Summary

Under Section 655 of the Foreign Assistance Act, as amended, the Department of State reports annually to Congress on the aggregate dollar value and quantity of all defense articles and services that State licensed for direct commercial sale to each country. State's report is intended to be an accurate record to ensure that Congress and the public are informed regarding foreign arms sales by U.S. industry. In the course of a previous GAO review on the proliferation of man-portable air defense systems (MANPADS),we found that State reported to Congress that it had approved licenses for the commercial sale of Stinger missiles to foreign countries in five instances during fiscal years 2000 and 2002. However, U.S. government policy precludes the commercial sale of Stinger missiles, and State had not approved licenses for the commercial sale of Stinger missiles. State officials stated in May 2004 that the information the department had reported in its fiscal years 2000 and 2002 reports was incorrect. In response to our ongoing review, State submitted an amended 2002 report to Congress in September 2004 and posted corrected 2000 and 2002 reports to its Web site. Under the authority of the Comptroller General, we assessed the reasons for State's misreporting of Stinger missile sales authorizations in its fiscal years 2000 and 2002 Section 655 reports.

State officials attributed State's inaccurate reporting on the licensing of Stinger missiles for commercial sale to errors in the license data entry process. In addition, State's multioffice review of the draft Section 655 reports failed to discover the inaccurate reporting. Furthermore, we found data reliability problems that raise additional questions about the accuracy and reliability of data in State's Section 655 reports to Congress. Although State's report is intended to ensure that Congress and the public are informed about foreign arms sales by U.S. industry, deficiencies in State's processes for preparing its Section 655 report inhibit the ability of Congress to obtain accurate information needed to provide effective oversight of these weapons sales programs. To ensure that Congress obtains accurate information on foreign arms sales by U.S. industry, we recommend that the Secretary of State establish and implement procedures to resolve data reliability problems that affect direct commercial sales information in State's Section 655 report, including the review of data entered and database-design limitations.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Implemented" or "Not implemented" based on our follow up work.

Recommendations for Executive Action