As the United States focused on toppling the Taliban regime and fighting al Qaeda in Afghanistan, Pakistan became an important ally. In December 2001, Congress passed the Defense Appropriations Act for fiscal year 2002, stipulating that the “Defense Emergency Response Fund” could be used by the Secretary of Defense to reimburse coalition partners like Pakistan for their logistical and military support of U.S. military operations. This funding became known as Coalition Support Funds. To provide Defense with maximum flexibility, Congress passed the Defense Appropriations Act for Fiscal Year 2002 granting the Secretary of Defense the authority to make CSF payments notwithstanding any other provision of law in such amounts as the Secretary may determine in his discretion, based on documentation determined by the Secretary to adequately account for the logistical and military support provided by partner nations. Any such determination by the Secretary shall be final and conclusive. The amount of CSF reimbursements to Pakistan from October 2001 through June 2007 are shown in figure 1. In 2003, at the request of the Comptroller, the Defense Inspector General performed an audit of the CSF oversight process. The report found deficiencies in both the CSF guidance and documentation provided by CSF recipients to support their claims. It recommended improvements in Defense’s analysis of CSF reimbursement requests and greater documentation requirements for countries seeking reimbursement. In response, the Comptroller published guidance in December 2003 to clarify the roles and responsibilities of the Comptroller, CENTCOM (and other regional combatant commanders), and ODRP in the CSF process. The 2003 guidance notes that Congress provided the Secretary of Defense with the authority to determine how much to reimburse partner countries, and how much documentation was needed to adequately account for the support provided. However, the guidance also stated that CENTCOM and the Comptroller are to obtain sufficient documentation to validate that Pakistani military support had been provided and that costs were incurred, reasonable, and appropriate under the CSF program. Under the December 2003 guidance and oversight process, Pakistan would first submit its claim to ODRP at the U.S. Embassy in Islamabad, which would assist the Pakistani military in formulating the claim before sending it to CENTCOM in Tampa, Florida. CENTCOM would then conduct its own review in an attempt to link claimed expenses to U.S. military operations before forwarding the claim package to the Comptroller. Under this process, ODRP and CENTCOM staff can make recommendations to defer or disallow costs based on their analysis of the Pakistan submission; however, the Comptroller makes the final recommendation to the Secretary of Defense on which costs should be paid, deferred, or disallowed. The Department of State, the Office of Management and Budget, and Congress also have a role in the CSF oversight process after the Comptroller has finished its review. The CSF process and guidance is detailed in Figure 2. In July 2006, the Comptroller provided the Pakistani government with a cost template and information intended to clarify the types of costs that were reimbursable under CSF and the information the Comptroller needed to support Pakistan’s reimbursement claims. We found that Defense did not consistently apply existing CSF guidance and that certain deficiencies existed in their oversight procedures. Comptroller generally performed four broad analytical reviews as called for in its guidance. For example, the Comptroller generally performed a comparison of total claimed costs to the estimated U.S. cost to provide the same support. Defense guidance developed by the Comptroller also calls for obtaining sufficient information to validate Pakistani claims to determine that costs were incurred, reasonable, and appropriate. However, Defense did not fully implement this criteria. For example, Defense reimbursed Pakistan over $2 billion for claims from January 2004 through June 2007 without obtaining detailed documentation that would allow a third party to recalculate the costs. In addition, Defense often did not adequately document the basis for their decisions to allow or disallow claims, and we found inconsistencies in Defense payments that were not explained. As a result, Defense may have paid costs that were (1) not incremental, (2) not based on actual activity, or (3) potentially duplicative. We also found that additional oversight controls were needed. Specifically, while Comptroller guidance calls for a historical comparison of claimed costs, the guidance does not indicate why or how the comparison should be performed. Additionally, Defense did not verify the currency conversion rates used by Pakistan from January 2004 through June 2007 and, as a result, may have overpaid Pakistani claims due to the devaluation of the Pakistan rupee. The Comptroller’s CSF guidance states that Pakistani claims should include associated invoices. In the absence of such support, CENTCOM officials are to obtain from Pakistan a detailed description of how these costs were computed. For example, claims for fuel should include information such as total fuel consumed, the number and types of vehicles supported, and best available assessments of the number of miles driven or hours employed. We found that few of the Pakistani claims we reviewed met the criteria contained in the Comptroller’s guidance. Defense reimbursed Pakistan more than $2.2 billion, or 76 percent, of Pakistani army claims from January 2004 through June 2007, without obtaining sufficient information to support how the costs were calculated. In addition, the lack of documentation led to inconsistencies in Defense’s reimbursement of certain costs. For example, as illustrated in figure 3, Defense paid Pakistani navy claimed costs for boats for about half of the months and disallowed them the other half, despite no discernable differences in the level of documentation the Pakistani government provided for the claims. We also identified additional inconsistently reimbursed costs, such as bulletproof jackets and telephone cables. Comptroller guidance states that reimbursement claims must clearly indicate the incremental nature of the logistical and military support provided—i.e., that claimed costs are above and beyond the partner country’s normal operating costs. Because the Pakistani claims lacked this information, Defense officials differed as to whether the claims should be disallowed or deferred until Pakistan could provide additional support. The case of the Pakistani radar claims illustrates this point. From January 2004 through February 2007, Defense paid Pakistan more than $200 million in radar expenses. However, the next month ODRP recommended the Comptroller disallow the costs. ODRP reasoned that Pakistan’s use of the radar was not related to U.S. efforts to combat terrorism in the region, as terrorists in the FATA did not have air attack capability. The Comptroller took the position that Pakistan likely incurred some increased costs related to U.S. efforts to combat terror in the region—for example, by providing air traffic control for U.S. military support flights into Afghanistan. The Comptroller nonetheless agreed that the claims lacked sufficient detail and has since deferred payment until Pakistan provides additional support for the March through June 2007 claims. According to the Comptroller’s criteria, both the Comptroller and CENTCOM are responsible for validating that claimed costs are associated with actual activities and are based on documentation that adequately accounts for the support provided. However, the documentation we were provided did not provide sufficient support that all claimed costs were based on actual activity or expenses. These include costs associated with construction, food, and vehicle maintenance. For example, Defense paid Pakistan more than $30 million for army road construction and over $15 million for army bunker construction before concerns about the validity of these charges led ODRP to ask the Pakistani military for the coordinates of the roads and bunkers to verify their existence. We also found large unexplained differences between the average costs of food per person for each force, as shown in figure 4. As the figure above shows, navy monthly food costs per person were generally higher than monthly air force and army food costs per person. From June 2005, navy claims for food rapidly increased from approximately $445 per sailor to $800 per sailor in December 2005, while air force and army food costs per person remained stable. Despite these anomalies, Defense continued to pay the navy $800 per sailor for food until September 2006, when the Comptroller began to question these costs. We also found Defense paid the Pakistani navy more than $1.5 million in possibly inflated costs for damage to navy vehicles. On average, Defense paid the Pakistani navy more than $5,700 per vehicle per month in damages compared with the army’s average claim of less than $100 per vehicle per month. According to the most recent navy claims, these vehicles generally consisted of passenger cars and SUVs that were not involved in combat. By contrast, the army vehicles were used to conduct military operations in the FATA and border region. Comptroller guidance requires CENTCOM to ensure that costs are not counted twice; however, none of the CENTCOM memos we reviewed provide any indication that a review for duplicate costs had been performed. As a result, Defense paid more than $8.9 million in potentially duplicative costs. For example, the most recent Pakistani navy claim (June 2007) includes cost categories titled “vehicle damage” and “cost of vehicles repaired,” but no details were provided to explain the differences between these two categories, and there was insufficient detail to determine whether some or all of the claimed costs were unique or duplicative. Despite this lack of detail, we found that Defense paid the Pakistani navy an average of over $19,000 per vehicle per month (more than $3.7 million per year) to operate, maintain, and repair a fleet of fewer than 20 passenger vehicles without sufficient information to determine that these costs were not duplicative. An official at ODRP with a role in reviewing CSF reimbursement claims stated that, based on the scarce details provided in the CSF claims, it was it was nearly impossible to know the actual cost of claimed items. When we discussed this issue with officials at the Comptroller’s office, they indicated that the Pakistani claims do not provide enough detail to explain the context of the costs.