Because DOD is responsible for reporting on the efforts made by the United States to ensure that CTR assistance is appropriately used, its report also includes some information on the science and technology centersand the nuclear material control, accounting, and physical protection (MCA&PP) projects being implemented by the Departments of State and Energy, respectively. DOD omitted from its report a cash grant made directly to the Ukrainian Ministry of Defense. Department of Energy

Although DOD’s June 1997 report listed the equipment delivered in support of the MCA&PP projects administered by the Department of Energy, it did not include the total value or describe the types of assistance provided. For example, DOD did not report that through 1996, the Department of Energy provided over $43 million worth of assistance to Russia, Ukraine, Belarus, and Kazakstan. The report, however, did not explain how DOD accounted for a cash grant to Ukraine or thoroughly describe how assistance to the science centers is monitored. Also, the report did not provide details of the Department of Energy’s assurance program. While DOD’s report to Congress states that during 1996 DCAA assessed 17 ISTC projects at 7 locations, it did not provide a description of the audits or the audits’ findings. In approximately half of the 17 audits conducted, DCAA auditors found weaknesses in recording the labor charges of ISTC grantees—they were working more hours than those billed. To date, however, such weaknesses have posed no risk to CTR funding. Future Audit and Examination Activities

According to its report, DOD plans to conduct 17 audit and examination activities during calendar year 1997. Recommendation

To better inform Congress about how CTR-funded assistance has been used, we recommend that the Secretary of Defense, in preparing future reports on such assistance, provide more complete data on CTR-funded projects managed by the Departments of State and Energy, including the values and types of assistance, a detailed description of how the assistance was accounted for, and information on future audit activities for the CTR assistance they provide to the recipient countries. Scope and Methodology

In conducting our work, we reviewed DOD’s latest report to determine whether it (1) contained current and complete data on CTR assistance deliveries, including the current location and condition of the assistance provided; (2) described how CTR-provided assistance was accounted for and used; (3) included an overall determination of whether the assistance was used for its intended purposes; and (4) provided a listing of future audit and examination activities.
Why GAO Did This Study

Pursuant to a legislative requirement, GAO reviewed the Department of Defense's (DOD) June 1997 report on Cooperative Threat Reduction (CTR) assistance provided to Belarus, Kazakhstan, Russia, and Ukraine, focusing on whether it: (1) contained current and complete data on CTR assistance deliveries, including the current location and condition of the assistance provided; (2) described how CTR-provided assistance was accounted for and used; (3) included an overall determination of whether the assistance has been used for its intended purposes; and (4) provided a listing of future audit and examination activities.

What GAO Found

GAO noted that: (1) DOD's June 1997 report: (a) listed CTR equipment delivered by DOD and provided information on the location and condition of the equipment, (b) described how such assistance was accounted for and used, and (c) made an overall determination that the assistance provided by DOD was appropriately used, and (d) listed DOD's future audit and examination activities; (2) however, GAO found that DOD's report lacked detailed information; (3) the report did not contain specific data on some CTR-funded projects; (4) for example, information on the CTR-funded cash grant that DOD provided directly to the Ukrainian Ministry of Defense was excluded; (5) also, the report did not describe the types and values of CTR-funded assistance managed by the Departments of State and Energy; (6) through 1996, such assistance amounted to nearly $50 million for over 200 projects at the international science centers, and over $43 million for a variety of material control, accounting, and physical protection projects at 19 sites; (7) the report did not thoroughly describe how DOD accounted for CTR assistance provided through the Departments of State and Energy; (8) for example, audits by the Defense Contract Audit Agency (DCAA) help account for CTR-provided assistance to the science centers, yet DOD did not report the results of 17 International Science and Technology Center project audits conducted by DCAA in 1996; (9) approximately half of the 17 audits found weaknesses in reporting labor charges of center grantees, although to date, such weaknesses have posed no risk to CTR funding; (10) also, DOD's report did not describe the nature of the Department of Energy's assurance program used to monitor the assistance provided; and (11) while DOD's report lists planned DOD audit and examination activities, it omitted those activities planned to account for CTR-funded assistance provided through the Departments of State and Energy.