Forces Command. Our specific objectives were to describe and assess (1) the level of U.S. participation, training, and operational impacts; (2) the actual cost of MFO operations, the U.S. contribution, and any cost-saving opportunities; (3) State oversight of the U.S. contribution; and (4) views of the State Department and other relevant parties on the MFO performance and lessons learned. The United States provides the largest military contingent, constituting 49.6 percent of the total force at the time of our review. According to MFO and U.S. Army officials, opportunities may exist to reduce the number of U.S. Army logistical personnel. Participation Increases

The MFO has progressively reduced its operating cost since fiscal year 1982. This is because although U.S. troop levels have decreased, their salaries and the offset costs have increased. According to State officials, the MFO is an operationally and cost-effective peacekeeping operation that has helped bridge confidence and communication between Egypt and Israel. U.S. Army officials, while viewing the MFO as operationally effective, have concerns about the level of U.S. participation, the operational impacts to the Army, and the lack of an end date. These officials view the MFO as an indefinite Army commitment. Recommendations

We recommend that the Secretary of State improve the oversight of the MFO by (1) examining the MFO annual published financial statements for discrepancies, (2) requesting and reviewing all reports issued by the MFO external auditors, (3) request the MFO to have its external auditor periodically perform a separate audit of the MFO management and internal accounting controls and provide a copy of the resulting report to State, and (4) include the U.S. annual assessment cost contribution of one-third of the MFO operating costs in its annual report to Congress on the MFO.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed U.S participation in the Multinational Force and Observers (MFO), focusing on: (1) U.S. contributions to MFO and measures taken to reduce MFO costs; (2) the operational impacts of U.S. participation in MFO; (3) the Department of State's oversight of U.S. participation in MFO; and (4) views of MFO performance and lessons learned.

What GAO Found

GAO found that: (1) the United States provides one-third of MFO operating expenses and the largest military contingent; (2) while U.S. annual assessments of MFO operating costs have steadily declined since 1989, the Department of Defense's (DOD) costs have increased, mainly due to salary increases; (3) Army operations have been impacted by the cumulative effects of DOD contingency efforts, but opportunities may exist to reduce the impact by reducing the number of logistical troops and using reserve forces; (4) despite MFO operational success and its ability to reduce certain costs, State needs to improve its oversight of U.S. participation in MFO because of inadequate internal controls and auditing procedures and the quality of its reporting to Congress; and (5) State and international officials view MFO as an operationally effective peacekeeping operation that has helped sustain peace between Egypt and Israel since 1982, while DOD views MFO as a limited operation that is not applicable to more hostile peacekeeping environments.