Environmental Protection: Status of Defense Initiatives for Cleanup,
Technology, and Compliance (Letter Report, 05/29/97, GAO/NSIAD-97-126).
Pursuant to a congressional request, GAO reviewed selected aspects of
the Department of Defense's (DOD) environmental mission, focusing on:
(1) the time lag between obligations and expenditures for environmental
cleanup and its impact on achieving actual cleanup; (2) the basis for
funding overseas cleanup; (3) DOD's proposal to enter into multistate
cooperative agreements for technology certification; and (4) DOD's need
for and efforts toward uniform tracking and management of programs
involving compliance with environmental laws and regulations.
GAO noted that: (1) of the $1.413 billion made available for
environmental cleanup through the fiscal year (FY) 1996 Defense
Environmental Restoration Account, DOD reported that it obligated $1.409
billion by the end of that fiscal year, and expended $385 million; (2)
as a result, reported expenditures for actual cleanup have not proceeded
as rapidly as the obligations shown in DOD's annual cleanup report to
Congress; (3) the primary reasons cited by the defense components for
cleaning up overseas sites have been responses to concerns about U.S.
personnel health and safety, and compliance with host nation laws or
agreements and U.S. standards; (4) Defense components reported that $102
million had been obligated for overseas cleanup during fiscal years
1993-96; (5) DOD told GAO that it plans to enter into cooperative
agreements with states and local governments regarding the certification
of environmental technologies; (6) DOD identified candidate technologies
for such agreements and expects to sign the first agreement by the end
of FY 1997; (7) DOD officials have not estimated the costs for expected
cooperative agreements in fiscal years 1997 or 1998 because they do not
view the use of these agreements as a separate program and they expect
cost savings to offset expenditures; (8) DOD compliance project and cost
data, as reported in the 1996 Environmental Quality Annual Report to
Congress, are not complete or accurate; (9) the DOD-wide funding totals
for environmental compliance did not account for all funds or major
projects; (10) the report omitted about $250 million in funding and
failed to include some major Navy projects; (11) also, compliance
activities with widely varying characteristics are now being combined in
DOD's classification categories; (12) projects with compliance
milestones in the year 2000 and beyond are now included with
installations already out of compliance; (13) thus, DOD, the
Environmental Protection Agency (EPA), and Congress lack the data for
environmental compliance they need to conduct oversight functions; and
(14) because DOD has indicated a reluctance to take the necessary
actions to correct the problems noted in the report, GAO is suggesting
that Congress may wish to consider requiring DOD to ensure that the
problems are addressed.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: NSIAD-97-126
TITLE: Environmental Protection: Status of Defense Initiatives for
Cleanup, Technology, and Compliance
DATE: 05/29/97
SUBJECT: Defense budgets
Obligated budget balances
Environmental monitoring
Environmental law
Federal/state relations
International relations
Military facilities
Hazardous substances
Waste disposal
Cooperative agreements
IDENTIFIER: DOD Base Realignment and Closure Account
DOD Environmental Restoration Account
DOD Environmental Security Technology Certification Program
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Cover
================================================================ COVER
Report to Congressional Requesters
May 1997
ENVIRONMENTAL PROTECTION - STATUS
OF DEFENSE INITIATIVES FOR
CLEANUP, TECHNOLOGY, AND
COMPLIANCE
GAO/NSIAD-97-126
Environmental Protection
(709221)
Abbreviations
=============================================================== ABBREV
BRAC - Base Realignment and Closure account
DERA - Defense Environmental Restoration Account
DFAS - Defense Finance and Accounting Service
DLA - Defense Logistics Agency
DOD - Department of Defense
EPA - Environmental Protection Agency
OSD - Office of the Secretary of Defense
Letter
=============================================================== LETTER
B-276461
May 29, 1997
The Honorable James M. Inhofe
Chairman
The Honorable Charles S. Robb
Ranking Minority Member
Subcommittee on Readiness
Committee on Armed Services
United States Senate
The Department of Defense (DOD) spends about $5 billion annually to
fulfill its environmental mission. In response to your February 3,
1997, request, we examined selected aspects of DOD's environmental
mission. Specifically, this report addresses (1) the time lag
between obligations and expenditures for environmental cleanup and
its impact on achieving actual cleanup, (2) the basis for funding
overseas cleanup, (3) DOD proposal to enter into multistate
cooperative agreements for technology certification, and (4) DOD's
need for and efforts toward uniform tracking and management of
programs involving compliance with environmental laws and
regulations.
BACKGROUND
------------------------------------------------------------ Letter :1
DOD and other federal facilities are subject to the same
environmental, safety, and health laws and regulations as private
industry. To fulfill its environmental mission, DOD organized its
program into five elements: compliance, cleanup, conservation,
pollution prevention, and technology. This report covers three
elements that use about $4.2 billion (90 percent) of DOD's
approximately $4.6 billion funding for environmental protection for
fiscal year 1997. They are
cleanup ($2 billion), which includes identification, investigation,
and cleanup of contamination from hazardous substances and waste
on active, closing, and formerly used DOD sites;
technology ($0.2 billion), under which DOD invests in research,
development, demonstration, and validation of new technologies
to support the other elements of its environmental program; and
compliance ($2 billion), which ensures adherence to environmental
laws and regulations of federal, state, and local jurisdictions.
DOD funds domestic cleanup primarily from the Defense
Environmental Restoration Account (DERA).\1 Other environmental
activities such as overseas cleanup, technology certification,
and environmental compliance, are funded directly from several
appropriation accounts, primarily operations and maintenance.
In August 1996, we reported on the status of major defense
initiatives for cleanup, technology, and compliance.\2
--------------------
\1 Most DOD cleanup actions are funded through DERA and the Base
Realignment and Closure (BRAC) account. Congress established DERA in
1984 to fund the cleanup of old contamination sites on active DOD
installations and formerly used defense sites, and it later
established the BRAC account for closing installations. For fiscal
year 1997, the reported DERA funding totaled $1.3 billion, and BRAC
expenditures totaled $0.7 billion. BRAC expenditures were discussed
in Military Bases: Potential Reductions to the Fiscal Year 1997 Base
Closure Budget (GAO/NSIAD-96-158, July 7, 1996).
\2 Environmental Protection: Status of Defense Initiatives for
Cleanup, Compliance, and Technology (GAO/NSIAD-96-155, Aug. 2,
1996).
RESULTS IN BRIEF
------------------------------------------------------------ Letter :2
Of the $1.413 billion made available for environmental cleanup
through the fiscal year 1996 Defense Environmental Restoration
Account, DOD reported that it obligated $1.409 billion by the end of
that fiscal year, and expended $385 million. As a result, reported
expenditures for actual cleanup have not proceeded as rapidly as the
obligations shown in DOD's annual cleanup report to Congress.
The primary reasons cited by the defense components for cleaning up
overseas sites have been responses to concerns about U.S. personnel
health and safety, and compliance with host nation laws or agreements
and U.S. standards. Defense components reported that $102 million
had been obligated for overseas cleanup during fiscal years 1993-96.
DOD told us that it plans to enter into cooperative agreements with
states and local governments regarding the certification of
environmental technologies. DOD identified candidate technologies
for such agreements and expects to sign the first agreement by the
end of fiscal year 1997. DOD officials have not estimated the costs
for expected cooperative agreements in fiscal years 1997 or 1998
because they do not view the use of these agreements as a separate
program and they expect cost savings to offset expenditures.
DOD compliance project and cost data, as reported in the 1996
Environmental Quality Annual Report to Congress, are not complete or
accurate. The DOD-wide funding totals for environmental compliance
did not account for all funds or major projects. The report omitted
about $250 million in funding and failed to include some major Navy
projects. Also, compliance activities with widely varying
characteristics are now being combined in DOD's classification
categories. Projects with compliance milestones in the year 2000 and
beyond are now included with installations already out of compliance.
Thus, DOD, the Environmental Protection Agency, and Congress lack the
data for environmental compliance they need to conduct oversight
functions. Because DOD has indicated a reluctance to take the
necessary actions to correct the problems noted in the report, we are
suggesting that Congress may wish to consider requiring DOD to ensure
that the problems are addressed.
DOD FUNDS FOR CLEANUP WERE
EXPENDED OVER SEVERAL YEARS
------------------------------------------------------------ Letter :3
In response to our and Congress' concerns, DOD reported that
environmental funds obligated for actual cleanup at active
installations and formerly used defense sites reached about 61
percent in fiscal year 1995 and were projected to reach about 74
percent in fiscal year 1997.\3 Although DOD reported obligating
increasing amounts of funds for actual cleanup activities, a
significant portion of these funds will not actually be expended
until after the year of obligation. Officials from the Office of the
Secretary of Defense (OSD) stated that the expenditure of these funds
is based on the amount of work that is completed satisfactorily by
contractors.\4 Expenditures are made after a contractor completes a
portion of the contract and submits a bill for the work done, and the
government validates the bill and writes a check to pay it.
Table 1 shows that funds appropriated to DERA for fiscal years
1990-95 are reported by the defense components as expended over a
period of years, with less than 30 percent expended in the year of
appropriation, except for fiscal year 1995.\5 DOD officials told us
that the expenditure rates were generally better than the first-year
expenditure rate of 22 percent, which was established as reasonable
in a December 1993 joint Office of Management and Budget and
Congressional Budget Office letter on outlay rates. OSD officials
stated that the expenditure data were obtained from requests to
defense components--the Army, the Navy, the Marine Corps, the Air
Force, and the Defense Logistics Agency (DLA)--for data because OSD
lacks direct access to such defense component reported
expenditures.\6 Expenditure data showing further breakdowns of
cleanup phases, such as study, oversight, and actual cleanup, were
not available for fiscal years 1990-95 but were available for fiscal
year 1996.
Table 1
Reported Expenditures From Cleanup Funds
for All Phases of Cleanup as a
Percentage of Environmental Account
Appropriations (fiscal years 1990-95)
FY FY FY FY FY FY FY
Fiscal year appropriations 90 91 92 93 94 95 96
---------------------------- ---- ---- ---- ---- ---- ---- ----
1990 22.6 44.3 18.2 5.4 2.0
1991 21.4 43.7 18.2 4.6 \a
1992 26.1 42.5 16.8 \a \a
1993 27.2 42.6 14.4 4.6
1994 24.5 40.0 15.0
\b
1995 37.1 32.8
----------------------------------------------------------------------
\a The fiscal year 1995 and 1996 expenditure data for the fiscal year
1991 and 1992 appropriation years were not available at the time of
our review.
\b According to OSD, the Army's portion of expenditures for this year
was estimated based on input from other defense components and Army
data before and after the fiscal year 1995 time frame.
Source: Office of the Deputy Under Secretary of Defense for
Environmental Security.
In fiscal year 1996, the defense components and the Defense Finance
and Accounting Service (DFAS) began preparing reports on the
components' accountability for environmental restoration funds. A
specific goal for establishing the reporting requirement was to track
expenditures by phase, such as cleanup in the year of appropriation
and subsequent fiscal years. DFAS data did not include all reported
obligations in its first report. However, it did account for $1.2
billion of the $1.4 billion reported amounts obligated by DOD in
fiscal year 1996 and $325 million of the $385 million reported
expenditures by DOD. Table 2 shows the fiscal
year 1996 DERA expenditure plan in the fiscal year 1997 President's
budget submission and the end-of-year obligations and expenditures
for fiscal year 1996 by phase, as reported by DFAS.
Table 2
Reported Obligations and Expenditures as
a Percentage of DERA Funding for Fiscal
Year 1996 by Phase
(Dollars in millions)
Phase Dollars Dollars Percent Dollars Percent
-------------------- -------- -------- -------- -------- --------
Total $1,413\a $1,206\b 85 $325 23
Cleanup 911 757 83 176 19
Study 319 329\c 103\c 91 29
Oversight 183 120 65 58 32
----------------------------------------------------------------------
\a The funding, as reported in the budget submission, is $2 million
greater than that reported by DFAS. The higher total includes $1.4
million carried over from prior years, which the DFAS report does not
include.
\b DFAS data did not account for all obligations and expenditures.
\c Although DFAS accounted for less than the total amount obligated,
obligations for the study phase were more than originally estimated.
Source: The President's fiscal year 1997 budget submission for
budget plan data and DFAS for obligation and expenditure data.
According to DFAS report data as of September 30, 1996, DOD expended
23 percent of the total $1.413 billion of the DERA budget plan in
fiscal
year 1996. The reported first-year expenditures for study and
oversight,
29 and 32 percent of budget, respectively, exceeded the expenditure
rate for cleanup.
DFAS officials acknowledge that they cannot presently track detailed
breakouts, such as by cleanup phase, of all expenditure data after
the first year. Officials told us they recently identified problems
in capturing Army and Navy environmental restoration program
continuing obligations and expenditures against the fiscal year 1996
appropriation--the first reporting year. According to DFAS, the
Army's accounting system does not allow identification of specific
program elements beyond the first year for operation and maintenance.
Although they agreed that they could provide aggregate expenditure
data, Navy officials stated their accounting system does not permit
tracking expenditures by phase of cleanup beyond the appropriation
year, and the Navy did not submit fiscal year 1996 data in the first
quarter of fiscal year 1997. The Air Force had prior difficulty
reporting expenditures but believes it has resolved the problems.
OSD officials said they were working with the Army and the Navy to
resolve these reporting problems.
--------------------
\3 This figure was taken from the President's budget submission for
fiscal year 1997.
\4 We use the term expenditure to refer to the amount of checks
issued or other payments made. DOD's July 1996 Financial Management
Regulation indicates that the terms disbursement, outlay, and
expenditure may be used interchangeably.
\5 DOD officials told us that the percent for this year may be higher
than in other years because of rescissions. The total appropriation
dropped by $300 million, causing reported expenditures for that year
to become a larger percentage of the total program funding.
\6 We have issued a series of reports over the past few years
documenting deficiencies in the Department's ability to reliably
account for and report on its expenditures.
CLEANUP OF OVERSEAS SITES IS
LARGELY FOR HOST COUNTRY AND
U.S. REQUIREMENTS
------------------------------------------------------------ Letter :4
According to DOD officials, reasons for cleaning up overseas sites
are to (1) respond to known imminent and substantial endangerment to
human health and safety due to environmental contamination caused by
DOD operations; (2) ensure that U.S. forces are able to conduct
operations; and (3) respond to requirements stipulated by host
nations, which are laid out in Status of Forces Agreements or other
legal authorities. The degree of cleanup is negotiated with the host
nation before starting work. DOD told us that it uses either host
nation laws as the standard for cleaning up or U.S. standards, such
as the National Contingency Plan under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended, when host nation standards are not specified.
DOD does not routinely report overseas cleanup data, such as numbers,
values, or reasons for cleanup. In response to your 1996 inquiry, we
asked DOD to provide such information on a one-time basis. Although
the data were not complete, we believe the preliminary data provide
some useful insight. Information provided by defense components
indicates that 69 of 355 overseas cleanup projects with documentation
of the reason for cleanup were based on host country laws or host
nation agreements. Army officials stated that many of the 195
cleanups for which documents did not show a reason also related to
host country laws or requirements.
Our August 1996 report provides a breakdown of the total reported
$102 million for overseas cleanup, including information on the
number of sites and projects and funding for fiscal years 1993-96 by
service. Table 3 shows the basis for and number of overseas cleanup
projects reported by defense components. Host nation laws or
agreements were cited as the basis for 3 of the Army's 7 projects for
which a basis was reported and for 33 of the Navy's 40 projects. The
Marine Corps cited health risks as the basis for projects; the Air
Force cited various policies, standards, instructions, and host
nation agreements; and DLA cited U.S. responsibility and host nation
laws.
Table 3
Overseas Cleanup Projects Identified by
Defense Component and the Basis Cited
for Cleanup (fiscal years 1993-96)
Host Basis
U.S. nation Host not
standar agreemen nation document Othe Tota
Component ds t law ed r\a l
-------------------- ------- -------- ------- -------- ---- ====
Army 0 \0 3\ 195\b 4 202
Navy 0 26\c 7 0 7 40
Marine Corps 2 0 0 0 0 2
Air Force 56\d 3\1\e 0 0 17 104
DLA 5 0 2 0 0 7
======================================================================
Total 63 57 12 195 28 355
----------------------------------------------------------------------
\a Other category includes training requirements, surveys, and DOD
and Air Force policies.
\b The Army did not report a basis for action for 195 of the 202
projects, but officials told us most, if not all, of the Army's
overseas cleanup expenditures are based on host nation laws or
agreements.
\c These projects were based on final standards governing the
cleanup, which are a combination of the overseas environmental
baseline guidance document standards, host nation laws, and
international and Status of Forces Agreements.
\d Of the 56 projects, 22 were based on DOD's Overseas Environmental
Baseline Guidance Document standards, which provide implementation
guidance, procedures, and criteria for environmental compliance at
overseas installations.
\e These projects were based on the host nation's final standards
governing the cleanup.
Source: Defense components.
In reviewing data provided by the Air Force and the Navy, OSD
officials stated that there was no official DOD guidance on overseas
cleanup before late 1995. They stated that data before 1996 were not
easily categorized due to difficulties in differentiating cleanup
expenses from compliance expenses overseas. Funding for both
overseas cleanup and compliance comes from operation and maintenance
funds, according to OSD officials, and some cleanup costs, such as
those that refer to Overseas Environmental Baseline Guidance Document
standards, may actually have been compliance activities. DOD
officials are reviewing Air Force and Navy data to determine the
correct basis for cleanup. Also, DOD Inspector General officials
told us that they plan to determine the basis for cleanup as part of
a planned review of overseas cleanup issues.
COOPERATIVE AGREEMENTS FOR
TECHNOLOGY CERTIFICATIONS ARE
NOT YET ESTABLISHED
------------------------------------------------------------ Letter :5
At OSD's request, Congress authorized the Secretary of Defense, in
fiscal year 1997, to enter into cooperative agreements with states
and local governments to certify new environmental technologies.\7
State environmental authorities supervise many environmental
activities and may require demonstration of a new technology before
authorizing its use. DOD officials believe state expertise can be
used to address environmental requirements cost-effectively, improve
operational effectiveness, and achieve wider acceptability of
technologies. According to DOD, cooperative agreements would provide
a mechanism for several states to view a demonstration of an
environmental technology in one location and approve and certify the
technology. Under the new law, DOD officials identified potential
technologies for consideration and anticipated entering into the
first of expected cooperative agreements by the end of fiscal year
1997. However, DOD has not estimated the costs involved in entering
into cooperative agreements because officials do not view the use of
these agreements as a separate program and they expect savings to
offset agreement costs.
--------------------
\7 National Defense Authorization Act for Fiscal Year 1997, Public
Law 104-201, September 23, 1996.
LEGISLATIVE REQUIREMENTS FOR
COOPERATIVE AGREEMENTS
---------------------------------------------------------- Letter :5.1
The Defense Authorization Act for Fiscal Year 1997 allows DOD to
enter into cooperative agreements for obtaining assistance in
demonstrating environmental technologies, collecting and analyzing
data from those demonstrations, and implementing quality assurance
and quality control programs.\8 The act requires that the Secretary
report annually to Congress on the number of agreements reached and
the states involved, nature of the technology involved in each
agreement, and funds obligated or expended by DOD during that year
for each agreement. The Secretary's authority to enter into
agreements terminates at the end of fiscal year 2001.
--------------------
\8 To qualify for a cooperative agreement, the Secretary of Defense
must determine that the technology could significantly benefit DOD
and that there is no private market for the technology without
certification.
NO AGREEMENTS TO DATE
---------------------------------------------------------- Letter :5.2
DOD has not yet entered into any cooperative agreements, but it
expects to do so by the end of September 1997. To date, DOD has not
estimated costs for agreements. DOD officials stated that they view
cooperative agreements as tools to enhance existing environmental
programs rather than as a separate program. Consequently, they told
us they have not developed documents to describe overall goals or
project costs.
DOD officials have not estimated costs for cooperative agreements,
but they expect any added costs to be minimal partly because the
number of technology demonstrations would be reduced. According to
DOD officials, each agreement could have different related costs,
including employee salaries for demonstration site visits, employee
travel costs to demonstration sites, and the cost of analyses
required for state reciprocity. DOD expects funding for cooperative
agreements to come from projected savings in other environmental
funds.
DOD officials stated that, before the law's enactment, they had used
the demonstration technology approach. For example, DOD worked with
the Departments of Energy and Interior, the Environmental Protection
Agency (EPA), and western states to demonstrate a system that
measures subsurface conditions. If the system is employed, the
parties expect it to reduce the number of core samples and monitoring
wells needed to screen sites effectively. In another example, the
Navy worked with other federal and state entities and a commercial
company to demonstrate new methods to clean up polychlorinated
biphenyls, pesticides, and halogenated compounds from soil,
sediments, liquids, and other materials. We requested DOD cost and
milestone dates, but they stated they had no definitive information.
POTENTIAL TECHNOLOGIES AND
STATES IDENTIFIED FOR
COOPERATIVE AGREEMENTS
---------------------------------------------------------- Letter :5.3
DOD has identified over 100 technologies as potential candidates
under the new law. For example, table 4 shows 12 projects in DOD's
Environmental Security Technology Certification Program that could be
developed as cooperative agreements.\9 OSD officials stated that DOD
is now deciding which technologies, potential uses, and regulatory
agencies (federal, state, or local) might be involved in
demonstration projects. DOD plans to select technologies based on
urgency, acceptability, and utility, and then expects to match
validated technology needs with each location.
Table 4
Candidates Identified by DOD for the Use
of Cooperative Agreements as Part of its
Environmental Security Technology
Certification Program
Number of states
Demonstration where technology
Project state could be applied
---------------------------------- -------------- ------------------
Recycling of waste acids New York 5
Site characterization system Louisiana 50
Containment and recycling of small Kentucky 50
arms ammunition
High-temperature destruction of Virginia 9
hazardous waste
Oxidation of explosives in water Nebraska 12
Underground barrier wall California 45
Groundwater recirculation wells Massachusetts 4
Seismic detection of dense liquids Pennsylvania 50
Fuel contamination treatment California 51\a
Fiber-optic sensors Washington 12
Removal of lead-based paint Illinois 51\a
Water oxidation Arkansas 5
----------------------------------------------------------------------
\a Includes Washington, D.C.
Source: Office of the Deputy Under Secretary of Defense for
Environmental Security.
--------------------
\9 The program aims to demonstrate and validate technologies that
meet DOD environmental needs and environmental security objectives.
NEED TO IMPROVE DATA USED FOR
COMPLIANCE OVERSIGHT CONTINUES
------------------------------------------------------------ Letter :6
DOD has modified its environmental reporting, but environmental
compliance project and cost data reported by the defense components
in the 1996 Environmental Quality Annual Report to Congress were not
yet complete or accurate. Environmental projects of widely varying
compliance status are being included in DOD's compliance categories
because changes in DOD's policy now combine previously distinct
categories and not all service data systems can provide the data for
the revised reporting categories.
DOD INITIATIVES TO IMPROVE
COMPLIANCE MANAGEMENT BEGAN
IN 1995
---------------------------------------------------------- Letter :6.1
We and OSD have noted that DOD's budget execution and financial
reporting do not provide DOD or Congress with the information needed
to provide for oversight of compliance. In 1995, DOD began an
environmental quality initiative to promote consistency in compliance
definitions, categories, and requirements. It planned to identify
goals; strategies; budget items; and measures of performance for
compliance, conservation, and pollution prevention. Accordingly, for
the fiscal year 1998 budget planning process, DOD's Office of the
Under Secretary of Defense for Environmental Security established new
policies and goals for classifying compliance projects and obtaining
needed compliance data. For fiscal year 1999 planning, DOD officials
have added explanatory footnotes to budget preparation instructions.
OSD officials stated that they asked the defense components to
provide funding breakdowns by project and environmental area (such as
compliance or pollution prevention) to support fiscal year 1998 data
in next year's annual report for fiscal year 1996. However, they
told us that such detail may not be included in the report because
data reported by the services were not consistent and could not be
standardized for reporting.
COMPLIANCE DATA ARE NOT
COMPLETE OR ACCURATE
---------------------------------------------------------- Letter :6.2
Although the environmental quality report for the first time included
individual projects at installations, the data were incomplete
because they did not account for all environmental funding or include
all projects costing $300,000 or more. For instance, the report
discussed environmental quality programs, including technology, and
showed
$2.33 billion planned for DOD's fiscal year 1997 environmental
quality program worldwide.\10 However, the President's 1998 budget
for fiscal
year 1997 totaled $2.58 billion.\11
The report's breakout of projects costing $300,000 or more omitted
some projects. Not all costs would be expected to be included in
detail because much of DOD's spending is for recurring costs that are
not project based, and many projects fall under the report's $300,000
threshold. However, the Army's, the Air Force's, and the Marine
Corps' detailed project lists accounted for 36, 27, and 25 percent,
respectively, of the total they planned to spend, but the Navy's
project lists accounted for only 6 percent. Our visits to Navy
locations showed that more projects were eligible to be reported.
For example, the fiscal year 1995 DOD Environmental Quality Annual
Report released in December 1996 showed that the U.S. Atlantic Fleet
planned 4 fiscal year 1997 projects costing $300,000 or more, but
data at the U.S. Atlantic Command showed 21 approved projects
costing $300,000 or more for fiscal year 1997.
The Navy reported planned spending of about $737 million for its
fiscal year 1997 U.S. environmental quality program, but it reported
56 projects costing $300,000 or more, valued at about $41 million
(about 6 percent of its reported total). In discussing this issue,
Navy headquarters officials stated that (1) most Navy projects fall
under the $300,000 reporting threshold, but the project amounts may
later increase; (2) some proposed requirements may be validated
later; and (3) new requirements may arise after approval. However,
the supporting documentation we examined, such as U.S. Atlantic
Fleet project costs, indicated that although better data were
available at the time, the Navy did not provide that information to
DOD.
Also, reported summary and detailed data are not always accurate.
Our comparison of planned funding for environmental quality for
fiscal
year 1997, as estimated in DOD's two most recent reports, varied
significantly in aggregate totals by state and other localities.
DOD's planned environmental quality funding for fiscal year 1997 in
the two most recent reports was similar in total but varied widely
for aggregations, even at the state level. The total difference
between the fiscal year 1994 report at $2.083 billion and the fiscal
year 1995 report at $2.016 billion was a reduction of about $67
million, a difference of only 3 percent. Even though it is
reasonable to expect year-to-year differences in program estimates,
more than half of the states and localities varied by significant
amounts. Allocations for 29 states and other localities for fiscal
year 1997 varied by more than either $30 million or 30 percent from
the plans as estimated in DOD's fiscal year 1994 report versus the
fiscal year 1995 report. Data from only nine states and other
localities varied by less than 10 percent from one report to the
next. Table 5 shows the variations exceeding $10 million.
Table 5
Fiscal Year 1997 Planned Spending in
Fiscal Year 1994 and 1995 Defense
Environmental Quality Reports
(Dollars in millions)
Fiscal Fiscal
year 1994 year 1995 Dollar Percent
State dollars dollars difference difference
------------------------ --------- --------- ---------- ----------
Colorado $21.9 $33.3 $11.5 53
Connecticut 20.8 9.5 -11.3 -54
District of Columbia 234.6 172.0 -62.6 -27
Florida 100.1 63.2 -36.9 -37
Hawaii 89.8 53.7 -36.0 -40
Louisiana 31.0 16.4 -14.6 -47
Missouri 30.4 10.9 -19.5 -64
New Jersey 16.8 46.7 29.8 177
Ohio 20.9 45.7 24.8 118
Pennsylvania 26.2 39.0 12.8 49
Rhode Island 5.9 25.7 19.8 337
Virginia $344.1 $302.4 $-41.7 -12
----------------------------------------------------------------------
Source: Defense Environmental Quality Program Annual Reports to
Congress, Fiscal Years 1994 and 1995.
In discussing state-level variances, DOD officials told us they
believe some major changes could be attributed to practices such as
initially identifying funds for a nationwide initiative to a single
headquarters unit and then later identifying specific locations.
Also, major decisions, such as closing of bases through the base
closure process, could cause some significant changes. In addition,
DOD advised us that requirements generated under federal, state, and
local environmental statutes and regulations become effective without
regard to DOD's budget cycle, and may necessitate shifts in funding.
DOD stated the extent of variance would preclude meaningful
year-to-year comparisons of spending in different states.
Our comparison of fiscal year 1997 allotments to individual
installations with information in DOD's December 1996 report for
fiscal year 1995 showed significant differences at the selected
installations. Records at these installations showed that all had
changes to their programs from that reflected in the DOD reports.
Some programs were reported with reasonable accuracy, whereas others
showed large differences in costs and projects in the 1995 report.
(Except as described below, neither we nor DOD has followed up to
reconcile the differences.) For example:
Fort Bliss, Texas, data in DOD's report showed $25 million planned
for the environmental quality program for fiscal year 1997,
including 21 projects costing over $300,000 or more each,
totaling $14.5 million. Data at that location in January 1997
showed only $18.8 million for the fiscal year 1997 environmental
quality program. Of the original 21 projects, 4 were
discontinued, 3 were deferred, 4 were funded early, and 4 were
funded at less than $300,000, the minimum for inclusion in the
report. In addition, seven new projects were added at a
reported total cost of $4.4 million.
DOD's report showed $24 million in expenditures at Navy Public
Works Center, Norfolk, Virginia, for fiscal year 1996, but data
at the Center showed it had spent only about $9.5 million for
that period. An installation official said that the Center had
incorrectly reported its fiscal year 1996 program to higher
levels. We requested, but have not received, data on planned
projects costing $300,000 or more for fiscal year 1997.
Data in DOD's report from Quantico Marine Corps Base, Virginia,
showed a total of $22.5 million. The total was $5.9 million
higher than the $16.6 million that service officials reported.
The Navy, which coordinates Marine Corps input, erroneously made
two changes that affected the data. The Navy counted an $8.9
million military construction sanitary landfill project twice
and erroneously assessed a $3-million environmental budget
reduction. Quantico's current fiscal year 1997 environmental
program has increased to $17.3 million.
Data from Aberdeen Proving Ground, Maryland, were relatively more
accurate: the fiscal year 1995 report showed $24.9 million
planned for fiscal year 1997, and data at the installation
showed planned fiscal
year 1997 funding of $21.7 million. However, the installation's
data showed a greater portion of projects costing $300,000 or
more. Nine projects were added, increasing the projects' total,
previously valued at $6.3 million, to $11.7 million.
--------------------
\10 According to DOD, its environmental quality program is divided
into six major functions: planning, compliance, pollution
prevention, conservation, education and training, and environmental
technology.
\11 Our draft report reflected a difference of over $200 million
based on the 1997 President's budget for fiscal year 1997, a total of
$2.55 billion ($220 million greater than the $2.33 billion in DOD's
annual report).
WIDELY VARYING ACTIVITIES
ARE INCLUDED WITHIN DOD'S
NEW COMPLIANCE CATEGORIES
---------------------------------------------------------- Letter :6.3
We reported in March\12 and August 1996 that changes made by DOD in
definitions for EPA classes used to set priorities for compliance
projects in DOD's fiscal year 1998 budget could increase the number
of highest priority projects. These changes could dilute the
usefulness of the highest priority category by reducing management
oversight. Our follow-up work indicates that the defense components
have encountered difficulty in providing data in the new categories.
We also reported in March 1996 that, for its fiscal year 1998 budget
process, DOD developed new definitions for four of the five EPA
classes. We agreed with DOD's general approach but expressed concern
that the class definitions in DOD's plan (1) were a significant
departure from DOD's past definitions, (2) differed from EPA's
definitions, and (3) expanded the number of projects that qualify for
funding under compliance Class I without distinguishing among
different project types, as shown in the following examples:
Although EPA explicitly limits Class I to facilities currently out
of compliance, as documented by notices of violation or consent
agreements, DOD's new definition added projects to address
requirements in facilities that may not be out of compliance for
2 or more years.
DOD's descriptions also indicated that items that EPA includes in
Class III (such as inventories, surveys, studies, and
assessments) could also be routinely funded as Class I projects.
EPA stated that designating a project as Class III does not mean
the project is necessarily less important than one in Classes I
or II. Nonetheless, the inclusion of greater numbers of
indistinguishable projects under a redefined Class I could
reduce management oversight. OSD officials stated it was not
their intent to dilute the compliance priority setting process.
As we reported in August 1996, DOD said it would act to ensure
that priorities are not diluted in the compliance priority
setting process. We have not yet seen changes to do this.
After we issued our March and August 1996 reports, DOD updated its
environmental compliance guidance (DOD Instruction 4715.6) to reflect
the new definitions. Our discussions and review of records showed
some concerns about the definitions. For example, in a December 1996
memorandum, the Army's Training and Doctrine Command stated that it
disagreed with DOD's revised policy because it is not consistent with
the original class definitions. It stated that clear, logically
consistent, and stable definitions are useful in managing an
environmental program and that changing the definition of classes
will make it harder to track, justify, and explain requirements.
The data gathered by DOD under the old or new system do not meet
EPA's data needs. According to an April 1996 EPA memorandum, DOD
agreed to separately provide EPA with project-level data and
supplemental project listings with the details needed to support
EPA's automated system. EPA had believed that the additional detail
would allow it to recategorize DOD projects under EPA definitions for
governmentwide comparability. However, the data DOD provided to EPA
varied by service and omitted elements such as federal facility
identification numbers and unique project numbers. Also, the Navy
did not specify statutory authority data needed by EPA, and DOD did
not provide compliance status information. Without the compliance
status information beyond DOD's classification, it is difficult to
determine or compare the urgency of projects.
In discussing this issue, an OSD official did not agree that the
changes in compliance classes have reduced oversight. The official
stated that, even though individual organizations may have opposed
the changes, Army headquarters has agreed to the change.
Furthermore, the official said DOD provided the same data to EPA last
year as it did to Congress and that EPA had not requested additional
information this year. According to EPA, it was too late in the
budget cycle to ask DOD for additional fiscal year 1997 data.
--------------------
\12 Environmental Protection: Issues Facing the Energy and Defense
Environmental Management Programs (GAO/T-RCED/NSIAD-96-127, Mar. 21,
1996).
CONCLUSIONS AND RECOMMENDATIONS
------------------------------------------------------------ Letter :7
We support DOD's continuing efforts to resolve defense components'
information system weaknesses that limit the accuracy and
completeness of reported data. We also agree with DOD's efforts to
provide project-level data for compliance oversight but believe that
the initiative is impeded by the decision to combine previously
distinct compliance categories and the services' inability to provide
the requested project-level data. Therefore, we recommend that the
Secretary of Defense direct the
Secretaries of the Army, the Navy, and the Air Force to establish
milestones and time frames for providing environmental
compliance funding estimates, obligations, and expenditures,
including data at the project level and
Deputy Under Secretary of Defense for Environmental Security to
reconsider changes in compliance class definitions so that the
data permit better oversight and are more consistent with
governmentwide reporting to EPA.
MATTER FOR CONGRESSIONAL
CONSIDERATION
------------------------------------------------------------ Letter :8
DOD's inconsistent funding and reporting practices can lead to
adverse budget consequences. DOD's planned actions appear to be
insufficient to ensure that only the highest priority projects are
funded. Because DOD's comments indicate that it does not plan to
take the necessary actions to correct the problems identified in this
report, Congress may wish to consider requiring DOD to issue guidance
for environmental compliance funding. As stated in our
recommendations, the guidance should address (1) milestones and time
frames needed for obtaining environmental compliance funding
estimates, obligations, and expenditures, including project-level
data and (2) changes to DOD's compliance class definitions that are
more consistent with governmentwide reporting to EPA.
AGENCY COMMENTS AND OUR
EVALUATION
------------------------------------------------------------ Letter :9
DOD stated that it partially concurred with our recommendations, but
that (1) existing milestones were sufficient and the military
departments were improving their ability to meet them and (2) DOD
recently reviewed the classification systems for environmental
projects and made minor modifications. DOD indicated that it was
working to improve the accuracy of the annual report's list of
projects in excess of $300,000 and to monitor the execution of those
projects during a semi-annual review process. However, DOD noted
that, at both the summary and project levels, expenditure reporting
depends on the appropriation from which the efforts are funded. DOD
also indicated that the EPA classification system is not sufficient
to support budget development or longer range financial planning.
Despite DOD's partial concurrence with our recommendations, we are
concerned that its response actually means that little additional
effort will be taken to address the issues related to the accuracy
and completeness of data, and the dilution of priorities by combining
previously distinct compliance categories. For example, DOD's
comments give no specific indication as to how DOD intended to
improve the accuracy of the data or how it would overcome the
difficulties in tracking, justifying, and explaining environmental
requirements within DOD's broadened class definitions.
DOD's comments are reprinted in appendix I. DOD also provided
suggested editorial and technical changes and supplied updated
information. We have incorporated this additional information in the
report where appropriate.
SCOPE AND METHODOLOGY
----------------------------------------------------------- Letter :10
To determine the time lag between obligations and expenditures for
environmental cleanups and its impact on achieving actual cleanup, we
collected and analyzed DFAS reports on cleanup-phase expenditures for
fiscal years 1990-96. We discussed the reports and their accuracy
with officials from the Office of the Under Secretary of Defense for
Environmental Security, and the Office of Program Integration. We
compared data for locations visited with corresponding DOD databases,
but we did not verify overall database accuracy. However, we have
issued a series of reports over the past few years documenting
deficiencies in the Department's ability to reliably account for and
report on its expenditures. Consequently, it was not practical for
us to identify, collect, and report more reliable expenditure data as
a part of this assignment.\13
To determine the basis for funding overseas cleanup, we obtained and
analyzed documents provided by the defense components on cleanup
costs by project for fiscal years 1993-96. We also discussed
overseas cleanup issues with DOD officials from the Offices of
International Affairs and Program Integration. We discussed the
accuracy of the data and specific errors discovered by officials but
did not verify the reports to overseas source data. We also
obtained, reviewed, and analyzed laws, regulations, and other
relevant documents.
To determine the status of DOD's proposal to enter into multistate
cooperative agreements for technology certifications, we obtained and
examined listings of potential projects and related data. We
discussed related issues with officials from the Office of the Under
Secretary of Defense for Environmental Security.
To obtain information on DOD's compliance programs and tracking and
management system, we met with and obtained information from
officials in the headquarters offices of EPA and the Office of the
Deputy Under Secretary of Defense for Environmental Security and in
headquarters and field offices of the Army, the Navy, the Air Force,
and the Marine Corps. We discussed issues with DOD officials from
the Army Training and Doctrine Command, Fort Monroe, Virginia; Air
Force Materiel Command, Wright-Patterson Air Force Base, Ohio; and
U.S. Atlantic Fleet, Norfolk, Virginia. We reviewed pertinent
documents, laws, and regulations as they related to various projects,
but did not verify the extent to which projects would comply with
applicable laws and regulations. We visited and obtained information
on program planning, budget execution, requirements determination,
resource allocation, and financial operations for fiscal years
1994-2001 from the following military installations: Aberdeen
Proving Ground, Maryland; Fort Bliss, Texas; Kirtland Air Force Base,
New Mexico; Quantico Marine Corps Base, Virginia; Navy Public Works
Center and Naval Station, Norfolk, Virginia; and Naval Air Facility,
El Centro, California. The locations selected were from
installations with larger compliance funding for each service in the
eastern, central, and western United States.
We conducted our work from November 1996 to March 1997 in accordance
with generally accepted government auditing standards.
--------------------
\13 In DOD Problem Disbursements (GAO/AIMD-97-36R, Feb. 20, 1997),
we identified significant errors in DOD expenditure reports.
--------------------------------------------------------- Letter :10.1
Unless you publicly announce its contents earlier, we plan no further
distribution of this report until 30 days from its issue date. At
that time, we will send copies to appropriate congressional
committees, the Secretaries of Defense, the Army, the Navy, and the
Air Force; the Commandant, Marine Corps; and the Director, Office of
Management and Budget. We will also make copies available to others
on request.
If you or your staff have any questions concerning this report,
please contact me on (202) 512-8412. Major contributors to this
report are listed in appendix II.
David R. Warren, Director
Defense Management Issues
(See figure in printed edition.)Appendix I
COMMENTS FROM THE DEPARTMENT OF
DEFENSE
============================================================== Letter
the end of this appendix. DOD comments identified as editorial are
not included.
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
(See figure in printed edition.)
The following are GAO's comments on the Department of Defense's (DOD)
letter dated April 23, 1997.
GAO COMMENTS
1. We revised our report to reflect DOD's suggested changes.
2. We did not make the suggested change because the term "most"
accurately describes that a large percentage but not all of DOD
cleanup actions are funded through the Defense Environmental
Restoration Account and the Base Realignment and Closure account.
For example, Defense Logistics Agency cleanups are commonly funded
through its working capital fund.
3. DOD acknowledged that its annual report did not reflect all of
the defense agencies' projects. However, it indicated that the
understatement was only $40 million, and not the $250 million we
reported. Even though DOD's annual report lists technology as one of
its six major environmental quality program functions, DOD officials
told us they did not consider technology as part of the environmental
quality program and thus excluded such amounts from reported totals.
Our calculations, showing a difference of $250 million between the
President's budget and the annual report, included totals for the
defense agencies and technology programs that DOD omitted. The
President's 1998 budget for fiscal year 1997 totaled $2.58 billion,
including technology. The $2.37 billion excludes technology. Since
the President's budget included technology programs and the annual
report did not indicate that technology programs were being excluded
from reported totals, we have not changed our calculations.
4. We recognize that DOD defines Class I to include (1) requirements
that will be out of compliance if funds are not provided in the
fiscal year requested and (2) inventories, surveys, studies, and
assessments required by various federal, state, and local laws to
stay in compliance. We addressed the impact of DOD's expanded Class
I definitions and the differences between DOD and Environmental
Protection Agency (EPA) definitions in prior reports.\1 The EPA Class
II definition recognizes those requirements that need funding by the
end of the fiscal year, and the
Class III definition recognizes what is needed to maintain compliance
beyond the near term. In addition, we recognize that inventories and
assessments may be required by law, but note that EPA's definition
necessitates current non-compliance with requirements to warrant
inclusion in Class I, whereas DOD's definition does not.
5. We revised the report to be more precise. The data presented in
table 1 show that a significant portion of obligated cleanup funds
are not expended in the year in which they are obligated.
6. Our draft report cited a 1994 working group that the Office of
the Secretary of Defense (OSD) Deputy Comptroller established to
develop budgeting procedures for compliance activities. We deleted
reference to that working group because DOD officials stated that
they intended for the authorization for an environmental security
working group to be limited to cleanup activities.
7. OSD officials told us the components were to provide the
collected data to DOD in April 1996, and much of the data were
provided late. As indicated in our report, we noted similarities at
service installations in that project amounts may later increase,
proposed requirements may be validated later, and new requirements
may arise after approval. We also noted that additional Navy data
were available at the time the Navy provided information to DOD.
8. We revised our report to reflect the challenges DOD encounters
with respect to new requirements that arise during a fiscal year, and
the necessary funding shifts associated with these requirements.
9. We did not state that DOD contemplated classification changes.
We indicated only that DOD officials had stated they would ensure
that priorities are not diluted.
10. We revised our report to be more precise. We indicated that
data gathered by DOD under its old or new systems do not meet EPA's
needs.
--------------------
\1 Environmental Protection: Status of Defense Initiatives for
Cleanup, Compliance, and Technology (GAO/NSIAD-96-155, Aug. 2, 1996)
and Environmental Protection: Issues Facing the Energy and Defense
Environmental Management Programs (GAO/T-RCED/NSIAD-96-127, Mar. 21,
1996).
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix II
NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.C.
Charles I. Patton, Jr.
Uldis Adamsons
Elizabeth G. Mead
Robert B. Brown
Richard Meeks
Joanne Jurmu
George Shelton
DALLAS FIELD OFFICE
David Marks
NORFOLK FIELD OFFICE
Ed Soniat
Johnnie Phillips
OFFICE OF THE GENERAL COUNSEL
Lynn Gibson
Margaret Armen
*** End of document. ***