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National Audit Office report: Kosovo: The Financial Management of Military Operations

Kosovo: The Financial Management of Military Operations

"The Ministry of Defence made a major contribution to NATO operations in Kosovo and the professionalism and commitment of our Armed Forces has contributed, and continues to contribute, to the military success and the wider rebuilding of infrastructure and relationships. The Department’s financial management of the operations represents a clear improvement over that demonstrated for Bosnia, and the report details some further important lessons for the Department when undertaking future deployments."

"The Ministry of Defence made a major contribution to NATO operations in Kosovo and the professionalism and commitment of our Armed Forces has contributed, and continues to contribute, to the military success and the wider rebuilding of infrastructure and relationships. The Department’s financial management of the operations represents a clear improvement over that demonstrated for Bosnia, and the report details some further important lessons for the Department when undertaking future deployments."

Sir John

 

Sir John Bourn, head of the National Audit Office, told Parliament today that the United Kingdom made a major and vital contribution to the successful NATO operation in Kosovo. And the Ministry of Defence’s financial management of their military operations in Kosovo represented a clear improvement over that achieved in Bosnia. Against the background of military success, Sir John’s report highlights scope for further improvement when undertaking future deployments.

The United Kingdom contribution included flying some ten per cent of strike sorties during the air campaign, commanding Kosovo Force (KFOR) peacekeeping activity in one of five sectors in Kosovo, and, at the peak of activity in June 1999, providing 10,500 troops and some three thousand vehicles. Facilities for our troops in Kosovo have been basic, the climate inclement, and they have had to cope with the complexities of multi-national operations – initially conducted in circumstances where there was considerable uncertainty about the behaviour of Yugoslav/ Serbian forces and militia, and of the returning Kosovar refugees. That they have been successful in that environment is an outstanding testament to the professionalism of our Armed Forces.

The National Audit Office report looks at the financial management of the United Kingdom element of the NATO operation. In so doing, it follows up previous concerns over the quality of financial management of operations, most notably of those in the former Yugoslavia (Bosnia). The report states that there have been clear improvements since Bosnia and, in many areas, the Department have achieved their objectives to reach peacetime accounting and stewardship standards in such operations. Against the backdrop of a very successful campaign that was conducted in difficult circumstances it is always possible to find some aspects that could have been handled better, and the report draws attention to the following points:

  • Cost estimates have been revised downwards and, despite a clear commitment to Parliament, forecast costs were not reported until January 2000 and then only for 1999-00. The five year “additional costs” of the operation are expected to be £866 million.
  • The Department have applied the costing convention as accurately as their systems allow but the “additional costs” approach does not fully capture the value of extra resources applied to the United Kingdom participation in KFOR. Additional costs from the operation were forecast at £342 million for 1999-2000, but these do not include some £50 million of assets damaged or munitions used.
  • The Department judged the air campaign to be a success but, in reviewing their performance, they highlighted the lack of capability to strike targets accurately from medium altitude in adverse weather conditions. United Kingdom operations were cancelled on some days and one quarter of sorties were aborted due to cloud cover in the target area. In addition, had bombing at maximum intensity been possible throughout the campaign, there was a real risk of exhausting stocks of precision guided munitions within a number of weeks. In the event, when the air campaign was suspended sufficient stocks remained which would have enabled the campaign to continue for some time thereafter.
  • Brigade communications broke down for short periods during the move into Kosovo. And a 75 month delay in the Bowman project to replace Clansman meant the insecure Clansman system was used for tactical level communications, allowing Yugoslav/ Serbian forces, the Kosovo Liberation Army and the media to listen in. Clansman is also unreliable – up to 35 per cent of 1 Para’s Clansman radios required repair at any one time.
  • The field accommodation was initially in normal tents, and thus of insufficient quality for a prolonged deployment, but has been substantially improved by the Department’s urgent procurements to provide: first a quick improvement in tented camps; and then modular hard-walled accommodation for the expected duration of the deployment. The £113 million procurement of modular accommodation was delayed by five months, with the result that troops were in improved tents over the cold Balkan winter. However, there have been adjustments to the required number and configuration of camps after contract signature, and the Department and contractor expect to negotiate over the final cost.
  • There have been some problems in the provision of medical services. Work on the creation of a permanent hospital was suspended when staff in the United Kingdom concluded that the facilities would not support high enough standards of medical care, but the Department paid the contractor £228,000 in respect of materials provided and work done. And, faced with a potential gap in supply, half of the stock of morphine which the Department sent to theatre was stock which had had its shelf life extended to provide a reserve. The Department began replacing this stock in June 1999.
  • The vehicle fleet (bar some specialised vehicles) performed very well, meeting or beating targets for availability. However, the Department’s lack of information on the reliability of vehicles, the factor that drives the cost of vehicle maintenance, is unchanged from Bosnia and compares poorly with other fleet-managing organisations. And, good equipment availability was achieved despite the spares supply system struggling to meet supply time targets. The performance of the logistics organisation in the United Kingdom was a particular problem – 62 per cent of orders were not despatched to theatre within the specified target time, although extended pipeline times caused no operational difficulties.

The National Audit Office’s reports on previous operations have made recommendations which have helped the Department to make improvements – for example on Bosnia better asset tracking has enabled the Department to recover £75 million from the United Nations. This report makes a number of detailed recommendations covering the reporting of costs to Parliament, collecting better data on equipment reliability and supply chain performance, and strengthening financial management, as well as addressing shortfalls in capability for such deployments.

 

Publication details:

ISBN: 0105567817 [Buy a hard copy of this report from TSO]

HC: 530 1999-2000

Published date: June 5, 2000