Defense Headquarters: Total Personnel and Costs Are Significantly Higher Than Reported to Congress (Letter Report, 10/30/97, GAO/NSIAD-98-25)
Pursuant to a congressional request, GAO reviewed the Department of
Defense's (DOD) program to account for its management headquarters and
headquarters support activities, focusing on: (1) the accuracy and
reliability of DOD's reported data on management headquarters and
headquarters support personnel and costs; (2) reasons that data on
personnel and costs could be inaccurate; and (3) DOD's plans to reduce
the size of its management headquarters and headquarters support
activities.
GAO noted that: (1) DOD's annual budget exhibits to Congress on
management headquarters and headquarters support are unreliable because
the number of personnel and costs are significantly higher than
reported; (2) neither DOD nor Congress can determine trends in
headquarters personnel and costs to help them make informed decisions
about the appropriate size of headquarters; (3) during fiscal years (FY)
1985-86, DOD reported steady decreases in its management headquarters
and headquarters support personnel, however, these data did not include
personnel at most of DOD's noncombat organizations that are subordinate
to management headquarters; (4) in a review of selected subordinate
organizations, GAO found that almost three-fourths were primarily
performing management or headquarters support functions and should have
been reported to Congress by DOD; (5) DOD's headquarters costs are also
significantly higher than reported to Congress; (6) DOD's data indicate
that management headquarters and headquarters support costs decreased
from $5.3 billion to $4.3 billion in constant 1997 dollars during FY
1985-86, however, DOD's reported data did not include all costs; (7)
DOD's reported headquarters personnel and cost data are understated for
several reasons: (a) sustained criticism from Congress about the size of
DOD's headquarters has been a disincentive; (b) many DOD officials
believe that they are required to report only personnel that make
policy, allocate resources, or plan for the future; (c) the criteria for
determining whether organizations should be included in management
headquarters are complicated; and (d) oversight has been limited; (8)
DOD faces challenges in reducing the size of its headquarters; (9) DOD
has not determined the scope of future reductions or developed a
detailed plan for making the reductions; (10) DOD is examining the
effects of a possible 15-percent reduction in management headquarters
and support personnel during FY 1998-2003; (11) a Defense Reform Task
Force is assessing the missions, functions, and size of the Office of
the Secretary of Defense and other headquarters; (12) determining
whether and how much to reduce management headquarters is difficult
because DOD has no generally accepted staffing standards; and (13) DOD
officials have a range of views on whether and how to reduce management
headquarters, some advocating reduction while others have no plans for
reduction.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: NSIAD-98-25
TITLE: Defense Headquarters: Total Personnel and Costs Are
Significantly Higher Than Reported to Congress
DATE: 10/30/97
SUBJECT: Administrative costs
Defense budgets
Personnel management
Reductions in force
Human resources utilization
Military downsizing
Personnel classification
Management information systems
Defense cost control
IDENTIFIER: DOD Future Years Defense Program
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Cover
================================================================ COVER
Report to the Honorable
Charles E. Grassley, U.S. Senate
October 1997
DEFENSE HEADQUARTERS - TOTAL
PERSONNEL AND COSTS ARE
SIGNIFICANTLY HIGHER THAN REPORTED
TO CONGRESS
GAO/NSIAD-98-25
Defense Headquarters
(701105)
Abbreviations
=============================================================== ABBREV
CINCLANTFLT - Commander in Chief, U.S. Atlantic Fleet
DA&M - Director of Administration and Management
DARO - Defense Airborne Reconnaissance Office
DOD - Department of Defense
FORSCOM - U.S. Army Forces Command
FYDP - Future Years Defense Program
OPNAV - Office of the Chief of Naval Operations
OSD - Office of the Secretary of Defense
QDR - Quadrennial Defense Review
TRADOC - U.S. Army Training and Doctrine Command
USACOM - U.S. Atlantic Command
WHS - Washington Headquarters Services
Letter
=============================================================== LETTER
B-275837
October 30, 1997
The Honorable Charles E. Grassley
United States Senate
Dear Senator Grassley:
Since at least the early 1970s, Congress has been concerned about the
size of management headquarters in the Department of Defense (DOD).
At your request, we reviewed DOD's program to account for its
management headquarters and headquarters support activities.
Specifically, our objectives were to determine (1) the accuracy and
reliability of DOD's reported data on management headquarters and
headquarters support personnel\1 and costs, (2) reasons that data on
personnel and costs could be inaccurate, and (3) DOD's plans to
reduce the size of its management headquarters and headquarters
support activities.
--------------------
\1 Unless stated otherwise, we have used the term "personnel"
throughout this report to connote positions for which funding has
been requested or provided.
BACKGROUND
------------------------------------------------------------ Letter :1
In 1972, after receiving inconsistent data on DOD headquarters from
the military services, the House Appropriations Committee directed
DOD to define headquarters functions, list headquarters activities,
and develop a common method of accounting for headquarters personnel
and costs. In response, in 1973 the Deputy Secretary of Defense
issued DOD
Directive 5100.73. Over the years, the directive has been revised
and is now titled "Department of Defense Management Headquarters and
Headquarters Support Activities."
The directive defines management as exercising oversight, direction,
and control of subordinate organizations or units by (1) developing
and issuing policies and providing policy guidance; (2) reviewing and
evaluating program performance; (3) allocating and distributing
resources; or (4) conducting mid- and long-range planning,
programming, and budgeting. It defines headquarters support as
professional, technical, administrative, or logistic support that is
performed in, or provided directly to, a management headquarters.
The definition includes both staff support and operating support
(such as secretarial or computer support). It excludes specific
products or technical and operating-type services that are provided
on a DOD- or componentwide basis (such as payroll services) and base
operating support functions provided by a host to all tenants.
The directive includes a list of organizations that DOD classifies as
management headquarters and headquarters support activities. This
list includes the Office of the Secretary of Defense (OSD); the Joint
Staff; defense agency headquarters; unified command headquarters;
international military headquarters; and military department
headquarters, including the headquarters of acquisition centers,
major commands, and similar Navy organizations. In addition to the
listed entities, the directive establishes criteria for DOD
components to use in identifying other personnel and organizations
that perform management headquarters and headquarters support
functions. The directive, as implemented in DOD, requires that DOD
annually report to Congress all military and civilian personnel and
all budgeted funds for organizations identified under the directive.
OSD and the military departments report this data to Congress on four
separate budget documents, called PB-22 exhibits.
Many DOD management headquarters listed in the directive have
numerous subordinate noncombat organizations that perform a wide
variety of functions, from direct staff support to their parent
headquarters to operating military academies. In the Army and Air
Force, these types of organizations are called field operating
agencies/activities, staff support agencies, or direct reporting
units. The Navy has no specific term for these noncombat support
activities--at the Department of the Navy level, they are a subset of
"Echelon 2" organizations, a generic term for Navy organizations that
report to the Secretary of the Navy or the Chief of Naval Operations
(OPNAV).
In the past, we reported that DOD had an incentive to respond to
pressures to reduce its management headquarters by transferring
personnel to nonmanagement headquarters organizations. We also
reported that past efforts to reduce headquarters personnel in OSD
and military department headquarters were achieved primarily through
transfers of functions and personnel to other organizations.\2
Concerned that DOD's efforts to reduce its infrastructure, including
headquarters, have lagged behind the cuts made in operational forces,
Congress has taken several actions to reduce headquarters personnel.
For example, in 1990, Congress ordered DOD to reduce total personnel
assigned to DOD management headquarters and headquarters support
activities by 20 percent over 5 years in order to bring the size of
headquarters "into line with" legislated force structure and
budgetary reductions. Also, in the National Defense Authorization
Act for Fiscal Year 1997, Congress directed DOD to reduce OSD, its
DOD support activities, and the Washington Headquarters Services
(WHS) by 25 percent over 5 years.
--------------------
\2 Highlights of a Report on Staffing and Organization of
Top-Management Headquarters in the Department of Defense
(GAO/FPCD-76-35A, 1976), Defense Headquarters Staff Reductions: An
Overview (GAO/FPCD-78-72, Oct. 2, 1978), and Staffing Data for
Department of Defense Top Management Headquarters Organizations
(GAO/FPCD-83-29, May 6, 1983).
RESULTS IN BRIEF
------------------------------------------------------------ Letter :2
DOD's annual budget exhibits to Congress on management headquarters
and headquarters support are unreliable because the number of
personnel and costs are significantly higher than reported. As a
result, neither DOD nor Congress can determine trends in headquarters
personnel and costs to help them make informed decisions about the
appropriate size of headquarters. During fiscal years 1985-96, DOD
reported steady decreases in its management headquarters and
headquarters support personnel--a 31-percent decline from about
77,000 to 53,000. However, these data did not include personnel at
most of DOD's noncombat organizations that are subordinate to
management headquarters. In our review of selected subordinate
organizations, we found that almost three-fourths were primarily
performing management or headquarters support functions and should
have been reported to Congress by DOD, using the criteria in DOD
Directive 5100.73. Also, a DOD study group concluded that DOD has
about 81,000 management headquarters and support personnel, or 30,000
more than were reported to Congress in the President's budget for
fiscal year 1998.
DOD's headquarters costs are also significantly higher than reported
to Congress. DOD's data indicate that management headquarters and
headquarters support costs decreased from $5.3 billion to $4.3
billion in constant 1997 dollars during fiscal years 1985-96.
However, DOD's reported data did not include all costs, as required
by its financial management regulation. In addition, cost data for
management headquarters and headquarters support activities are
scattered among several budget documents, making it difficult to
determine total costs.
DOD's reported headquarters personnel and cost data are understated
for several reasons. Sustained criticism from Congress about the
size of DOD's headquarters has been a disincentive for DOD to
accurately report the number of such personnel and their related
costs. Thus, DOD has "played games" to "hide" management
headquarters personnel from Congress, according to several Office of
the Secretary of Defense and military service officials. Second,
many DOD officials believe that they are required to report only
personnel that make policy, allocate resources, or plan for the
future, even though DOD Directive 5100.73 requires that headquarters
support personnel be reported. Third, the directive's criteria for
analyzing organizations to determine whether they should be included
in budget exhibits on management headquarters are complicated.
Finally, oversight by the Office of the Secretary of Defense and the
military services has been limited.
DOD faces challenges in reducing the size of its headquarters. While
DOD wants to reduce the size and cost of its management headquarters
to reallocate funds to other areas, it has not determined the scope
of future reductions or developed a detailed plan for making the
reductions. DOD is examining the effects of a possible 15-percent
reduction in management headquarters and support personnel during
fiscal years 1998-2003, a cut of about 7,650 more personnel than is
currently programmed in its Future Years Defense Program. At the
same time, a Defense Reform Task Force is assessing the missions,
functions, and size of the Office of the Secretary of Defense and
other headquarters. Determining whether and how much to reduce
management headquarters is difficult because DOD has no generally
accepted staffing standards to objectively size a management
headquarters. Furthermore, DOD officials have a range of views on
whether and how to reduce management headquarters further--some
advocate significant reductions while others have no plans to reduce.
We are making recommendations intended to (1) simplify the criteria
in, and expand the scope of, DOD Directive 5100.73 to generate more
accurate and complete data and (2) provide Congress with a readily
available summary of the total costs of DOD management headquarters
and headquarters support activities.
NUMBER OF HEADQUARTERS
PERSONNEL ARE SIGNIFICANTLY
HIGHER THAN DOD REPORTS
------------------------------------------------------------ Letter :3
The total number of personnel associated with DOD's management
headquarters and headquarters support activities are significantly
higher than DOD has reported to Congress. DOD reported steady
decreases in its management headquarters and headquarters support
personnel from about 77,000 to 53,000 during fiscal years 1985-96, a
31-percent decrease. However, DOD does not report personnel at most
of its noncombat organizations that are directly subordinate to
management headquarters. In our review of selected subordinate
noncombat organizations, we found that almost three-fourths of the
organizations were primarily performing management or management
support functions and should have been reported to Congress by DOD,
using the criteria in DOD Directive 5100.73. Some personnel in these
subordinate organizations had been part of headquarters, but they
were transferred out of headquarters, or reclassified as
nonheadquarters, during periods when Congress mandated that DOD
reduce its management headquarters personnel. For example, in 1992
the Air Force removed about 2,000 personnel in its numbered air
forces headquarters from reporting under DOD's management
headquarters program. We also found situations in which the military
services use unusual accounting devices that distort the true size of
organizations; in addition, the size of OSD is unclear because of
definitional issues.
DOD REPORTED STEADY
DECREASES IN HEADQUARTERS
PERSONNEL DURING 1985-96
---------------------------------------------------------- Letter :3.1
DOD reported steady decreases in its management headquarters and
headquarters support personnel from about 77,000 to 53,000 during
fiscal years 1985-96, a 31-percent decrease. These reported
decreases were, to some extent, in response to reductions directed by
Congress. This rate of decrease is somewhat less than the 36-percent
decrease in combat forces over the same time period. Figure 1 shows
reported personnel levels for management headquarters and
headquarters support for past and future fiscal years.
Figure 1: Reported DOD
Management Headquarters
Personnel (fiscal years
1985-99)
(See figure in printed
edition.)
Notes: Data for 1985-96 are reported actual values. Data for
1997-99 are estimates.
The Defense-wide category includes management headquarters personnel
in OSD; OSD support organizations; the Joint Staff; and the
headquarters of defense agencies, DOD field activities, and the U.S.
Special Operations Command.
Source: OSD's Director of Administration and Management (OSD/DA&M)
and DOD's PB-22 exhibits.
Although DOD showed a steady decline in management headquarters and
headquarters support personnel overall, the Defense-wide category
increased 34 percent, from 7,089 in fiscal year 1985 to 9,533 in
fiscal
year 1996. The increase in OSD alone was 23 percent--from 1,691 to
2,078 during this time. (See app. I for a discussion of OSD
personnel.) The increase in Defense-wide personnel was especially
high from fiscal year 1988 to 1990--from 7,599 to 10,347, an increase
of 36 percent. During that time, an additional 1,500 personnel in
the Defense Logistics Agency's management support activities (now
called DOD support activities) were included in DOD's report,
according to agency officials. Also, in fiscal year 1990, DOD's
report included for the first time headquarters personnel from the
U.S. Special Operations Command.
DOD projects smaller annual decreases in management headquarters and
headquarters support personnel for fiscal years 1997-99 than those
reportedly made during the last 10 years. Beyond 1999, DOD's
estimates for these personnel are contained only in the Future Years
Defense Program (FYDP), which shows a slight decrease, from 49,699 to
49,270 during fiscal years 2000-03. However, these projections do
not include any changes that may occur as a result of implementing
recommendations based on the Quadrennial Defense Review (QDR).
ALMOST THREE-FOURTHS OF
SELECTED ORGANIZATIONS
SHOULD HAVE BEEN REPORTED
---------------------------------------------------------- Letter :3.2
Based on our review of 40 noncombat organizations subordinate to the
10 management headquarters we audited, we concluded that DOD had not
included 29 organizations and 2,853 personnel in its reports to
Congress on management headquarters and headquarters support (see
table 1). We selected organizations to review based on a variety of
factors, including conditions that OSD/DA&M officials agreed may
indicate that an organization is providing management support. These
indicators, also called "red flags" by OSD/DA&M, are headquarters
officials serving additional duty as senior officials in the
subordinate organization (called "dual hatting"), transfer of
personnel from headquarters to create or augment subordinate
organizations, diverse functions that mirror headquarters functions,
and collocation of the subordinate organization with its
headquarters. Although the presence of one or more of these
indicators is not conclusive, it led us to perform the analysis
called for in DOD Directive 5100.73.
Table 1
Review of Subordinate Noncombat
Organizations That Report to Management
Headquarters
Subordinat
Total e Organizations Personnel
Subordinate subordinat noncombat that should that should
noncombat e organizati be reported be reported
Management organizations noncombat ons we on PB-22 but on PB-22 but
headquarters \a personnel reviewed are not are not\b
------------ ------------- ---------- ---------- ------------- ------------
OSD 27 157,164 2 1 108
Army 77 21,703 5 5 546
Secretariat,
Army Staff
Navy 64 13,863 4 4 379
Secretariat,
Chief of
Naval
Operations,
Headquarter
s Marine
Corps
Air Force 40 20,592 5 3 510
Secretariat,
AirStaff
U.S. 13 1,097 3 2 269
Atlantic
Command
U.S. Army 13 1,393 4 4 164
Training
and
Doctrine
Command
U.S. Army 1 293 1 1 293
Forces
Command
U.S. 25 5,902 2 1 7
Atlantic
Fleet
Air Combat 16 1,829 5 2 121
Command
Air 9 692 9 6 456
Education
and
Training
Command
================================================================================
Total 285 224,528 40 29 2,853
--------------------------------------------------------------------------------
\a Army and Air Force major commands are excluded. Navy and Marine
Corps operational fleets, forces, bases, and acquisition commands are
excluded.
\b Personnel not reported on PB-22 exhibits are reported to Congress
on other budget exhibits.
Source: DOD and GAO.
Many different types of organizations should have been reported to
Congress because they perform management or management support
functions covered by DOD's directive:
-- The Army's Congressional Inquiry Division, a field operating
activity with 41 personnel, augments 46 personnel that are
designated as headquarters personnel. The division is one of
seven in the Office of the Chief of Legislative Liaison in the
Pentagon.
-- The Navy's International Programs Office, an Echelon 2 command
with 169 personnel, manages foreign assistance programs for the
Navy and reports to the Assistant Secretary of the Navy
(Research, Development, and Acquisition).
-- The Air Intelligence Agency's 497th Intelligence Group, a direct
reporting unit with 305 personnel located in Washington, D.C.,
primarily supports the Air Staff.
-- The U.S. Army's Forces Command's Field Support Activity, with
293 personnel, is merely an accounting device for personnel
integrated throughout Forces Command headquarters.
-- The U.S. Atlantic Command's Information Systems Support Group,
a support activity with 117 personnel that was previously
considered part of headquarters, provides computer support to
the Command's headquarters.
-- The Air Combat Command's Studies and Analyses Squadron, a field
operating activity with 71 personnel, studies issues for its
headquarters.
Appendix II contains details on these and other noncombat
organizations we reviewed.
In addition to these organizations that we found, OSD/DA&M agreed
that other organizations should have been reported in DOD's annual
PB-22 exhibits. For example, OSD's fiscal year 1998 PB-22 exhibit on
Defense-wide activities omitted the management headquarters personnel
and costs for five defense agencies--the Ballistic Missile Defense
Organization, the Defense Advanced Research Projects Agency, the
Defense Commissary Agency, the Defense Finance and Accounting
Service, and the Defense Security Assistance Agency. In total, these
agencies had about 1,300 management headquarters personnel and $150
million in related operations and maintenance costs for fiscal
year 1997. The fiscal year 1998 PB-22 exhibit did include, however,
the management headquarters personnel and costs of the National
Security Agency,\3 a defense agency explicitly covered by DOD
Directive 5100.73 that had not been reported on the exhibit since
fiscal year 1993.
--------------------
\3 The number of headquarters personnel and the costs at the agency
are classified.
PERSONNEL TRANSFERS AND
RECLASSIFICATIONS HAVE
DECREASED REPORTED
HEADQUARTERS NUMBERS
---------------------------------------------------------- Letter :3.3
An unknown portion of DOD's reported personnel decreases in
management headquarters and headquarters support activities were due
to transferring personnel to nonheadquarters organizations or to
reclassifying personnel and their functions as nonheadquarters,
rather than actually reducing DOD personnel. In April 1997, in
response to questions from the House Committee on National Security,
DOD stated that a "good number" of its reported decrease in
management headquarters personnel since 1985 were due to transfers of
personnel from headquarters activities to operational activities and
that a "minimal number" of the decrease was due to reclassification
of positions. DOD emphasized that it had achieved real reductions in
management headquarters personnel, but it could not quantify the
number.\4
In the past, we have reported that headquarters personnel reductions
in OSD and the military department headquarters in Washington were
achieved primarily through transfers of functions and personnel to
other organizations.\5
For example, although OSD, the Army, and the Navy had reduced
personnel by about 2,900 during 1977-78, only 62 employees had been
removed from DOD's payroll through retirement, resignation, and
involuntary separation. We could not determine whether these
transfers had any adverse impact, primarily because few functional
changes or physical relocations were involved. Most transferred
functions and personnel remained in the Washington area; for example,
in October 1977, OSD created WHS and transferred 265 OSD personnel to
it.\6
In 1988, DOD's Deputy Inspector General studied the headquarters of
the unified and specified commands.\7 Among other things, he found
many cases where integral headquarters support functions and
personnel had been transferred from headquarters to support
organizations. The primary purpose of many of these transfers was to
avoid the headquarters connotation and/or personnel limitations
placed on headquarters in legislation and congressional committee
reports, according to his report.
As the Air Force began to restructure its numbered air forces in the
early 1990s, it requested to stop reporting as management
headquarters about 2,000 personnel in the headquarters of numbered
air forces. The Air Force's request came as Congress mandated
reductions in DOD management headquarters during fiscal years
1991-95. OSD/DA&M approved the Air Force's request subject to its
review in fiscal year 1993. However, the review never took place.
Our review of 2 of the 16 numbered air forces\8 indicated that the
Air Force had not fully implemented its restructuring plans. Both
headquarters continue to perform some management headquarters and
headquarters support functions, such as inspections and readiness
oversight, which are covered by DOD Directive 5100.73. Since the Air
Force and OSD/DA&M have not analyzed the numbered air forces since
they began restructuring, they cannot be sure that the Air Force's
exemption for these organizations is in compliance with DOD's
directive. (See app. III for our discussion of numbered air
forces.)
--------------------
\4 The scope of our audit did not include systematically counting
DOD's personnel transfers or reclassifications.
\5 Defense Headquarters Staff Reductions: An Overview
(GAO/FPCD-78-72, Oct. 2, 1978).
\6 WHS is a DOD field activity that is directed by an OSD official,
the Director of Administration and Management. WHS provides support
to OSD, DOD field activities, and other specified defense activities
in the National Capital Region. Specifically, WHS provides services,
such as budgeting and accounting, civilian and military personnel
management, office services, correspondence and cables management,
directives and records management, housekeeping, security, and
computer and graphics support.
\7 Review of Unified and Specified Command Headquarters ("The Vander
Schaaf Report"), Feb. 1988.
\8 The two numbered air forces we reviewed were the 12th Air Force at
Davis-Monthan Air Force Base, Arizona, and the 19th Air Force at
Randolph Air Force Base, Texas.
INAPPROPRIATE USE OF SPECIAL
ACCOUNTING DEVICES MASKS
SIZE OF HEADQUARTERS
---------------------------------------------------------- Letter :3.4
In some instances, the military services have used accounting devices
that have masked the number of personnel in certain headquarters
organizations. However, DOD Directive 5100.73 prohibits "special
personnel accounting devices" to mask or distort the true size or
structure of headquarters.
The Air Force has accounted for 242 personnel that directly support
the Secretary and the Chief of Staff of the Air Force in a
"non-unit"--an accounting device. Air Force leaders do not know
which of their personnel are accounted for as headquarters and which
are accounted for in the non-unit, according to Air Force officials.
The Air Force does not report these personnel as part of the
Secretariat or the Air Staff but instead reports them on a separate
line on its PB-22 exhibit.
If the Air Force added these 242 personnel to its reported fiscal
year 1997 total of 2,460 for the Secretariat and the Air Staff, it
would exceed its statutory limit of 2,639 personnel by 63.\9
According to an Air Staff official, the 242 personnel would have been
accounted for as a part of the Secretariat and the Air Staff, if
Congress had not legislated a personnel ceiling. Nonetheless, in an
April 1997 meeting, Air Force officials stated that the Air Force was
not circumventing the ceiling and they pointed out that OSD/DA&M had
approved of this reporting arrangement. An OSD/DA&M official stated
that he did not know whether the office had formally approved the
arrangement but that it would not be viewed as a problem since the
Air Force had reported the personnel on its PB-22 exhibit.
Two Navy organizations appear to be accounting devices to hold
headquarters personnel. The OPNAV Support Activity's 168 personnel
and the Field Support Activity's 34 personnel are not reported as
part of the 1,023 OPNAV personnel but rather are reported separately
as part of the Navy's departmentwide total. However, the two
organizations are each commanded by OPNAV officials who are
"dual-hatted." Furthermore, OPNAV Support Activity personnel are
intermingled and fully integrated with OPNAV staff. A cognizant Navy
official could not explain the distinction between support personnel
that are accounted for as part of OPNAV proper and those accounted
for as part of the OPNAV Support Activity. Navy documents show that
the OPNAV Support Activity's mission is to provide administrative,
technical, and office services support to OPNAV, while the Field
Support Activity's mission is to assist the Vice Chief of Naval
Operations in budgeting, evaluating resource execution, and providing
manpower and facilities for assigned organizations.
At the Army's Forces Command, Fort McPherson, Georgia, the Command's
Field Support Activity is merely an accounting device for 293
personnel integrated throughout Forces Command headquarters.
--------------------
\9 As part of the Goldwater-Nichols DOD Reorganization Act of 1986,
Congress directed that the total number of military and civilian
personnel assigned to the Air Force Secretariat and the Air Staff may
not exceed 2,639 (10 U.S.C. 8014). Similar personnel ceilings apply
to the Department of the Army,
10 U.S.C. 3014, and to the Department of the Navy, 10 U.S.C. 5014.
SIZE OF OSD IS UNCLEAR
---------------------------------------------------------- Letter :3.5
The size of OSD is unclear because of definitional issues. OSD does
not report, as part of OSD, certain headquarters personnel that are a
part of OSD or are integral to its operation. OSD defines its
personnel to include about 2,000 civilian and military personnel
assigned to various OSD offices and certain OSD-administered
temporary commissions. However, OSD does not include any of the
approximately 1,400 DOD Inspector General personnel in its total,
even though by law the Inspector General is part of OSD and appears
on OSD organization charts. OSD also excludes direct support
provided by DOD support activities, WHS, and the Air Force Pentagon
Communications Agency.\10 DOD does separately report these activities
as well as 56 Inspector General personnel on its Defense-wide PB-22
exhibit, and it provides further information to Congress on them in
annual budget justification materials. Our review, however,
disclosed that OSD underreported WHS support to OSD by 82 personnel.
Also, OSD did not report 26 personnel in the Defense Airborne
Reconnaissance Office as management headquarters personnel, even
though they are, in effect, part of OSD. (See app. I.)
In 1994, the DOD Inspector General recommended that DOD abolish DOD
support activities and transfer their personnel to OSD because the
structure of the activities was not conducive to effective
accountability and management and actually hindered effective mission
accomplishment by OSD managers.\11 While OSD has not eliminated the
DOD support activity organizational category, it has abolished some
activities.\12
In the National Defense Authorization Act for Fiscal Year 1997,
Congress directed OSD, its DOD support activities, and WHS to reduce
their combined personnel by 25 percent by October 1, 1999, with
interim reductions in 1997 and 1998. The baseline for the reductions
is the number of personnel in these organizations as of October 1,
1994. The baseline is 4,815 and the ceiling for October 1, 1997, is
4,093, a reduction of 722.
OSD plans to meet the 1997 ceiling primarily by contracting out WHS
custodians and by reclassifying nearly 300 personnel at the Defense
Manpower Data Center. The Center was considered a DOD support
activity, but in December 1996 the Deputy Secretary of Defense merged
it with the Defense Civilian Personnel Management Service to form the
DOD Human Resources Activity, which is headed by the Under Secretary
of Defense (Personnel and Readiness). OSD will take credit for the
reduction but achieve no near-term savings from the merger and
reclassification of the Center's personnel. OSD has not determined
how it will reduce personnel to meet the 1998 and 1999 ceilings; an
ongoing study will provide the Secretary of Defense with advice on
this matter.
DOD should rebaseline the composition of OSD, according to a May 1997
contractor study commissioned by the Deputy Secretary of Defense in
response to congressional guidance that DOD review the organization
and functions of OSD.\13 The study concluded that DOD had in the past
purposefully redefined certain activities outside of OSD, thus making
OSD appear smaller while increasing personnel in less visible
organizations. The study recommended that the Secretary of Defense
include as part of OSD the headquarters element of the DOD Inspector
General, elements of WHS that support OSD, and the DOD support
activities. The study also recommended that OSD's role focus on top
leadership and management tasks and that OSD be divested of program
management, execution, and lower priority tasks. Regarding the
congressionally directed cuts, the study concluded that DOD and
Congress should not decide on an optimal personnel ceiling for OSD
until they agree on OSD's composition and roles.
--------------------
\10 The two remaining DOD support activities (the C\4 I Integration
Support Activity and the Plans and Program Analysis Support Center)
and WHS are under the direction, authority, and control of OSD
officials.
\11 Defense Support Activities: Providing Technical and Analytical
Support to the Office of the Secretary of Defense (94-INS-08, June
23, 1994).
\12 As of August 1997, only two DOD support activities remained. In
July 1997, the Deputy Secretary of Defense abolished the DOD support
activity that serviced the Under Secretary of Defense (Acquisition
and Technology) and transferred 156 of its 187 personnel to the
office of the Under Secretary. The Under Secretary requested the
transfer to reduce his total personnel, save at least $2 million, and
alleviate morale problems caused by having to apply different
personnel management directives to support activity personnel and OSD
personnel, even though they worked side-by-side on the same tasks.
\13 The Office of the Secretary of Defense: Creating a New
Organization for a New Era (Hicks & Associates, Inc., McLean,
Virginia, #SAIC 97-1026, May 1997).
HEADQUARTERS COSTS ARE
SIGNIFICANTLY HIGHER THAN DOD
REPORTS
------------------------------------------------------------ Letter :4
DOD has significantly understated the costs of its management
headquarters and headquarters support activities. DOD reported a
19-percent decrease in costs--from $5.3 billion to $4.3
billion--during fiscal years 1985-96 and projects that costs will be
about $5 billion through fiscal year 2003. However, DOD's cost data
are unreliable. Some of DOD's PB-22 exhibits have only reflected
partial headquarters costs, contrary to a DOD financial management
regulation that calls for the reporting of all budgeted funds. Other
PB-22 cost estimates made by military service officials in
Washington, and reported to Congress, were significantly less than
the estimates made by the military commands. As previously
discussed, our review found 29 organizations with nearly 2,900
personnel that should be reported by DOD as management headquarters
or headquarters support. DOD has understated headquarters costs by
about $215 million by not reporting these personnel, using an average
cost per headquarters person of $75,000 based on DOD data.
DOD'S COST DATA ARE
UNRELIABLE
---------------------------------------------------------- Letter :4.1
DOD reported a 19-percent decrease in management headquarters and
headquarters support costs--from $5.3 billion to $4.3 billion--during
fiscal years 1985-96, using constant 1997 dollars and PB-22 data.\14
These costs were primarily composed of operations and maintenance
costs and military personnel costs. In general, within operations
and maintenance accounts, civilian pay/benefits and "other
contractual services"\15 were the largest cost categories.
PB-22 data are unreliable. The Navy's annual PB-22 exhibit includes
only estimated personnel costs for military and civilian positions,
contrary to DOD Financial Management Regulation 7000.14-R that calls
for reporting of all budgeted funds to support an activity.\16 For
example, the Navy reported $11.6 million in operations and
maintenance costs for fiscal year 1996 for the Commander in Chief,
U.S. Atlantic Fleet headquarters. This amount understated actual
costs by $17.6 million, an error of over 150 percent. At the U.S.
Atlantic Command, a unified command administered by the Navy,
officials documented $43.4 million in actual operations and
maintenance costs during fiscal year 1996, $39.1 million (or 9 times)
more than the Navy reported to Congress on its PB-22 exhibit.\17 Navy
officials told us they had issued guidance to correct this problem.
Furthermore, on the latest Defense-wide PB-22 exhibit prepared by the
DOD Comptroller, no military personnel costs or other costs funded
outside of the operations and maintenance appropriation were
reported.
DOD projects that management headquarters and headquarters support
costs will be about $5 billion through fiscal year 2003, using
constant 1997 dollars and FYDP data (see table 2).\18
Table 2
DOD's Estimated Headquarters Costs for
Fiscal Years 1998-2003
(1997 dollars in billions)
1998 1999 2000 2001 2002 2003
---------------------------------- ---- ---- ---- ---- ---- ----
Army $ $ $ $ $ $
0.9 0.9 1.3 1.3 1.4 1.4
Navy/Marine Corps 1.4 1.4 1.3 1.3 1.3 1.3
Air Force 1.1 1.1 1.1 1.1 1.1 1.1
Defense-wide 1.5 1.4 1.3 1.3 1.3 1.3
======================================================================
Total cost (FYDP) $4.9 $4.7 $5.0 $5.0 $5.1 $5.1
----------------------------------------------------------------------
Notes: Numbers may not add due to rounding. Estimates for the
military services include some costs for Defense-wide activities that
are budgeted for by the military services (such as military personnel
costs).
Source: DOD's 1998-2003 FYDP and DOD deflators.
According to these estimates, DOD will not free up funds in its
management headquarters accounts to help fund modernization efforts
or other initiatives. These projections, based on the completed
1998-2003 FYDP, do not reflect cost reductions in management
headquarters being sought by the Secretary of Defense that could
arise from ongoing DOD studies.
The FYDP's estimates of management headquarters and headquarters
support costs are also unreliable. Program elements in the FYDP
reserved for these costs also contain other costs. For example, the
Army's estimated management headquarters costs include $2.3 billion
during fiscal years 2000-2003 in one program element for military
construction projects. After the Army decides which projects to
fund, it will disperse the funds to separate program elements that
are not counted as part of the cost of management headquarters.
Also, according to a DOD Comptroller official, the Navy's management
headquarters cost data in the FYDP are inaccurate because of the
Navy's method of estimating the costs.
--------------------
\14 Under DOD Directive 5100.73, personnel and costs associated with
base operating support functions and componentwide technical and
operating-type services (such as payroll services) are not reported.
\15 According to Office of Management and Budget Circular A-11, the
"other contractual services" cost category includes advisory and
assistance services; purchases of goods and services from government
accounts; payments for medical care; research and development
contracts; operation and maintenance of facilities and equipment; and
other services. Under DOD Directive 5100.73, operation and
maintenance of facilities, such as headquarters buildings, are
excluded when this support is performed by a host organization (i.e.,
a base command) for all tenants.
\16 In September 1997, after our audit work was completed, the Acting
Under Secretary of Defense (Comptroller) redefined the cost data
required. PB-22 exhibits should show costs directly in support of
management headquarters, excluding operational expenses for items
centrally funded or managed at headquarters but executed elsewhere in
DOD.
\17 DOD stated that not all operations and maintenance costs at the
U.S. Atlantic Command necessarily support management headquarters
functions.
\18 The FYDP projects costs beyond fiscal year 1999, the last year on
PB-22 exhibits. Because of differences in how costs and personnel
are reported in DOD's PB-22 exhibits compared with DOD's FYDP, the
headquarters cost data for fiscal years 1998-2003 from DOD's FYDP are
not easily comparable with PB-22 data.
HEADQUARTERS PERSONNEL AND
COSTS ARE UNDERSTATED FOR
SEVERAL REASONS
------------------------------------------------------------ Letter :5
DOD's management headquarters and headquarters support personnel and
cost data are understated for several reasons. Sustained criticism
from Congress about the size of DOD's headquarters has been a
disincentive for DOD to accurately report the number of such
personnel and their related costs. Thus, DOD has "played games" to
"hide" management headquarters personnel from Congress, according to
several OSD and military service officials. Second, many DOD
officials believe that they are required to report only personnel
that make policy, allocate resources, or plan for the future, even
though DOD Directive 5100.73 requires that headquarters support
personnel be reported. Third, the directive's criteria for analyzing
organizations to determine whether they should be included in budget
exhibits on management headquarters are complicated. Finally,
oversight by OSD and the military services has been limited.
DISINCENTIVES TO ACCURATE
ACCOUNTING CAUSE DOD TO
"HIDE" HEADQUARTERS
PERSONNEL AND COSTS
---------------------------------------------------------- Letter :5.1
Many DOD officials believe that being counted as a management
headquarters or headquarters support activity increases the chance of
personnel reductions, given the history of congressional reductions
to management headquarters personnel. Therefore, DOD organizations
have incentives to avoid inclusion in DOD's management headquarters
program, according to an OSD/DA&M official, the Vice Commander of the
Air Combat Command, and our analysis.
Officials from OSD and each of the military departments told us that
DOD components have organized themselves in such a way as to "hide"
personnel performing headquarters or headquarters support functions.
According to an OSD personnel official, the military service chiefs
and others know that DOD's reported numbers of management
headquarters personnel are too low. He referred to DOD's actions
over the years as a game of "hiding the ball." Separately, Army and
Navy officials told us that their departments "play games" by not
designating personnel as management headquarters or headquarters
support when, under DOD Directive 5100.73, they should. Instead,
management and support functions are placed in field operating
agencies or staff support groups that report to management
headquarters but are not reported to Congress on DOD's PB-22
exhibits, according to the officials. As far back as 1984, the
Secretary of Defense wrote of DOD being criticized for "hiding"
headquarters by labeling them as operational instead of management
organizations. A senior Navy official explained that bureaucracies
find ways to "live with" directives and laws that impose constraints.
Likewise, Air Force actions have led to a "strange organizational
structure," according to an Air Staff official. An official in the
office of the Secretary of the Army noted that this "game goes on"
because headquarters work does not diminish when Congress mandates
reductions in numbers of headquarters personnel.
According to a former DOD Deputy Inspector General, DOD has a long
history of redefining management headquarters to reduce their
apparent size, ignoring the rules for counting personnel assigned to
management headquarters, and renaming organizations to remove them
from the headquarters tracking system. In a 1988 study of unified
and specified commands, the Deputy found that the definition of
headquarters in DOD Directive 5100.73 led to a significant
understatement of the number of personnel that directly supported
headquarters. Many personnel were transferred from headquarters to
support organizations to avoid the headquarters connotation and/or
legislated personnel limits, but they continued to function as part
of headquarters, according to the study. The study recommended that
DOD revise the definition of headquarters personnel to more
completely identify the number of personnel directly supporting
management headquarters. However, DOD did not implement this
recommendation because it was based on a lack of understanding of the
purpose of the management headquarters program, according to
OSD/DA&M.
OFFICIALS MISINTERPRET SCOPE
OF DOD'S DIRECTIVE
---------------------------------------------------------- Letter :5.2
According to officials at several subordinate noncombat
organizations, their organizations, costs, and personnel do not have
to be reported under DOD Directive 5100.73 because they do not "make
policy." However, Washington, D.C., officials that manage their
departments' compliance with the directive are aware that the
directive's scope includes headquarters support functions and in fact
lists and defines 33 such functions. While the directive does not
preclude DOD components from establishing subordinate units to carry
out support functions, it does require components to account for all
management headquarters and headquarters support activities, however
organized, using specific criteria.
DOD'S DIRECTIVE HAS
COMPLICATED CRITERIA
---------------------------------------------------------- Letter :5.3
DOD Directive 5100.73 has complicated criteria for analyzing whether
organizations, particularly headquarters support organizations,
should be counted and reported to Congress. Under the directive,
each DOD component is to analyze the percentage of "work" or "effort"
devoted to
4 management functions and 33 headquarters support functions at each
of its organizations. Different rules for reporting personnel and
costs are applied depending on whether the percentage of
management-related work exceeds 25 or 50 percent of an organization's
total work/effort.
In specific cases, there is ambiguity as to whether an organization
qualifies as a management headquarters or headquarters support
activity under the directive, but OSD/DA&M is charged with making the
final determination. For example, the Third Army asked to have all
of its headquarters personnel removed from DOD's management
headquarters reporting system. However, after a review by OSD/DA&M
and others, OSD/DA&M excluded only a portion of Third Army
headquarters personnel from reporting under DOD's directive.
DOD'S OVERSIGHT OF
HEADQUARTERS ACCOUNTING
SYSTEM HAS BEEN LIMITED
---------------------------------------------------------- Letter :5.4
DOD's oversight of its management headquarters and headquarters
support accounting system has been limited, which has not facilitated
compliance with DOD Directive 5100.73. The directive requires
OSD/DA&M to determine the composition of, maintain, and monitor the
official list of DOD management headquarters and headquarters support
functions and organizations and to conduct periodic reviews to ensure
DOD components accurately identify and account for management
headquarters and headquarters support activities. In addition, the
directive requires the DOD components to designate a single office to
implement the directive, maintain an information system that
identifies the number and size of their management headquarters and
headquarters support activities, ensure that their list of such
activities is accurate, and conduct surveys or studies and establish
administrative controls to comply with the directive.
OSD/DA&M has one person that spends part of his time monitoring
compliance with the directive; in the past 3 years, the office has
reviewed five cases for compliance. The Navy's primary office for
monitoring the management headquarters program is the Office of the
Assistant Secretary of the Navy (Financial Management and
Comptroller), according to officials who work there. However, our
questions to this office on the management headquarters program
typically had to be referred to other Navy offices.
The Office of the Assistant Secretary for Manpower and Reserve
Affairs controls the Army's management headquarters program and is
the approval authority for any changes requested by Army commanders.
According to an Office official, the Army's Manpower Analysis Agency,
a field operating activity that reports to the Assistant Secretary,
conducts manpower surveys of commands and, among other things,
determines whether commands have properly accounted for their
management headquarters personnel. However, Manpower Analysis Agency
officials said "no one is checking" the Army's management
headquarters program. Until 1992, this Agency reviewed Army
organizations to determine compliance with the program, but it
stopped doing so routinely when the Army gave its commanders more
authority with less oversight, according to Agency officials.
In response to our inquiries, representatives from the offices of the
inspector generals and auditors of the Army, the Navy, and the Air
Force said they had not audited or inspected this area. In addition
to its 1994 study discussed earlier, in 1989, the DOD Inspector
General reviewed DOD support activities, formerly called management
support activities/agencies.\19
--------------------
\19 Management Support Activities (89-INS-12, Oct. 17, 1989). We
also reported on this topic in Defense Budget Issues: Uniform
Definition of Management Support Agencies Needed (GAO/NSIAD-90-255,
July 30, 1990).
CHALLENGES REMAIN IN REDUCING
SIZE OF DOD HEADQUARTERS
------------------------------------------------------------ Letter :6
DOD faces challenges in reducing the size of its management
headquarters and headquarters support activities. While DOD wants to
reduce the size and cost of its management headquarters to reallocate
funds to other areas, it has not determined the scope of future
reductions or developed a detailed plan for making the reductions.
Also, DOD has different definitions of management headquarters and
headquarters support--when analyzing their headquarters internally,
DOD officials include more activities than are reported on DOD's
PB-22 exhibits. Determining whether and how much to reduce
management headquarters is difficult because DOD has no generally
accepted staffing standards to objectively size a management
headquarters. Furthermore, DOD officials have a range of views on
whether and how to reduce management headquarters further--some
advocate significant reductions while others have no plans to reduce.
DOD WANTS TO REDUCE
HEADQUARTERS PERSONNEL, BUT
IT HAS NOT DEVELOPED A
DETAILED PLAN
---------------------------------------------------------- Letter :6.1
The QDR report concluded that significant cuts in DOD headquarters
are feasible and desirable.\20 However, it did not recommend a
detailed plan for reducing headquarters, in part, because senior DOD
officials lacked a reliable database to serve as a baseline for
analysis. A subsequent study, ordered by the QDR and led by OSD,
examined the effects of reducing DOD headquarters and headquarters
support personnel by 15 percent during fiscal years 1998-2003--a
total cut of about 12,550 positions, or about 7,650 more than
reductions currently programmed in DOD's 1998-2003 FYDP. This number
was based on the plan to reduce the percentage of headquarters
personnel, relative to total DOD personnel, to the 1989 level of 3.3
percent. The estimated 1998 level without further reductions is 3.7
percent, according to the study.\21
In implementing this reduction, DOD does not want to make equal
across-the-board percentage reductions for each component; it will
instead analyze major structural changes, such as consolidating
organizations and eliminating entire organizational echelons,
according to the leader of DOD's study. In addition, the Defense
Reform Task Force, established by the Secretary of Defense, is to
report in November 1997 on the size and functions of OSD, defense
agencies, DOD field activities, and the military departments.
--------------------
\20 The Report of the Quadrennial Defense Review (May 19, 1997).
\21 Organizational Staffing: Review of Headquarters Activities
(marked "Final Report" and "Draft," undated).
DOD DEFINES HEADQUARTERS
MORE BROADLY FOR INTERNAL
PLANNING PURPOSES
---------------------------------------------------------- Letter :6.2
DOD has different definitions of management headquarters and
headquarters support--when analyzing their headquarters internally,
DOD officials include more activities than are reported on DOD's
PB-22 exhibits. For example, on its PB-22 budget exhibit for fiscal
year 1998, the Army estimated a total of 2,784 personnel for
Headquarters, Department of the Army.\22 However, as part of its
analysis for redesigning this Headquarters, the Army included 19,502
personnel because it counted all personnel in its 58 field operating
agencies that report to the Army Secretariat or to the Army Staff.
Also, when the Navy studied its Secretariat, the study team included
the numerous subordinate activities/offices that are not part of, but
report to, the Navy Secretariat. Only two of these activities--the
Office of Civilian Personnel Management and the Chief of Naval
Research--are included on the Navy's PB-22 budget exhibit and
reported to Congress.
In a follow-on study to the QDR, the study group created a new
definition of management headquarters and headquarters support
activities because senior DOD officials had concluded that the
numbers reported under DOD Directive 5100.73 were unreliable. The
group's expanded definition included the DOD Inspector General,
selected personnel at DOD field activities, military service field
operating agencies, and headquarters subordinate to headquarters
currently reported under the directive. Using this new definition,
the group concluded that DOD had about 81,000 management headquarters
and headquarters support personnel, or 30,000 more than were reported
to Congress in the President's budget for fiscal year 1998. However,
OSD/DA&M and military service officials have criticized this
definition and DOD has not adopted this revised definition.
--------------------
\22 Headquarters Department of the Army is composed of the Army
Secretariat; the Office of the Chief of Staff, Army; the Army Staff;
and staff support agencies.
DOD HAS NO STANDARDS FOR
DETERMINING THE APPROPRIATE
NUMBER OF HEADQUARTERS
PERSONNEL
---------------------------------------------------------- Letter :6.3
According to military service officials, there are no overall
staffing standards to objectively quantify the number of personnel
required for headquarters functions. The Air Force at one time sized
its headquarters staff at major commands at between 1.7 and 2.0
percent of the total personnel under each command's headquarters, but
no longer does so, according to Air Force officials. Without
quantifiable standards for headquarters staff work, which may not be
feasible given the nature of the work, DOD and Congress are left to
rely on judgment for sizing headquarters. In the past, this has led
OSD and the military services to apportion percentage cuts
across-the-board to their components, although some organizations
have reengineered.
Our work has shown that successful businesses have effectively tied
personnel reductions to reengineering business processes.\23 For
example, one company began reductions to control costs and increase
efficiency by using across-the-board cuts but found that because the
cuts were not tied to a larger strategy, they only exacerbated the
company's problems. The company's more recent restructuring efforts
involved analyses of the distribution of employees and resources to
determine where to cut and where to consolidate--a strategy that
proved successful. These lessons are applicable to DOD as it
develops a strategy for reducing its activities.
--------------------
\23 Workforce Reductions: Downsizing Strategies Used in Selected
Organizations (GAO/GGD-95-54, Mar. 13, 1995).
OFFICIALS' VIEWS ON FURTHER
HEADQUARTERS REDUCTIONS VARY
---------------------------------------------------------- Letter :6.4
DOD officials have a range of views on whether and how to further
reduce management headquarters. Senior DOD officials and some
military commanders have publicly advocated reductions, while others
have no plans to reduce.
The Commander in Chief, U.S. Atlantic Command, stated in March 1996
that it is time to review the number and size of headquarters as well
as the size of the defense agencies. Likewise, the Air Combat
Commander concluded that a pervasive "inattention to the cost of
doing business, from the flight line on up" was wasting resources and
that headquarters specifically were "bloated," according to the Vice
Commander. The Commander has instructed his staff to analyze, as a
preliminary goal, reducing the Command's 2,284 headquarters personnel
by 400 and reducing the Command's subordinate activities by 600
personnel, according to the Vice Commander. At the time of our
review, this study was in its initial stages.
In contrast to the Air Combat Command's numerical goals, the Deputy
Under Secretary of the Navy (Institutional and Strategic Planning)
has led a headquarters reengineering study without setting numerical
goals. In his view, headquarters personnel should not be reduced by
the same percentage as operational forces because a minimum level of
headquarters personnel is always required, whatever the size of the
operating forces. He further believes that a comprehensive
understanding of the requirements placed on headquarters is necessary
to determine the number of personnel needed. Thus, he said that
management reforms in Navy headquarters should come from within the
Navy and should not be mandated by outsiders.
The Deputy Assistant Secretary of the Army (Force Management,
Manpower and Resources) said that the need to save money drives many
of the Army's organizational changes and that the Army is studying
options to reduce the number of its major commands. Various factors
complicate headquarters reductions, including demands by certain OSD
and Joint Staff officials to protect Army personnel levels in their
functional areas and political pressures not to cut personnel in
congressional districts.
The Air Education and Training Command has no plans to reengineer or
reduce its headquarters. Command officials and the Air Force's PB-22
exhibit indicate no change in the number of personnel projected
during fiscal years 1997-99. Similarly, an OPNAV official told us
that the Navy does not plan to reduce OPNAV personnel. Some OPNAV
directorates are restructuring to more efficiently do their work, not
to reduce personnel, according to this official.
CONCLUSIONS
------------------------------------------------------------ Letter :7
DOD needs to change its directive for reporting management
headquarters and headquarters support personnel and costs to Congress
because overall the data are inaccurate and incomplete--total
personnel and costs are significantly higher than reported. DOD and
Congress cannot rely on the data to determine trends in headquarters
and help them make informed decisions about whether headquarters are
appropriately sized. One approach would be for DOD to increase
enforcement of its existing directive. However, this is not the best
alternative because DOD, in an era of downsizing, would require
additional personnel for enforcement. Also, the directive's
complicated criteria for determining which organizations to report to
Congress is a problem. A simpler definition that would include more
organizations could lead to the collection of more meaningful data
and eliminate the need for complicated analyses of organizational
work efforts. DOD's current definition can be expanded without
counting the headquarters of operational or combat organizations,
which should be analyzed separately.
Also, DOD's estimated costs for its management headquarters and
headquarters support are scattered among several budget documents.
Having the total cost in one document would facilitate DOD and
congressional reviews. DOD has already placed a summary of its total
personnel in one document.
RECOMMENDATIONS
------------------------------------------------------------ Letter :8
To generate accurate information needed by Congress and the Secretary
of Defense to carry out their oversight and management
responsibilities, we recommend that the Secretary of Defense revise
DOD Directive 5100.73 to expand its coverage and simplify its
criteria. The revised directive should require the inclusion of all
personnel assigned to all noncombat organizations that are
subordinate to DOD management headquarters, including those at the
major command level, such as field operating activities, direct
reporting units, and other similar organizations that support their
parent headquarters. The revised definition should permit common
sense exemptions, such as the students and faculty of military
academies and componentwide operating-type services, such as payroll
services.
To provide Congress with a cost summary, we also recommend that the
Secretary of Defense direct the Under Secretary of Defense
(Comptroller) to report the total cost, including all appropriations,
of DOD's management headquarters and headquarters support in one
document.
AGENCY COMMENTS AND OUR
EVALUATION
------------------------------------------------------------ Letter :9
DOD provided written comments on a draft of this report. These
comments are reprinted in appendix V. DOD partially concurred with
our first recommendation and concurred with our second
recommendation. DOD acknowledged that, in some cases, the process
for analyzing DOD organizations to determine whether they should be
included in management headquarters budget exhibits can be
complicated, labor-intensive, and subjective in nature. However, DOD
believes it is impossible to develop a single fair definition of
management headquarters and headquarters support activities that can
be universally applied, given the large size and complexity of the
Department. DOD has established a Management Headquarters Working
Group to recommend to the Secretary of Defense whether DOD Directive
5100.73 should be revised, replaced, or augmented. DOD stated that
it would summarize the total costs for its management headquarters
and headquarters support, beginning with the fiscal year 1999
President's budget submission. DOD also provided us with technical
corrections and clarifying comments that we incorporated into our
final report, as appropriate.
---------------------------------------------------------- Letter :9.1
To determine the accuracy and reliability of PB-22 data, we selected
10 headquarters and their subordinate noncombat organizations to
review. We also reviewed two numbered air forces. To determine
reported trends in DOD's management headquarters personnel and costs,
we obtained annual PB-22 exhibits and DOD's 1998-2003 FYDP. To
obtain information on plans to reduce the size of DOD's management
headquarters, we interviewed officials in the 10 headquarters
organizations we audited and officials involved with studies of
management headquarters. (See app. IV.)
We are providing copies of this report to appropriate Senate and
House committees; the Secretaries of Defense, the Army, the Navy, and
the Air Force; and the Director of the Office of Management and
Budget. We will also provide copies to other interested parties upon
request.
Please contact me at (202) 512-3504 if you or your staff have any
questions concerning this report. Major contributors to this report
are listed in appendix VI.
Sincerely yours,
Richard Davis
Director, National Security
Analysis
OFFICE OF THE SECRETARY OF DEFENSE
=========================================================== Appendix I
The Secretary of Defense is the principal defense policy adviser to
the President and is responsible for the formulation of general
defense policy and policy related to all matters of direct and
primary concern to the Department of Defense (DOD) and for the
execution of approved policy. The Office of the Secretary of Defense
(OSD) is the Secretary's principal staff element for policy
development, planning, resource management, fiscal, and program
evaluation responsibilities. Two DOD support activities, 15 defense
agencies, 9 DOD field activities (including the Washington
Headquarters Services (WHS)), and the Defense Airborne Reconnaissance
Office (DARO) are subordinate to OSD. DOD support activities provide
OSD with technical and/or analytical support. Defense agencies
perform selected support and service functions on a departmentwide
basis. DOD field activities also perform selected support and
service functions but with a more limited scope than defense
agencies. DARO is a unique organizational type, because it is not a
DOD support activity, defense agency, or DOD field activity. Each of
these agencies/activities is under the authority, direction, and
control of an OSD official. (See fig. I.1.)
Figure I.1: OSD and its
Subordinate Organizations
(See figure in printed
edition.)
Source: OSD's Director of Administration and Management (OSD/DA&M).
REPORTED PERSONNEL LEVELS
--------------------------------------------------------- Appendix I:1
The size of OSD is unclear because of definitional issues. OSD does
not report, as part of OSD, certain headquarters personnel that are a
part of OSD or are integral to its operation. OSD defines its
personnel to include about 2,000 civilian and military personnel
assigned to various OSD offices and certain OSD-administered
temporary commissions. However, OSD does not include any of the
approximately 1,400 DOD Inspector General personnel in its total,
although by law the Inspector General is part of OSD and appears on
OSD organizational charts. OSD also excludes direct support provided
by DOD support activities, WHS and the Air Force Pentagon
Communications Agency. DOD separately reports these activities as
well as 56 Inspector General personnel on its Defense-wide PB-22
exhibit and provides further information to Congress on them in
annual budget justification materials.
As defined by OSD, during fiscal years 1985-96, OSD personnel
increased from 1,691 to 2,078, or 23 percent. For fiscal years
1997-99, OSD projects a 3- to 6-percent annual decrease in OSD
personnel, to 1,823 personnel in fiscal year 1999, according to the
Defense-wide PB-22 exhibit in the fiscal year 1998 President's
budget. These levels were determined, in part, by a December 1994
decision by the Deputy Secretary of Defense to reduce OSD civilian
personnel by 5 percent per year during fiscal years 1996-2001.
During fiscal years 1985-96, OSD support personnel increased by 90
percent, from 662 to 1,260 personnel. The largest annual increase
was 752 in fiscal year 1991, due to the reporting of DOD support
activities, a new category. In fiscal year 1997, OSD estimates that
its support will decrease by 379 personnel, primarily due to a
reclassification and reorganization involving 300 personnel at the
Defense Manpower Data Center, formerly a DOD support activity. (See
fig. I.2.)
Figure I.2: Reported Personnel
Levels for OSD and OSD Support
(See figure in printed
edition.)
Source: OSD/DA&M, compiled from PB-22 budget exhibits.
Notes: Fiscal years 1985-96 are actual values; 1997-99 are
estimates. OSD support includes all personnel in DOD support
activities and some personnel in WHS and the Air Force Pentagon
Communications Agency that provide direct support to OSD.
DARO AND WHS
--------------------------------------------------------- Appendix I:2
We reviewed DARO and WHS for compliance with DOD Directive 5100.73.
DARO is not reported on DOD's PB-22 budget exhibits, but it is
clearly a management headquarters organization under DOD Directive
5100.73 because it allocates resources and conducts mid- and
long-range planning, programming, and budgeting. Essentially, DARO
is part of OSD, but it is not counted as such because of OSD's
personnel ceilings, according to a DARO official. Of DARO's 28
government personnel, only 2 are on OSD's manning document; the
remaining 26 personnel are not reported by DOD as management
headquarters.
DOD created DARO in 1993 to increase senior management attention and
oversight of airborne reconnaissance systems. DARO develops and
manages the $2 billion per year Defense Airborne Reconnaissance
Program. DARO is under the authority, direction, and control of the
Under Secretary of Defense (Acquisition and Technology). Although
DARO is not officially part of OSD--and is neither a defense agency
nor a DOD field activity--it is listed in the DOD telephone directory
in the Office of the Under Secretary of Defense (Acquisition and
Technology), and DARO's message address is SECDEF WASHINGTON
DC//USDA&T/DARO//.
We also reviewed WHS for compliance with DOD Directive 5100.73. We
agreed with OSD/DA&M as to which WHS directorates were primarily
performing headquarters support functions and which were primarily
performing nonheadquarters functions under the definitions in DOD
Directive 5100.73. However, OSD underreported WHS headquarters
support personnel by 82 on the Defense-wide PB-22 exhibit. According
to our analysis of its manning document, 466 WHS personnel should
have been reported as headquarters support, but OSD reported 384
personnel for fiscal year 1997.
WHS is a DOD field activity created in 1977 by the Secretary of
Defense, primarily by transferring personnel from OSD. The Director
of WHS is dual-hatted as an OSD official, the Director of
Administration and Management. WHS' mission is to support specified
DOD activities in the National Capital Region. For OSD, DOD field
activities, and other specified defense activities, WHS provides
services, such as budgeting and accounting, civilian and military
personnel management, office services, correspondence and cables
management, directives and records management, housekeeping,
security, and computer and graphics support.
OSD/DA&M officials could not explain why some WHS personnel were not
part of OSD. That is, given the nature of some of the positions,
such as receptionists for the Secretary of Defense, they could not
explain the basis for deciding whether these personnel would be
accounted for in OSD or WHS. They said that since WHS' mission
included support to OSD, this condition was not a problem. They also
observed that the total number assigned to OSD "is a politically
sensitive number."
SUBORDINATE NONCOMBAT
ORGANIZATIONS
========================================================== Appendix II
At the 10 headquarters organizations we audited, we judgmentally
selected 40 subordinate noncombat organizations to review.
Specifically, we reviewed mission and functions documents,
organizational manning documents, and organizational history. We
also discussed the organization's activities, products, services,
customers, and relationship with headquarters with cognizant
officials in the subordinate organization and in its headquarters.
We determined that 29 of the 40 subordinate noncombat organizations
should have been reported by DOD as management headquarters or
headquarters support activities, using the criteria in DOD Directive
5100.73. One of these organizations was previously discussed in
appendix I; the remaining 28 organizations are discussed in this
appendix.
ARMY SECRETARIAT AND ARMY STAFF
-------------------------------------------------------- Appendix II:1
For fiscal year 1997, the Army had 2,491 personnel in the Army
Secretariat and the Army Staff and 21,703 personnel in 77 field
operating activities and staff support activities subordinate to the
Army Secretariat and the Army Staff. We reviewed five of these
activities, using the criteria in DOD Directive 5100.73, and found
that all five--the Congressional Inquiry Division, the Cost and
Economic Analysis Center, the Information Management Support Center,
the Army National Guard Readiness Center, and the Installation
Support Management Activity--with a total of 546 personnel, should
have been reported to Congress by the Army as management headquarters
or headquarters support activities but were not. Army officials
raised no objections to our assessment of their field activities and
concurred with our facts.
CONGRESSIONAL INQUIRY
DIVISION
------------------------------------------------------ Appendix II:1.1
The Congressional Inquiry Division, a field operating activity with
41 personnel, is one division within the Army's Office of the Chief
of Legislative Liaison. Its primary function is to reply to all
letters written to DOD by members of Congress that raise Army issues.
The Division gathers information from installations and Army commands
and prepares a coordinated response. In addition, the Division
provides computer support and mailroom services for the entire office
and educates new congressional staff on the Army. The Division's 41
personnel are collocated with its sister divisions' 46 management
headquarters personnel in the Pentagon.
COST AND ECONOMIC ANALYSIS
CENTER
------------------------------------------------------ Appendix II:1.2
The Cost and Economic Analysis Center, with 76 personnel, conducts
cost and economic analyses of weapons, automated information systems,
force structure, operations and support, and installations to support
Army planning, programming, and budgeting. In addition, it manages
the Army's cost review board and cost position for selected major
programs. The Center's data and analyses are used by the Army
Secretariat, including its program executive offices, the Army Staff,
OSD, Forces Command, the Training and Doctrine Command, and the Army
Materiel Command.
Organizationally, the Center is imbedded as one of four divisions in
the Office of the Assistant Secretary of the Army (Financial
Management & Comptroller). The Center's director is dual-hatted as
the Deputy for Cost Analysis, a management headquarters position.
The Center is the only division in the Assistant Secretary's office
classified as a field operating activity and not reported as part of
Army Secretariat personnel on the Army's PB-22 exhibit. The Center's
personnel--66 of whom are operations research or systems
analysts--are located in Falls Church, Virginia, near the Pentagon.
Both operations analysis and cost analysis are headquarters support
functions listed in DOD Directive 5100.73.
INFORMATION MANAGEMENT
SUPPORT CENTER
------------------------------------------------------ Appendix II:1.3
The Information Management Support Center, with 139 personnel,
provides all information management support and services for the Army
Secretariat, the Army Staff, and their assigned agencies and
activities. The Center reports to the Secretary of the Army's
Administrative Assistant and is located in the Pentagon. The Army
established the Center in 1994 based in part on an internal study
recommendation on information management. The study recommended,
among other things, that the Army consolidate its headquarters
positions in information management. The creation of the Center
resulted in the transfer of 109 personnel from management
headquarters to the Center.
ARMY NATIONAL GUARD
READINESS CENTER
------------------------------------------------------ Appendix II:1.4
The Army National Guard Readiness Center has 195 civilian and active
military personnel who support the Army Directorate of the National
Guard Bureau.\1 These personnel work in the same directorates as the
headquarters personnel of the Army Directorate. We believe that the
Army Directorate's 279 active military and civilian personnel
function as one staff, though 195 personnel (70 percent) are
accounted for as part of the Readiness Center, while 84 are accounted
for as part of the Army Staff, a management headquarters.\2
Organizationally, the Center is a field operating agency that reports
to the National Guard Bureau. In the DOD telephone directory, the
Center is one of several subdivisions listed under the Director, Army
National Guard Bureau. Furthermore, the Bureau's organization chart
shows it is located both in the Pentagon and at the Center's
building, nearby in Arlington, Virginia.
The Center's mission is the same as that of the Army Directorate: to
provide functional support to the 54 states and territories of the
Army National Guard; to serve as the National Guard Bureau Chief's
intermediate channel of communications between the Army and the
states and territories; and to manage the Army National Guard's
functional areas that is, personnel, operations, training and
readiness, logistics, force management, aviation and safety,
engineering, information systems, environmental programs, and
comptroller. The Center's major functions include both Army
Staff-level functions and major command-level functions, such as
developing policy and assisting Headquarters, Department of the Army,
in developing resource requirements and allocating resources.
--------------------
\1 This staff level does not include 141 active military and
civilians who are assigned to the Center but work for the Chief of
the National Guard Bureau's "joint staff" and not for the Army
Directorate. It also excludes six personnel at the Professional
Education Center, Little Rock, Arkansas; another six personnel at
Fort Benjamin Harrison, Indiana; and the Operations Support Airlift
Command, a field activity that manages aircraft nationwide.
\2 An additional 568 full-time Guard personnel are part of the Army
Directorate--530 are accounted for in the Center and 38 in the Army
Staff.
INSTALLATION SUPPORT
MANAGEMENT ACTIVITY
------------------------------------------------------ Appendix II:1.5
The Installation Support Management Activity, with 95 personnel, is a
field operating activity under the Army's Assistant Chief of Staff
for Installation Management. The activity provides policy
recommendations, program management, oversight, and analysis for
installation facilities, housing, and public works. Facility
management is a headquarters support function listed in DOD Directive
5100.73. Organizationally, the activity's divisions and personnel
are interspersed within the Assistant Chief of Staff's headquarters
organization or collocated in the Pentagon with headquarters
personnel. The Deputy Assistant Chief of Staff for Installation
Management is dual-hatted as the Director of this activity. Most of
the activity's personnel are housing management specialists/analysts
and general engineers.
The distinction, or lack thereof, between this activity and its
headquarters is such that when we requested a concept plan for the
activity, we received a concept plan for the headquarters
organization. However, an analysis prepared by activity officials at
our request concluded that less than 21 percent of the activity's
personnel perform management headquarters or headquarters support
functions, below the 25-percent threshold in DOD Directive 5100.73.
Given all of the above, we believe that more than 50 percent of the
activity's effort is for management and headquarters support
functions.
NAVY SECRETARIAT AND CHIEF OF
NAVAL OPERATIONS
-------------------------------------------------------- Appendix II:2
For fiscal year 1997, the Department of the Navy had 2,267 total
personnel in the Navy Secretariat, the Office of the Chief of Naval
Operations (OPNAV), and Headquarters, Marine Corps and 13,863
personnel in 64 organizations subordinate to these three
organizations. We reviewed four of these subordinate organizations,
using the criteria in DOD Directive 5100.73, and found that all
personnel in three organizations--the Naval Center for Cost Analysis,
the Legal Services Support Group, and the Navy International Programs
Office--with a total of 312 personnel, should have been reported to
Congress by the Navy as management headquarters or headquarters
support but were not. In addition, the Navy should have reported a
portion of the Naval Information Systems Management Center (67
personnel, or 48 percent) as headquarters support.
NAVAL CENTER FOR COST
ANALYSIS
------------------------------------------------------ Appendix II:2.1
The Naval Center for Cost Analysis, with 52 personnel, prepares cost
estimates of the resources required to develop, procure, and operate
systems and forces in support of Navy planning, programming,
budgeting, and acquisition management. Most personnel are operation
research analysts. Operations analysis and cost analysis are
headquarters support functions listed in DOD Directive 5100.73. The
Center's customers include the Assistant Secretary of the Navy
(Research, Development, and Acquisition), the Assistant Secretary of
the Navy (Financial Management and Comptroller), OPNAV, and the
Navy's Chief Information Officer, all management headquarters
officials/organizations. The Center is located in Arlington,
Virginia, near the Pentagon, and it reports to the Assistant
Secretary of the Navy (Financial Management and Comptroller). It was
created in 1985 to implement legislation mandating the Navy to create
a cost-estimating organization independent of the Navy's research,
development, and acquisition organization.
LEGAL SERVICES SUPPORT GROUP
------------------------------------------------------ Appendix II:2.2
The Legal Services Support Group, with 91 personnel, provides legal
services throughout the Navy, including all Offices of Counsel and
their client headquarters and field activities, in the areas of
litigation, environmental law, and the Freedom of Information Act.
It handles significant cases of interest to the General Counsel,
including contract claims litigation over $400,000, civil personnel
litigation, and federal environmental litigation. The Group reports
to the Navy's General Counsel.
Although a document establishing the Group in 1989 stated that it is
a "nonmanagement headquarters shore activity," there are indicators
that the organization exists only on paper and is, in fact, not
distinct from the General Counsel office. For example, the Group's
Director is also an Associate General Counsel--a dual-hat
relationship in which he is counted as management headquarters (as
part of the Secretariat) while his staff are not counted as
management headquarters or headquarters support. In a hand-drawn
organization chart prepared by the Group's Director--no official
chart exists--the Group's personnel, all of whom are civilian
attorneys, are interspersed within components of the General
Counsel's office. Most personnel are located in Arlington, Virginia,
near the Pentagon. Furthermore, the Naval Litigation Office, the
forerunner of the Legal Services Support Group, was transferred from
a management headquarters activity to a nonmanagement activity
without any apparent change in its duties, missions, or functions,
according to Navy documents.
NAVY INTERNATIONAL PROGRAMS
OFFICE
------------------------------------------------------ Appendix II:2.3
The Navy International Programs Office, with 169 personnel,
implements departmental policies and manages international efforts
concerning research, development, and acquisition for the Navy,
according to its mission statement. In our view, this office should
have reported all of its personnel as management headquarters or
headquarters support because most of the effort in four of its five
directorates\3 was for functions covered by DOD Directive 5100.73,
such as security, data automation, facilities, financial management,
and policy-making.
--------------------
\3 The Arms Control Directorate, with 12 government personnel, has an
operational mission to prepare Navy facilities for foreign
inspections under various arms control agreements.
NAVAL INFORMATION SYSTEMS
MANAGEMENT CENTER
------------------------------------------------------ Appendix II:2.4
The Naval Information Systems Management Center had 139 personnel at
the time of our review. The Center will be disestablished by
September 1997, according to Navy officials, because the Navy is
creating a chief information officer organization as required by the
fiscal year 1996 DOD Authorization Act. According to its purpose and
mission statement, the Center performs shore activities assigned by
the Assistant Secretary of the Navy (Research, Development, and
Acquisition). The Assistant Secretary is the Center's primary
customer, according to officials. Created in 1991 and described as a
"management support activity," the Center consolidated information
technology functions centering on acquisition, management oversight,
software development, policy-making, and information security.
The Center's efforts, with the exception of the Contracting
Directorate, met the criteria of the data automation headquarters
support function defined in DOD Directive 5100.73. The Contracting
Directorate, with 72 personnel, supported the Navy Department as a
whole and not just management headquarters. Contracting is not a
headquarters support function listed in DOD's directive. However,
under the methodology in DOD's directive, the 67 personnel outside of
the Contracting Directorate that performed headquarters support
functions should have been reported on the Navy's PB-22 exhibit.
AIR FORCE SECRETARIAT AND AIR
STAFF
-------------------------------------------------------- Appendix II:3
For fiscal year 1997, the Air Force had 2,460 personnel in the Air
Force Secretariat and the Air Staff and 20,592 personnel in 40 direct
reporting units and field operating activities that are subordinate
to the Secretariat and the Air Staff. We reviewed five activities,
using the criteria in DOD Directive 5100.73, and found that three
activities--the Air Force Studies and Analysis Agency, the Air Force
Medical Operations Agency, and the 497th Intelligence Group--with a
total of 510 personnel, should have been reported by the Air Force to
Congress as management headquarters or headquarters support
activities but were not. The 11th Wing and the Air Force Frequency
Management Agency are properly classified as a nonmanagement
headquarters under the DOD directive.\4 Air Force officials did not
agree with our assessment that three field operating agencies should
be classified as headquarters support organizations.
--------------------
\4 The 11th Wing administers the Air Force Band, the Air Force Honor
Guard, and the Arlington National Cemetery Chaplaincy; operates
Bolling Air Force Base; and supports the Air Force Secretariat, the
Air Staff, designated Air Force field operating activities, and other
organizations. We found that 415 personnel are located in the
Pentagon primarily to support the Air Staff and the Secretariat with
the following functions: chaplain, security police, supply,
transportation, civil engineering, inspection/audit,
communications/computer, contracting, medical, comptroller,
operations, plans, programming, personnel, manpower, and legal.
Because the Wing has 2,195 personnel, this level of headquarters
support is less than 25 percent of the Wing's work and under DOD
Directive 5100.73, the Air Force is not required to report these
personnel on its PB-22 exhibit.
AIR FORCE STUDIES AND
ANALYSIS AGENCY
------------------------------------------------------ Appendix II:3.1
The Air Force Studies and Analysis Agency has 132 personnel located
in the Pentagon. It reports to the Deputy Chief of Staff for Plans
and Operations. The agency primarily does modeling and simulation
studies of air superiority, ground superiority, nuclear superiority,
and campaign activities. This function is part of the operational
analysis headquarters support function defined in DOD Directive
5100.73. Furthermore, its customers are management headquarters. A
1997 study plan for the Agency indicated that 35 of its 40 studies
had DOD management headquarters as its customers, for example, OSD,
the Joint Staff, and the Air Staff.
The Air Force redesignated the Agency in 1991. In 1984, its
predecessor--a direct reporting unit to the Chief of Staff of the Air
Force--was created in an apparent response to mandated reductions in
management headquarters personnel. According to an Air Force
document, the unit was created to "draw down" the size of the Air
Staff by 162 personnel, but it stated "there will be no changes in
administrative, manpower, personnel, and budget support as currently
provided" and "there will be no `real change' in the Air Staff status
for the [Agency]." The Air Force's reclassification of these
positions from management headquarters to nonmanagement headquarters
became effective in September 1984, the deadline for a congressional
provision to reduce DOD management headquarters by 5 percent.
AIR FORCE MEDICAL OPERATIONS
AGENCY
------------------------------------------------------ Appendix II:3.2
The Air Force Medical Operations Agency has 73 personnel who are
classified as medical services management, according to its unit
manning document. The Agency develops policies and programs to
improve aerospace medicine, preventive medicine, and clinical health
services for the Air Force. The Agency's divisions perform many
management headquarters or headquarters support functions included
under medical services, a headquarters support function defined in
DOD
Directive 5100.73. The Agency's primary customers are the Surgeon
General of the Air Force (to whom its director reports), the Chief of
Staff of the Air Force, the Air Staff, and the Office of the
Assistant Secretary of Defense for Health Affairs--all of which are
headquarters officials or organizations. The Air Force created the
Agency in July 1992 by transferring a directorate from the Surgeon
General's office to the new Agency.
497TH INTELLIGENCE GROUP
------------------------------------------------------ Appendix II:3.3
The 497th Intelligence Group, headquartered at Bolling Air Force
Base, Washington, D.C., has 305 personnel. According to its master
plan, its mission is "intelligence infrastructure and services
(security, weapons system support, automation, and information
operations) to defense community users worldwide." The unit's history
states that the Group has a unique role of providing planning, policy
implementation, and functional management support to the Air Staff
and other DOD customers in Washington, D.C., and around the world.
Our analysis shows that over 50 percent of the Group's effort is for
headquarters support functions, such as security, acquisition, and
data automation support, as defined in DOD Directive 5100.73;
therefore, under the directive, all of its personnel should have been
reported on the Air Force's PB-22 exhibit.
U.S. ATLANTIC COMMAND
-------------------------------------------------------- Appendix II:4
For fiscal year 1997, the U.S. Atlantic Command (USACOM) had 501
personnel in its headquarters and 1,097 personnel in 13 noncombat
activities subordinate to USACOM headquarters. We reviewed three of
these activities, using the criteria in DOD Directive 5100.73, and
found the Information Systems Support Group, with 117 personnel, and
a portion of the Atlantic Intelligence Command, with 152 personnel,
should be reported to Congress by DOD as headquarters support but
were not. The Cruise Missile Support Activity is properly classified
as a nonmanagement headquarters activity under the DOD directive.
USACOM officials agreed that the Information Systems Support Group
should be reported as a headquarters support activity, and one
official noted that the Joint Staff had removed the Group from
reporting under DOD's headquarters tracking program. An Atlantic
Intelligence Command official said that the Intelligence Command is
not a management headquarters because it does not create policy,
review and evaluate programs, or conduct long-range planning.
However, he agreed that the Intelligence Command provides
intelligence services directly to management headquarters, which is a
headquarters support function covered by DOD Directive 5100.73.
INFORMATION SYSTEMS SUPPORT
GROUP
------------------------------------------------------ Appendix II:4.1
All of the 117 personnel in the Information Systems Support Group
should be reported as headquarters support because more than 50
percent of the group's effort is to provide automated data processing
support to a management headquarters, a support function covered by
DOD
Directive 5100.73. The Group provides analysis, programming,
installation, and other technical support services to satisfy
information system requirements of USACOM staff and subordinate
commands; 24-hour operations and management of various computer
systems, including the local area network at USACOM headquarters; and
an inventory of automated data processing equipment under USACOM's
Command, Control, Communication, and Computer System Directorate at
headquarters. According to a Group official, USACOM could not
function without the computer support provided by the Group.
The Group's personnel are collocated with headquarters personnel, and
a USACOM headquarters official is "dual-hatted" as the Group's
commander. Furthermore, these personnel were previously classified
as management headquarters until 1992. All of these conditions are
indicators of possible headquarters support activity, according to
OSD/DA&M officials.
ATLANTIC INTELLIGENCE
COMMAND
------------------------------------------------------ Appendix II:4.2
At least 152, or 27 percent, of the Atlantic Intelligence Command's
572 personnel for fiscal year 1997 should be reported by DOD as
management headquarters and/or headquarters support because they
provide integral support to USACOM's Directorate of Intelligence by
working there. In some Directorate of Intelligence divisions, the
Atlantic Intelligence Command provides all of the personnel. For
example, 78 personnel from the Atlantic Intelligence Command work in
the Current Intelligence and Current Analysis Divisions in USACOM's
Directorate of Intelligence.
The Atlantic Intelligence Command serves as USACOM's Joint
Intelligence Center and, as such, provides tailored, on-demand,
integrated intelligence products, services, and training for USACOM
and manages its theater intelligence production program in support of
national and theater requirements. The Intelligence Center's primary
customers are USACOM and other unified commands, which are management
headquarters, and the service component commands and their units,
such as the Air Combat Command, a management headquarters. Under DOD
Directive 5100.73, management of intelligence collection, analysis,
production, and evaluation programs, and intelligence services
provided directly to a management headquarters activity are covered
functions.
U.S. ARMY TRAINING AND
DOCTRINE COMMAND
-------------------------------------------------------- Appendix II:5
For fiscal year 1997, the U.S. Army Training and Doctrine Command
(TRADOC) had 919 personnel in its headquarters and 1,393 personnel in
13 field operating activities subordinate to TRADOC headquarters. We
reviewed four of these activities, using the criteria in DOD
Directive 5100.73, and found that all personnel in three
activities--the Training Operations Management Activity, the Training
Development and Analysis Activity, and the Internal Review and Audit
Compliance Activity--with a total of 112 personnel, should have been
reported to Congress by the Army as management headquarters or
headquarters support but were not. In addition, the Army should have
reported a portion of the Combat Developments Field Operating
Activity (52 personnel, or 26 percent) as headquarters support.
TRADOC officials believe these field operating activities were
properly classified as nonmanagement headquarters, although they
stated that the definition of management and headquarters support in
DOD Directive 5100.73 needs to be clarified because it is open to
interpretation.
TRAINING OPERATIONS
MANAGEMENT ACTIVITY
------------------------------------------------------ Appendix II:5.1
The Training Operations Management Activity has 42 personnel
collocated with TRADOC headquarters personnel. It plans,
coordinates, and oversees all of the Army's training courses
conducted by centers and schools in the Total Army School System and
is involved in curriculum development and review, a headquarters
support function under DOD Directive 5100.73. The Activity oversees
the documenting, programming, scheduling, equipment management,
ammunition management, support systems management, and training for
courses; according to a TRADOC official, it is the link between
TRADOC headquarters and subordinate centers and schools. The
Activity supports TRADOC headquarters and the Army by assessing the
schools' capabilities to meet training requirements and by working
within TRADOC headquarters to resolve problems at centers and
schools.
TRAINING DEVELOPMENT AND
ANALYSIS ACTIVITY
------------------------------------------------------ Appendix II:5.2
The Training Development and Analysis Activity, with 59 personnel,
develops concepts, strategies, and guidance for current and future
training; develops and reviews curricula; researches technology and
initiatives for future training concepts; focuses on
TRADOC-identified training problems; and develops technology-based
solutions for TRADOC's Training Directorate. This Activity is
collocated with TRADOC's headquarters, and part of it was previously
reported as management headquarters. In addition, DOD Directive
5100.73 cites training and education as headquarters support
functions.
INTERNAL REVIEW AND AUDIT
COMPLIANCE ACTIVITY
------------------------------------------------------ Appendix II:5.3
The Internal Review and Audit Compliance Activity, with 11 personnel,
provides internal review and audit compliance services to TRADOC
headquarters, the Reserve Officer Training Command Cadet Command, and
the Army Training Support Center. Personnel from these offices were
combined to create this field operating activity; previously, 9 of
the 11 personnel were counted as part of TRADOC's headquarters. The
inspection and evaluation of management headquarters activities and
subordinate units is a headquarters support function, as is the
management of audit programs, under the criteria in DOD Directive
5100.73.
COMBAT DEVELOPMENTS FIELD
OPERATING ACTIVITY
------------------------------------------------------ Appendix II:5.4
The Combat Developments Field Operating Activity, with 201 personnel,
is responsible for coordinating and integrating delivery for approved
combat development requirement documents that support the development
and fielding of materiel systems; conducting special experiments and
studies; and managing the changes to current force designs used
across the Army. The Activity's primary customer is TRADOC's Combat
Developments Directorate, and in fiscal year 1994, over 100 personnel
were transferred from this headquarters Directorate to the Activity.
Today, most personnel assigned to the Activity are collocated with
TRADOC headquarters personnel. Both collocation with headquarters
and transfers of personnel from headquarters are indicators of
possible headquarters support activity, according to OSD/DA&M
officials.
According to DOD Directive 5100.73, the development and analysis of
strategic, defensive, and tactical operations--including planning and
requirements--provided directly to a management headquarters is a
headquarters support function. Also, if an organization devotes more
than 25 percent, but less than 50 percent, of its efforts to
management headquarters support, then this portion of the
organization's personnel should be included in the program. The
Activity's records show 52 personnel within four divisions performing
some management headquarters functions directly for management
headquarters activities. These personnel accounted for 26 percent of
the total personnel assigned to the Activity.
U.S. ARMY FORCES COMMAND
-------------------------------------------------------- Appendix II:6
For fiscal year 1997, the U.S. Army Forces Command (FORSCOM) had
1,582 personnel in its headquarters\5 and 293 personnel in one field
operating activity. A recent headquarters restructuring led FORSCOM
to eliminate all but one of its field operating activities; the
remaining organization is the FORSCOM Field Support Activity. This
Activity should have been reported by the Army to Congress as a
headquarters support activity but was not. FORSCOM officials did not
dispute our evidence concerning the Activity, and they took no
position on our conclusion that the Activity is merely an extension
of FORSCOM headquarters and should be reported to Congress under the
criteria in DOD Directive 5100.73. However, they did say that
perhaps they were interpreting the directive incorrectly. We also
reviewed the Army Signal Command, a new organization under FORSCOM
created when the Army abolished the Information Systems Command.
Although the Army previously reported the Information Systems
Command, a major command, as a management headquarters, the Army
Signal Command is not reported on the Army's PB-22 exhibit.
--------------------
\5 However, 468 of these positions are not available to FORSCOM
because they are being withheld by the Army, according to FORSCOM
officials.
FORSCOM FIELD SUPPORT
ACTIVITY
------------------------------------------------------ Appendix II:6.1
Since 1973, FORSCOM headquarters has had multiple field operating
activities that have totaled more than 200 military and civilian
personnel annually. However, a recent headquarters restructuring led
FORSCOM to eliminate all but one of its field operating activities.
The remaining organization is the FORSCOM Field Support Activity,
with 293 military and civilian personnel in fiscal year 1997. None
of these personnel are reported to the Congress as management
headquarters or headquarters support personnel.
This Activity is not a discrete organization separate from
headquarters. Activity personnel work in the headquarters building
and are assigned to the same directorates, and many possess the same
job series and grade levels as personnel designated as FORSCOM
headquarters staff. For example, the Activity has 46 personnel
identified as management analysts and 20 as logistics management
specialists within its various work centers. Individual headquarters
directors decided which positions were categorized as headquarters
and which were counted in the Activity for each functional area.
Furthermore, the head of the Activity is FORSCOM's Chief of Staff--a
headquarters official; other managers in the Activity (two-star
generals) are also dual-hatted as headquarters directors. According
to OSD/DA&M officials, these conditions are indicators that an
organization is performing management support functions.
During our audit, FORSCOM requested that the Army increase its
management headquarters personnel ceiling by 100 to allow it to count
some, but not all, Field Support Activity personnel as management
headquarters. FORSCOM based its request on a recent FORSCOM
headquarters restructuring that combined tasks, functions, and
missions in a way that may have "clouded" the distinction between
management headquarters and nonmanagement headquarters work,
according to officials. The Army has not approved FORSCOM's request
because of pending legislation that would reduce DOD management
headquarters personnel, according to a FORSCOM official.
ARMY SIGNAL COMMAND
------------------------------------------------------ Appendix II:6.2
On September 16, 1996, the Army eliminated a major command when it
transitioned its Information Systems Command to the Army Signal
Command, a new subordinate command. The Army Signal Command operates
several signal brigades and battalions worldwide. The Army does not
report the Army Signal Command as a management headquarters, unlike
its predecessor, because it is not a major command and all previous
management headquarters functions were transferred to FORSCOM and
other Army commands, according to an Army official.
The Army's restructuring reduced the size of the Command's
headquarters from 554 to 393 personnel by transferring several
functions, such as publications and printing, engineering,
acquisition, software development, and data processing, to other Army
commands. While the new Command is more operationally oriented, more
than two-thirds of its headquarters personnel are civilians.
According to FORSCOM officials, civilians typically do not deploy;
moreover, the Command has yet to determine the number that would.
The Command continues to perform some headquarters support functions
described in DOD Directive 5100.73. For example, it inspects and
audits subordinate units, assesses training, and evaluates and
monitors unit readiness. Moreover, neither the Army nor OSD have
done a detailed analysis to determine the percentage of personnel
that perform either management or management support functions.
Without such an analysis, we believe it is questionable to exclude
the Army Signal Command headquarters from the Army's PB-22 exhibit.
Command officials agree that the Command continues to perform many of
the same activities as when the Army reported it as a management
headquarters, but they did not agree that the Command should be
reported to Congress as a management headquarters or headquarters
support activity.
COMMANDER IN CHIEF, U.S.
ATLANTIC FLEET
-------------------------------------------------------- Appendix II:7
For fiscal year 1997, the Commander in Chief, U.S. Atlantic Fleet
(CINCLANTFLT) staff had 542 personnel in its headquarters and an
additional 5,902 personnel in 25 direct reporting units subordinate
to CINCLANTFLT. We reviewed two of these activities, using the
criteria in DOD Directive 5100.73, and found that one of them-- the
Naval Shores Activities--with seven personnel, should have been
reported by the Navy to Congress as a headquarters support activity
but was not. CINCLANTFLT's Manpower Analysis Team was properly
classified as a nonmanagement headquarters because its primary
customers are nonmanagement headquarters shore activities. Some
officials involved with the Naval Shore Activities believed it was
not management headquarters because it does not control any resources
and provides direct support to nonmanagement headquarters activities.
However, other CINCLANTFLT officials involved with DOD's management
headquarters program agreed that an error had occurred in classifying
the activity as nonmanagement headquarters. They did not know why
these personnel were not included in CINCLANTFLT's headquarters
totals, but they believe that they should have been.
NAVAL SHORE ACTIVITIES
------------------------------------------------------ Appendix II:7.1
The Naval Shore Activities organization has seven personnel, some of
which are dual-hatted in positions at CINCLANTFLT headquarters. All
personnel are collocated with headquarters personnel and the
Activities' funding is contained in a line item in DOD's Future Years
Defense Program (FYDP) reserved for management headquarters
activities. The Chief of Naval Operations notice establishing this
organization in 1994 specifically created it as a management
headquarters activity to coordinate shore activity support to
operating forces, other naval activities, and tenant commands;
command assigned shore installations; and perform other functions as
directed by higher authority. This organization is being
disestablished as of October 1, 1997.
AIR COMBAT COMMAND
-------------------------------------------------------- Appendix II:8
For fiscal year 1997, the Air Combat Command had 2,284 personnel in
its headquarters and 1,829 personnel in 16 field operating activities
subordinate to Command headquarters. We reviewed five of the
activities, using the criteria in DOD Directive 5100.73, and found
that two--the Studies and Analyses Squadron and the Quality and
Management Innovation Squadron--with 121 personnel, should have been
reported by the Air Force to Congress as headquarters support
organizations but were not. Three activities--the Logistics Support
Group/Maintenance Support Office, the Civil Engineering Squadron, and
the Intelligence Squadron--were properly classified as nonmanagement
headquarters activities because their primary efforts were not
headquarters support and/or their customers are mainly
nonheadquarters organizations. Command officials agreed that the
Studies and Analyses Squadron performed headquarters support
functions as defined by DOD
Directive 5100.73; thus, it should have been reported by the Air
Force on its PB-22 exhibit. They did not agree that the Quality and
Management Innovation Squadron provided headquarters support under
the criteria in the DOD directive because they said that most of its
effort was for bases and wings, not the headquarters.
STUDIES AND ANALYSES
SQUADRON
------------------------------------------------------ Appendix II:8.1
The Studies and Analyses Squadron, with 71 personnel, provides the
Air Combat Command and Air Force senior leaders with analyses to
support their decision-making. The Squadron uses simulation,
modeling, and other analytical tools to provide specialized technical
information to its customers--80 percent of whom are at the Command's
headquarters, according to the Squadron's statistics. The Air Force
activated the Squadron in 1994 as a result of the Air Force's
reengineering efforts; previously, this function had been classified
as a management headquarters activity. Furthermore, the Squadron is
collocated with the Command's headquarters. Both reclassification
and collocation are indicators of possible headquarters support
activity, according to OSD/DA&M officials.
QUALITY AND MANAGEMENT
INNOVATION SQUADRON
------------------------------------------------------ Appendix II:8.2
In October 1996, the Air Force merged the Air Combat Command's
Management Engineering Flight, a field operating activity, with the
Directorate of Quality Improvement, a headquarters unit that provided
quality assurance evaluations for the Command. The Quality and
Management Innovation Squadron, which resulted from the merger, has
50 personnel to provide quality innovation and manpower engineering
services to improve the Command's processes and achieve efficiencies.
The Squadron's primary customers are the Command's headquarters,
wings, and units. Like the Studies and Analyses Squadron, this
Squadron is collocated with Command headquarters; furthermore, 40
percent of its personnel were part of the headquarters until October
1996. According to DOD Directive 5100.73, management analysis and
management engineering functions, including the analysis of systems,
procedures, organizations, methods, and techniques and the
development or maintenance of work measurement systems, are
headquarters support functions. And although "quality management" is
not specifically listed among the 33 headquarters support functions
in DOD Directive 5100.73, OSD/DA&M officials told us that the list is
not exclusive; that is, as new disciplines are developed, such as
information management or quality management, these disciplines can
be considered in analyzing organizations for compliance with the
directive.
AIR EDUCATION AND TRAINING
COMMAND
-------------------------------------------------------- Appendix II:9
For fiscal year 1997, the Air Force's Air Education and Training
Command had 1,206 personnel in its headquarters and 692 personnel in
nine field operating activities subordinate to its headquarters. We
reviewed all nine of these activities, using the criteria in DOD
Directive 5100.73, and found that six--the Studies and Analysis
Squadron, the Quality Management and Innovation Flight, the Computer
Systems Support Squadron, the Training Support Squadron, the Air
Operations Squadron, and the Civil Engineering Flight--with a total
of 456 personnel, should have been reported to Congress by the Air
Force as management headquarters or headquarters support but were
not. Three activities--the Occupational Measurement Squadron, the
Contracting Squadron, and the Program Management Flight--were
properly classified as nonmanagement headquarters because these
activities have significant Air Force or DOD-wide missions that are
not considered management headquarters or headquarters support under
DOD Directive 5100.73. Command officials do not believe that any of
the personnel assigned to their field operating activities should be
reported as management headquarters or headquarters support because
they do not develop policy, prepare plans, or allocate resources.
However, Command officials acknowledged that the Command's field
operating activities do perform some of the management support
functions listed in DOD Directive 5100.73.
STUDIES AND ANALYSIS
SQUADRON
------------------------------------------------------ Appendix II:9.1
The Studies and Analysis Squadron, with 56 personnel, conducts
studies and tests at the direction of Air Education and Training
Command headquarters to support decisionmaking at headquarters. The
Squadron plans, executes, and reports on the tests of new and
modified training systems. Previous projects included a study of
basic military training and an economic analysis of the costs and
benefits of an advanced training system for the Command's technical
training. The Squadron's staff includes specialists in regression
analysis, modeling and simulation, and electrical engineering
analysis. As defined by DOD Directive 5100.73, professional,
technical, or logistical support to a headquarters is a headquarters
support function.
QUALITY MANAGEMENT AND
INNOVATION FLIGHT
------------------------------------------------------ Appendix II:9.2
The Quality Management and Innovation Flight, with 21 personnel,
provides Air Education and Training Command headquarters with quality
management principles, management engineering activities, and
productivity programs to improve the Command's mission performance,
planning, and resource use. The Flight's specific responsibilities
include facilitating the Command's strategic planning for quality,
conducting unit self assessments, training quality management
trainers at the subordinate units, and managing the Command's
suggestion program. Moreover, the Flight commander said that, until
January 1997, the eight personnel with quality management duties were
attached to the Command Group within the headquarters. The remaining
13 personnel perform management engineering functions. The DOD
directive identifies strategic planning and management engineering
and analysis as management support functions, and OSD/DA&M officials
said that quality management is also a management support function.
Further, the transfer of personnel and functions from a headquarters
to a subordinate organization is an indicator of possible management
support activity, according to OSD/DA&M officials.
COMPUTER SYSTEMS SUPPORT
SQUADRON
------------------------------------------------------ Appendix II:9.3
The Computer Systems Support Squadron, with 148 personnel, is the
central design activity for the Command's computer systems, and it
operates the headquarters computer network. This Squadron
establishes the Command's software policy and standards and manages
its radio frequency spectrum, land mobile radios, and cellular
telephones. Furthermore, the Squadron conducts business process
analyses to support the Command's current and future automation
requirements. Computer support to headquarters, including data
standardization and computer systems policy development, is
considered a management support function, according to the DOD
directive.
TRAINING SUPPORT SQUADRON
------------------------------------------------------ Appendix II:9.4
The Training Support Squadron, with 89 personnel, develops training
syllabi and courseware for both Command aircraft and undergraduate
flight training and manages the Command's Graduate Evaluation
Program. DOD Directive 5100.73 identifies the management of training
and educational programs and curriculum development and review as
management headquarters or headquarters support functions.
AIR OPERATIONS SQUADRON
------------------------------------------------------ Appendix II:9.5
The Air Operations Squadron, with 77 personnel, is under the
Operations Directorate and provides operational and readiness
support, including crisis response, unit/individual deployments,
contingency operations, and intelligence support to its headquarters,
functions covered under DOD's directive. For example, the Squadron
provides policy and procedures for conducting and evaluating
headquarters deployment exercises, and its personnel collect and
analyze readiness data on the Command's subordinate units.
CIVIL ENGINEERING FLIGHT
------------------------------------------------------ Appendix II:9.6
The Civil Engineering Flight, with 65 personnel, manages the
Command's military construction, base realignment and closure
programs, military family housing, and environmental projects, and it
has specialized engineering and technical capabilities not found at
base-level engineering squadrons. The Flight has design and
construction management responsibilities and must approve all minor
construction projects over $450,000. The management of engineering
programs, including design development and review and technical
review of construction, is a headquarters support function according
to DOD's directive. Furthermore, Flight officials have determined
that six personnel are performing headquarters support functions and
should be transferred to Command headquarters. Although officials
said the headquarters does not currently have the positions to allow
this transfer, it would merely be a paper change because the Flight
is collocated and fully integrated with the Engineering Directorate
branches it supports in headquarters. According to Command
officials, the Flight is integrated with headquarters to save
management overhead and to promote efficiency and effectiveness.
NUMBERED AIR FORCES
========================================================= Appendix III
The Air Force has 16 active duty numbered air forces assigned to 6 of
its 8 major commands. The Air Combat Command and the Pacific Air
Forces have four numbered air forces each, while the Air Education
and Training Command, the Air Force Space Command, the Air Mobility
Command, and U.S. Air Forces Europe have two each. The Air Force
Materiel Command and the Air Force Special Operations Command do not
have any numbered air forces.
The 12th Air Force is the Air Force component command for the U.S.
Southern Command, a unified command; as such, its principal mission
is to ensure that its units can fulfill their military missions,
including antidrug missions in the Southern Command's area of
responsibility. However, the organizing, training, and equipping of
assigned active wings is the responsibility of the Air Combat
Command--the parent organization of the 12th Air Force. The 19th Air
Force was reactivated in 1993 when the Air Education and Training
Command was established. The 19th Air Force is responsible for
almost all Air Force flight instruction, both general undergraduate,
and specialized flight training for fighter, airlift, and tanker
aircraft. It only has a training mission; its headquarters does not
deploy for military operations.
The 12th and 19th Air Forces are organized differently because of
their different missions and functions. The 12th Air Force
headquarters contains a command group and four divisions. In
addition, the 12th Air Force has 850 personnel in two squadrons and
two groups that are designated as the Air Force's air component to
the Southern Command. These 850 personnel are not considered part of
the 12th Air Force headquarters. The 19th Air Force does not have
this type of structure because it does not support a unified command.
These two numbered air forces also have other organizational
differences. For example, unlike the 12th Air Force headquarters,
the 19th Air Force headquarters does not have an inspector general
division, a manpower office, a Latin American Affairs office, a
command historian, or protocol or public affairs officials.
REVIEW RESULTS
In 1992, the Secretary of the Air Force asked OSD/DA&M to exclude
about 2,000 personnel in the numbered air force headquarters from the
Air Force's management headquarters total. The Air Force provided
documentation to OSD/DA&M concerning its plans to reorganize and
reorient these headquarters into operational organizations.
Management and administration functions that had been mixed among
combat-oriented functions would be eliminated or realigned, according
to the Air Force. The Air Force's planned actions came as Congress
mandated reductions in DOD management headquarters during fiscal
years 1991-95.\1
In 1992, OSD/DA&M approved the exclusion of numbered air forces from
reporting under DOD's management headquarters program, subject to a
review by OSD/DA&M in fiscal year 1993. However, OSD/DA&M did not
review the numbered air forces. Starting with fiscal year 1993, the
Air Force no longer reported numbered air forces headquarters
personnel on its PB-22 exhibits sent to Congress. Yet, our review of
the 12th and 19th Air Forces showed that the Air Force did not fully
implement its planned reorganization and that numbered air forces
continue to perform some management headquarters and headquarters
support functions covered by DOD Directive 5100.73.
--------------------
\1 National Defense Authorization Act for Fiscal Year 1991, sec. 906
(P.L. 101-510).
12TH AIR FORCE
----------------------------------------------------- Appendix III:0.1
The 12th Air Force headquarters, with 110 personnel, performs some
management functions that, according to the Air Force's restructuring
plan, were to be transferred to major commands or wings. For
example, the plan said that numbered air force inspection functions
were to be transferred to major commands. Yet, 12th Air Force
headquarters has a 30-person inspector general office with
responsibilities that include monitoring the operational readiness of
subordinate guard and reserve units--a headquarters support function
specifically listed in DOD
Directive 5100.73. Additionally, the 12th Air Force headquarters has
a two-person history office, a three-person manpower office, a
protocol official, and a public affairs official. The proposed
reorganization plan said that these functions would be transferred in
their entirety to wings or major commands. Furthermore, the 12th Air
Force headquarters has a Latin American Affairs office with 11
personnel responsible for managing an exchange program with Latin air
forces. In sum, 48 of 110 headquarters personnel perform management
or headquarters support functions.
19TH AIR FORCE
----------------------------------------------------- Appendix III:0.2
The 19th Air Force headquarters, with 99 personnel, oversees the Air
Education and Training Command's flying training program and assesses
compliance with the Command's training policies and directives.
Headquarters support functions listed in DOD Directive 5100.73 and
performed by the 19th Air Force include analyzing training results
and overseeing unit readiness. In addition, its logistics branch,
with seven personnel, manages the munitions and weapons program for
the entire Command. This branch's responsibilities include providing
guidance and written direction to all munitions and weapons elements
within the Command, consolidating and estimating munitions
requirements, and representing the Command. The Command's Logistics
Directorate is discussing the transfer of this function from the 19th
Air Force to the Command's headquarters, according to a 19th Air
Force official.
OBJECTIVES, SCOPE, AND METHODOLOGY
========================================================== Appendix IV
Our objectives were to determine (1) the accuracy and reliability of
DOD's reported data on management headquarters and headquarters
support personnel and costs, (2) reasons that data on personnel and
costs could be inaccurate, and (3) DOD's plans to reduce the size of
its management headquarters and headquarters support activities.
To determine the accuracy and reliability of certain PB-22 cost data
and the completeness of personnel data reported under DOD Directive
5100.73, we selected 10 headquarters to review. We chose
organizations from the following categories: Defense-wide
headquarters, military department headquarters, and unified command
headquarters. Given congressional interest in headquarters in the
Washington, D.C., area, we included four of these organizations in
our review. To minimize travel costs, we also selected DOD
organizations near our available GAO staff in Norfolk, Virginia, and
Atlanta, Georgia. The headquarters we reviewed were
-- Office of the Secretary of Defense, Pentagon, Arlington,
Virginia;
-- Army Secretariat and Army Staff, Pentagon, Arlington, Virginia;
-- Navy Secretariat and OPNAV, Pentagon, Arlington, Virginia;\1
-- Air Force Secretariat and Air Staff, Pentagon, Arlington,
Virginia;
-- U.S. Atlantic Command, Norfolk, Virginia;
-- Navy's Commander in Chief, Atlantic Fleet, Norfolk, Virginia;
-- U.S. Army Training and Doctrine Command, Fort Monroe, Virginia;
-- Air Combat Command, Langley Air Force Base, Virginia;
-- U.S. Army Forces Command, Fort McPherson, Georgia; and
-- Air Education and Training Command, Randolph Air Force Base,
Texas
In addition to these headquarters, we visited two numbered air forces
because our review of DOD records indicated these organizations had
been reported as management headquarters, and after a reorganization
in the early 1990s, questions remained about the extent of management
and headquarters support functions continuing at these organizations.
We visited the 12th Air Force, Davis-Monthan Air Force Base, Arizona,
and the 19th Air Force, collocated with the Air Education and
Training Command. As part of our FORSCOM review, we visited one of
its subordinate commands, the Army Signal Command, Fort Huachuca,
Arizona. This Command had been reported as a management headquarters
when it was an independent major command, the Information Systems
Command.
At each of the 10 headquarters organizations we audited, we
judgmentally selected subordinate noncombat organizations to review.
We selected organizations based on a variety of factors, including
the organizations' names, missions, and functions, and conditions
that OSD/DA&M officials agreed may indicate that an organization is
providing management support. These indicators, also called "red
flags" by OSD/DA&M, are headquarters officials serving additional
duty as senior officials in the subordinate organization (called
"dual hatting"), transfer of personnel from headquarters to create or
augment subordinate organizations, diverse functions that mirror
headquarters functions, and collocation of the subordinate
organization with its headquarters. Although the presence of one or
more of these indicators is not conclusive, it led us to perform the
analysis called for in DOD Directive 5100.73. In general, our
analysis involved reviewing mission and functions documents,
organizational manning documents, and organizational history. We
also discussed the organization's activities, products, services,
customers, and relationship with headquarters with cognizant
officials in the subordinate organization and in its headquarters.
The primary disadvantage to this approach is that our findings cannot
be generalized to DOD as a whole or to entire types of DOD
organizations because we did not randomly sample the organizations we
reviewed. The primary advantage is that we obtained an in-depth
understanding of each organization reviewed, which gave us adequate
information to judge compliance with DOD Directive 5100.73.
Both the FYDP and PB-22 exhibits contain errors that make them
unreliable for assessing the resources expended by DOD for management
headquarters and headquarters support activities. According to DOD
Directive 5100.73, program elements (or line items) in the FYDP that
end in "98" are reserved exclusively to account for personnel and
costs of DOD's management headquarters and headquarters support
activities. In the FYDP, we found costs in "98" program elements
that were not related to management headquarters. An official in the
Office of the Under Secretary of Defense (Comptroller), who performed
her own analysis of these program elements, also found costs
unrelated to management headquarters, particularly in Navy and
Defense-wide program elements. For PB-22 cost data, we performed a
limited check of the data's accuracy for one fiscal year by comparing
the PB-22 data with financial records at the headquarters spending
the money. As discussed previously, at many headquarters we found
significant discrepancies between costs reported on the PB-22
exhibits and costs incurred by headquarters. With respect to PB-22
personnel data, OSD/DA&M acknowledged that these exhibits contain
errors. For example, in the Defense-wide PB-22 exhibit prepared for
the President's budget for fiscal year 1998, OSD did not report the
headquarters of five defense agencies that it agrees should have been
reported. For the personnel numbers that were reported on the PB-22
exhibits, we did not independently verify their accuracy.
To determine past and projected trends in DOD's management
headquarters personnel and costs, as reported by DOD, we used annual
PB-22 exhibits prepared by OSD and the military departments and
submitted to Congress. For management headquarters data beyond
fiscal year 1999, we used DOD's 1998-2003 FYDP.
To obtain information on plans to reduce the size of DOD's management
headquarters, we interviewed officials in the 10 headquarters
organizations we audited and OSD and military service officials who
are involved with studies of management headquarters, such as the
study called for by the Quadrennial Defense Review report.
We performed our review from October 1996 to August 1997 in
accordance with generally accepted government auditing standards.
(See figure in printed edition.)Appendix V
--------------------
\1 Due to time constraints, we did not review Headquarters, Marine
Corps.
COMMENTS FROM THE DEPARTMENT OF
DEFENSE
========================================================== Appendix IV
(See figure in printed edition.)
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix VI
NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.C.
Janet St. Laurent, Assistant Director
Douglas M. Horner, Evaluator in Charge
Arnett Sanders, Senior Evaluator
ATLANTA FIELD OFFICE
Leo B. Sullivan, Jr., Senior Evaluator
Frank C. Smith, Senior Evaluator
NORFOLK FIELD OFFICE
Joseph A. Rutecki, Senior Evaluator
Carleen C. Bennett, Senior Evaluator
*** End of document. ***
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