FY 2003 Annual Report on the Cooperative Threat Reduction Program
(08-APR-03, GAO-03-627R).					 
                                                                 
Under section 1308 of the National Defense Authorization Act for 
Fiscal Year 2001, 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 Department of Defense, however, submitted its CTR	 
annual report for fiscal year 2003 to Congress on January 8,	 
2003, more than 11 months after the submission date mandated by  
law. The legislation also requires the Comptroller General to	 
provide Congress with an assessment of the report's multiyear	 
plan setting forth the amount and purpose of funding to be	 
provided over the 5-year term of the plan and describing the	 
department's efforts to ensure that CTR assistance is accounted  
for and used as intended. We reviewed the fiscal year 2003 annual
CTR report and compared it with our assessment of the 2002 annual
report. As with the 2002 report, we analyzed the 2003 report to  
determine whether it (1) provides a 5-year plan that sets forth  
the funding requirements for the program and includes key federal
strategic planning elements and (2) describes the methods used to
determine whether the assistance provided is used for the	 
purposes intended. We also reviewed the 2003 report to determine 
if it addresses past open GAO recommendations. We did not assess 
the validity of the data contained in the 2003 annual CTR report 
because most of the information contained in the report was	 
outdated due to its late submission to Congress.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-627R					        
    ACCNO:   A06616						        
  TITLE:     FY 2003 Annual Report on the Cooperative Threat Reduction
Program 							 
     DATE:   04/08/2003 
  SUBJECT:   Federal funds					 
	     Internal controls					 
	     Program evaluation 				 
	     Reporting requirements				 
	     Strategic planning 				 
	     Noncompliance					 
	     Funds management					 
	     DOD Cooperative Threat Reduction Program		 

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GAO-03-627R

GAO- 03- 627R FY 2003 Annual Report on the Cooperative Threat Reduction
Program United States General Accounting Office

Washington, DC 20548

April 8, 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 2003 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
Department of Defense, however, submitted its CTR annual report for fiscal
year 2003 to Congress on January 8, 2003, more than 11 months after the
submission date mandated by law. The legislation also requires the
Comptroller General to provide Congress with an assessment of the report*s
multiyear plan setting forth the amount and purpose of funding to be
provided over the 5- year term of the plan and describing the department*s
efforts to ensure that CTR assistance is accounted for and used as
intended.

As agreed with your staff, we reviewed the fiscal year 2003 annual CTR
report and compared it with our assessment of the 2002 annual report. As
with the 2002 report, we analyzed the 2003 report to determine whether it
(1) provides a 5- year plan that sets forth the funding requirements for
the program and includes key federal strategic planning elements and (2)
describes the methods used to determine whether the assistance provided is
used for the purposes intended. We also reviewed the 2003 report to
determine if it addresses past open GAO recommendations. We did not assess
the validity of the data contained in the 2003 annual CTR report because
most of the information contained in the report was outdated due to its
late submission to Congress.

In reviewing the CTR annual report submitted for fiscal year 2002, we
found that it (1) did not clearly set forth the amount of CTR funding to
be provided over the 5- year

GAO- 03- 627R FY 2003 Annual Report on the Cooperative Threat Reduction
Program Page 2 term of its plan, (2) did not include key federal strategic
planning elements in the

5- year plan, (3) described the procedures CTR officials used to account
for the assistance provided but in some instances asserted a more rigorous
methodology than what was actually used, and (4) incorporated some but not
all prior GAO recommendations. 1 When comparing the 2002 CTR annual report
with the 2003 report, we found that the

Department of Defense had corrected some of the weaknesses we had
previously identified. Primarily, the 2003 report clearly provides the
required funding information for each program objective through fiscal
year 2007, the 5- year period covered by the plan. For fiscal years 2002
through 2007, the Department of Defense estimates that it may spend more
than $2.3 billion. 2 However, the 2003 report continues to omit key
federal strategic planning elements

contained in the Government Performance and Results Act. Such planning
elements could help guide preparation of annual CTR budgets. The current
report excludes (1) external factors that could impact program goals, (2)
annual performance goals that are linked to long- term program goals, and
(3) evaluation plans that could help determine or revise program goals.
The Defense Threat Reduction Agency that oversees the implementation of
the CTR program has begun including such federal planning elements in its
internal strategic plan.

The 2003 annual CTR report describes the methods used by the Department of
Defense to determine whether the assistance provided is used for the
purposes intended. For example, the report explains the status of CTR-
provided equipment and contracts, as well as the methods used to ensure
the proper use of equipment. The 2003 annual report accurately describes
the procedures used in accounting for CTR assistance.

In compiling the 2003 annual CTR report, the Department of Defense
addresses open GAO recommendations regarding the program. We found that
the current CTR report does list CTR- provided services and provide a
cumulative listing of assistance as recommended in our 2000 report. 3 In
addition, the 2003 CTR report incorporates a 2001 recommendation that the
Department of Defense develop criteria for conducting audits and
examinations of CTR- provided equipment. The 2003 CTR report does not
address our 2001 recommendation that the Department of Defense expand the
scope of its CTR audits and examinations from simply taking an inventory
of equipment to assessing whether CTR- provided assistance is being used
efficiently and effectively. 4 However, according to the 2003 annual
report, the Department of Defense will include such an assessment in its
2004 CTR annual report.

1 U. S. General Accounting Office, Cooperative Threat Reduction Annual
Report, GAO- 03- 341R (Washington, D. C.: Dec. 2, 2002). 2 Since fiscal
year 2001, the CTR program has obligated more than $3.5 billion. 3 U. S.
General Accounting Office, Cooperative Threat Reduction: DOD*s 1997- 98
Reports on

Accounting for Assistance Were Late and Incomplete, GAO/ NSIAD- 00- 40
(Washington, D. C.: Mar. 15, 2000). 4 U. S. General Accounting Office,
Cooperative Threat Reduction: DOD Has Adequate Oversight of Assistance,
but Procedural Limitations Remain, GAO- 01- 694 (Washington, D. C.: June
19, 2001).

GAO- 03- 627R FY 2003 Annual Report on the Cooperative Threat Reduction
Program Page 3 We performed our work in Washington, D. C., from January
through April 2003 in

accordance with generally accepted government auditing standards. We
provided a draft of this report to Department of Defense officials, but
they had no comments.

- - - - - We are sending copies of this report to the Honorable Donald
Rumsfeld, Secretary of Defense, and to interested congressional
committees. The 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, Beth Hoffman Leon, Hynek
Kalkus, Pierre Toureille, and Lynn Cothern also made key contributions to
this report.

Joseph A. Christoff Director, International Affairs and Trade (320180)
*** End of document. ***