Chemical Weapons: Organization for the Prohibition of Chemical	 
Weapons Needs Comprehensive Plan to Correct Budgeting Weaknesses 
(24-OCT-02, GAO-03-5).						 
                                                                 
The Organization for the Prohibition of Chemical Weapons is	 
responsible for implementing the Chemical Weapons Convention,	 
which bans the use of chemical weapons and requires their	 
elimination. The United States and other member states have	 
raised concerns that a number of management weaknesses may	 
prevent the organization from fulfilling its mandate. As	 
requested, GAO assessed the accuracy of the organization's budget
and the impact of budget shortfalls on program activities. GAO	 
also reviewed efforts to improve the organization's budget	 
planning.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-5						        
    ACCNO:   A05397						        
  TITLE:     Chemical Weapons: Organization for the Prohibition of    
Chemical Weapons Needs Comprehensive Plan to Correct Budgeting	 
Weaknesses							 
     DATE:   10/24/2002 
  SUBJECT:   Budget administration				 
	     Budget deficit					 
	     National preparedness				 
	     Chemical warfare					 
	     Inspection 					 
	     International organizations			 
	     International relations				 
	     Planning programming budgeting			 
	     Weapons						 
	     Chemical Weapons Convention			 

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO Product.                                                 **
**                                                              **
** 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-03-5

                                       A

Report to the Ranking Minority Member, Committee on Foreign Relations, U.
S. Senate

October 2002 CHEMICAL WEAPONS Organization for the Prohibition of Chemical
Weapons Needs Comprehensive Plan to Correct Budgeting Weaknesses

GAO- 03- 5

Lett er

October 24, 2002 The Honorable Jesse Helms Ranking Minority Member
Committee on Foreign Relations United States Senate

The Chemical Weapons Convention, which entered into force in April 1997,
bans the development, production, acquisition, and use of chemical weapons
by member states and requires the elimination of those states* existing
chemical weapons stocks. To implement these provisions, the

convention established the Organization for the Prohibition of Chemical
Weapons (OPCW). The organization*s primary functions are to verify the
destruction of chemical weapons and their production facilities, conduct
chemical industry inspections, and encourage international cooperation in
the field of chemistry. A Technical Secretariat, headed by a
DirectorGeneral, carries out the organization*s daily operations. The
organization*s budget for calendar year 2002 is about $54 million. 1 The
United States contributes about 22 percent of the organization*s assessed
budget each year. Recently, the United States and other member states have
raised

concerns that the organization is not fulfilling its mandate because of a
number of management weaknesses. Such concerns prompted the removal of the
organization*s Director- General in April 2002.

You initially requested that we conduct a comprehensive management review
of the organization to determine how it has implemented the convention. We
could not fulfill the original scope of your request, however because
officials at the Organization for the Prohibition of Chemical Weapons and
the State Department limited our access during our visit to The Hague in
May 2002. On the basis of the information that we could obtain, and as
agreed with your staff, we assessed (1) the accuracy of the Secretariat*s
budgets, (2) the impact of budget shortfalls on the organization*s
inspection and international cooperation activities, and (3) the
Secretariat*s and State Department*s efforts to improve the

organization*s budget- planning practices. In conducting our work, we
analyzed the organization*s program and budget documents and audited
financial statements. We also reviewed financial regulations, annual
reports, and reports prepared by the organization*s External Auditor, the

1 In order to compare budget figures over time, all dollar figures used in
this report are expressed in 2001 dollars. For more details on our
methodology see appendix I.

Advisory Body on Administrative and Financial Matters, and the Office of
Internal Oversight. In addition, we obtained information from State
Department officials and member states* representatives to the
organization. (See app. I for details of our scope and methodology.)

Results in Brief Since the creation of the Organization for the
Prohibition of Chemical Weapons in 1997, the Secretariat*s budgets have
not been based on accurate projections of income and expenses. The
organization*s budgets (like those of other international organizations)
are based on the presumption that all member states will pay their
assessments in full, and the budgets have therefore recorded as income
nearly $1 million in unpaid assessments owed by 30 member states as of
August 2002. In addition, the Secretariat has overestimated reimbursement
income from inspections conducted in countries possessing chemical weapons
and has not collected

the inspection reimbursements in a timely manner. As of June 2002, member
states with chemical weapons- related facilities owed the organization
more than $2 million from inspections completed over the past 2 years; the
United States owed more than $1.4 million. In addition, the budgets for
2000 through 2002 underestimated the organization*s personnel expenses.
These collective problems contributed to a budget deficit of more than
$2.8 million in 2000 and a potential budget deficit of more than $5. 2
million in 2002, despite the organization*s plans to achieve a balanced

budget during these years. Since 1998, the organization*s external auditor
and financial advisory body have recommended changes to the organization*s
budgeting process to address these problems. However, the organization has
yet to fully implement their recommendations.

Weak budgeting practices and budget deficits have affected the
organization*s ability to perform its primary inspection and international
cooperation activities. As a result of these problems, the Secretariat
completed 200 of the 293 inspections planned for 2001. For 2002, the
Secretariat plans to reduce the number of inspections to compensate for
the projected deficit. The Secretariat also reduced funding for
international cooperation and assistance activities and imposed a hiring
freeze to offset its budget shortfalls. According to organization
documents, the workload of the organization is expected to grow as the
number of operational chemical weapons destruction facilities increases
from 6 to 12 by 2006 and

member states declare more industry facilities. According to the Deputy
Director- General, the Secretariat may have to increase its budget by 50
percent to support the growth in inspection activities, thus increasing

budgetary pressures and the probability that it will request increased
funding from member states. Although the Secretariat and the State
Department have taken some

preliminary steps to address budget problems, the Secretariat has yet to
develop a comprehensive plan that will remedy the organization*s budgeting
weaknesses. The Secretariat is creating a more accurate and timely
invoicing process for inspection reimbursements. In developing its
internal spending plans to implement the budget, the Secretariat has also
begun to exclude the assessments of member states in arrears. Furthermore,
the newly appointed Director- General has stated his

commitment to address the organization*s financial difficulties by
ensuring that adequate funding is available in the 2003 budget. The State
Department paid for a budget consultant to assist the organization and is
considering paying some inspection reimbursement costs in advance.
However, the organization has not developed a comprehensive plan to help
improve its projections of income and expenses and has not implemented
recommendations made by its external auditor and financial advisory body
to develop more accurate and realistic budgets. In addition, the Deputy
Director- General and representatives of other member states stated that
it is crucial for the United States, as the top contributor to the
organization,

to continue to play a leadership role in helping the organization address
its budget- planning weaknesses. In this report, we are recommending that
the Secretary of State work with the representatives of other member
states and the newly appointed Director- General to develop a
comprehensive plan to improve the organization*s budgeting process. In
addition, we recommend that the Secretary of State annually report to
Congress on the extent to which the organization is correcting its
budgeting weaknesses and implementing the budget- related recommendations
made by the organization*s oversight bodies.

The State Department, in commenting on our draft report, generally
concurred with our findings that budgetary and financial problems have
plagued the OPCW. With regard to our recommendation calling for a
comprehensive plan to improve the organization*s budgeting process, the
State Department agreed that no comprehensive plan exits. However, the
Department noted that the OPCW is taking some steps to address its

budget problems. The Department stated that it intends to monitor the
implementation of these steps and will pursue corrective action when
necessary. The Department disagreed with our recommendation that the

Secretary of State be required to report annually to Congress on how the
OPCW is correcting its budget weaknesses, asserting that such a
requirement would impose an administrative burden. We believe that such a
reporting requirement would help improve congressional oversight of the
OPCW and would not impose an undue burden on the State Department, since
it already provides various reports to Congress on international
organizations.

Background The Organization for the Prohibition of Chemical Weapons
consists of three entities: the Conference of the States Parties, the
Executive Council, and the Technical Secretariat. The Conference of the
States Parties currently comprises 147 representatives, one from each
member state, and oversees the implementation of the convention. The
Executive Council, consisting of 41 representatives from regionally
distributed member states,

meets in sessions throughout the year to supervise the Secretariat*s
activities. The Secretariat, headed by the Director- General, manages the
organization*s daily operations, including implementing the inspection

measures of the convention and preparing the organization*s annual budgets
and reports. About 60 percent of the Secretariat*s authorized staff level
of 507 employees engages in the inspection- related activities mandated
under Articles IV, V, and VI of the convention. Specifically, to verify
compliance with Article IV, the Secretariat inspects declared chemical
weapons stocks and destruction facilities. To verify compliance with
Article V, it inspects and monitors the destruction and conversion of
chemical weapons production facilities. Under Article VI of the
convention, the Secretariat inspects commercial production facilities. As
of July 2002, the organization had conducted 1,210 inspections at the
5,066 declared

chemical weapons sites and facilities that fall under the convention*s
purview.

The Secretariat supports member states in their efforts to implement the
convention. It also encourages international cooperation and assistance
among the member states as mandated by Articles X and XI of the

convention. Under these provisions, the Secretariat is authorized to
coordinate the provision of assistance to member states that are the
victims of chemical attacks. The Secretariat also encourages economic and
technological developments in the field of chemistry by encouraging trade
and exchange of information among the member states.

The organization*s budget for calendar year 2002 is about $54 million.
Funding for OPCW operations comes primarily from the 147 member

states* annual contributions, which are based on the United Nations scale
of assessments. The other large source of funding is reimbursement
payments for inspections conducted under Articles IV and V of the

convention. As required by the convention, members states with chemical
weapons related* facilities must reimburse the organization for its
inspection costs related to the destruction of chemical weapons (Article
IV) and the destruction of chemical weapons production facilities (Article
V). The State Department reports annually to Congress on U. S.
contributions to international organizations, including the OPCW. In early
2002, the United States and other member states to the convention raised
concerns that the organization was not fulfilling its mandate because of a
number of management weaknesses. According to the United States, such
weaknesses included mismanagement by the organization*s then Director-
General, as well as his advocacy of inappropriate roles for the
organization* such as attempting to interfere with United Nations weapons
inspections in Iraq. To address these management concerns, the

Conference of the States Parties voted to remove the former
DirectorGeneral in April 2002. In July 2002, the Conference appointed a
new Director- General.

Budgets Not Based on In its budgets, the Secretariat has not accurately
projected income and Accurate Income and

expenses. The Secretariat has overestimated its income for two reasons.
First, the budgets include as income the assessed contributions of member
Expense Projections states that are in arrears, some of which have not
paid their contributions since before 1997. Second, the Secretariat has
difficulty predicting and collecting income from inspections conducted at
chemical weapons* related facilities. The budgets also include inaccurate
expense projections.

OPCW*s inaccurate income and expense estimates contributed to a budget
deficit in 2000, and a potential deficit for 2002, despite plans to
achieve balanced budgets in those years.

Budgets Based on In developing its budget plans for the past 6 calendar
years, the Secretariat Inaccurate Income

has overestimated the amount of income it would receive from member
Projections states* assessed contributions and from reimbursable expenses
paid by member states for inspections at chemical weapons* related
facilities.

Income Projections Include When preparing its annual budgets, the
Secretariat overestimates the Arrearages

income that it realistically expects to receive from member states* annual
assessments. The Chemical Weapons Convention requires all member states to
pay their annual assessments or lose their voting privileges. 2 The
Secretariat*s annual budgets, however, included as income the
contributions due from 30 member states, even though these members had not
paid their annual assessments for at least the 2 previous years. The
cumulative total of arrearages over the past several years amounted to
almost $1 million as of August 2002. (See app. II for more details.) This
includes $781,883 from 16 member states that had not paid any of their
assessed or other contributions since before the organization*s inception
in 1997. 3 An OPCW official stated that budgeting for arrearages presents
a

politically sensitive problem for the organization because excluding
member states* assessed contributions from the annual budgets would
require approval from the Conference of the States Parties.

In response to these budgeting problems, the organization*s Advisory Body
on Administrative and Financial Matters 4 and its External Auditor 5
recommended that the Secretariat improve its budgeting practices by
developing more accurate and realistic budgets. For example, in 1998, the

2 Under Article VIII of the convention, *a member of the Organization
which is in arrears in the payment of its financial contribution to the
Organization shall have no vote in the Organization if the amount of its
arrears equals or exceeds the amount of the contribution due from it for
the preceding two full years.* However, the Conference of the States
Parties may allow a member to vote if it believes that the failure to pay
is beyond the member state*s control.

3 The Preparatory Commission for the Organization for the Prohibition of
Chemical Weapons preceded the creation of the OPCW in 1997 and carried out
the initial implementation of the Chemical Weapons Convention. Under the
Preparatory Commission, member states were assessed contributions to fund
the commission*s expenses. 4 Article 15, Regulation 15. 1, of the OPCW*s
draft financial regulations gives the Executive Council the authority to
*establish a body to advise it on administrative and financial matters.
This body shall consist of experts of recognized standing from States
Parties.* The duties of the Advisory Body of Administrative and Financial
Matters include, among others,

reporting on the OPCW*s draft program and budget, the audited financial
statements, and the organization*s internal oversight reports.

5 Article 13, Regulation 13. 1, of the OPCW*s financial regulations
requires the appointment of an External Auditor for the organization who
is also the Auditor- General (or an officer holding an equivalent title)
of a member state. The Conference of the States Parties can

appoint the auditor for 2 to 6 years. According to Regulation 13. 3, the
External Auditor*s duties include, among others, annual audits of the
OPCW*s financial statements in accordance with the auditing standards
promulgated by the International Organization of Supreme Audit
Institutions.

Advisory Body and the External Auditor stated that the Secretariat*s
future budgets should be more realistic and accurate and based on the
experience gained in the organization*s first year of operation. In 2000,
the External Auditor recommended that income projections, which are used
to establish expenditure targets, should be more realistic and based on
reasonable and sound assumptions using past trends in the budget. The
Secretariat has yet to act on these recommendations.

Budgets Overestimate Inspection As shown in table 1, every year since
1997, the budgets have overestimated

Reimbursements the amount of money that the organization will invoice and
receive each year for inspections conducted at chemical weapons* related
facilities.

Table 1: Inspection Reimbursements Collected, 1997* 2002 (as of June 18,
2002)

2001 dollars

1997* 1998 1999 2000 2001 2002 Total

Estimated reimbursements $8, 173, 878 $6, 588, 251 $5,115, 987 $3, 580,
163 $2, 621,336 $26,079, 615

Invoiced reimbursements 5, 898, 727 3,342,545 3, 313, 850 2, 566,964
425,913 $15,547, 999

Reimbursements collected (cumulative) 229, 545 4,377,532 8, 860, 499 12,
078, 774 13, 488,961 $13,488, 961

Note: Invoices are through February 2002. Source: GAO analysis of OPCW
data.

As indicated by OPCW documents, the Secretariat often receives its
reimbursements from those member states possessing chemical weapons*
related facilities late because these states usually do not pay the OPCW
during the year that they receive the inspection invoices. Frequently, the
organization does not receive payments until several years after issuing
the invoices. According to State Department officials, the United States
and Russia have not made payments, in many cases, until several years
after receiving OPCW invoices, because both governments experienced

difficulties in identifying a funding source and obtaining appropriations.
These officials added that both governments are working to improve their
reimbursement records during 2002. As of June 2002, those states
possessing chemical weapons* related facilities, including the United
States, owed OPCW more than $2 million in reimbursable inspection

expenses from the previous 2 years. The United States accounts for $1.4
million of the $2 million owed.

It is difficult, however, for the Secretariat to estimate the number of
inspections that will be conducted and therefore the amount of inspection
reimbursement payments that can be collected from those states possessing
chemical weapons* related facilities. According to State Department and
OPCW officials, the Secretariat relies on states* destruction plans to
calculate the number of inspections the organization

may conduct during the year. Chemical weapons possessor states cannot
always accurately predict when their destruction facilities will become
operational and what problems may arise once they do. Any change to the
schedule of a destruction facility*s operations can affect the timing of
OPCW inspections and thus affect the organization*s reimbursement
estimates. In commenting on our draft report, the State Department stated
that possessor states* destruction plans have collectively overstated
destruction activity, and consequently monitoring activity, by 30 percent
or

more. While it may be difficult for the Secretariat to estimate income
from inspection reimbursements, the Secretariat does not issue the
reimbursement invoices in a timely manner, according to State Department
and OPCW officials. Recent OPCW analysis indicates, however, that the
organization is working to improve the timeliness of its invoices. In
addition, sometimes the invoices are inaccurate, causing those states
possessing chemical weapons* related facilities to withhold payment until
corrections are made.

The organization*s External Auditor recommended in 2001 that the
Secretariat take concrete steps to pursue and recover outstanding invoices
and develop realistic estimates of its income from Articles IV and V

(reimbursable) inspections. In its April 2002 report, the organization*s
Advisory Body also recommended that the Secretariat avoid optimistic
income forecasts regarding Articles IV and V inspections, as well as
expedite and improve its billing procedures.

Budgets Underestimate As the result of a staff reclassification and
upgrade undertaken in 1999 and

Personnel Costs mandatory United Nations salary increases, the
Secretariat*s personnel costs increased, affecting the 2000, 2001, and
2002 budgets. However, the

budgets underestimated this increase. The Secretariat*s budget for 2002
underestimated staff cost increases by about 6 percent ($ 1.8 million) and
may contribute to a potential budget deficit for 2002. The audited
financial statement for 1999 and the Advisory Body*s January 2001 report
stated that

increases in personnel costs were inevitable as a result of the staff
reclassification and upgrade. The OPCW*s salary system further complicates
the budget projections for staff costs. OPCW uses the United Nations
compensation system, which budgets salaries and staff wages in U. S.
dollars. The OPCW, however, pays its staff in euros. According to State
Department and OPCW officials, the organization has had difficulty in
covering the currency risks associated with fluctuations in the dollar-
to- euro exchange rate. The organization can experience significant
personnel cost increases, depending upon the exchange rate; staff costs
represent about 75 percent of OPCW*s 2002 budget. Furthermore, OPCW and
State Department officials stated that it is difficult to manage staff
costs given the organization*s current tenure

policy, which does not clearly establish a start date for OPCW employees.
During the creation of the organization, a 7 year tenure policy was
established to reduce the number of career employees in the organization.

Currently, staff members are hired on a 3 year contract that can be
renewed yearly thereafter. However, the Conference of the States Parties
has yet to agree on a date for the commencement of the tenure policy.
Organization Had Budget

In 2000, the organization experienced a budget deficit of more than $2.8
Deficit in 2000 and

million when expenditures exceeded the income for the year. In 2001, the
Anticipates Deficit for 2002

Advisory Body reported that the Secretariat was aware of the income
shortfall of 2000 and should have managed the budget more carefully to
avoid a deficit. It also recommended that, to avoid a recurrence of
overspending, the Secretariat should maintain budgetary discipline by
matching expenditures to anticipated income in developing the 2001 budget.
However, for 2002, the organization may again experience a budget deficit.
According to an OPCW briefing document, 6 the organization will experience
a potential $5.2 million deficit because of unrealistic income

projections in the budget and underbudgeted personnel expenditures. 7 6
Director of Administration Management Board Briefing on the OPCW 2002
Programme and Budget Shortfall (The Hague, the Netherlands: Organization
for the Prohibition of Chemical Weapons, 2001).

7 About $3. 4 million of the potential deficit is attributable to
unrealistic expectations of income from Articles IV and V reimbursements
and unpaid assessed contributions. About $1. 8 million can be attributed
to the mandatory staff reclassification and upgrades.

Budget Shortfalls Because of its budget problems, the Secretariat has
reduced inspections Resulted in Reduced and international cooperation and
assistance efforts and has implemented

a hiring freeze. Unless the organization can obtain additional funding, it
will Inspections and have to further reduce its inspections in 2002. The
problem will intensify as International the number of inspectable
facilities increases during the next few years.

Cooperation Activities Primary Functions Reduced

The Secretariat has curtailed its inspection activities in response to its
to Offset Budget Deficits budget problems. As a result the Secretariat
conducted only 200 of the 293

inspections planned for 2001. The Secretariat plans to reduce the number
of inspections for 2002 to compensate for the potential deficit of $5.2
million. As of June 2002, OPCW inspectors had conducted only 90 of the 264
inspections planned for the year. Figure 1 depicts the number of
inspections planned and conducted from 1997 through June 2002.

Figure 1: Planned and Conducted OPCW Inspections, 1997* 2002

Notes: For 1997, inspections were conducted beginning in June. For 2002,
the figure represents inspections conducted through June 24, 2002.

Source: GAO analysis of OPCW documents.

Since 1997, most OPCW inspection activities have taken place at chemical
weapons* related facilities. The Secretariat receives reimbursements from
member states for inspections conducted under Articles IV and V of the
convention. However, the Secretariat is not reimbursed for inspections
carried out at commercial chemical facilities under Article VI. According
to OPCW documents, when funding is limited, the Secretariat reduces the
number of inspections at commercial chemical facilities that it conducts
during the year. Because of its budget problems, OPCW conducted only 75,
or 57 percent, of the 132 chemical industry inspections planned for 2001.
As of June 2002,

the organization had conducted only 47, or 36 percent, of the 132 industry
inspections planned for 2002. According to an OPCW document, if additional
funding becomes available, a maximum of 11 chemical industry

inspections per month can be conducted between the time additional monies
are received and the end of 2002. At the same time, the Secretariat cut
funding for international cooperation and assistance efforts in 2001 by
about one- third, from $3 million to $2 million, and has made further
reductions in funding for 2002. The Secretariat also imposed a hiring
freeze on OPCW personnel for 2000 through 2002. According to the OPCW*s
latest budget proposal, the Secretariat plans to leave 33 positions vacant
for 2003. Of these 33 positions, 22 are related to inspection and
verification activities.

Budget Problems Will According to OPCW officials, unless it receives
additional funding, the Multiply OPCW will not be able to completely
fulfill its primary inspection functions this year. As of June 2002, six
member states have provided about $397,000

in voluntary contributions to help offset the OPCW budget deficit for
2002. 8 According to a State Department official, the United States,
France, Germany, and the United Kingdom are considering contributing
additional funding to support the organization.

The Secretariat*s inspection resources will be further affected by
expected increases in the numbers of chemical weapons destruction
facilities and commercial chemical facilities requiring OPCW inspections.
Specifically, by 2006, the number of continuously operating chemical
weapons destruction facilities is expected to increase from 6 to 12. An
OPCW planning document also indicates that additional member states may
declare more industry facilities. 9 According to the Deputy Director-
General, preliminary OPCW estimates indicate that the funding level needed
to support inspection activities may increase by 50 percent.

8 As of June 2002, Japan, the Netherlands, Norway, Oman, Sweden, and the
United Kingdom had provided voluntary contributions to support various
OPCW activities. 9 OPCW Executive Council, Medium- Term Plan 2004* 2006
[draft] (The Hague, the Netherlands: Organization for the Prohibition of
Chemical Weapons, 2002).

OPCW and State The organization has taken some preliminary steps to
address its budgeting

Department Have problems, but it lacks a comprehensive strategy to
overcome the inherent

weaknesses in its budgeting process. Also, limited oversight resources
have Taken Steps to affected the organization*s efforts to improve its
budgeting process. The

Improve Budget State Department has taken some steps to assist the OPCW,
but budgeting

Practices, but problems remain.

Problems Remain Secretariat Taking Steps, The Secretariat is taking some
preliminary steps to improve its budgeting but Has No Plan to Address

practices. The new Director- General has stated his commitment to ensure
Budget Problems that the organization receives the financial resources
needed to implement its mandate and that these resources are used
exclusively for the objectives and missions outlined in the convention.
According to a State Department official, when developing its internal
spending plans to implement the

budget, the Secretariat has begun to exclude the assessments of member
states in arrears. The OPCW is also reducing its estimates of income
derived from inspection activities, based on the chemical weapons
possessor states* destruction plans, by 30 percent, to better reflect the
historical level of activity. State Department officials also indicated
that the

Secretariat is working to improve the invoicing and payments process for
Articles IV and V reimbursements by providing more accurate bills on a
more timely basis. Invoices sent out during the last two months of the
calendar year will be applied to the following year*s income projections.
State Department officials added that OPCW member states are considering
changing the current financial regulations to provide the Secretariat
flexibility in using the organization*s Working Capital Fund to cover
inspection- related expenses. 10 In commenting on our draft report, the
State Department also stated that the Secretariat has begun using actual
staff costs to develop more accurate budget forecasts of salary costs.

Although the Secretariat*s efforts to collect income from member states is
a positive first step in addressing its budget difficulties, it has not
directed sufficient attention to improving projections of future expenses.
According

10 The Working Capital Fund was designed to meet short- term liquidity
problems during a given financial period and is funded by the member
states in accordance with their scale of assessments. Current regulations
require that monies borrowed from the Working Capital Fund be repaid by
the end of the year.

to State and OPCW officials, the Secretariat does not budget for currency
fluctuations in calculating its staff expenses. These officials also
stated that current personnel regulations contain a vague employee tenure
policy, making it difficult to predict employee turnover and reduce the
number of employees. Accordingly, the Secretariat*s recent efforts do not
reflect a

comprehensive approach to addressing its continuing budget problems.
OPCW*s Office of Internal Oversight may play an important role in helping
reform the Secretariat*s budget process. In March 2002, the organization*s
Advisory Body questioned the role of the oversight office, stating that
the office may not be focusing on key internal auditing, monitoring,
evaluation, and investigation activities that could detect budgeting
problems. In providing its advice and consent to the ratification of the
Chemical

Weapons Convention, the U. S. Senate required the President to certify
that the OPCW had established an independent internal oversight office
that would conduct audits, inspections, and investigations relating to the
programs and operations of the OPCW. 11 In December 1997, the President
certified that the office was in compliance with the Senate*s requirement.
However, the OPCW*s 2000 annual report states that only one auditor

within the oversight office was responsible for internal audit activities.
The 2002 Advisory Body report states that the oversight office was
devoting only one- third of its staff resources to conducting audits,
while the remaining two- thirds was focused on other functions, such as
the implementation of the organization*s confidentiality regime and the
establishment of a quality assurance system. 12 In that same report, the
Advisory Body reemphasized that the principal and overriding functions of

the oversight office should be internal audit, monitoring, evaluation, and
investigation. Given the current financial and budgetary crisis, the
Advisory Body recommended that the Secretariat redefine the office*s role
to ensure a clear and sustained focus on proper management of the budget.

11 Condition 3 of Senate Resolution 75 of the 105th Congress (April 1997)
imposes such a certification requirement. 12 The Chemical Weapons
Convention contains provisions to protect the confidentiality of all
information reported to the OPCW and to prevent its unauthorized release.
The

confidentiality regime includes procedures for granting access to
confidential information, rigid registration, archiving and handling
procedures for confidential documents, and the operation of a secure
archive. It also involves physical and administrative protections to
prevent the loss or unauthorized transfer or release of documents.

State Department Taking The State Department funded a budget consultant to
assist the Secretariat Initiatives, but More in reviewing its budget
processes. However, it is difficult to assess the

Assistance Is Needed consultant*s impact in improving the budget processes
of the organization.

According to the State Department, although it reimbursed the Secretariat
for the consultant*s salary (including per diem) of $170, 000, the
consultant was not required to provide the Department with a statement of
work or a written analysis of the Secretariat*s budgetary practices and
efforts to improve its processes, because he was considered an employee of
the Technical Secretariat.

According to State Department officials, the United States is also
attempting to pay its Articles IV and V inspection reimbursements in a
timelier manner and is considering paying in advance the chemical weapons*
inspection costs that cover inspector salaries. To assist the organization
in meeting its 2002 budget, the State Department is providing $2 million
in supplemental funding to restore, to the extent feasible, budgeted
levels of inspection activity and to strengthen management and planning
functions, among other purposes. Funds will be deposited in a trust fund
and will remain available until expended by the OPCW on activities agreed
to by the United States.

OPCW*s Deputy Director- General and representatives from member states
commented that the United States needs to continue in its leadership role
by providing financial, managerial, and political support to the
organization. According to these officials, the U. S. government*s recent
efforts focused primarily on the removal of the former Director- General.

The officials added that the United States should now focus on addressing
the organization*s budgetary and financial problems. Conclusions The OPCW
has consistently overestimated its income and underestimated its expenses,
and thus has planned more inspections than it is financially able to
conduct. Unless the Secretariat corrects its weak estimating practices,
the Secretariat may continue to plan more inspections than it can
undertake. The problem may grow worse in future years as the number of new
chemical weapon*s destruction facilities increases and additional states
ratify the convention. The organization*s newly appointed DirectorGeneral

has an opportunity to correct these budgeting weaknesses and improve the
organization*s finances.

Recommendations for To improve the current budget problems of the
Organization for the

Executive Action Prohibition of Chemical Weapons, we recommend that the
Secretary of

State work with the representatives of other member states and the new
Director- General to develop a comprehensive plan to improve the
organization*s budgetary practices. The plan should outline specific
strategies to (1) improve the projection and collection of income, (2)
accurately project expenses, and (3) strengthen the role of the Office of
Internal Oversight in helping the organization improve its budgeting
process. Such a plan would be consistent with the budget recommendations
of the Secretariat*s oversight bodies. To ensure that Congress is informed
about the status of efforts to improve

the OPCW*s budgeting practices, we recommend that the Secretary of State
annually report to Congress on the extent to which the OPCW is correcting
its budgeting weaknesses and implementing the recommendations made by the
organization*s oversight bodies.

Agency Comments and We received written comments on a draft of this report
from the State Our Evaluation

Department that are reprinted in appendix III. We also received technical
comments from the State Department and have incorporated them where
appropriate. The State Department generally concurred with our findings
that budgetary and financial problems have plagued the OPCW, and that
unless corrected, these problems could have even more dramatic effects in
coming years. The Department, however, raised several issues with the
report. First, the Department asserted that our analysis of OPCW budgetary
and financial difficulties presented an incomplete picture of the OPCW*s
budgeting practices. Second, the State Department disputed our assertion
that we had to limit the scope of our review because of the access
restrictions we encountered during our May 2002 visit to the OPCW in The

Hague. Third, it stated that our report did not fully reflect the changes
that the OPCW has recently begun taking to address its budget weaknesses.
Finally, the Department disagreed with our recommendation that the
Secretary of State be required to report annually to Congress on how the
OPCW is correcting its budget weaknesses, asserting that such a
requirement would impose an administrative burden.

In response to the State Department*s comments on our draft report, we
added information on the reasons why the OPCW experienced budget problems.
Regarding our access to OPCW records and staff, although the State
Department provided us with some access to OPCW budget and

finance documents through the Department*s offices in Washington, D. C.,
we were denied the opportunity to review related budget documentation and
meet with numerous OPCW officials during our visit to The Hague in May
2002. Although we provided the State Department with an extensive

list of OPCW officials with whom we wanted to meet prior to our visit, we
were allowed to meet only with the Deputy Director- General and selected
representatives from the budget office and the inspection equipment

laboratory. We were not allowed to meet with representatives from key OPCW
offices, including the Special Projects Division, the Office of Internal
Oversight, the Office of the Legal Advisor, the Administration Division,
the Verification Division, the Inspection Division, the International
Cooperation and Assistance Division, and the Advisory Body on
Administrative and Financial Matters. Furthermore, the State Department
failed to notify us of any potential access difficulties with the OPCW
prior to our trip to The Hague, and did not actively seek to provide us
with access to these officials on our arrival. Consequently, we had to
limit the scope of our review to budget- related issues. In response to
the

State Department*s comments about recent budgetary initiatives, we have
updated the report to reflect the most current initiatives being
undertaken by the OPCW to address its budgeting problems. Regarding our
recommendation for an annual reporting requirement, we do not believe

that such a requirement would impose an administrative burden on the
Department, since it already provides various reports to Congress on
international organizations. This reporting requirement is necessary to
improve congressional oversight of the OPCW. We are providing copies of
this report to other interested congressional

committees and to the Secretary of State. We will make copies available to
others on request. In addition, the report will be available at no charge
on the GAO Web site at http:// www. gao. gov.

Please contact me at (202) 512- 8979 if you or your staff have any
questions concerning this report. Another GAO contact and staff
acknowledgments are listed in appendix IV.

Sincerely yours, Joseph Christoff, Director International Affairs and
Trade

Appendi Appendi xes x I

Scope and Methodology We could not conduct a comprehensive management
review of the organization as requested, because the Organization for the
Prohibition of Chemical Weapons (OPCW) and State Department officials
limited our access during our visit to The Hague in May 2002. As a result
of our lack of access to OPCW officials and limited access to OPCW
documents, we

could not determine how the reduction in chemical weapons and industry
inspections has affected the implementation of the Chemical Weapons
Convention. In addition, we could not assess the organization*s personnel
management, administrative, and internal audit functions. Specifically, we
were not permitted to meet with or obtain information from OPCW officials

from the following offices: the Special Projects Division, the Office of
Internal Oversight, the Office of the Legal Advisor, the Administration
Division, the Verification Division, the Inspection Division, the
International Cooperation and Assistance Division, and the Advisory Body
on Administrative and Financial Matters. However, we met with OPCW*s
Deputy Director- General. We also received a budget briefing from the
Director of the Administrative Division and the budget consultant being

funded by the State Department. In addition, we visited the inspection
laboratory and equipment store at Rijswijk, the Netherlands.

To determine the accuracy of the Secretariat*s budgets, we compared OPCW*s
program and budget documents for 1997* 2003 with the data in the audited
financial statements for 1997* 2001. 13 To compare budget and program
data, figures were converted from Netherlands guilders and euros to 2001
dollars, using appropriate exchange and inflation rates. We also

reviewed other OPCW documents, including the organization*s financial
regulations and annual reports. We analyzed reports prepared by the
organization*s External Auditor, the Advisory Body on Administrative and
Financial Matters, and the Office of Internal Oversight. In addition, we
obtained information from officials in the State Department*s Bureau of
Arms Control and Office of International Organization Affairs, as well as

from member states* representatives to OPCW. 14 13 Although we could not
independently review the reliability of the data provided in the audited
financial statements, the OPCW*s External Auditor provided an unqualified
opinion on the statements for each of these years. 14 During our visit to
The Hague in May 2002, we were able to meet with representatives from
Australia, France, Germany, Japan, the Russian Federation, and the United
Kingdom. We also obtained written responses to our questions from the
South African representative.

To determine the impact of budget shortfalls on the organization*s
inspection and international cooperation activities, we analyzed the data
contained in the organization*s program and budget documents and in

annual implementation reports for calendar years 1997* 2001. To confirm
our understanding of the data obtained, we met with an official from the
State Department*s Bureau of Arms Control. In addition, we reviewed other
OPCW documents and statements provided by the State Department. To assess
OPCW and State Department efforts to improve the organization*s budget-
planning practices, we met with State Department officials in Washington,
D. C., and The Hague. We also obtained information

from OPCW member states* representatives. We reviewed and analyzed OPCW
and State Department documents, including OPCW*s draft MediumTerm Plan for
2004* 2006; speeches given by the Director- General to the Executive
Council and Conference of the States Parties; and reports of the Advisory
Board on Administrative and Financial Matters, the External Auditor, and
the Office of Internal Oversight.

We could not independently verify the accuracy of the budget and other
financial data obtained from OPCW and the State Department. Although we
met with, and obtained documents from, officials at the Departments of
Commerce and Defense, the information they provided was not relevant to
the reduced scope of our work. We performed our work from January 2002
through October 2002 in

accordance with generally accepted government auditing standards.

Member States in Arrears of Contributions to the Organization for the
Prohibition of

Appendi x II

Chemical Weapons (as of August 31, 2002) 2001 dollars

Assessed contributions Preparatory

Working Member Commission

Capital Fund states

contributions a contributions b 1997 1998 1999 2000 2001 Total owed

Armenia $48, 755 $2, 227 $19, 774 $25, 805 $4, 861 $2, 583 $2, 948 $106,
953

Benin 2, 022 407 0 2, 903 884 861 982 $8, 059

Bolivia 0 0 0 98 3, 093 3, 013 3, 440 $9, 644

Burkina Faso 3, 051 407 2,255 4, 976 884 861 982 $13, 416

Burundi 6049 407 0 1, 244 439 428 492 $9, 058

El Salvador 6, 049 407 3,608 4, 976 5,302 5, 166 5,898 $31, 405

Equatorial Guinea 6, 049 407 3,608 4, 976 439 428 492 $16, 398

Fiji 0 0 0 3, 129 1,767 1, 722 1,966 $8, 585

Gambia 0 51 0 2, 357 439 428 492 $3, 767

Georgia 95, 747 4, 900 43, 502 56, 771 8,396 3, 013 3,440 $215, 769

Ghana 1, 680 407 2, 255 4, 976 3,093 3, 013 3,440 $18, 864

Guinea 6, 049 407 2,706 4, 976 1,326 1, 291 1,474 $18, 229

Guyana 4, 357 407 1,353 4, 976 439 428 492 $12, 452

Laos 2, 766 407 3,608 4, 976 439 428 492 $13, 116

Malawi 6, 049 407 0 2, 488 884 861 982 $11, 671

Maldives 0 0 3,392 4, 976 439 428 492 $9, 727

Mali 6, 049 407 3,608 4, 976 884 861 982 $17, 766

Mauritania 6, 049 407 0 4, 147 439 428 492 $11, 961

Nicaragua 6, 049 41 0 0 37 428 492 $7, 047

Niger 6, 049 407 3,608 4, 976 884 861 982 $17, 766

Papua New Guinea 0 0 0 2, 376 3,093 3, 013 3,440 $11, 922

Paraguay 0 0 3,159 4, 976 6,186 6, 027 6,880 $27, 228

Republic of Moldova 68, 237 3, 564 31, 638 41, 288 7,953 4, 304 4,914
$161, 898

Senegal 3, 022 407 0 2, 073 2,651 2, 583 2,948 $13, 684

Seychelles 6, 049 407 3,608 4, 976 884 861 982 $17, 766

Tajikistan 18, 540 891 7, 909 10, 322 2,210 1, 722 1,966 $43, 560

Togo 6, 049 407 3,608 4, 976 439 428 492 $16, 398

Trinidad and Tobago 0 1, 336 8,898 15, 483 7,512 6, 887 7,864 $47, 979

Turkmenistan 22, 377 1,336 11,864 15, 483 3,535 2, 583 2,948 $60, 127

(Continued From Previous Page)

2001 dollars

Assessed contributions Preparatory

Working Member Commission

Capital Fund states

contributions a contributions b 1997 1998 1999 2000 2001 Total owed

Tanzania 4, 892 407 0 2, 488 1,326 1, 291 1,474 $11, 878 Total $341, 986
$21,259 $163,958 $253, 143 $71,155 $57, 229 $65,362 $974, 093

Note: Numbers in columns may not sum to totals because of rounding. a The
Preparatory Commission for the Organization for the Prohibition of
Chemical Weapons preceded

the OPCW and carried out the initial implementation of the Chemical
Weapons Convention. Under the Preparatory Commission, member states were
assessed contributions to fund the commission*s expenses.

b The Working Capital Fund was designed to meet short- term liquidity
problems during a given financial period and is funded by the member
states in accordance with their scale of assessments. Source: GAO analysis
of OPCW data.

Appendi x II I Comments from the Department of State Note: GAO comments
supplementing those in the report text appear at the end of this appendix.

See comment 1.

See comment 2. See comment 3.

See comment 4. See comment 5.

See comment 6. See comment 7.

See comment 8. See comment 9.

See comment 10.

The following are GAO*s comments on the Department of State*s letter,
dated October 16, 2002.

GAO Comments 1. We agree that monitoring activities at chemical weapons*
destruction facilities account for most of OPCW*s workload, and that to
project this workload, the organization has depended on plans submitted by

chemical weapons* possessor states. Our report states that since 1997,
most OPCW inspection activities have taken place at chemical weapons
facilities. Our report also states that the Secretariat relies on
possessor states* destruction plans to calculate the number of inspections
the

organization may conduct during the year. Chemical weapons* possessor
states cannot accurately predict when their destruction facilities will
become operational and what problems may arise when they do. However, in
response to the State Department*s comments, we have included additional
information in the report to clarify this point.

2. We identified the key reasons why OPCW underestimated staff costs for
calendar years 2000* 2002, and included this information in the report.
For example, our report states that as the result of a staff
reclassification and upgrade undertaken in 1999 and mandatory United

Nations salary increases, the Secretariat*s personnel costs increased,
affecting the 2000, 2001, and 2002 budgets. 3. We agree that the OPCW
encounters the same difficulties as other

international organizations with regard to the late payment of annual
dues, and that the United States and Russia have experienced difficulties
in paying their Articles IV and V inspection bills. We included this
additional information in the report.

4. We agree that the OPCW has lacked adequate liquidity to deal with its
cash shortages, and this has resulted in a curtailment of inspection
activity. We have made no change to the report, however, because this is
its major theme. We reported that weak budgeting practices and budget
deficits have affected the organization*s ability to perform its primary
inspection and international cooperation activities, as outlined

in the Chemical Weapons Convention. 5. As explained in our report, the
OPCW spent against budgeted income

based on inflated estimates of inspection activity. This budget shortfall
resulted in reduced inspections and international cooperation activities.
We do not believe that a change in our report is needed.

6. Our report clearly states that since 1997, most OPCW inspection
activities have taken place at chemical weapons facilities. Because of its
budget problems, the OPCW conducted only 57 percent of the

chemical industry inspections planned for 2001. As of June 2002, it had
conducted only 36 percent of these inspections planned for 2002. We do not
believe that a change in our report is needed.

7. We disagree that the State Department made every reasonable effort to
accommodate our requests for information and access to OPCW staff. We were
not allowed to hold meetings with representatives from several key OPCW
offices. The State Department failed to notify us of any impending
scheduling difficulties prior to our trip to The Hague in

May 2002. On our arrival, the Department made no effort to facilitate
meetings with the following offices: the Special Projects Division, the
Office of Internal Oversight, the Office of the Legal Advisor, the
Administration Division, the Verification Division, the Inspection
Division, the International Cooperation and Assistance Division, and the
Advisory Body on Administrative and Financial Matters.

8. This comment confirms that we were able to meet with only a few select
OPCW staff. It is unclear how the State Department concluded that we were
unable to identify specific questions to which answers were not provided.
Prior to our departure for The Hague in May 2002,

we provided State Department officials in Washington and at the U. S.
Delegation to the OPCW with five pages of detailed questions that we
planned to raise with OPCW officials. Many of these questions remain
unanswered. We also provided the State Department with a detailed set of
questions we planned to raise with representatives from other

member states. 9. We have updated our report to provide the most recent
information on

OPCW initiatives currently under way. However, the State Department*s
mosaic of measures does not represent an overall strategy or plan for
improving the organization*s budgeting weaknesses. At best, it represents
only the first steps in addressing systemic weaknesses in the OPCW*s
budgeting process. 10. We believe that our recommendation for an annual
reporting

requirement to Congress is appropriate. Such reporting will help establish
a baseline for judging OPCW progress in achieving needed reforms. In
addition, this requirement will not impose an undue

administrative burden on the Department, since it already provides various
reports to Congress on international organizations, including the OPCW.

Appendi x V I GAO Contact and Staff Acknowledgments GAO Contact Stephen
Lord (202) 512- 4379 Acknowledgments In addition to the individual named
above, Beth Hoffman Leon, Richard K.

Geiger, and Reid Lelong Lowe made key contributions to this report. Bruce
Kutnick, Christine Bonham, and Geoffrey Frank provided additional
assistance.

(320100)

GAO*s Mission The General Accounting Office, the investigative arm of
Congress, exists to support Congress in meeting its constitutional
responsibilities and to help improve the performance and accountability of
the federal government for the American people. GAO examines the use of
public funds; evaluates federal programs and

policies; and provides analyses, recommendations, and other assistance to
help Congress make informed oversight, policy, and funding decisions.
GAO*s commitment to good government is reflected in its core values of
accountability, integrity, and reliability.

Obtaining Copies of The fastest and easiest way to obtain copies of GAO
documents at no cost is through the Internet. GAO*s Web site (www. gao.
gov) contains abstracts and fulltext GAO Reports and

files of current reports and testimony and an expanding archive of older
Testimony

products. The Web site features a search engine to help you locate
documents using key words and phrases. You can print these documents in
their entirety, including charts and other graphics.

Each day, GAO issues a list of newly released reports, testimony, and
correspondence. GAO posts this list, known as *Today*s Reports,* on its
Web site daily. The list contains links to the full- text document files.
To have GAO e- mail this list to you every afternoon, go to www. gao. gov
and select *Subscribe to daily E- mail alert for newly released products*
under the GAO Reports heading.

Order by Mail or Phone The first copy of each printed report is free.
Additional copies are $2 each. A check or money order should be made out
to the Superintendent of Documents. GAO also accepts VISA and Mastercard.
Orders for 100 or more copies mailed to a single address are discounted 25
percent. Orders should be sent to:

U. S. General Accounting Office 441 G Street NW, Room LM Washington, D. C.
20548

To order by Phone: Voice: (202) 512- 6000 TDD: (202) 512- 2537 Fax: (202)
512- 6061

To Report Fraud, Contact: Waste, and Abuse in

Web site: www. gao. gov/ fraudnet/ fraudnet. htm E- mail: fraudnet@ gao.
gov

Federal Programs Automated answering system: (800) 424- 5454 or (202) 512-
7470

Public Affairs Jeff Nelligan, managing director, NelliganJ@ gao. gov (202)
512- 4800 U. S. General Accounting Office, 441 G Street NW, Room 7149

Washington, D. C. 20548

a

GAO United States General Accounting Office

Since its establishment in 1997, the ability of the Organization for the
Prohibition of Chemical Weapons (OPCW) to carry out key inspection
functions has been hindered by inaccurate budget projections and, more
recently, budget deficits. The organization has consistently overestimated
its income and underestimated its expenses. Its budgets have recorded as
income nearly $1 million in unpaid assessments owed by 30 member states.
The budgets have also overestimated reimbursement payments for inspections
conducted in member states with chemical weapons* related facilities. As
of June 2002, these states owed the organization more than $2 million.
Furthermore, the budgets for 2000 through 2002 underestimated personnel
expenses.

The organization*s inaccurate income and spending estimates contributed to
a $2.8 million deficit in 2000 and a potential deficit of $5.2 million in
2002. Weak budgeting practices and budget deficits have affected the
organization*s ability to perform inspection activities as mandated by the
Chemical Weapons Convention. The organization had to reduce the number of
inspections it conducted in 2001 and plans to reduce the number it
conducts in 2002.

OPCW Inspections, 1997*2002

0 50

100 150

200 250

300 350

1997 1998 1999 2000 2001 2002 Inspections planned

Inspections conducted

Notes: Inspections for 1997 did not begin until June. Inspections in 2002
were conducted through June. Source: GAO analysis of OPCW data.

Although the organization and the State Department have taken some steps
to address the budget problems, the organization has not developed a
comprehensive plan to overcome its inherent budgeting weaknesses. Unless
the organization improves its planning, budget shortfalls will continue to
affect its ability to conduct inspections. CHEMICAL WEAPONS

Organization for the Prohibition of Chemical Weapons Needs Comprehensive
Plan to Correct Budgeting Weaknesses

www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 5. To view the full report,
including the scope and methodology, click on the link above. For more
information, contact Joseph Christoff at (202) 512- 8979 or christoffj@
gao. gov. Highlights of GAO- 03- 5, a report to the

Ranking Minority Member, Committee on Foreign Relations, U. S. Senate

October 2002

The Organization for the Prohibition of Chemical Weapons is responsible
for implementing the Chemical Weapons Convention, which bans the use of
chemical weapons and requires their elimination. The United States and
other member states have raised concerns that a number of management
weaknesses may prevent the organization from fulfilling its mandate.

As requested, GAO assessed the accuracy of the organization*s budgets and
the impact of budget shortfalls on program activities. GAO also reviewed
efforts to improve the organization*s budget planning.

To improve the current budgeting practices of the organization, the
Secretary of State should (1) work with the organization to develop a
comprehensive plan to improve budget projections and income collection,
and (2) report annually to Congress on the organization*s progress in
correcting its budgeting weaknesses.

The State Department generally concurred with GAO*s findings. However,
State disagreed with our recommendation for annual reports to Congress on
the OPCW*s progress. We believe, however, that such a reporting
requirement is necessary to improve congressional oversight of the OPCW.

Page i GAO- 03- 5 Chemical Weapons

Contents Letter 1

Results in Brief 2 Background 4 Budgets Not Based on Accurate Income and
Expense Projections 5 Budget Shortfalls Resulted in Reduced Inspections
and International

Cooperation Activities 10 OPCW and State Department Have Taken Steps to
Improve Budget Practices, but Problems Remain 13

Conclusions 15 Recommendations for Executive Action 16 Agency Comments and
Our Evaluation 16

Appendixes

Appendix I: Scope and Methodology 19

Appendix II: Member States in Arrears of Contributions to the Organization
for the Prohibition of Chemical Weapons (as of August 31, 2002) 21

Appendix III: Comments from the Department of State 23 GAO Comments 28

Appendix IV: GAO Contact and Staff Acknowledgments 31 GAO Contact 31
Acknowledgments 31

Table Table 1: Inspection Reimbursements Collected, 1997* 2002 (as of June
18, 2002) 7 Figure Figure 1: Planned and Conducted OPCW Inspections,

1997* 2002 11

Page 1 GAO- 03- 5 Chemical Weapons United States General Accounting Office

Washington, D. C. 20548 Page 1 GAO- 03- 5 Chemical Weapons

A

Page 2 GAO- 03- 5 Chemical Weapons

Page 3 GAO- 03- 5 Chemical Weapons

Page 4 GAO- 03- 5 Chemical Weapons

Page 5 GAO- 03- 5 Chemical Weapons

Page 6 GAO- 03- 5 Chemical Weapons

Page 7 GAO- 03- 5 Chemical Weapons

Page 8 GAO- 03- 5 Chemical Weapons

Page 9 GAO- 03- 5 Chemical Weapons

Page 10 GAO- 03- 5 Chemical Weapons

Page 11 GAO- 03- 5 Chemical Weapons

Page 12 GAO- 03- 5 Chemical Weapons

Page 13 GAO- 03- 5 Chemical Weapons

Page 14 GAO- 03- 5 Chemical Weapons

Page 15 GAO- 03- 5 Chemical Weapons

Page 16 GAO- 03- 5 Chemical Weapons

Page 17 GAO- 03- 5 Chemical Weapons

Page 18 GAO- 03- 5 Chemical Weapons

Page 19 GAO- 03- 5 Chemical Weapons

Appendix I

Appendix I Scope and Methodology

Page 20 GAO- 03- 5 Chemical Weapons

Page 21 GAO- 03- 5 Chemical Weapons

Appendix II

Appendix II Member States in Arrears of Contributions to the Organization
for the Prohibition of Chemical Weapons (as of August 31, 2002)

Page 22 GAO- 03- 5 Chemical Weapons

Page 23 GAO- 03- 5 Chemical Weapons

Appendix III

Appendix III Comments from the Department of State

Page 24 GAO- 03- 5 Chemical Weapons

Appendix III Comments from the Department of State

Page 25 GAO- 03- 5 Chemical Weapons

Appendix III Comments from the Department of State

Page 26 GAO- 03- 5 Chemical Weapons

Appendix III Comments from the Department of State

Page 27 GAO- 03- 5 Chemical Weapons

Appendix III Comments from the Department of State

Page 28 GAO- 03- 5 Chemical Weapons

Appendix III Comments from the Department of State

Page 29 GAO- 03- 5 Chemical Weapons

Appendix III Comments from the Department of State

Page 30 GAO- 03- 5 Chemical Weapons

Page 31 GAO- 03- 5 Chemical Weapons

Appendix IV

United States General Accounting Office Washington, D. C. 20548- 0001

Official Business Penalty for Private Use $300

Address Service Requested Presorted Standard

Postage & Fees Paid GAO Permit No. GI00
*** End of document. ***