Climate Resilience: A Strategic Investment Approach for High-Priority Projects Could Help Target Federal Resources

Since 2005, federal funding for disaster assistance has totaled at least $450 billion, including a 2019 supplemental appropriation of $19.1 billion for recent disasters. In 2018 alone, 14 separate billion-dollar weather and climate disaster events occurred across the United States, with total costs of at least $91 billion, including the loss of public and private property, according to the National Oceanic and Atmospheric Administration. Disaster costs likely will increase as certain extreme weather events become more frequent and intense due to climate change, according to the U.S. Global Change Research Program, a global change research coordinating body that spans 13 federal agencies. In 2013, GAO included “Limiting the Federal Government’s Fiscal Exposure by Better Managing Climate Change Risks” on its high-risk list. The cost of recent weather disasters has illustrated the need to plan for climate change risks and invest in climate resilience, which can reduce the need for far more costly steps in the decades to come.

This statement summarizes GAO’s findings from its October 2019 report on climate resilience and federal investment (GAO-20-127). Specifically, it focuses on (1) the extent to which the federal government has a strategic approach for investing in climate resilience projects; (2) key steps that provide an opportunity to strategically prioritize projects for investment; and (3) the strengths and limitations of options for focusing federal funding on these projects.

To perform this work, GAO reviewed about 50 relevant reports and interviewed 35 stakeholders with expertise in climate resilience and related fields, including federal officials, researchers, and consultants. GAO also identified domestic and international examples of governments that invest in climate resilience and related projects.

The federal government has invested in individual projects that may enhance climate resilience, but it does not have a strategic approach to guide its investments in high-priority climate resilience projects. In GAO’s March 2019 update to its list of federal programs at high risk for fraud, waste, abuse, and mismanagement, or most in need of transformation, GAO reported that one area of government-wide action needed to reduce federal fiscal exposure is in the federal government’s role as the leader of a strategic plan that coordinates federal efforts and informs state, local, and private-sector action. For this 2019 update, GAO assessed the federal government’s progress since 2017 related to climate change strategic planning against five criteria and found that the federal government had not met any of the criteria for removal from the high-risk list. Further, as of August 2019, no action had been taken to implement 14 of GAO’s 17 recommendations to improve federal climate change strategic planning. Additionally, no federal agency, interagency collaborative effort, or other organizational arrangement has been established to implement a strategic approach to climate resilience investment that includes periodically identifying and prioritizing projects. Such an approach could supplement individual agency climate resilience efforts and help target federal resources toward high-priority projects.

Based on its review of prior GAO work, relevant reports, and stakeholder interviews, GAO found six key steps that provide an opportunity for the federal government to strategically identify and prioritize climate resilience projects for investment. These are (1) defining the strategic goals of the climate resilience investment effort and how the effort will be carried out, (2) identifying and assessing high-risk areas for targeted resilience investment, (3) identifying potential project ideas, (4) prioritizing projects, (5) implementing high-priority projects, and (6) monitoring projects and climate risks.

GAO also identified two options—each with strengths and limitations—for focusing federal funding on high-priority climate resilience projects. The options are (1) coordinating funding provided through multiple existing programs with varied purposes and (2) creating a new federal funding source specifically for investment in climate resilience. In addition, GAO identified opportunities to increase the impact of federal funding options on climate resilience, including ensuring adequate and consistent funding and encouraging nonfederal investment in climate resilience.

Congress should consider establishing a federal organizational arrangement to periodically identify and prioritize climate resilience projects for federal investment. Such an arrangement could be designed using the six key steps for prioritizing climate resilience investments and the opportunities to increase the climate resilience impact of federal funding options that GAO identified in its October 2019 report.

Thank you for the opportunity to discuss our recent work on climate  resilience and federal investment strategies. Since 2005, federal funding  for disaster assistance has totaled at least $450 billion, including a 2019  supplemental appropriation of $19.1 billion for recent disasters. In 2018  alone, 14 separate billion-dollar weather and climate disaster events  occurred across the United States, with total costs of at least $91 billion,  including the loss of public and private property, according to the National  Oceanic and Atmospheric Administration. Disaster costs likely will  increase as certain extreme weather events become more frequent and  intense due to climate change, according to the U.S. Global Change  Research Program, a global change research coordinating body that  spans 13 federal agencies.

The cost of recent weather disasters has illustrated the need to plan for  climate change risks and invest in climate resilience. In 2013, we included  “Limiting the Federal Government’s Fiscal Exposure by Better Managing  Climate Change Risks” on our list of federal program areas at high risk of  fraud, waste, abuse, and mismanagement or most in need of  transformation. Enhancing climate resilience means taking actions to  reduce potential future losses by planning and preparing for potential  climate hazards such as extreme rainfall, sea level rise, and drought.  Investing in climate resilience can reduce the need for far more costly  steps in the decades to come; therefore, we and others have  recommended enhancing climate resilience to help limit the federal  government’s fiscal exposure to climate change.

Planning for federal investments in climate resilience projects to limit  fiscal exposure is no longer a hypothetical issue. The Disaster Recovery  Reform Act of 2018 provides one potential source of funding for climate  resilience projects. In particular, it allows the President to set aside up to  6 percent of the estimated aggregate amount of grants from certain  emergency programs under a major disaster declaration to implement  pre-disaster hazard mitigation activities. The Federal Emergency  Management Agency (FEMA) will administer the associated program— the Building Resilient Infrastructure and Communities program. As of the  date of this testimony, FEMA had not yet developed program guidance,  although the agency has sought input from the public on program  design. FEMA officials estimate annual funds for the program will  average $300 million to $500 million.

My statement today focuses on (1) the extent to which the federal  government has a strategic approach for investing in climate resilience  projects; (2) key steps that provide an opportunity to strategically prioritize  projects for investment; and (3) the strengths and limitations of options for  focusing federal funding on these projects. My statement is based on the  findings of our October 2019 report on climate resilience. To perform the  work for our report, we reviewed about 50 relevant reports and  interviewed 35 stakeholders with expertise in climate resilience and  related fields, including federal officials, researchers, and consultants. In  addition, during the course of this work, we identified domestic and  international examples of governments that invested in climate resilience  and related projects. We selected two of these examples for in-depth  review and presentation in our report: the state of Louisiana’s coastal  master planning effort and Canada’s Disaster Mitigation and Adaptation  Fund. Additional information on our scope and methodology is available  in our October 2019 report.

We conducted the work on which this statement is based in accordance  with generally accepted government auditing standards. Those standards  require that we plan and perform the audit to obtain sufficient, appropriate  evidence to provide a reasonable basis for our findings and conclusions  based on our audit objectives. We believe that the evidence obtained  provides a reasonable basis for our findings and conclusions based on  our audit objectives.

The Federal Government Has Invested in Projects That May Convey Some Climate Resilience Benefits but Does Not Have a Strategic Investment Approach

As we reported in October 2019, the federal government has invested in  projects that may enhance climate resilience but does not have a  strategic approach for investing in high-priority climate resilience projects.  Some federal agencies have made individual efforts to manage climate  change risk within existing programs and operations, and these efforts  may convey climate resilience benefits. For example, the U.S. Army  Corps of Engineers’ civil works program constructs flood control projects,  such as sea walls, that could convey climate resilience benefits by  protecting communities from storms that may be exacerbated by climate  change.

However, even with individual agency efforts, federal investment in  projects specifically designed to enhance climate resilience to date has  been limited. As we stated in our Disaster Resilience Framework, most of  the federal government’s efforts to reduce disaster risk are reactive, and  many revolve around disaster recovery. As a result, we reported in  October 2019 that additional strategic federal investments may be  needed to manage some of the nation’s most significant climate risks  because climate change cuts across agency missions and presents fiscal  exposures larger than any one agency can manage. Our analysis shows  the federal government does not strategically identify and prioritize  projects to ensure they address the nation’s most significant climate risks.

In addition, our October 2019 report discusses our past work that shows  an absence of government-wide strategic planning for climate change.  For example, in our March 2019 update to our high-risk list, we reported  that one area of government-wide action needed to reduce federal fiscal  exposure is in the federal government’s role as the leader of a strategic  plan that coordinates federal efforts and informs state, local, and private- sector action. For this 2019 update, we assessed the federal  government’s progress since 2017 related to climate change strategic  planning against five criteria and found that the federal government had  not met any of the criteria for removal from the high-risk list. Specifically,  since our 2017 high-risk update, four ratings regressed to “not met” and  one remained unchanged as “not met.”

Also, although we have made 17 recommendations that address  improving federal climate change strategic planning, as of August 2019,  no action had been taken toward implementing 14 of those  recommendations—including one dating from 2003. Our enterprise risk  management framework calls for reviewing risks and selecting the most  appropriate strategy to manage them. However, no federal agency,  interagency collaborative effort, or other organizational arrangement has  been established to implement a strategic approach to climate resilience  investment that includes periodically identifying and prioritizing projects.  Such an approach could supplement individual agency climate resilience  efforts and help target federal resources toward high-priority projects.

Six Key Steps Provide an Opportunity for the Federal Government to Strategically Identify and Prioritize Climate Resilience Projects

Six key steps provide an opportunity for the federal government to  strategically identify and prioritize climate resilience projects for  investment, based on our review of reports (including a National  Academies report and the U.S. Global Change Research Program’s  Fourth National Climate Assessment) that discuss adaptation as a risk  management process, as well as on international standards, our past  work (including our enterprise risk management criteria), and interviews  with stakeholders. The six key steps are (1) defining the strategic goals  of the climate resilience investment effort and how the effort will be  carried out, (2) identifying and assessing high-risk areas for targeted  resilience investment, (3) identifying potential project ideas, (4) prioritizing  projects, (5) implementing high-priority projects, and (6) monitoring  projects and climate risks. (See fig. 1.)

In our October 2019 report, we used one domestic and one international  example to illustrate these key steps: Louisiana’s Coastal Protection and  Restoration Authority (CPRA) coastal master planning effort and  Canada’s Disaster Mitigation and Adaptation Fund (DMAF).

In the domestic example, to address the lack of strategic coordination, in  2005 the state of Louisiana consolidated coastal planning efforts  previously carried out by multiple state entities into a single effort, led by  CPRA. CPRA periodically identifies high-priority coastal resilience  projects designed to address two primary risks: flooding and coastal land  loss. To identify potential projects, CPRA sought project proposals from  citizens, nongovernmental organizations, and others. To prioritize  projects, CPRA used quantitative modeling to estimate project outcomes  under multiple future scenarios of varied climate and other conditions and  coordinated with stakeholders to understand potential project impacts.  CPRA has published three coastal master plans in which it identified and  evaluated potential projects. For example, in its 2017 Comprehensive  Master Plan for a Sustainable Coast, CPRA identified $50 billion in high- priority projects to be implemented as funding becomes available.

In the international example, in 2018 the Canadian government launched  the DMAF, a financial assistance program, to provide $1.5 billion (in U.S.  dollars) over 10 years for large-scale, nationally significant projects to  manage natural hazard risks, including those triggered by climate change.  Infrastructure Canada, the entity responsible for administering the DMAF,  seeks project ideas from provinces and territories, municipal and regional  governments, indigenous groups, and others. These entities apply directly  to Infrastructure Canada for funding. According to Canadian officials, two  committees of experts—one composed of experts from other federal  departments and the other composed of nonfederal experts (e.g., urban  planners and individuals with regional expertise)—provide feedback on  potential projects. These projects are prioritized based on multiple criteria  such as the extent to which they reduce the impacts of natural disasters.

Options for Focusing Federal Funding on High-Priority Climate Resilience Projects Have Strengths and Limitations, and Opportunities Exist to Increase Funding Impact

As we reported in October 2019, on the basis of our review of relevant  reports and our past work, interviews with stakeholders, and illustrative  examples, we identified two options—each with strengths and  limitations—for focusing federal funding on high-priority climate resilience  projects. The options are (1) coordinating funding provided through  multiple existing programs with varied purposes and (2) creating a new  federal funding source specifically for investment in climate resilience. In  addition, our analysis of these sources identified opportunities to increase  the climate resilience impact of these two funding options.

A strength of coordinating funding from existing sources is access to  multiple funding sources for a project. For example, one stakeholder we  interviewed whose community used federal funding to implement large- scale resilience projects said that having multiple programs is  advantageous because when funding from one program is not available— such as when the project does not match that program’s purpose or when  there are insufficient funds—funds could be sought from another  program. The state of Louisiana’s coastal master planning effort also  uses multi-program coordination to fund projects. Specifically, funding for  high-priority resilience projects identified in the master plan is provided via  several federal and nonfederal programs designed for wetlands  restoration, hurricane risk reduction, oil spill recovery, and community  development, among other purposes. A limitation of that option, according  to CPRA officials, is that coordinating funding from multiple sources could  be administratively challenging and could require dedicated staff to  identify programs, assess whether projects meet program funding criteria,  apply for funds, and ensure program requirements are met.

Alternatively, one strength of creating a new federal funding source, such  as a federal financial assistance program that could provide loans or  grants or a climate infrastructure bank, is that it could encourage cross- sector projects designed to achieve benefits in multiple sectors. For  example, according to one stakeholder, such a funding source could  allow experts from multiple sectors—such as infrastructure, housing,  transportation, and health—to collaborate on projects, leading to more  creative, comprehensive approaches to enhance community resilience.  However, such a new funding source would have to be created, which  would require congressional authorization.

In addition, we identified opportunities to increase the climate resilience  impact of federal funding options based on our review of our past work,  related reports, an international standard, and the Louisiana and  Canadian examples, as well as interviews with stakeholders:

Using both existing and new funding options. Several  stakeholders told us that using both funding options—multiple,  existing federal programs with varied purposes and a new funding  source for high-priority climate resilience projects—in a strategic,  coordinated way could help increase the impact of federal investment.  Two stakeholders told us that in practice, multiple, existing federal  funding sources that are not specific to climate resilience could be  coordinated to fund projects when their purposes and rules align and  adequate funding is available. A funding source specifically for climate  resilience could be used to fund proposed projects when no related  program exists or when existing programs do not have sufficient  funding available, according to these and other stakeholders.

Helping ensure adequate and consistent funding. Several  stakeholders we interviewed identified the need for adequate and  consistent funding to implement high-priority climate resilience  projects. For example, according to one stakeholder we interviewed,  inconsistent, inadequate funding makes it difficult to complete large- scale projects and can lead to additional costs if significant delays  occur during which existing work deteriorates. In addition to adequate  and consistent funding, funding options should be designed to  accommodate long-term projects since high-priority climate resilience  projects can take multiple years to design and implement, according  to two stakeholders we interviewed.

Encouraging nonfederal investment. Several stakeholders we  interviewed told us that the federal government could use a federal  climate resilience investment effort to encourage nonfederal  investment in high-priority climate resilience projects, thereby  increasing the impact of federal investment. For example, several  stakeholders identified the importance of a cost-share component so  that funding recipients are invested in a project’s success. Canada’s  DMAF encourages nonfederal investment by partially funding projects  of national significance and requiring different levels of cost-share  from funding recipients, ranging from 25 percent for indigenous  recipients to 75 percent for private-sector and other for-profit  recipients. Several stakeholders also identified potential funding  mechanisms—for example, public-private partnerships and loan  guarantees—that could leverage federal dollars to encourage  additional investment in climate resilience projects by nonfederal  entities, including the private sector.

Encouraging complementary resilience activities. To increase the  impact of federal investment in climate resilience, a federal investment  effort presents an opportunity to encourage complementary resilience  activities by nonfederal actors such as states, localities, and private- sector partners, based on interviews with several stakeholders, the  Canadian example, and reports we reviewed. For example, this could  include establishing conditions that funding recipients must meet in  exchange for receiving federal funding. Alternatively, the federal  government could use incentives (e.g., providing greater federal cost- share or giving additional preference in the project prioritization  process) to encourage complementary resilience activities by  nonfederal actors. Our Disaster Resilience Framework states that  incentives can make long-term, forward-looking risk reduction  investments more viable and attractive among competing priorities.  The federal government could use these conditions and incentives to  encourage several types of complementary resilience activities by  nonfederal actors. For example, the federal government could  encourage the use and enforcement of building codes that require  stronger risk-reduction measures. In addition, a federal investment  effort could provide an opportunity to encourage communities to limit  or prohibit development in high-risk areas to minimize risks to people  and assets exposed to future climate hazards. One example of this  would be through zoning regulations. Another stakeholder suggested  that communities receiving federal funding for resilience projects  should be adequately insured against future climate risks so they  have a potential source of funding for rebuilding in the event of a  disaster.

Allowing funds to be used at various stages of project  development. Several stakeholders suggested that federal funds be  used for multiple stages of project development—such as project  design, implementation, or monitoring—to increase the impact of  federal funds. For example, two stakeholders we interviewed told us  that resilience projects can require significant amounts of design work  to develop an implementable and effective project concept and that  making funds available for project design could improve the quality of  project proposals, thereby maximizing the impact of federal funds. In  addition to providing federal funds for project design, one stakeholder  suggested making federal funding available to measure project  outcomes (e.g., how effectively projects increased resilience) to  improve future decisions by both the federal government and others  making resilience investments.

Based on the findings of our October 2019 report, we recommended that  Congress consider establishing a federal organizational arrangement to  periodically identify and prioritize climate resilience projects for federal  investment. Such an arrangement could be designed using the six key  steps for prioritizing climate resilience investments and the opportunities  to increase the climate resilience impact of federal funding options that  we identified in our report.

Chairwoman Castor, Ranking Member Graves, and Members of the  Select Committee, this completes my prepared statement. I would be  pleased to respond to any questions that you may have at this time.

If you or your staff have any questions about this testimony, please  contact Mark Gaffigan at (202) 512-3841 or gaffiganm@gao.gov. Contact  points for our Offices of Congressional Relations and Public Affairs may  be found on the last page of this statement.

GAO staff members who made key contributions to this testimony and the  underlying report are Joseph “Joe” Thompson (Assistant Director), Celia  R. Mendive (Analyst in Charge),Taiyshawna Battle and Paige Gilbreath.  Also contributing to this report were Alicia Puente Cackley, Colleen M.  Candrl, Kendall Childers, Steven Cohen, Christopher Curry, Cindy  Gilbert, Kathryn Godfrey, Holly Halifax, Carol Henn, Susan Irving, Richard  Johnson, Gwendolyn Kirby, Joe Maher, Gregory Marchand, Diana  Maurer, Kirk Menard, Tim Persons, Caroline N. Prado, William Reinsberg,  Oliver Richard, Danny Royer, Jeanette Soares, Kiki Theodoropoulos,  Sarah Veale, Patrick Ward, Jarrod West, Kristy Williams, Eugene  Wisnoski, and Melissa Wolf.

This is a work of the U.S. government and is not subject to copyright protection in the  United States. The published product may be reproduced and distributed in its entirety  without further permission from GAO. However, because this work may contain  copyrighted images or other material, permission from the copyright holder may be  necessary if you wish to reproduce this material separately.

There were 14 separate billion-dollar weather and climate disasters in the United States in 2018, with a total cost of at least $91 billion. These costs will likely rise due to climate change.

Investing in climate resilience projects to help communities prepare for hazards such as sea level rise could reduce future costs. The federal government makes ad hoc investments but does not have a strategy for prioritizing projects with the most impact.

We testified that Congress should consider establishing a federal entity to identify and prioritize these projects.

The government’s fiscal exposure from climate change is a topic on our High Risk List.


Defense Logistics Agreements: DOD Should Improve Oversight and Seek Payment from Foreign Partners for Thousands of Orders It Identifies as Overdue

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.

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.

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.

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.

The Department of Defense (DOD) uses acquisition and cross-servicing  agreements (ACSA) to exchange logistic support, supplies, and services  with the military forces of more than 100 partner countries and  international organizations in return for cash or in-kind reimbursement.  According to its records, between fiscal years 2014 and 2019, DOD  provided about $5 billion of support to partners using ACSA transactions.  For example, DOD used ACSAs to provide bombs valued at about $2  million to the United Arab Emirates for activities in Yemen.

Senate Report 115-262, accompanying a bill for the National Defense  Authorization Act (NDAA) for Fiscal Year 2019, includes a provision for us  to review aspects of ACSA management, including information provided  to Congress and DOD’s tracking of support and receipt of  reimbursement. In this report, we examine the extent to which (1)  agencies have provided information to Congress about ACSAs, and (2)  DOD has tracked and received reimbursement for ACSA orders.

To address these objectives, we reviewed DOD and Department of State  (State) reporting to Congress, guidance and policy on establishing  ACSAs, and ACSA management and implementation. We also reviewed  DOD’s Report to Congress Concerning Acquisition and Cross-Servicing  Activities for Fiscal Year 2018 and DOD Inspector General reporting on  DOD’s management of ACSAs.

To examine the extent to which agencies have provided information to  Congress about ACSAs, we analyzed DOD and State activities to  respond to two different congressional notification requirements  pertaining to ACSAs. First, we reviewed DOD’s notifications to Congress  about its intent to designate governments of countries that are not part of  the North Atlantic Treaty Organization (NATO) as eligible for an ACSA.  To do so, we conducted a content analysis of relevant documents to  identify the dates on which DOD made notifications to Congress and the  dates it signed agreements with those countries. We then calculated the  number of days between these dates for each ACSA and compared our  results to DOD’s requirement to notify Congress of its intent to make a  designation not less than 30 days before the date on which a country is  designated. Second, in reviewing State notifications to Congress  reporting entry into force of ACSAs, we conducted a content analysis of  DOD ACSA documents and State notification records to identify dates  when ACSAs entered into force and when State notified Congress. We  then calculated the number of days between these dates and compared  our results to State’s statutory notification requirements. We also  interviewed DOD officials from the Office of the Chairman of the Joint  Chiefs of Staff (OCJCS) and the Office of the Undersecretary of Defense  (OUSD) for Acquisition and Sustainment (A&S), and State officials from  the Bureau of Political-Military Affairs and the Office of the Legal Adviser’s  Office of Treaty Affairs to discuss DOD’s and State’s notification  processes.

To determine the extent to which DOD has tracked and received  reimbursement for support provided through ACSAs, we analyzed a  generalizable sample of ACSA orders that DOD authorized and recorded  in its ACSA Global Automated Tracking and Reporting System (AGATRS)  from October 2013 through March 2018. AGATRS is DOD’s system of  record for management of ACSA transactions and designates orders as  overdue if reimbursement is not completed within 12 months of the order  authorization date. We selected March 31, 2018, as the latest  authorization date for orders in our sample, and conducted our review of  the sample from May through June 2019. As a result, at least 14 months  had elapsed since the authorization date of orders in our sample. Thus,  all orders that were not recorded in AGATRS as completed by June 2019  were designated in the system as overdue.

We reviewed supporting documentation stored in AGATRS for each  ACSA order in our sample to determine the accuracy of the “order status”  field recorded in the system, which designates whether an order is  complete or incomplete based on whether DOD has received  reimbursement. Additionally, we verified with DOD the status of orders in  our sample that DOD recorded as (1) reimbursed, but for which AGATRS  lacked sufficient supporting documentation to confirm reimbursement, or  (2) not reimbursed. We requested that DOD provide documentation for  orders that it recorded as complete, but for which we could not find  sufficient supporting documentation in AGATRS. DOD could not validate  the reimbursement status for some orders in our sample. We describe  these information gaps in this report. Additionally, DOD identified whether  orders recorded as overdue in AGATRS had been partially reimbursed,  which we incorporated into our calculation of unreimbursed dollar  amounts for the orders in our sample. On the basis of this validation  process, we report on whether ACSA orders authorized from October  2013 through March 2018 in AGATRS had been reimbursed or not fully  reimbursed as of July 10, 2019, or if DOD did not know the  reimbursement status as of October 2019.

Additionally, we discussed ACSA management and transactions,  including information about support provided to the Saudi-led Coalition for  activities in Yemen, with DOD officials from the Defense Finance and  Accounting Service (DFAS), Defense Logistics Agency (DLA), OCJCS,  OUSD (A&S), U.S. Air Force, U.S. Air Forces Central Command  (AFCENT), U.S. Army, U.S. Central Command, and U.S. Marine Corps,  and conducted field work at AFCENT Headquarters at Shaw Air Force  Base in Sumter, South Carolina. For more detail on our scope and  methodology, see appendix I.

We conducted this performance audit from September 2018 to March  2020 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.

Background Definition and Purpose of an ACSA

The Secretary of Defense may enter into ACSAs with authorized  countries and international organizations for the reciprocal provision of  logistic support, supplies, and services with the military forces of that  country or international organization. DOD describes ACSAs as bilateral  agreements that allow exchanges of logistic support, supplies, and  services between the United States and partners in return for  reimbursement in the form of cash or the reciprocal provision of support.  As of February 2020, DOD had signed 125 ACSAs, including five that had  expired, which span DOD’s six geographic areas of responsibility  identified in table 1. For a full list of past and present ACSA partners, see  appendix II.

According to DOD, it uses ACSAs primarily during wartime, combined  exercises, training, deployments, contingency operations, humanitarian or  foreign disaster relief operations, certain peace operations under the  United Nations Charter, or for unforeseen or exigent circumstances. For  example, ACSAs can give a commander increased flexibility to address  logistical shortfalls in a contingency environment. DOD officials noted that  the agreements provide DOD with flexibility, enhanced readiness at  minimal cost, and increased military effectiveness by allowing partners  and allies to access U.S. logistics capabilities and practice mutual support  procedures, which is particularly valuable in planning international  exercises and coalition operations. For example, DOD established  ACSAs with 70 new partners during Operations Enduring Freedom and  Iraqi Freedom, which together covered the 14 years from 2001 through  2014. DOD signed an additional 15 ACSAs from 2015 through February  2020. Figure 1 shows the cumulative growth in the number of ACSAs  over time.

Under 10 U.S.C. §2342, DOD is authorized to enter into ACSAs with  governments of NATO countries, subsidiary bodies of NATO, and  international organizations. DOD can also enter into ACSAs with  governments of non-NATO countries, but must first designate the country  eligible for an ACSA by following a process that includes consulting with  State, determining that the designation is in the interests of national  security, and notifying Congress of its intent to make the designation.  Within DOD, the OUSD (A&S) is the focal point for establishing ACSAs,  as of December 2019, and officials from that office request State’s  authority to negotiate an ACSA and coordinate designees with DOD— typically Combatant Command staff—to negotiate and sign ACSAs.  DOD officials told us that the amount of time it takes to negotiate and sign  an ACSA varies because of a number of factors. For example, a lack of  urgency or the complicated legal context of a potential partner can extend  negotiations. As a result, the amount of time it takes to negotiate and sign  an ACSA has varied greatly, from less than 1 year to more than 25  years.

After an agreement is signed, State is required to notify Congress about  international agreements that enter into force, including ACSAs.  Although, according to agency documentation, most ACSAs enter into  force at the time they are signed, an ACSA may enter into force on a later  date, depending on the conditions outlined in each agreement. According  to State officials, ACSAs, like some other international agreements, may  be applied provisionally (the agreement has been signed and transactions  may be executed) prior to entering into force. Figure 2 illustrates the  process by which DOD and State generally establish new ACSAs.

The Secretary of Defense generally delegates the responsibilities of  managing ACSA implementation to various components including the  OUSD (A&S), Chairman of the Joint Chiefs of Staff (CJCS), defense  agencies, military departments and service components, Combatant  Commands, and subordinate unified commands. Responsibilities and  procedures for implementing ACSA transactions are set forth in DOD  guidance and regulations including CJCS Instruction (CJCSI) 2120.01D,  DOD Directive 2010.9, and DOD’s Financial Management Regulation.  For example, CJCSI 2120.01D calls for military departments and defense  agencies to appoint primary ACSA program managers charged with  maintaining financial and program records of all ACSA transactions.

In addition to the primary guidance documents, DOD policy and  legislation have modified ACSA implementation over time. For example,  DOD issued memorandums in 2017, 2018, and 2019 to update or clarify  requirements for managing ACSAs, and in October 2018, officials noted  that DOD had begun a process to update each of the three primary  guidance documents listed above. In addition, the NDAA for Fiscal Year  2020 was enacted on December 20, 2019, and Section 1203 modified the  authorities related to ACSAs. The law includes a number of new  requirements, including a requirement for the Secretary of Defense to  designate an official who will have primary responsibility for overseeing  and monitoring the implementation of ACSAs in coordination with the Under Secretary of Defense for Policy. Further, the law requires that,  among other things, the Secretary of Defense shall prescribe regulations  to ensure that adequate processes and controls are in place to provide for  the accurate accounting of logistic support, supplies, and services  received or provided under ACSAs. The legislation also instituted a new  congressional notification requirement that DOD may not enter into an  ACSA without notifying the appropriate congressional committees of its  intent to do so at least 30 days in advance.

DOD uses AGATRS as its system of record to create, track, and manage  transactions executed under ACSAs. CJCSI 2120.01D requires the use of  AGATRS to fully document all ACSA transfers of logistic support,  supplies, and services. DLA has managed AGATRS since 2013, when,  according to DLA officials, an updated version of the system was  launched and historical data archived. As of November 2019, AGATRS  included records of more than 31,000 ACSA sales and acquisitions  orders authorized from fiscal years 2014 through 2019. According to  DOD officials, AGATRS is the best source of automated information on  ACSA transactions.

According to DOD, it authorized more than 22,000 ACSA sale orders from  October 2013 through September 2019 that provided approximately $5  billion of logistic support, supplies, and services for items ranging from  water and fuel to bullets and munitions. Figure 3 shows examples of the  types of support provided through ACSAs.

According to AGATRS, more than 70 different DOD components  executed ACSA order sales or acquisitions from October 2013 through  September 2019. However, the seven components shown in table 2  accounted for about 92 percent of the reported total value and about 79  percent of the reported order volume.

Retransfers of ACSA Logistic Support, Supplies, and Services

In addition to direct transactions, the retransfer of support may also occur  under ACSAs. CJCSI 2120.01D describes these retransfers as transfers  from the original recipient to another foreign government or international  organization, or to any entity other than the officers, employees, or agents  of the foreign country or international organization whose military  originally received the logistic support, supplies, or services. DOD  Directive 2010.9 prohibits the retransfer of ACSA support without the prior  written consent of the U.S. government. DOD records indicate that it  approved 11 ACSA retransfers with six different partners from 2003  through 2019. These approvals, listed in appendix III, involved at least 15  final foreign recipients. Eight of these recipients did not have an ACSA at  the time of DOD’s authorization for a retransfer. For example, before  DOD signed an ACSA with Saudi Arabia in 2016, DOD authorized a  retransfer of general purpose bombs from the United Arab Emirates to  Saudi Arabia to support its activities in Yemen. In August 2018,  Congress amended 10 U.S.C. §2342 to prohibit DOD from using an  ACSA to facilitate the transfer of logistic support, supplies, and services to  a final recipient that has not signed an ACSA with DOD.

DOD and State Have Generally Provided Required Information about ACSAs to Congress, but Have Recordkeeping Gaps and Timeliness Issues DOD Notified Congress of Its Intent to Designate at Least 78 of 104 Non-NATO Partners for ACSAs, but Does Not Have Documentation of Remaining Notifications

DOD is responsible for providing information to Congress regarding its  intent to designate non-NATO countries for an ACSA. Specifically, under  10 U.S.C. §2342, DOD must notify Congress of its intent to designate the  government of a non-NATO country for an ACSA at least 30 days before  making the designation. Of the 125 ACSAs DOD had signed as of  February 2020, 21 were agreements with NATO countries and  international organizations, which do not require congressional  notification. For the remaining 104 agreements signed with the  governments of non-NATO countries, DOD should have notified  Congress at least 30 days before designating each country eligible for an  ACSA.

DOD records indicate that DOD transmitted notifications of its intent to  designate at least 78 of the 104 countries as eligible for ACSAs. For  these 78 ACSAs, we confirmed that notifications to Congress were dated  on time, that is, at least 30 days before DOD signed the relevant  agreements. However, as shown in figure 4, DOD did not have records  of 26 of the 104 agreements for which DOD should have notified  Congress, so we could not confirm whether the notifications had  occurred. DOD estimates that these 26 notifications would have occurred  between 1993 and 2009, with 20 being before or during 1996.

According to DOD officials, DOD’s ACSA recordkeeping procedures are  not documented and have changed over time, which contributes to gaps  in DOD notification records. DOD officials told us that while they had  endeavored to save notifications and signed agreements, they had not  systematically tracked notifications for each partner. Neither DOD  Directive 2010.9 nor CJCSI 2120.01D specifically call for DOD to track  ACSA signature or congressional notification transmittal dates, but DOD  officials noted that recordkeeping procedures such as scanning and  maintaining documents should be part of commonly understood proper  administration practices. In addition, several different DOD offices have  been responsible for various aspects of ACSA management over the  years. Each office, according to DOD officials, may have had different  recordkeeping practices, including some that predated electronic records.  Further, DOD officials had difficulties finding paperwork from offices not  currently involved with ACSAs and those that no longer exist.

Poor recordkeeping has affected DOD’s ability to provide Congress with  full and accurate information about ACSAs. For example, DOD’s January  2019 report to Congress on ACSA activities included inaccurate and  incomplete information on notification and signature dates, including  some for which DOD did not have documentation. DOD included  estimated Congressional notification transmittal dates for the agreements  for which it could not locate supporting documentation. Moreover, DOD  included incorrect ACSA signature dates in the report for 16 other  agreements. DOD officials responsible for compiling the report told us  that they made some of these errors because they used the inaccurate  data available at the time. In November 2019, DOD officials told us that  they intended to create a consolidated list of ACSA partners including the  date of eligibility designations and agreement signatures for each partner  to be kept updated through a joint effort by OUSD (A&S) and the Joint  Staff. As of January 2020, DOD had not formalized these intentions in  written guidance. Documenting and implementing recordkeeping  procedures would help ensure that DOD can report accurate and  complete information to Congress.

State Provided Late Notifications to Congress for About a Third of the ACSAs That Had Entered into Force

While DOD is required to notify Congress about non-NATO partner  eligibility for ACSAs, under 1 U.S.C. §112b (commonly referred to as “the  Case-Zablocki Act”), State is required to notify Congress when any  international agreement to which the United States is a party, other than a  treaty, enters into force. Under the Case-Zablocki Act, State is required to  provide this notification as soon as practicable after the agreement has  entered into force, but in no event later than 60 days thereafter. In  addition, the law requires any department or agency of the U.S.  government that enters into any international agreement on behalf of the  United States to transmit the text of such an agreement to State no later  than 20 days after such agreement has been signed. Of the 125 signed  ACSAs, State and DOD officials confirmed that, as of February 2020, 118  had entered into force and, as such, required State notification to  Congress. State’s Office of the Assistant Legal Advisor’s Office of  Treaty Affairs is responsible for receiving texts of signed international  agreements from the agencies that signed them, for recordkeeping  associated with such agreements, and for transmitting the texts of such  agreements to Congress in accordance with the Case-Zablocki Act.

As of February 2020, records for the 118 ACSAs that had entered into  force indicate that State’s notifications to Congress for 68 (or 58 percent)  were dated within 60 days, as required. However, 48 (or 41 percent) of  the 118 notifications were late, that is, dated more than 60 days after  entry into force, as shown in figure 5. According to agency records, these  48 agreements entered into force between 1995 and 2019. For two  agreements that entered into force in 1983 and 2002, State records are  insufficient to determine whether or not State notified Congress.

For most of the 48 State notifications dated after the 60-day deadline,  State attributed the delays to untimely DOD delivery of required  information to State. Specifically, 32 (or 74 percent) of the 43 late  notifications that included a reason for delayed transmittal attributed the  cause to DOD elements having provided late or incomplete agreement  information to State’s Treaty Office. As described above, because DOD  enters into ACSAs on behalf of the United States, it must provide State  the text of the agreements no later than 20 days after signing or otherwise  concluding such an agreement, to facilitate State’s required notifications  to Congress. However, DOD officials confirmed that they provided  information on some ACSAs to State more than 20 days after signature.

DOD officials and our analysis identified multiple causes that contributed  to DOD’s providing information on newly signed ACSAs to State after the  20-day deadline:

Procedural complications. Procedural complications can affect  DOD’s ability to provide information to State within 20 days. For  example, DOD officials noted that the standard DOD process to send  a memo to State sometimes takes more than 20 days to complete.  Further, for some agreements, DOD provided some information to  State within 20 days, but did not include one or more necessary  elements—such as a language certification if the agreement was  signed in a language other than English—to determine whether such  an agreement had been concluded. DOD officials told us that a  significant amount of time can pass before they compile all the  information State needs from DOD, resulting in State’s inability to  send notifications within 60 days of entry into force, as required.

Lack of experience. DOD officials told us that the relevant DOD  officials had overlooked the responsibility to send information to State  about newly signed ACSAs, at times because of a lack of experience.  For example, they explained that DOD missed the 20-day deadline to  send information to State about the 2017 ACSA signing with Mexico  because it had been 10 years since officials from DOD’s Northern  Command had negotiated an ACSA, and the officials had overlooked  the requirement. Regarding two ACSAs about which State had not  notified Congress as of September 2019, State officials told us they  did not know those agreements had entered into force until we asked  about their status. Subsequently, State notified Congress about one of  these agreements in October 2019. For the second, as of February  2020, DOD had begun providing related information to State, and  State was continuing to review related documentation to confirm that  the agreement had entered into force.

Inconsistent guidance. Our review of DOD’s guidance found  inconsistent language describing when DOD should provide  information to State about new ACSAs that could affect DOD’s  transfer of such information. Specifically, the CJCSIs on  international agreements and ACSAs note that DOD should provide  State with information on new ACSAs no later than 20 days after an  agreement is signed. However, DOD Directives on international  agreements and ACSAs indicate that the relevant deadline is no later  than 20 days after an agreement enters into force, which can be days  or years after an ACSA is signed. DOD officials noted that the  officials who drafted the guidance may not have understood the  difference between the signing and entry into force of international  agreements.

Limitations in training. As of December 2019, DOD’s standard  online training on ACSAs did not address responsibilities to share  information about newly signed agreements with State. Specifically,  while DOD’s two required training courses on ACSAs include some  aspects of negotiation and signing new agreements, neither mentions  DOD’s responsibility to report signed ACSAs to State. According to  DOD officials, the requirement may be included during in-person  training conducted by personnel from DOD’s Office of General  Counsel for DOD’s combatant command officials.

Congress depends on State and DOD for information to oversee the use  of ACSAs, which DOD officials have cited as important tools for furthering  national security interests, particularly involving activities with broad  coalitions. Without timely notification of entry into force, Congress will not  have full information about countries and international organizations to  and from which DOD can and may already be using ACSAs to transfer  logistic support, supplies, and services.

DOD Lacks Quality Data to Track ACSA Orders, and Has Not Received Reimbursement for Thousands of Orders

DOD Lacks Quality Data to Track ACSA Orders

CJCS Instruction 2120.01D contains policy and procedural guidance  concerning the use of ACSA authorities, and addresses, among other  things, maintenance of ACSA transaction orders. Specifically, the  instruction establishes AGATRS as DOD’s system of record for the Joint Staff,  Combatant Commands, and the Military Services to manage ACSA  orders; describes processes to execute an ACSA order; and notes that AGATRS will be used to fully record all transfers of ACSA  support, including documentation such as invoices.

Additionally, federal standards for internal control state that management  should use quality information to make informed decisions and achieve  agency objectives. Quality information is defined as information that is  accurate, complete, and provided on a timely basis, among other  attributes, and should include relevant data obtained from reliable  sources.

However, based on our analysis of a generalizable sample of orders, we  found that DOD’s ACSA system of record lacked quality data to track the  status of ACSA order reimbursement. First, we found that DOD  incorrectly recorded the reimbursement status in AGATRS of an  estimated 7.3 percent of ACSA orders authorized from October 2013  through March 2018. For example, DOD recorded three of the 227  orders in our sample as completed, even though it had not received full  reimbursement for them—including at least one order that it had ceased  processing. DOD records included five orders recorded as incomplete  despite having received full reimbursement. We also identified six orders  that DOD either improperly categorized as ACSA transactions or orders  that DOD should have cancelled because the related transaction never  took place or was a duplicate.

Second, DOD could not determine the reimbursement status of an  estimated 12.2 percent of ACSA orders authorized from October 2013  through March 2018 in AGATRS. Based on our generalizable sample,  DOD would not be able to locate records to verify the status of  reimbursement for an estimated 1,100 ACSA orders with authorization  dates ranging from this time period. With regard to the reimbursement  status of these orders, a DOD official noted that DOD could not determine  the status based on available information. As a result, DOD does not  know if the orders have been reimbursed, were processed for  reimbursement, or even took place.

According to DOD officials, data quality lapses occur because DOD does  not have a process in place to reconcile reimbursement information with  data recorded in AGATRS. Although AGATRS is DOD’s system of record  for ACSA transactions, DOD officials told us that the database does not  have financial processing capabilities and is not integrated with DOD’s  financial processing systems. As a result, ACSA personnel must manually  update information in AGATRS as orders are processed in other financial  systems, but do not always do so, according to DOD officials. A DOD official told us that the military services vary greatly in the extent to which  they regularly populate AGATRS, and even within a service, some  personnel are better than others at including complete information.

DOD officials explained that personnel may delay or fail to update  information in AGATRS for multiple reasons. First, personnel may be on  temporary duty in an operational environment where they do not have a  secure internet connection and thus cannot upload information into  AGATRS. Second, short-term rotations of personnel in the field can result  in delays as new personnel learn how to use AGATRS and process  transactions. Third, after negotiating the transfer of support, drafting the  order, and receiving a unique order number assignment in AGATRS,  ACSA orders change frequently. These changes can include price  adjustments that result in DOD or the partner deciding not to move  forward with the transaction, or significantly revising it. In such situations,  DOD officials told us that DOD should cancel orders in AGATRS, but  does not always do so.

Further, DOD does not have quality data to track the extent to which DOD  processes ACSA transactions in accordance with statutory requirements.  Under 10 U.S.C. §2345, payment-in-kind or exchange entitlements  through ACSA transactions shall be satisfied within 12 months of the date  of the delivery of logistic support, supplies, or services. However, DOD  officials told us that they did not have the information necessary to track  such compliance because AGATRS lacks a mechanism to track these  data. DOD officials explained that AGATRS has a field to record the  “delivery time” for an order, but that field does not require users to enter  data in a standard format. Our review of AGATRS data found instances in  which users left the field blank, entered date ranges as opposed to a  single date, or entered text information about the delivery, such as how  quickly it should occur. DOD officials noted that they could not use the  information in this field to determine the extent to which orders were  reimbursed within 12 months of delivery, as outlined in the statute.  Instead of using the date of delivery, DOD officials stated, and our  analysis confirmed, that DOD used an order’s date of authorization as an  alternate metric to indicate whether an order was reimbursed within 12  months. However, DOD has transactions in which it delivers the support  weeks or months after the order is authorized, according to DOD officials.  When asked about such transactions, DOD officials acknowledged that  the authorization date was not an appropriate alternate date to use to  determine if ACSA orders were completed within 12 months of delivery.

DOD has taken some steps—including several since we began our  review—to improve tracking of ACSA orders in AGATRS, such as issuing  memos reiterating requirements for personnel to use AGATRS, improving  the system’s functionality, and updating relevant training. For example, in  October 2018, DOD introduced additional categories of order status in  AGATRS to track an order’s progress through the transaction process  and in June 2019, DOD updated the AGATRS training course to reflect  this and other updates to the system. Additionally, in October 2019, DOD  updated AGATRS to help ensure that orders are assigned to appropriate  DOD organizations and personnel in the system. According to DOD  officials, as of October 2019, three military services were discussing  processes that could improve record keeping and tracking for ACSA  orders. For instance, U.S. Army officials told us that the Army had  begun reconciling data from the service’s financial accounting system  with information recorded in AGATRS to address data quality issues.  However, DOD has not finalized or fully implemented most of these steps,  which, even if implemented, would not address historical inaccuracies in  DOD’s recorded data, according to DOD officials.

According to DOD, from fiscal years 2014 through 2019, DOD used  ACSAs to provide support valued at about $5 billion to foreign partners.  Without a process to ensure that ACSA order data are accurate and  without data to track the timeliness of transactions, DOD does not have  sufficient information to oversee ACSA reimbursement.

DOD Has Received Reimbursement for an Estimated 64 Percent of Recorded ACSA Orders from October 2013 through March 2018, but Thousands of Orders Identified as Overdue Remain Unreimbursed

Section 2344(a) of Title 10 of the United States Code provides that the  United States can use ACSAs to transfer logistic support, supplies, and  services to partners in return for cash reimbursement or by replacement- in-kind or exchange of supplies or services of an equal value. DOD  guidance and financial management regulations outline procedures for  DOD to carry out these transactions and seek timely reimbursement.  Additionally, federal standards for internal control state that management  should perform ongoing monitoring as part of the normal course of  operations to obtain reasonable assurance about the effectiveness of its  internal controls.

On the basis of a generalizable sample of ACSA orders recorded in  AGATRS, we estimate that DOD received reimbursement for  approximately 64 percent of ACSA orders recorded in AGATRS that it  authorized from October 2013 through March 2018 (about 6,000), but did  not receive full reimbursement for approximately 24 percent (about  2,300), as shown in figure 6. Some orders for which DOD did not  receive full reimbursement included basic life support such as food,  water, housing, and fuel, authorized in 2017. Further, DOD could not  verify the accuracy of the reimbursement status for an estimated 12.2  percent of orders (about 1,100) recorded in AGATRS during this time  period—meaning that for these orders, DOD could not verify whether it  had requested or received reimbursement, or whether the transaction had  occurred. The orders in this category included, for example, helicopter  transportation authorized for a partner in 2015 and valued by DOD at  almost $150,000.

DOD officials identified several factors that contributed to unreimbursed  ACSA orders, including:

Lack of invoicing. DOD officials said that DOD had not received  reimbursement for 39 of the 221 ACSA orders in our sample, valued  by DOD at more than $700,000, because it had not sent invoices to  request reimbursement from partners. According to the officials, DOD  had not processed these orders for invoicing in part because it had  not assigned the orders to the appropriate officials who manage  financial processing. Officials from two military services told us that  while they aim to have strong communication between the personnel  who manage logistics and finance processes for ACSA orders, factors  such as staff rotations, contingency environments, and delayed  training may affect the efficiency of order processing. DOD officials  also noted that missing or incorrect order information, such as an  incorrect billing address for a partner nation, may delay invoicing.

Delays from partner countries. For some unreimbursed orders in  our sample, DOD officials explained that DOD had sent invoices to  partner countries but, as of August 2019, had not received  reimbursement. The average time from the date of invoice to the  date of reimbursement was 208 days for reimbursed cash  transactions in our sample of 221 orders authorized from October  2013 through March 2018, and the longest amount of time was 751  days.

Lack of a monitoring process. According to DOD officials, DOD did  not appropriately monitor the reimbursement status of some orders in  our sample and does not have a process to monitor delinquent debt.  For example, DOD officials explained that they could not verify  reimbursement for some orders recorded as overdue in our sample  because personnel had not closely monitored the status of these  orders. Additionally, in response to our inquiries, DOD acknowledged  that it would need to reassign certain overdue orders to appropriate  officials for processing. Although AGATRS produces reports that  identify overdue orders, DOD does not have an agency-wide process  to monitor and take action on unreimbursed orders that become  delinquent. DOD officials told us that the Defense Finance and  Accounting Service (DFAS), responsible for some ACSA billing, sends  letters to partners for delinquent ACSA bills 30, 60, and 90 days after  the end of the billing period outlined under the terms of the ACSA.  However, after 90 days, DOD does not have a standardized approach  to continue seeking delinquent ACSA debt according to DOD officials.  In 2018, DOD updated the section of its Financial Management  Regulation that addresses the collection of debt owed by foreign  entities, but according to DOD officials, DOD had not implemented the  updated policy as of October 2019. Officials from DFAS explained  that the policy had not been implemented because they were working  with officials from the military services to evaluate possible debt  collection procedures.

Unless it takes steps to ensure that it processes and invoices ACSA  orders as required, and seeks unpaid debt, DOD may not receive  reimbursement for thousands of orders for which it has provided  support. As of November 2019, DOD indicated that the department had  authorized more than $1 billion in ACSA sale orders for which  reimbursement is now overdue. Seeking reimbursement for these ACSA  orders and implementing oversight processes will help ensure that the  United States receives reimbursement for current and future orders under  the terms of these agreements.

In the past 5 years, DOD has exchanged billions of dollars in  reimbursable ACSA support with military forces from more than 100  partner nations and international organizations through ACSA  transactions. DOD uses ACSAs to exchange logistic support, supplies,  and services with partners in a variety of circumstances, including  international coalition efforts, such as those combating terrorist groups in  Iraq and Syria. However, weaknesses in recordkeeping and management  processes limit the extent to which agencies can (1) provide Congress  with information requested for oversight and (2) monitor and secure  reimbursement.

First, DOD could not locate records related to required congressional  notifications about designating 26 countries for an ACSA. Further, State  transmitted almost half of its congressional notifications on ACSA entry  into force after required deadlines, largely because DOD did not provide  State with information about new agreements. Without full and timely  information about new partners that DOD intends to designate for an ACSA or agreements that have entered into force, Congress will not be  sufficiently informed to effectively oversee DOD’s use of ACSAs as an  element of security cooperation.

Second, DOD lacks quality data necessary for tracking ACSA orders and  has not received reimbursement for thousands of orders. Our review of  227 transactions confirmed at least $26 million of unreimbursed overdue  transactions, but, as of November 2019, DOD records include additional  overdue ACSA transactions for support provided to partners dating back  to 2011, which DOD values at more than $1 billion. By establishing  procedures to improve ACSA recordkeeping and processes to seek  reimbursement, DOD can help ensure that reliable information is  available for reporting and oversight of activities to secure reimbursement  of hundreds of millions of dollars of support provided to our partners.

We are making a total of seven recommendations to DOD:  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)

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)

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)

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)

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).

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)

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)

We provided a draft of this report to DOD and State for comment. In its  comments, reproduced in appendix V, DOD concurred with the seven  recommendations directed to it. DOD also provided information about  actions it has taken to address recommendations 1 and 2. With respect to  recommendation 1, DOD provided a copy of a February 2020  memorandum that outlines 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. With respect to recommendation 2, DOD  provided a copy of a February 2020 memorandum that issued guidance  related to DOD’s provision of ACSA information to State for State’s  congressional notifications under the Case-Zablocki Act. We plan to  follow up with DOD to learn about the distribution of these memoranda.

State provided technical comments, which we incorporated as  appropriate.

We are sending copies of this report to the appropriate congressional  committees, the Secretaries of Defense and State, and other interested  parties. In addition, the report is available at no charge on the GAO  website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-6881 or bairj@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made key contributions to this report are  listed in appendix VI.

Appendix I: Objectives, Scope, and Methodology

Senate Report 115-262, accompanying a bill for the National Defense  Authorization Act (NDAA) for Fiscal Year 2019, includes a provision for us  to review several aspects of Acquisition and Cross-Servicing Agreement  (ACSA) management, including information provided to Congress and  Department of Defense (DOD) tracking of support and receipt of  reimbursement. In this report, we examine the extent to which (1)  agencies have provided information to Congress about ACSAs, and (2)  DOD has tracked and received reimbursement for ACSA orders.

To address these objectives, we reviewed legal authorities related to  ACSAs in sections 2341-2350 of Title 10 of the United States Code,  DOD policy and guidance on ACSA management and implementation,  and DOD Inspector General (IG) reporting on DOD’s management of  ACSAs. We analyzed DOD and Department of State (State)  documentation related to congressional notifications and the  establishment of ACSAs, DOD ACSA transaction data, and DOD’s Report  to Congress Concerning Acquisition and Cross-servicing Activities for  Fiscal Year 2018. We also discussed ACSA management, order tracking,  and transactions, including for the Saudi-led Coalition, with DOD officials  from the Air Force Central Command (AFCENT); Defense Finance and  Accounting Services; Defense Logistics Agency (DLA), including DLA  Energy; Office of the Chairman of the Joint Chiefs of Staff (OCJCS);  Office of the Undersecretary of Defense for Acquisition and Sustainment  (OUSD (A&S)); U.S. Air Force; U.S. Marine Corps; U.S. Army; and U.S.  Central Command. With State officials from the Bureau of Political-Military  Affairs and the Office of the Legal Adviser’s Office of Treaty Affairs, we  discussed the process to establish international agreements, State’s  notifications to Congress on ACSA entry into force, and recordkeeping for  those notifications. We conducted fieldwork at AFCENT Headquarters at  Shaw Air Force Base in Sumter, South Carolina, to discuss ACSA  transactions related to support provided to the Saudi-led Coalition.

To determine the extent to which agencies have provided information to  Congress about ACSAs, we analyzed agency activities related to (1)  DOD’s requirement to notify Congress of its intent to designate a country  eligible for an ACSA and (2) State’s requirement to notify Congress no  later than 60 days after the entry into force of international agreements,  which includes ACSAs.

First we reviewed DOD’s congressional notification requirements under  10 U.S.C. §2342. The law authorizes the Secretary of Defense to sign  ACSAs with the governments of North Atlantic Treaty Organization  (NATO) countries, subsidiary bodies of NATO, and the United Nations  Organization or any regional international organizations without an official  designation of eligibility. However, for countries that are not members of  NATO, DOD must notify Congress of its intent to designate the  government of a country eligible for an ACSA at least 30 days before  making the designation. Agency records indicate that DOD had signed  125 ACSAs as of February 2020. We included these 125 agreements in  our analysis because, according to DOD, each agreement is considered  to be an ACSA although some are named as other types of mutual  logistics support agreements.

To determine the extent to which DOD addressed requirements for  notifying Congress of its intent to designate a non-NATO country for the  purposes of entering into an ACSA, we conducted a content review of  ACSA documents to identify signature and notification dates for each relevant ACSA, calculated the number of days between them, and  compared our results to DOD’s requirement to notify Congress of its  intent to make a designation not less than 30 days before a country is  designated. Although DOD is required to notify Congress at least 30 days  before designating non-NATO countries for the purposes of entering into  an ACSA, DOD officials told us that ACSA records do not include a  precise designation date for each country. Therefore, we used ACSA  signature dates as a proxy for designation dates. In addition, because  some ACSAs are revised and re-signed over time, we planned to  compare the date on which DOD transmitted notifications to Congress  with the signature date of the first ACSA signed with each partner.  However, DOD officials explained that they could not readily provide the  signature dates of the first ACSA signed with each partner because they  purposefully expunged electronic records related to expired or replaced  agreements—which would have noted signature dates—to help ensure  that officials planning ACSA transactions referenced the current version  of the agreement.

Although DOD did not systematically track the signature dates for  agreements that had been revised and re-signed, we reviewed  documents related to each ACSA partner, historical treaty records, and  other agency documents and found the signature date for the first  agreement DOD signed with each ACSA partner. We compared NATO  accession dates with these first ACSA signature dates and determined  that 19 ACSA partners were members or elements of NATO at the time  the relevant ACSA was signed. An additional two ACSA partners were  elements of other international organizations. Therefore, we determined  that DOD had signed 21 of its 125 ACSAs with governments of NATO  countries, subsidiary bodies of NATO, and other international  organizations, which do not require an official designation of eligibility.

Under the law, DOD was required to notify Congress at least 30 days  prior to designating the remaining 104 countries for an ACSA. The  Secretary of Defense typically submits these notifications to the Senate  Committees on Armed Services and Foreign Relations and the House  Committees on Armed Services and Foreign Affairs. We included in our analysis the 78 of these 104 countries for which DOD records included a  copy of a dated notification letter addressed to at least one of these four  committees. For these 78 countries, we compared DOD notification  dates with the signature date of the initial agreement with each partner.  DOD could not provide documentation of congressional notifications for  the remaining 26 partners, which we excluded from our analysis. We also  interviewed DOD officials from the OCJCS and the OUSD (A&S) to  discuss DOD’s congressional notification process.

Second, we analyzed State’s requirement under 1 U.S.C. §112b to notify  Congress no later than 60 days after the entry into force of international  agreements, which includes ACSAs. Under the law, often referred to as  “the Case-Zablocki Act,” State is required to notify Congress of any  international agreement to which the United States is a party, other than a  treaty, as soon as practicable after the agreement has entered into force,  but in no event later than 60 days thereafter. To determine the extent to  which State had transmitted notifications about ACSA entry into force on  or before the statutory 60-day deadline, we conducted a content analysis  of DOD ACSA documents and State notification records to identify  relevant entry into force and State notification dates. We then calculated  the number of days between them and compared our results to State’s  reporting requirement under 1 U.S.C. §112b. Of the 125 ACSAs that DOD  had signed, State officials confirmed that, as of February 2020, 118 had  entered into force and, as such, required notification to Congress of entry  into force under the Case-Zablocki Act.

We excluded the remaining seven signed ACSAs from our analysis as  follows. First, we excluded three agreements DOD signed with Benin,  Iraq, and Uruguay that, according to State and DOD officials, had not  entered into force as of February 2020, and therefore did not yet require  notification under the Case-Zablocki Act. Second, we excluded two  ACSAs signed with Canada and the United Kingdom, for which State  officials explained that the legal arrangements governing acquisition and  cross-servicing transactions are contained in government-to government  “chapeau agreements” regarding defense cooperation rather than in  agency-level ACSA agreements more commonly used with other  partners. According to officials, these chapeau agreements are  supplemented by nonbinding, agency-level implementing procedures that  are not separately subject to Case-Zablocki Act reporting to Congress.  Third, we excluded two agreement for which, as of February 2020, State  officials were reviewing agreement documentation to confirm potential  entry into force prior to notifying Congress. For one of these two  agreements, if State determines the agreement to be entered into force,  the date of entry into force will be retroactively dated to the date of  signature, per the terms of the agreement. The retroactive entry into force  date for the agreement is more than 60 days before February 2020, so if  the entry into force date is confirmed, the related notification to Congress  under the Case-Zablocki Act would be late as compared to the 60-day  deadline. The second of these two agreements was signed on January  31, 2020.

For the 118 ACSAs that had entered into force and thus required State’s  notification to Congress, we compared entry into force dates with  notification dates to determine the extent to which State had provided  notifications on or before its 60-day deadline. State provided  documentation on entry into force notifications for all but two of the 118  relevant ACSAs. For these two agreements, signed in 1983 and 2002,  State had no record of related notifications, so we were unable to  conclude whether or not they had occurred. For the remaining 116  agreements, State provided copies of dated congressional notifications  for 113 and notification dates from its Treaty Information Management  System for three notifications for which copies of the letters were  unavailable. We included in our analysis notifications that were  transmitted to either the President of the Senate, the Speaker of the  House, or both. We compared the date of these notifications with ACSA  entry into force dates we verified using ACSA agreement documentation  and State notification documents. We also analyzed information in State’s  notification documents to determine the causes for late transmittals. We  interviewed DOD officials from the OCJCS and the OUSD (A&S), and  State officials from the Bureau of Political-Military Affairs and the Office of  the Legal Adviser’s Office of Treaty Affairs to discuss State’s  congressional notification process.

To determine the extent to which DOD has tracked and received  reimbursement for support provided through ACSA orders, we analyzed  a generalizable sample of ACSA orders that DOD had authorized from  October 2013 through March 2018 in the ACSA Global Automated  Tracking and Reporting System (AGATRS). AGATRS is DOD’s system  of record for management of ACSA transactions and designates orders  as overdue if reimbursement is not completed within 12 months of the  order authorization date.

We selected a stratified random sample of 227 orders, which were  sampled from a population of 9,761 orders within the population groups in  table 3. Strata in table 3 are based on a combination of four features:  order total (dollar amount); order status (completed versus incomplete);  document upload requirement (required versus not required); and military  service. With this probability sample, each order of the study population  had a nonzero probability of being included, and that probability could be  computed for any order. Because we followed a probability procedure  based on random selections, our sample is only one of a large number of  samples that we might have drawn. Since each sample could have  provided different estimates, we express our confidence in the precision  of our particular sample’s results as a 95-percent confidence interval  (e.g., the margin of error is plus or minus 7 percentage points). This  interval would contain the actual population value for 95 percent of the  samples we could have drawn. We calculated our sample analysis with  survey software that accounts for the sample design (stratification and  weights) and appropriate subpopulation reporting group statements.

We designed stratification and sample sizes based on order status and  document upload requirements to ensure that the 95-percent confidence  intervals of attribute estimates (e.g., percentage of orders that have  proper support) had margins of error within around +/- 10 percentage  points for each of the following four reporting groups, which collapse over  the following strata: complete orders, incomplete orders, document  upload required, and document upload not required. We also designed  stratification based on military service to ensure proportionate  representation of each military service in our sample within each  combination of order status and document upload requirement.

All of the orders in our population had been authorized for 14 months, and  thus should have been repaid according to DOD’s 12-month system  requirement, at the time we conducted our review of the sample from May  2019 through June 2019. For this sample, we analyzed order information  and coordinated with DOD to validate the reimbursement status recorded  in AGATRS. On the basis of (1) reporting from the DOD Inspector  General, (2) interviews with DOD officials, (3) DOD’s use of manual entry  to populate the system, and (4) our review of DOD’s use of ACSA orders  to process reimbursement for unpaid transactions with members of the  Saudi-led Coalition, we determined that DOD’s data in AGATRS may not  be fully reliable. DOD officials explained that although AGATRS was the  single repository for global ACSA transaction data, the system was not  integrated with any other DOD systems and thus relied on manual entry  from personnel to populate ACSA order information. As a result, we took  additional steps to determine the reliability of information reported in the  system. Specifically, we requested a data report from DOD of all ACSA  transactions recorded in AGATRS as of May 8, 2019. We reviewed  supporting documentation and information recorded in AGATRS for each  ACSA order in our sample to determine whether the data in the “order  status” field were accurate. For the order status “completed,” which  indicates that the ACSA order has been fully reimbursed, we reviewed  available information to determine whether financial collection  documentation had been recorded and compared the information in these  documents to the information in AGATRS.

We then took steps to verify with DOD the status of orders that (1) were  recorded as “completed,” but for which we had not identified any financial  documentation or the documentation did not contain sufficient information  to verify reimbursement, and (2) were not recorded as “completed” as of  the time of our review. Of the 227 orders in our sample, 138 fit into one  of these two categories. For orders that were recorded as completed but  did not have sufficient supporting documentation, we requested that DOD  provide additional support. For orders that were recorded as incomplete,  we requested that DOD verify whether the orders had been reimbursed,  given that they had been in the system longer than 12 months and were  categorized as overdue in the data report provided by DOD. DOD provided feedback on and validated the reimbursement status for 101 of  the 138 orders sent for follow-up. DOD did not provide a response for the  remaining 37 orders. DOD identified whether orders recorded as overdue  in AGATRS had been partially reimbursed, which we incorporated into  our calculation of unreimbursed dollar amounts for the orders in our  sample. On the basis of this validation process, we report on whether  ACSA orders authorized from October 2013 through March 2018 in  AGATRS had been reimbursed or not fully reimbursed as of July 10,  2019, or whether DOD did not know the reimbursement status as of  October 2019.

We found that approximately 7 percent of the order status information  recorded in AGATRS was inaccurate. For example, three of the 227  orders in our sample that DOD had recorded as “completed” were not  fully reimbursed. Five of the 227 orders in our sample that DOD had  recorded as incomplete were actually reimbursed; DOD uploaded  supporting documents and closed these orders in AGATRS in response  to our inquiry. Additionally, as described above, six of the 227 orders  should not have been included in our scope but were misclassified in  DOD’s system. We also found orders under the purview of DLA Energy  that were partially or fully settled (i.e., reimbursed or reconciled by netting  sales and purchases between the United States and the partner nation),  but whose status had not been updated in AGATRS. DLA Energy officials  told us that AGATRS does not have sufficient functions to capture DLA  Energy’s fuel reconciliation process, in which sales and purchases with  partners may be offset through specific implementing arrangements with  the partners. In some cases DLA Energy provided us with the actual  amounts, including unpaid amounts, but we were unable to verify this  information further.

In response to our verification questions, DOD took steps to correct some  of the AGATRS data inaccuracies we identified. For instance, DOD  reopened (i.e., redesignated as incomplete) some orders it had recorded  as completed in AGATRS but for which it had not received full  reimbursement. Similarly, DOD uploaded reimbursement information for  orders that it had recorded in the system as incomplete, but for which it  had received reimbursement. DOD also uploaded reimbursement  information in AGATRS for ACSA orders from our sample that it had  recorded as completed, but for which it lacked documentation to support  that it had received reimbursement. Finally, DOD settled or requested and  received reimbursement for five of the ACSA orders in our sample.

We found that DOD data on ACSA transactions contained weaknesses  that we describe in this report. Because of these weaknesses, we only  used data from our sample in developing estimates on data quality and  reimbursement. We checked all of the orders in our sample, and either  verified or corrected them as needed, and report any data that could not  be verified. Since our probability sample with verified and corrected  information is generalizable to all in-scope orders, we were able to  estimate population values based on the corrected sample information.

We conducted this performance audit from September 2018 to March  2020 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.

Appendix II: Signed U.S. Department of Defense Acquisition and Cross-Servicing Agreements as of February 2020

As of February 2020, DOD had 120 signed ACSAs that span DOD’s  geographic areas of responsibility. (See table 4.)

Appendix III: List of Logistics Support Retransfers under Department of Defense Acquisition and Cross-Servicing Agreements

The Department of Defense (DOD) describes the retransfer of logistic  support, supplies, and services provided under Acquisition and Cross- Servicing Agreements (ACSA) as a transfer from the original recipient to  another foreign government or international organization, or to any entity  other than the officers, employees, or agents of the foreign country or  international organization whose military originally received the support.  DOD Directive 2010.9 prohibits the retransfer of ACSA support without  the prior written consent of the U.S. government, obtained through  applicable DOD channels. As of November 2019, DOD had information  related to 11 ACSA transactions made with six different ACSA partners  between 2003 and 2019 for which the United States approved retransfer  of ACSA support, as detailed in table 5.

Appendix IV: Use of Acquisition and Cross- Servicing Agreements to Seek Reimbursement from the Saudi-led Coalition

In 2019, we presented preliminary observations to Congress about the  extent to which the Department of Defense (DOD) had provided support  to and requested reimbursement from the Saudi-led Coalition (SLC), and  DOD’s use of Acquisition and Cross-Servicing Agreements (ACSA) to do  so. This appendix describes those observations and provides updates as  appropriate with information obtained during the course of our review.

In March 2018, DOD received a congressional inquiry regarding DOD’s  use of ACSAs to provide support to the SLC activities in Yemen. In  November 2018, DOD informed Congress about (1) the legal justification  for the provision of aerial refueling assistance to the SLC, since March  2015, and (2) the status of reimbursement. DOD reported that it had  failed to process and seek reimbursement for some fuel and all aerial  refueling support provided to members of the SLC from March 2015  through November 2018, and that it would use the ACSA authority to  request retroactive reimbursement. Additionally, as of August 2019, DOD  had not received full reimbursement for general purpose bombs provided  through ACSA in April 2015.

According to DOD officials, a Joint Staff Execute Order signed on March  27, 2015, directed DOD to provide aerial refueling support to the SLC, if  requested, and stated that the support would be provided on a  reimbursable basis either through foreign military sales (FMS) or an  ACSA. The order also stated that, as of March 2015, Saudi Arabia had  not signed an ACSA. Further, according to DOD officials, there was no  FMS case through which DOD might have provided aerial refueling to  Saudi Arabia in March 2015.

Aerial refueling support includes flying hours to conduct refueling and the  fuel exchanged. According to DOD officials, air crews recorded aerial  refueling flight hours for members of the SLC at the time they occurred,  but did not record them as related to SLC activities in Yemen or process  them as reimbursable FMS or ACSA transactions. For fuel provided to  SLC members during aerial refueling flights at this time, DOD  documented and processed some, but not all, as ACSA transactions.  DOD officials identified multiple factors, including inadequate planning  and insufficient understanding of guidance in the Joint Staff order, that led  to a process breakdown in which DOD did not invoice and request  reimbursement.

Following the congressional inquiry, DOD began a review of air tanker  flight hours, Air Force fuel purchases, and data from Saudi Arabia to  determine aerial refueling reimbursement charges for flying hours and  fuel. Based on this review, DOD identified reimbursable amounts of more  than $261 million for flying hours and $37 million for fuel provided to  coalition members. Using this information, DOD requested retroactive  reimbursement through the ACSA authority from the United Arab  Emirates (UAE) and Saudi Arabia for the flight hours and fuel not  previously reimbursed. According to DOD officials, DOD is treating these  transactions as third-party transfers. According to DOD documents and  officials, because Saudi Arabia did not have a signed ACSA prior to June  2016, UAE agreed to reimburse the United States for transactions  supporting the SLC before this date. Saudi Arabia agreed to reimburse  the United States for transactions after this date. As of February 28, 2019,  UAE had submitted $103.7 million in retroactive reimbursement for air  tanker flight hours and $15 million for fuel. In May 2019, DOD signed an  agreement with Saudi Arabia for repayment of $151 million for aerial  refueling support provided from June 2016 through September 2018.  DOD and Saudi Arabia agreed that Saudi Arabia would submit payments  in increments over the course of 12 months, after receiving approval from  the crown prince, Mohammad bin Salman, and additional leadership in  Saudi Arabia. As of February 2020, Saudi Arabia had submitted payment  of approximately $114 million, according to DOD documents. A balance  of about $37 million for flight hours remains unreimbursed as well as $22  million for fuel.

In addition to aerial refueling support, in 2015 DOD provided about $2  million of general purpose bombs to UAE for which UAE had received  U.S. approval for an ACSA retransfer to Saudi Arabia for operations in  Yemen. However, DOD did not record this order in the ACSA system of  record as required until August 2019 and, as of September 2019, had  received reimbursement in the form of reciprocal support for only two- thirds of the value of the bombs initially provided. DOD officials told us  that UAE planned to provide the remaining in-kind reimbursement in  September 2020.

Appendix V: Comments from the Department of Defense

Appendix VI: GAO Contact and Staff Acknowledgments

In addition to the contact named above, Biza Repko (Assistant Director),  Kathryn Bolduc and Jasmine Senior (Analysts-in-Charge), Joe Carney,  Debbie Chung, Martin de Alteriis, Neil Doherty, Adrian Good, Sally  Newman, Cary Russell, Sonya Vartivarian, and Nicole Willems made key  contributions to this report.

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.