Peacekeeping:

Multinational Force And Observers Maintaining Accountability, but State Department Oversight Could Be Improved

GAO-04-883: Published: Jul 23, 2004. Publicly Released: Jul 23, 2004.

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Since 1982, the Multinational Force and Observers (MFO) has monitored compliance with the security provisions of the Egyptian-Israeli Treaty of Peace. The United States, while not a party to the treaty, contributes 40 percent of the troops and a third of MFO's annual budget. All personnel in the MFO civilian observer unit (COU) are Americans. GAO (1) assessed State's oversight of the MFO, (2) reviewed MFO's personnel and financial management practices, and (3) reviewed MFO's emerging budget challenges and U.S. MFO cost sharing arrangements.

The State Department has fulfilled some but not all of its operational and financial oversight responsibilities for MFO, but lack of documentation prevented us from determining the quality and extent of its efforts. State has not consistently recruited candidates suited for the leadership position of the MFO's civilian observer unit, which monitors and verifies the parties' compliance with the treaty. State also has not evaluated MFO's financial practices as required by State's guidelines because they lacked staff with expertise in this area. However, State recently formed an MFO management advisory board to improve its oversight of MFO operations. MFO has taken actions in recent years to improve its personnel system, financial accountability, and internal controls. For example, it has provided incentives to retain experienced staff and taken steps to standardize its performance appraisal system. It has received clean opinions on its annual financial statements and on special reviews of its internal controls. MFO has also controlled costs, reduced its military and civilian personnel levels, and kept its budget at $51 million since 1995, while meeting mission objectives and Treaty party expectations. MFO faces a number of personnel, management, and budgetary challenges. For example, leading practices suggest its employees' access to alternative dispute resolution mechanisms for discrimination complaints, and the gender imbalance in its workforce, could be issues of concern. Moreover, MFO lacks oversight from an audit committee or senior management review committee to ensure the independence of its external auditors. Finally, MFO's budget is likely to increase because of costs associated with replacing its antiquated helicopter fleet. U.S. and MFO efforts to obtain support from other contributors generally have not succeeded. Army, State, and MFO officials have yet to agree who should pay the increased costs associated with changes in the composition and pay scales of U.S. troops deployed at MFO.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In its July 2004 report (Peacekeeping: Multinational Force and Observers (MFO) Maintaining Accountability, But State Department Oversight Could Be Improved), GAO recommended that State's MFO Advisory Board should monitor and document Bureau of Near Eastern Affairs, U.S. Department of State (NEA) compliance with its oversight guidelines. In response, State's new MFO Advisory Board adopted a mission statement to ensure adequate and documented review and analysis of the MFO's activities and budget in accordance with established guidelines of the bureau. At an October 2004 Advisory Board Meeting, the NEA's Officer in Charge of MFO affairs noted that he would provide to all members of the Advisory Board written copies of his reports on his biannual monitoring trips to MFO facilities.

    Recommendation: To promote improved oversight of the MFO and ensure that NEA redresses these issues, the Secretary of State should direct the MFO management advisory board to monitor and document NEA's compliance with its guidelines for overseeing the MFO.

    Agency Affected: Department of State

  2. Status: Closed - Implemented

    Comments: In its July 2004 report (Peacekeeping: Multinational Force and Observers (MFO) Maintaining Accountability, But State Department Oversight Could Be Improved), GAO recommended that State ensure that staff with accounting expertise are available to carry out the Bureau of Near Eastern Affairs' financial oversight responsibilities for the MFO and, if necessary, review the terms of MFO's external audits to ensure that they are appropriate. GAO noted that State had not provided employees who possess the expertise to carry out many of its financial oversight responsibilities for the MFO. In response, the State MFO Advisory Board included representatives from the Office of the Inspector General (OIG) to review MFO audits. OIG reviewed MFO's latest annual external audit and financial statements in August 2004 and found no problems. A State official said that OIG will routinely participate on the Advisory Board and will check on the quality of MFO's audits through an annual financial desk review of MFO audited financial statements and relate them to prior year statements. Moreover, any irregularities will be brought to the attention of MFO, Bureau of Near Eastern Affairs, U.S. Department of State (NEA), and the Advisory Board.

    Recommendation: To promote improved oversight of the MFO and ensure that NEA redresses these issues, the Secretary of State should ensure that staff with accounting expertise are available to carry out NEA's financial oversight responsibilities for MFO and, if necessary, review the terms of MFO's external audits to ensure that they are appropriate.

    Agency Affected: Department of State

  3. Status: Closed - Implemented

    Comments: State and MFO officials noted that this problem had been previously addressed to State and MFO's satisfaction in 2006. Moreover, State's mandatory requirement for postings in the Middle East have increased the number of interested applicants because MFO is now a much more attractive assignment for senior staff given the alternatives (Iraq). State took three actions to address this concern: First, State raised the grade level of the position from Foreign Service Officer-2 to FSO-1 to open the post to more seasoned candidates over two years ago. The selected candidate in 2006 was considered by both State and MFO to have performed ably in the position, and had successfully addressed a number of the morale issues GAO had identified in the report. Second, knowing how difficult it could be to find a qualified candidate for the summer 2008 bidding cycle, NEA did early outreach in the fall of 2007 to attract candidates; also, NEA elevated the position to the OC (Foreign service equivalent of the Senior Executive Service) to attract the best candidates (and to give the CCOU the same rank as his military counterpart in the MFO). Third, State also made the salary negotiations more flexible.

    Recommendation: To promote improved oversight of the MFO and ensure that the Bureau of Near Eastern Affairs (NEA) redresses these issues, the Secretary of State should resolve the recurring concern of finding qualified candidates for the chief of the civilian observer unit.

    Agency Affected: Department of State

  4. Status: Closed - Implemented

    Comments: MFO and State officials noted that the dispute between MFO and the U.S. Army over responsibility for the costs of deploying new U.S. Army helicopters to the MFO and the long-term dispute over responsibility for covering special U.S. Army pays associated with the deployment of U.S. Army troops to the Sinai were largely resolved by 2007. The U.S. Army agreed to pay about $6.2 million in unprogrammed, one time costs associated with the transfer of the helicopters . According to the 2007 MFO Annual Report, the U.S. government agreed to pay for some of the higher annual maintenance costs of the helicopters as well. The U.S. government and MFO also have come to an agreement on how to update and reconcile the long-term cost sharing arrangements, and have reconciled the long-standing dispute between the Army and MFO over the cost of providing special pays for U.S. troops and reservists deployed to the MFO.

    Recommendation: To promote improved oversight of the MFO and ensure that NEA redresses these issues, the Secretary of State should work with Army officials to reconcile differences between Army and State views about the current MFO cost-sharing arrangements.

    Agency Affected: Department of State

 

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