Defense Budget: Visibility and Accountability of O&M Fund Movements
(Statement/Record, 02/29/2000, GAO/T-NSIAD-00-98).

Pursuant to a congressional request, GAO discussed the Department of
Defense's (DOD) fiscal year (FY) 2001 budget as it relates to readiness
needs, focusing on: (1) identifying the aggregated differences between
the amounts Congress initially designated for the operation and
maintenance (O&M) subactivities and those DOD reported as obligated for
the same subactivities; (2) identifying those O&M subactivities where
DOD obligated funds differently than congressionally initially
designated in each year of the 5-year period GAO examined (1994 through
1998); and (3) assessing information available to Congress to track
DOD's movement of funds among O&M subactivities.

GAO noted that: (1) from FY 1994 through FY 1998, DOD changed funding
amounts for 245 O&M subactivities by almost $43 billion compared with
the amounts Congress initially designated for them; (2) these changes
included both decreases and increases to the amounts designated by
Congress; (3) DOD moved almost $16 billion out of and $27 billion onto
O&M subactivities; (4) the changes made to these O&M subactivities
accounted for about 12 percent of the total amounts initially
appropriated for O&M during the period; (5) over half of the $43 billion
was moved out of or into 81 O&M subactivities DOD considers directly
related to readiness, while $10 billion was moved out of or into 28 O&M
subactivities that Congress considers high-priority readiness-related;
(6) every year from FY 1994 through 1998 DOD obligated a different
amount than Congress designated for the same 63 subactivities; (7) in
total, DOD moved about $19 billion out of or into these subactivities;
(8) about $4.3 billion was moved out of and about $6.7 billion was moved
into 30 subactivities DOD considers directly related to readiness for a
total of about $11 billion; (9) the 30 subactivities include 11 of the
high-priority readiness-related subactivities; (10) further, of the 11
subactivities, DOD moved $3.2 billion out of 6 subactivities Congress
considers high-priority readiness-related, while moving $2.3 billion
into 5 others; (11) in recent years DOD has improved the information it
gives to Congress on the movement of O&M funds; (12) but this budget
information is still incomplete and does not provide adequate details of
where funds are moved and why; (13) changes in the way DOD presents
budget justification materials, as well as congressionally mandated
changes in the level of details to be provided by DOD, have improved
DOD's budget information available to Congress; (14) in particular, the
high-priority readiness-related transfer reports offer the most
information available on why DOD moves funds among selected
subactivities; (15) however, the statutory requirement for these reports
will expire when DOD submits its FY 2000 report; (16) in addition, from
FY 1994 through FY 1998, little information was available to Congress
about what DOD terms fact-of-life movements, which DOD says are made to
reflect changes that occur between the time DOD formulates its budget
request and the time Congress passes the appropriation act; and (17)
DOD's financial management regulation does not define these adjustments
and provides no guidance on when it is appropriate to make such
adjustments, who should approve them, or how much funding can be moved.

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

 REPORTNUM:  T-NSIAD-00-98
     TITLE:  Defense Budget: Visibility and Accountability of O&M Fund
	     Movements
      DATE:  02/29/2000
   SUBJECT:  Defense appropriations
	     Budget administration
	     Defense budgets
	     Reporting requirements
	     Military budgets
	     Reprogramming of appropriated funds
	     Defense contingency planning

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Testimony Before the Subcommittee on Military Readiness,

Committee on Armed Services, House of Representatives

For Release on Delivery

Expected at 2:00 p.m.

Tuesday, February 29, 2000

DEFENSE BUDGET

Visibility and Accountability of O&M Fund Movements

Statement for the Record by Norman J. Rabkin, Director

National Security Preparedness

National Security and International Affairs Division

GAO/T-NSIAD-00-98

Mr. Chairman, Members of the Subcommittee:

At the request of this Subcommittee, we are submitting a statement for the
record in conjunction with today's hearings on the adequacy of the
Department of Defense's (DOD) fiscal year 2001 budget request as it relates
to readiness needs. Specifically, the Subcommittee asked that we summarize
the results of our analysis of the Operation and Maintenance (O&M)
appropriations of active components and Defense-wide agencies from fiscal
year 1994 through 1998. We issued a report on this work in February 2000.
The objectives of our work were to

   * identify the aggregated differences between the amounts Congress
     initially designated for O&M subactivities, (especially the
     readiness-related subactivities) and those DOD reported as obligated
     for the same subactivities;

   * identify those O&M subactivities where DOD obligated funds differently
     than congressionally initially designated in each year of the 5-year
     period we examined (1994 through 1998); and
   * assess information available to Congress to track DOD's movement of
     funds among O&M subactivities.

Since 1989, O&M has accounted for an average of 35 percent of the total
Defense budget, making it DOD's largest appropriation group. For fiscal year
2000, Congress has provided about $104 billion for O&M. O&M is directly
related to military readiness because it provides funds for training troops
for combat and for maintaining tanks, airplanes, ships, and related
equipment. O&M accounts also fund a wide range of activities that are less
directly related to readiness. These include many day-to-day activities such
as civilian personnel management and payments, transportation, health, and
child care. Congressional defense committees have expressed concerns about
the extent to which funds that directly affect readiness have been reduced
to pay for other O&M expenses.

To request funding from Congress, DOD divides its services' O&M budget
requests into four budget activities: (1) operating forces, (2)
mobilization, (3) training and recruiting, and (4) administration and
servicewide activities. DOD further divides its budget activities into
various activity groups, then again into subactivity groups. The number and
names of the activity and subactivity groups differ with each service.
Although Congress reviews DOD's budget proposal for the services and
Defense-wide activities at the subactivity level, it makes appropriations at
the aggregated account level-that is, for the Army, the Navy, the Marine
Corps, the Air Force, and the Defense-wide O&M accounts. However, to
indicate how it expects O&M funds to be spent, Congress designates in its
conference report on annual appropriations acts, specific amounts for each
subactivity group, Defense-wide agency, field activity, and program.

In addition, Congress has directed DOD to provide semiannual reports on
transfers from certain high-priority readiness-related subactivities within
the Operating Forces budget activity. Included in the reports are data on
the funds moved into or out of these subactivities, as well as explanations
of the movements.

SUMMARY

From fiscal year 1994 through 1998, DOD changed funding amounts for 245 O&M
subactivities by almost $43 billion compared with the amounts Congress
initially designated for them. These changes included both decreases and
increases to the amounts designated by Congress. DOD moved almost $16
billion out of and

$27 billion into O&M subactivities. The changes made to these O&M
subactivities accounted for about 12 percent of the total amounts initially
appropriated for O&M during the period. Over half of the $43 billion was
moved out of or into

($9 billion out of and $13.5 billion into) 81 O&M subactivities DOD
considers directly related to readiness, while $10 billion was moved out of
or into

($5.5 billion out of and $4.4 billion into) 28 O&M subactivities that
Congress considers high-priority readiness-related.

Every year from fiscal year 1994 through 1998 DOD obligated a different
amount than Congress designated for the same 63 subactivities. (See appendix
I,

tables 2 and 3 for details.) In total, DOD moved about $19 billion out of or
into these subactivities ($6.2 billion was moved out and $12.6 billion was
moved in). About $4.3 billion was moved out of and about $6.7 billion was
moved into

30 subactivities DOD considers directly related to readiness for a total of
about $11 billion. The 30 subactivities include 11 of the high-priority
readiness-related subactivities. Further, of the 11 subactivities, DOD moved
$3.2 billion out of 6 subactivities Congress considers high-priority
readiness-related (e.g., Army divisions, Navy ship depot maintenance, Air
Force primary combat forces), while moving $2.3 billion into 5 others (e.g.,
Army base operations for land forces, Navy mission and other flight
operations, Marine Corps operational forces).

In recent years DOD has improved the information it gives to Congress on the
movement of O&M funds. But this budget information is still incomplete and
does not provide adequate details of where funds are moved and why. Changes
in the way DOD presents budget justification materials, as well as
congressionally mandated changes in the level of details to be provided by
DOD, have improved DOD's budget information available to Congress. In
particular, the high-priority readiness-related transfer reports offer the
most information available on why DOD moves funds among selected
subactivities. However, the statutory requirement for these reports will
expire when DOD submits its fiscal year 2000 report. In addition, from
fiscal years 1994 through 1998, little information was available to Congress
about what DOD terms "fact-of-life" movements, which DOD says are made to
reflect changes that occur between the time DOD formulates its budget
request and the time Congress passes the appropriation act. DOD reported
over $1 billion in fact-of-life adjustments to its fiscal year 1999 O&M
appropriations. DOD's financial management regulation does not define these
adjustments and provides no guidance on when it is appropriate to make such
adjustments, who should approve them, or how much funding can be moved.
Without any such guidance governing these movements, DOD and Congress cannot
evaluate whether the movements of funds are appropriate.

To enhance congressional oversight, we recommended in our February 2000
report that DOD take actions to further improve the visibility and
accountability of funds moved within the O&M appropriations. DOD agreed with
our recommendation to provide more guidance on the fact-of-life adjustments.
DOD did not agree with our recommendation to continue to provide Congress
reports on transfers of funds in high-priority readiness-related
subactivities because DOD believes the information is available in several
other reports. However, because we do not believe these reports collectively
provide the same information, we changed our recommendation to a matter for
congressional consideration.

BACKGROUND

DOD has considerable flexibility in using O&M funds and can move them in
several ways and at different times during the fiscal year. As shown in
figure 1, DOD can "adjust" funding after an initial appropriation is made
through

   * adjustments directed by Congress in conference reports on appropriation
     acts and
   * 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 it makes these fund movements, DOD establishes a new "adjusted"

baseline budget. It can then move funds among subactivities through

   * reprogramming actions, to move funds from one budget activity to
     another within the same account;
   * statutorily authorized transfers, to move funds from other Defense
     appropriations (such as Procurement);
   * transfers from congressionally established, centrally managed accounts
     (such as for overseas contingencies);
   * supplemental appropriations that Congress provides for additional
     expenses during the year; and
   * rescissions, with which Congress cancels appropriated funds.

aIn the conference report on the appropriations act, conferees 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).

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

DOD OBLIGATIONS DIFFERED SUBSTANTIALLY

FROM INITIAL CONGRESSIONAL DESIGNATIONS

We compared the initial congressional designations for O&M subactivities as
identified in conference reports on Defense appropriation acts with DOD's
reported obligations for the same subactivities and found that from fiscal
year 1994 through 1998, DOD moved almost $43 billion out of or into 245 O&M
budget subactivities after the conferees made initial funding designations.
This amount represents about 12 percent of all the services' and
Defense-wide agencies' O&M appropriations over the 5-year period and
includes all fact-of-life adjustments, reprogramming actions, statutorily
authorized transfers, and supplemental appropriations (see table 1).

Table 1: Differences Between Initial Congressional Designations and DOD's
Reported Obligations, by O&M Budget Activity, Fiscal Years 1994-98 a

Constant 1999 dollars in millions
                                     Training    Administration
 O&M account  Operating Mobilization and         and            Total
              forces                                            difference
                                     recruiting  servicewide

 Army         $9,873.8  $284.0       $1,248.4    $4,515.5       $15,921.7
              b
 Navy         6,641.7   338.9        540.2       3,392.7        10,913.5
 Marine Corps 603.6     c            251.5       152.8          1,007.9
 Air Force    5,023.4   2,248.7      874.1       4,026.9        12,173.1
 Defense-wide 383.4     67.4         19.6        2,341.8        2,812.2
 Total        $22,525.9 $2,939.0     $2,933.8    $14,429.7      $42,828.4

a Initial congressional designations for each O&M subactivity as reported in
annual conference reports on Defense appropriations acts for fiscal years
1994-98.

bAmount does not include Army data for fiscal year 1996, when the Army
restructured its Operating Forces budget activity.

c The Marine Corps does not have a separate budget activity for
Mobilization.

Amounts may not total due to rounding.

Source: Our analysis, based on Defense O&M budget data.

These changes included both decreases (about $16 billion) and increases
(about $27 billion) to initial congressional designations. In addition,

   * over half of the $43 billion was moved out of or into ($9 billion out
     of and $13.5 billion into) 81 O&M subactivities DOD considers directly
     related to readiness, and
   * about $10 billion was moved out of or into ($5.5 billion out of and
     $4.4 billion into) 28 O&M subactivities that Congress considers
     high-priority readiness-related.

Our recent report contains more detailed information on the differences
between initial congressional designations and DOD obligations, by
individual O&M subactivity and Defense-wide agency, from fiscal year 1994
through 1998.

DOD CONSISTENTLY MOVED O&M FUNDS

INTO AND OUT OF CERTAIN SUBACTIVITIES

We identified those O&M subactivities that were obligated differently than
those initially congressionally designated in each of the 5 years in our
study period (1994-98) and found that DOD consistently obligated either more
or less funds for the same 63 O&M subactivities. Specifically, DOD moved a
total of about

$19 billion--$6.2 billion out of and $12.6 billion into-these 63
subactivities. Further,

   * DOD moved about $4.3 billion out of and about $6.7 billion into 30
     subactivities DOD considers directly related to readiness, and
   * DOD moved about $3.2 billion out of six subactivities Congress
     considers high-priority readiness-related (e.g., Army divisions, Navy
     ship depot maintenance, Air Force primary combat forces), while moving
     $2.3 billion into five others (e.g., Army base operations for land
     forces, Navy mission and other flight operations, Marine Corps
     operational forces).

Again, our recent report presents more detailed data on each of these
subactivities.

CONGRESS HAS VISIBILITY OVER

SOME MOVEMENTS OF O&M FUNDS

The information DOD provides to Congress on the movement of funds among O&M
subactivities has improved, but additional improvements are needed to
enhance congressional oversight of these movements and to ensure DOD can
account for its use of O&M funds. Currently available budget information is
incomplete and does not provide adequate details of where or why funds are
moved. Our report discusses the following two examples of how DOD could
improve the visibility and accountability of O&M fund movements.

   * Congress has directed DOD to provide semiannual reports on transfers
     from certain high-priority readiness-related subactivities within the
     services' Operating Forces budget activity. Included in the reports are
     data on the funds moved into or out of these subactivities, as well as
     explanations of the movements. However, the statutory requirement for
     these reports will expire soon, and when it does, DOD does not plan to
     continue providing these reports. DOD believes that the information is
     redundant and is available in several other reports DOD provides to
     Congress. We believe, however, that the high-priority readiness-related
     transfer reports offer the most information available on why DOD moves
     funds among selected subactivities. In view of the consistency with
     which DOD has reported obligations that are different from initial
     congressional designations for some readiness-related O&M
     subactivities, we noted in our February 2000 report that Congress may
     wish to consider extending the legislative requirement that DOD
     continue to provide the high-priority readiness-related transfer
     reports.

   * DOD does not have any formal guidance stating when it is appropriate to
     make fact-of-life budget adjustments, which totaled over $1 billion in
     fiscal year 1999 alone. We reported that little information was
     available to Congress about these adjustments from fiscal year 1994
     through 1998. DOD's financial management regulation does not define
     these adjustments and provides no guidance on when it is appropriate to
     make them, who should approve them, or how much funding can be moved.
     Without such guidance, DOD and Congress cannot determine whether
     adjustments are appropriate. We have recommended that in order to
     improve the accountability of these fund movements, DOD develop such
     guidance in consultation with the House and Senate Committees on
     Appropriations. DOD has agreed with our recommendation.

This concludes our formal statement. If you or other members of this
subcommittee have any questions, we will be pleased to answer them.

Contacts and Staff Acknowledgments

For future contacts regarding this statement, please contact Norman J.
Rabkin on (202) 512-5140. Individuals making key contributions to this
statement included Brenda Farrell and Laura Talbott.

Appendix I

O&M Subactivities and Agencies for Which DOD Consistently Obligated Less or
More Funds Than Congress Initially Designated, Fiscal Years 1994-98

Every year from fiscal year 1994 through 1998, DOD obligated a different
amount than Congress designated for the same 63 subactivities. Table 2 shows
the O&M subactivities and Defense-wide agencies that consistently obligated
less funding than Congress initially designated. Table 3 shows the O&M
subactivities and Defense-wide agencies that consistently obligated more
funding than Congress initially designated.

Table 2: O&M Subactivities and Defense-Wide Agencies for Which DOD
Consistently Obligated Less Funds Than Congress Initially Designated, Fiscal
Years 1994-98

Constant 1999 dollars in millions

 O&M subactivity     5-year total                   Difference  Percentage
                                                                difference

                     Congress' initial DOD's
                     designationa
                                       Obligation
 Army
 Divisionsc,d        $2,515.7          $1,935.8     $579.9      23.1
 Claims              917.8             688.5        229.3       25.0
 Corps combat
 forcesc,d           720.9             500.3        220.6       30.6
 Servicewide
 communications      3,808.6           3,629.4      179.2       4.7
 Land forces depot
 maintenancec,d      1,649.2           1,486.2      163.0       9.9
 Echelon above corps
 forcesc,d           906.3             827.2        79.1        8.7
 Civilian education
 and training        443.3             420.5        22.8        5.1
 One station unit
 training            84.2              66.6         17.6        20.9

                     $ =SUM(ABOVE) \#  $            $
 Subtotal            "#,##0.0"         =SUM(ABOVE)  =SUM(ABOVE)
                     11,046.0          \# "#,##0.0" \# "#,##0.0"
                                       9,554.5      1,491.5
 Navy
 Ship depot
 maintenancec        11,611.9          10,393.6     1,218.3     10.5
 Weapons
 maintenanceb        2,335.0           2,088.8      246.2       10.5
 Air systems support 1,467.8           1,310.8      157.0       10.7
 Flight training     1,630.5           1,509.4      121.1       7.4
 Fleet ballistic
 missileb            4,180.4           4,102.4      78.0        1.9
 Cruise missileb     568.0             529.0        39.0        6.9
 Air operations and
 safety supportb     454.4             419.6        34.8        7.6
 Space and
 electronic warfare  385.9             353.5        32.4        8.4
 systems
 Coast Guard support 104.3             92.9         11.4        10.9
 Electronic warfareb 41.3              34.1         7.2         17.3
 Junior reserve
 officer training    119.2             113.5        5.7         4.8
 corps
 Fleet hospital
 program             95.0              92.4         2.6         2.7
 Depot operations
 supportb            6.3               5.7          0.6         10.0

                     $ =SUM(ABOVE) \#  $            $
 Subtotal            "#,##0.0"         =SUM(ABOVE)  =SUM(ABOVE)
                     23,000.0          \# "#,##0.0" \# "#,##0.0"
                                       21,045.7     1,954.3
 Marine Corps
 Base support for
 accession training  284.0             233.4        50.6        17.8
 Maritime
 prepositioningb     420.9             406.8        14.1        3.3
 Base support for
 recruiting and
 other training and  43.6              30.0         13.6        31.1

 education

                                       =SUM(ABOVE)  $
 Subtotal            =SUM(ABOVE) \#    \# "#,##0.0" =SUM(ABOVE)
                     "#,##0.0" $748.5               \# "#,##0.0"
                                       $670.2
                                                    78.3
 Air Force
 Primary combat
 forcesc             13,448.3          12,459.9     988.4       7.3
 Logistics
 operations          4,574.9           3,978.1      596.8       13.0
 Space control
 systemsb            1,874.2           1,551.8      322.4       17.2
 Base support for
 other training      2,303.6           2,066.9      236.7       10.3
 Global C3I and
 early warningb      4,053.5           3,914.3      139.2       3.4
 Launch vehiclesb    596.5             527.7        68.8        11.5
 Satellite systemsb  231.5             165.9        65.6        28.3
 Arms control        168.9             131.5        37.4        22.2
 Other personnel
 support             178.3             159.5        18.8        10.5

                     $ =SUM(ABOVE) \#  $            $
 Subtotal            "#,##0.0"         =SUM(ABOVE)  =SUM(ABOVE)
                     27,429.7          \# "#,##0.0" \# "#,##0.0"
                                       24,955.6     2,474.1
 Defense-wide
 On-Site Inspection
 Agencye             464.5             352.7        111.8       24.1
 Joint Chiefs of
 Staff               2,807.3           2,761.3      46.0        1.6
 Defense Contract
 Audit Agency        1,754.7           1,733.5      21.2        1.2
                                       $            $
 Subtotal            $ =SUM(ABOVE) \#  =SUM(ABOVE)  =SUM(ABOVE)
                     "#,##0.0" 5,026.5 \# "#,##0.0" \# "#,##0.0"
                                       4,847.5      179.0
 Total               $67,250.7         $61,073.5    $6,177.2    9.2

aInitial congressional designations for each O&M subactivity as reported in
DOD's budget estimates to Congress.

bO&M subactivities located in the Operating Forces budget activity that DOD
considers to be most directly related to readiness.

cO&M subactivities located in the Operating Forces budget activity that DOD
considers to be most directly related to readiness for which Congress also
identified as high-priority readiness-related for reporting fiscal year 1998
transfers.

dIncludes only fiscal year 1997 and 1998 because the Army restructured its
Operating Forces budget activity in fiscal year 1997 and did not maintain a
link between the old and the new budget structure. Four subactivities in the
Army's Operating Forces budget activity in this table were affected by this
change.

eOn-Site Inspection Agency's resources were transferred to the newly
established Defense Threat Reduction and Treaty Compliance Agency as of
October 1, 1998.

Amounts may not total due to rounding.

Source: Our analysis, based on Defense O&M budget data.

Appendix I

Table 3: O&M Subactivities and Defense-Wide Agencies for Which DOD
Consistently Obligated More Funds Than Congress Initially Designated, Fiscal
Years 1994-98

Constant 1999 dollars in millions

 O&M subactivity    5-year total                    Difference  Percentage
                                                                difference
                    Congress'        DOD's
                    initial
                    designationa     obligation
 Army
 Miscellaneous
 activitiesb,d      $216.0          $3,140.5        $2,924.5    1353.7
 Base operations
 support for land
 forces             5,198.8         5,620.4         421.6       8.1
 readinessc,d
 Logistic support
 activities         1,667.0         1,984.4         317.4       19.0
 Land forces
 operations         1,325.8         1,528.8         203.0       15.3
 supportc,d
 Unified
 commandsb,d        119.6           225.5           105.9       88.6
 Other personnel
 support            890.3           995.6           105.3       11.8
 Management and
 operational        291.7           384.2           92.5        31.7
 headquartersb,d

                    $ =SUM(ABOVE)   $ =SUM(ABOVE)   $
 Subtotal           \# "#,##0.0"    \# "#,##0.0"    =SUM(ABOVE)
                    9,709.2         13,879.4        \# "#,##0.0"
                                                    4,170.2
 Navy
 Planning,
 engineering, and   1,398.7         3,056.2         1,657.5     118.5
 design
 Mission and other
 flight operationsc 10,187.7        11,063.1        875.4       8.6
 Mission and other
 ship operationsc   10,302.7        10,958.9        656.2       6.4
 Combat support
 forcesb            1,748.8         2,146.9         398.1       22.8
 Space systems and
 surveillanceb      809.0           1,039.4         230.4       28.5
 Acquisition and
 program management 2,239.0         2,370.7         131.7       5.9
 Warfare tacticsb   728.6           806.4           77.8        10.7
 International
 headquarters and   38.8            45.7            6.9         17.6
 agencies

                    $ =SUM(ABOVE)   $ =SUM(ABOVE)   $
 Subtotal           \# "#,##0.0"    \# "#,##0.0"    =SUM(ABOVE)
                    27,453.3        31,487.3        \# "#,##0.0"
                                                    4,034.0
 Marine Corps
 Operational
 forcesc            1,810.8         1,944.5         133.7       7.4
 Recruiting and
 advertising        347.5           374.8           27.3        7.9
 Recruit training   38.3            43.6            5.3         14.1
                    $ =SUM(ABOVE)                   =SUM(ABOVE)
 Subtotal           \# "#,##0.0"    $2,362.9        \# "#,##0.0"
                    2,196.6                         $166.3
 Air Force
 Other servicewide
 activities         2,760.1         4,935.4         2,175.3     78.8
 Base support for
 logistics          3,553.6         3,894.1         340.5       9.6
 operations
 Management and
 operational        572.1           911.8           339.7       59.4
 headquartersb
 Other combat
 operations         1,159.6         1,417.4         257.8       22.2
 supportb
 Administration     543.7           757.0           213.3       39.3
 Training support   324.0           400.1           76.1        23.5

                    $ =SUM(ABOVE)   $ =SUM(ABOVE)   $
 Subtotal           \# "#,##0.0"    \# "#,##0.0"    =SUM(ABOVE)
                    8,913.1         12,315.8        \# "#,##0.0"
                                                    3,402.7

 Defense-wide
 Classified and
 communications agenciese     20,643.4    21,146.9     503.5       2.4
 U.S. Special Operations
 Command                      5,514.8     5,795.1      280.3       5.1
 Defense Security Service     1,012.5     1,035.8      23.3        2.3
                              $           $            =SUM(ABOVE)
 Subtotal                     =SUM(ABOVE) =SUM(ABOVE)  \#
                              \# "#,##0.0"\# "#,##0.0" "#,##0.0"
                              27,170.7    27,977.8     $807.1
 Total                        $75,442.9   $88,023.2    $12,580.3   16.7

aInitial congressional designations for each O&M subactivity as reported in
DOD's budget estimates to Congress.

bO&M subactivities located in the Operating Forces budget activity that DOD
considers to be most directly related to readiness.

cO&M subactivities located in the Operating Forces budget activity that DOD
considers to be most directly related to readiness for which Congress also
identified as high-priority readiness-related for reporting fiscal year 1998
transfers.

dIncludes only fiscal year 1997 and 1998 because the Army restructured its
Operating Forces budget activity in fiscal year 1997 and did not maintain a
link between the old and the new budget structure. Five subactivities in the
Army's Operating Forces budget activity in this table were affected by this
change.

eIncludes the classified and communications agencies, the Defense
Information Systems Agency, and the Defense Mapping Agency.

Amounts may not total due to rounding.

Source: Our analysis, based on Defense O&M budget data.

(702045)

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