Defense Acquisitions:

DOD's Research and Development Budget Requests to Congress Do Not Provide Consistent, Complete, and Clear Information

GAO-07-1058: Published: Sep 5, 2007. Publicly Released: Sep 5, 2007.

Additional Materials:

Contact:

Michael J. Sullivan
(937) 258-7915
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

The Department of Defense (DOD) asked Congress for $73.2 billion in fiscal year 2007 for research, development, testing, and evaluation (RDT&E). DOD organized this request using program element (PE) codes, which are designed to convey key information about the budget request. DOD also provides documents called budget exhibits detailing the activities for which funds are being requested. The National Defense Authorization Act for Fiscal Year 2006 mandated that GAO examine the program elements and budget exhibits. GAO assessed (1) whether the RDT&E program element code structure and the associated budget exhibits provide accurate, consistent, complete, and clear information, and (2) what factors contribute to any problems found. In conducting this review GAO analyzed all of the fiscal year 2007 program element codes and 47 budget exhibits. GAO also interviewed key DOD officials.

Neither the RDT&E program element code structure nor the budget exhibits consistently provide accurate, clear, and complete information on the nature of DOD's proposed research and development efforts. First, one-third of the requested RDT&E funding is for efforts that are not identified as research and development in their program element codes. In addition, a majority of the remaining funding request misidentifies the budget activity (which is a classification of the stage of development and ranges from BA 1 for basic research to BA 6 for management support) as it is stated in program element codes. Second, some of the budget exhibits justifying the programs' funding requests do not provide consistent, complete, and clear information with suitable levels of detail needed to understand DOD's research and development efforts. GAO found that DOD budget exhibits were difficult to understand, frequently lacked information about the accomplishments and planned efforts of each project, lacked appropriate cross-references between efforts, and were frequently missing key schedule data. The RDT&E program element codes are not always accurate nor are the budget exhibits always accurate, clear, consistent and complete for two major reasons. First, DOD's regulation does not require identification of any RDT&E effort as such in its program element code if it is taking place on a weapon system that is approved for production or already fielded. This affects over a third of all RDT&E funds. Second, the regulation governing the structuring of the coding and the content of the exhibits is vague. For example, the regulation does not require the coding to be updated from one year to the next to ensure the correct stage of development has been accurately identified. The regulation also does not provide sufficiently detailed guidance to ensure consistency in the format and content of the budget exhibits. This results in budget exhibits being insufficient as decision-making tools, according to DOD officials.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: The Senate FY 2008 Department of Defense Appropriations Bill cited the GAO report when it stated that the Department of Defense (DOD) needs to make improvements over the program element codes and budget justification documents for RDT&E budget requests. The bill stated that improvements were needed in the correlation of program element codes with the activities funded under the program element; the provision of specific information about activities conducted and accomplishments achieved with prior year funding; information on planned activities and their costs for the budget year at the project level; the improvement of cross references among projects; provision of schedules that identify key events; updates to narratives that reflect prior year's events; and the implementation of a more informative display of programmatic, schedule and budgetary changes. The Committee stated that they will work with DOD to achieve this goal in time for preparation of the fiscal year 2010 budget submission. The primary action office for this recommendation was changed in 2009. DOD agrees that all new start RDT&E Programs should have a unique designation. However,they have concluded that creating programs to specifically capture RDT&E for production and fielded weapon systems would be counter-productive with respect to decision making. DOD further concluded that keeping all appropriations in one program for fielded systems allows visibility over the full scope of a program. The existing program element structure reflects the stage of development. The DoD Comptroller, Investment Directorate worked with the Director, Defense Research and Engineering (DDR&E) and Defense Technical Information Center (DTIC) to develop an automated process to improve the quality of budget justification documents (R-2s and R-2As) and reduce processing time. Phase 1 consisted of a pilot program that included all Science and Technology (S&T) Budget Activity (BA-1, BA-2, and BA-3) budget justification exhibits. This effort consisted of a Web-based, restricted access application to support the creation of RDT&E budget exhibits implemented during the FY 2010-2015 budget submission. Phase II will consist of three ongoing efforts to fully support the FY 2011-2016 budget submission: (1) build out Phase I into full production capability, (2) expand full development to the remaining RDT&E budget exhibits (R-3, R-4, and R-5) to include BA-4, BA-5, BA-6, and BA-7, and (3) create a process to Components to assemble R-exhibits into a complete, multiple volume justification book. 8/09: The new Phase I exhibits were submitted to Congress for the first time in the FY 2010 President's Budget Request (PBR) in May 2009. Phase II is now underway and is creating a process to allow the Components to assemble R-exhibits into a complete, multiple volume justification book. The Comptroller anticipates full implementation in the FY 2011 PBR. Phase III will initiate the conversion of the Procurement exhibits. Estimated completion FY 2012. A sample review of budget RDT&E budget exhibits submitted in support of the FY2010 budget request found that there was more information provided on the specifics of what the funds have and would be used for some of program elements. These exhibits were an improvement over prior years budget exhibits and suggests that that our recommendation is being implemented to some degree. Therefore, we are closing this recommendation as implemented but in ongoing and future work, we will continue to monitor improvements and recommend additional actions.

    Matter: Congress may wish to have DOD's Comptroller work with relevant committees to reach agreement on how to revise budget exhibits and the program element code structure to meet congressional oversight needs as well as serve the needs of DOD. In these discussions, consideration could be given to the changes needed to the format and content of the budget exhibits to more effectively communicate the purpose for which funding is sought, the progress made with prior funding, and other key funding justification information.

  2. Status: Closed - Implemented

    Comments: The Senate FY 2008 Department of Defense Appropriations Bill cited the GAO report when it stated that the Department of Defense (DOD) needs to make improvements over the program element codes and budget justification documents for RDT&E budget requests. The bill stated that improvements were needed in the correlation of program element codes with the activities funded under the program element; the provision of specific information about activities conducted and accomplishments achieved with prior year funding; information on planned activities and their costs for the budget year at the project level; the improvement of cross references among projects; provision of schedules that identify key events; updates to narratives that reflect prior year's events; and the implementation of a more informative display of programmatic, schedule and budgetary changes. The Committee stated that they will work with DOD to achieve this goal in time for preparation of the fiscal year 2010 budget submission. The primary action office for this recommendation was changed in 2009. DOD agreed that all new start RDT&E Programs should have a unique designation. However,they have concluded that creating programs to specifically capture RDT&E for production and fielded weapon systems would be counter-productive with respect to decision making. DOD further concluded that keeping all appropriations in one program for fielded systems allows visibility over the full scope of a program. The existing program element structure reflects the stage of development. The DoD Comptroller, Investment Directorate worked with the Director, Defense Research and Engineering (DDR&E) and Defense Technical Information Center (DTIC) to develop an automated process to improve the quality of budget justification documents (R-2s and R-2As) and reduce processing time. Phase 1 consisted of a pilot program that included all Science and Technology (S&T) Budget Activity (BA-1, BA-2, and BA-3) budget justification exhibits. This effort consisted of a Web-based, restricted access application to support the creation of RDT&E budget exhibits implemented during the FY 2010-2015 budget submission. Phase II will consist of three ongoing efforts to fully support the FY 2011-2016 budget submission: (1) build out Phase I into full production capability, (2) expand full development to the remaining RDT&E budget exhibits (R-3, R-4, and R-5) to include BA-4, BA-5, BA-6, and BA-7, and (3) create a process to Components to assemble R-exhibits into a complete, multiple volume justification book. 8/09: The new Phase I exhibits were submitted to Congress for the first time in the FY 2010 President's Budget Request (PBR) in May 2009. Phase II is now underway and is creating a process to allow the Components to assemble R-exhibits into a complete, multiple volume justification book. The Comptroller anticipates full implementation in the FY 2011 PBR. Phase III will initiate the conversion of the Procurement exhibits. Estimated completion FY 2012. A sample review of budget RDT&E budget exhibits submitted in support of the FY2010 budget request found that there was more information provided on the specifics of what the funds have and would be used for some of program elements. These exhibits were an improvement over prior years budget exhibits and suggests that that our recommendation is being implemented to some degree. Therefore, we are closing this recommendation as implemented but in ongoing and future work, we will continue to monitor improvements and recommend additional actions.

    Matter: Congress may wish to have DOD's Comptroller work with relevant committees to reach agreement on how to revise budget exhibits and the program element code structure to meet congressional oversight needs as well as serve the needs of DOD. In these discussions, consideration could be given to the best means to inform Congress of the state of development of the requested effort as it progresses toward production.

  3. Status: Closed - Implemented

    Comments: The Senate FY 2008 Department of Defense Appropriations Bill cited the GAO report when it stated that the Department of Defense (DOD) needs to make improvements over the program element codes and budget justification documents for RDT&E budget requests. The bill stated that improvements were needed in the correlation of program element codes with the activities funded under the program element; the provision of specific information about activities conducted and accomplishments achieved with prior year funding; information on planned activities and their costs for the budget year at the project level; the improvement of cross references among projects; provision of schedules that identify key events; updates to narratives that reflect prior year's events; and the implementation of a more informative display of programmatic, schedule and budgetary changes. The Committee stated that they will work with DOD to achieve this goal in time for preparation of the fiscal year 2010 budget submission. The primary action office for this recommendation was changed in 2009. DOD agreed that all new start RDT&E Programs should have a unique designation. However,they have concluded that creating programs to specifically capture RDT&E for production and fielded weapon systems would be counter-productive with respect to decision making. DOD further concluded that keeping all appropriations in one program for fielded systems allows visibility over the full scope of a program. The existing program element structure reflects the stage of development. The DoD Comptroller, Investment Directorate worked with the Director, Defense Research and Engineering (DDR&E) and Defense Technical Information Center (DTIC) to develop an automated process to improve the quality of budget justification documents (R-2s and R-2As) and reduce processing time. Phase 1 consisted of a pilot program that included all Science and Technology (S&T) Budget Activity (BA-1, BA-2, and BA-3) budget justification exhibits. This effort consisted of a Web-based, restricted access application to support the creation of RDT&E budget exhibits implemented during the FY 2010-2015 budget submission. Phase II will consist of three ongoing efforts to fully support the FY 2011-2016 budget submission: (1) build out Phase I into full production capability, (2) expand full development to the remaining RDT&E budget exhibits (R-3, R-4, and R-5) to include BA-4, BA-5, BA-6, and BA-7, and (3) create a process for Components to assemble R-exhibits into a complete, multiple volume justification book. 8/09: The new Phase I exhibits were submitted to Congress for the first time in the FY 2010 President's Budget Request (PBR) in May 2009. Phase II is now underway and is creating a process to allow the Components to assemble R-exhibits into a complete, multiple volume justification book. The Comptroller anticipates full implementation in the FY 2011 PBR. Phase III will initiate the conversion of the Procurement exhibits. Estimated completion FY 2012. A sample review of budget RDT&E budget exhibits submitted in support of the FY2010 budget request found that there was more information provided on the specifics of what the funds have and would be used for some of program elements. These exhibits were an improvement over prior years budget exhibits and suggests that that our recommendation is being implemented to some degree. Therefore, we are closing this recommendation as implemented but in ongoing and future work, we will continue to monitor improvements and recommend additional actions.

    Matter: Congress may wish to have DOD's Comptroller work with relevant committees to reach agreement on how to revise budget exhibits and the program element code structure to meet congressional oversight needs as well as serve the needs of DOD. In these discussions, consideration could be given to the value and cost of modifying or replacing the current PE code structure so that it more readily informs Congress as to the nature of the R&D effort for systems in development as well as fielded systems and systems approved for production.

  4. Status: Closed - Implemented

    Comments: Based on GAO's report the Senate FY 2008 Department of Defense Appropriations Bill which cited the GAO report when it stated that the Department of Defense (DOD) needs to make improvements over the program element codes and budget justification documents for RDT&E budget requests. The bill stated that improvements were needed in the correlation of program element codes with the activities funded under the program element; the provision of specific information about activities conducted and accomplishments achieved with prior year funding; information on planned activities and their costs for the budget year at the project level; the improvement of cross references among projects; provision of schedules that identify key events; updates to narratives that reflect prior year's events; and the implementation of a more informative display of programmatic, schedule and budgetary changes. The Committee states that they will work with DOD to achieve this goal in time for preparation of the fiscal year 2010 budget submission. The primary action office for this recommendation was changed in 2009. DOD agrees that all new start RDT&E Programs should have a unique designation. However,they have concluded that creating programs to specifically capture RDT&E for production and fielded weapon systems would be counter-productive with respect to decision making. DOD further concluded that keeping all appropriations in one program for fielded systems allows visibility over the full scope of a program. The existing program element structure reflects the stage of development.The DoD Comptroller, Investment Directorate worked with the Director, Defense Research and Engineering (DDR&E) and Defense Technical Information Center (DTIC) to develop an automated process to improve the quality of budget justification documents (R-2s and R-2As) and reduce processing time. Phase 1 consisted of a pilot program that included all Science and Technology (S&T) Budget Activity (BA-1, BA-2, and BA-3) budget justification exhibits. This effort consisted of a Web-based, restricted access application to support the creation of RDT&E budget exhibits implemented during the FY 2010-2015 budget submission. Phase II will consist of three ongoing efforts to fully support the FY 2011-2016 budget submission: (1) build out Phase I into full production capability, (2) expand full development to the remaining RDT&E budget exhibits (R-3, R-4, and R-5) to include BA-4, BA-5, BA-6, and BA-7, and (3) create a process to Components to assemble R-exhibits into a complete, multiple volume justification book. 8/09: The new Phase I exhibits were submitted to Congress for the first time in the FY 2010 President's Budget Request (PBR) in May 2009. Phase II is now underway and is creating a process to allow the Components to assemble R-exhibits into a complete, multiple volume justification book. The Comptroller anticipates full implementation in the FY 2011 PBR. Phase III will initiate the conversion of the Procurement exhibits. Estimated completion FY 2012. A sample review of budget RDT&E budget exhibits submitted in support of the FY2010 budget request found that there was more information provided on the specifics of what the funds have and would be used for some of program elements. These exhibits were an improvement over prior years budget exhibits and suggests that that our recommendation is being implemented to some degree. Therefore, we are closing this recommendation as implemented but in ongoing and future work, we will continue to monitor improvements and recommend additional actions.

    Matter: Congress may wish to have DOD's Comptroller work with relevant committees to reach agreement on how to revise budget exhibits and the program element code structure to meet congressional oversight needs as well as serve the needs of DOD. In these discussions, consideration could be given to the time frames and funding needed to develop and implement any changes.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: According to DOD the FMR RDT&E budget exhibit preparation guidance supports this recommendation. It is doubtful that any single template would be feasible or desirable given the scope ans complexity of RDT&E activity. DOD has a disciplined review process in place and will put additional emphasis on proper reporting of program progress and planned efforts.

    Recommendation: To provide Congress with greater understanding of the nature of developmental activities proposed, as well as to improve the consistency and completeness of the justification material provided for the RDT&E funds requested, the Secretary of Defense should ensure that the DOD Comptroller Develops more specific guidance for budget exhibits to ensure that they are accurate, consistent, clear, and complete, and enforce a disciplined process for ensuring proper reporting of program progress and planned efforts.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: In response to our report DOD states that all new start RDT&E Programs should have a unique designation. However, creating programs to specifically capture RDT&E for production and fielding weapon systems would be counter-productive with respect to decision making. Keeping all appropriations in one program for fielding systems allows visibility over the full scope of a program. The existing program element structure reflects the stage of development. The Congress, however, does agree with our findings that improvements in program element codes and budget justification documents for RDT&E are needed. Based on GAO's report the Senate FY 2008 Department of Defense Appropriations Bill which cited the GAO report when it stated that the Department of Defense (DOD) needs to make improvements over the program element codes and budget justification documents for RDT&E budget requests. The bill stated that improvements were needed in the correlation of program element codes with the activities funded under the program element; the provision of specific information about activities conducted and accomplishments achieved with prior year funding; information on planned activities and their costs for the budget year at the project level; the improvement of cross references among projects; provision of schedules that identify key events; updates to narratives that reflect prior year's events; and the implementation of a more informative display of programmatic, schedule and budgetary changes. The Committee states that they will work with DOD to achieve this goal in time for preparation of the fiscal year 2010 budget submission.

    Recommendation: To provide Congress with greater understanding of the nature of developmental activities proposed, as well as to improve the consistency and completeness of the justification material provided for the RDT&E funds requested, the Secretary of Defense should ensure that the DOD Comptroller revises the Financial Management Regulation to, (1) in the case of programs approved for production or fielded, ensure that the code or the budget exhibit indicates which stage of development--from basic research through system development and demonstration--the effort is undertaking, and (2) ensure that the program element codes reflect the stage of development--that is from basic research through system development and demonstration--of the requested research and development effort.

    Agency Affected: Department of Defense

 

Explore the full database of GAO's Open Recommendations »

Sep 10, 2014

Sep 9, 2014

Sep 8, 2014

Jul 31, 2014

Looking for more? Browse all our products here