Coast Guard
Observations on the Genesis and Progress of the Service's Modernization Program Gao ID: GAO-09-530R June 24, 2009The U.S. Coast Guard is currently undertaking a major effort to update its command structure, support systems, and business practices. This effort, referred to as the modernization program, is intended to better position the service to fulfill not only traditional missions--such as ensuring the safety and security of commercial shipping, safeguarding U.S. fisheries, interdicting the smuggling of illicit drugs, and conducting search and rescue operations--but also homeland security responsibilities that expanded after September 11, 2001 (9/11). The modernization program is specifically focused on modifying the Coast Guard's command and control structure--including the establishment of four new organizational entities--as well as updating mission support systems, such as maintenance, logistics, financial management, human resources, acquisitions, and information technology. The proposed changes will have a major impact on a variety of functions servicewide, including management of Deepwater--the long-term, multibillion-dollar program to upgrade the Coast Guard's aging fleet of water vessels and aircraft. The conceptual framework for the modernization program is reflected in 10 Commandant Intent Action Orders, which were issued by the Commandant of the Coast Guard in 2006. Subsequently, congressional direction accompanying the Coast Guard's fiscal year 2008 appropriations required the Coast Guard to submit a report describing and assessing each of the 10 action orders. In August 2008, the Coast Guard submitted its report on the modernization program to the Senate and House Appropriations Committees. In accordance with the congressional direction and as discussed with Congressional offices, this report assesses the Coast Guard's modernization program. Specifically this report answers the following primary research questions: (1) What is the genesis for the Coast Guard's modernization program? (2) To what extent has the Coast Guard conducted efforts to monitor the progress of its modernization program and evaluate the results?
The Coast Guard's modernization program--while inherently reflecting the judgment and prerogatives of the service's leadership--derives from multiple sources that collectively encompass a time frame from the mid-1980s to the present. These sources include internal and external studies or reports that identified deficiencies in the Coast Guard's command and control structure, the acquisition and logistics systems, and other aspects of the service's operations and capabilities, including the financial management system. Coast Guard officials also cited lessons learned from emergencies, such as the terrorist attacks of 9/11, and major natural disasters, such as Hurricane Katrina. According to officials, these events highlighted the need for greater standardization of policies and procedures, which the new command structure is intended to address. As an overarching cause for action, Coast Guard officials also stressed a need for positioning the service to be more responsive to 21st century demands and challenges by eliminating existing geographic command boundaries and establishing a more functionally based organizational structure. The Coast Guard has several efforts under way or planned for monitoring the progress of the modernization program and identifying needed improvements; however, development of applicable performance measures to evaluate results remains in the early stages. Consistent with project management principles and our previous work on organizational transformation, the Coast Guard has established implementation timelines to help guide the overall modernization program, which include key actions and milestones. The Coast Guard has reported that all interim key actions have been completed on schedule, including the implementation of several new organizational components. However, the Coast Guard has requested additional statutory authorities designed to fully establish the new command structure and associated senior leadership positions, currently envisioned to be in place in June 2009. For some of the organizational components established to date, the Coast Guard has also developed business plans that further identify key goals, activities, and specific milestones. In addition, the Coast Guard has initiated efforts to conduct external and internal assessments of various aspects of the modernization program. For example, the Coast Guard engaged the National Academy of Public Administration (NAPA) to conduct a third-party, independent review of the Coast Guard's overall modernization efforts. This review--which began in April 2008 and was completed in April 2009--was conducted to identify the strengths, weaknesses, opportunities, and risks involved in the current modernization approach and make recommendations for improvements and risk mitigation. Internally, the Coast Guard is conducting a series of process reviews intended to identify the key internal activities and outputs required for mission execution within the new structure. These process reviews--currently scheduled for completion during the summer of 2009--are also intended to generate inputs folonger-term effort to identify and develop applicable performance metrics for assessing the results of the modernization program. As the new organizational components and command elements are further implemented, the development of relevant performance metrics will become increasingly important to help ensure that the purported benefits from modernization are realized.
GAO-09-530R, Coast Guard: Observations on the Genesis and Progress of the Service's Modernization Program
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GAO-09-530R:
United States Government Accountability Office:
Washington, DC 20548:
June 24, 2009:
The Honorable Robert C. Byrd:
Chairman:
The Honorable George Voinovich:
Ranking Member:
Subcommittee on Homeland Security:
Committee on Appropriations:
United States Senate:
The Honorable David E. Price:
Chairman:
The Honorable Harold Rogers:
Ranking Member:
Subcommittee on Homeland Security:
Committee on Appropriations:
House of Representatives:
Subject: Coast Guard: Observations on the Genesis and Progress of the
Service's Modernization Program:
The U.S. Coast Guard is currently undertaking a major effort to update
its command structure, support systems, and business practices. This
effort, referred to as the modernization program, is intended to better
position the service to fulfill not only traditional missions--such as
ensuring the safety and security of commercial shipping, safeguarding
U.S. fisheries, interdicting the smuggling of illicit drugs, and
conducting search and rescue operations--but also homeland security
responsibilities that expanded after September 11, 2001 (9/11). The
modernization program is specifically focused on modifying the Coast
Guard's command and control structure[Footnote 1]--including the
establishment of four new organizational entities--as well as updating
mission support systems, such as maintenance, logistics, financial
management, human resources, acquisitions, and information technology.
The proposed changes will have a major impact on a variety of functions
servicewide, including management of Deepwater--the long-term,
multibillion-dollar program to upgrade the Coast Guard's aging fleet of
water vessels and aircraft.[Footnote 2]
The conceptual framework for the modernization program is reflected in
10 Commandant Intent Action Orders, which were issued by the Commandant
of the Coast Guard in 2006. Subsequently, congressional direction
accompanying the Coast Guard's fiscal year 2008 appropriations required
the Coast Guard to submit a report describing and assessing each of the
10 action orders.[Footnote 3] Further, the congressional direction
required that following submission of the Coast Guard's report, we were
to review the data and analysis supporting the report and, where
appropriate, the status of implementation. In August 2008, the Coast
Guard submitted its report on the modernization program to the Senate
and House Appropriations Committees.[Footnote 4] In accordance with the
congressional direction and as discussed with your offices, this report
assesses the Coast Guard's modernization program. Specifically this
report answers the following primary research questions:
* What is the genesis for the Coast Guard's modernization program?
* To what extent has the Coast Guard conducted efforts to monitor the
progress of its modernization program and evaluate the results?
As an additional component, the Explanatory Statement in the Committee
Print accompanying the Consolidated Appropriations Act of 2008 also
directed us to evaluate the benefits and drawbacks of including all
funding for Coast Guard personnel within the Operating Expenses (OE)
appropriation.[Footnote 5] Our review of this issue is contained within
this report as enclosure II.
To address the primary research questions, we reviewed the August 2008
report submitted by the Coast Guard to the Senate and House
Appropriations Committees. To obtain additional perspectives on the
genesis of the Coast Guard's modernization efforts and other factors it
considered, we reviewed internal studies conducted by the Coast Guard,
as well as relevant external studies--particularly studies conducted by
either the Department of Homeland Security's (DHS) Office of Inspector
General or GAO.[Footnote 6] At Coast Guard headquarters, we interviewed
members of the Strategic Transformation Team, whose primary
responsibility is to oversee the planning and execution of the
service's overall modernization and transformation efforts. We also
evaluated how these efforts aligned with key practices identified in
previous GAO work related to organizational transformation and
development of performance measures.[Footnote 7] Further, we
interviewed members of the National Academy of Public Administration's
(NAPA) project team--which, in April 2008, began reviewing the Coast
Guard's modernization program.[Footnote 8] We also reviewed an interim
progress report (dated December 2008) prepared by NAPA as well as the
final report on the modernization program provided to the Coast Guard
on April 30, 2009.[Footnote 9] To address the issue of personnel
account funding, we reviewed pertinent legislative history of the
Acquisition, Construction, and Improvements (AC&I) and the OE
appropriation accounts, as well as Coast Guard position papers and
other documentation regarding possible consolidation of the Coast
Guard's AC&I personnel funding into the OE account. We conducted this
performance audit from November 2008 to June 2009 in accordance with
generally accepted government auditing standards. Those standards
require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions
based on our audit objectives. More details about the scope and
methodology of our work are presented in enclosure III.
Results in Brief:
The Coast Guard's modernization program--while inherently reflecting
the judgment and prerogatives of the service's leadership--derives from
multiple sources that collectively encompass a time frame from the mid-
1980s to the present. These sources include internal and external
studies or reports that identified deficiencies in the Coast Guard's
command and control structure, the acquisition and logistics systems,
and other aspects of the service's operations and capabilities,
including the financial management system. Coast Guard officials also
cited lessons learned from emergencies, such as the terrorist attacks
of 9/11, and major natural disasters, such as Hurricane Katrina.
According to officials, these events highlighted the need for greater
standardization of policies and procedures, which the new command
structure is intended to address. As an overarching cause for action,
Coast Guard officials also stressed a need for positioning the service
to be more responsive to 21ST century demands and challenges by
eliminating existing geographic command boundaries and establishing a
more functionally based organizational structure.
The Coast Guard has several efforts under way or planned for monitoring
the progress of the modernization program and identifying needed
improvements; however, development of applicable performance measures
to evaluate results remains in the early stages. Consistent with
project management principles and our previous work on organizational
transformation, the Coast Guard has established implementation
timelines to help guide the overall modernization program, which
include key actions and milestones.[Footnote 10] The Coast Guard has
reported that all interim key actions have been completed on schedule,
including the implementation of several new organizational components.
However, the Coast Guard has requested additional statutory authorities
designed to fully establish the new command structure and associated
senior leadership positions, currently envisioned to be in place in
June 2009. For some of the organizational components established to
date, the Coast Guard has also developed business plans that further
identify key goals, activities, and specific milestones. In addition,
the Coast Guard has initiated efforts to conduct external and internal
assessments of various aspects of the modernization program. For
example, the Coast Guard engaged NAPA to conduct a third-party,
independent review of the Coast Guard's overall modernization efforts.
This review--which began in April 2008 and was completed in April 2009--
was conducted to identify the strengths, weaknesses, opportunities, and
risks involved in the current modernization approach and make
recommendations for improvements and risk mitigation. Internally, the
Coast Guard is conducting a series of process reviews intended to
identify the key internal activities and outputs required for mission
execution within the new structure.[Footnote 11] These process reviews-
-currently scheduled for completion during the summer of 2009--are also
intended to generate inputs for a longer-term effort to identify and
develop applicable performance metrics for assessing the results of the
modernization program. As the new organizational components and command
elements are further implemented, the development of relevant
performance metrics will become increasingly important to help ensure
that the purported benefits from modernization are realized.
Background:
The Coast Guard is a multimission military service comprising
approximately 49,100 full-time personnel--about 42,000 military and
7,100 civilians. The Coast Guard's responsibilities include a range of
both homeland security mission-programs and non-homeland security
mission-programs (see table 1 for additional details on these mission-
programs and the associated budget request for fiscal year 2010).
[Footnote 12] Following the terrorist attacks of 9/11, the Coast
Guard's homeland security mission-programs--such as conducting harbor
patrols and participating in global military operations--took on
increased significance and demands.
Table 1: Overview of Coast Guard Missions and Programs and the Fiscal
Year 2010 Budget Request:
Homeland security mission-programs:
Mission and program[A]: Ports, waterways, and coastal security;
Activities and functions of each mission-program: Conducting harbor
patrols, vulnerability assessments, intelligence gathering and
analysis, and other activities to prevent terrorist attacks and
minimize the damage from attacks that occur;
Budget request (in thousands)[B]: $1,924,760.
Mission and program[A]: Defense readiness;
Activities and functions of each mission-program: Participating with
the Department of Defense (DOD) in global military operations;
deploying cutters and other boats in and around harbors to protect DOD
force mobilization operations;
Budget request (in thousands)[B]: $535,279.
Mission and program[A]: Undocumented migrant interdiction;
Activities and functions of each mission-program: Deploying cutters and
aircraft to reduce the flow of undocumented migrants entering the
United States via maritime routes;
Budget request (in thousands)[B]: $524,757.
Non-homeland security mission-programs:
Mission and program[A]: Illegal drug interdiction;
Activities and functions of each mission-program: Deploying cutters and
aircraft in high drug-trafficking areas and gathering intelligence to
reduce the flow of illegal drugs through maritime transit routes;
Budget request (in thousands)[B]: $1,288,285.
Mission and program[A]: Aids to navigation and waterways management;
Activities and functions of each mission-program: Managing U.S.
waterways and providing a safe, efficient, and navigable marine
transportation system; maintaining the extensive system of navigation
aids; monitoring marine traffic through vessel traffic service centers;
Budget request (in thousands)[B]: $1,201,650.
Mission and program[A]: Search and rescue;
Activities and functions of each mission-program: Operating
multimission stations and a national distress and response
communication system; conducting search and rescue operations for
mariners in distress;
Budget request (in thousands)[B]: $972,434.
Mission and program[A]: Living marine resources;
Activities and functions of each mission-program: Enforcing domestic
fishing laws and regulations through inspections and fishery patrols;
Budget request (in thousands)[B]: $851,336.
Mission and program[A]: Marine safety;
Activities and functions of each mission-program: Setting standards and
conducting vessel inspections to better ensure the safety of passengers
and crew aboard commercial vessels; partnering with states and boating
safety organizations to reduce recreational boating deaths;
Budget request (in thousands)[B]: $594,009.
Mission and program[A]: Marine environmental protection;
Activities and functions of each mission-program: Preventing and
responding to marine oil and chemical spills; preventing the illegal
dumping of plastics and garbage in U.S. waters; preventing biological
invasions by aquatic nuisance species;
Budget request (in thousands)[B]: $203,587.
Mission and program[A]: Other law enforcement;
Activities and functions of each mission-program: Protecting U.S.
fishing grounds by ensuring that foreign fishermen do not illegally
harvest U.S. fish stocks;
Budget request (in thousands)[B]: $138,748.
Mission and program[A]: Ice operations;
Activities and functions of each mission-program: Conducting polar
operations to facilitate the movement of critical goods and personnel
in support of scientific and national security activity; conducting
domestic icebreaking operations to facilitate year-round commerce;
conducting international ice operations to track icebergs below the
48th north latitude;
Budget request (in thousands)[B]: $137,904.
Total discretionary funding request: $8,372,749.
Source: U.S. Coast Guard.
[A] The Coast Guard's homeland security and non-homeland security
missions are delineated in section 888 of the Homeland Security Act of
2002 (Pub. L. No. 107-296, 116 Stat. 2135, 2249 (2002). Starting with
the fiscal year 2007 budget, however, the Office of Management and
Budget designated the Coast Guard's illegal drug interdiction and other
law enforcement mission-programs--which were originally homeland
security missions--as non-homeland security missions for budgetary
purposes.
[B] The Coast Guard does not budget by mission-programs but rather by
congressionally established appropriations account categories. In order
to display budget allocations by mission-program, the Coast Guard uses
an activity-based cost model that averages past expenditures to
forecast future spending.
[End of table]
Shortly after taking office in May 2006, the Commandant issued 10
action orders (Commandant Intent Action Orders) that--as reported by
the Coast Guard--"form the framework for the modernization and
strategic transformation the Coast Guard is undergoing to ultimately be
best organized for optimal mission execution." The 10 action orders
constitute interrelated initiatives that encompass efforts ranging, for
example, from improving the service's financial accounting system to
developing a more effective command and control structure.
Subsequently, in August 2008, the Coast Guard reported that the 10
initiatives were combined into five coordinated efforts that make up
the Coast Guard's current modernization program. The purpose of these
efforts is to establish a more responsive organizational structure and
enhance the Coast Guard's business processes. Four of the five
modernization efforts focus on changes to the Coast Guard's
organizational command structure. Specifically, the Coast Guard has
proposed establishing four new organizational entities--the Deputy
Commandant for Mission Support (DCMS), the Deputy Commandant for
Operations (DCO), Operations Command (OPCOM), and Force Readiness
Command (FORCECOM). The first two entities, DCMS and DCO, are to be
located in headquarters whereas OPCOM and FORCECOM are field-based
commands. To facilitate implementation of the modernization program,
the Coast Guard created a Strategic Transformation Team, which consists
of one flag officer and 16 full-time staff representing various
components of the service.[Footnote 13] The team is responsible for
overseeing the planning, execution, and measurement of the Coast
Guard's modernization efforts. See enclosure I for additional
information regarding the Coast Guard's original action orders and the
four new organizational entities.
The Coast Guard's Modernization Program Derives from Multiple Sources:
Through our discussions with Coast Guard officials and review of the
service's planning and implementation documents, we determined that the
Coast Guard's modernization program is derived from multiple sources
that collectively encompass a time frame of more than two decades. In
addition to addressing documented deficiencies, many of the
modernization program's various initiatives largely reflect the
judgment and prerogatives of the service's leadership. Generally, as a
starting point for discussing the genesis of the modernization program,
service officials cited an internal study (the Gilbert study) that led
to a major organizational realignment in 1987.[Footnote 14]
Specifically, among other results, this study led to a reduction in the
number of Coast Guard districts and created two new regional
Maintenance and Logistics Commands--one at Governors Island (New York
harbor) and another at Coast Guard Island (Alameda, California).
[Footnote 15] According to the Coast Guard, the current modernization
program addresses some of the changes initially proposed by the Gilbert
study that were never fully implemented. For example, the proposed
transition to a more centralized command structure is intended to
reduce work duplication and enhance standardization across the agency.
Coast Guard officials also noted that additional catalysts for
improvements have been studies conducted by DHS's Office of Inspector
General,[Footnote 16] GAO,[Footnote 17] and others. Such external
studies have addressed not only the Coast Guard's acquisition
organization and processes but also various other aspects of the
service's operations and capabilities, including the financial
management system. Regarding the latter, for example, external audits
have documented longstanding financial management deficiencies. In
2008, the independent auditor reported that for the fifth year, it was
unable to provide an opinion on DHS's balance sheet, largely because of
the Coast Guard's material weaknesses in internal control.[Footnote 18]
Other contributors to the impetus for modernization cited by Coast
Guard officials were lessons learned from the events of 9/11 and from
preparing for and responding to major natural disasters, such as
Hurricane Katrina, which made landfall in August 2005. As discussed in
our 2006 report, the Coast Guard played a key role in the planning,
response, and recovery efforts for Hurricane Katrina in three mission
areas--search and rescue, marine pollution response, and management of
maritime commerce.[Footnote 19] According to Coast Guard officials,
these operations highlighted the need for enhanced standardization
across the service and more centralized logistics and asset management.
Under the new command structure, the Coast Guard has established five
new logistics and service centers that are intended to ensure
consistent delivery of support services and full life cycle management
for applicable product lines.[Footnote 20]
Further, Coast Guard officials stressed that, as an overarching or
holistic cause for action to modernize, the service must be positioned
to respond to a wide array of 21ST century demands and challenges. The
Coast Guard cites, for example, ever-increasing growth in maritime
trade and tourism (more and larger vessels, increased waterborne
transport of liquefied natural gas, expanded activity in the Arctic
region, etc.) and the persistence of terrorism and other transnational
threats, such as drug trafficking and mass migration. By eliminating
existing geographical command barriers and establishing a more
centralized and functionally based organizational structure, the Coast
Guard believes it can better meet these challenges.
The Coast Guard Has Ongoing Efforts to Monitor Progress of the
Modernization Program, but Work Remains to Develop Performance Metrics:
The Coast Guard has several efforts under way or planned that are
intended to monitor the implementation progress of the modernization
program and identify needed improvements; however, more work remains to
develop applicable performance metrics to evaluate the results. As an
overarching planning effort, the Coast Guard has established timelines
that identify the sequencing and target dates for key actions related
to the modernization program consistent with project management
principles.[Footnote 21] Our prior work has shown that such action-
oriented goals along with associated timelines and milestones are
critical to successful organizational transformation efforts and are
necessary to track an organization's progress toward its goals.
[Footnote 22] As of March 2009, the Coast Guard reported that it has
met all of the key interim milestones for the phased implementation of
the modernization program. Some of the interim actions that have been
completed include the establishment of new organizational components
such as the Acquisition Directorate, the Deployable Operations Group,
and the Office of Financial Transformation and Compliance, as well as
several logistics centers dedicated to specific Coast Guard assets (see
fig. 1). However, as further noted in figure 1, the Coast Guard has
requested additional statutory authorities to reorganize the service's
senior management structure and leadership positions. According to the
Coast Guard, enactment of its legislative change proposal will enable
the service to establish four new organizational entities--DCO, DCMS,
OPCOM, and FORCECOM--currently scheduled to be in place in June 2009.
[Footnote 23]
Figure 1: Selected Key Actions Underlying the Coast Guard's
Modernization Program:
[Refer to PDF for image: illustration]
Selected actions and organizational components implemented to date:
Fiscal years 2007 - 2008:
* Established the Strategic Transformation Team;
* Reorganized all acquisition entities to establish a consolidated
Acquisition Directorate;
* Established the Deployable Operations Group;
* Established the Office of Financial Transformation and Compliance;
* Established the Aviation Logistics Center[B].
Fiscal years 2009:
* Transferred operational control of the Deployable Operations Group to
Pacific Area;
* Established the Maritime Intelligence Fusion Center in Pacific Area;
* Established the Surface Forces Logistics Center[B];
* Established the Personnel Service Center[B];
* Established the Command, Control, Communication, Computers, and
Information Technology Service Center[B];
* Established the Shore Infrastructure Logistics Center[B].
Statutory changes requested[A]:
Currently scheduled for June 2009:
* Establish Deputy Commandant for Operations as a three-star/vice
admiral position;
* Transition Chief of Staff to Deputy Commandant for Mission Support;
* Establish Operations Command;
* Establish Force Readiness Command.
Source: GAO summary of Coast Guard information.
[A] Title 14 of the U.S. Code outlines the role and functions of the
Coast Guard, including the composition and organization of flag
officers. To implement the envisioned command structure realignment,
the Coast Guard has submitted a legislative change proposal to, in
general, amend 14 U.S.C. § 47 changing the Vice Commandant's grade from
that of a vice admiral to an admiral, and 14 U.S.C. § 50, enabling the
Coast Guard to appoint four vice admirals rather than two.
[B] The center is to be aligned under DCMS--which, pending enactment of
the legislative change proposal, is scheduled to become operational in
June 2009.
[End of figure]
For some of the new organizational components established to date,
additional implementation plans are also in place. These plans, whether
referred to as business plans or strategic plans, represent a range of
efforts to further identify key goals, activities, and in some cases,
specific milestones. For example, a business plan for FORCECOM
documents the command's primary mission and goals, and outlines
potential metrics for evaluating effectiveness.[Footnote 24] Similarly,
a strategic plan for the Command, Control, Communication, Computers,
and Information Technology component identifies key goals and
objectives, as well as milestones and applicable performance indicators
for fiscal year 2009.[Footnote 25] While we did not evaluate the
specific content of these plans, they generally include a description
of the mission and core values for the organizational element, as well
as goals and objectives with which to assess progress as these elements
continue to mature.[Footnote 26]
Furthermore, the Coast Guard also has more detailed implementation
plans in place that address targeted issue areas encompassed within the
modernization program. Specifically, the Coast Guard has developed
plans related to acquisition and financial management reforms, which
DHS's Office of Inspector General and we have assessed in greater
depth.
* Acquisition reforms. To address acquisition-related challenges,
including those identified by our prior work, the Coast Guard developed
the Blueprint for Acquisition Reform (Blueprint). Since July 2007, the
Blueprint has served as the capstone strategic document for reshaping
acquisition and contracting capabilities under the newly established
Acquisition Directorate. Currently in its third version, the Blueprint
is planned to be updated annually and is to undergo a comprehensive
review and revalidation in odd-numbered years.[Footnote 27] Contained
within the Blueprint are specific objectives and milestones for the
upcoming year, as well as detailed action items addressing the four
subcomponents of the reform plan: organizational alignment and
leadership, policies and processes, human capital, and information
management and stewardship. Our recent work has assessed Coast Guard
acquisition efforts included within the Blueprint.[Footnote 28]
* Financial management reforms. To address financial management
deficiencies, the Coast Guard developed the Financial Strategy for
Transformation and Audit Readiness (Version 2).[Footnote 29] To
implement this overall strategy, the Coast Guard developed 17 Mission
Action Plans to address individual weaknesses identified within the
service's financial management system.[Footnote 30] According to Coast
Guard officials, some of the Mission Action Plans correspond to
individual line items and others address more general processes and
information systems. Collectively, the 17 Mission Action Plans
represent a combination of efforts that can be addressed either in the
near term (by the end of fiscal year 2010) or will require long-term
systemic changes. Officials noted that the Financial Strategy for
Transformation and Audit Readiness and the underlying Mission Action
Plans will continue to be revisited on an annual basis.[Footnote 31]
In a supplemental effort intended to evaluate aspects of the
modernization program and identify potential improvements, the Coast
Guard engaged NAPA to conduct a third-party, independent review of the
Coast Guard's overall realignment and modernization program. According
to NAPA, this study--which formally began in April 2008 and was
completed in April 2009--consisted of two primary research objectives:
[Footnote 32]
* Review of modernization program. Under this objective, NAPA assessed
the Coast Guard's modernization efforts to determine how they will
function to bridge the gap between the current state and the desired
future state of the organization, the extent to which the
organizational structure aligns with the Commandant's operational
vision, and the progress to date toward implementation. NAPA worked
with the Coast Guard leadership team and NAPA panel members to identify
the strengths, weaknesses, opportunities, and risks involved in the
current modernization approach and make recommendations for
improvements and suggest mitigation steps for key risks identified.
* Financial management and resource planning analysis. To address this
objective, NAPA advised and assisted Coast Guard leadership in
undertaking an analysis of financial management and resource planning
functions based on data and knowledge of best practices. According to
NAPA, this work included a review of the functions of the Coast Guard's
Chief Financial Officer to evaluate the potential impacts of financial
management reforms on the overall modernization program.
NAPA completed its review and provided two final reports to the Coast
Guard on April 30, 2009--one report addressing the service's overall
modernization efforts and another report addressing financial
management.[Footnote 33] Regarding overall modernization efforts, NAPA
recognized that the Coast Guard's planned organizational realignment
"makes logical sense" and that the service's leadership "is
collectively engaged" to improve mission execution and support-related
business processes. NAPA cautioned, however, that the Coast Guard
remains in the early stages of its organizational transformation, and
that "materially enhanced efforts in strategic communications,
enterprise-wide analysis and performance measurement, change
management, and financial management will be needed to ensure that
ultimate outcomes are achieved and sustained." As a framework for
analysis, the NAPA study team identified eight key success indicators,
which the study team determined reflected common best practices for
organizational transformation.[Footnote 34] As a result of its review,
NAPA made four concluding recommendations intended to help mitigate
potential implementation risks and facilitate a successful
modernization process. Specifically, NAPA recommended that the Coast
Guard:
* establish a Modernization Implementation Guidance Team before the
expiration of the Strategic Transformation Team charter;[Footnote 35]
* develop a clear quantifiable business case for modernization,
measurement tools, and a process of metrics assessment to track
modernization progress and the effects on mission execution;[Footnote
36]
* conduct an assessment of the service's communications processes in an
effort to better realign the communications functions and their
accountabilities; and:
* build and expand innovation capacities for continuous improvement,
employee ownership, and best practices.
As NAPA's second recommendation highlights, one of the key challenges
faced by the Coast Guard is the development of adequate measures to
assess the progress and outcomes of the modernization program. As the
NAPA report indicated, such measures are important to ensure that the
impacts of modernization are aligned with intended objectives; also,
such measures provide an opportunity to "course-correct" as necessary.
NAPA further noted that the development of appropriate measurement
tools will help to provide quantifiable support for the modernization
business case and facilitate stakeholder buy-in.
According to the Coast Guard, several efforts are currently under way
to develop and utilize performance metrics to assess the results of the
modernization program. According to officials, the strategic intent of
the modernization program is to enhance the overall performance of the
service. In this respect, officials noted that the 25 primary
performance measures currently used to report on Coast Guard mission
performance are to remain the principal indicators to ensure that
modernization does not adversely affect the delivery of services to the
American public.[Footnote 37] However, officials acknowledged that it
will likely be difficult to directly evaluate the effectiveness of the
modernization program using these high-level mission performance
indicators. For this reason, Coast Guard officials are planning to
adapt or utilize an alternate set of existing business metrics to
assess the impacts of the modernization program. The Coast Guard
reported that over 1,000 metrics are currently available to evaluate
various aspects of the service's operations and business processes.
[Footnote 38]
While the Coast Guard is currently taking steps to further identify and
develop applicable performance metrics, this effort remains in the
early stages. According to the Coast Guard, identification and
development of applicable business metrics will take place in two
steps. The first step includes identification of key internal
activities and outputs required to enable mission execution within the
realigned organizational structure. The Coast Guard reported that this
step was under way in February 2009 and is scheduled for completion
during the summer of 2009. Once this framework of key activities and
outputs is established, the Coast Guard plans to identify the specific
business metrics available that relate to these core services and
products. However, Coast Guard officials were unable to provide a
specific time frame for the estimated completion of this secondary
step. According to the Coast Guard, once applicable metrics are
identified and adequate data are collected--in approximately 6 months
to 1 year--these metrics will enable evaluation of the performance and
effectiveness of the modernized Coast Guard processes and facilitate
continued improvements.
As outlined in the Government Performance and Results Act of 1993
[Footnote 39] and Standards for Internal Control in the Federal
Government,[Footnote 40] performance measures are important to
reinforce the connection between long-term strategic goals and the day-
to-day activities of management and staff. Moreover, the Coast Guard
noted that the proposed organizational construct--based on the
functional components of policy and resources, support, readiness, and
mission execution--represents a substantial change from the service's
existing business practices. For this reason, the Coast Guard's efforts
to develop adequate performance metrics to help validate existing
organizational designs and processes and make adjustments as needed is
an important step. According to officials, they plan to include a range
of indicators that represent multiple goals and priorities, such as
quantity, timeliness, cost, and outcomes, consistent with our prior
work.[Footnote 41] Such action would help ensure that the Coast Guard's
overall measurement of performance does not become biased by metrics
that assess some priorities but neglect others.
Agency Comments and Our Evaluation:
On May 4, 2009, we provided a draft of this report for review and
comment to DHS and the Coast Guard. On May 19, 2009, the department's
audit liaison office responded by e-mail that the Coast Guard, after
reviewing the report on behalf of DHS, provided no formal comments but
offered one technical clarification. We incorporated the technical
clarification into this report where appropriate.
We are sending copies of this report to interested congressional
committees, the Secretary of Homeland Security, and the Commandant of
the U.S. Coast Guard. The report also is available at no charge on the
GAO Web site at [hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report or wish to
discuss these matters further, please contact me at (202) 512-9610 or
caldwells@gao.gov. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this
report. Other key contributors to this report are listed in enclosure
IV.
Signed by:
Stephen L. Caldwell:
Director, Homeland Security and Justice Issues:
Enclosures - 4:
[End of section]
Enclosure I:
Overview of the Coast Guard's Modernization Report (August 2008)
Submitted to the Senate and House Appropriations Committees:
During the summer of 2006, the Commandant of the U.S. Coast Guard
issued 10 Commandant Intent Action Orders intended to address elements
of the Coast Guard's command and control structure, mission support
system, and business processes that were identified as detracting from
mission execution. In August 2008, the Coast Guard reported to the
Senate and House Appropriations Committees that the 10 action orders
have been "combined into five coordinated efforts that comprise Coast
Guard Modernization."[Footnote 42] Table 2 shows the relationship
between the 10 action orders and the five efforts that make up the
Coast Guard's modernization program.
Table 2: Relationship between Commandant Intent Action Orders and the
Coast Guard's Five Efforts That Make Up the Modernization Program:
Modernization program:
Commandant Intent Action Orders (10 action orders): Acquisition
Directorate and the Integrated Deepwater System Consolidation (action
order #1). Consolidate the Acquisition Directorate with the Integrated
Deepwater System Directorate to improve the effectiveness and
efficiency of the Coast Guard's total acquisitions system;
Modernization program: Establishment of the Deputy Commandant for
Mission Support (DCMS) at Coast Guard headquarters to oversee all
support and logistics systems and processes.
Commandant Intent Action Orders (10 action orders): Logistics
organizational alignment (action order #4). Realign the Coast Guard's
logistics organization to reduce the support burden on field units,
control costs, drive enterprise decision making, and improve
accountability;
Modernization program: Establishment of the Deputy Commandant for
Mission Support (DCMS) at Coast Guard headquarters to oversee all
support and logistics systems and processes.
Commandant Intent Action Orders (10 action orders): Human resources
strategies to support Coast Guard maritime strategy (action order #8).
Create a human resources strategy to better support Coast Guard mission
execution;
Modernization program: Establishment of the Deputy Commandant for
Mission Support (DCMS) at Coast Guard headquarters to oversee all
support and logistics systems and processes.
Commandant Intent Action Orders (10 action orders): Reserve component
mission support system (action order # 9). Develop a plan to align the
Coast Guard Reserve component mission support system to ensure the
optimal organization, administration, recruiting, instruction,
development, and training of Reserve component forces;
Modernization program: Establishment of the Deputy Commandant for
Mission Support (DCMS) at Coast Guard headquarters to oversee all
support and logistics systems and processes.
Commandant Intent Action Orders (10 action orders): Service-oriented
architecture implementation (action order #10). Implement a service-
oriented architecture to better support the Coast Guard's technological
needs;
Modernization program: Establishment of the Deputy Commandant for
Mission Support (DCMS) at Coast Guard headquarters to oversee all
support and logistics systems and processes.
Commandant Intent Action Orders (10 action orders): Deployable
Operations Group implementation (action order #3). Establish a
Deployable Operations Group to integrate Coast Guard special deployable
forces into the service's trident force structure, which also includes
shore-based forces (e.g., small boat stations, aids to navigation
teams) and maritime patrol forces (e.g., major cutters, fixed-wing
aircraft)[A];
Modernization program: Establishment of the Deputy Commandant for
Operations (DCO) at Coast Guard headquarters to manage all operational
programs and develop policy and regulations.
Commandant Intent Action Orders (10 action orders): Transition
headquarters to numbered staff offices (CG-1, CG-2, etc.) (action order
#2). Complete the reorganization of headquarters staff into numbered
offices to better align with the Department of Defense and make the
headquarters organization more understandable to internal and external
Coast Guard customers[B];
Modernization program: Establishment of the Deputy Commandant for
Operations (DCO) at Coast Guard headquarters to manage all operational
programs and develop policy and regulations.
Commandant Intent Action Orders (10 action orders): Assessment of Coast
Guard command and control organization (action order #7). Develop an
operational framework for the Coast Guard that provides greater focus
on the command and control structure needed to effectively execute
missions and ensure service readiness;
Modernization program: Establishment of the Coast Guard Operations
Command (OPCOM) as the primary unit responsible for Coast Guard mission
execution; Establishment of the Coast Guard Force Readiness Command
(FORCECOM) as the primary unit to manage the overall readiness
capabilities of the service.
Commandant Intent Action Orders (10 action orders): Financial
management transformation and audit remediation (action order #5).
Transform the Coast Guard financial system to improve accuracy,
accountability, and alignment with the Department of Homeland Security
(DHS);
Modernization program: Strategic transformation of Coast Guard
headquarters and financial management systems and processes.
Commandant Intent Action Orders (10 action orders): Maritime strategy
and the Evergreen cycle of strategic renewal (action order #6). Develop
a comprehensive direction document to provide a strategic framework for
planning maritime safety, security, and stewardship responsibilities
for the Coast Guard through the next 4 years;
Modernization program: Strategic transformation of Coast Guard
headquarters and financial management systems and processes.
Commandant Intent Action Orders (10 action orders): Headquarters
transition to numbered staffs (action order #2): Complete the
reorganization of headquarters staff into numbered staffs to better
align with the Department of Defense and make the headquarters
organization more understandable to internal and external Coast Guard
customers;
Modernization program: Strategic transformation of Coast Guard
headquarters and financial management systems and processes.
Source: U.S. Coast Guard.
[A] The Deployable Operations Group was initially established under the
command of the Assistant Commandant for Operations--an interim position
created as a transitional step towards establishment of the DCO. As of
November 2008, operational and administrative control of the Deployable
Operations Group was officially transferred to Pacific Area Command.
However, future plans call for the Deployable Operations Group to be
aligned under FORCECOM when that command is established.
[B] Action order #2 also applies to one other effort of the Coast
Guard's modernization program--the strategic transformation of Coast
Guard headquarters and financial management systems and processes.
[End of table]
As table 2 indicates, the modernization program largely focuses on
establishing four new organizational entities--two headquarters
entities (DCMS and DCO) and two field-based commands (OPCOM and
FORCECOM). Under the modernization program, the Coast Guard Vice
Commandant is to assume responsibility for overseeing the new
organizational entities (see figure 2).
Figure 2: U.S. Coast Guard-Envisioned Organizational Structure after
Modernization:
[Refer to PDF for image: organizational chart]
Top level:
* Commandant (CG-00)(4 star):
Second level, reporting to Commandant:
* Vice Commandant (CG-09) (4 star):
Third level, reporting to Vice Commandant:
* Director of Governmental and Public Affairs (CG-092):
* Assistant Commandant for Intelligence and Criminal Investigations
(CG-2):
* Assistant Commandant for Resources (CG-8):
* Judge Advocate General and Chief Counsel (CG-094):
* Deputy Commandant for Mission Support (3 star):
* Deputy Commandant for Operations (3 star):
* Commander, Operations Command (3 star):
* Commander, Force Readiness Command (3 star):
Fourth level, reporting to Deputy Commandant for Mission Support:
* Assistant Commandant for Acquisition (CG-9):
* Assistant Commandant for Engineering and Logistics (CG-4):
* Assistant Commandant for C4IT (CG-6):
* Assistant Commandant for Human Resources (CG-1).
Fourth level, reporting to Deputy Commandant for Operations:
* Assistant Commandant for Marine Safety, Security and Stewardship
(CG-5):
* Assistant Commandant for Capability (CG-7).
Fourth level, reporting to Commander, Operations Command:
* Districts (reporting to Districts: Sectors).
Fourth level, reporting to Commander, Force Readiness Command:
* Shore Forces Manager:
* Maritime Patrol Forces:
* Deployable Operations Group:
Source: U.S. Coast Guard.
Note: Effective May 4, 2009, the Coast Guard established a new
organizational entity--the Coast Guard Enterprise Strategy, Management
and Doctrine Oversight Directorate--which is to report to the Office of
the Vice Commandant. Among other functions, this directorate is to be
responsible for strategic analysis and ongoing coordination of change
initiatives within the modernization effort and beyond.
[End of figure]
The overarching mission of DCMS is to enhance the Coast Guard's
business processes and systems related to logistics and mission support
and human resources. The four major directorates under DCMS, each led
by an assistant commandant, are as follows:
* Acquisition Directorate. This directorate is intended to streamline
five headquarters offices and the Coast Guard Research and Development
Center into a single headquarters organizational entity.
* Engineering and Logistics Directorate. This directorate is to focus
on greater standardization of maintenance processes and will provide
single-point accountability for life cycle management of all assets.
* Command, Control, Communication, Computers, and Information
Technology Directorate. Among other responsibilities, this directorate
is intended to enhance policies and processes related to information
sharing, technology standards, and security awareness and compliance.
* Human Resources Directorate. This directorate is intended to develop
a human resources system that is flexible and responsive to dynamic
personnel requirements.
DCO is to integrate policy development for all operating programs of
the service under a single deputy commandant at headquarters. DCO is
also intended to develop capability requirements for new assets and
will serve to maintain relations with the Department of Defense and
other interagency partners.
OPCOM--which is to be responsible for mission execution domestically
and internationally--shifts the Coast Guard's current organization from
two area commands to a centralized structure under one commander. OPCOM
is to oversee all Coast Guard districts and sectors and the deployment
of major assets in executing the 11 statutory missions of the service.
FORCECOM is to be responsible for preparing forces to perform missions
and execute them properly. Among other responsibilities, FORCECOM is to
promulgate operational doctrine (tactics, techniques, and procedures)
and establish a standard measurement system to evaluate the readiness
of Coast Guard forces. FORCECOM is also to oversee the Deployable
Operations Group, the service's adaptive force group for responding to
all threats and hazards.
[End of section]
Enclosure II:
Benefits and Drawbacks of Consolidating the Coast Guard's Acquisition
Personnel Funding into the Operating Expenses Account:
The Coast Guard currently receives personnel funding primarily through
two appropriation accounts: (1) the Operating Expenses (OE) account,
which provides compensation such as salaries and benefits for over 90
percent of the service's personnel, and (2) the Acquisition,
Construction, and Improvements (AC&I) account, which provides
compensation for the service's acquisition-related personnel and
assets. (See table 3 for further information on the Coast Guard's
budget for fiscal year 2009.) The Explanatory Statement in the
Committee Print accompanying the Consolidated Appropriations Act of
2008 directed us to evaluate the benefits and drawbacks of including
all funding for Coast Guard personnel within the OE appropriation.
[Footnote 43]
Table 3: Coast Guard Fiscal Year 2009 Funding Summary:
Appropriation accounts: Operating Expenses;
Amount (in thousands): $6,194,925;
Percentage of total: 66.2.
Appropriation accounts: Environmental Compliance and Restoration;
Amount (in thousands): $13,000;
Percentage of total: 0.1.
Appropriation accounts: Reserve Training;
Amount (in thousands): $130,501;
Percentage of total: 1.4.
Appropriation accounts: Acquisition, Construction, and Improvements[A];
Amount (in thousands): $1,494,576[B];
Percentage of total: 16.0.
Appropriation accounts: Alteration of Bridges;
Amount (in thousands): $16,000;
Percentage of total: 0.2.
Appropriation accounts: Research, Development, Test, and Evaluation;
Amount (in thousands): $18,000;
Percentage of total: 0.2.
Appropriation accounts: Medicare Eligible Retiree Health Care Fund
Contribution;
Amount (in thousands): $257,305;
Percentage of total: 2.7.
Appropriation accounts: Retired Pay;
Amount (in thousands): $1,236,745;
Percentage of total: 13.2.
Appropriation accounts: Total appropriations;
Amount (in thousands): $9,361,052;
Percentage of total: 100.
Sources: Department of Homeland Security Appropriations Act, 2009 (Pub.
L. No. 110-329, 122 Stat. 3574, 3652 (2008)), and GAO analysis of U.S.
Coast Guard budget documents.
[A] Personnel funding constituted $92.3 million of the overall $1.495
billion.
[B] Does not include $20 million recission from prior year balances for
the canceled Vertical Unmanned Aerial Vehicle program.
[End of table]
In our previous work, we concluded that consideration of consolidating
appropriation accounts involves potential trade-offs between, for
example, management flexibility and program cost transparency. For
instance, a budget structure in which all of the administrative costs
for a number of distinct programs are contained within one account may
increase the focus for decision making and oversight on the cost of
administering programs but make it difficult to see the "full cost" of
the underlying programs.[Footnote 44] While there may be operational
advantages and disadvantages associated with consolidation of personnel-
related appropriations accounts, a key determinant is what budget
structure Congress considers most useful for its appropriations and
oversight objectives. In reference to a broader or governmentwide
perspective, in February 2005, we reported that "budget restructuring
involves significant tradeoffs between the type of information provided
and accountability frameworks used and has implications for the balance
between managerial flexibility and congressional control."[Footnote 45]
According to Coast Guard officials, consolidation of AC&I personnel
funding into the OE appropriation account would allow for more flexible
management of acquisition personnel. The officials explained that the
consolidation would enhance the service's ability to shift personnel to
respond to changes in project priorities and funding. In general, the
transfer of funds between appropriation accounts is prohibited without
statutory authority.[Footnote 46] Coast Guard officials noted that
under provisions of federal appropriations legislation before fiscal
year 2009, the service's acquisition personnel funded by the AC&I
account generally were not permitted to work on projects funded through
the OE account. However, the Coast Guard's fiscal year 2009
appropriations provided the service with limited two-way transfer
authority--that is, authority to transfer a limited amount of
acquisition personnel funding from the OE account to the AC&I account
and vice versa.[Footnote 47] The Coast Guard's appropriations for
fiscal years 2007 and 2008 provided the service with limited one-way
transfer authority only--that is, authority to transfer a limited
amount of acquisition personnel funding from the OE account to the AC&I
account.
Coast Guard officials told us that neither of these authorities--the
two-way transfer authority or the one-way transfer authority--has ever
been used because of the administrative and other constraints
associated with implementation. For example, officials explained that
the Coast Guard has not used it partly because the transfer authority
is authorized for 1 year only--and thus using the authority would at
best create only a temporary acquisition position. Further, officials
noted that the Coast Guard may not be able to fill a temporary position
during the year of the transfer authority, given that the service has
already experienced difficulties in filling acquisition positions. The
Coast Guard officials stressed that the segregation of acquisition
personnel funding from the OE appropriation has restricted the
service's ability to respond to surges in demand for acquisition
personnel and address persistent critical staffing shortfalls. To
illustrate the rationale for consolidating acquisition personnel
funding into the OE account, the Coast Guard provided us an example
comparing two scenarios--(1) the transfer process without consolidated
OE and AC&I personnel accounts and (2) the transfer process with
consolidated OE and AC&I personnel accounts (see table 4). According to
the Coast Guard's estimated timelines, completing a transfer of funds
and personnel positions could require 17 weeks under the first
scenario, whereas the transfer could be accomplished in 5 weeks under
the second scenario.
Table 4: Example Provided by the Coast Guard to Illustrate the
Rationale for Consolidating AC&I Personnel Funding Into the OE Account:
Process without consolidated OE and AC&I personnel accounts:
Process step: Forecast workload and identify needs;
Time estimated by Coast Guard (in weeks): 1.
Process step: Review of AC&I personnel positions (billet base)
conducted[A];
Time estimated by Coast Guard (in weeks): 1.
Process step: Review requirements for alternatives;
Time estimated by Coast Guard (in weeks): 1.
Process step: CG-9 contacts Coast Guard Investment Board with funding
and personnel request;
Time estimated by Coast Guard (in weeks): 1.
Process step: If approved, Coast Guard contacts DHS Chief Financial
Officer for coordination and approval;
Time estimated by Coast Guard (in weeks): 3.
Process step: If approved, DHS Chief Financial Officer contacts the
Office of Management and Budget (OMB) for coordination and approval;
Time estimated by Coast Guard (in weeks): 3.
Process step: If OMB approves, the Coast Guard and OMB notify Congress;
Time estimated by Coast Guard (in weeks): 3.
Process step: Coast Guard implements transfer of funds (Coast Guard has
10 days to notify Congress of transfer);
Time estimated by Coast Guard (in weeks): 1.
Process step: Coast Guard routes congressional notification through DHS
Chief Financial Officer;
Time estimated by Coast Guard (in weeks): 1.
Process step: DHS Chief Financial Officer routes congressional
notification through OMB;
Time estimated by Coast Guard (in weeks): 1.
Process step: OMB routes congressional notification to Congress;
Time estimated by Coast Guard (in weeks): 1.
Total time (in weeks): 17.
Process with consolidated OE and AC&I personnel accounts:
Process step: Forecast workload and identify needs;
Time estimated by Coast Guard (in weeks): 1.
Process step: Review of AC&I personnel positions (billet base)
conducted;
Time estimated by Coast Guard (in weeks): 1.
Process step: Review requirements for alternatives;
Time estimated by Coast Guard (in weeks): 1.
Process step: CG-9 contacts Coast Guard Investment Board with funding
and personnel request;
Time estimated by Coast Guard (in weeks): 1.
Process step: If approved, Coast Guard initiates transfer of funds and
personnel positions;
Time estimated by Coast Guard (in weeks): 1.
Total time (in weeks): 5.
Source: U.S. Coast Guard.
[A] Within the military, a billet is the equivalent of a job
assignment.
[End of table]
An additional benefit of consolidation cited by Coast Guard officials
involves staff development. The officials stated that consolidation of
acquisition personnel-related appropriations into the OE account would
facilitate the service's ability to provide professional development
opportunities, including cross-training in acquisition-related tasks.
The officials stressed the importance of training junior staff to help
ensure the availability of a well-qualified cadre of acquisition
personnel. While officials did not to cite any specific examples of
training and development opportunities that were hampered because of
the separation of accounts, they noted that a consolidated account
would allow for the utilization of training billets located within the
OE account.[Footnote 48] Coast Guard officials further noted that
consolidation of acquisition personnel funding into one account (the OE
account for the Coast Guard) would increase the Coast Guard's budget
consistency with two other component agencies of DHS that have large
acquisition projects under way--U.S. Immigration and Customs
Enforcement and U.S. Customs and Border Protection.
On the other hand, a potential drawback of consolidating personnel-
related AC&I appropriations into the OE account is less transparency of
the total costs of Coast Guard acquisition projects. Officials
recognize that reduced transparency of acquisition costs is an issue of
concern to congressional appropriators. According to Coast Guard
officials, however, any reduction in transparency resulting from
consolidation of the acquisition personnel accounts is mitigated by an
alternative reporting mechanism. Specifically, the officials noted that
the Coast Guard is directed to submit quarterly reports on acquisition
projects to congressional appropriators, which include details on
personnel costs associated with each project.[Footnote 49] The Coast
Guard also noted that in accordance with congressional direction, the
level of detail in the quarterly reports--beginning with the second
quarter of fiscal year 2008--was expanded to include outyear funding
estimates by asset as well as metrics for assessing the performance of
all major acquisition projects.[Footnote 50] Another perspective, as
presented in our April 2009 congressional testimony, is that (1) the
quarterly acquisition reports are provided only to the appropriations
committees and (2) the information is restricted because of acquisition
sensitive material--two factors that necessarily affect transparency.
[Footnote 51]
[End of section]
Enclosure III:
Objectives, Scope, and Methodology:
Objectives Congressional direction accompanying the Coast Guard's
fiscal year 2008 appropriations required the Coast Guard to submit a
report describing and assessing the service's reorganization
initiatives--specifically, initiatives reflected in 10 Commandant
Intent Action Orders.[Footnote 52] In August 2008, the Coast Guard
submitted its report to the Senate and House Appropriations
Committees.[Footnote 53] The congressional direction further required
that following submission of the Coast Guard's report, GAO was to (1)
review the data and analysis supporting the report and, where
appropriate, the status of implementation and (2) submit a report no
later than 120 days after the Coast Guard submitted its report. To meet
the mandated date, we offered to provide a briefing in December 2008--
summarizing the preliminary results to date of our ongoing study--to
the offices of the Chairmen and Ranking Members of the Senate and House
Appropriations Committees. Accordingly, during that month, we briefed
interested congressional staff.
Going forward, in accordance with the congressional direction and as
agreed with the offices of the Chairmen and Ranking Members of the
Senate and House Appropriations Committees, this report addresses the
following questions:
* What is the genesis for the Coast Guard's modernization program?
* To what extent has the Coast Guard conducted efforts to monitor the
progress of its modernization program and evaluate results?
As an additional component, the Explanatory Statement in the Committee
Print accompanying the Consolidated Appropriations Act of 2008 also
directed GAO to evaluate the benefits and drawbacks of including all
funding for Coast Guard personnel within the Operating Expenses (OE)
appropriation.[Footnote 54]
Scope and Methodology:
To address the modernization program questions, we reviewed (1) the
August 2008 report submitted by the Coast Guard to the Senate and House
Appropriations Committees; (2) briefing materials, implementation
plans, and other documentation prepared by the Coast Guard that
provided additional perspectives on the service's modernization and
strategic transformation initiatives; and (3) modernization-related
information available on the Coast Guard's Web site [hyperlink,
http://uscg.mil/modernization/]. Also, we reviewed internal and
external studies and reports that Coast Guard headquarters officials
cited as having collectively contributed to a cause for action to
modernize. Relevant external studies included those conducted by the
DHS Office of Inspector General as well as our previous reports that
have addressed Coast Guard issues. At Coast Guard headquarters, we
interviewed members of the Strategic Transformation Team, whose primary
responsibility is to oversee the planning and execution of the
service's overall modernization and transformation efforts. Further, we
interviewed members of the National Academy of Public Administration's
(NAPA) project team--which, in April 2008, began reviewing the Coast
Guard's modernization program.[Footnote 55] Also, we reviewed an
interim progress report (dated December 2008) and the final reports
that NAPA submitted to the Coast Guard on April 30, 2009.[Footnote 56]
In reference to monitoring the progress of the Coast Guard's
modernization program and evaluating results, we determined whether the
service has established overall timelines and milestones for key
actions, consistent with project management principles and our prior
work on organizational transformation efforts.[Footnote 57] We focused
particularly on realignment actions involving establishment of four
major organizational elements--(1) Deputy Commandant for Operations,
(2) Deputy Commandant for Mission Support, (3) Operations Command, and
(4) Force Readiness Command--realignments that are intended to enhance
organizational effectiveness by establishing a command structure based
on functions rather than geographic regions. For example, regarding
Force Readiness Command (FORCECOM), we reviewed the Coast Guard's
business plan, which describes the actions needed to create the new
command by the scheduled stand-up date of June 1, 2009.[Footnote 58] We
noted that the plan includes milestones and readiness measures.
However, the scope of our work did not include independently evaluating
the adequacy of the milestones and measures presented in this or other
planning documents, such as the Blueprint for Acquisition Reform,
[Footnote 59] which the Coast Guard cites as the "capstone strategic
document" for reshaping the service's acquisition and contracting
capabilities. One reason for this limitation is that we have a separate
effort underway to evaluate aspects of the Coast Guard's acquisition
program.
Similarly, given existing work underway by DHS's Office of Inspector
General, we did not evaluate the Coast Guard's Financial Strategy for
Transformation and Audit Readiness (Version 2.0),[Footnote 60] which is
a 2-year plan to be updated annually to specify tasks and milestones
necessary to achieve financial statement audit readiness by addressing
internal control material weaknesses in the service's financial
management processes. In January 2009, DHS's Office of Inspector
General reported as follows regarding its review of the remediation
plan: "We did not conduct an audit of the plan, but analyzed the plan
by comparing it to previous plans and assessing planned actions and
milestones for remediating material weaknesses. Overall, the plan
should provide a useful tool for management to monitor progress toward
remediating known weaknesses and improving the financial management
process with the Coast Guard. However, due to the inherent limitations
of a forecast, we cannot offer an opinion as to the certainty of its
successful completion."[Footnote 61]
Moreover, we interviewed the senior Coast Guard official responsible
for leading the Strategic Transformation Team to obtain an overview of
the service's plans for conducting "process reviews," which are
intended to help facilitate implementation of the new functionally
based commands.[Footnote 62] Also, we discussed with Coast Guard
headquarters officials the extent to which the service has established
(or has plans to establish) performance measures for specifically
evaluating impacts resulting from the modernization program. To assess
the service's efforts, we used our prior work and related guidance on
the development and implementation of successful performance measures.
[Footnote 63] To obtain a general overview and contextual perspectives
on some of the Coast Guard's existing performance measures, we also
reviewed the DHS Office of Inspector General's most recent annual
report on the service's mission performance[Footnote 64] and our
previous reports on the service's mission performance measures.
[Footnote 65]
To address the issue regarding the Coast Guard's personnel-related
appropriations, we reviewed the pertinent legislative history of the
AC&I and OE appropriation accounts, as well as pertinent statutory
provisions that either prohibit or authorize the transfer of
acquisition personnel funding from one account to the other. We also
reviewed Coast Guard position papers and other documentation regarding
possible consolidation of the Coast Guard's AC&I personnel funding into
the OE account. In addition, we interviewed Coast Guard headquarters
officials to discuss the benefits and drawbacks of such consolidation.
To obtain additional perspectives, we reviewed the quarterly
acquisition reports (for fiscal years 2007 and 2008) submitted by the
Coast Guard to the Senate and House Appropriations Committees'
Subcommittees on Homeland Security. Among other things, the quarterly
reports provide personnel expenditure details (by program, project, and
activity) regarding the use of AC&I appropriations. We conducted this
performance audit from November 2008 to June 2009 in accordance with
generally accepted government auditing standards. Those standards
require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions
based on our audit objectives.
[End of section]
Enclosure IV:
GAO Contact and Staff Acknowledgments:
GAO Contact:
Stephen L. Caldwell, (202) 512-9610 or caldwells@gao.gov:
Acknowledgments:
In addition to the contact named above, Danny Burton, Assistant
Director, and Ryan Lambert, Analyst-in-Charge, managed this assignment.
Catherine Bombico contributed to all aspects of the work. Michele
Fejfar assisted with methodology and data reliability. Geoff Hamilton
provided legal support. Katherine Davis assisted in report development.
[End of section]
Related GAO Products:
Coast Guard: Observations on Changes to Management and Oversight of the
Deepwater Program. [hyperlink,
http://www.gao.gov/products/GAO-09-462T]. Washington, D.C.: March 24,
2009.
Maritime Security: Vessel Tracking Systems Provide Key Information, but
the Need for Duplicate Data Should Be Reviewed. [hyperlink,
http://www.gao.gov/products/GAO-09-337]. Washington, D.C.: March 17,
2009.
Coast Guard: Change in Course Improves Deepwater Management and
Oversight, but Outcome Still Uncertain. [hyperlink,
http://www.gao.gov/products/GAO-08-745]. Washington, D.C.: June 24,
2008.
Coast Guard: Strategies for Mitigating the Loss of Patrol Boats Are
Achieving Results in the Near Term, but They Come at a Cost and Longer
Term Sustainability Is Unknown. [hyperlink,
http://www.gao.gov/products/GAO-08-660]. Washington, D.C.: June 23,
2008.
Status of Selected Aspects of the Coast Guard's Deepwater Program.
[hyperlink, http://www.gao.gov/products/GAO-08-270R]. Washington, D.C.:
March 11, 2008.
Coast Guard: Observations on the Fiscal Year 2009 Budget, Recent
Performance, and Related Challenges. [hyperlink,
http://www.gao.gov/products/GAO-08-494T]. Washington, D.C.: March 6,
2008.
Coast Guard: Deepwater Program Management Initiatives and Key Homeland
Security Missions. [hyperlink,
http://www.gao.gov/products/GAO-08-531T]. Washington, D.C.: March 5,
2008.
Maritime Security: Coast Guard Inspections Identify and Correct
Facility Deficiencies, but More Analysis Needed of Program's Staffing,
Practices, and Data. [hyperlink,
http://www.gao.gov/products/GAO-08-12]. Washington, D.C.: February 14,
2008.
Maritime Security: Federal Efforts Needed to Address Challenges in
Preventing and Responding to Terrorist Attacks on Energy Commodity
Tankers. [hyperlink, http://www.gao.gov/products/GAO-08-141].
Washington, D.C.: December 10, 2007.
Coast Guard: Challenges Affecting Deepwater Asset Deployment and
Management and Efforts to Address Them. [hyperlink,
http://www.gao.gov/products/GAO-07-874]. Washington, D.C.: June 18,
2007.
Coast Guard: Observations on the Fiscal Year 2008 Budget, Performance,
Reorganization, and Related Challenges. [hyperlink,
http://www.gao.gov/products/GAO-07-489T]. Washington, D.C.: April 18,
2007.
Port Risk Management: Additional Federal Guidance Would Aid Ports in
Disaster Planning and Recovery. [hyperlink,
http://www.gao.gov/products/GAO-07-412]. Washington, D.C.: March 28,
2007.
Coast Guard: Status of Efforts to Improve Deepwater Program Management
and Address Operational Challenges. [hyperlink,
http://www.gao.gov/products/GAO-07-575T]. Washington, D.C.: March 8,
2007.
Maritime Security: Public Safety Consequences of a Terrorist Attack on
a Tanker Carrying Liquefied Natural Gas Need Clarification. [hyperlink,
http://www.gao.gov/products/GAO-07-316]. Washington, D.C.: February 22,
2007.
Coast Guard: Preliminary Observations on Deepwater Program Assets and
Management Challenges. [hyperlink,
http://www.gao.gov/products/GAO-07-446T]. Washington, D.C.: February
15, 2007.
Coast Guard: Coast Guard Efforts to Improve Management and Address
Operational Challenges in the Deepwater Program. [hyperlink,
http://www.gao.gov/products/GAO-07-460T]. Washington, D.C.: February
14, 2007.
Homeland Security: Observations on the Department of Homeland
Security's Acquisition Organization and on the Coast Guard's Deepwater
Program. [hyperlink, http://www.gao.gov/products/GAO-07-453T].
Washington, D.C.: February 8, 2007.
Coast Guard: Condition of Some Aids-to-Navigation and Domestic
Icebreaking Vessels Has Declined; Effect on Mission Performance Appears
Mixed. [hyperlink, http://www.gao.gov/products/GAO-06-979]. Washington,
D.C.: September 22, 2006.
Coast Guard: Non-Homeland Security Performance Measures Are Generally
Sound, but Opportunities for Improvement Exist. [hyperlink,
http://www.gao.gov/products/GAO-06-816]. Washington, D.C.: August 16,
2006.
Coast Guard: Observations on the Preparation, Response, and Recovery
Missions Related to Hurricane Katrina. [hyperlink,
http://www.gao.gov/products/GAO-06-903]. Washington, D.C.: July 31,
2006.
Maritime Security: Information-Sharing Efforts Are Improving.
[hyperlink, http://www.gao.gov/products/GAO-06-933T]. Washington, D.C.:
July 10, 2006.
United States Coast Guard: Improvements Needed in Management and
Oversight of Rescue System Acquisition. [hyperlink,
http://www.gao.gov/products/GAO-06-623]. Washington, D.C.: May 31,
2006.
Coast Guard: Changes to Deepwater Plan Appear Sound, and Program
Management Has Improved, but Continued Monitoring Is Warranted.
[hyperlink, http://www.gao.gov/products/GAO-06-546]. Washington, D.C.:
April 28, 2006.
Coast Guard: Progress Being Made on Addressing Deepwater Legacy Asset
Condition Issues and Program Management, but Acquisition Challenges
Remain. [hyperlink, http://www.gao.gov/products/GAO-05-757].
Washington, D.C.: July 22, 2005.
Coast Guard: Station Readiness Improving, but Resource Challenges and
Management Concerns Remain. [hyperlink,
http://www.gao.gov/products/GAO-05-161]. Washington, D.C.: January 31,
2005.
Maritime Security: Better Planning Needed to Help Ensure an Effective
Port Security Assessment Program. [hyperlink,
http://www.gao.gov/products/GAO-04-1062]. Washington, D.C.: September
30, 2004.
Maritime Security: Partnering Could Reduce Federal Costs and Facilitate
Implementation of Automatic Vessel Identification System. [hyperlink,
http://www.gao.gov/products/GAO-04-868]. Washington, D.C.: July 23,
2004.
Maritime Security: Substantial Work Remains to Translate New Planning
Requirements into Effective Port Security. [hyperlink,
http://www.gao.gov/products/GAO-04-838]. Washington, D.C.: June 30,
2004.
Coast Guard: Relationship between Resources Used and Results Achieved
Needs to Be Clearer. [hyperlink,
http://www.gao.gov/products/GAO-04-432]. Washington, D.C.: March 22,
2004.
Contract Management: Coast Guard's Deepwater Program Needs Increased
Attention to Management and Contractor Oversight. [hyperlink,
http://www.gao.gov/products/GAO-04-380]. Washington, D.C.: March 9,
2004.
Coast Guard: Comprehensive Blueprint Needed to Balance and Monitor
Resource Use and Measure Performance for All Missions. [hyperlink,
http://www.gao.gov/products/GAO-03-544T]. Washington, D.C.: March 12,
2003.
[End of section]
Footnotes:
[1] Within the Coast Guard, command and control refers to the exercise
of authority and direction by a properly designated commander over
assigned forces in the accomplishment of the mission. Command and
control functions are performed through an arrangement of personnel,
equipment, communications, facilities, and procedures.
[2] Our reports and testimonies over the past 11 years have included
details on the Deepwater program related to affordability, management,
and operations. See, for example, GAO, Coast Guard: Change in Course
Improves Deepwater Management, but Outcome Still Uncertain, [hyperlink,
http://www.gao.gov/products/GAO-08-745] (Washington, D.C.: June 24,
2008); Coast Guard: Observations on the Fiscal Year 2009 Budget, Recent
Performance, and Related Challenges, [hyperlink,
http://www.gao.gov/products/GAO-08-494T] (Washington, D.C.: Mar. 6,
2008); and Coast Guard: Challenges Affecting Deepwater Asset Deployment
and Management and Efforts to Address Them, [hyperlink,
http://www.gao.gov/products/GAO-07-874] (Washington, D.C.: June 18,
2007).
[3] H. Comm. on Appropriations, 110TH Cong., Committee Print on H.R.
2764/Public Law 110-161 (Legislative Text and Explanatory Statement) at
1059 (2008), accompanying the Consolidated Appropriations Act of 2008
(Pub. L. No. 110-161, 121 Stat. 1844 (2007)), and S. Rep. No. 110-84,
at 69-70 (2007).
[4] U.S. Coast Guard, Congressional Report to FY 2008 Appropriations
Committee - Coast Guard Modernization (Washington, D.C., Aug. 15,
2008). In enclosure I, we present an overview of the Coast Guard's
August 2008 report. In its report, the Coast Guard noted that the 10
broad initiatives known as Commandant Intent Action Orders have been
"combined into five coordinated efforts that comprise Coast Guard
Modernization."
[5] H. Comm. on Appropriations, 110TH Cong., Committee Print on H.R.
2764/Public Law 110-161 (Legislative Text and Explanatory Statement) at
1059 (2008), accompanying the Consolidated Appropriations Act of 2008.
[6] A list of related GAO products is presented at the end of this
report.
[7] GAO, Results-Oriented Cultures: Implementation Steps to Assist
Mergers and Organizational Transformations, [hyperlink,
http://www.gao.gov/products/GAO-03-669] (Washington, D.C.: July 2,
2003), and The Results Act: An Evaluator's Guide to Assessing Agency
Annual Performance Plans, [hyperlink,
http://www.gao.gov/products/GAO/GGD-10.1.20] (Washington, D.C.: April
1998).
[8] NAPA is an independent, nonprofit organization chartered by
Congress to assist federal, state, and local governments in improving
their effectiveness, efficiency, and accountability.
[9] NAPA's study addressing the Coast Guard's modernization program
includes an assessment of the service's current approach, an evaluation
of its alignment to the Commandant's stated transformation objectives,
identification of risks and weaknesses, and recommendations for program
improvement.
[10] Project Management Institute, A Guide to the Project Management
Body of Knowledge, Fourth Edition (2008), and [hyperlink,
http://www.gao.gov/products/GAO-03-669].
[11] These "process reviews" are intended to baseline current processes
so that officials may better understand the changes, linkages, and
accountabilities associated with shifting to a new structure and
processes.
[12] A summary of the Coast Guard's enacted appropriations for fiscal
year 2009 is presented in enclosure II (see table 3).
[13] A flag officer is an officer in the Navy or Coast Guard holding a
rank higher than captain, such as rear admiral, vice admiral, or
admiral.
[14] See Rear Admiral Marshall E. Gilbert, Chief, Office of Research
and Development, U.S. Coast Guard, "Realignment 1987: The New Structure
and How We Got There," Commandant's Bulletin 13-87 (June 26, 1987), 33-
40.
[15] As part of the Coast Guard's modernization program all logistics
support functions are to be realigned under one organizational entity,
DCMS. See enclosure I.
[16] Section 888(f) of the Homeland Security Act of 2002 requires that
the DHS Office of Inspector General annually review the Coast Guard's
mission performance.
[17] See, for example, GAO, Coast Guard: Station Readiness Improving,
but Resource Challenges and Management Concerns Remain, [hyperlink,
http://www.gao.gov/products/GAO-05-161] (Washington, D.C.: Jan. 31,
2005).
[18] A material weakness is a significant deficiency, or a combination
of significant deficiencies, that result in more than a remote
likelihood that a material misstatement of the financial statements
will not be prevented or detected. A significant deficiency is a
control deficiency, or combination of control deficiencies, that
adversely affect the entity's ability to initiate, authorize, record,
process, or report financial data reliably in accordance with generally
accepted accounting principles such that there is more than a remote
likelihood that a misstatement of the entity's financial statements
that is more than inconsequential will not be prevented or detected.
Department of Homeland Security, Office of Inspector General,
Independent Auditor's Report on DHS' FY 2008 Financial Statements, OIG-
09-09 (Washington D.C., November 2008).
[19] GAO, Coast Guard: Observations on the Preparation, Response, and
Recovery Missions Related to Hurricane Katrina, [hyperlink,
http://www.gao.gov/products/GAO-06-903] (Washington, D.C.: July 31,
2006).
[20] The five logistics and service centers are the Aviation Logistics
Center (Elizabeth City, North Carolina); the Surface Forces Logistics
Center (Baltimore, Maryland); the Shore Infrastructure Logistics Center
(Norfolk, Virginia); the Command, Control, Communication, Computers,
and Information Technology Service Center (Alexandria, Virginia); and
the Personnel Service Center (Arlington, Virginia). As of March 2009,
all five of these logistics and service centers were established.
[21] Project Management Institute, A Guide to the Project Management
Body of Knowledge, Fourth Edition (2008).
[22] GAO, Highlights of a GAO Forum: Mergers and Transformation:
Lessons Learned for a Department of Homeland Security and Other Federal
Agencies, [hyperlink, http://www.gao.gov/products/GAO-03-293SP]
(Washington, D.C.: Nov. 14, 2002), and [hyperlink,
http://www.gao.gov/products/GAO-03-669].
[23] The Coast Guard's legislative change proposal is intended to
enable the service to establish four three-star vice admiral positions
of significant authority to manage and oversee each of the four
organizational entities. In June 2008, DCO was established as an
interim two-star rear admiral position.
[24] U.S. Coast Guard, FORCECOM Fiscal Year 2009-2010 Business Plan,
First Edition (Version 1.0) (October 2008).
[26] U.S. Coast Guard, Command, Control, Communication, Computers, and
Information Technology (C4&IT), Strategic Plan, FY 2009 - 2013
(undated).
[26] The Coast Guard also developed an internal business plan to help
guide efforts to establish and operate the anticipated DCMS
organization in fiscal year 2009. According to the Coast Guard, senior
officials have not identified a need for similar business plans for DCO
and OPCOM.
[27] U.S. Coast Guard, Blueprint for Acquisition Reform (Version 3.0)
(July 14, 2008).
[28] GAO, Coast Guard: Update on Deepwater Program Management, Cost,
and Acquisition Workforce, [hyperlink,
http://www.gao.gov/products/GAO-09-620T] (Washington, D.C.: Apr. 22,
2009), and [hyperlink, http://www.gao.gov/products/GAO-08-745].
[29] See, U.S. Coast Guard, Coast Guard Report to Congress: Financial
Management Improvement Plan, which was submitted on November 28, 2008,
to the Chairmen and Ranking Members of the Senate and House
Appropriations Committees' Subcommittees on Homeland Security.
[30] The Coast Guard's development of Mission Action Plans is part of a
larger effort by DHS to address identified weaknesses in internal
controls over financial reporting. Beginning in 2006, DHS launched a
corrective action plan to remediate these deficiencies, which is
documented in the Internal Controls Over Financial Reporting Playbook
(ICOFR Playbook). Mission Action Plans are a key element of the ICOFR
Playbook and identify the specific remediation actions planned for each
control deficiency at the DHS component levels.
[31] See, Department of Homeland Security, Office of Inspector General,
Independent Auditor's Report on U.S. Coast Guard's FY 2008 Mission
Action Plans, OIG-08-73 (Washington, D.C., July 2008), which addressed
the Coast Guard's efforts as of February 2008. At the time of our
review, the Office of Inspector General was conducting additional audit
work to further evaluate the Mission Action Plans.
[32] According to NAPA officials, the academy's work encompassed a
broad scope and included over 150 interviews with a wide variety of
Coast Guard officials, including civilians and military personnel, flag
officers, and staff located among all four of the envisioned new
organizational entities, as well as key external stakeholders.
[33] National Academy of Public Administration, U.S. Coast Guard
Modernization Study (Washington, D.C., April 2009), and National
Academy of Public Administration, U.S. Coast Guard Modernization--
Financial Transformation Study (Washington, D.C., April 2009). Our
review focused primarily on the first report, which addresses the
overall modernization program.
[34] [hyperlink, http://www.gao.gov/products/GAO-03-669] was one of the
principal sources that the NAPA study team used to identify the key
success indicators.
[35] The Coast Guard's Strategic Transformation Team--whose primary
responsibility is to oversee the planning and execution of the
service's overall modernization and transformation efforts--is
scheduled to stand down in June 2009. In its April 2009 report, NAPA
recognized that the Coast Guard "recently established a new directorate
that brings together a number of existing functions responsible for
organizational and strategic analysis, change management, and
performance management." The report noted, however, that NAPA did not
evaluate whether the new directorate meets all aspects of the
recommendation regarding establishment of a Modernization
Implementation Guidance Team. According to the Coast Guard, the
Enterprise Strategy, Management and Doctrine Oversight Directorate--
which the service established effective May 4, 2009--is to be
responsible for ongoing coordination of change initiatives within the
modernization effort and beyond, among other functions.
[36] In discussing the rationale for this recommendation, among other
considerations, NAPA cited two GAO reports: GAO, Coast Guard:
Relationship between Resources Used and Results Achieved Needs to Be
Clearer, [hyperlink, http://www.gao.gov/products/GAO-04-432]
(Washington, D.C.: Mar. 22, 2004), and Coast Guard: Strategy Needed for
Setting and Monitoring Levels of Effort for All Missions, [hyperlink,
http://www.gao.gov/products/GAO-03-155] (Washington, D.C.: Nov. 12,
2002).
[37] For related work on Coast Guard primary performance measures, see
GAO, Coast Guard: Non-Homeland Security Performance Measures Are
Generally Sound, but Opportunities for Improvement Exist, [hyperlink,
http://www.gao.gov/products/GAO-06-816] (Washington, D.C.: Aug. 16,
2006).
[38] Individual business metrics are managed by the Coast Guard's
Business Intelligence Unit and fall into eight distinct categories:
activities, equipment, infrastructure, information, outcomes, people,
supply, and training.
[39] Pub. L. No. 103-62, 107 Stat. 285 (1993).
[40] See GAO, Standards for Internal Control in the Federal Government,
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]
(Washington, D.C.: November 1999). These standards, issued pursuant to
the requirements of the Federal Managers' Financial Integrity Act of
1982, provide the overall framework for establishing and maintaining
internal control in the federal government.
[41] [hyperlink, http://www.gao.gov/products/GAO/GGD-10.1.20].
[42] U.S. Coast Guard, Congressional Report to FY 2008 Appropriations
Committee - Coast Guard Modernization (Washington, D.C., Aug. 15,
2008).
[43] H. Comm. on Appropriations, 110TH Cong., Committee Print on H.R.
2764/Public Law 110-161 (Legislative Text and Explanatory Statement) at
1059 (2008), accompanying the Consolidated Appropriations Act of 2008.
Further clarifying guidance was provided by cognizant congressional
staff that our evaluation should be limited to the inclusion of AC&I
personnel funding into the OE account.
[44] See GAO, Performance Budgeting: Efforts to Restructure Budgets to
Better Align Resources with Performance, [hyperlink,
http://www.gao.gov/products/GAO-05-117SP] (Washington, D.C.: February
2005).
[45] Ibid.
[45] Title 31 U.S.C. § 1532 provides, for example, that an amount
available under law may be withdrawn from one appropriation account and
credited to another or to a working fund only when authorized by law.
See also, GAO, Coast Guard: Acquisition Program Staff Were Funded
Improperly, [hyperlink, http://www.gao.gov/products/GAO/RCED-93-123]
(Washington, D.C.: Apr. 27, 1993).
[47] This type of limited transfer authority is provided, to some
extent, to various other agencies in their respective appropriations
provisions. For example, fiscal year 2008 appropriation provided
versions of limited transfer authority--with an accompanying
congressional notification or advance approval requirements--to
agencies and offices within the Department of Agriculture, Department
of Commerce, Department of Justice, Department of the Treasury, and
DHS, among others.
[48] In addition to billets allocated for specific job functions, the
Coast Guard also has a limited number of billets designated
specifically for training, which can be used to support developmental
activities for a variety of different job functions.
[49] The quarterly acquisition reports to Congress do not include some
project overhead costs for major acquisition projects, such as contract
support for financial management services, contracting support
services, and training and workforce certification. For fiscal year
2009, the Coast Guard requested $500,000 to cover the costs of the
associated acquisition project overhead, which was not included in the
total congressional appropriations request for the AC&I personnel
account of $82.215 million.
[50] The Coast Guard's fiscal year 2003 appropriations act set forth
the initial quarterly reporting requirements for all major Coast Guard
acquisition projects (Section 360 of Division I of the Fiscal Year 2003
Department of Transportation and Related Agencies Appropriations Act
(Pub. L. No. 108-7, 117 Stat. 11 (2003)). Congressional direction in
various subsequent Appropriations Committee reports further modified
such requirements. More recent amplifying guidance is provided in the
Explanatory Statement in the Committee Print accompanying the
Consolidated Appropriations Act, 2008 (H. Comm. on Appropriations,
110th Cong., Committee Print on H.R. 2764/Public Law 110-161
(Legislative Text and Explanatory Statement) at 1061 (2008),
accompanying the Consolidated Appropriations Act of 2008), and H. Rep.
No. 110-181 at 70-71 (2007).
[51] GAO, Coast Guard: Update on Deepwater Program Management, Cost,
and Acquisition Workforce, [hyperlink,
http://www.gao.gov/products/GAO-09-620T] (Washington, D.C.: Apr. 22,
2009).
[52] H. Comm. on Appropriations, 110TH Cong., Committee Print on H.R.
2764/Public Law 110-161 (Legislative Text and Explanatory Statement) at
1059 (2008), accompanying the Consolidated Appropriations Act of 2008,
and S. Rep. No. 110-84, at 69-70 (2007).
[53] U.S. Coast Guard, Congressional Report to FY 2008 Appropriations
Committee - Coast Guard Modernization (Washington, D.C., Aug. 15,
2008). In its report, the Coast Guard noted that the 10 broad
initiatives known as Commandant Intent Action Orders have been
"combined into five coordinated efforts that comprise Coast Guard
Modernization." For an overview of the Coast Guard's August 2008
report, see enclosure II of this report.
[54] H. Comm. on Appropriations, 110TH Cong., Committee Print on H.R.
2764/Public Law 110-161 (Legislative Text and Explanatory Statement) at
1059 (2008), accompanying the Consolidated Appropriations Act of 2008.
[55] NAPA--an independent, nonprofit organization chartered by Congress
to assist federal, state, and local governments in improving their
effectiveness, efficiency, and accountability--was engaged by the Coast
Guard to conduct a third-party, independent review of the service's
modernization program.
[56] NAPA's study addressing the Coast Guard's modernization program
includes an assessment of the service's current approach, an evaluation
of the approach's alignment to the Commandant's stated transformation
objectives, identification of risks and weaknesses, and recommendations
for program improvement.
[57] Project Management Institute, A Guide to the Project Management
Body of Knowledge, Fourth Edition (2008), and GAO, Results-Oriented
Cultures: Implementation Steps to Assist Mergers and Organizational
Transformations, [hyperlink, http://www.gao.gov/products/GAO-03-669]
(Washington, D.C.: July 2, 2003).
[58] U.S. Coast Guard, FORCECOM Fiscal Year 2009-2010 Business Plan,
First Edition (Version 1.0) (October 2008).
[59] U.S. Coast Guard, Blueprint for Acquisition Reform (Version 3.0)
(July 14, 2008).
[60] See, U.S. Coast Guard, Coast Guard Report to Congress: Financial
Management Improvement Plan, which was submitted on November 28, 2008,
to the Chairmen and Ranking Members of the Senate and House
Appropriations Committees' Subcommittees on Homeland Security.
[61] Department of Homeland Security, Office of Inspector General,
letter (dated Jan. 7, 2009) to the Chairman, Subcommittee on Homeland
Security, Committee on Appropriations, U.S. Senate.
[62] Within the context of the Coast Guard's modernization program, a
process review is a detailed review that baselines current processes so
that officials can better understand the changes, linkages, and
accountabilities associated with shifting to a new structure and
processes.
[63] GAO, Executive Guide: Effectively Implementing the Government
Performance and Results Act, [hyperlink,
http://www.gao.gov/products/GAO/GGD-96-118] (Washington, D.C.: June
1996).
[64] Department of Homeland Security, Office of Inspector General,
Annual Review of United States Coast Guard's Mission Performance (FY
2007), OIG-09-13 (Washington, D.C., December 2008).
[65] See, for example, GAO, Coast Guard: Non-Homeland Security
Performance Measures Are Generally Sound, but Opportunities for
Improvement Exist, [hyperlink, http://www.gao.gov/products/GAO-06-816]
(Washington, D.C.: Aug. 16, 2006).
[End of section]
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