Summary
This is the second in a series of reports on the foreign military sales program. GAO focuses on the Department of Defense's (DOD) implementation of end-use monitoring requirements of the Arms Export Control Act. GAO discusses DOD's efforts to (1) observe and report on defense articles and services transferred under the program, (2) perform end-use checks, and (3) satisfy requirements of end-use monitoring. GAO found that DOD has not effectively implemented any of its monitoring and reporting requirements under amendments to the Arms Export Control Act. GAO makes recommendations to correct program weaknesses.
GAO noted that: (1) DOD has not effectively implemented the requirement that its field personnel observe and report on foreign governments' use of U.S. defense articles and services transferred through the Foreign Military Sales program; (2) because the extent of observation needed to verify that defense articles and services are being used appropriately will vary from country to country, DOD has not issued guidance specifying what monitoring is required; (3) as a result, field personnel interpret the requirements and the activities that they should perform differently; (4) DOD has not effectively implemented requirements for its field personnel to perform end-use checks in response to specific standards or for selected weapon systems; (5) for example, field personnel responsible for performing checks are not receiving the needed information from Defense or Department of State officials; (6) as a result, GAO identified 16 countries where end-use checks were not performed in fiscal years 1997-1999, even though one of the standards was met; (7) in addition, specific requirements have been established to conduct end-use checks for selected weapon systems such as Stinger missiles; (8) for some other weapon systems, such as Advanced Medium Range Air-to-Air Missiles, sales agreements allow U.S. personnel to conduct end-use checks; (9) for both of these weapon systems, the U.S. relies on host country records to maintain accountability; (10) however, the reliability of such records varies from country to country; (11) for example, after performing a worldwide inventory of Stinger missiles, DOD identified discrepancies in some countries' records, which left some missiles unaccounted for; (12) further, according to GAO's survey and field visits, no end-use checks of Advanced Medium Range Air-to-Air Missiles have ever been performed by U.S. personnel; (13) DOD has not complied with the reporting requirements of the end-use monitoring amendment to the Arms Export Control Act because it does not collect the information needed to do so; (14) the amendment requires DOD to report annually to Congress on actions taken to implement the end-use monitoring program; (15) this report is to include a detailed accounting of the cost and number of personnel associated with its program; and (16) field personnel are currently not required to track the resources they use in performing end-use monitoring activities and only routinely report on the number of Stinger missile inspections conducted.
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.
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Recommendations for Executive Action
Recommendation: To improve the implementation of the end-use monitoring program, the Secretary of Defense should, with concurrence from the Secretary of State, develop procedures to provide field personnel with the information necessary to apply the five end-use check standards, including the information contained in Arms Export Control Act violation reports, and provide guidance on when to apply the standards.
Agency Affected: Department of Defense
Status: Implemented
Comments: In April 2004, the Defense Security Cooperation Agency (DSCA) updated the Security Assistance Management Manual to reflect the new program and assign responsibilities for end-use monitoring. This includes guidance for field and headquarters personnel to apply when situations occur in a country or region that necessitate additional end-use checks. The manual also includes specific procedures on performing end-use checks when the Department of State reports to field staff through the U.S. embassy that an Arms Export Control Act violation has occurred.
Recommendation: To improve the implementation of the end-use monitoring program, the Secretary of Defense should, with concurrence from the Secretary of State, issue specific guidance to field personnel on what activities need to be performed for the routine observation of U.S. defense equipment and additional guidance for the monitoring of specific weapon systems.
Agency Affected: Department of Defense
Status: Implemented
Comments: In response to GAO's recommendation, DOD has developed an enhanced end-use monitoring program, and in 2004, provided guidance on the requirements, timelines, and reports for each type of end-use monitoring visit. DOD has also developed a specific checklist for use in reviewing requirements for one specific weapon system and stated that additional checklists were being developed for all enhanced articles/services.
Recommendation: To improve the implementation of the end-use monitoring program, the Secretary of Defense should, with concurrence from the Secretary of State, reconcile discrepancies in foreign governments' Stinger missile inventories, where discrepancies exist.
Agency Affected: Department of Defense
Status: Not Implemented
Comments: In a follow-on review of Stinger missile end-use monitoring, GAO reported that DOD's inventory inspection process still has flaws. (NONPROLIFERATION: Further Improvements Needed in U.S. Efforts to Counter Threats from Man-Portable Air Defense Systems, May 12, 2004, GAO-04-519). Because DOD's records on the number and destination of Stinger missiles sold overseas are incomplete and unreliable, the department continues to be unable to reconcile discrepancies in foreign governments' Stinger missile inventories.
Recommendation: To improve the implementation of the end-use monitoring program, the Secretary of Defense should, with concurrence from the Secretary of State, comply with the 1996 end-use monitoring amendment by reporting required information to Congress.
Agency Affected: Department of Defense
Status: Implemented
Comments: Beginning with the fiscal year 2005 Congressional Budget Justification for Foreign Operations (released on February 10, 2004), DOD is now tracking and reporting to Congress the activities and resource expenditures associated with end-use monitoring under the Golden Sentry program.
