Army Corps of Engineers
Budget Formulation Process Emphasizes Agencywide Priorities, but Transparency of Budget Presentation Could Be Improved Gao ID: GAO-10-453 April 2, 2010The U.S. Army Corps of Engineers (Corps) is the world's largest public engineering, design, and construction management agency. In fiscal year 2006 it began incorporating performance information into its budget process, but Congress raised concerns that the criteria used by the Corps to prioritize projects are not transparent and the budget formulation process could achieve a higher return on investment. GAO was asked to (1) describe the information the Corps uses in its budget formulation process and the implications of the process, and (2) evaluate whether the President's recent budget requests for the Corps are presented so that agency priorities are clear and proposed use of funds transparent. GAO reviewed the Corps' internal budget guidance, documentation of its project rankings and budget formulation process, performance review materials, and budget presentation materials. GAO also interviewed Corps and Office of Management and Budget officials.
With the introduction of performance-based budgeting in fiscal year 2006, the Corps began emphasizing projects with the highest anticipated returns on investment. Previously, Corps division officials sought to provide continued funding to all ongoing projects that fit within administration guidelines. Now, under the current process, Corps headquarters plays an increased role in selecting projects, and evaluates projects using certain performance metrics. The Corps gives priority to those projects with the highest anticipated returns for the economy and the environment, as well as those that reduce risk to human life. The Corps' use of performance metrics makes projects in certain geographic areas more likely to be included in the budget request. For example, the benefit-cost ratio, a measure of economic benefit that is used to rank certain projects, tends to favor areas with high property values. Another effect of the Corps' use of performance-based budgeting is that fewer construction and investigation projects--studies to determine whether the Corps should initiate construction projects--have been included in the budget request in recent years. In contrast, the number of projects in the Operation and Maintenance account has been relatively stable, which Corps officials attributed partially to its emphasis on routine activities. While the metrics used by the Corps in its budget formulation process focus on anticipated benefits, the Corps monitors the progress of ongoing projects through review boards at the headquarters, division, and district levels. However, the Corps does not have written guidance establishing a process for incorporating information on demonstrated performance, such as review board findings, into budget formulation decisions. In the absence of such a process, the Corps may miss opportunities to make the best use of this performance information. The budget presentation for the Corps lacks transparency on key elements of the budget request. It focuses on requested construction and investigations projects, but does not describe how the decisions made during the budget formulation process affected the budget request. For example, the budget presentation does not include an explanation of the relative priority given to project categories or how they are evaluated against each other. Also, while the number of construction and investigations projects receiving appropriations is typically much greater than the number requested, the budget presentation does not include detailed information on all projects with continuing resource needs. The budget presentation also lacks detail on the amount of the balance of unobligated appropriations (carryover) that remain available for each project. Users of the budget presentation told GAO that these two types of project information would be useful.
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-10-453, Army Corps of Engineers: Budget Formulation Process Emphasizes Agencywide Priorities, but Transparency of Budget Presentation Could Be Improved
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Report to the Subcommittee on Energy and Water Development, Committee
on Appropriations, House of Representatives:
United States Government Accountability Office:
GAO:
April 2010:
Army Corps Of Engineers:
Budget Formulation Process Emphasizes Agencywide Priorities, but
Transparency of Budget Presentation Could Be Improved:
GAO-10-453:
GAO Highlights:
Highlights of GAO-10-453, a report to the Subcommittee on Energy and
Water Development, Committee on Appropriations, House of
Representatives.
Why GAO Did This Study:
The U.S. Army Corps of Engineers (Corps) is the world‘s largest public
engineering, design, and construction management agency. In fiscal
year 2006 it began incorporating performance information into its
budget process, but Congress raised concerns that the criteria used by
the Corps to prioritize projects are not transparent and the budget
formulation process could achieve a higher return on investment. GAO
was asked to (1) describe the information the Corps uses in its budget
formulation process and the implications of the process, and (2)
evaluate whether the President‘s recent budget requests for the Corps
are presented so that agency priorities are clear and proposed use of
funds transparent.
GAO reviewed the Corps‘ internal budget guidance, documentation of its
project rankings and budget formulation process, performance review
materials, and budget presentation materials. GAO also interviewed
Corps and Office of Management and Budget officials.
What GAO Found:
With the introduction of performance-based budgeting in fiscal year
2006, the Corps began emphasizing projects with the highest
anticipated returns on investment. Previously, Corps division
officials sought to provide continued funding to all ongoing projects
that fit within administration guidelines. Now, under the current
process, Corps headquarters plays an increased role in selecting
projects, and evaluates projects using certain performance metrics.
The Corps gives priority to those projects with the highest
anticipated returns for the economy and the environment, as well as
those that reduce risk to human life. The Corps‘ use of performance
metrics makes projects in certain geographic areas more likely to be
included in the budget request. For example, the benefit-cost ratio, a
measure of economic benefit that is used to rank certain projects,
tends to favor areas with high property values. Another effect of the
Corps‘ use of performance-based budgeting is that fewer construction
and investigation projects”studies to determine whether the Corps
should initiate construction projects”have been included in the budget
request in recent years. In contrast, the number of projects in the
Operation and Maintenance account has been relatively stable, which
Corps officials attributed partially to its emphasis on routine
activities. While the metrics used by the Corps in its budget
formulation process focus on anticipated benefits, the Corps monitors
the progress of ongoing projects through review boards at the
headquarters, division, and district levels. However, the Corps does
not have written guidance establishing a process for incorporating
information on demonstrated performance, such as review board
findings, into budget formulation decisions. In the absence of such a
process, the Corps may miss opportunities to make the best use of this
performance information.
The budget presentation for the Corps lacks transparency on key
elements of the budget request. It focuses on requested construction
and investigations projects, but does not describe how the decisions
made during the budget formulation process affected the budget
request. For example, the budget presentation does not include an
explanation of the relative priority given to project categories or
how they are evaluated against each other. Also, while the number of
construction and investigations projects receiving appropriations is
typically much greater than the number requested, the budget
presentation does not include detailed information on all projects
with continuing resource needs. The budget presentation also lacks
detail on the amount of the balance of unobligated appropriations
(carryover) that remain available for each project. Users of the
budget presentation told GAO that these two types of project
information would be useful.
What GAO Recommends:
GAO recommendations include the Corps establishing a documented
process for incorporating ongoing performance information into budget
formulation decisions and improving the transparency of its budget
presentation. The Corps concurred with all but the first
recommendation, stating existing mechanisms are sufficient. GAO
believes establishing a process would ensure more complete and
consistent decision making.
View [hyperlink, http://www.gao.gov/products/GAO-10-453] or key
components. For more information, contact Denise M. Fantone at (202)
512-6806 or fantoned@gao.gov or Anu K. Mittal at (202) 512-3841 or
mittala@gao.gov.
[End of section]
Contents:
Letter:
Background:
The Corps' Budget Formulation Process Favors Projects with the Highest
Anticipated Outcomes and Emphasizes Agencywide Priorities:
The Corps' Budget Presentation Lacks Transparency on Key Elements of
Its Budget Request:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Project Prioritization in the Construction,
Investigations, and O&M Accounts:
Appendix III: Methodology for Calculating Benefit-Cost Ratio and
Changes in Requirements Over Time:
Appendix IV: Trends in Budget Requests for the Corps:
Appendix V: Comments from the Department of Defense:
Appendix VI: GAO Contacts and Staff Acknowledgments:
Tables:
Table 1: Summary of Fiscal Year 2010 Budget Request and
Appropriations: Construction, Investigations, and O&M Accounts:
Table 2: Construction Categories and Ranking Metrics (Fiscal Year 2010
Budget Request):
Table 3: Summary of Primary Inputs Used to Calculate Benefits for
Different Project Types:
Table 4: Hypothetical BCR Calculation for Two Alternative Construction
Projects:
Table 5: Summary of Economic Requirements for Construction Projects,
by Fiscal Year:
Figures:
Figure 1: Locations of the Corps' Civil Works Divisions and Districts:
Figure 2: Fiscal Year 2010 Civil Works Budget Request, by Account:
Figure 3: Total U.S. Army Corps of Engineers Annual and Supplemental
Appropriations, by Fiscal Year:
Figure 4: Number of Construction Projects Requested, by Fiscal Year:
Figure 5: Number of Investigations Projects Requested, by Fiscal Year:
Figure 6: Number of O&M Projects Requested, by Fiscal Year:
Abbreviations:
BCR: benefit-cost ratio:
Corps: U.S. Army Corps of Engineers:
EC: Engineer Circular:
OMB: Office of Management and Budget:
O&M: Operation and Maintenance:
RBRC: remaining benefits-remaining costs:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
April 2, 2010:
The Honorable Peter J. Visclosky:
Chairman:
The Honorable Rodney P. Frelinghuysen:
Ranking Member:
Subcommittee on Energy and Water Development:
Committee on Appropriations:
House of Representatives:
The U.S. Army Corps of Engineers (Corps) is the world's largest public
engineering, design, and construction management agency. The Corps
provides vital public engineering services in peace and war to
strengthen the nation's security, energize the economy, and reduce
risks from disasters.[Footnote 1] In fiscal year 2010 the Corps' civil
works program received $5.4 billion to plan, construct, operate, and
maintain a wide range of water resource projects. In fiscal year 2006,
the Corps began incorporating performance information in its civil
works budget formulation process. The Corps uses performance
information both (1) to gauge overall progress in performing its civil
works mission and (2) to prioritize and select civil works projects
for inclusion in its funding request. Performance information is a
broad term that often includes a variety of measures. These measures
may be based on the demonstrated performance of a program or project
and on estimates of future outcomes. The Corps' performance measures
primarily focus on estimates of future outcomes such as providing
economic benefits, addressing risk to human life, and restoring
ecosystems. Congress has raised concerns that the criteria the Corps
uses to prioritize projects are not transparent and the Corps' budget
formulation process could achieve a higher return on investment for
the nation's water resource projects.
In this context, you asked that we (1) describe the information the
Corps uses in its budget formulation process and the implications of
the process, and (2) evaluate whether the President's recent budget
requests for the Corps are presented so that agency priorities are
clear and proposed use of funds transparent.
To identify the information used in the Corps' budget formulation
process since the Corps began incorporating performance information in
fiscal year 2006, we reviewed documentation of its project rankings
and budget formulation process, as well as budget presentation
materials from fiscal years 2006 through 2010. While we did not
evaluate in detail the fiscal year 2011 budget submitted in February
of 2010, we did review it to gain a sense of key changes. We also
reviewed the Corps' internal budget guidance for fiscal year 2011 and
examples of its performance review materials. We interviewed officials
at Corps headquarters and all eight U.S. division offices about the
budget formulation process and the information developed and used for
it, as well as the impacts of the process. To examine the implications
of the Corps' budget formulation process, we also analyzed Corps
budget and project data from fiscal years 2001 through 2010, the 5
years before and the 5 years after the Corps introduced performance-
based budgeting. We reviewed the metrics and measures used to rank
Corps projects and how they have changed since fiscal year 2006. We
reviewed Corps guidance on calculating the benefit-cost ratio (BCR) of
projects and interviewed Corps officials about their use of the BCR
and other metrics in formulating the agency's budget and the related
effects these metrics have on the budget. We did not evaluate the
accuracy of the Corps' calculations for the BCR or other metrics.
To evaluate how the President's budget request for the Corps is
presented, we reviewed the President's budgets and appendixes, and
budget presentation materials for the Corps, including the budget
justifications and Press Books for fiscal years 2006 through 2010. We
also reviewed the Corps' Five Year Development Plans for fiscal years
2007 through 2011, 2008 through 2012, and 2009 through 2013. To obtain
input from users of the budget presentation, we interviewed staff from
relevant congressional committees. We also reviewed appropriations
committee reports from fiscal years 2005 through 2010. We interviewed
Corps officials and staff at the Office of Management and Budget (OMB)
about the reasons for the structure of the budget presentation, the
information provided in it, and the feasibility of making specific
changes to it. Appendix I contains more detailed information on our
scope and methodology.
We conducted this performance audit from March 2009 to March 2010 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Background:
Headquartered in Washington, D.C., the Corps has 8 regional divisions
and 38 districts that carry out its domestic civil works
responsibilities (see figure 1). Corps headquarters primarily develops
policies, based on administration guidance, and plans the direction of
the organization; divisions coordinate the districts' projects; and
the districts plan and implement the projects, which are approved by
the divisions and headquarters. The Corps' civil works program is
classified into nine major functional areas, or business lines:
Navigation, Flood Risk Management, Environment, Recreation,
Hydropower, Water Supply, Emergency Management, Regulatory Program,
and Support for Others[Footnote 2][Footnote 3].
Figure 1: Locations of the Corps' Civil Works Divisions and Districts:
[Refer to PDF for image: illustrated map of the U.S.]
Depicted on the map are the following entities:
Division headquarters location:
District headquarters location:
Division boundary:
District boundary:
State boundary:
North Atlantic Division:
Division headquarters: New York City;
District headquarters:
Baltimore, Maryland;
Norfolk, Virginia;
Philadelphia, Pennsylvania.
South Atlantic Division:
Division headquarters: Atlanta, Georgia;
District headquarters:
Charleston, South Carolina;
Jacksonville, Florida;
Mobile, Alabama;
Savannah, Georgia;
Wilmington, North Carolina.
Great Lakes and Ohio River Division:
Division headquarters: Cincinnati, Ohio;
District headquarters:
Buffalo, New York;
Chicago, Illinois;
Detroit, Michigan;
Huntington, West Virginia;
Louisville, Kentucky;
Nashville, Tennessee;
Pittsburgh, Pennsylvania.
Mississippi Valley Division:
Division headquarters: Vicksburg, Mississippi;
District headquarters:
Memphis, Tennessee;
New Orleans, Louisiana;
Rock Island, Iowa;
St. Louis, Missouri;
St. Paul, Minnesota;
Vicksburg, Mississippi.
Southwestern Division:
Division headquarters: Dallas, Texas;
District headquarters:
Fort Worth, Texas;
Galveston, Texas;
Little Rock, Arkansas;
Tulsa, Oklahoma.
Northwestern Division:
Division headquarters: Portland, Oregon;
District headquarters:
Kansas City, Missouri;
Omaha, Nebraska;
Portland, Oregon;
Seattle, Washington;
Walla Walla, Washington.
South Pacific Division:
Division headquarters: San Francisco, California;
District headquarters:
Albuquerque, New Mexico;
Los Angeles, California;
Sacramento, California;
San Francisco, California.
Pacific Ocean Division:
Division headquarters: Honolulu, Hawaii;
District headquarters:
Alaska;
Honolulu, Hawaii.
Source: GAO representation of U.S. Army Corps of Engineers data.
[End of figure]
Corps headquarters, divisions, and districts are all involved in
developing the President's budget request for the Corps. As part of
the executive budget formulation process, Corps headquarters staff,
with input and data from division and district offices, develop a
budget request for the agency. Once the Corps completes its internal
review, the Assistant Secretary of the Army for Civil Works approves
and submits its budget to OMB for review. OMB recommends to the
President whether to support or change the Army's proposals and the
decisions made during OMB's budget review process culminate in the
President's budget request transmitted to Congress at the beginning of
February. Shortly thereafter the Corps provides budget justification
materials that support the President's request in more detail to the
House and Senate Appropriations committees' subcommittees.
The documents that typically make up the budget presentation for the
Corps are the congressional budget justification, the Press Book, and
the Five Year Development Plan. The budget justification for the
fiscal year 2010 budget request includes details on construction
projects and investigations projects--studies to determine whether the
Corps should initiate construction projects--included in the budget
request, including a narrative description and such details as the
total estimated federal cost and amount allocated in prior years. It
also provides some information on other Corps accounts such as the
Flood Control and Coastal Emergencies account. The information
included in the Press Book has varied in recent years, but the Press
Book accompanying the fiscal year 2010 budget request consisted
primarily of a listing of all construction, investigations, and
operation and maintenance (O&M) projects included in the budget
request. The listing is organized by state and specifies the amount
requested for each project. Finally, the Corps has in the past
included a Five Year Development Plan as part of the budget
presentation, though it did not for the fiscal year 2010 or 2011
budget requests. The most recent Five Year Development Plan contained
descriptions of nine civil works accounts[Footnote 4] and summaries of
its business line programs, including past accomplishments and future
challenges.[Footnote 5] It also included project-level details for the
Construction and Investigations accounts with projected funding
requirements for the current fiscal year and 4 subsequent fiscal
years. It did not include project-level details for the O&M account.
In addition to the information contained in the budget presentation,
congressional staff members may request additional information as
needed for decision making.
The submission of the President's budget request to Congress marks the
beginning of the congressional phase of the budget process. The budget
request is often a starting point for congressional actions and
Congress typically makes changes that reflect its priorities. For
example, Congress has historically appropriated more funding to the
Corps for a greater number of projects than have been included in the
President's budget request.
About 84 percent of the President's fiscal year 2010 budget request
for the Corps' civil works program was for three appropriations
accounts--Construction, Investigations, and O&M--all of which are
focused on specific projects or studies.[Footnote 6], [Footnote 7] The
Construction account includes construction and major rehabilitation
projects related to navigation, flood control, water supply,
hydroelectric power, and environmental restoration. The Investigations
account funds studies to determine the necessity, feasibility, and
returns to the nation for potential solutions to water resource
problems, as well as design, engineering, and other work. The O&M
account focuses on preserving, operating, and maintaining river and
harbor projects that have already been constructed. Table 1 summarizes
the fiscal year 2010 budget request and appropriations for these three
accounts.[Footnote 8]
Table 1: Summary of Fiscal Year 2010 Budget Request and
Appropriations: Construction, Investigations, and O&M Accounts:
Construction:
Fiscal year 2010 budget request: Amount: $1,718 million;
Fiscal year 2010 budget request: Number of projects: 93;
Fiscal year 2010 appropriations: Amount: $2,031 million;
Fiscal year 2010 appropriations: Number of projects: 278.
Investigations:
Fiscal year 2010 budget request: Amount: $100 million;
Fiscal year 2010 budget request: Number of projects: 68;
Fiscal year 2010 appropriations: Amount: $160 million;
Fiscal year 2010 appropriations: Number of projects: 315.
O&M:
Fiscal year 2010 budget request: Amount: $2,504 million;
Fiscal year 2010 budget request: Number of projects: 813;
Fiscal year 2010 appropriations: Amount:$2,400 million;
Fiscal year 2010 appropriations: Number of projects: 826.
Total (3 accounts):
Fiscal year 2010 budget request: Amount: $4,322 million;
Fiscal year 2010 budget request: Number of projects: 974;
Fiscal year 2010 appropriations: Amount: $4,591 million;
Fiscal year 2010 appropriations: Number of projects: 1,419.
Source: GAO analysis of U.S. Army Corps of Engineers data.
[End of table]
A breakdown by account of the fiscal year 2010 budget request is shown
in figure 2.
Figure 2: Fiscal Year 2010 Civil Works Budget Request, by Account:
[Refer to PDF for image: pie-chart]
O&M: 49% ($2,504 million);
Construction: 34% ($1,718 million);
Investigations: 2% ($100 million);
Other: 16% ($803 million).
The total civil works budget request in fiscal year 2010 was $5.125
billion.
Source: GAO analysis of U.S. Army Corps of Engineers data.
Note: the "Other" category consists of the following six accounts:
Regulatory Program, Mississippi River and Tributaries, Expenses, Flood
Control and Coastal Emergencies, Formerly Utilized Sites Remedial
Action Program, and the Office of the Assistant Secretary of the Army
(Civil Works).
[End of figure]
Since fiscal year 2006 the Corps has received appropriations of over
$5 billion annually for its civil works program through the Energy and
Water Development Appropriations Act. Committee and conference reports
accompanying the appropriations bills include specific allocations of
funding for individual projects. The Corps also typically receives
funds, particularly for construction projects, from each project's
local sponsor, which may be a state, tribal, county, or local agency
or government.[Footnote 9] In addition to the funding received through
annual appropriations acts, the Corps received supplemental
appropriations in 6 of the past 8 fiscal years. Some supplemental
appropriations have been designated for specific activities. For
example, a Corps official told us that in fiscal year 2009 the agency
received supplemental funding of about $5.8 billion for hurricane
protection in Louisiana. In recent years, most supplemental funding
provided to the Corps has been used for expenses related to the
consequences of 2005 Gulf Coast hurricanes, including Hurricane
Katrina. According to the Corps official, funding has also been
directed to expenses related to the consequences of hurricanes Gustav
and Ike (both 2008 hurricanes), as well as the 2008 Midwest floods.
The Corps also received $4.6 billion in fiscal year 2009 through the
American Recovery and Reinvestment Act. Figure 3 shows the amount of
funding the administration has requested for the Corps' civil works
program and the amount the Corps has received, both through annual and
supplemental appropriations, from fiscal years 2003 through 2010.
Figure 3: Total U.S. Army Corps of Engineers Annual and Supplemental
Appropriations, by Fiscal Year:
[Refer to PDF for image: multiple vertical bar graph]
Fiscal year: 2003;
Administration's request: $4.3 billion;
Annual appropriations: $4.6 billion;
Supplemental appropriations: $0.1 billion.
Fiscal year: 2004;
Administration's request: $4.2 billion;
Annual appropriations: $4.6 billion.
Fiscal year: 2005;
Administration's request: $4.2 billion;
Administration's supplemental request: $0.4 billion;
Administration's supplemental request: $4.7 billion;
Annual appropriations: $0.8 billion.
Fiscal year: 2006;
Administration's request: $4.5 billion;
Administration's supplemental request: $3.7 billion;
Annual appropriations: $5.3 billion;
Supplemental appropriations: $6.6 billion.
Fiscal year: 2007;
Administration's request: $4.7 billion;
Annual appropriations: $5.3 billion;
Supplemental appropriations: $1.6 billion.
Fiscal year: 2008;
Administration's request: $4.9 billion;
Annual appropriations: $5.6 billion;
Supplemental appropriations: $3.4 billion.
Fiscal year: 2009;
Administration's request: $4.7 billion;
Annual appropriations: $5.4 billion;
Supplemental appropriations: $11.2 billion.
Fiscal year: 2010;
Administration's request: $5.1 billion;
Annual appropriations: $5.4 billion.
Source: GAO analysis of U.S. Army Corps of Engineers data.
Note: Dollar amounts are nominal.
[End of figure]
Rescissions are included in the annual request and appropriations
amounts.
The Corps' strategic plan for its civil works program lays out its
goals and objectives and its strategies for achieving them. The Corps'
current strategic plan covers fiscal years 2004 through 2009, and the
Corps is planning to issue an updated version that will cover fiscal
years 2010 through 2014.[Footnote 10] The goals listed in the most
recent strategic plan are: (1) provide sustainable development and
integrated management of the nation's water resources; (2) repair past
environmental degradation and prevent future environmental losses; (3)
ensure that projects perform to meet authorized purposes and evolving
conditions; (4) reduce vulnerabilities and losses to the nation and
the Army from natural and man-made disasters, including terrorism; and
(5) be a world-class engineering organization.[Footnote 11]
The Corps' Budget Formulation Process Favors Projects with the Highest
Anticipated Outcomes and Emphasizes Agencywide Priorities:
The Corps' Use of Performance-Based Budgeting Emphasizes Anticipated
Returns and Takes a Centralized Approach to Decision Making:
Prior to fiscal year 2006, the Corps' budget formulation process was
relatively decentralized, with divisions playing a significant role.
According to Corps officials, the Corps' previous budget formulation
process for the Construction, Investigations, and O&M accounts started
with district staff, who developed a request for their geographic
area. Next, division staff integrated the district office projects
into a single divisionwide portfolio of projects. Finally,
headquarters staff consolidated each of the divisionwide portfolios
into a single agencywide portfolio. Under the former process, each
division was authorized an amount of funding, which division officials
would allocate with two conditions: (1) all projects were required to
meet administration priorities, and (2) construction and
investigations projects that reached a certain stage were required to
have benefits that at least equaled costs. Corps officials told us
that they sought to provide continued funding to all ongoing projects
that fit within administration guidelines.
Beginning in fiscal year 2006 the Corps introduced what it refers to
as performance-based budgeting as a way to focus funding requests on
those projects with the highest anticipated return on investment, not
on all ongoing projects as it sought to do in the past. Under the new
process, Corps headquarters began playing a greater role in selecting
projects, using performance criteria that emphasize agencywide
priorities. Specifically, although districts and divisions continue to
collect and develop project data, ranking of construction and
investigations projects is now done only at the headquarters level.
While division staff still rank O&M projects, a Corps official told us
that headquarters staff review these rankings to make sure that they
are consistent with Corps-wide guidance and result in decisions that
emphasize agencywide priorities. Then, they consolidate the O&M
requests across business lines and divisions to a highest priority
grouping. According to a Corps official, the use of performance-based
budgeting has allowed the Corps to present OMB with various funding
options based on performance criteria. While the Corps also presented
OMB with different options prior to fiscal year 2006, the official
told us that under that process these options reflected regional
priorities.
Under its current budget formulation process, the Corps uses
performance metrics to evaluate projects' estimated future outcomes,
and gives priority to those with the highest expected returns for the
national economy and the environment, as well as those that reduce
risk to human life. The Corps' written budget guidance, the Budget
Engineer Circular (Budget EC), details the data that should be
developed for each project to support budgetary decisions. For
example, the Corps calculates the economic benefits of most
construction and investigations projects using a BCR.[Footnote 12] The
Corps uses projects' BCRs to evaluate them against each other and
determine whether they will be given priority in the budget request.
According to Corps and OMB staff, each year OMB sets minimum BCR
thresholds that some construction and investigations projects must
meet to be included in the budget request. If projects do not meet the
designated BCR thresholds, they may qualify in other ways, such as by
restoring a nationally significant ecosystem or addressing risk to
human life. The use of these metrics to evaluate projects provides the
Corps with a mechanism to give priority to projects that, based on the
current method of calculation, may not generate any economic benefits
or have relatively low BCRs, but benefit nationally significant
ecosystems or address risk to human life. For O&M projects, imminent
risk to human life and the amount of commercial tonnage transported on
a waterway are examples of the types of factors described in the
Budget EC that influence the priority of a navigation project.
Additionally, the Corps' use of performance metrics makes projects in
certain geographic areas more likely to be included in the budget
request, since they produce higher returns on investment. For example,
since a primary input in BCR calculations for Flood Risk Management
projects is the value of property for which damage would be prevented
as a result of the project, projects in areas with high property
values--such as in California--tend to have higher BCRs.[Footnote 13]
Ecosystem restoration projects with national significance are also
given priority under this process. More specifically, the Everglades
in Florida has consistently been among the projects included in this
category, and over the past 5 years has been the project with the most
funding requested. In addition, the risk to human life metric is
affected by population density, so more densely populated areas tend
to be given priority.[Footnote 14]
According to Corps and OMB staff, another effect of the performance
criteria used as part of the current budget process is that fewer
construction and investigation projects have been included in the
budget request in recent years. Corps officials also attributed the
decrease in number of projects to available funding and budget
cutoffs, such as the BCR. From fiscal year 2001 to 2010, the number of
construction projects included in the budget request decreased by
about 52 percent, and the number of investigations projects decreased
by about 79 percent. Though the number of construction and
investigations projects decreased, the average amount requested per
project has increased over time. For example, the average request per
construction project went from $7.0 million in fiscal year 2001 to
$17.3 million in fiscal year 2010.[Footnote 15] In contrast to trends
in the Construction and Investigations accounts, the use of the
ranking metrics does not appear to have had a significant effect on
the O&M account; the number of projects within the O&M account has
remained relatively stable. From fiscal year 2001 to 2010, the number
of O&M projects requested increased by about 7 percent. Corps
officials told us that the relative consistency of the O&M account is
partially due to the emphasis on critical routine projects and
activities. Because the performance metrics used to evaluate O&M
projects--such as the amount of commercial tonnage transported on a
waterway--tend to be consistent, and a large portion of projects are
routine (occurring every year or on an otherwise cyclical basis), the
projects given priority tend to be the same from year to year.
Additionally, they told us that because there are more project
activities of lower value in the O&M account, changes to specific
projects generally do not affect the overall request amount as
significantly as variations in the projects in the Construction
account do. In fiscal year 2010, the average amount requested per O&M
project was $2.8 million. Budget trends are discussed in more detail
in appendix IV. OMB staff that review the budget request for the Corps
concurred that the nature of the O&M account results in more stability
in project selection than in the Construction and Investigations
accounts.
The Corps' Budget Formulation Process Focuses on Projects' Anticipated
Outcomes, Rather than Demonstrated Performance:
The Corps uses performance metrics in its budget formulation process
that primarily focus on anticipated outcomes with limited evidence of
how performance information measuring demonstrated performance factors
into decisions on budget requests. In part, the Corps focuses on
anticipated outcomes because most of the construction and
investigations projects being considered in the budget request are new
or have not yet been completed, and thus have not generally begun to
achieve benefits. Because the O&M account includes projects that have
already been constructed, the Corps incorporates ongoing performance
information, such as assessments of whether infrastructure meets
current engineering and industry standards, to a greater extent when
budgeting for these projects. Even though the overall focus for budget
formulation of the three accounts is on anticipated outcomes, Corps
officials told us that they monitor the progress of projects underway
through review boards established at the district, division, and
headquarters levels within the agency. These review boards generally
meet monthly and focus on project management issues. These issues
include whether projects are meeting financial goals and other
milestones, such as awarding contracts on schedule. Review boards also
discuss progress on two of the nine business lines each month and, on
average, each business line is reviewed at least twice annually.
[Footnote 16] A Corps headquarters official told us that the
performance metrics presented at review boards demonstrate good
performance, areas that need improvement, and situations where focused
leadership attention would be useful. For example, Corps documentation
showed that in a meeting in which it focused on the Flood Risk
Management business line, the headquarters-level program review board
looked at measures such as the number of dam safety assessments
completed and the percentage of dams rated as unsafe. Although review
boards collect a variety of performance information, the Corps does
not have written guidance establishing a process for incorporating
their findings into budget formulation decisions.[Footnote 17] Our
previous work on performance-based budgeting found that federal
agencies that were successful in measuring their performance worked to
ensure that decisions were based on complete information.[Footnote 18]
The Corps collects numerous data and has detailed processes for
evaluating projects during the budget formulation process; however, in
the absence of a documented process for considering information on
demonstrated performance--such as the performance information
discussed during review board meetings on whether projects are on time
and on budget--the Corps may miss opportunities to make the best use
of this information. Additionally, without a documented process it is
not clear how information from the review boards shapes program
priorities and affects decision making.
The Corps' Budget Presentation Lacks Transparency on Key Elements of
Its Budget Request:
Our prior work has emphasized the importance of transparency in
federal agencies' budget presentations.[Footnote 19] While the budget
presentation for the Corps includes summaries of project categories,
business lines, and accounts, it lacks summary-level information on
the relationships and trade-offs made across these groups. For
example, the presentation for the fiscal year 2010 budget request
describes the primary criteria used to evaluate both construction and
O&M projects. However, it does not include an explanation of how the
Corps makes trade-offs among the project types in these accounts--for
example, the budget presentation does not include an explanation of
the priority given to dam safety projects over other construction
project categories, or the effects that this has on the other
categories. It also lacks an explanation of the impact of emphasizing
one account over another. Congressional users of the budget
presentation told us that having summary information on how decisions
that significantly affect the budget request are made would enhance
their understanding of the budget process.
The budget presentation for the Corps only includes detailed
information on the projects the President proposes to fund in the
budget year, even though appropriated funding is provided to a number
of projects that are not included in the budget request.[Footnote 20]
House appropriators have voiced interest in having the Corps include
additional information in the budget presentation. For example, the
House committee report accompanying the fiscal year 2010 Energy and
Water Development Appropriations bill requested that the Corps include
in the fiscal year 2011 budget presentation project-level details for
all of the projects that received appropriations in fiscal year 2010.
Part of the reason for this request may be the difference between the
number of projects requested in the budget for the Corps and the
number that actually receive appropriations. For example, a Corps
official told us that in fiscal year 2010 appropriated funds were
applied to 278 construction projects, whereas the fiscal year 2010
budget request included 93 construction projects. Additionally, in
fiscal year 2010 appropriated funds were applied to 315 investigations
projects, while the fiscal year 2010 budget request included 68
investigations projects.[Footnote 21], [Footnote 22] Moreover, work on
most construction and investigations projects is conducted over
multiple years and thus projects require appropriations in more than 1
year. With over twice as many projects receiving funds than were
included in the budget request, an information gap is created when an
administration highlights its priority projects, but does not provide
sufficient information on other ongoing projects that may continue to
have resource needs. Congressional users of the Corps' budget
presentation told us that they are interested in previously funded
projects not included in the budget request, and that not having
information on these projects limits the ability of Congress to make
fully informed decisions when making appropriations decisions. A Corps
official told us that the Corps would be able to include in the budget
presentation information on projects funded in the previous year.
Senate appropriators have also expressed interest in greater project
level information for the O&M account. Specifically, the Senate
conference report accompanying the fiscal year 2010 Energy and Water
Development Appropriations bill requested that the Corps provide in
the fiscal year 2011 budget presentation, at a minimum, detailed
project information justifying the need for each O&M project. For
example, although the fiscal year 2010 budget request for the Corps
included $2.5 billion for the O&M account (approximately 49 percent of
the total request), the budget presentation for the Corps did not
include detailed project-level information for this account or
sufficient summary information to understand the status of O&M project
implementation against agency projections or other benchmarks.
Similarly, the Press Book lists all O&M projects in the request and
the amount requested for each, but it does not provide any detailed
information on how requested funding will be used. Furthermore,
although the fiscal year 2010 budget justification provided detailed
project-level information, such as narrative descriptions and previous
funding allocations, for construction and investigations projects, it
did not include any information on requested O&M projects.
Congressional users of the budget presentation told us that such
information would increase the usefulness and transparency of the
presentation. Following up on the Senate's request, the fiscal year
2011 budget request for the Corps included summary-level information
describing how funding for each requested O&M project would be used.
The Senate did not specify whether its request applies to fiscal years
beyond 2011.
Finally, the budget presentation for the Corps does not include
information on how much carryover of unobligated appropriations is
available to potentially offset new requests for projects that were
previously funded, which congressional users of the budget
presentation stated would be useful.[Footnote 23] With this
information, they can consider how much of the previous year's funding
remains available for obligations. Moreover, Corps officials told us
that carryover amounts have increased in recent years.[Footnote 24]
The budget request for the Corps includes aggregate information on
carryover balances by account, but neither it nor the budget
presentation includes information on how much carryover is available
for specific projects. Accordingly, Congress has not been able to
consider the full level of resources available for projects when
making its appropriations decisions. Corps review boards routinely
review whether projects are meeting financial milestones, so carryover
balance information is available. However, a Corps official told us
that project-level carryover estimates would not be available until
after budget materials are submitted to Congress. According to this
official, while the Corps is not able to include this information in
the budget presentation, the Corps would be able to provide Congress
with project carryover amounts separately and before final
appropriations decisions are made.
Conclusions:
The Corps' move toward including performance information in the budget
formulation process has given priority to the projects with the
highest anticipated returns on investment. Although the Corps collects
data on the demonstrated performance of ongoing projects and on a case-
by-case basis may use this information in budget decisions, it does
not have a documented process to incorporate this type of information
in budget formulation decisions. Without an established process to
ensure that decision makers are aware of this information, relevant
information may not always be considered in budget decisions.
The current budget formulation process emphasizes agencywide
priorities and focuses on projects with the highest estimated returns;
however, the budget presentation for the Corps continues to lack
transparency and key information that could be of use to congressional
decision makers. While the budget presentation for the Corps includes
a description of the primary metrics used to evaluate projects, it
does not include a description of how decisions and trade-offs were
made across project categories, business lines, or accounts.
Although annual appropriations and accompanying committee and
conference reports sometimes designate funds to be used for specific
construction, investigations, and O&M projects, the budget
presentation for the Corps lacks two types of project-level
information that could be useful to congressional decision makers.
First, the budget presentation lacks information on many projects that
were previously funded and may continue to have resource needs.
Because appropriators are likely to consider these projects for
funding again, information on these projects is relevant and useful in
the decision-making process. Second, the budget presentation lacks
information on the amount of unobligated appropriations that remain
available for each project. Such project-level information would help
congressional decision makers make better informed appropriations and
oversight decisions.
Without such information it is unlikely that Congress can have a clear
understanding of (1) how key trade-off decisions affected the budget
request, (2) how new funding requests relate to funding decisions for
existing projects with continuing resource needs, and (3) whether a
given budget request and the underlying projects support longer term
goals and priorities across component operations.
Recommendations for Executive Action:
To ensure that all relevant information is considered during the
budget formulation process, we recommend that the Secretary of Defense
direct the Chief of Engineers and Commanding General of the U.S. Army
Corps of Engineers to take the following action:
* Establish a documented process to incorporate assessments of ongoing
project performance, such as information from review boards, into the
budget formulation process.
To improve the transparency and usefulness of the Corps' budget
presentation to Congress, building on the information the
appropriators have requested the Corps provide, we recommend that the
Secretary of Defense direct the Chief of Engineers and Commanding
General of the U.S. Army Corps of Engineers to work with OMB and
Congress to take the following four actions:
* Include in the annual budget presentation for the Corps summary-
level information on how the budget request reflects decisions made
across project categories, business lines, and accounts.
* Continue to include in the annual budget presentation for the Corps
project-level details for the O&M account, including an explanation of
how the requested funding for each project will be used.
* Provide project-level information on all projects with continuing
resource needs, either as part of the budget presentation or as
supplementary information.
* As a supplement to the budget presentation, provide Congress with
information on the estimated carryover of unobligated appropriations
that remain available for each project.
Agency Comments and Our Evaluation:
We provided a draft of this report to the Department of Defense for
official review and comment. The department provided us with written
comments, which are summarized below and reprinted in appendix V. The
department concurred with four of our recommendations and did not
concur with one. Specifically, the department concurred with our
recommendations that the Corps include additional information in the
budget presentation, including summary-level information on how the
budget request reflects decisions, project-level details for the O&M
account, and project-level information on all projects with continuing
resource needs. The department also concurred with our recommendation
that the Corps provide Congress with information on the estimated
carryover of unobligated appropriations that remain for each project.
The department did not agree, however, with our recommendation that
the Corps establish a documented process to incorporate assessments of
ongoing project performance, such as information from review boards,
into the budget formulation process. The department stated that its
existing mechanisms to incorporate assessments of project performance
into the budget formulation process are adequate and that project
review findings are used in making budgeting decisions. It also
provided an example of how actual performance of O&M projects is used
to determine budget priority. While we agree that the Corps' current
processes may incorporate project review findings, we continue to
believe that establishing a documented process for the use of such
information in the Corps' budget formulation would ensure that the
Corps routinely makes the best use of all available information.
Additionally, having a documented process would improve understanding
of how information from the review boards shapes program priorities
and affects decision making. Moreover, our report discusses the Corps'
use of information on project progress, such as whether schedule and
budgetary milestones are being met, through review boards at the
district and division levels. However, according to Corps officials,
this review board information affects funding decisions on a case-by-
case rather than routine basis. Finally, we have clarified in our
report that we agree that the Corps' budget formulation process for
the O&M account reflects actual performance. Nonetheless, we continue
to believe that the overall emphasis of the Corps' budget process is
on anticipated rather than demonstrated performance.
We are sending copies of this report to the appropriate congressional
committees, the Secretary of Defense, and the Chief of Engineers and
Commanding General of the U.S. Army Corps of Engineers. In addition,
this report will be available at no charge on the GAO Web site at
[hyperlink, http://www.gao.gov].
If you or your staff have any questions regarding this report, please
contact Denise M. Fantone, (202) 512-6806 or fantoned@gao.gov or Anu
K. Mittal at (202) 512-3841 or mittala@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. Key contributors to this report are
listed in appendix VI.
Sincerely yours,
Signed by:
Denise M. Fantone:
Director, Strategic Issues:
Anu K. Mittal:
Director, Natural Resources and Environment:
Signed by:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
To analyze the U.S. Army Corps of Engineers' (Corps) budget
formulation process, we examined (1) the information the Corps uses in
its budget formulation process and the implications of the process and
(2) whether the President's budget request for the Corps is presented
so that agency priorities are clear and the proposed use of funds
transparent. We focused our review on three of the Corps' accounts--
Construction, Investigations, and Operation and Maintenance (O&M).
Most civil works funding is designated to be used for specific
projects, and projects are classified mainly into these accounts. The
Formerly Utilized Sites Remedial Action Program (FUSRAP) is also
project-based, but we did not include it in our review because of its
specialized focus on sites contaminated during the development of
atomic weapons and relatively small size (the fiscal year 2010 budget
request for the Corps included 24 FUSRAP projects).
To understand the Corps' budget formulation process and identify the
information used to evaluate projects, we reviewed documentation
related to the process. We examined the Corps' Budget Engineer
Circular used in formulation of the fiscal year 2011 budget request.
This document guides the formulation of the budget within the Corps.
We reviewed Corps construction project rankings from fiscal year 2006,
the first year in which the Corps ranked construction projects using
performance information, through fiscal year 2010, the most recent
year from which ranking information was available at the time of our
review. In addition, we reviewed records of the agency's internal
project performance reviews and documentation of the data collected as
part of the budget formulation process. We also interviewed Corps
headquarters officials in the Program Integration Division, including
those responsible for budget formulation and execution, and officials
at all eight U.S. division offices. In our interviews with division
officials we used a common set of questions that focused on officials'
perspectives on the effects at the division level of performance-based
budgeting, as compared to the previous budget formulation process. To
examine the effects of the Corps' budget formulation process, we also
analyzed Corps budget and project data from fiscal years 2001 through
2010, the 5 years before and the 5 years after the implementation of
performance-based budgeting. We did not review in detail the fiscal
year 2011 budget for the Corps, as it was released after our audit
work concluded, though we did examine it for key changes from the
previous year. We reviewed the metrics and measures used to rank Corps
projects and how they have changed since fiscal year 2006. We examined
Corps guidance on calculating the benefit-cost ratio (BCR) of projects
and interviewed Corps officials about the BCR and other metrics used
in budgeting and the related effects on the budget request. In
reviewing budgeting metrics and rankings, we did not evaluate the
accuracy of the Corps' calculations for BCR or other metrics. Our
recommendation related to the budget process is based on previous GAO
work which identified leading practices for performance-based
budgeting.
To evaluate how the President's budget request for the Corps is
presented, we reviewed budget presentation materials, including the
President's budgets and appendices and the budget justifications and
Press Books from fiscal years 2006 through 2010. We also reviewed the
Corps' Five Year Development Plans for fiscal years 2007 through 2011,
2008 through 2012, and 2009 through 2013. We reviewed past GAO work on
best practices of performance-based budgeting and examples of budget
presentations for other agencies. To obtain input from users of the
budget presentation for the Corps, we interviewed staff from relevant
congressional committees. We also reviewed appropriations committee
reports from fiscal years 2005 through 2010. We interviewed Corps and
Office of Management and Budget (OMB) officials about the reasons for
the structure and information provided in the budget presentation, and
about the feasibility of making specific changes to it. Our
recommendations related to budget presentation are based on
information from users of the budget presentation, as well as previous
GAO work on performance-based budgeting.
We conducted this performance audit from March 2009 to March 2010 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
[End of section]
Appendix II: Project Prioritization in the Construction,
Investigations, and O&M Accounts:
The Construction Account:
According to a U.S. Army Corps of Engineers (Corps) official, for the
Construction account, projects are systematically classified into
established categories and headquarters officials use specific
metrics, outlined in the Budget Engineer Circular, to rank projects
within these categories. Corps documentation shows that construction
projects are ranked within seven categories: (1) dam safety assurance,
seepage control, and static instability correction projects; (2)
projects with mitigation or environmental requirements; (3) projects
with substantial life-saving benefits; (4) high-performing ongoing
projects; (5) high-performing new start projects; (6) qualifying
ongoing projects with continuing contracts; and (7) projects scheduled
to be completed in the fiscal year of the budget request. The primary
metrics that are to be used to rank projects within each of these
categories are listed in table 2, along with a breakdown of funding by
project type in the fiscal year 2010 budget request for the Corps.
However, according to Corps officials, the metrics alone do not always
determine the priority given to a project in the budget request, as
varying degrees of professional judgment are involved in ranking
individual projects. For example, high-performing projects (excluding
those related to ecosystem restoration) are ranked primarily using the
benefit-cost ratio (BCR). Once a project's BCR has been calculated,
Corps officials have minimal discretion because, according to Corps
and Office of Management and Budget (OMB) staff, OMB establishes
minimum BCR thresholds and projects that do not meet the threshold
cannot be included in the budget request in the high-performing
category. On the other hand, while some metrics are applied to
rankings of ecosystem restoration projects, a Corps official described
these as more subjective. For example, a greater amount of
professional judgment is used in evaluating the significance of one
habitat against others.
Table 2: Construction Categories and Ranking Metrics (Fiscal Year 2010
Budget Request):
Category: Dam safety assurance, seepage control, and static
instability correction projects;
Ranking metrics (fiscal year 2010): Dam safety ranking, which is based
on risk factors such as the dam's condition and danger to human life;
Percent of fiscal year 2010 construction project budget request: 32%.
Category: Projects with mitigation or environmental requirements;
Ranking metrics (fiscal year 2010): Required by environmental treaties
or mitigation requirements;
Percent of fiscal year 2010 construction project budget request: 13%.
Category: Projects with substantial life-saving benefits;
Ranking metrics (fiscal year 2010): Risk to human life (e.g., from
flooding);
Percent of fiscal year 2010 construction project budget request: 14%.
Category: High-performing ongoing projects;
Ranking metrics (fiscal year 2010): For all project types except
ecosystem restoration: benefit-cost ratio (BCR) (2.5 to 1 or greater);
Ecosystem restoration: Cost-effectively contribute to the restoration
of a nationally or regionally significant aquatic ecosystem that has
become degraded as a result of a civil works project or a restoration
effort for which the Corps is otherwise uniquely well-suited;
Percent of fiscal year 2010 construction project budget request: 27%.
Category: High-performing new start projects;
Ranking metrics (fiscal year 2010): For all project types except
ecosystem restoration: BCR (3.2 to 1 or greater);
Ecosystem restoration: same as above;
Percent of fiscal year 2010 construction project budget request: 3%.
Category: Qualifying ongoing projects with continuing contracts;
Ranking metrics (fiscal year 2010): Special category for projects with
continuing contracts that were not convertible to annual contracts;
Percent of fiscal year 2010 construction project budget request: 8$.
Category: Fiscal year 2010 completions;
Ranking metrics (fiscal year 2010): Projects scheduled to be completed
in fiscal year 2010;
Percent of fiscal year 2010 construction project budget request: 3%.
Source: GAO analysis of U.S. Army Corps of Engineers data.
[End of table]
A Corps headquarters official told us that headquarters officials
largely evaluate construction projects across categories on a case-by-
case basis. Although performance-based budgeting has made ranking
projects within categories more systematic, the Corps official added
that professional judgment is still needed to compare projects across
categories. For example, while formal written guidance documenting
priorities across categories does not exist, dam safety projects are
generally the highest priority among the project categories because
these dams are already built and need to be maintained to provide
continued protection to people living in the area. This is supported
by Corps ranking data from the past 5 fiscal years, as the highest
priority dam projects have generally been budgeted for the maximum
amount of funding that the Corps determines can be effectively used.
According to our analysis of Corps data, in most years since
performance-based budgeting was begun, the funding requested for dam
safety projects has been among the highest of the construction
categories. In addition, the agency requests enough funding for
projects with environmental or mitigation requirements to meet annual
targets laid out in environmental plans. Other than dam safety and
projects with environmental requirements, the Corps official could not
generalize about the relative priority or level of funding requested
for the remaining project categories, noting that they are decided on
a case-by-case basis. A Corps official told us that administration
priorities influence budget formulation, and may be communicated to
the Corps through OMB's written feedback on the budget submission or
in a letter from the Assistant Secretary of the Army for Civil Works.
The Investigations Account:
For the Investigations account, information used to make budgetary
decisions varies depending on the phase of the project--reconnaissance
study, feasibility study, and preconstruction engineering and design.
In the first two phases, a Corps headquarters official told us that
the Corps relies primarily on professional judgment and other factors,
but that by the last phase, data are available to guide decision
making. More specifically, the first phase of an investigation is a
reconnaissance study, which is conducted to understand the nature of a
water resources problem and determine the federal government's
interest. To determine if a potential project warrants a
reconnaissance study, he also stated that the headquarters business
line managers meet with the Chief of Budget Development to discuss the
merits of conducting the study. They make funding decisions based on a
narrative description of the proposed study. At this point in the
process, since the study is still prospective and there is no
performance information available, agency officials rely primarily on
their professional judgment, as they did prior to the use of
performance-based budgeting. If the Corps determines through the
reconnaissance study that there is a federal interest in the study,
and local sponsors are available, as required by law, a feasibility
study is conducted. This type of study is done to formulate and
recommend specific solutions to a water resources problem.
At the end of the feasibility study phase, performance information,
such as BCR and returns for the environment, is available to inform
decisions about which projects will move on to the final phase of the
investigation, preconstruction engineering and design.[Footnote 25]
Corps officials consider the same metrics used to evaluate
construction projects since the purpose of this phase is to determine
whether a project should be authorized for construction.
The Operation and Maintenance Account:
For the Operation and Maintenance (O&M) account, the divisions have a
greater role in selecting projects in certain funding increments.
Although the budget formulation process for the O&M account is less
centralized than it is for Construction and Investigations, Corps
headquarters and division officials described how the process is more
centralized than it was prior to the introduction of performance-based
budgeting, when the divisions could largely distribute funding as they
saw fit. Corps officials noted that for increments 1 and 2, the
highest priority increments, Corps division officials identify
critical projects, equaling up to 75 percent of the average of their
previous 5 years' budget requests. According to the Budget Engineer
Circular (EC), the first increment should represent critical routine
projects, meaning projects that are done every year or on a cyclical
basis, or projects that are required in order to meet legal and
environmental requirements or for historic preservation. For example,
the ongoing operation of a powerhouse and the biennial dredging of a
channel could be included in this increment. The Budget EC notes that
the second increment should also represent critical projects, though
these do not take place on a regular basis. An example of this would
be the replacement of a potable water well or a broken gate on a lock.
[Footnote 26] In addition, a Corps official stated that business line
managers at Corps headquarters provide oversight to ensure the
divisions include projects in the first two increments that reflect
Corps-wide priorities. They read the divisions' narrative descriptions
of how they plan to use the requested funding and what the
consequences would be if the projects did not receive the funding. In
addition, as stated in the Budget EC, the projects in increment 3--
equaling up to 25 percent of the average of the previous 5 years'
budget requests for each division--are also considered critical, but
are of lower priority than the first increments. A Corps official
noted that headquarters officials play a greater role by evaluating
increment 3 projects across divisions to determine which projects will
be included in the ceiling level of funding. Unlike increments 1 and
2, in which the divisions can generally be assured of a certain level
of funding, some increment 3 projects may only be funded if the Corps
receives more than the ceiling level of funding. Finally, increments 4
and 5 are lower priority projects above the ceiling level of funding.
The Corps' Budget EC provides detailed guidance to divisions on the
metrics that should be considered to determine which O&M projects and
activities receive priority. Imminent risk to human life, court
mandates, strategic importance to the Department of Defense, and the
amount of commercial tonnage transported on a waterway are among the
factors that would give a waterway higher priority status. For
example, the Budget EC provides specific tonnage ranges to assess the
relative levels of commerce on particular waterways. Thus, all else
being equal, a project that is critical to the operation of a waterway
with a high level of commercial tonnage will be given priority over a
project that is equally critical to the operation of a waterway with a
low level of commercial tonnage. The Budget EC also specifies that,
even if waterways do not support a high level of commercial tonnage,
they can be included in the budget request if they support significant
commercial fishing and public transportation, or are subsistence
harbors, which local communities depend on for survival, or harbors of
refuge, which are protected from heavy seas.
Decision Making Across Accounts:
Although the Budget EC provides guidance on the metrics that should be
considered in determining which projects and activities receive
priority, the Corps does not have formal guidance for making trade-off
decisions while formulating the budget across Construction,
Investigations, O&M, and the other accounts. According to a Corps
official, however, the agency does have an informal process for making
these trade-off decisions. First, the Corps headquarters business line
managers and the Chief of Budget Development meet to consider the
construction and investigations projects in the prior year's budget
request. The goal is to maintain continuity of ongoing projects,
provided they still meet the performance criteria, so these projects'
minimum needs are met. Next, the managers of the nonproject-based
accounts and the Chief of Budget Development consider these accounts,
including General Expenses and the Regulatory Program, and determine
what it would take to maintain the existing level of service. Then,
with the remaining funds, headquarters business line managers and the
Chief of Budget Development consider O&M projects above increments 1
and 2, since these initial increments are included in the ceiling
level of funding. Finally, they consider high-performing new start
construction projects after the ceiling level of funding has been
reached.
[End of section]
Appendix III: Methodology for Calculating Benefit-Cost Ratio and
Changes in Requirements Over Time:
Benefit-cost ratio (BCR) is calculated differently for various types
of projects, but generally represents the value of damages avoided as
a result of constructing a project, divided by the life-cycle cost of
the project for the U.S. Army Corps of Engineers (Corps).[Footnote 27]
Table 3 summarizes the primary inputs used to calculate benefits.
Table 3: Summary of Primary Inputs Used to Calculate Benefits for
Different Project Types[A]:
BCR: Primary benefits;
Flood Risk Management and Coastal Storm Damage: Estimated cost of
property damage and emergency response prevented as a result of the
project;
Navigation (deep draft and inland): Estimated shipping savings
resulting from the project;
Navigation (shallow draft): Estimated cost of vessel damages prevented
as a result of the project;
Hydropower: Estimated difference in cost between providing hydropower
compared to other available power sources.
Source: GAO summary of U.S. Army Corps of Engineers information.
[A] According to Corps officials, the benefits listed here are the
ones that typically have the most significant effect on benefit
calculations. Other factors, such as recreation value, may also be
included in the benefit estimates.
[End of table]
Table 4 shows a simplified example of how BCR would be calculated for
two alternative construction projects aimed at reducing the
transportation costs to users of a channel. The first example, channel
deepening, would generate benefits due to several factors. First, a
deeper channel would accommodate larger vessels, which are more
efficient and have a lower per-unit cost. Additionally, vessels
sometimes have to wait for tidal changes so that there is sufficient
channel depth. Deepening the channel reduces or eliminates the need to
do this and thus creates savings. Finally, if a channel is not deep
enough to accommodate a vessel, the cargo must sometimes be
transferred to a vessel with a more shallow draft.[Footnote 28] If
deepening reduces or eliminates this need, cargo handling savings are
created.
The second example, channel widening, would generate benefits due to
reductions in vessel delays. This would occur if the widening allowed
more vessels to use the channel at one time. For example, the channel
might currently only permit one-way vessel traffic, but the widening
would allow two-way traffic. The reduction in delays generates
savings. Similarly, sometimes weather-related factors such as fog
require wider channels. If a wider channel permits increased vessel
traffic during foggy conditions, savings are also generated. According
to a Corps official, channel widening projects are typically less
expensive than channel deepening projects, though their benefits also
tend to be lower.
Table 4: Hypothetical BCR Calculation for Two Alternative Construction
Projects:
Alternative for reducing transportation costs: Channel deepening:
Benefits:
Savings due to lower per-unit cost of transporting goods; a deeper
channel can accommodate larger vessels: $6,200,000;
Savings due to reduced delays; deep-draft vessels do not have to work
around the tide schedule: $1,400,000;
Savings due to reduced cargo handling costs; there is a reduced need
to transfer goods to shallow-draft vessels: $500,000;
Total increased benefits: $8,100,000;
Costs:
Construction and maintenance: $3,100,000;
Benefit-cost ratio: 2.61;
Eligible for authorization (FY2010)[A]: Yes;
Eligible for budgeting as an ongoing project (FY2010)[B]: Yes;
Eligible for budgeting as a new start project (FY2010)[C]: No.
Alternative for reducing transportation costs: Channel widening:
Benefits:
Savings due to reduced delays; a wider channel would allow two-way
vessel traffic: $2,500,000;
Savings due to reduced delays; a wider channel would reduce weather-
related delays: $700,000;
Total increased benefits: $3,200,000;
Costs:
Construction and maintenance: $1,700,000;
Benefit-cost ratio: 1.88;
Eligible for authorization (FY2010)[A]: Yes;
Eligible for budgeting as an ongoing project (FY2010)[B]: No;
Eligible for budgeting as a new start project (FY2010)[C]: No.
Source: GAO Analysis of U.S. Army Corps information.
[A] In order to be eligible for authorization, most construction
projects must have a BCR of at least 1.
[B] Projects that do not qualify for budgeting by restoring ecosystems
or addressing risk to human life must meet BCR thresholds set by the
administration. In fiscal year 2010 the BCR threshold for ongoing
projects was 2.5. These examples assume that the projects would not
qualify for budgeting for environmental or risk to human life reasons.
[C] In fiscal year 2010 the BCR threshold for new start projects was
3.2. These examples assume that the projects would not qualify for
budgeting for environmental or risk to human life reasons.
[End of table]
The minimum BCR has been higher for new start construction projects
than ongoing projects, reflecting the administration's preference for
fewer new start projects. Prior to fiscal year 2008, a different
measure was used instead of BCR as the primary economic metric. Table
5 shows the changes in the BCR requirements over the past 5 years.
Office of Management and Budget (OMB) staff stated they recommended
changing the measure to create more stability. Nevertheless, according
to Corps division officials, there is still uncertainty about whether
particular projects will be included in the budget request. Since,
according to Corps and OMB staff, the BCR threshold set by OMB can
change from year to year, a project may meet the BCR threshold 1 year
but fail to meet it in future years, making it difficult for the Corps
to make long-term commitments. For example, one division cited a
hydropower plant that had been funded since 2005, but was not included
in the President's 2010 budget request because it had a BCR of 1.7 and
the BCR threshold for ongoing projects that year was 2.5. Officials at
another division estimated that three to four projects in their
jurisdiction had been put on hold since the introduction of
performance-based budgeting because they could not meet the BCR
threshold. Officials at some divisions told us that this uncertainty
and the failure of a project to be budgeted has negatively affected
the Corps' relationship with local sponsors. Some division officials
also told us that this increased uncertainty has made workforce
planning more challenging.
Table 5: Summary of Economic Requirements for Construction Projects,
by Fiscal Year:
Thresholds for ongoing projects;
Fiscal year: 2006: RBRC[A] must be at least 3 to 1;
Fiscal year: 2007: RBRC must be at least 3 to 1;
Fiscal year: 2008: BCR must be at least 1.5 to 1;
Fiscal year: 2009: BCR must be at least 1.5 to 1;
Fiscal year: 2010: BCR must be at least 2.5 to 1.
Thresholds for new start projects;
Fiscal year: 2006: Must rank in the top 20 percent of ongoing,
budgeted projects of its type;
Fiscal year: 2007: Must rank in the top 20 percent of ongoing,
budgeted projects of its type;
Fiscal year: 2008: Must rank in the top 20 percent of ongoing,
budgeted projects of its type;
Fiscal year: 2009: Must rank in the top 20 percent of ongoing,
budgeted projects of its type;
Fiscal year: 2010: BCR of at least 3.2 to 1.
Source: GAO analysis of U.S. Army Corps of Engineers data.
[A] RBRC represents the remaining benefits of a project divided by its
remaining cost to complete.
[End of table]
[End of section]
Appendix IV: Trends in Budget Requests for the Corps:
Numbers of Projects Requested:
Over the past decade the number of projects included in the budget
request for the U.S. Army Corps of Engineers (Corps) has varied. The
number of construction projects has in general decreased, though it
has been more stable in recent years, as shown in figure 4.
Figure 4: Number of Construction Projects Requested, by Fiscal Year:
[Refer to PDF for image: vertical bar graph]
Fiscal year: 2001;
Number of construction projects requested: 194.
Fiscal year: 2002;
Number of construction projects requested: 207.
Fiscal year: 2003;
Number of construction projects requested: 194.
Fiscal year: 2004;
Number of construction projects requested: 161.
Fiscal year: 2005;
Number of construction projects requested: 139.
Fiscal year: 2006;
Number of construction projects requested: 98.
Fiscal year: 2007;
Number of construction projects requested: 86.
Fiscal year: 2008;
Number of construction projects requested: 66.
Fiscal year: 2009;
Number of construction projects requested: 83.
Fiscal year: 2010;
Number of construction projects requested: 93.
Fiscal year: 2011;
Number of construction projects requested: 95.
Source: GAO analysis of U.S. Army Corps of Engineers data.
[End of figure]
The number of investigations projects included in the budget request
has followed a similar trend to the Construction account, though the
degree of the decrease over time has been greater, as shown in figure
5.
Figure 5: Number of Investigations Projects Requested, by Fiscal Year:
[Refer to PDF for image: vertical bar graph]
Fiscal year: 2001;
Number of investigations projects requested: 327.
Fiscal year: 2002;
Number of investigations projects requested: 353.
Fiscal year: 2003;
Number of investigations projects requested: 384.
Fiscal year: 2004;
Number of investigations projects requested: 293.
Fiscal year: 2005;
Number of investigations projects requested: 262.
Fiscal year: 2006;
Number of investigations projects requested: 135.
Fiscal year: 2007;
Number of investigations projects requested: 56.
Fiscal year: 2008;
Number of investigations projects requested: 61.
Fiscal year: 2009;
Number of investigations projects requested: 65.
Fiscal year: 2010;
Number of investigations projects requested: 68.
Fiscal year: 2011;
Number of investigations projects requested: 65.
Source: GAO analysis of U.S. Army Corps of Engineers data.
[End of figure]
Compared to the Construction and Investigations accounts, the
Operation and Maintenance (O&M) account has been relatively stable, as
shown in figure 6.
Figure 6: Number of O&M Projects Requested, by Fiscal Year:
[Refer to PDF for image: vertical bar graph]
Fiscal year: 2001;
Number of O&M projects requested: 761.
Fiscal year: 2002;
Number of O&M projects requested: 688.
Fiscal year: 2003;
Number of O&M projects requested: 814.
Fiscal year: 2004;
Number of O&M projects requested: 821.
Fiscal year: 2005;
Number of O&M projects requested: 692.
Fiscal year: 2006;
Number of O&M projects requested: 747.
Fiscal year: 2007;
Number of O&M projects requested: 792.
Fiscal year: 2008;
Number of O&M projects requested: 814.
Fiscal year: 2009;
Number of O&M projects requested: 846.
Fiscal year: 2010;
Number of O&M projects requested: 813.
Fiscal year: 2011;
Number of O&M projects requested: 768.
Source: GAO analysis of U.S. Army Corps of Engineers data.
[End of figure]
[End of section]
Appendix V: Comments from the Department of Defense:
Department Of The Army:
Office Of The Assistant Secretary:
Civil Works:
108 Army Pentagon:
Washington, DC 20310-0108:
March 30, 2010:
Ms. Anu K. Mittal:
Director, Natural Resources and Environment:
U.S. Government Accountability Office:
441 G Street, N.W.
Washington, D.C. 20548:
Dear Ms. Mittal:
This is the Department of Defense (DoD) response to the GAO Draft Report
(GAO-10-453), "Army Corps Of Engineers: Budget Formulation Process
Emphasizes Agency-Wide Priorities, but Transparency of Budget
Presentation Could be Improved," dated February 23, 2010 (GAO Code
450715).
Thank you for the opportunity to review and comment on the draft report.
Responses to the GAO recommendations are enclosed and summarized below.
DoD concurs with recommendations two, three, four and five, but non-
concurs with recommendation one, specifically, the GAO recommendation
that the Secretary of Defense direct the Chief of Engineers and
Commanding General of the U.S. Army Corps of Engineers to establish a
documented process to incorporate assessments of on-going project
performance, such as information from review boards, into the budget
formulation process.
Existing methods of incorporating assessments of project performance
into the Army Civil Works budget formulation process are considered to
be sufficient, as explained in the enclosed response to recommendation
one.
Very truly yours,
Signed by:
Jo-Ellen Darcy::
Assistant Secretary of the Army (Civil Works):
Enclosure:
GAO Draft Report Dated February 23, 2010:
GAO-10-453 (GAO Code 450715):
"Army Corps Of Engineers: Budget Formulation Process Emphasizes Agency-
Wide Priorities, But Transparency Of Budget Presentation Could Be
Improved"
Department Of Defense Comments To The GAO Recommendations:
Recommendation 1: The GAO recommends that the Secretary of Defense
direct the Chief of Engineers and Commanding General of the U.S. Army
Corps of Engineers to establish a documented process to incorporate
assessments of ongoing project performance, such as information from
review boards, into the budget formulation process. (See page 18/GAO
Draft Report.) [Now on page 18]
DoD Response: Non-concur. Existing processes are considered to be
adequate and there would be no added benefit to establishing new ones.
On page 12 the report states that "the Corps' budget formulation
process focuses on projects' anticipated outcomes, rather than
demonstrated performance." While it is correct that criteria such as
safety and benefit-to-cost ratio are the primary budget prioritization
criteria, it is not correct that the results of periodic assessments
and review boards are not incorporated into the budget formulation
process. [See comment 1]
If an individual project review determines that the project is not
consistent with policy, it will not be budgeted at all. Corps
Headquarters performance review boards focus at the programmatic
level, and the results of the reviews are considered in the
formulation of overall priorities for the program. For policy
consistent studies and projects under construction, the results of
management reviews of schedule slippage and cost changes inform the
development of both the budget amount and optimal funding capability
for the budget year.
For completed projects in the Operation and Maintenance program,
actual performance over time is assessed against authorized project
purposes and contributes to the determination of budget priority. For
example, in the navigation program, actual commercial use of projects
normally establishes the budget priority. The first step for the
Operation and Maintenance program, subject to Headquarters review, is
for each Division to allocate an amount equal to 75 percent of its
recent total allocations. This enables the Districts and Divisions,
which are most familiar with projects and conduct the most intensive
reviews of project performance and conditions, to allocate funds to
project activities to ensure at least basic operation and attention to
the most critical maintenance within the region. [See comment 2]
The final 25 percent is allocated according to nation-wide budget
metrics, to raise the level of operation in some cases and to address
the next most important maintenance items from a national perspective.
Recommendation 2: The GAO recommends that the Secretary of Defense
direct the Chief of Engineers and Commanding General of the U.S. Army
Corps of Engineers to work with OMB and Congress to include in the
annual budget presentation for the Corps summary level information on
how the budget request reflects decisions made across project
categories, business lines, and accounts. (See page 18/GAO Draft
Report.) [Now on pp. 18-19]
DoD Response: Concur. The Army will include, in the annual budget
presentation for the Corps' Civil Works program, summary level
information on how the budget reflects decisions made across project
categories, business lines, and accounts.
Recommendation 3: The GAO recommends that the Secretary of Defense
direct the Chief of Engineers and Commanding General of the U.S. Army
Corps of Engineers to work with OMB and Congress to continue to
include in the annual budget presentation for the Corps project-level
details for the O&M account, including an explanation of how the
requested funding for each project will be used. (See page 18/GAO
Draft Report.) [Now on pp. 18-19]
DoD Response: Concur. The Army will continue to include, in the annual
budget presentation for the Corps' Civil Works program, project-level
details for the O&M account, including an explanation of how funding
budgeted for each project will be used.
Recommendation 4: The GAO recommends that the Secretary of Defense
direct the Chief of Engineers and Commanding General of the U.S. Army
Corps of Engineers to work with OMB and Congress to provide project-
level information on all projects with continuing resource needs,
either as part of the budget presentation or as supplementary
information. (See page 18/GAO Draft Report.) [Now on pp. 18-19]
DoD Response: Concur. The Army will provide project level information
on all projects funded in the prior year with continuing resource
needs, either as part of the Corps' Civil Works budget presentation or
as supplemental information.
Recommendation 5: The GAO recommends that the Secretary of Defense
direct the Chief of Engineers and Commanding General of the U.S. Army
Corps of Engineers to work with OMB and Congress, as a supplement to
the budget presentation, to provide Congress with information on the
estimated carryover of unobligated appropriations that remain
available for each project. (See page 18/GAO Draft Report.) [Now on
pp. 18-19]
DoD Response: Concur. The Army will provide information on the
estimated carryover of unobligated appropriations that remain
available for each project. The estimated carryover is taken into
consideration in establishing the amount of additional funding to be
budgeted for a given project.
GAO Comments:
1. While we agree that the Corps' current processes may incorporate
project review findings, we continue to believe that establishing a
documented process for the use of such information in the Corps'
budget formulation would ensure that the Corps routinely makes the
best use of all available information. Additionally, having a
documented process would improve understanding of how information from
the review boards shapes program priorities and affects decision
making. Moreover, our report discusses the Corps' use of information
on project progress, such as whether schedule and budgetary milestones
are being met, through review boards at the district and division
levels. However, according to Corps officials, this review board
information affects funding decisions on a case-by-case rather than
routine basis.
2. We have clarified in our report that we agree the Corps' budget
formulation process for the O&M account reflects actual performance.
Nonetheless, we continue to believe that the overall emphasis of the
Corps' budget process is on anticipated rather than demonstrated
performance.
[End of section]
Appendix VI: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Denise M. Fantone, (202) 512-6806 or fantoned@gao.gov:
Anu K. Mittal, (202) 512-3841 or mittala@gao.gov:
Acknowledgments:
In addition to the individuals listed above, Carol M. Henn, Assistant
Director; Vondalee R. Hunt, Assistant Director; Kathleen Padulchick;
and Kelly A. Richburg made significant contributions to this report.
Joshua Archambault, Virginia Chanley, Robert L. Gebhart, Chelsa
Gurkin, Felicia Lopez, and Vasiliki Theodoropoulos also made key
contributions.
[End of section]
Footnotes:
[1] The Corps has both a military and a civil works program. The
military program provides, among other things, engineering and
construction services to other U.S. government agencies and foreign
governments, while the civil works program is responsible for
investigating, developing, and maintaining water resource projects.
This report only discusses the civil works program.
[2] The "Support for Others" business line covers the Corps'
activities related to interagency and international support.
[3] The Corps has business line managers at the headquarters,
division, and some district levels. Business line managers work to
integrate resources, budgets, and activities, with a focus on
executing the mission of each specific business line.
[4] The nine civil works accounts included in the budget request for
the Corps are: Construction, Investigations, O&M, Regulatory Program,
Mississippi River and Tributaries, Expenses, Flood Control and Coastal
Emergencies, Formerly Utilized Sites Remedial Action Program, and the
Assistant Secretary of the Army (Civil Works). During the time period
reviewed for this report, the Flood Control and Coastal Emergencies
account received funding through supplemental appropriations.
[5] The most recent Five Year Development Plan issued by the Corps
covered fiscal years 2009 through 2013 and accompanied the fiscal year
2009 budget request.
[6] The Formerly Utilized Sites Remedial Action Program, another Corps
account, is also project-based.
[7] The remaining 16 percent of the budget request is for the
following six accounts: Regulatory Program, Mississippi River and
Tributaries, Expenses, Flood Control and Coastal Emergencies, Formerly
Utilized Sites Remedial Action Program, and the Office of the
Assistant Secretary of the Army (Civil Works).
[8] Information on the number of projects receiving appropriations in
fiscal year 2010 was provided to us by a Corps official.
[9] The Water Resources Development Act (WRDA) of 1986 stipulated that
nonfederal sponsors share the cost of planning and implementing Corps
projects. The division of federal and nonfederal cost-sharing required
varies by project purpose. Funding from nonfederal sources is not
included in figure 3.
[10] A Corps official told us that he expects the updated strategic
plan to be issued in 2010.
[11] A Corps official told us that the Corps plans to revise the
strategic goals from five to four. The fifth goal will be incorporated
into the others.
[12] The Corps calculates BCR differently for various types of
projects, but it generally represents the value of damages avoided as
a result of constructing a project, divided by the life-cycle cost of
the project for the Corps. See appendix III for additional discussion
of the BCR calculation.
[13] Appendix III contains a more detailed description of how BCR is
calculated for different project types.
[14] The risk to human life metric is also affected by factors such as
the velocity and depth of flood waters, as well as warning and escape
times.
[15] Requested amounts were not adjusted for inflation.
[16] As previously described, the nine business lines are: Navigation,
Flood Risk Management, Environment, Recreation, Hydropower, Water
Supply, Emergency Management, Regulatory Program, and Support for
Others.
[17] A Corps official told us that certain projects may receive more
or less funding on a case-by-base basis depending on issues identified
at review boards. Because the Corps does not compile detailed
information on how review board findings affect budgetary decisions,
we could not determine how often this occurs.
[18] GAO, Executive Guide: Effectively Implementing the Government
Performance and Results Act, [hyperlink,
http://www.gao.gov/products/GAO-96-118] (Washington, D.C.: June 1996).
[19] GAO, Veterans' Disability Benefits: More Transparency Needed to
Improve Oversight of VBA's Compensation and Pension Staffing Levels,
[hyperlink, http://www.gao.gov/products/GAO-05-47] (Washington, D.C.:
Nov. 15, 2004).
[20] Some information on projects not in the budget request is
included in the Fiscal Year 2009 Five Year Development Plan. This
document includes a listing of construction and investigations
projects that make up an "enhanced plan" budget scenario, which is
based on the prior year's appropriations. The listing includes the
project name, the state and division in which the project is located,
and estimates of fiscal year 2009 and subsequent year funding
requirements. At a summary level, the Five Year Development Plan
describes how the enhanced plan would affect business line performance.
[21] The projects that received appropriations and the projects for
which funding was requested included both new and ongoing projects.
Project numbers do not include construction or investigations projects
in the Mississippi River and Tributaries (MR&T) account.
[22] The fiscal year 2011 budget request included 95 construction
projects and 65 investigations projects. These numbers do not include
projects in the MR&T account.
[23] During the period examined for this report, Corps accounts
received "no-year" appropriations--that is, funds that are available
for obligation until expended--so funding may be carried over to
subsequent fiscal years. For example, if the Corps obligates $40
million of a $50 million appropriation, the $10 million that was not
spent is available for use in subsequent years, with certain
conditions.
[24] A Corps official attributed the increase in carryover partially
to the large amount of supplemental funding the Corps has received in
recent years. In the past the Corps had a goal that projects have no
carryover from year to year, but Corps officials told us that the
agency no longer has this goal.
[25] Many projects must also have nonfederal sponsors to advance to
the next phase.
[26] A section of a waterway, such as a canal, closed off with gates,
in which vessels in transit are raised or lowered by raising or
lowering the water level of that section.
[27] Life-cycle cost is the overall estimated cost for a particular
project over the time period corresponding to the life of the project,
including periodic or continuing costs of operation and maintenance.
[28] Draft refers to the depth of a vessel's keel below the water
line, especially when loaded.
[End of section]
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