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Congress has repeatedly expressed concerns about the pace of military operations and 10 U.S.C. 487 requires that the Department of Defense (DOD) annually report on personnel tempo--the time servicemembers spend away from home. Section 345 of the John Warner National Defense Authorization Act for Fiscal Year 2007 directed GAO to report on a number of Army and Marine Corps issues. For this report GAO addresses the extent to which (1) changes in mobilization and deployment policies have affected reserve component availability and provided an approach to meet the requirements for the global war on terrorism; and, (2) DOD, the Army, and the Marine Corps have collected, maintained, and reported complete and accurate personnel tempo data. To address these objectives, GAO analyzed data from DOD's Personnel Tempo and Contingency Tracking System databases, and interviewed agency officials. On January 19, 2007, the Secretary of Defense issued a memorandum which changed mobilization and deployment policies and increased reserve component availability, making virtually all reserve component personnel available on an indefinitely recurrent basis under a long-term approach for meeting the requirements for the global war on terror. Previously, involuntary reserve component mobilizations for the global war on terrorism were limited to 24 cumulative months; there is no cumulative time limit on involuntary mobilizations under the new policy. DOD's new policies provide for an integrated approach to manage the long-term requirements for the global war on terrorism while addressing issues that had previously been addressed in a piecemeal fashion. The new policies emphasize the importance of deployment predictability and unit cohesion and they contain deployment rotation goals, which differ between the active and reserve components. In taking this long-term approach, DOD has recognized that it will not be able to immediately achieve its rotation goals and some units will be remobilized sooner than the standard. Therefore, the Secretary also directed that a program be established to compensate servicemembers who are required to mobilize or deploy early or often or extend beyond the established rotation policy goals. DOD has reported personnel tempo data to Congress and the President since 2001, but the reports have not been complete and accurate because the Army and Marine Corps do not have quality controls in place to ensure the accuracy and completeness of the reports' underlying data. In October 2001, DOD waived two statutory personnel tempo requirements due to national security interests. As permitted by the statutes, DOD waived the high-deployment payment provision and the management of servicemember deployments which approach or exceeded certain thresholds. With the provisions waived, two mechanisms that would identify faulty personnel tempo data were no longer in place, and the services lacked any other quality control procedures to ensure the... [ABSTRACT FROM AUTHOR]

Following the invasion of Iraq in March 2003--known as Operation Iraqi Freedom (OIF)--concerns were raised about how the Department of Defense (DOD) secured Iraqi conventional munitions storage sites during and after major combat operations. Because of the broad interest in this issue, GAO conducted this work under the Comptroller General's authority to conduct evaluations. This report examines (1) the security provided by U.S. forces over Iraqi conventional munitions storage sites and (2) DOD actions to mitigate risks associated with an adversary's conventional munitions storage sites for future operations on the basis of OIF lessons learned. To address these objectives, GAO reviewed OIF war plans, joint doctrine and policy, and intelligence reports, and interviewed senior-level DOD officials. The overwhelming size and number of conventional munitions storage sites in Iraq, combined with certain prewar planning assumptions that proved to be invalid, resulted in U.S. forces not adequately securing these sites and widespread looting, according to field unit, lessons learned, and intelligence reports. Pre-OIF estimates of Iraq's conventional munitions varied significantly, with the higher estimate being five times greater than the lower estimate. Conventional munitions storage sites were looted after major combat operations and some remained vulnerable as of October 2006. According to lessons learned reports and senior-level DOD officials, the widespread looting occurred because DOD had insufficient troop levels to secure conventional munitions storage sites due to several OIF planning priorities and assumptions. DOD's OIF planning priorities included quickly taking Baghdad on a surprise basis rather than using an overwhelming force. The plan also assumed that the regular Iraqi army units would "capitulate and provide internal security." GAO analysis showed that the war plan did not document risk mitigation strategies--such as branch plans as recommended by joint planning doctrine--in case assumptions were proven wrong. Not securing these conventional munitions storage sites has been costly, as government reports indicated that looted munitions are being used to make Improvised Explosive Devices (IED) that have killed or maimed many people, and will likely continue to support terrorist attacks in the region. As of October 2006, the Multi-National Coalition-Iraq stated that some remote sites have not been revisited to verify if they pose any residual risk nor have they been physically secured. However, DOD does not appear to have conducted a theaterwide survey and assessment of the current risk unsecured conventional munitions represent to U.S. forces and others. DOD has taken many actions in response to OIF lessons learned, such as setting up the Joint IED Defeat Organization to develop a more strategic approach to countering IEDs, which typically are made using looted munitions. However, our review of DOD doctrine, policy,... [ABSTRACT FROM AUTHOR]

GAO is releasing a report today on lessons learned concerning the need for security over conventional munitions storage sites which provides the basis for this testimony. Following the invasion of Iraq in March 2003--known as Operation Iraqi Freedom (OIF)--concerns were raised about how the Department of Defense (DOD) secured Iraqi conventional munitions storage sites during and after major combat operations. This testimony addresses (1) the security provided by U.S. forces over Iraqi conventional munitions storage sites and (2) DOD actions to mitigate risks associated with an adversary's conventional munitions storage sites for future operations on the basis of OIF lessons learned. To address these objectives, GAO reviewed OIF war plans, joint doctrine and policy, intelligence reports, and interviewed senior-level DOD officials. The overwhelming size and number of conventional munitions storage sites in Iraq combined with certain prewar planning assumptions that proved to be invalid, resulted in U.S. forces not adequately securing these sites and widespread looting, according to field unit, lessons learned, and intelligence reports. Pre-OIF estimates of Iraq's conventional munitions varied significantly, with the higher estimate being 5 times greater than the lower estimate. Conventional munitions storage sites were looted after major combat operations and some remained vulnerable as of October 2006. According to lessons learned reports and senior-level DOD officials, the widespread looting occurred because DOD had insufficient troop levels to secure conventional munitions storage sites due to several OIF planning priorities and assumptions. DOD's OIF planning priorities included quickly taking Baghdad on a surprise basis rather than using an overwhelming force. The plan also assumed that the regular Iraqi army units would "capitulate and provide internal security." According to an Army lessons learned study, this assumption was central to the decision to limit the amount of combat power deployed to Iraq. GAO analysis showed that the war plan did not document risk mitigation strategies in case assumptions were proven wrong. Furthermore, DOD did not have a centrally managed program for the disposition of enemy munitions until August 2003, after widespread looting had already occurred. According to officials from Multi-National Coalition-Iraq, unsecured conventional munitions continue to pose a threat to U.S. forces and others. Not securing these conventional munitions storage sites has been costly, as government reports indicated that looted munitions are being used to make improvised explosive devices (IED) that have killed or maimed many people, and will likely continue to support terrorist attacks in the region. As of October 2006, the Multi-National Coalition-Iraq stated that some remote sites have not been revisited to verify if they pose any residual risk nor have they been physically secured. DOD has taken many actions in... [ABSTRACT FROM AUTHOR]

The United States Air Force has described aerial refueling as a key capability supporting the National Security Strategy and military warfighters on a daily basis. Currently, the Air Force uses two aircraft for aerial refueling: the KC-135 and the KC-10. While the KC-10 fleet has an average age greater than 20 years, the KC-135 fleet averages more than 46 years and is the oldest combat weapon system in the Air Force inventory. Consequently, the Air Force intends to replace or recapitalize the KC-135 first. The Air Force began its KC-135 recapitalization efforts in fiscal year 2004, and officials presented a KC-135 recapitalization program to joint military decision makers in November 2006. This program proposed the inclusion of a passenger and cargo capability, which exists to some extent in the current aircraft, in the replacement air refueling aircraft. According to Air Force officials, the recapitalization process may cost between $72 billion and $120 billion and will span decades. This recapitalization takes place at a time when the Air Force faces fiscal constraints over the next few years, forcing officials to reconfigure the service's short- and long-term priorities in its fiscal year 2008 budget plan. The Air Force has begun this process by announcing the intention to reduce personnel levels by 40,000 members. GAO is currently reviewing, under the Comptroller General's authority to conduct evaluations on his own initiative, the Analysis of Alternatives for the recapitalization of the KC-135 aircraft. To fully understand the Analysis of Alternatives for the KC-135 Recapitalization, we reviewed the requirements determination process, of which an analysis of alternatives is a part. Specifically, GAO reviewed (1) to what extent policy and implementing guidance were followed in identifying the passenger and cargo capability and in assessing the associated risk of not including that capability in the replacement refueling aircraft proposal and (2) to what extent decision makers, who validated and approved the capability as a requirement, relied on analyses as specified in policy and implementing guidance and the extent to which this reliance may affect initiation of the acquisition program. Mandatory Air Force policy requires Air Force organizations to use a formal capabilities-based approach to identify, evaluate, develop, field, and sustain capabilities that compete for limited resources. Contrary to mandatory Air Force implementing guidance, however, the Air Force proposal for a replacement refueling aircraft included a passenger and cargo capability without analyses identifying an associated gap, shortfall, or redundant capability. According to mandatory Air Force implementing guidance, analyses supporting the decision-making process should assess a capability based on the effects it seeks to generate and the associated operational risk of not having it. In this case, the supporting analyses determined neither need nor risk... [ABSTRACT FROM AUTHOR]

For the military to operate in environments contaminated by chemical and biological warfare agents, the Department of Defense (DOD) has developed collective protection equipment to provide a protected environment for group activities. GAO previously reported persistent problems in providing collective protection for U.S. forces in high threat areas overseas. In this report, GAO examined (1) current intelligence assessments of chemical and biological threats, (2) the extent to which DOD has provided collective protection at critical overseas facilities and major expeditionary warfighting assets, and (3) DOD's framework for managing installation protection policies and prioritizing critical installations for funding. In conducting this review, GAO developed criteria to identify critical sites in the absence of a DOD priority listing of such sites in overseas high threat areas--areas at high risk of terrorist or missile attack. The intelligence community is struggling with the changing security environment and communicating the uncertainties in the quality of chemical and biological threat information. Generally, the two key chemical and biological threats facing DOD forces are from hostile nations using missiles, or terrorist groups (e.g., Al Qaeda) using devices to release chemical or biological agents. DOD expects these threats to grow. The intelligence community has recognized the need to communicate more candidly about the uncertainties in intelligence regarding the type and amount of agents, the number of missiles likely armed with chemical and biological warheads, and the method of dissemination. Communicating these uncertainties helps in understanding the actual threat posed by our adversaries and in making risk management decisions on investments. However, while the intelligence community, under the Director of National Intelligence, has issued a new 2006 intelligence estimate regarding the uncertainties in the biological warfare threat, it has not issued an update on the chemical warfare threat since 2002 due to evolving assessment and communication policies. Despite the growing threat, collective protection at both critical overseas facilities and in some major expeditionary warfighting assets (e.g., infantry units, naval vessels, and medical units) is limited and inconsistent. Nearly 80 percent of overseas sites identified as critical by combatant commanders based on criteria GAO provided them, did not have collective protection equipment--including about two-thirds of the critical sites in high threat areas. At the same time, GAO found problems such as often vague and inconsistent guidance on the use of collective protection. DOD guidance encourages the use of collective protection but does not prescribe specific standards to guide strategic decisions on its use. Military service guidance, except the Air Force, was also vague and inconsistent on key issues such as (1) whether decisions on the need for the equipment... [ABSTRACT FROM AUTHOR]

The war in Iraq along with other overseas operations have led to significant stress on U.S. ground forces and raised questions about whether those forces are appropriately sized and structured. In 2005, the Department of Defense (DOD) agreed with GAO's recommendation that it review military personnel requirements. The Office of the Secretary of Defense (OSD) concluded in its 2006 Quadrennial Defense Review (QDR) that the number of active personnel in the Army and Marine Corps should not change. However, the Secretary of Defense recently announced plans to increase these services' active end strength by 92,000 troops. Given the long-term costs associated with this increase, it is important that Congress understand how DOD determines military personnel requirements and the extent of its analysis. GAO has issued a number of reports on DOD's force structure and the impact of ongoing operations on military personnel, equipment, training, and related funding. This statement, which draws on that prior work, focuses on (1) the processes and analyses OSD and the services use to assess force structure and military personnel levels; (2) the extent to which the services' requirements analyses reflect new demands as a result of the changed security environment; and (3) the extent of information DOD has provided to Congress to support requests for military personnel. Both OSD and the military services play key roles in determining force structure and military personnel requirements and rely on a number of complex and interrelated analyses. Decisions reached by OSD during the QDR and the budget process about planning scenarios, required combat forces, and military personnel levels set the parameters within which the services can determine their own requirements for units and allocate military positions. Using OSD guidance and scenarios, the Army's most recent biennial analysis, completed in 2006, indicated that the Army's total requirements and available end strength were about equal. The Marine Corps' most recent assessment led to an adjustment in the composition and mix of its units. Both the Army and Marine Corps are coping with additional demands that may not have been fully reflected in OSD guidance, the QDR, or in recent service analyses. First, the Army's analysis did not fully consider the impact of converting from a division-based force to modular units, partly because modular units are a new concept and partly because the Army made some optimistic assumptions about its ability to achieve efficiencies and staff modular units within the QDR-directed active military personnel level of 482,400. Second, the Army's analysis assumed that the Army would be able to provide 18 to 19 brigades at any one time to support worldwide operations. However, the Army's global operational demand for forces is currently 23 brigades and Army officials believe this demand will continue for the foreseeable future. The Marine Corps' analyses reflected some new... [ABSTRACT FROM AUTHOR]

As the Department of Defense (DOD) has expanded its involvement in overseas military operations, it has grown increasingly reliant on its federal civilian workforce to support contingency operations. The Senate Armed Services Committee required GAO to examine DOD's policies concerning the health care for DOD civilians who deploy in support of contingency operations in Afghanistan and Iraq. GAO analyzed over 3,400 deployment-related records for deployed federal civilians and interviewed department officials to determine the extent to which DOD has established and the military services and defense agencies (hereafter referred to as DOD components) have implemented (1) force health protection and surveillance policies and (2) medical treatment policies and procedures for its deployed federal civilians. GAO also examined the differences in special pays and benefits provided to DOD's deployed federal civilians and military personnel. DOD has established force health protection and surveillance policies to assess and reduce or prevent health risks for its deployed federal civilian personnel, but it lacks procedures to ensure implementation. Our review of over 3,400 deployment records at eight component locations found that components lacked documentation that some federal civilian personnel who deployed to Afghanistan and Iraq had received, among other things, required pre- and post-deployment health assessments and immunizations. These deficiencies were most prevalent at Air Force and Navy locations, and one Army location. As a larger issue, DOD lacked complete and centralized data to readily identify its deployed federal civilians and their movement in theater, further hindering its efforts to assess the overall effectiveness of its force health protection and surveillance capabilities. In August 2006, DOD issued a revised policy which outlined procedures that are intended to address these shortcomings. However, these procedures are not comprehensive enough to ensure that DOD will know the extent to which its components are complying with existing health protection requirements. In particular, the procedures do not establish an oversight and quality assurance mechanism for assessing the implementation of its force health protection and surveillance requirements. Until DOD establishes a mechanism to strengthen its force health protection and surveillance oversight, it will not be effectively positioned to ensure compliance with its policies, or the health care and protection of deployed federal civilians. DOD has also established medical treatment policies for its deployed federal civilians which provide those who require treatment for injuries or diseases sustained during overseas hostilities with care that is equivalent in scope to that provided to active duty military personnel under the DOD military health system. GAO reviewed a sample of seven workers' compensation claims (out of a universe of 83) filed under the Federal... [ABSTRACT FROM AUTHOR]

Servicemembers who are assigned, deployed, or travel on temporary duty to certain foreign areas are eligible for special pays and benefits including (1) imminent danger pay (IDP) when the Department of Defense (DOD) determines that members are subject to the threat of physical harm or imminent danger and (2) combat zone tax relief (CZTR) benefits, which allow members to exclude earned income from federal taxes. If travel to IDP- or CZTR-designated areas begins during one month and concludes during another (known as cross-month travel), members could receive 2 full months of benefits. GAO conducted this review under the Comptroller General's authority to initiate such reviews. GAO evaluated DOD's (1) process for reviewing IDP areas and (2) internal controls over servicemembers' temporary duty travel to areas designated for IDP and CZTR benefits. GAO is also providing information on the reporting of IDP and CZTR data. GAO analyzed legislation, guidance, travel vouchers, and internal control standards and interviewed appropriate officials. DOD's processes for reviewing existing IDP areas could be improved. While combatant commanders have taken the initiative periodically to make recommendations to designate or terminate IDP areas, DOD has not conducted annual reviews of existing IDP designations in accordance with its guidance to ensure that conditions in these areas continue to warrant such designation. Also, DOD has not updated its guidance to reflect current responsibilities for initiating annual reviews or to include factors used to determine when conditions in foreign areas pose the threat of physical harm or imminent danger to servicemembers on duty in these locations. DOD conducted 6 annual reviews between 1992 and 2006. When conducting reviews, DOD has queried combatant commanders using a set of factors to determine the nature of threats to servicemembers. However, DOD has not incorporated these factors into its guidance. By conducting annual reviews in accordance with its guidance, DOD could strengthen its oversight of IDP designations to ensure that conditions in designated areas continue to pose the threat of physical harm or imminent danger to servicemembers and that these areas should continue to be designated. Internal controls over servicemembers' temporary duty travel to areas designated for IDP or CZTR benefits need to be strengthened. While two DOD components have instituted policies to regulate and monitor cross-month travel to these areas, there is no similar departmentwide policy to ensure that travel to areas designated for IDP or CZTR benefits needs to cross calendar months. Data limitations prevented GAO from determining the full extent of temporary duty travel to areas designated for IDP and CZTR benefits, as well as how much of this travel crosses calendar months. The U.S. Central Command and U.S. Army, Europe--which collectively account for 62 percent of IDP areas and 86 percent of CZTR benefit areas--have... [ABSTRACT FROM AUTHOR]

Almost 6,000 servicemembers died from October 2001 through September 2005. The Department of Defense (DOD), the Department of Veterans Affairs (VA), and the Social Security Administration (SSA) provide assistance to survivors of servicemembers who die on active duty. This assistance includes but is not limited to making funeral arrangements, applying for federal benefits, providing relocation assistance, and coordinating with other agencies. The National Defense Authorization Act for Fiscal Year 2006 required GAO to assess casualty assistance provided to survivors of servicemembers. For this report, GAO reviewed the extent to which DOD has (1) an oversight framework and standards to monitor the assistance it provides to survivors of these deceased servicemembers and (2) visibility over the costs of its casualty assistance programs. GAO also reviewed the roles of VA and SSA in providing casualty assistance. In conducting this review, GAO analyzed agency documents and interviewed program officials, limiting its scope to federal programs. DOD does not have a comprehensive oversight framework and standards that could improve its ability to monitor the casualty assistance it provides to survivors of servicemembers who die while on active duty. The absence of a comprehensive oversight framework exists because DOD has not developed departmentwide program objectives and all the necessary outcome measures to monitor the military services' casualty assistance programs' effectiveness and efficiency. GAO found that while each service gathers information about its casualty assistance program and DOD and the services meet three times a year to share information, program performance comparisons across services are hampered by the lack of common metrics and assessment methods. Moreover, DOD's current policy does not specify key standards for the services' casualty assistance programs that would facilitate more consistent delivery of assistance across the services. Such standards would include processes (1) for consistent delivery of short- and long-term assistance across and within the services and (2) for coordinating with the Defense Finance and Accounting Service about benefit payments to survivors. DOD does not know the total costs of its casualty assistance programs because it has limited visibility over all program costs. This limited visibility exists for two primary reasons: (1) casualty assistance program costs are scattered across many different parts of DOD's budget, including military personnel, operation and maintenance, and defense health program budgets, and (2) costs of benefits provided to survivors of active duty servicemembers and military retirees, such as the annuities, are lumped together. Although casualty assistance program costs and benefits represent a small portion of DOD's overall budget, without visibility over costs, it is difficult for program officials to make informed decisions regarding the costs of any changes... [ABSTRACT FROM AUTHOR]

The viability of the All Volunteer Force depends, in large measure, on the Department of Defense's (DOD) ability to recruit several hundred thousand individuals each year. Since the involvement of U.S. military forces in Iraq in March 2003, several DOD components have been challenged in meeting their recruiting goals. In fiscal year 2005 alone, three of the eight active and reserve components missed their goals. Some recruiters, reportedly, have resorted to overly aggressive tactics, which can adversely affect DOD's ability to recruit and erode public confidence in the recruiting process. GAO was asked to address the extent to which DOD and the services have visibility over recruiter irregularities; what factors may contribute to recruiter irregularities; and what procedures are in place to address them. GAO performed its work primarily at the service recruiting commands and DOD's Military Entrance Processing Command; examined recruiting policies, regulations, and directives; and analyzed service data on recruiter irregularities. DOD and the services have limited visibility to determine the extent to which recruiter irregularities are occurring. DOD, for example, has not established an oversight framework that includes guidance requiring the services to maintain and report data on recruiter irregularities and criteria for characterizing irregularities and establishing common terminology. The absence of guidance and criteria makes it difficult to compare and analyze data across services and limits DOD's ability to determine when corrective action is needed. Effective federal managers continually assess and evaluate their programs to provide accountability and assurance that program objectives are being achieved. Additionally, the services do not track all allegations of recruiter wrongdoing. Accordingly, service data likely underestimate the true number of recruiter irregularities. Nevertheless, available service data show that between fiscal years 2004 and 2005, allegations and service-identified incidents of recruiter wrongdoing increased, collectively, from 4,400 cases to 6,500 cases; substantiated cases increased from just over 400 to almost 630 cases; and criminal violations more than doubled from just over 30 to almost 70 cases. The department, however, is not in a sound position to assure Congress and the general public that it knows the full extent to which recruiter irregularities are occurring. A number of factors within the recruiting environment may contribute to irregularities. Service recruiting officials stated that the economy has been the most important factor affecting recruiting success. Almost three-quarters of active duty recruiters responding to DOD's internal survey also believed that ongoing hostilities in Iraq made it hard to achieve their goals. These factors, in addition to the typical challenges of the job, such as demanding work hours and pressure to meet monthly goals, may lead to recruiter... [ABSTRACT FROM AUTHOR]

Although the Department of Defense (DOD) pays active-duty servicemembers who do not live in military housing a Basic Allowance for Housing (BAH) to help them afford private market residences, expected growth at some military installations has raised concerns about whether nearby communities will have enough affordable rental housing for incoming personnel. In response to a congressional mandate, GAO assessed (1) how excluding BAH would affect servicemembers' eligibility to apply for federal rental housing programs and (2) factors that could affect their use of the programs in selected communities gaining military personnel. GAO compared servicemembers' eligibility for the programs as of December 2005 by including and excluding BAH from income determinations and examined factors affecting potential program use near four growing military installations. Excluding BAH from income determinations for federal rental housing programs would have substantially increased the percentage of servicemembers eligible to apply for the programs as of December 2005, assuming military pay was their only income. To be eligible to apply for rental assistance programs of the Departments of Housing and Urban Development (HUD) and Agriculture (USDA), or to live in units produced by the Internal Revenue Service's (IRS) Low-Income Housing Tax Credit program, households must have incomes at or below a specific limit, generally 50 percent or 60 percent of the median household income for their area. At the 50 percent income limit, 20 percent of servicemembers who received BAH would have been eligible if BAH were excluded from income determinations, compared with 1 percent with BAH included. Most junior enlisted members would have been eligible if BAH were excluded, as would have small percentages of senior personnel. However, at all levels, many would not have been eligible if their households had even modest income from other sources. Agency and community officials cited factors that could limit the role of federal programs in building housing or helping servicemembers afford existing units near four installations that GAO examined. DOD officials said that servicemembers would be unlikely to need the programs because BAH payments provide for the median cost of market-rate housing. Some community officials said the tax-credit program, which spurs housing production, could be useful if more servicemembers qualified. But developers would have to compete for tax credits, and market factors--such as the financial feasibility of building units that junior enlisted members could afford--could limit their interest. The HUD and USDA programs might help some servicemembers rent existing units, but--because the programs are not entitlements--servicemembers could face lengthy waits, and eligible civilians might wait longer for assistance. [ABSTRACT FROM AUTHOR]

According to the Department of Defense's (DOD) fiscal year 2006 budget estimates, working capital fund activity groups (depot maintenance, ordnance, and research and development) will have about $6.3 billion of funded work that will be carried over from fiscal year 2006 into fiscal year 2007. The congressional defense committees recognize that these activity groups need some carryover to ensure smooth work flow from one fiscal year to the next. However, the committees have previously raised concern that the amount of carryover may be more than is needed. GAO was asked to determine (1) if the military services' carryover calculations were in compliance with DOD's new carryover policy and (2) if customers were submitting orders to working capital fund activities late in the fiscal year and, if so, the effect this practice has had on carryover. The military services have not consistently implemented DOD's revised policy in calculating carryover. Instead, the military services used different methodologies for calculating the reported actual amount of carryover and the allowable amount of carryover since DOD changed its carryover policy in December 2002. The military services did not consistently calculate the allowable amount of carryover that was reported in their fiscal year 2004, 2005, and 2006 budgets because they used different outlay rates for the same appropriation. The Air Force did not follow DOD's regulation on calculating carryover for its depot maintenance activity group, which affected the amount of allowable carryover and actual carryover by tens of millions of dollars and whether the actual carryover exceeded the allowable amount as reported in the fiscal year 2004, 2005, and 2006 budgets. The Army depot maintenance and ordnance activity groups' actual carryover was understated in fiscal years 2002 and 2003 because carryover associated with prior year orders was not included. While the Navy generally followed DOD's policy for calculating carryover, the Navy consolidated the reporting of carryover information for research and development activities. The Navy budgets no longer provide information to show if any of the five research and development subactivity groups individually exceeded the carryover ceiling as the Navy budgets did prior to the change in the carryover policy. As a result, carryover data provided to decision makers who review and use the data for budgeting are erroneous and not comparable across the three military services. For example, the Air Force reported to Congress that the actual fiscal year 2002 carryover for depot maintenance was $87 million less than the ceiling. If the Air Force followed DOD's policy, GAO's calculations show its carryover would have exceeded the ceiling by $216 million. Carryover is greatly affected by orders accepted by working capital fund activities late in the fiscal year that generally cannot be completed by fiscal year end, and in some cases cannot even be started prior... [ABSTRACT FROM AUTHOR]

Maintaining the right amount and types of items in its inventory--a key aspect of supply chain management--has been a long-standing challenge for the Department of Defense (DOD) and has been on GAO's list of high-risk areas since 1990. DOD retains inventory above its normal operating requirements for various reasons including for contingency purposes or because it is more economical to keep items than dispose and repurchase them later. DOD's inventory levels have grown in recent years to almost $80 billion in fiscal year 2005. GAO was asked to assess the management of contingency retention inventory to determine whether (1) the Army, Air Force, Navy, and Defense Logistics Agency have followed inventory guidance and (2) DOD is providing oversight of inventory across these components. Also, GAO provided an update on the progress DOD has made in implementing GAO's past recommendations on the components' management of economic retention inventory. Some DOD inventory management centers have not followed DOD-wide and individual policies and procedures to ensure they are retaining the right amount of contingency retention inventory. While policies require the centers to (1) use category codes to describe why they are retaining items in contingency inventory, (2) hold only those items needed to meet current and future needs, and (3) perform annual reviews of their contingency inventory decisions, one or more centers has not followed these policies. For example, the Army's Aviation and Missile Command is not properly assigning category codes that describe the reasons they are holding items in contingency inventory because the inventory system is not programmed to use the codes. GAO found that items valued at $193 million did not have codes to identify the reasons why they were being held, and therefore GAO was unable to determine the items' contingency retention category. GAO also found that some inventory centers have held items such as gears, motors, and electronic switches, even though there have been no requests for some of them by the services in over 10 years. Moreover, some centers are not annually reviewing their contingency retention decisions. Navy Inventory Control Point Mechanicsburg's officials, for example, were unaware that program managers had not conducted the required reviews until GAO brought this to their attention. Since GAO's work only focused on the centers it reviewed, it is unknown if these issues are occurring at other DOD inventory centers. By not following policies for managing contingency inventory, DOD's centers may be retaining items that are needlessly consuming warehouse space, and they are unable to know if their inventories most appropriately support current and future operational needs. DOD has provided insufficient oversight of inventory retention management across the components. DOD's Supply System Inventory Report, which DOD uses to oversee the components' inventory management, only requires the... [ABSTRACT FROM AUTHOR]

Due to concerns about domestic violence in the military and its adverse effect on mission readiness, Congress required the Department of Defense (DOD) to establish a task force to assess the services' response to domestic violence and recommend improvements. The task force issued three reports containing 194 recommendations. The Fiscal Year 2004 National Defense Authorization Act required GAO to review DOD's progress in implementing the recommendations. This report discusses (1) DOD's ability to report on domestic violence incidents and disciplinary actions, (2) the resources DOD has provided to implement the recommendations, and (3) DOD's specific actions to ensure victim confidentiality and the education of commanding officers, senior enlisted personnel, and chaplains. GAO also examined whether DOD has established an oversight framework to monitor implementation. DOD's ability to report on domestic violence incidents and disciplinary actions taken by commanders is hampered because the systems that the department uses to collect domestic violence information do not contain complete data. DOD's domestic violence database does not capture data from all law enforcement systems and, therefore, does not provide a complete accounting of reported incidents and actions taken by commanders. Notwithstanding the task force's recommendation to report on the number of domestic violence incidents, DOD and the services have not developed any plans to address the data limitations, which do not allow for visibility over domestic violence incidents. Without complete information on reported incidents of domestic violence and the steps taken by commanders to address these incidents, DOD will not know the size and nature of the problems or be able to assess the effectiveness of its actions. DOD has provided about $23 million to implement the recommendations and has made progress in this regard. Specifically, GAO identified 94 recommendations of varying potential importance as completed, 60 as pending further action, and 40 in which no action had been taken because DOD either disagreed with the recommendations or determined that they were not applicable to the department. Nonetheless, DOD faces challenges in completing the pending recommendations in a timely manner because of potential shortages of essential personnel in the office overseeing implementation. In addition, DOD's method of communicating its policy changes resulting from the recommendations has not ensured consistent practices and widespread understanding of the policies among DOD and the services. While DOD is taking steps toward ensuring confidentiality for victims and to train its personnel on domestic violence issues, additional efforts are needed. To ensure victim confidentiality, DOD issued a policy, effective April 22, 2006, allowing victims to report domestic violence to specified people without notifying command. In addition, DOD issued guidance requiring training and is... [ABSTRACT FROM AUTHOR]

The House Committee on Armed Services report that accompanies the National Defense Authorization Act of fiscal year 2006 directs GAO to review results of the military disability evaluation system. In response to this mandate, GAO determined: (1) how current DOD policies and guidance for disability determinations compare for the Army, Navy, and Air Force, and what policies are specific to reserve component members of the military; (2) what oversight and quality control mechanisms are in place at DOD and these three services of the military to ensure consistent and timely disability decisions for active and reserve component members; and (3) how disability decisions, ratings, and processing times compare for active and reserve component members of the Army, the largest branch of the service, and what factors might explain any differences. Policies and guidance for military disability determinations differ somewhat among the Army, Navy, and Air Force. DOD has explicitly given the services the responsibility to set up their own processes for certain aspects of the disability evaluation system and has given them latitude in how they go about this. As a result, each service implements its system somewhat differently. Further, the laws that govern military disability and the policies that DOD and the services have developed to implement these laws have led reservists to have different experiences in the disability system compared to active duty members. For example, because reservists are not on active duty at all times, it takes longer for them to accrue the 20 years of service that may be needed to earn monthly disability retirement benefits. While DOD has issued policies and guidance to promote consistent and timely disability decisions for active duty and reserve disability cases, DOD is not monitoring compliance. To encourage consistent decision making, DOD requires all services to use multiple reviewers to evaluate disability cases. Furthermore, federal law requires that reviewers use a standardized disability rating system to classify the severity of the medical impairment. In addition, DOD periodically convenes the Disability Advisory Council, comprised of DOD and service officials, to review and update disability policy and to discuss current issues. However, neither DOD nor the services systematically determine the consistency of disability decision making. DOD has issued timeliness goals for processing disability cases, but is not collecting information to determine compliance. Finally, the consistency and timeliness of decisions depend, in part, on the training that disability staff receive. However, DOD is not exercising oversight over training for staff in the disability system. While GAO's review of the military disability evaluation system's policies and oversight covered the three services, GAO examined Army data on disability ratings and benefit decisions from calendar year 2001 through 2005. After controlling for many of the differences between reserve and active duty soldiers, GAO found that, among soldiers who received disability ratings, the ratings of reservists were comparable to those of active duty soldiers with similar conditions. GAO's analyses of the military disability benefit decisions for the soldiers who were determined to be unfit for duty were less definitive, but suggest that Army reservists were less likely to receive permanent disability retirement or lump sum disability severance pay than their active duty counterparts. However, data on possible reasons for this difference, such as whether the condition existed prior to service, were not available for our analysis. GAO did not compare processing times for Army reserve and active duty cases because GAO found that Army's data needed to calculate processing times were unreliable.… [ABSTRACT FROM AUTHOR]

The Department of Defense (DOD) is planning to invest $1.3 trillion between 2005 and 2009 in researching, developing, and procuring major weapon systems. How DOD manages this investment has been a matter of congressional concern for years. Numerous programs have been marked by cost overruns, schedule delays, and reduced performance. Over the past 3 decades, DOD's acquisition environment has undergone many changes aimed at curbing cost, schedule, and other problems. In order to determine if the policy DOD put in place is achieving its intended goals, we assessed the outcomes of major weapons development programs initiated under the revised policy. Additionally, we assessed whether the policy's knowledge-based, evolutionary principles are being effectively implemented, and whether effective controls and specific criteria are in place and being used to make sound investment decisions. Changes made in DOD's acquisition policy over the past 5 years have not eliminated cost and schedule problems for major weapons development programs. Of the 23 major programs we assessed, 10 are already expecting development cost overruns greater than 30 percent or have delayed the delivery of initial operational capability to the warfighter by at least 1 year. The overall impact of these costly conditions is a reduction in the value of DOD's defense dollars and a lower return on investment. Poor execution of the revised acquisition policy is a major cause of DOD's continued problems. DOD frequently bypasses key steps of the knowledge-based process outlined in the policy, falls short of attaining key knowledge, and continues to pursue revolutionary--rather than evolutionary or incremental--advances in capability. Nearly 80 percent of the programs GAO reviewed did not fully follow the knowledge-based process to develop a sound business case before committing to system development. Most of the programs we reviewed started system development with immature technologies, and half of the programs that have held design reviews did so before achieving a high level of design maturity. These practices increase the likelihood that problems will be discovered late in development when they are more costly to address. Furthermore, DOD's continued pursuit of revolutionary leaps in capability also runs counter to the policy's guidance. DOD has not closed all of the gaps in the policy that GAO identified nearly 3 years ago, particularly with regard to adding controls and criteria. Effective controls require decision makers to measure progress against specific criteria and ensure that managers capture key knowledge before moving to the next acquisition phase. However, DOD's policy continues to allow managers to approach major investment decisions with many unknowns. Without effective controls that require program officials to satisfy specific criteria, it is difficult to hold decision makers or program managers [ABSTRACT FROM AUTHOR]

The House Committee on Armed Services report that accompanies the National Defense Authorization Act of fiscal year 2006 directs GAO to review results of the military disability evaluation system. In response to this mandate, GAO determined: (1) how current DOD policies and guidance for disability determinations compare for the Army, Navy, and Air Force, and what policies are specific to reserve component members of the military; (2) what oversight and quality control mechanisms are in place at DOD and these three services of the military to ensure consistent and timely disability decisions for active and reserve component members; and (3) how disability decisions, ratings, and processing times compare for active and reserve component members of the Army, the largest branch of the service, and what factors might explain any differences. [ABSTRACT FROM AUTHOR]

The House Subcommittee on Military Personnel asked GAO to discuss the results of its recent study on the Military Disability Evaluation System. In this study, GAO determined (1) how current DOD policies and guidance for disability determinations compare for the Army, Navy, and Air Force, and what policies are specific to reserve component members of the military; (2) what oversight and quality control mechanisms are in place at DOD and these three services of the military to ensure consistent and timely disability decisions for active and reserve component members; and (3) how disability decisions, ratings, and processing times compare for active and reserve component members of the Army, the largest branch of the service, and what factors might explain any differences. [ABSTRACT FROM AUTHOR]

For many years, the Department of Defense (DOD) has been attempting to improve visibility over its inventory and equipment. The lack of visibility over inventory and equipment shipments increases vulnerability to undetected loss or theft and substantially heightens the risk that millions of dollars will be spent unnecessarily. Additionally, needed supplies may not reach the warfighter when needed, which may impair readiness. In order to improve visibility, DOD began using a technology to enable it to track shipments. This technology is known as radio frequency identification (RFID). RFID technology consists of active or passive electronic tags that are attached to equipment and supplies that are shipped from one location to another. This technology is part of a family of automatic information technologies used to enable hands-off identification of cargo and inventory. This report focuses on active RFID tags, which cost around $100 each and are reusable. DOD has been using active RFID technology since the early 1990s to help with in-transit visibility of shipments, and, as of January 2005, it officially began to implement the use of passive RFID. During the course of our work on the use and implementation of passive RFID technology in DOD, we observed that active RFID tags were not being routinely returned for reuse. This report discusses DOD's efficiency in managing the reuse of active RFID tags, specifically the effectiveness of DOD's RFID policy and the extent of tag reuse and monitoring. DOD's final RFID policy was issued by the Under Secretary of Defense (Acquisition, Technology, and Logistics), the defense logistics executive for RFID implementation, on July 30, 2004. DOD's use of active RFID tags can be more efficiently managed, potentially avoiding millions of dollars in unnecessary tag purchases. DOD's current RFID policy does not require active tags to be returned or reused even though these tags are designed for repeated reuse. DOD's July 30, 2004, RFID policy governing active RFID tag return and reuse only "encourages" components to return active RFID tags for reuse. The policy does not specifically direct that active tags be returned for reuse or require military services and other users to reuse tags. Estimates of tag reuse by DOD component officials and DOD tag reuse data as of May 2005 indicate that the majority of active RFID tags had not been returned or reused more than twice. For example, Army and DLA officials estimate that 10 percent of active tags were being returned for reuse before Operations Iraqi Freedom and Enduring Freedom and only 3 percent after.ߪ [ABSTRACT FROM AUTHOR]

The Air Force is in the process of transforming its force to meet today's new and emerging threats. Its "Future Total Force" concept is intended to maximize future capabilities by integrating its active, National Guard, and reserve components to a greater degree. While the Air Force was making force structure decisions and developing its 20-year plan, the Air National Guard embarked on its own "Vanguard" transformation initiative to ensure its role and relevance in the new Air Force. This report discusses (1) the processes and events that surrounded the Air Force's development of its 20-year force structure plan, including the involvement of key stakeholders and the development of the Guard's Vanguard initiative, and (2) the extent to which the Air Force is utilizing key results-oriented management tools to guide its effort to identify new missions for the Air National Guard and integrate active and Guard forces as part of its Future Total Force effort. The Air Force used an iterative process to develop its 20-year force structure plan with periodic review and oversight by senior-level Department of Defense (DOD) and Air Force officials; however, stakeholders have different views on the extent to which the Air Force sought and addressed input from process participants. The plan included a reduction in the legacy fighter fleet--residing largely within the Air National Guard--and the acquisition of new aircraft such as the F/A-22 and the Joint Strike Fighter. In late 2004, a departmentwide shift in funding priorities reduced the number of F/A-22 aircraft to be acquired and resulted in changes to the Air Force's plan. Perspectives on how well this process worked vary depending on the role and level of involvement of each organization. For example, Air Force Air Staff officials viewed the process as fully participatory and noted that the Air National Guard Bureau and the Air Force's major commands had direct representation on the force structure development team. In contrast, Air National Guard officials expressed concerns about their ability to influence decisions and 7 of the 10 adjutants general whom GAO contacted believed that they did not have sufficient opportunity to influence the decisions. Because documentation of the proceedings of key meetings was limited, GAO was unable to evaluate the extent to which stakeholders influenced the process... [ABSTRACT FROM AUTHOR]

GAO has previously reported that the lack of control over inventory shipments increases the Department of Defense's (DOD) vulnerability to undetected loss or theft. GAO evaluated the Army's effectiveness in maintaining accountability of inventory shipped to repair contractors. To conduct its review, GAO analyzed shipment data for fiscal year 2004, surveyed repair contractors that were recipients of inventory shipments, and assessed the Army's adherence to internal control procedures. Inventory shipments included both secondary repair items--components, assemblies, and subassemblies, other than major end items, which may be sent to commercial facilities for repair, alteration, or modification--and government-furnished materiel--assemblies, parts, and other items provided in support of this work. The Army has not maintained accurate accountability for inventory shipped to repair contractors, thereby placing these assets at risk of loss or theft. Although DOD policy requires the military services to confirm receipt of all assets shipped to contractors, the Army is not consistently recording shipment receipts in its inventory management systems. In an analysis of fiscal year 2004 shipment data obtained from two Army inventory control points, GAO could not reconcile shipment records with receipt records for 42 percent of the unclassified secondary repair item shipments, with a value of $481.7 million, or for 37 percent of the classified secondary repair item shipments, with a value of $8.1 million. These data show that the Army cannot confirm that all inventory items shipped to repair contractors were received. The Army's data contained no receipts for government-furnished materiel. GAO survey results showed that repair contractors could confirm receipt of most, but not all, of the shipments. Specifically, on the basis of its survey results and follow-up work, GAO estimated that about 15 percent of the unclassified secondary repair item shipments in the survey population could not be confirmed as being received. GAO estimated that these lost or unaccounted for shipments have a value of approximately $68 million. All shipments of classified government-furnished materiel and secondary repair items were reported as received by the contractors in our survey. For shipments of unclassified government-furnished materiel, almost all shipments were reported by the contractors in our survey as being received. The Army's accountability for shipments of items sent to repair contractors is impeded by three internal control weaknesses. First, Army inventory control points lack systematic procedures for (1) obtaining and documenting contractor receipt of shipments of secondary repair items, (2) following up in cases where receipt was not confirmed by the contractors, and (3) providing advance notification of shipments to contractors. Second, the Army does not confirm receipt of government-furnished materiel shipments, reflecting a discrepancy between the Army's practices and DOD regulations regarding the need to confirm receipt of these shipments. DOD regulations require receipts for all shipments, including government-furnished materiel. Third, inventory control points do not provide the Defense Contract Management Agency with required quarterly reports that show the status of government-furnished materiel shipments. As a result, Defense Contract Management Agency officials may lack data to corroborate contractor-generated data during their inventory audits. These weaknesses in the Army's ability to account for inventory shipped to repair contractors increase the risk of undetected loss or theft. Moreover, inaccurate receipt records can diminish asset visibility and distort on-hand inventory balances, leading to unnecessary procurement of items. [ABSTRACT FROM AUTHOR]

The Department of Defense (DOD) has three military exchanges--the Army and Air Force Exchange Service, the Navy Exchange, and the Marine Corps Exchange--that operate retail and other specialty stores. During fiscal years 2000 through 2004, the three exchanges provided more than $300 million annually, an average of 55 to 70 percent of their profits, in the form of a dividend to support the military services' morale, welfare, and recreation programs. DOD, through the Defense Commissary Agency (DeCA), also operates commissaries that sell groceries and authorized household products at the lowest practical price, charging patrons only for the cost of goods sold plus a 5 percent surcharge. The funds generated by the surcharge are used to construct new and modernize existing commissaries. The Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 authorized the Secretary of Defense to conduct a pilot project involving the sale of film, one-time use cameras, and telephone cards in not less than 10 commissary stores for a period selected by the Secretary, but not less than 6 months. Previously, these items had only been sold by the exchanges. Concerns were expressed by some associated with the exchanges that allowing the commissary stores to sell these items could adversely affect the exchange dividend, which could reduce the funding for the military services' morale, welfare, and recreation programs. The legislation also included a requirement that we examine that issue. In response to the 2005 act, we determined (1) the status of the pilot project to sell film, one-time use cameras, and telephone cards in select commissaries; and (2) the potential impact that the pilot project could have on the exchange dividend. Officials from the three exchanges and DeCA signed a memorandum in November 2005 agreeing to institute a pilot project to sell film, one-time use cameras, and telephone cards at 10 commissaries in the continental United States. DOD implemented the pilot project at one location in November 2005 and plans to implement it at the other nine locations in December 2005. The pilot project is scheduled to last for 2 years. As designed, the pilot project is a test of convenience. The commissaries will purchase the selected film, one-time use cameras, and telephone cards from the exchanges at the exchanges' retail price and sell the items at the same price as the exchanges. The commissaries will receive a management fee equal to 2 percent of the sale price of the items to offset the costs for handling the pilot project items and will not collect a surcharge on these items. The pilot project should have a negligible impact on the exchange dividend because of the design of the pilot project and the small percentage of sales from film, one-time use cameras, and telephone cards. The commissaries will purchase all pilot project items from the exchanges, less a 2 percent management fee. Further, based on our analysis of the exchanges' sales data, the sale of all film, one-time use cameras, and telephone cards comprise a very small percentage (less than 1 percent from fiscal years 2003 through 2005) of annual total exchange sales, and the pilot project calls for only selling 8 varieties of these items at 10 locations. Moreover, the exchanges would continue to sell the items at their locations throughout the pilot project. Based on fiscal year 2004 sales and dividend data, we determined that the fiscal year 2004 exchange dividend would have decreased by about $600,000, or 0.2 percent, if all sales of all varieties of these items were made at the commissaries. Our estimate represents a worst case scenario because it includes the sale of all film, one-time use cameras, and telephone cards, rather than the eight items selected for the pilot project; assumes that all sales of film, one-time use cameras, and telephone cards would occur at the commissaries instead of the exchanges; and assumes that the sales of these items remain the same as when they were only sold in the exchanges. [ABSTRACT FROM AUTHOR]

Unmanned aircraft systems (UAS) consist of an unmanned aircraft; sensor, communications, or weapons, carried on board the aircraft, collectively referred to as payloads; and ground controls. UAS have been used successfully in recent operations, and are in increasingly high demand by U.S. forces. To meet the demand, the Department of Defense (DOD) is increasing its investment in and reliance on UAS, and often deploying them while still in development. GAO has previously found that DOD's approach to developing and fielding UAS risked interoperability problems which could undermine joint operations. GAO was asked to review (1) UAS performance in recent joint operations and (2) the soundness of DOD's approach to evaluating joint UAS operational performance. DOD has achieved certain operational successes using UAS, including identifying time-critical targets in Iraq and Afghanistan, and striking enemy positions to defeat opposing forces. Some missions effectively supported joint operations, and in other cases, the missions were service-specific. DOD has encountered challenges which have hampered joint operations at times. First, some UAS cannot easily transmit and receive data with other communication systems because they are not interoperable. Although DOD guidance requires interoperability, detailed standards for interoperability have not been developed; DOD has relied on existing, more general standards; and the services developed differing systems. For now, U.S. forces have developed technical patches permitting transmission but slowing data flow, potentially hampering time-critical targeting. Second, some sensor payloads cannot be interchangeably used on different UAS because DOD has not adopted a payload commonality standard. Some UAS missions may have to be delayed if compatible unmanned aircraft and payloads are not available. Based on its experience with UAS in Persian Gulf operations, U.S. Central Command believes communications interoperability and payload commonality problems occur because the services' UAS development programs have been service-specific and insufficiently attentive to joint needs. Lastly, the electromagnetic spectrum needed to control the flight of certain unmanned aircraft and to transmit data is constrained and no standard requiring the capability to change frequencies had been adopted because the problem was not foreseen. Thus, some systems cannot change to avoid congestion and consequently some missions have been delayed, potentially undermining time-critical targeting. In addition to the joint operational challenges, inclement weather can also hamper UAS operations. Unmanned aircraft are more likely to be grounded in inclement weather than manned aircraft and DOD had not decided whether to require all-weather capability. While DOD has acknowledged the need to improve UAS interoperability and address bandwidth and weather constraints, little progress has been made. Until DOD adopts and enforces interoperability and other standards, these challenges will likely remain and become more widespread as new UAS are developed and fielded. DOD's approach to evaluating UAS joint operational performance has been unsound because it was not systematic or routine. DOD has deployed UAS before developing a joint operations performance measurement system, even though results-oriented performance measures can be used to monitor progress toward agency goals. DOD has generally relied on after-action and maintenance reports which have useful but not necessarily joint performance information. DOD has also relied on short-duration study teams for some performance information but had not established ongoing or routine reporting systems. Thus, while continuing to invest in UAS, DOD has incomplete performance information on joint operations on which to base acquisition or modification decisions. In May 2005, U.S. Strategic Command began developing joint performance measures. [ABSTRACT FROM AUTHOR]

The article reports on the concept of the National Defense Authorization Act in the U.S. Congress has expressed concern that urgent joint warfighting requirements are not always met in the most expeditious manner, particularly command and control and blue-force-tracking capabilities that reduce the chances of friendly-fire casualties. The Act required the Government Accountability Office to determine the extent to which Limited Acquisition Authority (LAA) has been used. In implementing LAA, the Joint Forces Command has faced challenges in finding funding for and sustaining LAA projects.

The Department of Defense's (DOD) operations in time of war or national emergency depend on sizeable reserve force involvement and DOD expects future use of the reserve force to remain high. Operational readiness depends on healthy and fit personnel. Long-standing problems have been identified with reserve members not being in proper medical or physical condition. Drilling members in the reserve force by law are required to have a medical exam every 5 years and an annual certificate of their medical status. Also, DOD policies require an annual dental exam and an annual evaluation of physical fitness. Compliance with these routine requirements is the first step in determining who is fit for duty. Public Law 108-375 required GAO to study DOD's management of the health status of reserve members activated for Operations Enduring Freedom and Iraqi Freedom. GAO assessed DOD's (1) ability to determine reserve force compliance with routine exams, and (2) visibility over reserve members' health status after they are called to duty and the care, if any, provided to those deployed with preexisting conditions. DOD is unable to determine the extent to which the reserve force complied with routine examinations due to lack of complete or reliable data. Although each reserve component employs a tracking system capable of monitoring compliance with medical exams, only one component has taken the necessary quality assurance steps to ensure the reliability of its data. While the Office of the Under Secretary of Defense for Personnel and Readiness has the responsibility for overseeing medical and physical fitness policy and processes, it has not established a management control framework and executed a plan to oversee compliance with routine examinations. Specifically, this office has not enforced holding all responsible levels accountable, ensuring that all requirements are being met, and that complete and reliable data are being entered into the appropriate tracking system. For example, this office has not enforced its own requirement for the services to report on the components' physical fitness status. Without complete and reliable data, DOD is not in a sound position to provide the Secretary of Defense or Congress assurances that the reserve force is medically and physically fit when called to active duty. DOD has only limited visibility over the health status of reserve members after they are called to duty and is unable to determine the extent of care provided to those members deployed with preexisting medical conditions despite the existence of various sources of medical information. The components collect various types of medical data, but vary in their ability to systematically identify, track, and report information on those with temporary and permanent conditions that may limit deployability. In addition, medical information is captured on predeployment forms for all members and entered into a DOD-wide centralized database. GAO has previously reported that the database has missing and incomplete health data, and DOD is working to correct this through its quality assurance program. GAO found during this review that DOD has continued to make progress entering the data from the forms into the database, but the data are still incomplete and the reasons why members are determined medically nondeployable are not captured in a way that is easily discernable. While the Under Secretary of Defense continues to have responsibility for overseeing the medical and physical fitness of reserve members after they are called to duty, the combatant commanders, under the Joint Chief of Staff, have this responsibility for the theater. DOD is unable to determine the care provided to those deployed with preexisting medical conditions because DOD has not determined what preexisting conditions may be allowed into a specific theater and, thus, does not know what conditions to track. Evidence GAO developed suggests that members are deployed into theater with preexisting conditions, such as diabetes, heart problems, and cancer. The impact of those who are not medically and physically fit for duty could be significant for future deployments as the pool of reserve members from which to fill requirements is dwindling and those who have deployed are not in as good health as they were before deployment. [ABSTRACT FROM AUTHOR]

Operation Iraqi Freedom (OIF) and Operation Enduring Freedom (OEF) servicemembers and those who are discharged from military service may receive health care from the Department of Veterans Affairs (VA). Since the onset of OIF and OEF, the Department of Defense (DOD) has reported that more than 15,000 servicemembers have been wounded in combat. Those who are seriously injured require comprehensive health care services and may be treated at either DOD or VA medical facilities. Because VA is expected to provide health care to many of the injured OIF and OEF servicemembers, concerns have been raised about the ease with which these individuals and their health care information transition from DOD's to VA's health care system. This statement is based on GAO's preliminary work on "seamless transition" and focuses on (1) the policies and outreach efforts that VA has instituted to provide timely access to health care to OIF and OEF servicemembers and (2) the extent to which individually identifiable health information is shared systematically between DOD and VA. Since GAO's work is still in the early stages of review, the statement is limited to information gathered to date. Since 2002, VA has developed policies and procedures that direct its medical facilities to provide OIF and OEF servicemembers timely access to care. Most notably, VA assigned VA social workers to selected military treatment facilities in August 2003, directed VA facilities to designate combat case managers in October 2003, and directed the establishment of four VA polytrauma centers for OIF and OEF servicemembers in June 2005. In January 2005, VA established the Seamless Transition Office to further improve coordination within the Veterans Benefits Administration and the Veterans Health Administration as well as between DOD and VA. In addition, VA has increased outreach efforts by providing OIF and OEF servicemembers who have been discharged with personal letters and newsletters, a Web site for health information tailored to OIF and OEF servicemembers, counseling services, and briefings on available VA health care services. GAO is in the beginning stages of reviewing VA's efforts to provide a smooth transition from DOD health care and has not yet evaluated the effectiveness of VA's related policies, procedures, and outreach initiatives. An important issue associated with transitioning servicemembers to VA health care is the sharing of health care information between DOD and VA. The two departments have signed a memorandum of understanding for sharing individually identifiable health information, but the memorandum does not specify the particular types of individually identifiable health information that will be exchanged and when the information will be shared. The absence of specific procedures continues to hinder VA's efforts to obtain needed health information from DOD. Recently, DOD has begun to share certain health assessment information with VA on individuals who have been discharged from the military, and the transmitting of this information to VA on a routine basis is expected to occur in October 2005. However, according to VA officials, DOD is not providing health assessment information to VA for Reserve and National Guard members, who comprise 35 percent of the OIF and OEF forces. [ABSTRACT FROM AUTHOR]

Since the attacks of September 11, 2001, the Department of Defense (DOD) has reported spending $191 billion through May 2005 to conduct the Global War on Terrorism (GWOT). On an ongoing basis, DOD compiles and reports information on the incremental costs of the war, and uses these data in preparing future funding requests. To assist Congress in its oversight of war spending, GAO assessed (1) whether DOD's reported war costs are based on reliable data, (2) the extent to which DOD's existing financial management policy is applicable to war spending, and (3) whether DOD has implemented cost controls as operations mature. GAO focused primarily, but not exclusively, on fiscal year 2004 reported costs--the latest full year of data available at the time of GAO's review. GAO found numerous problems in DOD's processes for recording and reporting costs for GWOT, raising significant concerns about the overall reliability of DOD's reported cost data. As a result, neither DOD nor Congress can reliably know how much the war is costing and details on how appropriated funds are being spent, or have historical data useful in considering future funding needs. On the basis of GAO's work, DOD is taking steps to improve its cost reporting. Factors affecting the reliability of DOD's reported costs include long-standing deficiencies in DOD's financial systems, the lack of a systematic process to ensure that data are correctly entered into those systems, inaccurately reported costs, and difficulties in properly categorizing costs. In at least one case, reported costs may be materially overstated. Specifically, DOD's reported obligations for mobilized Army reservists in fiscal year 2004 were based primarily on estimates rather than actual information and differed from related payroll information by as much as $2.1 billion, or 30 percent of the amount DOD reported in its cost report. In addition, GAO found inadvertent double counting in the Navy's and Marine Corps' portion of DOD's reported costs amounting to almost $1.8 billion from November 2004 through April 2005. Because it was not feasible to examine all reported costs and significant data reliability problems existed, GAO was not able to determine the extent that total costs were misstated. Further complicating the data reliability issue is the fact that DOD has not updated its policy to address GWOT spending. Instead, DOD is using its existing financial management regulation for funding contingency operations, although it was developed and structured to manage the costs of small-scale contingency operations. GAO has noted that specific provisions of the existing policy conflict with the needs of GWOT. One conflict concerns the use of supplemental funds for base support activities at home stations. DOD's financial management regulation administratively precludes such use, but military service officials have spent billions of dollars in supplemental funds on these activities. Some of this spending appears to directly support the war, but some does not. DOD is currently updating its regulation on the basis of GAO's work. While individual commands have taken steps to control costs and DOD policy generally advises its officials of their financial management responsibilities to ensure the prudent use of contingency funding, DOD has not established guidelines that would require all commands involved in GWOT to take steps to control costs and to keep DOD informed of those steps and their success. For example, the commander of coalition forces in Iraq has unilaterally set a 10 percent cost reduction target for fiscal year 2005 but the details are not widely known outside the command. With the growth in GWOT costs, there is a need to ensure that all commands seek to control costs, including the need to review and rationalize related requirements. Until the department establishes guidelines on cost controls and is routinely informed about the types of controls and their impact on costs, it cannot be sure that all that can be done to control costs is being done. [ABSTRACT FROM AUTHOR]

The Department of Defense (DOD) has had problems with tracking and identifying inventory for many years, most recently in Operation Iraqi Freedom. One of several tools DOD is using to address these inventory problems is radio frequency identification (RFID). RFID technology consists of passive or active tags that are attached to equipment and supplies that are shipped from one location to another. Although DOD did not begin official implementation of passive RFID technology until January 1, 2005, DOD has been using active RFID technology since the early 1990s and began developing policy and pilot testing passive RFID in 2003. As of January 1, 2007, all commodities, excluding bulk commodities, are to have passive RFID tags. Full implementation of passive RFID is estimated to cost hundreds of millions of dollars. This report (1) provides information on the status of passive RFID implementation, (2) addresses the extent to which DOD has developed a strategic approach for implementing passive RFID, and (3) highlights challenges DOD recognizes it faces in implementing passive RFID and any plans developed by DOD to mitigate these challenges. Since 2003, DOD and the components have taken actions to begin using a potentially promising technology, known as passive RFID, throughout their supply chain operations. These actions include development of policy and guidance and the use of pilot projects and initial implementation to test the technology's application to their business processes. In addition, infrastructure and funding have been provided, but this has been minimal because implementation did not officially begin until January 2005. Future funding requirements are expected to increase sharply as full implementation proceeds--from $6.6 million as of January 2005 to about $472 million projected from fiscal years 2006 through 2011. This $472 million projection does not include the cost of system interoperability, which officials believe will be the most expensive element of implementation. Full implementation of passive RFID in supply operations is not anticipated until 2016 or beyond. While DOD has taken a number of actions to direct the implementation of passive RFID, it has not yet developed a comprehensive strategic management approach that incorporates sound management principles. The planning by DOD and its components lacks or only partially incorporates several key management principles needed to effectively guide, monitor, and assess implementation. The development of a comprehensive strategic management approach that fully incorporates these principles could provide decision makers with a framework to guide RFID implementation efforts and the means to determine whether these efforts are achieving the desired results. This affects both DOD and its components because the components are developing implementation plans to support DOD's RFID policy. DOD has identified several challenges that will need to be resolved before passive RFID can be fully implemented, but it has not yet developed a mitigation plan to address these challenges. Some challenges relate to the fact that passive RFID is a new and evolving technology, while other challenges derive from operational issues and obtaining adequate funding. Furthermore, certain regulatory and administrative obstacles remain. Until DOD and the components identify actions to mitigate these implementation challenges, their progress in resolving these challenges may be impeded. [ABSTRACT FROM AUTHOR]

In 2002, the Department of Defense (DOD) implemented a new acquisition model to develop a Ballistic Missile Defense System (BMDS) that included all major missile defense acquisitions, some of which were being developed by the military services. The model called for the management and funding responsibility for production, operation, and sustainment of a capability to be transferred to a military service when a BMDS element or major component is technically mature and plans for production are well developed. The Missile Defense Agency (MDA) was given responsibility for developing the BMDS and recommending the transfer of management and funding responsibilities to the services. In 2004, MDA emplaced an initial missile defense capability, but DOD did not transfer management and funding responsibility for that capability. Because a formal transfer did not occur, GAO was asked to (1) identify DOD's criteria for deciding when a missile defense capability should be transferred to a service and (2) determine how DOD is managing the costs of fielding a BMDS capability. There is currently uncertainty as to which assets may eventually be transferred to each military service and under what conditions those transfers should occur. This uncertainty makes it difficult for the services to plan to address the requirements of DOD acquisition regulations and realign their budgets to support the missile defense mission. According to MDA and other DOD officials, when transfer criteria were established in 2002, the Department did not fully understand the complexity of the BMDS and how it could affect transfer decisions. For example, it has been difficult to determine whether MDA or a military service will be responsible for managing and funding some assets, such as stand-alone missile defense radars, because these assets are not integrated on service platforms or do not perform core service missions. MDA officials suggested that these components could be operated by either contractors or military personnel and MDA might fund their operation and sustainment. A team that includes representatives from the military services, the combatant commands, MDA, and other DOD offices was established early this year to address transfer issues. However, because MDA and the services have been unable to reach agreement on the transfer of some missile defense assets, a unit under the Joint Chiefs of Staff was tasked in July 2005 with recommending revisions to the existing transfer criteria. MDA budgeted $1.5 billion of its fiscal year 2005 research and development funds to acquire interceptors and radars and upgrade various BMDS components. It expects to continue to acquire and upgrade BMDS assets through 2011 and beyond. However, MDA and the services disagree as to who should pay for operating and sustaining the initial defensive capability after fiscal year 2005. Additionally, although DOD has budgeted $68.5 billion to develop, procure, operate, and sustain a missile defense capability between 2005 and 2011, it has not completely determined whether additional operation and sustainment funds will be needed, and it has not included all known operation and sustainment costs in its budget. Until DOD decides who will fund these costs, the services will likely continue to provide only the funding that they have been directed to provide. As a result, some needs--for which neither MDA nor the services have planned--will go unfunded. Additionally, if the funds budgeted for some purposes, such as logistical support for the BMDS, turn out to be insufficient, DOD will either have to take funds from other programs or spend less on missile defense. [ABSTRACT FROM AUTHOR]

In October 2002 we reported that inadequate linkage existed between near-term munitions needs of the combatant commanders and the purchases made by the military services. The Department of Defense (DOD) concurred with our recommendations and took steps to address them by rewriting the overarching DOD Instruction for determining munitions requirements. Related to our ongoing work on prepositioned stocks, we assessed whether DOD's efforts thus far and initiatives planned for the future will ensure the required linkage since successful implementation of operational war plans is contingent on the availability of the right mix and quantity of munitions. To make our assessment, we obtained and analyzed information from cognizant organizations within DOD, Joint Chiefs of Staff (JCS), Headquarters and subordinate units of the Military Services, and U.S. Forces Korea (USFK). We conducted our analysis of DOD's munitions requirements process in accordance with generally accepted government auditing standards. While the revised DOD Instruction established requirements to create the needed linkage between the combatant commander's munitions needs and the military services procurement decisions, limited implementation has been achieved. The Instruction, which was revised in October 2003, in response to our recommendation, identified key timeline dates and requirements for each of the DOD organizations involved in the process. The Instruction was modified to create a linkage between the combatant commander's munitions needs and the purchasing decisions of the military services. However, this linkage did not occur because there has been little, if any, compliance by DOD organizations with the Instruction's requirements. Our recent assessment of prepositioned munitions supporting the operational war plan of USFK revealed that key timeline dates were missed and required coordination with USFK was not accomplished. For instance, threat reports developed by the Defense Intelligence Agency that are used to identify key targets were late. As a result, USFK officials told us they had to identify target lists based on dated information. DOD officials stated that the specific timeline and other requirements were not met because formal communication links needed to ensure compliance were not established. The department recognizes that further changes are needed and is revising the Instruction a second time. Our review of the current draft Instruction raises two concerns. First, the draft Instruction does not include additional oversight and control criteria to ensure compliance by all organizations involved in the munitions requirement process. Second, the draft Instruction does not require combatant commander participation in risk assessments performed prior to and after the Program Objective Memorandum (POM) submission occurs. Combatant commanders are in the best position to identify the impact of not having munitions needed to support the operational plan. Non-compliance by any of the myriad of organizations involved in the munitions requirements process could result in procurement decisions that will not support operational war plans and impact the war fighter's ability to execute them. Based on our follow-up efforts and analysis, this letter includes recommendations to ensure that there is adequate linkage between combatant commanders' munitions needs and the purchases made by the military services. [ABSTRACT FROM AUTHOR]

Over the years, the Department of Defense's (DOD) military compensation system has become an increasingly complex and piecemeal accretion of pays, allowances, benefits, and special tax preferences. DOD leaders have expressed concern that rising compensation costs may not be sustainable in the future and could crowd out other important investments needed to recapitalize equipment and infrastructure. Given the looming fiscal challenges facing the nation in the 21st century, GAO believes it is time for a baseline review of all federal programs to ensure that they are efficiently meeting their objectives. Under the Comptroller General's authority, GAO (1) assessed whether DOD's approach to compensation provides adequate transparency over costs; (2) identified recent trends in active duty compensation, and how costs have been allocated to cash and benefits; and (3) reviewed how active duty servicemembers perceive their compensation and whether DOD has effectively explained the value of the military compensation package to its members. DOD's historical piecemeal approach to military compensation has resulted in a lack of transparency that creates an inability to (1) identify the total cost of military compensation to the U.S. government and (2) assess the allocation of total compensation investments to cash and benefits. No single source exists to show the total cost of military compensation, and tallying the full cost requires synthesizing about a dozen information sources from four federal departments and the Office of Management and Budget. Without adequate transparency, decision makers do not have a true picture of what it costs to compensate servicemembers. They also lack sufficient information to identify long-term trends, determine how best to allocate available resources to ensure the optimum return on compensation investments, and better assess the efficiency and effectiveness of DOD's current compensation system in meeting recruiting and retention goals. To address this and other major business transformation challenges in a more strategic and integrated fashion, GAO recently recommended the creation of a chief management official at DOD. Transparency over military compensation is critical because costs to provide compensation are substantial and rising, with over half of the costs allocated to noncash and deferred benefits. In fiscal year 2004, it cost the federal government about $112,000, on average, to provide annual compensation to active duty enlisted and officer personnel. Adjusted for inflation, the total cost of providing active duty compensation increased about 29 percent from fiscal year 2000 to fiscal year 2004, from about $123 to $158 billion. During this time, health care was one of the major cost drivers, increasing 69 percent to about $23 billion in fiscal year 2004. In addition, military compensation is weighted more toward benefits compared with other government and private sector civilian compensation systems. Furthermore, less than one in five service members will serve 20 years of active duty service to become eligible for retirement benefits. Increasing compensation costs make the need to address the appropriateness and reasonableness of the compensation mix and the long-term affordability and sustainability of the system more urgent. DOD survey results and analysis of GAO focus groups and survey data have shown that servicemembers are dissatisfied and harbor misperceptions about their pay and benefits in part because DOD does not effectively educate them about the competitiveness of their total compensation packages. About 80 percent of the 400 servicemembers that GAO surveyed believed they would earn more as civilians; in contrast, a 2002 study showed that servicemembers generally earn more cash compensation alone than 70 percent of like-educated civilians. Servicemembers also expressed confusion over aspects of their compensation, like retirement, and many complained that benefits were eroding despite recent efforts by Congress and DOD to enhance pay and benefits. By not systematically educating servicemembers about the value of their total compensation, DOD is essentially allowing a culture of dissatisfaction and misunderstanding to perpetuate. [ABSTRACT FROM AUTHOR]