)
KazakhstanSS-18 missile silo Aqtua Parts $16,546 December
elimination 1
Strategic bomber Dolon Baler and parts 706,374 October
elimination 1
Crane and parts 239,549 October
1
Tool carrier and
miscellaneous 116,321 October
items 1
Excavator and 344,944 October
parts 1
Tractor and 92,846 October
trailer 1
Work benches 733 October
10
Ladder platforms 6,384 October
10
Cutting tools 16,902 November
and parts 19
Nuclear testing
infrastructure Semipalatinsk Miscellaneous 7,402 October
elimination items 1
Vehicle 6,194 October
lubricants 24
Bioweapons
production Stepnogorsk Safety equipment 978,008 November
facility and spare parts 27
dismantlement
Intercontinental
ballistic missile
launcher and
intercontinental
Logistics Computers and
Russia ballistic support base, miscellaneous 13,811 October
missile/submarine 15
launched ballistic Moscow parts
missile
elimination
equipment
Parts 36,250 October
28
Parts 300 December
30
Surovatikha Loaders and 60,996 December
parts 8
Heavy bomber Logistics
elimination support base, Parts 5,716 October
equipment Moscow 7
Liquid propellant
fuel disposition Krasnoyarsk Epoxy material 6,972 October
system 4
Rocket fuel
disposition 102,943 October
system start-up 4
kit
Spare parts 365,478 October
4
Rocket fuel
disposition 8,573,506 October
system 13
Steam generator 1,040,667 October
plant 13
Rocket fuel
disposition 410,000 October
system shelter 21
Rocket fuel
disposition 410,000 October
system shelter 21
Logistics
Chemical weapons support base, Spare parts 62,073 October
destruction 15
Moscow
Fissile material Gamma-neutron
storage facility Sarov passportization 56,847 December
design system 12
Fissile material Mayak Doors and parts 734,796 December
storage facility 31
Fissile material Mayak Fissile material 1,160,880 October
containers containers 2
Fissile material 1,658,400 November
containers 2
Fissile material 2,487,600 November
containers 29
Nuclear weapons
storage Sergiev Posad Breathalyzer 463,326 November
security-storage equipment 14
site enhancements
Training 500 November
supplies 14
St. Petersburg Polygraph and 58,950 November
miscellaneous 14
Nuclear weapons
transportation Sergiev Posad Supercontainers 1,962,590 October
security- 7
supercontainers
Restraint chains 310,260 October
7
Supercontainer 108,000 October
improvement kit 7
Restraint chains 310,260 October
8
Miscellaneous 29,326 December
items 17
Nuclear weapons
transportation
security- St. Petersburg Video cassette 19,650 October
emergency support recorders 1
equipment
Nonhazardous
Material control Beloyarsk fission counter 22,000 November
and accounting 28
system
Hazardous
fission counter 14,600 November
system 28
Portable
Moscow gamma-ray 1,510,099 October
spectroscopy 7
system
Uranium
Podolsk plutonium 125,065 November
inspector system 17
SS-19 missile
Ukraine integrating Kiev Computer 24,783 October
contract equipment 31
Uman Commercial tires 199,567 October
12
Vehicles 79,660 October
22
Parts 752,505 November
12
Spare parts Unknown November
16
Logistics
support base, Office supplies 521,570 October
Uman and spare parts 16
Fire truck 39,278 November
winterization 27
Batteries 300 December
10
Miscellaneous
vehicle 172,765 December
lubricants and 25
parts
Material control Kharkiv Miscellaneous 18,375 October
and accounting items 6
Electronic
security 229,807a December
equipment 5
Low resolution
Yuzhnoukrainsk gamma-ray 53,365 November
spectrometry 15
system
Total $26,742,074
aDOD's data indicates the unit cost of this equipment but does not indicate
the quantity delivered. Therefore, this figure is the minimum value of the
shipment based on the assumption that DOD sent one unit of each item listed.
Source: GAO analysis of DOD Cooperative Threat Reduction equipment
deliveries database.
Department of Defense Projects for Which No Information Was Given on the
Condition of Assistance Provided
Continued
Accounting
report Country Project
1997 Report Belarus Conversion of military technologies and
capabilities into civilian activities
Continuous communications links
Defense conversion
Kazakhstan Government-to-government communications link
Emergency response
Defense conversion
Russia Intercontinental ballistic missile launcher
elimination
Heavy bomber elimination
Liquid propellant transportation and storage
SS-18 missile elimination
Fissile material storage facility design
Fissile material containers
Emergency response
Security enhancements for railcar
Armored blankets
Ukraine SS-19 missile neutralization and dismantlement
facility
SS-24 missile early deactivation
Emergency response support equipment
Emergency response
Housing conversion
1998 Report Belarus Liquid rocket propellant disposition
Continuous communications link
Emergency response
Defense conversion
Conversion of military technologies and
capabilities into civilian activities
Kazakhstan Strategic bomber elimination
Export control
Defense conversion
Russia Intercontinental ballistic missile launcher
elimination
Solid rocket motor elimination
SS-18 missile elimination
Intercontinental ballistic missile launcher
elimination and intercontinental ballistic
missile/submarine-launched ballistic missile
elimination equipment
Liquid propellant oxidizer disposition systems
Fissile material storage facility
Supercontainers
Export control
Armored blankets
Housing conversion
Industry conversion
Ukraine SS-19 missile liquid propellant disposition
SS-19 missile neutralization and dismantlement
facility
SS-19 missile forces demobilization
SS-24 missile early deactivation
SS-24 missile silo launcher and missile
elimination
Government-to-government communications link
Export control
Housing conversion
Industry conversion
Source: GAO analysis of DOD's 1997 and 1998 accounting reports.
Department of Defense Projects for Which No Determination Was Made About the
Usage of Assistance Provided for the Intended Purposes
Continued
Accounting
report Country Project
1997 Report Belarus Conversion of military technologies and
capabilities into civilian activities
Continuous communications links
Defense conversion
Kazakhstan Strategic bomber elimination
Government-to-government communications link
Defense conversion
Russia Intercontinental ballistic missile launcher
elimination
Heavy bomber elimination
Liquid propellant disposition
Liquid propellant transportation and storage
Fissile material storage facility design
Fissile material containers
Emergency response
Armored blankets
Chemical weapons destruction facility
Chemical agent analytical monitoring
Ukraine SS-19 liquid propellant disposition
SS-19 neutralization and dismantlement facility
SS-19 forces demobilization
SS-24 early deactivation
Emergency response support equipment
Emergency response
Housing conversion
1998 Report Belarus Liquid rocket propellant disposition
Continuous communications link
Emergency response
Defense conversion
Conversion of military technologies and
capabilities into civilian activities
Kazakhstan Strategic bomber elimination
Russia Intercontinental ballistic missile launcher
elimination
Solid rocket motor elimination
Intercontinental ballistic missile launcher
elimination and intercontinental ballistic
missile/submarine-launched ballistic missile
elimination equipment
Liquid propellant oxidizer disposition systems
Fissile material storage facility
Supercontainers
Export control
Armored blankets
Chemical weapons destruction facility
Chemical agent analytical monitoring
Housing conversion
Industry conversion
Ukraine SS-19 missile liquid propellant disposition
SS-19 missile neutralization and dismantlement
facility
SS-19 missile forces demobilization
SS-24 missile early deactivation
SS-24 missile silo launcher and missile
elimination
Government-to-government communications link
Export control
Housing conversion
Industry conversion
Source: GAO analysis of DOD's 1997 and 1998 accounting reports.
Comments From the Department of Defense
The following are GAO's comments on the Department of Defense's (DOD) letter
dated February 28, 2000.
1. We have clarified this sentence in response to DOD's suggestion.
2. We do not believe that DOD duly notified the Department of State of its
informational needs. We reviewed the correspondence between the two
Departments concerning the 1998 accounting report, which was comprised
primarily of emails, and found that DOD had not provided the Department of
State with clear guidance on its complete informational needs. For example,
DOD did not request information from the Department of State on audits by
the Defense Contract Audit Agency of individual science center projects that
used Cooperative Threat Reduction funds. During the course of our review, we
were able to obtain the information 2 months before DOD submitted the 1998
accounting report.
3. Although the Department of State's audit cycle is different from DOD's,
our review nonetheless found that the Department of State had relevant
information on its auditing activities to date that it could have provided
DOD before the 1998 report was due to Congress on January 31, 1999.
4. Future accounting reports will likely continue to be incomplete should
DOD proceed with submitting the reports without relevant information from
other agencies. Moreover, this approach will not guarantee the timeliness of
future reports because it does not address the delays caused by DOD's report
review process. For example, DOD is currently taking this approach with the
draft 1999 accounting report. However, DOD has not yet submitted the 1999
report, which was due to Congress on January 31, 2000.
5. Concerning this section, we believe that DOD could have annotated the
audit plans to reflect DOD's most current knowledge. DOD knew that it would
not complete the number of projected audits 5 months in advance of the 1997
report's submission and at least 6 weeks in advance of the 1998 report's
submission to Congress. Our analysis of DOD's report review process shows
that DOD made several other changes to the reports during these time periods
preceding the reports' submissions.
6. In appendix I of this report, we have included a list of the assistance
that was omitted.
(711438)
Figure 1: Lateness of Department of Defense Cooperative
Threat Reduction Accounting Reports, 1994-98 7
Figure 2: Percent of Cooperative Threat Reduction
Expenditures Spent on Equipment Transferred to
Former Soviet States, 1993-98 10
Figure 3: Cooperative Threat Reduction Expenditures
Compared to the Value of Equipment Transferred, 1993-98 11
1. Section 1206 of the National Defense Authorization Act for Fiscal Year
1996 (P.L. 104-106).
2. For example, DOD is required to submit its accounting report for 1999 to
Congress by January 31, 2000.
3. Section 1312 of the National Defense Authorization Act for Fiscal Year
2000 (P.L. 106-65).
4. For GAO's assessments of previous reports, please refer to Weapons of
Mass Destruction: DOD Reporting on Cooperative Threat Reduction Assistance
Can Be Improved
(NSIAD-95-191 , Sept. 29, 1995); Weapons of Mass Destruction: DOD Reporting
on Cooperative Threat Reduction Assistance Has Improved (NSIAD-97-84 , Feb.
27, 1997); and Cooperative Threat Reduction: Review of DOD's June 1997
Report on Assistance Provided (NSIAD-97-218 , Sept. 5, 1997).
5. Section 1206 of Public Law 104-106 requires the Comptroller General to
provide this assessment within 30 days of DOD's submission of an accounting
report. Not long after DOD submitted the accounting report for 1997 in June
1999, DOD officials informed us that they would submit the 1998 report by
the end of August 1999. Accordingly, we notified your Committees in July
1999 that we would provide a combined assessment of both reports once DOD
had submitted the 1998 report. However, DOD did not submit the report for
1998 until December 1999.
6. We have described Cooperative Threat Reduction efforts in greater detail
in past reports, such as Weapons of Mass Destruction: Effort to Reduce
Russian Arsenals May Cost More, Achieve Less Than Planned (GAO/NSIAD-99-76 ,
Apr. 13, 1999) and Weapons of Mass Destruction: Status of the Cooperative
Threat Reduction Program (GAO/NSIAD-96-222 , Sept. 27, 1996).
7. The Civilian Research and Development Foundation is a nongovernmental,
nonprofit foundation.
8. The international science and technology centers are multinational
organizations funded by the United States, European Union, and four other
countries. The Department of State is responsible for managing U.S.
involvement in the science centers.
9. Section 1311 of the National Defense Authorization Act for Fiscal Year
2000 (P.L. 106-65, Oct. 5, 1999).
10. See Cooperative Threat Reduction: Review of DOD's June 1997 Report on
Assistance Provided.
11. DOD's list is derived from a database of equipment shipped by DOD. The
database is designed to include all equipment for which there has been a
transfer of custody. In 1997, the Departments of State and Energy shipped
some, but not all, of the Cooperative Threat Reduction equipment they had
purchased through DOD. Therefore, only the equipment that was shipped
through DOD appears in DOD's database.
12. DOD's previous accounting reports specified the equipment that had been
accounted for during audits and examinations conducted by DOD inspectors.
13. In commenting on a draft of this report, DOD stated that it could not
physically verify the condition of all Cooperative Threat Reduction
assistance. Instead, DOD felt that it could confidently ascertain the
condition of all of the assistance by verifying the condition of a sample of
assistance. The scope of our review did not include evaluating the adequacy
of DOD's sampling approach.
14. The 1998 report's introduction referred readers to an annex in the
report for more information on this program. However, our review found no
information on this program in that annex or any other part of the report.
15. The Defense Contract Audit Agency prepared these 26 audit reports
between November 1998 and September 1999.
16. DOD planned to perform 10 audits and examinations in Russia, 5 in
Ukraine, 3 in Kazakhstan, and 2 in Belarus during 1998. In reality, DOD
completed eight audits and examinations in Russia, four in Ukraine, three in
Kazakhstan, and two in Belarus.
17. DOD planned to perform 10 audits and examinations in Russia, 6 in
Ukraine, 5 in Kazakhstan, and 3 in Belarus. In reality, DOD completed eight
audits and examinations in Russia, six in Ukraine, five in Kazakhstan, and
three in Belarus.
*** End of document. ***
|
NEWSLETTER
|
|
Join the GlobalSecurity.org mailing list
|
|
|
