Within DTRA, the  Cooperative Threat Reduction (CT) directorate manages the program’s  daily operations. DOD Has Improved Its Management and Internal Controls over the CTR Program

Since 2003, DOD has improved its management and internal controls over  the CTR program. Following two project failures in Russia, DOD implemented a series of  new measures in 2003 that provided a more structured approach to  managing the CTR program. Most importantly, in July 2003, DOD filled  vacancies within AT&L, the office responsible for ensuring that DTRA’s  implementation of CTR projects was meeting cost, schedule, and  performance goals. For example, DOD adopted several new  methods to assess and mitigate the risks involved in cooperating with CTR- recipient governments. While DOD’s  enhancements are an improvement over the previous management and  internal controls for the program, CTR procedures do not include final  reviews of CTR projects upon their completion. As such, DOD has no  mechanism for assessing the success of completed projects and applying  lessons learned to future projects. The DOD IG reported that the CTR program management’s  failure to fully assess project risks contributed to DOD spending nearly  $200 million on projects in Russia to construct a liquid rocket fuel  disposition facility that was never utilized and to design a solid rocket  motor elimination facility that was never constructed. The information was not included in the project’s 2003  review. Most significantly, the success of the CTR program requires  the cooperation of recipient governments. Good internal controls help  mitigate the risks from having to rely on recipient governments to sign  agreements, provide access, and support project implementation. Legislative Mandates Covering the CTR Program

As required by section 3611 of the National Defense Authorization Act for  Fiscal Year 2004, we reviewed the status of DOD’s implementation of  legislative mandates covering the CTR program. We focused  on those controls most relevant to the CTR program, including  organizational structure, risk assessments, performance measures,  program reviews, communications, and monitoring of projects. Current CTR Program Areas

Since 1992, Congress has authorized DOD to provide more than $5 billion  for the CTR program to help the former states of the Soviet Union,  including Russia, Ukraine, Belarus, Kazakhstan, Uzbekistan, Azerbaijan,  Moldova, and Georgia, secure and eliminate their weapons of mass  destruction and prevent their proliferation. DOD’s Current Management and Internal Controls for the CTR Program Compared with Internal Control Standards

In managing the CTR program, standards for internal controls in the federal  government provide an overall framework for DOD to establish and  maintain management controls and identify and address major  performance challenges and areas at risk for mismanagement. Etana  Finkler also provided assistance.
Why GAO Did This Study

Section 3611 of the National Defense Authorization Act for Fiscal Year 2004 mandates that GAO assess the Department of Defense's (DOD) internal controls for the Cooperative Threat Reduction (CTR) program and their effect on the program's execution. In addressing the mandate, we assessed DOD's management and internal controls over implementing CTR projects since 2003 by using the control standards for the federal government as criteria. In response to the mandate, we focused on those management and internal control areas considered most relevant to CTR project implementation: (1) building a management structure, (2) risk assessments, (3) performance measures, (4) program reviews, (5) communications, and (6) project monitoring. The Congress also mandated that GAO describe the status of DOD's implementation of legislative mandates covering the CTR program.

What GAO Found

Through the CTR program, DOD provides assistance to help the former states of the Soviet Union secure and eliminate their weapons of mass destruction. Since 2003, DOD has improved its management and internal controls over the CTR program. Prior to 2003, DOD had problems managing the program and ensuring that the program was meeting its objectives. These inadequacies became apparent in 2003 following two project failures in Russia that cost the CTR program almost $200 million, including the never used liquid rocket fuel disposition facility. Following these incidents, DOD implemented a more structured approach to managing the CTR program. In July 2003, DOD filled vacancies in the office responsible for managing the program, providing a level of leadership and oversight that did not previously exist. Once in place the new leadership made important improvements to the program's internal controls in the areas of organizational structure, risk assessments, performance measures, program reviews, and communication. For example, DOD now assesses and balances risks with project requirements and measures project performance at each phase. DOD also conducts semi-annual meetings to review commitments and responsibilities of CTR-recipient governments and to minimize risk. Although enhancing its internal controls helps mitigate the risks that stem from having to rely on the cooperation of CTR-recipient governments, DOD can never fully eliminate the project risks associated with recipient governments' cooperation. Furthermore, while DOD's enhancements are an improvement over previous internal controls, current mechanisms do not include a separate review of CTR projects upon their completion. As such, DOD lacks a system for evaluating projects upon their completion and applying lessons learned to future projects.