    District of Columbia Opportunity Scholarship Program: Additional
    Policies and Procedures Would Improve Internal Controls and
    Program Operations (01-NOV-07, GAO-08-9).

    The D.C. School Choice Incentive Act created the first private
    kindergarten-through-grade-12 school-choice program supported by
    federal funds. The program was named the D.C. Opportunity
    Scholarship Program (OSP). GAO was asked to assess the (1)
    accountability mechanisms governing the use of funds, (2) results
    of the grantee's efforts to meet the program's recruiting
    priorities and eligibility requirements and inform parents of
    their choices, and (3) extent that the evaluation of OSP reflects
    statutory requirements and the implementation of the program
    supported the detection of useful and generalizable findings. To
    assess the program, GAO analyzed financial, program, and
    evaluation data. GAO did not assess the performance of
    participating private schools nor did GAO evaluate the impact of
    the program.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-08-9
        ACCNO:   A77909
      TITLE:     District of Columbia Opportunity Scholarship Program:
    Additional Policies and Procedures Would Improve Internal
    Controls and Program Operations
         DATE:   11/01/2007
      SUBJECT:   Accountability
    	     Accounting procedures
    	     Accounting standards
    	     Audits
    	     Education program evaluation
    	     Educational grants
    	     Eligibility criteria
    	     Federal funds
    	     Financial management
    	     Internal controls
    	     Private schools
    	     Program evaluation
    	     Program management
    	     Risk assessment
    	     Scholarship programs
    	     Schools
    	     Student financial aid
    	     Policies and procedures
    	     Program implementation
    	     DC Opportunity Scholarship Program
    	     Washington Scholarship Fund

    ******************************************************************
    ** 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-08-9

    This text file was formatted by the U.S. Government Accountability
    Office (GAO) to be accessible to users with visual impairments, as part
    of a longer term project to improve GAO products' accessibility. Every
    attempt has been made to maintain the structural and data integrity of
    the original printed product. Accessibility features, such as text
    descriptions of tables, consecutively numbered footnotes placed at the
    end of the file, and the text of agency comment letters, are provided
    but may not exactly duplicate the presentation or format of the printed
    version. The portable document format (PDF) file is an exact electronic
    replica of the printed version. We welcome your feedback. Please E-mail
    your comments regarding the contents or accessibility features of this
    document to Webmaster@gao.gov.

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. It may be reproduced and distributed
    in its entirety without further permission from GAO. Because this work
    may contain copyrighted images or other material, permission from the
    copyright holder may be necessary if you wish to reproduce this
    material separately.

    Report to the Committee on Foreign Affairs, House of Representatives:

    United States Government Accountability Office:

    GAO:

    November 2007:

    Defense Trade:

    State Department Needs to Conduct Assessments to Identify and Address
    Inefficiencies and Challenges in the Arms Export Process:

    Defense Trade:

    GAO-08-89:

    GAO Highlights:

    Highlights of GAO-08-89, a report to the Committee on Foreign Affairs,
    House of Representatives.

    Why GAO Did This Study:

    To regulate the export of billions of dollars worth of arms to foreign
    governments and companies, the Department of State�s (State)
    Directorate of Defense Trade Controls (DDTC) reviews and authorizes
    export licenses and other arms export cases. While such reviews require
    time to consider national security and foreign policy interests, the
    U.S. defense industry and some foreign government purchasers have
    expressed concern that the U.S. export control process is unnecessarily
    time-consuming.

    In 2005, GAO reported that processing times for arms export cases had
    increased despite State efforts to streamline its process. GAO was
    asked to (1) describe recent trends in the processing of arms export
    cases and (2) identify factors that have contributed to these trends.

    To conduct its work, GAO obtained and analyzed State arms export case
    data for fiscal year 2003 through April 30, 2007; reviewed relevant
    laws, regulations, and guidelines, as well as DDTC funding and staffing
    information; and interviewed State and Department of Defense officials
    and selected arms exporters.

    What GAO Found:

    Three key trends indicate that DDTC�s arms export licensing process is
    under stress. First, the number of arms export cases processed by DDTC
    increased 20 percent between fiscal years 2003 and 2006. Most of this
    increase was for licenses for permanent export. Second, during the same
    period, median processing times almost doubled. Third, the number of
    open arms export cases increased 50 percent from about 5,000 in October
    2002 to about 7,500 in April 2007, with a high of more than 10,000
    cases in September 2006. At the beginning of fiscal year 2007, DDTC
    launched a campaign to reduce the growing number of open cases. Through
    extraordinary measures�such as canceling staff training, meetings, and
    industry outreach, and pulling available staff from other duties to
    process cases�DDTC was able to cut the number of open cases by 40
    percent in 3 months. However, such measures are not sustainable in the
    long term, do not address underlying inefficiencies and problems, and
    may have negative unintended consequences for the mission.

    Figure: Open Arms Export Cases, Fiscal Year 2003 through April 30,
    2007:

    This figure is a line graph showing open arms export cases, between
    fiscal year 2003 and April 30, 2007. The X axis represents the month
    and year, while the Y axis represents the open cases.

    [See PDF for image]

    Source: GAO analysis of DDTC data.

    [End of figure]

    While some blips in the trends can be attributed to onetime events or
    efforts�such as DDTC�s campaign to reduce open cases�procedural
    inefficiencies, electronic processing system shortcomings, and human
    capital challenges underlie the overall trends. For example, GAO�s
    analysis shows that DDTC is taking increasingly longer to refer cases
    to other agencies or State bureaus for additional review�from 7 days in
    fiscal year 2003 to 20 days during the first 7 months of fiscal year
    2007. In addition, implementation of DDTC�s electronic system for
    submitting applications has been problematic, and electronic processing
    has not been the promised panacea for improving processing times. DDTC
    does not perform systematic assessments to identify root causes of
    increased workload, processing times, and open cases and, in turn,
    develop sustainable solutions.

    What GAO Recommends:

    GAO is recommending that State conduct systematic analyses to help
    achieve efficiencies in the processing of arms export cases. State
    concurred with GAO�s recommendation.

    To view the full product, including the scope and methodology, click on
    [hyperlink, http://www.GAO-08-89]. For more information, contact Ann
    Calvaresi-Barr at (202) 512-4841 or calvaresibarra@gao.gov.

    [End of section]

    Contents:

    Letter:

    Results in Brief:

    Background:

    Trends Indicate DDTC's Licensing Process Is Under Stress:

    Systemic Inefficiencies Underlie Overall Trends in the Licensing
    Process:

    Conclusions:

    Recommendation for Executive Action:

    Agency Comments:

    Appendix I: Scope and Methodology:

    Appendix II: Additional Analyses Related to Arms Export Case
    Processing:

    Appendix III: Comments from the Department of State:

    Appendix IV: GAO Contact and Staff Acknowledgments:

    Related GAO Products:

    Tables:

    Table 1: Median Days Processing Time by Steps in the Referral Process,
    Fiscal Year 2003 through April 2007:

    Table 2: Cases Closed and Licensing Officer Positions Filled, Fiscal
    Year 2003 through April 30, 2007:

    Table 3: DDTC Cases Closed by Case Type from Fiscal Year 2003 through
    April 30, 2007:

    Table 4: Median Days Processing Time by Case Type from Fiscal Year 2003
    through April 30, 2007:

    Table 5: Permanent Export Cases Processed and Processing Times by
    Commodity Group, Fiscal Year 2003 through April 30, 2007:

    Table 6: Percentage of Cases Closed and Median Processing Time for Top
    10 Countries of Destination, Fiscal Year 2006:

    Table 7: Number of Cases and Processing Times for OEF/OIF Cases, Fiscal
    Years 2003 through 2006:

    Table 8: Number of Exporters by Cases Submitted, Fiscal Years 2003
    through 2006:

    Table 9: Percentage of Cases Received from the Top 10 Exporters, Fiscal
    Years 2003 through 2006:

    Table 10: Cases Closed by Final Action, Fiscal Year 2003 through April
    30, 2007:

    Figures:

    Figure 1: DDTC's Licensing Review Process:

    Figure 2: Processing Time Frames for Nonreferred Permanent Export
    Licenses and Agreements, Fiscal Year 2003 through April 30, 2007:

    Figure 3: Processing Time Frames for Referred Permanent Export Licenses
    and Agreements, Fiscal Year 2003 through April 30, 2007:

    Figure 4: Open Arms Export Cases, Fiscal Year 2003 through April 30,
    2007:

    Abbreviations:

    DDTC: Directorate of Defense Trade Controls:

    DOD: Department of Defense:

    DTSA: Defense Technology Security Administration:

    OEF: Operation Enduring Freedom:

    OIF: Operation Iraqi Freedom:

    United States Government Accountability Office:

    Washington, DC 20548:

    November 30, 2007:

    The Honorable Tom Lantos:
    Chairman:
    The Honorable Ileana Ros-Lehtinen:
    Ranking Member:
    Committee on Foreign Affairs:
    House of Representatives:

    The State Department (State), through the Directorate of Defense Trade
    Controls (DDTC), regulates the export of billions of dollars worth of
    arms[Footnote 1] by U.S. companies to foreign governments and companies
    and has responsibility for reviewing and authorizing export license
    applications and other arms export cases.[Footnote 2] Reviews of arms
    export cases require time to deliberate because U.S. national security
    and foreign policy interests must be considered. However, the U.S.
    defense industry and some foreign government purchasers have expressed
    concern that the U.S. export control process is unnecessarily
    burdensome because of the time needed to complete these deliberations.
    To facilitate defense cooperation, State announced in 2000 several
    efforts to reduce arms export processing times, and began the
    development of a new automated system for submitting and reviewing
    cases. Despite efforts to streamline the process, we reported that
    processing times for arms export cases began to increase in
    2003.[Footnote 3]

    Over the past decade, we have reported on various problems in the U.S.
    export control system. Vulnerabilities in the U.S. export control
    system, along with related government programs,[Footnote 4] prompted
    GAO to designate the effective protection of technologies critical to
    U.S. national security interests as a new high-risk area in
    2007.[Footnote 5] This report looks at a key component of the arms
    export control system--the licensing review process for arms export
    cases. Because of concerns about increasing processing times and a DDTC
    announcement of a significant number of open cases, you requested we
    evaluate the processing of arms export control cases. Specifically,
    this report (1) describes recent trends in the processing of arms
    export cases, including processing times and open cases, and (2)
    identifies factors that have contributed to the trends in processing
    these cases.

    To conduct our work, we obtained and analyzed State arms export case
    data for fiscal year 2003 through April 30, 2007, to identify
    processing trends. We assessed the reliability of the data and
    determined them to be sufficiently reliable for our purposes. We also
    examined DDTC and Department of Defense (DOD) case processing
    guidelines, DDTC funding and staffing information, and applicable laws
    and regulations. In addition, we interviewed officials from DDTC,
    State's bureaus to which cases are referred, DOD's Defense Technology
    Security Administration (DTSA), and selected arms exporters to identify
    factors affecting processing trends. For more on our scope and
    methodology, see appendix I. We performed our review from February
    through September 2007 in accordance with generally accepted government
    auditing standards.

    Results in Brief:

    Our analysis pointed to three key trends in the processing of arms
    export cases in recent years. First, DDTC's caseload increased 20
    percent, from about 55,000 to 65,000 between fiscal years 2003 and
    2006. Second, median processing times almost doubled in the same time
    period, from 14 days to 26 days. Third, the number of open arms export
    cases increased 50 percent, from about 5,000 in October 2002 to about
    7,500 in April 2007, reaching a high of more than 10,000 cases in
    September 2006. At the beginning of fiscal year 2007, DDTC launched a
    campaign to reduce the number of open cases. While DDTC was able to cut
    the number of open cases by over 40 percent over 3 months, it did so by
    extending work hours and canceling staff training and meetings and
    other activities to focus on the mounting number of open cases.
    However, such measures are not sustainable in the long term, do not
    address underlying inefficiencies and problems, and may adversely
    affect the mission.

    Inefficiencies and problems in the license review process are largely
    affected by procedural weaknesses, shortfalls with the electronic
    processing system, and human capital challenges. Lack of screening
    procedures for referring arms export cases outside DDTC have resulted
    in cases languishing for weeks before any action is taken. While DDTC's
    new electronic processing system, D-Trade, was intended to improve
    processing times, the system has not been the panacea the agency
    expected. Our analysis shows that processing times for like types of
    cases are virtually the same, regardless of whether the case was
    submitted through D-Trade or on paper. The system also lacks tools to
    aid the licensing officer to process cases more efficiently. DDTC also
    faces human capital challenges in establishing and retaining a
    sufficient workforce with the experience and skills needed to
    efficiently and effectively process arms export cases. These factors
    have largely gone unaddressed because DDTC management does not
    systematically analyze licensing data to identify inefficiencies and
    develop solutions to manage its processes and more effectively
    structure the workforce.

    To improve the efficiency of processing arms export cases, we are
    recommending that State conduct systematic analyses of licensing data
    to identify potential causes of inefficiencies and develop solutions to
    better manage its workload, processes, and workforce structure. In
    commenting on a draft of this report, State concurred with our
    recommendation and indicated that it has initiated efforts to improve
    its processes and organizational alignment. Defense had no comments on
    the draft report.

    Background:

    Under the authority of the Arms Export Control Act, State regulates and
    controls arms exports by U.S. companies to help ensure that those
    exports are consistent with national security and foreign policy
    interests.[Footnote 6] This function has been delegated to DDTC within
    the Bureau of Political-Military Affairs. DDTC's staffing levels are
    allocated and funded by State. Funding for other DDTC activities and
    operations comes from two main sources: (1) appropriated funds that
    State then allocates to DDTC through the Bureau of Political-Military
    Affairs, and (2) registration fees, which DDTC is authorized to retain
    to help fund certain activities related to licensing, enforcement, and
    compliance.[Footnote 7]

    Exporters submit arms export cases via paper or electronically through
    D-Trade, DDTC's Web-based electronic processing system.[Footnote 8]
    Cases include permanent arms export licenses, temporary arms exports or
    imports, agreements between U.S. industry and foreign entities to
    provide technical assistance or manufacturing capability, requests for
    amendments to existing licenses or agreements, and requests to
    determine commodity jurisdiction.[Footnote 9] Cases vary in terms of
    complexity and time to process. For example, agreements generally take
    longer than other cases because they are complex, require substantial
    work by licensing officers, and often require interagency review.

    Once cases are received, DDTC assigns them to one of five teams, based
    on commodity categories: firearms, aircraft, missile and spacecraft,
    military electronics, and military vehicles and naval vessels. Team
    leaders, in turn, assign cases to a licensing officer, who conducts an
    initial review to determine whether the case needs a referral to an
    agency, such as DOD's DTSA, and/or another State bureau for additional
    review--or whether the case can be reviewed and analyzed internally.
    Either way, the licensing officer conducts the final review and
    determines the final action. Final action on cases can only be taken by
    licensing officers with designated signature authority, which DDTC
    officials stated takes an average of 18 months of training and
    experience to obtain. Prior to approving cases that involve exports
    meeting statutory dollar thresholds and involving selected countries,
    State must notify Congress.[Footnote 10] Figure 1 depicts DDTC's
    licensing review process.

    Figure 1: DDTC's Licensing Review Process:

    This figure is a flowchart showing DDTC's licensing review process.

    [See PDF for image]

    Source: GAO analysis of licensing process.

    [A] Some cases require congressional notification prior to final
    action.

    [B] Provisos are conditions that limit the use of exported items and
    technologies.

    [C] DDTC returns applications without action when it determines the
    application does not meet regulatory requirements or does not provide
    adequate documentation and details.

    [End of figure]

    In addition to reviewing arms export cases, DDTC conducts outreach to
    educate industry about export controls and promote compliance with laws
    and regulations.

    Trends Indicate DDTC's Licensing Process Is Under Stress:

    Our analysis shows several trends have emerged in the processing of
    arms export cases, which indicate the system is under stress. First,
    the number of arms export cases processed by DDTC has increased since
    fiscal year 2003. Most of the increase was for licenses for permanent
    export. Second, processing times almost doubled from fiscal year 2003
    to 2006. Third, the number of open arms cases has increased since
    fiscal year 2003. While extraordinary actions taken by DDTC to address
    the mounting number of open cases achieved short-term gains, these
    actions are not sustainable because they strained personnel and
    involved deferring other mission-related activities.

    Arms Export Caseload, Processing Times, and Open Cases Have
    Significantly Increased:

    Between fiscal years 2003 and 2006, the arms export caseload processed
    by DDTC has increased 20 percent, from about 55,000 to 65,000. DDTC
    officials attributed this growth to several possible factors, including
    increased globalization of the defense industry and an overall increase
    in arms exports. In addition, our analysis of the cases processed by
    DDTC shows that permanent export licenses constituted about two-thirds
    of all cases, thereby accounting for the major part of DDTC's caseload
    activity. For these cases, the greatest increase occurred in aircraft
    and related components among the various types of controlled
    commodities. Our analysis also showed a high concentration of cases by
    country of destination--almost half consisted of seven countries, with
    25 percent involving Japan and the United Kingdom. In contrast, we
    found cases are not concentrated by major defense arms exporting
    companies. In fiscal year 2006, only 21 percent of cases processed
    involved the top 10 arms exporting firms. (For additional analyses of
    cases, including type of case, commodities, countries, and expedited
    cases, see app. II.)

    Overall, processing times for all types of cases have increased.
    Between fiscal years 2003 and 2006, median processing times nearly
    doubled, from 14 days to 26 days. Some types of cases take longer to
    process than others, in part because of their complexity. For example,
    in fiscal year 2006, technical assistance agreements took a median of
    94 days to process. However, these agreements made up less than 9
    percent of the cases processed for that year, and therefore may not be
    a significant driver of overall increased processing times. Permanent
    exports, which constituted the majority of cases, took a median of 25
    days to process in fiscal year 2006.

    For nonreferred cases, which made up about two-thirds of all cases,
    DDTC's in-house processing times increased significantly. For example,
    between fiscal years 2003 and 2006, median processing times for
    nonreferred cases increased from 8 to 19 days. For the first 7 months
    of fiscal year 2007, the median processing time was 17 days. Moreover,
    the number of nonreferred permanent export license cases taking longer
    than 2 weeks to process increased from 26 percent in fiscal year 2003
    to 72 percent in fiscal year 2006. The increase in the percentage of
    nonreferred agreements taking longer than 2 weeks was even more
    dramatic--increasing from about 13 percent to 87 percent (see fig. 2).

    Figure 2: Processing Time Frames for Nonreferred Permanent Export
    Licenses and Agreements, Fiscal Year 2003 through April 30, 2007:

    This figure is combination of shaded bar graphs showing processing time
    frames for nonreferred permanent export licenses and agreements,
    between fiscal year 2003 and April 30, 2007. The X axis in both graphs
    represent percent, while the Y axis represents the year.

    [See PDF for image]

    Source: GAO analysis of DDTC DATA.

    [A] Agreements include technical assistance, manufacturing, brokering,
    distribution, and generic agreements.

    [End of figure]

    Processing times for cases referred outside of DDTC for review, which
    made up about one-third of all cases, have also increased. For example,
    between fiscal years 2003 and 2006, median processing times increased
    from 49 to 61 days. For the first 7 months of fiscal year 2007, the
    median processing time was 50 days. Moreover, in fiscal year 2006, 70
    percent of referred agreement cases, which tend to take longer to
    process than other cases, took longer than 12 weeks to process,
    compared to 11 percent in fiscal year 2003. In contrast, processing
    times for permanent export license cases referred outside of DDTC have
    held relatively steady for the past several years (see fig. 3).

    Figure 3: Processing Time Frames for Referred Permanent Export Licenses
    and Agreements, Fiscal Year 2003 through April 30, 2007:

    This figure is a combination of two shaded bar graphs showing
    processing time frames for referred permanent export licenses and
    agreements, between fiscal year 2003 and April 30, 2007. The X axis in
    both graphs represent percent, while the Y axis represents the year.

    [See PDF for image]

    Source: GAO analysis of DDTC data.

    [A] Agreements include technical assistance, manufacturing, brokering,
    distribution, and generic agreements.

    [End of figure]

    The number of open arms export cases has also increased because DDTC
    has received cases at a higher rate than it processed them. Open cases
    increased from about 5,000 in October 2002 to about 7,500 in April
    2007, reaching a high of more than 10,000 open cases in September 2006
    (see fig. 4).

    Figure 4: Open Arms Export Cases, Fiscal Year 2003 through April 30,
    2007:

    This figure is a line graph showing open arms export cases, between
    fiscal year 2003 and April 30, 2007. The X axis represents the month
    and year, while the Y axis represents the open cases.

    [See PDF for image]

    Source: GAO analysis of DDTC data.

    [End of figure]

    Actions Taken by DDTC to Achieve Short-Term Gains Are Unsustainable:

    At the beginning of fiscal year 2007, DDTC launched its "winter
    offensive," a campaign to reduce the growing number of open cases.
    Through extraordinary measures--such as extending work hours; canceling
    staff training, meetings, and industry outreach; and pulling available
    staff from other duties to process cases--DDTC was able to reduce the
    number of open cases by 40 percent in 3 months. However, DDTC officials
    told us that these measures were not sustainable for the long term
    because they put a strain on personnel and deferred mission-related
    activities.

    Not only are these short-term measures unsustainable, they may have
    unintended adverse consequences. A DDTC official stated the short-term
    emphasis during the winter offensive was necessary to reduce the number
    of open cases but may have the unanticipated effect of shifting the
    focus from the mission of protecting U.S. national security and
    promoting foreign policy interests to simply closing cases to reduce
    the queue of open cases.

    Systemic Inefficiencies Underlie Overall Trends in the Licensing
    Process:

    While some blips in the trends can be attributed to onetime events or
    efforts, such as the winter offensive, the overall trends of increased
    processing times and open cases are affected by several factors,
    including procedural inefficiencies, electronic processing system
    shortcomings, and human capital challenges. DDTC does not perform
    systematic assessments to identify overall trends and root causes,
    which could lead to sustainable solutions.

    Case Processing Encumbered by DDTC Procedural Inefficiencies:

    While DDTC has established a time frame goal in its guidelines for
    referring cases outside of DDTC, it has not met this goal.[Footnote 11]
    Specifically, the guidelines indicate that DDTC licensing officers
    should refer cases to other agencies or State bureaus within 10 days of
    receipt by the licensing officer.[Footnote 12] Our analysis shows that
    DDTC has taken increasingly longer to refer cases. As shown in table 1,
    the median days from when the case was received to outside referral
    increased from 7 days in fiscal year 2003 to 20 days during the first 7
    months of fiscal year 2007. In contrast, the median number of days
    cases spent outside of DDTC for referral has decreased over the same
    period from 31 to 18 days.[Footnote 13]

    Table 1: Median Days Processing Time by Steps in the Referral Process,
    Fiscal Year 2003 through April 2007:

    Fiscal year: 2003;
    Days DDTC takes to refer a case: 7;
    Days at an agency or bureau: 31;
    Days from receipt of agency or bureau position to final action: 7;
    Days to complete referred cases: 49.

    Fiscal year: 2004;
    Days DDTC takes to refer a case: 10;
    Days at an agency or bureau: 29;
    Days from receipt of agency or bureau position to final action: 7;
    Days to complete referred cases: 51.

    Fiscal year: 2005;
    Days DDTC takes to refer a case: 12;
    Days at an agency or bureau: 28;
    Days from receipt of agency or bureau position to final action: 8;
    Days to complete referred cases: 52.

    Fiscal year: 2006;
    Days DDTC takes to refer a case: 18;
    Days at an agency or bureau: 27;
    Days from receipt of agency or bureau position to final action: 9;
    Days to complete referred cases: 61.

    Fiscal year: 2007[A];
    Days DDTC takes to refer a case: 20;
    Days at an agency or bureau: 18;
    Days from receipt of agency or bureau position to final action: 4;
    Days to complete referred cases: 50.

    Source: GAO analysis of DDTC data.

    [A] Data are for the first 7 months of fiscal year 2007.

    [End of table]

    DDTC has not established procedures to promptly screen most cases to
    identify those that need outside referral. As a result, cases often
    languish in a team leader's or licensing officer's queue awaiting
    assignment or initial review. In contrast, DOD's DTSA--which receives
    the majority of cases referred by DDTC--uses a team to screen cases
    daily to determine if cases should be reviewed solely at DTSA or
    whether they should be referred to military services or other DOD
    components for further review. In making the decision to refer cases,
    the team considers such factors as the existence of precedent cases,
    the level of technology, and the circumstances of the transaction.
    According to DTSA officials, this process allows them to expedite
    certain cases and to focus efforts on more complicated cases involving
    commodities or capabilities not previously exported or presenting
    special concerns. For referred cases, DTSA officials told us the daily
    screening process allows them to make the referral in less than 2 days
    on average. According to DDTC officials, they have recently established
    a process for promptly referring technical assistance agreements
    outside DDTC but have not done so for other types of cases.

    Until recently, DDTC lacked procedures for expediting certain cases.
    Specifically, the Ronald W. Reagan National Defense Authorization Act
    for Fiscal Year 2005, enacted in 2004, requires the expeditious
    processing of arms export cases for the United Kingdom and Australia by
    State, in consultation with DOD.[Footnote 14] Although the legislation
    does not specify a processing time frame goal, in fiscal year 2006, the
    processing times for United Kingdom and Australia cases was 21 days,
    which did not differ significantly from the processing times for other
    allied countries. (For additional analysis of processing times by
    country, see app. II.) DDTC officials told us they have been working
    with DOD on developing procedures to expedite processing for United
    Kingdom and Australia cases, and recently established a process for
    doing so.[Footnote 15]

    D-Trade Has Yet to Achieve Case Processing Efficiencies:

    The establishment of a new automated system for processing cases had
    been cited by State officials as its most significant effort to improve
    efficiency. However, the anticipated efficiencies have not been
    realized. Our analysis of processing times shows no significant
    difference between like types of cases submitted electronically versus
    paper submissions. For example, in fiscal year 2006, median processing
    time for permanent export cases submitted through D-Trade was 23 days
    versus 25 for paper submissions. Although 77 percent of cases are now
    received electronically through D-Trade,[Footnote 16] its
    implementation has been problematic and electronic processing has not
    been the promised panacea for improving processing times.

    According to DDTC officials, poorly defined system requirements and a
    rush to production led to technical glitches and performance problems.
    For example, in January 2007, DDTC released a new version of D-Trade,
    but because of software problems, cases received could not be
    processed. As a result, the new version was shut down after 3 days,
    requiring DDTC to revert to the previous version. The 1,300 cases
    received during the 3-day period had to be resubmitted by exporters,
    resulting in some rework and an increase in the number of open cases.

    DDTC has relied on an information technology solution without
    reengineering the underlying processes or without developing tools to
    facilitate the licensing officer's job. In 2001, we reported
    information systems that simply use technology to do the same work, the
    same way, but only faster typically fail or reach only a fraction of
    their potential.[Footnote 17] While defense industry officials told us
    that D-Trade simplifies the process for submitting cases and receiving
    final authorizations, the system lacks tools to aid licensing officers
    to process cases more efficiently. For example, the system has limited
    capabilities to reference precedent cases that would allow licensing
    officers to leverage work previously done on similar cases. The system
    also lacks other tools, such as automated access to regulations,
    guidance, or other information that may facilitate processing. DDTC
    officials said they expect future versions of D-Trade will incorporate
    tools to help licensing officers process cases more efficiently.

    DDTC Faces Staffing Instabilities:

    The fundamental work of reviewing and analyzing arms export cases
    requires an adequate number of personnel with the right skills and
    knowledge--especially given the continued rise in caseload. However,
    ensuring a sufficient workforce with the needed skills and knowledge
    has been a challenge for DDTC because of staffing instabilities. For
    example, the number of licensing officers on board has fluctuated over
    recent years and was at the same level in fiscal years 2003 and 2006,
    yet the number of cases processed increased about 20 percent during the
    same period (see table 2).

    Table 2: Cases Closed and Licensing Officer Positions Filled, Fiscal
    Year 2003 through April 30, 2007:

    Cases closed;
    Fiscal year: 2003: 54,576;
    Fiscal year: 2004: 57,885;
    Fiscal year: 2005: 62,954;
    Fiscal year: 2006: 65,274;
    Fiscal year: 2007[A]: 43,642.

    Licensing officer positions filled[B];
    Fiscal year: 2003: 35;
    Fiscal year: 2004: 31;
    Fiscal year: 2005: 31;
    Fiscal year: 2006: 35;
    Fiscal year: 2007[A]: 34.

    Source: GAO analysis of DDTC data.

    [A] Data are for the first 7 months of fiscal year 2007.

    [B] Licensing officer positions include civil service licensing
    officers and team leaders.

    [End of table]

    DDTC officials have acknowledged that more work is falling on fewer
    experienced staff. According to these officials, in the summer of 2006,
    about one-half of licensing officers had less than 1 year of
    experience, and many did not have the signature authority needed to
    take final action on cases. For example, early in 2007, one team had
    three licensing officers but only the team leader had the authority to
    approve or deny cases. Although the staff could perform research, the
    team leader had to review all cases before final action could be taken.

    Staffing instabilities have also been affected by fluctuating levels of
    military officers detailed to DDTC from DOD, who are generally assigned
    to review agreements. The Foreign Relations Authorization Act for
    Fiscal Year 2003 states the Secretary of Defense should ensure that 10
    military officers are continuously detailed to DDTC.[Footnote 18]
    However, the number of officers DOD detailed to DDTC has fluctuated
    over recent years. In fiscal year 2006, the number of military officers
    detailed to DDTC ranged from 3 to 7. From fiscal year 2005 to 2006,
    processing times for agreements nearly doubled from 48 days to 94 days.
    In fiscal year 2007, the number of military officers increased to 8,
    and by April 2007, processing times for agreements was 72 days. To help
    address the potential adverse effect of insufficient numbers of
    military officers, DDTC began assigning additional civilian licensing
    officers to process agreements in 2006.

    DDTC Does Not Conduct Systematic Assessments to Identify Root Causes of
    Problems and to Develop Sustainable Solutions:

    DDTC management does not systematically assess licensing data to
    identify inefficiencies. Analysis of these data could allow DDTC to
    more effectively structure its workforce and manage workload. Instead,
    DDTC management reviews reports consisting of aggregate information on
    received, processed, and open cases to determine the status of cases
    and licensing officer productivity. However, DDTC cannot identify the
    drivers of the workload or bottlenecks in the process from these status
    reports. Using DDTC's data, we conducted analyses of factors that can
    drive workload, such as type of cases, commodities, countries, and
    profiles of the exporter base (see app. II). Such analyses could
    provide insights to managers on ways to reduce workload, structure the
    workforce, target outreach with industry, and reengineer processes. For
    example:

    * By examining caseload by type of commodity, DDTC could assess the
    impact on workload of potential changes to licensing requirements such
    as application of or modification to exemptions--if such changes are
    warranted given the national security risk and foreign policy
    interests.

    * Given DDTC's current organizational structure of teams associated
    with particular commodities, DDTC could examine its licensing data to
    determine if there is a concentration of cases by factors other than
    commodity, such as country. Such analyses could permit DDTC to consider
    possible efficiencies related to aligning its workforce to where its
    workload is concentrated. Also, by monitoring processing times for
    factors driving the workload, DDTC could take corrective actions and
    reallocate resources before processing times for some types of cases
    become a problem.

    * By assessing the volume and type of case submissions by exporters,
    DDTC could better target its industry education and outreach activities
    to help ensure the quality of submissions and compliance with export
    control law and regulations.

    * DDTC could analyze the processing times associated with steps in the
    licensing process--such as time it takes to refer cases--to assess the
    flow of cases through the review process and identify possible
    bottlenecks or inefficiencies in the process.

    While DDTC has taken actions to achieve some short-term gains to
    growing problems in its processing of cases, DDTC managers lack
    systematic analyses to identify root causes and develop sustainable
    solutions. Federal managers, including those at DDTC, need to monitor
    and assess their systems to ensure that they are well designed and
    efficiently operated, are appropriately updated to meet changing
    conditions, and provide reasonable assurance that the objectives of the
    agency are being achieved.[Footnote 19]

    Conclusions:

    The licensing of arms exports is a key component of the U.S. export
    control system to help ensure arms do not fall into the wrong hands.
    Licensing officers are challenged to weigh national security and
    foreign policy interests on thousands of cases a year while allowing
    legitimate defense trade to occur in an efficient manner. However,
    systemic inefficiencies in arms export licensing are straining the
    system and may be diminishing licensing officers' capacity to process
    cases efficiently and effectively. To date, DDTC has not
    comprehensively analyzed its export processing system to identify
    causes of inefficiencies and needed actions to address them. Unless
    DDTC systematically analyzes its licensing data in terms of drivers of
    workload and steps in the process, it will continue to ineffectively
    and inefficiently manage its processes, workload, and resources.

    Recommendation for Executive Action:

    To improve the efficiency of processing arms export cases, we recommend
    that the Secretary of State direct the Deputy Assistant Secretary of
    the Directorate of Defense Trade Controls to conduct systematic
    analyses of licensing data to assess root causes of inefficiencies and
    to identify and implement actions to better manage workload, reexamine
    its processes, determine the most effective workforce structure, and
    target industry outreach.

    Agency Comments:

    We provided a draft of this report to the Departments of State and
    Defense and for their review and comment. DOD did not comment on our
    draft. State provided written comments that are reprinted in appendix
    III. In commenting on the draft, State concurred with our
    recommendation and recognized the need for additional systematic
    analyses of data to achieve greater efficiencies. State noted that the
    report does not reflect the impact of three recent initiatives, which
    according to State resulted in a 30 percent reduction of open cases
    from April to October 2007. Because our analysis was through April
    2007, we are not able to verify what effects--both short-and long-term-
    -the initiatives have had on the number of open cases. Until State
    engages in a continual process of systematically analyzing its
    licensing data, it will have no assurance that current or future
    initiatives will address the underlying causes and achieve sustainable
    improvements to the processing of arms export cases.

    As agreed with your office, unless you publicly release its contents
    earlier, we plan no further distribution of this report until 30 days
    from the date of this letter. At that time, we will send copies of this
    report to interested congressional committees, as well as the
    Secretaries of State and Defense; the Director, Office of Management
    and Budget; and the Assistant to the President for National Security
    Affairs. In addition, this report will be made available at no charge
    on the GAO Web site at [hyperlink, http://www.gao.gov].

    Please contact me at (202) 512-4841 or calvaresibarra@gao.gov if you or
    your staff have any questions concerning this report. Contact points
    for our Offices of Congressional Relations and Public Affairs may be
    found on the last page of this report. Others making key contributions
    to this report are listed in appendix IV.

    Sincerely yours,

    Signed by:

    Ann Calvaresi-Barr:
    Director Acquisition and Sourcing Management:

    [End of section]

    Appendix I: Scope and Methodology:

    To determine trends in arms export case processing by State's
    Directorate of Defense Trade Controls (DDTC), we obtained State's arms
    export case data for fiscal year 2003 through April 30, 2007. We
    obtained data from State's paper-based "legacy" system and its D-Trade
    system--a Web-based electronic processing system. We merged the data
    from these two systems and created a single Microsoft Access database
    to determine trends in caseload, cases processed, open cases, and
    processing times. Our analysis did not include cases that were approved
    and then subsequently suspended or revoked because this action takes
    place after the original cases were closed, and including these cases
    would thus skew the results. Processing time represents the median
    number of calendar days between receipt of a case and the final action.
    Open cases are those cases that were received by DDTC but on which no
    final action has been taken. To obtain an overview of the data systems
    used to accept and process license cases at DDTC, we interviewed State
    officials responsible for information technology management. We
    assessed data reliability by obtaining and reviewing system
    documentation and performing electronic testing of data, and determined
    the data to be sufficiently reliable for our intended purposes. We also
    analyzed the data by type of license, commodities, countries, cases
    referred, cases in support of ongoing war efforts, exporters, and case
    final actions.

    To identify factors contributing to trends in processing times and open
    cases, we interviewed officials from DDTC, State bureaus to which cases
    are most frequently referred, the Department of Defense's (DOD) Defense
    Technology Security Administration (DTSA), and selected arms exporters.
    To understand the process of reviewing arms export cases referred from
    DDTC, we obtained and reviewed DDTC case review guidelines, applicable
    regulations, and laws. We compared DDTC procedures with DTSA case
    processing procedures. To determine the status of D-Trade, we obtained
    briefings and systems documentation and discussed problems with
    implementing the electronic processing system and future development
    plans with cognizant officials. We also compared processing times for D-
    Trade and paper processing by calculating processing times for
    permanent exports, which are processed through both systems. We
    obtained and analyzed data on DDTC funding and staffing levels. We also
    obtained and reviewed DDTC status reports used to monitor workload,
    processing times, and open cases.

    [End of section]

    Appendix II: Additional Analyses Related to Arms Export Case
    Processing:

    This appendix provides additional analyses of licensing data related to
    the composition of cases closed and case outcomes. Specifically, we
    analyzed the data in terms of types of cases, commodities, countries of
    destination, cases in support of ongoing war efforts, exporters, and
    case final actions.

    Of the 14 case types processed by DDTC, licenses for permanent exports
    made up the majority of cases. From fiscal year 2003 to 2006, the
    percentage of licenses for permanent exports increased from about 62
    percent to over 66 percent of all cases, as shown in table 3.

    Table 3: DDTC Cases Closed by Case Type from Fiscal Year 2003 through
    April 30, 2007:

    Case type: Amendments;
    Fiscal year: 2003: 8,725;
    Fiscal year: percent: 16.0%;
    Fiscal year: 2004: 6,364;
    Fiscal year: percent: 11.0%;
    Fiscal year: 2005: 9,603;
    Fiscal year: percent: 15.3%;
    Fiscal year: 2006: 9,001;
    Fiscal year: percent: 13.8%;
    Fiscal year: 2007[A]: 4,547;
    Fiscal year: percent: 10.4%.

    Case type: Brokering agreements;
    Fiscal year: 2003: 34;
    Fiscal year: percent: 0.1%;
    Fiscal year: 2004: 66;
    Fiscal year: percent: 0.1%;
    Fiscal year: 2005: 74;
    Fiscal year: percent: 0.1%;
    Fiscal year: 2006: 47;
    Fiscal year: percent: 0.1%;
    Fiscal year: 2007[A]: 31;
    Fiscal year: percent: 0.1%.

    Case type: Classified export/import;
    Fiscal year: 2003: 244;
    Fiscal year: percent: 0.4%;
    Fiscal year: 2004: 307;
    Fiscal year: percent: 0.5%;
    Fiscal year: 2005: 310;
    Fiscal year: percent: 0.5%;
    Fiscal year: 2006: 292;
    Fiscal year: percent: 0.4%;
    Fiscal year: 2007[A]: 199;
    Fiscal year: percent: 0.5%.

    Case type: Commodity jurisdictions;
    Fiscal year: 2003: 199;
    Fiscal year: percent: 0.4%;
    Fiscal year: 2004: 173;
    Fiscal year: percent: 0.3%;
    Fiscal year: 2005: 181;
    Fiscal year: percent: 0.3%;
    Fiscal year: 2006: 266;
    Fiscal year: percent: 0.4%;
    Fiscal year: 2007[A]: 225;
    Fiscal year: percent: 0.5%.

    Case type: Distribution agreements;
    Fiscal year: 2003: 75;
    Fiscal year: percent: 0.1%;
    Fiscal year: 2004: 68;
    Fiscal year: percent: 0.1%;
    Fiscal year: 2005: 112;
    Fiscal year: percent: 0.2%;
    Fiscal year: 2006: 111;
    Fiscal year: percent: 0.2%;
    Fiscal year: 2007[A]: 76;
    Fiscal year: percent: 0.2%.

    Case type: General correspondence;
    Fiscal year: 2003: 1,035;
    Fiscal year: percent: 1.9%;
    Fiscal year: 2004: 1,335;
    Fiscal year: percent: 2.3%;
    Fiscal year: 2005: 1,288;
    Fiscal year: percent: 2.0%;
    Fiscal year: 2006: 1,217;
    Fiscal year: percent: 1.9%;
    Fiscal year: 2007[A]: 990;
    Fiscal year: percent: 2.3%.

    Case type: Generic agreements;
    Fiscal year: 2003: 519;
    Fiscal year: percent: 1.0%;
    Fiscal year: 2004: 406;
    Fiscal year: percent: 0.7%;
    Fiscal year: 2005: 294;
    Fiscal year: percent: 0.5%;
    Fiscal year: 2006: 293;
    Fiscal year: percent: 0.4%;
    Fiscal year: 2007[A]: 275;
    Fiscal year: percent: 0.6%.

    Case type: Government jurisdictions;
    Fiscal year: 2003: 2;
    Fiscal year: percent: 0.0%;
    Fiscal year: 2004: 1;
    Fiscal year: percent: 0.0%;
    Fiscal year: 2005: 2;
    Fiscal year: percent: 0.0%;
    Fiscal year: 2006: 0;
    Fiscal year: percent: 0.0%;
    Fiscal year: 2007[A]: 3;
    Fiscal year: percent: 0.0%.

    Case type: International import certificates;
    Fiscal year: 2003: 225;
    Fiscal year: percent: 0.4%;
    Fiscal year: 2004: 278;
    Fiscal year: percent: 0.5%;
    Fiscal year: 2005: 210;
    Fiscal year: percent: 0.3%;
    Fiscal year: 2006: 250;
    Fiscal year: percent: 0.4%;
    Fiscal year: 2007[A]: 150;
    Fiscal year: percent: 0.3%.

    Case type: Manufacturing agreements;
    Fiscal year: 2003: 764;
    Fiscal year: percent: 1.4%;
    Fiscal year: 2004: 566;
    Fiscal year: percent: 1.0%;
    Fiscal year: 2005: 598;
    Fiscal year: percent: 0.9%;
    Fiscal year: 2006: 613;
    Fiscal year: percent: 0.9%;
    Fiscal year: 2007[A]: 565;
    Fiscal year: percent: 1.3%.

    Case type: Permanent exports;
    Fiscal year: 2003: 33,718;
    Fiscal year: percent: 61.8%;
    Fiscal year: 2004: 38,682;
    Fiscal year: percent: 66.8%;
    Fiscal year: 2005: 41,093;
    Fiscal year: percent: 65.3%;
    Fiscal year: 2006: 43,167;
    Fiscal year: percent: 66.1%;
    Fiscal year: 2007[A]: 28,871;
    Fiscal year: percent: 66.2%.

    Case type: Technical assistance agreements;
    Fiscal year: 2003: 5,249;
    Fiscal year: percent: 9.6%;
    Fiscal year: 2004: 5,401;
    Fiscal year: percent: 9.3%;
    Fiscal year: 2005: 4,847;
    Fiscal year: percent: 7.7%;
    Fiscal year: 2006: 5,536;
    Fiscal year: percent: 8.5%;
    Fiscal year: 2007[A]: 5,231;
    Fiscal year: percent: 12.0%.

    Case type: Temporary exports;
    Fiscal year: 2003: 2,634;
    Fiscal year: percent: 4.8%;
    Fiscal year: 2004: 3,012;
    Fiscal year: percent: 5.2%;
    Fiscal year: 2005: 3,076;
    Fiscal year: percent: 4.9%;
    Fiscal year: 2006: 3,451;
    Fiscal year: percent: 5.3%;
    Fiscal year: 2007[A]: 1,895;
    Fiscal year: percent: 4.3%.

    Case type: Temporary imports;
    Fiscal year: 2003: 1,153;
    Fiscal year: percent: 2.1%;
    Fiscal year: 2004: 1,226;
    Fiscal year: percent: 2.1%;
    Fiscal year: 2005: 1,266;
    Fiscal year: percent: 2.0%;
    Fiscal year: 2006: 1,030;
    Fiscal year: percent: 1.6%;
    Fiscal year: 2007[A]: 584;
    Fiscal year: percent: 1.3%.

    Total cases closed;
    Fiscal year: 2003: 54,576;
    Fiscal year: percent: [Empty];
    Fiscal year: 2004: 57,885;
    Fiscal year: percent: [Empty];
    Fiscal year: 2005: 62,954;
    Fiscal year: percent: [Empty];
    Fiscal year: 2006: 65,274;
    Fiscal year: percent: [Empty];
    Fiscal year: 2007[A]: 43,642;
    Fiscal year: percent: [Empty].

    Source: GAO analysis of DDTC data.

    [A] Data are for the first 7 months of fiscal year 2007.

    [End of table]

    Processing times varied by type of case, as shown in table 4. For
    example, in fiscal year 2006, technical assistance agreements took a
    median of 94 days to process, while licenses for permanent exports, the
    most common case type, took 25 days, and amendments to existing
    licenses took 13 days to process.

    Table 4: Median Days Processing Time by Case Type from Fiscal Year 2003
    through April 30, 2007:

    Case type: Amendments;
    Fiscal year: 2003: 8;
    Fiscal year: 2004: 8;
    Fiscal year: 2005: 10;
    Fiscal year: 2006: 13;
    Fiscal year: 2007[A]: 8.

    Case type: Brokering agreements;
    Fiscal year: 2003: 43.5;
    Fiscal year: 2004: 41.5;
    Fiscal year: 2005: 34.5;
    Fiscal year: 2006: 64;
    Fiscal year: 2007[A]: 95.

    Case type: Classified export/import;
    Fiscal year: 2003: 31.5;
    Fiscal year: 2004: 35;
    Fiscal year: 2005: 36;
    Fiscal year: 2006: 42;
    Fiscal year: 2007[A]: 30.

    Case type: Commodity jurisdictions;
    Fiscal year: 2003: 105;
    Fiscal year: 2004: 107;
    Fiscal year: 2005: 111;
    Fiscal year: 2006: 157.5;
    Fiscal year: 2007[A]: 126.

    Case type: Distribution agreements;
    Fiscal year: 2003: 75;
    Fiscal year: 2004: 84.5;
    Fiscal year: 2005: 64.5;
    Fiscal year: 2006: 84;
    Fiscal year: 2007[A]: 90.5.

    Case type: General correspondence;
    Fiscal year: 2003: 57;
    Fiscal year: 2004: 62;
    Fiscal year: 2005: 52;
    Fiscal year: 2006: 65;
    Fiscal year: 2007[A]: 86.

    Case type: Generic agreements;
    Fiscal year: 2003: 22;
    Fiscal year: 2004: 14;
    Fiscal year: 2005: 30.5;
    Fiscal year: 2006: 91;
    Fiscal year: 2007[A]: 68.

    Case type: Government jurisdictions;
    Fiscal year: 2003: 787.5;
    Fiscal year: 2004: 98;
    Fiscal year: 2005: 1,171.5;
    Fiscal year: 2006: [B] ;
    Fiscal year: 2007[A]: 171.

    Case type: International import certificates;
    Fiscal year: 2003: 5;
    Fiscal year: 2004: 5;
    Fiscal year: 2005: 7;
    Fiscal year: 2006: 8.5;
    Fiscal year: 2007[A]: 6.

    Case type: Manufacturing agreements;
    Fiscal year: 2003: 37;
    Fiscal year: 2004: 37.5;
    Fiscal year: 2005: 45;
    Fiscal year: 2006: 99;
    Fiscal year: 2007[A]: 83.

    Case type: Permanent exports;
    Fiscal year: 2003: 13;
    Fiscal year: 2004: 17;
    Fiscal year: 2005: 20;
    Fiscal year: 2006: 25;
    Fiscal year: 2007[A]: 25.

    Case type: Technical assistance agreements;
    Fiscal year: 2003: 39;
    Fiscal year: 2004: 41;
    Fiscal year: 2005: 48;
    Fiscal year: 2006: 94;
    Fiscal year: 2007[A]: 71.

    Case type: Temporary exports;
    Fiscal year: 2003: 37;
    Fiscal year: 2004: 36;
    Fiscal year: 2005: 36;
    Fiscal year: 2006: 38;
    Fiscal year: 2007[A]: 33.

    Case type: Temporary imports;
    Fiscal year: 2003: 13;
    Fiscal year: 2004: 14;
    Fiscal year: 2005: 16;
    Fiscal year: 2006: 22;
    Fiscal year: 2007[A]: 16.5.

    All cases;
    Fiscal year: 2003: 14;
    Fiscal year: 2004: 18;
    Fiscal year: 2005: 19;
    Fiscal year: 2006: 26;
    Fiscal year: 2007[A]: 27.

    Source: GAO analysis of DDTC data.

    [A] Data are for the first 7 months of fiscal year 2007.

    [B] No government jurisdiction cases were closed in fiscal year 2006.

    [End of table]

    For cases involving permanent export licenses, aircraft and related
    components were the primary driver of increased cases, increasing about
    44 percent, from about 9,800 in fiscal year 2003 to over 14,000 in
    fiscal year 2006, as shown in table 5. Processing times for permanent
    export licenses also varied by type of commodity group and were
    increasing for most commodities from fiscal years 2003 through 2006,
    with missile and spacecraft taking the longest to process. Several
    commodity groups saw reductions in processing times during the first 7
    months of fiscal year 2007, including a significant reduction in
    missile and spacecraft. Processing times for aircraft increased during
    each period.

    Table 5: Permanent Export Cases Processed and Processing Times by
    Commodity Group, Fiscal Year 2003 through April 30, 2007:

    Commodity group: Aircraft;
    Fiscal year: 2003: Cases closed: 9,822;
    Fiscal year: 2003: Median days processing: 10;
    Fiscal year: 2004: Cases closed: 12,385;
    Fiscal year: 2004: Median days processing: 14;
    Fiscal year: 2005: Cases closed: 13,224;
    Fiscal year: 2005: Median days processing: 18;
    Fiscal year: 2006: Cases closed: 14,099;
    Fiscal year: 2006: Median days processing: 24;
    Fiscal year: 2007[A]: Cases closed: 9,701;
    Fiscal year: 2007[A]: Median days processing: 29.

    Commodity group: Firearms;
    Fiscal year: 2003: Cases closed: 6,984;
    Fiscal year: 2003: Median days processing: 8;
    Fiscal year: 2004: Cases closed: 7,145;
    Fiscal year: 2004: Median days processing: 10;
    Fiscal year: 2005: Cases closed: 7,464;
    Fiscal year: 2005: Median days processing: 15;
    Fiscal year: 2006: Cases closed: 7,429;
    Fiscal year: 2006: Median days processing: 20;
    Fiscal year: 2007[A]: Cases closed: 4,381;
    Fiscal year: 2007[A]: Median days processing: 16.

    Commodity group: Military electronics;
    Fiscal year: 2003: Cases closed: 6,614;
    Fiscal year: 2003: Median days processing: 18.5;
    Fiscal year: 2004: Cases closed: 7,748;
    Fiscal year: 2004: Median days processing: 23;
    Fiscal year: 2005: Cases closed: 8,699;
    Fiscal year: 2005: Median days processing: 23;
    Fiscal year: 2006: Cases closed: 9,417;
    Fiscal year: 2006: Median days processing: 31;
    Fiscal year: 2007[A]: Cases closed: 6,536;
    Fiscal year: 2007[A]: Median days processing: 28.

    Commodity group: Military vehicle and naval vessel;
    Fiscal year: 2003: Cases closed: 5,992;
    Fiscal year: 2003: Median days processing: 21;
    Fiscal year: 2004: Cases closed: 7,107;
    Fiscal year: 2004: Median days processing: 26;
    Fiscal year: 2005: Cases closed: 7,612;
    Fiscal year: 2005: Median days processing: 21;
    Fiscal year: 2006: Cases closed: 7,777;
    Fiscal year: 2006: Median days processing: 22;
    Fiscal year: 2007[A]: Cases closed: 4,376;
    Fiscal year: 2007[A]: Median days processing: 31.

    Commodity group: Missile and spacecraft;
    Fiscal year: 2003: Cases closed: 4,221;
    Fiscal year: 2003: Median days processing: 32;
    Fiscal year: 2004: Cases closed: 4,229;
    Fiscal year: 2004: Median days processing: 29;
    Fiscal year: 2005: Cases closed: 3,807;
    Fiscal year: 2005: Median days processing: 36;
    Fiscal year: 2006: Cases closed: 4,092;
    Fiscal year: 2006: Median days processing: 39;
    Fiscal year: 2007[A]: Cases closed: 3,151;
    Fiscal year: 2007[A]: Median days processing: 17.

    Source: GAO analysis of DDTC data.

    [A] Data are for the first 7 months of fiscal year 2007.

    [End of table]

    Arms export cases are relatively concentrated by country of
    destination. As shown in table 6, in fiscal year 2006, cases
    identifying Japan and the United Kingdom as destination countries
    represented about 25 percent of all cases. Processing times, with the
    exception of those for Israel, are similar for the top countries of
    destination.

    Table 6: Percentage of Cases Closed and Median Processing Time for Top
    10 Countries of Destination, Fiscal Year 2006:

    Rank: 1;
    Country: Japan;
    Percentage of all cases closed: 12.7%;
    Median days processing: 22.

    Rank: 2;
    Country: United Kingdom;
    Percentage of all cases closed: 12.0%;
    Median days processing: 21.

    Rank: 3;
    Country: Canada;
    Percentage of all cases closed: 6.9%;
    Median days processing: 22.

    Rank: 4;
    Country: Germany;
    Percentage of all cases closed: 5.4%;
    Median days processing: 24.

    Rank: 5;
    Country: Australia;
    Percentage of all cases closed: 4.5%;
    Median days processing: 21.

    Rank: 6;
    Country: Israel;
    Percentage of all cases closed: 4.3%;
    Median days processing: 36.

    Rank: 7;
    Country: South Korea;
    Percentage of all cases closed: 4.0%;
    Median days processing: 24.

    Rank: 8;
    Country: Italy;
    Percentage of all cases closed: 3.9%;
    Median days processing: 25.

    Rank: 9;
    Country: France;
    Percentage of all cases closed: 3.2%;
    Median days processing: 29.

    Rank: 10;
    Country: Spain;
    Percentage of all cases closed: 2.4%;
    Median days processing: 26.

    Source: GAO analysis of DDTC data.

    [End of table]

    DDTC has procedures to expedite cases submitted in support of ongoing
    war efforts including Operation Enduring Freedom (OEF) or Operation
    Iraqi Freedom (OIF). These cases did not represent a significant
    caseload---ranging from 0.8 percent to 1.5 percent from fiscal year
    2003 through 2006. Median processing times for these cases ranged from
    8 to 11 days, as shown in table 7.

    Table 7: Number of Cases and Processing Times for OEF/OIF Cases, Fiscal
    Years 2003 through 2006:

    Fiscal year: 2003;
    All cases closed: 54,576;
    Cases expedited: 444;
    Percentage of all cases closed: 0.8%;
    Median days for processing: 8.

    Fiscal year: 2004;
    All cases closed: 57,885;
    Cases expedited: 477;
    Percentage of all cases closed: 0.8%;
    Median days for processing: 11.

    Fiscal year: 2005;
    All cases closed: 62,954;
    Cases expedited: 958;
    Percentage of all cases closed: 1.5%;
    Median days for processing: 9.

    Fiscal year: 2006;
    All cases closed: 65,274;
    Cases expedited: 773;
    Percentage of all cases closed: 1.2%;
    Median days for processing: 9.

    Source: GAO analysis of DDTC data.

    [End of table]

    The number of exporters registered with DDTC that submitted cases
    increased about 13 percent, from almost 2,500 in fiscal year 2003 to
    almost 2,800 in fiscal year 2006. However, most exporters submitted
    relatively few applications, as shown in table 8.

    Table 8: Number of Exporters by Cases Submitted, Fiscal Years 2003
    through 2006:

    Fiscal year: 2003;
    Total exporters submitting cases: 2,470;
    Exporters who submitted: Ten or fewer cases: 1,826;
    Exporters who submitted: Percent: 74%;
    Exporters who submitted: Five or fewer cases: 1,480;
    Exporters who submitted: Percent: 60%;
    Exporters who submitted: One case: 684;
    Exporters who submitted: Percent: 28%.

    Fiscal year: 2004;
    Total exporters submitting cases: 2,651;
    Exporters who submitted: Ten or fewer cases: 1,911;
    Exporters who submitted: Percent: 72%;
    Exporters who submitted: Five or fewer cases: 1,582;
    Exporters who submitted: Percent: 60%;
    Exporters who submitted: One case: 683;
    Exporters who submitted: Percent: 26%.

    Fiscal year: 2005;
    Total exporters submitting cases: 2,759;
    Exporters who submitted: Ten or fewer cases: 2,000;
    Exporters who submitted: Percent: 72%;
    Exporters who submitted: Five or fewer cases: 1,634;
    Exporters who submitted: Percent: 59%;
    Exporters who submitted: One case: 687;
    Exporters who submitted: Percent: 25%.

    Fiscal year: 2006;
    Total exporters submitting cases: 2,781;
    Exporters who submitted: Ten or fewer cases: 1,978;
    Exporters who submitted: Percent: 71%;
    Exporters who submitted: Five or fewer cases: 1,609;
    Exporters who submitted: Percent: 58%;
    Exporters who submitted: One case: 737;
    Exporters who submitted: Percent: 27%.

    Source: GAO analysis of DDTC data.

    [End of table]

    In contrast, some exporters submit thousands of applications in a given
    year. In terms of all cases received, the percentage of cases received
    from the top 10 exporters in terms of cases submitted ranged from about
    19 to 26 percent, as shown in table 9.

    Table 9: Percentage of Cases Received from the Top 10 Exporters, Fiscal
    Years 2003 through 2006:

    Fiscal year: 2003;
    Total cases received: 55,073;
    Cases received by top 10 exporters: 14,240;
    Percent: 25.9%.

    Fiscal year: 2004;
    Total cases received: 58,404;
    Cases received by top 10 exporters: 10,896;
    Percent: 18.7%.

    Fiscal year: 2005;
    Total cases received: 65,150;
    Cases received by top 10 exporters: 14,508;
    Percent: 22.3%.

    Fiscal year: 2006;
    Total cases received: 67,785;
    Cases received by top 10 exporters: 14,263;
    Percent: 21.0%.

    Source: GAO analysis of DDTC data.

    [End of table]

    As shown in table 10, most cases processed by DDTC are approved or
    approved with condition, known as a proviso. Very few cases are denied.
    The number of cases returned without action increased from about 13
    percent in fiscal year 2003 to over 17 percent in the first 7 months of
    fiscal year 2007.

    Table 10: Cases Closed by Final Action, Fiscal Year 2003 through April
    30, 2007:

    Final action: Approved;
    Fiscal year: 2003: 27,916;
    Fiscal year: Percent: 51.2%;
    Fiscal year: 2004: 29,914;
    Fiscal year: Percent: 51.7%;
    Fiscal year: 2005: 34,638;
    Fiscal year: Percent: 55.0%;
    Fiscal year: 2006: 35,046;
    Fiscal year: Percent: 53.7%;
    Fiscal year: 2007[A]: 19,961;
    Fiscal year: Percent: 45.7%.

    Final action: Approved with proviso;
    Fiscal year: 2003: 18,918;
    Fiscal year: Percent: 34.7%;
    Fiscal year: 2004: 19,054;
    Fiscal year: Percent: 32.9%;
    Fiscal year: 2005: 18,586;
    Fiscal year: Percent: 29.5%;
    Fiscal year: 2006: 20,183;
    Fiscal year: Percent: 30.9%;
    Fiscal year: 2007[A]: 15,507;
    Fiscal year: Percent: 35.5%.

    Final action: Denied;
    Fiscal year: 2003: 395;
    Fiscal year: Percent: 0.7%;
    Fiscal year: 2004: 426;
    Fiscal year: Percent: 0.7%;
    Fiscal year: 2005: 394;
    Fiscal year: Percent: 0.6%;
    Fiscal year: 2006: 433;
    Fiscal year: Percent: 0.7%;
    Fiscal year: 2007[A]: 229;
    Fiscal year: Percent: 0.5%.

    Final action: Returned without action;
    Fiscal year: 2003: 6,992;
    Fiscal year: Percent: 12.8%;
    Fiscal year: 2004: 8,237;
    Fiscal year: Percent: 14.2%;
    Fiscal year: 2005: 8,990;
    Fiscal year: Percent: 14.3%;
    Fiscal year: 2006: 9,171;
    Fiscal year: Percent: 14.1%;
    Fiscal year: 2007[A]: 7,450;
    Fiscal year: Percent: 17.1%.

    Source: GAO analysis of DDTC data.

    [A] Data are for the 7 months of fiscal year 2007.

    [End of table]

    [End of section]

    Appendix III: Comments from the Department of State:

    United States Department of State:
    Assistant Secretary for Resource Management and Chief Financial
    Officer:
    Washington, D.C. 20520:

    November 8, 2007:

    Ms. Jacquelyn Williams-Bridgers:
    Managing Director:
    International Affairs and Trade Government:
    Accountability Office:
    441 G Street, N.W.:
    Washington, D.C. 20548-0001:

    Dear Ms. Williams-Bridgers:

    We appreciate the opportunity to review your draft report, "Defense
    Trade: State Department Needs to Conduct Assessments to Identify and
    Address Inefficiencies and Challenges in the Arms Export Process," GAO
    Job Code 120629.

    The enclosed Department of State comments are provided for
    incorporation with this letter as an appendix to the final report.

    If you have any questions concerning this response, please contact
    Laurell Brault, Deputy Director, Bureau of Political and Military
    Affairs, Office of Directorate of Defense Trade Controls at (202) 663-
    2736.

    Sincerely,

    Signed by:

    Bradford R. Higgins:

    cc: GAO � Anne-Marie Lasowski: PM � Frank Ruggiero:
    State/OIG � Mark Duda:

    Department of State Comments on GAO Draft Report:

    Defense Trade: State Department Needs to Conduct Assessments to
    Identify and Address Inefficiencies and Challenges in the Arms Export
    Process, (GAO-08-89, GAO Code 120629):

    Thank you for allowing the Department of State the opportunity to
    comment on the draft Defense Trade: State Department Needs to Conduct
    Assessments to Identify and Address Inefficiencies and Challenges in
    the Arms Export Process.

    The GAO recommended that the Secretary of State direct the Deputy
    Assistant Secretary of the Directorate of Defense Trade Controls (DDTC)
    to conduct systematic analyses of licensing data to assess root causes
    of inefficiencies and to identify and implement actions to better
    manage workload, reexamine its processes, determine the most effective
    workforce structure, and target industry outreach.

    State concurs with the overall GAO recommendations; however, it should
    be noted that the GAO review does not include licensing data collected
    after April 2007, and thus does not capture the full impact of the
    licensing guidance and procedural changes that were implemented after
    March 2007. Although, the recommendations have merit, they are more
    historical in nature. The draft report identified three key trends in
    the processing of arms export cases:

    (1) A 20% increase in the number of export cases received by DDTC
    between fiscal years 2003 and 2006;
    (2) Processing times almost doubled from fiscal year 2003 to 2006;
    (3) Increase in the number of open arms cases since fiscal year 2003;

    Our remarks will focus on the last two trends identified in the draft
    report.

    In September 2006 the number of open arms export cases reached a high
    of 10,200 cases. The timeframe in which this occurred came when DDTC
    was severely resource constrained in terms of total number of
    personnel, experienced licensing officers with full signature
    authority, and the post-911 environment and support of the Global War
    on Terror (OIF/OEF). Simultaneously, we were implementing a D-Trade
    system which we continue to believe will have major long term
    benefits-- particularly D-Trade II--but which in the short run has
    experienced some challenges and delays.

    As stated in the draft report, DDTC undertook extraordinary measures
    over the course of three months to reduce the number of open cases by
    almost 50 percent. We recognized that the measures were not sustainable
    and conducted a critical review of our internal procedures to identify
    and address deficiencies in the analysis and case review process. Since
    that time frame, several initiatives were implemented that are
    highlighted below, resulting in a reduction of the number of open cases
    from 7,500 in April 2007 to 5,300 as of 31 October 2007 (a 30 percent
    reduction).

    (1) Management Case Review Guidance-addresses the decision-making
    process for pending cases and identifies required timelines for
    specific actions by licensing personnel.

    (2) Expedited License Processing Guidelines and revised staffing
    requirements. The guidelines address the expedited review process for
    priority cases such as OIF/OEF, Defense Capabilities Initiative, and
    UK/Australia cases. We also revised the staffing requirements to
    eliminate the staffing of spare parts to NATO countries, and routine
    staffing to other Bureaus and Agencies, based on the level of
    technology and geographical region.

    (3) Deputy Assistant Secretary (DAS) level review for cases over 75
    days. In the three months since the review was implemented we have
    continued to see a significant reduction in the number of "old" D-Trade
    cases. We are confident that the improvements noted are long-term,
    given the disciplined approach and increased accountability instituted
    through the case review process.

    We recognize that additional systematic analyses of the data collected
    by our internal staff, along with the data provided by the GAO, is
    needed to achieve even greater efficiencies in the arms export analysis
    and review process. We have initiated a review of our organizational
    alignment to better structure the workforce, and have made initial
    staffing changes to two of the licensing teams, as a result of the
    imbalance in the caseload. We are also committed to pursuing
    technological solutions to optimize the ability of licensing officers
    to access case related material, and reducing the administrative burden
    on the licensing staff and the arms export community.

    [End of section]

    Appendix IV: GAO Contact and Staff Acknowledgments:

    GAO Contact:

    Ann Calvaresi-Barr (202) 512-4841 or calvaresibarra@gao.gov:

    Acknowledgments:

    In addition to the contact named above, Anne-Marie Lasowski, Assistant
    Director; Bradley Terry; Peter Zwanzig; Jacqueline Wade; Arthur James,
    Jr; Julia Kennon; Karen Sloan; and Alyssa Weir made key contributions
    to this report.

    [End of section]

    Related GAO Products:

    Export Controls: Vulnerabilities and Inefficiencies Undermine System's
    Ability to Protect U.S. Interests. GAO-07-1135T. Washington, D.C.: July
    26, 2007.

    High Risk Series: An Update. GAO-07-310. Washington, D.C.: January,
    2007.

    Export Controls: Challenges Exist in Enforcement of an Inherently
    Complex System. GAO-07-265. Washington, D.C.: December 20, 2006.

    Defense Technologies: DOD's Critical Technologies Lists Rarely Inform
    Export Control and Other Policy Decisions. GAO-06-793. Washington,
    D.C.: July 28, 2006.

    Export Controls: Improvements to Commerce's Dual-Use System Needed to
    Ensure Protection of U.S. Interests in the Post-9/11 Environment. GAO-
    06-638. Washington, D.C.: June 26, 2006.

    Defense Trade: Arms Export Control Vulnerabilities and Inefficiencies
    in the Post-9/11 Security Environment. GAO-05-468R. Washington, D.C.:
    April 7, 2005.

    Defense Trade: Arms Export Control System in the Post-9/11 Environment.
    GAO-05-234. Washington, D.C.: February 16, 2005.

    Export Controls: Processes for Determining Proper Control of Defense-
    Related Items Need Improvement. GAO-02-996. Washington, D.C.: September
    20, 2002.

    Export Controls: Department of Commerce Controls over Transfers of
    Technology to Foreign Nationals Need Improvement. GAO-02-972.
    Washington, D.C.: September 6, 2002.

    Export Controls: More Thorough Analysis Needed to Justify Changes in
    High Performance Computer Controls. GAO-02-892. Washington, D.C.:
    August 2, 2002.

    Defense Trade: Lessons to Be Learned from the Country Export Exemption.
    GAO-02-63. Washington, D.C.: March 29, 2002.

    Export Controls: Issues to Consider in Authorizing a New Export
    Administration Act. GAO-02-468T. Washington, D.C.: February 28, 2002.

    Export Controls: State and Commerce Department License Review Times Are
    Similar. GAO-01-528. Washington, D.C.: June 1, 2001.

    Export Controls: Reengineering Business Processes Can Improve
    Efficiency of State Department License Reviews. GAO-02-203. Washington,
    D.C.: December 31, 2001.

    Export Controls: System for Controlling Exports of High Performance
    Computing Is Ineffective. GAO-01-10. Washington, D.C.: December 18,
    2000.

    Defense Trade: Analysis of Support for Recent Initiatives. GAO/NSIAD-
    00-191. Washington, D.C.: August 31, 2000.

    Defense Trade: Status of the Department of Defense's Initiatives on
    Defense Cooperation. GAO/NSIAD-00-190R. Washington, D.C.: July 19,
    2000.

    Export Controls: Better Interagency Coordination Needed on Satellite
    Exports. GAO/NSIAD-99-182. Washington, D.C.: September 17, 1999.

    Export Controls: Some Controls over Missile-Related Technology Exports
    to China Are Weak. GAO/NSIAD-95-82. Washington, D.C.: April 17, 1995.

    [End of section]

    Footnotes:

    [1] For the purposes of this report, "arms" refers to defense articles
    and services as specified in the United States Munitions List. 22
    C.F.R. � 121.1 (2007).

    [2] Arms export cases processed by DDTC include applications for the
    export of arms and agreements between U.S. industry and foreign
    entities to provide technical assistance or manufacturing capability.

    [3] GAO, Defense Trade: Arms Export Control System in the Post 9/11
    Environment. GAO-05-234 (Washington D.C.: Feb. 16, 2005).

    [4] Related programs include the Foreign Military Sales program, the
    Committee on Foreign Investment in the United States, and the
    Department of Defense's program for identifying militarily critical
    technologies.

    [5] GAO, High Risk Series: An Update, GAO-07-310 (Washington, D.C.:
    January 2007).

    [6] The Arms Export Control Act authorizes the President to control the
    export and import of defense articles and services. 22 U.S.C. � 2778.
    The statutory authority of the President to promulgate regulations with
    respect to defense exports and imports was delegated to the Secretary
    of State by Executive Order 11958, as amended. This authority is
    implemented through the International Traffic in Arms Regulations. 22
    C.F.R. �� 120-130 (2007).

    [7] Registration fees are paid by manufacturers and exporters who must
    register with State as required by the Arms Export Control Act. 22
    U.S.C. � 2778. State can use these funds only for expenses related to
    such activities as contract personnel assisting in the evaluation of
    license applications, automation of trade control functions, or
    enhancement of compliance and enforcement activities. 22 U.S.C. � 2717.

    [8] At the time of our review, only certain types of cases could be
    submitted electronically through D-Trade, including licenses for
    permanent export, temporary export, and temporary import.

    [9] Exporters can request a jurisdiction determination when they are
    uncertain if an export item is subject to State controls or want an
    item removed from State's jurisdiction.

    [10] For example, the Arms Export Control Act requires that Congress be
    given at least 15 days written notification of State's intent to
    approve licenses for defense articles and services valued at $100
    million or more, or for major defense equipment valued at $25 million
    or more, to North Atlantic Treaty Organization (NATO) member countries,
    Japan, Australia, and New Zealand. 22 U.S.C. � 2776(c).

    [11] In 2007, DDTC established guidelines that cover the export
    licensing review process, including review and referral of cases.

    [12] According to DDTC officials, DDTC has an informal rule that team
    leaders are supposed to assign cases to licensing officers within 2
    days, thereby increasing the overall time frame goal to 12 days.

    [13] In 2007, DDTC established a policy limiting review to 15 days of
    cases referred to State bureaus and other agencies, except for DOD and
    the Missile Technology Export Committee. DDTC can grant extensions if
    additional time is needed.

    [14] Pub. L. No. 108-375 � 1225 (2004).

    [15] In June 2007, the United States and the United Kingdom signed a
    defense trade cooperation treaty that would exempt some arms exports to
    the United Kingdom from export license requirements. In September 2007,
    the United States and Australia signed a similar treaty. Until these
    treaties have been ratified by the United States Senate, they will not
    have the force of law.

    [16] The current version of D-Trade accepts 3 of the 14 types of case
    processed by DDTC, including applications for permanent export, the
    most common case type.

    [17] GAO, Export Controls: Reengineering Business Processes Can Improve
    Efficiency of State Department License Reviews, GAO-02-203 (Washington,
    D.C.: Dec. 31, 2001).

    [18] Pub. L. No. 107-228 � 1401(c) (2002).

    [19] GAO, Internal Control Management and Evaluation Tool: Exposure
    Draft, GAO-01-131G (Washington, D.C.: February 2001). See also GAO,
    Export Controls: Vulnerabilities and Inefficiencies Undermine System's
    Ability to Protect U.S. Interests, GAO-07-1135T (Washington, D.C.: July
    26, 2007).

    GAO's Mission:

    The Government Accountability Office, the audit, evaluation, and
    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 GAO Reports and Testimony:

    The fastest and easiest way to obtain copies of GAO documents at no
    cost is through GAO's Web site [hyperlink, http://www.gao.gov]. Each
    weekday, GAO posts newly released reports, testimony, and
    correspondence on its Web site. To have GAO e-mail you a list of newly
    posted products every afternoon, go to [hyperlink, http://www.gao.gov]
    and select "E-mail Updates."

    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. Government Accountability Office:
    441 G Street NW, Room LM:
    Washington, DC 20548:

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

    To Report Fraud, Waste, and Abuse in Federal Programs:

    Contact:

    Web site: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]:
    E-mail: fraudnet@gao.gov:
    Automated answering system: (800) 424-5454 or (202) 512-7470:

    Congressional Relations:

    Gloria Jarmon, Managing Director, JarmonG@gao.gov:
    (202) 512-4400:
    U.S. Government Accountability Office:
    441 G Street NW, Room 7125:
    Washington, DC 20548:

    Public Affairs:

    Chuck Young, Managing Director, BeckerS@gao.gov:
    (202) 512-4800:
    U.S. Government Accountability Office:
    441 G Street NW, Room 7149:
    Washington, DC 20548:

    *** End of document. ***