The locations of the nonstockpile chemical materiel, as of January 31, 2000,  are shown in figure 2. Most Chemical Weapons and Materiel Could Be Destroyed Before the Convention’s 2007 Deadline

The Army has destroyed approximately 17.7 percent of the original  chemical weapons stockpile and could destroy 90 percent of its stockpile  of chemical agents and munitions and most of its nonstockpile chemical  warfare materiel before the Chemical Weapons Convention’s 2007  deadline, given its recent progress and projected plans. However, because of the additional time required to develop and select  disposal methods that are acceptable to the state regulatory agencies and  local communities in Kentucky and Colorado, which store the remaining  10 percent of the original stockpile, the Army will not meet the 2007  deadline at these sites. The disposal method for the remaining  10 percent of the stockpile stored in Kentucky and Colorado has not yet  been selected because the 1997 Defense Appropriations Act requires an  examination of alternative disposal methods under the Assembled  Chemical Weapons Assessment Program. Program Costs Will Likely Exceed $14.9 Billion Estimate

The Chemical Demilitarization Program has a long-standing history of  experiencing significant cost growth. The Army Has Not Adequately Managed the Liquidation of Program Funds

The Army has experienced problems in recent years in managing its  liquidations of program funds. We found that the  program had more than $3.1 billion in budget authority from fiscal  years 1993-98 appropriations as of September 30, 1999, of which a reported $498 million (16.1 percent) was unliquidated. Our review of $382.1 million (62.6 percent) of the reported $610.5 million in unliquidated  obligations for fiscal years 1992-98 showed that $150.6 million (39.4 percent  of our sample) had already been spent but was not recorded in accounting  records or included in financial reports prepared by the Defense Finance  and Accounting Service (DFAS). Of the remaining $432 million in  unliquidated obligations, most was for work completed but not yet billed  by the contractor or verified by the Defense Contract Audit Agency  (DCAA), or for work being done but not yet completed. Procedural Delays

Procedural delays have accounted for the accumulation of some of the  unliquidated obligations. Program Management Has Been Hindered by Complex Structure and Ineffective Coordination

Effective management of the Chemical Demilitarization Program has been  hindered by its complex management structure and ineffective  coordination among program offices and with state and local officials. In  addition, accountability for program performance has been unclear, and  coordination and communication among certain program elements and  state and local officials have been inadequate. Further, officials of the  Departments of Defense and the Army have not agreed on whether or when  management roles, responsibilities, and accountability should be  consolidated for destruction of the chemical stockpiles at Blue Grass,  Kentucky, and Pueblo, Colorado. Consequently, state and local officials  have raised concerns that no single office is accountable for achieving the  desired results of the program’s various elements. Evolution of the Management Structure

As provided for in the original legislation establishing the Chemical  Demilitarization Program, the Army, as executive agent for the program,  established a Program Manager for Chemical Demilitarization who was  responsible for management of the destruction of the stockpile.
Why GAO Did This Study

Pursuant to a legislative requirement, GAO reviewed the financial management of the Department of Defense's (DOD) Chemical Demilitarization Program, focusing on whether: (1) the program will meet the Chemical Weapons Convention timeframes within the costs projected; (2) obligations and liquidations of funds appropriated for the program have been adequately managed; and (3) the management structure of the program allows for coordinated accountability of the program.

What GAO Found

GAO noted that: (1) the Army had destroyed approximately 17.7 percent of the chemical weapons stockpile as of January 31, 2000, and could destroy about 90 percent of the stockpile by the convention's 2007 deadline, given its recent progress and projected plans; (2) however, the Army may not meet the deadline for the remaining 10 percent of the stockpile because the incineration method of destruction has not been acceptable to two of the states where the chemical stockpile is located; (3) additionally, some of the nonstockpile materiel may not be destroyed before the deadline because the proposed method of destruction has not been proven safe and effective and accepted by state and local communities; (4) the Army's $14.9 billion estimate for program costs will likely increase due to: (a) the additional time required to develop and select disposal methods for the remaining 10 percent of the stockpile and for some of the nonstockpile chemical materiel; and (b) possible delays in demolition of a former chemical weapons production facility; (5) the Army has experienced significant problems in recent years in effectively managing the use of funds appropriated for the Chemical Demilitarization Program; (6) the Army reported that as of September 30, 1999, $498 million of the $3.1 billion appropriated for the program in fiscal years 1993 through 1998 was unliquidated; (7) in an assessment of interagency orders that account for $495.1 million of the unliquidated obligations, GAO found that $63.1 million had been liquidated but was not recorded in accounting records or included in financial reports prepared by the Defense Finance and Accounting Service; (8) of the remaining $432 million, most was for work completed but not yet billed by the contractor or verified by the Defense Contract Audit Agency or for work in progress but not yet completed; (9) effective management of the Chemical Demilitarization Program has been hindered by its complex management structure and ineffective coordination among program offices and with state and local officials; (10) coordination and communication among officials responsible for elements of the program have been inadequate, thus causing confusion about what actions would be taken at certain sites; (11) DOD and Army officials have not agreed on whether or when management roles, responsibilities, and accountability should be consolidated for destruction of the chemical stockpiles in Kentucky and Colorado; and (12) consequently, state and local officials have expressed concern that no single office is accountable for achieving the desired results of the Chemical Demilitarization Program.