Contingency Operations:

Update on DOD's Fiscal Year 1995 Cost and Funding

NSIAD-96-184BR, Jun 27, 1996

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Pursuant to a congressional request, GAO provided information on the Department of Defense's (DOD) incremental costs for contingency operations in fiscal year 1995, focusing on: (1) how the services covered costs in excess of supplemental funding; and (2) why the incremental costs of contingency operations surged in September 1995.

GAO found that: (1) the Army and the Navy reported incremental contingency costs that exceeded their operations and maintenance (O&M) supplemental appropriations; (2) while they covered their shortfall differently, both Army and Navy officials believe that unit readiness was not affected significantly; (3) the reported shortfalls, however, may not be as great as reported costs suggest; (4) GAO previously reported that some Army and Navy O&M costs were overstated; (5) the surge in September costs primarily related to accounting adjustments, end of fiscal year payments, and other spending, including spending associated with higher operating tempo in Bosnia and southwest Asia; and (6) GAO identified $92 million in accounting adjustments and $82 million in end-of-fiscal year payments, which together represented 60 percent of the September costs that GAO examined.

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