5 December 1997
United States General Accounting Office
United States General Accounting Office
Washington, D.C. 20548
National Security and International Affairs Division
December 1, 1997
The Honorable Ike Skelton
House of Representatives
The Honorable John Glenn
Ranking Minority Member
Committee on Governmental Affairs
United States Senate
We recently reported to you on the U.S. efforts to combat terrorism.1 As noted in that report, we are reporting separately on your request that we identify interagency processes intended to ensure the efficient allocation of funding and resources for such efforts across the federal government. Specifically, we (1) identified federal funding for unclassified programs and activities to combat terrorism2 ; (2) determined whether any agency or entity has been designated to coordinate budget proposals, establish priorities, manage funding requirements, and help ensure the efficient allocation of federal resources for combating terrorism across federal agencies; (3) explored opportunities for agencies to expand coordination of terrorism-related programs and activities under the Government Performance and Results Act principles and framework; and (4) assessed issues concerning the reimbursement of support provided to agencies with lead counterterrorism responsibilities.
Under Presidential Decision Directive (PDD) 39 (U.S. Policy on Counterterrorism, June 1995), the National Security Council (NSC) is to coordinate interagency terrorism policy issues and review ongoing crisis operations and activities concerning foreign terrorism and domestic terrorism with significant foreign involvement. An NSC-chaired coordinating group is to ensure the PDD is implemented but does not have authority to direct agencies activities.
Among its general mission responsibilities, the Office of Management and Budget (OMB) is to evaluate the effectiveness of agency programs, policies, and procedures; assess competing funding demands among agencies; set funding priorities; and develop better performance measures and
1 Combating Terrorism: Federal Agencies Efforts to Implement National Policy and Strategy (GAO/NSIAD-97-254, Sept. 26, 1997). (A list of related GAO products is on p. 39.)
2 For purposes of this report, programs and activities to combat terrorism include antiterrorism, or defensive activities such as security measures and counterterrorism, or offensive activities and countermeasures.
coordinating mechanisms. Further, according to PDD 39, OMB is to analyze the adequacy of funding for terrorism-related programs and ensure the adequacy of funding for research, development, and acquisition of counterterrorism-related technology and systems on an ongoing basis.
Under PDD 39, the State Department and the Department of Justice, through the Federal Bureau of Investigation (FBI), have lead federal agency responsibility for dealing with terrorist incidents overseas and domestically, respectively. Numerous federal departments, agencies, bureaus, and offices also have terrorism-related programs and activities that are funded through annual and supplemental appropriations. (See app. I for a list of federal entities with terrorism-related programs and activities.) Terrorism-related funding requests include nearly $290 million provided under the 1995 Emergency Supplemental Appropriations Act (P.L. 104-19) in the aftermath of the domestic terrorist attack in Oklahoma City and $1.1 billion proposed for counterterrorism programs within a number of agencies in fiscal year 1996 supplemental appropriations and fiscal year 1997 budget amendments.
The Government Performance and Results Act (Results Act) of 1993 is intended to improve the management and accountability of federal agencies.3 The Results Act seeks to shift the focus of federal management and decision-making from activities that are undertaken to the results of activities as reflected in citizens lives. Specifically, it requires federal agencies to prepare multiyear strategic plans and annual performance plans, establish program performance measures and goals, and provide annual performance reports to the Congress. Agencies submitted the first strategic plans to OMB and the Congress by September 30, 1997; the first annual performance plans, covering fiscal year 1999, are to be submitted to the Congress after the Presidents budget submission in 1998.
In recent years, several efforts have been undertaken to coordinate federal programs that cut across agencies to help ensure that national needs are being effectively targeted. These efforts have shown that coordinating crosscutting programs takes time and sustained attention and, because of the statutory bases of crosscutting programs, may require congressional involvement to integrate the federal response to national needs. With the large number of government entities involved, the federal effort to combat
3 For a full discussion of the act and its implementation, see The Government Performance and Results Act: 1997 Governmentwide Implementation Will Be Uneven (GAO/GGD-97-109, June 2, 1997) and Managing for Results: The Statutory Framework for Improving Federal Management and Effectiveness (GAO/T-GGD/AIMD-97-144, June 24, 1997).
terrorism is one example of a crosscutting program to which Results Act principles and measures might be applied.
The amount of federal funds being spent on programs and activities to combat terrorism is unknown and difficult to determine. Identifying and tracking terrorism-related governmentwide spending with precision is difficult for several reasons, such as the lack of a uniform definition of terrorism and the inclusion of these expenditures within larger categories that do not readily allow separation. For example, building security measures protect against criminals as well as terrorists. Some agencies maintain data on their spending for efforts to combat terrorism, while others have only fragmented information or estimates. Information from key agencies involved in combating terrorism shows that nearly $7 billion was spent for unclassified terrorism-related programs and activities during fiscal year 1997. The Department of Defense (DOD)which plays a key supporting role to the lead federal agencies in combating terrorism and is also responsible for protecting its personnel and facilities from terrorist attack worldwidebudgeted about $3.7 billion in fiscal year 1997, or about 55 percent of the estimated spending.
Although NSC is to coordinate counterterrorism policy issues and OMB is to assess competing funding demands, neither agency is required to regularly collect, aggregate, and review funding and spending data relative to combating terrorism on a crosscutting, governmentwide basis. Further, neither agency establishes funding priorities for terrorism-related programs across agencies budgets or ensures that individual agencies stated requirements have been validated against threat and risk criteria before budget requests are submitted to the Congress. Because governmentwide priorities for combating terrorism have not been established and funding requirements have not necessarily been validated based on an analytically sound assessment of the threat and risk of terrorist attack, there is no basis to have reasonable assurance that
The Results Act principles and framework can provide guidance and opportunities for the many federal agencies involved in the crosscutting program to combat terrorism to develop coordinated goals, objectives, and performance measures and to enhance the management of individual agency and overall federal efforts related to combating terrorism. In the next phase of Results Act implementation, agencies are to develop annual performance plans that are linked to their strategic plans. These plans are to contain annual performance goals, performance measures to gauge progress toward achieving the goals, and the resources agencies will need to meet their goals. The development of annual plans may provide the many federal agencies involved in combating terrorism the next opportunity to develop coordinated goals, objectives, and performance measures for programs and activities that combat terrorism and to articulate how they plan to manage this crosscutting program area.
Reimbursement of agencies expenses for support activities related to terrorist incidents has been a matter of concern to the FBI, the lead agency for responding to a terrorist incident in the United States. PDD 39 directs that agencies will provide support for terrorism-related activities at their own expense unless the President directs otherwise. However, the Economy Act generally requires reimbursement for goods and services provided to another agency.4 The difference between the PDD and the Economy Act concerning reimbursement has caused disagreements between agencies in some cases. For example, the FBI has cited PDD 39 to seek DOD support for counterterrorism activities on a nonreimbursable basis, whereas DOD has cited the Economy Act as requiring reimbursement, unless another statute specifically allows DOD to provide nonreimbursable support. DODs position is that PDD 39 is not sufficient for this purpose. This issue remained unresolved at the time of our review.
Federal agencies are not required to account separately for their terrorism-related programs and activities. Because most federal agencies do not isolate or account specifically for terrorism-related funding, it is difficult to determine how much the government budgets and spends to combat terrorism. Key agencies provided us their estimates of terrorism-related spending, using their own definitions. These estimates totaled nearly $7 billion for unclassified programs and activities for fiscal
4 The Economy Act of 1932 (31 U.S.C. 1535, as amended) authorizes federal agencies to order goods and services from other federal agencies when funds are available, it is in the best interest of the government, and the goods and services cannot be provided as conveniently and cheaply by private industry.
year 1997, and should be considered a minimum estimate of federal spending for unclassified terrorism-related programs and activities.
The amounts for governmentwide terrorism-related funding and spending are uncertain because (1) definitions of antiterrorism and counterterrorism vary from agency to agency; (2) in most cases agencies do not have separate budget line items for terrorism-related activities; (3) some agency functions serve more than one purpose, and it is difficult to allocate costs applicable to terrorism alone (e.g., U.S. embassy security measures protect not only against terrorism but also against theft, compromise of classified documents, and violent demonstrations); (4) some agencies, such as the Departments of Energy and Transportation, have decentralized budgeting and accounting functions and do not aggregate terrorism-related funding agencywide5 ; (5) programs and activities may receive funding from more than one appropriation within a given agency, which makes it difficult to track collective totals; and (6) appropriations legislation often is not clear regarding which amounts are designated to combat terrorism.
At our request, the primary agencies leading or supporting operational crisis response and management activities under PDD 39 provided spending data for fiscal years 1994 to 1996 (not all agencies were able to provide historical data prior to fiscal year 1996) and estimates for fiscal year 1997 (see table 1).
5 For example, individual organizational units within the Department of Transportations modal administrations are responsible for their own budgeting and accounting. Further, to obtain the Federal Aviation Administrations (FAA) terrorism-related funding, we requested and compiled estimates from three FAA entities.
Figure 1 indicates that DOD spent the largest share of estimated terrorism-related funds for fiscal year 1997, followed by the Department of Energy.
While DOD and the Department of Energy estimated spending accounted for 76 percent of the unclassified fiscal year 1997 terrorism-related funds, other agencies resources dedicated to combating terrorism have significantly increased in recent years. For example, FAA resources tripled (in current dollars) during fiscal years 1994-97, and FBI resources increased five-fold. FAA increased equipment purchases and aviation security operations, and the FBI nearly tripled the authorized staffing level dedicated to combating terrorism, with the largest staff increase occurring in fiscal year 1997.
There is no interagency mechanism to centrally manage funding requirements and requests to ensure an efficient, focused governmentwide application of federal funds to numerous agencies programs designed to combat terrorism. Given the high national priority and magnitude of this nearly $7-billion federal effort, sound management principles dictate that (1) governmentwide requirements be prioritized to meet the objectives of national policy and strategy and (2) spending and program data be
collected from the federal agencies involved to conduct annual, crosscutting evaluations of their funding requests based on the threat and risk of terrorist attack and to avoid duplicated efforts or serious funding gaps. Neither NSC nor OMB currently performs these functions for the governmentwide program to combat terrorism. Rather, each agency is responsible for identifying and seeking funding for its priorities within its own budget allocation, and OMB reviews the budget requests on an agency-by-agency basis. Because individual agencies continue to propose new programs, activities, and capabilities to combat terrorism, annual crosscutting evaluations of agency budget requests for such programs would be prudent to help avoid duplicated efforts.
Under PDD 39, NSC is to ensure the federal policy and strategy for combating terrorism is implemented. Although PDD 39 establishes interagency coordinating and working groups under the auspices of NSC to handle policy and operational issues related to combating terrorism, these groups operate on a consensus basis, do not have decision-making authority, and do not establish governmentwide resource priorities for combating terrorism. Moreover, PDD 39 does not assign responsibility to NSC to ensure that terrorism-related requirements and related funding proposals (1) are analyzed and reviewed to ensure they are based on a validated assessment of the terrorism threat and risks of terrorist attack, (2) provide a measured and appropriate level of effort across the federal government, (3) avoid duplicative efforts and capabilities, and (4) are prioritized governmentwide in a comprehensive strategy to combat the terrorist threat.
PDD 39 requires OMB to analyze the adequacy of funding for terrorism-related programs, technology, and systems. Further, OMBs general mission responsibilities include evaluating the effectiveness of federal programs and policies, assessing competing funding demands, and setting funding priorities. However, PDD 39 does not specifically require OMB to prioritize terrorism-related requirements governmentwide or to gather funding data across agencies and perform the crosscutting analyses of agencies funding proposals necessary to ensure the efficient use of federal resources.
OMB examiners who review individual agencies terrorism-related funding requests explained that although they do not review activities and programs to combat terrorism on a crosscutting basis as such, they often discuss funding issues with each other during their reviews. Further, they bring issues they identify during their reviews to the attention of senior
OMB officials. For example, OMB said it reviewed the FBIs funding requests for a hazardous materials laboratory capability and for increased staffing to combat terrorism. However, because OMB did not provide evidence of its reviews, we could not verify the extent to which OMB considered the capabilities of other federal laboratories or analyzed the FBIs request for increased staffing based on workload data and on the threat and risk of terrorism. Further, because terrorism-related funding requirements and proposals have not been prioritized across agencies, OMB could not have fully considered tradeoffs among competing demands. For this reason, it is unclear, for example, whether OMBs denial of an FBI request for an aircraft that the FBI said was required for counterterrorism and other operations was based on an assessment of terrorism-related priorities across the government or of only the FBIs funding requests.
OMB stated that in addition to its examination of agencies funding requests, it has met its responsibilities under PDD 39 by reviewing DODs counterterrorism program baseline funding and program submission, participating in interagency meetings designed to better identify terrorism-related budget functions that are imbedded in broader funding accounts, and reviewing specific technology proposals (such as FAA proposals for explosives detection technology). Also, consistent with its role, OMB prepared the Presidents $1.1-billion request for terrorism-related programs and activities. We submitted a letter of inquiry to OMB to obtain information about OMBs role in reviewing federal agencies budget requests and spending to combat terrorism. Our questions and OMBs written response appear in appendixes II and III, respectively.
While OMB said that it analyzes individual agencies funding requestsand some examiners say they share information during their examinationsOMB does not regularly perform crosscutting analyses of requirements, priorities, and funding for the overall federal effort to combat terrorism. Consequently, OMB cannot provide reasonable assurance that specific federal activities and programs to combat terrorism (1) are required based on a full assessment of the threat and risk involved, (2) avoid unnecessary duplication of effort or capability with other agencies, and (3) meet governmentwide priorities for effectively and efficiently implementing the national strategy on combating terrorism.
Section 1501 of the recently enacted National Defense Authorization Act for Fiscal Year 1998 requires OMB to establish a reporting system for executive agencies on the budgeting and expenditure of funds for counterterrorism and antiterrorism programs and activities. The section
also requires OMB, using the reporting system, to collect agency budget and expenditure information on these programs and activities. Further, the President is required to submit an annual report to the Congress containing agency budget and expenditure information on counterterrorism and antiterrorism programs and activities. The report is also to identify any priorities and any duplication of efforts with respect to such programs and activities.
The Results Act requires each executive branch agency to define its mission and desired outcomes, measure performance, and use performance information to ensure that programs meet intended goals. However, the national policy, strategy, programs, and activities to combat terrorism cut across agency lines. The acts emphasis on results implies that federal programs contributing to the same or similar outcomes should be closely coordinated to ensure that goals are consistent and that program efforts are mutually reinforcing. Effective implementation of the act governmentwide should eventually help prevent uncoordinated crosscutting program efforts that can waste funds and limit the overall effectiveness of the federal effort.
The principles underlying the Results Act provide guidance that the many federal agencies responsible for combating terrorism can use to develop coordinated goals, objectives, and performance measures and to improve the management of individual agency and overall federal efforts to combat terrorism. For example, the act focuses on clarifying missions, setting program goals, and measuring performance toward achieving those goals. In our work examining implementation of the Results Act, we identified several critical issues that need to be addressed if the act is to succeed in improving management of crosscutting program efforts by ensuring that those programs are appropriately and substantively coordinated.6 As their implementation of the Results Act continues to evolve, agencies with terrorism-related responsibilities may become more aware of the potential for and desirability of coordinating performance plans, goals, and measures for their crosscutting activities and programs.
The next phase of implementation of the Results Act requires agencies to develop annual performance plans that are linked to their strategic plans.
6 See, for example, Managing for Results: Critical Issues for Improving Federal Agencies Strategic Plans (GAO/GGD-97-180, Sept. 16, 1997); Managing for Results: Using the Results Act to Address Mission Fragmentation and Program Overlap (GAO/AIMD-97-146, Aug. 29, 1997); and Managing for Results: Building on Agencies Strategic Plans to Improve Federal Management (GAO/T-GGD/AIMD-98-29, Oct. 30, 1997).
These plans are to contain annual performance goals, performance measures to gauge progress toward achieving the goals, and the resources agencies will need to meet their goals. The development of annual plans may provide the many federal agencies responsible for combating terrorism the next opportunity to develop coordinated goals, objectives, and performance measures for programs and activities that combat terrorism and to articulate how they plan to manage this crosscutting program area.
The Economy Act of 1932 (31 U.S.C. 1535, as amended) generally requires federal agencies to reimburse other federal agencies that provide them with support. However, PDD 39 states that federal agencies providing support to lead agencies counterterrorist operations or activities must bear the cost unless otherwise directed by the President. Because the Economy Act and PDD 39 differ in their treatment of reimbursement, DOD and the FBI have disagreed on whether the FBI must reimburse DOD for its support of counterterrorist operations. Primary examples of DOD support involve air transportation to return terrorists from overseas locations or other deployments of FBI personnel and equipment for special events or for the investigation of terrorist incidents. DOD officials stated that PDD 39 does not have the force of statutory authority regarding whether or not DODs support to another agency is reimbursable. These officials believe the Economy Act requires DOD to provide the requested support on a reimbursable basis unless another statute allows for nonreimbursable support.7 Every request for DOD support requires a legal determination of which statutes are applicable and whether the Economy Act applies. DOD believes that PDD 39 does not control the legal determination of reimbursement.
The issue of reimbursement has caused two concerns within the FBI: (1) the potential impairment of its operations under PDD 39 or other authorities and (2) the availability of funding for operations under PDD 39 if DOD does not provide nonreimbursable support. According to the FBI, DOD ultimately provides nonreimbursable support in most cases, but delays and uncertainties involved in DODs decision process on reimbursement frequently threaten timely FBI deployments.
7 For example, 10 U.S.C. 377 requires reimbursement for any DOD assistance provided under 10 U.S.C. 371 and 372 unless the support is provided in the normal course of military training or operations or results in a benefit to the DOD element providing the support that is substantially equivalent to that which would otherwise be obtained from military operations or training. Also, DOD may provide nonreimbursable support under certain circumstances to the Secret Service under the 1976 Presidential Assistance Act.
DOD officials cited an example of the process it follows when the FBI, through the Attorney General, requests support under PDD 39. In response to an Attorney General request that DOD provide air transportation for FBI personnel and equipment to prepare for the June 1997 Summit of the Eight in Denver, Colorado, DOD identified a statute that allowed nonreimbursable support regarding the provision of security to foreign dignitaries. Otherwise, the Economy Act would have required the FBI to reimburse DOD for the transportation costs.
In an attempt to alleviate concern and confusion over reimbursement of support activities, NSC tasked a special working group on interagency operations to explore solutions. According to NSC, possible solutions include legislation to provide DOD with special authority to provide nonreimbursable support or to set aside contingency funds for domestic emergency support team activities. The Department of Justice commented that DOD-provided transportation services and assistance provided in response to terrorist activities involving a weapon of mass destruction should be exempt from the requirements of the Economy Act. DOD commented that it is also considering various legislative options to permit nonreimbursable support for counterterrorism operations. At the time of our review, the issue remained unresolved.
Billions of dollars are being spent by numerous agencies with roles or potential roles in combating terrorism, but because no federal entity has been tasked to collect such information across the government, the specific amount is unknown. Further, no governmentwide spending priorities for the various aspects of combating terrorism have been set, and no federal entity manages the crosscutting program to channel resources where they are most needed in consideration of the threat and the risk of terrorist attack and to prevent wasteful spending that might occur from unnecessary duplication of effort. Recent legislation requires that OMB establish a reporting system for executive agencies on the budgeting and expenditure of funds for counterterrorism and antiterrorism programs and activities and that the President report this information annually to the Congress, along with program priorities and any duplication of effort.
We recommend that consistent with the responsibility for coordinating efforts to combat terrorism, the Assistant to the President for National Security Affairs, NSC, in consultation with the Director, OMB, and the heads of other executive branch agencies, take steps to ensure that (1) governmentwide priorities to implement the national counterterrorism policy and strategy are established; (2) agencies programs, projects, activities, and requirements for combating terrorism are analyzed in relation to established governmentwide priorities; and (3) resources are allocated based on the established priorities and assessments of the threat and risk of terrorist attack.
To ensure that federal expenditures for terrorism-related activities are well-coordinated and focused on efficiently meeting the goals of U.S. policy under PDD 39, we recommend that the Director, OMB, use data on funds budgeted and spent by executive departments and agencies to evaluate and coordinate projects and recommend resource allocation annually on a crosscutting basis to ensure that governmentwide priorities for combating terrorism are met and programs are based on analytically sound threat and risk assessments and avoid unnecessary duplication.
In a draft of this report we also recommended that the Director, OMB, establish a governmentwide mechanism for reporting expenditures to combat terrorism. We deleted that recommendation in view of the requirements of the recently enacted legislation. Our remaining recommendations are consistent with and complement this legislation.
In written comments on a draft of this report, the Department of Defense concurred with our findings. DOD noted that we identified a significant issue involving reimbursement for and providing DOD support to other federal agencies under PDD 39. DOD commented that although PDD 39 states that support provided by a federal agency to the lead federal agency in support of counterterrorist operations is borne by the providing agency, PDD 39 is not a statute, and does not provide authority to waive reimbursement that is required by the Economy Act. DOD also discussed in its comments specific legislative options it is considering to resolve the issue. (DODs comments and our response are in app. IV.)
In its written comments, the State Department pointed out that, although interagency funding requirements for combating terrorism are not managed by any single mechanism, overall counterterrorism and antiterrorism spending is discussed by NSCs Coordinating Sub-Group and
interagency coordination occurs in other contexts. We agree that interagency coordination occurs at various forums in the counterterrorism community but such coordination mechanisms do not perform the functions we are recommending to NSC and OMB. State also highlighted the difficulties of determining the amount of funds spent to combat terrorism with a certain level of precision. We agree that it would be difficult and possibly not cost-effective to account for programs and activities that combat terrorism with a high degree of precision. Nevertheless, at the time of our review, information on federal spending to combat terrorism had not been gathered in any form or at any level of specificity, and we believe that a reasonable methodology could be devised to allow OMB to capture this data governmentwide. State also noted that efforts to coordinate programs and activities and prevent duplication are further complicated by the authorization and appropriations process in the Congress, because various committees have jurisdiction over the federal agencies involved in combating terrorism. State finally noted that it is important to have good working relations with other countries to effectively counter international terrorism. (States comments and our response are in app. V.)
OMB noted in its written comments that although our recommendations are consistent with policies and responsibilities established by statute and the President, the budget process would not be improved by mandating annual, formal crosscutting reviews of budget requests and spending for federal programs that combat terrorism. OMB also stated that, because of the significant investment in combating terrorism over the past few years, it will include a crosscutting review of these programs in the formulation of the fiscal year 1999 budget. We are encouraged by OMBs crosscutting evaluation of programs to combat terrorism for the fiscal year 1999 budget submission. Because of the high national priority, the significant federal resources allocated, and the numerous federal agencies, bureaus, and programs involved, we continue to believe that annual crosscutting reviews would provide a mechanism for OMB to better assure that federal resources are aligned with governmentwide program priorities and that funds are not allocated to duplicative activities and functions to combat terrorism. Annual reviews would be particularly important because federal agencies continue to propose funding of new programs, activities, and capabilities to combat terrorism.
OMB expressed concern that our report suggests that there currently is no effective process to review spending for combating terrorism. We acknowledge OMBs reviews of individual agencies funding requests, but as noted in our report, OMB did not provide evidence of its reviews, in
particular of the $1.1-billion fiscal year 1997 amended budget request for combating terrorism. OMB also commented that it carefully considers funding levels for activities to combat terrorism. During the course of our review, OMB could not provide data on funding levels across the federal government for combating terrorism. During the agency comment period on a draft of this report, officials from the Treasury and Justice Departments noted that OMB recently issued a budget data request to gather budgetary and expenditure data from executive agencies for fiscal years 1996-99, which in part satisfies our recommendation to OMB. OMB would not provide a copy of the budget data request because we are not part of the executive branch and it was in the process of being implemented. As a result, we could not verify that the request was issued or determine its content. (OMBs written comments are in app. VI.)
The Departments of Treasury; Justice, including the FBI; and Transportation provided technical comments, which we have reflected in our report, as appropriate. NSC and the Departments of Energy and Health and Human Services did not comment on the draft report.
We reviewed PDD 39 to determine agencies roles and responsibilities in managing and coordinating resources for combating terrorism. Because data on agencies spending for U.S. efforts to combat terrorism are not available from a central source, we obtained from the Departments of Defense; Energy; Justice, including the FBI; State; Transportation (FAA); Treasury; and Health and Human Services data on spending that the agencies categorized as related to their unclassified efforts to combat terrorism. We did not verify the data for accuracy, completeness, or consistency. We discussed with NSC and OMB their respective roles in managing the crosscutting federal effort to combat terrorism, and we also submitted questions to the Director, OMB, on OMBs role under PDD 39. We discussed reimbursement issues with the FBI and DOD.
We conducted our work from November 1996 to October 1997 in accordance with generally accepted government auditing standards.
As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution of this report until 7 days after its issue date. At that time, we will send copies to the appropriate congressional committees; the Director, Office of Management and Budget; other federal agencies discussed in the report;
and other interested parties. If you have any questions about this report, please contact me at (202) 512-3504. Major contributors to this report were Davi M. DAgostino, Richard A. McGeary, H. Lee Purdy, and Raymond J. Wyrsch.
Director, National Security Analysis
Federal Entities With Terrorism-related Programs and Activities 20
Letter of Inquiry From GAO to the Office of Management and Budget 22
OMB Response to GAO Letter of Inquiry 24
Comments From the Department of Defense 26
Comments From the Department of State 29
Comments From the Office of Management and Budget 34
Related GAO Products 39
Table 1: Estimated Spending for Key Agencies Unclassified Terrorism-related Programs and Activities 6
Figure 1: Estimated Spending for Key Agencies Unclassified Terrorism-related Programs and Activities 7
DOD Department of Defense
FAA Federal Aviation Administration
FBI Federal Bureau of Investigation
NSC National Security Council
OMB Office of Management and Budget
PDD Presidential Decision Directive
Department of State
Department of JusticeFederal Bureau of Investigation
Immigration and Naturalization Service
U.S. Marshals Service
Drug Enforcement Agency
Department of Defense (DOD)
Office of the Secretary of Defense
Joint Chiefs of StaffU.S. Army
U.S. Marine Corps
U.S. Air Force
U.S. Special Operations Command
U.S. Central Command
Defense Intelligence Agency
Advanced Research Projects Agency
Defense Information Systems Agency
Defense Special Weapons Agency
Department of Energy
Department of Health and Human Services
Department of TreasuryU.S. Customs Service
Bureau of Alcohol, Tobacco, and Firearms
U.S. Secret Service
Department of TransportationFederal Aviation Administration
U.S. Coast Guard
Department of Commerce
Environmental Protection Agency
Federal Emergency Management Agency
Nuclear Regulatory Commission
U.S. Postal Service
White House Military Office
White House Communications Agency
U.S. Supreme Court Marshals Office
U.S. Capitol Police
Office of the Vice President
U.S. Information Agency
National Security Council (NSC)
Central Intelligence Agency
National Security Agency
National Reconnaissance Office
[Note: letters in appendices are transcribed from images]
GAO United States General Accounting Office Washington D.C. 20548 National Security and International Affairs Division May 5, 1997 Franklin D. Raines, Director Office of Management and Budget Old Executive Office Building Washington, DC 20503 Attention: Stephen A. Weigler Acting Associate Director for Administration Dear Mr. Raines: We are currently reviewing U.S. efforts to combat terrorism in response to requests by Representative Ike Skelton and Senator John Glenn, Ranking Minority Member, Senate Committee on Governmental Affairs. A significant issue within our review is the coordination and monitoring of funding for federal agencies' counterterrorism and antiterrorism activities. We understand that the Office of Management and Budget (OMB) is generally responsible for (1) supervising and controlling the administration of the budget, (2) helping to develop efficient coordinating mechanisms to implement government activities and to expand interagency coordination, and (3) planning, conducting, and promoting evaluation efforts that assist the President in assessing program objectives, performance, and efficiency. Further. under Presidential Decision Directive 39, OMB is required to analyze and oversee the adequacy of funding for terrorism-related programs, technology and systems. Based on OMB's general responsibilities as well as its specific responsibilities under PDD 39, we are seeking information on the nature and extent of OMB's efforts to (1) track all of the funds that have been allocated to combating terrorism, (2) monitor funding to prevent duplicative or inefficient efforts, and (3) evaluate whether counterterrorism and antiterrorism program objectives are being met. To that end, we are asking that you respond to the following questions. (1) What is OMB doing to carry out its specific responsibilities established by Presidential Decision Directive 39 and its general responsibilities as they relate to counterterrorism and antiterrorism? (2) Does OMB have a government-wide agency reporting mechanism for counterterrorism and antiterrorism funding?
(3) Does OMB have data on counterterrorism and antiterrorism funding amounts since fiscal year 1995 by agency and purpose? If so, please provide a copy of this data. (4) Please describe how OMB has evaluated and coordinated antiterrorism and counterterrorism projects and expenditures to ensure priority of effort and avoid duplication? Describe what OMB does with such evaluations and how OMB coordinates these expenditures. Please provide copies of such evaluations and any documentation of OMB's coordination activities. We are requesting a response by May 12,1997, so that we can be responsive to our requestors. If you have any questions, please call me on (202) 512 3504. This work is being performed under job code 701103 by our National Security and International Affairs Division and has been coordinated with GAO's OMB liaison, L. Nye Stevens, Director, Federal Management and Workforce Issues, General Government Division. Sincerely yours, [Signature] Richard Davis Director, National Security Analysis cc Mr. Stevens Page 2
EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT AND BUDGET WASHINGTON, D.C. 20503 JUN 10 1997 Mr. Richard Davis Director, National Security Analysis U. S. General Accounting Office Washington, D.C. 20548 Dear Mr. Davis: Thank you for your letter of May 5, 1997, informing me of the General Accounting Office's review of the United States Government efforts to combat terrorism. As you know, the U.S. policy on counterterrorism, including OMB's role in supporting that policy, are described in Presidential Decision Directive 39. OMB considers combating terrorism, both foreign and domestic, to be among the President's foremost priorities. As such, OMB has taken the following actions to carry out the specific responsibilities established by PDD 39, and its general responsibilities (as correctly noted in your letter) as they relate to combating terrorism: + OMB's National Security Division coordinated the interagency review of the annual "Report on Activities and Programs for Countering Proliferation and Nuclear, Biological and Chemical Terrorism". This report is prepared by the Departments of Defense and Energy, and the Intelligence Community and addresses the funding of technology and systems. + We reviewed the Department of Defense's Combating Terrorism baseline funding and program. DOD recently transmitted letters and budget exhibits that detail their combating terrorism funding for Fiscal Years 1998/1999 to the appropriate Congressional Committees (as well as Carol Coffey of GAO). The Office of the Secretary of Defense conducted an extensive program and budget review of combating terrorism and force protection programs, which served to prioritize programs and eliminate duplication. + Through the annual program and budget review which culminates in the submission of the President's Budget to Congress, counterterrorism, and antiterrorism programs are reviewed, although we do not collect or aggregate government-wide program funding by function. Also, in l996 the President submitted an anti-terrorism budget amendment to the Congress. Preparation of the amendment required a thorough review by OMB of government-wide anti-terrorism requirements. Programs were prioritized based on overseas force protection, anti-terror physical security, and counter-terrorism.
+ OMB reviewed the Attorney General's Report to the Congress concerning the Administration's Comprehensive Counterterrorism Strategy. In the report, the Attorney General describes responsibilities incorporated in PDD 39, aud is due to testify before the Congress this week concerning this matter. + Finally, we attended and co-chaired meetings with the National Security Council staff, and representatives of the Departments of State, Defense, Justice, Energy, FEMA, and Public Health Service to establish methodologies for delineating counterterrorism and antiterrorism budget functions embedded in broader funding accounts. Similar meetings were conducted to supervise the execution of domestic emergency preparedness programs authorized in the National Defense Authorization Act for Fiscal Year 1997. The above actions generally describe OMB's efforts to support the President's counterterrorism and antiterrorism program. Please contact me if I can provide further information concerning your review. Sincerely, [Signature] Gordon Adams Associate Director, National Security and International Affairs cc: Richard Emery 2
[Note: bracketed material within following letters are GAO margin notes.]
THE ASSISTANT SECRETARY OF DEFENSE WASHINGTON. D.C. 20301-2500 SPECIAL OPERATIONS LOW-INTENSITY CONFLICT NOV - 7 1997 Mr. Richard Davis Director, National Security Analysis National Security and International Affairs Division U. S. General Accounting Office Washington, D. C. 20548 Dear Mr. Davis: This letter is the Department of Defense (DoD) response to the General Accounting Office (GAO) draft report entitled "COMBATING TERRORISM: Spending on Government- Wide Programs Requires Better Management and Coordination," dated October 2, 1997 (GAO Code 701122), OSD Case 1474. The Department appreciates the opportunity to review the draft report. The DoD concurs with the draft report. We note that the GAO has properly identified a significant issue involving reimbursement and the provision of DoD support to other federal agencies under the umbrella of PDD-39. As stated in the report, it is the position of the DoD General Counsel that under the Economy Act (31 U.S.C. section 1535, as amended), federal [Now on pp. 11-12.] agencies that provide support to other federal agencies must be reimbursed for that support, unless waiver of such reimbursement is specially authorized by statute or the Department can find a DoD interest/benefit. Although PDD 39 states that support provided by a federal agency to the lead federal agency in support of counterterrorist operations is borne by the providing agency, PDD-39 is not a statute, and does not provide authority to waive reimbursement that is required by the Economy Act. [See comment 1.] Because of this, the Department continues to review each request for support on a case- by-case basis to determine policy, authority, funding, and to seek appropriate decisions from senior defense managers on each request. However, the Department is considering proposing legislation which would permit DoD to provide equipment and operators (including airlift) to federal, state or local law enforcement agencies for counterterrorism operations on a reimbursable basis, with reimbursement waivable where there is a training or operational benefit to DoD. As currently written, DoD may not operate equipment, including aircraft, for a law enforcement agency except upon the request of a federal law enforcement agency in support of counter-drug or immigration law enforcement or for other limited purposes not pertinent to this discussion. Our legislative proposal would extend counterterrorism support to the appropriate law enforcement agencies. Further, if we wanted to limit such assistance only to federal
agencies, an alternative approach would be to amend Title 10 U.S.C section 374 to permit such support to federal agencies with jurisdiction over terrorism related crimes. Suggested technical changes for accuracy and clarification have been provided separately. Again, the Department appreciates the opportunity to review the draft report. Sincerely, [Signature] H. ALLEN HOLMES
The following is GAOs comment on DODs letter dated November 7, 1997.
1. We did not evaluate DODs options for proposed legislative changes that would permit nonreimbursable support to law enforcement agencies.
United States Department of State Chief Financial Officer Washington, D.C. 20520-7427 November 3, 1997 Dear Mr. Hinton: I am responding on behalf of the Department of State to the GAO draft report on "COMBATING TERRORISM: Spending on Governmentwide Programs Requires Better Management and Coordination," GAO Job Code 701122. We appreciate the difficulties in attempting to determine exactly how much the U.S. Government spends on countering terrorism and commend the GAO for its effort to compile figures from the various agencies and understand how priorities are worked out. In some instances, however, the draft report states the problem in terms that may be misleading. In others, the report could provide a more rounded and nuanced picture of how resources are coordinated and used in the "real world" of countering terrorism, a complex activity whose costs are not always possible to quantify in a rigid framework of budget programs and charts. We have provided some suggested language for inserting into the report but want to also make some of the Points in this separate letter. In an example of where the report gives a misleading [Now on p. 7.] impression, the draft (page 12, paragraph 1) stated "there is no interagency mechanism to centrally manage funding requirements to ensure an efficient focused application of federal funds Government-wide to numerous agencies' programs designed to combat terrorism." While it is accurate that interagency funding requirements for counterterrorism are not managed by any single mechanism, overall counterterrorism and antiterrorism spending is discussed at the Interagency Coordinating Sub- Group (CSG), and a good deal of coordination of priorities does take place within the CSG. In addition, significant Mr. Henry L. Hinton, Jr. Assistant Comptroller General, National Security and International Affairs, U.S General Accounting Office.
- 2 - interagency coordination takes place in other contexts, on a level of the specialists and the agencies most directly involved, not necessarily with NSC or OMB active participation. For example, there is a long-standing interagency program to coordinate and prevent duplication of research and development in counterterrorism technologies under the aegis of the Technical Support Working Group (TSWG.) Through the leadership of the Department of State, the TSWG brings together experts from over 50 government agencies to establish priorities and evaluate projects for counterterrorism research and development. In recent years, the effort has expanded to include consultations with other countries and now, joint projects are also under way with three NATO and major non-NATO allies. Similarly, there are other interagency working groups established under the direction of the Department's Coordinator for Counterterrorism in such areas as training, exercises, and the terrorism information and rewards programs. These function at the specialist level without a need for NSC direct [See comment 1.] involvement. Instead, the appropriate lead agency coordinates the activities and reports the recommendations or results to the Department's Coordinator for Counterterrorism. Although, as the second paragraph of page 12 notes, these [Now on p. 8.] interagency groups do not establish Government-wide resource priorities for combating terrorism, their recommendations to their Assistant Secretaries strongly influence decisions and the budget requests of the participating agencies. In an additional category of difficulties in determining the exact funding by the government to combat terrorism, it should be [See comment 2.] understood that many agency functions serve more than one purpose Combating terrorism is but one part. For example, U. S. embassy guards and building security programs help protect against a variety of threats, such as theft, compromises of classified documents, demonstrations, as well as terrorism. The exact ratios are not fixed, are difficult to determine, and may change quickly within a given country. Similarly, attorneys in State, Justice and Treasury often work on terrorism issues, but not exclusively. On a given day, several attorneys may be working on terrorism-related issues. The same is true of diplomatic and security officers posted overseas. In the case of the State Department, regional bureaus, some functional bureaus and the missions overseas and at the United Nations also work closely with the Office of the Counterterrorism (S/CT), depending on the issue.
- 3 - While the S/CT budget and related programs, such as training and R&D are readily identifiable, it would be extremely time- consuming to try to quantify and estimate the person-hours and other resources regional and functional bureaus may spend on terrorism issues, especially as the intensity and issues may vary considerably from week to week. It also is very difficult to predict in advance, or quantify after the fact, the amount of time an embassy might spend on dealing with terrorism. A major incident such as the takeover of the Japanese Embassy in Peru preoccupied the U.S. Embassy in Lima for weeks, then months, and prompted the creation of a task force in the Department. When the American hostages were released, early on, Embassy Lima continued to be heavily involved while the Department scaled back its efforts, continuing to monitor the situation and assist with the diplomatic aspects. Nor is it possible to easily quantify the resources needed to implement legislation. The designation of foreign terrorist organizations, a major task completed on October 8 pursuant to the Antiterrorism and Effective Death Penalty Act of 1996, required the work of scores of officers, analysts and lawyers in [See comment 3.] the Department and other agencies -- over a period of 14 months. It is fair to say that no one in the Congress or the Executive agencies anticipated the amount of resources needed to complete this work. Likewise, enforcement costs, borne primarily by other agencies, also are difficult to predict. A significant court case can require considerable resources, not only from the State Department and Intelligence community. The increased pace of terrorist extradition and renditions in recent years are cases in point. Another factor that does not show up in budget submissions is the cost of security services the Department provides to other agencies. The draft report noted (page 6, last paragraph) the EBI's concern about reimbursement of agency expenses for support activities. By the same token, the State Department is concerned that other agencies pay their fair share of the cost of [See comment 4.] facilities in U. S missions abroad, including costs associated with security-related matters, and anti-terrorism protective equipment and services. In many embassies, a large percentage of the personnel are from A.I.D., the Defense Department and other agencies. To help round out the picture, it should be noted that [See comment 5.] another complication in trying to coordinate counterterrorism programs and prevent duplication may arise in the authorization and appropriation process in Congress. Different committees have jurisdiction over the various agencies which have a role in dealing with terrorism. There have been instances in which one committee in Congress approved funds and even established
- 4 - programs that duplicated existing efforts funded through another committee -- for example, in the counterterrorism research and development area. A final point, and a fundamental one, is that to effectively counter international terrorism, it is necessary to have good working relations with other countries. This means a strong diplomatic presence overseas. As Ambassador Philip C. Wilcox Jr, [See comment 5.] then the Coordinator for Counterterrorism, testified at a Congressional hearing in March, 1997, "...An effective counterterrorism program is not fought only with separate programs. The cooperation of foreign nations, including those in the third world, is essential to the successful combating of international terrorism and the prosecution of individual terrorists. Indeed, of the six rendition or extradition cases of terrorist suspects found overseas and turned over to us for prosecution, all involved countries in the third world." "It is important that we maintain a strong foreign policy influence and presence overseas, that we be able to cultivate relationships, exchange information and influence attitudes so when the time comes, we get the assistance and cooperation we need, especially if the other country involved is concerned they are taking risks." "An effective antiterrorism policy and effort to protect American lives and interests overseas depend not only on our very important separate identifiable counterterrorism programs and projects. In the long run, they also depend on the ability and the resources of our government to conduct an effective diplomatic effort overseas." If you have any questions concerning this response, please contact Mr. Kenneth McKune, Acting Coordinator for Counterterrorism, S/CT, at (202) 647-8949. Sincerely, [Signature] Richard L. Greene cc: GAO/National Security and Analysis Group - Mr. Davis STATE/S/CT - Mr. McKune /FMP/BP/OBP - Ms. Greene
The following are GAOs comments on the Department of States letter dated November 3, 1997.
1. While we acknowledge the existence of various interagency coordinating mechanisms within the NSC structure, these mechanisms do not perform the functions we are recommending to NSC and OMB. For example, the interagency Technical Support Working Group coordinates only certain terrorism-related research and development projects, and it does not function to eliminate duplicative or redundant terrorism-related research and development across government agencies.
2. We modified the text to reflect the Departments point that embassy guards help protect against a variety of threats.
3. We agree that it would be difficult and possibly not cost-effective to account for spending to combat terrorism with a high degree of precision. Our report discusses this matter on p. 14.
4. The Departments concern about reimbursement for the cost of facilities security in U.S. missions abroad was not brought to our attention during our review of funding issues for combating terrorism. As a result, we are not in a position to comment on this matter.
5. The report discusses the State Department position on p. 14.
EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT AND BUDGET WASHINGTON, D.C 20503 THE DIRECTOR November 18, 1997 Mr. Richard Davis Director National Security Analysis United States General Accounting Office Washington, D.C. 20548 Dear Mr. Davis: Thank you for the opportunity to review the draft General Accounting office report "Combating Terrorism: Spending on Governmentwide Programs Requires Better Management and Coordination." The report recommends that the Assistant to the President for National Security Affairs, in consultation with the Director of OMB and the heads of other government agencies. take steps to ensure that priorities are established for combating terrorism activities, and that resources are allocated based on these priorities and assessments of the threat and risk of terrorist attack. To support this process. the report recommends that the Director of OMB establish a government- [See comment 1.] wide mechanism for reporting expenditures to combat terrorism. and use this data to evaluate projects and expenditures. In general, the report recommendations are consistent with policies and responsibilities established by statute and the President. However, I am concerned by the theme of the report, which suggests that there currently is no effective process to review spending for combating terrorism. I do not believe this to be an accurate representation of the situation. In developing recommendations to the President for his annual budget submission to the Congress, OMB carefully considers funding levels tor activities to combat terrorism. These requests are considered in terms of priorities for combating terrorism and adequacy of funding. as well as competing demands for scarce budget resources. The funding requests are carefully [See comment 2.] considered by OMB policy officials, including myself In particular. the development of the 1997 combating terrorism amendment was the subject of a rigorous, governmentwide review in which all spending was carefully reviewed and prioritized. Because of the significant investment combating terrorism over the past few years, the formulation of the FY 1999 budget will include a cross-cutting review of these programs. This year's cross-cut of terrorism programs is consistent with our long-standing approach to supplement the normal formulation process with special reviews as conditions warrant. Many agencies share responsibilities in a wide variety of policy areas. We do not believe that the
budget process would be improved by making formal cross-cutting reviews, whether for terrorism or for any other area of shared responsibility, a mandatory element of the annual process. While GAO appears to have arrived at a different conclusion, I hope that you can appreciate the OMB position, especially since it is based on years of experience in preparing the [See comment 3.] President's Budget. Sincerely. [Signature] Franklin D. Raines Director
The following are GAOs comments on OMBs letter dated November 18, 1997.
1. The report acknowledges that OMB reviews agencies individual budget requests, and suggests that this process would be enhanced if federal funding proposals were reviewed on a crosscutting, governmentwide basis. The report also points out that additional steps could be taken to prioritize federal programs and activities to combat terrorism at a strategic level to better ensure priority programs are funded and avoid duplicative and overlapping activities.
2. As discussed on p. 14 of the final report, we are encouraged by OMBs crosscutting review of programs to combat terrorism as part of the fiscal year 1999 budget process.
3. As discussed on pp. 14-15, in view of the national importance and priority, the significant federal resources allocated, and the numerous federal agencies, bureaus, and programs involved, we continue to believe that governmentwide priorities should be set and annual crosscutting reviews be performed on programs to combat terrorism. As agencies continue to propose new programs, activities, and capabilities, priorities and annual crosscutting reviews are particularly important to better assure that funds are not allocated to duplicative activities and functions to combat terrorism.
Combating Terrorism: Federal Agencies Efforts to Implement National Policy and Strategy (GAO/NSIAD-97-254, Sept. 26, 1997).
Combating Terrorism: Status of DOD Efforts to Protect Its Forces Overseas (GAO/NSIAD-97-207, July 21, 1997).
Chemical Weapons Stockpile: Changes Needed in the Management Structure of Emergency Preparedness Program (GAO/NSIAD-97-91, June 11, 1997).
State Department: Efforts to Reduce Visa Fraud (GAO/T-NSIAD-97-167, May 20, 1997).
Aviation Security: FAAs Procurement of Explosives Detection Devices (GAO/RCED-97-111R, May 1, 1997).
Aviation Security: Commercially Available Advanced Explosives Detection Devices (GAO/RCED-97-119R, Apr. 24, 1997).
Terrorism and Drug Trafficking: Responsibilities for Developing Explosives and Narcotics Detection Technologies (GAO/NSIAD-97-95, Apr. 15, 1997).
Federal Law Enforcement: Investigative Authority and Personnel at 13 Agencies (GAO/GGD-96-154, Sept. 30, 1996).
Aviation Security: Urgent Issues Need to Be Addressed (GAO/T-RCED/NSIAD-96-151, Sept. 11, 1996).
Terrorism and Drug Trafficking: Technologies for Detecting Explosives and Narcotics (GAO/NSIAD/RCED-96-252, Sept. 4, 1996).
Aviation Security: Immediate Action Needed to Improve Security (GAO/T-RCED/NSIAD-96-237, Aug. 1, 1996).
Passports and Visas: Status of Efforts to Reduce Fraud (GAO/NSIAD-96-99, May 9, 1996).
Terrorism and Drug Trafficking: Threats and Roles of Explosives and Narcotics Detection Technology (GAO/NSIAD/RCED-96-76BR, Mar. 27, 1996).
Nuclear Nonproliferation: Status of U.S. Efforts to Improve Nuclear Material Controls in Newly Independent States (GAO/NSIAD/RCED-96-89, Mar. 8, 1996).
Aviation Security: Additional Actions Needed to Meet Domestic and International Challenges (GAO/RCED-94-38, Jan. 27, 1994).
Nuclear Security: Improving Correction of Security Deficiencies at DOEs Weapons Facilities (GAO/RCED-93-10, Nov. 16, 1992).
Nuclear Security: Weak Internal Controls Hamper Oversight of DOEs Security Program (GAO/RCED-92-146, June 29, 1992).
Electricity Supply: Efforts Underway to Improve Federal Electrical Disruption Preparedness (GAO/RCED-92-125, Apr. 20, 1992).
Economic Sanctions: Effectiveness as Tools of Foreign Policy (GAO/NSIAD-92-106, Feb. 19, 1992).
State Department: Management Weaknesses in the Security Construction Program (GAO/NSIAD-92-2, Nov. 29, 1991).
Chemical Weapons: Physical Security for the U.S. Chemical Stockpile (GAO/NSIAD-91-200, May 15, 1991).
State Department: Status of the Diplomatic Security Construction Program (GAO/NSIAD-91-143BR, Feb. 20, 1991).
International Terrorism: FBI Investigates Domestic Activities to Identify Terrorists (GAO/GGD-90-112, Sept. 9, l990).
International Terrorism: Status of GAOs Review of the FBIs International Terrorism Program (GAO/T-GGD-89-31, June 22, 1989).
Embassy Security: Background Investigations of Foreign Employees (GAO/NSIAD-89-76, Jan. 5, 1989).
Aviation Security: FAAs Assessments of Foreign Airports (GAO/RCED-89-45, Dec. 7, 1988).
Domestic Terrorism: Prevention Efforts in Selected Federal Courts and Mass Transit Systems (GAO/PEMD-88-22, June 23, 1988).
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