	Background

The National Defense Authorization Act for Fiscal Year 2006 established  the authority for the Section 1206 and 1207 programs. Section 1206 and 1207 Programs Are Generally Consistent with U.S. Strategic Priorities

The Section 1206 and 1207 programs have generally been consistent with  U.S. strategic priorities relating to combating terrorism and addressing  instability. DOD and State have devoted 82 percent of Section 1206  counterterrorism resources spent through fiscal year 2009 to addressing  specific terrorist threats, primarily in countries designated as priorities by  the U.S. government. DOD, State, and USAID devoted 77 percent of  Section 1207 program resources to relatively unstable countries, mostly  those the U.S. government has identified as vulnerable to state failure. Furthermore, we found that  most Section 1206 counterterrorism resources have been directed to  countries that the U.S. intelligence community has identified as priority  countries for the counterterrorism effort. The Section 1207  program is not distinct from other programs, as it has funded  reconstruction, stability, and security-related activities that are virtually  indistinguishable from those of other foreign aid programs in their content  and time frames. Furthermore, using Section 1207 program funding for  these projects has entailed additional implementation costs and funding  delays. Section 1206 Program Is Generally Distinct from Other Train and Equip Programs

According to DOD and State guidelines for fiscal year 2009, the Section  1206 program should be distinct from security assistance programs in that  its projects (1) address U.S. military priorities; (2) respond to urgent and  emergent needs; (3) do not overlap with other State and DOD train and  equip programs, such as FMF, by “backfilling” lower-priority projects  unfunded by those programs; and (4) are administered with a dual key, or  DOD and State interagency process, to ensure they accord with U.S.  foreign policy. Although DOD and embassy officials we interviewed consistently  explained why there was no overlap between Section 1206 projects and  other programs, project proposals we reviewed have not always  documented the distinctions. However, they did not provide any documentation to support this  claim. For the Section 1207 program, since State, USAID, and DOD are  not restricted by law or agency policy from drawing on a variety of  overlapping funding sources to continue and expand Section 1207  projects, sustainment risks are not as significant. Availability of Funding to Sustain Section 1206 Projects Is Uncertain

According to State planning documents, including department- and  bureau-level performance plans, helping partner nations achieve  sustainable counterterrorism capabilities is a key foreign policy  objective. For the Section 1207  program, State requires quarterly reporting on project implementation but  has not analyzed this information or reported results to DOD to inform  program management and funding decisions. As a result of these  deficiencies, U.S. agencies have made decisions to sustain and expand  both Section 1206 and 1207 projects without formal assessments of project  progress or impact. For the Section 1206 program, we recommend that the  Secretary of Defense, in consultation with the Secretary of State, (1)  develop and implement specific plans to monitor, evaluate, and report  routinely on Section 1206 project outcomes and their impact on U.S.  strategic objectives; (2) base further decisions about sustaining existing  Section 1206 projects on the results of such monitoring and evaluation; (3)  estimate the cost of sustaining projects at the time they are proposed and,  where possible, obtain a commitment from partner nations to fund those  costs; and (4) seek further guidance from the Congress on what funding  authorities are appropriate to sustain Section 1206 projects when the  Secretary determines that (a) projects address specific terrorist and  stabilization threats in high-priority countries, (b) reliable monitoring and  evaluation have shown that projects are effective, and (c) partner nation  funds are unavailable. To select countries to visit, we ranked all  62 countries based on the following criteria: (1) the amount of Section  1206 and 1207 program funding a country had received in order to include  countries representing a significant portion of total funding, as well as  both large and small individual projects from each program; (2) the year  when a country’s projects began, in order to visit mature projects; (3) the  presence of both Section 1206 and Section 1207 projects in a country, in  order to use our time efficiently in visiting projects from both programs in  single country visits; (4) DOD and State suggestions; (5) recent GAO or  DOD and State Inspectors General visits, to reduce the burden on  embassies; (6) congressional interest; (7) security considerations; and (8)  opportunities to consolidate the fieldwork of multiple GAO engagements.
Why GAO Did This Study

In 2006, the United States created two new programs, authorized in Sections 1206 and 1207 of the Fiscal Year 2006 National Defense Authorization Act, to respond to the threats of global terrorism and instability. These programs have provided over $1.3 billion in military and nonmilitary aid to 62 countries and are due to expire in 2011 and 2010, respectively. The Congress mandated that GAO assess the programs. This report addresses the extent to which the programs (1) are consistent with U.S. strategic priorities, (2) are distinct from other programs, (3) address sustainment needs, and (4) incorporate monitoring and evaluation. GAO analyzed data and program documents from the Departments of Defense (DOD) and State (State), and the U.S. Agency for International Development (USAID), and interviewed U.S. and host country officials.

What GAO Found

The Section 1206 and 1207 programs have generally been consistent with U.S. strategic priorities. The Section 1206 program was established to build the military capacity of foreign countries to conduct counterterrorism and stabilization operations. DOD and State have devoted 82 percent of this program's funds to address specific terrorist threats, primarily in countries the U.S. intelligence community has identified as priorities for the counterterrorism effort. The Section 1207 program was established to transfer DOD funds to State for nonmilitary assistance related to stabilization, reconstruction, and security. DOD, State, and USAID have devoted 77 percent of this program's funds to countries at significant risk of instability, mostly those the United States has identified as vulnerable to state failure. Based on agency guidelines, the Section 1206 program is generally distinct from other programs, while the Section 1207 program is not. In most cases, Section 1206 projects addressed urgent and emergent counterterrorism and stabilization priorities of combatant commanders and did so more quickly than other programs, sometimes in a year, whereas Foreign Military Financing (FMF) projects can take up to 3 years to plan. DOD and embassy officials GAO spoke to consistently explained why projects do not overlap those of FMF and other programs, although project proposals GAO reviewed did not always document these distinctions. Section 1207 projects are virtually indistinguishable from those of other foreign aid programs in their content and time frames. Furthermore, the Section 1207 program has entailed additional implementation costs and funding delays beyond those of traditional foreign assistance programs, while the 1206 program has not. The uncertain availability of resources to sustain Section 1206 projects poses risks to achieving long-term impact. Enabling nations to achieve sustainable counterterrorism capabilities is a key U.S. policy goal. The long-term viability of Section 1206 projects is threatened by (1) the limited ability or willingness of partner nations to support new capabilities, as 76 percent of Section 1206 projects are in low- or lower-middle-income countries, and (2) U.S. legal and policy restrictions on using FMF and additional Section 1206 resources for sustainment. In contrast, sustainment risks for Section 1207 projects appear minimal, because State, USAID, and DOD are not restricted from drawing on a variety of overlapping funding sources to continue them. DOD and State have incorporated little monitoring and evaluation into the Section 1206 and 1207 programs. For Section 1206 projects, the agencies have not consistently defined performance measures, and results reporting has generally been limited to anecdotal information. For Section 1207 projects, the agencies have defined performance measures and State requires quarterly reporting on project implementation. However, State has not fully analyzed this information or provided it to DOD to inform program management. As a result, agencies have made decisions to sustain and expand both Section 1206 and 1207 projects without documentation of progress or effectiveness.