Peace Operations: Cost of DOD Operations in Somalia (Chapter Report, 03/04/94, GAO/NSIAD-94-88). The Defense Department (DOD) has incurred incremental costs of nearly $885 million for operations in Somalia through the end of fiscal year 1993. According to DOD officials, the transfer of funds necessary to cover these costs has not harmed normal spending plans. Should such spending conditions continue for contingency operations, however, DOD officials say that it could create problems over the long run. Of the $885 million in incremental costs, DOD is entitled to be reimbursed by the United Nations for about $124 million. In some cases, DOD would be allowed to keep the money it received from the United Nations, giving it access to funds above the amount appropriated for that fiscal year. DOD would then have access to these funds without any requirement for further congressional authorization or appropriation. --------------------------- Indexing Terms ----------------------------- REPORTNUM: NSIAD-94-88 TITLE: Peace Operations: Cost of DOD Operations in Somalia DATE: 03/04/94 SUBJECT: Military intervention International cooperation Defense appropriations Appropriation accounts Military operations Reimbursements to government Logistics Military materiel Military training Budget receipts IDENTIFIER: DOD Operation Provide Relief DOD Operation Restore Hope DOD Operation Continue Hope UN Trust Fund for Somalia Somalia ************************************************************************** * This file contains an ASCII representation of the text of a GAO * * report. Delineations within the text indicating chapter titles, * * headings, and bullets are preserved. 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We are unable to accept electronic orders * * for printed documents at this time. * ************************************************************************** Cover ================================================================ COVER Report to Congressional Committees March 1994 PEACE OPERATIONS - COST OF DOD OPERATIONS IN SOMALIA GAO/NSIAD-94-88 Peace Operations Abbreviations =============================================================== ABBREV DOD - Department of Defense GAO - General Accounting Office LOA - Letter of Assist OSD - Office of the Secretary of Defense UNITAF - Unified Task Force UNOSOM - U.N. Operation in Somalia Letter =============================================================== LETTER B-255935 March 4, 1994 The Honorable Sam Nunn Chairman, Committee on Armed Services United States Senate The Honorable Ronald V. Dellums Chairman, Committee on Armed Services House of Representatives This report discusses the costs incurred by the Department of Defense (DOD) in operations in Somalia since fiscal year 1992 and the extent to which those costs are reimbursable by the United Nations. It suggests that the Congress consider whether to (1) continue to allow DOD to retain any reimbursements in excess of the funds already appropriated by the Congress, (2) reduce DOD's appropriated funds by the amount reimbursed by the United Nations, or (3) create an account to receive the reimbursements for use in funding future contingency operations. We are sending copies of this report to the Chairmen of the House and Senate Committees on Appropriations, House Committee on Foreign Affairs, and Senate Committee on Foreign Relations. We are also sending copies to the Secretaries of Defense, State, the Army, the Navy, and the Air Force. We will also make copies available to others upon request. Please contact me at (202) 512-3504 if you or your staffs have any questions concerning this report. Major contributors to this report are listed in appendix III. Richard Davis Director, National Security Analysis EXECUTIVE SUMMARY ============================================================ Chapter 0 PURPOSE ---------------------------------------------------------- Chapter 0:1 In response to widespread starvation in Somalia, the United States provided support for relief efforts as part of three U.N.-sponsored operations. After discussions with several congressional committees, GAO reviewed the costs associated with these operations to determine (1) what incremental costs\1 the Department of Defense (DOD) incurred during its operations in Somalia; (2) the impact these operations have had on DOD's normal spending plans; and (3) what, if any, reimbursement the United States could expect for expenses incurred during the Somalia operations and how DOD and the State Department will share such reimbursement. -------------------- \1 As defined by the Omnibus Budget Reconciliation Act of 1990 (P.L. 101-508), for use during Operation Desert Shield/Storm, incremental costs are only those costs that would not have been incurred except for the operation. DOD is still using this definition. BACKGROUND ---------------------------------------------------------- Chapter 0:2 In April 1992, the United Nations passed a resolution establishing the U.N. Operation in Somalia (UNOSOM) to observe prior cease-fire agreements and provide security to humanitarian relief efforts in Somalia. DOD's participation, termed Operation Provide Relief, provided transportation for Pakistani troops, humanitarian aid workers, and supplies. The situation in Somalia deteriorated, and on December 3, 1992, the U.N. Security Council passed Resolution 794, accepting the U.S. offer to lead a multinational Unified Task Force (UNITAF) to establish a secure environment for humanitarian relief operations and prepare for subsequent transition to U.N. forces. At UNITAF's peak early in 1993, about 26,000 U.S. troops and about 12,000 troops from 20 other countries were involved. UNITAF was not a U.N. operation. U.S. participation in UNITAF was called Operation Restore Hope. On March 26, 1993, the United Nations authorized the establishment of UNOSOM II to maintain the secure environment in Somalia created by UNITAF, pursue disarmament, and reestablish basic civil institutions. Most U.S. troops from UNITAF were withdrawn by May 4, 1993, when the UNITAF commander officially turned over command to the UNOSOM II commander. DOD participation in support of UNOSOM II has been designated Operation Continue Hope. At the peak of U.S. involvement, there were about 2,900 logistics troops as a direct part of UNOSOM II. In addition, up to approximately 14,000 U.S. military personnel in and near Somalia have served in support of UNOSOM II but under U.S. command and control and not as part of U.N. forces. The United States will withdraw all but a few hundred military personnel in noncombat roles by March 31, 1994. The United Nations pays countries for providing support through certain types of agreements. To pay for support provided to 10 specific countries during UNITAF, the United Nations established the Trust Fund for Somalia and asked for contributions from member states. Other support is provided through Letters of Assist, which arrange for goods and services to be paid for by the United Nations. The United Nations also pays member states participating in U.N. operations for providing troops and equipment. The United Nations will pay the U.S. government for the 2,900 logistics troops assigned to the U.N. force and whatever equipment the United Nations requested for the operation. Since it was not a U.N. operation, the United States will not be paid for the troops involved in UNITAF/Restore Hope; nor will the United States be paid for Continue Hope forces that are outside of UNOSOM II. RESULTS IN BRIEF ---------------------------------------------------------- Chapter 0:3 DOD has incurred incremental costs of almost $885 million for operations in Somalia through the end of fiscal year 1993, as shown in table 1. DOD paid for most of this by a congressionally approved transfer of funds between its existing appropriations and absorbed the balance within its normal operating appropriations. No additional funds were appropriated to cover these costs. According to DOD and service officials, the transfer of funds necessary to cover DOD Somalia costs has not adversely affected normal spending plans. However, should such spending conditions continue for contingency operations, DOD officials say it could create mid- to long-term problems. Of the almost $885 million in incremental costs incurred through fiscal year 1993, DOD is entitled to be reimbursed by the United Nations for at least $123.6 million for expenses incurred during UNITAF and UNOSOM II. DOD has been paid $27.5 million for expenses incurred in the support of other nations during UNITAF, and the United Nations has been billed for $43.7 million in self- sustainment costs and $44.2 million for support provided to the United Nations during UNOSOM II. The United Nations has yet to be billed for $3.8 million in UNOSOM II costs. DOD has received $2.7 million, of an estimated $4.4 million for troop reimbursements for UNOSOM II. There is no estimate as yet for equipment payments to DOD. In some circumstances, DOD would be allowed to retain the money it receives from the United Nations, giving it access to funds above the amount appropriated for that fiscal year. DOD would then have access to these funds without any requirement for further congressional authorization or appropriation. PRINCIPAL FINDINGS ---------------------------------------------------------- Chapter 0:4 DOD INCURRED SUBSTANTIAL INCREMENTAL COSTS FOR SOMALIA OPERATIONS -------------------------------------------------------- Chapter 0:4.1 Table 1 summarizes DOD's incremental costs for operations in Somalia through fiscal year 1993. Table 1 DOD Incremental Costs for Somalia Operations From April 1992 Through September 1993 (Dollars in millions) Incremen Amount tal reimbursab Description costs le to DOD Notes ---------------- -------- ---------- ---------------------------------------- Provide Relief/ $20.1 None Reimbursement waived by acting Secretary UNOSOM I of State. (April 1992 through April 1993) Restore Hope/ 692.2 None This was not a U.N.-led operation and UNITAF was, therefore, not reimbursable by the (December 1992 United Nations. through April 1993) Continue Hope/ 94.7 $ 43.7 $43.7 million in self-sustainment has UNOSOM II been billed; an additional $46.6 (May 1993 million of the total $94.7 million is through not reimbursable since these costs were September 1993) incurred by U.S. troops not involved in 4.4 the U.N. operation. $4.4 million in estimated U.N. payment To be for DOD's share of troop payments. determined Unknown amount due for contingent- owned equipment. DOD support 75.5 75.5 $27.5 million received from Trust Fund provided by for Somalia. agreement to United $44.2 million for Letters of Assist has Nations been billed; $7.1 million in payment (December 1993 has been received as of January 1994. through September 1993) $3.8 million for Letters of Assist has not been billed. Support provided 2.4 None Cross-service agreements provide for to sharing support between nations, with other countries reimbursement usually coming in the through form of assistance-in-kind instead of cross-service cash. agreements ================================================================================ Total $884.9 $123.6 -------------------------------------------------------------------------------- Note: Some of the operations overlap. For the first operation, Provide Relief, DOD incurred $20.1 million in costs, primarily for airlift of humanitarian workers, aid, and Pakistani troops. The acting Secretary of State, in consultation with the Secretary of Defense, waived U.N. reimbursement for services to UNOSOM, as allowed under section 7 of the U.N. Participation Act. Therefore, DOD absorbed the entire $20.1 million within its normal operating appropriations. DOD officials estimated that $750 million would be spent on Operation Restore Hope during fiscal year 1993. To pay for these costs, the services used money allocated to programs with less immediate funding needs and future quarters until the Congress allowed DOD to transfer the $750 million from the procurement and research and development appropriations to its operations and maintenance and military personnel appropriations to cover the amounts paid from those accounts. The actual incremental costs totaled $692.2 million. Money left after Restore Hope costs were paid was applied to unfunded operations, such as Provide Relief. DOD estimated that the incremental costs for Operation Continue Hope/UNOSOM II for May through September 1993 were $94.7 million. Of this amount, DOD incurred costs of $46.6 million for U.S. troops that are not part of UNOSOM II. The services absorbed the costs through their normal operating appropriations or offset them against the funds that were transferred for Operation Restore Hope. An estimated $4.4 million in incremental personnel costs will be reimbursed by the United Nations. The balance of $43.7 million for self-sustainment has been billed to the United Nations. DOD and the services have not yet estimated the fiscal year 1994 costs for the operation, which is ongoing and changing. DOD SPENDING PLANS WERE NOT ADVERSELY AFFECTED -------------------------------------------------------- Chapter 0:4.2 Service and DOD officials said that operations in Somalia have not significantly disrupted normal spending plans. According to DOD and service officials, the continued expenditure of training and infrastructure support funds on unplanned and unfunded contingency operations could have an adverse impact on readiness in the future. DOD officials expressed concern that, with regard to combat forces, participation in peacekeeping operations may degrade unit combat readiness. However, peacekeeping activities may give those with noncombat skills, such as logistics, an opportunity to practice and enhance those skills. SOME OF DOD'S INCREMENTAL COSTS WILL BE REIMBURSED BY THE UNITED NATIONS -------------------------------------------------------- Chapter 0:4.3 DOD is entitled to at least $123.6 million in reimbursements from the United Nations and the U.N.-held Trust Fund for Somalia. Of this, almost $75.5 million in reimbursable costs were incurred by the military services under contractual agreements in support of the United Nations and others for UNITAF and UNOSOM II. Of this amount, DOD has billed the Trust Fund for Somalia for $27.5 million for support provided to 10 countries participating in UNITAF. These bills were paid in late October 1993. The remaining $48 million is for equipment purchases and transport services. These were provided to the United Nations through Letters of Assist during UNOSOM II. DOD has billed the United Nations for about $44.2 million of this amount and, as of January 1994, has been paid $7.1 million. The United Nations will reimburse the United States for sustainment--food, water, and fuel--costs for U.S. troops assigned to the UNOSOM II force from May through September 1993, which the United States was incurring until the U.N. operation could sustain all participating troops. The United States billed the United Nations for the entire $43.7 million in January 1994. The U.S. government is also entitled to U.N. reimbursement for providing troops and equipment for UNOSOM II. DOD seeks only to recover its incremental costs for personnel of $248 per person per month for imminent danger, foreign duty, and family separation pays and other incremental costs of $70 per month per person for clothing, personal equipment, and weapon and the maintenance costs required to refurbish equipment used in UNOSOM II from these payments. The United States is due an estimated $15 million in total troop payments for May through September 1993, of which $4.4 million is DOD's incremental personnel costs. The remaining $10.6 million is available to be applied toward the U.S. assessment for peacekeeping operations. There is no estimate for equipment payments. QUESTIONS SURROUNDING USE OF POTENTIAL U.N. REIMBURSEMENTS -------------------------------------------------------- Chapter 0:4.4 DOD could receive at least $123.6 million in U.N. reimbursements in fiscal year 1994. These reimbursements would be primarily for equipment and services and for funds DOD spent in fiscal year 1993 and would be in addition to the amount the Congress appropriated for fiscal year 1994. Depending on the timing of such reimbursements and the statutory authority under which the payments would be received, DOD could be authorized to deposit these payments into its currently available appropriation accounts. DOD could use these funds for the same purposes as the accounts into which they were deposited without any requirement for further congressional action. As a general rule, without specific authority to the contrary, payments agencies receive from outside sources, including reimbursements for goods or services provided by the agency, must be deposited in the Treasury as miscellaneous receipts. Section 607 of the Foreign Assistance Act, however, allows U.N. reimbursements for goods and services, as well as for Trust Fund support, to be credited to DOD's existing appropriation accounts if received within 180 days after the end of the fiscal year in which the goods or services were delivered. These amounts remain available to the agency for the same purposes as the appropriations to which they are credited. However, section 607 of the act does not authorize DOD to retain payments received after the 180-day time period has expired. There are no similar time limits that apply to U.N. payments received under section 630 of the act, such as the troop payments. MATTERS FOR CONGRESSIONAL CONSIDERATION ---------------------------------------------------------- Chapter 0:5 While existing legislation allows DOD to retain U.N. reimbursements under certain circumstances, any reimbursement DOD receives from the United Nations in fiscal year 1994 or in subsequent fiscal years for troops, goods, or services, would be over the level of congressional appropriations for those fiscal years. Given the significant level of reimbursements involved, the Congress may wish to consider whether (1) DOD should continue to have access to these reimbursements as currently allowed by the Foreign Assistance Act and, if so, whether the 180-day time limit for retaining any reimbursements received under section 607 of that act should be revised; (2) an amount equal to the reimbursements should be rescinded from DOD's current appropriations, if DOD is allowed to retain the reimbursements; or (3) it should create an account into which these U.N. reimbursements could be deposited for use in funding future DOD contingency operations. AGENCY COMMENTS AND GAO'S EVALUATION ---------------------------------------------------------- Chapter 0:6 DOD and the Department of State generally agree with the contents of this report; however, DOD does not believe that amounts equal to U.N. reimbursements should be rescinded because the reimbursements allow DOD to execute previous congressionally approved programs. DOD noted, and GAO agreed, that under section 607 of the Foreign Assistance Act, the Congress has given DOD authority to accept reimbursement for goods and services provided to certain international organizations. GAO raises this matter not because it advocates denying DOD access to U.N. reimbursements, but because of (1) the large amount of reimbursements due DOD and (2) the fact that these reimbursements are in addition to amounts appropriated by the Congress. In addition, as discussed in the report, DOD presently only has access to U.N. reimbursements if they are received within 180 days from the end of the fiscal year in which the goods and services were delivered. However, DOD may not always receive reimbursements within the statutory period, in which case the reimbursement would be deposited in the general fund of the U.S. Treasury and be unavailable to DOD. GAO believes that all of the above factors merit a reexamination of U.N. reimbursements, including considering whether (1) the access to such reimbursements should continue and (2) the limited period for receiving reimbursements should be revised. Appendixes I and II, respectively, contain DOD's and the State Department's comments and GAO's response. INTRODUCTION ============================================================ Chapter 1 In January 1991, the President of Somalia, Mohammed Siad Barre, was overthrown after 3 years of civil war. With no functioning government following Barre's ouster, violence and internal conflict continued. The clan-based groups that once cooperated to fight Barre began to combat each other. Political upheaval and the displacement of thousands of Somalis, along with the poor harvest in 1991, created an environment of starvation and violence. DOD PARTICIPATION IN SOMALIA OPERATIONS ---------------------------------------------------------- Chapter 1:1 For several years, the United States and the United Nations, as well as private relief organizations, have participated in humanitarian efforts to help the starving population of Somalia. As the country became torn by civil war and continued factional fighting, these relief organizations found it increasingly difficult to both deliver aid to Somalia and distribute it inland once it arrived. In April 1992, the United Nations arranged for a tenuous cease-fire among the factions and the Security Council authorized deployment of military forces under a peacekeeping mandate pursuant to its Resolution 751. This deployment was meant to help protect relief efforts in Somalia and was called the U.N. Operation in Somalia (UNOSOM). Department of Defense (DOD) efforts to support UNOSOM, called Operation Provide Relief, were in the form of transport for supplies, workers, and Pakistani troops. It soon became apparent that, although some U.N. forces had deployed to the area, starvation and lawlessness continued, and the situation in Somalia deteriorated further. Raids by armed militia continued to hamper relief efforts. The United States responded to this situation with an offer to establish and lead a multinational coalition that would provide sizeable military forces to secure the central and southern regions of Somalia so that famine relief could be effectively delivered. The U.N. Security Council accepted this offer and passed Resolution 794 on December 3, 1992, authorizing the Unified Task Force (UNITAF), though the subsequent operation would be under U.S. rather than U.N. control. Participation in this operation was considered voluntary, and member states were not assessed for its costs by the United Nations. UNOSOM continued to provide humanitarian aid, but the principal focus of efforts in Somalia now shifted to the U.S.-led UNITAF. DOD called U.S. participation in UNITAF Operation Restore Hope. The mission of UNITAF/Restore Hope was to establish, by any means necessary, a secure environment for humanitarian relief and prepare for transition to U.N. forces. The United States deployed about 26,000 troops at the operation's peak (mostly Marines and Army troops) and secured the participation of about 12,000 troops from 20 other countries. During Operation Restore Hope, DOD provided food, water, and other support to coalition forces participating in UNITAF, since many contingents arrived without the supplies to fully sustain themselves. About $2.4 million in support was provided to some coalition forces through cross-service agreements. These agreements allow for support to be shared between nations with reimbursements made through assistance-in-kind rather than cash. DOD also provided construction services and general logistical support through a private contractor. In March 1993, the Security Council authorized, by Resolution 814, the establishment of UNOSOM II, a peacemaking operation that was intended to maintain the secure environment created by UNITAF as U.S. troops departed Somalia. In addition, UNOSOM II was to aid Somalia in creating a more stable infrastructure, encourage national political reconciliation, and help to rebuild the Somali system for administering justice. Member states were expected to pay their assessed share of the estimated budget for the operation.\1 Command of the area was turned over to the UNOSOM II commander on May 4, 1993. The United Nations planned that UNOSOM II would eventually comprise about 28,000 troops from a number of participating countries. The United States deployed 2,900 military logistics personnel to participate in UNOSOM II, as authorized by section 628 of the Foreign Assistance Act of 1961. DOD's effort in support of UNOSOM II was called Operation Continue Hope. Under this operation, DOD also had about 1,100 troops from the 10th Mountain Division, under U.S. command, as a quick reaction force to assist U.N. forces. In October 1993, the President sent additional ground troops into Somalia, under U.S. command, and ordered Marines and Navy ships to offshore positions as reinforcements. As of November 1993, U.S. military personnel in and near Somalia totaled almost 14,000, in addition to the 2,900 troops assigned to the U.N. operation. In accordance with the President's decision of October 7, 1993, all but a few hundred military personnel will be withdrawn from Somalia by March 31, 1994. These personnel will remain to assist in the protection of the U.S. Liaison Office. -------------------- \1 The United States is assessed 30.4 percent of each U.N. peacekeeping operation's budget. As of December 1993, the United States owes $156 million to the United Nations for peacekeeping assessments. UNITED NATIONS PROVIDES REIMBURSEMENT FOR SOME PARTICIPATION IN SOMALIA OPERATIONS ---------------------------------------------------------- Chapter 1:2 In operations for Somalia, the United Nations agreed to pay governments for providing support to the United Nations under different types of agreements. The United States provided assistance through these agreements under the authority of section 607 of the Foreign Assistance Act. In addition, support was provided through the Trust Fund for Somalia, which used contributions from member states totaling $105 million, to reimburse governments for the assistance necessary to field the contingents from 10 specific countries as part of UNITAF. Another type of agreement is a Letter of Assist, whereby goods and services are requested from a government and paid for by the United Nations. In addition to paying for specific goods and services, and in return for participating in specific U.N.-led peacekeeping operations, the United Nations reimburses member nations for the costs they incur when fielding troops and equipment. As authorized under section 630 of the Foreign Assistance Act, the U.S. government will be reimbursed by the United Nations for the use of the 2,900 logistics troops assigned to the U.N. force, based on the established payment rates. The United States will not receive this payment for troops participating in UNITAF/Restore Hope, as this was a U.S.-led operation. Prior to deployment, the United Nations requests each participating country to bring certain types and amounts of ground equipment. The United Nations estimates the total value of equipment in the operation and budgets for payments of 20 percent of that value each year, for up to 5 years. It bases the actual payments on an estimate of the difference in value of the equipment between the time it arrived and the time it departs an operation. The United Nations reimburses for aircraft and ships based on hourly rates and actual usage. The U.S. government will, therefore, receive some payment for the value of its equipment brought by the 2,900 logistics troops that are part of UNOSOM II. Since other U.S. military personnel are under direct U.S. command and control and not part of UNOSOM II, neither the use of these troops nor their equipment is subject to reimbursement by the United Nations. Also, the United States will not receive this payment for equipment used in UNITAF/Restore Hope, since this was not a U.N.-led operation. OBJECTIVES, SCOPE, AND METHODOLOGY ---------------------------------------------------------- Chapter 1:3 After discussions with several congressional committees, we determined that a review of the costs associated with U.S. participation in U.N. Somalia operations would be useful. Our objectives were to determine (1) what incremental costs DOD incurred during operations in Somalia; (2) the impact these operations have had on DOD's normal spending plans; and (3) what, if any, reimbursement the United States could expect for expenses incurred during the Somalia operations and how DOD and the State Department will share such reimbursement. To review cost and troop participation information for Somalia operations, we interviewed officials and reviewed cost reports at the Office of the Secretary of Defense (OSD), Office of the Comptroller; the Budget Offices for the Army, Air Force, and Marine Corps; the 10th Mountain Division Headquarters, Fort Drum, New York; and the 1st Marine Expeditionary Force Headquarters, Camp Pendleton, California. We interviewed officials at the OSD Office of the Comptroller and the State Department's Bureau of International Organizations Affairs and the Permanent Mission of the United States to the United Nations and reviewed documents from these offices. Our purpose was to review the tracking and billing at the United Nations for DOD assistance and the procedures for receipt of U.N. payments to the U.S. government for in-kind assistance and troop/equipment usage. To review the U.N. budget process for peacekeeping and the policies for paying bills, we interviewed officials at the Field Operations Division, United Nations; the Permanent Mission of the United States to the United Nations; and the Ford Foundation. To assess whether DOD will be able to receive and use the payments from the United Nations and how these payments may be divided between DOD and the State Department, we reviewed applicable legislation and interviewed officials at both DOD and the State Department. We conducted our review between March 1993 and January 1994 in accordance with generally accepted government auditing standards. THE COST OF DOD OPERATIONS IN SOMALIA AND EFFECT ON NORMAL SPENDING PLANS ============================================================ Chapter 2 DOD has incurred incremental costs\1 of almost $885 million for operations in Somalia through the end of fiscal year 1993. (See table 1 in executive summary.) This includes DOD's incremental costs for its operations, as well as reimbursable expenses DOD incurred in support of the United Nations and other nations, which are discussed in chapter 3. DOD paid for these operations by moving funds within and between its existing appropriations. According to DOD officials, this movement did not adversely affect DOD's normal spending plans. -------------------- \1 As defined by the Omnibus Budget Reconciliation Act of 1990 (P.L. 101-508) for use during Operation Desert Shield/Storm, incremental costs are only those costs that would not have been incurred except for the operation. DOD is still using this definition. COSTS OF DOD'S OPERATIONS IN SOMALIA COULD APPROACH $1 BILLION ---------------------------------------------------------- Chapter 2:1 U.S. military personnel participated in three different operations in Somalia--Provide Relief, Restore Hope, and Continue Hope. Operations Provide Relief and Restore Hope ran concurrently, with different missions. Operation Continue Hope began when the other two operations ended in May 1993 and is ongoing. OPERATION PROVIDE RELIEF -------------------------------------------------------- Chapter 2:1.1 From April 1992 through April 1993, DOD spent $20.1 million--$9.3 million in fiscal year 1992 and $10.8 million in fiscal year 1993--to support Operation Provide Relief. This support consisted mainly of airlift for humanitarian supplies and workers and Pakistani troops participating in UNOSOM I. The services have had to absorb most of these costs. To pay for some of the $9.3 million in fiscal year 1992 costs, DOD reimbursed the Air Force for almost $3.6 million from funds for global disaster relief established by section 8105A of the fiscal year 1992 Defense Appropriations Act. The remaining $5.7 million from fiscal year 1992 and the $10.8 million for fiscal year 1993 had to be absorbed by the services within their normal operations and maintenance appropriations. As allowed by section 7 of the U.N. Participation Act (22 U.S.C. 287d-1(b)), the acting Secretary of State, using authority delegated by the President under Executive Order No. 10206 and in consultation with the Secretary of Defense, waived reimbursement for support provided to the United Nations during this operation. The decision to waive reimbursement was based on a U.N. request for assistance and the related determination by the acting Secretary of State that it was consistent with the national interest to comply without seeking reimbursement. Therefore, costs incurred during this operation remained the responsibility of the service directed to accomplish the task assigned. OPERATION RESTORE HOPE -------------------------------------------------------- Chapter 2:1.2 OSD officials reported that, as of the end of April 1993, which was essentially the end of the operation, $692.2 million had been obligated for Restore Hope. These obligations included the sustainment costs, such as food, water, and fuel, for the U.S. troops deployed to the operation, as well as transportation of personnel and equipment. They also included incremental payroll costs for military personnel stationed in the area. Each service member was paid a total of $248 per month above salary for imminent danger pay, foreign duty pay, and, if applicable, family separation pay. Most of the support for the operation was drawn from the services' operations and maintenance appropriations. Initially, to cover costs for the operation, the services were able to reallocate funds from programs with less immediate funding needs and borrow against future quarterly budget allocations. Some scheduled training exercises were canceled and others were postponed, if possible. Services were required to capture and report all operation-related obligations to the OSD Comptroller. Our review of a limited number of obligation documents for purchase of material and equipment determined that they were directly related to the operation and charged to the appropriate accounting designation. DOD estimated the incremental cost of Operation Restore Hope to be $750 million. This total was developed early in the operation from estimates provided by the services and revised by OSD, based on available information. In April 1993, the Secretary of Defense submitted a plan to the House and Senate Committees on Appropriations and on Armed Services to transfer funds to cover the estimated incremental cost of $750 million from current procurement and research and development appropriations to operations and maintenance and military personnel appropriations. Funding was taken from several programs, including the Strategic Defense Initiative and National Guard aircraft. In July 1993, the Congress enacted legislation (P.L. 103-50) that was consistent with the DOD-proposed transfer and did not provide DOD with any additional funding for the operation. Since Operation Restore Hope cost less than the estimated $750 million, the remaining funds from the transfer were applied to other unfunded operations, such as Operation Provide Relief. OPERATION CONTINUE HOPE -------------------------------------------------------- Chapter 2:1.3 OSD estimates incremental costs of $94.7 million for fiscal year 1993 for Operation Continue Hope and U.S. participation in UNOSOM II. These costs were absorbed by the services within their normal operations and maintenance appropriations or covered by some of the unexpended money left from Restore Hope, which was applied to these additional costs. The costs include (1) $46.6 million predominantly for the quick reaction force in country to assist forces in UNOSOM II, (2) $43.7 million in self-sustainment for the 2,900 U.S. troops assigned to the United Nations as part of the UNOSOM II force, and (3) $4.4 million in incremental personnel costs. DOD is eligible for reimbursement from the United Nations for the entire cost of this self-sustainment and billed the United Nations for the total in January 1994. DOD will also be reimbursed for the incremental personnel costs. The United States is eligible for reimbursement because guidelines for the U.N. Operation in Somalia direct that each nation come prepared to sustain its troops until the United Nations has established the necessary infrastructure to cover operational requirements. This is normally assumed to be a limited period--not more than 60 days. Occasionally, it is extended, as has happened in Somalia. The United Nations will then resupply each nation. OSD and the services have not yet estimated the fiscal year 1994 costs for the operation, which is ongoing and changing. The Army had estimated costs for the 1,100 quick reaction force troops to be $45.8 million; however, this estimate was done late in fiscal year 1993 and was overtaken by events. Since that time, some troops were redeployed, additional troops were sent into the area, and now most troops are being redeployed. Therefore, it is difficult to accurately estimate what costs might be incurred. DOD REPORTS THAT SPENDING PLANS WERE NOT ADVERSELY AFFECTED BY MOVING MONEY TO PAY FOR SOMALIA OPERATIONS ---------------------------------------------------------- Chapter 2:2 OSD and the services were able to reallocate funds from programs with less immediate funding needs and use money allocated to future quarters. According to DOD officials, this did not seem to adversely affect the normal spending plans established through the budget and appropriations cycle. However, the same officials are concerned that readiness may suffer if funding continues to be taken from training and infrastructure support. After the yearly Defense Appropriations Act is passed by the Congress, the Office of Management and Budget apportions the funds, and the DOD Office of the Comptroller allocates the apportioned amounts to each service by quarter. Under 31 U.S.C. 1515(b), an agency may request access to funds that would otherwise be apportioned for future quarters of the fiscal year if this is necessary to respond to emergencies. This allows the budget offices some flexibility to fund large unanticipated emergencies, such as Operation Restore Hope, if they occur early enough in the fiscal year. Since the operation began in the first quarter of fiscal year 1993, the services had access to almost the entire year's apportionments and were able to use future quarters' allocations to cover initial obligations for Restore Hope. Some services canceled scheduled training exercises and postponed others in the early phase of Operation Restore Hope. These cancellations were made in part because the troops scheduled for the training were being deployed to the operation, although the immediate need for funds was also a factor. In some instances, other troops were substituted for those originally scheduled. The impact of peacekeeping operations on readiness, however, is mixed. With regard to combat forces, Army officials have expressed some concern that participating in peacekeeping operations may degrade unit combat readiness because of the inability to practice individual and collective warfighting skills. In addition, DOD officials noted that soldiers require reorientation when shifting from a peacekeeping environment, which requires restraint in the use of force, to a traditional warfighting role. On the other hand, peacekeeping activities provide opportunities for those with skills other than warfighting, such as logistics, to practice and enhance these skills. However, in commenting on a draft of this report, DOD noted that logistics training being provided in operations such as Restore Hope does not substitute completely for the training that would result from a prepared training exercise. In the latter, the combat support and combat services support elements would work with combat forces as they would in high intensity combat operations. Service officials expressed concerns regarding the mid- to long-term effects of transferring appropriations in order to provide funding for unplanned operations; Somalia is only one of several such operations now underway. In a budget presentation, the commanding general of one major Army command stated that any diversion of funds will undermine a commander's program even if the funds are reimbursed later; without timely reimbursement, the ability to perform critical training or infrastructure support tasks is permanently lost. DOD officials noted that the transfer of funds from other appropriations accounts to operations and maintenance may interfere with long-term efforts to upgrade or modernize equipment, thus degrading readiness. CONCLUSIONS ---------------------------------------------------------- Chapter 2:3 Operations in Somalia have cost DOD almost $885 million during fiscal years 1992 and 1993. Of this amount, over $123.6 million should be reimbursed by the United Nations. Initially, DOD and the services had to absorb these costs in their normal operating budgets. However, the costs were, for the most part, covered by transferring funds from other DOD accounts into the operations and maintenance account, or they will be reimbursed by the United Nations. This did not adversely affect the services' normal spending plans. Continued disruptions in DOD's spending plans, untimely reimbursements from both within and outside DOD, and the transfer of funds between accounts may, in the long run, undermine readiness. Also, there is concern that participation in peacekeeping operations could degrade unit combat readiness because of unique factors that do not allow for normal warfighting training. DOD IS TO BE REIMBURSED BY THE UNITED NATIONS FOR TROOPS, GOODS, AND SERVICES ============================================================ Chapter 3 The United States is entitled to two categories of reimbursements from the United Nations for participating in Somalia operations: (1) goods and services provided under specific agreements and (2) the general use of U.S. troops and equipment. The United Nations has not yet paid DOD for all the bills submitted for goods and services. The U.S. government should also receive payment from the United Nations for the participation of its troops and equipment in UNOSOM II. The manner in which the money paid for troop participation and equipment usage may be shared by the Department of State and DOD is established in a written understanding between the two departments. THE UNITED NATIONS OWES DOD MONEY FOR GOODS AND SERVICES ---------------------------------------------------------- Chapter 3:1 During UNITAF and UNOSOM II, DOD provided assistance, in the form of goods and services, to the United Nations and participating countries; the United Nations will directly reimburse DOD for these costs. Such assistance, totaling about $75.5 million, was provided in two ways: support defined and paid for by the Trust Fund for Somalia during UNITAF and support provided through Letters of Assist during UNOSOM II. TRUST FUND FOR SOMALIA -------------------------------------------------------- Chapter 3:1.1 U.N. Security Council Resolution 794 led to the establishment of the Trust Fund for Somalia to provide support for some countries that would otherwise not be able to participate in UNITAF due to financial hardship. Since UNITAF was not under the United Nations, the fund was meant to serve as the only source of reimbursement for assistance provided to participants. The fund was financed by monetary contributions from member nations to reimburse countries for clothing, rations, equipment, and other goods and services that they had provided to 10 eligible countries during UNITAF operations. The 10 countries were Botswana, Egypt, Morocco, Turkey, Zimbabwe, Nigeria, Tunisia, Jordan, India, and Pakistan. The United Nations is responsible for managing the fund, and an ad hoc panel was established to oversee the implementation of the fund's guidelines. The panel consists of a representative from Japan, which contributed $100 million of the fund's $105 million total; the United States, which contributed the largest share of troops, goods, and services to UNITAF; and the U.N. Secretary General. In recognition of the large U.S. troop and logistics contribution to UNITAF, at least 85 percent of the Trust Fund monies were reserved for U.S. claims. The United States concluded an agreement with the United Nations under the authority of section 607 of the Foreign Assistance Act of 1961 to provide goods and services for reimbursement under the guidelines of the Trust Fund and for DOD to be the executive agent for the United States. This agreement stated that the United Nations would pay bills within 30 days after their receipt. Though the fund was established for UNITAF-related reimbursement, the donors have indicated that should any money remain in the fund after UNITAF bills are paid, it may be made available for use in UNOSOM II under the Trust Fund's original guidelines and U.N. Security Council resolutions. DOD presented certified bills to the Trust Fund in June 1993 for $9.79 million and in August 1993 for $17.75 million, for a total of $27.54 million for reimbursement for support it provided under the agreement. This amount was paid on October 21, 1993, 1 month after the end of fiscal year 1993, the year in which the goods and services were delivered. As a general rule, in the absence of specific statutory authority to the contrary, reimbursements and other types of payments agencies receive from outside sources must be deposited into the Treasury as miscellaneous receipts (31 U.S.C. 3302(b)). Section 607 of the Foreign Assistance Act of 1961, however, allows payments agencies receive from foreign governments or international organizations for goods and services to be credited to the appropriate currently available appropriations account, if received within 180 days of the end of the fiscal year in which the goods or services were delivered. These amounts remain available to the agency for the same purposes as the original appropriation. In accordance with this authority, DOD transferred the $27.54 million received from the United Nations into the fiscal year 1994 accounts that correspond to the fiscal year 1993 accounts that had been used to make the original payments. The funds were transferred as follows: almost $14 million to the other procurement, Army, appropriation account; $3.7 million to the operations and maintenance, Army account; $1.4 million to the operations and maintenance, Marine Corps account; and $8.4 million to the Defense Business Operations Fund for transportation. LETTERS OF ASSIST -------------------------------------------------------- Chapter 3:1.2 During its operations, including UNOSOM II, the United Nations needs to fill planned and unexpected requirements for equipment and services peculiar to the operation. To do this, the United Nations uses Letters of Assist (LOA), which are specific agreements under which member countries are paid to provide needed goods and services to the United Nations. LOAs drawn up between DOD and the United Nations specifically define a requirement, the delivery and payment terms, and other necessary information. DOD has provided the United Nations such items as armored personnel carriers, maps, riot control gear, and transport services through LOAs. According to DOD officials, as with the support provided through the Trust Fund, support provided through LOAs are authorized by section 607 of the Foreign Assistance Act. DOD and the United Nations agreed on 19 individual LOAs for UNOSOM II in fiscal year 1993 that total $48 million. Except in special circumstances, the United Nations does not prepay for support provided through LOAs, but reimburses based on completion of the terms of the agreement. DOD submitted the first bill to the United Nations on July 30, 1993. As of January 1994, the United Nations has been billed for $44.2 million for LOAs that have been fully executed. The United Nations has paid $7.1 million of this amount as of January 1994. DOD will submit bills to the United Nations for the remaining $3.8 million. However, since DOD does not have an automated system for generating bills, it takes time to gather and consolidate data and create the bills to forward to the United Nations. As is true of reimbursements from the Trust Fund for Somalia, payments to DOD under the LOAs are also covered by section 607 of the Foreign Assistance Act. Accordingly, DOD will be able to retain and spend these payments if they are received within 180 days of the end of the fiscal year in which the goods and services were provided. However, section 607 does not authorize DOD to retain payments received after this time period has elapsed. Therefore, LOAs must be fully executed, and bills for items delivered under them in fiscal year 1993 must be submitted to the United Nations so that DOD can receive the U.N. payments before March 30, 1994. U.N. PAYMENT FOR TROOP AND EQUIPMENT PARTICIPATION ---------------------------------------------------------- Chapter 3:2 The United Nations pays each participating government for the use of its troops and equipment in a U.N. operation. The United States will, therefore, be paid for the 2,900 military logistics personnel and the equipment they operate as part of UNOSOM II. However, these payments may come long after the United States ends its participation. DISPOSITION OF U.N. TROOP PAYMENTS -------------------------------------------------------- Chapter 3:2.1 Section 628 of the Foreign Assistance Act provides the authority for the United States to detail or assign personnel to international organizations such as the United Nations. Section 630 of the act provides that any reimbursement the United States receives for such personnel may be credited to either the original appropriation used to make the payment or the corresponding currently available appropriation or be applied against the U.S. share of the expenses of the international organizations involved. The statute does not establish any time limit during which the reimbursement must be received. The United Nations uses a fixed rate of payment for all troops serving in U.N. operations. The payment the U.S. government receives for the 2,900 troops that are part of UNOSOM II will be based on the set U.N. payment rates of $988 per person per month for regular infantry, $1,279 per person per month for specialists, and $70 per person per month for wear and tear on personal clothing, gear, and weapon. While the U.S. government will receive the full U.N. troop reimbursement, DOD is interested in recovering only its incremental cost of $318 per person per month. This amount includes $248 per person per month in imminent danger, foreign duty, and family separation pays associated with sending troops to Somalia. It also includes $70 per person per month for personal clothing, gear, and weapon. According to both State Department and DOD officials, there is a written understanding between the Department of State and DOD on the division of U.N. payments for troop participation. Since DOD claims only those personnel-related costs that are incremental in nature ($318 per person per month), the understanding would allocate the difference between these incremental costs and the U.N. payment for troop participation to the State Department as an offset to U.S. peacekeeping assessments. This understanding is included in a draft Presidential Review Directive outlining policies for U.S. participation in peacekeeping activities. The State Department has estimated that, for the 5-month period ending September 1993, the United Nations could owe the U.S. government a total of $15 million for troop participation in UNOSOM II. Of this amount, it is estimated that DOD's incremental personnel costs could be $4.4 million, which would leave $10.6 million to be offset against the U.S. peacekeeping assessment. The United States has now received a check from the United Nations for $11.9 million\1 for payment of U.S. troop participation in UNOSOM II through August 1993. To reimburse DOD for its incremental costs and credit the remaining amount properly to the U.S. assessment, the State Department returned this check to the United Nations, asking instead that the United Nations send DOD a check for $2.7 million and credit the U.S. peacekeeping assessment for $9.2 million. -------------------- \1 This total also includes a very small amount for U.S. participation in the United Nations Transitional Authority in Cambodia. CONTINGENT-OWNED EQUIPMENT -------------------------------------------------------- Chapter 3:2.2 At the start of an operation, the United Nations requests that each participating country bring specific types and amounts of equipment for use in the operation. According to DOD officials, section 607 of the Foreign Assistance Act provides the authority for DOD to provide this equipment on a reimbursable basis. The value of contingent-owned equipment is the basis for determining how much the United Nations pays for the use of this equipment. DOD is currently determining the value of the equipment operated by the 2,900 U.S. troops now part of UNOSOM II. These troops deployed with more equipment than the United Nations requested, since the Army has specific requirements for unit equipment that exceed U.N. requirements. The United Nations does not pay for the use of equipment it did not request. The written understanding between the Department of State and DOD allows DOD to retain all payments for equipment, so that DOD can recover its incremental costs for refurbishing the equipment used in UNOSOM II. Since this equipment is provided under the authority of section 607 of the Foreign Assistance Act, the payment must be received within 180 days of the end of the fiscal year in which the equipment was provided. If payment is received after this time, it appears that DOD would be unable to retain and spend the money. CONCLUSIONS ---------------------------------------------------------- Chapter 3:3 DOD could receive at least $123.6 million in reimbursements from the United Nations for operations in Somalia. Of this amount, DOD has received $37.3 million in payments owed by the United Nations and could receive at least an additional $86.3 million. These reimbursements would be for equipment, services, and other support provided primarily in fiscal year 1993. To the extent the reimbursements are received within the authorized time frame, they can be deposited into DOD's existing appropriations accounts for fiscal year 1994 and expended, without any requirement for further congressional action. Accordingly, these reimbursements could be expended by DOD in addition to the funds the Congress has appropriated for fiscal year 1994. MATTERS FOR CONGRESSIONAL CONSIDERATION ---------------------------------------------------------- Chapter 3:4 While existing legislation allows DOD to retain U.N. reimbursements under certain circumstances, any reimbursement DOD receives from the United Nations in fiscal year 1994 or subsequent years for troops, goods, or services would be above the level of congressional appropriations for those fiscal years. Given the significant level of reimbursements involved, the Congress may wish to consider whether (1) DOD should continue to have access to these reimbursements as currently allowed by the Foreign Assistance Act and, if so, whether the 180-day time limit for retaining any reimbursements received under section 607 of that act should be revised; (2) an amount equal to the reimbursements should be rescinded from DOD's current appropriations, if DOD is allowed to retain the reimbursements; or (3) it should create an account into which these U.N. reimbursements could be deposited for use in funding future DOD contingency operations. AGENCY COMMENTS AND OUR EVALUATION ---------------------------------------------------------- Chapter 3:5 DOD and the Department of State generally agreed with the contents of this report; however, DOD disagreed with the matters suggested for congressional consideration. DOD noted, and we agreed, that under section 607 of the Foreign Assistance Act, the Congress has given DOD authority to accept reimbursement for goods and services to certain international organizations. DOD does not believe that amounts equal to U.N. reimbursements should be rescinded because the reimbursements simply allow DOD to execute previous congressionally approved programs. We have raised this matter not because we advocate denying DOD access to U.N. reimbursements, but because of (1) the large amount of reimbursements due DOD and (2) the fact that these reimbursements are in addition to amounts appropriated by the Congress. In addition, as discussed in the report, DOD presently only has access to U.N. reimbursements if they are received within 180 days from the end of the fiscal year in which the goods and services were delivered. However, DOD may not always receive reimbursements within the statutory period, in which case the reimbursement would be deposited in the general fund of the U.S. Treasury and be unavailable to DOD. We believe that all of the above factors merit a reexamination of U.N. reimbursements, including considering whether the (1) access to such reimbursements should continue and (2) the limited period for receiving reimbursements should be revised. We have revised the matters for congressional consideration to clarify the options available to the Congress. The State Department's comments emphasize that voluntary contributions and assessments of member states provide the United Nations with the funds with which it reimburses countries that participate in peacekeeping operations. We recognize that assessments and voluntary contributions are the principal sources of U.N. funds. Our discussion of the U.N.'s sources of funds is limited because the scope of this report as described in chapter 1 is (1) DOD's incremental costs, (2) the impact operations in Somalia have had on DOD's normal spending plans, and (3) reimbursements the United States could expect. Both DOD and the State Department provided technical comments, which we have incorporated into the report as appropriate. (See figure in printed edition.)Appendix I COMMENTS FROM THE DEPARTMENT OF DEFENSE ============================================================ Chapter 3 (See figure in printed edition.) (See figure in printed edition.) (See figure in printed edition.) (See figure in printed edition.) (See figure in printed edition.) (See figure in printed edition.) (See figure in printed edition.) (See figure in printed edition.) (See figure in printed edition.) (See figure in printed edition.) (See figure in printed edition.) The following are GAO's comments on the Department of Defense's letter dated February 10, 1994. GAO COMMENTS ---------------------------------------------------------- Chapter 3:6 1. We have revised the report to reflect this information. 2. Although DOD anticipates payment within the 180-day limit, whether the United Nations will pay these bills within this period cannot be predicted. 3. DOD will have access to these payments only if they are received within the 180-day limit established in section 607 of the Foreign Assistance Act. Although the cost of restoring contingent-owned equipment will be incurred after it is returned to the United States, the 180-day limit is based on the fiscal year in which the equipment is provided, not the year in which it is refurbished. 4. We have revised the matters for congressional consideration to more clearly state our position. This issue is also discussed in the agency comments section of chapter 3. (See figure in printed edition.)Appendix II COMMENTS FROM THE DEPARTMENT OF STATE ============================================================ Chapter 3 (See figure in printed edition.) (See figure in printed edition.) See comment 1. See comment 3. See comment 4. See comment 5. (See figure in printed edition.) See comment 1. See comment 7. See comment 9. See comment 1. (See figure in printed edition.) See comment 10. See comment 2. See comment 10. (See figure in printed edition.) See comment 2. See comment 1. See comment 12. See comment 13. See comment 1. See comment 14. See comment 15. (See figure in printed edition.) See comment 2. See comment 18. See comment 1. (See figure in printed edition.) See comment 16. See comment 1. See comment 1. (See figure in printed edition.) See comment 19. See comment 20. (See figure in printed edition.) The following are GAO's comments on the Department of State's letter dated February 7, 1994. GAO COMMENTS ---------------------------------------------------------- Chapter 3:7 1. We have revised the report to reflect this information. 2. Our report includes the essence of the State Department's suggested change. 3. We have amended table 1 to reflect this information, but do not believe the suggested revisions to the table's format would improve its clarity. 4. We have revised the report to reflect this information, but have updated the numbers and provided greater detail. 5. This is a military issue and has been revised based on DOD comments. 6. We have revised the report to reflect this information. However, DOD does not characterize its incremental cost of $70 per month for personal clothing, gear, and weapon as "the U.N. allowance for clothing and personal equipment" as stated in the State Department's comments. 7. The United States assessment for peacekeeping operations is discussed in chapter 1. 8. The goods and services, as well as the support provided under the Trust Fund for Somalia, were provided under the authority of section 607 of the Foreign Assistance Act, not the U.N. Participation Act. Therefore, we believe there is no need to make reference to the U.N. Participation Act. Also, we continue to believe that reimbursements made under the authority of section 607 of the Foreign Assistance Act must be received within the statutory time limit included in that section if DOD is to retain the reimbursements. 9. We do not agree with the State Department's characterization of the discussion on statutory time limits as "not particularly relevant here." See comment 19 for further discussion. 10. We have revised the report to reflect this information. However, as discussed in the agency comments section of chapter 3, we believe that a detailed discussion of how U.N. peacekeeping operations are funded is outside the scope of this report. 11. United Nations documents state that the United Nations budgets for contingent owned equipment at a rate of 20 percent per year for 5 years and discussions with officials from the United Nations and the Permanent Mission of the United States to the United Nations confirmed this information. Also, since the agreements for operations in Somalia were concluded prior to 1994, any new payment arrangements do not affect U.S. reimbursements. 12. We have revised the report to indicate that consultation with the Secretary of Defense did occur. 13. As of January 1994, there have been no payments received from the United Nations for these costs. 14. We have revised the report to reflect this information but have updated the amount of reimbursement. 15. The report discusses bills submitted to the United Nations. These bills, totaling $44.2 million, were submitted in June, August, October, and December 1993 and January 1994. As of February 8, 1994, DOD has only received $7.1 million in reimbursement for the June bill. 16. As discussed in the agency comments section of chapter 3, we believe that a detailed discussion of how U.N. peacekeeping operations are funded is outside the scope of this report. 17. While we agree that the United Nations Participation Act allows the receipt of payments, we do not believe that discussion of the act is appropriate at this point, since the report is discussing support provided under section 607 of the Foreign Assistance Act. Also, we continue to believe that reimbursements made under the authority of section 607 must be received within the statutory time limit included in that section if DOD is to retain the reimbursements. 18. While we agree that support can be provided to the United Nations through several statutes, the report is discussing support provided under section 607 of the Foreign Assistance Act. Therefore, we believe this to be the relevant statutory cite. 19. We do not agree with the State Department's proposed language for three reasons. First, the agreement with the United Nations is a contractual agreement and any amendment, such as adding a requirement that the United Nations pay interest on any reimbursements received after the statutory time limit contained in section 607 of the Foreign Assistance Act had expired, would not become effective unless it was agreed to by both DOD and the United Nations. We have seen no indication that the United Nations would agree to such an amendment. Second, our interpretation of the statutory language in section 607 (a)(2) and its legislative history leads us to conclude that authority to retain reimbursements received after the 180-day time limit has expired only applies to assistance provided through the Agency for International Development appropriations, provided the other statutory conditions such as the payment of interest and other requirements are satisfied. Third, as a matter of policy, we question whether the United States would charge the United Nations interest, particularly since the United States is in arrears on payment of its assessment for peacekeeping operations. 20. We believe that our discussion in the matters for congressional consideration lays out the options available to the Congress. With regard to the State Department's suggested changes, we have revised the first option to include whether the statutory time limit in section 607 of the Foreign Assistance Act should be revised if DOD is to be allowed to retain reimbursements. Also, we believe the State Department is incorrect in asserting that option 3 is "already the case." DOD does not deposit any reimbursements from the United Nations into a separate account for use in future contingencies. To our knowledge, no such DOD account exists. MAJOR CONTRIBUTORS TO THIS REPORT ========================================================= Appendix III NATIONAL SECURITY AND INTERNATIONAL AFFAIRS DIVISION, WASHINGTON, D.C. ------------------------------------------------------- Appendix III:1 Steven Sternlieb, Assistant Director Ann Borseth, Evaluator-in-Charge William Cawood, Senior Evaluator Joseph Kirschbaum, Evaluator OFFICE OF GENERAL COUNSEL ------------------------------------------------------- Appendix III:2 Alan Belkin, Senior Attorney