Defense Budget

Congress has raised concerns about the extent to which the military has moved funds that directly affect readiness, such as those that finance training, to pay for real property maintenance and base operations. GAO found that from fiscal years 1994 through 1999, the military reported obligations that were $7.1 billion (eight percent) more for real property maintenance and base operations than the $88.6 billion initially designated by Congress. Nearly three-fourths of the $2.7 billion increase from fiscal year 1996 to 1999 went for base operations, with the rest going to real property maintenance. For fiscal years 1994 through 1999, the services' movement of funds in and out of unit training varied. The Army and the Air Force have moved unit training funds to base operations and real property maintenance. GAO summarized this report in testimony before Congress; see: Defense Budget: Visibility and Accountability of O&M Fund Movements, by Norman J. Rabkin, Director of National Security Preparedness Issues, before the Subcommittee on Military Readiness, House Committee on Armed Services. GAO/T-NSIAD-00-98, Feb. 29 (12 pages).

GAO noted that: (1) from fiscal year (FY) 1994 through 1999, the military services reported obligations that were $7.1 billion (8 percent) more for real property maintenance and base operations than the $88.6 billion initial congressional designations; (2) almost three-fourths of the total $2.7 billion increase from FY 1996 through 1999 was for base operations, with the remainder going for real property maintenance; (3) most of the increases went to base operations and real property maintenance subactivities that finance functions that the services considered most directly related to readiness, such as the cost of utilities and the maintenance of runways; (4) for FY 1994 through FY 1999, the services' movement of funds into and out of unit training varied; (5) in each fiscal year from 1997 through 1999 (the only years for which detailed Army data is available) the Army reported obligations that were $1.1 billion, or about 12 percent, less than congressionally designated; (6) the Air Force moved more than $400 million from unit training for fiscal years 1994 and 1995 and increased funding for unit training by $2.6 billion in fiscal years 1996 through 1999; (7) the Navy and the Marine Corps consistently moved funds into unit training, increasing them by a total of $2.1 billion, or 8 percent of their combined initial congressional designation; (8) the Army and the Air Force have moved unit training funds to base operations and real property maintenance; (9) although data on the movement of O&M funds between subactivities is limited, DOD's high-priority readiness-related transfer reports show that in fiscal years 1997 and 1998, the Army moved $641 million from unit training to real property maintenance and base operations and attribute the movement of those funds to efficiencies in training; and (10) the FY 1998 report states that the Air Force moved $35 million from training to base operations and notes that commanders increased real property maintenance funding by about $155 million, but did not cite the source of those funds.