Summary
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.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director:
Team:
Phone:
Michael J. Sullivan
Government Accountability Office: Acquisition and Sourcing Management
(937) 258-7915
Matters for Congressional Consideration
Recommendation: 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.
Status: Open
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. 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. However, other program elements in the sample did not show increased fidelity.
Recommendation: 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.
Status: Open
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. 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. However, other program elements in the sample did not show increased fidelity.
Recommendation: 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.
Status: Open
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. 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. However, other program elements in the sample did not show increased fidelity.
Recommendation: 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.
Status: Open
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. 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. However, other program elements in the sample did not show increased fidelity.
Recommendations for Executive Action
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
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 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
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.
