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United States Government Accountability Office: 
Washington, DC 20548: 

February 15, 2011: 

Congressional Addressees: 

Subject: Accountability for U.S. Equipment Provided to Pakistani 
Security Forces in the Western Frontier Needs to Be Improved: 

Al Qaeda, the Taliban, and other extremists have used safe havens 
along Pakistan's Western Frontier (border) region to attack Pakistani, 
Afghan, U.S., and coalition troops; plan and train for attacks against 
U.S. interests and the U.S. homeland; destabilize Pakistan, a nuclear- 
armed U.S. ally; and spread radical Islamic ideologies that threaten 
U.S. interests. A key U.S. national security objective is to disrupt, 
dismantle, and defeat al Qaeda and its violent extremist affiliates in 
Pakistan and to deny them a safe haven. Since 2002, the United States 
has provided over $18 billion in assistance and reimbursement to 
Pakistan including (1) reimbursements to the Pakistani government for 
costs incurred in direct support of U.S. counterterrorism operations; 
(2) security assistance such as grants to Pakistan for the acquisition 
of military equipment; and (3) development, economic, and humanitarian 
assistance. 

Since 2006, this assistance has included $1.5 billion to improve the 
counterterrorism and counterinsurgency capabilities of Pakistani 
security forces operating along the country's border with Afghanistan, 
including $400 million for the Pakistan Counterinsurgency Fund (PCF) 
and $700 million for the Pakistan Counterinsurgency Capabilities Fund 
(PCCF).[Footnote 1] The President has requested an additional $1.2 
billion for fiscal year (FY) 2011 and $1.1 billion for fiscal year 
2012 to train and equip these forces. U.S. assistance under this 
initiative has provided military equipment, such as helicopters and 
night-vision devices; infrastructure, such as border coordination and 
training centers; and training.[Footnote 2] The Office of Defense 
Representative Pakistan (ODRP), under the U.S. Central Command 
(CENTCOM), manages this assistance. ODRP is responsible for the 
receipt and storage of U.S.-provided military equipment at a leased 
warehouse in Islamabad prior to the equipment's transfer to Pakistan. 
ODRP is also responsible for, among other things, developing and 
implementing policies and procedures to document the transfer of the 
equipment to Pakistan and to ensure that once in Pakistan's custody, 
items requiring enhanced monitoring[Footnote 3] are subject to 
periodic inventories. The Defense Security Cooperation Agency (DSCA) 
is responsible for ensuring that U.S. and Pakistani officials 
implement appropriate internal control procedures to account for 
sensitive defense equipment, including conducting compliance 
assessments. 

This report focuses on U.S. activities to ensure accountability of 
sensitive equipment provided to Pakistani security forces operating 
along the western border. We have previously reported on Afghan and 
Iraqi weapon accountability coverage, as well as the importance of 
accountability and oversight of U.S. efforts in Pakistan, including 
Coalition Support Fund reimbursements to Pakistan and the planning and 
documentation of U.S. development assistance in Pakistan's Federally 
Administered Tribal Areas.[Footnote 4] 

We conducted this review under the authority of the Comptroller 
General to undertake work under his own initiative because of 
significant and broad congressional interest. The objectives of this 
review were to determine the extent to which the Department of Defense 
(DOD) has (1) ensured accountability for the receipt, storage, and 
transfer to Pakistan of U.S.-provided equipment at its Islamabad 
warehouse; (2) responded to reported weaknesses in accountability for 
night-vision devices in Pakistan's custody; and (3) addressed new 
accountability requirements established in section 1225 of the 2010 
National Defense Authorization Act (NDAA) for defense articles 
provided to Pakistan.[Footnote 5] 

To address these objectives, we reviewed relevant U.S. laws, federal 
internal control standards, DOD policies and procedures, reports and 
other documents; interviewed DOD officials at the DSCA in Washington, 
D.C.; the ODRP in Fort Belvoir, Virginia, and in Pakistan; at CENTCOM 
in Tampa, Florida; and at a DOD-leased warehouse in Islamabad where 
some U.S.-provided equipment is received and stored prior to transfer 
to Pakistani security forces. To determine what accountability 
procedures were adequate for equipment received and stored at the 
warehouse, we used DOD Instruction 5000.64 to identify those 
requirements that would be needed, at a minimum, to ensure adequate 
accountability of the equipment received and stored at the Islamabad 
warehouse. Our analysis resulted in the identification of 17 
requirements. We assessed ODRP's standard operating procedures against 
these 17 requirements to determine the adequacy of DOD's efforts to 
maintain accountability for equipment. We also interviewed Department 
of State officials in Washington, D.C., and at the U.S. Embassy in 
Islamabad. 

We completed this performance audit between June 2009 and February 
2011 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 based on our audit objectives. We believe that 
the evidence obtained provides a reasonable basis for our findings 
based on our audit objectives. 

This audit was conducted as part of a larger review of U.S. assistance 
to enhance the counterterrorism and counterinsurgency capabilities of 
Pakistani security forces operating along the country's Western 
Frontier. We plan to report separately on the status of U. S. efforts 
to provide equipment, training, and infrastructure to enhance the 
capabilities of these forces, including the impact of the floods on 
this assistance.[Footnote 6] Additionally, we are reviewing the 
President's forthcoming certification relating to Pakistan's 
counterterrorism and nuclear networks cooperation with the United 
States and the United States' Pakistan Assistance Strategy report in 
response to congressional mandates in the Enhanced Partnership with 
Pakistan Act of 2009.[Footnote 7] 

Written Procedures for Ensuring Accountability for Equipment at DOD's 
Islamabad Warehouse Are Incomplete, Increasing the Risk for Loss or 
Misuse: 

DOD's written procedures for ensuring accountability for equipment 
received and stored at its Islamabad warehouse do not fully address 
key requirements on how to maintain accountability and management of 
property. Federal government standards for internal control[Footnote 
8] state that federal agencies should design and document internal 
controls that provide safeguards to help prevent and detect the loss 
or misuse of equipment. Further, DOD guidance[Footnote 9] emphasizes 
the need to document the internal controls used to maintain 
accountability for property. Our analysis of the DOD guidance resulted 
in the identification of 17 key requirements. The key requirements 
focus on (1) physical controls over vulnerable assets; (2) proper 
execution of transactions and events; (3) management of human capital 
and reviews by management at the functional or activity level; and (4) 
controls over information processing. 

During a field visit to Pakistan, we observed that ODRP did not have 
written procedures to help ensure consistent accountability for the 
receipt and storage of U.S. defense articles at its Islamabad 
warehouse prior to their transfer to Pakistan. Further, we observed 
that knowledge of processes to provide accountability, including the 
use of the inventory tracking database, resided primarily with the 
supply officer who had developed these processes starting in May 2009. 
According to ODRP officials, this officer departed Islamabad in May 
2010. At the conclusion of our field work in Pakistan in February 
2010, we advised embassy and ODRP officials that without written 
procedures there was a risk that the inventory tracking process 
implemented at the warehouse might not be consistently performed or 
continued when officers rotate. U.S. military assignments to ODRP are 
generally for 1 year or less and, according to DOD officials, delays 
obtaining visas have prevented DOD from being able to overlap officer 
rotations. 

In May and November 2010, ODRP issued standard operating procedures 
[Footnote 10] for the inventory management process at the warehouse in 
Islamabad, including the use of an inventory tracking database. 
Although ODRP's written procedures generally provide an overview of 
the inventory tracking process, several of the procedures do not 
provide sufficient information regarding their operational procedures 
or internal controls. Our review determined that out of the 17 key 
requirements, 10 were incorporated to a large extent, 2 were 
incorporated to some extent, and 5 were incorporated to little or no 
extent. For example, 

* DOD guidance requires that certain data elements such as name, 
unique item identifier (e.g., serial number), description quantity, 
and location be recorded in the property system to enable the tracking 
of equipment. However, the written procedures provided did not 
identify the specific data elements that should be recorded in the 
property system. 

* DOD guidance requires that periodic internal reviews and audits of 
the property accountability and management system be performed to 
determine if it is operating as intended. However, the written 
procedures provided do not require that such internal reviews or 
audits be performed. 

Without robust procedures, there is increased risk of equipment loss 
or fraudulent activity. See enclosure I for more detailed information 
on the extent to which the inventory tracking process incorporated the 
key requirements. 

DOD's Follow-Up Actions on Weaknesses in Accountability for Sensitive 
Equipment in Pakistan's Custody Were Not Completed in a Timely Manner: 

DSCA did not follow up in a timely manner to ensure corrective actions 
were taken to fix weaknesses in accountability procedures that it 
identified in 2008 for sensitive equipment in Pakistan's custody. U.S. 
government standards for internal control recommend that agencies 
ensure the prompt resolution of the findings of audits and other 
compliance reviews. Within DOD, DSCA is the principal agency 
responsible for implementing the Golden Sentry Program, created to 
meet accountability requirements under the Arms Export Control Act, 
for defense articles funded through traditional security assistance 
programs.[Footnote 11] The Golden Sentry Program requires monitoring 
of sensitive and nonsensitive defense equipment transferred to foreign 
countries.[Footnote 12] Sensitive equipment is subject to enhanced end-
use monitoring. Some sensitive equipment, such as night-vision 
devices, require 100 percent inventory by serial number. DSCA carries 
out its responsibilities under the program by reviewing the 
implementation of internal control procedures intended to help 
maintain security and accountability over sensitive defense articles 
transferred to foreign countries, and by following up to ensure that 
its findings are implemented in a timely manner. A key element of the 
program is compliance assessment visits to assess host nation and U.S. 
security assistance personnel compliance with end-use, security, and 
accountability procedures. Although on-site assessments are a key 
element of end-use monitoring, according to a DSCA official, DSCA also 
relies on intelligence and other reports to accomplish its oversight 
and monitoring responsibilities. 

In March 2008, DSCA reported that a compliance assessment had 
identified weaknesses in ODRP's and Pakistan's accountability 
procedures for sensitive night-vision devices. Among its findings, 
DSCA reported that ODRP lacked records showing that required quarterly 
100 percent inventory of sensitive night-vision devices by serial 
number had been conducted and that Pakistan's inventory records lacked 
serial numbers for 64 of the 687 U.S.-provided night-vision devices 
that were in Pakistan's custody. During the course of the compliance 
assessment, ODRP identified the missing serial numbers from its own 
records and inventoried 60 of the 64 night-vision devices. Based on 
information provided later by Pakistan, 4 night-vision devices were 
declared lost in combat. 

DSCA recommended to CENTCOM in March 2008 that ODRP correct weaknesses 
identified during its compliance assessment and improve accountability 
for sensitive night-vision devices in Pakistan's custody by (1) 
ensuring that the status of all night-vision devices was accurately 
reflected in a database used to track sensitive defense articles, (2) 
updating a June 2004 U.S.-Pakistan bilateral memorandum of agreement 
[Footnote 13] to reflect a revised inventory schedule for night-vision 
devices, and (3) establishing procedures to ensure that Pakistan 
inventoried and recorded serial numbers for all night-vision devices. 
DSCA recommended steps be taken to ensure all weaknesses were 
corrected within 90 days and to provide written confirmation that it 
had addressed the agency's recommendations. 

In April 2008, ODRP responded to DSCA that it had made significant 
progress in addressing DSCA's findings and recommendations, including 
ensuring the database used to track sensitive defense articles was up- 
to-date and drafting a new bilateral memorandum of agreement. However, 
ODRP's response did not specifically address DSCA's third 
recommendation that it establish procedures to ensure that Pakistan 
inventoried and recorded serial numbers for all night-vision devices, 
nor did it provide any evidence of the corrective actions it reported 
taking in response to DSCA's other recommendations. As of September 
2010, ODRP had not addressed two of DSCA's recommendations[Footnote 
14] and only partially addressed a third recommendation.[Footnote 15] 

As of September 2010, DSCA had not conducted, and had no plans to 
conduct, another compliance assessment of ODRP's and Pakistan's 
accountability procedures for night-vision devices. In response to our 
work, DSCA stated that it had initiated actions to include a risk-
based approach in prioritizing future compliance assessments and 
follow-up actions. In addition to risk, DSCA would consider factors 
such as the inventory of defense articles that require enhanced end-
use monitoring, the history of compliance with the Golden Sentry 
Program within the host nation, the stability of the region, and 
current or previous reports of concerns relative to the country's 
protection of U.S.-provided defense articles. Without follow-up 
actions to verify that DSCA's recommendations were fully addressed, 
there continues to be a risk that sensitive night-vision devices are 
not being adequately safeguarded. 

DSCA's Plans for Assessing Compliance with New Accountability 
Requirements for Defense Equipment Transferred to Pakistan Have Been 
Postponed: 

Section 1225 of the 2010 NDAA required the Secretary of Defense to 
establish and carry out a program to provide accountability for 
defense articles transferred to Afghanistan and Pakistan pursuant to 
authorities other than the Arms Export Control Act, including 
maintaining detailed records of origin, shipping, distribution, and 
registration of serial numbers of all small arms.[Footnote 16] In 
April 2010, the Secretary certified that DOD had established a program 
to provide additional accountability for defense articles transferred 
to these countries. In September 2010, DOD issued additional guidance 
[Footnote 17] on the registering and end-use monitoring of defense 
articles, including small arms, to ensure compliance with section 1225 
requirements of the 2010 NDAA. The guidance requires DSCA to conduct a 
review of DOD components to ensure consistent and proper 
implementation of the guidance. In accordance with DSCA's oversight 
responsibilities, DSCA planned to conduct compliance assessments in 
Afghanistan and Pakistan to verify the implementation of new 
accountability requirements established in section 1225 of the 2010 
NDAA for defense equipment transferred to those countries. However, 
several factors have led DSCA to postpone its planned assessment. DSCA 
officials told us that they initially planned to conduct compliance 
assessments in July 2010 to verify that U.S., Afghan, and Pakistani 
officials had implemented procedures to assure compliance with the 
law's requirements.[Footnote 18] However, the planned assessments were 
delayed due to security concerns in Afghanistan and because the 
Pakistani Army had not issued a Letter of Invitation for the 
assessment team. According to a DSCA official, as of November 2010, 
DSCA had not conducted a compliance assessment but planned to conduct 
it in early 2011. Until DSCA takes steps to verify that the new 
accountability requirements have been fully implemented, there is a 
risk that defense articles like small arms may not be controlled or 
used as intended. 

Conclusions: 

The increasing level of U.S. security assistance to Pakistan, coupled 
with the potential that U.S.-provided equipment to Pakistan could fall 
into the wrong hands if not fully secured, make it essential that DOD 
implement robust accountability procedures for U.S.-provided 
equipment. DOD needs to ensure that ODRP's written procedures include 
key requirements established by the department's own guidance, such as 
data requirements for the property system and periodic internal 
reviews and audits of the property system, to provide reasonable 
assurance that equipment received and stored at the Islamabad 
warehouse is properly safeguarded. DOD also needs to ensure DSCA takes 
timely action to follow up on audit findings in order to provide 
reasonable assurance that U.S. and Pakistani officials have 
implemented internal control procedures to prevent the loss or misuse 
of sensitive night-vision devices. Further, DOD needs to ensure that 
DSCA takes timely action to verify that the accountability program 
required by the 2010 NDAA--and certified by the Secretary of Defense--
has been fully implemented. 

Recommendations for Executive Action: 

To improve accountability for U.S.-provided defense equipment, the 
Secretary of Defense should take the following three actions. The 
Secretary should direct: 

* the Commander of U.S. Central Command to ensure ODRP's written 
procedures for equipment received and stored at its Islamabad 
warehouse incorporate key asset accountability controls including (1) 
identifying required data elements to be recorded in the property 
system to facilitate the tracking of equipment and (2) performing 
periodic reviews and audits of the property accountability and 
management system to ensure that it is operating as intended. 

* the Director of the Defense Security Cooperation Agency to take 
follow-up action, in accordance with internal control standards, to 
ensure that ODRP fully addresses all of DSCA's 2008 recommendations. 

* the Director of the Defense Security Cooperation Agency to conduct a 
compliance assessment to verify that U.S. and Pakistani officials have 
fully implemented the new accountability program required by the 2010 
NDAA. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to DOD for review and comment. DOD 
provided written comments, which are reprinted in enclosure II. DOD 
also provided technical comments, which we have incorporated as 
appropriate. The department disagreed with our first recommendation, 
partially agreed with the second, and agreed with the third. 

In written comments, the Assistant Secretary of Defense for Asian and 
Pacific Security Affairs disagreed with our recommendation to improve 
accountability for U.S.-provided equipment by ensuring ODRP's written 
procedures for equipment received and stored at the Islamabad 
warehouse incorporate key accountability requirements in DOD 
Instruction 5000.64. The Assistant Secretary stated that this 
instruction is more applicable to U.S. property accountability and not 
property that is "in transit" to Pakistani forces. The Assistant 
Secretary stated that it would have been more appropriate to apply 
standards relevant to supply chain management because the property, 
once transferred to the Pakistanis, is no longer a U.S. possession. 
The Assistant Secretary also noted that we did not find any 
significant deviations from its implementation of the procedures, thus 
confirming that there have been no negative consequences in terms of 
equipment accountability. We modified this recommendation by deleting 
reference to DOD Instruction 5000.64 and by specifying the 
requirements still not addressed by ODRP's written procedures. Our 
review of DOD's supply chain management standards found similar 
internal control requirements as in DOD Instruction 5000.64 that we 
have recommended they incorporate in ODRP's written procedures. 
Accordingly, in the following paragraphs we rebut DOD's position and 
summarize the basis for our conclusions and recommendations to improve 
the accountability of equipment stored at the Islamabad warehouse. 

As discussed in the draft report, at the time of our visit to Pakistan 
in February 2010, DOD did not have written standard operating 
procedures to provide safeguards to help prevent and detect the loss 
or misuse of equipment in the warehouse. Because the equipment stored 
in the warehouse is still U.S.-owned until the government of Pakistan 
officially receives delivery of it, DOD is responsible for maintaining 
controls over the safeguarding of assets. During our February 2010 
visit, our review of inventory records showed equipment generally had 
been stored at this warehouse for 3 to 6 months. As such, DOD retains 
ownership of the property; therefore, the department is responsible 
for safeguarding such equipment. We determined that DOD Instruction 
5000.64 would be the appropriate criteria to use to assess any 
procedures DOD developed because the United States retains possession 
until the equipment is transferred to the government of Pakistan. 

During an August 18, 2010, meeting, the Director-Pakistan, Office of 
the Secretary of Defense Policy, agreed that our use of this 
instruction was appropriate. After the meeting, DOD provided 
procedures that referenced DOD Instruction 5000.64 as well as supply 
chain management procedures. In addition, our review of DOD 4140.1-R, 
"DOD Supply Chain Material Management Regulation," which is the 
department's overarching policy and procedure for supply chain 
management, found that it had requirements for safeguarding U.S.-owned 
equipment similar to those in DOD Instruction 5000.64.[Footnote 19] 
For example, DOD 4140.1-R explicitly states that the heads of DOD 
components (e.g., combatant commands) shall: 

* Establish and maintain a physical inventory control program to 
provide for the economical and efficient stewardship of DOD supplies 
and ensure that sufficient emphasis is placed on material 
accountability and inventory accuracy to promote improved performance 
of individuals directly responsible for making reports on the status 
of that inventory; 

* Establish and execute a physical security program to prevent or 
reduce the potential for theft, fraud, sabotage, and abuse of DOD 
material;[Footnote 20] and: 

* Provide for visibility of the quantity, condition, and location of 
in-storage, in-process, and in-transit assets through the DOD supply 
chain. 

Consequently, regardless of the standard that is applied (DOD 
Instruction 5000.64 or DOD 4140.1-R), the fundamental principle is the 
same--all property of the department must be accounted for until it is 
transferred to the Pakistani security forces. 

This report does not assess whether equipment has been lost or stolen 
since DOD began leasing the Islamabad warehouse in December 2008. 
Although we assessed the adequacy of the design of DOD's procedures 
for safeguarding equipment at the Islamabad warehouse, we did not 
assess the extent to which DOD had implemented these procedures, 
primarily due to the absence of such procedures during our February 
2010 visit. As stated in the draft report, DOD had not developed 
procedures to safeguard this equipment at the time of our visit, 
although the warehouse had been leased for approximately 14 months. On 
August 26, 2010, DOD provided for our review three standard operating 
procedures that were developed after we informed them that written 
procedures to safeguard the equipment stored in the warehouse did not 
exist[Footnote 21]. These procedures were used to assess the extent 
that ODRP addressed DOD Instruction 5000.64 requirements. The initial 
draft report provided to DOD on November 4, 2010, summarized the 
results of our analysis. In response to the draft report, DOD provided 
four additional standard operating procedures on December 15, 2010, 
one of which was dated on November 14, 201[Footnote 22]0. Upon receipt 
of these additional procedures, we included them in our assessment and 
updated the draft report, which was provided to DOD for review on 
December 21, 2010. As this chronology shows, subsequent to informing 
ODRP during our February 2010 site visit that it lacked written 
procedures, ODRP developed written procedures. Our conclusion and 
recommendations are based on the updated analyses and we continue to 
find that some accountability elements that are included in both DOD 
Instruction 5000.64 and DOD 4140.1-R, such as performing periodic 
reviews and audits of the property accountability and management 
system, have not been incorporated into the procedures. 

DOD partially agreed with our recommendation to improve accountability 
for U.S.-provided equipment by following up to ensure that ODRP fully 
addresses all of DSCA's 2008 recommendations. In written comments, the 
Assistant Secretary felt (1) the report incorrectly implies that DSCA 
did not follow up in a timely manner to ensure that ODRP took 
corrective action regarding a recommendation noted in DSCA's March 
2008 compliance assessment visit report, and (2) DSCA has ensured the 
necessary corrective actions have been taken to address its 2008 
recommendations. However, DSCA has only provided evidence to show that 
one recommendation has been partially addressed. The other two 
recommendations have not been addressed. The Assistant Secretary noted 
that DOD plans to conduct a compliance assessment visit to Pakistan in 
the second quarter of FY 2011. We believe this visit should include a 
review whether the 2008 recommendations have all been fully addressed. 

DOD concurred with our recommendation that DSCA should conduct a 
compliance visit to verify that U.S. and Pakistani officials have 
fully implemented the new accountability program required by the 2010 
NDAA. In written comments, the Assistant Secretary stated the 
assessment is planned for the second quarter of FY 2011. 

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

If you or your staff members have any questions about this report, 
please contact Charles Michael Johnson Jr. at (202) 512-7331 or 
johnsoncm@gao.gov or Asif A. Khan at (202) 512-9095 or khana@gao.gov. 
Contact points for our offices of Congressional Relations and Public 
Affairs may be found on the last page of this report. GAO contacts and 
staff acknowledgments are listed in enclosure III. 

Signed by: 

Charles Michael Johnson Jr. 
Director: 
International Affairs and Trade: 

Signed by: 

Asif A. Khan: 
Director: 
Financial Management and Assurance: 

Enclosures (3): 

List of Congressional Addressees: 

The Honorable Carl Levin: 
Chairman: 
The Honorable John McCain: 
Ranking Member: 
Committee on Armed Services: 
United States Senate: 

The Honorable John F. Kerry: 
Chairman: 
The Honorable Richard G. Lugar: 
Ranking Member: 
Committee on Foreign Relations: 
United States Senate: 

The Honorable Joseph I. Lieberman: 
Chairman: 
The Honorable Susan M. Collins: 
Ranking Member: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

The Honorable Howard P. McKeon: 
Chairman: 
The Honorable Adam Smith: 
Ranking Member: 
Committee on Armed Services: 
House of Representatives: 

The Honorable Ileana Ros-Lehtinen: 
Chairman: 
The Honorable Howard L. Berman: 
Ranking Member: 
Committee on Foreign Affairs: 
House of Representatives: 

The Honorable John Tierney: 
Ranking Member: 
Subcommittee on National Security, Homeland Defense, and Foreign 
Operations: 
Committee on Oversight and Government Reform: 
House of Representatives: 

[End of section] 

Enclosure I: Summary of GAO Analysis of Key Requirements in DOD 
Instruction 5000.64: 

We assessed Department of Defense (DOD) Instruction 5000.64 using 
federal internal control standards to identify those requirements that 
would be needed, at a minimum, to ensure adequate accountability of 
the equipment received and stored at the Islamabad warehouse. Our 
analysis resulted in the identification of 17 requirements. We 
assessed the standard operating procedures issued in May, June, and 
November 2010 by the Office of the Defense Representative in Pakistan 
(ODRP) against these 17 requirements to determine the adequacy of 
DOD's efforts to maintain accountability for equipment. These standard 
operating procedures were: 

* Standard Operating Procedure-1: Security Assistance Office J4 
Responsibilities (Islamabad, Pakistan, May 1, 2010); 

* Standard Operating Procedure-2: Material Accountability Program 
(MAP) (Islamabad, Pakistan, May 1, 2010); 

* Standard Operating Procedure-3: Material Flow into Pakistan 
(Islamabad, Pakistan, May 1, 2010); 

* Standard Operating Procedure-7: Material Accountability Program 
Access Database (Islamabad, Pakistan, May 1, 2010); 

* Standard Operating Procedure-8: Information Management (Islamabad, 
Pakistan, May 1, 2010); 

* Standard Operating Procedure-9: Accountability and End-use 
Monitoring (Islamabad, Pakistan, May 1, 2010); and: 

* Standard Operating Procedure-11: Warehouse Procedures (Islamabad, 
Pakistan, November 14, 2010. 

We assessed these procedures to determine the extent to which they 
incorporated the 17 key requirements identified in DOD Instruction 
5000.64. Table 1 presents the results of our assessment. 

Table 1: Analysis of Selected ODRP Standard Operating Procedures: 

Physical controls over vulnerable assets: 

Key internal control elements from DOD Instruction 5000.64: 1. 
Physical controls over vulnerable assets: Section 5.2.7.5 requires 
that property received and issued is properly and uniquely identified; 
Extent to which ODRPís procedures address the key element: 
Incorporates the key element to a large extent. 

Key internal control elements from DOD Instruction 5000.64: 2. 
Physical controls over vulnerable assets: Section 5.2.7.7 requires 
evaluating culpability when property has been reported lost, damaged, 
misused, or stolen; 
Extent to which ODRPís procedures address the key element: 
Incorporates the key element to a large extent. 

Key internal control elements from DOD Instruction 5000.64: 3. 
Physical controls over vulnerable assets: Section 6.1.2 requires 
accountability of property be established and maintained using 
information technology[A]; 
Extent to which ODRPís procedures address the key element: 
Incorporates the key element to little or no extent. 

Key internal control elements from DOD Instruction 5000.64: 4. 
Physical controls over vulnerable assets: Section 5.2.7.9 requires 
scheduling physical inventories; 
Extent to which ODRPís procedures address the key element: 
Incorporates the key element to a large extent. 

Key internal control elements from DOD Instruction 5000.64: 5. 
Physical controls over vulnerable assets: Section 6.11.1.2 requires a 
physical inventory plan. At a minimum, property shall be inventoried 
at least every 3 years; classified or sensitive property shall be 
inventoried at least annually; 
Extent to which ODRPís procedures address the key element: 
Incorporates the key element to a large extent. 

Key internal control elements from DOD Instruction 5000.64: 6. 
Physical controls over vulnerable assets: Section 6.11.1.3 requires a 
minimum 98 percent physical inventory accuracy rate for completion; 
Extent to which ODRPís procedures address the key element: 
Incorporates the key element to a large extent. 

Key internal control elements from DOD Instruction 5000.64: 7. 
Physical controls over vulnerable assets: Section 6.6 requires at 
least the following data elements in the property systems of record: 
name, part number, and description; owner; status; quantity; general 
ledger classification; value at full cost; estimated useful life (for 
property to be capitalized); unique item identifier; date placed in 
service; location; current condition; posting reference; transaction 
type, and transaction date[A]; 
Extent to which ODRPís procedures address the key element: 
Incorporates the key element to little or no extent. 

Key internal control elements from DOD Instruction 5000.64: 8. 
Physical controls over vulnerable assets: Section 6.13 requires 
internal controls shall be established and maintained according to DOD 
Instruction 5010.40 including that an agency will establish physical 
control to secure and safeguard vulnerable assets; 
Incorporates the key element to a large extent. 

Proper Execution of Transactions and Events: 

Key internal control elements from DOD Instruction 5000.64: 9. 
Physical controls over vulnerable assets: Section 6.5 requires 
including reference to establishing records required by law, policy, 
regulation, or agency direction (e.g., small arms registration).[B]; 
Extent to which ODRPís procedures address the key element: 
Incorporates the key element to some extent. 

Key internal control elements from DOD Instruction 5000.64: 10. 
Physical controls over vulnerable assets: Section 6.2.1 requires 
records be established for property having a unit acquisition value of 
$5,000 or more; 
Extent to which ODRPís procedures address the key element: 
Incorporates the key element to a large extent. 

Key internal control elements from DOD Instruction 5000.64: 11. 
Physical controls over vulnerable assets: Section 5.2.7.1 requires a 
complete trail of all transactions, suitable for audit, and the 
ability to implement and adhere to associated internal controls; 
Extent to which ODRPís procedures address the key element: 
Incorporates the key element to a large extent. 

Key internal control elements from DOD Instruction 5000.64: 12. 
Physical controls over vulnerable assets: Section 6.2.3 requires 
original document and/or hard copies of original documentation be 
maintained in a readily available location; 
Extent to which ODRPís procedures address the key element: 
Incorporates the key element to a large extent. 

Management of Human Capital and Reviews by Management at the 
Functional or Activity Level: 

Key internal control elements from DOD Instruction 5000.64: 13. 
Physical controls over vulnerable assets: Section 5.2.7.1 requires 
appointment of an Accountable Property Officer in writing[A]; 
Extent to which ODRPís procedures address the key element: 
Incorporates the key element to little or no extent. 

Key internal control elements from DOD Instruction 5000.64: 14. 
Physical controls over vulnerable assets: Section 5.2 requires the 
Accountable Property Officer to among other things establish and 
maintain an organization's accountable property records, systems, and/ 
or financial records, in connection with government property; evaluate 
culpability when property has been reported lost, damaged, misused, or 
stolen; report and recommend appropriate action and assist in 
investigations, as required; process reports of survey and liability 
investigations according to established procedures; and schedule 
physical inventories and assist in their completion[C]; 
Extent to which ODRPís procedures address the key element: 
Incorporates the key element to some extent. 

Key internal control elements from DOD Instruction 5000.64: 15. 
Physical controls over vulnerable assets: Section 5.2.3 requires 
establishing implementing regulations and procedures, including the 
assessment and reporting of its overall property management maturity 
level[A]; 
Extent to which ODRPís procedures address the key element: 
Incorporates the key element to little or no extent. 

Key internal control elements from DOD Instruction 5000.64: 16. 
Physical controls over vulnerable assets: Section 5.2.5 requires that 
periodic internal review and audits necessary to assess property 
accountability and management system effectiveness to be performed[A]; 
Extent to which ODRPís procedures address the key element: 
Incorporates the key element to little or no extent. 

Controls Over Information Processing: 

Key internal control elements from DOD Instruction 5000.64: 17. 
Physical controls over vulnerable assets: Section 6.13 requires that 
internal controls shall be established and maintained according to DOD 
Instruction 5010 including that access to resources and records be 
limited to authorized individuals, and accountability for their 
custody and use be assigned and maintained; 
Extent to which ODRPís procedures address the key element: 
Incorporates the key element to a large extent. 

Source: GAO analysis of Selected ODRP Standard Operating Procedures. 

[A] These key elements are applicable to DOD 4140.1-R, DOD Supply 
Chain Materiel Management Regulation. 

[B] Standard Operating Procedure-9, Accountability and End-use 
Monitoring, includes references to the U.S. Arms Export Control Act of 
1961, DOD 5105.38-M, Security Assistance Management Manual, among 
others, but does not include reference to the 2010 National Defense 
Authorization Act (Pub. L. 111-84, Sec. 1225). 

[C] Standard Operating Procedure-1, Security Assistance Office J4 
Responsibilities, does not reference DOD Instruction 5000.64 Section 
5.2, which requires the Accountable Property Officer to evaluate lost, 
damaged, or stolen property; to ensure property received and issued is 
properly and uniquely identified; and schedule physical inventories. 

[End of table] 

Enclosure II: Comments from the Department of Defense: 

Assistant Secretary Of Defense: 
Asian & Pacific Security Affairs: 
2700 Defense Pentagon: 
Washington, DC 20301-2700: 

Charles Michael Johnson Jr.
Director, International Affairs and Trade: 
U.S. Government Accountability Office: 
441 G Street, N.W. 
Washington, DC 20548: 

Mr. Johnson: 

This is the Department of Defense (DoD) response to the draft GAO 
Report, GAO-II-156R, "Accountability for U.S. Equipment Provided to 
Pakistani Security Forces in the Western Frontier Needs to be 
Improved," dated December 21, 2010 (GAO Code 320796). 

We have attached comments addressing the report. My point of contact 
is Mr. Dan Folliard, (703) 695-8272 or daniel.folliard@osd.mil. 

Sincerely, 

Signed by: 

Wallace C. Gregson: 

[End of letter] 

GAO Draft Report Dated December 21, 2010: 
GAO-11-156R (GAO Code 320796): 

"Accountability for U.S. Equipment Provided to Pakistani Security 
Forces in the Western Frontier Needs to be Improved" 

Department Of Defense Comments On GAO Draft Report On Equipment 
Accountability In Pakistan: 

The Department of Defense (DoD) appreciates the opportunity to comment 
on this draft report. DoD welcomes periodic reviews of critical 
national security efforts, such as the provision of equipment to 
Pakistan's security forces, and looks forward to receiving 
recommendations meant to enhance the oversight and effectiveness of 
these efforts. DoD sees some value in certain recommendations made in 
this draft report, but is concerned that other recommendations appear 
to be based on incorrect analytical judgments and thus are not seen as 
useful recommendations. 

Pakistan is an essential partner in the U.S. Government's efforts to 
combat violent extremist organizations. Pakistan has committed 140,000 
security forces personnel to the fight along its western border, and 
the people of Pakistan continue to be the victims of terrorist 
attacks. The United States has increased its civilian and military 
assistance to Pakistan since 2008, and we continue to work 
collaboratively with the Pakistan Government and its military to 
counter groups that threaten Pakistan, Afghanistan, other regional 
partners, and the U.S. homeland. The majority of U.S. security 
assistance to the Pakistan military is designed to enhance its 
counterinsurgency and counterterrorism capabilities, which are 
critical to the Government of Pakistan's efforts to deny safe haven to 
violent extremists within its borders. 

Material assistance to the Pakistan military has increased 
significantly in recent years, and the demand on the Office of the 
Defense Representative-Pakistan (ODRP) to maintain appropriate, 
statutorily required accountability standards has remained steady and, 
pursuant to the requirements of Section 1225 of the National Defense 
Authorization Act for FY2010, has even increased. The report does not 
adequately highlight the complex and challenging security environment 
that DoD operates within while working and operating in Pakistan. In 
addition, Pakistan is a sovereign state that has a history of mistrust 
over U.S. intentions, which DoD is working hard to overcome by 
building a long-term strategic partnership. 

Despite these challenges, it is a testament to the professionalism of 
DoD personnel involved in the provision of security assistance to 
Pakistan that the draft report found no significant deviations from 
the accountability standards required by current policy or by 
statute ó only areas where GAO believes that DoD could do a more 
thorough job in mitigating potential risks to equipment 
accountability. Unlike other programs designed to equip partners 
during wartime, which have resulted in the identification of several 
problematic practices, the draft report confirms that DoD's efforts in 
Pakistan have not produced the negative consequences of terms of 
equipment accountability that some may have feared. [See comment 1] 

The thrust of the draft report is a recommendation to apply the 
Federal internal control standards-óthose contained in DoD Instruction 
5000.64 that are used by DoD for equipment owned by DoD, stored in 
U.S.-controlled facilities, and operated by U.S. forces-óto a DoD-
leased warehouse in Islamabad where material is received and stored 
prior to transfer to the Pakistani security forces. In essence, we 
believe it is infeasible in practice to apply the requirements of DoD 
Instruction 5000.64 to the situation in Pakistan because the equipment 
essentially remains "in transit" to Pakistani forces while it is in 
the leased warehouse, and, therefore, supply chain management 
standards, not equipment accountability standards, should apply. 
Following transfer, U.S. responsibility shifts to end-use monitoring 
as the equipment is no longer U.S.-owned. 

Significant processes that are prescribed for U.S. property, such as 
listing items in unit property books and appointment of property book 
officers, etc., are not applicable to equipment being provided to 
Pakistani forces under the Pakistan Counterinsurgency Fund (PCF) and 
Pakistan Counterinsurgency Capability Fund (PCCF) authority and is 
still in transit, as explained above. While such equipment is in a 
warehouse awaiting transfer, supply chain management processes apply. 

The applicable accountability requirements upon which to evaluate the 
ODRP procedures for the storage of such equipment should be based on 
supply chain management instructions, not property accountability 
instructions. Maintaining current accountability requires possession 
of an item and periodic inventories. Once equipment is transferred to 
the Pakistanis, the United States does not possess the equipment and 
can no longer be accountable for the equipment; instead, U.S. 
responsibility shills to monitoring. Some equipment will be subject to 
Enhanced End Use Monitoring (EEUM), requiring periodic inventories. 
The United States is responsible to monitor equipment transferred to 
Pakistan, but the United States is not accountable for that equipment 
once transferred (although, the United States is responsible for 
reporting any losses of EEUM items to DSCA). 

PCF and PCCF-acquired equipment is not DOD property once it is 
transferred to the Pakistani military. Similarly, FMF-procured 
equipment is not USG property once it is transferred to the host 
nation. Therefore, the term "accountability" for equipment after it 
has been turned over to Pakistan requires clarification. The materiel 
provided to Pakistan via PCF and PCCF falls under Pakistani control, 
once transferred. We believe that the distinction between "control" 
and "monitoring" is necessary if an evaluation of DoD's accountability 
for PCF/PCCF equipment, once transferred to Pakistan, is to be 
meaningful. The United States retains the authority to conduct End Use 
Monitoring on materiel provided via the Foreign Military Sales (FMS) 
process. This is standard in FMS Letters of Offer and Acceptance 
(LOAs) between the Pakistan government and the U.S. End Use Monitoring 
requirements are included in LOAs for pseudo-FMS cases, such as for 
PCF equipment, even though those LOAs do not constitute an agreement 
between the government of Pakistan and the United States but are 
instead agreements between the U.S. implementing agencies and the U.S. 
security cooperation office. The United States generally retains 
possession of material acquired under PCF/PCCF and similar programs 
for only short periods of time. The materiel is, in effect, still in 
transit while temporarily awaiting final delivery to the Pakistani 
users. 

It is also important to recognize that the Host Nation imposes 
limitations on certain ODRP operations. We believe that had the GAO 
auditors applied risk-based modeling using inherent risks, control 
risks and detection risks, of loss in conjunction with their key 
stated requirements, if is likely that existing SOP's, contracts, and 
real world experience would have proved sufficient in light of the 
requirements identified and the host nation imposed limitations. 

As the final draft report shows, DoD has used elements of its own 
equipment storage practices, such as those set out in DoD Instruction 
5000.64, to shape the way it handles equipment destined to be provided 
to our Pakistani partners. However, the use of DoD Instruction 5000.64 
as a reference to guide DoD procedures is not appropriate to cover 
equipment that is only temporarily in U.S. possession while awaiting 
transfer to the Pakistan military. 

On August 26 and again on December 15, 2010, DoD provided GAO copies 
of its standard operating procedures for maintaining equipment 
accountability while at the warehouse in Islamabad. Such procedures 
have been informed by existing DoD practice for handling its own 
equipment as well as the unique operating environment in Pakistan. DoD 
notes that GAO did update an earlier draft of its analysis based on 
input provided on December 15 to reflect more accurately the controls 
in place in Islamabad and the degree to which DoD Instruction 5000.64 
has informed ODRP's standard operating procedures (SOPS). Still, we 
are concerned that the draft report identifies the Pakistan case as an 
example to justify the imposition of an accountability frameworkó
designed for U.S. equipment for U.S. forcesóon equipment being 
provided as foreign assistance for foreign forces, with little regard 
to particular circumstances. [See comment 2] 

ODRP is in compliance with existing statutes and policy guidance, and 
its practices have not resulted in a loss of accountability for U.S.-
supplied equipment. 

Additional technical details and factual corrections have been 
provided to GAO through separate correspondence. This information 
caused GAO to revise parts of its analysis in its final report, which 
DoD received from GAO on December 21 with a request for comment by 
January 4, 2011. 

DoD Responses to GAO Recommendations: 

Recommendation 1: To improve accountability for U.S.-provided defense 
equipment, the GAO recommends that the Secretary of Defense should 
direct the Commander of the U.S. Central Command to ensure that the 
Office of Defense Representative Pakistan's (ODRP) written procedures 
for equipment received and stored at its Islamabad warehouse 
incorporate all of the key requirements contained in DoD Instruction 
5000.64, such as requirements focused on security issues involving the 
receipt, storage, and handling of sensitive items. (See page 9/GAO 
Draft Report.) 

DOD Response: Non-concur. As noted above, DoD Instruction 5000.64 is 
not an appropriate guide for the case of equipment being transferred 
to Pakistan. The equipment essentially remains in transit to Pakistani 
forces while it is in the leased warehouses, and therefore, supply 
chain management standards, not equipment accountability standards, 
should apply. 

GAO Recommendation 2: To improve accountability for U.S.-provided 
defense equipment, the GAO recommends that the Secretary of Defense 
should direct the Director of the Defense Security Cooperation Agency 
(DSCA) to follow up, in accordance with U.S internal control 
standards, to ensure that ODR-P fully addresses all of DSCA's 2008 
recommendations. 

DOD Response: Partially Concur. The report incorrectly implies that 
DSCA did not follow up in a timely manner to ensure that the Office of 
the Defense Representative-Pakistan (ODRP) took corrective action 
regarding a recommendation noted in a 2008 Compliance Assessment Visit 
(CAV) report. Although a follow-on CAV has not been conducted in 
Pakistan as recommended in the report due to other CAV commitments 
world-wide, DSCA ensured that the ODRP took the necessary corrective 
actions to comply with the report's recommendations regarding the 
security of night vision devices (NVDs) transferred to Pakistan. ODRP 
has signed a Memorandum of Agreement (MOA) with Pakistan that 
delineates procedures for safeguarding NVDs. ODRP also conducts annual 
100 percent inventories to ensure accountability and enters all 
inventories into a DSCA-maintained database. DSCA personnel 
continually monitor the database to verify compliance with the 
inventory requirements. Additionally, commitments to conduct CAVs in 
other USCENTCOM countries such as Saudi Arabia, Oman, Egypt, and the 
UAE prevented a follow-on assessment of Pakistan earlier than the 
currently planned visit during the second quarter of FY 2011. 

GAO Recommendation 3: To improve accountability for U.S.-provided 
defense equipment, the GAO recommends that the Secretary of Defense 
should direct the Director of DSCA to conduct a compliance assessment 
to verify that U.S. and Pakistani officials have fully implemented the 
new accountability program required by the National Defense 
Authorization Act (NDAA) for FY 2010. (See page 9/GAO Draft Report.) 

DOD Response: Concur, DSCA drafted and coordinated DoD Instruction 
(DoDI) 4140.66, which established policy and procedures within DoD to 
ensure compliance with the Registration and Monitoring Program 
required by Section 1225 of the NDAA for FY 2010 for the transfer or 
export of defense articles and services to Pakistan. As the DoD 
organization responsible to review whether DoD Components have 
implemented the necessary procedures to comply with the guidance 
prescribed in DoD Instruction 4140.66, DSCA will conduct periodic 
assessments of the ODRP in Pakistan. An assessment is planned during 
the second quarter of FY 2011. 

The following are GAO's comments on the Department of Defense letter, 
dated December 21, 2010. 

GAO Comments: 

1. This report does not assess whether equipment has been lost or 
stolen since DOD began leasing the Islamabad warehouse in December 
2008. Although we assessed the adequacy of the design of DOD's 
procedures for safeguarding equipment at the Islamabad warehouse, we 
did not assess the extent to which DOD had implemented these 
procedures, primarily due to the absence of such procedures during our 
February 2010 visit. As stated in the draft report, DOD had not 
developed procedures to safeguard this equipment at the time of our 
visit, although the warehouse had been leased for approximately 14 
months. 

2. On August 26, 2010, DOD provided for our review three standard 
operating procedures (SOP-01, SOP-7, SOP-9) that were developed after 
we informed them that written procedures to safeguard the equipment 
stored in the warehouse did not exist. These procedures were used to 
assess the extent that ODRP addressed DOD Instruction 5000.64 
requirements. The initial draft report provided to DOD on November 4, 
2010, summarized the results of our analysis. In response to the draft 
report, DOD provided four additional standard operating procedures on 
December 15, 2010 (SOP-2, SOP-3, SOP-8, SOP-11), one of which was 
dated on November 14, 2010. Upon receipt of these additional 
procedures, we included them in our assessment and updated the draft 
report, which was provided to DOD for review on December 21, 2010. As 
this chronology shows, DOD developed applicable procedures as a result 
of our work throughout the course of our audit. Our conclusion and 
recommendations are based on the updated analyses and we continue to 
find that some accountability elements that are included in both DOD 
Instruction 5000.64 and DOD 4140.1-R, such as performing periodic 
reviews and audits of the property accountability and management 
system, have not been incorporated into the procedures. 

[End of section] 

Enclosure III: GAO Contact and Staff Acknowledgments: 

GAO Contacts: 

Charles Michael Johnson Jr., (202) 512-4128 or Johnsoncm@gao.gov Asif 
A. Khan, (202) 512-9095 or Khana@gao.gov: 

Staff Acknowledgments: 

Major contributors to this report were Mary Ellen Chervenic, Jeffrey 
Isaacs, Hynek Kalkus, Ophelia Robinson, Michael Rohrback, Kira Self, 
Darby Smith, Sally Williamson, and Tom Zingale. 

[End of section] 

Related GAO Products: 

Combating Terrorism: Planning and Documentation of U.S. Development 
Assistance in Pakistan's Federally Administered Tribal Areas Need to 
Be Improved. [hyperlink, http://www.gao.gov/products/GAO-10-289]. 
Washington, D.C.: April 15, 2010. 

Securing, Stabilizing, and Developing Pakistan's Border Area with 
Afghanistan: Key Issues for Congressional Oversight. [hyperlink, 
http://www.gao.gov/products/GAO-09-263SP]. Washington, D.C.: February 
23, 2009. 

Combating Terrorism: Increased Oversight and Accountability Needed 
over Pakistan Reimbursement Claims for Coalition Support Funds. 
[hyperlink, http://www.gao.gov/products/GAO-08-806]. Washington, D.C.: 
June 24, 2008. 

Combating Terrorism: U.S. Oversight of Pakistan Reimbursement Claims 
for Coalition Support Funds. [hyperlink, 
http://www.gao.gov/products/GAO-08-932T]. Washington, D.C.: June 24, 
2008. 

Combating Terrorism: U.S. Efforts to Address the Terrorist Threat in 
Pakistan's Federally Administered Tribal Areas Require a Comprehensive 
Plan and Continued Oversight. [hyperlink, 
http://www.gao.gov/products/GAO-08-820T]. Washington, D.C.: May 20, 
2008. 

Preliminary Observations on the Use and Oversight of U.S. Coalition 
Support Funds Provided to Pakistan. [hyperlink, 
http://www.gao.gov/products/GAO-08-735R]. Washington, D.C.: May 6, 
2008. 

Combating Terrorism: The United States Lacks Comprehensive Plan to 
Destroy the Terrorist Threat and Close the Safe Haven in Pakistan's 
Federally Administered Tribal Areas. [hyperlink, 
http://www.gao.gov/products/GAO-08-622]. Washington, D.C.: April 17, 
2008. 

[End of section] 

Footnotes: 

[1] On June 24, 2009, Congress appropriated funding for PCF and PCCF 
(P.L. 111-32). The PCF appropriation was available on June 24, 2009, 
but expired on September 30, 2010, while the PCCF appropriation was 
not available until September 30, 2009, but is available until 
September 30, 2011. 

[2] According to DOD, security conditions and rough terrain in 
Pakistan's western border areas have made the provision of this 
assistance challenging. 

[3] Enhanced end-use monitoring is required for sensitive defense 
articles, services, and technologies, such as night-vision devices, 
transferred to foreign security forces. 

[4] GAO, Afghanistan Security: Lack of Systemic Tracking Raises 
Significant Accountability Concerns about Weapons Provided to Afghan 
National Security Forces, [hyperlink, 
http://www.gao.gov/products/GAO-09-267] (Washington, D.C.: Jan. 30, 
2009); GAO, Stabilizing Iraq: DOD Cannot Ensure That U.S.-Funded 
Equipment Has Reached Iraqi Security Forces, [hyperlink, 
http://www.gao.gov/products/GAO-07-711] (Washington, D.C.: July 31, 
2007); GAO, Combating Terrorism: Increased Oversight and 
Accountability Needed over Pakistan Reimbursement Claims for Coalition 
Support Funds, [hyperlink, http://www.gao.gov/products/GAO-08-806] 
(Washington, D.C.: June 24, 2008); and GAO, Combating Terrorism: 
Planning and Documentation of U.S. Development Assistance in 
Pakistan's Federally Administered Tribal Areas Need to Be Improved, 
[hyperlink, http://www.gao.gov/products/GAO-10-289] (Washington, D.C.: 
Apr. 15, 2010). 

[5] Pub L. 111-84, sec. 1225. 

[6] In late summer 2010, monsoon rains caused massive flooding 
throughout Pakistan. Our field work in Pakistan preceded the flooding; 
however, in October 2010, DOD officials confirmed that flooding had 
affected U.S. assistance efforts in Pakistan. 

[7] Pub. L. 111-73. 

[8] GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] 
(Washington, D.C., November 1999). 

[9] DOD, Accountability and Management of DOD-Owned Equipment and 
Other Accountable Property, DOD Instruction 5000.64, (Washington D.C., 
November 2006). This guidance incorporates by reference [hyperlink, 
http://www.gao.gov/products/GAO/AIMD-00-21.3.1]. 

[10] These procedures include Standard Operating Procedure (SOP)-1: 
Security Assistance Office J4 Responsibilities (Islamabad, Pakistan, 
May 1, 2010); SOP-2: Material Accountability Program (Islamabad, 
Pakistan, May 1, 2010); SOP-3: Material Flow into Pakistan (Islamabad, 
Pakistan, May 1, 2010); SOP-7: Material Accountability Program Access 
Database (Islamabad, Pakistan, May 1, 2010); SOP-8: Information 
Management (Islamabad, Pakistan, May 1, 2010); SOP-9: Accountability 
and End-use Monitoring (Islamabad, Pakistan, May 1, 2010); and SOP-11: 
Warehouse Procedures (Islamabad, Pakistan, Nov. 14, 2010). 

[11] Arms Export Control Act, sec. 40A (codified at 22 U.S.C. 2785). 

[12] DSCA, Security Assistance Management Manual, DOD 5105.38-M, 
(Washington D.C., October 2003). End-use monitoring responsibilities 
are performed in conjunction with other required security assistance 
duties and consist of noting the quality, general physical condition, 
and use of U.S.-provided equipment. 

[13] The revised memorandum of agreement would outline ODRP's and 
Pakistan's responsibilities for maintaining security and 
accountability of night-vision devices in Pakistan's custody. 

[14] The bilateral agreement had not been updated to reflect a revised 
inventory schedule for night-vision devices and new procedures to 
ensure that Pakistan inventoried and recorded serial numbers for all 
night-vision devices had not been established. 

[15] ODRP and Pakistan had taken some steps to ensure that the status 
of all night-vision devices was accurately reflected in a database 
used to track sensitive defense articles. However, some equipment 
losses were not recorded until 9 months after the date of loss or were 
recorded without noting the date of loss. 

[16] Pub. L. 111-84, sec. 1225. 

[17] DOD, Registration and End-Use Monitoring of Defense Articles and/ 
or Defense Services, DOD Instruction 4140.66 (Washington D.C., Sept. 
7, 2010). 

[18] DSCA is responsible for reviewing the implementation of 
procedures intended to maintain accountability over defense articles 
transferred to foreign countries. 

[19] DOD, Office of the Deputy Under Secretary of Defense for 
Logistics and Materiel Readiness, DOD Supply Chain Material Management 
Regulation, DOD 4140.1-R (Washington D.C., May 23, 2003). 

[20] DOD 4140.1-R, paragraph C5.7.8 "Security of Material." 

[21] DOD SOP-1, SOP-7, and SOP-9. 

[22] DOD SOP-2, SOP-3, SOP-8, and SOP-11. 

[End of section] 

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