Summary: The General Accounting Office has reviewed the Military Assistance Program (MAP) for Iran as administered by the Military Assistance Advisory Group (MAAG), Iran. Our review was made pursuant to the provisions of the Budget and Accounting Act, 1921 (31 U.S.C. 53), and the Accounting and Auditing Act of 1950 (31 U.S.C. 67) and consisted of an initial examination in November 1957 and a supplemental examination in July 1958. This is one of a group of reports on the military assistance program. The organization and management and the financing of this program were discussed in our over-all report which was transmitted to the Congress on August 29, 1957. Our review of the Military Assistance Program (MAP) for Iran was directed toward examining management controls within the Department of Defense, including procedures, records, reports- and internal reviews for developing and carrying out the MAP in accordance with established United States policies and objectives. We reviewed at MAAG/Iran and at higher levels activity relating to (1) the development of requirements, particularly for fiscal year 1959 programs, for the build-up, modernization, and maintenance of approved Iranian forces, (2) the delivery of military end items, and (3) the degree of utilization achieved by the country forces equipped under the military assistance program. No attempt was made to evaluate technical or strategic matters. We examined selected transactions and made such other tests as we deemed appropriate to enable us to consider the adequacy and effectiveness of the management controls.
Our initial examination in November 1957 disclosed significant weaknesses in the administration of the Military Assistance Program for Iran. MAAG/Iran had developed program requirements for Iran without complete knowledge of the equipment already possessed by Iranian forces and without sufficient attention being given to known deficiencies in Iran's capability to use the equipment on hand and to be furnished. Since the United States European Command (EUCOM) in some instances questioned the validity of our initial findings or the need for corrective action, we conducted a supplemental review in Iran in July 1958. We were pleased to note during this review that MAAG/Iran had improved its programming techniques and corrected many of the deficiencies brought to its attention during our initial review. We believe that the conditions disclosed by our initial review demonstrate the need for a thorough and continuous internal review of the military assistance program. The Department of Defense has established a comprehensive internal audit for the military assistance program as recommended by us in our over-all report on the military assistance program which was transmitted to the Congress on August 29, 1957.
