Preliminary Observations on the Use and Oversight of U.S.	 
Coalition Support Funds Provided to Pakistan (06-MAY-08,	 
GAO-08-735R).							 
                                                                 
According to U.S. embassy officials in Islamabad and unclassified
U.S. intelligence documents, since 2002, al Qaeda and the Taliban
have used Pakistan's Federally Administered Tribal Areas (FATA)  
and the border region to attack Pakistani, Afghan, U.S. and	 
coalition troops; plan and train for attacks against U.S.	 
interests; destabilize Pakistan; and spread radical Islamist	 
ideologies that threaten U.S. interests. Since October 2001, the 
United States has provided Pakistan with over $10 billion for	 
military, economic, and development activities in support of the 
critical U.S. national security goals of destroying terrorist	 
threats and closing terrorist safe havens. A major component of  
this effort has been U.S. Coalition Support Funds (CSF) 	 
reimbursed to Pakistan. The purpose of CSF is to reimburse	 
coalition countries for logistical and military support provided 
to United States military operations in the global war on terror.
In Pakistan, reimbursements through CSF are intended to enable	 
the government of Pakistan to attack terrorist networks in the	 
FATA and stabilize the border areas. It is structured as a	 
reimbursement mechanism in which the U.S. Department of Defense  
(Defense) policy is to validate that support was provided, costs 
were incurred, and these costs were incremental to normal	 
Pakistani military operations. We were asked to assess how CSF	 
reimbursements have been used to meet U.S. goals in Pakistan, and
what controls exist to ensure that reimbursements are for	 
legitimate claims.						 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-735R					        
    ACCNO:   A81979						        
  TITLE:     Preliminary Observations on the Use and Oversight of U.S.
Coalition Support Funds Provided to Pakistan			 
     DATE:   05/06/2008 
  SUBJECT:   Combating terrorism				 
	     Counterterrorism					 
	     Federal aid to foreign countries			 
	     Federal funds					 
	     Foreign military assistance			 
	     Funds management					 
	     Homeland security					 
	     Internal controls					 
	     International cooperation				 
	     International organizations			 
	     International relations				 
	     Military operations				 
	     Program evaluation 				 
	     Program management 				 
	     Security threats					 
	     Strategic planning 				 
	     Terrorism						 
	     Executive agency oversight 			 
	     Foreign countries					 
	     Program goals or objectives			 
	     Reimbursements from government			 
	     Security operations				 
	     Federally Administered Tribal Areas		 
	     (Pakistan) 					 
                                                                 
	     Pakistan						 

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GAO-08-735R

   

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United States Government Accountability Office: 

Washington, DC 20548: 

May 6, 2008: 

Congressional Requesters: 

Subject: Preliminary Observations on the Use and Oversight of U.S. 
Coalition Support Funds Provided to Pakistan: 

According to U.S. embassy officials in Islamabad and unclassified U.S. 
intelligence documents, since 2002, al Qaeda and the Taliban have used 
Pakistan's Federally Administered Tribal Areas (FATA) and the border 
region to attack Pakistani, Afghan, U.S. and coalition troops; plan and 
train for attacks against U.S. interests; destabilize Pakistan; and 
spread radical Islamist ideologies that threaten U.S. interests. Since 
October 2001, the United States has provided Pakistan with over $10 
billion for military, economic, and development activities in support 
of the critical U.S. national security goals of destroying terrorist 
threats and closing terrorist safe havens.[Footnote 1] A major 
component of this effort has been U.S. Coalition Support Funds (CSF) 
reimbursed to Pakistan. The purpose of CSF is to reimburse coalition 
countries for logistical and military support provided to United States 
military operations in the global war on terror. In Pakistan, 
reimbursements through CSF are intended to enable the government of 
Pakistan to attack terrorist networks in the FATA and stabilize the 
border areas. It is structured as a reimbursement mechanism in which 
the U.S. Department of Defense (Defense) policy is to validate that 
support was provided, costs were incurred, and these costs were 
incremental to normal Pakistani military operations. 

We were asked to assess how CSF reimbursements have been used to meet 
U.S. goals in Pakistan, and what controls exist to ensure that 
reimbursements are for legitimate claims. During the months of March 
and April 2008, we briefed the Chairman of the House Committee on 
Oversight and Government Reform's Subcommittee on National Security and 
Foreign Affairs and his staff, as well as various other congressional 
staff members, including those from the House Committee on Foreign 
Affairs, on the interim results of our work on CSF. This report 
provides preliminary unclassified observations conveyed during those 
briefings; it does not include findings and recommendations on the CSF 
program. 

We plan to issue the final results of our evaluation regarding the use 
and oversight of CSF in the summer of 2008, which will include an 
evaluation of Defense's implementation of the CSF oversight process. 
This report will be followed by a report assessing security, political, 
and development assistance activities undertaken by the United States 
to meet U.S. national security goals in the FATA.[Footnote 2] 

In summary, the briefings provided to the Chairman and various 
congressional staff members note that: 


* For the period covering October 2001 through June 2007, the United 
States reimbursed Pakistan about $5.56 billion in CSF for military 
operations in FATA and other support in the war on terror. CSF 
reimbursement funds are paid directly into the Pakistani government 
treasury and become sovereign funds. Once they become sovereign funds, 
the U.S. government has no oversight authority over these funds. 

* In response to a Defense Inspector General review conducted in 2003, 
DOD implemented additional guidance to improve oversight of the CSF 
reimbursed to Pakistan. Moreover, in 2007, the Office of the Defense 
Representative to Pakistan (ODRP) began playing a larger role in 
overseeing CSF reimbursement claims. 

* In performing oversight, ODRP reviews the Pakistani claims and 
indicates that to the best of their knowledge military support was 
provided and expenses were actually incurred. U.S. Central Command 
(CENTCOM) then validates that Pakistani operations listed were 
essential to support U.S. military operations in the theater. The 
claims are sent to the Office of the Under Secretary of Defense for 
Comptroller, who (1) performs a macro-level review comparing the cost 
to similar operations, and (2) assesses whether the cost categories are 
reasonable, selected subcategories are reasonable compared to U.S. 
costs, and costs are consistent with previous claims. In addition, both 
the Undersecretary of Defense for Policy and the State Department 
verify that the reimbursement is consistent with the U.S. government's 
National Security Strategy and that the CSF payment does not adversely 
impact the balance of power in the region. 

* In recent months,[Footnote 3] Defense has disallowed or deferred a 
significantly greater amount of CSF reimbursement claims from 
Pakistan.[Footnote 4] 

We determined the amount and oversight process used for CSF 
reimbursements to Pakistan by analyzing Defense documents covering 
reimbursement claims for the period from fiscal years 2002 through June 
2007 and by verifying the amounts used for the FATA and the border 
regions through discussions with Defense officials in Washington, D.C., 
and Tampa, Florida. As part of our data reliability process, we 
confirmed that the data provided by the OSD Comptroller were accurately 
recorded in the software we used to analyze the data. This analysis 
does not include funding for covert activities in Pakistan. We 
conducted this performance audit from July 2007 through April 2008 in 
accordance with generally accepted government auditing standards. Those 
standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings based on our audit objectives. We believe that the evidence 
obtained provides a reasonable basis for our findings based on our 
audit objectives. 

We provided drafts of this report to Defense and State officials for 
comment. 

Defense provided written comments on a draft of this report (see encl. 
II). Overall, Defense found most of the content to be accurate and 
provided comments on points it felt needed additional clarification. 
Defense also commented on the limited time it was given to provide 
comments on this correspondence. We agree that we were only able to 
provide Defense a limited time to comment on our draft, and appreciate 
Defense's assistance in providing detailed comments under tight time 
constraints. We also note that the briefing charts reflected our 
preliminary observations on CSF, and did not contain findings, 
conclusions, or recommendations. Defense is aware that we are 
conducting a detailed assessment of the CSF effort, and we look forward 
to working closely with Defense as we finalize the draft. 

We also received technical comments from Defense, which we have 
incorporated throughout the report where appropriate. We requested 
comments from the Department of State, but none were provided. 

Upon releasing the report, we will send copies of this report to 
interested congressional committees and the Secretaries of Defense and 
State. We will also make copies of this report available to others upon 
request. We will also make copies available at no charge on the GAO Web 
site at http://www.gao.gov. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-4128 or [email protected]. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made major contributions 
to this report are listed in enclosure III. 

Signed by: 

Charles Michael Johnson Jr.: 

Director, International Affairs and Trade: 

Enclosures: 

List of Congressional Committees: 

The Honorable Howard L. Berman: 
Chairman: 
The Honorable Ileana Ros- Lehtinen: 
Ranking Member: 
Committee on Foreign Affairs: 
House of Representatives: 

The Honorable Gary L. Ackerman: 
Chairman: 
The Honorable Mike Pence: 
Ranking Member: 
Subcommittee on the Middle East and South Asia: 
Committee on Foreign Affairs: 
House of Representatives: 

The Honorable John F. Tierney: 
Chairman: 
The Honorable Christopher Shays: 
Ranking Member: 
Subcommittee on National Security and Foreign Affairs: 
Committee on Oversight and Government Reform: 
House of Representatives: 

The Honorable Tom Harkin: 
The Honorable Robert Menendez: 
United States Senate: 

[End of section] 

Enclosure I: Briefing for Congressional Requesters: 

Preliminary Observations on the Use and Oversight of Coalition Support 
Funds to Pakistan: 

Briefing for Congressional Requesters March and April 2008: 

Table of Contents: 

Requesters: 
Ongoing GAO Work on Pakistan: 
Background: 
Funding: 
Preliminary Observations: 
Scope and Methodology: 
Appendix: 2004 Coalition Support Funds (CSF) Criteria 

Requesters: 

Chairman and Ranking Member of the: 

* House Committee on Foreign Affairs: 

* Subcommittee on the Middle East and South Asia, House Committee on 
Foreign Affairs: 

* Subcommittee on National Security and Foreign Affairs, House 
Committee on Oversight and Government Reform: 

Tom Harkin, U.S. Senate, co-requester: 

Robert Menendez, U.S. Senate, co-requester: 

Ongoing GAO Work on Pakistan: 

U.S. Strategy* 

* What is the status and reported progress in meeting U.S. strategic 
goals for the Federally Administered Tribal Areas (FATA) and Pakistanï¿½s 
border region with Afghanistan? 

* What is the status of U.S. efforts to develop a strategic plan for 
the FATA and Pakistanis border region, and does it contain key elements 
recommended by national security documents and key legislation? 

Coalition Support Funds: 

* How have Coalition Support Funds been used to meet U.S. strategic 
goals for Pakistan and the region? 

* What controls exist to ensure that they are used as intended? 

Capping Report: 

* What types of U.S. security, political, and development assistance 
activities are being used to meet U.S. strategic goals, what has been 
the progress of these efforts, and what controls exist over them? 

Strategic Importance of the FATA and Pakistanis Border Region with 
Afghanistan: 

According to the U.S. embassy in Islamabad and U.S. intelligence 
officials, since 2002 al Qaeda and the Taliban have used the FATA and 
the border region to: 

Attack Pakistan, Afghanistan, U.S. and allied NATO troops: 

Plan and train for attacks against U.S. interests: 

Destabilize Pakistan, a major nuclear-armed Muslim ally Spread radical: 

Islamic ideologies that threaten U.S. interests: 

Figure: Map of Pakistan: 

[See PDF image] 

Source: None listed. 

[End of figure] 

Table: Allocation of U.S. Funding to Pakistan (in billions): 

Key Funding Streams (FY02-08)*: $5.56; 
* Coalition Support Funding (CSF)**: $1.52; 
* Foreign Military Financing (FMF)***: $2.48; 
* USAID Assistance****: $.25; 
* Other*****: $.95. 
Total FY 02-08 Funding: $10.76. 

* Includes FY 2008 requests.
**CSF is a reimbursement for support provided by Pakistan to U.S. 
military operations.
*** FMF is used to purchase military equipment and training from the 
United States.
****Includes Economic Support Funds, most of which is direct budget 
support for Pakistan.
*****Other includes assistance for other activities, such as legal 
reform and police and military training. 

Source: GAO analysis of Defense, State, and USAID documents. 

[End of table] 

CSF Purpose, Objective, and Funding: 

Purpose: To reimburse coalition countries for logistical and military 
support provided to U.S. military operations: 

Objective in Pakistan: To enable government of Pakistan efforts to 
attack terrorist networks in the FATA and stabilize the border areas: 

Funding: $5.56 billion reimbursed to Pakistan for military operations 
in FATA and other support to war on terror ~ from October 2001 through 
June 2007 (latest 4. reimbursement): 

Figure: Reimbursement Amount By Month: 

This figure is a line graph showing the reimbursement amount by month. 
The X axis represents the month and year, and the Y axis represents the 
current dollars.  

Month/Year: 01-Jan-04; 
Current dollars: $58,251,000.00. 

Month/Year: 04-Feb-04; 
Current dollars: $62,981,000.00. 

Month/Year: 01-Mar-04; 
Current dollars: $76,886,000.00. 

Month/Year: 04-Apr-04; 
Current dollars: $82,094,200.00. 

Month/Year: 04-May-04; 
Current dollars: $77,287,372.00. 

Month/Year: 04-Jun-04; 
Current dollars: $91,951,300.00. 

Month/Year: 04-Jul-04; 
Current dollars: $90,345,700.00. 

Month/Year: 04-Aug-04; 
Current dollars: $109,313,700.00. 

Month/Year: 04-Sep-04; 
Current dollars: $92,784,580.00. 

Month/Year: 04-Oct-04; 
Current dollars: $88,625,574.00. 

Month/Year: 01-Nov-04; 
Current dollars: $79,856,000.00. 

Month/Year: 01-Dec-04; 
Current dollars: $75,114,600.00. 

Month/Year: 01-Jan-05; 
Current dollars: $85,661,800. 

Month/Year: 01-Feb-05; 
Current dollars: $80,219,300. 

Month/Year: 01-Mar-05; 
Current dollars: $86,698,400. 

Month/Year: 01-Apr-05; 
Current dollars: $67,102,600. 

Month/Year: 01-May-05; 
Current dollars: $68,608,500. 

Month/Year: 01-Jun-05; 
Current dollars: $68,722,000. 

Month/Year: 01-Jul-05; 
Current dollars: $71,646,500. 

Month/Year: 01-Aug-05; 
Current dollars: $72,467,600. 

Month/Year: 01-Sep-05; 
Current dollars: $78,564,600. 

Month/Year: 01-Oct-05; 
Current dollars: $88,856,000. 

Month/Year: 01-Nov-05; 
Current dollars: $75,446,693. 

Month/Year: 01-Dec-05; 
Current dollars: $71,453,495. 

Month/Year: 01-Jan-06; 
Current dollars: $79,400,674. 

Month/Year: 01-Feb-06; 
Current dollars: $78,406,260. 

Month/Year: 01-Mar-06; 
Current dollars: $87,766,027. 

Month/Year: 01-Apr-06; 
Current dollars: $92,032,823. 

Month/Year: 01-May-06; 
Current dollars: $86,283,491. 

Month/Year: 01-Jun-06; 
Current dollars: $100,877,374. 

Month/Year: 01-Jul-06; 
Current dollars: $99,607,230. 

Month/Year: 01-Aug-06; 
Current dollars: $97,656,140. 

Month/Year: 01-Sep-06; 
Current dollars: $83,249,465. 

Month/Year: 01-Oct-06; 
Current dollars: $88,126,587. 

Month/Year: 01-Nov-06; 
Current dollars: $90,183,688. 

Month/Year: 01-Dec-06; 
Current dollars: $86,146,231. 

Month/Year: 01-Jan-07; 
Current dollars: $85,535,351. 

Month/Year: 01-Feb-07; 
Current dollars: $85,628,299. 

Month/Year: 01-Mar-07; 
Current dollars: $71,899,270. 

Month/Year: 01-Apr-07; 
Current dollars: $71,145,810. 

Month/Year: 01-May-07; 
Current dollars: $69,536,440. 

Month/Year: 01-Jun-07; 
Current dollars: $69,153,140. 

[See PDF for image] 

Source: DOD. GAO has not verified the reliability of DOD Comptroller's 
data processing. 

Note: There is a lag between the provision of support and DODï¿½s 
reimbursement of these costs. The March-June 2007 claims were 
reimbursed in February 2008 and are the latest claims reimbursed by DOD 
Comptroller as of April 24, 2008. 

[End of figure] 

Figure: Claimed Amounts Disallowed or Deferred by Month: 

This figure is a line graph showing the claimed amounts disallowed or 
deferred by month. The X axis represents the month and the year, and 
the Y axis represents the current dollars. 

Month/Year: 01-Jan-04; 
Current dollars: $2,280,000.00. 

Month/Year: 04-Feb-04; 
Current dollars: $2,353,100.00. 

Month/Year: 01-Mar-04; 
Current dollars: $2,655,600.00. 

Month/Year: 04-Apr-04; 
Current dollars: $2,795,900.00. 

Month/Year: 04-May-04; 
Current dollars: $2,574,000.00. 

Month/Year: 04-Jun-04; 
Current dollars: $3,097,000.00. 

Month/Year: 04-Jul-04; 
Current dollars: $6,511,300.00. 

Month/Year: 04-Aug-04; 
Current dollars: $5,790,300.00. 

Month/Year: 04-Sep-04; 
Current dollars: $462,000.00. 

Month/Year: 04-Oct-04; 
Current dollars: $442,000.00. 

Month/Year: 01-Nov-04; 
Current dollars: $72,000.00. 

Month/Year: 01-Dec-04; 
Current dollars: $363,900.00. 

Month/Year: 01-Jan-05; 
Current dollars: $1,593,900. 

Month/Year: 01-Feb-05; 
Current dollars: $316,200. 

Month/Year: 01-Mar-05; 
Current dollars: $3,155,100. 

Month/Year: 01-Apr-05; 
Current dollars: $328,600. 

Month/Year: 01-May-05; 
Current dollars: $1,439,800. 

Month/Year: 01-Jun-05; 
Current dollars: $1,350,000. 

Month/Year: 01-Jul-05; 
Current dollars: $1,390,100. 

Month/Year: 01-Aug-05; 
Current dollars: $1,582,900. 

Month/Year: 01-Sep-05; 
Current dollars: $3,681,800. 

Month/Year: 01-Oct-05; 
$234,868. 

Month/Year: 01-Nov-05; 
Current dollars: $0. 

Month/Year: 01-Dec-05; 
Current dollars: $339. 

Month/Year: 01-Jan-06; 
Current dollars: $1,539,000. 

Month/Year: 01-Feb-06; 
Current dollars: $556,070. 

Month/Year: 01-Mar-06; 
Current dollars: $1,273,399. 

Month/Year: 01-Apr-06; 
Current dollars: $1,025,549. 

Month/Year: 01-May-06; 
Current dollars: $3,305,170. 

Month/Year: 01-Jun-06; 
Current dollars: $3,991,700. 

Month/Year: 01-Jul-06; 
Current dollars: $1,311,000. 

Month/Year: 01-Aug-06; 
Current dollars: $1,953,300. 

Month/Year: 01-Sep-06; 
Current dollars: $6,230,809. 

Month/Year: 01-Oct-06; 
Current dollars: $7,172,879. 

Month/Year: 01-Nov-06; 
Current dollars: $5,602,293. 

Month/Year: 01-Dec-06; 
Current dollars: $5,224,623. 

Month/Year: 01-Jan-07; 
Current dollars: $5,214,793. 

Month/Year: 01-Feb-07; 
Current dollars: $3,853,753. 

Month/Year: 01-Mar-07; 
Current dollars: $23,493,614. 

Month/Year: 01-Apr-07; 
Current dollars: $21,768,340. 

Month/Year: 01-May-07; 
Current dollars: $20,728,684. 

Month/Year: 01-Jun-07; 
Current dollars: $15,200,400. 

[See PDF for image] 

Source: DOD. GAO has not verified the reliability of DOD Comptrollerï¿½s 
data processing. 

Note: There is a lag between the provision of support and DODï¿½s 
reimbursement of these costs. The March-June 2007 claims were 
reimbursed in February 2008 and are the latest claims reimbursed by DOD 
Comptroller.  Submitted costs can be (a) recommended for approval; b) 
ï¿½deferredï¿½ or returned for additional documentation; or c) ï¿½disallowedï¿½ 
for not being consistent with the scope of CSF.  

[End of figure] 

Figure: CSF Oversight Process

This figure is a flowchart showing CSF oversight process. 

Source: GAO depiction of CSF oversight process based on DOD 
documentation and discussions with DOD/OUSD/Comptroller. 

[End of figure] 

Figure: Example of Recent Reimbursement: 

This figure is a flowchart showing an example of recent reimbursement. 

[See PDF for image] 

Source: GAO analysis based on DOD oversight documentation. 

[End of figure] 

Preliminary Observations on Use of CSF Funds: 

CSF reimbursement funds are paid directly into Pakistan government 
general treasury and become sovereign funds: 

After reimbursement to Pakistan for prior expenditures there is no 
requirement for further oversight of these funds by the U.S. 
government: 

New FATA Effort Seeks to Direct Pakistan Funding: 

CSF in current form is strictly a reimbursement program with little or 
no U.S. direction over funding priorities until after Pakistan has 
incurred the expense: 

CSF has enabled immediate and continued Pakistani military presence in 
the FATA: 

However, according to DOD, Pakistan Army has been unsuccessful at 
defeating terrorists in FATA: 

* Pakistani security forces lack counterinsurgency capability: 

- Army neither structured nor trained for counterinsurgency: 

- Serious equipment and training deficiencies exist in Frontier Corps:  

Security Development Plan* 

* Under CENTCOM review; being implemented at post with FY2007 & FY2008 
funds: 

* According to the Office of the Secretary of Defense: $12.3M funding 
shortfall for FY 2008; no designated funding secured for FY 2009 and 
beyond: 

* Security Development Plan is a joint U.S.-Pakistan effort to enhance 
the ability of the Pakistan military and security forces to secure its 
border with Afghanistan, among other things. 

Scope and Methodology: 

To address our objectives, we met with officials from: 

* Department of State: 

* Department of Defense (DOD): 

Analyzed DOD and embassy oversight documentation including: 

* Pakistan government reimbursement claims: 

* ODRP memos: 

* Central Command (CENTCOM) operational validations: 

* OSD/Comptroller evaluations and guidance: 

Compiled and analyzed DOD Comptroller data October 2002 ï¿½ June 2007: 

Appendix: CSF Oversight Criteria: 

2003 DOD-Inspector General study cited deficiencies in oversight. In 
response, DOD Comptroller issued new guidance in December 2003 as 
follows:

CENTCOM to include sufficient documentation: 

* Identify of who requested the service, one-time vs. recurring: 

* Validate that support/service provided and that costs would not 
otherwise have been incurred: 

* Describe cost categories and method of computation: 

* Include copies of invoices or other cost documentation: 

Office of the Under Secretary of Defense for Comptroller performs 
analysis including:

* Macro-level comparison of claimed costs to similar U.S. costs: 

* Evaluation of cost category reasonableness: 

* Comparison of representative U.S. costs for sub-set of items: 

* Assessment that costs are consistent with previous claims

[End of section] 

Enclosure II: Agency Comments and Our Evaluation: 

Note: GAO comments supplementing those in the report text appear at the 
end of this appendix. 

The Assistant Secretary Of Defense: 
2700 Defense Pentagon: 
Washington, Dc 20301-2700: 

Asian & Pacific Security Affairs: 

Mr. Charles Johnson Jr.: 
Director, International Counterterrorism Issues, International Affairs 
and Trade: 
Government Accountability Office: 
441 G Street, N.W.: 
Washington, D.C. 20548: 

Mr. Johnson: 

This is the Department of Defense (DoD) response to the GAO Draft 
Report, "Preliminary Observations On The Use And Oversight Of Coalition 
Support Funds To Pakistan," dated April 25, 2008 (GAO Code 320594). 

We have enclosed comments addressing the report. 

My point of contact is Mr. Eric Lebson, 703-697-3754, or e-mail: 
[email protected]. 

Sincerely,

Signed by: 

James L. Shinn: 

GAO Draft Report Dated April 25, 2008 GAO Code 320594:  

"Preliminary Observations On The Use And Oversight Of Coalition Support 
Funds To Pakistan":  

Department Of Defense Comments On The Draft Report By Gao On Coalition 
Support Fund: 

The Department of Defense (DoD) appreciates the necessity and 
importance of Congressional oversight of the Coalition Support Funds 
(CSF) program. This authority is a critical tool in the War on Terror, 
reimbursing the costs incurred by 27 partner nations in the global 
effort to fight violent extremism. A July 2007 National Intelligence 
Estimate highlighted the existence of extremist safe havens in 
Pakistan's western border region and the manner by which Al-Qaida and 
other extremists are using these safe havens to plan attacks against 
Pakistan, Afghanistan and the American homeland. 

At a time when Pakistan has a new civilian government and is working to 
cope with significant national financial issues, CSF reimburses the 
significant costs that Pakistan incurs daily in support of U.S. 
military operations. CSF is a critical tool in our joint effort with 
Pakistan to constrain the assumption of sanctuary by extremists in 
western Pakistan and support of U.S. military operations by employing 
120,000 military and paramilitary forces in the western border region 
and conducting military operations against extremist groups. CSF 
directly contributes to the Pakistani military and political decision 
to divert forces from their perceived strategic threat in the east, to 
a lesser understood threat in the west. The missions of Pakistan's 
military and civil armed forces have been redefined and over 30,000 
additional troops have been employed in the west, which have certainly 
reduced U.S. casualties in Afghanistan. 

In addition, CSF was particularly effective when it was used to fund 
the $236M cost of fielding twenty-six Bell 412EP helicopters for use in 
the fight in the western border region. Without the use of CSF in this 
manner, Pakistan would be mission non-capable in a variety of air 
assault, command and control, and administrative/logistics missions 
essential to the conduct of military operations in western Pakistan. 
CSF enabled a partner nation to contribute to the GWOT as no other 
authority could. 

While most of the content is accurate, the Department has several 
comments on certain portions of this report. Despite frequent 
interaction with GAO personnel in March, DoD was advised of this 
interim report only on 17 April, when it was noted in the final 
issuance of a different report (GAO-08-622). On 24 April, DoD was 
advised that GAO had presented a set of briefing charts on CSF to 
Members of Congress without DoD input. DoD was then asked to make 
suggested edits or comments, but was told that because the 
presentations had already been provided to Members, its comments were 
limited to only technical modifications. 

In recognition of GAO's position that substantial edits cannot be made 
to the presentation, DoD provides the following technical comments to 
the draft presentation in the hope that Congress ultimately will have 
the full benefit of the Department's insights into the CSF process. 

* Cover letter ï¿½ Page three of the cover note has a bullet that 
includes the text: "Moreover, in 2007 the Office of the Defense 
Representative to Pakistan (ODRP) began playing a larger role in 
overseeing CSF reimbursement claims." Defense notes that this cover 
letter was not provided to Defense in the 24 April out-brief and, as 
such, Defense had no opportunity to ask GAO to explain this reference. 
GAO should explain in what way ODRP played a different role in 2007. 

(See comment 1.): 

* Cover letter ï¿½ In the bullet on page four, GAO notes: "In recent 
months, Defense has disallowed or deferred a significantly greater 
amount of CSF reimbursement claims from Pakistan." Defense has two 
comments: (1) GAO needs to contextualize what is meant by "recent 
months." In fact, GAO's slide 10 indicates that the amount of 
disallowed or deferred claims increased as of September 2006; and (2) 
In order to present a consistent impression of the numbers, GAO should 
use the same reference numbers on the Y axis on the charts on slides 9 
and 10. 

(See comment 2.): 

* Slide 14 ï¿½ "New FATA Effort Seeks to Direct Pakistan Funding" 

- The Department disagrees with this slide. DoD has advised GAO on 
several occasions that there is no funding shortfall for the Security 
Development Plan (SDP) in FY08. Congress included in the FY08 National 
Defense Authorization Act a $75M authority to train and equip 
Pakistan's Frontier Corps. The Department appreciates Congress having 
granted the Frontier Corps train and equip authority, which is a 
critical tool in the War on Terror and in the Security Development Plan 
within Pakistan. Realigning existing Defense appropriations to fund 
this important authority has been a major priority for the senior 
leadership at DoD. In the 24 April meeting between GAO and DoD, GAO was 
told that Secretary Gates had signed a memo directing that funds be 
realigned and made available for this purpose. GAO's response was that 
the presentation was given in March and April 2008 and, at the time, 
the funds were not available. DoD replied that this was an inaccurate 
representation that would leave the reader with the impression that 
there was both a funding shortfall and a disinclination to fund the 
program.

(See comment 3.): 

The following are GAO's comments on the letter from the Department of 
Defense dated May 2, 2008. 

GAO Comments: 

1. We intend to address the issue of ODRP's role in the CSF 
reimbursement process, and how it has changed, in our upcoming product 
addressing CSF to Pakistan. However, at the time we presented this 
briefing, our preliminary observations indicated that this was the 
first time that ODRP recommended significant denials or deferrals of 
Pakistani claims to CENTCOM. 

2. As chart 10 illustrates, the U.S. disallowed or deferred 
significantly greater amounts in its February 2008 reimbursement to 
Pakistan for its March through June 2007 claims. We disagree that the 
September 2006 reimbursement claim represents the significant change in 
denials and deferrals. We also disagree with Defense's recommendation 
to use the same Y axis scale on slides 9 and 10. We used scales for 
slides 9 and 10 that were appropriate to illustrate the amounts 
reimbursed compared with the smaller amounts that were disallowed or 
deferred. 

3. We did not intend to imply that Defense was not inclined to fund the 
program, only that at the time of our March and April briefings, there 
was still a funding shortfall for the fiscal year 2008 elements of the 
plan. Furthermore, as of May 3, 2008, the process of realigning funds 
for this effort was not complete. 

[End of section] 

Enclosure III: GAO Contact and Staff Acknowledgements: 

GAO Contact: 

Charles Michael Johnson Jr., Director, International Affairs and Trade, 
(202) 512-4128 or [email protected]: 

Staff Acknowledgments: 

In addition to the individual named above, Hynek Kalkus, Assistant 
Director; Edward J. George Jr; Claude Adrien; David Hancock; Karen 
Deans; Roger Stoltz; Cara Bauer; Janice Friedeborn; Arthur James; and 
Jena Sinkfield made key contributions to this report. 

[End of section] 

Footnotes: 

[1] These goals have been set forth in the 2002 National Security 
Strategy, the 2003 National Strategy for Combating Terrorism, and the 
2004 9/11 Commission Report, and have been endorsed by the Intelligence 
Reform and Terrorism Prevention Act of 2004 (P.L. 108-458, sec 7102 
(b)(3)) and the Implementing the Recommendations of the 9/11 Commission 
Act of 2007 (P.L. 110-53, sec. 2042(b)(2)). 

[2] We recently issued a report entitled Combating Terrorism: The 
United States Lacks Comprehensive Plan to Destroy the Terrorist Threat 
and Close the Safe Haven in Pakistan's Federally Administered Tribal 
Areas, GAO-08-622 (Washington, D.C.: Apr. 17, 2008). 

[3] The March-June 2007 claims reimbursed in February 2008 are the 
latest claims reimbursed by DOD Comptroller. 

[4] Submitted costs can be (a) recommended for approval; (b) "deferred" 
and returned for additional documentation; or (c) "disallowed" for not 
being consistent with the scope of CSF. 

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