International Security: DOD and State Need to Improve Sustainment Planning and Monitoring and Evaluation for Section 1206 and 1207 Assistance Programs
Released: 2010-04-15T00:00:00

Letter

Background

The National Defense Authorization Act for Fiscal Year 2006 established the authority for the Section 1206 and 1207 programs. Section 1206 authorizes the Secretary of Defense to use up to $350 million each year, with the concurrence of the Secretary of State, to train and equip foreign military and nonmilitary maritime forces, such as coast guards, to conduct counterterrorist operations or to support military and stability operations in which the U.S. armed forces are a participant. The authority will expire at the end of fiscal year 2011 if it is not renewed. Section 1207 of the fiscal year 2006 NDAA provides authority for DOD to transfer up to $100 million per fiscal year to State to support reconstruction, stabilization, and security activities in foreign countries. A congressional notification describing the project is required upon the exercise of the transfer authority. The funds are subject to the authorities and limitations in the Foreign Assistance Act of 1961, the Arms Export Control Act, or any law making appropriations to carry out such acts. The funds also remain available until expended. This authority was intended to be temporary and expires at the end of fiscal year 2010.

The Foreign Military Financing program has traditionally been the primary mechanism for providing training and equipment assistance to foreign military forces. State and USAID have traditionally addressed civilian reconstruction, stabilization, and security needs abroad through programs funded by several foreign operations appropriations accounts, including Development Assistance; Economic Support Funds; Freedom Support Act (now Assistance for Europe, Eurasia, and Central Asia); International Narcotics Control and Law Enforcement; Nonproliferation, Antiterrorism, Demining, and Related Programs; Peacekeeping Operations; and Transitions Initiatives. (See app. II for a description of U.S. foreign assistance programs and accounts.)

For both the Section 1206 and 1207 programs, DOD and State established an interagency process to implement each program. Within DOD, the Office of the Assistant Secretary of Defense for Special Operations, Low Intensity Conflict, and Interdependent Capabilities has overall responsibility for both programs. This office coordinates primarily with State’s Bureau of Political-Military Affairs for the Section 1206 program and with State’s Office of the Coordinator for Reconstruction and Stabilization (State/S/CRS) for the Section 1207 program. DOD and State solicit project proposals for each program annually, in accordance with guidelines and project proposal instructions for each program that are revised periodically to reflect lessons learned, congressional concerns, and other considerations. Interagency boards review the proposals— approved by both the relevant U.S. combatant commander and ambassador—and select projects to recommend to the Secretaries of Defense and State for final funding approval. Once projects are approved, DOD and State may begin implementation after notification to designated congressional committees. For approved Section 1206 projects, the Defense Security Cooperation Agency assumes overall responsibility for procuring training and equipment, while security assistance officers (SAO)—posted at U.S. embassies and reporting to both the ambassador and the relevant U.S. geographic combatant commands—are responsible for coordinating in-country project implementation. For approved Section 1207 projects, country teams at U.S. embassies are responsible for implementing projects in cooperation with relevant State and USAID offices, while State/S/CRS is responsible for oversight.

For fiscal years 2006 through 2009, DOD has allotted about $985 million for Section 1206 projects in 53 countries and $350 million for Section 1207 projects in 23 countries. Figures 1 and 2 depict the geographic distribution of Section 1206 and 1207 resources, respectively. (See app. III for detailed information on the geographic distribution of Section 1206 and 1207 funds.)

The Section 1206 and 1207 programs incorporate a wide variety of assistance. The most common types of Section 1206 program assistance have been training and technical assistance and radios and other communications equipment. Under the Section 1207 program, the most common types of assistance activities are local government capacity development and police training and equipment. Tables 1 and 2 list the types of assistance provided by the Section 1206 and 1207 programs, respectively, and the number of countries receiving them. (See app. IV for more detailed information on the types of assistance provided through the Section 1206 and 1207 programs from fiscal years 2006 to 2009.)

Figure 3 shows an example of radar and surveillance equipment provided to Malaysia and 36 other countries under the Section 1206 program to conduct coastal surveillance.

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.

Section 1206 Program Consistent with U.S. Counterterrorism Strategic Priorities

Implementation of the Section 1206 program has generally been in alignment with U.S. counterterrorism priorities. Section 1206 authorizes DOD and State to build the capacity of partner nations’ national military forces to (1) conduct counterterrorist operations or (2) participate in or support military and stability operations in which the U.S. armed forces are a participant. From fiscal year 2006 to 2009, DOD and State allotted $932 million (95 percent) of all Section 1206 funding for counterterrorism- related equipment and training and $47 million (5 percent) to build the capacity of five partner nations to participate in stability operations with the United States. Overall, DOD and State have allotted 82 percent of these resources to projects that address specific terrorist threats, based on our review of approved project proposals. 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 focus on specific terrorist threats increased in fiscal year 2009. In fiscal years 2007 and 2008, DOD and State allotted 75 percent ($405 million) of $536 million to fund Section 1206 projects targeted at specific terrorist threats. Proposals for the remaining projects identify global terrorist threats in general or security issues indirectly related to terrorism, such as ungoverned spaces and smuggling. For example, in the Caribbean region, several Section 1206 projects funded in fiscal years 2007 and 2008 were justified as countering a terrorist threat but did not specifically identify the source of that threat, and appeared to address narcotics trafficking more directly. In Albania, a U.S. official noted that the country received Section 1206 funding in fiscal year 2008 even though there was no significant terrorist threat there. He explained that Section 1206-funded boats would be used primarily to respond to potential security threats such as smuggling and human trafficking in coastal waters that the Albanian government had not previously patrolled. For fiscal year 2009, DOD and State issued instructions that project proposals must describe the “actual or potential terrorist threat” to be addressed and how the project responds to “an urgent and emergent threat or opportunity.” In line with these instructions, we found that 92 percent ($306 million) of the $334 million approved for fiscal year 2009 proposals identified a specific terrorist threat to be addressed (see fig. 4).

Section 1207 Program Generally Consistent with U.S. Stabilization Priorities

The Section 1207 program has generally been consistent with U.S. stabilization priorities. According to State guidelines for the program, State uses DOD funds to provide reconstruction, stabilization, and security assistance to a foreign country for the purpose of restoring or maintaining peace and security. State has therefore indicated that countries eligible to receive Section 1207 funding should be at significant risk of instability or working to recover from instability. State uses a U.S. government source— an interagency “watchlist” developed to identify countries vulnerable to state failure—to help determine which countries could merit conflict prevention and mitigation efforts, and has established inclusion on the list as one of the criteria for a country to receive funding through the Section 1207 program. We found that most countries receiving Section 1207 funding appear on this watchlist. Further, according to our analysis of data we obtained from an independent risk forecasting firm, DOD, and USAID allotted 77 percent of Section 1207 funds to countries measuring high, very high, or extremely high levels of instability, as s in figure 5. Section 1207 projects shows that these projects address either the prevention of instability in a particular country or region or the recovery from instability or conflict. Eighteen proposals (about two-thirds) w projects to help countries recover from instability or conflict, as in Georgia, Kenya, and Lebanon. The remaining 10 proposals (about one third) were for projects that hel p prevent instability, as in Bangladesh, Panama, and the Philippines.

As reported by IHS Global Insight’s Global Risk Service in the country rating section for short-term, internal political risk. IHS Global Insight is a private forecasting company that provides economic, financial, and political analyses, including risk assessments, of over 200 countries. IHS Global Insight’s Global Risk Service monitors and updates country risk assessments on a quarterly basis. The Global Risk Service political risk score is a weighted average summary of probabilities that different political events, both domestic and external, such as civil war and trade conflicts, will reduce gross domestic product growth rates. The subjective probabilities are assessed by economists and country analysts at IHS Global Insight, on the basis of a wide range of information, and are reviewed by a team to ensure consistency across countries.

Section 1206 Program Is Generally Distinct, but Section 1207 Program Is Not

According to DOD and State guidelines, the Section 1206 program has generally been distinct from other train and equip programs. DOD and State have used it to address unforeseen U.S. military needs relatively quickly compared with FMF and other programs. 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.

Addressing U.S. Military Priorities

DOD and State have consistently used Section 1206 to address U.S. military priorities. Each U.S. geographic military command reviews proposals from U.S. embassy country teams in its area of responsibility and endorses for final submission those proposed projects that address its highest priorities. Furthermore, the U.S. Special Operations Command reviews all Section 1206 project proposals to ensure that each aligns with U.S. military strategy and ranks each proposal across the geographic combatant commands in accordance with counterterrorism priorities. Our review of approved Section 1206 project proposals indicates that projects are designed primarily to address U.S. military requirements that are also aligned with the countries’ security interests. DOD officials we interviewed described the Section 1206 program as a way to meet U.S. military priorities that they may not have been able to address without the Section 1206 program. For example, in Kazakhstan, according to a U.S. embassy official, DOD and State have used Section 1206 funds to address its priority of enhancing the country’s counterterrorism capacity in the Caspian Sea, while Kazakhstan has requested FMF funding for its priority to develop its military airlift capability. In Pakistan, U.S. officials used Section 1206 funds to increase special operations capacity to support counterterrorism operations on its western border, a U.S. military counterterrorism priority for which DOD and State had not been able to persuade the country to use FMF resources.

Responding to Urgent and Emergent Needs

DOD and State can use Section 1206 funds to respond to urgent and emergent needs more quickly than they have been able to do with FMF and other security assistance programs. With the Section 1206 program, DOD and State have often formulated and begun implementing projects within 1 fiscal year, while FMF projects have usually required up to 3 years of planning. U.S. geographic combatant commands and embassies submit project proposals early in the fiscal year, and DOD and State select projects for funding in the months that follow. DOD and State had already approved Section 1206 project proposals for fiscal year 2009 when we interviewed most SAOs, some of whom told us that equipment associated with those proposals had already begun to arrive in country. For example, radios approved as part of a fiscal year 2009 equipment package for Mali arrived and were installed in September of that same fiscal year. In contrast, several SAOs we interviewed in fiscal years 2009 and the beginning of 2010 were either drafting or had recently submitted FMF requests for fiscal year 2012. This requires the SAOs to plan for training and equipment relatively far in advance, without necessarily knowing what the geopolitical context will be when the countries receive the assistance. According to DOD and State officials, this process, including consultation and negotiation with partner nations, incorporating funding requests into State’s budget, and obtaining appropriations, can take up to 3 years. Because DOD and State can review and approve Section 1206 project proposals more quickly than this, SAOs have used Section 1206 projects to begin addressing new requirements that DOD may not have not foreseen when it submitted the FMF request for the same fiscal year.

Avoiding Overlap with Other Train and Equip Programs

DOD officials we interviewed stated that the narrower goals of the Section 1206 program prevent overlap with the FMF program. They indicated that FMF program objectives have traditionally been to achieve a variety of U.S. foreign policy and partner nation military goals, which have not necessarily included counterterrorism and stability operations. For example, State has used the FMF program to strengthen bilateral relationships, gain access to foreign governments, foster long-term defense modernization of partner nations, and achieve other broad foreign policy objectives. Eight of 15 SAOs we interviewed noted that the Section 1206 projects they were implementing addressed objectives substantially different from those of the FMF program. SAOs further explained that there is no guarantee that partner nations will use FMF to fund counterterrorism and stability operations. For example, the SAO in Kazakhstan explained that FMF has been used to enhance diplomatic relations with that key ally by responding to its request for helicopters.

The Section 1206 program is also distinct in that it allows the United States to provide partner countries with complete assistance packages, whereas other funding sources might provide only a portion of the aid needed to build a counterterrorism or stability operations capability. Eight of the 15 SAOs we interviewed noted that the Section 1206 program offered a unique means to provide bundled training and equipment, such as operations and maintenance training and spare parts. Agency officials in Washington, D.C., also attested that one of the unique strengths of the 1206 program is that it allows the United States to provide partner countries with comprehensive assistance packages. Of the 53 countries receiving assistance in fiscal years 2006 through 2009, 50 (94 percent) received spare parts or training, and 40 (75 percent) received both. SAOs we interviewed indicated that other programs, such as FMF, may be used to fund spare parts, or that Joint Combined Exchange Training might be used to provide additional training for foreign troops, but those programs may not be able to independently provide all the equipment and training components typical of a Section 1206 package.

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. DOD and State revised program guidelines in fiscal year 2009 in response to congressional concerns regarding program overlap with counternarcotics and other funding sources. However, in reviewing the 25 approved Section 1206 project proposals for fiscal year 2009, 11 identified similar ongoing efforts that were funded by FMF or other U.S. programs. Only 1 proposal clearly explained why there was no overlap with other programs, and the remaining proposals did not specifically address this issue. Also, during our overseas visits, we observed some potential overlap between Section 1206 projects and other U.S. security assistance programs that was not explained in corresponding project proposals. In the Bahamas, DOD and State used Section 1206 program funds to provide that country with the same type of boats that State had previously provided with International Narcotics Control and Law Enforcement funding. (See fig. 6.)

In Kazakhstan, DOD and State used both the Section 1206 program and the Global Peace Operations Initiative to provide equipment to a Kazakh peacekeeping unit. The Global Peace Operations Initiative has also funded training and equipment for at least 572 foreign troops worldwide for deployments to operations in Iraq and Afghanistan, which could overlap with Section 1206 program stabilization objectives. Figure 7 shows an example of U.S. assistance to Kazakhstan to build its capacity for conducting stability operations, in part by providing spare parts for its ground vehicles.

DOD and State have used a dual key decision-making process for selecting Section 1206 projects, and in doing so have addressed three key practices for interagency collaboration we have previously identified. DOD and State incorporate interagency input at several stages of the Section 1206 proposal development and selection process. First, SAOs at recipient country embassies have typically developed Section 1206 project proposals—including objectives and implementation strategies—with input from State and other colleagues. For instance, 12 of the 15 SAOs we interviewed indicated that they had requested country team counterparts to at least review, if not help draft, Section 1206 proposals before submitting them. Through this process, DOD and State have defined common outcomes and joint strategies for achieving them, two key practices for interagency collaboration. Second, the relevant regional U.S. geographic combatant commander and ambassador have approved each proposal before officially submitting them to the Joint Staff for consideration. Once a proposal is submitted, a DOD-State working group reviews it and considers how Section 1206 projects will support U.S. foreign policy and foreign assistance goals. Last, the Secretary of State concurs with the Secretary of Defense’s approval of Section 1206 projects, thereby leveraging resources for mutually beneficial projects—another key practice for enhancing interagency collaboration.

Section 1207 Projects Are Largely Indistinguishable from Other State and USAID Activities, but Add Implementation Costs and Funding Delays

DOD and State guidelines indicate that Section 1207 projects should fund activities that are distinct from those of other U.S. government foreign assistance programs, and address urgent or emergent threats or opportunities that conventional foreign assistance programs cannot address in the required time frame.

Funding Distinct Activities

Section 1207 program-funded projects are consistent with the purposes stated in the law but are not distinct from activities funded by other foreign assistance programs. Overall, Section 1207 projects achieved objectives commonly addressed through a variety of other programs. In our country visits to Haiti, Georgia, and the Philippines, we observed many Section 1207 program-funded activities with objectives similar to those of prior or existing State and USAID programs in those countries. Moreover, according to State and USAID officials in those countries, the same activities implemented through Section 1207 funding could be accomplished with additional funding from traditional foreign assistance accounts, such as Economic Support Funds and Assistance for Europe, Eurasia, and Central Asia.

Haiti’s Section 1207 project in fiscal year 2007 was aimed at stabilizing Cité Soleil, an urban area of Port-au-Prince, Haiti’s capital, through rapid implementation of short-term job creation activities, infrastructure improvements, and security enhancement through police training and equipment. However, from 2004 to 2006 (prior to the Section 1207 project)

USAID had implemented the Haiti Transition Initiative, which attempted to stabilize urban areas, such as Cité Soleil, by rebuilding local services and infrastructure and providing short-term employment. In 2005, USAID also began the Urban Peace-Building Initiative, which attempted to stabilize urban areas, including Cité Soleil, through economic development. According to a USAID official in Haiti, this initiative was the precursor to Haiti’s Section 1207 project. USAID used existing contracts with nongovernmental organizations implementing other projects to carry out the short-term job creation and infrastructure improvements in Haiti’s Section 1207 project (see fig. 8).

Georgia’s Section 1207 project in fiscal years 2008 and 2009 provided reconstruction assistance after the August 2008 Russian invasion, including support for resettlement of internally displaced persons (see fig. 9), police training and equipment, and removal of unexploded ordnance. However, according to State and USAID embassy officials, the Section 1207 project funded some activities with objectives that were previously being addressed through existing programs. For example, by amending a cooperative agreement with a nongovernmental organization partner, USAID carried out its Section 1207-funded school rehabilitation activities through an infrastructure initiative that had been operating since 2004. Also, State’s Bureau for International Narcotics and Law Enforcement’s (State/INL) plans to use Section 1207 funds to upgrade the Ministry of Interior’s emergency communications system and national criminal database were continuations of previously established State/INL programs in Georgia. The removal of unexploded ordnance to facilitate the return of internally displaced persons was carried out through a State humanitarian demining program that had been operating in Georgia for several years.

The Philippines’ Section 1207 projects in fiscal years 2007 and 2009 attempt to stabilize the region of Mindanao through economic development, with a focus on infrastructure development activities as well as police training and equipment. However, USAID implemented the Section 1207 infrastructure development activities in Mindanao through an existing program—Growth with Equity in Mindanao—which had been carrying out similar activities in the region since 1995 (see fig. 10). Also, the Department of Justice has been conducting similar police training and equipment activities in the Philippines, including in Mindanao, since 2006.

In addition, we reviewed all 28 approved Section 1207 proposals for fiscal years 2006 through 2009, including the 6 proposals for the countries we visited. We found that 22 proposals expand on recent or ongoing State and USAID activities funded through other foreign assistance accounts. For example, Colombia’s Section 1207 project in fiscal year 2007, which aimed to stabilize regions of that country recently freed from insurgent control, supported an interagency body of the Colombian government that the U.S. Southern Command had funded 3 years earlier. In addition, Tajikistan’s Section 1207 project in fiscal year 2008, intended to reduce the potential for conflict in unstable areas, supports community policing and local government development activities that build upon previous and continuing USAID and State initiatives. Finally, Uganda’s Section 1207 project in fiscal year 2009, aimed at reestablishing the rule of law in the north of the country, includes training for police and construction of community justice centers, which have both been implemented under previous and current USAID initiatives.

In December 2009, the Congress established the Complex Crises Fund, which provides greater flexibility to USAID to prevent or respond to emerging or unforeseen complex crises overseas. The Congress appropriated $50 million for this fund, with which the Administrator of USAID can fund such programs and activities, in consultation with the Secretary of State. Furthermore, in its proposed budget for fiscal year 2011, released in February 2010, State requested another $100 million in flexible contingency funding to meet unforeseen reconstruction and stabilization needs. This request is intended to transition the funding of the Section 1207 program from DOD to State. DOD has not requested Section 1207 funding for fiscal year 2011.

Addressing Urgent or Emergent Threats or Opportunities More Quickly than Other Programs

We found that State and USAID can provide funding to address urgent or emergent threats or opportunities just as quickly, or more quickly, through other foreign assistance programs, than through the Section 1207 program. For example, in Georgia, where DOD and State allotted $100 million in Section 1207 funds for reconstruction projects after the 2008 Russian invasion, State provided over $50 million in Economic Support Funds to start similar projects before the full amount of Section 1207 funds was available. In the Philippines, when faced with an initial delay in receiving approved Section 1207 funds in fiscal year 2007 for police training in Mindanao, State reprogrammed International Narcotics Control and Law Enforcement funds for this purpose. Furthermore, our review of Section 1207 project proposals shows that the proposals for projects in Lebanon in fiscal year 2006 and Kenya in fiscal year 2009 describe using reprogrammed funds from conventional accounts alongside Section 1207 funds to help achieve similar stabilization goals.

Additional Implementation Costs and Funding Delays

Using Section 1207 funding for reconstruction, stabilization, and security- related projects has created a new layer of program management through State’s Office of the Coordinator for Reconstruction and Stabilization (State/S/CRS)—the office responsible for oversight of the Section 1207 program—which has entailed additional implementation costs and funding delays with negative consequences.

In addition to State and USAID’s normal administrative costs for implementing an assistance project, State/S/CRS charges a fee for oversight of Section 1207 projects to cover the cost of program support and coordination from Washington, D.C., and in the field. For fiscal years 2008 and 2009, this fee totaled nearly $2.5 million, which State/S/CRS deducted from the project funds DOD transferred to State. When added to State and USAID administrative costs of nearly $5.4 million during the same period, the State/S/CRS fee represents an increase of 46 percent for overall administrative costs for Section 1207 projects during these 2 years. Furthermore, according to embassy officials we spoke to in Haiti, Georgia, and the Philippines, State/S/CRS oversight over Section 1207 has not necessarily improved project implementation or effectiveness. State and USAID officials at these embassies questioned the added value of State/S/CRS’s oversight of the Section 1207 program. According to the officials, State/S/CRS offers to coordinate interagency efforts and facilitate interagency collaboration within the country teams to help develop and execute Section 1207 projects. However, the embassy officials stated that interagency collaboration is already a part of how their country teams operate, through country team working groups and the development of mission strategic plans, and that the ambassador or deputy chief of mission can encourage such collaboration when necessary. In our discussions with State/S/CRS officials, they identified their ability to facilitate a whole-of-government approach for embassy country teams as their key added value and cited six countries—Lebanon, Nepal, Panama, Sri Lanka, Tajikistan, and Uganda—where their involvement brought benefits. However, they did not provide any documentation to support this claim.

We also found that addressing urgent or emergent threats or opportunities through the Section 1207 program has caused funding delays, which have had some negative consequences. In two countries we visited, funding for State/INL-implemented activities was significantly delayed compared with funding for USAID activities within the same project. In the Philippines, U.S. embassy officials told us that State borrowed funds from an existing police assistance project in order to start its Section 1207-funded police training on time, with an understanding that Section 1207 funds would arrive quickly for reimbursement. However, the Section 1207 funds took 6 months longer than expected to arrive, which subsequently delayed the existing police assistance project by 18 months and decreased the overall quantity of equipment procured. According to officials at the U.S. embassy in Georgia, a 6-month delay in receiving State’s Section 1207 funds for law enforcement activities interfered with the embassy’s goal of simultaneously improving the security and economy in the conflict zone. We also found in our review of quarterly reporting documents for all Section 1207 projects that funding delays for State activities was an issue in at least three other countries—Bangladesh, Kenya, and Malaysia. For example, in Kenya, U.S. embassy officials reported that the delay of Section 1207 funds for State’s police assistance resulted in the postponement of a State/INL assessment visit necessary to begin providing assistance.

In contrast, DOD and State implement the 1206 program within the existing management structure of FMF, under the auspices of the Defense Security Cooperation Agency. Hence, the Defense Security Cooperation Agency charges the same administrative fees for both programs and procures training and equipment at least as quickly for Section 1206 projects as for FMF.

Long-term Impact of Section 1206 Projects at Risk without Sustainment Planning

The long-term impact of Section 1206 projects is at risk, because it is uncertain whether funds will be available to sustain the military capabilities that these projects are intended to build. U.S. law and DOD and State policies limit the use of U.S. government funds for sustainment of Section 1206 projects, and most participating countries have relatively low incomes and may be unwilling or unable to provide the necessary resources. 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. In addition, the joint DOD and State Inspectors General report on the Section 1206 program found that continued sustainment is essential to achieving the intended objectives of the Section 1206 program and that long-term sustainability of Section 1206 projects depends on continued investment by the partner nations or U.S. government. DOD officials have noted that some Section 1206 projects are intended to address an immediate threat and may not require long-term sustainment. Nevertheless, according to Section 1206 project proposal instructions, proposals must explain how projects will be sustained in future years.

However, we found that the availability of sustainment funds from the U.S. government is uncertain. DOD and State policy has potentially constrained the use of U.S. government funding for Section 1206 project sustainment. According to fiscal year 2009 program guidelines, the Section 1206 program should not fund projects that must be continued over long periods (more than 3 years) to achieve a capability for a partner nation. However, Section 1206 projects are highly dependent on U.S. funding for long-term sustainment. Prior to fiscal year 2009, 62 (56 percent) of 110 approved Section 1206 proposals we reviewed indicated that FMF resources would be used to sustain projects. Other potential sources of sustainment funds identified in proposals include partner nations’ own resources and other U.S. programs.

Despite the new guidelines, 13 (52 percent) of the 25 approved fiscal year 2009 Section 1206 proposals we reviewed indicated that partner nations would use FMF resources to sustain Section 1206 projects. Furthermore, 11 (73 percent) of the 15 SAOs we interviewed had already requested or planned to request FMF resources to sustain Section 1206 projects. However, several SAOs were not certain that State would award the funds they had requested. State determines FMF allotments to recipient countries based on congressional direction and availability of funds, and at the time of our interviews, State had not finalized fiscal year 2010 allotments. Moreover, in fiscal years 2006 through 2009, 18 (34 percent) of the 53 Section 1206 recipient countries did not receive any FMF funding. While proposals continue to cite FMF for Section 1206 project sustainment, a provision of the fiscal year 2009 Omnibus Appropriations Act potentially further constrains the use of FMF to sustain Section 1206 projects. This provision, which prohibits the use of FMF funds to support or continue any Section 1206 projects unless the Secretary of State justifies such use to the Committees on Appropriations, may limit the availability of FMF for Section 1206 project sustainment.

The ability of partner nations to sustain Section 1206 projects in the absence of U.S. funding is also uncertain. DOD and State have not required countries to sign formal commitments to sustain Section 1206 projects, and only 35 (26 percent) of the 135 proposals we reviewed for fiscal years 2007-2009 projects explicitly address the recipient country’s ability or willingness to bear sustainment costs. Furthermore, only 9 (7 percent) of those 135 proposals provided estimates of the project’s maintenance, operation, or other sustainment costs. Moreover, DOD and State have implemented 113 (76 percent) of 149 Section 1206 projects in low- or lower-middle-income countries, as classified by the World Bank, where funding for sustainment efforts may be scarce. Only 1 of the SAOs we interviewed in 15 countries indicated that he believed his partner nation had the ability to sustain its Section 1206 projects independently; 6 SAOs said that they did not believe their partner nations had this ability, and 8 were uncertain. For example, the SAO in Nigeria was concerned about that country’s ability to support long-term maintenance activities for the vehicles, surveillance, and other Section 1206-funded equipment. Similarly, the SAO in Mali noted that sustainment of the Section 1206 project to train and equip that country’s light infantry units would be problematic if the country had to find its own funding. Only the SAO in Malaysia believed that the partner nation would fund the necessary sustainment of its maritime surveillance projects, based on that government’s stated intention to do so. Furthermore, Section 1206 program managers at U.S. geographic combatant commands also questioned the likelihood of partner nations to sustain Section 1206 projects. For example, at the U.S. Africa Command, the Section 1206 program manager explained that while the command would prefer that partner nations budget for sustainment activities, it was unlikely this would happen.

State and USAID Can Leverage Other U.S. Assistance Program Resources to Sustain Section 1207 Projects

Since the Section 1207 program does not have the same statutory or policy constraints as the Section 1206 program on using other U.S. assistance program resources to sustain projects, State and USAID use other U.S. assistance program resources for this purpose. State and DOD acknowledged in fiscal year 2008 guidelines that Section 1207 projects should seek to achieve short-term security, stabilization, or reconstruction objectives that are coordinated with longer-term development efforts to be sustained by the host government, international organizations, or other forms of U.S. foreign assistance. In our visits to Haiti, Georgia, and the Philippines, we found that State and USAID have provided assistance through other projects that are similar to Section 1207 projects and help sustain and consolidate their impacts. For example, in Haiti, USAID’s implementing partners have helped support the goals of the fiscal year 2007 Section 1207 project by funding assistance activities in Cité Soleil and neighboring areas through other ongoing USAID projects. In addition, in September 2009, State and USAID officials in Haiti told us that they planned to continue efforts to stabilize Port-au-Prince by using Economic Support Funds and International Narcotics Control and Law Enforcement funding. In the Philippines, where the Section 1207 project in fiscal year 2007 has attempted to stabilize the region of Mindanao through economic development, USAID applied funds from an ongoing project in the region to supplement a Section 1207 activity—an upgrade to a local water distribution system—that required additional support.

Furthermore, in our review of all 28 proposals for Section 1207 projects, we found that 21 proposals address the issue of sustainment by identifying possible sources of funding to sustain or build on project results. Among the 21 proposals, 17 identify additional U.S. foreign assistance funding as a source, 10 cite host government resources, and 5 mention other donors, such as other countries and international organizations. Only 3 proposals identify host government resources as the sole source of possible sustainment funding: Two of these are for upper-middle-income countries and the third is in a lower-middle-income country. Not every project goal funded through the Section 1207 program requires sustainment funding. For example, in Georgia’s Section 1207 project in fiscal year 2008, USAID funded a “winter wheat” initiative, which was designed as onetime assistance to provide seed, fertilizer, and other supplies so that farmers disrupted by the 2008 Russian invasion could produce a wheat crop in the months after the conflict. As a result of this initiative, the farmers harvested a better than expected wheat crop in the fall of 2009, according to the Georgian Deputy Minister of Agriculture.

Section 1206 and 1207 Program Monitoring and Evaluation Is Weak

DOD and State have conducted little monitoring and evaluation of the Section 1206 and Section 1207 programs. DOD and State have not carried out systematic program monitoring for the Section 1206 program, and reporting has generally consisted of anecdotal information, although DOD has taken initial steps to establish such a system. 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.

The Government Performance and Results Act of 1993 requires agencies to develop objective performance measures, monitor progress on achieving goals, and report on their progress in their annual performance reports. Our previous work has noted that the lack of clear, measurable goals makes it difficult for program managers and staff to link their day-to-day efforts to achieving the agency’s intended mission. Furthermore, according to Standards for Internal Control in the Federal Government, U.S. agencies should monitor and assess the quality of performance over time. In addition, we have previously reported that key practices for enhancing and sustaining interagency collaboration include developing mechanisms to monitor, evaluate, and report the results of collaborative programs; reinforcing agency accountability for collaborative efforts through agency plans and reports; and reinforcing individual accountability for collaborative efforts through agency performance management systems. Also, the Congress has directed the Secretaries of Defense and State to report on the implementation and impact of Building Global Partnership authorities provided under the Section 1206 and 1207 authorities no later than December 31, 2010.

Section 1206 Program Lacks Measurable Performance Objectives, Monitoring and Evaluation Plans, and Results Reporting

DOD and State have not consistently defined performance measures for their Section 1206 projects, although the agencies have made some improvement in doing so. Section 1206 program guidelines and instructions for fiscal year 2007 required project proposals to identify measures of effectiveness, and in fiscal year 2008, revised instructions required project proposals to identify the anticipated outcomes. However, we found that only 27 percent (30) of 110 approved proposals for fiscal year 2007 and 2008 provided this information. DOD and State refined the instructions for fiscal year 2009 by requiring project proposals to identify measures of effectiveness. As a result, 72 percent (18 of 25) of projects approved in fiscal year 2009 include this information. Overall, DOD and State have defined measures of effectiveness or anticipated outcomes for only 32 percent (48 of 149) of all projects approved from fiscal years 2006 through 2009.

Furthermore, DOD and State have not established a plan to monitor and evaluate Section 1206 program results systematically. DOD officials stated that they had not consistently monitored Section 1206 projects, and State officials were not involved with or aware of a formal evaluation process. In addition, only 34 (25 percent) of 135 approved fiscal year 2007-2009 proposals we reviewed documented an intention to monitor project results. Some SAOs we interviewed noted that embassy officials sometimes informally monitor Section 1206 project activities. For example, in Georgia, U.S. military trainers observed the use and maintenance of some Section 1206 program-funded equipment when they helped prepare troops for deployment to Afghanistan. Also, in Sri Lanka, DOD officials inspected some Section 1206 equipment when they hosted an Inspector General visit to the country.

Although regular reporting on performance is an established good management practice, DOD and State have not required Section 1206 program managers to report on progress or results. Only one of the six U.S. geographic combatant commands indicated that it routinely required SAOs implementing Section 1206 projects overseas to submit regular progress reports. Furthermore, 13 of the 15 SAOs we interviewed indicated that they do not routinely submit any formal reports to DOD or State on the Section 1206 projects they implement. For example, 1 SAO indicated that no reports were required and that he had not volunteered to write any. A few SAOs noted that they report the status of equipment deliveries, but not project results or impact. DOD and State have undertaken two evaluations of the Section 1206 program, focusing largely on initial projects. The first, prepared by a contractor in July 2008, addressed fiscal year 2006 and 2007 projects in Lebanon, Yemen, Pakistan, and São Tomé and Principe. The second, prepared jointly by the DOD and State Inspectors General, focused on seven countries with projects approved in fiscal year 2006. Since DOD and State had not established objective performance measures for most of the projects reviewed, these reports relied heavily on anecdotal information to assess progress and effectiveness.

These monitoring, evaluation, and reporting deficiencies may stem from DOD’s and State’s unclear assignment of roles and responsibilities for these tasks. We have previously reported that clearly identifying roles and responsibilities and establishing policies to operate across agency boundaries are key practices for enhancing interagency collaboration. However, DOD and State have not applied these practices for Section 1206 program monitoring and evaluation. Section 1206 program managers we spoke to at U.S. geographic combatant commands had varied opinions regarding who should be responsible for monitoring Section 1206 projects.

For example, officials at the U.S. Central Command indicated that monitoring and evaluation should be the joint responsibility of State, relevant embassies’ chiefs of mission, U.S. geographic combatant commands, as well as the SAOs. The security assistance manager at the U.S. Africa Command understood that monitoring was a responsibility of the relevant embassy country teams. Meanwhile, DOD officials in the Office of the Secretary of Defense told us they thought the U.S. geographic combatant commands should evaluate Section 1206 projects. One project proposal indicated only that “the embassy” should be responsible for monitoring the project in question, without identifying any particular office for this task.

DOD and State lack a monitoring and evaluation system; nevertheless, they have requested additional funding to sustain Section 1206 projects without documented evidence of results. SAOs have sometimes submitted FMF requests for Section 1206 project sustainment before the projects are fully implemented in order to have those funds available by the end of the 2-year period for which spare parts are typically included in Section 1206 packages. For example, the SAO in Lebanon explained that the Lebanon Armed Forces planned to use FMF to sustain its Section 1206 projects, and that he had already submitted FMF requests to that end despite the fact that most Section 1206 projects in Lebanon have not yet been fully implemented. In Ukraine, the SAO has submitted FMF requests for fiscal years 2010 through 2012, although some of the Section 1206 equipment had not yet been shipped to the country.

According to a DOD official in the Office of the Assistant Secretary of Defense for Special Operations, Low Intensity Conflict, and Interdependent Capabilities—the office with overall responsibility for the Section 1206 program—DOD has begun to implement a new two-phase initiative to assess Section 1206 projects. This assessment process is intended to use both quantitative and qualitative performance-related data to form the basis for measuring progress toward desired project outcomes. For the first phase, DOD has hired a contractor to identify current Section 1206 roles, data sources, and ongoing assessment activities to develop a framework for implementing Section 1206 assessments. The contract was signed in January 2010 and the final deliverable is due 8 months later. According to the officer, the second phase will consist of using the newly designed framework to assess a sample of Section 1206 projects. In addition, the official indicated that resources would not be available to evaluate all Section 1206 projects, and that the agency had not yet determined what sample of countries would be assessed.

Section 1207 Projects Have Measures of Effectiveness, but State Has Conducted Limited Monitoring and Evaluation

In general, State and USAID have established measures of effectiveness for individual Section 1207 projects. In our review of all 28 approved proposals for the Section 1207 program, we found that 25 proposals identified measures of effectiveness or performance indicators. For example, in the Philippines, State and USAID indicated that they would assess the effectiveness of a Section 1207 project by measuring changes in private sector investment, the prevalence of waterborne diseases, and police response times, among other performance indicators.

State and DOD first issued guidelines for Section 1207 project monitoring in January 2008, 2 years after the program began. According to these guidelines, embassies with Section 1207 projects are responsible for submitting quarterly progress reports containing both narrative and financial data to State’s Office of the Coordinator for Reconstruction and Stabilization (State/S/CRS) and to DOD’s Office of Partnership Strategy and Stability Operations. According to the guidelines, the reports should describe the project’s progress against the measures of effectiveness established in the project proposal, identify any challenges expected over the next quarter, and describe the expenditure to date on different project activities. State/S/CRS officials told us that, initially, embassies typically submitted these reports several months later than expected, but that punctuality improved after State/S/CRS hosted a Section 1207 program conference in May 2009. Since then, State/S/CRS officials said they usually receive reports within 30 days after the end of the quarter.

State/S/CRS officials told us that they had not fully analyzed the quarterly reports they received. According to these officials, State/S/CRS began systematically analyzing the financial information contained in the reports in April 2009, thereby monitoring the progress of project implementation by tracking the obligation and expenditure of funds over time for each component of the projects. However, State/S/CRS officials indicated that they routinely reviewed the reports when they arrived, but had not systematically analyzed them, because of staffing shortages. Thus, State/S/CRS was not systematically monitoring project effectiveness or implementation challenges described in the narrative section of these reports as a basis for providing program oversight. In December 2009, State/S/CRS assigned an additional employee to review the narrative reports.

Although Section 1207 program guidelines instruct embassies to submit quarterly reports to both State and DOD, embassies have not been sending these reports to DOD, and State/S/CRS has not forwarded them. State/S/CRS officials indicated that they have provided DOD information on problems with Section 1207 projects but not on progress or effectiveness. An official in DOD’s Office of Partnership Strategy and Stability Operations responsible for the Section 1207 program issues told us that, as of mid-December 2009, he had not received any Section 1207 quarterly reports, but that he was working with State/S/CRS to develop an evaluation process for Section 1207 projects. Because of limited monitoring and evaluation, State and DOD have made decisions about sustaining Section 1207 projects without documentation on project progress or effectiveness. For example, officials at the U.S. Southern Command told us that they did not support a proposal from the U.S. embassy in Haiti for a second Section 1207 project in fiscal year 2008 because they were not aware of the implementation progress or results of the first project. Nevertheless, State/S/CRS officials told us that the information obtained from the quarterly reports informed decisions about proposal approval and funding at the decision-making level.

State/S/CRS officials told us that in January 2010 they began efforts to develop information for the congressionally required report on the implementation and impact of the Section 1207 program, which is due on December 31, 2010. In particular, State/S/CRS offered to hire evaluation specialists to help embassies receiving Section 1207 program funds in fiscal year 2009 meet the congressional reporting requirement by developing a monitoring strategy and carrying out data collection and analysis. State/S/CRS has not offered this assistance to embassies that received program funds in prior years, which represent 59 percent of all Section 1207 funding through fiscal year 2009.

Conclusions

The Section 1206 and 1207 programs are aimed at achieving high-priority counterterrorism, stabilization, reconstruction, and security objectives for the United States. Anecdotal evidence from some early Section 1206 and 1207 projects suggests that individual projects under both programs could achieve noteworthy results, but achieving long-term results from the projects is likely to require a sustained U.S. effort, especially in poorer countries. State and USAID can continue to draw upon traditional foreign aid programs to continue nonmilitary assistance initiated under Section 1207. However, as the appropriate funding source for sustaining military assistance under Section 1206 is unclear, given current legal restrictions and agency policy, DOD and State need guidance from the Congress on how to fund longer-term assistance. Furthermore, without a rigorous monitoring and evaluation system, DOD and State have gathered little evidence to prove that the programs have been effective and whether continued funding should be provided to sustain the efforts they have initiated. The Section 1207 authority has allowed DOD to infuse existing USAID and State programs with additional resources to help those agencies achieve their objectives. However, channeling these resources through the Section 1207 authority has created a new layer of program management, which appears to be largely redundant and entails additional implementation costs and funding delays. Moreover, a new funding source for projects similar to those of the Section 1207 program may supplant the need to continue Section 1207 funding.

Matter for Congressional Consideration

In preparing to reauthorize U.S. national defense programs, the Congress should consider requiring the Secretaries of Defense and State to document how Section 1207 projects are distinct from those of other foreign assistance programs and that these projects incur no additional implementation costs and experience no funding delays beyond those of other foreign assistance programs. In the absence of this documentation, the Congress should consider not reauthorizing the Section 1207 program for fiscal year 2011 and, instead, appropriate funds to State and USAID programs.

Recommendations for We are making five recommendations relating to the Section 1206 and Executive Action 1207 programs. 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. For the Section 1207 program, we recommend that the Secretary of Defense, in consultation with the Secretary of State and the Administrator of USAID, develop and implement specific plans to monitor, evaluate, and report on their outcomes and their impact on U.S. strategic objectives to determine whether continued funding for these projects is appropriate under other authorities and programs.

Agency Comments and Our Evaluation

We provided a draft of this report to DOD, State, and USAID. We received written comments from all three, which we have reprinted in appendixes V, VI, and VII, respectively. The agencies also provided technical comments, which we incorporated throughout the report, as appropriate.

DOD concurred with all of our recommendations.

State indicated in its written comments that it appreciated the observations contained in our report and would take them into account when shaping the Complex Crises Fund, which State requested for fiscal year 2011 to replace the Section 1207 program. State noted that this new fund will solve many of the issues outlined in our report, including an unwieldy funds transfer process that has sometimes prevented as rapid a response to immediate needs as State would have preferred. State also indicated that our findings regarding the limited monitoring and evaluation for the Section 1207 program and additional administrative costs entailed by the program were contradictory, noting that State has increasingly developed and refined its monitoring and evaluation of Section 1207 projects, requiring adequate administrative costs to carry out. We disagree. While State/S/CRS had taken some steps to increase its monitoring of Section 1207 projects, it had neither systematically analyzed embassy reports on the effectiveness of Section 1207 projects nor provided these reports to its DOD counterparts responsible for the projects’ funding. Accordingly, we do not believe that these efforts justified the additional fees this office charged beyond those that State and USAID already charged to implement the projects.

USAID noted in its written comments that our report highlights several issues of interest to all agencies participating in the Section 1207 process and that USAID looks forward to continuing to refine its business processes based on our review.

We are sending copies of the report to the Secretaries of Defense and State and other interested parties or interested congressional committees. In addition, the report will be available at no charge on the GAO Web site at http://www.gao.gov.

If you or your staff have questions about this report, please contact me at (202) 512-8979 or at christoffj@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix VIII.

Appendix I: Scope and Methodology

Our review encompassed all projects funded by the Department of Defense (DOD) under authorities in Sections 1206 and 1207 of the National Defense Authorization Act of Fiscal Year 2006, as amended, during fiscal years 2006 through 2009. For more in-depth project review, we focused on 18 of the 62 countries receiving assistance under these programs: Albania, the Bahamas, Georgia, Haiti, Kazakhstan, Malaysia, and the Philippines, where we visited with U.S. embassy officials and host country officials, as well as implementing partner representatives in Section 1207 recipient countries; Ethiopia, Pakistan, and Uganda, where we interviewed U.S. embassy officials in conjunction with other GAO work; and Honduras, Kenya, Lebanon, Mali, Mexico, Nigeria, Sri Lanka, and Ukraine, where we conducted interviews with security assistance officers (SAO) or other project managers via telephone. 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. We selected the highest-ranking countries within the areas of responsibility of each of the six U.S. geographic combatant commands. For telephone interviews, we selected the next-highest-ranking country within the area of responsibility of each combatant command and four additional countries of strategic importance. The results of our work for the 18 countries we selected are not necessarily generalizable to all 62 countries receiving assistance under these programs.

To assess the extent to which the Section 1206 and 1207 programs have been consistent with U.S. government strategic priorities, we conducted the following work.

We interviewed DOD, State, and U.S. Agency for International Development (USAID) officials involved in implementing Section 1206 and 1207 programs and documented their views on how ongoing projects relate to U.S. strategies and priorities. At DOD we spoke to officials from the Office of the Secretary of Defense (OSD) and Joint Staff and the Defense Security Cooperation Agency, in Washington, D.C.; the U.S. Special Operations Command in Tampa, Florida; the six geographic combatant commands—the U.S. Africa Command and the U.S. European Command in Stuttgart, Germany; the U.S. Central Command in Tampa, Florida; the U.S. Northern Command in Colorado Springs, Colorado (by telephone); the U.S. Pacific Command in Honolulu, Hawaii; and the U.S. Southern Command in Miami, Florida; and the Africa Command Navy component, in Naples, Italy. At State we spoke to officials in the Bureau of Political-Military Affairs and the Office of the Coordinator for Reconstruction and Stabilization (State/S/CRS) in Washington, D.C. At USAID we spoke to officials from the Office of the Chief Operating Officer and the Bureau for Democracy, Conflict, and Humanitarian Assistance in Washington, D.C. We also interviewed U.S. embassy officials (by telephone or in person) in all 18 countries we selected. To identify U.S. strategic priorities, we also obtained and analyzed documents, such as mission strategic plans and lists of priority countries identified by the U.S. intelligence community.

We analyzed Section 1206 program funding data and DOD’s priority country list to determine the percentage of funding that has been allotted for countries on this list. We calculated this amount overall and for each year to identify any trends over time. Since the list of priority countries is classified, we aggregated the information we reported from our analysis to avoid disclosing classified information. We used funding data based on allotments for each Section 1206 project, in line with DOD’s notifications to the Congress, which we determined were sufficiently reliable for our purposes.

We analyzed all written project proposals for approved Section 1206 program-funded projects to determine how many of them described specific terrorist threats. DOD officials consistently identified these proposals as the most authoritative and detailed documents about each project’s purpose and objectives. In all, DOD and State have approved 92 proposals, accounting for 149 projects. No formal proposals had been submitted for the 11 projects approved in fiscal year 2006 and 3 projects approved in fiscal years 2007 and 2008. We analyzed the proposals for 135 projects from fiscal years 2007-2009: 62 projects approved in 2007, 48 projects approved in 2008, and 25 projects approved in 2009. We determined that a project proposal addressed a specific threat if it (1) provided information indicating that some terrorist act had occurred, had been attempted, or had been or was being planned for in the country/region of the project, or (2) referred to a terrorist organization or individual in the country/region of the project that posed a threat that was being targeted by the proposed project. If project proposals did not meet these criteria, we determined that they addressed a nonspecific threat. Projects that we determined fell into this second category included those that addressed the global threat of terrorism, the existence of ungoverned territory, illegal fishing, smuggling, narcotics trafficking, human trafficking, piracy, or other illegal activities not specifically tied to observable terrorist-related activity in the country/region in question. Two analysts independently reviewed all the proposals according to these criteria, and any disagreements in the determinations both made were resolved through discussion.

We reviewed applicable Section 1207 program guidelines to identify the requirements related to meeting U.S. stabilization priorities. We then analyzed Section 1207 program funding data and a U.S. government watchlist identifying countries vulnerable to state failure to determine the percentage of program funding that has been allotted for countries on this list. Since the watchlist is classified, we did not present specific data from our analysis to avoid disclosing classified information. We also analyzed political risk data compiled by IHS Global Insight, a private forecasting firm, to determine the percentage of project funds that were allotted to countries categorized as having high, very high, or extremely high short- term, internal political risk. This political risk score is a weighted average summary of probabilities that different political events, both domestic and external, such as civil war and trade conflicts, will reduce gross domestic product growth rates. The subjective probabilities are assessed by economists and country analysts at Global Insight on the basis of a wide range of information, and are reviewed by a team to ensure consistency across countries. The measures are revised quarterly; the measure we used comes from the first quarter of the year after each project proposal for the corresponding country was approved, except in the case of fiscal year 2009 projects, for which we used data from the third quarter of 2009 because data from the first quarter of 2010 were not yet available at the time of our review. We combined the results for all years to indicate what percentage of total funding was allotted to countries within each political risk category. To assess the reliability of the risk rating data, we interviewed officials of IHS Global Insight and reviewed related documents describing the methods used to gather these data and the internal control mechanisms employed to ensure consistency and reliability. We also compared the risk scores of similar sources of data related to country political risk to assess overall consistency. We determined that these risk rating data were sufficiently reliable for the purpose of assessing the general level of political stability of countries receiving Section 1207 program assistance. In addition, we reviewed all 28 approved proposals relating to 25 projects in the Section 1207 program in fiscal years 2006 through 2009 and assessed the extent to which proposals were for projects to help countries recover from or prevent instability. We considered that a project proposal addressed the prevention of instability if (1) the project objectives described an attempt to prevent, deny, counter, or reduce threat(s) to stability, such as armed conflict, violence, extremism, or terrorism/terrorists, or (2) the project objectives described an attempt to strengthen or enhance stability, and (3) the project did not address recovery from a specific event or occurrence of instability. We considered that a project proposal addressed the recovery from instability if (1) the project objectives described a specific event or occurrence of instability (e.g., insurgency, war, or episodic or recurring violence) and supported postconflict reconstruction or rebuilding efforts, or (2) the project objectives described efforts to help foreign governments regain or reestablish control over territories or institutions that were previously ungoverned or under the control of criminals, terrorists, or insurgents. Two analysts independently reviewed all the proposals according to these criteria, and any disagreements in the determinations both made were resolved through discussion. We used funding data based on allotments for each Section 1207 project, in line with DOD’s notifications to the Congress, which we determined were sufficiently reliable for our purposes.

To assess the extent to which the Section 1206 and 1207 programs are distinct from other U.S. programs, we conducted the following work.

We reviewed applicable Section 1206 program guidelines to identify the requirements relating to project distinctness. We then reviewed all available written proposals for projects to which these requirements applied (e.g., we compared projects approved in fiscal year 2009 with fiscal year 2009 guidelines) and analyzed the information that the proposals provided to distinguish the proposed project from those funded by other security assistance programs. We categorized each proposal based on whether the proposal (1) explained the reason(s), other than the lack of available funds, that another program could not be used; (2) did not address whether the proposed project was distinct from projects funded by other programs, other than the lack of available funds; or (3) identified one or more similar or related projects funded by another program but did not explain how the proposed project was distinct. Two analysts independently reviewed all the proposals according to these criteria, and any disagreements in the determinations both made were resolved through discussion. We considered only those proposals meeting the first criterion to have documented that the proposed project was distinct.

We also interviewed relevant staff—at OSD; State’s Bureau for Political- Military Affairs; all six geographic combatant commands; the Africa Command Navy component; and the U.S. embassies in Albania, the Bahamas, Georgia, Kazakhstan, the Philippines, Malaysia, Ethiopia, Pakistan, Honduras, Lebanon, Mali, Mexico, Nigeria, Sri Lanka, and Ukraine—in person or by telephone, and documented their views on the factors that distinguish Section 1206 projects from other train and equip projects that they help implement under other programs. To determine whether funding assistance under Section 1206, instead of other traditional security assistance programs, entailed additional costs or funding delays, we asked an official from the Defense Security Cooperation Agency overseeing the Section 1206 program about the fees and implementation timing under this program and Foreign Military Financing (FMF).

We reviewed applicable Section 1207 program guidelines to identify the requirements relating to project distinctness. We then reviewed all proposals for projects to which these requirements applied (i.e., 28 approved proposals for fiscal years 2006 through 2009) and assessed the extent to which the proposals included information to distinguish the respective project from those funded under other foreign assistance programs. We considered a proposed project to be distinct from other projects if (1) no other related projects were identified in the proposal, or (2) the proposed project did not fund a continuation of a prior or existing program in that country, through expansion of its geographic scope or an increase in the number of identical or closely related activities. For example, we did not consider an initiative to increase funding for an existing school construction program to build additional schools in other regions of a country to be distinct. We did not consider projects to be undertaken using existing contracting mechanisms, grants, or cooperative agreements to be distinct unless the type of proposed activity funded was described as being substantially different from ongoing activities. Two analysts independently reviewed all the proposals according to these criteria, and any disagreements in the determinations both made were resolved through discussion.

We reviewed quarterly reports from countries that received Section 1207 program funding for State’s Bureau of International Narcotics and Law Enforcement activities to determine if funding delays were an issue. We also reviewed Section 1207 program funding data to determine the administrative costs charged by State/S/CRS, State (at U.S. embassies), and USAID. In addition, we interviewed cognizant officials at the U.S. embassies in Georgia, Haiti, Malaysia, the Philippines, and Uganda, and documented their views of the factors that distinguish respective Section 1207 projects from other assistance activities that they help implement under other programs. We also interviewed cognizant officials at USAID, State/S/CRS, and five geographic commands and documented their views on this topic.

To determine the extent to which the Section 1206 and 1207 projects have addressed the sustainment needs of executed projects, we conducted the following work.

We reviewed State and USAID documents describing U.S. foreign policy goals relating to sustainment of international counterterrorism-related efforts. We also reviewed Section 1206 program guidelines to identify requirements relating to project sustainment. We then reviewed all available written proposals for projects to which these requirements applied (i.e., projects approved in fiscal year 2009) and analyzed the information that each proposal included relating to project sustainment. We identified all the sources of funding that each proposal indicated would be used to sustain the project and categorized them as Foreign Military Financing, U.S. programs other than FMF, or host country funds. We also identified those proposals that indicated that host nation funds alone would be used for sustainment. Two analysts independently reviewed all the proposals according to these criteria, and any disagreements in the determinations both made were resolved through discussion.

We also interviewed cognizant officials at OSD, State’s Bureau for Political-Military Affairs, all six geographic combatant commands, the Africa Command Navy component, and the U.S. embassies in Albania, the Bahamas, Ethiopia, Georgia, Honduras, Kazakhstan, Lebanon, Malaysia, Mali, Mexico, Nigeria, Pakistan, the Philippines, Sri Lanka, and Ukraine, and documented their views regarding sustainment of ongoing Section 1206 projects. We also used the World Bank’s 2010 country income ratings to analyze the potential ability of recipient countries to independently sustain Section 1206 projects.

We reviewed applicable Section 1207 program guidelines to identify the requirements relating to project sustainment. We then reviewed all available written proposals to which these requirements applied (i.e., all 28 approved proposals for fiscal years 2006 through 2009) and assessed whether each proposal included information relating to project sustainment. We identified all the sources of funding that each proposal indicated would be used to sustain the project and categorized them as U.S. government assistance, host nation funds, or non-U.S. donors or other sources. We also identified those proposals that indicated that host nation resources alone would be used for sustainment. Two analysts independently reviewed all the proposals according to these criteria, and any disagreements in the determinations both made were resolved through discussion. In addition, we interviewed relevant staff at U.S. embassies in Georgia, Haiti, Malaysia, and the Philippines, and documented their views regarding sustainment of ongoing Section 1207 projects. We also documented the views on this topic from cognizant officials at USAID, State/S/CRS, and five geographic combatant commands. For those projects where potential sustainment from U.S. or other donor sources was not addressed by project proposals, we used the World Bank’s 2010 country income ratings to analyze the potential ability of the recipient countries to independently sustain Section 1207 activities. We determined that these data were sufficiently reliable for the purpose of this analysis.

To establish the extent to which the Section 1206 and 1207 programs incorporate plans for monitoring and evaluation to assess project impact and inform program implementation, we conducted the following work.

We reviewed applicable Section 1206 and 1207 program guidelines, as well as authorizing legislation, the Government Performance and Results Act of 2003, and Standards for Internal Controls in the Federal Government to identify the requirements relating to project monitoring and evaluation.

To determine what monitoring and evaluation has been conducted and what was planned for the Section 1206 program, we interviewed cognizant DOD and State officials in Washington, D.C., and at the six U.S. geographic combatant commands and the Africa Command Navy component, as well as U.S. officials in Albania, the Bahamas, Ethiopia, Georgia, Honduras, Kazakhstan, Lebanon, Malaysia, Mali, Mexico, Nigeria, Pakistan, the Philippines, Sri Lanka, and Ukraine in person or via telephone. We also analyzed the 135 available written project proposals to determine the extent to which they identified measurable program objectives. We considered a proposal as having a measurable objective if (1) it identified an objective or an expected outcome and a means of quantitatively or qualitatively assessing achievement of that objective or outcome, or (2) it identified a specific expected outcome, such as the establishment of a particular military capability or deployment of troops in a particular stabilization operation, specific enough that an observer could reasonably be expected to determine by objective means whether the outcome had been achieved. We did not consider a proposal as having a measurable objective if (1) it did not identify any objective or expected outcome or (2) it described the objective or expected outcome in general terms, such as achieving long-term stability or establishing an effective deterrence against extremist incursions, without identifying potential indicators or other quantitative or qualitative means to assess the achievement of that objective or outcome. Two analysts independently reviewed all the proposals according to these criteria, and any disagreements in the determinations both made were resolved through discussion.

To determine what monitoring and evaluation has been conducted and what was planned for the Section 1207 program, we interviewed cognizant DOD, State, and USAID officials, as well as agency officials at five U.S. geographic combatant commands. In addition, we interviewed relevant staff at U.S. embassies in Georgia, Haiti, Malaysia, and the Philippines, and documented their views regarding monitoring and evaluation of ongoing Section 1207 projects. We also analyzed all 28 approved proposals to determine the extent to which they identified measures of effectiveness. We considered a proposal to have measures of effectiveness if it identified either quantitative or qualitative measures or performance indicators that would be used to assess the results of the proposed project. We did not require the proposal to provide detailed information about every measure or indicator that would be used, but we considered a basic description of them or examples as adequate evidence to meet the criteria. We did not consider a reference to State’s standard performance measurement structure as adequate evidence to meet our criteria unless the proposal identified which standard measures would be used. Two analysts independently reviewed all the proposals according to these criteria, and any disagreements in the determinations both made were resolved through discussion.

We conducted this performance audit from February 2009 to April 2010 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Appendix II: Descriptions of Traditional DOD and State Assistance Programs

Table 3 describes selected U.S. foreign assistance programs and accounts that DOD, State, and USAID have traditionally used to fund training and equipment for counterterrorism and stabilization operation support and assistance related to reconstruction, security, and stabilization.

Appendix III: Section 1206 and 1207 Funding Allotments

Table 4 lists the recipient countries and their allotments of Section 1206 and 1207 funds for fiscal years 2006 through 2009, ranked according to total amount funding provided.

Figures 11 and 12 show the allotments of Section 1206 and 1207 funds, respectively, to U.S. geographic combatant commands for fiscal years 2006 through 2009.

Appendix IV: Types of Assistance Provided through Section 1206 and 1207 Programs

Table 5 lists the recipients of Section 1206 funds and the type of equipment DOD and State have provided to each country for fiscal years 2006 through 2009.

Table 6 lists the recipients of Section 1207 funds and the type of reconstruction, stabilization, and security assistance provided by State and USAID.

Appendix V: Comments from the Department of Defense

Appendix VI: Comments from the Department of State

Appendix VII: Comments from the U.S. Agency for International Development

Appendix VIII: GAO Contact and Staff Acknowledgments

Staff Acknowledgments

Key contributors to this report include Jeffrey Phillips, Assistant Director; James Michels; Kathryn Bolduc; Robert Heilman; Martin de Alteriis; Michael Silver; Mark Dowling; John Pendleton; Marie Mak; Alissa Czyz; Jodie Sandel; Erin Smith; Thomas Costa; Kathryn Bernet; John Neumann; Michael Rohrback; Sally Williamson; Jeff Isaacs; Ophelia Robinson; Jenna Beveridge; Joseph Carney; Lynn Cothern; Anthony Pordes; and Jeremy Sebest.