Analysis of Department of Defense Unobligated Budget Authority

Gao ID: PAD-78-34 January 13, 1978

Budget authority is the authority provided by law to enter into obligations which will result in outlays of government funds. In the Department of Defense (DOD), budget authority is used to enter into contracts with defense contractors. DOD unobligated balances of budget authority for military activities grew from $12.8 billion to $34.5 billion during fiscal years 1972 through 1976.

There was no evidence that the buildup in unobligated balances for DOD procurements represented an inability to perform functions. Excess obligational authority in DOD procurement programs could possibly be reprogrammed or used to fund future requirements. Despite the existence of excess funds, DOD has not implemented a process for systematic and regular reporting on the availability of excess funds. Over 90 percent of the $5.5 billion increase in the unobligated total was due to program growth rather than an obligation rate decline. Among the reasons for the decline in obligation rates were: delays in awarding contracts, planning and production problems, reserves, funds withheld from program managers, congressional actions, better contract prices than budgeted for, staffing deficiencies, and invalid obligations. Through the 1972 to 1976 period, the executive branch consistently underestimated DOD unobligated balances.

Recommendations

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