Defense Budget: Analysis of Real Property Maintenance and Base Operations
Fund Movements (Letter Report, 02/29/2000, GAO/NSIAD-00-87).

Pursuant to a congressional request, GAO provided information on the
extent to which the Department of Defense (DOD) has moved funds that
directly affect readiness to pay for real property maintenance and base
operations, focusing on: (1) the net differences between the initial
congressional designations of operation and maintenance (O&M) funding
for real property maintenance and base operations and the amounts the
services reported as obligated; (2) the net differences between the
initial congressional designations of O&M funding for unit training and
the amounts the services reported as obligated; and (3) determining from
available DOD reports whether O&M funds were moved from unit training to
pay for real property maintenance and base operations.

GAO noted that: (1) from fiscal year (FY) 1994 through 1999, the
military services reported obligations that were $7.1 billion (8
percent) more for real property maintenance and base operations than the
$88.6 billion initial congressional designations; (2) almost
three-fourths of the total $2.7 billion increase from FY 1996 through
1999 was for base operations, with the remainder going for real property
maintenance; (3) most of the increases went to base operations and real
property maintenance subactivities that finance functions that the
services considered most directly related to readiness, such as the cost
of utilities and the maintenance of runways; (4) for FY 1994 through FY
1999, the services' movement of funds into and out of unit training
varied; (5) in each fiscal year from 1997 through 1999 (the only years
for which detailed Army data is available) the Army reported obligations
that were $1.1 billion, or about 12 percent, less than congressionally
designated; (6) the Air Force moved more than $400 million from unit
training for fiscal years 1994 and 1995 and increased funding for unit
training by $2.6 billion in fiscal years 1996 through 1999; (7) the Navy
and the Marine Corps consistently moved funds into unit training,
increasing them by a total of $2.1 billion, or 8 percent of their
combined initial congressional designation; (8) the Army and the Air
Force have moved unit training funds to base operations and real
property maintenance; (9) although data on the movement of O&M funds
between subactivities is limited, DOD's high-priority readiness-related
transfer reports show that in fiscal years 1997 and 1998, the Army moved
$641 million from unit training to real property maintenance and base
operations and attribute the movement of those funds to efficiencies in
training; and (10) the FY 1998 report states that the Air Force moved
$35 million from training to base operations and notes that commanders
increased real property maintenance funding by about $155 million, but
did not cite the source of those funds.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-00-87
     TITLE:  Defense Budget: Analysis of Real Property Maintenance and
	     Base Operations Fund Movements
      DATE:  02/29/2000
   SUBJECT:  Defense appropriations
	     Budget administration
	     Defense budgets
	     Budget obligations
	     Military budgets
	     Reprogramming of appropriated funds
	     Military facilities
	     Facility maintenance
	     Military training
IDENTIFIER:  Overseas Contingency Operations Transfer Fund
	     DOD Overseas Humanitarian, Disaster, and Civic Aid
	     Transfer Account

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GAO/NSIAD-00-87

Appendix I: Objectives, Scope, and Methodology

16

Appendix II: How O&M Funds Can Be Moved

18

Appendix III: Initial Congressional Designations and DOD Obligations
by O&M Unit Training Subactivity

20

Appendix IV: GAO Contacts and Staff Acknowledgments

25

Table 1: Net Difference Between Initial Congressional Designations
and Reported Obligations for O&M Base Operations and Real
Property Maintenance (fiscal years 1994-99) 7

Table 2: Net Difference Between Initial Congressional Designations
and Reported Obligations for Base Operations and Real Property Maintenance,
by Budget Activity (fiscal years 1996-99) 9

Table 3: Net Difference Between Initial Congressional Designations
and Reported Obligations for O&M Unit Training
(fiscal years 1994-99) 11

Table 4: Net Difference Between Initial Congressional Designations
and Reported Obligations for Army O&M Unit Training Subactivities (fiscal
years 1997-99) 20

Table 5: Net Difference Between Initial Congressional Designations
and Reported Obligations for Navy O&M Unit Training Subactivities (fiscal
years 1994 -99) 21

Table 6: Net Difference Between Initial Congressional Designations
and Reported Obligations for Marine Corps O&M Unit Training Subactivities
(fiscal years 1994-99) 22

Table 7: Net Difference Between Initial Congressional Designations
and Reported Obligations for Air Force O&M Unit Training
Subactivities (fiscal years 1994-99) 22

Figure 1: Service Changes to Initial Congressional Designations-Base
Operations and Real Property Maintenance (fiscal years 1994-99) 8

Figure 2: Service Changes to Initial Congressional Designations-Unit
Training (fiscal years 1994-99) 12

Figure 3: How O&M Funds Are Moved Throughout the Fiscal Year 19

O&M Operation and Maintenance

DOD Department of Defense

National Security and
International Affairs Division

B-284608

February 29, 2000

Congressional Committees

Congressional committees have expressed concerns about the extent to which
the Department of Defense (DOD) has moved funds that directly affect
readiness, such as those that finance training, to pay for real property
maintenance and base operations. The National Defense Authorization Act for
Fiscal Year 2000 requires that we review the military services' funding and
management of real property maintenance and base operations.1 This is the
first in a series of GAO reports in response to that requirement. While
follow-on work will try to shed more light on the relationships between
readiness, quality of life, and infrastructure funding, this report examines
trends in funding for real property maintenance, base operations, and unit
training and operations. The services' principal source of funding for these
functions is their operation and maintenance (O&M) appropriations, and the
services have considerable flexibility in using O&M funds. Although these
funds cannot generally be traced to their ultimate disposition, analyses of
budget data can indicate whether the services obligated the funds as
initially congressionally designated.2

DOD uses real property maintenance funds to maintain and repair buildings,
structures, warehouses, roadways, runways, railway tracks, and utility
plants. Base operations funding is used for services such as utilities, base
communications, snow removal, security, and recreation activities. Unit
training and operations funds are used to increase units' proficiency
through flying and ground operations training and provide these units
resources such as fuel, support equipment, and spare parts for equipment to
meet their mission requirements. Throughout the remainder of this report, we
refer to unit training and operating funds as unit training funds.

As agreed with your offices, we (1) identified the net differences between
the initial congressional designations of O&M funding for real property
maintenance and base operations and the amounts the services reported as
obligated, (2) identified the net differences between the initial
congressional designations of O&M funding for unit training and the amounts
the services reported as obligated, and (3) determined from available DOD
reports whether O&M funds were moved from unit training to pay for real
property maintenance and base operations.

We reviewed funds at the most detailed budget level at which congressionally
designated funds for the military services are identified, the subactivity
level. The services' annual O&M budget requests are aligned in broad
categories called budget activities. Each budget activity is divided into
activity groups, which in turn are divided into subactivities. Although
Congress reviews DOD's budget proposals for the services at the subactivity
level, it appropriates funds at the aggregated account level--for the Army,
the Navy, the Marine Corps, and the Air Force. To indicate how it expects
O&M funds to be spent, the conferees then designate specific amounts for
each subactivity in applicable conference reports. We also reviewed DOD's
reports on high-priority readiness-related transfers, which describe the
movement of funds among certain subactivities designated as high priority by
Congress.3 While existing reports and budget documents provide an indication
of whether funds were spent in accordance with congressional designations,
DOD does not have reliable records of transfers and amounts spent by
subactivity. Appendix I includes additional details on our scope and
methodology.

From fiscal year 1994 through 1999, the military services reported
obligations that were $7.1 billion (8 percent) more for real property
maintenance and base operations than the $88.6 billion initial congressional
designations. Almost three-fourths of the total $2.7 billion increase from
fiscal year 1996 through 1999 was for base operations,4 with the remainder
going for real property maintenance. Most of the increases went to base
operations and real property maintenance subactivities that finance
functions that the services considered most directly related to readiness,
such as the cost of utilities and the maintenance of runways.

For fiscal years 1994 through 1999, the services' movement of funds into and
out of unit training varied. In each fiscal year from 1997 through 1999 (the
only years for which detailed Army data is available) the Army reported
obligations that were $1.1 billion, or about 12 percent, less than
congressionally designated. The Air Force moved more than $400 million
(3 percent) from unit training for fiscal years 1994 and 1995 and increased
funding for unit training by $2.6 billion (10 percent) in fiscal years 1996
through 1999. The Navy and the Marine Corps consistently moved funds into
unit training, increasing them by a total of $2.1 billion, or 8 percent of
their combined initial congressional designations.

The Army and the Air Force have moved unit training funds to base operations
and real property maintenance. Although data on the movement of O&M funds
between subactivities is limited, DOD's high-priority readiness-related
transfer reports show that in fiscal years 1997 and 1998, the Army moved
$641 million from unit training to real property maintenance and base
operations and attribute the movement of those funds to efficiencies in
training. The fiscal year 1998 report states that the Air Force moved $35
million from training to base operations and notes that commanders increased
real property maintenance funding by about $155 million, but did not cite
the source of those funds.

The O&M budget structure is multitiered, with each service's O&M request
broken down into four budget activities: (1) operating forces,
(2) mobilization, (3) training5 and recruiting, and (4) administration and
servicewide support.6 Generally, the services consider subactivities within
the operating forces budget activity to be most directly related to
readiness. Unit training subactivities are almost all within the operating
forces activity,7 whereas real property maintenance and base operations
subactivities are spread across all four of the budget activities.

After the initial appropriation is made,8 O&M funding levels can fluctuate
for several reasons. As we recently reported,9 the services have various
ways to move funds into or out of subactivities, such as making what DOD
terms fact-of-life adjustments due to changes that occurred after the budget
was formulated and moving, or reprogramming, funds from one budget activity
to another within the same account.10 In addition, increases to
subactivities often come from special accounts created for unanticipated
expenditures such as overseas contingencies or supplemental appropriations
that Congress provides for additional expenses during the year.11 The
various adjustments that can be made and the timing of those adjustments in
the budget year are depicted in appendix II.

The House report on the National Defense Authorization Act for Fiscal Year
1996 noted the Committee's concerns over the extent of the resources
provided for training and maintenance that are moved for other uses and the
effects of such movements on readiness.12 Congress now requires13 DOD to
provide detailed data on budget movements for high-priority
readiness-related subactivities, including the total amounts moved into and
out of each subactivity and an explanation of the movement.14

Maintenance

For fiscal years 1994 through 1999, the services' reported obligations were
$7.1 billion more for base operations and real property maintenance than the
$88.6 billion initial congressional designations. This amount represents an
increase of more than 8 percent and includes all adjustments, such as
reprogramming actions, statutorily authorized transfers, and supplemental
appropriations. Table 1 shows for each service the difference between
initial congressional designations for base operations and real property
maintenance and the services' reported obligations.

Table 1: Net Difference Between Initial Congressional Designations and
Reported Obligations for O&M Base Operations and Real Property Maintenance
(fiscal years 1994-99)

 Current dollars in millions

                                                Difference from initial
                                                congressional designation
           Initial
 Service   congressional        Reported                    Percent of
           designationa         obligations                 increase
 Army      $31,511.8            $34,088.0       $2,576.2    8.2
 Navyb     21,798.4             22,114.5        316.0       1.4
 Marine
 Corps     6,036.0              6,454.4         418.5       6.9
 Air Force 29,241.5             33,069.2        3,827.7     13.1
 Total     $88,587.7            $95,726.1       $7,138.5    8.1

Note: Amounts may not total due to rounding.

aInitial congressional designation as reported in appropriations acts
conference reports.

bNavy officials indicated that for fiscal year 1999 reported obligations,
not all base operations and real property maintenance funds were accounted
for in the table. This was due to the Navy restructuring these accounts
after the initial congressional designation had been made. Some functions,
such as those associated with equipment maintenance for communication
antennas, that were formerly considered as base operations and real property
maintenance are no longer accounted for in those subactivities.

Source: Our analysis based on congressional appropriations acts conference
reports and DOD's O&M budget data.

Each of the services moved funds into its base operations and real property
maintenance subactivities from fiscal years 1994-99. Figure 1 shows that,
beginning in fiscal year 1996, the Army, the Navy, and the Air Force
reported obligations more closely aligned with congressionally designated
amounts than in previous years. However, the trend began to reverse for the
Air Force in fiscal year 1998 and for the Army and the Navy in fiscal year
1999, while the Marine Corps trend has remained fairly steady.

Figure 1: Service Changes to Initial Congressional Designations−Base
Operations and Real Property Maintenance (fiscal years 1994-99)

aNavy officials indicated that for fiscal year 1999 reported obligations,
not all base operations and real property maintenance funds were accounted
for in the table. This was due to the Navy restructuring these accounts
after the initial congressional designation had been made. Some
subactivities formerly considered as base operations and real property
maintenance are no longer accounted for in those subactivities.

Source: Our depiction based on congressional appropriations acts conference
reports and DOD's O&M budget data.

We analyzed the changes to base operations and real property maintenance
funding separately for fiscal years 1996 through 1999. Further, we analyzed
the movement of funds by budget activity. We were not able to analyze data
in this way prior to fiscal year 1996 because the services' budget structure
combined base operations and real property maintenance. Table 2 shows that
during fiscal years 1996 through 1999, the services' reported obligations
were $2.7 billion (4.5 percent) more for base operations and real property
maintenance than the initial $61.2 billion congressional designation. Most
of the identified increase (about $2 billion, or 73 percent) was for base
operations within the services' operating forces budget activity, which the
services consider to be most directly related to readiness.

Table 2: Net Difference Between Initial Congressional Designations and
Reported Obligations for Base Operations and Real Property Maintenance, by
Budget Activity (fiscal years 1996-99)

 Current dollars in millions

              Difference between initial designations and reported
              obligationsa

 Service      Operating              Training and Administration Total
 subactivity  forces    Mobilization recruitingb  and            difference
                                                  servicewide
 Army
 Base
 operations   $1,092.6  c            $246.3       ($82.5)        $1,256.4
 Real
 property     295.6     ($11.2)d     (126.7)      (124.0)        33.6
 maintenance
 Subtotal     $1,388.2  ($11.2)d     $119.6       ($206.5)       $1,290.1
 Navy
 Base
 operations   26.0      c            (124.2)      (155.5)        (253.7)
 Real
 property     (28.7)    c            11.7         (25.0)         (41.9)
 maintenance
 Subtotal     ($2.7)                 ($112.6)     ($180.5)       ($295.7)
 Marine Corps
 Base
 operations   138.2     c            (24.7)       1.3            114.7
 Real
 property     177.1     c            25.2         2.4            204.8
 maintenance
 Subtotal     $315.3                 $0.6         $3.7           $319.5
 Air Force
 Base
 operations   725.8     78.5         (39.6)       135.6          900.3
 Real
 property     317.6     40.4         92.5         69.2           519.7
 maintenance
 Subtotal     $1,043.5  $118.9       $52.9        $204.8         $1,420.0
 Total
 Base
 operations   1,982.6   78.5         57.8         (101.1)        2,017.7
 Real
 property     761.6     29.2         2.8          (77.3)         716.2
 maintenance
 Total        $2,744.3  $107.6       $60.5        ($178.5)       $2,734.0

Note: Parentheses denote negative numbers, and amounts may not total due to
rounding.

aInitial congressional designations for these subactivities as reported in
appropriations acts conference reports. Differences equal reported
obligations minus initial congressional designations.

bThe training in this budget activity is training and education at military
institutions and schools, not the unit mission training we refer to in this
report.

cThe Army and the Navy did not have these subactivities in their
mobilization budget activities. The Marine Corps does not have a
mobilization budget activity.

dThe Army had this subactivity in its mobilization budget activity beginning
in fiscal year 1999.

Source: Our analysis based on congressional appropriations acts conference
reports and DOD's O&M budget data.

Over the period studied, the services' movement of funds for their unit
training subactivities varied. In fiscal years 1997-99,15 the Army moved
$1.1 billion, about 12.2 percent of the funds congressionally designated for
unit training, from those subactivities. During fiscal years 1994-99, the
Navy and the Marine Corps consistently moved funds into unit training,
increasing them by a total of $2.1 billion, or 8 percent of their combined
congressional designation. The Air Force moved more than $400 million
(3 percent of its congressionally designated amount) from unit training
during fiscal years 1994 and 1995 and increased funding for unit training by
$2.6 billion (10 percent) for fiscal years 1996-99. The reported obligations
include all adjustments, such as reprogramming actions, statutorily
authorized transfers, and supplemental appropriations.

Table 3: Net Difference Between Initial Congressional Designations and
Reported Obligations for O&M Unit Training (fiscal years 1994-99)

 Current dollars in millions

                                                 Difference from
                                                 congressional designation
           Initial
 Service   congressional        Reported                         Percent
           designationa         obligations
 Army      $8,975.3b            $7,876.1b        ($1,099.2)b     (12.2)b
 Navy      23,419.2             25,300.5         1,881.2         8.0
 Marine
 Corps     2,100.0              2,290.4          190.4           9.1
 Air Force 36,807.1             38,940.0         2,132.9         5.8

Note: Parentheses denote negative numbers, and amounts may not total due to
rounding.

aInitial congressional designations as reported in appropriations acts
conference reports.

bArmy data is for 3-year period, fiscal years 1997-99. Comparable data is
not available for prior years.

Source: Our analysis based on congressional appropriations acts conference
reports and DOD's O&M budget data.

Figure 2 shows, by year, the extent to which the services' reported
obligations for unit training differed from the initial congressional
designations for fiscal years 1994 through 1999.

Figure 2: Service Changes to Initial Congressional Designations−Unit
Training (fiscal years 1994-99)

Source: Our depiction based on congressional appropriations acts conference
reports and DOD's O&M budget data.

Appendix III presents data on each services' O&M unit training
subactivities, including the amounts congressionally designated and those
reported as obligated for fiscal years 1994-99.

Real Property Maintenance

We could not determine the total amount of funds moved from unit training
into real property maintenance or base operations because funds moved out of
one DOD subactivity cannot generally be traced to another subactivity.
However, DOD's reports on high-priority readiness-related transfers for
certain subactivities indicate that the Army and the Air Force have moved
some funds from their unit training subactivities to base operations and
real property maintenance subactivities in recent years. The reports for the
Navy and the Marine Corps gave no indications of such fund movements.

For example, the reports on high-priority readiness-related transfers for
fiscal years 1997 and 199816 show that the Army moved a total of
$641 million from its unit training subactivities to the real property
maintenance and base operations subactivities and attribute the movement of
those funds to efficiencies in training. Moreover, the Air Force noted in
its fiscal year 1998 report that $35 million was moved from a unit training
subactivity to base operations. In the same report, the Air Force noted that
commanders increased real property maintenance funding by about
$155 million but did not cite the source of those funds.

The reports on high-priority readiness-related transfers also identified
additional sources of funds for real property maintenance and base
operations. For example, in fiscal year 1998, the Air Force moved about $347
million into base operations and about $11 million into real property
maintenance from the Overseas Contingency Operations Transfer Fund and the
Overseas Humanitarian, Disaster, and Civic Aid transfer account.

A draft of this report was provided to DOD for oral comments. The Director
of Installations Requirements and Management within the Office of the Deputy
Under Secretary of Defense (Installations) generally agreed with the facts
presented in the report. He emphasized that many of the funding changes
noted in our report are caused by reprogramming changes for which
congressional notification is required. We agree that reprogramming is one
of the many ways that DOD moves funds. As stated earlier in our report, O&M
funding levels can fluctuate for several reasons. The amounts representing
the differences between the initial congressional designation and the
amounts the services reported as obligated include all adjustments, such as
fact-of-life changes, unallocated changes, reprogramming actions,
statutorily authorized transfers, and supplemental appropriations. In
recognition of these comments, we included a depiction of the types of
adjustments that can be made as appendix II.

We are sending copies of this report to the Honorable William S. Cohen,
Secretary of Defense; the Honorable William J. Lynn III, Under Secretary of
Defense (Comptroller and Chief Financial Officer); the Honorable Louis
Caldera, Secretary of the Army; the Honorable Richard Danzig, Secretary of
the Navy; General James Jones, Commandant of the Marine Corps; the Honorable
F. Whitten Peters, Secretary of the Air Force; the Honorable Jacob J. Lew,
Director, Office of Management and Budget; and interested congressional
committees and members. Copies will also be made available to others upon
request.

Please contact me at (202) 512-5140 if you or your staff have any questions
concerning this report. GAO contacts and staff acknowledgments are listed in
appendix IV.

Neal P. Curtin
Associate Director
National Security Preparedness Issues

List of Congressional Committees

The Honorable John W. Warner
Chairman
The Honorable Carl Levin
Ranking Minority Member
Committee on Armed Services
United States Senate

The Honorable Ted Stevens
Chairman
The Honorable Daniel K. Inouye
Ranking Minority Member
Subcommittee on Defense
Committee on Appropriations
United States Senate

The Honorable Floyd D. Spence
Chairman
The Honorable Ike Skelton
Ranking Minority Member
Committee on Armed Services
House of Representatives

The Honorable Jerry Lewis
Chairman
The Honorable John P. Murtha
Ranking Minority Member
Subcommittee on Defense
Committee on Appropriations
House of Representatives

Objectives, Scope, and Methodology

As agreed with Defense authorization committees' staff, we (1) identified
the net differences between the initial congressional designations17 of
operations and maintenance (O&M) funding for real property maintenance and
base operations and the funding the services reported as obligated,
(2) identified the net differences between the initial congressional
designations of O&M funding for unit training and the funding the services
reported as obligated, and (3) determined from available Department of
Defense (DOD) reports whether O&M funds were moved from unit training to pay
for real property maintenance and base operations.

To identify the net differences in the initial congressional designations
for those subactivities and the amounts obligated for them, we compared O&M
amounts initially designated by subactivity in conference reports on the
applicable appropriations acts with amounts reported as obligated for the
same subactivities in DOD's budget documents. We used DOD's reported
obligation data because no reliable accounting data was available. However,
our recent financial statement audit results show that DOD's budget data is
of limited reliability. Specifically, we reported in May 1999 that DOD does
not know the true amount of funds that are available to obligate and spend
in its appropriations because obligated balances are not always correct or
supported and fund control weaknesses impair DOD's ability to properly
identify and manage budget authority.18 In addition, because the Army
restructured its operating forces budget activity in fiscal year 1997, we
were limited to using the unit training subactivity data that was available
after the restructuring.

Officials from each service identified for us O&M subactivities that fund
unit training. Each service organizes its unit training funds differently
into particular subactivities. Thus, information on the services' unit
training is not comparable. Further, we reviewed base operations and real
property maintenance separately only for fiscal years 1996-99. Prior to
fiscal year 1996, funds for these functions were maintained in the same
subactivities.

To determine from DOD reports whether the services moved O&M funds from unit
training to pay for real property maintenance and base operations, we
reviewed DOD's high-priority readiness-related transfer reports for fiscal
years 1997 and 1998 and determined whether they included documentation on
the movement of funds between subactivities. We discussed the relevant
information in these reports with service officials.

We performed our review at the Office of the Under Secretary of Defense
(Personnel and Readiness) and the Office of the Deputy Under Secretary of
Defense (Installations); the budget offices at the Army, the Navy, the
Marine Corps, and the Air Force headquarters; the Army Forces Command, the
Commander in Chief Atlantic Fleet, and the Air Combat Command. We conducted
our review from November 1999 through February 2000 in accordance with
generally accepted government auditing standards.

How O&M Funds Can Be Moved

DOD has considerable flexibility in using O&M funds and can move them in
several ways. As shown in figure 3, after the initial appropriation is made,
DOD can adjust funding through

ï¿½ adjustments directed by Congress in conference reports on apropriations
acts and

ï¿½ fact-of-life adjustments DOD believes are necessary due to changes, such
as unplanned force structure changes, that have occurred since the budget
was formulated.

After making these initial fund movements, DOD establishes a new "adjusted"
baseline budget. It can then move funds among subactivities through

ï¿½ reprogramming actions, to move funds from one budget activity to another
within the same account;

ï¿½ statutorily authorized transfers, to move funds from other Defense
appropriations (such as Procurement);

ï¿½ transfers from congressionally established, centrally managed accounts
(such as for overseas contingencies);

ï¿½ supplemental appropriations that Congress provides for additional expenses
during the year; and

ï¿½ rescissions, with which Congress cancels appropriated funds.

Figure 3: How O&M Funds Are Moved Throughout the Fiscal Year

aIn the conference report on the appropriations act, conferees often direct
DOD to make changes to its budget baseline. These changes are known as
unallocated adjustments and general provisions.

Source: Our depiction, based on Defense Financial Management Regulation DOD
7000.14-R, conference reports on the appropriations acts, and interviews
with officials from the Office of the Under Secretary of Defense
(Comptroller).

Initial Congressional Designations and DOD Obligations by O&M Unit Training
Subactivity

In this appendix, we present information on services' O&M unit training
subactivities, including the amounts congressionally designated and those
reported as obligated by the services for fiscal years 1994 through 1999.

Table 4: Net Difference Between Initial Congressional Designations and
Reported Obligations for Army O&M Unit Training Subactivities (fiscal years
1997-99)

 Current dollars in
 millions

 Army O&M subactivitya Initial            Reported          Net difference
                       designationb       obligations
 Fiscal year 1997
 Divisions             $1,276.6           $998.5            ($278.1)
 Corps combat forces   369.1              257.2             (111.8)
 Corps support forces  276.2              310.8             34.5
 Echelon above corps
 forces                442.7              411.1             (31.5)
 Land forces
 operations support    634.4              816.7             182.3
 Subtotal              $2,998.9           $2,794.3          ($204.6)
 Fiscal year 1998
 Divisions             1,173.5            886.2             (287.3)
 Corps combat forces   332.9              229.9             (103.0)
 Corps support forces  323.2              259.7             (63.5)
 Echelon above corps
 forces                440.5              394.8             (45.8)
 Land forces
 operations support    658.1              670.9             12.9
 Subtotal              $2,928.2           $2,441.6          ($486.7)
 Fiscal year 1999
 Divisions             1,172.9            940.6             (232.3)
 Corps combat forces   299.7              224.7             (75.0)
 Corps support forces  316.4              259.7             (56.7)
 Echelon above corps
 forces                434.6              425.2             (9.4)
 Land forces
 operations support    824.6              790.0             (34.6)
 Subtotal              $3,048.2           $2,640.2          ($408.0)
 Total                 $8,975.3           $7,876.1          ($1,099.2)

Notes: The data for the Army is only for fiscal years 1997-99 because it
restructured its budget in fiscal year 1997 for these subactivities. Amounts
may not total due to rounding.

aThese O&M subactivities are located in the operating forces budget
activity, which the Army considers to be most directly related to unit
training and operations.

bInitial congressional designations for each O&M subactivity as reported in
conference reports on DOD appropriations acts, fiscal years 1997-99.

Source: Our analysis based on congressional appropriations acts conference
reports and DOD's O&M budget data.

Table 5: Net Difference Between Initial Congressional Designations and
Reported Obligations for Navy O&M Unit Training Subactivities (fiscal years
1994 −99)

 Current dollars in
 millions

 Navy O&M subactivitya   Initial             Reported           Net
                         designationb        obligations        difference
 Fiscal year 1994
 Mission and other ship
 operations              $1,932.1            $2,149.2           $217.1
 Mission and other flight
 operations              1,776.5             1,971.9            195.4
 Subtotal                $3,708.5            $4,121.1           $412.6
 Fiscal year 1995
 Mission and other ship
 operations              1,891.2             2,046.3            155.1
 Mission and other flight
 operations              1,922.6             2,174.8            252.2
 Subtotal                $3,813.8            $4,221.2           $407.4
 Fiscal year 1996
 Mission and other ship
 operations              1,885.2             1,985.9            100.7
 Mission and other flight
 operations              1,796.3             1,966.7            170.4
 Subtotal                $3,681.5            $3,952.6           $271.0
 Fiscal year 1997
 Mission and other ship
 operations              1,895.7             1,924.1            28.3
 Mission and other flight
 operations              1,767.4             1,873.6            106.3
 Subtotal                $3,663.1            $3,797.7           $134.6
 Fiscal year 1998
 Mission and other ship
 operations              2,108.1             2,216.9            108.8
 Mission and other flight
 operations              2,357.7             2,449.9            92.2
 Subtotal                $4,465.8            $4,666.8           $201.0
 Fiscal year 1999
 Mission and other ship
 operations              1,987.9             2,083.3            95.4
 Mission and other flight
 operations              2,098.6             2,457.9            359.2
 Subtotal                $4,086.5            $4,541.1           $454.6
 Total                   $23,419.2           $25,300.5          $1,881.2

Note: Amounts may not total due to rounding.

aThese O&M subactivities are located in the operating forces budget
activity, which the Navy considers to be most directly related to unit
training and operations.

bInitial congressional designations for each O&M subactivity as reported in
conference reports on DOD appropriations acts, fiscal years 1994-99.

Source: Our analysis based on congressional appropriations acts conference
reports and DOD's O&M budget data.

Table 6: Net Difference Between Initial Congressional Designations and
Reported Obligations for Marine Corps O&M Unit Training Subactivities
(fiscal years 1994-99)

 Marine Corps O&M      Initial            Reported
 subactivitya          designationb       obligations       Net difference
 Fiscal year 1994
 Operational forces    $304.1             $314.1            $10.0
 Fiscal year 1995
 Operational forces    318.6              367.0             48.4
 Fiscal year 1996
 Operational forces    344.1              367.8             23.7
 Fiscal year 1997
 Operational forces    365.3              394.7             29.4
 Fiscal year 1998
 Operational forces    378.1              392.1             14.1
 Fiscal year 1999
 Operational forces    389.8              454.7             64.9
 Total                 $2,100.0           $2,290.4          $190.4

Note: Amounts may not total due to rounding.

aThese O&M subactivities are located in the operating forces budget
activity, which the Marine Corps considers to be most directly related to
unit training and operations.

bInitial congressional designations for each O&M subactivity as reported in
conference reports on DOD appropriation acts, fiscal years 1994-99.

Source: Our analysis based on congressional appropriations acts conference
reports and DOD's O&M budget data.

Table 7: Net Difference Between Initial Congressional Designations and
Reported Obligations for Air Force O&M Unit Training Subactivities (fiscal
years 1994−99)

Continued from Previous Page

 Current dollars in
 millions
 Air Force O&M          Initial            Reported
 subactivity            designationb       obligations      Net difference
 Fiscal year 1994
 Primary combat forcesa $2,544.9           $2,480.6         ($64.3)
 Primary combat
 weaponsa               458.1              470.5            12.4
 Current dollars in
 millions
 Air Force O&M          Initial            Reported
 subactivity            designationb       obligations      Net difference
 Combat enhancement
 forcesa                319.4              275.1            (44.3)
 Air operations
 traininga              489.0              484.7            (4.3)
 Combat communicationsa 561.8              536.5            (25.3)
 Airlift operationsc    1,566.4            1,316.6          (249.8)
 Subtotal               $5,939.6           $5,563.9         ($375.7)
 Fiscal year 1995
 Primary combat forcesa 2,868.1            2,731.6          (136.5)
 Primary combat
 weaponsa               542.6              503.3            (39.3)
 Combat enhancement
 forcesa                404.1              294.0            (110.1)
 Air operations
 traininga              583.6              627.0            43.4
 Combat communicationsa 844.4              924.7            80.3
 Airlift operationsc    1,182.6            1,299.9          117.3
 Subtotal               $6,425.3           $6,380.4         ($44.9)
 Fiscal year 1996
 Primary combat forcesa 2,713.9            2,508.2          (205.7)
 Primary combat
 weaponsa               389.7              402.2            12.5
 Combat enhancement
 forcesa                257.1              259.9            2.8
 Air operations
 traininga              655.5              617.3            (38.2)
 Combat communicationsa 846.5              1,065.1          218.6
 Airlift operationsc    1,533.8            1,639.7          105.9
 Subtotal               $6,396.6           $6,492.3         $95.7
 Fiscal year 1997
 Primary combat forcesa 1,950.7            2,280.2          329.5
 Primary combat
 weaponsa               394.4              394.3            (0.1)
 Combat enhancement
 forcesa                253.2              252.8            (0.4)
 Air operations
 traininga              515.8              585.8            70.0
 Combat communicationsa 913.3              1,105.1          191.8
 Airlift operationsc    1,584.2            1,660.3          76.1
 Subtotal               $5,611.6           $6,278.4         $666.8
 Fiscal year 1998
 Primary combat forcesa 2,572.8            2,926.7          353.9
 Primary combat
 weaponsa               457.9              414.7            (43.2)
 Combat enhancement
 forcesa                256.2              253.0            (3.2)
 Air operations
 traininga              617.8              728.0            110.2
 Combat communicationsa 981.9              1,148.9          167.0
 Current dollars in
 millions
 Air Force O&M          Initial            Reported
 subactivity            designationb       obligations      Net difference
 Airlift operationsc    1,908.1            2,053.6          145.5
 Subtotal               $6,794.8           $7,524.9         $730.1
 Fiscal year 1999
 Primary combat forcesa 2,355.4            2,463.9          108.5
 Primary combat
 weaponsa               234.3              230.0            (4.3)
 Combat enhancement
 forcesa                196.0              216.9            20.8
 Air operations
 traininga              567.9              718.2            150.3
 Combat communicationsa 958.7              1,094.9          136.2
 Airlift operationsc    1,326.8            1,976.1          649.3
 Subtotal               $5,639.2           $6,700.1         $1,060.9
 Total                  $36,807.1          $38,940.0        $2,132.9

Note: Amounts may not total due to rounding.

aThese O&M subactivities are located in the operating forces budget
activity, which the Air Force considers to be most directly related to unit
training and operations.

bInitial congressional designations for each O&M subactivity as reported in
conference reports on DOD appropriations acts, fiscal years 1994-99.

cAlthough this subactivity is located in the mobilization budget activity,
it is a congressionally designated high-priority readiness-related
subactivity and the Air Force also considers it to be unit training.

Source: Our analysis based on congressional appropriations acts conference
reports and DOD's O&M budget data.

GAO Contacts and Staff Acknowledgments

Brenda Farrell (202) 512-3604
Janet Keller (757) 552-8133

In addition to those named above, Douglas Mills, Laura Talbott, Janine
Cantin, Janine Prybyla, Stacey Keisling, Harry Jobes, Julia Kennon, and
Stefano Petrucci made key contributions to this report.

(702029)

Table 1: Net Difference Between Initial Congressional Designations
and Reported Obligations for O&M Base Operations and Real
Property Maintenance (fiscal years 1994-99) 7

Table 2: Net Difference Between Initial Congressional Designations
and Reported Obligations for Base Operations and Real Property Maintenance,
by Budget Activity (fiscal years 1996-99) 9

Table 3: Net Difference Between Initial Congressional Designations
and Reported Obligations for O&M Unit Training
(fiscal years 1994-99) 11

Table 4: Net Difference Between Initial Congressional Designations
and Reported Obligations for Army O&M Unit Training Subactivities (fiscal
years 1997-99) 20

Table 5: Net Difference Between Initial Congressional Designations
and Reported Obligations for Navy O&M Unit Training Subactivities (fiscal
years 1994 -99) 21

Table 6: Net Difference Between Initial Congressional Designations
and Reported Obligations for Marine Corps O&M Unit Training Subactivities
(fiscal years 1994-99) 22

Table 7: Net Difference Between Initial Congressional Designations
and Reported Obligations for Air Force O&M Unit Training
Subactivities (fiscal years 1994-99) 22

Figure 1: Service Changes to Initial Congressional Designations-Base
Operations and Real Property Maintenance (fiscal years 1994-99) 8

Figure 2: Service Changes to Initial Congressional Designations-Unit
Training (fiscal years 1994-99) 12

Figure 3: How O&M Funds Are Moved Throughout the Fiscal Year 19
  

1. P.L. 106-65, section 365.

2. We use the term "initial congressional designation" or variations of this
term throughout to refer to amounts set forth in an appropriation act's
conference report. These recommended amounts are not binding unless they are
also incorporated directly or by reference into an appropriation act or
other statute.

3. 10 U.S.C. 483.

4. We were not able to analyze base operations and real property maintenance
separately prior to fiscal year 1996 because the services' budget structures
combined the two until then.

5. The training in this budget activity is training and education at
military institutions and schools, not the unit mission training we refer to
in this report.

6. The Marine Corps is an exception with only three budget activities. It
does not include the mobilization budget activity.

7. Only the Air Force's airlift operations subactivity is not within the
operating forces activity. It is in the mobilization activity.

8. In conference reports on the appropriations acts, conferees often direct
DOD to make changes to its budget baseline, or congressional designations.
These changes are known as unallocated adjustments and general provisions
and are not designated by subactivity.

9. Defense Budget: DOD Should Further Improve Visibility and Accountability
of O&M Fund Movements (GAO/NSIAD-00-18, Feb. 9, 2000).

10. DOD financial management regulations, which reflect agreements between
DOD and the authorization and appropriation committees, provide general
guidelines for various reprogramming actions. For example, congressional
notification is required for O&M reprogramming actions of $15 million or
more.

11. Congress established special accounts for unanticipated expenditures
such as overseas contingency operations to ensure DOD would have funds for
these activities without having to shift funds from training, maintenance,
or other O&M subactivities.

12. House Report 104-131, p.150 (1995).

13. 10 U.S.C. 483.

14. This reporting requirement will expire when DOD submits its annual
report for fiscal year 2000. In our report, Defense Budget (GAO/NSIAD-00-18,
Feb. 9, 2000), we suggested that Congress consider extending the reporting
requirement.

15. The Army restructured its operating forces budget activity in fiscal
year 1997 and did not maintain a link between the old and new budget
structures. The unit training subactivities were affected by this change and
data before fiscal year 1997, therefore, is not available for them.

16. The report on high-priority readiness-related transfers for fiscal year
1999 was not released in time to be reviewed for this report.

17. We use the term "initial congressional designation" or variations of
this term throughout to refer to amounts set forth in an appropriation act's
conference report. These recommended amounts are not binding unless they are
also incorporated directly or by reference into an appropriation act or
other statute.

18. Department of Defense: Status of Financial Management Weaknesses and
Actions Needed to Correct Continuing Challenges (GAO/T-AIMD/NSIAD-99-171,
May 4, 1999).
*** End of document. ***