Military Operations: Fiscal Year 2004 Costs for the Global War on Terrorism Will Exceed Supplemental, Requiring DOD to Shift Funds from Other Uses

GAO-04-915 Published: Jul 21, 2004. Publicly Released: Jul 21, 2004.
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Highlights

To support the Global War on Terrorism in fiscal year 2004, the Congress appropriated $65 billion to the Department of Defense (DOD) in an emergency supplemental appropriations act. To assist the Congress in its oversight role, GAO reviewed (1) the adequacy of current funding for fiscal year 2004 war-related activities and (2) actions DOD is undertaking to cover anticipated shortfalls, if any. Based on the body of work GAO has done on the cost of contingency operations, GAO is also making observations on efforts to require greater accountability to the Congress on the use of funds appropriated to DOD for contingency operations.

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Recommendations

Matter for Congressional Consideration

Matter Status Comments
To better assess the adequacy of previously provided funding, the Congress may wish to expand its reporting requirements for DOD on the use of GWOT funds to include reports at the half year and the end of the third quarter of each fiscal year that include an assessment of the adequacy of funding for GWOT in that fiscal year, including (a) if funding appears to be insufficient, the Secretary of Defense's plan for covering any shortfall and (b) if funding appears to exceed forecasted costs, the procedures that will be followed to ensure that any excess funds are not used for non-GWOT purposes.
Closed – Not Implemented
Congress did not expand the reporting requirement for DOD.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense In light of the fact that we have reported for years on the large amounts of reported obligations in the miscellaneous categories of the Consolidated DOD Terrorist Response Cost Reports, the Secretary of Defense should review recent Consolidated DOD Terrorist Response Cost Reports to identify the larger groupings of reported obligations within the "other supplies and equipment," "other services and miscellaneous contracts," and "other military personnel" cost categories.
Closed – Implemented
In January 2005, the Office of the Secretary of Defense-Comptroller (OUSD-C)issued a revised version of Vol. 12, Chapter 23, of the Financial Management Regulations which included new cost reporting categories that refine the capture of obligations previously reported in the larger "miscellaneous" categories. The OUSD-C directed the Defense Financial Accounting Service to implement these changes to the Cost Categories and Cost Breakdown Structure for contingency operations effective for the October 31, 2004, version of the Consolidated Department of Defense Terrorist Response Cost Report, and the Consolidated Department of Defense Contingency Cost Report. These changes have been verified in the October, November, and December 2004 versions of the Consolidated Department of Defense Terrorist Response Cost Reports.
Department of Defense In light of the fact that we have reported for years on the large amounts of reported obligations in the miscellaneous categories of the Consolidated DOD Terrorist Response Cost Reports, the Secretary of Defense should revise Chapter 23 of the Financial Management Regulations to include these groupings as reporting categories so that the amounts classified in the "other" categories are minimized.
Closed – Implemented
In January 2005, the Office of the Secretary of Defense-Comptroller (OUSD-C)issued a revised version of Vol. 12, Chapter 23, of the Financial Management Regulations which included new cost reporting categories that refine the capture of obligations previously reported in the larger "miscellaneous" categories. The OUSD-C directed the Defense Financial Accounting Service to implement these changes to the Cost Categories and Cost Breakdown Structure for contingency operations effective for the October 31, 2004, version of the Consolidated Department of Defense Terrorist Response Cost Report, and the Consolidated Department of Defense Contingency Cost Report. These changes have been verified in the October, November, and December 2004 versions of the Consolidated Department of Defense Terrorist Response Cost Reports.
Department of Defense In light of the fact that we have reported for years on the large amounts of reported obligations in the miscellaneous categories of the Consolidated DOD Terrorist Response Cost Reports, the Secretary of Defense should direct the military services to begin reporting obligations using these new cost categories as soon as they are identified.
Closed – Implemented
In January 2005, the Office of the Secretary of Defense-Comptroller (OUSD-C)issued a revised version of Vol. 12, Chapter 23, of the Financial Management Regulations which included new cost reporting categories that refine the capture of obligations previously reported in the larger "miscellaneous" categories. The OUSD-C directed the Defense Financial Accounting Service to implement these changes to the Cost Categories and Cost Breakdown Structure for contingency operations effective for the October 31, 2004, version of the Consolidated Department of Defense Terrorist Response Cost Report, and the Consolidated Department of Defense Contingency Cost Report. These changes have been verified in the October, November, and December 2004 versions of the Consolidated Department of Defense Terrorist Response Cost Reports.

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