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Highlights

Under Department of Defense (DOD) policy, the export of classified and controlled spare parts must be managed to prevent their release to foreign countries that may use them against U.S. interests. GAO has issued a series of reports on the foreign military sales program in which weaknesses in the military services' internal controls were identified. This report highlights (1) a systemic problem that GAO identified in the internal controls of the military services' requisition-processing systems and (2) a potential best practice that GAO identified in one service that provides an additional safeguard over foreign military sales of classified and controlled parts.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense To reduce the likelihood of releasing classified and controlled spare parts that DOD does not want to be released to foreign countries the Secretary of Defense should direct the Under Secretary of Defense for Policy, in conjunction with the Secretaries of the Army and the Navy, and direct the Secretary of the Air Force to develop an implementation plan, such as a Plan of Actions & Milestones, specifying the remedial actions to be taken to ensure that applicable testing and review of the existing requisition-processing systems are conducted on a periodic basis.
Closed - Implemented
In November 2004, the Defense Security Cooperation Agency sent an initial electronic mail to the Military Department representatives involved in the previous GAO spare parts audits (GAO-04-507 and GAO-05-327) requiring testing of the existing requisition processing systems beginning in or around May 2005. The tests were conducted and the results from the services confirmed that proper controls are in place for their systems. Follow-up testing will be conducted annually.
Department of Defense To reduce the likelihood of releasing classified and controlled spare parts that DOD does not want to be released to foreign countries the Secretary of Defense should direct the Under Secretary of Defense for Policy, in conjunction with the Secretaries of the Army, the Air Force, and the Navy, to determine whether current plans for developing the Case Execution Management Information System call for periodic testing and, if not, provide for such testing.
Closed - Implemented
The Case Execution Management Information System (CEMIS) will be developed in accordance with all known US government and DOD standards for the acquisition and implementation of automated information technology systems. CEMIS software program testing will adhere to software-testing standards in place at the time of implementation, including testing to ensure that the functionality of existing software code is not changed when the coding is modified or enhanced.
Department of Defense To reduce the likelihood of releasing classified and controlled spare parts that DOD does not want to be released to foreign countries the Secretary of Defense should direct the Under Secretary of Defense for Policy, in conjunction with the Secretary of the Navy, and direct the Secretary of the Air Force to determine if it would be beneficial to modify the Navy's and the Air Force's requisition-processing systems so that the systems reject requisitions for classified or controlled parts that foreign countries make under blanket orders and preclude country managers from manually overriding system decisions, and to modify their systems as appropriate.
Closed - Implemented
August 3, 2005. The Navy and Air Force business processes will be reviewed, as well as the requisition-processing systems, to determine the benefits of modifying the systems to mirror the Army system. The review is expected to be completed by mid 2006. In September 2005, as a result of system testing, DOD has determined that the existing controls in both systems are sufficient to preclude the unauthorized release of classified or controlled parts on blanket order cases. No modifications are planned for either system.

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