Global War On Terrorism
Fiscal Year 2006 Obligation Rates Are Within Funding Levels and Significant Multiyear Procurement Funds Will Likely Remain Available for Use in Fiscal Year 2007 Gao ID: GAO-07-76 November 13, 2006Because of broad congressional interest, GAO is examining the costs of military operations in support of the Global War on Terrorism (GWOT) under the Comptroller General's authority to conduct evaluations on his own initiative. In September 2005, GAO reported the Department of Defense (DOD) cannot ensure reported GWOT obligations are complete, reliable, and accurate, and recommended improvements. In this report, GAO (1) compared supplemental and annual appropriations identified for GWOT in fiscal year 2006 to the military services' reported obligations as of June 2006 and their cost projections for the remainder of the fiscal year, and (2) examined DOD's efforts to improve the reliability of GWOT obligation data. For this engagement, GAO analyzed fiscal year 2006 GWOT related appropriations and reported obligations, and DOD's corrective actions.
As of June 2006, which represents 9 months (75 percent) of fiscal year 2006, the military services have reported obligating about $51.6 billion (55 percent) of the $93.3 billion they received for GWOT in supplemental and annual appropriations for military personnel, operation and maintenance, and procurement. Our analysis of reported obligations and the military services' forecasts of their likely costs for fiscal year 2006 suggest that the rates of obligation for military personnel and operation and maintenance are within fiscal year 2006 GWOT funding levels and significant amounts of multiyear procurement funds will likely remain available for use in fiscal year 2007. The rates of obligation for military personnel are within funding levels for all military services except the Army, which plans to transfer about $591 million in funds from other appropriations accounts to cover its military personnel obligations. The rates of obligation for operation and maintenance are within funding levels for all military services. As of June, the military services reported obligating about 85 percent of military personnel funds and 60 percent of operation and maintenance funds. For various reasons, most notably being that supplemental funds were not appropriated until June 2006, the military services do not expect to obligate a large portion of procurement funds, which generally are available for multiple years, and therefore these funds will remain available in fiscal year 2007. The military services received about 32 percent ($6.8 billion) of procurement funding in annual appropriations and 68 percent ($14.7 billion) in the supplemental appropriation. As of June, the military services reported obligating about 68 percent of the procurement funds received in the annual appropriation. DOD and the military services have taken specific steps intended to improve the accuracy and reliability of their reported GWOT obligation data. Some problems remain with transparency over certain costs and inaccuracies in reported obligations. In response to GAO's prior recommendations, DOD now requires components to perform a monthly variance analysis to identify and explain significant changes in obligations and to attest to the accuracy of monthly obligation reports, and affirm it provides a fair representation of ongoing activities. Because these efforts are in the early stages of implementation, GAO has not fully evaluated their impact. Existing cost reporting procedures limit transparency of certain obligations because DOD continues to report large amounts in miscellaneous "other" categories. Also, DOD's cost reports for fiscal year 2005 understated total GWOT obligations for that year because they did not initially include about $1.1 billion in obligations tied to the training and equipping of Afghan and Iraqi security forces. Without transparent and accurate cost reporting, Congress and DOD will continue to be unable to reliably know how much the war is costing, examine details on how appropriated funds are being spent, or have historical data useful in considering future funding needs. On the basis of GAO's work, DOD updated its guidance on the reporting of obligations in miscellaneous "other" categories and revised its September 2005 cost-of-war report to more fully reflect past obligations.
RecommendationsOur 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.
Director: Team: Phone:GAO-07-76, Global War On Terrorism: Fiscal Year 2006 Obligation Rates Are Within Funding Levels and Significant Multiyear Procurement Funds Will Likely Remain Available for Use in Fiscal Year 2007
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Will Likely Remain Available for Use in Fiscal Year 2007' which was
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
November 2006:
Global War On Terrorism:
Fiscal Year 2006 Obligation Rates Are Within Funding Levels and
Significant Multiyear Procurement Funds Will Likely Remain Available
for Use in Fiscal Year 2007:
Global War on Terrorism:
GAO-07-76:
GAO Highlights:
Highlights of GAO-07-76, a report to congressional committees
Why GAO Did This Study:
Because of broad congressional interest, GAO is examining the costs of
military operations in support of the Global War on Terrorism (GWOT)
under the Comptroller General‘s authority to conduct evaluations on his
own initiative. In September 2005, GAO reported the Department of
Defense (DOD) cannot ensure reported GWOT obligations are complete,
reliable, and accurate, and recommended improvements. In this report,
GAO (1) compared supplemental and annual appropriations identified for
GWOT in fiscal year 2006 to the military services‘ reported obligations
as of June 2006 and their cost projections for the remainder of the
fiscal year, and (2) examined DOD‘s efforts to improve the reliability
of GWOT obligation data.
For this engagement, GAO analyzed fiscal year 2006 GWOT related
appropriations and reported obligations, and DOD‘s corrective actions.
What GAO Found:
As of June 2006, which represents 9 months (75 percent) of fiscal year
2006, the military services have reported obligating about $51.6
billion (55 percent) of the $93.3 billion they received for GWOT in
supplemental and annual appropriations for military personnel,
operation and maintenance, and procurement. Our analysis of reported
obligations and the military services‘ forecasts of their likely costs
for fiscal year 2006 suggest that the rates of obligation for military
personnel and operation and maintenance are within fiscal year 2006
GWOT funding levels and significant amounts of multiyear procurement
funds will likely remain available for use in fiscal year 2007. The
rates of obligation for military personnel are within funding levels
for all military services except the Army, which plans to transfer
about $591 million in funds from other appropriations accounts to cover
its military personnel obligations. The rates of obligation for
operation and maintenance are within funding levels for all military
services. As of June, the military services reported obligating about
85 percent of military personnel funds and 60 percent of operation and
maintenance funds. For various reasons, most notably being that
supplemental funds were not appropriated until June 2006, the military
services do not expect to obligate a large portion of procurement
funds, which generally are available for multiple years, and therefore
these funds will remain available in fiscal year 2007. The military
services received about 32 percent ($6.8 billion) of procurement
funding in annual appropriations and 68 percent ($14.7 billion) in the
supplemental appropriation. As of June, the military services reported
obligating about 68 percent of the procurement funds received in the
annual appropriation.
DOD and the military services have taken specific steps intended to
improve the accuracy and reliability of their reported GWOT obligation
data. Some problems remain with transparency over certain costs and
inaccuracies in reported obligations. In response to GAO‘s prior
recommendations, DOD now requires components to perform a monthly
variance analysis to identify and explain significant changes in
obligations and to attest to the accuracy of monthly obligation
reports, and affirm it provides a fair representation of ongoing
activities. Because these efforts are in the early stages of
implementation, GAO has not fully evaluated their impact. Existing cost
reporting procedures limit transparency of certain obligations because
DOD continues to report large amounts in miscellaneous ’other“
categories. Also, DOD‘s cost reports for fiscal year 2005 understated
total GWOT obligations for that year because they did not initially
include about $1.1 billion in obligations tied to the training and
equipping of Afghan and Iraqi security forces. Without transparent and
accurate cost reporting, Congress and DOD will continue to be unable to
reliably know how much the war is costing, examine details on how
appropriated funds are being spent, or have historical data useful in
considering future funding needs. On the basis of GAO‘s work, DOD
updated its guidance on the reporting of obligations in miscellaneous
’other“ categories and revised its September 2005 cost-of-war report to
more fully reflect past obligations.
What GAO Recommends:
Because significant multiyear procurement funds from fiscal year 2006
will likely remain available, GAO suggests Congress require DOD provide
year-end data on fund availability and plans for additional funds
received or requested. DOD disagreed, noting, among other things, it
had already justified its needs. To ensure appropriate transparency,
GAO continues to believe Congress needs updated data on DOD‘s plans.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-76].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Sharon Pickup at (202)
512-9619 or pickups@gao.gov.
[End of Section]
Contents:
Letter:
Results in Brief:
Background:
Fiscal Year 2006 Rates of Obligations Are Within Funding Levels and
Significant Multiyear Procurement Funds Will Likely Remain Available
for Use in Fiscal Year 2007:
DOD and the Military Services Have Taken Specific Steps Intended to
Improve GWOT Cost Reporting Procedures and Data Reliability; Some
Problems Remain:
Conclusions:
Matter for Congressional Consideration:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: DOD's Process for Reporting GWOT Obligations:
Appendix III: Comments from the Department of Defense:
Appendix IV: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Fiscal Year 2006 Appropriations Identified for GWOT for the
Military Services:
Table 2: DOD's Six Largest Obligation Categories from Fiscal Year 2001
through Fiscal Year 2006 (June):
Table 3: DOD Supplemental and Cost of War Execution Report for Fiscal
Year 2006:
Figures:
Figure 1: Military Services' Fiscal Year 2006 Reported GWOT Military
Personnel Obligations of Appropriations Identified for GWOT through
June 2006:
Figure 2: Military Services' Fiscal Year 2006 Reported GWOT Operation
and Maintenance Obligations of Appropriations Identified for GWOT
through June 2006:
Figure 3: Military Services' Fiscal Year 2006 Reported GWOT Procurement
Obligations of Appropriations Identified for GWOT through June 2006:
United States Government Accountability Office:
Washington, DC 20548:
November 13, 2006:
Congressional Committees:
Since the September 11, 2001, terrorist attacks, Congress has provided
the Department of Defense (DOD) with about $381 billion, as of June
2006, in supplemental and annual appropriations for military operations
both in the United States and overseas in support of the Global War on
Terrorism (GWOT).[Footnote 1] DOD received about $114.4 billion in
appropriations for GWOT in fiscal year 2006, $49 billion of which was
received in its annual appropriation and $65.4 billion of which came
through a supplemental appropriation. The portion of annual
appropriations for GWOT, also known as "Title IX" or "bridge"
funding,[Footnote 2] was provided to pay for ongoing military
operations during the first part of the fiscal year. In June 2006,
Congress passed a supplemental appropriation to provide funding for
GWOT operations through the remainder of the fiscal year. Of the $114.4
billion provided in fiscal year 2006, about $93.3 billion was
appropriated to the military services for military personnel, operation
and maintenance, and procurement. The remaining funds provided, about
$21.1 billion, were for defensewide agencies; research, development,
test, and evaluation; and military construction. In fiscal year 2006
through June, DOD reported total obligations of about $63 billion for
GWOT, including about $54 billion for Operation Iraqi Freedom (OIF) and
about $9 billion for Operation Enduring Freedom (OEF).
DOD compiles and reports obligations[Footnote 3] incurred to support
GWOT in a monthly Supplemental and Cost of War Execution Report. This
document is used by senior DOD leadership, along with other
information, in evaluating the costs of the war and formulating future
budget requests to fund GWOT. The document identifies the monthly and
cumulative reported incremental GWOT obligations. DOD reports these
obligations by appropriation, contingency operation,[Footnote 4] and
military service or defense agency. According to Volume 12, Chapter 23
of the DOD Financial Management Regulation, the monthly cost reports
are typically compiled in the 45 days after the end of the reporting
month in which the obligations are incurred.[Footnote 5] DOD has
prepared monthly reports on the obligations incurred for its
involvement in GWOT since fiscal year 2001.
We have conducted a series of reviews under the Comptroller General's
authority examining the reported obligations and funding for military
operations in support of GWOT. In July 2004, we issued a report stating
that large amounts of DOD's obligations were being reported in
miscellaneous "other" categories, which provided little insight into
how those funds had been spent.[Footnote 6] In September 2005, we
issued a report identifying numerous reliability issues with DOD's
reported GWOT obligation data, which make it difficult for DOD and
Congress to know reliably how much the war is costing, examine details
on how appropriated funding is being spent, or have historical data
useful in considering future funding needs.[Footnote 7] Over the years,
we have made a series of recommendations to the Secretary of Defense
intended to improve the transparency and reliability of DOD's GWOT
obligation data, including recommendations that DOD (1) revise the cost
reporting guidance so that large amounts of reported obligations are
not shown in "miscellaneous" categories, and (2) take steps to ensure
that reported GWOT obligations are reliable. In response, the
Department has implemented many of our previous recommendations.
To assist Congress in its oversight role and to help it consider future
GWOT funding needs, we prepared this report under the Comptroller
General's authority to conduct evaluations on his own initiative. In it
we assess the outlook of fiscal year 2006 reported GWOT obligations and
funding based on data through June 2006, and determine DOD's progress
in addressing problems we identified regarding the reliability of DOD's
reported GWOT obligation data. We (1) compared supplemental and annual
appropriations identified for GWOT in fiscal year 2006 to the military
services' reported obligations as of June 2006 and their cost
projections for the remainder of the fiscal year, and (2) examined the
extent to which DOD has taken steps to improve its cost reporting
procedures and the reliability of its reported GWOT obligation data.
To compare the military services' reported obligations against
available funding appropriated for GWOT in fiscal year 2006, we
analyzed copies of DOD's monthly Supplemental and Cost of War Execution
Report for October 2005 through June 2006 and reviewed applicable
supplemental and annual appropriations and DOD reports on the transfer
of funds between various appropriation accounts. We also interviewed
key officials from the Office of the Under Secretary of Defense
(Comptroller)[Footnote 8] and the Army, Navy, Marine Corps, and Air
Force to determine if their projected GWOT obligations are within
fiscal year 2006 funding levels. As previously reported, we found the
data in DOD's monthly Supplemental and Cost of War Execution Report to
be of questionable reliability. Consequently, we are unable to ensure
that DOD's reported obligations for GWOT are complete, reliable, and
accurate, and they should therefore be considered approximations. In
addition, as recently as November 2005, DOD acknowledged that systemic
weaknesses with its financial management systems and business
operations continue to impair its financial information. To examine the
steps DOD has taken to improve the reliability of its reported GWOT
obligations, we interviewed key officials from the DOD Comptroller and
the Army, Navy, Marine Corps, and Air Force to determine the extent to
which our previous recommendations have been implemented. We also
reviewed any new guidance issued by DOD regarding the analysis and
reporting of obligations for contingencies. In addition, we performed
limited testing of the reported GWOT obligations for military personnel
and discussed with DOD and military service financial managers their
specific processes and procedures used to ensure that reported GWOT
obligation data provided by the subordinate commands are accurate and
reliable.
We performed our work from January 2006 through September 2006 in
accordance with generally accepted government auditing standards.
Results in Brief:
As of June 2006, which represents 9 months (75 percent) of fiscal year
2006, the military services reported obligating about $51.6 billion (55
percent) of the $93.3 billion they received for GWOT in supplemental
and annual appropriations for military personnel, operation and
maintenance, and procurement. Our analysis of reported obligations and
the military services' forecasts of their likely costs for fiscal year
2006 suggest that the rates of obligation for military personnel and
operation and maintenance are within fiscal year 2006 GWOT funding
levels and significant amounts of multiyear procurement funds will
likely remain available for use in fiscal year 2007. As of June, the
military services reported obligating about 85 percent of military
personnel funds and 60 percent of operation and maintenance funds.
Fiscal year 2006 rates of obligation for military personnel for GWOT
are within GWOT funding levels for all military services except the
Army. According to military service officials, the Army experienced
higher than anticipated obligations for military personnel due
primarily to increased recruitment and retention incentives offered to
assist in manning the force during GWOT and increased death gratuity
benefits provided in the National Defense Authorization Act for fiscal
year 2006. The Army expects to be able to cover these obligations by
transferring about $591 million in funds from other appropriations
accounts into the military personnel account under authority granted by
Congress.[Footnote 9] In addition, the military services' rates of
obligation for operation and maintenance for GWOT are within fiscal
year 2006 GWOT funding levels for all military services. According to
military service officials, operation and maintenance obligations in
June 2006 were lower than anticipated due to reduced spending relating
to contracts and certain operations bills. For example, the Army
reduced spending on contracts for selected base closures and
restructuring in Iraq because of the security environment and
uncertainty regarding receipt of supplemental funding. Furthermore, for
fiscal year 2006, GWOT-related procurement funds are expected to remain
largely unobligated by the end of the fiscal year, and will remain
available in fiscal year 2007. Procurement funds appropriated in one
fiscal year may remain available in future fiscal years because they
are available for obligation over multiple years. For fiscal year 2006,
the military services received about 32 percent ($6.8 billion) of
procurement funding in Title IX as part of the annual appropriation and
68 percent ($14.7 billion) in the supplemental appropriation. As of
June, the military services have spent about 68 percent of the
procurement funds received through Title IX. Given the time required to
negotiate new procurement contracts, military service officials stated
that they were prevented from obligating much of their procurement
funds received in the supplemental appropriation prior to the end of
the fiscal year and therefore expect reported monthly procurement
obligations to be higher in the last month of fiscal year 2006 and in
early fiscal year 2007. However, given that at the time of this report
DOD had only reported obligations through June 2006, we were unable to
determine how much funding would remain at the end of the fiscal year.
Since it is likely that much of the procurement funding from fiscal
year 2006 will remain available in fiscal year 2007, knowledge of what
those available amounts are and how DOD plans to spend them would
assist congressional decision makers in determining DOD's future
funding needs.
DOD and the military services have taken specific steps intended to
improve the accuracy and reliability of their reported GWOT obligation
data. Some problems remain with transparency over certain costs and
inaccuracies in reported obligations. In response to our previous
recommendation to improve the accuracy and reliability of reported GWOT
obligation data, in August 2005 the DOD Comptroller issued
guidance[Footnote 10] to the secretaries of the military services and
the directors of the defense agencies to help DOD components[Footnote
11] more accurately and consistently report obligations for
contingencies such as GWOT. This guidance directed DOD components to
perform a monthly variance analysis to review and validate that their
reported obligations are accurate and provide a fair representation of
ongoing activities, and to include an explanation of variances that
exceed a certain threshold. The DOD Comptroller also issued guidance
directing submitting DOD components to attest to the accuracy of their
monthly obligation data contained in DOD's Supplemental and Cost of War
Execution Report and affirm that the report provides a fair
representation of ongoing activities. Because these efforts are in the
early stages of implementation, we have not fully evaluated their
impact. The Army also made improvements to the accuracy of its imminent
danger pay reporting shortly after the issuance of our September 2005
report and DOD's guidance regarding the analysis of contingency
operations costs. In addition to these efforts, further improvements
are needed in the cost reporting process. For example, existing cost
reporting procedures limit the visibility over or transparency of
certain obligations because DOD continues to report large amounts of
obligations in miscellaneous "other" categories. For example, in fiscal
year 2005, about $12.8 billion (or 26 percent of all obligations)
reported in the operation and maintenance account were in "other
supplies and equipment" and "other services and miscellaneous
contracts." This trend has continued in fiscal year 2006. Little has
been done DOD-wide to further refine reporting of these miscellaneous
obligations in DOD's cost-of-war reports, although the Army has taken
some steps at the headquarters level to reduce the amounts reported in
these "other" categories by revising its reporting methodology to
redirect some of the obligations into reporting categories that more
closely describe the obligations. Moreover, while the components have
taken steps to improve their reporting of GWOT obligations, as required
by DOD's financial management regulation, inaccuracies in DOD's
reported obligations continue to exist. For example, we found that
DOD's cost-of-war reports understated total GWOT obligations because
they did not include about $1.1 billion in obligations for fiscal year
2005 tied to the training and equipping of Afghan and Iraqi security
forces. According to DOD officials, because the funds for these
purposes became available later in the fiscal year, DOD did not have a
reporting format in the cost-of-war reports for these obligations and
planned to amend its September 2005 cost-of-war report at some point to
reflect them. Without transparent and accurate reporting of GWOT
obligations, the public, Congress, and DOD will continue to be unable
to reliably know how much the war is costing, examine details on how
appropriated funds are being spent, or have historical information
useful in determining future funding needs.
In a draft of this report, we made two recommendations to DOD to
improve the transparency and accuracy of its cost reporting. DOD agreed
with one recommendation to revise Volume 12, Chapter 23 of the DOD
Financial Management Regulation to provide additional subcategories for
"other supplies and equipment," "other services and miscellaneous
contracts," and "other military personnel" to provide further breakdown
of reported obligations in miscellaneous categories and, in fact, in
October 2006, issued a revision to Chapter 23 to provide such
breakdowns. We believe this meets the intent of our recommendation and
removed the recommendation from the final report. DOD disagreed with
the basis of a second recommendation to amend the September 2005
version of DOD's Supplemental and Cost of War Execution Report to
include the unreported Afghan and Iraqi security forces fund
obligations for fiscal year 2005. In its comments, DOD stated that this
information was provided to Congress in another report and therefore
did not agree with our observation that the costs were "understated".
DOD also stated it had revised its September 2005 cost-of-war report to
reflect these obligations. However, since DOD has already issued and
provided us with an amended September 2005 cost-of-war report including
the about $1.1 billion in fiscal year 2005 obligations, we believe this
fulfills the intent of our recommendation and removed the
recommendation from the final report. DOD's comments and our evaluation
of them can be found at the end of this report. DOD's comments are
reprinted in appendix III.
In addition, since it is likely significant multiyear procurement
funding from fiscal year 2006 will remain available in fiscal year
2007, we have included a matter for congressional consideration.
Congress should consider requiring DOD to provide information on how
much procurement funding remains available for obligation at the
conclusion of the fiscal year and how the department intends to
obligate this funding and any other procurement funding received or
requested for GWOT in fiscal year 2007 and beyond. DOD also did not
agree with our matter for congressional consideration, stating that it
has plans for reconstituting forces deployed in the war on terror and
that it is not reasonable to infer that these funds are available for
other purposes. We do not believe that our report implies that any
previously appropriated procurement funding is available for other
purposes. On the contrary, we stated that significant multiyear funds
will remain available at the end of fiscal year 2006 for procurement
purposes. Given that DOD received more procurement funding with the
enactment of the fiscal year 2007 defense appropriation and
authorization bills and is expected to request more in a fiscal year
2007 supplemental appropriation, we believe it is important that
Congress have a complete picture of all funding DOD has available for
procurement purposes when considering future appropriations requests
from DOD and have retained the matter.
Background:
After the terrorist attacks of September 11, 2001, the President
announced a Global War on Terrorism requiring the collective
instruments of the entire federal government to counter the threat of
terrorism. Military operations to combat terrorism began with Operation
Noble Eagle, which is aimed at defending the United States homeland
against terrorist attacks, and Operation Enduring Freedom (OEF), which
takes place principally in and around Afghanistan, but also covers
additional operations in the Horn of Africa, the Philippines, and
elsewhere.[Footnote 12] In 2003, the United States began Operation
Iraqi Freedom (OIF), which takes place principally in Iraq. These
operations involve a wide variety of activities such as combating
insurgents, training the military forces of other nations, and
conducting small-scale reconstruction and humanitarian relief projects.
DOD and the military services are responsible for carrying out these
operations.
To fund these operations in fiscal year 2006, Congress provided DOD
with funding for GWOT as part of its annual appropriations, known as
"Title IX" or "bridge" funding, and through supplemental
appropriations. This funding totaled about $114.4 billion, of which
about $93.3 billion went to the military services' three major
appropriations accounts: military personnel, operation and maintenance,
and procurement. The remaining funds provided, about $21.1 billion,
were for defensewide agencies; research, development, test and
evaluation; and military construction. As shown in table 1, the
military services received about $15.9 billion for military personnel,
about $55.9 billion for operation and maintenance, and about $21.5
billion for procurement.
Table 1: Fiscal Year 2006 Appropriations Identified for GWOT for the
Military Services:
Dollars in billions.
Military Personnel: Title IX;
Army: $ 5.1;
Navy: $ 0.1;
Marine Corps: $ 0.5;
Air Force: $ 0.5;
Totals: [Empty].
Military personnel: Supplemental;
Army: 6.8;
Navy: 0.9;
Marine Corps: 0.8;
Air Force: 1.2;
Totals: [Empty].
Military Personnel: Total;
Army: 11.9;
Navy: 1.0;
Marine Corps: 1.3;
Air Force: 1.7;
Totals: $ 15.9.
Operation and maintenance: Title IX;
Army: 21.6;
Navy: 1.8;
Marine Corps: 1.9;
Air Force: 2.5;
Totals: [Empty].
Operations and maintenance: Supplemental;
Army: 18.0;
Navy: 2.8;
Marine Corps: 1.7;
Air Force: 5.6;
Totals: [Empty].
Operations and maintenance: Total;
Army: 39.6;
Navy: 4.6;
Marine Corps: 3.6;
Air Force: 8.1;
Totals: 55.9.
Procurement: Title IX;
Army: 4.6;
Navy: 0.3;
Marine Corps: 1.7;
Air Force: 0.1;
Totals: [Empty].
Procurement: Supplemental;
Army: 9.0;
Navy: 1.0;
Marine Corps: 2.6;
Air Force: 2.2;
Totals: [Empty].
Procurement: Total;
Army: 13.6;
Navy: 1.3;
Marine Corps: 4.3;
Air Force: 2.3;
Totals: 21.5.
Grand total;
Army: [Empty];
Navy: [Empty];
Marine Corps: [Empty];
Air Force: [Empty];
Totals: 93.3.
Source: GAO analysis of Pub. L. No. 109-148 (2005) and Pub. L. No. 109-
234 (2006).
Note: Totals may not compare to those in the report due to rounding.
[End of table]
In addition to the funds appropriated to the military services, since
2003 Congress has also appropriated funds to the Iraqi Freedom Fund
(IFF), a special account providing funds available for 2 fiscal years
and that can be transferred to the military services' appropriations
accounts. DOD may transfer funds from the IFF to other accounts to
cover additional expenses for ongoing military operations in Iraq,
operations authorized by the Authorization for Use of Military
Force,[Footnote 13] and other operations and related activities in
support of GWOT. In fiscal year 2006 through June, DOD had transferred
about $3.7 billion of the funds originally appropriated to the IFF into
the military services' appropriations accounts, most of which were to
cover the expenses for classified programs and to defeat improvised
explosive devices.
For fiscal year 2006 through June, DOD has reported total obligations
of about $63 billion for GWOT, including about $54 billion for OIF and
about $9 billion for OEF. DOD began the fiscal year operating under a
continuing resolution[Footnote 14] and legislation providing the $49
billion bridge funding was not passed until December 2005, causing the
services to curtail spending early in the fiscal year. Additionally,
military service officials stated they had anticipated receiving
supplemental appropriations in May, but since this funding was not
appropriated until June, the military services took steps to reduce
costs until supplemental funds were received, including postponing
payment of bills and delaying certain maintenance activities. Appendix
II contains an explanation of DOD's process for reporting obligations.
Between September 2001 and June 2006, Congress provided DOD with about
$381 billion in supplemental and annual appropriations for military
operations in support of GWOT. DOD reported total obligations[Footnote
15] of about $287 billion for overseas GWOT-related activities from
September 2001 through June 2006, including about $227 billion for
operations in Iraq and about $60 billion for operations in Afghanistan,
the Horn of Africa, the Philippines, and elsewhere. In addition to
overseas obligations, DOD reported about $27.7 billion in obligations
related to defense of the U.S. homeland from 2001 through June 2006.
Fiscal Year 2006 Rates of Obligations Are Within Funding Levels and
Significant Multiyear Procurement Funds Will Likely Remain Available
for Use in Fiscal Year 2007:
Our analysis of reported obligations and the military services'
forecasts of their likely costs for fiscal year 2006 suggest that the
rates of obligation for military personnel and operation and
maintenance are within fiscal year 2006 GWOT funding levels and
significant amounts of multiyear procurement funds will likely remain
available for use in fiscal year 2007. As of June, the military
services reported obligating about 85 percent of military personnel
funds and 60 percent of operation and maintenance funds. Fiscal year
2006 rates of obligation for military personnel for GWOT are within
GWOT funding levels for all military services except the Army, due
primarily to increased recruitment and retention incentives offered by
the Army to assist in manning the force during GWOT and increased death
gratuity benefits provided in the National Defense Authorization Act
for fiscal year 2006. The military services' rates of obligation for
operation and maintenance for GWOT are within fiscal year 2006 GWOT
funding levels for all military services, although they curtailed
spending in multiple categories due to uncertainty relating to receipt
of supplemental funding. For fiscal year 2006, the GWOT procurement
funds appropriated to the military services are largely expected to
remain unobligated and will remain available in fiscal year 2007.
Procurement funds may remain available in future fiscal years because
they are available for obligation over multiple years.
Fiscal Year 2006 Rates of Obligation for Military Personnel for GWOT
Are Within GWOT Funding Levels for All Military Services Except the
Army:
Fiscal year 2006 rates of obligation for military personnel for GWOT
are within GWOT funding levels for all military services except the
Army. The Army experienced higher than anticipated obligations for
military personnel due primarily to increased recruitment and retention
incentives offered to assist in manning the force during GWOT and
increased death gratuity benefits provided in the National Defense
Authorization Act for fiscal year 2006. To avoid a problem in the last
quarter of the fiscal year, the Army included a transfer action in the
so-called fiscal year 2006 omnibus reprogramming request DOD submitted
to Congress. This action transfers about $591 million in funds from
various appropriation accounts to the Army's military personnel account
and fund the Army's remaining military personnel needs for fiscal year
2006. As figure 1 shows, after 9 months, or 75 percent of the fiscal
year, the Army reported obligations of 91 percent, the Navy 63 percent,
the Marine Corps 72 percent, and Air Force 68 percent of available GWOT
appropriations.
Figure 1: Military Services' Fiscal Year 2006 Reported GWOT Military
Personnel Obligations of Appropriations Identified for GWOT through
June 2006:
[See PDF for image]
Source: GAO analysis of DOD data.
Notes: June 2006 represents 75 percent of the fiscal year and is an
indication of where DOD would be if it had obligated its available
funding equally each month throughout the fiscal year. Reported
obligations include those from both the active and reserve components.
We have previously assessed the reliability of DOD's obligations data
and found that while the data we report reflect the data used by DOD to
advise Congress on the cost of the war, they may not accurately reflect
the true dollar value of GWOT obligations.
[End of figure]
Fiscal Year 2006 Rates of Obligation for Operation and Maintenance for
GWOT Are Within Fiscal Year 2006 GWOT Funding Levels for All Military
Services:
The military services' rates of obligation for operation and
maintenance for GWOT are within fiscal year 2006 GWOT funding levels
for all military services. As shown in figure 2, after 9 months, or 75
percent of the fiscal year, the Army reported obligations of 61
percent, the Navy 49 percent, the Marine Corps 58 percent, and the Air
Force 62 percent of available GWOT appropriations. The military
services' reported GWOT operation and maintenance obligations are less
than anticipated because they curtailed spending at the beginning of
the year due to uncertainty relating to the receipt of supplemental
funding. For example, sustainment contracts in Iraq, Afghanistan, and
Kuwait were scaled back due to the unpredictability of fiscal year 2006
funding. In addition, Army officials stated that contracts for selected
base closures and restructuring in Iraq have been scaled back due to
the security environment. As previously stated, the Navy is reporting
lower than anticipated obligations for operation and maintenance
because many Navy components took steps to reduce spending early in the
fiscal year. For example, Navy officials stated that they withheld
payment of certain operations bills, such as transportation, and
deferred obligations for depot maintenance to stay within available
funding as the military services awaited receipt of supplemental
funding.
Figure 2: Military Services' Fiscal Year 2006 Reported GWOT Operation
and Maintenance Obligations of Appropriations Identified for GWOT
through June 2006:
[See PDF for image]
Source: GAO analysis of DOD data.
Notes: June 2006 represents 75 percent of the fiscal year and is an
indication of where DOD would be if it had obligated its available
funding equally each month throughout the fiscal year. Reported
obligations include those from both the active and reserve components.
We have previously assessed the reliability of DOD's obligations data
and found that while the data we report reflect the data used by DOD to
advise Congress on the cost of the war, they may not accurately reflect
the true dollar value of GWOT obligations.
[End of figure]
GWOT Appropriations for Procurement in Fiscal Year 2006 Will Largely
Remain Unobligated and Remain Available for Future Fiscal Years:
For fiscal year 2006, the GWOT procurement funds appropriated to the
military services are largely expected to remain unobligated and will
remain available in future fiscal years. Procurement funds can remain
available for future fiscal years because they generally are available
for obligation over multiple years. For fiscal year 2006, the military
services received about 32 percent ($6.8 billion) of procurement
funding in Title IX as part of the annual appropriation and 68 percent
($14.7 billion) in the supplemental appropriation. As of June the
military services have spent about 68 percent of the procurement funds
received through Title IX.
We project that DOD's procurement obligations will remain low in fiscal
year 2006 for two reasons. First, the majority of the fiscal year 2006
procurement appropriations were provided in the GWOT supplemental
appropriation, which the military services did not receive until June
2006. Second, officials stated that supplemental funds had been
expected in May 2006 but were not received until June 2006 and the time
required to negotiate new procurement contracts may prevent the
military services from obligating much of their procurement funds prior
to the end of fiscal year 2006. As a result, significant procurement
funds will remain available in fiscal year 2007. Figure 3 shows, the
percentage of the total available GWOT procurement appropriations
obligated through June 2006. According to military service officials,
they expect higher procurement obligations late in fiscal year 2006 and
into early fiscal year 2007. At the time of this report, DOD had only
reported obligations through June 2006; therefore, we were unable to
determine how much funding would remain at the end of the fiscal year.
DOD received more procurement funding with the enactment of the fiscal
year 2007 defense appropriation bill. Since it is likely that much of
the procurement funding from fiscal year 2006 will remain available in
fiscal year 2007, knowledge of what those available amounts are and how
DOD plans to spend them would assist congressional decision makers in
determining DOD's future funding needs.
Figure 3: Military Services' Fiscal Year 2006 Reported GWOT Procurement
Obligations of Appropriations Identified for GWOT through June 2006:
[See PDF for image]
Source: GAO analysis of DOD data.
Notes: Reported obligations include those from both the active and
reserve components. We have previously assessed the reliability of
DOD's obligations data and found that while the data we report reflect
the data used by DOD to advise Congress on the cost of the war, they
may not accurately reflect the true dollar value of GWOT obligations.
[End of figure]
DOD and the Military Services Have Taken Specific Steps Intended to
Improve GWOT Cost Reporting Procedures and Data Reliability; Some
Problems Remain:
DOD and the military services have taken specific steps intended to
improve the accuracy and reliability of their reported GWOT obligation
data. Some problems remain with transparency over certain costs and
inaccuracies in reported obligations. The DOD Comptroller has
established new monthly variance reporting and affirmation
requirements, and the military services have improved the accuracy of
some of their reported obligations. In addition to these efforts,
further improvements are needed in the cost reporting process. For
example, existing cost reporting procedures do not provide transparency
and visibility over certain GWOT obligations because DOD and the
military services continue to report large obligations in miscellaneous
"other" categories that provide little insight on how those funds have
been spent. We also continue to find inaccuracies in the overall
reported GWOT obligations due to unreported obligations related to the
training and equipping of Afghan and Iraqi security forces. Until DOD
takes steps to address these problems, it will continue to be difficult
for Congress and DOD to reliably know how much the war is costing,
examine details on how appropriated funds are being spent, or have
historical information useful to determine future funding needs.
DOD and the Military Services Have Established New Monthly Variance
Reporting and Affirmation Requirements, and Have Improved the Accuracy
of Some Reported Obligation Data:
The DOD Comptroller has established new monthly variance reporting and
affirmation requirements intended to improve GWOT cost reporting
procedures, and the military services have improved the accuracy of
some reported obligations. Specifically, in response to our previous
recommendation to improve the accuracy and reliability of reported GWOT
obligation data, the DOD Comptroller, in August 2005, issued
guidance[Footnote 16] to the secretaries of the military services and
the directors of the defense agencies to help DOD components more
accurately and consistently report obligations for contingencies such
as GWOT. This guidance directed DOD components to perform a monthly
variance analysis to review and validate that their reported
obligations are accurate and provide a fair representation of ongoing
activities, and to include an explanation of variances that exceed a
certain threshold.[Footnote 17] Thresholds triggering the variance
analysis review differ by cost category.
DOD components were directed to use, to the fullest extent possible,
actual obligation data as captured in the official accounting systems.
When obligation data were not available in the accounting system, then
an auditable alternative methodology was to be established providing
explanation of all sources used to capture the data other than official
accounting systems. For example, when using alternate data sources,
DOD's variance analysis guidance requires each DOD component to provide
detail on the type or description of the cost, the cost category
impacted, an explanation of why data are not available from the
accounting system, a description of the criteria or methodology used to
calculate costs, and the mechanism used to track these costs. Each of
the military services directed its major and subordinate commands to
complete the monthly variance analysis, and submit the analysis to the
command level, where financial management officials are expected to
review obligations data for discrepancies. In early fiscal year 2006,
DOD set up a task force under the leadership of the DOD Comptroller to
develop and refine DOD's efforts to improve the reliability of its
reported obligations, including the variance analyses. This task force
includes representatives from each of the military services' financial
management and comptroller offices, as well as representatives from
Defense Finance and Accounting Service.
DOD began including the variance analyses with the November 2005 DOD
Supplemental and Cost of War Execution Report. In reviewing the
variance analysis submissions since then, we have noted improvements in
both the variance analysis submissions as well as the explanations
provided on the use of alternate data sources. Military service
officials stated that the variance analysis highlighted several
problems and allowed them to correct the mistakes before submitting
their reports to the DOD Comptroller for inclusion in the monthly DOD
Supplemental and Cost of War Execution Report. In June 2006, DOD issued
revised guidance[Footnote 18] for analyzing obligations for contingency
operations based on the experiences of the DOD components with the
variance analysis over the last several months.
Because efforts to implement the variance analysis are still in the
early stages, we have not fully evaluated the impact of this new
initiative on cost reporting. However, in reviewing the June 2006
variance submission, we identified two examples of where additional
explanation could be provided. For example, in reviewing the Air
Force's June 2006 variance report for military personnel obligations--
which includes imminent danger pay, hardship duty pay, and family
separation pay--we found that the Air Force had used an alternative
data source, but provided limited explanation as to the criteria and
methodology it used to track these obligations. Our past work has shown
significant problems with DOD's reported obligations data, in
particular its military personnel obligations, including imminent
danger pay. Upon discussion with Air Force officials, they recognized
that their explanation could be expanded to provide further
clarification. We also found problems with the explanations provided
for variances in the Marine Corps' June 2006 operation and maintenance
obligations for GWOT. For example, the Marine Corps reported that its
obligations for transportation in support of OEF had decreased by 81
percent, due to the refinement of transportation obligations in
previous months. However, no further explanation is provided as to what
types of refinements were made and how these refinements resulted in
reductions in obligations. Similarly, the Marine Corps Reserve reported
that its obligations for personnel support for OIF had changed by 900
percent due to a realignment of expenses. However, no explanation is
provided as to where the obligations were realigned and why the
realignment was made. Marine Corps officials subsequently stated that
the variance explanation for transportation was not fully addressed due
to an administrative oversight and the variance explanation for
personnel support was not provided because, in their view, the small
obligations reported, totaling $1000, which is associated with the
variance, did not warrant explanation. Because the variance analysis
process is relatively new, we are not making recommendations at this
time, but will continue to monitor this process in the future.
Furthermore, to help ensure that the obligations for contingency
operations being reported were as accurate as possible, DOD developed
an affirmation process. In March 2006, the DOD Comptroller issued
initial guidance[Footnote 19] directing submitting DOD components to
attest to the accuracy of their monthly obligation data contained in
DOD's Supplemental and Cost of War Execution Report and affirm that the
report provides a fair representation of ongoing activities. The
affirmation was to accompany the monthly GWOT cost report and would be
provided to the Defense Finance and Accounting Service by the
comptroller or financial manager of the associated DOD component.
However, shortly thereafter, the DOD Comptroller instructed the
military services to delay submission of their affirmation memos until
revised guidance could be issued. Revised guidance was issued in late
June 2006, to allow for further delegation of the affirmation
authority. All other requirements for the affirmation were unchanged.
Specifically, DOD's guidance now requires that each military service's
Assistant Secretary for Financial Management & Comptroller, the Deputy,
or the Director for Budget provide the affirmation. However, we note
that it does not contain criteria or factors that could be considered
during the review process. In discussions with military service
officials, some military services are relying on the judgment of their
major and subordinate commands that the costs are indeed accurate as a
basis for their affirmation, while others have instituted additional
management reviews of the reported costs. Because this affirmation
process is new, we are making no recommendations regarding the process
at this time, but will continue to monitor this process in the future.
Finally, we found that the Army made improvements to the accuracy of
its imminent danger pay reporting shortly after the issuance of our
September 2005 report and DOD's guidance regarding the analysis of
contingency operations costs. As part of our work last year, we
conducted limited testing of military personnel obligations data and
reported wide monthly swings in imminent danger pay with little
correlation to the numbers of deployed personnel.[Footnote 20] Reported
imminent danger pay obligations for GWOT should correlate to the
approximate number of deployed forces in eligible areas.[Footnote 21]
In our September 2005 report we noted a reporting discrepancy for DOD's
reported imminent danger pay in fiscal year 2004. The reported
obligations suggested that more than 1 million personnel were deployed
in support of OIF and OEF, while according to DOD only about 221,300
personnel from all the military services were deployed. DOD was able to
identify the accounting error and provide a revised obligations figure.
Our analysis of reported Army imminent danger pay for fiscal year 2006
through May 2006 shows that the accuracy of these data improved, with
reduced monthly swings and closer correlation to the actual number of
deployed personnel.
Cost Reporting Procedures Do Not Provide Visibility and Transparency
over Certain Obligations:
Existing cost reporting procedures do not provide visibility and
transparency over certain obligations because DOD continues to obligate
large amounts of funds in miscellaneous "other" categories that provide
little insight on how those funds have been spent. For example, in
fiscal year 2005, close to 26 percent of obligations reported in the
operation and maintenance account were in "other supplies and
equipment" and "other services and miscellaneous contracts."[Footnote
22] This trend has continued in fiscal year 2006. As shown in table 2,
from fiscal year 2001 through June of fiscal year 2006, DOD has
reported operation and maintenance obligations in the cost reports of
$26.5 billion for "other services and miscellaneous contracts" and
obligations of $23.9 billion for "other supplies and equipment." During
this time frame, DOD has reported military personnel obligations of
about $15.7 billion for "other military personnel."
Table 2: DOD's Six Largest Obligation Categories from Fiscal Year 2001
through Fiscal Year 2006 (June):
Dollars in thousands.
Category: Reserve components called to active duty;
FY 2005: $8,398,240;
FY 2006 as of June: $6,033,225;
Total FY 2001 to June 2006: $37,809,078.
Category: Operation OPTEMPO (fuel, petroleum, oils, lubricants, and
spare parts);
FY 2005: 8,344,809;
FY 2006 as of June: 7,964,114;
Total FY 2001 to June 2006: 34,024,022.
Category: Facilities/base support;
FY 2005: 9,118,936;
FY 2006 as of June: 5,982,880;
Total FY 2001 to June 2006: 28,885,801.
Category: Other services/miscellaneous contracts;
FY 2005: 6,609,012;
FY 2006 as of June: 2,979,547;
Total FY 2001 to June 2006: 26,584,689.
Category: Other supplies & equipment;
FY 2005: 6,250,765;
FY 2006 as of June: 3,901,483;
Total FY 2001 to June 2006: 23,982,627.
Category: Other military personnel;
FY 2005: 2,541,957;
FY 2006 as of June: 3,792,359;
Total FY 2001 to June 2006: 15,775,832.
Source: GAO's analysis of DOD's reported GWOT data.
Note: The reported obligations in this chart include obligations for
Operation Noble Eagle, Operation Enduring Freedom, and Operation Iraqi
Freedom.
[End of table]
We have previously stated our concerns that while the miscellaneous
"other" categories defined in DOD's Financial Management Regulation
provide a uniform framework for capturing obligations, they do not
provide the specificity or transparency needed for Congress and others
to understand clearly how funds appropriated for contingency operations
are being used, particularly since these categories involve billions of
dollars in reported obligations. We have reported for several years,
and as recently as July 2004, that large amounts of reported
obligations for GWOT are in miscellaneous "other" categories in both
the operation and maintenance and the military personnel
accounts.[Footnote 23] For example, in our report on fiscal year 2003
funding[Footnote 24] we pointed out that almost 35 percent of
obligations reported in the operation and maintenance account were in
"other supplies and equipment" and "other services and miscellaneous
contracts." We previously recommended that DOD revise its cost
reporting guidance so that the use of miscellaneous "other" categories
is minimized when reporting obligations.
In response to our recommendations, in January 2005, DOD expanded the
cost categories for contingency operations in the DOD Financial
Management Regulation to include an additional category for military
personnel obligations related to active component end strength. These
obligations had previously been recorded in the "other military
personnel" category. However, DOD did not refine reporting of the other
miscellaneous obligations in DOD's cost-of-war reports. On its own
initiative, the Army has taken some steps to provide better
transparency over the operation and maintenance obligations previously
reported in the "other services and miscellaneous contracts" category.
Specifically, it has revised its reporting methodology to redirect some
of its contracting obligations into other reporting categories more
directly tied to the contracted activity. For example, the Army is now
reporting obligations for information technology contracts tied to
DOD's Projects and Contracting Office[Footnote 25] under the command,
control, communications, computers, and intelligence cost category. It
has also begun reporting contract obligations associated with the
special technical inspection and repair process at the Army's Aviation
and Missile Command under the reporting category for intermediate level
maintenance. However, the Navy, Marine Corps, and Air Force have yet to
take similar steps. On the basis of our work, in October 2006 DOD
updated its guidance on the reporting of obligations in miscellaneous
"other" categories to more fully reflect these obligations.
Inaccuracies in Reported GWOT Obligations Continue to Exist:
We continue to find inaccuracies in the overall reported GWOT
obligations. For example, DOD had not reported certain obligations tied
to the training and equipping of Afghan and Iraqi security forces in
fiscal year 2005. Based on our work, DOD has since taken corrective
action. In September 2005, DOD issued an update to the DOD Financial
Management Regulation governing contingency operations, adding an
additional cost reporting category called "Other Support Costs," in the
DOD Supplemental and Cost of War Execution Report.[Footnote 26] This
"Other Support Costs" category includes obligations such as the
reimbursement of coalition countries for logistical and military
support, lift and sustainment for coalition partners during military
operations, training and equipping the Afghan National Army and the
Armed Forces of Iraq, and obligations tied to the Commander's Emergency
Response Program. [Footnote 27]
At the time of a draft of this report, DOD had not yet reported
obligations tied to the training and equipping of Afghan and Iraqi
security forces for fiscal year 2005. While DOD has begun reporting
obligations incurred for these activities in fiscal year 2006, the DOD
Comptroller's office had not amended its previously reported
obligations for fiscal year 2005 to include these obligations.
According to DOD officials, because the funds for these purposes became
available later in the fiscal year, DOD did not have a reporting format
in the cost-of-war reports for these obligations and planned to amend
its September 2005 cost-of-war report at some point to reflect them.
For example, DOD had not reported more than $1.1 billion in obligations
tied to these categories, the majority of which is for the Armed Forces
of Iraq. Excluding these obligations from the cost-of-war reports
understates DOD's total GWOT obligations for fiscal year 2005, and
limits Congress's visibility over DOD's total fiscal year 2006 GWOT
requirements. However, in October 2006, DOD did amend the September
2005 cost-of-war report to reflect the $1.1 billion in fiscal year 2005
obligations.
In reviewing the Army's fiscal year 2006 obligations to finance the
training and equipping of the Afghan National Army, we found that the
obligations reported by the Army in DOD's GWOT cost reports were being
understated between the October 2005 and March 2006 cost reports, when
compared to the Office of Management and Budget's (OMB) SF 133 Report
on Budget Execution and Budgetary Resources[Footnote 28] for the same
time period. In total, we found that the Army had understated
obligations by almost $371 million. In discussions with the DOD
Comptroller, we pointed out that the obligations data being reported to
OMB were different from the data being reported to DOD for its GWOT
cost-of-war report. According to DOD Comptroller officials, prior to
fiscal year 2005 appropriations for the training and equipping of the
Afghan National Army flowed to the Defense Security Cooperation Agency
for obligation through the Foreign Military Sales program. After the
Afghanistan Security Forces Fund was established in fiscal year 2005,
the Defense Security Cooperation Agency began transferring the funds
directly to the Foreign Military Sales program for use by the Army.
Additionally, the DOD Comptroller noted that upon transfer from the
Afghanistan Security Forces Fund, DOD and OMB consider these funds
fully obligated, since the funds will not be spent elsewhere. However,
the Defense Security Cooperation Agency and the Army were not reporting
the transferred amounts as obligations, but were instead reporting the
amount of funds disbursed through the Foreign Military Sales program.
The Army's lower obligation data were appearing in DOD's Supplemental
and Cost of War Execution Report from October 2005 through March 2006.
Once this matter came to light, DOD Comptroller officials took action
to reflect the accurate obligations against the Afghanistan Security
Forces Fund. The April 2006 report reflects the corrected cumulative
obligations through April 2006.
Conclusions:
While the military services expect increases in the amount of reported
obligations for procurement in the last month of fiscal year 2006, much
of this multiyear funding will remain available in fiscal year 2007.
Since it is likely that much of the procurement funding from fiscal
year 2006 will remain available in fiscal year 2007, knowledge of those
amounts and how DOD plans to spend them would ensure congressional
decision makers have additional information to use in determining DOD's
future funding needs. While DOD has taken steps to improve its cost
reporting procedures and the reliability of its reported GWOT
obligation data, lack of transparency and inaccuracies in reported GWOT
obligations continue to exist. The large obligations in miscellaneous
categories do not provide decision makers with transparency over how
those funds have been spent, while underreported obligations understate
DOD's total GWOT obligations. Until DOD and the military services
revise their cost reporting procedures to address these problems, it
will continue to be difficult for the public, Congress, and DOD to
reliably know how much the war is costing, examine details on how
appropriated funds are being spent, or have historical information
useful in determining future funding needs.
Matter for Congressional Consideration:
When conducting its deliberations over DOD's funding needs, Congress
should consider requiring DOD to provide fiscal year-end information on
how much procurement funding remains available for obligation at the
conclusion of fiscal year 2006. Congress should also require DOD to
provide a plan detailing how the department intends to obligate this
funding and any other procurement funding received or requested for
GWOT for fiscal year 2007 and beyond.
Agency Comments and Our Evaluation:
In written comments on a draft of this report, DOD agreed with one
recommendation made in the draft report and disagreed with the second.
DOD also provided technical comments and we have incorporated them in
the report as appropriate.
DOD agreed with our recommendation that Volume 12, Chapter 23 of the
DOD Financial Management Regulation be revised to provide additional
subcategories for "other supplies and equipment," "other services and
miscellaneous contracts," and "other military personnel" to provide
further breakdown of reported obligations in miscellaneous categories.
DOD further stated that it has updated the DOD Financial Management
Regulation to expand the cost categories of the data reported in its
monthly Supplemental and Cost of War Execution Reports. This guidance,
issued in October 2006, adds elements that expand these "other" cost
categories into more descriptive subcategories that provide additional
details on DOD's reported obligations for pay and allowances, permanent
changes of station, temporary storage, supplies and equipment and
contract services. We believe this meets the intent of our
recommendation and removed the recommendation from the final report.
DOD did not agree with the basis of our recommendation that it amend
the September 2005 version of DOD's Supplemental and Cost of War
Execution Report to include about $1.1 billion in unreported fiscal
year 2005 obligations tied to the training and equipping of Afghan and
Iraqi security forces. In its comments, DOD stated that this
information was provided to Congress in an October 2005 report pursuant
to Section 9010 of the Department of Defense Appropriations Act,
2005[Footnote 29] and therefore did not agree with our observation that
the fiscal year 2005 costs of the war were "understated" by $1.1
billion. However, DOD stated it did amend the September 2005 cost-of-
war report to include the $1.1 billion in fiscal year 2005 obligations,
as we recommended, and noted this in their comments. We recognize that
DOD did report some of these obligations to Congress in this October
2005 report entitled Report on the Military Operations of the Armed
Forces and the Reconstruction Activities of the Department of Defense
in Iraq and Afghanistan. However, in reviewing the obligation figures
included in this report, we note these figures do not match those
reported in DOD's amended September 2005 cost-of-war report and the
Office of Management and Budget's (OMB) SF 133 Report on Budget
Execution and Budgetary Resources for fiscal year 2005. According to a
DOD official, the figures in DOD's October 2005 report were preliminary
and did not reflect all technical adjustments. Furthermore, this
official stated that reports pursuant to Section 9010 no longer include
obligations against the Afghan and Iraqi security forces funds because
these obligation figures are being reported in DOD's monthly
Supplemental and Cost of War Execution Reports. As we discuss in this
report, DOD's monthly Supplemental and Cost of War Execution Report is
used by senior DOD leadership, along with other information, in
evaluating costs of the war and formulating future budget requests to
fund GWOT. Since this document does provide historical data with which
to evaluate the costs of the war and advise Congress, we believe it is
important that DOD include all GWOT related obligations in these
reports. Since DOD has already issued and provided us with an amended
September 2005 cost-of-war report including the about $1.1 billion in
fiscal year 2005 obligations, we believe this fulfills the intent of
our recommendation and removed the recommendation from the final
report.
With respect to our suggestion that Congress consider requiring DOD to
provide fiscal year-end information on how much procurement funding
remains available for obligation at the conclusion of fiscal year 2006
and require DOD to provide a plan detailing how the department intends
to obligate this funding and any other procurement funding received or
requested for GWOT in fiscal year 2007 and beyond, DOD commented that
it has plans for reconstituting forces deployed in the war on terror
and that it is not reasonable to infer that these funds are available
for other purposes. DOD further stated that it had justified the
procurement requirements to Congress and already provides reports that
clearly state the status of obligations for all GWOT funds. We do not
believe that our report implies that any previously appropriated
procurement funding is available for other purposes. On the contrary,
we stated that significant multiyear funds will remain available at the
end of fiscal year 2006 for procurement purposes. Given that DOD
received more procurement funding with the enactment of the fiscal year
2007 defense appropriation bill and is expected to request more in a
fiscal year 2007 supplemental appropriation, we believe it is important
that Congress have a complete and up-to-date picture of all funding DOD
has available for procurement purposes when considering future
appropriations requests from DOD.
We are sending copies of this report to other interested congressional
committees; the Secretary of Defense; the Under Secretary of Defense
(Comptroller); and the Director, Office of Management and Budget.
Copies of this report will also be made available to others upon
request. In addition, this report will be available at no charge on the
GAO Web site at [Hyperlink, http://www.gao.gov].
If you have any questions regarding this report, please contact me at
(202) 512-9619 or pickups@gao.gov. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last
page of this report. GAO staff who made major contributions to this
report are listed in appendix IV.
Signed by:
Sharon L. Pickup:
Director, Defense Capabilities and Management:
List of Congressional Committees:
The Honorable John Warner:
Chairman:
The Honorable Carl Levin:
Ranking Minority Member:
Committee on Armed Services:
United States Senate:
The Honorable Judd Gregg:
Chairman:
The Honorable Kent Conrad:
Ranking Minority Member:
Committee on the Budget:
United States Senate:
The Honorable Ted Stevens:
Chairman:
The Honorable Daniel K. Inouye:
Ranking Minority Member:
Subcommittee on Defense:
Committee on Appropriations:
United States Senate:
The Honorable Duncan L. Hunter:
Chairman:
The Honorable Ike Skelton:
Ranking Minority Member:
Committee on Armed Services:
House of Representatives:
The Honorable Jim Nussle:
Chairman:
The Honorable John M. Spratt, Jr.
Ranking Minority Member:
Committee on the Budget:
House of Representatives:
The Honorable C.W. Bill Young:
Chairman:
The Honorable John P. Murtha:
Ranking Minority Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives:
[End of section]
Appendix I: Scope and Methodology:
To compare the military services' reported obligations against
available funding appropriated for Global War on Terrorism (GWOT) in
fiscal year 2006, we analyzed applicable annual and supplemental
appropriations provided to the military services and Department of
Defense (DOD) reports on GWOT obligations. To identify funding for the
GWOT, we reviewed applicable annual and supplemental DOD appropriations
in fiscal year 2006. We also reviewed DOD reports on the transfer or
reprogramming of funds among various appropriation accounts or budget
activities to support GWOT. To examine DOD's reported obligations, we
obtained and analyzed copies of the October 2005 through June 2006
monthly DOD Supplemental and Cost of War Execution Report from the
Office of the Under Secretary of Defense (Comptroller) to identify
reported obligations by operation and by appropriation account for the
military services. We focused our review on the reported obligation of
GWOT funds appropriated for military personnel, operation and
maintenance, and procurement for the Army, Air Force, Navy, and Marine
Corps, for both active and reserve forces, because they represented
more than 80 percent of the funds obligated in fiscal year 2006. We
excluded classified programs from our review because obligations for
those programs are not reported in DOD's monthly Supplemental and Cost
of War Execution Report. In addition, for fiscal year 2006, we reviewed
the latest available obligation data and held discussions with the
military services on the results of their midyear budget reviews. We
compared the military services' reported obligations through June 2006,
the latest available reported obligation data at the time of our
review, to the supplemental appropriations provided to calculate the
proportion of funds obligated through June. We then compared those
proportions to the proportion of the fiscal year that has elapsed
through June--which represents 75 percent of the fiscal year--to assess
whether based on obligations through June funding is likely to be
greater than, less than, or equal to obligations. We also interviewed
key officials from the Office of the Under Secretary of Defense
(Comptroller) and the Army, Navy, Marine Corps, and Air Force to
determine if their projected GWOT obligations are within fiscal year
2006 funding levels. We recognize that funds are not obligated equally
each month throughout the fiscal year and that the supplemental
appropriation funding was not received by the military services until
June.
GWOT obligations provided in this report are DOD's claimed obligations
as reported in DOD's monthly Supplemental and Cost of War Execution
Report. As previously reported, we found the data in DOD's monthly
Supplemental and Cost of War Execution Reports to be of questionable
reliability. Consequently, we are unable to ensure that DOD's reported
obligations for GWOT are complete, reliable, and accurate, and they
should therefore be considered approximations. In addition, as recently
as November 2005, DOD acknowledged that systemic weaknesses with its
financial management systems and business operations continue to impair
its financial information. Despite the uncertainty about obligation
data, we are reporting the information because it is the only way to
approach an estimate of the costs of the war. Also, despite the
uncertainty surrounding the true dollar figure for obligations, these
data are used to advise Congress on the cost of the war.
To examine the steps DOD has taken to improve the reliability of its
reported GWOT obligations, we reviewed DOD Financial Management
Regulation Volume 12, Chapter 23, which establishes DOD's policies and
procedures for developing contingency budget estimates and cost
reporting. We analyzed DOD's emergency supplemental budget requests for
fiscal year 2006, and military service contingency operation financial
management policies and procedures. We analyzed the fiscal year 2006
GWOT cost reports and held discussions with the DOD Comptroller and
military service financial management officials regarding the processes
used to ensure that GWOT obligation data provided were accurate and
reliable. We conducted limited testing of the Army's reported military
personnel obligations, specifically imminent danger pay, and discussed
our work with officials from the Army Budget Office and DOD
Comptroller. We also obtained and reviewed information on DOD's budget
estimates, supplemental requests, budget reprogramming and transfer
documents, and other supporting documentation. Lastly, we reviewed
previous GAO reports and testimonies and reports from other agencies
regarding guidance and oversight of contingency operations costs in
DOD's accounting systems. As of September 2006, we determined that
problems with the completeness and accuracy of DOD's reported
obligations continue and we discuss these problems throughout the
report.
We interviewed DOD representatives regarding GWOT obligations and
funding for fiscal year 2006 and the reliability of cost reporting in
the following locations:
* Office of the Under Secretary of Defense (Comptroller), Washington,
D.C.
* U.S. Pacific Command, Camp H.M. Smith, Hawaii:
* Defense Finance and Accounting Service Center, Denver, Colorado:
* Headquarters, Department of the Army, Washington, D.C.
* U.S. Army Installation Management Agency, Washington, D.C.
* U.S. Army Installation Management Agency, Southeast Region, Fort
McPherson, Georgia:
* U.S. Army Installation Management Agency, Pacific Region, Fort
Shafter, Hawaii:
* Headquarters, U.S. Army Forces Command and Headquarters, Third Army
(Army Central Command), Fort McPherson, Georgia:
* Headquarters, U.S. Army Pacific, Fort Shafter, Hawaii:
* Army Materiel Command, Fort Belvoir, Virginia:
* Headquarters, 25th Infantry Division, Schofield Barracks, Hawaii:
* U.S. Army Garrison, Schofield Barracks, Hawaii:
* Headquarters, U.S. Marine Corps, Washington, D.C.
* U.S. Marine Corps Forces Pacific, Camp H.M. Smith, Hawaii:
* Marine Corps Central Command, MacDill AFB, Florida:
* Department of the Navy, Headquarters, Washington, D.C.
* Commander, U.S. Pacific Fleet, Pearl Harbor, Hawaii.
* Military Sealift Command, Washington, D.C.
* Department of the Air Force, Headquarters, Washington, D.C.
* U.S. Air Forces Pacific, Hickam Air Force Base, Hawaii:
* Air Force Air Combat Command, Langley Air Force Base, Virginia:
* Air Force Air Mobility Command, Scott Air Force Base, Illinois:
* U.S. Central Command Air Forces, Shaw Air Force Base, South Carolina:
We performed our work from January 2006 through September 2006 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: DOD's Process for Reporting GWOT Obligations:
Obligations are the foundation of all Global War on Terrorism (GWOT)
cost reporting. The obligations incurred for military contingency
operations are referred to as "incremental," which are costs that are
directly attributable to the operation that would not have been
incurred if it were not for the operation.[Footnote 30] The reported
incremental obligations incurred for these military or contingency
operations include the pay of mobilized reservists as well as the
special pays and allowances for deployed personnel, such as imminent
danger pay and foreign duty pay for those personnel serving in
Operation Iraqi Freedom (OIF) and Operation Enduring Freedom (OEF); the
cost of transporting personnel and materiel to the theater of operation
and supporting them upon arrival; and the operational cost of equipment
such as vehicles and aircraft, among many other obligations.[Footnote
31] Obligations that are incurred regardless of whether there is a
contingency operation, such as the base pay of active duty military
personnel, are not considered incremental.
When obligations are incurred, the military services enter them into
their individual accounting systems. An obligation entry includes
information on the funding source; the operational mission, such as
OIF; and the category of cost, as determined by the individual military
service. The Department of Defense's (DOD) financial management
regulation direct the military services to capture contingency costs,
which include GWOT obligations, within their existing accounting
systems and at the lowest possible level of organization.
To improve the consistency of contingency-cost reporting between the
multiple military services and agencies, on October 1, 1998, DOD
implemented a standard contingency cost-breakdown structure. This cost-
breakdown structure was to facilitate future efforts to understand and
interpret differences between estimated and actual obligations.
Examples of cost categories include imminent danger or hostile fire
pay, facilities/base support, airlift, vehicle procurement, and major
military construction. Of the common cost categories and multiple
subcategories listed in DOD financial management regulation, 55 cost
categories are used to report DOD's monthly GWOT obligations.
For GWOT cost reporting, individual obligation data that are coded as
being in support of GWOT are recorded and sent through the military
services' chain of command where they are aggregated at successively
higher command levels. Each military service and defense agency
compiles its reported obligations in the standard contingency cost
breakdown structure, and sends them to the Defense Finance and
Accounting Service (DFAS). DFAS aggregates the individual submissions
into the monthly Supplemental and Cost of War Execution Report. DFAS
publishes 10 versions of this report on a monthly basis, each of which
specifies GWOT obligations by operation, appropriation, and appropriate
DOD component.[Footnote 32] The monthly GWOT cost reports are then
submitted to the DOD Comptroller for review and further
dissemination.[Footnote 33] The versions of the report published for
fiscal year 2006 are listed in table 3.
Table 3: DOD Supplemental and Cost of War Execution Report for Fiscal
Year 2006:
Fiscal years:
2006 Summary:
2006 Appropriations.
2005 Title IX Appropriation (Second Year Execution).
2005 Iraq Security Forces Fund (Second Year Execution).
2005 Coalition Support Fund (Second Year Execution).
2005 Afghanistan Security Forces Fund (Second Year Execution).
2005 Appropriations (Second Year Execution).
2004 Title IX Appropriation (Third Year Execution).
2004 Appropriations (Third Year Execution).
2003 Appropriations (Fourth Year Execution).
Source: Defense Finance and Accounting Service.
[End of table]
[End of section]
Appendix III: Comments from the Department of Defense:
Under Secretary Of Defense:
1100 Defense Pentagon:
Washington, DC 20301- 1100:
Comptroller:
The Honorable David M. Walker:
Comptroller General:
U.S. Government Accountability Office:
Washington, DC 20548:
Dear Mr. Walker:
This is the Department of Defense (DoD) response to the Government
Accountability Office (GAO) Draft Report GAO-07-76, titled "Global War
On Terrorism: Fiscal Year 2006 Obligation Rates Are Within Funding
Levels And Significant Multi-Year Procurement Funds Will Likely Remain
Available For Use In Fiscal Year 2007."
The Department of Defense does not concur with one of the
recommendations for executive action and has taken appropriate action
to address the second. Enclosed are specific comments on each issue.
The Department did not "understate" the fiscal year (FY) 2005 cost of
the war by $1.1 billion because these costs have been reported to
Congress. The Department included this funding in its October 2005
report to Congress to comply with Section 9010 of Public Law 10-287,
the Department of Defense Appropriations Act, 2005. We also have
provided an amended September FY 2005 Cost of War report including the
$1.1 billion. The second item, providing additional detail for other
costs, has also been addressed. We have updated the Department of
Defense Financial Management Regulation to expand the cost categories
of the data reported in the Cost of War reports.
We also do not agree with the recommended matter for congressional
action regarding procurement. The Department of Defense has plans for
reconstituting forces deployed in the war on terror over the next
several years. The majority of the FY 2006 Supplemental funds were
appropriated in June 2006. These funds are designed to spend out over a
maximum of 3 years in accordance with a reasonable plan for
reconstituting forces. It is not reasonable to infer that these funds
are available for other purposes.
Thank you for the opportunity to provide the Department's response to
GAO's recommendations.
Signed by:
Tina W. Jonas:
Enclosure:
As stated:
Department of Defense Comments GAO-07-76:
Subject: GAO Draft Report, titled "Global War On Terrorism: Fiscal Year
2006 Obligation Rates Are Within Funding Levels And Significant Multi-
Year Procurement Funds Will Likely Remain Available For Use In Fiscal
Year 2007."
Discussion:
* The GAO report outlined two recommendations for executive action and
one item for Congressional concern.
* The Department of Defense nonconcurs with one item for executive
action and concurs with comment on the other.
* The findings help highlight problems for corrective action, such as
insufficient detail for "Other" categories in the Cost Breakdown
Structure (CBS).
* The Department nonconcurs on the item for Congressional concern.
Recommendation 1: The Secretary of Defense revise Volume 12, Chapter 23
of the DoD Financial Management Regulation to provide additional
subcategories for "other supplies and Equipment," "other services and
miscellaneous contracts," and "other military personnel" to provide a
further breakdown of reported obligation in miscellaneous categories.
DoD Comment To Recommendation 1: Concur with comment. The Department
has updated the DoD Financial Management Regulation to expand the
accuracy of the data reported in the cost reports. The Cost of War
reports now provide additional details in miscellaneous categories.
* Pay and allowances:
* Permanent change of station cost:
* Costs for temporary storage:
* Supplies and equipment:
* Contract services:
Recommendation 2: The Secretary of Defense should direct the Under
Secretary of Defense (Comptroller) to amend the September 2005 version
of DoD's Supplemental and Cost of War Execution reports to include the
unreported Iraq and Afghan security forces fund obligations for fiscal
year 2005.
DoD Comment To Recommendation 2: Non concur. The Department did not
"understate" the fiscal year (FY) 2005 cost of the war by $1.1 billion
because these costs have been reported to Congress. The Department
included this funding in its October 2005 report to Congress to comply
with Section 9010 of Public Law 10-287, the Department of Defense
Appropriations Act, 2005. We also have provided an amended September FY
2005 Cost of War report including the $1.1 billion.
Matter for Congressional Concern: When conducting its deliberations
over DoD s funding needs for fiscal year 2007 and beyond, Congress
should consider requiring DoD to provide fiscal yearend information on
how much procurement funding remains available for obligation from
fiscal year 2006. Congress should also require DoD to provide a plan
detailing how the department intends to obligate these and any other
procurement funding received or requested for GWOT.
DoD Comment On Matter for Congressional Concern: Non concur. The
Department of Defense justified the procurement requirements to
Congress and is currently executing the approved program. The
Department of Defense already provides reports that clearly state the
status of obligations of all GWOT funds.
[End of section]
Appendix IV: GAO Contact and Staff Acknowledgments:
GAO Contact:
Sharon Pickup (202) 512-9619 or pickups@gao.gov:
Acknowledgments:
In addition to the contact named above, Ann Borseth, Assistant
Director; Richard K. Geiger; Natalie Schneider; Kim Mayo; Renee S.
Brown; and Lonnie McAllister made key contributions to this report.
FOOTNOTES
[1] For purposes of this report, GWOT refers to the ongoing military
operations overseas.
[2] Title IX is the section of the annual defense appropriation that
outlines emergency spending provisions for operations in support of
GWOT.
[3] According to Department of Defense Financial Management Regulation,
7000.14-R, vol. 1, Definitions, p. xvii (December 2001), obligations
are incurred through actions such as orders placed, contracts awarded,
services received, or similar transactions made by federal agencies
during a given period that will require payments during the same or a
future period.
[4] DOD defines contingency operations to include small, medium, and
large-scale campaign-level military operations, including support for
peacekeeping operations, major humanitarian assistance efforts,
noncombatant evacuation operations, and international disaster relief
efforts.
[5] Volume 12, Chapter 23 of DOD's Financial Management Regulation,
7000.14R generally establishes financial policy and procedures related
to DOD contingency operations. Volume 6A, Chapter 2 and Volume 3,
Chapter 8 of the DOD Financial Management Regulation also include
provisions to ensure the accuracy of cost reporting.
[6] GAO, Military Operations: Fiscal Year 2004 Costs for the Global War
on Terrorism Will Exceed Supplemental, Requiring DOD to Shift Funds
from Other Uses, GAO-04-915 (Washington, D.C.: July 21, 2004).
[7] GAO, Global War on Terrorism: DOD Needs to Improve the Reliability
of Cost Data and Provide Additional Guidance to Control Costs, GAO-05-
882 (Washington, D.C.: Sept. 21, 2005).
[8] For purposes of this report, we refer to the Office of the Under
Secretary of Defense (Comptroller) as the DOD Comptroller.
[9] DOD uses "transfer authority" to shift funds between appropriation
accounts, for example, between military personnel and operation and
maintenance. Transfer authority is granted by Congress to DOD usually
pursuant to specific provisions in authorization or appropriation acts.
The ability to shift funds within a specific appropriation account,
like operation and maintenance, is referred to as "reprogramming." In
general, DOD does not need statutory authority to reprogram funds
within an account as long as the funds to be spent would be used for
the same general purpose of the appropriation and the reprogramming
does not violate any other specific statutory requirements or
limitations.
[10] DOD Comptroller, Memorandum: Analysis of Contingency Operation
Costs (Aug. 30, 2005).
[11] "Components" refers to all military services and DOD agencies.
[12] From fiscal year 2001 through fiscal year 2004, military
operations in defense of the homeland were funded through supplemental
appropriations. Since fiscal year 2005, DOD has funded these operations
through its regular annual budget.
[13] Pub. L. No. 107-40 (Sept. 18, 2001).
[14] A continuing resolution is a joint resolution enacted by Congress,
providing budget authority for federal agencies and programs to
continue in operation until the regular appropriations acts are
enacted.
[15] DOD's reported obligations do not include obligations for
classified activities, which are not captured in DOD's monthly
Supplemental and Cost of War Execution Report. However, on the basis of
conference reports for various supplemental appropriations acts, the
Congressional Budget Office estimates those costs are at least $25
billion.
[16] DOD Comptroller, Memorandum: Analysis of Contingency Operation
Costs (Aug. 30, 2005).
[17] The DOD components submit their monthly variance reports to the
Defense Finance and Accounting Service along with their reported
obligation data.
[18] DOD Comptroller Memorandum: Revised Instructions for Analysis of
Contingency Operation Costs (June 13, 2006).
[19] DOD Comptroller Memorandum: Accuracy of Contingency Operation and
Disaster Relief Cost Reports (Mar. 3, 2006).
[20] GAO-05-882.
[21] As of October 1, 2002, all military personnel--both Active and
Reserve Component--in areas designated as eligible for imminent danger
pay receive $225 per month. Such areas include, but are not limited to,
the countries of Iraq, Afghanistan, Kuwait, Qatar, Bahrain, and Saudi
Arabia. The monthly amount is payable in full without being prorated or
reduced, for each month, during any part of which a service member
qualifies and regardless of the actual period of time served on active
or inactive duty during that month.
[22] The percentage of reported obligations in this category includes
obligations for Operation Noble Eagle, Operation Enduring Freedom, and
Operation Iraqi Freedom.
[23] GAO, Military Operations: Fiscal Year 2004 Costs for the Global
War on Terrorism Will Exceed Supplemental, Requiring DOD to Shift Funds
from Other Uses, GAO-04-915 (Washington, D.C.: July 21, 2004).
[24] GAO, Military Operations: Fiscal Year 2003 Funding and Reported
Obligations in Support of the Global War on Terrorism, GAO-04-668
(Washington, D.C.: May 13, 2004).
[25] In May 2004, the President signed National Security Presidential
Directive 36, which established the Projects and Contracting Office as
a temporary organization within DOD. The Projects and Contracting
Office provides acquisition and project management support for the
reconstruction effort in Iraq.
[26] These "Other" costs are reported in up to 20 categories and are
included as subsidiary reports to the Army's and the Defense Security
Cooperation Agency's DOD Supplemental and Cost of War Execution Report.
[27] The Commander's Emergency Response Program provides funds to
military commanders for small-scale reconstruction and humanitarian
relief projects in Iraq and Afghanistan.
[28] The Office of Management and Budget's SF 133 Report on Budget
Execution and Budgetary Resources fulfills the requirement in 31 U.S.C.
§ 1511 - 1514 that the President review federal expenditures at least
four times a year. The report provides a basis to determine obligation
patterns and provide historical reference that can be used to help
prepare the President's budget, program operating plans, and spend-out
rate estimates.
[29] Pub. L. No. 108-287 (Aug. 5, 2004).
[30] Sections 230406 and 230902 of DOD's Financial Management
Regulation 7000.14-R, Volume 12, Chapter 23 "Contingency Operations"
(September 2005) provide additional information on incremental costs.
[31] Service members who are assigned, deployed, or traveling on
temporary duty to certain foreign areas are eligible for certain
special pays and benefits, such as imminent danger pay. 37 USC § 310
(a) (2) (D) (2006).
[32] For fiscal year 2006, additional resources at DFAS were reassigned
to assist in producing and reviewing DOD's monthly Supplemental and
Cost of War Execution Report.
[33] The DOD Comptroller has two full-time employees dedicated to
reviewing the department's GWOT obligations reported in DOD's monthly
Supplemental and Cost of War Execution Report.
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