History of Common Budget Cost Shares

NSIAD-98-172: Published: May 22, 1998. Publicly Released: Jun 22, 1998.

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Benjamin F. Nelson
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Pursuant to a congressional request, GAO reviewed how the North Atlantic Treaty Organization's (NATO) apportionment of cost shares has changed over the years and how NATO determines what the members' cost shares will be for its three common budgets.

GAO noted that: (1) NATO does not routinely evaluate members' cost shares for any of its three commonly funded budgets; (2) rather, NATO has adjusted the shares based on comprehensive reviews occurring at no specific interval and in response to discrete events, such as entry of a new member; (3) cost shares for the NATO Security Investment Program (NSIP) budget, most recently reviewed in 1990, have been subject to comprehensive reviews more frequently than the civil budget--last reviewed in 1955, or the military budget--last reviewed in 1966; (4) NATO has adjusted cost shares due to discrete events infrequently--in 1966, when France withdrew from NATO's military structure; in 1982, when Spain joined NATO; and in 1994, when Canada sought to decrease its NSIP share; (5) NATO has used various methods to adjust cost shares; (6) for example, in 1955, NATO used expenditures to comprehensively review and adjust shares for its civil and military budgets; (7) in contrast, changes to NSIP cost shares in 1990 were based on negotiations among members that considered factors such as each nation's capacity to pay and the expected benefits from NSIP-funded projects; (8) NATO has also relied on negotiations to adjust cost shares in response to discrete events; (9) for example, when Spain joined NATO in 1982, its share was determined through high-level negotiations and the other members' shares were adjusted on a prorated basis; and (10) in 1997, the United States' actual cost-share across all the common budgets was 28.45 percent.

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