Fast Facts

Weaknesses in the Department of Defense’s oversight of the support it has provided to foreign partners have resulted in thousands of overdue reimbursements.

Through its Acquisition and Cross-Servicing Agreements, DOD provides foreign partners with reimbursable support such as meals, aerial refueling, munitions (for example some used in Saudi-led Coalition activities in Yemen), and more. However, DOD has not consistently maintained quality data or requested reimbursement for thousands of these transactions, which it values at more than $1 billion.

We made 7 recommendations to improve DOD’s oversight of these transactions.

Aerial refueling is one example of support that may be exchanged through Acquisition and Cross-Servicing Agreements (ACSAs)

Aerial refueling

Aerial refueling

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Highlights

What GAO Found

While generally providing required information to Congress, poor recordkeeping by the Department of Defense (DOD) and late notifications by the Department of State (State) have limited the accuracy and timeliness of information provided to Congress on acquisition and cross-servicing agreements (ACSA). DOD and State have Congressional notification requirements pertaining to ACSAs—agreements through which DOD exchanges logistic support, supplies, and services with foreign partners in return for cash or in-kind reimbursement. Documents indicate that DOD provided notice to Congress before designating 78 of 104 countries eligible for an ACSA. However, DOD did not have records for the remaining 26, in part because it lacks documented recordkeeping procedures. While State generally notified Congress about ACSAs' entry into force, it transmitted 41 percent of them after the statutory deadline, largely because DOD did not provide required information to State. These gaps and issues have reduced the accuracy and timeliness of information provided to Congress about ACSAs.

DOD has not maintained quality data to track ACSA orders and has not received reimbursement for thousands of orders. First, DOD does not have complete and accurate ACSA data. For example, for an estimated 12 percent of ACSA orders authorized from October 2013 through March 2018 in DOD's system of record, DOD could not determine whether it had received reimbursement for support provided to partners. According to DOD officials, such inaccuracies occur in part because DOD does not have a process to validate data in its system. Second, GAO estimates that DOD received full reimbursement for 64 percent of ACSA orders authorized from October 2013 through March 2018 (about 6,000 orders), but did not receive full reimbursement for 24 percent. Orders remain unpaid in part because DOD has not requested timely repayment or monitored reimbursement. These management weaknesses limit DOD's ability to obtain reimbursement for overdue ACSA orders, which, according to DOD, were valued at more than $1 billion as of November 2019.

Reimbursement Status for ACSA Orders in DOD's System of Record from October 2013 through March 2018, by Number of Orders

Highlights_v7_pie chart_103030_njd

Note: These estimates are based on a generalizable sample of orders in which the United States provided support to foreign partners; have a margin of error of up to plus or minus 5.1 percentage points at the 95-percent confidence level; and represent the percentage of the number of orders, not the dollar value of orders.

Why GAO Did This Study

According to DOD, from fiscal years 2014 through 2019, it used ACSAs to provide billions of dollars of logistic support, supplies, and services to more than 100 partner countries. For example, this support included fuel and ammunition to assist international exercises and coalition operations, among other efforts.

Senate Report 115-262 included a provision for GAO to review ACSA management. This report examines the extent to which (1) agencies have provided information to Congress about ACSAs, and (2) DOD has tracked and received reimbursement for ACSA orders. GAO conducted content analysis of DOD and State ACSA documents, and analyzed a generalizable sample of ACSA orders authorized from October 2013 through March 2018 and recorded in DOD's system of record for ACSA orders. An ACSA order, also referred to as a transaction, documents an exchange of support between the United States and a foreign partner. In addition, GAO interviewed agency officials and conducted fieldwork at Shaw Air Force Base in Sumter, South Carolina.

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Recommendations

GAO is making seven recommendations to DOD to improve ACSA recordkeeping and reimbursement, through steps such as better monitoring, periodic data reconciliation, and timely invoicing. DOD agreed with all seven recommendations.

Recommendations for Executive Action

Agency Affected Recommendation Status
Office of the Secretary of Defense The Secretary of Defense should ensure that written ACSA guidance includes recordkeeping procedures related to ACSA congressional notifications and signature dates to help enable the provision of complete information for Congress. (Recommendation 1)
Closed - Implemented
DOD concurred with this recommendation in its official comment letter included as an appendix in GAO-20-309, published in March 2020. At that time, DOD provided a copy of a February 2020 memorandum issued in response to our draft recommendation that outlined procedures to capture and preserve information about ACSA establishment, including the dates of DOD's congressional notifications of intent to designate countries for ACSAs and agreement signature dates. In April 2020, DOD provided evidence confirming appropriate distribution of the memorandum. In addition, from July through November 2020, DOD provided us with updated copies of their record of current ACSAs and key dates related to each, including for milestones such as congressional notification and signature dates.
Office of the Secretary of Defense The Secretary of Defense should take steps, such as updating guidance, to help ensure the implementation of requirements related to providing information to State about newly signed ACSAs. (Recommendation 2)
Closed - Implemented
DOD concurred with this recommendation in its official comment letter included as an appendix in GAO-20-309, published in March 2020. At that time, DOD provided a copy of a February 2020 memorandum issued in response to our draft recommendation that provided guidance related to DOD's provision of ACSA information to the Department of State for its congressional notifications under the Case-Zablocki Act. In April 2020, DOD provided us evidence about the distribution of that memorandum to appropriate individuals and we have closed the recommendation accordingly.
Office of the Secretary of Defense The Secretary of Defense should take steps to verify the accuracy of ACSA order statuses recorded in DOD's system of record, and make corrections as appropriate. (Recommendation 3)
Open
DOD concurred with this recommendation in its official comment letter included as an appendix in GAO-20-309, published in March 2020. As of April 2021, DOD officials indicated that some military services were beginning to design and implement methodologies to verify and correct the status of ACSA orders for which they were responsible. GAO continues working with DOD to assess these efforts.
Office of the Secretary of Defense The Secretary of Defense should implement a process to reconcile data in financial systems with the data and associated documents collected and stored in DOD's ACSA system of record on a periodic basis. (Recommendation 4)
Open
DOD concurred with this recommendation in its official comment letter included as an appendix in GAO-20-309, published in March 2020. As of April 2021, the Army had begun taking steps to implement such a process. Further, DOD officials told us that draft regulation would require that other military services responsible for ACSA management undertake similar efforts. We will continue to monitor their progress.
Office of the Secretary of Defense The Secretary of Defense should develop and implement a mechanism to record and track the extent to which it is meeting required time frames to receive reimbursement for ACSA orders. (Recommendation 5).
Open
DOD concurred with this recommendation in its official comment letter included as an appendix in GAO-20-309, published in March 2020. As of April 2021, DOD had launched an update of its ACSA system of record intended to capture key order dates in a standardized, operational format. Officials told us that these dates should provide more accurate timeliness information on each order to better record and track the extent to which DOD is meeting required time frames to receive reimbursement for ACSA orders. We are working with DOD officials to confirm that the system is working as intended and that tracking mechanisms are in place.
Office of the Secretary of Defense The Secretary of Defense should take steps to improve invoicing of ACSA orders, such as identifying ACSA orders recorded in DOD's system of record that have not been invoiced and sending invoices to partner countries. (Recommendation 6)
Open
DOD concurred with this recommendation in its official comment letter included as an appendix in GAO-20-309, published in March 2020. In January 2021, DOD made some revisions to its Financial Management Regulations that provide some additional clarity regarding roles and responsibilities for managing overdue ACSA-related debt. As of April 2021, DOD was in the process of developing standard procedures for collecting overdue ACSA reimbursements. We continue working with DOD to better understand how it is implementing the new guidance and we will monitor their progress implementing new internal procedures.
Office of the Secretary of Defense The Secretary of Defense should implement a process to monitor ACSA orders recorded as overdue in DOD's system of record, and take steps to resolve outstanding reimbursements, as appropriate. (Recommendation 7)
Open
DOD concurred with this recommendation in its official comment letter included as an appendix in GAO-20-309, published in March 2020. As of April 2021, DOD had updated its system of record used to track ACSA orders that officials indicated should provide an improved source of information to use in monitoring overdue ACSA orders. As we confirm that DOD is employing these system improvements or conducting other efforts to better monitor ACSA orders and resolve outstanding reimbursements, we will provide updated information.

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