This is the accessible text file for GAO report number GAO-08-853R 
entitled 'Global War on Terrorism: Reported Obligations for the 
Department of Defense' which was released on June 13, 2008.

This text file was formatted by the U.S. Government Accountability 
Office (GAO) to be accessible to users with visual impairments, as part 
of a longer term project to improve GAO products' accessibility. Every 
attempt has been made to maintain the structural and data integrity of 
the original printed product. Accessibility features, such as text 
descriptions of tables, consecutively numbered footnotes placed at the 
end of the file, and the text of agency comment letters, are provided 
but may not exactly duplicate the presentation or format of the printed 
version. The portable document format (PDF) file is an exact electronic 
replica of the printed version. We welcome your feedback. Please E-mail 
your comments regarding the contents or accessibility features of this 
document to Webmaster@gao.gov. 

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. It may be reproduced and distributed 
in its entirety without further permission from GAO. Because this work 
may contain copyrighted images or other material, permission from the 
copyright holder may be necessary if you wish to reproduce this 
material separately. 

GAO-08-853R: 

June 13, 2008: 

Congressional Committees: 

Subject: Global War on Terrorism: Reported Obligations for the 
Department of Defense: 

Since 2001, Congress has provided the Department of Defense (DOD) with 
hundreds of billions of dollars in supplemental and annual 
appropriations for military operations in support of the Global War on 
Terrorism (GWOT).[Footnote 1] DOD's reported annual obligations 
[Footnote 2] for GWOT have shown a steady increase from about $0.2 
billion in fiscal year 2001 to about $139.8 billion in fiscal year 
2007. To continue GWOT operations, the President requested $189.3 
billion in appropriations for DOD in fiscal year 2008. As of May 2008, 
Congress has provided DOD with about $86.8 billion of this request, 
including $16.8 billion for Mine Resistant Ambush Protected vehicles. 
Congress has not finalized action on the remaining $102.5 billion. In 
addition, the President also requested about $66 billion in 
appropriations for DOD in fiscal year 2009 for GWOT, which was 
submitted along with DOD's annual budget request. The United States' 
commitments to GWOT will likely involve the continued investment of 
significant resources, requiring decision makers to consider difficult 
trade-offs as the nation faces an increasing long-range fiscal 
challenge. The magnitude of future costs will depend on several direct 
and indirect cost variables and, in some cases, decisions that have not 
yet been made. DOD's future costs will likely be affected by the pace 
and duration of operations, the types of facilities needed to support 
troops overseas, redeployment plans, and the amount of equipment to be 
repaired or replaced.[Footnote 3] 

DOD compiles and reports monthly and cumulative incremental obligations 
incurred to support GWOT in a monthly Supplemental and Cost of War 
Execution Report. DOD leadership uses this report, along with other 
information, to advise Congress on the costs of the war and to 
formulate future GWOT budget requests. DOD reports these obligations by 
appropriation, contingency operation,[Footnote 4] and military service 
or defense agency. The monthly cost reports are typically compiled 
within the 45 days after the end of the reporting month in which the 
obligations are incurred.[Footnote 5] DOD has prepared monthly reports 
on the obligations incurred for its involvement in GWOT since fiscal 
year 2001. 

Section 1221 of the National Defense Authorization Act for Fiscal Year 
2006[Footnote 6] requires us to submit quarterly updates to Congress on 
the costs of Operation Iraqi Freedom and Operation Enduring Freedom 
based on DOD's monthly Supplemental and Cost of War Execution Reports. 
This report, which responds to this requirement, contains our analysis 
of DOD's reported obligations for military operations in support of 
GWOT through March 2008. Specifically, we assessed (1) DOD's cumulative 
appropriations and reported obligations for military operations in 
support of GWOT and (2) DOD's fiscal year 2008 reported obligations 
through March 2008, the latest data available for GWOT by military 
service and appropriation account. 

Over the years, we have conducted a series of reviews examining funding 
and reported obligations for military operations in support of GWOT. 
Our prior work[Footnote 7] has found the data in DOD's monthly 
Supplemental and Cost of War Execution Report to be of questionable 
reliability. Consequently, we are unable to ensure that DOD's reported 
obligations for GWOT are complete, reliable, and accurate, and they 
therefore should be considered approximations. Based on this work, we 
have made a number of recommendations to the Secretary of Defense 
intended to improve the transparency and reliability of DOD's GWOT 
obligations. For example we have recommended that DOD (1) revise the 
cost reporting guidance so that large amounts of reported obligations 
are not shown in "other" miscellaneous categories and (2) take steps to 
ensure that reported GWOT obligations are reliable. In response, DOD is 
taking steps to improve GWOT cost reporting. For example, DOD has 
modified its guidance to more clearly define some of the cost 
categories and is taking additional steps to strengthen the oversight 
and program management of the cost reporting. Specifically, DOD has 
taken steps to improve transparency by requiring components to analyze 
variances in reported obligations and to disclose reasons for 
significant changes, and to affirm that monthly reported GWOT 
obligations provide a fair representation of ongoing activities. 
Furthermore, in February 2007 DOD established a Senior Steering Group 
including representatives from DOD, the Defense Finance and Accounting 
Service (DFAS), and the military services in an effort to standardize 
and improve the GWOT cost-reporting process and to increase management 
attention to the process. DOD established a GWOT Cost-of-War Project 
Management Office to monitor work performed by auditing agencies and to 
report possible solutions and improvements to the Senior Steering 
Group. DOD has started several initiatives to improve credibility, 
transparency, and timeliness. One of the initiatives is a quarterly 
validation of GWOT obligation transactions at each of the DOD 
components with the goal of having a sampling of all types of costs 
validated by the end of the fiscal year. Until all DOD efforts are more 
fully implemented, it is too soon to know the extent to which these 
changes will improve the reliability of DOD's cost reporting. 

While establishing sound cost reporting procedures and oversight is 
clearly important, the reliability of the cost-of-war reports also 
depends on the quality of DOD's accounting data. Factors contributing 
to DOD's challenges in reporting reliable cost data include long- 
standing deficiencies in DOD's financial management systems. We are 
aware that DOD has efforts under way to improve these systems as well. 

We have also made recommendations to improve transparency and fiscal 
responsibility related to funding the war on terrorism, and to permit 
Congress and the administration to establish priorities and make trade- 
offs among those priorities in defense funding. Specifically, we 
recommended that DOD (1) issue guidance defining what constitutes the 
"longer war against terror," identify what costs are related to that 
longer war, and build these costs into the base defense budget; (2) 
identify incremental costs of the ongoing GWOT operations that can be 
moved into the base budget; and (3) in consultation with the Office of 
Management and Budget, consider limiting emergency funding requests to 
truly unforeseen or sudden events.[Footnote 8] We will continue to 
review DOD's efforts to implement these recommendations as part of our 
follow-up work on GWOT. 

Scope and Methodology: 

To conduct our work, we analyzed applicable annual and supplemental 
appropriations from fiscal year 2001 through fiscal year 2007 and for 
fiscal year 2008 through December 2007, the latest GWOT appropriations 
provided. We also analyzed DOD's monthly Supplemental and Cost of War 
Execution Reports from September 2001 through March 2008, the latest 
data available. Specifically, we identified appropriated amounts 
intended for GWOT and reported GWOT obligations for each operation, 
military service, and appropriation account. 

We are continuing to review DOD's fiscal year 2008 funding and reported 
obligations, including the reliability of the reported obligations. We 
are also reviewing the processes, including models and other tools, 
used to estimate GWOT funding requirements. We plan to report on this 
work later this year. 

We conducted this performance audit from May 2008 to June 2008 in 
accordance with generally accepted government auditing standards. Those 
standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe that 
the evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives. 

Summary: 

From fiscal year 2001 through fiscal year 2007, and for the first 
quarter of fiscal year 2008 through December 2007, Congress has 
provided DOD with a total of about $635.9 billion for its efforts in 
support of GWOT.[Footnote 9] DOD has reported obligations of about $562 
billion for military operations in support of the war from fiscal year 
2001 through fiscal year 2007 and for the second quarter of fiscal year 
2008 through March 2008. The $73.9 billion difference[Footnote 10] 
between DOD's GWOT appropriations and reported obligations can 
generally be attributed to certain fiscal year 2008 appropriations and 
multiyear funding for procurement; military construction; and research, 
development, test, and evaluation from previous GWOT-related 
appropriations[Footnote 11] that have yet to be obligated and 
obligations for classified and other activities, which are not reported 
in DOD's cost-of-war reports. As part of our ongoing work, we are 
reviewing DOD's rationale for reporting its GWOT related obligations. 

Figure 1 shows the increase in DOD's cumulative reported GWOT 
obligations and cumulative GWOT appropriations from fiscal year 2001 
through fiscal year 2007 and through the second quarter of fiscal year 
2008 (October through March 2008). 

Figure 1: DOD's Cumulative Reported GWOT Obligations and Cumulative 
GWOT Appropriations for Fiscal Years 2001 through 2007 and through the 
Second Quarter of Fiscal Year 2008 (October through March 2008): 

[See PDF for image] 

This figure is a combination vertical bar and line graph depicting the 
following data: 

Fiscal year: 2001; 
Cumulative GWOT appropriations: $16.6 billion; 
Cumulative reported GWOT obligations: $0.2 billion. 

Fiscal year: 2002; 
Cumulative GWOT appropriations: $31 billion; 
Cumulative reported GWOT obligations: $29.4 billion. 

Fiscal year: 2003; 
Cumulative GWOT appropriations: $99.9 billion; 
Cumulative reported GWOT obligations: $98 billion. 

Fiscal year: 2004; 
Cumulative GWOT appropriations: $165.8 billion; 
Cumulative reported GWOT obligations: $169.2 billion. 

Fiscal year: 2005; 
Cumulative GWOT appropriations: $266.7 billion; 
Cumulative reported GWOT obligations: $254 billion. 

Fiscal year: 2006; 
Cumulative GWOT appropriations: $382.7 billion; 
Cumulative reported GWOT obligations: $#54.5 billion. 

Fiscal year: 2007; 
Cumulative GWOT appropriations: $549.1 billion; 
Cumulative reported GWOT obligations: $492.2 billion. 

Fiscal year: 2008 (October-March); 
Cumulative GWOT appropriations: $635.9 billion; 
Cumulative reported GWOT obligations: $562 billion. 

Source: GAO analysis of DOD and appropriations data. 

Notes: Reported GWOT obligations include Operation Noble Eagle, 
Operation Enduring Freedom, and Operation Iraqi Freedom, and generally 
reflect costs reported in DOD's cost-of-war reports. However, the 
fiscal year 2002 and 2003 figures include about $20.1 billion that 
according to DOD officials was war related but not reported in DOD's 
cost-of-war reports. GAO has assessed the reliability of DOD's 
obligation data and found significant problems, such that these data 
may not accurately reflect the true dollar value of GWOT obligations. 

[End of figure] 

Of DOD's total cumulative reported obligations for GWOT through March 
2008 (about $562 billion), about $435.1 billion is for operations in 
and around Iraq as part of Operation Iraqi Freedom, and about $98.9 
billion is for operations in Afghanistan, the Horn of Africa, the 
Philippines, and elsewhere as part of Operation Enduring Freedom. The 
remaining about $28 billion is for operations in defense of the 
homeland as part of Operation Noble Eagle. 

As figure 2 shows, DOD's reported obligations for Operation Iraqi 
Freedom have consistently increased each fiscal year since operations 
began. The increases in reported obligations for Operation Iraqi 
Freedom are in part due to continued costs for military personnel, such 
as military pay and allowances for mobilized reservists, and for rising 
operation and maintenance expenses, such as higher contract costs for 
housing, food, and services and higher fuel costs. In addition, the 
need to repair and replace equipment because of the harsh combat and 
environmental conditions in theater and the ongoing costs associated 
with the surge strategy announced in January 2007, which provided for 
the deployment of additional troops, have further increased obligations 
for Operation Iraqi Freedom. In contrast, DOD's reported obligations 
for Operation Noble Eagle have consistently decreased since fiscal year 
2003, largely because of the completion of repairs to the Pentagon and 
upgrades in security at military installations that were onetime costs, 
as well as a reduction in combat air patrols and in the number of 
reserve personnel guarding government installations. Reported 
obligations for Operation Enduring Freedom have ranged from $10.3 
billion to $20.1 billion each fiscal year since 2003. Recent increases 
in reported obligations for Operation Enduring Freedom are in part 
caused by higher troop levels in Afghanistan, the costs associated with 
training Afghan security forces, and the need to repair and replace 
equipment after several years of ongoing operations. 

Figure 2: DOD's Reported GWOT Obligations for Fiscal Years 2001 through 
2007 by Operation: 

[See PDF for image] 

This figure is a stacked line graph depicting the following data: 

Reported GWOT obligation per fiscal year: 
2001: $0.2 billion; 
2002: $29.1 billion; 
2003: $68.6 billion; 
2004: $71.3 billion; 
2005: $84.8 billion; 
2006: $98.4 billion; 
2007: $139.8 billion; 
Total, Operation Noble Eagle: $27.9 billion; 
Total, Operation Enduring Freedom: $86.2 billion. 
Total, Operation Iraqi Freedom: $378.1 billion. 

Source: GAO analysis of DOD data. 

Notes: Operation Iraqi Freedom began in fiscal year 2003; therefore no 
obligations were reported in fiscal years 2001 and 2002 for this 
operation. Reported GWOT obligations generally reflect costs reported 
in DOD's cost-of-war reports. However, the fiscal year 2002 and 2003 
figures include about $20.1 billion that according to DOD officials was 
war related but not reported in DOD's cost-of-war reports. GAO has 
assessed the reliability of DOD's obligation data and found significant 
problems, such that these data may not accurately reflect the true 
dollar value of GWOT obligations. 

[End of figure] 

In fiscal year 2008, through March 2008, DOD's total reported 
obligations of about $69.8 billion are about half of the total amount 
of obligations it reported for all of fiscal year 2007. Reported 
obligations for Operation Iraqi Freedom continue to account for the 
largest portion of total reported GWOT obligations by operation--about 
$57 billion. In contrast, reported obligations associated with 
Operation Enduring Freedom total about $12.7 billion, and reported 
obligations associated with Operation Noble Eagle total about $89.3 
million. 

The Army accounts for the largest portion of reported obligations for 
fiscal year 2008 through March 2008--about $51.7 billion, eight times 
higher than the almost $6.3 billion in obligations reported for the Air 
Force, the military service with the next greatest reported amount. 
Among appropriation accounts, operation and maintenance, which includes 
items such as support for housing, food, and services; the repair of 
equipment; and transportation to move people, supplies, and equipment, 
accounts for the largest reported obligations--about $38.4 billion. 
Reported obligations for procurement account for about 21 percent of 
reported obligations or about $14.5 billion. Of the $43.6 billion 
provided to DOD for procurement in fiscal year 2007, approximately 22 
percent, or $9.4 billion, has yet to be obligated and remains available 
in fiscal year 2008.[Footnote 12] Figure 3 shows DOD's reported 
obligations for fiscal year 2008 through March 2008 by DOD component 
and appropriation account. 

Figure 3: DOD's Reported GWOT Obligations for Fiscal Year 2008 through 
March 2008, by DOD Component and Appropriation Account: 

[See PDF for image] 

This figure contains two pie-charts depicting the following data: 

By DOD component: 
Army: 74.1% ($51.7 billion); 
Air Force: 9% ($6.3 billion); 
Marine Corps: 6.5% ($4.5 billion); 
Navy: 6.5% ($4.5 billion); 
Other DOD components: 4% ($2.8 billion). 

By appropriation account: 
Operation and Maintenance: 55% ($38.4 billion); 
Procurement: 20.8% ($14.5 billion); 
Military personnel: 12.6% ($8.8 billion); 
Other: 10.2% ($7.1 billion); 
Military construction: 0.8% ($0.5 billion); 
Research, development, test, and evaluation: 0.6% ($0.4 billion); 
Working Capital Fund: 0.2% ($0.1 billion). 

Overall total: $69.8 billion. 

Source: GAO analysis of DOD data. 

Notes: Obligation figures may not add to $69.8 billion because of 
rounding. The "Other" portion of the appropriation account pie chart 
includes programs designed to reimburse coalition countries for 
logistical and military support, to train and equip the Afghan National 
Army and Armed Forces of Iraq and to execute the Commanders Emergency 
Response Program. GAO has assessed the reliability of DOD's obligation 
data and found significant problems, such that these data may not 
accurately reflect the true dollar value of GWOT obligations. 

[End of figure] 

Agency Comments and Our Evaluation: 

We requested comments from DOD, but none were provided. 

We are sending copies of this report to interested congressional 
committees; the Secretary of Defense; the Under Secretary of Defense 
(Comptroller); and the Director, Office of Management and Budget. We 
will also make copies available to others upon request. In addition, 
this report will be available at no charge on the GAO Web site at 
[hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-9619 or pickups@gao.gov. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. Key contributors to this report are 
listed in the enclosure. 

Signed by: 

Sharon L. Pickup:
Director, Defense Capabilities and Management: 

Enclosure: 

List of Committees: 

The Honorable Carl Levin:
Chairman:
The Honorable John McCain:
Ranking Member:
Committee on Armed Services:
United States Senate: 

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

The Honorable Ike Skelton:
Chairman:
The Honorable Duncan L. Hunter:
Ranking Member:
Committee on Armed Services:
House of Representatives: 

The Honorable John P. Murtha:
Chairman:
The Honorable C. W. Bill Young:
Ranking Member:
Subcommittee on Defense:
Committee on Appropriations:
House of Representatives: 

[End of section] 

GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Sharon Pickup, (202) 512-9619 or pickups@gao.gov: 

Acknowledgments: 

In addition to the contact named above, Ann Borseth, Assistant 
Director; Richard Geiger; Linda Keefer; Ron La Due Lake; Deanna Laufer; 
Lonnie McAllister; and Eric Petersen made key contributions to this 
report. 

[End of section] 

Footnotes: 

[1] After the terrorist attacks of September 11, 2001, the President 
announced a Global War on Terrorism, requiring the collective 
instruments of the entire federal government to counter the threat of 
terrorism. Ongoing military and diplomatic operations overseas, 
especially in Iraq and Afghanistan, constitute a key part of GWOT. 
These operations involve a wide variety of activities, such as 
combating insurgents, training the military forces of other nations, 
and conducting small-scale reconstruction and humanitarian relief 
projects. 

[2] According to Department of Defense, Financial Management 
Regulation, 7000.14-R, vol. 1, "Definitions" (Dec. 2001), xvii, 
obligations are incurred through actions such as orders placed, 
contracts awarded, services received, or similar transactions made by 
federal agencies during a given period that will require payments 
during the same or a future period. 

[3] For more information see GAO, Securing, Stabilizing, and Rebuilding 
Iraq: Key Issues for Congressional Oversight, GAO-07-308SP (Washington, 
D.C.: Jan. 9, 2007), and Global War on Terrorism: Observations on 
Funding, Costs, and Future Commitments, GAO-06-885T (Washington, D.C.: 
July 18, 2006). 

[4] DOD defines contingency operations to include small, medium, and 
large-scale campaign-level military operations, including support for 
peacekeeping operations, major humanitarian assistance efforts, 
noncombatant evacuation operations, and international disaster relief 
efforts. 

[5] Department of Defense, Financial Management Regulation, 7000.14-R, 
vol. 12, ch. 23. This regulation generally establishes financial policy 
and procedures related to DOD contingency operations. Volume 6A, 
chapter 2, and volume 3, chapter 8, of the DOD Financial Management 
Regulation also include provisions to ensure the accuracy of cost 
reporting. 

[6] Pub. L. No. 109-163,  1221(c) (2006). 

[7] For more information see GAO, Global War on Terrorism: DOD Needs to 
Improve the Reliability of Cost Data and Provide Additional Guidance to 
Control Costs, GAO-05-882 (Washington, D.C.: Sept. 21, 2005), and 
Global War on Terrorism: DOD Needs to Take Action to Encourage Fiscal 
Discipline and Optimize the Use of Tools Intended to Improve GWOT Cost 
Reporting, GAO-08-68 (Washington, D.C.: Nov. 6, 2007). 

[8] GAO-08-68. 

[9] From fiscal year 2001 through fiscal year 2004, funding for 
military operations in defense of the homeland (Operation Noble Eagle) 
was included in DOD's emergency supplemental funding requests. Since 
fiscal year 2005, DOD has requested funding for these operations as 
part of its annual base budget request. Because Congress does not 
appropriate funds by military operation, these amounts cannot be 
separately identified in DOD's annual base appropriation. Therefore, 
the $635.9 billion includes funding for Operation Noble Eagle only from 
fiscal years 2001 through 2004. 

[10] We calculated this difference by comparing available data on 
appropriations and reported obligations. Since data on appropriations 
for Operation Noble Eagle from fiscal year 2005 through fiscal year 
2007 are unavailable, the difference between DOD's GWOT appropriations 
and reported obligations may be larger. 

[11] Appropriations for military personnel and operation and 
maintenance are usually available for 1 year, while appropriations for 
research, development, test and evaluation are usually available for 2 
years; procurement funds (with the exception of shipbuilding funds, 
which are sometimes available longer) are usually available for 3 
years; and military construction funds are usually available for 5 
years. 

[12] The available fiscal year 2007 procurement funding as of March 
2008 reflects an increase in funding available since our last report 
examining DOD's reported obligations for GWOT--GAO, Global War on 
Terrorism: Reported Obligations for the Department of Defense, GAO-08- 
557R (Washington, D.C.: Mar. 17, 2008). According to DOD and Army 
officials, the increase in funding is due to the correction of 
inaccurately reported obligations. GAO has assessed the reliability of 
DOD's obligation data and found significant problems, such that these 
data may not accurately reflect the true dollar value of GWOT 
obligations. 

[End of section] 

GAO's Mission: 

The Government Accountability Office, the audit, evaluation and 
investigative arm of Congress, exists to support Congress in meeting 
its constitutional responsibilities and to help improve the performance 
and accountability of the federal government for the American people. 
GAO examines the use of public funds; evaluates federal programs and 
policies; and provides analyses, recommendations, and other assistance 
to help Congress make informed oversight, policy, and funding 
decisions. GAO's commitment to good government is reflected in its core 
values of accountability, integrity, and reliability. 

Obtaining Copies of GAO Reports and Testimony: 

The fastest and easiest way to obtain copies of GAO documents at no 
cost is through GAO's Web site [hyperlink, http://www.gao.gov]. Each 
weekday, GAO posts newly released reports, testimony, and 
correspondence on its Web site. To have GAO e-mail you a list of newly 
posted products every afternoon, go to [hyperlink, http://www.gao.gov] 
and select "E-mail Updates." 

Order by Mail or Phone: 

The first copy of each printed report is free. Additional copies are $2 
each. A check or money order should be made out to the Superintendent 
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 
more copies mailed to a single address are discounted 25 percent. 
Orders should be sent to: 

U.S. Government Accountability Office: 
441 G Street NW, Room LM: 
Washington, D.C. 20548: 

To order by Phone: 
Voice: (202) 512-6000: 
TDD: (202) 512-2537: 
Fax: (202) 512-6061: 

To Report Fraud, Waste, and Abuse in Federal Programs: 

Contact: 

Web site: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]: 
E-mail: fraudnet@gao.gov: 
Automated answering system: (800) 424-5454 or (202) 512-7470: 

Congressional Relations: 

Ralph Dawn, Managing Director, dawnr@gao.gov: 
(202) 512-4400: 
U.S. Government Accountability Office: 
441 G Street NW, Room 7125: 
Washington, D.C. 20548: 

Public Affairs: 

Chuck Young, Managing Director, youngc1@gao.gov: 
(202) 512-4800: 
U.S. Government Accountability Office: 
441 G Street NW, Room 7149: 
Washington, D.C. 20548: