In December 1987, the Inspector General of the Department of State was designated by Congress to serve concurrently as Inspector General of the U.S. Arms Control and Disarmament Agency (ACDA).' The first review of ACDA by the Office of Inspector General (OIG) was a survey of ACDA's security program and practices, conducted from February through July 1988, which led to a subsequent inquiry into charges of nepotism in Geneva. This was followed by a review in October 1988 of ACDA administrative practices in Geneva, Switzerland, and a full inspection of ACDA operations during the first quarter of 1989.

The October review examined allegations that arose during the early 1988 survey of ACDA's security program and practices. These allegations concerned inappropriate and costly administrative practices at ACDA offices in Geneva, Switzerland. The review team received the full support of the ACDA Director, who traveled to Geneva to examine the situation personally. Improvements initiated during the survey and prompt implementation of OIG recommendations realized a $318,000 annual cost savings.

The inspection of ACDA conducted in early 1989 marked the first across-the-board examination of ACDA operations and established a "base'ne" evaluation by which to judge future reviews of ACDA activities and offices. In addition to providing an overview of the operations of the entire Agency, the inspection exam

'See Public Law 100-213, "Arms Control and Disarmament Amendments Act of 1987, December 24, 1987.

ined the arms control process and ACDA's role and effectiveness within this structure. The inspectors concluded that ACDA is not now satisfying the full intent of the legislation that established the Agency, in that it does not exercise the primary responsibility for arms control that was mandated by the Congress in 1961. Nevertheless, there is a continuing need within the U.S. Government for an organization such as ACDA to manage the arms control process and to ensure consideration of arms control issues in the formulation of foreign policy goals and objectives.

The central determination of the inspection was that ACDA can be strengthened to perform its duties more effectively, notwithstanding the competition for leadership that exists within the arms control arena. Management of resources was found to be a problem, although significant improvements in internal security controls were noted. The inspectors also found problems in the management and administration of the U.S. arms control delegations in Geneva and Vienna.

Compliance of ACDA and State Department management with OIG recommendations has been good. The 10 security recommendations still unresolved at the end of the last reporting period have been resolved. For the current reporting period, all recommendations issued in connection with the OIG review of administrative practices in Geneva have been implemented, and the report has been closed. Implementation of the inspection recommendations is underway.

During the survey of ACDA security programs, procedures, and policies conducted during the last reporting period, the OIG received allegations of inappropriate and costly administrative practices in Geneva, Switzerland. The OIG review of these allegations, conducted in October 1988, disclosed that ACDA:

• Showed improper preference in the hiring of American and foreign national contract personnel;

• Allowed improper use of official vehicles; • Operated an inefficient official vehicle fleet;

• Underutilized official residences in Geneva;

• Extended official residence expenses to an unauthorized employee; and

• Had weak and inadequate internal controls in its financial and procurement operations in Geneva.

After being briefed by the OIG on its findings in Geneva, the then-Director of ACDA and members of the ACDA staff traveled to Geneva to review the problems. Corrective action was initiated, and a $318,000 annual cost savings resulted.

In all, the auditors made nine recommendations to correct ACDA's administrative practices in Geneva. As of the end of this reporting period, ACDA had accepted and satisfactorily implemented all nine recommendations. Although action has been completed, ACDA's senior management must continue to emphasize the need to follow correct procedures and maintain adequate controls in its administrative as well as its program operations.

As forecast in the last semiannual report, the OIG conducted a baseline inspection of ACDA from January 3 to March 3, 1989. The inspection provided an overview of the operations of the whole agency-how well it was implementing policy, managing the resources given to it, and maintaining internal controls and resulted in 57 recommendations for improvement. Because the inspection report was issued at the end of the reporting period, these recommendations are still being resolved.

OIG Findings

The inspectors concluded that ACDA has an impossible mission and is not now satisfying the full intent of the legislation that established

the Agency in September 1961, in that ACDA does not have primary responsibility for formulating arms control policies for the U.S. Government. In recent years, the subject of arms control has taken on such ever-increasing importance that it must be handled at the highest levels of government and cannot be the exclusive preserve of a sub-Cabinet agency. Nevertheless, the inspectors concluded that, in a way not foreseen in 1961, the will of the Congress is being carried out by the national security community of the executive branch as a whole. Arms control has achieved a place of such prominence on the national agenda that Presidents, Cabinet secretaries, and other advisers engaged in the business of national

security and foreign policy have developed their own staffs of experts devoted to arms control.

With regard to other aspects of ACDA's congressional mandate, the inspectors concluded that there is a continuing need within the U.S. Government for an organization such as ACDA (i.e., a semiautonomous, sub-Cabinet agency with a special relationship to the Secretary of State) that focuses on the management of the arms control process and ensures that the subject of arms control is not overlooked in the formulation of other national security policies. ACDA also has a major role to play in the implementation of arms control policies, and this role should become an increasingly important focus of ACDA efforts. In these more realistic roles, the performance of ACDA was found to be "mixed." Moreover, the inspectors noted that the arms control function is rapidly evolving and that ACDA has not yet established the proper degree of expertise and managerial focus to accept new responsibilities that are likely to arise. For example, the planning of verification is more important, as some arms control talks are now leading to agreements and the task of implementing arms control agreements has become real and current.

The inspectors concluded that ACDA can be strengthened to perform more effectively the tasks that it can reasonably be expected to perform, given its size, resources, and current position within the arms control structure of the U.S. Government. This is the central conclusion of the inspection.

Research and Analysis

One of ACDA's legislatively assigned responsibilities is to conduct research and analysis on arms control, both internally and externally, and to coordinate arms control research by other U.S. Government agencies. The inspectors found that ACDA's research budget is miniscule compared to those of other agencies involved in arms control issues, particularly the Departments of Energy and Defense. This makes it almost impossible for ACDA to have more than a minor voice in managing and coordinating such research, although ACDA has found innovative ways to involve itself in the more meaningful research areas.

One area of research in which ACDA, drawing upon the expertise of its personnel, already makes important contributions but could do so more effectively, is research and analysis of the arms control negotiations process, especially with regard to verification measures and compliance with arms control agreements. These research efforts currently are being conducted by ACDA's Verification and Intelligence Bureau, which also manages the operations analysis and intelligence funetions of the Agency. The inspectors concluded that combining these functions in one bureau detracts from the performance of those tasks. Research on verification measures should be a forward-looking effort, testing hypotheses to be applied to talks now underway or likely to begin in the future. Analysis of compliance and implementation is more of a current effort, examining present actions in the light of agreements and negotiating histories, and the intelligence function is largely one of management and liaison.

The inspectors recommended that these functions be divided to encourage greater focus on each. As things stand, a quite justifiable preoccupation with compliance has caused verification studies to be short-changed-a case of the urgent overcoming the important. Research and analysis should be the sole function of one bureau. To that end, the inspectors recommended that additional, highly qualified people, including an analysis office from another bureau, be added to the Verification and Intelligence Bureau, which should then be renamed the "Verification and Research Bureau." Intelligence should be elevated to the status of an independent office attached directly to the Office of the Deputy Director of ACDA. This would bring it organizationally closer to ACDA's Office of Security and enhance the management of counterintelligence. The examination of compliance should be done by another separate office, directly under the ACDA Director, which would follow more closely the issues concerning treaty implementation. The inspectors considered this upgrading of the compliance function to be more in line with congressional intent than the present organizational arrangement.

Management of Negotiations

Congress also assigned ACDA to manage negotiations on arms control. In fact, at times in the past, the Director of ACDA has held the position of "Chief Arms Control Negotiator" for the United States or has headed one of the major negotiating delegations. The inspectors found both positive and negative aspects to such an arrangement. Given the heavy responsibilities of the ACDA Director for managing the arms control process in Washington, the inspectors decided that the disadvantages outweigh the advantages.

ACDA handles the task of providing technical support to arms control negotiations very well, and the Agency receives high marks from other elements of the U.S. Government engaged in these negotiations. ACDA officers are familiar with the interagency process and do a good job of backstopping delegations engaged in arms control negotiations; they can quickly prepare and clear responses to requests for guidance on those negotiations. ACDA also is praised for the quality of legal advice provided to arms control delegations, and in some cases, such as the U.S. interaction with the International Atomic Energy Agency (IAEA) in Vienna, ACDA's technical expertise is rated as "invaluable."

In other regards, ACDA's support of arms control negotiations is less satisfactory. There is some misalignment of responsibilities between the two bureaus primarily engaged in supporting negotiations-the Multilateral Affairs Bureau and the Strategic Programs Bureau. Both bureaus have devoted resources to issues that are not directly connected with the support of U.S. delegations to arms control negotiations, thereby detracting from their core responsibilities. The inspectors concluded that the work of these bureaus should be restructured, after which it will be possible to reduce the span of management control, providing a better focus to their work.

In addition, ACDA needs to organize itself to deal more effectively with the problems of proliferation of new arms technologies and exotic weapons, including chemical and biological weapons. The bureau that deals with these

matters should be reorganized to provide more effective technical analysis of developments in this area. One of ACDA's two "Special Representative" positions might be designated as a troubleshooter for this purpose.

Dissemination of Public Information

ACDA does not perform well in meeting a third congressionally mandated responsibility-that of disseminating information on arms control to the U.S. public. The Public Affairs Office of ACDA has suffered from poor management and a misalignment of staff. The office does not produce many publications, and those that are produced are not necessarily being sent to the right audiences or providing the data that the targeted audiences most require. The inspectors recommended that ACDA survey its subscribers something that it has not done for several years to update address lists and elicit audience views on the utility of ACDA publications. The possibilities of eliminating some reports, of privatizing certain publications operations, or of selling ACDA publications through the Government Printing Office also should be explored.

Verification of Arms Control Agreements The last of the tasks assigned to ACDA in the 1961 legislation is responsibility for the "control" of arms control agreements (now referred to as "verification"). As pointed out above, ACDA is not currently in a position to fulfill this mandate completely, being limited to providing studies on compliance. U.S. representatives of both the Special Consultative Commission (SCC) on the Strategic Arms Limitation Talks and the Special Verification Commission (SVC) on the Intermediate-Range Nuclear Forces (INF) Agreement report to the Director of ACDA. An ACDA official chairs an interagency support group on INF implementation policy, which assists the work of a higher level interagency steering committee chaired by a National Security Council representative.

The inspectors found that ACDA's efforts in this area lack focus, however. As a result, ACDA is transmitting mixed signals on im