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This letter formally transmits the summary of an oral briefing we gave on December 8, 2008, and subsequent agency comments. We gave this briefing in response to Senate Report 110-129, accompanying the 2008 Financial Services and General Government Appropriations Bill. In accordance with direction in that report, and in consultation with House and Senate Appropriation Committee staff, we are reporting on the Office of National Drug Control Policy's (ONDCP) Counterdrug Technology Assessment Center (CTAC). Specifically, we address issues pertaining to CTAC's use of funds since fiscal year 2003, the ONDCP Director's approach to funding decisions for research and development, CTAC's measures of performance, and CTAC's reorganization in 2007.

In summary, since fiscal year 2003, CTAC has allocated funds to a variety of efforts to treat and prevent drug abuse and reduce the availability, production, and distribution of illicit drugs by transferring appropriated funds for its two programs--research and development and technology transfer--to its contracting agents. However, CTAC officials lacked confidence in the information on expenditures provided by its contractor, prompting CTAC to replace its primary contracting agent in March 2007. CTAC's contracting agents did not obligate $17.8 million (about 20 percent) of CTAC's fiscal year 2004 through 2007 research and development appropriations to specific projects, and returned these funds to CTAC. CTAC transferred all of its appropriations related to its technology transfer program since fiscal year 2003 to contracting agents, and CTAC was in the process of phasing out the program in October 2008 due to lack of funding. The ONDCP Director's approach to making research and development funding decisions is not documented and, therefore, not fully consistent with internal control standards.