NATO

In response to a congressional request, GAO reviewed the financial controls over U.S. contributions to the North Atlantic Treaty Organization's (NATO) Airborne Early Warning and Control Program to determine whether U.S. performance in this program was consistent with: (1) the Memorandum of Understanding establishing the program; and (2) U.S. laws and regulations covering contributions to such multilateral efforts.

GAO found that: (1) the United States and other participating countries provided contributions to the program in advance of requirements; (2) NATO deposited the funds in commercial, interest-bearing accounts, which resulted in NATO earnings of about $250 million; (3) U.S. contributions earned about $80 million in interest; (4) NATO committed all earned interest to original program requirements or to outstanding claims payments; and (5) the advance payments resulted in increased borrowing and interest costs for the Treasury. GAO also found that Department of Defense (DOD) representatives: (1) did not violate any U.S. laws, but failed to comply with Department of the Treasury principles and guidelines for providing funds to international organizations; (2) did not request that NATO adjust or delay U.S. contributions or support efforts to identify and return any interest earned on those contributions; (3) supported the use of the accumulated interest rather than appropriated funds for program requirements; and (4) failed to inform Congress in its summary financial information of the accumulation and use of the interest.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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