Defense Budget Increases:

How Well Are They Planned and Spent

PLRD-82-62: Published: Apr 13, 1982. Publicly Released: Apr 13, 1982.

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GAO analyzed the $72 billion Defense budget increases in fiscal years 1981 and 1982, a 50-percent increase over the 1980 budget year. GAO also reviewed attempts to show how the Department of Defense (DOD) planned to use these funds and how they were spent.

GAO found that DOD generally followed through on its pledge to emphasize readiness and sustainability and to invest heavily in force modernization. It also increased military pay to recruit and retain critical skills and increased funding to the real property maintenance accounts to improve not only readiness, but also the quality of life for military personnel. However, the Administration had only limited success in eliminating marginal weapons programs to fund higher priority programs at more efficient production rates. Further, increases in operations and maintenance funds could have been spent more prudently. There is also a need for top managers in DOD to maintain visibility over how the funds are used. In the personnel area, DOD is using an across-the-board compensation approach to resolving skill shortage problems, rather than managing skill categories individually and tailoring pay and benefit packages to attract and keep sufficient people. Finally, DOD needs to add an accountability system or feedback loop to its Planning, Program and Budgeting System that would adequately inform top DOD officials and Congress on the progress made on major problems and projects. The major problem areas are: (1) providing more program stability; (2) adding to weapons systems support; (3) using the funds prudently; (4) defining objectives for use of funds; (5) maintaining program visibility; (6) obligating funds received late; (7) overcoming military skill imbalance problems; and (8) accountability over program execution.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: This recommendation has been overtaken by events and is covered in the 1983 report.

    Matter: Congress may want to have DOD begin developing comprehensive management-by-skill programs that would provide the services with more flexibility in dealing with skill imbalances in selected areas.

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 Secretary of Defense should develop methods and systems that will enable DOD to: (1) identify the results (major accomplishments) to be achieved with each level of increase to the Defense budget and over what timeframes; (2) identify to Congress what has been accomplished to date for any major program or specific appropriation; and (3) provide to Congress, with each budget package, information on accomplishments in terms of established goals and priorities in each major program and appropriation.

    Agency Affected: Department of Defense

  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: (1) follow through on the plan to cut lower priority programs so that higher priority programs can be funded at more efficient production rates; and (2) provide pricing data at various rates of production to Congress, to allow it to consider the impact of additional changes balancing mission needs against available funding.

    Agency Affected: Department of Defense

  3. 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, to ensure DOD and Congress that funds are spent prudently on programs to enhance readiness and improve quality of life: (1) monitor programs receiving large funding increases to ensure that additional funding can be absorbed efficiently; (2) direct the military services to establish the optimum level of depot backlog in major equipment categories that will provide for economic work scheduling, require that categories of equipment be identified and prioritized according to their contribution to readiness and sustainability, and require the services to define to Congress what they mean by a zero backlog; and (3) direct the military services to develop guidance and criteria for funding real property maintenance projects that contribute directly to readiness and quality of life.

    Agency Affected: Department of Defense

  4. 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 require: (1) the military services to adopt a system for monitoring the use of operations and maintenance funds ensuring that the funds are applied in the programs intended and that approval for major shifts of funds above an established threshold be justified; (2) the military services to report to Congress on the execution of major operations and maintenance programs as part of their annual budget presentations; and (3) the military services to revise their stock fund procedures where necessary to be able to obligate funds for the purposes intended.

    Agency Affected: Department of Defense

 

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