B-213137, MAR 25, 1986

B-213137, MAR 25, 1986

PRECIS-UNAVAILABLE

THE HONORABLE CASPAR WEINBERGER:

THE SECRETARY OF DEFENSE

ATTENTION: DEPUTY ASSISTANT INSPECTOR GENERAL FOR GAO REPORT ANALYSIS

ENCLOSED IS A COPY OF OUR RECENT DECISION B-213137, JANUARY 30, 1986, CONCERNING THE DEPARTMENT'S USE OF OPERATIONS AND MAINTENANCE (O&M) APPROPRIATIONS IN HONDURAS. THE DECISION WAS IN RESPONSE TO A REQUEST BY REPRESENTATIVE BILL ALEXANDER THAT WE UPDATE OUR DECISION OF JUNE 22, 1984, ON THE SAME SUBJECT. IN IT, WE ADDRESS THE SAME THREE CATEGORIES OF ACTIVITIES CONSIDERED IN THE EARLIER DECISION: EXERCISE RELATED CONSTRUCTION ACTIVITIES, TRAINING OF FOREIGN FORCES, AND PROVISION OF HUMANITARIAN ASSISTANCE. FOR EACH OF THESE CATEGORIES OF ACTIVITIES, WE ADDRESS THE ADEQUACY OF THE DEPARTMENT'S RESPONSE TO OUR EARLIER DECISION, BOTH IN TERMS OF FUNDING ADJUSTMENTS, AND IN TERMS OF THE USE OF O&M FUNDS FOR ACTIVITIES SUBSEQUENT TO THE ISSUANCE OF OUR EARLIER DECISION.

IN THE ENCLOSED DECISION, WE REEXAMINE THE LEGAL BASIS OF OUR EARLIER DECISION, PARTICULARLY WITH REGARD TO CONSTRUCTION ACTIVITIES. REAFFIRM THE BASIC LEGAL CONCLUSIONS REACHED IN THAT EARLIER DECISION, AND IN DOING SO, ATTEMPT TO ADDRESS SPECIFIC CONCERNS RAISED BY DOD OFFICIALS.

OUR DECISION DISAGREES WITH DOD'S CONCLUSION THAT ALL CONSTRUCTION PROJECTS CARRIED OUT DURING THE AHUAS TARA II EXERCISES COST LESS THAN $200,000. IT QUESTIONS DOD'S APPLICATION OF MILITARY CONSTRUCTION ACCOUNTING PRINCIPLES TO ACCOUNT FOR THESE PROJECTS, PARTICULARLY WITH RESPECT TO THE METHOD USED BY THE DEPARTMENT TO DETERMINE PROJECT SCOPE. IT ALSO EXPRESSES CONCERN THAT CONSTRUCTION ACTIVITIES FINANCED AFTER THE ISSUANCE OF OUR EARLIER DECISION FAILED TO FOLLOW ESTABLISHED GUIDANCE FOR ACCOUNTING FOR MILITARY CONSTRUCTION PROJECTS. THE DECISION CONCLUDES THAT DOD SHOULD ENSURE THAT ITS CONSTRUCTION ACTIVITIES ARE FINANCED IN ACCORDANCE WITH CURRENT FUNDING RULES, OR WORK WITH THE CONGRESS TO ESTABLISH ALTERNATE FUNDING PROCEDURES FOR EXERCISE-RELATED CONSTRUCTION.

WITH RESPECT TO TRAINING ACTIVITIES, OUR DECISION CONCLUDES THAT FUNDING ADJUSTMENTS MADE BY THE DEPARTMENT FOR IMPROPER USE OF O&M FUNDS DURING AHUAS TARA II MEET THE CONCERNS EXPRESSED IN OUR PREVIOUS REVIEW. ALTHOUGH U.S. FORCES IN HONDURAS HAVE CONTINUED TO ENGAGE IN SOME AMOUNT OF TRAINING ACTIVITIES, THOSE ACTIVITIES ARE JUSTIFIED BY THE DEPARTMENT ON THE BASIS THAT THEY ARE NOT COMPARABLE TO THOSE NORMALLY CONDUCTED WITH SECURITY ASSISTANCE FUNDS. WHILE WE AGREE THAT A LIMITED AMOUNT OF TRAINING OF FOREIGN FORCES MAY BE CONDUCTED ON THAT BASIS, WE RECOMMEND TO DOD THAT IT ESTABLISH BETTER PROCEDURES TO ENSURE THAT EXERCISE-RELATED TRAINING OF SUCH FORCES IS LIMITED TO MINOR AMOUNTS NECESSARY TO MEET U.S. OPERATIONAL REQUIREMENTS, AND IS NOT USED AS A METHOD OF PROVIDING O&M- FUNDED SECURITY ASSISTANCE.

ON THE ISSUE OF CIVIC AND HUMANITARIAN ASSISTANCE, WE DISAGREE WITH THE DEPARTMENT'S ASSESSMENT THAT ALL SUCH ACTIVITIES CONDUCTED DURING AHUAS TARA II WERE MERELY INCIDENTAL TO EXISTING TRAINING ACTIVITIES. WITH REGARD TO NEW FUNDING AUTHORITY FOR THESE ACTIVITIES PROVIDED BY THE CONGRESS AFTER THE ISSUANCE OF OUR PREVIOUS DECISION, WE CONCLUDE THAT THE DEPARTMENT'S INTERPRETATION OF THAT AUTHORITY IS REASONABLE, BUT STATE OUR CONCERNS THAT THE LARGE SCALE OF SUCH ACTIVITIES MAY GO BEYOND THE LEVEL CONTEMPLATED BY THE CONGRESS IN ENACTING THAT NEW AUTHORITY. WE STATE THAT THE DEPARTMENT SHOULD CARRY OUT ITS ACTIVITIES WITH ATTENTION TO THE LEGISLATIVE HISTORY OF THE PROVISION IN QUESTION, WHICH STRESSES THE LIMITED NATURE OF THE AUTHORITY SO PROVIDED. WE ALSO RECOMMEND TO THE CONGRESS THAT IT CONSIDER PROVIDING MORE EXPLICIT GUIDANCE AS TO THE TYPES OF ACTIVITIES AUTHORIZED.