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U.S. Participation in the NATO Infrastructure Program

ID-83-3 Published: Jan 27, 1983. Publicly Released: Jan 27, 1983.
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Highlights

GAO examined aspects of the North Atlantic Treaty Organization's (NATO) infrastructure, which is its commonly funded military construction program, to: (1) answer some frequently asked questions about how the program works; (2) identify actions to improve the future recovery from NATO of funds spent by the United States on prefinanced projects; and (3) suggest how savings could be achieved by the Department of Defense (DOD) through better cash management over U.S. payments to the infrastructure program.

Recommendations

Matter for Congressional Consideration

Matter Status Comments
Congress should consider, in debating prefinancing decisions, whether a system like the rolling fund would meet congressional mandates for improving DOD performance in recovering funds from NATO for prefinancing projects. Specific authorizing legislation would be needed to implement such a system.
Closed – Not Implemented
In considering the 1984 Military Construction Budget Request for the NATO Infrastructure, the House and Senate Conferences required the Secretary of Defense to prepare a report on how to improve the recoupment record but did not require that he implement a system like a rolling fund.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense The Secretary of Defense should, before requesting any additional prefinancing for NATO-eligible construction projects, develop and propose a system like the rolling fund. Such a system should be designed to provide greater incentive to the military services to recoup funds from NATO. The system should also include greater participation by the U.S. European Command in the selection of projects for prefinancing.
Closed – Not Implemented
DOD disagreed with the recommendation to develop a system like a rolling fund before requesting additional prefinancing of NATO projects. Prefinancing funds were requested in the fiscal year 1984 budget submission.
Department of Defense The Secretary of State, in conjunction with the Secretary of Defense, should ask the U.S. Mission to NATO to pursue the feasibility with NATO authorities of changing the current schedule of U.S. payments and to prepare a report on its findings. Until NATO adopts a more precise payment criteria and unless it can be demonstrated that a monthly schedule of U.S. payments will have an adverse impact on NATO program implementation, GAO believes that a monthly payment schedule should be used. Existing payment procedures should be modified to reflect this change.
Closed – Not Implemented
DOD and the Department of State do not believe that it would be useful to change the timing of U.S. payments to NATO.
Department of State The Secretary of State, in conjunction with the Secretary of Defense, should ask the U.S. Mission to NATO to pursue the feasibility with NATO authorities of changing the current schedule of U.S. payments and to prepare a report on its findings. Until NATO adopts a more precise payment criteria and unless it can be demonstrated that a monthly schedule of U.S. payments will have an adverse impact on NATO program implementation, GAO believes that a monthly payment schedule should be used. Existing payment procedures should be modified to reflect this change.
Closed – Not Implemented
DOD and the Department of State do not believe that it would be useful to change the timing of U.S. payments to NATO.

Full Report

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Topics

Defense cost controlFunds managementMilitary facility constructionProgram managementInternational organizationsMilitary forcesBid proposalsInfrastructure projectsMilitary constructionExpenditure of funds