Pursuant to a congressional request, GAO determined the potential
U.S. financial obligations to the Philippines when the United
States closes two military facilities there, focusing on: (1) the
costs of separation allowances and contract termination; (2)
whether the United States can recover any equipment for reuse
elsewhere; and (3) whether the United States has any obligation for
environmental cleanup or restoration. GAO found that: (1) U.S.
liabilities for separation allowances totalled approximately $71.3
million, as of March 31, 1991; (2) Air Force and Navy activities
underfunded severance pay liabilities by $12.9 million; (3) with
the exception of Navy industrial fund's $10.1-million liability,
the Department of Defense (DOD) stated that it had sufficient
resources available to cover the shortfall; (4) most activities had
not set aside funds for the $15.5 million in sick and annual leave
liabilities because, under DOD policy, those liabilities are not
funded until they are ready to be paid; (5) U.S. liabilities for
contract termination costs are estimated to be $3.7 million; (6)
the United States has invested $2.199 billion in military
facilities in the Philippines, and the Air Force plans to remove 75
percent of the removable property and declare the balance excess to
U.S. requirements; and (7) the Air Force and Navy have identified
significant environmental damage at the bases, basing agreement
does not impose responsibility upon the United States.
General
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