Summary: GAO examined aspects of the North Atlantic Treaty Organization's (NATO) infrastructure, which is its commonly funded military construction program, to: (1) answer some frequently asked questions about how the program works; (2) identify actions to improve the future recovery from NATO of funds spent by the United States on prefinanced projects; and (3) suggest how savings could be achieved by the Department of Defense (DOD) through better cash management over U.S. payments to the infrastructure program.
The NATO infrastructure program provides funds for building essential operational facilities in support of the alliance's military forces. The United States uses military construction appropriations to prefinance projects for reimbursement by NATO and, to date, the military services have recouped only about 38 percent of the total amount prefinanced. The NATO infrastructure program is experiencing funding shortfalls and does not have sufficient funds to finance many projects which have already been approved. The U.S. military commanders charged with increasing conventional warfare capability often are unable to obtain funding for their NATO-eligible projects through the infrastructure program. GAO identified two possible courses of action when the infrastructure program is unable to accommodate critical construction projects vital to U.S. security interests: (1) the creation of a separate funding mechanism for prefinancing called a rolling fund; and (2) the expansion of the U.S. European Command's role in the selection of projects to be prefinanced. Infrastructure program expenditures are expected to increase in the next few years, and GAO believes that changing from a quarterly to a monthly schedule of payments to the program could result in considerable savings to the United States.
