Summary: Pursuant to congressional and other requests, GAO and the International Board of Auditors (IBAN) for the North Atlantic Treaty Organization (NATO) reviewed the internal financial and management controls of the North Atlantic Assembly's (NAA) International Secretariat. GAO and IBAN noted that: (1) from about 1988 to mid-1995, the Secretariat's financial records were under the control of the Assembly's financial officer and NAA funds were substantially abused and misused; (2) NAA initiated procedures in May 1995 to strengthen its internal management controls, but NAA financial management systems controls remain seriously inadequate; (3) NAA lacked the ability to record and document commitments and obligations in advance against approved budget categories, control over travel expenses, adequate administrative procedures and policies, compliance with Belgian tax laws, and an adequate external audit; (4) the NAA Secretary General did not always have access to key financial data; (5) there were several instances where NAA funds were spent without due regard for economy; and (6) NAA is still vulnerable to future improprieties because of continuing control weaknesses, but recommended actions should correct these problems if properly implemented.
