Coast Guard
Comprehensive Blueprint Needed to Balance and Monitor Resource Use and Measure Performance for All Missions Gao ID: GAO-03-544T March 12, 2003The September 11th attacks decidedly changed the Coast Guard's priorities and markedly increased its scope of activities. Homeland security, a long-standing but relatively small part of the Coast Guard's duties, took center stage. Still, the Coast Guard remains responsible for many other missions important to the nation's interests, such as helping stem the flow of drugs and illegal migration, protecting important fishing grounds, and responding to marine pollution. For the past several years, the Coast Guard has received substantial increases in its budget to accommodate its increased responsibilities. GAO was asked to review the Coast Guard's most recent level of effort on its various missions and compare them to past levels, analyze the implications of the proposed 2004 budget for these levels of effort, and discuss the challenges the Coast Guard faces in balancing and maximizing the effectiveness of all its missions.
The most recent levels of effort for the Coast Guard's various missions show clearly the dramatic shifts that have occurred among its missions since the September 11th attacks. Predictably, levels of effort related to homeland security remain at much higher levels than before September 11th. Levels of effort for two major nonsecurity missions--search and rescue and aids to navigational--are now relatively consistent with historical levels. By contrast, several other missions--most notably fisheries enforcement and drug interdiction--dropped sharply after September 11th and remain substantially below historical levels. Although the Coast Guard has stated that its aim is to increase efforts in the missions that have declined, continued homeland security and defense demands make it unlikely that the agency, in the short run, can deliver on this goal. The 2004 budget request contains little that would appear to substantially alter the existing levels of effort among missions. The initiatives in the proposed budget relate mainly to enhancing homeland security and search and rescue missions. Although the 2004 budget request represents a sizeable increase in funding (9.6 percent), the Coast Guard still faces fundamental challenges in meeting its new security-related responsibilities while rebuilding its capacity to accomplish other missions that have declined. Given the likely constraints on the federal budget in future years, it is important for the Coast Guard to identify the likely level of effort for each of its missions; lay out a plan for achieving these levels; and tie these levels to measurable outputs and goals, so that the agency and the Congress can better decide how limited dollars should be spent.
GAO-03-544T, Coast Guard: Comprehensive Blueprint Needed to Balance and Monitor Resource Use and Measure Performance for All Missions
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Testimony:
Before the Subcommittee on Oceans, Atmosphere, and Fisheries, Committee
on Commerce, Science, and Transportation, U.S. Senate:
United States General Accounting Office:
GAO:
For Release on Delivery Expected at 2:30 p.m. EST:
Wednesday, March 12, 2003:
Coast Guard:
Comprehensive Blueprint Needed to Balance and Monitor Resource Use and
Measure Performance for All Missions:
Statement of JayEtta Z. Hecker, Director
Physical Infrastructure:
GAO-03-544T:
GAO Highlights:
Highlights of GAO-03-544T, a testimony before the Subcommittee on
Oceans,
Atmosphere, and Fisheries, Senate Committee on Commerce, Science, and
Transportation
Why GAO Did This Study:
The September 11th attacks decidedly changed the Coast Guard‘s
priorities
and markedly increased its scope of activities. Homeland security, a
long-standing but relatively small part of the Coast Guard‘s duties,
took
center stage. Still, the Coast Guard remains responsible for many
other
missions important to the nation‘s interests, such as helping stem the
flow of drugs and illegal migration, protecting important fishing
grounds, and responding to marine pollution. For the past several
years,
the Coast Guard has received substantial increases in its budget to
accommodate its increased responsibilities. GAO was asked to review
the
Coast Guard‘s most recent level of effort on its various missions and
compare them to past levels, analyze the implications of the proposed
2004 budget for these levels of effort, and discuss the challenges the
Coast Guard faces in balancing and maximizing the effectiveness of all
its missions.
What GAO Found:
The most recent levels of effort for the Coast Guard‘s various missions
show clearly the dramatic shifts that have occurred among its missions
since the September 11th attacks. Predictably, levels of effort
related to homeland security remain at much higher levels than before
September 11th. Levels of effort for two major nonsecurity missions”
search and rescue and aids to navigational”are now relatively
consistent with historical levels. By contrast, several other
missions”most notably fisheries enforcement and drug interdiction”
dropped sharply after September 11th and remain substantially below
historical levels. Although the Coast Guard has stated that its aim
is to increase efforts in the missions that have declined, continued
homeland security and defense demands make it unlikely that the
agency, in the short run, can deliver on this goal. The 2004 budget
request contains little that would appear to substantially alter the
existing levels of effort among missions. The initiatives in the
proposed budget relate mainly to enhancing homeland security and
search and rescue missions.
Although the 2004 budget request represents a sizeable increase in
funding (9.6 percent), the Coast Guard still faces fundamental
challenges in meeting its new security-related responsibilities while
rebuilding its capacity to accomplish other missions that have
declined. Given the likely constraints on the federal budget in
future years, it is important for the Coast Guard to identify the
likely level of effort for each of its missions; lay out a plan for
achieving these levels; and tie these levels to measurable outputs
and goals, so that the agency and the Congress can better decide how
limited dollars should be spent.
What GAO Recommends:
In order to monitor resource use and measure performance, GAO
recommended in November, 2002 that the Coast Guard develop a
longer-term strategy outlining how resources will be distributed
across missions, a time frame for achieving this desired balance,
and a useful format for reporting progress to the Congress. The Coast
Guard agreed with the need for such a strategy and has started an
effort to develop one.
www.gao.gov/cgi-bin/getrpt?GAO-03-544T.
To view the full testimony, including the scope
and methodology, click on the link above.
For more information, contact JayEtta Hecker at (206) 512-2834 or
heckerj@gao.gov.
Madame Chair and Members of the Subcommittee:
I am pleased to be here today to discuss the President‘s fiscal year
2004 budget request for the Coast Guard and the challenges the agency
faces in this and future budgets. Since the terrorist attacks of
September 11, 2001, the Coast Guard has had to reinvent itself in many
respects, shifting its focus and resources from many of its traditional
missions--such as stemming the flow of illegal drugs and protecting
important fishing grounds--to homeland security. The President‘s fiscal
year 2004 budget request for the Coast Guard is $6.8 billion, a 9.6
percent increase in nominal dollars from the previous year. If the
request is approved, about half of the agency‘s operating expenses will
be directed to fulfilling expanded homeland security responsibilities.
How--and whether--the Coast Guard can continue to meet its
responsibilities for all of its missions, given the increased emphasis
on and resources required for homeland security, is a matter of great
concern to the Congress.
My testimony today, which is based on recently completed work,
addresses three topics: (1) the most recent levels of effort for the
Coast Guard‘s various missions, and how these levels compare to those
in the past; (2) the implications of the proposed 2004 budget for these
various levels of effort; and (3) the challenges the Coast Guard faces
in balancing its resources among its missions and ensuring and
maximizing its effectiveness in each of its missions. The scope and
methodology of our review is described in the appendix.
In summary:
* The most recent levels of effort for the Coast Guard‘s various
missions, as measured by the use of multiple-mission resources such as
cutters, patrol boats, and aircraft, show clearly the dramatic increase
in the amount of time spent on homeland security following the
September 11th attacks. In the months after the attacks, as the initial
surge in homeland security activities was abating, activity in many
other missions began returning to pre-September 11th levels, but some
have not yet recovered. For example, the amount of resource hours
currently being spent on search and rescue and maintaining aids to
navigation are fairly consistent with traditional levels over the last
5 years. However, there have been substantial declines from traditional
levels of time spent on two law enforcement missions--fisheries
enforcement and drug interdiction. Although the Coast Guard Commandant
has stated that the Coast Guard would like to return all law
enforcement missions to 93 percent of pre-September 11th levels by the
end of 2003 and 95 percent by the end of 2004, it appears unlikely that
the Coast Guard can meet these goals. Achieving these goals depends
heavily on not having to respond to such contingencies as heightened
terror alerts or deployment of Coast Guard resources in military
operations. However, in the current environment, such contingencies
continue to occur, as evidenced by the recent deployment of several
cutters and patrol boats to the Persian Gulf as part of the Middle East
buildup.
* The fiscal year 2004 budget request for the Coast Guard contains
little that would substantially change the levels of effort for most
missions. The budget request of $6.8 billion represents an increase of
about $592 million, or almost 10 percent over the previous year. About
$168 million is earmarked for new initiatives, mainly in homeland
security and search and rescue missions. Coast Guard officials said
that some of the new initiatives, such as establishing better
intelligence networks, would have potential benefit for other security-
related missions, such as migrant and drug interdiction, but the
initiatives do not directly pertain to augmenting activities or adding
new capacity in those missions that have seen substantial declines in
activity.
* Although the Coast Guard has received substantial budget increases in
recent years to deal with its increased responsibilities--a trend that
continues in the proposed budget--the Coast Guard still faces
fundamental challenges in being able to accomplish all the
responsibilities it has been given. The Coast Guard‘s Deepwater
Project, a modernization effort for cutters, patrol boats, and
aircraft, has already experienced delays in the delivery of key assets,
jeopardizing the agency‘s future ability to carry out a number of
missions at optimum levels. This situation could worsen because the
Coast Guard has tied successful completion of the project to levels of
funding that are beyond what has been available. Another budgetary
challenge is that, for the foreseeable future, the Coast Guard must
implement a variety of recently mandated homeland security tasks by
taking resources from other activities. Similarly, any unexpected
changes--such as terrorist attacks or extended terror alerts--could
also result in using resources for homeland security purposes that
would normally be used for other missions. Such challenges raise
serious concerns about the Coast Guard‘s ability to meet traditional
expectations across the broad range of all of its missions. In recent
reports[Footnote 1], we have pointed to several steps that are needed
in such an environment. One is to continue finding ways to operate more
efficiently to maximize the existing resources available. Another is to
develop a comprehensive blueprint for accomplishing mission
responsibilities. This blueprint needs to recognize the new operating
reality created by the Coast Guard‘s increasing homeland security role
and translate that reality into establishing realistic level-of-effort
targets for its all of missions, a plan for achieving these targets,
and appropriate measurement and reporting of results so that the agency
and the Congress can better decide how limited dollars can be spent.
Background:
The Coast Guard, which became a part of the Department of Homeland
Security on March 1, 2003, has a wide variety of both security and
nonsecurity missions. (See table 1.) The Coast Guard‘s equipment
includes 141 cutters, approximately 1,400 small patrol and rescue
boats, and about 200 aircraft. Coast Guard services are provided in a
variety of locations, including ports, coastal areas, the open sea, and
in other waterways like the Great Lakes and the Mississippi River. The
Coast Guard‘s installations range from small boat stations providing
search and rescue and other services to marine safety offices that
coordinate security and other activities in the nation‘s largest ports.
Table 1: Security and Nonsecurity Missions of the Coast Guard:
Mission area[A]: Security missions.
Mission area[A]: Ports, waterways, and coastal security; Activities and
functions within each mission area: Security missions: Conducting
harbor patrols, vulnerability assessments, intelligence gathering and
analysis, and other activities to prevent terrorist attacks and
minimize the damage from attacks that occur.
Mission area[A]: Drug interdiction; Activities and functions within
each mission area: Security missions: Deploying cutters and aircraft in
high drug trafficking areas and gathering intelligence to reduce the
flow of illegal drugs across maritime boundaries.
Mission area[A]: Migrant interdiction; Activities and functions within
each mission area: Security missions: Deploying cutters and aircraft to
reduce the flow of undocumented migrants entering the United States by
maritime routes.
Mission area[A]: Defense readiness; Activities and functions within
each mission area: Security missions: Participating with the Department
of Defense (DOD) in global military operations; deploying cutters and
other boats in and around harbors to protect DOD force mobilization
operations.
Mission area[A]: Nonsecurity missions.
Mission area[A]: Maritime safety; Activities and functions within each
mission area: Security missions: Setting standards and conducting
vessel inspections to better ensure the safety of passengers and crew
aboard cruise ships, ferries, and other passenger vessels and
commercial and fishing vessels; partnering with states and boating
safety organizations to reduce recreational boating deaths.
Mission area[A]: Search and rescue; Activities and functions within
each mission area: Security missions: Operating small boat stations and
national distress and response communication system; conducting search
and rescue operations for mariners in distress.
Mission area[A]: Living marine resources; Activities and functions
within each mission area: Security missions: Protecting our nation‘s
fishing grounds from foreign encroachment; enforcing domestic fishing
laws and regulations through inspections and fishery patrols.
Mission area[A]: Environmental protection; Activities and functions
within each mission area: Security missions: Preventing and responding
to marine oil spills; preventing the illegal dumping of plastics and
garbage into our nation‘s waters.
Mission area[A]: Aids to navigation; Activities and functions within
each mission area: Security missions: Maintaining the extensive system
of navigation aids in our waterways; monitoring marine traffic through
traffic service centers.
Mission area[A]: Ice operations; Activities and functions within each
mission area: Security missions: Conducting polar operations to
facilitate the movement of critical goods and personnel in support of
scientific and national security activity; conducting domestic
icebreaking operations to facilitate year-round commerce.
Source: U.S. Coast Guard.
[A] The Coast Guard‘s security and nonsecurity missions are delineated
in the Homeland Security Act of 2002 (Pub. L. 107-296, Nov. 25, 2002).
[End of table]
As an organization that is also part of the armed services, the Coast
Guard has both military and civilian positions. At the end of fiscal
year 2002, the agency had over 42,000 full-time positions--about 36,000
military and about 6,600 civilians. The Coast Guard also has about
7,200 reservists who support the national military strategy and provide
additional operational support and surge capacity during emergencies,
such as natural disasters. In addition, about 36,000 volunteer
auxiliary personnel assist in a wide range of activities from search
and rescue to boating safety education.
Overall, after using fiscal year 2003 inflation-adjusted dollars to
adjust for the effects of inflation, the Coast Guard‘s budget grew by
about 41 percent between fiscal years 1993 and 2003. However, nearly
all of this growth occurred in the second half of the period. During
fiscal years 1993-1998, after taking inflation into account, the budget
remained essentially flat. (See fig. 1.) Significant increases have
occurred since fiscal year 1998.
Figure 1: Annual Budgets for the Coast Guard, Fiscal Years 1993-2003:
[See PDF for image]
[End of figure]
The events of September 11th caused the Coast Guard to direct its
efforts increasingly into maritime homeland security activities,
highlighted by the Coast Guard‘s establishing a new program area:
Ports, Waterways, and Coastal Security (coastal security). Prior to
September 11th, activities related to this area represented less than
10 percent of the Coast Guard‘s operating budget, according to Coast
Guard officials. In the fiscal year 2004 request, Coastal Security
represents about one-quarter of the Coast Guard‘s operating budget.
Other mission areas, most notably drug interdiction, have declined
substantially as a percentage of the operating budget.
Security Emphasis Continues to Affect Levels of Effort in Some
Missions:
The emphasis the Coast Guard placed on security after September 11th
has had varying effects on its level of effort among all of its
missions, as measured by the extent to which multiple-mission resources
(cutters, other boats, and aircraft) are used for a particular mission.
The most current available data show that some security-related
missions, such as migrant interdiction and coastal security, have grown
significantly since September 11th. Other missions, such as search and
rescue and aids to navigation remained at essentially the same levels
as they were before September 11th. However, the level of effort for
other missions, most notably the interdiction of illegal drugs and
fisheries enforcement, is substantially below pre-September 11th
levels.
Missions with Increased Levels of Resources:
Missions such as ports, waterways, and coastal security, and migrant
interdiction have experienced increased levels of effort. Coastal
security has seen the most dramatic increase from pre-September 11th
levels. (See fig. 2.) For example, it went from 2,400 resource
hours[Footnote 2] during the first quarter of 1999, peaked at 91,000
hours during the first quarter of fiscal year 2002 (immediately after
September 11, 2001), and most recently stood at nearly 37,000 hours for
the first quarter of fiscal year 2003. In figure 2, as well as the
other resource hour figures that follow, we have added a line developed
by using a linear regression[Footnote 3] to show the general trend for
the period. It is important to note that while such lines depict the
trend in resource hours to date, they should not be taken as a
prediction of future values. Other activity indicators, such as sea
marshal[Footnote 4] boardings, also demonstrate an increased emphasis
in this area. Before September 11th, such boardings were not done, but
as of the first quarter of 2003 there have been over 550 such
boardings. Similarly, vessel operational control actions[Footnote 5]
have risen by 85 percent since the fourth quarter of fiscal year 2001.
Figure 2: Number of Resource Hours Spent on Ports, Waterways, and
Coastal Security, by Quarter, October 1998 - December 2002:
[See PDF for image]
Note: GAO analysis of data from the Coast Guard‘s Abstract of
Operations includes resource hours for cutters, boats, and aircraft.
Figures shown are for the first quarter of fiscal year 1999 and 2003,
respectively. The dotted line shows actual quarter-by-quarter totals;
the thicker line is a regression line showing the general trend.
[End of figure]
Given the emphasis on homeland security, it is not surprising that
efforts to interdict illegal immigrants have also increased. For
example, during the first quarter of 2003, the level of effort in this
area was 28 percent higher than it was for the comparable period in
1998.
Missions with a Steady State of Resources:
Some of the Coast Guard‘s traditional missions, such as aids to
navigation and search and rescue, have been the least affected by the
increased emphasis on security. While resource hours for both of these
missions have declined somewhat since the first quarter of fiscal year
1998, the overall pattern of resource use over the past 5 years has
remained consistent. Although search and rescue boats and buoy tenders
were used to perform homeland security functions immediately after
September 11th, their doing so did not materially affect the Coast
Guard‘s ability to carry out its search and rescue or aids to
navigation missions. Search and rescue boats were initially redeployed
for harbor patrols after the terrorist attacks, but the impact on the
mission was minimal because the deployments occurred during the off-
season with respect to recreational boating.[Footnote 6] Similarly,
some boats that normally serve as buoy tenders--an aids to navigation
function--were used for security purposes instead, but they were among
the first to be returned to their former missions. For the first
quarter of fiscal year 2003, the number of resource hours spent on
these missions was very close to the number spent during the comparable
quarter of fiscal year 1998.
Figure 3: Number of Resource Hours Spent on Search and Rescue and Aids
to Navigation, by Quarter, October 1997-December 2002:
[See PDF for image]
[End of figure]
Performance measurement data further demonstrates the relatively
minimal impact on these missions resulting from the Coast Guard‘s
emphasis on homeland security. For example, for search and rescue, the
Coast Guard was within about half a percentage point of meeting its
target for saving mariners in distress in 2002 (84.4 percent actual, 85
percent goal). Likewise, data show that with respect to its aid to
navigation mission, in 2002 the Coast Guard was about 1 percent from
its goal of navigational aid availability (98.4 percent actual, 99.7
percent goal).
Missions with a Decline in Resource Hours:
A number of missions have experienced declines in resource hours from
pre-September 11th levels, including drug interdiction, fisheries
enforcement (domestic and foreign), marine environmental protection,
and marine safety. In particular, drug enforcement and fisheries
enforcement have experienced significant declines. Compared with the
first quarter of 1998, resource hours for the first quarter of fiscal
year 2003 represent declines of 60 percent for drug interdiction and 38
percent for fisheries enforcement. (See fig. 4.) In fact, resource
hours for these areas were declining even before the events of
September 11th, and while they briefly rebounded in early 2002, they
have since continued to decline. A Coast Guard official said the recent
decline in both drug enforcement and fisheries can be attributed to the
heightened security around July 4, 2002, and the anniversary of the
September 11th terrorist attacks, as well as the deployment of
resources for military operations. They said the decline will likely
not be reversed during the second quarter of 2003 because of the
diversion of Coast Guard cutters to the Middle East and the heightened
security alert that occurred in February 2003.
Figure 4: Number of Resource Hours Spent on Drug Interdiction and
Fisheries Enforcement, by Quarter, October 1997-December 2002:
[See PDF for image]
[End of figure]
The reduction in resource hours over the last several years in drug
enforcement is particularly telling. In the first quarter of 1998, the
Coast Guard was expending nearly 34,000 resource hours on drug
enforcement, and as of first quarter of 2003, the resource hours had
declined to almost 14,000 hours--a reduction of nearly two-thirds.
Also, both the number of boardings to identify illegal drugs and the
amount of illegal drugs seized declined from the first quarter of
fiscal year 2000. The Coast Guard‘s goal of reducing the flow of
illegal drugs based on the seizure rate for cocaine has not been met
since 1999. During our conversations with Coast Guard officials, they
explained that the Office of National Drug Control Policy (ONDCP) set
this performance goal in 1997, and although they recognize they are
obligated to meet these goals, they believe the goals should be
revised.
Our review of the Coast Guard‘s activity levels in domestic fishing
shows U.S. fishing vessel boardings and significant violations[Footnote
7] identified are both down since 2000. The Coast Guard interdicted
only 19 percent as many foreign vessels as it did in 2000.[Footnote 8]
The reduced level of effort dedicated to these two missions is likely
linked to the Coast Guard‘s inability to meet its performance goals in
these two areas. For instance, in 2002 the Coast Guard did not meet its
goal of detecting foreign fishing vessel incursions,[Footnote 9] and
while there is no target for domestic fishing violations, there were
fewer boardings and fewer violations in 2002 than in 2000.
Recently, the Coast Guard Commandant stated that the Coast Guard
intends to return law enforcement missions (drug interdiction, migrant
interdiction, and fisheries enforcement) to 93 percent of pre-September
11th levels by the end of 2003 and 95 percent by the end of 2004.
However, in the environment of heightened security and the continued
deployment of resources to the Middle East, these goals will likely not
be achieved, especially for drug interdiction and fisheries
enforcement, which are currently far below previous activity levels.
Fiscal Year 2004 Budget Request Will Not Substantially Alter Current
Levels of Effort:
The Coast Guard‘s budget request for fiscal year 2004 does not contain
initiatives or proposals that would substantially alter the current
distribution of levels of effort among mission areas. The request for
$6.8 billion represents an increase of about $592 million, or about 9.6
percent in nominal dollars, over the enacted budget for fiscal year
2003. The majority of the increase covers pay increases for current or
retired employees or continues certain programs already under way, such
as upgrades to information technology. About $168.5 million of the
increase would fund new initiatives, most of which relate either to
homeland security or to search and rescue. Another $20.8 million of the
increase is for the capital acquisitions request,[Footnote 10] which
totals $797 million. The capital acquisition request focuses mainly on
two projects--the Deepwater Project for replacing or upgrading cutters,
patrol boats, and aircraft, and the congressionally mandated
modernization of the maritime distress and response system.
Operating Expenses Would Increase by $440 Million:
About $440 million of the $592 million requested increase is for
operating expenses[Footnote 11] for the Coast Guard‘s mission areas.
This requested increase in operating expenses is 10 percent higher than
the amount for operating expenses in the enacted budget for fiscal year
2003. The requested increase is made up of the following:
* pay increases and military personnel entitlements: $162.5
million;[Footnote 12]
* funding of continuing programs and technical adjustments: $81
million; (These are multiyear programs that the Coast Guard began in
previous years. Examples include continuing development of information
technology projects and operating new shore facilities started with
funds from previous budgets. Technical adjustments provide for the
annualization of expenditures that received only partial-year funding
in the prior fiscal year.):
* Reserve training: $28 million; and:
* new initiatives: $168.5 million. (These initiatives are described in
more detail below.):
New Initiatives Relate Primarily to Search and Rescue and Homeland
Security:
The Coast Guard‘s budget request includes three new initiatives--one
for search and rescue and two for homeland security. (See table 2.) As
such, these initiatives do not represent substantial shifts in current
levels of effort among missions. The search and rescue initiative is
part of a multiyear effort to address shortcomings in search and rescue
stations and command centers. In September 2001, the Department of
Transportation Office of the Inspector General reported that readiness
at search and rescue stations was deteriorating.[Footnote 13] For
example, staff shortages at most stations required crews to work an
average of 84 hours per week, well above the standard (68 hours)
established to limit fatigue and stress among personnel. The initiative
seeks to provide appropriate staffing and training to meet the
standards of a 12-hour watch and a 68-hour work week. The Congress
appropriated $14.5 million in fiscal year 2002 and $21.7 million in
fiscal year 2003 for this initiative. The amount requested for fiscal
year 2004 ($26.3 million) would pay for an additional 390 full-time
search and rescue station personnel and for 28 additional instructors
at the Coast Guard‘s motor lifeboat and boatswain‘s mate schools.
Table 2: New Initiatives in the Fiscal Year 2004 Budget Request for
Operational Expenses:
New Initiative: Maritime Search and Rescue/Personnel Safety; 390 new
full time personnel for search and rescue stations and command centers;
Additional Instructors and Training Enhancements; Amount (in millions):
$26.3.
New Initiative: Maritime Domain Awareness; Intelligence program;
Information sharing and systems; Amount (in millions): $33.5.
New Initiative: Homeland Security Operations; 6 new marine safety and
security teams; 51 sea marshals; 43 small response boats; 2 port
security units; Establish stations at Washington, D.C. and Boston;
Amount (in millions): $108.7.
New Initiative: Total fiscal year 2004 new initiatives; Amount (in
millions): $168.5.
Source: U.S. Coast Guard.
[End of table]:
Coast Guard officials said the two initiatives designed mainly for
homeland security purposes would help the Coast Guard in other mission
areas as well. For example, the information-sharing effort under
maritime domain awareness is designed to improve communications between
cutters and land stations. It also pays for equipping cutters with the
universal automated identification system, which allows the Coast Guard
to monitor traffic in its vicinity, including the vessel name, cargo,
and speed. These capabilities are important not only for homeland
security missions, but also for law enforcement and search and rescue,
according to Coast Guard officials. Likewise, the units being added as
part of the homeland security operations initiative will focus
primarily on security issues but will also serve other missions,
according to Coast Guard officials. For example, the new stations that
would be established in Washington and Boston would be involved in
search and rescue, law enforcement, and marine environmental
protection.
Capital Acquisition Budget Focuses on Two Main Projects:
The capital acquisition budget request for fiscal year 2004 is $797
million, an increase of $20.8 million in nominal dollars over fiscal
year 2003. The majority of the request will go to fund two projects--
the Integrated Deepwater System and the Coast Guard‘s maritime distress
and response system, called Rescue 21. Other acquisitions include new
response boats to replace 41-foot utility boats which serve multiple
missions, more coastal patrol boats, as well as a replacement
icebreaker for the Great Lakes. (See table 3.):
Table 3: Fiscal Year 2004 Capital Acquisition Budget Request:
Item: Integrated Deepwater System; Amount (in millions): $ 500.0.
Other systems:
Item: Rescue 21; Amount (in millions): $ 134.0.
Item: Defense Message System implementation; Amount (in millions): $
4.5.
Vessels and critical infrastructure projects:
Item: Great Lakes icebreaker replacement; Amount (in millions): $ 2.0.
Item: 41‘ utility boat replacement; Amount (in millions): $ 12.0.
Item: Additional coastal patrol boats to enforce security zones; Amount
(in millions): $ 52.5.
Item: Personnel and related support costs; Amount (in millions): $
70.0.
Item: Research, development, testing, and evaluation; Amount (in
millions): $ 22.0.
Item: Total; Amount (in millions): $ 797.0.
Source: U.S. Coast Guard.
[End of table]:
At $500 million, the Deepwater Project accounts for about 63 percent of
the amount requested for capital acquisitions. This project is a long-
term (20 to 30 years) integrated approach to upgrading cutters, patrol
boats, and aircraft as well as providing better links between air,
shore, and surface assets. When the system is fully operational, it
will make the Coast Guard more effective in all of its missions,
particularly law enforcement where deepwater cutters and aircraft are
key to carrying out critical functions such as drug and migrant
interdiction and fisheries enforcement.
Rescue 21, the second major program, provides for the modernization of
the command, control, and communication infrastructure of the national
distress and response system. The current system suffers from aging
equipment, limited spare parts, and limited interoperability with other
agencies. Of particular concern to the Coast Guard and the maritime
community are the current system‘s coverage gaps, which can result in
missed maritime distress calls. The Congress has mandated that this
system be completed by the end of fiscal year 2006. The $134 million
request for fiscal year 2004 would keep the project on schedule,
according to Coast Guard officials.
Significant Challenges Raise Concerns About Coast Guard‘s Ability to
Accomplish Its Diverse Missions:
Despite the billion-dollar (19 percent) budget increase it has received
over the past 2 years, the Coast Guard faces fundamental challenges in
attempting to accomplish everything that has come to be expected of it.
We have already described how the Coast Guard has not been able, in its
current environment, to both assimilate its new homeland security
responsibilities and restore other missions, such as enforcement of
laws and treaties, to levels that are more reflective of past years.
The fiscal year 2004 budget request does not provide substantial new
funding to change these capabilities, except for homeland security and
search and rescue. In addition, several other challenges further
threaten the Coast Guard‘s ability to balance these many missions. The
first is directly tied to funding for the Deepwater Project. The
project has already experienced delays in delivery of key assets and
could face additional delays if future funding falls behind what the
Coast Guard had planned. Such delays could also seriously jeopardize
the Coast Guard‘s ability to carry out a number of security and
nonsecurity missions. Similarly, for the foreseeable future, the Coast
Guard must absorb a variety of new mandated homeland security tasks by
taking resources from existing activities. To the extent that these
responsibilities consume resources that would normally go elsewhere,
other missions will be affected. Finally, in its new environment, the
Coast Guard faces the constant possibility that terror alerts,
terrorist attacks, or military actions would require it to shift
additional resources to homeland security missions.
Such challenges raise serious concerns about the Coast Guard‘s ability
to be ’all things to all people“ to the degree that the Coast Guard,
the Congress, and the public desire. In past work, we have pointed to
several steps that the Coast Guard needs to take in such an
environment. These include continuing to address opportunities for
operational efficiency, especially through more partnering; developing
a comprehensive strategy for balancing resource use across all of its
missions; and developing a framework for monitoring levels of effort
and measuring performance in achieving mission goals. The Coast Guard
has begun some work in these areas; however, addressing these
challenges is likely to be a longer-term endeavor, and the success of
the outcome is not clear.
Continued Funding Shortfalls Could Delay the Deepwater Project and
Adversely Affect the Coast Guard‘s Mission Capabilities:
Under current funding plans, the Coast Guard faces significant
potential delays and cost increases in its $17 billion Integrated
Deepwater Project. This project is designed to modernize the Coast
Guard‘s entire fleet of cutters, patrol boats, and aircraft over a 20-
year period. Given the way the Coast Guard elected to carry out this
project, its success is heavily dependent on receiving full funding
every year. So far, that funding has not materialized as planned.
Delays in the project, which have already occurred, could jeopardize
the Coast Guard‘s future ability to effectively and efficiently carry
out its missions, and its law enforcement activities--that is, drug and
migrant interdiction and fisheries enforcement--would likely be
affected the most, since they involve extensive use of deepwater
cutters and aircraft.
Under the project‘s contracting approach, the responsibility for
Deepwater‘s success lies with a single systems integrator and its
contractors for a period of 20 years or more. Under this approach, the
Coast Guard has started on a course potentially expensive to alter. It
is based on having a steady, predictable funding stream of $500 million
in 1998 dollars over the next 2 to 3 decades. Already the funding
provided for the project is less than the amount the Coast Guard
planned for. The fiscal year 2002 appropriation for the project was
about $28 million below the planned level, and the fiscal year 2003
appropriated level was about $90 million below the planning estimate.
And even the President‘s fiscal year 2004 budget request for the Coast
Guard is not consistent with the Coast Guard‘s deepwater funding plan.
If the requested amount of $500 million for fiscal year 2004 is
appropriated, this would represent another shortfall of $83 million,
making the cumulative shortfall about $202 million in the project‘s
first 3 years, according to Coast Guard data. If appropriations hold
steady at $500 million (in nominal dollars) through fiscal year 2008,
the Coast Guard estimates that the cumulative shortfall will reach $626
million.[Footnote 14]
The shortfalls in the last 2 fiscal years (2002 and 2003) and their
potential persistence could have serious consequences. The main impact
is that it would take longer and cost more in the long run to fully
implement the deepwater system. For example, due to funding shortfalls
experienced to date, the Coast Guard has delayed the introduction of
the Maritime Patrol Aircraft by 19 months and slowed the conversion and
upgrade program for the 110-foot Patrol Boats. According to the Coast
Guard, if the agency continues to receive funding at levels less than
planned, new asset introductions--and the associated retirement of
costly, less capable Coast Guard legacy assets--will continue to be
deferred.
The cost of these delays will be exacerbated by the accompanying need
to invest additional funds in maintaining current assets beyond their
planned retirement date because of the delayed introduction of
replacement capabilities and assets, according to the Coast Guard. For
example, delaying the Maritime Patrol Aircraft will likely require some
level of incremental investment to continue safe operation of the
current HU-25 jet aircraft. Similarly, a significant delay in the
scheduled replacement for the 270-foot Medium Endurance Cutter fleet
could require an unplanned and expensive renovation for this fleet.
System performance--and the Coast Guard‘s capability to effectively
carry out its mission responsibilities--would also likely be impacted
if funding does not keep pace with planning estimates. For example,
Coast Guard officials told us that conversions and upgrades for the
110-foot Patrol Boat would extend its operating hours from about 1,800
to 2,500 per year. Once accomplished, this would extend the time these
boats could devote to both security and nonsecurity missions. Given the
funding levels for the project, these conversions and upgrades have
been slowed. Coast Guard officials also said that with significant,
continuing funding shortfalls delaying new asset introductions, at some
point, the Coast Guard would be forced to retire some cutters and
aircraft--even as demand for those assets continues to grow. For
example, in 2002, two major cutters and several aircraft were
decommissioned ahead of schedule due to their deteriorated condition
and high maintenance costs.
Some New Homeland Security Duties Are Not Fully Factored into the Coast
Guard‘s Distribution of Resources:
A second challenge is that the Coast Guard has been tasked with a
myriad of new homeland security requirements since the fiscal year 2004
budget request was formulated and will have to meet many of these
requirements by pulling resources from other activities. Under the
Maritime Transportation Security Act (MTSA),[Footnote 15] signed into
law in November 2002, the Coast Guard must accomplish a number of
security-related tasks within a matter of months and sustain them over
the long term. MTSA requires the Coast Guard to be the lead agency in
conducting security assessments, developing plans, and enforcing
specific security measures for ports, vessels, and facilities. In the
near term, the Coast Guard must prepare detailed vulnerability
assessments of vessels and facilities it identifies to be at high risk
of terrorist attack. It must also prepare a National Maritime
Transportation Security Plan that assigns duties among federal
departments and agencies and specifies coordination with state and
local officials--an activity that will require substantial work by
Coast Guard officials at the port level. The Coast Guard must also
establish plans for responding to security incidents, including
notifying and coordinating with local, state, and federal authorities.
Because the fiscal year 2004 budget request was prepared before MTSA
was enacted, it does not specifically devote funding to most of these
port security responsibilities. Coast Guard officials said that they
will have to absorb costs related to developing, reviewing, and
approving plans, including the costs of training staff to monitor
compliance, within their general budget.[Footnote 16] Coast Guard
officials expect that the fiscal year 2005 budget request will contain
funding to address all MTSA requirements; in the meantime, officials
said that the Coast Guard would have to perform most of its new port
security duties without additional appropriation, and that the funds
for these duties would come from its current operations budget. The
costs of these new responsibilities, as well as the extent to which
they will affect resources for other missions, are not known.
External Uncertainties Place Additional Strain on Resources:
Security alerts, as well as actions needed in the event of an actual
terrorist attack, can also affect the extent to which the Coast Guard
can devote resources to missions not directly related to homeland
security. Coast Guard officials told us that in the days around
September 11, 2002, when the Office of Homeland Security raised the
national threat level from ’elevated“ to ’high“ risk, the Coast Guard
reassigned cutters and patrol boats in response. In February 2003, when
the Office of Homeland Security again raised the national threat level
to ’high risk,“ the Coast Guard repositioned some of its assets
involved in offshore law enforcement missions, using aircraft patrols
in place of some cutters that were redeployed to respond to security-
related needs elsewhere. While these responses testify to the
tremendous flexibility of a multi-mission agency, they also highlight
what we found in our analysis of activity-level trends--when the Coast
Guard responds to immediate security needs, fewer resources are
available for other missions.
The Coast Guard‘s involvement in the military buildup for Operation
Enduring Freedom in the Middle East further illustrates how such
contingencies can affect the availability of resources for other
missions. As part of the buildup, the Coast Guard has deployed eight
110-foot boats, two high-endurance cutters, four port security units,
and one buoy tender to the Persian Gulf. These resources have come from
seven different Coast Guard Districts. For example, officials from the
First District told us they sent four 110-foot patrol boats and three
crews to the Middle East. These boats are multi-mission assets used for
fisheries and law enforcement, search and rescue, and homeland security
operations. In their absence, officials reported, the First District is
more flexibly using other boats previously devoted to other tasks. For
instance, buoy tenders have taken on some search and rescue functions,
and buoy tenders and harbor tug/icebreakers are escorting high-interest
vessels. Officials told us that these assets do not have capabilities
equivalent to the patrol boats but have been able to perform the
assigned mission responsibilities to date.
Several Types of Actions Needed to Address Challenges:
In previous work, we have examined some of the implications of the
Coast Guard‘s new operating environment on the agency‘s ability to
fulfill its various missions.[Footnote 17] This work, like our
testimony today, has pointed to the difficulty the Coast Guard faces in
devoting additional resources to nonsecurity missions, despite the
additional funding and personnel the agency has received. In
particular, we have suggested that the following actions need to be
taken as a more candid acknowledgement of the difficulty involved:
* Opportunities for increased operational efficiency need to be
explored. Over the past decade, we and other outside organizations,
along with the Coast Guard itself, have studied Coast Guard operations
to determine where greater efficiencies might be found. These studies
have produced a number of recommendations, such as shifting some
responsibilities to other agencies. One particular area that has come
to the forefront since September 11th is the Coast Guard‘s potential
ability to partner with other port stakeholders to help accomplish
various security and nonsecurity activities involved in port
operations. Some effective partnerships have been established, but the
overall effort has been affected by variations in local stakeholder
networks and limited information-sharing among ports.
:
* A comprehensive blueprint is needed for setting and assessing levels
of effort and mission performance. One important effort that has
received relatively little attention, in the understandable need to
first put increased homeland security responsibilities in place, is the
development of a plan that proactively addresses how the Coast Guard
should manage its various missions in light of its new operating
reality. The Coast Guard‘s adjustment to its new post-September 11th
environment is still largely in process, and sorting out how
traditional missions will be fully carried out alongside new security
responsibilities will likely take several years. But it is important to
complete this plan and address in it key elements and issues so that it
is both comprehensive and useful to decision makers who must make
difficult policy and budget choices. Without such a blueprint, the
Coast Guard also runs the risk of continuing to communicate that it
will try to be ’all things to all people“ when, in fact, it has little
chance of actually being able to do so.
The Coast Guard has acknowledged the need to pursue such a planning
effort, and the Congress has directed it to do so. Coast Guard
officials told us that as part of the agency‘s transition to the
Department of Homeland Security, they are updating the agency‘s
strategic plan, including plans to distribute all resources in a way
that can sustain a return to previous levels of effort for traditional
missions. In addition, the Congress placed a requirement in MTSA for
the Coast Guard to submit a report identifying mission targets, and
steps to achieve them, for all Coast Guard missions for fiscal years
2003-2005. However, this mandate is not specific about the elements
that the Coast Guard should address in the report.
To be meaningful, this mandate should be addressed with thoroughness
and rigor and in a manner consistent with our recent recommendations--
it requires a comprehensive blueprint that embodies the key steps and
critical practices of performance management. Specifically, in our
November 2002 report on the progress made by the Coast Guard in
restoring activity levels for its key missions, we recommended an
approach consisting of a long-term strategy outlining how the Coast
Guard sees its resources--cutters, boats, aircraft, and personnel--
being distributed across its various missions, a time frame for
achieving this desired balance, and reports with sufficient information
to keep the Congress apprised not only of how resources were being
used, but what was being accomplished. The Coast Guard agreed that a
comprehensive strategy was needed, and believes that they are beginning
the process to develop one. Table 4 provides greater explanation of
what this approach or blueprint would entail.
Table 4: Elements of an Approach for Setting and Assessing Levels of
Effort and Mission Effectiveness:
Element: Setting realistic targets for levels of effort in
each mission area; Explanation: Targets need to take into account the
finite Deepwater and other resources available in the near to medium
term and the likely homeland security scenarios based on resource
requirements needed to respond to various potential terrorist threats
and attacks.
Element: Developing an action plan for achieving
targets; Explanation: Action plan needs to include:; * an analysis of
the mix of resources needed and timetables required to achieve level-
of-effort targets;; * strategies for partnering with other public and
private sector organizations to accomplish mission activities;; *
contingency plans for addressing responsibilities for all of its
missions during prolonged ’high alert“ periods;; * new approaches and
techniques, including the use of new technology, for achieving mission
responsibilities; and; * identifying operational efficiencies that
would free up funds for more mission-enhancing needs, such as keeping
the Deepwater Project on schedule.
Element: Establishing realistic performance measures
for all missions; Explanation: Includes two steps:; * completing
performance measures for homeland security, and; * evaluating and
revising, where necessary, performance measures, such as those for drug
interdiction, for all missions.
Element: Collecting sufficiently complete, accurate, and consistent
performance data to measure effectiveness in meeting performance
targets; Explanation: Includes data on:; * resources being applied to
each mission (money, personnel, and capital assets),; * output measures
that describe what is being done with these resources (e.g., numbers of
patrols and inspections conducted), and; * outcome data on the extent
that program goals are being achieved.
Source: GAO.
[End of table]
The events of recent months heighten the need for such an approach.
During this time, the budgetary outlook has continued to worsen,
emphasizing the need to look carefully at the results being produced by
the nation‘s large investment in homeland security. The Coast Guard
must be fully accountable for investments in its homeland security
missions and able to demonstrate what these security expenditures are
buying and their value to the nation. At the same time, recent events
also demonstrate the extent to which highly unpredictable homeland
security events, such as heightened security alerts, continue to
influence the amount of resources available for performing other
missions. The Coast Guard needs a plan that will help the agency, the
Congress, and the public understand and effectively deal with trade-
offs and their potential impacts in such circumstances.
Madame Chair, this concludes my testimony today. I would be pleased to
respond to any questions that you or Members of the Subcommittee may
have at this time.
Contacts and Acknowledgments:
For information about this testimony, please contact JayEtta Z. Hecker,
Director, Physical Infrastructure, at (202) 512-2834, or
heckerj@gao.gov, or Margaret T. Wrightson, at (415) 904-2200, or
wrightsonm@gao.gov. Individuals making key contributions to this
testimony include Steven Calvo, Christopher M. Jones, Sharon Silas,
Stan Stenersen, Eric Wenner, and Randall Williamson.
[End of section]
Appendix I: Scope and Methodology:
To determine the most recent levels of effort for the Coast Guard‘s
various missions and how these levels compare to those in the past, we
reviewed the data from the Coast Guard‘s Abstract of Operations. These
data, reported by crews of cutters, boats, and aircraft, represent the
hours that these resources spent in each of the Coast Guard‘s mission
areas. We reviewed these data to identify how resources were utilized
across missions both before and after September 11th, and to identify
any trends in resource utilization. In addition, we spoke with Coast
Guard officials at headquarters about the use of Coast Guard resources
both before and after September 11th.
To determine the implications of the proposed fiscal year 2004 budget
request for these various levels of effort, we reviewed the President‘s
fiscal year 2004 budget request for the Coast Guard, as well as the
enacted budget for the Coast Guard for fiscal year 2003. We used the
Department of Commerce‘s chain-weighted price index for gross domestic
product to adjust nominal dollare figures for the effect of inflation.
In addition, we spoke with Coast Guard officials within the Coast
Guard‘s Office of Programs and Operations Directorate, the Marine
Safety Directorate, and the Integrated Deepwater Systems Program
Office.
To identify the challenges the Coast Guard faces in balancing its
resources among its missions and ensuring and maximizing its
effectiveness in each of its missions, we reviewed our previous reports
on performance management and developing performance measures. We also
reviewed Coast Guard strategic documents and discussed these with staff
in the Coast Guard‘s Program Management and Evaluation Division. In
addition, we met with officials from the Coast Guard‘s Department of
Homeland Security Transition team to discuss strategic planning and
transition issues.
FOOTNOTES
[1] Coast Guard: Strategy Needed for Setting and Monitoring Levels of
Effort for All Missions. GAO-03-155 (Washington, D.C.: Nov. 12, 2002),
and Homeland Security: Challenges Facing the Coast Guard as it
Transitions to the New Department. GAO-03-467T (Washington, D.C.: Feb
12, 2003)
[2] The Coast Guard maintains information, on a mission-by-mission
basis, about how cutters, patrol boats, and aircraft are used. Each
hour that these resources are used in a mission is called a resource
hour. Resource hours do not include such things as the time that the
resource stands idle or the time that is spent maintaining it.
[3] Linear regression estimates the coefficients of the linear
equation, involving one or more independent variables, that best
predict the value of the dependent variable.
[4] Sea marshals are armed Coast Guard personnel who board selected
vessels operating in and around U.S. ports and harbors and take
position on the ship‘s bridge and other areas determined to be
necessary to vessel safety. These teams provide additional security to
ensure that only authorized personnel maintain control of the vessel at
all times.
[5] Vessel operational control actions are efforts to control vessels
and can include captain of the port orders, administration orders,
letters of deviation, and safety and the designation of security zones.
[6] Search and rescue resources are subject to seasonal cycles, with
more resources being used during the summer months when boating is at
its peak.
[7] The Coast Guard defines significant violations as any or all of the
following: (1) significant damage or impact to the resource or the
fisheries management plan, (2) significant monetary advantage to the
violator over the competition, or (3) a high regional interest of
emotional or political nature as determined by regional fisheries
councils.
[8] Activity data for foreign fishing vessels is a comparison of fourth
quarters in 2000 and 2002.
[9] In fiscal year 2002, the Coast Guard‘s goal was to detect 250
foreign fishing vessel incursions into U.S. fishing waters. Only 202
were detected that year.
[10] For fiscal year 2004, the Capital Acquisition account includes
funding previously requested in the Coast Guard Acquisition,
Construction, and Improvement account, and Research, Development, Test
and Evaluation accounts, as well as the Alteration to Bridges account.
We have reflected this change when making comparisons to the fiscal
year 2003 enacted budget.
[11] For fiscal year 2004, the Operating Expense account consolidates
funding previously requested in the Coast Guard Operating Expenses,
Environmental Compliance and Restoration, and Reserve Training
accounts. We have reflected this change when making comparisons to the
fiscal year 2003 enacted budget.
[12] This does not include an increase of $131 million in pay for
retired personnel. Because retirees are not part of ongoing operations,
their pay is not considered to be an operating expense. However, the
$131 million increase for retired pay is included in the overall
requested increase of $592 million.
[13] Audit of the Small Boat Station Search and Rescue Program. MH-
2001-94 (Washington, D.C.: Sept 14, 2001).
[14] The $28 million shortfall is expressed in 2002 dollars, the $90
million shortfall in 2003 dollars, and the $202 million shortfall in
2004 dollars. The $626 million dollar shortfall is expressed in 2008
dollars.
[15] Pub. L. 107-295, Nov. 25, 2002.
[16] The Coast Guard had already begun work on two aspects of the
legislation; these aspects are accounted for in the fiscal year 2004
budget request. These two items are requirements to (1) create marine
safety and security teams and (2) to dispatch armed officers as sea
marshals for some port security duties.
[17] Coast Guard: Budget and Management Challenges for 2003 and Beyond
GAO-02-588T (Washington, D.C.: Mar. 19, 2002), and Coast Guard:
Strategy Needed for Setting and Monitoring Levels of Effort for All
Missions GAO-03-155 (Washington, D.C.: Nov. 12, 2002).
