Defense Headquarters

Since at least the early 1970s, Congress has voiced concerns about the size of the management ranks at the Defense Department's (DOD) headquarters. GAO found that DOD's annual presentations to Congress on headquarters management and support staff are unreliable because the number of personnel and costs are significantly higher than reported. As a result, neither DOD nor Congress can determine trends in headquarters personnel or costs to help them make informed decisions about the appropriate size of headquarters. DOD's data indicate that headquarters management and support costs fell from $5.3 billion to $4.3 billion in constant 1997 dollars during fiscal years 1985-96. However, DOD's reported data did not include all costs, as required by its financial management regulation. In addition, cost data for headquarters management and support activities are scattered among several budget documents, making it hard to determine total costs. DOD's reported headquarters personnel and cost data are understated for several reasons. Because of sustained criticism from Congress about the levels of headquarters personnel, DOD has "played games" to "hide" headquarters management from Congress, according to several DOD officials. Second, many DOD officials believe that they are required to report only personnel who make policy, allocate resources, or plan for the future, even though a DOD directive requires that support personnel be reported. Third, the directive's criteria for analyzing organizations to determine whether they should be included in budget exhibits on headquarters management are complicated. Finally, military oversight has been limited. Although DOD would like to reduce the size and cost of its headquarters management and reallocate funds to other areas, it has not determined the scope of future reductions or developed a detailed plan for making them.

GAO noted that: (1) DOD's annual budget exhibits to Congress on management headquarters and headquarters support are unreliable because the number of personnel and costs are significantly higher than reported; (2) neither DOD nor Congress can determine trends in headquarters personnel and costs to help them make informed decisions about the appropriate size of headquarters; (3) during fiscal years (FY) 1985-86, DOD reported steady decreases in its management headquarters and headquarters support personnel, however, these data did not include personnel at most of DOD's noncombat organizations that are subordinate to management headquarters; (4) in a review of selected subordinate organizations, GAO found that almost three-fourths were primarily performing management or headquarters support functions and should have been reported to Congress by DOD; (5) DOD's headquarters costs are also significantly higher than reported to Congress; (6) DOD's data indicate that management headquarters and headquarters support costs decreased from $5.3 billion to $4.3 billion in constant 1997 dollars during FY 1985-86, however, DOD's reported data did not include all costs; (7) DOD's reported headquarters personnel and cost data are understated for several reasons: (a) sustained criticism from Congress about the size of DOD's headquarters has been a disincentive; (b) many DOD officials believe that they are required to report only personnel that make policy, allocate resources, or plan for the future; (c) the criteria for determining whether organizations should be included in management headquarters are complicated; and (d) oversight has been limited; (8) DOD faces challenges in reducing the size of its headquarters; (9) DOD has not determined the scope of future reductions or developed a detailed plan for making the reductions; (10) DOD is examining the effects of a possible 15-percent reduction in management headquarters and support personnel during FY 1998-2003; (11) a Defense Reform Task Force is assessing the missions, functions, and size of the Office of the Secretary of Defense and other headquarters; (12) determining whether and how much to reduce management headquarters is difficult because DOD has no generally accepted staffing standards; and (13) DOD officials have a range of views on whether and how to reduce management headquarters, some advocating reduction while others have no plans for reduction.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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