DOD Budget:

Analysis of Options for Funding Contingency Operations

NSIAD-94-152BR: Published: Apr 26, 1994. Publicly Released: May 26, 1994.

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Pursuant to a congressional request, GAO reviewed various mechanisms for funding defense contingency operations, focusing on: (1) some issues that Congress should consider before making any decisions regarding funding mechanisms; (2) the use of the Defense Business Operations Fund (DBOF) to finance contingencies; and (3) the advantages and disadvantages of the budgetary mechanisms that could be used to fund contingency operations.

GAO found that: (1) Congress should first consider whether contingency operations should be funded from existing appropriations or from supplemental appropriations; (2) use of existing appropriations does not increase the deficit, but disrupts spending plans and could affect readiness; (3) supplemental appropriations could be subject to discretionary spending limits unless they were designated as emergency funding; (4) the advantage of DBOF is that it is an existing financial and organizational structure, but its use for contingency operations could affect its relationship with its customers and its pricing and flexibility, while not ensuring that it would reimburse costs or cover the full cost of contingency operations; (5) alternatives to DBOF include using Department of Defense (DOD) reprogramming or transferring authority, future quarterly budget apportionments, DOD contracting authority under the Feed and Forage Act, and emergency supplemental appropriations; (6) emergency supplemental appropriations would maintain the status quo, but could disrupt planned DOD activities and be subject to funding limitations; (7) Congress could amend or modify existing DOD funding authorities, which would also disrupt spending plans and possibly affect readiness; (8) Congress could establish a revolving or transfer account to accumulate dedicated funds from other sources with whatever restrictions or limitations desired, but the funds would need supplemental appropriations; and (9) Congress could provide direct appropriations to each service and avoid transferring funds, but it would be difficult to determine the amounts needed and the appropriate allocation to each service.

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