Military Operations: Fiscal Year 2003 Obligations Are
Substantial, but May Result in Less Obligations Than Expected
(17-SEP-03, GAO-03-1088).
The Global War on Terrorism (GWOT)--principally involving
operations in Afghanistan and Iraq--is being funded in fiscal
year 2003 by Congress's appropriation of almost $69 billion,
including almost $16 billion in a transfer fund called the Iraqi
Freedom Fund. To assist Congress in its oversight of funding for
GWOT, GAO examined the obligation of GWOT funds and the
implications for additional funding in fiscal year 2003 and the
President's request for fiscal year 2004 funds for several
operations in Southwest Asia that were canceled after the budget
was submitted.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-03-1088
ACCNO: A08508
TITLE: Military Operations: Fiscal Year 2003 Obligations Are
Substantial, but May Result in Less Obligations Than Expected
DATE: 09/17/2003
SUBJECT: Appropriated funds
Budget obligations
Defense appropriations
Defense budgets
Defense capabilities
Military operations
Terrorism
DOD Operation Iraqi Freedom
Global War on Terrorism
Iraqi Freedom Fund
Operation Noble Eagle
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO Product. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
******************************************************************
GAO-03-1088
Report to Congressional Committees
United States General Accounting Office
GAO
September 2003 MILITARY OPERATIONS
Fiscal Year 2003 Obligations Are Substantial, but May Result in Less
Obligations Than Expected
GAO- 03- 1088
While funds obligated by DOD for GWOT, including the war with Iraq, in
fiscal year 2003 are substantial* about $39 billion through June 2003* the
funds appropriated by Congress appear to be sufficient for fiscal year
2003, and some of the services may not obligate all of the funds they were
appropriated for fiscal year 2003. For example, at the end of June 2003,
with 75 percent of the fiscal year completed, the services* percentage of
GWOT
operation and maintenance funds that had been obligated ranged from a low
of 65 percent for the Army to a high of 78 percent for the Marine Corps
(see chart below). In contrast, the percentage of military personnel funds
obligated by the three- fourths of- the- fiscal- year mark by the services
ranged from 72 to 75 percent of GWOT appropriations.
Obligations of GWOT Operation and Maintenance Funds, through June 2003
The military services believe they will obligate all the fiscal year 2003
funds appropriated to them. In addition, the services have received
billions of dollars more in transfers from the Iraqi Freedom Fund. But
GAO*s analysis suggests that they may not need all the funds transferred
as well as further transfers in fiscal year 2003 for operation and
maintenance, since considerable unobligated fiscal year 2003 funds remain
in their direct appropriations.
Since DOD terminated Operations Desert Spring and Northern and Southern
Watch in Southwest Asia in March 2003, the funds ($ 1.4 billion) that were
included in the President*s fiscal year 2004 budget to support those
operations next year may no longer be necessary. The Global War on
Terrorism
(GWOT)* principally involving operations in Afghanistan and Iraq* is being
funded in fiscal year 2003 by Congress*s appropriation of almost $69
billion, including almost $16 billion in a transfer fund called the Iraqi
Freedom Fund. To assist Congress in its oversight of
funding for GWOT, GAO examined the obligation of GWOT funds and the
implications for additional funding in fiscal year 2003 and the
President*s request for fiscal year 2004 funds for several operations in
Southwest Asia that were canceled after the budget was submitted.
GAO recommends that the Department of Defense (DOD) take several actions
to ensure that the
fiscal year 2003 funds appropriated for GWOT are fully utilized, including
that the Secretary of Defense review the services*
spending plans before transferring additional funds from the Iraqi Freedom
Fund to ensure the funds will be obligated as planned. GAO also suggests
that, given the results of this review, Congress not provide the $1.4
billion requested
by the President for DOD in fiscal year 2004 for continued support of
Operations Desert Spring and Northern and Southern Watch since DOD
canceled them. GAO made changes to its
recommendations based on DOD*s comments on a draft of this report and DOD
now agrees with the revised recommendations. www. gao. gov/ cgi- bin/
getrpt? GAO- 03- 1088.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Neal Curtin at (757) 552-
8100 or curtinn@ gao. gov. Highlights of GAO- 03- 1088, a report to
congressional committees
September 2003
MILITARY OPERATIONS
Fiscal Year 2003 Obligations Are Substantial, but May Result in Less
Obligations Than Expected
Page i GAO- 03- 1088 Military Operations Letter 1 Results in Brief 2
Background 3 Unobligated Balances Late in the Fiscal Year Raise Doubts
about
Services* Ability to Fully Obligate Their Fiscal Year 2003 GWOT Funds and
Justification for Iraqi Freedom Fund Transfers 5 The Termination of
Operations Northern Watch, Southern Watch,
and Desert Spring Obviates the Need for Requested Fiscal Year 2004 Funds
for These Operations 14 Conclusions 14 Recommendations for Executive
Action 15 Matter for Congressional Consideration 15 Agency Comments and
Our Evaluation 15 Appendix I Scope and Methodology 19
Tables
Table 1: Operation and Maintenance Funds Provided to the Services for the
Global War on Terrorism 6 Table 2: Military Personnel Funds Provided to
the Services for the
Global War on Terrorism 7 Figures
Figure 1: Location of DOD*s Fiscal Year 2003 Contingency Operations 4
Figure 2: Obligations of GWOT Operation and Maintenance Funds
through June 2003 9 Figure 3: Obligations of GWOT Military Personnel Funds
through June 2003 12 Contents
Page ii GAO- 03- 1088 Military Operations Abbreviations
DOD Department of Defense GWOT Global War on Terrorism This is a work of
the U. S. government and is not subject to copyright protection in the
United States. It may be reproduced and distributed in its entirety
without further permission from GAO. However, because this work may
contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.
Page 1 GAO- 03- 1088 Military Operations
September 17, 2003 Congressional Committees Following the terrorist
attacks of September 11, 2001, the United States began military operations
to combat terrorism both in the United States and overseas. Military
operations to defend the United States from terrorist attacks are known as
Operation Noble Eagle. Overseas operations to combat terrorism are known
as Operation Enduring Freedom and have taken place principally in
Afghanistan. In March 2003, the United States began Operation Iraqi
Freedom to change the government in Iraq. Together, these three operations
are known as the Global War on Terrorism (GWOT). To support GWOT in fiscal
year 2003, Congress appropriated $68.7 billion to the Department of
Defense (DOD) in the Consolidated Appropriations Resolution, 2003, and
Emergency Wartime Supplemental Appropriations Act, 2003. 1 Of the $68.7
billion appropriated, almost $16 billion was appropriated in the Wartime
Supplemental for a transfer account called the Iraqi Freedom Fund. 2 To
assist Congress in its oversight role, we reviewed the fiscal year 2003
funding for the GWOT. Specifically, we reviewed the services* obligation
rates for GWOT- related activities and what those obligation rates suggest
about the services* needs to draw from the Iraqi Freedom Fund during
fiscal year 2003. We also reviewed the President*s request for fiscal year
2004 funds for Operations Northern Watch, Southern Watch, and Desert
Spring, 3 which DOD subsequently terminated in March 2003. We provided
briefings to the House and Senate Appropriations Committee staff and
House and Senate Armed Services Committee staff as well as the House and
Senate Budget Committee staff in June and July 2003. This report updates
the information we provided during the briefings.
1 P. L. 108- 7 (Feb. 20, 2003) and P. L. 108- 11 (Apr. 16, 2003). 2 The
Iraqi Freedom Fund is a special account providing funds for additional
expenses for ongoing military operations in Iraq, and those operations
authorized by P. L. 107- 40
(Sept. 13, 2001), Authorization for Use of Military Force, and other
operations and related activities in support of the global war on
terrorism.
3 Operations Northern and Southern Watch enforced the no- fly zones over
Iraq. Operation Desert Spring, an Army operation, rotated forces in and
out of Kuwait to train with the Kuwaiti military. United States General
Accounting Office Washington, DC 20548
Page 2 GAO- 03- 1088 Military Operations
To accomplish this review, we obtained the most recently available DOD
data on the services* obligation of fiscal year 2003 GWOT funds. We
interviewed DOD and service officials responsible for preparing budgets
and estimating costs and force levels. We also interviewed resource
management officials from most of the major commands involved in Operation
Iraqi Freedom. We focused our work on the obligation of funds appropriated
for operation and maintenance and military personnel because they
represented the large majority of funds obligated in fiscal year 2003
through June 2003. A detailed discussion of our scope and methodology is
contained in appendix I.
While funds obligated for the Global War on Terrorism (GWOT) in fiscal
year 2003 are substantial* about $39 billion through June 2003, our
analysis of the services* obligation rates suggests that the funds
appropriated by Congress for fiscal year 2003 GWOT operation and
maintenance and military personnel, excluding transfers from the Iraqi
Freedom Fund, are sufficient because some of the services may not be able
to obligate, before the end of fiscal year 2003, the funds they were
appropriated. For example, at the end of June 2003, with three- fourths of
the fiscal year complete, the percentage of the services* GWOT operation
and maintenance appropriations that had been obligated ranged from a low
of 65 percent for the Army to a high of about 78 percent for the Marine
Corps. While some costs are higher than expected, other costs are lower,
and on balance considerable operation and maintenance funds remain
unobligated relatively late in the fiscal year for each of the services
except the Marine Corps. Costs are higher, for example, because force
levels in
Iraq have not decreased as quickly as expected; one of the reasons for
lower costs, on the other hand, is that not all forces deployed as
planned. The percentage of the GWOT military personnel funds that had been
obligated by the three- fourths of the fiscal- year mark by the services
ranged from 72 percent for the Air Force to 75 percent for the Army and
the Marine Corps.
The military services believe that they will be able to obligate their
entire fiscal year 2003 GWOT- appropriated funds, including an additional
$2.4 billion in transfers to their operation and maintenance accounts
received in August 2003 from the Iraqi Freedom Fund. Based on our analysis
of the services* obligation data, we identified considerable unobligated
balances in the services* fiscal year 2003 operation and maintenance
appropriations that can be used for GWOT. Therefore, we believe the
services may have sufficient funds in these accounts for fiscal year 2003,
that not all of the transferred funds may be obligated, and that Results
in Brief
Page 3 GAO- 03- 1088 Military Operations
the services should not require any further transfers from the Iraqi
Freedom Fund this fiscal year.
In March 2003, DOD terminated Operations Northern Watch, Southern Watch,
and Desert Spring. Therefore, the funds requested for these operations in
the President*s fiscal year 2004 budget request for DOD may no longer be
necessary as requested. We are making recommendations to ensure that (1)
funds provided to the
services for GWOT are fully utilized and (2) any funds transferred from
the Iraqi Freedom Fund that are not obligated by the end of fiscal year
2003 are identified and returned to the Fund. We also identified a matter
for congressional consideration regarding the President*s fiscal year 2004
budget request for certain Southwest Asia operations that DOD canceled in
March 2003 following the President*s budget submission.
In official oral comments on a draft of this report, DOD agreed with one
of our recommendations and had concerns with two others. We revised our
recommendations to reflect DOD*s concerns, and DOD now concurs with the
revised recommendations.
From the end of the Persian Gulf War in February 1991 through June 2003,
the DOD reported that it had obligated over $86.203 billion for
incremental costs 4 it had incurred for its overseas contingency
operations. These operations included the enforcement of no- fly zones,
humanitarian assistance, and peace enforcement operations, as well as
operations to combat terrorism. In fiscal year 2003, these costs were
incurred preparing for and undertaking GWOT, including the 2003 war
against Iraq. In addition, U. S. military forces are continuing to
participate in contingency operations in the Balkans. Figure 1 shows the
location of DOD*s contingency operations for fiscal year 2003.
4 The term *incremental costs* means those directly attributable costs
that would not have been incurred if it were not for the operation.
Sections 230406 and 230902 of Department of Defense Financial Management
Regulation 7000.14R, Volume 12, Chapter 23, Contingency Operations (Feb.
2001) provide additional information on incremental costs. We further note
that DOD*s financial systems only capture total obligations and the
services use various management information systems to identify
incremental obligations
and to estimate costs. Although we use the term costs throughout this
report as a convenience, we are actually referring to DOD*s obligation of
funds. Background
Page 4 GAO- 03- 1088 Military Operations
Figure 1: Location of DOD*s Fiscal Year 2003 Contingency Operations
Most of the costs associated with GWOT fall into two accounts* operation
and maintenance and military personnel. Operation and maintenance account
funds obligated in support of GWOT are used for a variety of purposes,
including transportation of personnel, goods, and equipment; unit
operating support costs; and intelligence, communications, and logistics
support. Military personnel funds obligated in support of GWOT cover the
pay and allowances of mobilized reservists as well as special payments or
allowances for all qualifying military personnel both active and reserve,
such as imminent danger pay and family separation allowance.
Page 5 GAO- 03- 1088 Military Operations
The services were appropriated about $34 billion to their operation and
maintenance accounts and about $15 billion to their military personnel
accounts for fiscal year 2003 5 to support the war in Iraq and Operations
Enduring Freedom and Noble Eagle. It appears that while the funds
obligated for these operations* about $39 billion as of the end of June
2003* are substantial, 6 the proportion of appropriated funds that have
been obligated as of that date is lower than the proportion of the fiscal
year elapsed as of that same date except for the Marine Corps. In this
regard, through June 2003, which represents three- fourths of the fiscal
year, three of the four services had not obligated more than 68 percent of
the operation and maintenance funds appropriated for GWOT, while the
Marine Corps had obligated 78 percent.
To support GWOT in fiscal year 2003, Congress appropriated $68.7 billion
to DOD in the Consolidated Appropriations Resolution, 2003, and Emergency
Wartime Supplemental Appropriations Act, 2003. According to the conference
report that accompanied the legislation, Congress included $6.1 billion
for Operations Noble Eagle and Enduring Freedom in the Consolidated
Appropriations Resolution of February 2003. 7 In March 2003, the President
requested that Congress appropriate $74.8 billion for GWOT, including the
conduct of military operations in Iraq and reconstruction and relief
there. Of this amount, $62.6 billion was identified in the President*s
budget for DOD*s GWOT military operations. In developing the President*s
request, DOD assumed, among other things, that the war with Iraq would
be a short conflict, would involve a two- front war using Turkey as a
staging area, and there would be a rapid redeployment and demobilization
of Reserve and National Guard troops following the cessation of combat
operations. In April 2003, Congress appropriated $79.2 billion, including
$62.6 billion for DOD to cover all GWOT, including the war with Iraq, in
5 This amount excludes almost $16 billion provided in the Iraqi Freedom
Fund, which is available until the end of fiscal year 2004. 6 Of this
amount, we estimate that almost $28 billion was for the war with Iraq
based on the Office of the Secretary of Defense (Comptroller) *s estimate
through May 2003 and our
analysis of the June 2003 obligations data. 7 Conference Report (H. R.
Conf. Rep. No. 108- 10), Feb. 13, 2003, accompanying H. J. Res. 2,
Consolidated Appropriations Resolution, 2003 (P. L. 108- 7) Feb. 20, 2003.
Unobligated Balances
Late in the Fiscal Year Raise Doubts about Services* Ability to Fully
Obligate Their Fiscal Year 2003 GWOT Funds and Justification for Iraqi
Freedom Fund Transfers Fiscal Year 2003 Funding
for the Global War on Terrorism
Page 6 GAO- 03- 1088 Military Operations
the Emergency Wartime Supplemental Appropriations Act of April 2003. 8
Although the services received their Consolidated Appropriations
Resolution, 2003, funds for fiscal year 2003 in February 2003, they did
not receive their first allocation of funds from the Emergency
Supplemental until May 2003 and their second allocation until July 2003.
Before receiving these monies, the services used funds from the
Consolidated Appropriations and their base programs, obligating $25.9
billion for GWOT. DOD*s statement of its requirements for the supplemental
appropriation included reimbursing the services* accounts for costs
incurred and financing the costs associated with military operations
against Iraq. Neither the President*s request for funds nor the
appropriations act
allocated the funds to specific operations. Of the funds appropriated to
DOD by the Emergency Wartime Supplemental, $46.699 billion was
appropriated directly to the services* and other defense agencies*
appropriations accounts and $15.679 billion to a transfer fund called the
Iraqi Freedom Fund. Tables 1 and 2 show the operation and maintenance and
the military personnel appropriations provided to the services for GWOT.
Table 1: Operation and Maintenance Funds Provided to the Services for the
Global War on Terrorism
Dollars in millions Operation and maintenance Army Navy Air Force Marine
Corps All services
Consolidated Appropriations Resolution $1.340 $0.436 $1.767 $0.202 $3.745
Emergency Wartime Supplemental Appropriations $16.078 $5.107 $7.120 $1.670
$29.975
Total $17. 418 $5.543 $8.887 $1.872 $33.720
Source: Department of Defense Fiscal Year 2003 Appropriations Report.
Note: The dollar figures cited above include appropriations received by
both the active and the reserve components for each service.
8 P. L. 108- 11 (Apr. 16, 2003).
Page 7 GAO- 03- 1088 Military Operations
Table 2: Military Personnel Funds Provided to the Services for the Global
War on Terrorism
Dollars in millions Military personnel Army Navy Air Force Marine Corps
All services
Consolidated Appropriations Resolution $0.771 $0.214 $0.563 $0.069 $1.617
Emergency Wartime Supplemental Appropriations $7.803 $1.600 $2.800 $1.200
$13.403
Total $8.574 $1.814 $ 3.363 $1.269 $15.020
Source: Department of Defense Fiscal Year 2003 Appropriations Report.
Note: The dollar figures cited above include appropriations received by
both the active and the reserve components for each service.
To assess the extent to which funds appropriated for GWOT have been
obligated, we compared the latest available obligation reports for GWOT
with the funds appropriated to each of the services* operation and
maintenance and military personnel accounts. We then compared the
proportion of the funds obligated to the proportion of the fiscal year
that had elapsed to ascertain if funds were obligated at a level
commensurate with that point in the fiscal year. We recognize that funds
are not obligated equally each month throughout the fiscal year but
believe that the further
into the fiscal year the closer to 100 percent obligations should be
relative to appropriations if all appropriated funds are likely to be
obligated. The results of this analysis are discussed in the following
sections of this report. We discussed our analysis with DOD
representatives at the Office of the Secretary of Defense (Comptroller)
and each of the services* budget offices, who disagreed with our
methodology. These representatives believed that the analysis should take
into account the fact that the supplemental appropriation was not
available until mid- April 2003 and that funds were not provided to the
services until the beginning of May 2003. We recognize that the
supplemental funding was not provided to the
services until May 2003. At the same time, DOD had to conduct Operations
Noble Eagle and Enduring Freedom from the first day of fiscal year 2003
and subsequently prepare for war in Iraq, deploy over 100,000 military
personnel to the Persian Gulf, and conduct major combat operations, all
before receiving supplemental funding. As discussed earlier, to fund these
operations in advance of receiving supplemental funding, the services used
funds from the Consolidated Appropriations and their base programs. In
doing so, DOD reported that it had obligated $25.9 billion for GWOT in
fiscal year 2003 through April 2003. Therefore, we believe that assessing
how much of the services* direct GWOT appropriations have been obligated
relatively late in the fiscal year provides a reasonable measure of how
quickly the services are obligating their GWOT
Page 8 GAO- 03- 1088 Military Operations
appropriations and the likelihood that they will obligate all the funds
appropriated to them. Our analysis suggests that the services have no need
for further transfers from the Iraqi Freedom Fund in fiscal year 2003,
that
all the funds transferred to their operation and maintenance accounts may
not be obligated, and that any transferred funds unobligated at the end of
the fiscal year should be transferred back to the Iraqi Freedom Fund.
Our analysis of the percentage of fiscal year 2003 GWOT operation and
maintenance funds obligated by the services compared with the proportion
of the fiscal year elapsed (i. e., October 1, 2002, through June 2003, the
latest month for which obligation data are available for all the services)
shows that the proportion of available appropriations that have been
obligated as of a particular date is lower than the proportion of the
fiscal year elapsed as of that same date for three of the four military
services, notwithstanding that funds obligated to date include those
required to cover the preparation of military forces for the war with Iraq
and the expense of transporting them and their equipment from the United
States and elsewhere to the Persian Gulf. Therefore, we believe the actual
operation and maintenance obligations made in fiscal year 2003 could be
less than the funds available for obligation in fiscal year 2003. By the
end of June 2003, only one of the services, the Marine Corps, had
obligated
more than 75 percent of the funds appropriated for operation and
maintenance, while the other three services had obligated between 65 and
68 percent, although three- fourths of the fiscal year had already
elapsed, raising doubts about whether all the services will be able to
obligate their
entire fiscal year 2003 GWOT operation and maintenance funds in the
remaining 3 months of fiscal year 2003. For example, the Army, by the end
of June 2003, had obligated 65 percent of its directly appropriated funds
for GWOT. Figure 2 displays the obligations through June 2003 for each of
the military services.
As can be seen in figure 2, the percentage of directly appropriated
operation and maintenance funds that were obligated as of June 30, 2003,
ranged from a low of 65 percent for the Army to a high of 78 percent for
the Marine Corps. Proportion of Operation
and Maintenance Funds Obligated Is Lower Than Proportion of Fiscal Year
Elapsed Except for the Marines Corps
Page 9 GAO- 03- 1088 Military Operations
Figure 2: Obligations of GWOT Operation and Maintenance Funds through June
2003
Note: Total obligations include obligations from both the active and the
reserve components.
Based on our analysis, we believe that in fiscal year 2003 the services,
with the possible exception of the Marine Corps, may not obligate all
operation and maintenance funds appropriated to them for GWOT. The
services,
however, believe that they will obligate all or almost all of these funds.
This may in fact be the case, but except for the Marine Corps, if the
services do obligate all these funds it will require a faster rate of
obligation of funds* greater than the rate at which they have been
obligating funds in recent months. We recognize that estimating the costs
of ongoing military
operations is difficult because operational requirements can differ
substantially from what was assumed in developing budget estimates. This
has been the case in Iraq, where actual operations have differed from some
of the assumptions. For example, a second front using Turkey as a
staging area never materialized, there has not been a rapid redeployment
and demobilization of Reserve and National Guard troops, one major Army
Page 10 GAO- 03- 1088 Military Operations
division expected to deploy did not, and transportation costs were lower
than predicted. Some of these differences, such as the lack of a rapid
redeployment and demobilization, are resulting in higher than expected
costs, while other differences, for example, the decision to not deploy
one of the Army*s divisions, are resulting in lower than expected costs.
However, in light of the rate of obligations made through June and the
information presented below, we continue to believe that actual
obligations of GWOT operation and maintenance funds for fiscal year 2003
may be less than the total GWOT operation and maintenance appropriations
available for obligation in fiscal year 2003.
According to the Army*s obligation plan, the Army expects to obligate $6
billion during the last 3 months of fiscal year 2003. Through June 2003,
the Army had obligated $11.315 billion. Combining the funds obligated
through June and the Army*s estimate for the balance of fiscal year 2003
indicates that the Army will obligate a total of $17.315 billion*$ 98
million
less than the $17.413 billion it received in direct operation and
maintenance appropriations for GWOT. It should be noted, however, that the
Army*s actual June obligations of $2.38 billion are higher than the $2.2
billion it planned to obligate in June. Whether the Army will obligate all
its fiscal year 2003 GWOT operation and maintenance funds depends on
whether its obligations for the last 3 months of the fiscal year continue
at or near the June 2003 rate or fall to the levels expected in its
obligation
plan. In discussing the results of our analysis with the Army, Army
officials told us that preliminary reports indicate that their July
obligations will be about $3 billion. However, their preliminary June
obligation estimate was higher than their actual June obligations, which
underscores the difficulty in projecting costs and the need to closely
monitor the obligation of GWOT funds. The Marine Corps expects to
obligate approximately $591 million for force
reconstitution (the repair of damaged equipment and the replacement of
munitions, spare parts or equipment lost in war) during the last 3 months
of the fiscal year. However, in discussing our analysis with the Marine
Corps, Marine Corps officials involved with budgeting for ongoing military
operations told us that constraints in depot and contractor capacity could
lead the Marine Corps to obligate fewer funds in fiscal year 2003 than
planned for depot maintenance, which accounts for $50 million to $70
million of its $591 million reconstitution estimate. Through June 2003,
which is the first 9 months of fiscal year 2003, the
Air Force had obligated $6.0 billion, or 68 percent, of its direct GWOT
operation and maintenance appropriation. Most of the Air Force*s aircraft
have redeployed from Operation Iraqi Freedom, and the Air Force*s role in
that operation has been reduced. According to Air Force officials, in
March 2003, the Air Force had 1, 000 aircraft deployed in support of the
Page 11 GAO- 03- 1088 Military Operations
war in Iraq and by late June the number had been reduced to 276. The Air
Force*s June 2003 obligation of its GWOT operation and maintenance
appropriation was $76 million less than its May 2003 obligation of that
appropriation. The Navy had obligated $3.7 billion, or 67 percent, of
its direct GWOT
appropriation through June 2003. According to Navy officials, all Navy
ships that deployed to support Operation Iraqi Freedom have been
redeployed, and Navy activity is back to pre- Operation Iraqi Freedom
levels. Furthermore, Navy officials with the Pacific Fleet (the Navy*s
major
force provider for Operation Iraqi Freedom) told us that their GWOT
obligations were lower than they had estimated, due in part to lower fuel
and airlift costs. In discussing our analysis with Navy headquarters
officials, they said that while a shorter duration of combat operations
resulted in certain costs not accruing or accruing at the estimated
levels, other operational factors and costs occurred that were substituted
and more than offset estimated fuel and airlift savings. Based on
obligations through June 2003, we believe the Navy may not be able to
obligate its entire fiscal year 2003 GWOT operation and maintenance
appropriation by the end of fiscal year 2003.
The services have been obligating their funds for military personnel at a
faster rate than that for their operation and maintenance funds. As figure
3 shows, with three- fourths of the fiscal year gone, the Army and the
Marine Corps had each obligated about three- fourths of their GWOT
appropriations for military personnel costs while the Navy and Air Force
had each obligated slightly less than three- fourths of their respective
GWOT appropriation. Military Personnel Funds
Are Being Obligated at a Faster Rate Than Operation and Maintenance Funds
Page 12 GAO- 03- 1088 Military Operations
Figure 3: Obligations of GWOT Military Personnel Funds through June 2003
Note: Total obligations include obligations from both the active and the
reserve components.
According to DOD*s July 2, 2003, report on fiscal year 2003
appropriations, the services will obligate their entire fiscal year 2003
GWOT military personnel appropriations. Service officials told us that
they believe they will use their entire GWOT military personnel
appropriation because the planned demobilization of reserve component
personnel has not occurred. In addition, the Army has not been able to
redeploy its troops from Iraq as originally planned, which increased the
Army*s costs for the special pays and allowances, such as imminent danger
pay and family separation allowance, which some deployed military
personnel are entitled to receive.
Page 13 GAO- 03- 1088 Military Operations
In addition to the direct appropriations included in the Emergency Wartime
Supplemental Appropriations Act, Congress also established the Iraqi
Freedom Fund, which provides the services with additional funds to cover
their GWOT costs. Congress appropriated almost $15.7 billion 9 to this
Fund and made it available to DOD through September 30, 2004. DOD must
notify Congress at least 5 days in advance of such transfers, but
congressional approval to make the transfers is not required. Once DOD
transfers funds to the services* operation and maintenance or military
personnel accounts during fiscal year 2003, the funds must be obligated by
September 30, 2003, or they should be transferred back to the Iraqi
Freedom Fund. 10 On August 11, 2003, DOD notified the Congressional
Defense Committees
of its intention to make an initial transfer of $4.8 billion from the
Iraqi Freedom Fund to various service and DOD agency accounts. Of the $4.8
billion, about half ($ 2.4 billion) would be transferred to the services*
operation and maintenance accounts; the balance would be transferred to
defensewide operation and maintenance and to a variety of procurement and
research, development, test, and evaluation accounts.
The August 11, 2003, notification did not include any transfers to the
services* military personnel accounts. Of the amount to be transferred to
the services* operation and maintenance accounts,
$1,097.3 million would be transferred to the Army, $683.7 million
would be transferred to the Navy, $285.9 million would be transferred to
the Marine Corps, and $377.5 million would be transferred to the Air
Force.
These transfers will increase the amount of funds in the services* fiscal
year 2003 operation and maintenance accounts available for GWOT.
9 Of the $15.7 billion, as much as $5.2 billion was earmarked for
particular programs or activities such as the Coast Guard, fighting oil
well fires, and repairing Iraq*s oil fields, as well as payments to
reimburse cooperating nations. The remaining $10.4 billion is available to
meet the requirements of the services and defensewide programs.
10 Although Iraqi Freedom Fund budget authority remains available for
transfer until September 30, 2004, funds transferred under this Fund shall
be merged with and shall be available for the same purposes and for the
same time period, as the appropriation to which transferred, but can be
transferred back to the Fund if unobligated by the end of the
fiscal year. DOD is Transferring
Additional Funds to the Military Services
Page 14 GAO- 03- 1088 Military Operations
Since the 1991 war with Iraq, the United States has been conducting
operations in Southwest Asia to monitor Iraq*s compliance with various
United Nations resolutions. Operations Northern and Southern Watch
enforced the no- fly zones over Iraq. Operation Desert Spring, an Army
operation, rotated forces in and out of Kuwait to train with the Kuwaiti
military. From the inception of operations through June 2003, 11 costs for
these operations have totaled $11.4 billion. Since fiscal year 2002, funds
for these operations have been included in the services* base programs.
In March 2003, DOD terminated Operations Northern and Southern Watch and
Operation Desert Spring. The President*s fiscal year 2004 budget request,
which was submitted in February 2003, before the termination of
these operations, included approximately $1.4 billion for these
operations. We briefed the Senate and House Committees on Appropriations
on the termination of these operations in early June 2003 and suggested
that since the operations have ended there was no need to provide funds
for them in fiscal year 2004, although there could be further costs
associated with shutting them down in fiscal year 2003 between the time
they were terminated in March 2003 and September 2003.
The Army agreed that it would not require any funding in fiscal year 2004
for Operation Desert Spring, and the Air Force agreed that it would not
require funding for Northern Watch, but it disagreed with congressional
action to eliminate funding for Operation Southern Watch. The Air Force
asked that the funds for Operation Southern Watch be restored because it
believed it needed these funds to maintain the bases that were previously
used for Operation Southern Watch and that now support the ongoing
operations.
Our analysis of the obligation of funds to support GWOT in fiscal year
2003 suggests that the funds appropriated to the services for that
purpose, particularly for operation and maintenance, could be sufficient
to cover their fiscal year 2003 costs. On August 11, 2003, DOD notified
Congress of its intent to initially transfer $2.4 billion from the Iraqi
Freedom Fund to the services* operation and maintenance accounts.
Collectively, with the funds DOD has transferred from the Iraqi Freedom
Fund to the military
11 While the programs were terminated in March 2003, after the President*s
fiscal year 2004 budget request submission, some costs continue to be
obligated as the services complete the process of shutting down the
operations. The Termination of
Operations Northern Watch, Southern Watch, and Desert Spring Obviates the
Need for Requested Fiscal Year 2004 Funds for These Operations
Conclusions
Page 15 GAO- 03- 1088 Military Operations
services and the large amount of unobligated funds remaining in the
services* fiscal year 2003 GWOT operation and maintenance appropriations
except for the Marine Corps as of the end of June 2003, obligating these
funds between July and September 30, 2003, could be challenging.
In March 2003, DOD terminated Operations Northern Watch, Southern Watch,
and Desert Spring. Therefore, the funds requested for these Operations in
the President*s fiscal year 2004 budget request for DOD may no longer be
necessary as requested. To ensure that funds already appropriated,
including funds transferred
from the Iraqi Freedom Fund, to the military services for GWOT are fully
utilized and that additional funds are not transferred to the military
services* operation and maintenance and military personnel accounts from
the Iraqi Freedom Fund until they are needed, we recommend that the
Secretary of Defense (1) monitor the obligation of funds in the services*
operation and maintenance accounts, including the GWOT funds, (2) ensure
that all funds transferred to the services* operation and maintenance
accounts that are not likely to be obligated by the end of fiscal year
2003 are transferred back to the Fund as allowed by the Wartime
Supplemental Appropriation, and (3) closely review the executability of
further funding transfers from the Iraqi Freedom Fund to ensure the funds
will be obligated as planned.
Because Operations Northern Watch, Southern Watch, and Desert Spring were
canceled in March 2003, after the President*s fiscal year 2004 budget
submission, Congress may wish to delete the funds requested for this
purpose from the fiscal year 2004 DOD appropriations. In official oral
comments on a draft of this report, DOD agreed with our recommendation to
ensure that all funds transferred to the services* operation and
maintenance accounts that are not likely to be obligated by the end of
fiscal year 2003 are transferred back to the Iraqi Freedom Fund.
DOD had concerns with our other two recommendations dealing with (1)
monitoring the obligation of GWOT funds and (2) prohibiting the transfer
of funds from the Iraqi Freedom Fund until the services provide obligation
reports showing that a large percentage of their current GWOT
appropriations, such as 90 percent, have been obligated and suggested some
revisions. Based on DOD*s comments we have revised our Recommendations for
Executive Action Matter for Congressional Consideration
Agency Comments and Our Evaluation
Page 16 GAO- 03- 1088 Military Operations
recommendations as discussed below. DOD agrees with our revised
recommendations.
With respect to our recommendation that the Secretary of Defense monitor
the obligation of GWOT funds in the services* operation and maintenance
accounts, including those transferred from the Iraqi Freedom Fund, DOD
noted that when the supplemental funds are released to the
components those funds become part of the appropriation and are not
separately identified as GWOT funds. DOD further noted that it could not
separately monitor GWOT funds because they are not identified separately
in the accounting systems. As a result, we revised our recommendation to
state that the Secretary of Defense monitor the obligation of funds in the
services* operation and maintenance accounts, including the GWOT funds.
DOD did not agree with our recommendation that the Secretary of Defense
prohibit further transfers until the services provide obligation reports
showing that a large percentage of their current GWOT appropriations, such
as 90 percent, have been obligated. DOD noted that our recommendation
ignores the funding pipeline issues; specifically that it takes time for
the funds to be released, received by the services, and obligated. DOD
said that to arbitrarily suggest that 90 percent of an
account must be obligated before additional funds could be transferred
into the account would create an unnecessary burden on the services, lead
to "stop- go" funding decisions, and have a negative impact on normal
operating procedures. We did not cite a specific figure in our draft
recommendation; rather we suggested that a large percentage of the
services* current GWOT appropriations, such as 90 percent, be obligated
before making further transfers. However, in light of DOD's concerns we
revised our recommendation to state that the Secretary of Defense closely
review the executability of further funding transfers from the Iraqi
Freedom Fund to ensure the funds will be obligated as planned. We are
sending copies of this report to interested congressional
committees; the Secretary of Defense; the Under Secretary of Defense
(Comptroller); and the Director, Office of Management and Budget. Copies
of this report will also be made available to others upon request. In
addition, this report will be available at no charge on the GAO Web site
at http:// www. gao. gov.
Page 17 GAO- 03- 1088 Military Operations
If you have any questions regarding this report, please call me on (757)
552- 8100. Principal contributors to this report were Steve Sternlieb,
Carole Coffey, George Duncan, Matt Ullengren, and James Reynolds.
Neal P. Curtin Director, Defense Capabilities
and Management
Page 18 GAO- 03- 1088 Military Operations
List of Congressional Committees The Honorable Ted Stevens Chairman The
Honorable Daniel K. Inouye Ranking Minority Member Subcommittee on Defense
Committee on Appropriations United States Senate
The Honorable John Warner Chairman The Honorable Carl Levin Ranking
Minority Member Committee on Armed Services United States Senate
The Honorable Jerry Lewis Chairman The Honorable John Murtha Ranking
Minority Member Subcommittee on Defense Committee on Appropriations House
of Representatives
The Honorable Duncan Hunter Chairman The Honorable Ike Skelton Ranking
Minority Member Committee on Armed Services House of Representatives
Appendix I: Scope and Methodology Page 19 GAO- 03- 1088 Military
Operations
To examine the adequacy of funding for the Global War on Terrorism (GWOT),
we reviewed (1) the President*s fiscal year 2003 budget request for
supplemental appropriations, (2) applicable laws and accompanying reports
appropriating funds for GWOT, and (3) DOD reports on the obligation of
funds. We also obtained budget estimates from the services and their key
elements involved in GWOT operations. We also met with service officials
to discuss world events that may have had an impact on their budget
estimates and their obligation patterns. We compared the latest available
obligation reports against total available appropriated funds. We then
compared the proportion of appropriated funds obligated with the
proportion of the fiscal year that had elapsed to ascertain how rapidly
funds were being obligated. We recognized that funds are not obligated
equally each month throughout the fiscal year but believe that the further
into the fiscal year the closer to 100 percent obligations should be
relative to appropriations if all appropriated funds are likely to be
obligated. We focused our work on the obligation of funds appropriated for
operation and maintenance and military personnel because they represented
the large majority of funds obligated in fiscal year 2003 through June
2003. During that period $866 million of the $38.9 billion in reported
obligations was obligated for what the Department of Defense categorized
as investment.
To determine if there is a continued need for fiscal year 2004 funds for
Operations Southern Watch, Northern Watch, and Desert Spring, we met with
service officials and reviewed documents to determine the status of the
three operations. We reviewed the President*s fiscal year 2004 budget
request for the Department of Defense to determine the total requested for
the three operations.
We visited the following locations during our review: Office of the
Secretary of Defense (Comptroller), Washington, D. C. Office of the
Secretary of Defense (Reserve Affairs), Washington, D. C. Department of
the Army, Headquarters, Washington, D. C. U. S. Army Reserve Command,
Fort McPherson, Ga. U. S. Army Forces Command, Fort McPherson, Ga. U.
S. Army National Guard, Arlington, Va. U. S. Army Europe, Heidelberg,
Germany. U. S. Army Pacific Command, Fort Shafter, Hawaii Department
of the Air Force, Headquarters, Washington, D. C. U. S. Air National
Guard, Arlington, Va.
U. S. Air Force Europe, Ramstein Air Base, Germany. Pacific Air Force,
Hickham Air Base, Hawaii Appendix I: Scope and Methodology
Appendix I: Scope and Methodology Page 20 GAO- 03- 1088 Military
Operations
Department of the Navy, Headquarters, Washington, D. C. United States
Marine Corps, Headquarters, Washington, D. C. Naval Reserve Forces
Command, New Orleans, La.
United States Marine Corps Reserve Forces, New Orleans, La. Marine
Forces, Pacific, Camp Smith, Hawaii Pacific Fleet, Pearl Harbor, Hawaii
We also obtained information from the Army Material Command, Alexandria,
Virginia.
We performed our work from February through September 2003 in accordance
with generally accepted government auditing standards.
(350308/ 350359)
The General Accounting Office, the audit, evaluation and investigative arm
of Congress, exists to support Congress in meeting its constitutional
responsibilities and to help improve the performance and accountability of
the federal government for the American people. GAO examines the use of
public funds; evaluates federal programs and policies; and provides
analyses, recommendations, and other assistance to help Congress make
informed oversight, policy, and funding decisions. GAO*s commitment to
good government is reflected in its core values of accountability,
integrity, and reliability.
The fastest and easiest way to obtain copies of GAO documents at no cost
is through the Internet. GAO*s Web site (www. gao. gov) contains abstracts
and fulltext files of current reports and testimony and an expanding
archive of older products. The Web site features a search engine to help
you locate documents using key words and phrases. You can print these
documents in their entirety, including charts and other graphics.
Each day, GAO issues a list of newly released reports, testimony, and
correspondence. GAO posts this list, known as *Today*s Reports,* on its
Web site daily. The list contains links to the full- text document files.
To have GAO e- mail
this list to you every afternoon, go to www. gao. gov and select
*Subscribe to e- mail alerts* under the *Order GAO Products* heading.
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent of
Documents. GAO also accepts VISA and Mastercard. Orders for 100 or more
copies mailed to a single address are discounted 25 percent. Orders should
be sent to: U. S. General Accounting Office 441 G Street NW, Room LM
Washington, D. C. 20548 To order by Phone: Voice: (202) 512- 6000
TDD: (202) 512- 2537 Fax: (202) 512- 6061
Contact: Web site: www. gao. gov/ fraudnet/ fraudnet. htm E- mail:
fraudnet@ gao. gov Automated answering system: (800) 424- 5454 or (202)
512- 7470 Jeff Nelligan, Managing Director, NelliganJ@ gao. gov (202) 512-
4800
U. S. General Accounting Office, 441 G Street NW, Room 7149 Washington, D.
C. 20548 GAO*s Mission Obtaining Copies of
GAO Reports and Testimony
Order by Mail or Phone To Report Fraud, Waste, and Abuse in Federal
Programs Public Affairs
*** End of document. ***