Opportunities Exist to Improve Information Used in Monitoring Status of Efficiency Initiatives
GAO-13-105R: Published: Dec 4, 2012. Publicly Released: Dec 4, 2012.
What GAO Found
The military departments and SOCOM have taken various steps to track the implementation of their efficiency initiatives. For example, prior to or during fiscal year 2012, they identified necessary programmatic actions to implement initiatives and began to carry out these actions, such as reassigning personnel from organizations being consolidated and terminating weapon system programs. They also set up approaches for senior officials to review progress, including using existing governance structures as a means for officials to review relevant financial and programmatic information, such as expected completion dates for actions related to implementing the initiatives and progress in meeting estimated savings targets. To track savings related to the initiatives, the military departments and SOCOM identified the appropriation accounts and areas within these accounts from which they expected to achieve savings, the specific dollar amounts, and areas where savings were to be reinvested.
DOD has developed an approach for the military departments and SOCOM to follow in reporting information on the status of efficiency initiatives; however, DOD's approach has some limitations that result in incomplete reporting, which may limit the visibility of senior leaders in monitoring progress in achieving programmatic and financial goals. Specifically, in emails, briefings, and training, the offices of the DCMO and Comptroller directed the military departments and SOCOM to compile information on their efficiency initiatives, such as risk, implementation status, and realized savings, enter this data into a database, and also prepare briefings for senior leadership using some of the same types of information entered into the database. DCMO and Comptroller officials stated that they are primarily interested in maintaining visibility for senior leaders over high- and medium-risk initiatives, but gave the military departments and SOCOM flexibility to report on the efficiency initiatives that they felt were important. In practice, the Army, Air Force, and SOCOM have reported on all of their efficiency initiatives, while the Navy has reported on only a subset of its initiatives based on what it deems to be at medium or high risk of experiencing implementation issues or adversely affecting the Navy's ability to carry out its mission.
With respect to reporting on realized savings, Comptroller officials stated that reported data on realized savings was expected to reflect net savings. However, the general directions did not specify whether the military departments and SOCOM should include all of the costs associated with implementing their efficiency initiatives, including costs not initially identified. For the case studies we reviewed, the military departments and SOCOM reported they were on track to realize estimated savings, but we found some instances where certain costs were not considered. For example, for its initiative to reduce fleet shore command personnel from U.S. Pacific Fleet and U.S. Fleet Forces Command, the Navy did not account for potential increases in relocation costs for moving fleet shore command personnel from U.S. Pacific Fleet and U.S. Fleet Forces Command to other areas within the Navy.
We have previously reported that a process with written guidance for monitoring achieved savings from efficiency initiatives can help organizations measure actual performance against planned results. In addition, a key part of ensuring that the information being measured is reportable in a consistent fashion is using standardized definitions and methodologies. Without guidance that clearly outlines the information to be provided, DOD cannot be assured that senior leaders are getting complete information needed to enhance their visibility over the status of efficiency initiatives.
Why GAO Did This Study
In May 2010, the Secretary of Defense publicly announced that the Department of Defense (DOD) was to undertake a department-wide initiative to assess how the department is staffed, organized, and operated with the goal of reducing excess overhead costs and reinvesting those savings in sustaining DOD's current force structure and modernizing its weapons portfolio. The Secretary's initiative targeted both short- and long-term improvements and set specific goals and targets for achieving cost savings and efficiencies, which are expected to be achieved between fiscal years 2012 and 2016. As part of this effort, the Secretary of Defense tasked the military departments and other components, including U.S. Special Operations Command (SOCOM), to find savings of about $100 billion in overhead costs over the specified time period. On January 6, 2011, the Secretary of Defense publicly stated that while about one-third of these savings would be used to fund higher-than-expected operating costs, the remaining two-thirds--over $70 billion--would be reinvested in high-priority military capabilities over five years. Of this amount, around $11 billion was projected to be achieved in fiscal year 2012 and available for reinvestment.
Information accompanying DOD's fiscal year 2012 budget request outlined specific efficiency initiatives identified by the military departments and SOCOM. Prior to the beginning of fiscal year 2012, DOD's Comptroller and Deputy Chief Management Officer (DCMO) began developing an approach for entities, including the military departments and SOCOM, to track and report on their efforts to implement efficiency initiatives and realize savings. In information accompanying its fiscal year 2013 budget request, DOD identified additional efficiency initiatives expected to generate $60 billion in savings for the period of fiscal years 2013 to 2017.
The National Defense Authorization Act for Fiscal Year 2012 required GAO to assess the extent to which DOD has tracked and realized the savings proposed pursuant to the initiative to identify at least $100 billion in efficiencies during fiscal years 2012 through 2016. This report addresses (1) the extent to which the military departments and SOCOM have taken steps to internally track the implementation of their efficiency initiatives, and (2) DOD's progress in developing an approach for reporting on the status of efficiency initiatives on a department-wide basis.
What GAO Recommends
GAO is recommending that DOD develop guidance with standardized definitions and methodologies for the military departments and SOCOM to use in reporting their efficiency initiatives and savings.
For more information, contact Sharon L. Pickup at (202) 512-9619 or email@example.com.
Recommendation for Executive Action
Status: Closed - Implemented
Comments: In formal written comments on a draft of our report, DOD stated that it agreed with the spirit and intent of our recommendation. In its formal response to our recommendation, DOD also stated that, prior to the next round of briefings in the February 2013 timeframe, it planned to issue this additional formal guidance. In February 2013, the DOD Comptroller issued written guidance that standardized and expanded on the type of information on efficiency initiatives that the military departments and SOCOM are expected to report. For example, the guidance specified that the military departments and SOCOM should report on 1) whether original net savings projections are being met, and 2) any associated program or milestone risks. In instances where original net savings projects were not met or risks were identified, the guidance required further detail such as how implementation would be achieved.
Recommendation: To ensure more complete and consistent reporting on the status of efficiency initiatives, and to improve their ability to monitor the efficiency initiatives of the military departments and SOCOM, the Secretary of Defense should direct the Under Secretary of Defense (Comptroller) and the Deputy Chief Management Officer to develop guidance with standardized definitions and methodologies for the military departments and SOCOM to use in reporting their efficiency initiatives and savings. This guidance should define reporting requirements for such things as the specific types of costs associated with implementing the initiatives, including implementation costs that were not initially identified in calculations of net savings.
Agency Affected: Department of Defense