FY 2004 Annual Report on the Cooperative Threat Reduction Program
(18-JUL-03, GAO-03-1008R).
Under section 1308 of the National Defense Authorization Act for
Fiscal Year 2001 (P.L. 106-398), the Department of Defense is to
submit an annual report to Congress on its Cooperative Threat
Reduction (CTR) program no later than the first Monday in
February of each year. The report should include a five-year plan
that discusses the amount and purpose of funding needed over the
term of the plan and a description of efforts conducted by the
United States to ensure that CTR assistance is fully accounted
for and used for its intended purposes. The Act requires the
Comptroller General to assess this five-year plan and the
description of efforts to account for CTR assistance within 90
days of the report's submission to Congress. The Department
submitted its CTR annual report for fiscal year 2004 to Congress
on April 18, 2003. We analyzed the 2004 report to determine
whether (1) the five-year plan addressed the legislative
requirements and presents accurate information, (2) the
accountability section addressed legislative requirements and
presents accurate information, and (3) the presentation and
usefulness of the CTR annual report could be improved.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-03-1008R
ACCNO: A07596
TITLE: FY 2004 Annual Report on the Cooperative Threat Reduction
Program
DATE: 07/18/2003
SUBJECT: Accountability
Federal funds
Reporting requirements
Funds management
Strategic planning
DOD Cooperative Threat Reduction Program
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GAO-03-1008R
GAO- 03- 1008R Cooperative Threat Reduction Program Annual Report
July 18, 2003 The Honorable John Warner Chairman The Honorable Carl Levin
Ranking Minority Member Committee on Armed Services United States Senate
The Honorable Duncan Hunter Chairman The Honorable Ike Skelton Ranking
Minority Member Committee on Armed Services House of Representatives
Subject: FY 2004 Annual Report on the Cooperative Threat Reduction Program
Under section 1308 of the National Defense Authorization Act for Fiscal
Year 2001 (P. L. 106- 398), the Department of Defense is to submit an
annual report to Congress on its Cooperative Threat Reduction (CTR)
program no later than the first Monday in February of each year. The
report should include a five- year plan that discusses the amount and
purpose of funding needed over the term of the plan and a description of
efforts conducted by the United States to ensure that CTR assistance is
fully accounted for and used for its intended purposes. The Act requires
the Comptroller General to assess this five- year plan and the description
of efforts to account for CTR assistance within 90 days of the report*s
submission to Congress. The Department submitted its CTR annual report for
fiscal year 2004 to Congress on April 18, 2003. 1 We analyzed the 2004
report to determine whether (1) the five- year plan
addressed the legislative requirements and presents accurate information,
(2) the accountability section addressed legislative requirements and
presents accurate information, and (3) the presentation and usefulness of
the CTR annual report could be improved. Attached to this letter are a
series of slides provided to your
1 The CTR annual report for fiscal year 2004 includes a section titled
*cooperative threat reduction (CTR) program implementation plan for FY
2004,* which we refer to as the five- year plan, and a section titled
*accounting for cooperative threat reduction (CTR) program assistance to
states of the former Soviet Union (FSU) conducted during FY 2002,* which
we refer to as the accountability section.
United States General Accounting Office Washington, DC 20548
Page 2 GAO- 03- 1008R Cooperative Threat Reduction Program Annual Report
staff presenting our assessment of the CTR annual report submitted for
fiscal year 2004 (see encl. I).
We found that the five- year plan addressed the legislative requirements
by setting forth funding information for the term of the plan and the
purpose of those funds. We also confirmed with project managers that, for
the eight projects we reviewed in detail, the information provided in the
five- year plan was generally accurate. We found that the accountability
section addressed all legislative requirements. It described the condition
and location of CTR- furnished equipment, discussed the status of
contracts and services and the methods used to ensure that CTR aid is used
for the purposes intended, determined whether assistance provided has been
used effectively and efficiently, and described the audits and
examinations planned for the next year. We found that the information was
generally accurate and complete and included the concerns raised in
project trip reports and audit and examinations. However, we noted two
issues where the information was not accurate and complete. First, there
was no discussion of Russia*s plans to store weapon- grade plutonium at
Mayak. CTR funding for this facility was intended only for the storage of
weapon- source fissile material to facilitate the dismantlement of nuclear
weapons. 2 Second, the list of equipment delivered under the CTR program
was incomplete because CTR officials do not have complete records of
equipment delivered before fiscal year 1999.
We found that the report lacked a discussion of key strategic planning
elements that could help congressional decision makers in their annual CTR
budget deliberations. Specifically, the report did not include annual
performance goals linked to long- term goals, information on external
factors that could affect the achievement of these goals, and plans for
revising program goals, all of which are
already developed by CTR program managers. Furthermore, the report
provided relevant project information in different locations, making it
difficult to understand the progress and problems of each project.
Therefore, we recommend that, in preparing future CTR annual reports to
Congress, the Secretary of Defense (1) incorporate key federal strategic
planning elements and (2) integrate the fiveyear plan and accountability
sections of the report to provide Congress with all project information in
one location.
We performed our work in Washington, D. C., from April 2003 through July
2003 in accordance with generally accepted government auditing standards.
We provided a draft of this report to Department of Defense (DOD)
officials. DOD provided written comments on the draft of this report,
which are included in Enclosure II. DOD concurred with our recommendation
that future CTR annual reports integrate the five- year plan and
accountability sections of the report. DOD did not, however, concur with
the recommendation that the department
2 See U. S. General Accounting Office, Weapons of Mass Destruction: Effort
to Reduce Russian Arsenals May Cost More, Achieve Less Than Planned, GAO-
NSIAD- 99- 76 (Washington, D. C.: April 1999).
Page 3 GAO- 03- 1008R Cooperative Threat Reduction Program Annual Report
incorporate key federal strategic planning elements in future CTR annual
reports. DOD stated that the legislation does not require reporting on
these elements in the annual report to Congress.
Neither effort proposed by our recommendations is required in the
legislation. However, incorporating the key federal strategic planning
elements and integrating the five- year plan and accountability sections
of the report will improve the presentation and usefulness of future CTR
annual reports to Congress. Furthermore, key federal strategic planning
elements are already included in CTR project management planning
documents. Incorporating these planning elements into the CTR annual
report could help congressional decision makers in their annual CTR budget
deliberations. Incorporating key federal strategic planning elements into
a report that integrates its five- year plan and accountability sections
would strengthen the presentation and usefulness of the annual CTR report
provided to Congress. Therefore, we continue to recommend
that the Secretary of Defense incorporate key federal strategic planning
elements and integrate the five- year plan and accountability sections of
the report.
- - - - - We are sending copies of this report to the Secretary of Defense
and to interested congressional committees. This report will also be
available at no charge on our Web site at http:// www. gao. gov.
If you or your staff have any questions regarding this assessment, please
contact me at (202) 512- 8979. James Shafer, Hynek Kalkus, Monica Brym,
Beth Hoffman Leon, David Maurer, Pierre Toureille, Martin de Alteriis,
Valerie Nowak, and Lynn Cothern also made key contributions to this
report.
Joseph A. Christoff Director, International Affairs and Trade
Enclosures
Enclosure I Page 4 GAO- 03- 1008R Cooperative Threat Reduction Program
Annual Report
1
Cooperative Threat Reduction Annual Report for FY 2004 Briefing to the
Staffs of the Armed Services Committees
Enclosure I Page 5 GAO- 03- 1008R Cooperative Threat Reduction Program
Annual Report
2 Overview
* Background GAO objectives Results in brief
Five- year plan Accountability section CTR annual report
presentation Conclusions Recommendations
Enclosure I Page 6 GAO- 03- 1008R Cooperative Threat Reduction Program
Annual Report
3 Background
The National Defense and Authorization Act (NDAA) for fiscal year 2001
requires the Department of Defense to submit an annual CTR report that
sets forth
the amount and purpose of funding needed over the next 5 years, and a
description of the audit and examinations (A& E) and other efforts
conducted by the United States to ensure that CTR assistance is fully
accounted for and used for its intended purposes.
NDAA requires GAO to assess the five- year plan and the accountability
section within 90 days of the annual report*s submission.
Enclosure I Page 7 GAO- 03- 1008R Cooperative Threat Reduction Program
Annual Report
4 Objectives
Determine whether the five- year plan addresses legislative requirements
and presents accurate information
Determine whether the accountability section addresses legislative
requirements and presents accurate information
Identify ways to improve the presentation and usefulness of the CTR
annual report
Enclosure I Page 8 GAO- 03- 1008R Cooperative Threat Reduction Program
Annual Report
5
Scope & Methodology: Five- year plan
To determine whether the five- year plan addresses legislative
requirements and presents accurate information: We assessed the plan to
determine if it included the
amount of funds and resources proposed to be provided over the term of the
plan and a description of how those resources will be used.
We selected eight projects and compared the information presented in the
plan with information from project managers to determine the accuracy of
the data.
Enclosure I Page 9 GAO- 03- 1008R Cooperative Threat Reduction Program
Annual Report
6 Scope & Methodology: Accountability section
To determine whether the accountability section addresses legislative
requirements and presents accurate information: We assessed the section
to determine if it included a
description of the condition and location of CTR- furnished equipment, a
discussion of the status of contracts and services and the methods used to
ensure CTR aid is used for purposes intended, a description of whether
assistance provided has been used effectively and efficiently, and a
description of the
audits and examinations planned for the next year. We reviewed 14 A& Es
and 133 project management trip reports for FY 2002 to determine if the
section accurately presents concerns raised in these reports.
Enclosure I Page 10 GAO- 03- 1008R Cooperative Threat Reduction Program
Annual Report
7 Scope & Methodology: CTR annual report
presentation To identify ways to improve the presentation and usefulness
of the CTR annual report:
We compared the FY 2004 CTR report*s content with key planning elements
from the Government Performance and Results Act.
We assessed how the legislative requirements were presented in the
report.
Enclosure I Page 11 GAO- 03- 1008R Cooperative Threat Reduction Program
Annual Report
8 Results in Brief
FY 2004 five- year plan All legislative requirements were addressed
Information provided in eight sample projects was accurate
Accountability section All legislative requirements were addressed
Information provided was generally accurate and complete
CTR annual report presentation Key strategic planning elements are not
incorporated in the report Project information not provided in one
comprehensive discussion
Enclosure I Page 12 GAO- 03- 1008R Cooperative Threat Reduction Program
Annual Report
9 Principal Findings: Five- year plan addressed
legislative requirements; the information provided was accurate.
The report provided the amount of funds and resources proposed for the
term of the plan.
The report stated the purposes for which these proposed funds and
resources will be used.
The project managers of eight selected projects confirmed that the
project information was accurate as of January 2003.
Enclosure I Page 13 GAO- 03- 1008R Cooperative Threat Reduction Program
Annual Report
10 Principal Findings: Accountability section
addressed all legislative requirements. Described the condition and
location of CTR- furnished equipment; Discussed the status of contracts
and services and the methods used to ensure CTR aid is used for purposes
intended;
Determined whether assistance provided has been used effectively,
efficiently, and for the purpose intended; and Described the audits and
examinations planned for the next year.
Enclosure I Page 14 GAO- 03- 1008R Cooperative Threat Reduction Program
Annual Report
11 Principal Findings: Accountability section
information was generally accurate and complete. The information
provided in the report regarding the accountability
of CTR- provided assistance was generally accurate and complete, except
that it
did not discuss Russia*s plan to store weapons- grade plutonium at
Mayak. CTR funding for this facility was intended only for the storage of
weapon- source fissile material to facilitate the dismantlement of nuclear
weapons.
did not provide a complete list of equipment delivered; CTR program does
not have complete records of equipment provided before fiscal year 1999.
Enclosure I Page 15 GAO- 03- 1008R Cooperative Threat Reduction Program
Annual Report
12 Principal Findings: CTR annual report did not include key strategic
planning elements.
The report does not incorporate key federal strategic planning elements
that could help congressional decision makers in their annual CTR budget
deliberation, including annual performance goals based on objective
measures of results and
linked to long- term goals, a description of external factors beyond the
agency*s control that could affect achievement of program goals, and
plans for revising program goals.
GAO reports cite these factors as important planning elements. The
report*s five- year plan does not provide these planning
elements; however, they are included in CTR project management planning
documents.
Enclosure I Page 16 GAO- 03- 1008R Cooperative Threat Reduction Program
Annual Report
13 Principal Findings: Project information was not
provided in one comprehensive discussion. Project information is provided
in various locations of the CTR annual report for fiscal year 2004:
Progress in the past year (FY2002), proposed funding (FY2004- 2009), and
purpose of proposed funds for each project are discussed in the report*s
five- year plan (pp. 8- 41).
Location, efforts to account for CTR assistance, and past problems
encountered, such as access issues, project delays, and instances of non-
cooperation for each project are discussed in the report*s accountability
section (pp. 42- 99).
For example, the report*s discussion of the SS- 24 propellant disposition
facility project in Ukraine includes
proposed funding, the purpose of the proposed funds, and a description
of activities carried out in FY 2002 (pp. 18- 19);
the location of the project, efforts to account for the CTR assistance,
and past problems encountered on the project (p. 64).
Enclosure I Page 17 GAO- 03- 1008R Cooperative Threat Reduction Program
Annual Report
14 Conclusion
The annual CTR report does not include federal strategic planning
factors and thus does not provide a useful context for understanding how
project and budget plans might be affected in the future.
Relevant project information is scattered throughout the report making
it difficult to understand the progress and problems of each project.
Consolidating this information in one location will provide readers with a
more accessible presentation of each project.
Enclosure I Page 18 GAO- 03- 1008R Cooperative Threat Reduction Program
Annual Report
15 Recommendation
We recommend that, in preparing future CTR annual reports to congress, the
Secretary of Defense:
(1) incorporate key federal strategic planning elements, such as a
description of annual performance goals linked to long- term goals,
external factors that could affect the achievement of program goals, and
plans for addressing these external factors, and
(2) combine the five- year plan and accountability sections of the report.
Enclosure II Page 19 GAO- 03- 1008R Cooperative Threat Reduction Program
Annual Report
Comments from the Under Secretary of Defense
Enclosure II Page 20 GAO- 03- 1008R Cooperative Threat Reduction Program
Annual Report
(320193)
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