An Analysis of DOD's Family Housing Management Account and Lease Construction Agreements

An examination was made of the Department of Defense (DOD) family housing management account for fiscal years 1977, 1978, and 1979 to determine (1) whether funds have been transferred among specified functional areas within the account without congressional approval; (2) how transferred funds are to be used and if they are used for that purpose; and (3) what the Congress could do to assure that funds are used for the purposes justified in the DOD family housing budget. GAO also examined the DOD family housing overseas leasing program to determine if DOD can legally enter into lease construction agreements before passage of appropriation laws, whether lease terms under the lease construction agreements are full-year leases, and the amount required in fiscal year 1981 for increased costs for existing leases.

DOD can reprogram funds appropriated to operate and maintain military-controlled family housing units. The laws creating the account and appropriating the funds as a lump sum entitled "operation, maintenance" permit this flexibility. Funds are transferred, and in some cases retransferred, during the fiscal year at DOD, Service Secretary, major command, and installation commander levels. In fiscal year 1977 funds obligated for operation were $41.4 million less than the budget amount and funds obligated for maintenance were $35 million more than the budget amount. The differences were larger for fiscal years 1978 and 1979. DOD lease construction agreements entered into before receipt of appropriations are authorized under applicable laws, provided their rental rates are within statutory limits. To ensure that funds are used for the specific purposes justified in the budget, the military construction appropriation act could specify amounts for the purposes justified in the budget. In addition, the appropriation committees could establish a requirement in the fiscal year 1981 military construction appropriation bill that DOD give advance notice of major reprogramming of family housing operation and maintenance funds. This would give the committees important budgetary information without necessarily decreasing DOD flexibility in undertaking needed reprogramming.