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Before the Committee on Armed Services, House of Representatives: 

United States Government Accountability Office: 


For Release on Delivery Expected at 10:00 a.m. EST: 

Thursday, January 18, 2007: 

Securing, Stabilizing, And Rebuilding Iraq: 

GAO Audit Approach and Findings: 

Statement of David M. Walker Comptroller General of the United States: 

Audit Approaches in Iraq: 


Mr. Chairman and Members of the Committee: 

I am pleased to be here today to provide a strategic overview of GAO's 
work related to securing, stabilizing, and rebuilding Iraq. In my 
statement today, as requested, I will highlight (1) GAO's scope, 
authority, and coordination; (2) some of the insights stemming from our 
work in Iraq; and (3) the rigorous quality assurance framework that GAO 
uses to ensure relevant, reliable, and consistent results in all of our 

My statement today is based upon extensive work spanning several years. 
Since 2003, we have issued 67 Iraq-related reports and testimonies. For 
example, I sent a report to the Congress last week on a range of key 
issues for congressional oversight of efforts to secure, stabilize, and 
rebuild Iraq.[Footnote 1] Although many of our sources are classified, 
we strive to report information to the Congress in a public format to 
promote greater transparency and accountability of U.S. government 
policies, programs, and activities. As provided for in our 
congressional protocols, most of our work in Iraq has been performed 
under my authority to conduct evaluations on my own initiative since it 
is a matter of broad interest to the entire Congress and numerous 
committees in both chambers. Our work also helped inform the 
deliberations of the Iraq Study Group; I personally briefed this group 
on the results of our Iraq work in June 2006. We also provided 
significant additional information to the Iraq Study Group for its use. 

The work supporting this statement is based on our analysis of agency 
plans and documents and discussions with relevant senior officials from 
the Departments of Defense (DOD), Energy, State, and the Treasury; the 
U.S. Agency for International Development (USAID); the Army Corps of 
Engineers; the multinational force; the Defense Intelligence Agency; 
and the Central Intelligence Agency. We conducted our reviews in 
accordance with generally accepted government auditing standards. 


GAO and the Inspectors General (IG) of individual departments and 
agencies have different roles and responsibilities. GAO's broad audit 
authority allows us to support Congress through strategic analyses of 
issues that cut across multiple federal agencies and sources of 
funding. Our work spans the security, political, and economic prongs of 
the U.S. national strategy in Iraq. The broad, cross-cutting nature of 
this work helps minimize the possibility of overlap and duplication by 
any individual Inspector General. 

Based on our work, we have made some unique contributions to Congress. 
Our past and ongoing work has focused on the U.S. strategy and costs of 
operating in Iraq, training and equipping the Iraqi security forces, 
governance issues, the readiness of U.S. military forces, and 
acquisition outcomes. Some highlights from our work follow: 

* Our analysis of the National Strategy for Victory in Iraq recommended 
that the National Security Council improve the strategy by articulating 
clearer roles and responsibilities, specifying future contributions, 
and identifying current costs and future resources. 

* In our examination of the cost of U.S. military operations abroad, we 
recommended that the Secretary of Defense improve the transparency and 
reliability of DOD's Global War on Terror (GWOT) obligation data. We 
also recommended that DOD build more funding into the baseline budget 
once an operation reaches a known level of effort and costs are more 

* In assessing the capabilities of Iraqi security forces, we found that 
overall security conditions in Iraq have deteriorated despite increases 
in the numbers of trained and equipped security forces. A complete 
assessment of Iraqi security forces' capabilities is dependent on DOD 
providing GAO with the readiness levels of each Iraqi unit. 

* We found that DOD faces significant challenges in maintaining U.S. 
military readiness for overseas and homeland missions and in sustaining 
rotational deployments of duty, especially if the duration and 
intensity of current operations continue at the present pace. 

* In assessing the impact of ongoing military operations in Iraq on 
military equipment, we found that the Army and the Marine Corps have 
initiated programs to reset (repair or replace) equipment and are 
likely to incur large expenditures in the future. 

* In reviewing efforts to secure munitions sites and provide force 
protection, we recommended that DOD conduct a theaterwide survey and 
risk assessment of unsecured conventional munitions in Iraq and 
incorporate storage site security into strategic planning efforts. 

* In assessing acquisition outcomes, we found that DOD often entered 
into contract arrangements with unclear requirements, which posed 
additional risks to the government. DOD also lacked the capacity to 
provide sufficient numbers of contracting, logistics, and other 
personnel, thereby hindering oversight efforts. 

In April 2005, an international peer review team gave our quality 
assurance system a clean opinion--only the second time a national audit 
institution has received such a rating from a multinational team. Thus, 
the Congress and the American people can have confidence that GAO's 
work is independent, objective, and reliable. 

GAO's Work in Iraq Is Broad and Coordinated with Other Audit 

While the IGs are designed to focus primarily on exposing fraud, waste, 
and abuse in individual federal agency programs, GAO's broad audit 
authority allows us to support Congress through strategic analyses of 
issues that cut across multiple federal agencies and sources of 
funding. Although the IGs report to the heads of their respective 
departments and make periodic reports to Congress, GAO reports directly 
to Congress on a continuous basis. GAO consults regularly with its 
oversight committees and relevant committees of jurisdiction regarding 
key issues of national importance, such as U.S. fiscal solvency, 
emergency preparedness, DOD transformation, global competitiveness, and 
emerging health care and other challenges for the 21st century. 

The Congress established the GAO in 1921 to investigate all matters 
relating to the receipt, disbursement, and application of public funds. 
Since then, Congress has expanded GAO's statutory authorities and 
frequently calls upon it to examine federal programs and their 
performance, conduct financial and management audits, perform policy 
analysis, provide legal opinions, adjudicate bid protests, and conduct 
investigations. In 2006, the GAO issued more than 1,000 audit products 
and produced a $105 return for each dollar invested in the 
agency.[Footnote 2] 

GAO has developed substantial expertise on security and reconstruction 
issues, as well as having long-term relationships with State, Defense, 
and USAID. Our work spans several decades and includes evaluations of 
U.S. military and diplomatic programs and activities, including those 
during and following contingency operations in Vietnam, the Persian 
Gulf (Operations Desert Shield and Storm), Bosnia, and Afghanistan. 

We also have many years of expertise in evaluating U.S. efforts to help 
stabilize regions or countries; we have, for example, monitored U.S. 
assistance programs in Asia, Central America, and Africa. The depth and 
breadth of our work and the expertise we have built has helped 
facilitate our ability to quickly gather facts and provide insights to 
the Congress as events unfold, such as the conflict in Iraq. Our 
current work draws on our past work and regular site visits to Iraq and 
the surrounding region, such as Jordan and Kuwait. Furthermore, we plan 
to establish a presence in Iraq beginning in March 2007 to provide 
additional oversight of issues deemed important to Congress. Our plans, 
however, are subject to adequate fiscal 2007 funding of GAO by the 

Our work in Iraq spans the three prongs of the U.S. national strategy 
in Iraq--security, political, and economic. The broad, cross-cutting 
nature of our work helps minimize the possibility of overlap and 
duplication by individual IGs. We and other accountability 
organizations take steps to coordinate our oversight with others to 
avoid duplication and leverage our resources. In that regard, the 
ability of the Special Inspector General for Iraq Reconstruction 
(SIGIR) to provide in-country oversight of specific projects and 
reconstruction challenges has enabled us to focus our work on more 
strategic and cross-cutting national, sector, and interagency issues. 

The expansion of SIGIR's authority underscores the need for close 
coordination. We coordinate our work in Iraq through various forums, 
including the Iraq Inspectors General Council (IIGC) and regular 
discussions with the IG community. Established by what is now SIGIR, 
IIGC provides a forum for discussion and collaboration among the IG and 
staff at the many agencies involved in Iraq reconstruction activities. 
Our work is coordinated through regular one-on-one meetings with SIGIR, 
DOD, State, and USAID. We also coordinate our work with other 
accountability organizations, such as the Federal Bureau of 
Investigation's (FBI) public corruption unit. 

Key Findings and Recommendations from GAO's Work in Iraq: 

Let me highlight some of the key findings and recommendations we have 
made as a result of our continuing work in Iraq. 

Assessment of the November 2005 National Strategy for Victory in Iraq 
and the U.S. Military Campaign Plan: 

In November 2005, the National Security Council issued the National 
Strategy for Victory in Iraq (NSVI) to clarify the President's strategy 
for achieving U.S. political, security, and economic goals in Iraq. The 
U.S. goals included establishing a peaceful, stable, and secure Iraq. 
Our July 2006 report assessed the extent to which the NSVI and its 
supporting documents addressed the six characteristics of an effective 
national strategy.[Footnote 3] While we reported that the NSVI was an 
improvement over previous U.S. planning efforts for stabilizing and 
rebuilding Iraq, we concluded that the strategy fell short in at least 
three key areas. First, it only partially identified the agencies 
responsible for implementing key aspects of the strategy. Second, it 
did not fully address how the United States will integrate its goals 
with those of the Iraqis and the international community, and it did 
not detail Iraq's anticipated contribution to its future needs. Third, 
it only partially identified the current and future costs of U.S. 
involvement in Iraq, including maintaining U.S. military operations, 
building Iraqi government capacity, and rebuilding critical 

We recommended that the NSC improve the current strategy by 
articulating clear roles and responsibilities, specifying future 
contributions, and identifying current costs and future resources. In 
addition, our report urged the United States, Iraq, and the 
international community to (1) enhance support capabilities of the 
Iraqi security forces, (2) improve the capabilities of the national and 
provincial governments, and (3) develop a comprehensive anti-corruption 
strategy. In our view, congressional review of the President's 2007 
plan for Iraq should consider whether it addresses the key elements of 
a sound national strategy identified in our July 2006 report. 

In October 2005, we issued a classified report on the military's 
campaign plan for Iraq.[Footnote 4] In that report, we discussed the 
military's counterinsurgency plan for Iraq and the conditions and 
phases in the plan. The report contained a recommendation to link 
economic, governance, and security indicators to conditions for 
stabilizing Iraq. Congress acted on our recommendation in the 2006 
National Defense Authorization Act and required DOD to report on 
progress toward meeting the conditions referred to in GAO's report. We 
have supplemented this work with a series of classified briefings to 
the Congress on changes to the campaign plan and U.S. efforts to train 
and equip Iraqi security forces and protect weapons caches throughout 
Iraq. We will continue to provide Congress these classified briefings. 

Limited Transparency on the Costs of the Global War on Terror: 

Since 2001, Congress has appropriated about $495 billion to U.S. 
agencies for military and diplomatic efforts in support of the global 
war on terrorism; the majority of this amount has gone to stabilize and 
rebuild Iraq. Efforts in Iraq involve various activities such as 
combating insurgents, conducting civil affairs, building capacity, 
reconstructing infrastructure, and training Iraqi military forces. To 
date, the United States has reported substantial costs for Iraq and can 
expect to incur significant costs in the foreseeable future, requiring 
decision-makers to consider difficult trade-offs as the nation faces an 
increasing number of long-range fiscal challenges. Funding for these 
efforts has been provided through annual appropriations, as well as 
supplemental appropriations that are outside the annual budget process. 
In our view, moving more funding into baseline budgets, particularly 
for DOD, would enable decision-makers to better weigh priorities and 
assess trade-offs. 

As of September 30, 2006, DOD had reported costs of about $257.5 
billion for military operations in Iraq.[Footnote 5] In addition, as of 
October 2006, about $29 billion had been obligated for Iraqi 
reconstruction and stabilization efforts. However, problems with the 
processes for recording and reporting GWOT costs raise concerns that 
these data may not accurately reflect the true dollar value of war- 
related costs. 

U.S. military and diplomatic commitments in Iraq will continue for the 
foreseeable future and are likely to involve hundreds of billions of 
additional dollars. The magnitude of future costs will depend on 
several direct and indirect variables and, in some cases, decisions 
that have not been made. DOD's future costs will likely be affected by 
the pace and duration of operations, the types of facilities needed to 
support troops overseas, redeployment plans, and the amount of military 
equipment to be repaired or replaced. Although reducing the number of 
troops would appear to lower costs, we have seen from previous 
operations in the Balkans and Kosovo that costs could rise--if, for 
example, increased numbers of contractors replace military personnel. 
With activities likely to continue into the foreseeable future, 
decision-makers will have to carefully weigh priorities and make 
difficult decisions when budgeting for future costs. 

Over the years, we have made a series of recommendations to the 
Secretary of Defense intended to improve the transparency and 
reliability of DOD's GWOT obligation data, including recommendations 
that DOD (1) revise the cost-reporting guidance so that large amounts 
of reported obligations are not shown in "miscellaneous" categories, 
and (2) take steps to ensure that reported GWOT obligations are 
reliable. We also have recommended that DOD build more funding into the 
baseline budget once an operation reaches a known level of effort and 
costs are more predictable. In response, the department has implemented 
many of our previous recommendations. 

Progress in Transferring Security Responsibilities to Iraq Has Not Led 
to Improved Security Conditions: 

Overall security conditions in Iraq continued to deteriorate in 2006 
and have grown more complex despite recent progress in transferring 
security responsibilities to Iraqi security forces and the Iraqi 
government. The number of trained and equipped Iraqi security forces 
has increased from about 174,000 in July 2005 to about 323,000 in 
December 2006, at the same time as more Iraqi army units have taken the 
lead for counterinsurgency operations in specific geographic areas. 
Despite this progress, attacks on coalition forces, Iraqi security 
forces, and civilians have all increased, reaching record highs in 
October 2006. Because of the poor security in Iraq, the United States 
could not draw down U.S. force levels in Iraq as planned in 2004 and 
2006, and U.S. forces have continued to conduct combat operations in 
urban areas, especially Baghdad. 

Transferring security responsibilities to the Iraqi security forces and 
provincial governments is a critical part of the U.S. government's 
strategy in Iraq and key to allowing a drawdown of U.S. forces. Since 
2003, the United States has provided about $15.4 billion to train, 
equip, and sustain Iraqi security forces and law enforcement. However, 
it is unclear whether U.S. expenditures and efforts are having their 
intended effect in developing capable forces and whether additional 
resources are needed. A key measure of the capabilities of Iraqi forces 
is the Transition Readiness Assessment (TRA) reports prepared by 
coalition advisors embedded in Iraqi units. These reports serve as the 
basis for the Multinational Force-Iraq (MNF-I) determination of when a 
unit is capable of leading counterinsurgency operations and can assume 
security responsibilities for a specific area. 

The TRA reports provide the coalition commander's professional judgment 
on an Iraqi unit's capabilities and are based on ratings in personnel, 
command and control, equipment, sustainment and logistics, training, 
and leadership. To conduct future work on this issue, GAO has made 
multiple requests for full access to the unit-level TRA reports over 
the last year. However, DOD has not yet complied with our requests. 
This serves to seriously and inappropriately limit congressional 
oversight over the progress achieved toward a critical U.S. objective. 

DOD May be Unable to Ensure that U.S.-Funded Equipment Has Reached 
Iraqi Security Forces: 

Since 2003, the United States has provided about $15.4 billion for 
Iraqi security forces and law enforcement. According to Multinational 
Security Transition Command-Iraq (MNSTC-I) records, MNF-I has issued 
about 480,000 weapons, 30,000 vehicles, and 1.65 million pieces of gear 
(uniforms, body armor, helmets, and footwear), among other items, to 
the Iraqi security forces as of October 2006. 

Congress funded the train-and-equip program for Iraq outside 
traditional security assistance programs, which, according to DOD 
officials, provided DOD with a large degree of flexibility in managing 
the program. Since the funding did not go through traditional security 
assistance programs,[Footnote 6] the accountability requirements 
normally applicable to these programs did not necessarily apply, 
according to DOD officials. It is currently unclear what accountability 
measures, if any, DOD has chosen to apply to the train-and-equip 
program for Iraq, as DOD officials have expressed differing opinions on 
this matter. As part of our ongoing work, we have asked DOD to clarify 
what accountability measures it has chosen to apply to the program. 

While it is unclear which regulations DOD has chosen to apply, 
beginning in early 2004, MNF-I established requirements to control and 
account for equipment provided to the Iraqi security forces by issuing 
orders that outlined procedures for its subordinate commands. These 
included obtaining signed records for equipment received by Iraqi units 
or individuals and recording weapons serial numbers. Although MNF-I 
took initial steps to establish property accountability procedures, 
limitations such as the initial lack of a fully operational equipment 
distribution network, staffing weaknesses, and the operational demands 
of equipping the Iraqi forces during war hindered its ability to fully 
execute critical tasks outlined in the property accountability orders. 
Since late 2005, MNSTC-I has taken additional steps to improve its 
property accountability procedures, including establishing property 
books[Footnote 7] for equipment issued to Iraqi Ministry of Defense and 
Ministry of Interior forces. According to MNSTC-I officials, MNSTC-I 
also recovered existing documentation for equipment previously issued 
to Iraqi forces. However, according to our preliminary analysis, DOD 
and MNF-I may not be able to account for Iraqi security forces' receipt 
of about 90,000 rifles and about 80,000 pistols that were reported as 
issued before early October 2005. Thus, DOD and MNF-I may be unable to 
ensure that Iraqi military forces and police received all of the 
equipment that the coalition procured or obtained for them. 

In our ongoing review, we will continue to assess MNF-I records for 
Iraqi equipment distributed to Iraqi forces. We plan on issuing a final 
report on these and related intelligence matters by March 2007. Our 
work focuses on the accountability requirements[Footnote 8] for the 
transportation and distribution of U.S.-funded equipment and did not 
review any requirements relevant to the procurement of this equipment. 

Challenges in Improving Governance and Spending Budgeted Capital 
Project Funds: 

The U.S. government faces significant challenges in improving the 
capabilities of Iraq's central and provincial governments so that they 
can provide security and deliver services to the Iraqi people. 
According to State, the Iraqi capacity for self-governance was 
decimated after nearly 30 years of autocratic rule. In addition, Iraq 
lacked competent existing Iraqi governmental organizations. Since 2003, 
the United States has provided the Iraqis with a variety of training 
and technical assistance to improve their capacity to govern. As of 
December 2006, we identified more than 50 capacity development efforts 
led by at least six U.S. agencies. However, it is unclear how these 
efforts are addressing core needs and Iraqi priorities in the absence 
of an integrated U.S. plan. 

Iraq also faces difficulties in spending budgeted funds for capital 
goods and projects in the security, oil, and electricity sectors. When 
the Iraqi government assumed control over its finances in 2004, it 
became responsible for determining how more than $25 billion annually 
in government revenues would be collected and spent to rebuild the 
country and operate the government. However, unclear budgeting and 
procurement rules have affected Iraq's efforts to spend capital budgets 
effectively and efficiently. Since most of the U.S. reconstruction 
funds provided between fiscal years 2003 and 2006 have been obligated, 
unexpended Iraqi funds represent an important source of additional 
financing. Iraq had more than $6 billion in unspent capital project 
funds as of August 2006. For example, Iraq's Oil Ministry spent only $4 
million of $3.6 billion in budgeted funds to repair Iraq's dilapidated 
oil infrastructure. 

The inability to spend this money raises serious questions for the 
government, which has to demonstrate to citizens who are skeptical that 
it can improve basic services and make a difference in their daily 
lives. The U.S. government has launched a series of initiatives in 
conjunction with other donors to address this issue and improve 
ministry budget execution. 

Impact of the War on U.S. Military Readiness: 

Since September 11, 2001, U.S. military forces have experienced a high 
pace of operations to support homeland security missions, Operation 
Enduring Freedom in Afghanistan, and various combat and 
counterinsurgency operations in Iraq. These operations have required 
many units and personnel to deploy for multiple tours of duty and, in 
some cases, to remain for extended tours. DOD faces significant 
challenges in maintaining readiness for overseas and homeland missions 
and sustaining rotational deployments of duty, especially if the 
duration and intensity of current operations continue at the present 

Ongoing military operations in Iraq are inflicting heavy wear and tear 
on military equipment. Some equipment items used by U.S. forces are 
more than 20 years old, and harsh combat and environmental conditions 
over time have further exacerbated equipment condition problems. The 
Army and the Marine Corps have initiated programs to reset (repair or 
replace) equipment and are likely to incur large expenditures in the 
future. We are currently assessing these programs, including the extent 
to which the military services are tracking reset costs and the extent 
to which their reset plans maintain unit equipment readiness while 
meeting ongoing operational requirements. 

Problems in Securing Munitions Sites and Providing Force Protection: 

U.S. ground forces in Iraq have come under frequent and deadly attacks 
from insurgents using weapons such as improvised explosive devices 
(IED), mortars, and rocket launchers. IEDs, in particular, have emerged 
as the number one threat against U.S. forces. Because of the 
overwhelming size and number of conventional munitions storage sites in 
Iraq, combined with prewar planning assumptions that proved to be 
invalid, there were an insufficient number of U.S. and coalition troops 
on the ground to prevent the widespread looting of those sites. The 
human, strategic, and financial costs of the failure to provide 
sufficient troops on the ground have been high, since IEDs made from 
looted explosives have caused about half of all U.S. combat fatalities 
and casualties in Iraq and have killed hundreds of Iraqis. In addition, 
unsecured conventional munitions sites have helped sustain insurgent 
groups and threatened the achievement of the Operation Iraqi Freedom's 
(OIF) strategic goal of creating a stable Iraqi nation.[Footnote 9] 

DOD's actions to date have primarily focused on countering IEDs and not 
on the security of conventional munitions storage sites as a strategic 
planning and priority-setting consideration for future operations. 
Although good first steps, these actions do not address what we believe 
is a critical OIF lesson learned: If not secured during initial combat 
operations, an adversary's conventional munitions storage sites can 
represent an asymmetric threat to U.S. forces that remain in country. 

In December 2006, we recommended that the Chairman of the Joint Staff 
conduct a theaterwide survey and risk assessment regarding unsecured 
conventional munitions in Iraq and incorporate conventional munitions 
storage site security as a strategic planning factor into all levels of 
planning policy and guidance. DOD partially concurred with our 

Efforts to protect U.S. ground forces with increased body and truck 
armor have been characterized by shortages and delays, which have 
reduced operational capabilities and forced combat commanders to accept 
additional risk in completing their missions.[Footnote 10] We are 
currently reviewing force protection measures, including body armor, 
for current operations, as well as the organization and management of 
the Joint IED Defeat to counter the IED threat. 

In prior reports, we recommended that the process for identifying and 
funding urgent wartime requirements be improved and that funding 
decisions be based on risk and an assessment of the highest priority 
requirements. More recently, we have recommended actions to ensure that 
the services make informed and coordinated decisions about materiel 
solutions developed and procured to address common urgent wartime 
requirements. DOD generally agreed with these recommendations. 

Improving DOD Acquisition Outcomes: 

DOD has relied extensively on contractors to undertake major 
reconstruction projects and provide logistical support to its troops in 
Iraq. Despite making significant investments through reconstruction and 
logistics support contracts, this investment has not always resulted in 
the desired outcomes. Many reconstruction projects have fallen short of 
expectations, and DOD has yet to resolve long-standing challenges in 
its management and oversight of contractors in deployed locations. 
These challenges often reflect shortcomings in DOD's capacity to manage 
contractor efforts, including having sufficiently focused leadership, 
guidance, a match between requirements and resources, sound acquisition 
approaches, and an adequate number of trained contracting and oversight 

The challenges encountered in Iraq are emblematic of the systemic 
issues that DOD faces. In fact, GAO designated DOD's contract 
management activities as a high-risk area more than a decade ago and 
have reported on DOD's long-standing problems with its management and 
oversight of support contractors since 1997.[Footnote 11] For example, 
because information on the number of contractor employees and the 
services they provide is not aggregated within DOD or its components, 
DOD cannot develop a complete picture of the extent to which it relies 
on contractors to support its operations. DOD recently established an 
office to address contractor support issues, but the office's specific 
roles and responsibilities are still being defined. 

In assessing acquisition outcomes government-wide over many years, we 
have applied a framework of sound acquisition practices that recognizes 
that a prerequisite to having good outcomes is to match well-defined 
requirements and available resources. Shifts in priorities and funding 
invariably have a cascading effect on individual contracts. Further, to 
produce desired outcomes with available funding and within required 
time frames, DOD and its contractors need to clearly understand DOD's 
objectives and needs and how they translate into the contract's terms 
and conditions; they need to know the goods or services required, the 
level of performance or quality desired, the schedule, and the cost. 
When such requirements were not clear, DOD often entered into contract 
arrangements that posed additional risks. Managing risks when 
requirements are in flux requires effective oversight, but DOD lacked 
the capacity to provide sufficient numbers of contracting, logistics, 
and other personnel, thereby hindering oversight efforts. With a 
considerable amount of DOD's planned construction work remaining and 
the need for continued logistical support for deployed forces, it is 
essential to improve DOD's capacity to manage its contractors if the 
department is to increase its return on its investment. 

GAO's Quality Assurance Framework: 

GAO's value to the Congress and the American people rests on its 
ability to demonstrate professional, independent, objective, relevant, 
and reliable work. To achieve this outcome, we set high standards for 
ourselves in the conduct of our work. Our core values of 
accountability, integrity, and reliability describe the nature of our 
work and, most importantly, the character of our people. In all 
matters, GAO takes a professional, objective, and nonpartisan approach 
to its work. GAO's quality assurance framework is designed to ensure 
adherence to these principles. 

The framework is designed around people, processes, and technology and 
applies to all GAO work conducted under generally accepted government 
auditing standards. GAO has a multidisciplinary staff of approximately 
3,200 accountants, health experts, engineers, lawyers, national 
security specialists, environmental specialists, economists, 
historians, social scientists, actuaries, and statisticians. GAO 
leverages this knowledge by staffing engagements with teams proficient 
in a number of areas. For example, engagement teams comprise a mix of 
staff supported by experts in technical disciplines, such as data 
collection and survey methods, statistics, econometric modeling, 
information technology, and the law. To add additional value and 
mitigate risk, GAO has a forensic audits and special investigations 
team to expose government fraud, waste, and abuse. 

A key process in our quality assurance framework is providing 
responsible officials of audited agencies with the opportunity to 
review and comment on our draft reports. This policy is one of the most 
effective ways to ensure that a report is fair, complete, and 

In April 2005, an international peer review team gave our quality 
assurance system a clean opinion--only the second time a national audit 
institution has received such a rating from a multinational team. Thus, 
the Congress and the American people can have confidence that GAO's 
work is independent, objective, and reliable. The team, under the 
auspices of the Global Working Group of national audit institutions, 
examined all aspects of GAO's quality assurance framework. The team 
found several global "better practices" at GAO that go beyond what is 
required by government auditing standards. These practices included its 
strategic planning process, which ensures that GAO focus on the most 
significant issues facing the country, serious management challenges, 
and the programs most at risk. 

The team identified other noteworthy practices: 

* GAO's audit risk assessment process, which determines the level of 
product review and executive involvement throughout the audit 

* GAO's agency protocols, which provide clearly defined and transparent 
policies and practices on how GAO will interact with audited agencies. 

* GAO's use of experts and specialists to provide multidisciplinary 
audit teams with advice and assistance on methodological and technical 
issues--vastly expanding GAO's capacity to apply innovative approaches 
to the analysis of complex situations. 

As an organization in constant pursuit of improvement, we benefited 
from the peer reviewers' recognition of our quality control procedures 
as global "better practices" as well as their suggestions on how to 
strengthen guidance and streamline procedures. 

Concluding Observations: 

Our work highlights the critical challenges that the United States and 
its allies face in the ongoing struggle to help the Iraqis stabilize, 
secure, and rebuild their country. Forthright answers to the oversight 
questions we posed in our report of January 9, 2007, are needed from 
the U.S. agencies responsible for executing the President's strategy. 
Congress and the American people need complete and transparent 
information on the progress made toward achieving U.S. security, 
economic, and diplomatic goals in Iraq to reasonably judge our past 
efforts and determine future directions. For future work, GAO will 
continue to provide this committee and Congress with independent 
analysis and evaluations and coordinate our efforts with the 
accountability community to ensure appropriate oversight of federal 
programs and spending. 

Mr. Chairman, this concludes my statement. I would be pleased to answer 
any questions that you or other members may have at this time. 

GAO Contacts and Acknowledgments: 

For questions regarding this testimony, please call Joseph A. Christoff 
at (202) 512-8979. Other key contributors to this statement were 
Nanette Barton, Donna Byers, David Bruno, Dan Cain, Lynn Cothern, Tim 
DiNapoli, Mike Ferren, Rich Geiger, Tom Gosling, Whitney Havens, Lisa 
Helmer, Patrick Hickey, Henry L. Hinton Jr., John Hutton, Steve Lord, 
Judy McCloskey, Tet Miyabara, Mary Moutsos, Ken Patton, Sharon Pickup, 
Jason Pogacnik, Jim Reynolds, Donna Rogers, and William Solis. 


[1] GAO, Securing, Stabilizing, and Rebuilding Iraq: Key Issues for 
Congressional Oversight, GAO-07-308SP (Washington, D.C.: Jan. 9, 2007). 

[2] GAO, Performance and Accountability Report: Fiscal Year 2006, GAO-
07-2SP (Washington, D.C.: Nov. 15, 2006). 

[3] The six characteristics are (1) a clear purpose, scope, 
methodology; (2) a detailed discussion of the problems, risks, and 
threats the strategy intends to address; (3) the desired goals and 
objectives, and outcome-related performance measures; (4) a description 
of the U.S. resources needed to implement the strategy; (5) a clear 
delineation of the U.S. government roles, responsibilities, and 
mechanisms for coordination; and (6) a description of how the strategy 
is integrated internally among U.S. agencies and externally with the 
Iraqi government and international organizations. See Rebuilding Iraq: 
More Comprehensive National Strategy Needed to Help Achieve U.S. Goals, 
GAO-06-788 (Washington, D.C.: July 11, 2006). 

[4] GAO, Rebuilding Iraq: DOD Reports Should Link Economic, Governance, 
and Security Indicators to Conditions for Stabilizing Iraq. GAO-06-217C 
(title is unclassified, Washington D.C.: Oct. 31, 2005). 

[5] DOD's reported costs in Iraq do not include the costs of classified 

[6] Traditional security assistance programs operate under State 
authority and are managed in country by DOD through security assistance 
organizations under the direction and supervision of the Chief of the 
U.S. Diplomatic Mission. 

[7] A property book is a formal set of property accounting records and 

[8] DOD defines accountability as the obligation imposed by law, lawful 
order, or regulation, accepted by an organization or person for keeping 
accurate records, to ensure control of property, documents or funds, 
with or without physical possession (DODI 5000.64, Accountability and 
Management of DoD-Owned Equipment and Other Accountable Property, 

[9] These issues are discussed in a classified GAO report, Operation 
Iraqi Freedom: DOD Should Apply Lessons Learned Concerning the Need for 
Security over Conventional Munitions Storage Sites to Future Operations 
Planning, GAO-07-71C (Washington, D.C.: Dec. 20, 2006). We plan to 
issue an unclassified version of this report. 

[10] For further information on these issues, see GAO, Defense 
Logistics: Actions Needed to Improve the Availability of Critical Items 
during Current and Future Operations, GAO-05-275 (Washington, D.C.: 
Apr. 8, 2005); Defense Logistics: Several Factors Limited the 
Production and Installation of Army Truck Armor during Current Wartime 
Operations, GAO-06-160 (Washington, D.C.: Mar. 22, 2006); and Defense 
Logistics: Lack of a Synchronized Approach between the Marine Corps and 
Army Affected the Timely Production and Installation of Marine Corps 
Truck Armor, GAO-06-274 (Washington, D.C.: June 22, 2006). 

[11] GAO, Military Operations: High-Level DOD Action Needed to Address 
Long-standing Problems with Management and Oversight of Contractors 
Supporting Deployed Forces, GAO-07-145 (Washington, D.C.: Dec. 18, 

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