Questionable Use of Military Minor Construction and Host Nation Funding in Transfer of 21st Replacement Battalion by U.S. Army Europe

ID-81-23: Published: Jan 19, 1981. Publicly Released: Jan 19, 1981.

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GAO was requested to review allied cost sharing for U.S. military forces stationed overseas. GAO studied a related issue involving two minor military construction account (MMCA) projects. The projects were constructed in connection with a complex for an Army battalion, in which most of the funding came from special Federal Republic of Germany (FRG) accounts.

GAO believes that the Army avoided the statutory MMCA dollar limitation by classifying the construction of two adjacent and similar buildings as two separate MMCA projects. Although the Army could argue that their action was authorized under applicable Army regulations, GAO believes that the classification of these buildings as two separate projects defied the spirit and intent of the statutory funding limitation. Also, the Army constructed an addition to one of these buildings using funds obtained from FRG. GAO believes that the Army failed to obtain satisfactory compensation from FRG for return of facilities in connection with the move. This situation suggests that future, similar incidents are possible, especially if congressional calls for increased allied cost sharing result in more cooperative projects using host nation funds.

Recommendations for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of the Army should strengthen his control over MMCA funding to prevent fragmenting of projects. GAO strongly believes that the three-digit category code should not be the sole basis for justifying the splitting of MMCA projects.

    Agency Affected: Department of Defense: Department of the Army

  2. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Defense should emphasize the importance of obtaining adequate compensation for facilities returned to host nations, and develop regulations for control of funds obtained in this way, or in other cost sharing initiatives, to assure that their use complies with host nation agreements.

    Agency Affected: Department of Defense

  3. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Defense should clarify DOD regulations on the mixing of MMCA and nonappropriated funds, specifying that foreign source funds should be treated as nonappropriated funds. The Secretary should also assure that the services' regulations on this matter are in compliance with DOD's.

    Agency Affected: Department of Defense

 

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