Chemical Weapons: Organization for the Prohibition of Chemical Weapons Needs Comprehensive Plan to Correct Budgeting Weaknesses

GAO's October 2002 report recommended that the Secretary of State work with representatives of other member states and the Director-General of the OPCW to develop a comprehensive plan to improve the organization's budgetary practices. In commenting on GAO's report, the State Department stated that the OPCW had taken several actions to address this recommendation, including developing better estimates of expenditures, income, and cash flow. The State Department also indicated that it intended to work with the OPCW's Director-General and other member states during 2003, to ensure that a comprehensive response to the organization's financial difficulties was put into place. In a separate December 2002 letter to GAO, the new Director-General of the OPCW stated that the organization was taking several measures to improve its budgeting practices. During a subsequent GAO visit to the OPCW in September 2003 on a related engagement, GAO observed that the organization had implemented a series of actions to improve its budgetary practices as GAO recommended in its 2002 report. Specifically, the OPCW has (1) improved the efficiency of its inspection activities by reducing the size of inspection teams where appropriate, thus lowering daily allowance and travel costs; and (2) revised inspector contracts to reduce staff costs and allow for greater flexibility in assigning inspection teams. In addition, OPCW member states approved a more than six-percent increase in the organization's budget for 2004, to ensure that the OPCW had sufficient funding to accomplish its various missions. According to the Director-General, use of a new results-based budgeting process will increase the effectiveness of the OPCW, enhance the transparency of the budgeting process, and improve budget controls and accountability.