Analysis of Department of Defense Unobligated Budget Authority

PAD-78-34: Published: Jan 13, 1978. Publicly Released: Feb 2, 1978.

Additional Materials:

Contact:

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

Budget authority is the authority provided by law to enter into obligations which will result in outlays of government funds. In the Department of Defense (DOD), budget authority is used to enter into contracts with defense contractors. DOD unobligated balances of budget authority for military activities grew from $12.8 billion to $34.5 billion during fiscal years 1972 through 1976.

There was no evidence that the buildup in unobligated balances for DOD procurements represented an inability to perform functions. Excess obligational authority in DOD procurement programs could possibly be reprogrammed or used to fund future requirements. Despite the existence of excess funds, DOD has not implemented a process for systematic and regular reporting on the availability of excess funds. Over 90 percent of the $5.5 billion increase in the unobligated total was due to program growth rather than an obligation rate decline. Among the reasons for the decline in obligation rates were: delays in awarding contracts, planning and production problems, reserves, funds withheld from program managers, congressional actions, better contract prices than budgeted for, staffing deficiencies, and invalid obligations. Through the 1972 to 1976 period, the executive branch consistently underestimated DOD unobligated balances.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Matter: Congress should: (1) require that DOD provide historical and projected obligation rates and analyses of variances between estimated and actual rates in its budget requests; (2) give greater attention to the significant balances of budget authority carried over from year to year; (3) review the Office of Management and Budget's plan to strengthen analysis of DOD obligations; and (4) monitor the implementation of the practice of treating extensions of unobligated balances as new budget authority.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Director of the Office of Management and Budget should monitor the obligation rates reflected in the DOD obligation projections with a view toward identifying possible misestimates, getting changes made, and developing guidelines concerning estimating procedures.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Defense should make certain that improvements in internal reporting provide for the systematic identification of amounts which have become excess to program funding requirements and that new policies and procedures provide for closer monitoring of obligation projections.

    Agency Affected: Department of Defense

 

Explore the full database of GAO's Open Recommendations »

Jul 21, 2016

Jun 23, 2016

May 12, 2016

Apr 14, 2016

Mar 4, 2016

Oct 30, 2015

Sep 9, 2015

Aug 17, 2015

Jul 9, 2015

Apr 27, 2015

Looking for more? Browse all our products here