**GAO-11-156R**                      Published: Feb 15, 2011. Publicly Released: Feb 15, 2011.                  

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## Highlights

 

Al Qaeda, the Taliban, and other extremists have used safe havens along Pakistan's Western Frontier (border) region to attack Pakistani, Afghan, U.S., and coalition troops; plan and train for attacks against U.S. interests and the U.S. homeland; destabilize Pakistan, a nuclear-armed U.S. ally; and spread radical Islamic ideologies that threaten U.S. interests. A key U.S. national security objective is to disrupt, dismantle, and defeat al Qaeda and its violent extremist affiliates in Pakistan and to deny them a safe haven. Since 2002, the United States has provided over $18 billion in assistance and reimbursement to Pakistan including (1) reimbursements to the Pakistani government for costs incurred in direct support of U.S. counterterrorism operations; (2) security assistance such as grants to Pakistan for the acquisition of military equipment; and (3) development, economic, and humanitarian assistance. Since 2006, this assistance has included $1.5 billion to improve the counterterrorism and counterinsurgency capabilities of Pakistani security forces operating along the country's border with Afghanistan, including $400 million for the Pakistan Counterinsurgency Fund (PCF) and $700 million for the Pakistan Counterinsurgency Capabilities Fund (PCCF). The President has requested an additional $1.2 billion for fiscal year (FY) 2011 and $1.1 billion for fiscal year 2012 to train and equip these forces. U.S. assistance under this initiative has provided military equipment, such as helicopters and night-vision devices; infrastructure, such as border coordination and training centers; and training. The Office of Defense Representative Pakistan (ODRP), under the U.S. Central Command (CENTCOM), manages this assistance. ODRP is responsible for the receipt and storage of U.S.-provided military equipment at a leased warehouse in Islamabad prior to the equipment's transfer to Pakistan. ODRP is also responsible for, among other things, developing and implementing policies and procedures to document the transfer of the equipment to Pakistan and to ensure that once in Pakistan's custody, items requiring enhanced monitoring are subject to periodic inventories. The Defense Security Cooperation Agency (DSCA) is responsible for ensuring that U.S. and Pakistani officials implement appropriate internal control procedures to account for sensitive defense equipment, including conducting compliance assessments. This report focuses on U.S. activities to ensure accountability of sensitive equipment provided to Pakistani security forces operating along the western border. We have previously reported on Afghan and Iraqi weapon accountability coverage, as well as the importance of accountability and oversight of U.S. efforts in Pakistan, including Coalition Support Fund reimbursements to Pakistan and the planning and documentation of U.S. development assistance in Pakistan's Federally Administered Tribal Areas.

DOD's written procedures for ensuring accountability for equipment received and stored at its Islamabad warehouse do not fully address key requirements on how to maintain accountability and management of property. Federal government standards for internal control state that federal agencies should design and document internal controls that provide safeguards to help prevent and detect the loss or misuse of equipment. Further, DOD guidance emphasizes the need to document the internal controls used to maintain accountability for property. Our analysis of the DOD guidance resulted in the identification of 17 key requirements. The key requirements focus on (1) physical controls over vulnerable assets; (2) proper execution of transactions and events; (3) management of human capital and reviews by management at the functional or activity level; and (4) controls over information processing. During a field visit to Pakistan, we observed that ODRP did not have written procedures to help ensure consistent accountability for the receipt and storage of U.S. defense articles at its Islamabad warehouse prior to their transfer to Pakistan. DSCA did not follow up in a timely manner to ensure corrective actions were taken to fix weaknesses in accountability procedures that it identified in 2008 for sensitive equipment in Pakistan's custody. U.S. government standards for internal control recommend that agencies ensure the prompt resolution of the findings of audits and other compliance reviews. Within DOD, DSCA is the principal agency responsible for implementing the Golden Sentry Program, created to meet accountability requirements under the Arms Export Control Act, for defense articles funded through traditional security assistance programs. The Golden Sentry Program requires monitoring of sensitive and nonsensitive defense equipment transferred to foreign countries.12 Sensitive equipment is subject to enhanced end-use monitoring. Some sensitive equipment, such as night-vision devices, require 100 percent inventory by serial number. DSCA carries out its responsibilities under the program by reviewing the implementation of internal control procedures intended to help maintain security and accountability over sensitive defense articles transferred to foreign countries, and by following up to ensure that its findings are implemented in a timely manner. A key element of the program is compliance assessment visits to assess host nation and U.S. security assistance personnel compliance with end-use, security, and accountability procedures. Although on-site assessments are a key element of end-use monitoring, according to a DSCA official, DSCA also relies on intelligence and other reports to accomplish its oversight and monitoring responsibilities. To improve accountability for U.S.-provided defense equipment, the Secretary of Defense should take the following three actions. The Secretary should direct (1) the Commander of U.S. Central Command to ensure ODRP's written procedures for equipment received and stored at its Islamabad warehouse incorporate key asset accountability controls, (2) the Director of the Defense Security Cooperation Agency to take follow-up action, in accordance with internal control standards, to ensure that ODRP fully addresses all of DSCA's 2008 recommendations, (3) the Director of the Defense Security Cooperation Agency to conduct a compliance assessment to verify that U.S. and Pakistani officials have fully implemented the new accountability program required by the 2010 NDAA.

 

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## Topics

International Affairs

AccountabilityFederal aid to foreign countriesForeign governmentsForeign military assistanceInternal controlsInternational relationsMilitary forcesMilitary inventoriesPropertyProperty and supply managementProtective equipmentReporting requirementsStandardsWarehouse facilitiesPolicies and procedures