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United States Government Accountability Office: 
GAO: 

Report to Congressional Committees: 

September 2014: 

Military Personnel: 

DOD Needs to Update General and Flag Officer Requirements and Improve 
Availability of Associated Costs: 

GAO-14-745: 

GAO Highlights: 

Highlights of GAO-14-745, a report to congressional committees. 

Why GAO Did This Study: 

GFOs are the elite leaders of the U.S. military. In August 2013 
Congress raised questions about costs associated with GFOs as the size 
of the military forces decreases. 

GAO was mandated to assess the trends in costs of the active duty GFO 
population from FY 2001 through FY 2013. This report (1) identifies 
changes in the population and statutory limits for active duty GFOs 
relative to other active duty personnel, and the extent to which DOD 
updated GFO requirements, and (2) assesses what is known about the 
costs associated with active duty GFOs and their aides and trends in 
such costs, including trends in GFO compensation costs relative to 
those of other active duty personnel from FY 2001 through FY 2013. GAO 
assessed the availability of cost data and analyzed available active 
duty military personnel population and cost data, including costs for 
compensation, housing and travel for FY 2001 through FY 2013, using FY 
2013 dollars. GAO also met with DOD officials. 

What GAO Found: 

The general and flag officer (GFO) population (i.e., officers ranked 
at or above brigadier general or rear admiral) experienced higher 
rates of growth than the enlisted population since fiscal year (FY) 
2001. The Department of Defense (DOD) has not comprehensively updated 
GFO requirements—-the number of GFOs needed to fill positions—-since 
2003 to reflect changes in the active duty force nor has DOD defined 
circumstances under which such an update should occur. GFO population 
growth was generally consistent with the growth in GFO statutory 
limits. From FY 2001 through FY 2013 growth was not evenly distributed 
across all military ranks. For example, the GFO and non-GFO officer 
populations grew from 871 to 943 (8 percent) and from 216,140 to 
237,586 (10 percent), respectively, while the enlisted population 
decreased from 1,155,344 to 1,131,281 (2 percent). DOD officials 
attributed these differences to the greater flexibility that military 
planners have to decrease the enlisted population. DOD guidance 
requires military personnel requirements to be periodically evaluated. 
DOD conducted a comprehensive update of GFO requirements in 2003 and 
concluded that the department needed more GFOs than were authorized by 
Congress. However, DOD officials said that they have not 
comprehensively updated the requirements since 2003 or advocated for 
an increase of GFOs because of fiscal constraints. Nevertheless, 
without periodically conducting a comprehensive update of DOD's GFO 
requirements, and defining when such an update should occur, it will 
be difficult for DOD to help ensure that the GFO population is 
properly sized and structured to meet its assigned missions. 

The full cost to DOD for GFOs from FY 2001 through FY 2013 is unknown 
because complete cost data for GFOs and their aides were not available 
and trends in available cost data varied. Certain cost data were fully 
available and complete for FY 2001 through FY 2013, while other cost 
data were either partially complete or unavailable because of 
reporting practices, retention policies, inconsistent definitions, and 
reliability factors. Also, the position of officer aide is not defined 
in departmental guidance and as a result all military services were 
not able to consistently track the number of personnel in these 
positions. Cost data related to GFO compensation and housing were 
readily available, and trends for these costs varied, with 
compensation increasing by 38 percent and housing decreasing by 67 
percent from FY 2001 through FY 2013. Measured on a per capita basis, 
compensation costs grew by 18 percent for GFOs, 19 percent for non-GFO 
officers, and 32 percent for enlisted personnel over the same time 
frame. GAO assessed GFO commercial travel and per diem and GFO health 
care costs as partially complete because data were not available for 
FY 2001 through FY 2013. For the years in which complete data were 
available, travel and per diem costs increased by 4 percent from FY 
2009 through FY 2013 and health care costs grew by 77 percent from FY 
2003 through FY 2013. Other cost data, including data for GFO travel 
on military and government flights, GFO personal security details, and 
certain enlisted and officer aide costs, were not readily available or 
GAO determined them to be unreliable because of concerns regarding 
completeness or accuracy. By defining the officer aide position and 
GFO and associated aide costs, DOD will be able to better account for 
the full costs of GFOs and improve its ability to make sound workforce 
allocation decisions. 

What GAO Recommends: 

GAO recommends that DOD update GFO requirements and define 
circumstances for doing so, improve information related to GFO aides, 
and define costs associated with GFOs. DOD partially concurred with 
the recommendations on updating requirements and improving information 
on GFO aides, and did not concur with defining costs associated with 
GFOs, citing among other reasons, a need for flexibility and the 
adequacy of existing information. GAO continues to believe the 
recommendations are valid, as discussed in the report. 

View [hyperlink, http://www.gao.gov/products/GAO-14-745]. For more 
information, contact Brenda S. Farrell at (202) 512-3604 or 
farrellb@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

GFO Population Growth Was Generally Consistent with the Growth in 
Statutory Limits but Was Higher Than Enlisted Personnel Growth, and 
DOD Has Not Updated GFO Requirements since 2003: 

The Full Cost of Active Duty GFOs Is Unknown; Trends in Available 
Costs Varied: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: GAO Contact and Staff Acknowledgments: 

Related GAO Products: 

Tables: 

Table 1: Pay Grade, Title of Rank, and Insignia Worn at General and 
Flag Officer Ranks: 

Table 2: Available Fiscal Year Officer and Enlisted Aide Population 
Data, All Services: 

Table 3: Total Official Entertainment and Representation Expenditures 
by Service, Fiscal Years 2008 through 2013: 

Figures: 

Figure 1: General and Flag Officer End Strengths and Statutory Limits 
for Fiscal Years 2001 through 2013: 

Figure 2: Percentage Change in General and Flag Officer (GFO), Non-GFO 
Officer, and Enlisted End Strengths from Fiscal Years 2001 through 
2013: 

Figure 3: General and Flag Officer (GFO) and Aide Cost Data 
Availability: 

Figure 4: Percentage Change in Total Compensation Costs from Fiscal 
Years 2001 through 2013 for Active Duty General and Flag Officers 
(GFO), Non-GFO Officers, and Enlisted Personnel: 

Figure 5: Percentage Change in Per Capita Compensation Costs from 
Fiscal Years 2001 through 2013 for Active Duty General and Flag 
Officers (GFO), Non-GFO Officers, and Enlisted Personnel: 

Figure 6: General and Flag Officer Housing Costs, Fiscal Years 2001 
through 2013: 

Figure 7: Percentage Change in Total and Per Capita Enlisted Aide 
Costs from Fiscal Years 2003 through 2013 for the Army and the Air 
Force: 

Figure 8: Percentage Change in Total and Per Capita Officer Aide Costs 
from Fiscal Years 2003 through 2013 for the Army and the Air Force: 

Abbreviations: 

DOD: Department of Defense: 

GFO: General and Flag Officer: 

[End of section] 

United States Government Accountability Office: 
GAO:
441 G St. N.W. 
Washington, DC 20548: 

September 9, 2014: 

Congressional Committees: 

General and flag officers (GFO) are the elite leaders of the U.S. 
military at the rank of brigadier general and above (for the Army, the 
Air Force, and the Marine Corps) and rear admiral and above (for the 
Navy), and make up less than a tenth of a percent of the active duty 
force. In 2003, the Department of Defense (DOD) determined that GFO 
requirements--the number of GFOs DOD components need to fill 
positions--were higher than the number of GFOs that were being 
authorized by Congress at that time.[Footnote 1] However, in March 
2011, DOD announced plans to eliminate 102--or 11 percent of--GFO 
positions as part of the department's efficiencies 
initiatives.[Footnote 2] Also, recent inspectors general 
investigations of GFO misconduct have placed costs associated with 
GFOs under increased scrutiny.[Footnote 3] While recognizing DOD's 
efforts to control the numbers of GFOs on active duty, Congress has 
raised questions over the costs associated with sustaining the GFO 
population as the size of the active duty force decreases.[Footnote 4] 

In DOD's 2003 Review of Active Duty and Reserve General and Flag 
Officer Authorizations, DOD concluded that at that time, GFO 
requirements were higher than the GFO statutory limit of 1,311 
positions by 319 positions.[Footnote 5] In April 2004, we reviewed 
this study and found that DOD did not explain why it did not seek to 
increase the statutory limits on GFO numbers to meet validated 
requirements. We recommended, among other things, that DOD 
periodically update GFO requirements.[Footnote 6] DOD concurred with 
this recommendation at the time, and we discuss the status of the 
recommendation later in this report. 

Moreover, in 2003 and 2004, DOD submitted legislative proposals to 
Congress aimed at enhancing the department's flexibility in managing 
GFOs. However, in our September 2004 review of these proposals, we 
found that DOD did not present evidence that the laws the department 
sought to change hindered the management of GFOs and noted that DOD 
had not made full use of flexibilities that existed without changes to 
the law. We recommended that DOD evaluate options for extending GFO 
careers within the existing legislative framework.[Footnote 7] DOD did 
not concur with our findings because it disagreed that the desired 
flexibility could have been achieved within the existing statutory 
framework. However, DOD had not presented a sound business case to 
support the need for changing the existing legislative framework. 
Since we issued our September 2004 report, DOD has continued to seek 
changes in the legislative framework for managing GFOs, and Congress 
has approved several changes. For example, the fiscal year 2007 
National Defense Authorization Act extended the mandatory retirement 
age for active duty GFOs. Also, for the fiscal year 2008 National 
Defense Authorization Act, DOD proposed eliminating mandatory 
retirement for years of service or time in grade for GFOs above the 
grade of major general or rear admiral. 

A Senate report accompanying the Consolidated Appropriations Act of 
2014 and a House report accompanying the National Defense 
Authorization Act for Fiscal Year 2014 mandated that GAO assess the 
trends in costs of the active duty GFO population from fiscal years 
2001 to 2013.[Footnote 8] This report (1) identifies any changes in 
the population and statutory limits for active duty GFOs relative to 
other active duty personnel, and the extent to which DOD updated GFO 
requirements, and (2) assesses what is known about the costs 
associated with the active duty GFO population and their aides and any 
trends in such costs, including trends in GFO compensation costs 
relative to those of other active duty personnel for fiscal years 2001 
through 2013. 

To identify any changes in the population and statutory limits for 
active duty GFOs relative to other active duty personnel for fiscal 
years 2001 through 2013, we reviewed the relevant U.S. Code provisions 
(10 U.S.C. §§ 525 and 526) as applicable and amended for each of these 
years, and obtained and analyzed population data for this time period 
using end strengths from the Defense Manpower Data Center.[Footnote 9] 
We assessed the reliability of Defense Manpower Data Center end 
strength data by reviewing documentation, interviewing and 
administering questionnaires to cognizant officials, and independently 
assessing the completeness of data. We determined the data to be 
sufficiently reliable for the purposes of this report, specifically to 
determine the population trends associated with GFOs and other active 
duty military personnel from fiscal years 2001 through 2013. We 
included population data from fiscal years 2001 through 2013 in our 
review to be consistent with the time frame included in our review of 
trends in GFO costs. The scope of our analysis included those 
personnel on active duty; we did not include reserve component 
personnel in our review. To determine the extent to which DOD updated 
GFO requirements since 2003, we reviewed relevant GAO and DOD studies, 
analyzed population trends for changes, reviewed relevant DOD policies 
and guidance, and interviewed officials at the Office of the Secretary 
of Defense and the military services responsible for GFO management. 
We assessed the information we collected against DOD guidance that 
requires military and civilian personnel resources be programmed in 
accordance with validated requirements that are periodically 
reevaluated,[Footnote 10] and a best practices model for strategic 
human capital management.[Footnote 11] 

To assess what is known about the costs associated with the active 
duty GFO population and their aides from fiscal years 2001 through 
2013, including any trends in GFO compensation costs relative to those 
of other active duty personnel, we identified the relevant offices in 
the Office of the Secretary of Defense, the Joint Staff, and the 
military departments responsible for managing active duty GFOs and 
aides, along with related costs, such as compensation, housing, and 
travel; met with officials at these offices to determine the extent to 
which data were available for this time frame; obtained and assessed 
the reliability of available data; and analyzed available data, when 
possible. We used DOD's composite standard pay rates to calculate the 
cost of compensation provided to active duty GFOs and enlisted and 
officer aides from fiscal years 2001 through 2013. The composite rates 
are used by DOD when determining the military personnel appropriations 
cost for budget and management studies, but do not include 
compensation costs located in other budgets, such as education 
benefits. We identified criteria in DOD guidance, federal internal 
control standards, and federal accounting standards that specify the 
need for full and reliable personnel and other cost data for the 
purpose of making operating decisions and allocating resources, and 
assessed the availability of GFO cost data against those criteria. 
[Footnote 12] We defined the GFO-related costs included in our scope 
as those costs that were (1) specified in the congressional reports 
that mandated our work, (2) consistent with our prior body of work on 
military compensation,[Footnote 13] or (3) determined as GFO-related 
costs based on discussions with knowledgeable officials. We 
categorized each cost element as "complete," "partially complete," or 
"unavailable" based on the availability, completeness, and reliability 
of data provided for fiscal years 2001 through 2013. Cost data that 
were determined to be "complete" were readily available for all of the 
years included in our review. Cost data that were determined to be 
"partially complete" were either not available or not reliable for all 
years. "Unavailable" cost data were either not readily available or 
were determined to be unreliable across all of the years included in 
our review. Because of the incomplete nature of the data, cost 
elements should not be aggregated to determine the full cost of GFOs. 
We assessed the reliability of available data by reviewing 
documentation, interviewing and administering questionnaires to 
cognizant DOD officials, and independently assessing the completeness 
of data in order to determine the process by which data were compiled; 
identify data aggregation, storage, reporting, and quality control 
processes; and resolve any data anomalies. We did not assess all of 
the processes used to create or assemble certain data, such as data 
sets assembled by DOD officials from multiple sources. We determined 
that certain data were not sufficiently reliable for the purpose of 
our review based on the presence of significant errors or 
incompleteness in some or all of the key data elements, or because 
using the data might lead to an incorrect or unintentional message. 
Those data were excluded from our analyses. We believe the cost data 
that we did include in this report are sufficiently reliable for the 
purpose of determining the costs associated with GFOs and other active 
duty personnel from fiscal years 2001 through 2013. A more detailed 
discussion of our scope and methodology is provided in appendix I. 

We conducted this performance audit from November 2013 to September 
2014 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. 

Background: 

GFOs are officers in the four ranks of brigadier general and above 
(for the Navy, rear admiral and above). GFOs are senior officers with 
high-level interagency, intergovernmental, and multinational 
responsibilities. These officers plan and implement military 
operations by integrated military forces across the domains of land, 
sea, air, and space. Table 1 displays the pay grade, title of rank, 
and insignia worn by GFOs. 

Table 1: Pay Grade, Title of Rank, and Insignia Worn at General and 
Flag Officer Ranks: 

Pay grade: O-10; 
Title of rank: 
Army, Air Force, and Marine Corps: General; 
Navy: Admiral; 
Insignia: ****. 

Pay grade: O-9; 
Title of rank: 
Army, Air Force, and Marine Corps: Lieutenant general; 
Title of rank: Navy: Vice admiral; 
Insignia: ***. 

Pay grade: O-8; 
Title of rank: 
Army, Air Force, and Marine Corps: Major general; 
Title of rank: Navy: Rear admiral; 
Insignia: ***. 

Pay grade: O-7; 
Title of rank: 
Army, Air Force, and Marine Corps: Brigadier general; 
Title of rank: Navy: Rear admiral (lower half); 
Insignia: *. 

Sources: Title 10 U.S. Code and Department of Defense. GAO-14-745. 

[End of table] 

GFOs are assigned based on statutory limits and requirements. Congress 
establishes statutory limits on the number and distribution across 
each rank of GFOs for each of the services and joint staff. For fiscal 
year 2014, Title 10 of the U.S. Code mandated service-specific 
ceilings totaling 652 active duty GFOs for all services.[Footnote 14] 
In addition to the service-specific GFO positions, for fiscal year 
2014, Title 10 also specifies 310 GFO positions to be designated by 
the Secretary of Defense for joint duty positions.[Footnote 15] These 
positions are not included in the service ceilings. DOD determines GFO 
requirements--the number of GFOs DOD components need--by determining 
the number of positions that should be filled by a GFO. 

DOD provides active duty personnel with a compensation package made up 
of cash, such as pay and allowances; noncash benefits, such as health 
care; and deferred compensation, such as retirement pensions and 
health benefits. We have previously reported on the costs of military 
compensation and found that there is variability in how compensation 
is defined.[Footnote 16] GFOs are generally eligible for the same 
types of compensation as other active duty personnel, and may also be 
provided with security details, travel on military aircraft, aides, 
and funds for official entertainment and representation functions. 
[Footnote 17] See appendix I for a discussion of the specific cost 
elements included in this review. 

According to DOD Instruction 1315.09, enlisted aides are a resource to 
assist GFOs with minor details that if performed by the officers 
themselves, would affect the GFOs' primary military and official 
duties. Enlisted aides may, for example, perform tasks that directly 
aid the officer in the performance of his or her military and official 
responsibilities and assist with the planning and implementation of 
official social functions and activities.[Footnote 18] Title 10 also 
places a ceiling on the total number of enlisted personnel that may be 
assigned or otherwise detailed as enlisted aides on the personal 
staffs of GFOs.[Footnote 19] Officers may also be detailed as officer 
aides to the personal staffs of GFOs. 

Various organizations across DOD are responsible for tracking GFOs and 
associated costs. Within the Office of the Under Secretary of Defense 
for Personnel and Readiness, the Officer and Enlisted Personnel 
Management office is responsible for GFO matters, including officer 
promotion and continuation policies and oversight of the number of 
GFOs in relation to statutory limits. Also, within the Office of the 
Under Secretary of Defense for Personnel and Readiness, the Military 
Compensation office is responsible for formulating, implementing, and 
administering DOD policy on military personnel compensation, including 
active duty and reserve military pay and allowances. The Director, 
Cost Assessment and Program Evaluation, is the principal advisor to 
the Secretary of Defense and other senior officials in DOD for 
independent cost assessment, program evaluation, and analysis. In 
collaboration with the Under Secretary of Defense for Personnel and 
Readiness and the Under Secretary of Defense (Comptroller), this 
office developed a tool to collect cost elements required to estimate 
the full cost of military and civilian personnel as outlined in DOD 
Instruction 7041.04.[Footnote 20] In September 2013, we reported that 
while this effort has improved DOD's ability to estimate the full cost 
of personnel, there are limitations in certain areas, such as the lack 
of specific guidance for estimating certain costs.[Footnote 21] We 
recommended, among other things, that DOD develop further guidance on 
certain cost elements. DOD partially concurred with this 
recommendation, but noted that the department will issue clarifying 
guidance where necessary or appropriate. We continue to believe that 
fully addressing this recommendation would enhance the development of 
DOD's methodology for estimating and comparing the cost of its 
workforces. DOD Instruction 7041.04 specifies that the Director, Cost 
Assessment and Program Evaluation, is responsible for preparing 
clarifying guidance as needed for implementing the instruction. 

The Secretary of Defense may authorize physical protection and 
personal security within the United States for departmental leadership 
who, based on their positions, require continuous security and 
protection.[Footnote 22] The Secretary of Defense also may authorize 
protection for additional personnel within the United States when 
necessary, as provided by law. The Under Secretary of Defense for 
Policy is the approving authority for designating individuals who are 
outside the United States as high-risk personnel and authorizing 
protective security details for those individuals. 

Each of the services and the Joint Staff has a general or flag officer 
matters office responsible for management and tracking of GFOs within 
their organization, which identifies, assigns, and tracks aides to 
GFOs. The services also track certain GFO costs, including official 
representation expenditures and costs associated with providing 
personal security details for eligible GFOs.[Footnote 23] The Under 
Secretary of Defense (Comptroller) is responsible for the budget and 
financial management policy of DOD, including budget data, 
justification materials, and performance measures. The Comptroller's 
office also formulates composite rates that reflect the estimated cost 
to DOD of compensation for all ranks of military personnel, including 
GFOs, and preparing annual reports on the costs associated with 
housing units used as quarters for GFOs (GFO housing). The Defense 
Travel Management Office and the Defense Logistics Agency manage the 
Defense Travel System, which is designed to capture travel costs for 
GFOs and other military personnel. The Defense Health Agency tracks 
health expenditures for GFOs and other military personnel, and the 
Defense Manpower Data Center maintains GFO and other military 
personnel population data, including end strengths. 

GFO Population Growth Was Generally Consistent with the Growth in 
Statutory Limits but Was Higher Than Enlisted Personnel Growth, and 
DOD Has Not Updated GFO Requirements since 2003: 

The GFO population has experienced higher rates of growth than the 
enlisted population since fiscal year 2001, but DOD has not 
comprehensively updated GFO requirements since 2003 to reflect changes 
in the active duty force.[Footnote 24] This growth in the GFO 
population was generally consistent with the growth in statutory 
limits. In addition, growth varied across all of the active duty 
military personnel populations (i.e., GFOs, non-GFO officers, and 
enlisted personnel), with the most growth experienced by non-GFO 
officers--officers at or below the rank of colonel/captain. DOD 
officials stated that there continues to be a need for more GFOs than 
are authorized by Congress, but added that the department has not 
comprehensively updated GFO requirements since 2003 or advocated for 
increased GFO statutory limits because of the recent fiscal 
constraints faced by the department. However, without periodically 
conducting a comprehensive update of DOD's GFO requirements, it will 
be difficult for DOD to help ensure that resources are properly 
matched to the needs of today's environment. 

GFO Population Growth Was Generally Consistent with the Growth in 
Statutory Limits: 

In fiscal year 2001, there were 871 GFOs, growing to 943 by fiscal 
year 2013 for an 8 percent overall increase. This growth in the GFO 
population was consistent with the growth in statutory limits for GFO 
positions, from 889 in fiscal year 2001 to 962 in fiscal year 2013, 
also an 8 percent increase (see figure 1). According to DOD officials, 
the growth in the GFO population is attributable in part to increases 
in the number of commands; growth in the number of headquarters staff 
members needed to support overseas contingency operations; demand for 
GFOs to support overseas contingency operations; and congressionally 
directed GFO positions, such as the director of DOD's Sexual Assault 
Prevention and Response Office. Our body of work has found that new 
commands and headquarters organizations have created additional 
requirements for military personnel, including GFO positions, and we 
have recommended that DOD take action to consolidate or eliminate 
military commands that are geographically close or have similar 
missions, to seek opportunities to centralize headquarters functions, 
and to periodically evaluate whether the size and structure of 
commands meet assigned missions.[Footnote 25] DOD generally concurred 
with our recommendations and specified steps it will take in response, 
such as revising agency guidance and establishing timelines for DOD 
organizations to review data on command personnel. 

Figure 1: General and Flag Officer End Strengths and Statutory Limits 
for Fiscal Years 2001 through 2013: 

[Refer to PDF for image: multiple line graph ans associated data table] 

Fiscal year: 2001; 
General and flag officers (GFO): 871; 
Statutory limits: 889. 

Fiscal year: 2002; 
General and flag officers (GFO): 867; 
Statutory limits: 889. 

Fiscal year: 2003; 
General and flag officers (GFO): 863; 
Statutory limits: 889. 

Fiscal year: 2004; 
General and flag officers (GFO): 867; 
Statutory limits: 889. 

Fiscal year: 2005; 
General and flag officers (GFO): 874; 
Statutory limits: 889. 

Fiscal year: 2006; 
General and flag officers (GFO): 906; 
Statutory limits: 889. 

Fiscal year: 2007; 
General and flag officers (GFO): 899; 
Statutory limits: 889. 

Fiscal year: 2008; 
General and flag officers (GFO): 920; 
Statutory limits: 889. 

Fiscal year: 2009; 
General and flag officers (GFO): 957; 
Statutory limits: 948. 

Fiscal year: 2010; 
General and flag officers (GFO): 981; 
Statutory limits: 982. 

Fiscal year: 2011; 
General and flag officers (GFO): 970; 
Statutory limits: 982. 

Fiscal year: 2012; 
General and flag officers (GFO): 944; 
Statutory limits: 968. 

Fiscal year: 2013; 
General and flag officers (GFO): 943; 
Statutory limits: 962. 

8% increase from 2001-2013. 

Source: GAO analysis of Defense Manpower Data Center end strength data 
and 10 U.S.C. §§ 525 and 526. GAO-14-745. 

Notes: From fiscal years 2006 through 2009, GFO end strengths were 
above statutory limits. These end strength data do not reflect 
exemptions applied by DOD to certain GFO positions during those years, 
and which allowed the services to exceed statutory limits on the 
numbers of GFOs. The Department of Defense applied an average of 30 
exemptions per year to the GFO population from fiscal years 2011 
through 2013. 

[End of figure] 

As shown in figure 1, from fiscal years 2006 through 2009 GFO end 
strengths were above statutory limits. However, DOD officials 
explained that these end strength data do not reflect exemptions 
applied by DOD to certain GFO positions during those years, and which 
allowed the services to exceed statutory limits on the numbers of 
GFOs. Specifically, GFOs who were on terminal leave immediately prior 
to retiring were included in end strength data, but were exempt from 
counting toward statutory limits. Also, 10 U.S.C. § 527 provides the 
President with authority to suspend the statutory limits on GFO 
numbers in time of war or national emergency.[Footnote 26] DOD 
provided data for fiscal years 2011 through 2013 that provided more 
detail on the department's use of exemptions to manage GFO numbers 
against statutory limits. These data showed that the services claimed 
an average of 30 exemptions per fiscal year for GFOs. DOD officials 
stated that it has been necessary to use such exemptions to manage the 
GFO population since the population has been consistently at the 
statutory limits, and the department needed flexibility to transition 
GFOs into their new assignments with sufficient time to allow for 
knowledge transfer from the GFOs they were replacing. 

In March 2011, DOD announced plans to eliminate 102 GFO positions as 
part of the department's efficiencies initiatives. DOD officials said 
that while the primary goal of the initiatives was to identify areas 
for cost savings, a secondary goal was to create flexibility in 
managing GFO positions by creating a "buffer" between the number of 
active duty GFOs and the statutory limits. The officials explained 
that this "buffer" would allow DOD the flexibility to immediately 
staff new GFO requirements (e.g., newly created commands or emerging 
requirements) rather than waiting for GFO retirements. DOD's 2011 
study, as part of the department's efficiencies initiatives, specified 
86 GFO positions that would be used by the Secretary of Defense to 
meet future and temporary GFO requirements.[Footnote 27] The officials 
said that they believe it is important for GFO statutory limits to 
remain at their current level, even as the GFO population is reduced, 
to preserve the department's flexibility in managing GFO assignments. 

The Growth of Active Duty Military Personnel Varied across Populations: 

From fiscal years 2001 through 2013, as the nation's military engaged 
in combat operations in Iraq and Afghanistan, all populations of 
active duty military personnel experienced periods of growth, with the 
total population peaking at 1,417,200 in fiscal year 2010 (see figure 
2). However, this growth was not consistently distributed across 
military populations. 

Figure 2: Percentage Change in General and Flag Officer (GFO), Non-GFO 
Officer, and Enlisted End Strengths from Fiscal Years 2001 through 
2013: 

[Refer to PDF for image: multiple line graph ans associated data table] 

Percent change: 

Fiscal year: 2001; 
General and flag officers (GFO): 871; 0%; 
Non-GFO officers: 216,140; 0%; 
Enlisted personnel: 1,155,344; 0%. 
Total: 1,372,355. 

Fiscal year: 2004; 
General and flag officers (GFO): 867; 0%; 
Non-GFO officers: 227,257; 5%; 
Enlisted personnel: 1,186,074; 3%; 
Total: 1,414,198. 

Fiscal year: 2007; 
General and flag officers (GFO): 899; 3%; 
Non-GFO officers: 220,418; 2%; 
Enlisted personnel: 1,145,036; -1%; 
Total: 1,366,353. 

Fiscal year: 2010; 
General and flag officers (GFO): 981; 13%; 
Non-GFO officers: 233,019; 8%; 
Enlisted personnel: 1,183,200; 2%; 
Total: 1,417,200. 

Fiscal year: 2013; 
General and flag officers (GFO): 943; 8%; 
Non-GFO officers: 237,586; 10%; 
Enlisted personnel: 1,313,281; -2%. 
Total: 1,369,810. 

Source: GAO analysis of Defense Manpower Data Center end strength 
data. GAO-14-745. 

Notes: Non-GFO officers are those officers on active duty ranked below 
O-6 (colonel/captain), including warrant officers. Enlisted personnel 
are those personnel on active duty ranked E-1 through E-9. 

[End of figure] 

Growth among active duty personnel varied across active duty military 
populations. For example, growth of the GFO population after fiscal 
year 2005 outpaced that of the enlisted active duty military 
population and has remained higher through fiscal year 2013. As the 
military began to draw down after fiscal year 2010, enlisted personnel 
have dropped below fiscal year 2001 levels while officers remained 
higher. Moreover, the ratios of enlisted to non-GFO officers and 
enlisted to GFOs are both at their lowest levels since prior to 2001 
(5: 1 and 1,200: 1, respectively). DOD reported in a 1988 officer 
requirements study that decreases in the enlisted to officer ratio 
could reflect changing requirements for personnel. For example, the 
study stated that a new weapon system may need fewer crew members to 
operate it without changing the number of officers needed to lead the 
units that use the system, or there may be new requirements for 
officers in joint-service assignments and in research, development, or 
contracting activities.[Footnote 28] DOD officials stated that during 
military drawdowns, population decreases in the officer population 
tend to lag behind those of the enlisted population and attributed 
this to the greater flexibility that military planners have to 
decrease the enlisted population by rotating them out of the active 
duty force, while officers tend to remain in theater to manage the 
drawdown effort. The officials added that because the officer 
population is much smaller than the enlisted population, relatively 
small changes to this population can have greater relative effect, and 
that they expect the officer population to follow a similar decrease 
as the enlisted population in future years as senior officers retire. 

DOD Has Not Updated GFO Requirements to Reflect Changes in the Active 
Duty Force since 2003: 

The last comprehensive update of DOD's GFO requirements was in 2003 
when Congress mandated that DOD study GFO statutory limits and provide 
an assessment of whether statutory limits were sufficient to meet all 
GFO requirements.[Footnote 29] Since that time, DOD has added new 
commands and organizations, including U.S. Africa Command (2007), U.S. 
Cyber Command (2010), the Sexual Assault Prevention and Response 
Office (2006), and the Defense Health Agency (2013), all of which 
require additional GFOs for senior leadership positions. For example, 
the fiscal year 2012 National Defense Authorization Act mandated that 
the Director position at the Sexual Assault Prevention and Response 
Office be elevated and filled by either a GFO or a senior executive 
civilian DOD employee.[Footnote 30] The office's current director is 
now the third GFO to have served in that position since the statute 
was passed. Also, in November 2013 we found that while the creation of 
the Defense Health Agency was intended to reduce personnel costs, the 
organization added new GFO positions at the two-and three-star ranks 
while retaining existing GFO positions at the service level.[Footnote 
31] We recommended, among other things, that DOD provide Congress with 
a more thorough explanation of the potential sources of cost savings 
and an estimate of the number of military, civilian, and contractor 
personnel who will work in the organization when it reaches full 
operating capability. DOD concurred with our recommendations. Also, in 
the past decade, the military concluded the Iraq war and is currently 
in the process of reducing its presence in Afghanistan. 

DOD guidance requires that military and civilian personnel resources 
be programmed in accordance with validated requirements that are 
periodically evaluated,[Footnote 32] and best practices for strategic 
human capital management state that high-performing organizations 
periodically evaluate their human capital practices and use complete 
and reliable data to ensure that resources are properly matched to the 
needs of today's environment.[Footnote 33] DOD currently updates 
requirements for GFOs on an ad hoc basis. For example, as emerging 
requirements are identified the department uses multiple criteria, 
such as the extent of interaction with foreign officials and the value 
of resources managed, to determine whether a newly created senior 
leader position should be filled by a GFO or a senior civilian 
employee. However, this process does not include a comprehensive 
update of all GFO requirements, specifically a position-by-position 
validation of GFO requirements across the department. Further, the 
department has not defined under what circumstances such 
comprehensive, periodic updates of GFO requirements should occur. 

As discussed earlier, DOD completed a validation of GFO requirements 
in 2003, and DOD concluded that at that time GFO requirements were 
higher than the GFO statutory limit of 1,311 positions by 319 
positions (24 percent). However, DOD has not conducted a comprehensive 
update of GFO requirements since then. In April 2004 we reviewed DOD's 
2003 GFO requirements study and recommended, among other things, that 
DOD periodically update GFO requirements. DOD concurred with our 
recommendation at the time, stating that a requirements database 
maintained by each of the military services was adequate to update 
requirements. However, as we noted in our 2004 report, DOD's process 
for updating the requirements database was not comprehensive. Since 
2003, DOD has not conducted a comprehensive update of GFO 
requirements. Also, as previously discussed, the ratio of enlisted 
personnel to GFOs is at its lowest level since prior to 2001. These 
types of changes to the active duty force suggest that an updated 
comprehensive validation of GFO requirements against statutory limits 
would help the department ensure that resources are properly matched 
to the needs of today's environment. 

DOD completed a study in 2011 to determine opportunities for 
efficiency gains in the GFO corps; the study noted that the objective 
was not to determine GFO requirements but instead to identify 
organizational efficiencies that would allow more effective alignment 
of the force to the priority missions of the department.[Footnote 34] 
As such, the study did not identify, assess, and validate positions 
that the department believes should be filled by GFOs, nor did it 
assess the impact of any shortfall of GFOs on the department's 
mission. The study was conducted in response to direction from the 
Secretary of Defense to review all active duty GFO positions and their 
associated overhead and determine how to reallocate positions such 
that at least 50 GFO positions would be eliminated within 2 years. The 
study identified 73 positions for elimination within 2 years, and an 
additional 28 eliminations based on conditions in overseas contingency 
operations. DOD officials said that these reductions are not complete 
because of continuing overseas contingency operations and the need to 
wait for GFOs serving in positions identified for elimination to 
retire. In commenting on the study, some services disagreed with the 
study's recommendation to reduce GFO positions, noting that GFO 
requirements had increased and that GFO reductions were not 
distributed fairly across all of the services. DOD officials told us 
that there continues to be a need for more GFOs than are authorized by 
Congress, but added that the department has not comprehensively 
updated GFO requirements since 2003 or advocated for increased GFO 
statutory limits because of the recent fiscal constraints faced by the 
department. Without conducting a comprehensive update of DOD's GFO 
requirements--to include identifying, assessing, and validating 
positions that the department believes should be filled by GFOs; 
defining the circumstances under which subsequent updates should 
occur; and assessing whether GFO statutory limits are sufficient to 
meet GFO requirements--it will be difficult for DOD to ensure that the 
GFO corps is properly sized and structured. It will also be difficult 
for DOD to ensure that the department can identify opportunities for 
managing these personnel and their associated resources more 
efficiently. 

The Full Cost of Active Duty GFOs Is Unknown; Trends in Available 
Costs Varied: 

The full cost to DOD for active duty GFOs from fiscal years 2001 
through 2013 is unknown because complete cost data for GFOs and their 
aides were not available. Data for compensation and housing were fully 
available, and trends for those costs varied from fiscal years 2001 
through 2013. Other costs, such as commercial travel and per diem and 
military and government air travel, were either partially complete or 
unavailable, thus affecting our ability to identify trends for those 
costs. Our work found that data availability was affected by reporting 
practices, retention policies, inconsistent definitions for certain 
cost elements, and reliability factors. DOD guidance states that DOD 
officials must be aware of the full costs of manpower, use these costs 
to support workforce allocation decisions, and have a thorough 
understanding of the implications of those costs to DOD and, on a 
broader scale, to the federal government.[Footnote 35] By defining in 
guidance the officer aide position and GFO and associated aide costs, 
DOD will be in a better position to help ensure that a consistent 
approach is employed when estimating GFO and associated aide costs, 
better account for the full costs of GFOs, and improve its ability to 
make sound workforce allocation decisions. 

Availability of GFO and Aide Cost Data Varied: 

The full cost to DOD for GFOs from fiscal years 2001 through 2013 is 
unknown because complete cost data for GFOs and their aides were not 
available. Elements of active duty GFO costs varied in availability 
from fiscal years 2001 through 2013. We assessed cost elements as 
complete, partially complete, or unavailable. Figure 3 depicts the 
extent to which GFO costs were included in our review depending on 
factors such as reporting practices, data retention policies, and data 
reliability factors, including completeness and accuracy. 

Figure 3: General and Flag Officer (GFO) and Aide Cost Data 
Availability: 

[Refer to PDF for image: illustrated table] 

GFO compensation: 
2001: Complete data; 
2002: Complete data; 
2003: Complete data; 
2004: Complete data; 
2005: Complete data; 
2006: Complete data; 
2007: Complete data; 
2008: Complete data; 
2009: Complete data; 
2010: Complete data; 
2011: Complete data; 
2012: Complete data; 
2013: Complete data. 

GFO tax expenditure: 
2001: Complete data; 
2002: Complete data; 
2003: Complete data; 
2004: Complete data; 
2005: Complete data; 
2006: Complete data; 
2007: Complete data; 
2008: Complete data; 
2009: Complete data; 
2010: Complete data; 
2011: Complete data; 
2012: Complete data; 
2013: Complete data. 

GFO housing costs: 
2001: Complete data; 
2002: Complete data; 
2003: Complete data; 
2004: Complete data; 
2005: Complete data; 
2006: Complete data; 
2007: Complete data; 
2008: Complete data; 
2009: Complete data; 
2010: Complete data; 
2011: Complete data; 
2012: Complete data; 
2013: Complete data. 

GFO health care costs: 
2001: Unavailable data; 
2002: Unavailable data; 
2003: Complete data; 
2004: Complete data; 
2005: Complete data; 
2006: Complete data; 
2007: Complete data; 
2008: Complete data; 
2009: Complete data; 
2010: Complete data; 
2011: Complete data; 
2012: Complete data; 
2013: Complete data. 

GFO commercial travel and per diem: 
2001: Unavailable data; 
2002: Unavailable data; 
2003: Unavailable data; 
2004: Unavailable data; 
2005: Unavailable data; 
2006: Unavailable data; 
2007: Unavailable data; 
2008: Unavailable data; 
2009: Complete data; 
2010: Complete data; 
2011: Complete data; 
2012: Complete data; 
2013: Complete data. 

GFO military/government air travel: 
2001: Unavailable data; 
2002: Unavailable data; 
2003: Unavailable data; 
2004: Unavailable data; 
2005: Unavailable data; 
2006: Unavailable data; 
2007: Unavailable data; 
2008: Unavailable data; 
2009: Unavailable data; 
2010: Unavailable data; 
2011: Unavailable data; 
2012: Unavailable data; 
2013: Unavailable data. 

GFO official representation costs: 
2001: Partial data; 
2002: Partial data; 
2003: Partial data; 
2004: Partial data; 
2005: Partial data; 
2006: Partial data; 
2007: Partial data; 
2008: Partial data; 
2009: Partial data; 
2010: Partial data; 
2011: Partial data; 
2012: Partial data; 
2013: Partial data. 

GFO executive training costs: 
2001: Complete data; 
2002: Complete data; 
2003: Complete data; 
2004: Complete data; 
2005: Partial data; 
2006: Partial data; 
2007: Partial data; 
2008: Complete data; 
2009: Complete data; 
2010: Complete data; 
2011: Complete data; 
2012: Complete data; 
2013: Complete data. 

GFO security detail costs: 
2001: Unavailable data; 
2002: Unavailable data; 
2003: Unavailable data; 
2004: Unavailable data; 
2005: Unavailable data; 
2006: Unavailable data; 
2007: Unavailable data; 
2008: Unavailable data; 
2009: Unavailable data; 
2010: Unavailable data; 
2011: Unavailable data; 
2012: Unavailable data; 
2013: Unavailable data. 

Aide compensation: 
2001: 
2002: Partial data; 
2003: Partial data; 
2004: Partial data; 
2005: Partial data; 
2006: Partial data; 
2007: Partial data; 
2008: Partial data; 
2009: Partial data; 
2010: Partial data; 
2011: Partial data; 
2012: Partial data; 
2013: Partial data. 

Aide travel and per diem: 
2001: Unavailable data; 
2002: Unavailable data; 
2003: Unavailable data; 
2004: Unavailable data; 
2005: Unavailable data; 
2006: Unavailable data; 
2007: Partial data; 
2008: Partial data; 
2009: Partial data; 
2010: Partial data; 
2011: Partial data; 
2012: Partial data; 
2013: Partial data. 

Aide housing costs: 
2001: Unavailable data; 
2002: Unavailable data; 
2003: Unavailable data; 
2004: Unavailable data; 
2005: Unavailable data; 
2006: Unavailable data; 
2007: Unavailable data; 
2008: Unavailable data; 
2009: Unavailable data; 
2010: Unavailable data; 
2011: Unavailable data; 
2012: Unavailable data; 
2013: Unavailable data. 

Source: GAO analysis of Department of Defense data. GAO-14-745. 

Notes: This graphic displays the extent to which specific types of GFO 
and aide cost data were complete for each individual year included in 
our review. Cost data that were determined to be "complete" were 
readily available and were determined to be reliable for that specific 
year. Cost data that were determined to be "partial" were either not 
fully available or reliable for all sources for that specific year. 
"Unavailable" cost data were either not readily available or were 
determined to be unreliable for that specific year. The discussion of 
these cost data below provides our assessment of the extent to which 
the different types of cost data were available for all years of our 
review. As such, categorizations for individual years as shown in this 
graphic may not align with overall designations of "complete," 
"partial," and "unavailable" below. We calculated GFO compensation 
costs based on the composite rates used by DOD when determining the 
military personnel appropriations cost for budget and management 
studies. However, the composite rates do not include compensation 
costs located in other budgets, such as education benefits. Appendix I 
contains additional information regarding our approach for overall 
data categorizations. 

[End of figure] 

Complete Data: 

Certain GFO cost data are reported in budget materials or other formal 
reports produced by DOD and were readily available for all of the 
years included in our review. For example, population and cost data 
related to GFO compensation were available in DOD budget materials and 
cost memorandums for fiscal years 2001 through 2013. Similarly, cost 
data related to GFO housing were reported annually per Title 10 of the 
U.S. Code, for all of the fiscal years included in our 
review.[Footnote 36] In addition, using DOD budget materials, we 
obtained data needed to estimate the tax expenditure resulting from a 
portion of GFO compensation being tax exempt.[Footnote 37] 

Partial Data: 

Certain cost data within the scope of our review were not available 
for all years. For example, complete cost data related to GFO 
commercial travel and per diem expenditures were available from the 
Defense Travel System for fiscal years 2009 through 2013. According to 
DOD officials, the services did not fully transition to this system 
until fiscal year 2009, and cost data predating that transition were 
spread across disparate systems and not captured in a consistent 
manner. Similarly, GFO health care cost data were not available prior 
to fiscal year 2003, because, according to Defense Health Agency 
officials, DOD transitioned to a new software system for tracking 
these costs in fiscal year 2003 and legacy data were not migrated to 
the new system. 

Cost data needed to calculate enlisted and officer aide compensation 
costs were also partially complete. For example, the Navy and the 
Marine Corps were unable to provide historical data on officer aides, 
such as name, rank, and overall numbers. According to DOD officials, 
the position of officer aide is not defined in departmental guidance 
because these positions are not established in statute. As a result, 
the military services were not able to provide consistent data for 
these personnel. Additionally, the Marine Corps tracked enlisted aide 
numbers by calendar instead of fiscal year, and the Navy was unable to 
provide enlisted aide numbers and ranks for more than 2 fiscal years. 
Table 2 depicts the availability of population data needed to 
calculate aide compensation. 

Table 2: Available Fiscal Year Officer and Enlisted Aide Population 
Data, All Services: 

Army: 
Data range: 12 years (FY2002 - FY2013); 
Officer aides: [Check]; 
Enlisted aides: [Check]. 

Navy: 
Data range: 2 years (FY2012 - FY2013); 
Officer aides: [Empty]; 
Enlisted aides: [Check]. 

Marine Corps: 
Data range: 0 years[A]; 
Officer aides: [Empty]; 
Enlisted aides: [Empty]. 

Air Force: 
Data range: 11 years (FY2003 - FY2013); 
Officer aides: [Check]; 
Enlisted aides: [Check]. 

Legend: FY = fiscal year. 

Source: GAO analysis of Department of Defense data. GAO-14-745. 

[A] The Marine Corps provided 2001 through 2013 enlisted aide data by 
calendar year. 

[End of table] 

Unavailable Data: 

Some GFO cost data were not readily available or were determined to be 
unreliable--such as cost data related to GFO travel on military and 
government flights and cost data associated with providing personal 
security details to GFOs. While the magnitude of unavailable cost data 
associated with GFO travel on military and government flights is 
unclear, the Secretary of Defense has designated certain high-ranking 
GFOs, including the Chairman and Vice Chairman of the Joint Chiefs of 
Staff, service chiefs, and combatant commanders as "required use" 
travelers for official air travel because of threats, secure 
communications requirements, or scheduling requirements that make 
commercial travel unacceptable.[Footnote 38] Other GFOs are not 
designated as required use travelers, but may use U.S. government 
aircraft for official travel when the travel complies with specified 
criteria and when the demands of their travel prevent the use of 
commercial aircraft.[Footnote 39] Similarly, while we obtained 
personal security cost data covering 27 organizations--including the 
combatant commands, services, and other DOD organizations--DOD 
officials told us that the data were likely underreported, and the 
costs could not be separated by fiscal year or adjusted for inflation. 
Further, DOD officials said that when asked for these data, service 
officials did not include consistent information (such as costs 
associated with compensation and travel, equipment, weapons, and 
vehicles of security personnel) because of the lack of a department-
wide definition for security detail costs. As a result, these cost 
data were excluded from our analysis.[Footnote 40] 

Certain cost data related to enlisted and officer aides were also 
unavailable. For example, the Army, the Navy, and the Marine Corps did 
not track enlisted and officer aides by name and fiscal year and were 
therefore unable to provide complete and accurate aide travel and per 
diem cost data. Similarly, the Army and the Navy were unable to 
provide enlisted and officer aide population data of sufficient 
detail--to include names and duration in aide position--to identify 
aide housing costs. Although the Air Force provided detailed aide 
population data, it did not track aide housing costs. An official from 
the Marine Corps told us that Marine aides were generally receiving a 
basic housing allowance, with one enlisted aide residing in the 
Commandant's quarters. In the absence of enlisted and officer aide 
population data of sufficient consistency and completeness, we were 
also unable to estimate the tax expenditure associated with housing 
and subsistence allowances provided to aides. 

The availability of enlisted and officer aide cost data was affected 
by the extent to which the services defined and tracked aide 
personnel. DOD officials told us that there is no department-wide 
definition for the position of officer aide, and the Air Force is the 
only service that has established a definition.[Footnote 41] Prior to 
March 2011, the secretaries of the military departments were required 
to provide the Principal Deputy Under Secretary of Defense for 
Personnel and Readiness biannual reports of enlisted aide 
authorizations by military service and by GFO position.[Footnote 42] 
However, that requirement was rescinded by the Secretary of Defense in 
March 2011 as part of DOD's efficiencies initiatives, and officials 
from the Office of the Under Secretary of Defense for Personnel and 
Readiness were not able to provide to us reports covering all of the 
years prior to the removal of this requirement.[Footnote 43] 
Recognizing the need to improve oversight of GFO costs, including 
costs associated with enlisted aides, DOD officials stated that the 
department plans to reinstate the biannual reporting requirement for 
enlisted aide authorizations in an upcoming revision to the 
instruction, but has not established a time frame for completing the 
revision. Reinstating this requirement could help DOD to track the 
number of enlisted aides, along with certain related costs, such as 
compensation. However, the department does not plan to include officer 
aide population data in this instruction. Without a similar reporting 
requirement for officer aide population data, DOD will not be able to 
improve the availability of officer aide costs, such as compensation. 

The size and complexity of DOD's worldwide operations, and the need to 
reduce its budget in an ongoing fiscally constrained environment, 
require that DOD have accurate, complete, and timely financial 
information available to make management decisions. DOD Instruction 
7041.04 states that DOD officials must be aware of the full costs of 
its workforce, use these costs to support workforce allocation 
decisions, and have a thorough understanding of the implications of 
those costs to DOD and, on a broader scale, to the federal 
government.[Footnote 44] In September 2013, we found that DOD has 
improved its methodology for estimating and comparing the full cost to 
the taxpayer of work performed by military and civilian personnel and 
contractor support, but the methodology continues to have certain 
limitations.[Footnote 45] Best practices state that cost estimating 
rules should include a common set of standards that minimize conflicts 
in definitions, but DOD's methodology does not provide guidance for 
certain costs. We made a number of recommendations that DOD develop 
further guidance on certain cost elements, such as training; develop 
business rules for estimating Reserve and National Guard costs; 
evaluate inclusion or non-inclusion of cost elements related to 
retirement; assess cost models being used across the department; and 
reassess sources for contractor data. DOD generally concurred with our 
recommendations but has not completed actions. 

Moreover, standards for internal control in the federal government 
state that financial data are needed for external and internal uses, 
to make operating decisions and to allocate resources,[Footnote 46] 
while federal accounting standards similarly emphasize the need for 
managers to have relevant and reliable information on the full costs 
of activities and changes in those costs and the need for appropriate 
procedures to enable the collection, analysis, and communication of 
cost information.[Footnote 47] We have placed DOD on our High-Risk 
List for financial management beginning in 1995 because of financial 
management weaknesses that affect its ability to control costs; ensure 
accountability; anticipate future costs and claims on the budget; 
detect fraud, waste, and abuse; and prepare auditable financial 
statements. We have reported that while DOD has made efforts to 
improve financial management, it still has much work to do if it is to 
meet its long-term goals of improving financial management and 
achieving full financial statement auditability.[Footnote 48] By 
defining the officer aide position and GFO and associated aide costs, 
DOD will be better positioned to help ensure that a consistent 
approach is employed when estimating GFO and associated aide costs, 
better account for the full costs of GFOs, and improve its ability to 
make sound workforce allocation decisions. 

Trends in Complete and Partially Complete GFO and Aide Costs Varied: 

GFO Compensation Growth Was Consistent with That of Other Officers but 
Was Outpaced by Enlisted Personnel Compensation Growth: 

From fiscal years 2001 through 2013, GFO and other active duty 
personnel compensation costs increased, with enlisted personnel 
experiencing the highest percentage per capita cost growth. The 
following information summarizes changes in inflation-adjusted costs 
to DOD to provide compensation for active duty GFOs, non-GFO officers, 
and enlisted personnel, as shown in figures 4 and 5. 

* GFOs. Total compensation costs grew from $199.4 million in fiscal 
year 2001 to $274.4 million in fiscal year 2013 (38 percent). Per 
capita costs grew from $228,129 to $268,187 (18 percent). 

* Non-GFO officers. Total compensation costs grew from $26.8 billion 
in fiscal year 2001 to $36.8 billion in fiscal year 2013 (38 percent). 
Per capita costs grew from $123,255 to $146,472 (19 percent). 

* Enlisted personnel. Total compensation costs grew from $64 billion 
in fiscal year 2001 to $86.7 billion in fiscal year 2013 (35 percent). 
Per capita costs grew from $55,325 to $73,056 (32 percent). 

Figure 4 shows the percentage change in total compensation costs from 
fiscal years 2001 through 2013, and figure 5 depicts the percentage 
change in per capita compensation costs. 

Figure 4: Percentage Change in Total Compensation Costs from Fiscal 
Years 2001 through 2013 for Active Duty General and Flag Officers 
(GFO), Non-GFO Officers, and Enlisted Personnel: 

[Refer to PDF for image: multiple line graph ans associated data table] 

Percent change: 

Fiscal year: 2001; 
General and flag officers (GFO): $0.2 billion; 0%; 
Non-GFO officers: $26.9 billion; 0%; 
Enlisted personnel: $64.0 billion; 0%. 
Total: $91.0 billion. 

Fiscal year: 2004; 
General and flag officers (GFO): $0.22 billion; 8%; 
Non-GFO officers: $33.1 billion; 24%; 
Enlisted personnel: $86.1 billion; 35%; 
Total: $119.42 billion. 

Fiscal year: 2007; 
General and flag officers (GFO): $0.23 billion; 14%; 
Non-GFO officers: $33.5 billion; 25%; 
Enlisted personnel: $83.3 billion; 30%; 
Total: $117.03 billion. 

Fiscal year: 2010; 
General and flag officers (GFO): $0.29 billion; 46%; 
Non-GFO officers: $38.1 billion; 42%; 
Enlisted personnel: $96.5 billion; 47%; 
Total: $134.89 billion. 

Fiscal year: 2013; 
General and flag officers (GFO): $0.27 billion; 38%; 
Non-GFO officers: $36.8 billion; 38%; 
Enlisted personnel: $86.7 billion; 35%. 
Total: $123.77 billion; 36%. 

Source: GAO analysis of Defense Manpower Data Center end strength 
data. GAO-14-745. 

Notes: Values are rounded and expressed in constant fiscal year 2013 
dollars. Percentage change calculated based on actual (not rounded) 
numbers. 

[End of figure] 

Figure 5: Percentage Change in Per Capita Compensation Costs from 
Fiscal Years 2001 through 2013 for Active Duty General and Flag 
Officers (GFO), Non-GFO Officers, and Enlisted Personnel: 

[Refer to PDF for image: multiple line graph ans associated data table] 

Percent change: 

Fiscal year: 2001; 
General and flag officers (GFO): $228,100; 0%; 
Non-GFO officers: $123,300; 0%; 
Enlisted personnel: $55,300; 0%. 

Fiscal year: 2004; 
General and flag officers (GFO): $231,700; 2%; 
Non-GFO officers: $131,700; 7%; 
Enlisted personnel: $65,000; 18%. 

Fiscal year: 2007; 
General and flag officers (GFO): $237,700; 4%; 
Non-GFO officers: $138,400; 12%; 
Enlisted personnel: $67,800; 23%. 

Fiscal year: 2010; 
General and flag officers (GFO): $270,700; 19%; 
Non-GFO officers: $149,800; 22%; 
Enlisted personnel: $74,800; 35%. 

Fiscal year: 2013; 
General and flag officers (GFO): $268,200; 18%; 
Non-GFO officers: $146,500; 19%; 
Enlisted personnel: $73,100; 32%. 

Source: GAO analysis of Defense Manpower Data Center end strength 
data. GAO-14-745. 

Notes: Values are rounded and expressed in constant fiscal year 2013 
dollars. Percentage change calculated based on actual (not rounded) 
numbers. 

[End of figure] 

As shown in figure 5, enlisted personnel experienced the highest per 
capita growth of the three populations we compared. Per capita costs 
represent averages of what it costs DOD to compensate military 
personnel across different ranks and services.[Footnote 49] We 
reported in March 2012 that the costs of military compensation have 
grown significantly, in part because of increases in basic pay and 
deferred compensation, such as health care benefits, for which DOD 
officials anticipate significant continued growth because of 
expansions in health care coverage.[Footnote 50] Such increases may 
explain the growth in per capita costs for GFOs, non-GFO officers, and 
enlisted personnel. Cost growth specific to the GFOs and non-GFO 
officers may also be attributed in part to the growth in each of these 
populations, which increased at rates of 8 percent and 10 percent, 
respectively. In contrast, the population of enlisted personnel in 
fiscal year 2013 was 2 percent below fiscal year 2001 levels, yet 
compensation costs for these personnel remained 35 percent higher, 
outpacing growth for both GFO and non-GFO officers. 

For the purposes of this report, compensation costs were calculated 
using DOD's composite standard pay rates,[Footnote 51] which include 
the following military personnel appropriation costs: average basic 
pay plus retired pay accrual, Medicare-eligible retiree health care 
accrual, basic allowance for housing, basic allowance for subsistence, 
incentive and special pay, permanent change of station expenses, and 
miscellaneous pay.[Footnote 52] These rates do not include the tax 
expenditure resulting from the federal government not collecting taxes 
on basic allowances for housing and subsistence. From fiscal years 
2001 through 2013, the GFO tax expenditure fluctuated but fell overall 
by approximately 1 percent, from an average of $10,689 to an average 
of $10,604, based on our calculations. Our total and per capita costs 
using the composite rates GFOs, non-GFO officers, and enlisted 
personnel are based on active duty average strengths from fiscal years 
2001 through 2013.[Footnote 53] Appendix I provides additional 
information regarding our approach to calculating total and per capita 
compensation costs for both GFOs and other active duty personnel. 

Trends in Other GFO Costs Varied: 

Trends in other complete or partially complete GFO costs--such as 
housing, travel and per diem, and official representation--varied from 
fiscal years 2001 through 2013. The following sections describe these 
costs across the fiscal years for which data were available and 
reliable for the purposes of our review. 

GFO Military Housing Costs from Fiscal Years 2001 through 2013: 

Inflation-adjusted GFO housing costs, depicted in figure 6, decreased 
from $33.4 million in fiscal year 2001 to approximately $10.9 million 
in fiscal year 2013--an overall decline of 67 percent. These costs 
include operations, maintenance, utility, lease, and repair costs 
associated with DOD-owned and leased properties, as well as certain 
costs associated with privatized housing. According to DOD officials, 
DOD's housing privatization initiative contributed to the cost 
decrease beginning in fiscal year 2005.[Footnote 54] DOD policy 
establishes private sector housing as the primary source of housing 
for military personnel within the United States.[Footnote 55] However, 
the lack of suitable available housing in the community, along with 
housing requirements for key personnel--such as GFOs--may require 
military housing on an installation. The number of GFOs residing in 
DOD-owned or DOD-leased properties decreased from 790 in fiscal 2001 
to 240 in fiscal year 2013. 

Figure 6: General and Flag Officer Housing Costs, Fiscal Years 2001 
through 2013: 

[Refer to PDF for image: line graph] 

Fiscal year: 2001: $33.4 million. 

Fiscal year: 2002: $37 million. 

Fiscal year: 2003: $38.1 million. 

Fiscal year: 2004: $39.7 million. 

Fiscal year: 2005: $25.7 million. 

Fiscal year: 2006: $23.8 million. 

Fiscal year: 2007: $20.3 million. 

Fiscal year: 2008: $19.1 million. 

Fiscal year: 2009: $24.1 million. 

Fiscal year: 2010: $22.4 million. 

Fiscal year: 2011: $15.6 million. 

Fiscal year: 2012: $17.9 million. 

Fiscal year: 2013: $10.9 million. 

Source: GAO analysis of DOD data. GAO-14-745. 

Note: Values are expressed in fiscal year 2013 dollars. 

[End of figure] 

GFO Commercial Travel and Per Diem Costs from Fiscal Years 2009 
through 2013: 

GFO commercial travel and per diem costs, adjusted for inflation, grew 
from $25.9 million in fiscal year 2009 to $34.6 million in fiscal year 
2012, before decreasing to $27.0 million in fiscal year 2013--for an 
overall increase of approximately 4 percent. DOD uses commercial 
providers to transport military personnel, including GFOs.[Footnote 
56] Costs for GFO commercial travel, including airfare, meals and 
incidentals, lodging, rental cars, and mileage, were available from 
the Defense Travel System for fiscal years 2009 through 2013. 
According to an official from the Defense Logistics Agency, the recent 
decline in GFO commercial travel and per diem costs is attributable in 
part to the effects of sequestration,[Footnote 57] and in part to 
DOD's efforts to reduce spending on travel and conferences.[Footnote 
58] As previously discussed, cost data prior to 2009 were not included 
in our analysis because pre-2009 data in the Defense Travel System 
were incomplete and not captured in a consistent manner. 

GFO Health Care Costs from Fiscal Years 2003 through 2013: 

GFO health care costs, adjusted for inflation, rose from approximately 
$11.7 million in fiscal year 2003 to approximately $20.6 million in 
fiscal year 2013, an overall increase of 77 percent. Per capita health 
care costs increased from $12,744 in fiscal year 2003 to $20,179 in 
fiscal year 2013, an increase of 58 percent. GFOs, like all active 
duty military personnel, have access to health care provided through 
TRICARE.[Footnote 59] GFO health care under TRICARE includes direct 
care (i.e., medical care provided by the U.S. military health system), 
purchased care (i.e., medical care provided by private sector 
providers in the networks outside of the military health system), and 
pharmacy costs for both GFOs and their dependents.[Footnote 60] GFOs 
also have access to health care at the Executive Medicine Clinic at 
Walter Reed National Military Medical Center and the Executive 
Services Health and Wellness Clinic at Fort Belvoir Community 
Hospital. According to these organizations, the clinics ensure 
availability, security, and confidentiality for military and 
government executives, including GFOs, select executive branch 
civilian executives, members of the U.S. Congress, and foreign 
dignitaries. GFO health care costs tracked by the Military Health 
System Data Repository, such as those costs associated with executive 
medicine clinics, are included in this report; however, the data 
repository is not structured to allow executive medicine clinic costs 
specifically associated with GFOs to be separately extracted. As 
mentioned earlier in this report, we determined that costs prior to 
fiscal year 2003 were not available because Defense Health Agency 
officials told us that the TRICARE Management Activity transitioned to 
a new software system at that time and legacy data were not migrated 
into the new system. 

The increase in per capita health care costs is consistent with growth 
in overall health care costs in the Military Health System. We 
reported in November 2013 that DOD's Military Health System costs have 
grown from $19 billion in fiscal year 2001 to the fiscal year 2014 
budget request of $49.4 billion.[Footnote 61] An advisory committee to 
the Secretary of Defense has cited increased utilization of services, 
increasingly expensive technology and pharmaceuticals, and the aging 
of the retiree population as reasons for increasing health care costs. 
[Footnote 62] We have reported on DOD's military health governance 
structure and the need for sustained senior leadership to achieve 
desired cost savings and found that DOD senior leadership has 
demonstrated a commitment to oversee implementation of its military 
health system's reform and has taken a number of actions to enhance 
reform efforts.[Footnote 63] 

GFO Official Representation Costs from Fiscal Years 2008 through 2013 
for the Air Force, Marine Corps, and Navy: 

Total official representation costs across the Air Force, the Marine 
Corps, and the Navy dropped 29 percent from fiscal years 2008 through 
2013. GFOs, along with members of the Senior Executive Service, have 
the authority to use official representation funds to host guests of 
the United States and DOD, such as civilian or military dignitaries 
and officials of foreign governments.[Footnote 64] We received 
complete official representation costs from the Air Force, the Marine 
Corps, and the Navy for fiscal years 2008 through 2013.[Footnote 65] 
The Army provided cost data for fiscal years 2001 through 2013, but 
these data were determined to be unreliable because of anomalies 
identified across multiple years. The official representation cost 
data were reported in aggregate, by service, and were therefore not 
attributable specifically to GFOs.[Footnote 66] As shown in table 3, 
inflation-adjusted official representation costs across the Navy, the 
Marine Corps, and the Air Force remained relatively constant from 
fiscal years 2008 through 2012, before dropping in fiscal year 2013. A 
Navy official attributed the decrease in Navy representation costs to 
the fiscal year 2013 budget sequester. 

Table 3: Total Official Entertainment and Representation Expenditures 
by Service, Fiscal Years 2008 through 2013: 

Navy: 
FY2008: $2.6 million; 
FY2009: $2.4 million; 
FY2010: $2.6 million; 
FY2011: $2.3 million; 
FY2012: $2.7 million; 
FY2013: $1.9 million; 
Percentage change: -26%. 

Marine Corps: 
FY2008: $0.5 million; 
FY2009: $0.4 million; 
FY2010: $0.3 million; 
FY2011: $0.2 million; 
FY2012: $0.2 million; 
FY2013: $0.2 million; 
Percentage change: -58%. 

Air Force: 
FY2008: $1.9 million; 
FY2009: $2.0 million; 
FY2010: $1.9 million; 
FY2011: $1.8 million; 
FY2012: $1.9 million; 
FY2013: $1.4 million; 
Percentage change: -26%. 

Total: 
FY2008: $4.9 million; 
FY2009: $4.7 million; 
FY2010: $4.8 million; 
FY2011: $4.3 million; 
FY2012: $4.9 million; 
FY2013: $3.5 million; 
Percentage change: -29%. 

Legend: FY= fiscal year. 

Source: GAO analysis of Department of Defense data. GAO-14-745. 

Note: Values are expressed in constant fiscal year 2013 dollars. 

[End of table] 

GFO Executive Training Costs from Fiscal Years 2001 through 2013: 

From fiscal years 2001 through 2013, the cost of GFO-specific training 
courses declined from $2.4 million to $1.8 million, a decrease of 
about 27 percent. Military officers, including GFOs, are encouraged to 
enroll in courses to further their military education. Two of these 
courses, CAPSTONE and PINNACLE, are specific to GFOs and are 
administered by the National Defense University. These courses are 
designed to prepare senior officers of the U.S. armed forces for high-
level joint, interagency, intergovernmental, and multinational 
responsibilities.[Footnote 67] CAPSTONE is a statutorily mandated 
course for newly selected GFOs administered over 5 weeks involving 
travel to domestic and international locations.[Footnote 68] The 
course objective is to make these individuals more effective in 
planning and employing U.S. forces in joint and combined operations. 
PINNACLE is a 1-week classroom course designed to prepare GFOs for 
senior political and military positions and command of joint and 
coalition forces at the highest level. On average, according to DOD 
data, CAPSTONE courses cost $15,684 per student from fiscal years 2001 
through 2013, and PINNACLE courses cost $4,067 per student from fiscal 
years 2008 through 2013.[Footnote 69] Officials from the National 
Defense University told us that costs declined because the length of 
the CAPSTONE course was changed from 6 to 5 weeks beginning in 2012. 

Aide Compensation in the Army and the Air Force from Fiscal Years 2003 
through 2013: 

Compensation costs for enlisted aides in the Army and Air Force--the 
number of which are authorized by Congress--grew 10 percent from 
fiscal years 2003 through 2013, from approximately $14.1 million to 
$15.5 million. Enlisted aide compensation costs within each of these 
services fluctuated from year to year but also increased overall 
during this period. This is due in part to fluctuations in the overall 
number and rank distribution of enlisted aides within each service. 
Specifically, during this period the number of enlisted aides in the 
Army fluctuated from 70 to 97, while the number of Air Force enlisted 
aides ranged from 73 to 88. From fiscal years 2003 through 2013, on 
average, the ratio of enlisted aides to GFOs in the Army was 1: 4, and 
the ratio of enlisted aides to GFOs in the Air Force was 1: 
3.5.[Footnote 70] 

Adjusting for changes in the aide population, we estimate that the 
average per capita compensation cost for enlisted aides in both the 
Army and the Air Force increased from $84,519 to $100,028, an increase 
of 18 percent. Figure 7 shows the percentage change in total and per 
capita enlisted aide costs from fiscal years 2003 through 2013 for the 
Army and the Air Force. Costs for the Marine Corps and the Navy could 
not be determined because the Marine Corps could not provide data by 
fiscal year and the Navy was able to provide only 2 years of enlisted 
aide personnel data. 

Figure 7: Percentage Change in Total and Per Capita Enlisted Aide 
Costs from Fiscal Years 2003 through 2013 for the Army and the Air 
Force: 

[Refer to PDF for image: multiple line graph ans associated data table] 

Percentage change: 

Fiscal year: 2003; 
Total costs: $14.1 million; 
Per capita costs: $84,519. 

Fiscal year: 2006; 
Total costs: $15.3 million; 8%; 
Per capita costs: $87,511; 4%; 

Fiscal year: 2009; 
Total costs: $13.9 million; -1%; 
Per capita costs: $97,439; 15%. 

Fiscal year: 2012; 
Total costs: $15.7 million; 11%; 
Per capita costs: $101,441; 20%. 

Fiscal year: 2013; 
Total costs: $15.5 million; 10%; 
Per capita costs: $100,028; 18%. 

Source: GAO analysis of DOD data. GAO-14-745. 

Notes: Values are rounded and expressed in constant fiscal year 2013 
dollars. Percentage change calculated based on actual (not rounded) 
numbers. 

[End of figure] 

Compensation costs for officer aides in the Army and the Air Force 
grew 8 percent from fiscal years 2003 through 2013, from approximately 
$28.9 million to $31.1 million. Officer aide compensation costs within 
each of these services also generally increased during these years but 
fluctuated depending on the number and distribution of aides across 
ranks. The number of officer aides in the Air Force ranged from 22 to 
47, while the number of officer aides in the Army ranged from 191 to 
228.[Footnote 71] 

Adjusting for changes in population, we estimate that the average per 
capita compensation cost for officer aides in both the Army and the 
Air Force increased from $125,759 to $140,288, an increase of 12 
percent. Figure 8 shows the percentage change in total and per capita 
officer aide costs from fiscal years 2003 through 2013 for the Army 
and the Air Force. As previously mentioned, costs for the Marine Corps 
and the Navy could not be determined because these services did not 
track the number of officer aide personnel. 

Figure 8: Percentage Change in Total and Per Capita Officer Aide Costs 
from Fiscal Years 2003 through 2013 for the Army and the Air Force: 

[Refer to PDF for image: multiple line graph ans associated data table] 

Percentage change: 

Fiscal year: 2003; 
Total costs: $28.9 million; 
Per capita costs: $125,759. 

Fiscal year: 2006; 
Total costs: $30.8 million; 6%; 
Per capita costs: $133,432; 6%. 

Fiscal year: 2009; 
Total costs: $30.4 million; 5%; 
Per capita costs: $143,246; 14%. 

Fiscal year: 2012; 
Total costs: $31.8 million; 12%; 
Per capita costs: $145,541; 15%. 

Fiscal year: 2013; 
Total costs: $31.1 million; 8%; 
Per capita costs: $140,288; 12%. 

Source: GAO analysis of DOD data. GAO-14-745. 

Notes: Values are rounded and expressed in constant fiscal year 2013 
dollars. Percentage change calculated based on actual (not rounded) 
numbers. 

[End of figure] 

Aide Travel and Per Diem for the Air Force from Fiscal Years 2007 
through 2013: 

The travel and per diem costs for enlisted and officer aides in the 
Air Force rose from approximately $862,000 in fiscal year 2007 to 
approximately $1.3 million in fiscal year 2010, before decreasing to 
approximately $768,000 in fiscal year 2013--an overall decrease of 
approximately 11 percent. As mentioned previously, the Army, Navy, and 
Marine Corps did not have enlisted and officer aide population data of 
sufficient detail to query the Defense Travel System for travel costs 
associated with those aides. 

Conclusions: 

Given the federal government's continuing fiscal challenges, it is 
more important than ever that Congress, the administration, and 
managers at DOD have reliable, useful, and timely financial 
information to help ensure fiscal responsibility and demonstrate 
accountability, particularly for the elite leaders responsible for 
planning and implementing military operations across the department. 
As DOD officials continue to manage implementation of the fiscal year 
2013 budget sequester, GFOs and related support costs are one of the 
areas in which efficiencies and reductions are being considered. 
However, DOD officials have voiced concern about reductions in this 
area and the need to retain flexibilities in staffing GFOs because of 
additional commands, joint responsibilities, and the potential to 
respond to future contingencies. These competing needs underscore the 
importance of DOD periodically conducting a comprehensive update of 
GFO requirements to efficiently manage the elite leaders of the 
military while also providing validation for existing and emerging 
needs. Moreover, if DOD had complete information on the costs of 
people and resources required to support the GFO corps (such as aide 
compensation and travel costs), the department would have an improved 
ability to manage these resources. More specific and complete 
definitions of GFO- and aide-associated costs would better position 
DOD to have more detailed and readily available information on these 
costs to help decision makers in DOD and Congress to balance resource 
priorities in a fiscally challenging environment. As the department 
realigns itself to address new challenges, full awareness of the GFO 
requirements and costs would help the department to provide 
congressional decision makers with the information needed for 
effective oversight and help ensure the efficient use of resources. 

Recommendations for Executive Action: 

We are making five recommendations to help DOD to improve management 
of GFO requirements and collect more detailed information on 
associated costs. To determine the number of GFOs required for DOD's 
mission, we recommend that the Secretary of Defense take the following 
action: 

* Direct the Under Secretary of Defense for Personnel and Readiness, 
in coordination with the secretaries of the military departments, to 
conduct a comprehensive update for GFO requirements by identifying, 
assessing, and validating positions that the department believes 
should be filled by GFOs, and define the circumstances under which 
subsequent periodic updates should occur. The update should include an 
assessment of whether GFO statutory limits are sufficient to meet GFO 
requirements and the impact of any shortfall on the department's 
mission. 

To help improve the definition and availability of costs associated 
with GFOs and aides, we recommend that the Secretary of Defense take 
the following four actions: 

* Direct the Under Secretary of Defense for Personnel and Readiness to 
establish guidance to: 

- finalize the enlisted aide population data biannual reporting 
requirement in the revised DOD Instruction 1315.09, 

- define the position of officer aide, and: 

- require the military departments to report on officer aide 
population data. 

* Direct the Director, Cost Assessment and Program Evaluation, in 
coordination with the Under Secretary of Defense for Personnel and 
Readiness and the secretaries of the military departments, to define 
the costs that could be associated with GFOs--such as security 
details--for the purpose of providing a consistent approach to 
estimating and managing the full costs associated with GFOs. 

Agency Comments and Our Evaluation: 

We requested comments on a draft of this product from the Department 
of Defense. On August 29, 2014, the Deputy Director, Military 
Compensation Policy in the office of the Under Secretary of Defense 
for Personnel and Readiness provided DOD's comments in an email. DOD 
also provided technical comments, which have been included as 
appropriate. In summary, DOD partially concurred with four of the five 
recommendations, and did not concur with one. 

DOD partially concurred with the first recommendation to conduct a 
comprehensive update for GFO requirements and define the circumstances 
under which periodic updates should occur. In its comments DOD stated 
that the recommendation is prudent given the changing operational 
environment and requirements. However, DOD also stated that defining 
the circumstances of a periodic review would impede the department's 
ability to provide flexibility on future requirements and engagements. 
The intent of the recommendation was to help ensure that regular 
updates of GFO requirements are conducted--as the report notes, DOD 
last completed a comprehensive update of GFO requirements in 2003. We 
believe that DOD can define the circumstances for updating GFO 
requirements while retaining the ability to provide flexibility on 
future requirements and engagements, for example, by specifying 
conditions that may require a change to the frequency or scope of 
requirements updates. We continue to believe that fully addressing 
this recommendation by defining the circumstances under which periodic 
updates should occur would allow the department to efficiently manage 
the GFO population while also providing validation for existing and 
emerging needs. 

DOD partially concurred with the second, third, and fourth 
recommendations to establish guidance to finalize the enlisted aide 
population data biannual reporting requirement in the revised DOD 
Instruction 1315.09, define the position of officer aide, and require 
the military departments to report on officer aide population data. In 
its comments, DOD stated that the department concurred with providing 
biannual reports on enlisted aides and is taking steps to incorporate 
a new requirement for reports in the updated instruction governing the 
use of enlisted aides. As noted in the report, DOD has not established 
a time frame for completing the revision. DOD also stated that officer 
aide assignments are more along the lines of professional development 
and staff officer experience, allowing the services flexibility to 
ensure a broad scope of professional development in an operational or 
training environment. Further, DOD stated that the department will 
continue to allow the services to manage officer aides at the local 
level. However, as noted in the report, due to the lack of a 
department-wide definition for officer aides, the military services 
were not able to provide consistent data for these personnel, 
including cost data. Moreover, the report notes that the lack of a 
definition for officer aides is preventing DOD from having visibility 
over the costs associated with those personnel, and from including 
such costs when calculating the full costs of the GFO population. We 
continue to believe that defining the position of officer aide and 
requiring the military departments to report on the number of 
personnel assigned to these positions would improve the availability 
of cost information associated with the GFO population. 

Finally, DOD did not concur with the fifth recommendation to define 
the costs associated with GFOs--such as security details--for the 
purpose of providing a consistent approach to estimating the full 
costs associated with GFOs. We modified the recommendation first 
provided to DOD in our draft report in response to technical comments 
from the Cost Assessment and Program Evaluation office. Specifically, 
the original recommendation was for the Director, Cost Assessment and 
Program Evaluation, in coordination with the Under Secretary of 
Defense for Personnel and Readiness and the secretaries of the 
military departments, to define the costs associated with GFOs--such 
as security details and other relevant costs. We modified this 
recommendation to include the clause "…costs that could be associated 
with GFOs…" (emphasis added) and to delete the phrase "and other 
relevant costs." We made this change because officials from the Cost 
Assessment and Program Evaluation office told us that the original 
recommendation did not provide them with needed flexibility to decide 
which GFO associated costs to define. However, DOD did not concur with 
the modified recommendation. 

In its comments, DOD stated that the department did not agree with the 
recommendation for two reasons. First, DOD stated it already defines 
the full manpower costs associated with GFOs in DOD Instruction 
7041.04 (Estimating and Comparing the Full Costs of Civilian and 
Active Duty Military Manpower and Contract Support). Second, DOD 
stated that security details and aides assigned to GFOs are managed by 
the services and are included in their personnel costs, and that those 
billets should not be included with the costs associated with GFOs. As 
stated in the report, certain costs associated with GFOs--such as 
security details and officer aides--were unavailable because the cost 
elements were not defined. For example, we reported that, according to 
DOD officials, the military services do not report security detail 
costs consistently because without a department-wide definition such 
costs could include compensation, travel, equipment, weapons, and 
vehicles. Moreover, the Federal Accounting Standards Advisory Board 
has noted that a cost methodology should include any resources 
directly or indirectly used to perform work, and GFO's often rely upon 
security details and officer aides to carry out their 
responsibilities. The report also stated that DOD Instruction 7041.04, 
and the accompanying tool developed by CAPE, are intended to collect 
cost elements required to estimate the full cost of military and 
civilian personnel. In commenting on the draft report, DOD did not 
address the issue of using these full costs to estimate and compare 
personnel costs and to support workforce allocation decisions, for 
example, when deciding whether a function should be performed by 
civilian or military personnel. Without a department-wide definition 
of the costs associated with GFOs--such as security details, and other 
relevant costs--the department is unable to include the full costs of 
GFOs as specified by DOD Instruction 7041.04 when making workforce 
allocation decisions. As a result, we continue to believe that 
formulating a consistent definition of the costs associated with GFOs--
such as security details, and other relevant costs--for purposes of 
making specific comparisons of individual functions would enhance the 
department's ability to consistently estimate the full costs 
associated with GFOs. 

We are sending copies of this report to the appropriate congressional 
committees, the Secretary of Defense, the Under Secretary of Defense 
for Personnel and Readiness, the Secretaries of the Air Force, the 
Army, and the Navy, and the Director, Cost Assessment and Program 
Evaluation. In addition, the report is available at no charge on the 
GAO website at [hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-3604 or farrellb@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made key contributions 
to this report are listed in appendix II. 

Signed by: 

Brenda S. Farrell: 
Director: 
Defense Capabilities and Management: 

List of Committees: 

The Honorable Carl Levin: 
Chairman: 
The Honorable James M. Inhofe: 
Ranking Member: 
Committee on Armed Services: 
United States Senate: 

The Honorable Richard J. Durbin: 
Chairman: 
The Honorable Thad Cochran: 
Ranking Member: 
Subcommittee on Defense: 
Committee on Appropriations: 
United States Senate: 

The Honorable Howard P. "Buck" McKeon: 
Chairman: 
The Honorable Adam Smith: 
Ranking Member: 
Committee on Armed Services: 
House of Representatives: 

The Honorable Rodney Frelinghuysen: 
Chairman: 
The Honorable Pete Visclosky: 
Ranking Member: 
Subcommittee on Defense: 
Committee on Appropriations: 
House of Representatives: 

[End of section] 

Appendix I: Scope and Methodology: 

To identify any changes in the population and statutory limits for 
active duty general and flag officers (GFO) relative to other active 
duty personnel for fiscal years 2001 through 2013, we reviewed the 
relevant U.S. Code provisions (10 U.S.C. §§ 525 and 526) as applicable 
and amended for each of these years, and obtained, analyzed, and 
assessed the reliability of end strength population data from the 
Defense Manpower Data Center.[Footnote 72] We included population data 
from fiscal years 2001 through 2013 in our review to be consistent 
with the time frame included in our review of trends in GFO costs. The 
scope of our analysis included only those personnel on active duty; we 
did not include reserve component personnel in our review. We also 
obtained more detailed GFO population data from the Department of 
Defense (DOD) for fiscal years 2011 through 2013 and analyzed these 
data for contextual information, such as the exemptions the services 
applied to GFO positions that were above statutory limits. To 
determine the extent to which DOD updated GFO requirements since 2003, 
we met with officials at the Office of the Secretary of Defense and 
the military services responsible for GFO management, reviewed 
relevant GAO and DOD studies, conducted trend analyses and discussed 
reasons for population changes, and reviewed relevant DOD policies and 
guidance. We assessed the information we collected against DOD 
guidance that requires military and civilian personnel resources to be 
programmed in accordance with validated requirements that are 
periodically reevaluated,[Footnote 73] and a best practices model for 
strategic human capital management.[Footnote 74] 

To assess what is known about the costs associated with the active 
duty GFO population and their aides and any trends in such costs from 
fiscal years 2001 through 2013, including trends in GFO compensation 
relative to that of other active duty personnel, we identified the 
relevant DOD, component, and service offices responsible for managing 
active duty GFOs and enlisted and officer aides, along with related 
military personnel and operations and maintenance costs, such as 
compensation, housing, and travel; met with officials at these offices 
to determine the extent to which data were available; obtained and 
assessed the reliability of available data; and analyzed available 
data, when possible. We identified criteria in DOD guidance, federal 
internal control standards, and federal accounting standards that 
specify the need for full and reliable manpower and other cost data 
for the purpose of making operating decisions and allocating 
resources, and assessed the availability of GFO cost data against 
those criteria.[Footnote 75] We defined the GFO-related costs included 
in our scope as those costs that were (1) specified in the 
congressional reports that mandated our work, (2) consistent with 
prior GAO work on military compensation,[Footnote 76] or (3) 
determined as GFO-related costs based on discussions with 
knowledgeable officials. To determine the extent to which data on GFO-
related costs were available, we categorized each cost element as 
"complete," "partially complete," or "unavailable" based on the 
availability, completeness, and reliability of data provided for 
fiscal years 2001 through 2013. Cost data that were determined to be 
"complete" were readily available for all of the years included in our 
review. Cost data that were determined to be "partially complete" were 
either not available or not reliable for all years. "Unavailable" cost 
data were either not readily available or were determined to be 
unreliable across all of the years included in our review. 
Specifically, we took the following steps to obtain, analyze, and 
assess the reliability of GFO and aide cost data: 

Compensation costs (GFOs, aides, non-GFO officers, and enlisted 
personnel)[Footnote 77] 

We used DOD's composite standard pay rates to calculate the cost of 
compensation provided to active duty GFOs and enlisted and officer 
aides from fiscal years 2001 through 2013. The composite rates are 
used by DOD when determining the military personnel appropriations 
cost for budget and management studies. The rates include average 
basic pay plus retired pay accrual; Medicare-eligible retiree health 
care accrual; basic allowances for housing and subsistence; incentive, 
miscellaneous, and special pays; and permanent change of station 
expenses. The composite rates pool these cost elements together, as 
such trends for discrete compensation cost elements could not be 
determined from these data. Our previous work has recognized that 
there are multiple ways of estimating the compensation costs of 
military personnel depending on the mix of cash, such as basic pay; 
noncash benefits, like health care; and deferred compensation, such as 
retirement pension.[Footnote 78] Although past studies have used 
varying approaches to study military compensation, certain elements of 
compensation are commonly incorporated into these assessments--for 
example, cash compensation beyond basic pay to include housing and 
subsistence allowances, the federal income tax advantage, and special 
and incentive pays. We used DOD's composite rates to calculate 
compensation in part because they allowed us to obtain data specific 
to the GFO population over the timeframe covered by our review. 

We multiplied the composite rates by the GFO average strengths 
contained in the military personnel budget justification books and 
actual numbers of aides provided to us by the services to obtain total 
compensation costs by rank and service. We then divided aggregate rank 
totals by these numbers of GFOs and aides to compute per capita costs 
for each rank. For comparison purposes, we performed a similar 
analysis of non-GFO officer and enlisted active duty military 
personnel compensation costs. We were not able to calculate 
compensation costs for officer and enlisted aides across all the 
services because of the limited availability of aide population data. 
We normalized all compensation costs that we were able to calculate to 
fiscal year 2013 dollars by using the employment cost index published 
by the U.S. Bureau of Labor Statistics. 

DOD's composite rate uses a standard factor to calculate deferred 
costs (i.e., pension and retiree health care costs) for all active 
duty personnel, which does not account for the significant differences 
in retirement rates across ranks that we have previously reported. For 
example, we reported in 2005 that an estimated 15 percent of new 
enlisted personnel and 47 percent of new officers become eligible to 
receive pensions and retiree health care.[Footnote 79] Also, GFOs 
generally have already completed 20 years of service at the time of 
their promotion to the GFO ranks, and as such the retirement rate of 
GFOs is closer to 100 percent. Therefore, DOD's approach to 
calculating the composite rate may significantly undercount the cost 
of providing retirement benefits to GFOs. 

We also used data supplied by the Office of the Under Secretary of 
Defense (Personnel and Readiness) to estimate the tax expenditure 
resulting from a portion of GFO compensation being tax exempt. 
[Footnote 80] The value of tax-exempt allowances (basic allowance for 
subsistence, basic allowance for housing) depends on a servicemember's 
pay grade, years of service, and number of dependents. To estimate the 
tax expenditure for each combination of pay grade (within the range of 
GFO pay grades), years of service, and number of dependents, we 
estimated the amount paid in taxes if the allowances are taxed and if 
they are not taxed, using estimates of applicable marginal tax rates 
supplied by the National Bureau of Economic Research. A weighted 
average of the differences in tax liability was then created based on 
the proportion of GFOs in each pay grade, years of service, and number 
of dependents category. 

Commercial travel costs (GFOs and aides). We obtained data on costs 
for GFO and select enlisted and officer aide commercial travel for 
fiscal years 2007 through 2013 from the Defense Travel System. These 
costs include airfare, per diem, lodging, car rental, and mileage 
reimbursement.[Footnote 81] GFO cost data from 2009 through 2013 were 
reported in aggregate, by fiscal year, so we were not able to assess 
trends across the military services. GFO travel costs prior to fiscal 
year 2009 were not available because not all military services 
transitioned to the Defense Travel System at the same time and not all 
legacy data were migrated to the new system. Aide travel and per diem 
cost data reported by the Air Force covered both enlisted and officer 
aides from fiscal years 2007 through 2013. The Marine Corps reported 
incomplete aide travel costs for personnel who were still on active 
duty that we excluded from our analysis, while the Army and the Navy 
did not report aide travel costs. The travel costs we analyzed were 
normalized to fiscal year 2013 dollars using the gross domestic 
product price index published by the U.S. Department of Commerce, 
Bureau of Economic Analysis. 

GFO military/government air travel costs. We requested but did not 
obtain costs for GFO travel on military aircraft for fiscal years 2001 
through 2013 from the military services, U.S. Transportation Command, 
the Defense Logistics Agency, and the U.S. Army Corps of Engineers. It 
is DOD policy that these data be retained for a period of 2 years, but 
cost data were not readily available. Ancillary costs associated with 
these flights, such as lodging, were included in our analysis of 
commercial travel data. 

GFO housing. We obtained data on the costs of housing units used as 
quarters for GFOs from fiscal years 2001 through 2013 from the annual 
GFOs' quarters expenditure reports produced by the Office of the Under 
Secretary of Defense (Comptroller)[Footnote 82] and a supplementary 
data set covering fiscal year 2001 Defense Logistics Agency costs, 
also provided by the Comptroller's office. These costs include 
operations, maintenance, utility, lease, and repair costs associated 
with DOD-owned and leased properties, as well as certain costs 
associated with privatized housing. The housing costs we analyzed were 
normalized to fiscal year 2013 dollars using the gross domestic 
product price index published by the U.S. Department of Commerce, 
Bureau of Economic Analysis. 

GFO health care. We obtained data on the costs of health care provided 
to active duty GFOs and their dependents from fiscal years 2003 
through 2013 from the Defense Health Agency. These costs include 
direct care (i.e., medical care provided by the U.S. military health 
care system), purchased care (i.e., medical care provided by private 
sector providers in the networks outside of the military health care 
system), and pharmacy costs for both GFOs and their dependents. These 
data include GFO health care costs incurred at the Executive Medicine 
Clinic at Walter Reed National Military Medical Center and the 
Executive Services Health and Wellness Clinic at Fort Belvoir 
Community Hospital. However, while costs associated with executive 
medicine are included in the health care cost data we obtained, 
executive medicine costs associated with GFOs could not be separated 
from costs associated with other individuals eligible for executive 
medicine care and are therefore not separately reported. Cost data 
were normalized to fiscal year 2013 dollars using the gross domestic 
product price index published by the U.S. Department of Commerce, 
Bureau of Economic Analysis. We determined that costs prior to fiscal 
year 2003 were not reliable because legacy data were not migrated into 
the new system when data formats in the Defense Enrollment Eligibility 
Reporting System were changed in fiscal year 2003. 

GFO security details. We obtained data on the costs of security 
details provided to GFOs from fiscal years 2001 through 2013 from 27 
different DOD organizations, including combatant commands, services, 
and other DOD organizations. These data included costs such as pay, 
travel, and equipment associated with personnel assigned to protective 
security details. Some of the DOD organizations provided fiscal year 
expenditures to us, while others reported a total sum of costs over a 
period covering several fiscal or calendar years. DOD officials told 
us that the costs were likely underreported. As a result, these data 
were excluded from our analysis. 

GFO official representation. We obtained complete official 
representation costs from the Air Force, Navy, and Marine Corps for 
fiscal years 2008 through 2013. The Army provided cost data from 
fiscal years 2001 through 2013, but data for certain years were 
inaccurate and the data set was therefore deemed unreliable for our 
purposes. The Navy also provided cost data from fiscal years 2001 
through 2007, but these data were excluded from our department-wide 
analysis in order to present a consistent range of data. Official 
entertainment and representation cost data were reported in aggregate 
by service. As a result, costs attributable to GFOs could not be 
separated from those attributable to senior civilian officials. The 
cost data were normalized to fiscal year 2013 dollars using the gross 
domestic product price index published by the U.S. Department of 
Commerce, Bureau of Economic Analysis. 

GFO executive training. We obtained costs for the CAPSTONE and 
PINNACLE training courses, which are specific to GFOs and are 
administered by the National Defense University. The National Defense 
University provided complete cost data for CAPSTONE from fiscal years 
2001 through 2013. Cost data for PINNACLE were provided for fiscal 
years 2005 through 2013, but data for fiscal years 2005 through 2007 
were excluded from our analysis because during this time the National 
Defense University combined costs for PINNACLE with another course 
(KEYSTONE). As such, we determined that PINNACLE data from fiscal 
years 2005 through 2007 were unreliable for our purposes. The cost 
data were normalized to fiscal year 2013 dollars using the gross 
domestic product price index published by the U.S. Department of 
Commerce, Bureau of Economic Analysis. 

To assess the reliability of population and cost data obtained for 
GFOs and other active duty personnel--including non-GFO officers, 
enlisted personnel, and officer and enlisted aides--we interviewed, 
corresponded with, or administered questionnaire(s) to ascertain the 
process by which data were compiled and to identify data aggregation, 
storage, reporting, and quality control processes. We also 
independently assessed the completeness of the data and coordinated 
with the appropriate officials to resolve any data anomalies, and 
reviewed available documentation describing the processes or system(s) 
used to house relevant data and to identify issues material to data 
reliability. We did not assess all of the processes used to create or 
assemble certain data, such as data sets assembled by DOD officials 
from multiple sources. We determined that certain data were not 
sufficiently reliable for the purpose of our review based on the 
presence of significant errors or incompleteness in some or all of the 
key data elements, or because using the data might lead to an 
incorrect or unintentional message. As discussed above, those data 
were excluded from our analyses. We believe the cost and population 
data that we did include in this report are sufficiently reliable for 
the purposes of assessing GFO and other active duty population trends 
and for determining the costs associated with GFOs and other active 
duty personnel from fiscal years 2001 through 2013. 

In addressing both of our audit objectives, we contacted officials 
from the following DOD organizations: 

* Office of the Secretary of Defense, Cost Assessment and Program 
Evaluation: 

* Office of the Under Secretary of Defense for Personnel and Readiness: 

* Office of the Assistant Secretary of Defense for Homeland Defense 
and Americas' Security Affairs: 

* The Joint Chiefs of Staff, Directorate for Logistics (J-4): 

* National Defense University: 

* Defense Manpower Data Center: 

* Defense Health Agency: 

* Office of the Under Secretary of Defense (Comptroller): 

* Defense Logistics Agency: 

* Defense Travel Management Office: 

* U.S. Army: 

* U.S. Navy: 

* U.S. Marine Corps: 

* U.S. Air Force: 

We conducted this performance audit from November 2013 to September 
2014 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. 

[End of section] 

Appendix II: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Brenda S. Farrell, (202) 512-3604 or farrellb@gao.gov. 

Staff Acknowledgments: 

In addition to the contact named above, Margaret A. Best (Assistant 
Director), Timothy J. Carr, Grace Coleman, Ryan D'Amore, Foster 
Kerrison, Michael Silver, Amie Steele, and Sabrina Streagle made key 
contributions to this report. 

[End of section] 

Related GAO Products: 

Defense Headquarters: DOD Needs to Reevaluate Its Approach for 
Managing Resources Devoted to the Functional Combatant Commands. 
[hyperlink, http://www.gao.gov/products/GAO-14-439]. Washington, D.C.: 
June 26, 2014. 

Defense Headquarters: Guidance Needed to Transition U.S. Central 
Command's Costs to the Base Budget. [hyperlink, 
http://www.gao.gov/products/GAO-14-440]. Washington, D.C.: June 9, 
2014. 

Human Capital: Opportunities Exist to Further Improve DOD's 
Methodology for Estimating the Costs of Its Workforces. [hyperlink, 
http://www.gao.gov/products/GAO-13-792]. Washington, D.C.: September 
25, 2013. 

Financial and Performance Management: More Reliable and Complete 
Information Needed to Address Federal Management and Fiscal 
Challenges. [hyperlink, http://www.gao.gov/products/GAO-13-752T]. 
Washington, D.C.: July 10, 2013. 

Defense Headquarters: DOD Needs to Periodically Review and Improve 
Visibility Of Combatant Commands' Resources. [hyperlink, 
http://www.gao.gov/products/GAO-13-293]. Washington, D.C.: May 15, 
2013. 

Defense Headquarters: Further Efforts to Examine Resource Needs and 
Improve Data Could Provide Additional Opportunities for Cost Savings. 
[hyperlink, http://www.gao.gov/products/GAO-12-345]. Washington, D.C.: 
March 21, 2012. 

Military Cash Incentives: DOD Should Coordinate and Monitor Its 
Efforts to Achieve Cost-Effective Bonuses and Special Pays. 
[hyperlink, http://www.gao.gov/products/GAO-11-631]. Washington, D.C.: 
June 21, 2011. 

Opportunities to Reduce Potential Duplication in Government Programs, 
Save Tax Dollars, and Enhance Revenue. [hyperlink, 
http://www.gao.gov/products/GAO-11-318SP]. Washington, D.C.: March 1, 
2011. 

Questions for the Record Related to Military Compensation. [hyperlink, 
http://www.gao.gov/products/GAO-10-803R]. Washington, D.C.: June 3, 
2010. 

Military Personnel: Military and Civilian Pay Comparisons Present 
Challenges and Are One of Many Tools in Assessing Compensation. 
[hyperlink, http://www.gao.gov/products/GAO-10-561R]. Washington, 
D.C.: April 1, 2010. 

Military Personnel: Military Departments Need to Ensure That Full 
Costs of Converting Military Health Care Positions to Civilian 
Positions Are Reported to Congress. [hyperlink, 
http://www.gao.gov/products/GAO-06-642]. Washington, D.C.: May 1, 2006. 

Military Personnel: DOD Needs to Improve the Transparency and Reassess 
the Reasonableness, Appropriateness, Affordability, and Sustainability 
of Its Military Compensation System. [hyperlink, 
http://www.gao.gov/products/GAO-05-798]. Washington, D.C.: July 19, 
2005. 

Military Personnel: DOD Could Make Greater Use of Existing Legislative 
Authority to Manage General and Flag Officer Careers. [hyperlink, 
http://www.gao.gov/products/GAO-04-1003]. Washington, D.C.: September 
23, 2004. 

Military Personnel: General and Flag Officer Requirements Are Unclear 
Based on DOD's 2003 Report to Congress. [hyperlink, 
http://www.gao.gov/products/GAO-04-488]. Washington, D.C.: April 21, 
2004. 

A Model of Strategic Human Capital Management. [hyperlink, 
http://www.gao.gov/products/GAO-02-373SP]. Washington, D.C.: March 15, 
2002. 

[End of section] 

Footnotes: 

[1] Department of Defense, Office of the Under Secretary of Defense 
for Personnel and Readiness, Review of Active Duty and Reserve General 
and Flag Officer Authorizations (Washington, D.C.: March 2003). 

[2] In 2010, the Secretary of Defense announced efficiencies 
initiatives designed to reduce overhead, duplication, and excess in 
DOD. The initiatives were structured into four "tracks"; the GFO 
reductions were included in Track 4. 

[3] For example, in June 2012 the DOD Inspector General reported that 
the general formerly serving as Commander of U.S. Africa Command 
engaged in multiple forms of misconduct related to official and 
unofficial travel, misused government funds, and misused his position 
(see Department of Defense, Office of Inspector General, Investigation 
Concerning Major General (MG) William E. Ward, U.S. Army, Former 
Commander, U.S. Africa Command, 11-119226-153 (Alexandria, Va.: June 
26, 2012). In June 2013 the Naval Inspector General reported 
violations of travel regulations, improper solicitation and receipt of 
moneys from an outside source, and false statements associated with 
official travel by three flag officers (see Department of the Navy, 
Office of Inspector General, Senior Official Cases: 201202138 Alleging 
Violation of Joint Travel Regulations by Radm Mark F. Heinrich, Capt 
(Rdml Select) David R. Pimpo and Capt (Rdml Select) Donald L. 
Singleton; 201204067 Alleging Radm Heinrich Improperly Solicited and 
Received Monies from an Outside Source; and 201300498 Alleging Radm 
Heinrich Made False Official Statements Pursuant to an Official 
Request (June 17, 2013). 

[4] See S. Rep. No. 113-85, at 11-12 (2013). Also, as of August 2014, 
the House of Representatives has passed a bill (H.R. 4435) and the 
Senate Armed Services Committee has reported out a bill (S. 2410) that 
if enacted, would freeze GFO pay at 2014 levels. 

[5] Department of Defense, Office of the Under Secretary of Defense 
(Personnel and Readiness), Review of Active Duty and Reserve General 
and Flag Officer Authorizations. 

[6] GAO, Military Personnel: General and Flag Officer Requirements Are 
Unclear Based on DOD's 2003 Report to Congress, [hyperlink, 
http://www.gao.gov/products/GAO-04-488] (Washington, D.C.: Apr. 21, 
2004). 

[7] GAO, Military Personnel: DOD Could Make Greater Use of Existing 
Legislative Authority to Manage General and Flag Officer Careers, 
[hyperlink, http://www.gao.gov/products/GAO-04-1003] (Washington, 
D.C.: Sept. 23, 2004). 

[8] See S. Rep. No. 113-85, at 11-12 (2013), and H.R. Rep. No. 113-
102, at 142 (2013). 

[9] End strengths are a measure of the number of personnel on military 
payrolls on the last day of each fiscal year (September 30). 

[10] Department of Defense Directive 1100.4, Guidance for Manpower 
Management, (Feb. 12, 2005). 

[11] GAO, A Model of Strategic Human Capital Management, [hyperlink, 
http://www.gao.gov/products/GAO-02-373SP] (Washington, D.C.: Mar. 15, 
2002). To develop this model, we reviewed multiple sources, including 
lessons learned from public and private organizations that are viewed 
as leaders in strategic human capital management and managing for 
results, in addition to findings from academia, the Office of 
Personnel Management, the Merit Systems Protection Board, and the 
National Academy of Public Administration. 

[12] See Department of Defense Instruction 7041.04, Estimating and 
Comparing the Full Costs of Civilian and Active Duty Military Manpower 
and Contract Support, (July 3, 2013); GAO, Standards for Internal 
Control in the Federal Government, [hyperlink, 
http://www.gao.gov/products/GAO/AIMD-00-21.3.1] (Washington, D.C.: 
November 1999); and Federal Accounting Standards Advisory Board, 
Statement of Federal Financial Accounting Standards No. 4: Managerial 
Cost Accounting Concepts and Standards for the Federal Government 
(Washington, D.C.: July 31, 1995). 

[13] DOD provides active duty personnel with a compensation package 
made up of cash, such as pay and allowances; noncash benefits, such as 
health care; and deferred compensation, such as retirement pensions 
and health benefits. See GAO, Military Personnel: Military and 
Civilian Pay Comparisons Present Challenges and Are One of Many Tools 
in Assessing Compensation, [hyperlink, 
http://www.gao.gov/products/GAO-10-561R] (Washington, D.C.: Apr. 1, 
2010); Military Personnel: DOD Needs to Establish a Strategy and 
Improve Transparency over Reserve and National Guard Compensation to 
Manage Significant Growth in Cost, [hyperlink, 
http://www.gao.gov/products/GAO-07-828] (Washington, D.C.: June 20, 
2007); and Military Personnel: DOD Needs to Improve the Transparency 
and Reassess the Reasonableness, Appropriateness, Affordability, and 
Sustainability of Its Military Compensation System, [hyperlink, 
http://www.gao.gov/products/GAO-05-798] (Washington, D.C.: July 19, 
2005). 

[14] 10 U.S.C. § 526. 

[15] 10 U.S.C. § 526(b). Joint duty assignments are defined by DOD as 
assignment to a designated position in a multiservice, joint, or 
multinational command or activity that is involved in the integrated 
employment or support of the land, sea, and air forces of at least two 
of the three military departments. Such involvement includes, but is 
not limited to, matters relating to national military strategy, joint 
doctrine and policy, strategic planning, contingency planning, and 
command and control of combat operations under a unified or specified 
command. 

[16] [hyperlink, http://www.gao.gov/products/GAO-10-561R]. 

[17] Official representation funds are used to host official guests of 
the United States and DOD, such as civilian or military dignitaries 
and officials of foreign governments. 

[18] Department of Defense Instruction 1315.09, Utilization of 
Enlisted Personnel on Personal Staffs of General and Flag Officers, 
(Oct. 2, 2007). 

[19] The number of enlisted aides on the personal staffs of officers 
is limited to the lesser of the sum of (1) four times the number of 
officers serving on active duty at the end of the preceding fiscal 
year in the grade of general or admiral and (2) two times the number 
of officers serving on active duty at the end of the preceding fiscal 
year in the grade of lieutenant general or vice admiral, or 300 
enlisted members per fiscal year. The statutory limit of 300 enlisted 
aides per fiscal year has not changed since October 1976. See 10 
U.S.C. § 981. 

[20] DOD Instruction 7041.04, Estimating and Comparing the Full Costs 
of Civilian and Active Duty Military Manpower and Contract Support, 
(July 3, 2013). 

[21] GAO, Human Capital: Opportunities Exist to Further Improve DOD's 
Methodology for Estimating the Costs of Its Workforces, [hyperlink, 
http://www.gao.gov/products/GAO-13-792] (Washington, D.C.: Sept. 25, 
2013). 

[22] Pub. L. No. 110-181, § 1074(a), defines departmental leadership 
as the persons who hold the following positions: Secretary of Defense, 
Deputy Secretary of Defense, Chairman of the Joint Chiefs of Staff, 
Vice Chairman of the Joint Chiefs of Staff, secretaries of the 
military departments, chiefs of the services, and commanders of 
combatant commands. 

[23] GFOs, along with members of the Senior Executive Service, have 
the authority to use official representation funds to host guests of 
the United States and DOD, such as civilian or military dignitaries 
and officials of foreign governments. 

[24] For the purposes of this report, we use end strength for our 
analysis of changes in the populations of GFOs and other military 
personnel. Enlisted personnel are those individuals at or below the 
rank of sergeant major (Army and Marine Corps), master chief petty 
officer (Navy), or chief master sergeant (Air Force). 

[25] GAO, Defense Headquarters: DOD Needs to Reevaluate Its Approach 
for Managing Resources Devoted to the Functional Combatant Commands, 
[hyperlink, http://www.gao.gov/products/GAO-14-439] (Washington, D.C.: 
June 26, 2014); Defense Headquarters: Guidance Needed to Transition 
U.S. Central Command's Costs to the Base Budget, [hyperlink, 
http://www.gao.gov/products/GAO-14-440] (Washington, D.C.: June 9, 
2014); Defense Headquarters: DOD Needs to Periodically Review and 
Improve Visibility Of Combatant Commands' Resources, [hyperlink, 
http://www.gao.gov/products/GAO-13-293] (Washington, D.C.: May 15, 
2013); and Defense Headquarters: Further Efforts to Examine Resource 
Needs and Improve Data Could Provide Additional Opportunities for Cost 
Savings, [hyperlink, http://www.gao.gov/products/GAO-12-345] 
(Washington, D.C.: Mar. 21, 2012). 

[26] A national emergency was declared by President George W. Bush on 
September 14, 2001. See 66 Fed. Reg. 48199, 7463 (Sept. 14, 2001). 
This declaration has been continued each year, with the latest 
continuation declared by President Barack Obama on September 18, 2013. 
See 78 Fed. Reg. 58,151 (Sept. 20, 2013). 

[27] Department of Defense, General and Flag Officer Efficiencies 
Study Group (2011). This study was conducted in response to direction 
from the Secretary of Defense to identify 50 GFO positions that would 
be eliminated within 2 years. The report noted that the effort was not 
a GFO requirements validation. 

[28] Department of Defense, Defense Officer Requirements Study (March 
1988), 32-36. 

[29] Pub. L. No. 107-314, § 404(c) (2002). 

[30] Pub. L. No. 111-383, § 1611(a) (2011), as amended by Pub. L. No. 
112-81, § 583 (2011). 

[31] GAO, Defense Health Care Reform: Additional Implementation 
Details Would Increase Transparency of DOD's Plans and Enhance 
Accountability, [hyperlink, http://www.gao.gov/products/GAO-14-49] 
(Washington, D.C.: Nov. 6, 2013). 

[32] Department of Defense, Guidance for Manpower Management. 

[33] [hyperlink, http://www.gao.gov/products/GAO-02-373SP]. To develop 
this model, we reviewed sources, including lessons learned from public 
and private organizations that are viewed as leaders in strategic 
human capital management and managing for results, in addition to 
findings from academia, the Office of Personnel Management, the Merit 
Systems Protection Board, and the National Academy of Public 
Administration. 

[34] Department of Defense, General and Flag Officer Efficiencies 
Study Group. 

[35] Department of Defense, Estimating and Comparing the Full Costs of 
Civilian and Active Duty Military Manpower and Contract Support. 

[36] Per title 10 U.S.C. §2831(e), the Secretary of Defense is 
required to submit to the congressional defense committees no later 
than 120 days after the end of each fiscal year a report specifying, 
for each family housing unit used as quarters for a GFO at any time 
during that fiscal year, the total expenditures for operation and 
maintenance, utilities, lease, and repairs of the unit during that 
fiscal year. 

[37] The tax expenditure is the estimated tax revenue forgone by the 
federal government by the policy of not taxing the basic allowance for 
housing and the basic allowance for subsistence. This is a tax 
advantage from the perspective of the individual servicemember but an 
expenditure for the federal government. 

[38] See Department of Defense Directive 4500.56, DOD Policy on the 
Use of Government Aircraft and Air Travel, (Apr. 14, 2009, 
incorporating change 3, June 24, 2014). 

[39] Ancillary costs associated with these flights, such as lodging, 
are captured in the Defense Travel System data. 

[40] Certain GFOs, including service chiefs and combatant commanders, 
are designated by DOD as high-risk personnel and are provided 
continuous security and protection. Criteria for designating physical 
protection are delineated by Department of Defense Instruction O-
2000.22, Designation and Physical Protection of DOD High Risk 
Personnel (June 19, 2014). 

[41] United States Air Force, General Officer Handbook (2012), 6. 

[42] See Department of Defense Instruction 1315.09, Utilization of 
Enlisted Personnel on Personal Staffs of General and Flag Officers, 
(Oct. 2, 2007). This instruction is currently being updated; DOD has 
not established a time frame for completing the revision. 

[43] The enlisted aide report required by DODI 1315.09 was canceled in 
March 2011. See Department of Defense, Secretary of Defense, "Track 
Four Efficiency Initiatives Decisions," memorandum (Washington, D.C.: 
Mar. 14, 2011). As of July 2014, the House of Representatives has 
passed a bill which, if enacted, would reinstate this requirement. 

[44] DOD Instruction 7041.04, Estimating and Comparing the Full Costs 
of Civilian and Active Duty Military Manpower and Contract Support, 
(July 3, 2013). 

[45] GAO, Human Capital: Opportunities Exist to Further Improve DOD's 
Methodology for Estimating the Costs of Its Workforces. [hyperlink, 
http://www.gao.gov/products/GAO-13-792] (Washington, D.C.: Sep. 25, 
2013). 

[46] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]. 

[47] Federal Accounting Standards Advisory Board, Statement of Federal 
Financial Accounting Standard No. 4. 

[48] GAO, Financial Audit: U.S. Government's Fiscal Years 2012 and 
2011 Consolidated Financial Statements, [hyperlink, 
http://www.gao.gov/products/GAO-13-271R] (Washington, D.C.: Jan. 17, 
2013); Financial Audit: U.S. Government's Fiscal Years 2013 and 2012 
Consolidated Financial Statements, [hyperlink, 
http://www.gao.gov/products/GAO-14-319R] (Washington, D.C.: Feb. 27, 
2014); and Financial and Performance Management: More Reliable and 
Complete Information Needed to Address Federal Management and Fiscal 
Challenges, [hyperlink, http://www.gao.gov/products/GAO-13-752T] 
(Washington, D.C.: July 10, 2013). 

[49] Individual compensation can vary greatly depending on factors 
including rank, years of service, and duty station. 

[50] GAO, Opportunities to Reduce Potential Duplication in Government 
Programs, Save Tax Dollars, and Enhance Revenue, [hyperlink, 
http://www.gao.gov/products/GAO-11-318SP] (Washington, D.C.: Mar. 1, 
2011). 

[51] The composite rates are used by DOD when budgeting for the 
military personnel appropriation. However, according to DOD guidance, 
these rates should not be considered as the full cost of military 
personnel for the purposes of workforce-mix decisions. 

[52] The composite standard pay rates are calculated in accordance 
with provisions of vol. 11A, ch. 6, appendix I of DOD Financial 
Management Regulation 7000.14R. According to officials from DOD's 
Comptroller's Office, overseas contingency operations costs, 
principally comprising danger pay, hardship duty pay, and family 
separation pay, are not included in these rates. DOD's composite rate 
uses a standard factor to calculate deferred costs (i.e., pension and 
retiree health care costs) for all active duty personnel. This 
approach may significantly undercount the cost of providing retirement 
benefits to GFOs because the retirement rate of GFOs is higher than 
that for enlisted and other officers. 

[53] Average strength in DOD's military personnel budget justification 
books is the arithmetic mean strength for a fiscal year, including, 
according to officials from DOD's Comptroller's Office, reserve 
component personnel called to active duty in support of contingency 
operations or other active duty requirements. In accordance with 10 
U.S.C. §115, these personnel are paid from the active duty 
appropriations but do not count against active duty end strength. 

[54] Congress established the Military Housing Privatization 
Initiative in 1996 to ensure that adequate military family housing was 
available when needed by renovating existing inadequate housing and 
constructing new homes on and around military bases more rapidly than 
was possible using traditional funding and construction methods. Under 
the initiative, Congress provided DOD with a variety of authorities 
that may be used to obtain private sector financing and expertise to 
repair, renovate, and construct military family housing. DOD policy 
establishes private sector housing as the primary source of housing 
for military personnel within the United States. 

[55] DOD Manual 4165.63-M, DOD Housing Management, (Oct. 28, 2010). 

[56] The Defense Travel Management Office is the single focal point of 
commercial travel within DOD and serves as the DOD customer and travel 
industry interface. 

[57] The absence of legislation to reduce the federal budget deficit 
by at least $1.2 trillion triggered the sequestration process in 
section 251A of the Balanced Budget and Emergency Deficit Control Act 
of 1985, as amended. Pursuant to this act, the President ordered 
sequestration of budgetary resources across nonexempt federal 
government accounts on March 1, 2013--5 months into fiscal year 2013. 
The Office of Management and Budget identified reductions to DOD's 
resources of about $37 billion in discretionary appropriations and 
about $37.4 million in direct spending. 

[58] The Office of Management and Budget issued in May 2012 a 
memorandum promoting further efficiency and cost consciousness in the 
federal government's operations, including in the areas of travel and 
conferences. Pursuant to this memo, DOD issued in June 2013 a 
memorandum stating the department's intent to reduce fiscal year 2013 
travel expenses by 30 percent from fiscal year 2010 levels, and to 
design and implement additional policy for conference spending and 
cost reporting. See Department of Defense, Deputy Secretary of 
Defense, "Implementation of May 11, 2012, Office of Management and 
Budget Memorandum, Promoting Efficient Spending to Support Agency 
Operations" (Washington, D.C.: June 3, 2012). 

[59] DOD offers health care services to its eligible beneficiaries 
through TRICARE. Beneficiaries may obtain care from military hospitals 
and clinics or from civilian providers. 

[60] Health care costs associated with Reserve and National Guard GFOs 
activated for 30 days or more were included in these data, but not 
those costs associated with their dependents. 

[61] [hyperlink, http://www.gao.gov/products/GAO-14-49]. GAO 
recommended that DOD provide decision makers with more complete 
information on the implementation of the creation of the Defense 
Health Agency, and that DOD develop and present to Congress 
performance measures, interim timelines, and staffing baseline 
assessments and refined cost savings estimates. DOD concurred with 
each of GAO's recommendations. 

[62] Defense Health Board, Task Force on the Future of Military Health 
Care (Washington, D.C.: December 2007). 

[63] GAO, Military Health System: Sustained Senior Leadership Needed 
to Fully Develop Plans for Achieving Cost Savings, [hyperlink, 
http://www.gao.gov/products/GAO-14-396T] (Washington, D.C.: Feb. 26, 
2014). 

[64] When the situation warrants, GFOs and members of the Senior 
Executive Service may delegate the ability to host and attend these 
events to a General Schedule 15 equivalent or military level O-6. See 
Department of Defense Instruction 7250.13, Use of Appropriated Funds 
for Official Representation Purposes, (June 30, 2009). 

[65] Navy and Marine Corps officials noted that while they believe 
official representation cost data obtained from the Defense Financial 
Accounting Service to be complete, they do not always receive the hard 
copy documentation required for them to reconcile payments in 
accordance with official representation expenditure guidance. 

[66] Although these costs are not attributable specifically to GFOs, 
we present cost data obtained from the services because these costs 
were specified by one of the congressional reports that mandated our 
work, and to provide context for the magnitude of official 
representation fund expenditures across the services. 

[67] Chairman of the Joint Chiefs of Staff Instruction 1800.01D, 
Officer Professional Military Education Policy, (Washington, D.C.: 
July 15, 2009). 

[68] 10 U.S.C. § 2153. 

[69] PINNACLE courses were first introduced in 2005; however, complete 
cost data were available beginning in 2008 because the National 
Defense University did not collect cost data specific to this course 
until that time. 

[70] Enlisted aides in the Air Force were ranked from E-4 (senior 
airman) to E-9 (chief master sergeant); those in the Army were ranked 
from E-5 (sergeant) to E-9 (sergeant major). 

[71] Officer aides in the Air Force were ranked from O-2 (first 
lieutenant) to O-5 (lieutenant colonel); those in the Army were ranked 
from O-2 (first lieutenant) to O-6 (colonel). 

[72] End strengths are a measure of the number of personnel on 
military payrolls on the last day of each fiscal year (September 30). 
These data include GFOs who are on terminal leave immediately prior to 
retirement and who are no longer serving in a command position. 

[73] Department of Defense, Guidance for Manpower Management, 
Directive 1100.4, (Feb. 12, 2005). 

[74] GAO, A Model of Strategic Human Capital Management, [hyperlink, 
http://www.gao.gov/products/GAO-02-373SP] (Washington, D.C.: Mar. 15, 
2002). To develop this model, we reviewed multiple sources, including 
lessons learned from public and private organizations that are viewed 
as leaders in strategic human capital management and managing for 
results, in addition to findings from academia, the Office of 
Personnel Management, the Merit Systems Protection Board, and the 
National Academy of Public Administration. 

[75] See Department of Defense, Estimating and Comparing the Full 
Costs of Civilian and Active Duty Military Manpower and Contract 
Support, Instruction 7041.04 (July 3, 2013); GAO, Standards for 
Internal Control in the Federal Government, [hyperlink, 
http://www.gao.gov/products/GAO/AIMD-00-21.3.1] (Washington, D.C.: 
November 1999); and Federal Accounting Standards Advisory Board, 
Statement of Federal Financial Accounting Standards No. 4: Managerial 
Cost Accounting Concepts and Standards for the Federal Government 
(Washington, D.C.: July 31, 1995). 

[76] See GAO, Military Personnel: Military and Civilian Pay 
Comparisons Present Challenges and Are One of Many Tools in Assessing 
Compensation, [hyperlink, http://www.gao.gov/products/GAO-10-561R] 
(Washington, D.C.: Apr. 1, 2010); Military Personnel: DOD Needs to 
Establish a Strategy and Improve Transparency over Reserve and 
National Guard Compensation to Manage Significant Growth in Cost, 
[hyperlink, http://www.gao.gov/products/GAO-07-828] (Washington, D.C.: 
June 20, 2007); and Military Personnel: DOD Needs to Improve the 
Transparency and Reassess the Reasonableness, Appropriateness, 
Affordability, and Sustainability of Its Military Compensation System, 
[hyperlink, http://www.gao.gov/products/GAO-05-798] (Washington, D.C.: 
July 19, 2005). 

[77] GFOs are senior officers at the rank of brigadier general and 
above (for the Navy, rear admiral and above). Non-GFO officers are 
those officers at or below the rank of colonel/captain, including 
warrant officers. Enlisted personnel are those individuals at or below 
the rank of sergeant major (Army and Marine Corps), master chief petty 
officer (Navy), or chief master sergeant (Air Force). 

[78] [hyperlink, http://www.gao.gov/products/GAO-10-561R]. 

[79] [hyperlink, http://www.gao.gov/products/GAO-05-798]. 

[80] The tax expenditure is the tax revenue forgone by the federal 
government by the policy of not taxing the basic allowance for housing 
and the basic allowance for subsistence. 

[81] Per diem, lodging, and other costs associated with military 
travel are also included in these data. 

[82] Per title 10, U.S.C. §2831 (e), the Secretary of Defense is 
required to submit to the congressional defense committees no later 
than 120 days after the end of each fiscal year a report specifying, 
for each family housing unit used as quarters for a GFO at any time 
during that fiscal year, the total expenditures for operation and 
maintenance, utilities, lease, and repairs of the unit during that 
fiscal year. 

[End of section] 

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