Background

DOD’s acquisition mission represents the largest buying enterprise in the  world. The defense acquisition workforce—which consists of military and  civilian program managers, contracting officers, engineers, logisticians,  and cost estimators, among others—is responsible for effectively  awarding and administering contracts totaling more than $250 billion  annually. The contracts may be for major weapon systems, support for  military bases, consulting services, and commercial items, among other  things. A skilled acquisition workforce is vital to maintaining military  readiness, increasing the department’s buying power, and achieving  substantial long-term savings through systems engineering and  contracting activities.
DOD’s acquisition workforce experienced significant cuts during the  1990s following the end of the Cold War and, by the early 2000s, began  relying more heavily on contractors to perform many acquisition support  functions. DOD reported that from 1998 through 2008, the number of  military and civilian personnel performing acquisition activities decreased  14 percent from about 146,000 to about 126,000 personnel. Amid  concerns about the growing reliance on contractors and skill gaps within  the military and civilian acquisition workforce, in April 2009, the Secretary  of Defense announced his intention to rebalance the workforce mix to  ensure that the federal government has sufficient personnel to oversee its  acquisition process. To support that objective, DOD’s April 2010 strategic  workforce plan stated that DOD would add 20,000 military and civilian  personnel to its workforce by fiscal year 2015.
Further, in 2008, Congress created DAWDF, codified in section 1705 of  title 10 of the U.S. Code, to provide DOD a dedicated source of funding  for rebuilding capacity, improving quality, and rebalancing the workforce.  Congress has specified in statute the level of DAWDF funding for a given  fiscal year and has adjusted that level several times. For example, the  National Defense Authorization Act for Fiscal Year 2010 specified $100  million for fiscal year 2010; $770 million for fiscal year 2011; $900 million  for fiscal year 2012; $1.2 billion for fiscal year 2013; $1.3 billion for fiscal  year 2014; and $1.5 billion for fiscal year 2015. In the National Defense  Authorization Act for Fiscal Year 2013, Congress extended the  requirement for DOD to fund DAWDF through 2018 and revised the  funding levels to $500 million for fiscal year 2013; $800 million for fiscal  year 2014; $700 million for fiscal year 2015; $600 million for fiscal year  2016; $500 million for fiscal year 2017; and $400 million for fiscal year  2018. Currently, the law mandates $500 million in DAWDF funding for a  fiscal year. However, the law also authorizes the Secretary of Defense to  reduce annual funding if the Secretary determines that the mandated  amount is greater than what is reasonably needed for a fiscal year. The  amount may not be reduced to less than $400 million for a fiscal year.
Section 1705 of title 10, U.S. Code, specifies three ways that DAWDF can  be funded:
Appropriations made for DAWDF. Appropriations were made for the  fund in fiscal years 2010 through 2015 and were available for  obligation for 1 fiscal year—the fiscal year for which they were  appropriated.
Credits, or funds that are remitted by DOD components from  operation and maintenance accounts. Funds credited to the account  are available for obligation in the fiscal year for which they are  credited and in the 2 succeeding fiscal years.
Transfers of expired funds. During the 3-year period following the  expiration of appropriations to DOD for research, development, test  and evaluation; procurement; or operation and maintenance, DOD  may transfer such funds to DAWDF to the extent provided in  appropriations acts. To date, Congress has granted authority for DOD  to transfer operation and maintenance funds included in the  appropriations acts for fiscal years 2014, 2015, and 2016 to DAWDF.  Funds transferred to DAWDF are available for obligation in the fiscal  year for which they are transferred and in the 2 succeeding fiscal  years.
Under current law, DOD is required to credit the fund $500 million for a  fiscal year, as previously mentioned. However, the law directs that the  amount required to be remitted by DOD components be reduced by any  amounts appropriated for or transferred to DAWDF for that fiscal year.  Collectively, from fiscal years 2008 through 2016, about $4.5 billion has  been deposited into DAWDF using various combinations of these  processes (see table 1).
From fiscal years 2008 through 2016, DOD obligated about $2.2 billion— or about 60 percent—for recruiting and hiring and about $1.2 billion—32  percent—for training and development. The remaining $269 million, or 7  percent, was used for retention and recognition. To help support  rebuilding the workforce, DOD obligated the most funds for recruiting and  hiring through fiscal year 2015; however, in fiscal year 2016, DOD  obligated slightly more for training and development than for recruiting  and hiring (see fig. 1).

		Organizations Responsible for DAWDF

Several organizations within DOD play key roles in the management and  oversight of DAWDF (see table 2).
DOD’s acquisition workforce management framework includes centralized  policy, decentralized execution by the DOD components, and joint  governance forums. DOD established the Senior Steering Board and the  Workforce Management Group in 2008 to oversee DAWDF activities. The  senior acquisition executives for the military departments, DOD functional  acquisition career field leaders, and heads of major DOD agencies were  designated as members of the Senior Steering Board, along with  representatives from the Office of the Under Secretary of Defense  (Comptroller) and Chief Financial Officer and the Office of the Under  Secretary of Defense for Personnel and Readiness. This board is  expected to meet quarterly and provide strategic oversight of DAWDF.  The Workforce Management Group includes representatives from the  offices on the Senior Steering Board, among others. It is expected to  meet bimonthly and oversee DAWDF operations and management (see  table 3).

		Prior GAO Work

In June 2012, we reported on DOD’s initial implementation of DAWDF;  we found that the ability of DOD components to effectively plan for and  execute efforts supported by DAWDF was hindered by delays in DOD’s  DAWDF funding processes and the absence of clear guidance on the  availability and use of funds. We also found that HCI and Comptroller  officials had differing views on how best to manage the DAWDF funding  process. Comptroller officials acknowledged that they delayed sending  out credit remittance notices and allowed components to delay crediting  DAWDF funds. At that time, we recommended that DOD revise its  DAWDF guidance to clarify when and how DAWDF funds should be  collected, distributed, and used. We also recommended that DOD clearly  align DAWDF’s funding strategy with the department’s strategic human  capital plan for the acquisition workforce. DOD concurred with these  recommendations. In October 2016, DOD completed an updated  acquisition workforce strategic plan. We discuss our assessment of the  extent to which DOD has taken action to address these recommendations  later in this report.
Further, we also recommended in June 2012 that DOD establish  performance metrics for DAWDF to allow senior leadership to track how  the fund is being used to support DOD’s acquisition workforce  improvement goals. DOD concurred and subsequently established four  metrics to track the defense acquisition workforce: (1) the size of the  acquisition workforce, (2) the shape of the acquisition workforce, (3)  defense acquisition workforce improvement act certification rates, and (4)  the education level of acquisition workforce personnel. In its October  2016 acquisition workforce strategic plan, DOD reported that the  cumulative efforts of the DOD components from fiscal year 2008 through  fiscal year 2015 increased the size of the acquisition workforce by 24  percent, from about 126,000 to 156,000 personnel. The department  accomplished this by hiring additional personnel, converting contractor  positions to civilian positions, adding military personnel to the acquisition  workforce, and administratively recoding existing personnel. DAWDF  contributed to this success by helping to increase the size of the  acquisition workforce and achieve a better balance of early-, mid-, and  senior-career personnel. DOD reported that more than 96 percent of the  acquisition workforce either met or was on track to meet certification  requirements within required time frames. DOD also reported that the  number of personnel with bachelor’s degrees or higher increased from 77  percent in fiscal year 2008 to 84 percent in fiscal year 2015, while those  with graduate degrees increased from 29 percent to 39 percent over the  same time period. These changes were accomplished during a period of  budget uncertainties and sequestration, during which time DOD imposed  hiring freezes and curtailed travel, training, and conferences, among other  actions.
In December 2015, we reported that DOD had accomplished some of its  goals in rebuilding the acquisition workforce and used DAWDF to help in  these efforts. While DOD increased the size of its acquisition workforce,  we found that it had not reached its targets for 6 of 13 acquisition career  fields, including those for 3 priority fields—contracting, engineering, and  business. To ensure that DOD has the right people with the right skills to  meet future needs, we recommended that DOD complete competency  assessments, issue an updated acquisition workforce strategic plan, and  issue guidance on prioritizing the use of funding. DOD concurred with our  recommendations. We discuss DOD’s efforts to address these  recommendations later in this report.

	Congressional Actions Have Enabled DOD to Overcome Previous DAWDF Funding Challenges

DOD, enabled by recent congressional action, has improved its ability to  fund DAWDF, which allowed DOD to fund DAWDF in 2 months,  compared to the 24 months the credit funding process took in fiscal year  2014. Specifically, in the DOD Appropriations Act for Fiscal Year 2014,  Congress authorized DOD to transfer operation and maintenance funds  appropriated by the act to DAWDF consistent with section 1705 of title 10  of the U.S. Code, which permits DOD to transfer expired funds for 3 years  following their expiration. The operation and maintenance funds  appropriated under the act expired at the end of fiscal year 2014, so the  transfer authority authorized by Congress and section 1705 of title 10  gives DOD the authority to transfer expired fiscal year 2014 funds to  DAWDF in fiscal years 2015 through 2017. Congress subsequently  enacted such transfer authority for both fiscal years 2015 and 2016. As  a result, DOD is authorized to fund DAWDF by transferring expired fiscal  year 2015 funds through fiscal year 2018 and expired fiscal year 2016  funds through fiscal year 2019.
Enabled by this authority, the DOD Comptroller funded DAWDF with $477  million of expired funds in one transaction for fiscal year 2015 and $400  million of expired funds in one transaction for fiscal year 2016. The DOD  Comptroller then allotted those funds to HCI in a single transaction for  each of those fiscal years. Our analysis found that it took 2 months from  the time that DOD submitted its written determination of the amount of  DAWDF funding required for fiscal year 2015, from June 23, 2015, to  when the DOD Comptroller transferred the funds into the DAWDF  account on August 24, 2015. HCI officials said that as a result of the  ability to transfer expired funds, they were able to distribute, or sub-allot,  to components 75 percent of their approved fiscal year 2016 funding  before the start of the fiscal year.
In contrast, DOD often experienced delays in its previous funding  process. Prior to 2015, DOD primarily relied on credits remitted by the  DOD components to meet DAWDF funding requirements. To complete  this process, the Comptroller calculated each component’s share of the  required credit based on the amount specified in the law, offset by the  amount of any annual appropriations made for DAWDF. The Comptroller  then sent a notice to each component specifying the amount of the credit  it was to remit by a specific date. After the components remitted the  funds, the Comptroller allotted those funds to HCI, which in turn sub- allotted DAWDF funds to the components based on their approved plans  for that year.
When DAWDF was first enacted, credits were to be remitted to the fund  not later than 30 days after the end of each fiscal quarter. In 2009,  Congress amended the DAWDF legislation to require DOD components  to remit credit funding not later than 30 days after the end of the first  quarter of each fiscal year. However, our analysis found that under the  credit funding process, the DOD Comptroller delayed sending out credit  remittance notices and allowed components to delay remitting funds to  DAWDF. In 2012, Comptroller officials said that they generally did not  begin the process of collecting and distributing DAWDF funds before  DOD received its annual appropriations to minimize the amount of credit  funding collected from other DOD programs and that the funds should not  be collected until necessary for DAWDF. These officials noted that this  was particularly important during a continuing resolution period where  DOD’s funding is often limited to the prior year’s appropriation level or  less, which puts additional stress on other programs required to  contribute funds to DAWDF. As a result, DOD components did not  complete remitting credit funds within the time frames required by DOD  for any year that the credit funding process was used.
For example, the notice for fiscal year 2013 was sent in June 2013 and  required components to remit credits by October 2013. However, the  remittance process was not completed until September 2014, or 11  months past the required deadline. Similarly, for fiscal year 2014, the  remittance process was not completed until May 2016, or 24 months after  DOD submitted its written determination of the amount of DAWDF funding  required for the fiscal year—the initiation of the funding process. Figure 2  compares the length of time between the initiation of the fiscal year 2014  funding process and the last credit remittance of DAWDF funding, to the  fiscal year 2015 time frames for transferring expired funds.
Despite the improved timeliness of funding DAWDF by transferring  expired funds, DOD experienced a significant increase in the amount of  carryover funds by the beginning of fiscal year 2016. Specifically, the  carryover balance increased from $129 million as of October 1, 2014, to  $875 million as of October 1, 2015, or nearly twice the amount DOD  eventually obligated in fiscal year 2016. The growth in the amount of  carryover was primarily due to the delay in the remittance of $509 million  in funding for fiscal year 2014—or about 86 percent of the amount to be  credited for that year—until 2015. As a result, about $869 million was  deposited into HCI’s DAWDF account during fiscal year 2015, while  components only obligated $358 million that year. Additional factors also  contributed to the large carryover balance:
According to HCI officials, DOD’s requirements were sometimes less  than the minimum amount that DOD was required to put into DAWDF.  For fiscal year 2014, for example, Congress mandated $800 million in  DAWDF funding (which was reduced by the Secretary of Defense to  $640 million, as permitted by the law), but the components only  planned to obligate $498 million.
HCI and component officials told us that delays in remittances and  additional factors, such as hiring freezes, affected DAWDF execution  for several years. Despite having $129 million in carryover funds, HCI  instructed DOD components to delay execution of hiring and other  planned fiscal year 2015 initiatives. HCI officials told us that because  of the uncertainty of when the fiscal year 2014 credits would be  remitted, they had to ensure that they had sufficient funds to pay the  salaries of the personnel who had been hired in the previous 2 years  using DAWDF funds. In addition, DOD components did not always  obligate all of their DAWDF funding for each fiscal year. For example,  for fiscal year 2015, the Defense Contract Management Agency  requested $84.4 million in funding for hiring, training, and retention  initiatives and was only able to obligate $61.9 million in that year.  Similarly, in fiscal year 2015, the Air Force Materiel Command  planned to spend $5.7 million in DAWDF funding for recruiting  incentives. However, Air Force officials told us that because of delays  in the remittance of fiscal year 2014 funds from the components, the  Air Force was instructed to delay its hiring plans, which in turn  affected the number of personnel available to accept the recruiting  incentives offered. Of the $5.7 million approved for recruiting  incentives that fiscal year, the command was only able to obligate  $1.3 million. Overall, from fiscal years 2011 through 2016, DOD  components obligated between 68 and 92 percent of the amount that  HCI approved them to spend (see fig. 3).
Congress acted to reduce the carryover balance in the National Defense  Authorization Act for Fiscal Year 2017. The act requires, during fiscal year  2017, DOD to transfer $475 million to the Treasury from amounts  available from credits to DAWDF. The act also requires DOD to transfer  $225 million of the funds required to be credited to DAWDF in fiscal year  2017 to the Rapid Prototyping Fund. When coupled with DOD’s fiscal  year 2017 spending and funding plans, we estimate that these actions will  result in a carryover balance of about $156 million at the beginning of  fiscal year 2018 in the DAWDF account, or about 26 percent of DOD’s  estimated fiscal year 2018 spending (see fig. 4).
With the transfer authority enacted by Congress in the DOD  Appropriations Act for Fiscal Year 2016, and section 1705 of title 10, DOD  is authorized, for example, to transfer operation and maintenance funds  appropriated in fiscal year 2016, which expired on September 30, 2016,  into DAWDF in fiscal years 2017, 2018, and 2019. If this transfer  authority is not renewed to enable DOD to transfer expired funds beyond  2019, DOD stated that it will be required to revert back to the credit  funding process that it had previously used. As of January 2017, there  have been no changes to the guidance or any agreement between HCI  and the Comptroller to address the issues we raised in our 2012 report  about how to resolve the credit funding delays. During our current review,  a Comptroller official reiterated that credit funding came at the expense of  programs and activities that had been included in the President’s budget  submission. We are not making new recommendations to address the  funding process and continue to believe that DOD needs to implement  the recommendation we made in 2012. Those actions, and the ability to  transfer expired funds through fiscal year 2019, will provide DOD the time  it needs to assess options, if necessary, to improve the credit funding  processes.

	DOD Has Taken Some Steps to Improve Management and Oversight of the Fund, but Opportunities Exist to Improve Guidance and Data Quality

DOD has taken several actions to improve management and oversight  processes for DAWDF over the past year, including issuing an updated  acquisition workforce strategic plan and DAWDF operating guidance.  DOD’s August 2016 DAWDF guidance required components to submit  annual and 5-year spending plans and formalized the requirement to hold  a midyear review to assess DAWDF execution and discuss best  practices. However, additional opportunities exist to better align DOD’s  strategic plan and DAWDF spending plans, improve consistency in how  components are using the fund to pay for personnel to help manage the  fund, and improve the quality of data on how the fund is being used.  Specifically, DOD’s October 2016 strategic plan indicates that the  department intends to shift its emphasis from rebuilding the workforce to  improving its capabilities. DOD’s plan established four goals and related  strategic priorities that it intends to use DAWDF to help support. The  October 2016 strategic plan, however, does not identify time frames,  metrics, or projected budgetary requirements associated with these goals  and strategic priorities or clearly prioritize DAWDF funding toward  achieving them.
DOD components identified more than $3 billion in potential DAWDF  funding requirements for fiscal years 2018 through 2022, which is  expected to exceed available funding by $500 million over this period.  Component policies and practices differ on the use of the fund to pay the  salaries of staff members who help manage DAWDF and execute  DAWDF initiatives. Further, component data we reviewed that were  provided to HCI for inclusion in DOD’s DAWDF annual report to Congress  and monthly oversight of the fund did not always accurately reflect the  results of DAWDF-funded initiatives, which DOD officials attributed to  resource constraints and the absence of processes to verify the data  collected.

		DOD Issued a New Strategic Plan That Focuses on Developing the Current Workforce but Lacks Time Frames and Metrics

In his June 2016 memorandum, the Under Secretary of Defense for  Acquisition, Technology and Logistics stated that DOD intends to sustain  the acquisition workforce size and continue to improve its  professionalism. Similarly, DOD’s October 2016 acquisition workforce  strategic plan for fiscal years 2016 through 2021 stated that DOD must  sustain the acquisition workforce size, factoring in workload demand and  requirements; ensure that its personnel continue to increase their  professionalism; and continue to expand talent management programs to  include recruitment, hiring, training, development, recognition, and  retention incentives by using DAWDF and other appropriate tools. To  accomplish this, the strategic plan identified four broad goals—making  DOD an employer of choice; shaping the acquisition workforce; improving  the quality and professionalism of the acquisition workforce; and  improving workforce policies, programs, and processes—and related  strategic priorities (see table 4).
In 2012, we recommended that DOD clearly align DAWDF’s funding  strategy with the department’s strategic human capital plan for the  acquisition workforce. DOD concurred and stated that the department  would continue to improve alignment of a revised funding strategy so that  it supports successful execution of the workforce initiatives. However,  while DOD’s October 2016 strategic plan provides an overall framework  for the acquisition workforce and broadly indicates how DAWDF will be  used to support these efforts, it does not identify time frames, metrics, or  projected budgetary requirements associated with these goals or strategic  priorities. As a part of our work on leading practices in strategic workforce  planning, we have shown that determining the critical skills and  competencies that agencies’ workforces need to achieve current and  future agency goals and missions and identify gaps, including those that  training and development strategies can help address, and developing  customized strategies to recruit for highly specialized and hard-to-fill  positions would be beneficial to strategic workforce planning. Because  the new strategic plan does not provide a clear link between its goals for  the acquisition workforce and how DAWDF funds should be used, it is  unclear how the department is ensuring that DAWDF targets its most  critical workforce needs. HCI and Director, Acquisition Career  Management (DACM) officials noted that each military department has  prepared or is preparing a workforce plan to help guide its efforts.
Further, in our December 2015 report, we recommended that DOD issue  an updated workforce plan that included revised career field goals and  that HCI issue guidance to the components to focus hiring on priority  career fields. DOD agreed that additional guidance was essential to  ensure that DOD had the right people with the right skills to meet future  needs, but noted that determining which career fields were a priority was  most appropriately determined by the components. DOD stated that it  would work with the components to issue guidance that would best meet  both enterprise and specific component workforce needs. In that regard,  the October 2016 strategic plan reiterated the need to shape the  acquisition workforce to achieve current and future acquisition  requirements but did not establish specific targets for the acquisition  workforce as a whole or targets for specific career fields. HCI officials  noted that DOD’s objective is to sustain the current level of the acquisition  workforce and understand the workload demand.
As part of its DAWDF planning process for fiscal year 2017, HCI  requested data from the DACMs of each military department on their  estimates for future DAWDF hiring through fiscal year 2022. Detailed  breakouts by career field were not required. At the component level, we  found a range of direction and data on future hiring efforts. For example:
The Army’s fiscal year 2017 memorandum accompanying its call for  DAWDF funding requests stated that commands should target hiring  requests in the following areas: financial management, cost  estimating, contracting, engineering, science and technology, and  program management. The Army DACM office provided HCI an  estimate of planned hires by career field for fiscal year 2017, which  indicated that about 80 percent of the Army’s fiscal year 2017 DAWDF  hires were planned for the contracting and engineering career fields.
The Navy’s fiscal year 2017 guidance accompanying its call for  DAWDF funding requests does not specify which acquisition career  fields to target for hiring requests, but Navy DACM officials stated that  they do obtain input from the commands regarding their acquisition  workforce hiring needs. The Navy indicated that it plans to hire 255  entry-level personnel and an additional 100 in the next 5 years to  address attrition in contracting and to hire engineers in new areas  such as cybersecurity.
The Air Force’s March 2016 DAWDF guidance highlighted that  DAWDF funds would be used to support the program management,  contracting, and test and evaluation career fields, among others, but it  does not specify critical career fields where DAWDF hiring should be  focused. Air Force officials stated that their fiscal year 2017 DAWDF  program guidance did not request hiring initiatives, but the Air Force  made a separate call for hiring requirements as a part of an  overarching Air Force program for force renewal, which would be  augmented by DAWDF for acquisition hiring. This separate call did  not specify the number of hires by career field.
DOD’s October 2016 acquisition workforce strategic plan noted that one  of DOD’s goals was to shape the acquisition workforce to achieve current  and future acquisition requirements. The absence of revised career field  goals, coupled with the variation in the details provided by DOD  components, underscores the importance of further management  attention and guidance in this area, consistent with our December 2015  recommendation.

		DOD Issued New Guidance to Improve DAWDF Management and Oversight, but Components Differed in Use of Fund for Management Support

DOD has taken a number of recent actions to mature its management  and oversight of the fund, including issuing DAWDF operating guidance in  August 2016 and initiating efforts to enhance long-range planning and  improve component reporting requirements. HCI officials stated that until  recently, HCI did not require DOD components to estimate requirements  across the time period covered by the Future Years Defense Program, in  part because DOD officials were uncertain whether DAWDF would be  permanent. As such, HCI required components to focus their efforts on  identifying initiatives that could be funded in the upcoming fiscal year.  Further, HCI and DACM officials noted that because DAWDF was  intended to supplement other sources of funding that may already be  available, components often used the flexibility provided by DAWDF to  address more short-term gaps and emerging needs for training and  retention initiatives, which may not lend themselves to long-term strategic  planning. For example, in fiscal year 2015, the Defense Acquisition  University, the Navy, and the Army each provided cybersecurity-related  training using DAWDF, including master’s level college courses in  cybersecurity and a Naval Postgraduate School cybersecurity certificate  program.
In its August 2016 guidance, however, HCI directed each DACM to  compile, among other things, annual and 5-year hiring and spending  plans. According to this guidance, DOD components are to identify  opportunities for using DAWDF and provide funding requests to their  DACMs for review and approval. In turn, the guidance requires each  DACM to ensure that DAWDF proposals are integrated and coordinated  within each component. The timing of this process varies by component,  but the acquisition commands we met with start this effort between  February and April. HCI typically requests that the components submit  upcoming fiscal year requests for review in July and meets with  components in August so that plans can be approved by the end of the  fiscal year in September. HCI and DACM officials stated that they are  working to improve the planning process and to develop better estimates  of DAWDF needs.
Overall, HCI approved $579 million in fiscal year 2017 DAWDF initiatives,  an increase of 20 percent over the $482 million approved for DOD’s fiscal  year 2016 initiatives. According to military department DACM officials, the  increase includes plans to hire additional personnel in contracting,  information technology, and test and evaluation. To execute its fiscal year  2017 initiatives, DOD expects to use both carryover funds and expired  funds that will be available for obligation once they are transferred to  DAWDF. Further, DOD components identified more than $3 billion in  potential DAWDF funding requirements from fiscal years 2018 through  2022. As submitted, the components’ collective annual DAWDF funding  requirements over this period ranged from $591 million in fiscal year 2018  to $628 million by fiscal year 2022 (see table 5).
Of the more than $3 billion in estimated funding requirements for fiscal  years 2018 through 2022, DOD components reported that they planned to  request about $1.2 billion—or about 41 percent—to hire more than 6,000  new acquisition personnel. Components also reported they plan to  request about $1.4 billion—or about 46 percent—for training for the  acquisition workforce, developing new talent, and targeting competency  gaps, while another $258 million—or 8 percent—would be requested for  retention and recognition. As reflected in Table 5, above, the  components’ collective estimated annual DAWDF funding requirements  exceed $500 million in each of fiscal years 2018 through 2022. HCI and  the components will need to prioritize funding requests since estimated  funding requirements may exceed available DAWDF funding over this  period.
HCI, DACM, and acquisition command officials noted that providing  management and oversight is complicated by differing views over  whether DAWDF funds can be used to pay for management personnel.  For example, officials at the Naval Sea Systems Command—which has  more than 18,000 acquisition workforce personnel—told us it has one full- time DOD civilian who is responsible for managing DAWDF and  overseeing its initiatives. Command officials told us that they use their  operation and maintenance budget to pay this DAWDF fund manager.  We identified differences of opinion by HCI, DACM, and acquisition  command officials on whether their offices could use DAWDF to help pay  for personnel to manage the fund and under what circumstances. For  example:
HCI officials said that their office does not use DAWDF funding to pay  for personnel to manage DAWDF. HCI’s August 2016 guidance  indicates that DAWDF can be used to hire interns, entry-level  personnel, journeymen, experts, and highly qualified experts assigned  to an acquisition career field. The guidance prohibits using DAWDF to  pay the base salary of any person who was a DOD acquisition  workforce member as of January 28, 2008, and who has continued in  the employment of the department since such time without a break in  such employment of more than 1 year.
The Air Force DACM approved the use of DAWDF to pay the salaries  of at least 12 civilian acquisition and nonacquisition workforce  personnel to manage DAWDF initiatives in hiring and training, as well  as to manage DAWDF itself. These personnel were located within the  Air Force Personnel Center, the Air Force Institute of Technology, and  the Air Force Materiel Command. The Air Force’s March 2016  guidance specifically permits using DAWDF to pay for personnel to  support and execute DAWDF initiatives. The guidance does not  specify whether those personnel must be acquisition workforce  members.
Naval Sea Systems Command officials told us that they believed that  DAWDF could not be used to hire any personnel to help manage  DAWDF. However, the Navy DACM told us that the Navy as a whole  had approximately 16 full-time equivalents supporting the  management and execution of DAWDF. Five of these 16 positions  were funded by DAWDF and were not acquisition coded.
The Army Contracting Command received approval from the Army  DACM to use DAWDF to pay for a DAWDF fund manager, which the  Army identified as an acquisition-coded position. Army DACM officials  told us that they do not believe that DAWDF funds can be used to pay  for DAWDF personnel to manage the fund unless they are in  acquisition-coded positions. The Army’s October 2016 guidance  specifies that DAWDF may be used for new hires placed in  acquisition-coded positions.
Defense Logistics Agency officials told us that they believed they were  not allowed to use DAWDF to pay the salaries of any personnel  responsible for managing DAWDF. As a result, the Defense Logistics  Agency uses its regular budget to pay the salary of the person  responsible for overseeing its DAWDF initiatives.
Federal internal control standards indicate that sufficient management  personnel are needed to oversee federal programs and that agencies  need clear and consistent policies and procedures to support  accomplishment of agency objectives consistently. HCI’s August 2016  guidance, however, did not clearly indicate whether DOD components  could use DAWDF to pay the salaries of personnel to manage DAWDF  and under what conditions, while the guidance at the military departments  is not consistent on the issue. Without additional clarification on whether  DAWDF funds may be used to pay for personnel to manage DAWDF, and  under what conditions, DOD components will continue to be at risk of not  using DAWDF funding consistently, or, if DAWDF can be used to help  manage and oversee the fund, potentially missing opportunities to  enhance management and oversight.

		HCI Has Implemented Some Additional Measures to Improve Oversight of DAWDF, but DAWDF Managers Do Not Have Accurate Data on the Execution of DAWDF Initiatives

DOD’s August 2016 guidance identifies several new and maturing  processes HCI will use to improve DOD’s management and oversight of  DAWDF. For example, in addition to the requirement for the DOD  components to submit annual and 5-year spending plans, DOD’s August  2016 guidance formalized the requirement to hold a midyear review to  assess DAWDF execution and discuss best practices, among other  issues, as a part of HCI’s management and oversight of the fund. HCI  conducted midyear reviews in 2015 and 2016 and believes they were  beneficial. Building on the midyear review, the August 2016 guidance also  includes a new requirement for all DAWDF users to submit annual year in  review reports beginning in 2016. Required data include a summary of  the implementation of DAWDF initiatives in a standardized format,  including details on hiring—by career field—and training, recruiting, and  retention initiatives. According to HCI officials, these data will be used to  compile the DAWDF annual report to Congress and provide more  detailed and consistent information on the execution of the fund. HCI  officials also hold monthly teleconferences with components to discuss  funding requests and execution.
Nevertheless, HCI and component officials we spoke with acknowledged  shortcomings in how they collected and reported data on DAWDF-funded  initiatives, citing resource constraints and the absence of processes to  verify the data collected. We found as a part of our review of fiscal year  2015 DAWDF initiatives that officials managing DAWDF did not have  complete and accurate data on DAWDF-funded initiatives to meet  reporting requirements and oversee the fund. To help meet congressional  reporting requirements and assess fund execution, HCI requested that  DOD components submit highlights of their DAWDF accomplishments for  the year for inclusion in DOD’s annual report to Congress. However, we  found that the components did not collect complete and accurate  information on their efforts, which at times were reflected in DOD’s report  to Congress. For example, DOD’s fiscal year 2015 report to Congress  highlighted that DAWDF funded a total of 287 student loan repayments,  but the Army alone provided us documentation that it awarded student  loan repayments to 762 recipients that year using DAWDF.
Further, HCI requires DOD components to submit a monthly report to  track program execution status. This report is intended to capture the  monthly spending plan and execution against that plan, hiring data, and  accomplishments associated with training and other incentives. However,  DOD components did not always submit monthly reports. For example, of  the 20 components that obligated DAWDF funds in fiscal year 2015, only  7 components provided HCI monthly reports in September 2015. HCI  stated that this was because key DAWDF personnel transitioned to  different jobs during the September and October 2015 time frame.
We also found that some information provided by the components to HCI  as a part of their monthly reporting requirements was either incomplete or  inaccurate. For example:
The Army did not report any tuition assistance recipients to HCI at the  end of fiscal year 2015, but the Army Materiel Command provided  documentation showing that it provided DAWDF-funded tuition  assistance to 233 acquisition workforce personnel. Army officials  explained that the discrepancy was because the acquisition personnel  who received DAWDF-funded tuition assistance were reported under  a different category.
Similarly, the Air Force DACM reported to HCI that the Air Force used  DAWDF to help provide student loan repayment benefits to 8  personnel in fiscal year 2015. The Air Force Materiel Command told  us that there were 32 recipients in the same year, but our analysis  indicated that the actual number was 40.
While the actions taken to improve management and oversight  processes, if fully implemented, can help address the issues we identified  during our review of fiscal year 2015 initiatives, it is not clear that these  new processes include specific steps to verify the data that are collected  and reported. Federal internal control standards state that programs need  accurate data to determine whether they are meeting their agencies’  strategic and annual performance plans and meeting their goals for  accountability for effective and efficient use of resources. To meet this  standard, programs require procedures to verify that required data are  complete and accurate. Without taking actions to ensure that the data  reported are complete and accurate, HCI and DOD components increase  their risk that they will not be able to determine whether they are meeting  their goals or provide accurate information for DOD’s annual DAWDF  reports to Congress.

	Conclusions

DOD’s use of DAWDF is at a critical juncture, in which it will no longer  use the fund to grow the workforce but rather to sustain and build on the  progress made over the past 9 years. Recent congressional actions have  provided more stability in the level of funding to be credited to DAWDF,  authorized the transfer of expired funds to DAWDF through fiscal year  2019, and addressed the carryover of unobligated DAWDF funds. Taken  as a whole, these actions should facilitate DOD’s efforts to manage  DAWDF but also require that DOD take greater initiative to maximize the  opportunities these changes provide. DOD’s October 2016 strategic plan  provides an overall framework for the acquisition workforce and broadly  indicates how DAWDF will be used to support these efforts, but it does  not identify time frames, metrics, or projected budgetary requirements  associated with these goals or strategic priorities. Further, the  components’ future DAWDF funding requirements average more than  $600 million a year through fiscal year 2022—or $100 million more per  year than DOD officials told us that they can put into DAWDF for a fiscal  year. Clearly aligning DAWDF funding with DOD’s strategic plan—as we  recommended in 2012—may help DOD determine how to prioritize  component spending plans.
At the tactical level, our work found that DOD components’ guidance,  practices, and views on whether they could use DAWDF to pay for  personnel to help manage the fund varied. Our work also found that  components collected and reported data to HCI on DAWDF-funded  initiatives that had not been verified, attributable in their view to resource  constraints and the absence of processes to ensure the accuracy and  completeness of the data. Addressing these issues in a timely fashion is  necessary for sound management of the fund and is consistent with  federal internal control standards.

	Recommendations for Executive Action

We recommend that the Director of Human Capital Initiatives take the  following two actions:
Clarify whether and under what conditions DAWDF funds could be  used to pay for personnel to help manage the fund.
In collaboration with cognizant officials within DOD components,  ensure that components have processes in place to verify the  accuracy and completeness of data on the execution of initiatives  funded by DAWDF.

	Agency Comments and Our Evaluation

We provided a draft of this report to DOD for comment. In its comments,  reproduced in appendix II, DOD partially concurred with both of the  recommendations, and indicated actions that will be or have been taken  to address them. DOD also provided technical comments, which we  incorporated as appropriate.
In response to our recommendation that DOD clarify whether DAWDF  funds could be used to pay for personnel to help manage the fund, DOD  stated that the next release of the DAWDF Desk Operating Guide would  provide the recommended clarity.
In response to our recommendation that DOD ensure that processes are  in place to verify the accuracy and completeness of data on the execution  of DAWDF initiatives, DOD noted that it had made significant  management and other changes to improve the accuracy and  completeness of data used and provided by components on the execution  of initiatives funded by DAWDF. DOD noted that it had, among other  actions, assigned a full-time DAWDF program manager; issued guidance  to improve data validity, consistency, and alignment; and instituted a  midyear execution review and established a requirement for a data-driven  year in review. Several of these changes were made or were in process  in 2016, which we identified in our draft report. If these management and  policy changes are effectively translated into practice, we believe these  actions will address the intent of the recommendation.
We are sending copies of this report to the appropriate congressional  committees; the Secretary of Defense; the Secretaries of the Army, the  Air Force, and the Navy; the Under Secretary of Defense for Acquisition,  Technology and Logistics; the Under Secretary of Defense (Comptroller)  and Financial Management; and the Director of Human Capital Initiatives.  In addition, the report is also available at no charge on the GAO website  at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-4841 or dinapolit@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix III.

Appendix I: Objectives, Scope, and Methodology

This report examines (1) the process the Department of Defense (DOD)  uses to fund the Defense Acquisition Workforce Development Fund  (DAWDF) and (2) DOD’s management and oversight of DAWDF  initiatives.
To conduct our work, we selected the acquisition command within each  military department that had the largest number of acquisition workforce  personnel in fiscal year 2015:
Department of the Army, Army Materiel Command;
Department of the Navy, Naval Sea Systems Command; and
Department of the Air Force, Air Force Materiel Command.
We also selected the Defense Logistics Agency, which had the second  largest number of acquisition personnel of the other defense agencies  that obligated DAWDF funds in fiscal year 2015. Collectively, the three  military departments and the Defense Logistics Agency comprised 88  percent of DOD’s acquisition workforce and received the majority of  DAWDF funds in fiscal year 2015.
To examine the process DOD uses to fund DAWDF, we reviewed  relevant legislation as well as DOD-wide and component guidance on the  use of DAWDF funding. We analyzed the amount of carryover and  estimated carryover funds from fiscal years 2008 through 2018. We  reviewed key documents, including DOD funding authorization  documents and DOD’s annual reports to Congress on DAWDF from fiscal  years 2008 through 2015. We assessed the timeliness of DOD’s funding  process by comparing data on key points in the funding process,  including when the DOD Comptroller deposited funds into the DAWDF  account, and analyzed documentation showing when the funds were  allotted and obligated from fiscal years 2008 through 2016.
To evaluate DOD’s DAWDF management and oversight processes, we  took several steps. We reviewed relevant legislation, DOD’s 2010  DAWDF guidance for components and its August 2016 DAWDF Desk  Operating Guide, which includes information on the annual planning,  proposal, review, approval, and funding processes; we also reviewed  guidance issued by each of the military departments. We also assessed  the Department of Defense Acquisition Workforce Strategic Plan, FY  2016 – FY 2021, which was completed in October 2016. We analyzed  DAWDF future spending estimates from fiscal year 2017 through fiscal  year 2022 submitted to the Office of the Under Secretary of Defense for  Acquisition, Technology and Logistics - Human Capital Initiatives (HCI) by  each of the military departments and other defense agencies. In addition,  we analyzed monthly DAWDF spending reports from fiscal year 2015,  DAWDF midyear review documentation from fiscal years 2015 and 2016,  and briefing materials from DAWDF governance meetings from fiscal  years 2015 and 2016. We also interviewed officials from HCI, the offices  of the Directors for Acquisition Career Management from each military  department, and acquisition command officials about DOD’s long-term  strategic planning efforts related to DAWDF. Further, we used Standards  for Internal Control in the Federal Government to identify criteria  regarding the types of control activities that should be in place to verify  data. These criteria include top-level reviews of actual performance,  reviews by management at the functional or activity level, establishment  and review of performance measures and indicators, proper execution of  transactions, and other steps to ensure the completeness, accuracy, and  validity of reported data.
To evaluate DOD’s DAWDF program execution and adherence to  reporting requirements, we compared DAWDF data submitted by DOD  components at the end of fiscal year 2015 with data obtained from  officials responsible for executing DAWDF initiatives, HCI’s monthly  reporting requirements for DAWDF, and data reported in DOD’s DAWDF  fiscal year 2015 annual report to Congress. In addition, we spoke with  HCI and component officials about the quality of the data. We describe  instances of incomplete and inaccurate data where appropriate in our  report.
To obtain an understanding of how the planning, review, and  implementation processes for DAWDF initiatives worked, we selected a  nongeneralizable sample of 10 fiscal year 2015 DAWDF initiatives. Our  sample included 3 initiatives from each department—1 from each of the  three major initiative categories—that were among initiatives with the  highest dollar values. In addition, we selected 1 initiative from the  Defense Logistics Agency. (See table 6.)
For these initiatives, we collected and reviewed relevant documentation  and data and interviewed cognizant component officials.
To verify whether military department recipients of DAWDF-funded tuition  assistance and student loan repayment were members of the defense  acquisition workforce in the year that they received the benefit, we  selected a nongeneralizable sample of 276 recipients across the military  departments for fiscal year 2015 from the lists of recipients provided by  the military departments. Because the programs are managed separately  by each military department, we selected student loan repayment  program recipients and tuition assistance recipients from each of the  military departments (see table 7). Because we used a nongeneralizable  sample, our findings cannot be used to make inferences about all  DAWDF recipients.
To determine whether these recipients were members of the acquisition  workforce, we verified that the recipients were in DataMart, DOD’s  acquisition workforce database, the year that they received the benefit.  To assess the reliability of DOD’s DataMart data, we (1) reviewed existing  information about the data and the system that produced them, (2)  reviewed the data for obvious errors in accuracy and completeness, and  (3) worked with agency officials to identify any data problems. When we  found discrepancies, we brought them to DOD’s attention and worked  with DOD officials to correct the discrepancies. For example, in those  instances where we could not verify a name in DataMart, we contacted  military department officials to obtain additional information that allowed  us to confirm that those recipients were a part of the acquisition  workforce. We also interviewed agency officials knowledgeable about the  data. We determined that the data were sufficiently reliable for the  purposes of this report.
To address both objectives, we interviewed representatives from the  following DOD organizations during our review:  Office of the Secretary of Defense
Office of the Under Secretary of Defense for Acquisition, Technology
Office of the Under Secretary of Defense (Comptroller) and Chief
Defense Finance and Accounting Service
Office of the Joint Chiefs of Staff (J-4)
Director, Acquisition Career Management
Army Acquisition Support Center
Research, Development and Engineering Command
Director, Acquisition Career Management
Naval Sea Systems Command
Director, Acquisition Career Management
Air Force Materiel Command
4th Estate Director, Acquisition Career Management  We conducted this performance audit from March 2016 to March 2017 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

Appendix II: Comments from the Department of Defense

Appendix III: GAO Contact and Staff Acknowledgments

	GAO Contact

	Staff Acknowledgments

In addition to the contact named above, Cheryl Andrew (Assistant  Director), James D. Ashley, Emily Bond, Lorraine Ettaro, Meafelia P.  Gusukuma, Kristine Hassinger, Katheryn Hubbell, Heather B. Miller,  Roger R. Stoltz, Roxanna Sun, Alyssa Weir, Nell Williams, and Lauren  Wright made key contributions to this report.

Summary:
Why GAO Did This Study

Congress established DAWDF in 2008 to provide DOD with a dedicated source of funding to help recruit and train members of the acquisition workforce. Since 2008, DOD has obligated more than $3.5 billion to meet those objectives. However, in 2012, GAO reported that DOD's ability to execute hiring and other initiatives had been hindered by delays in the DAWDF funding process, resulting in a large amount of unused funds being carried over from year to year.
GAO was asked to review DOD's management of DAWDF. This report examines (1) the process DOD uses to fund DAWDF and (2) DOD's DAWDF management and oversight. GAO analyzed relevant legislation; DOD's, the military departments', and other defense agencies' guidance and processes; and DAWDF budget and initiative execution data. GAO also interviewed DOD officials and conducted a nongeneralizable sample of 10 fiscal year 2015 DAWDF initiatives based on type of initiative and dollar value.

What GAO Found

The Department of Defense (DOD), enabled by congressional action, has improved the timeliness of the funding process for the Defense Acquisition Workforce Development Fund (DAWDF). For fiscal year 2015, DOD was authorized to transfer expired funds, which allowed it to fund DAWDF in 2 months. In contrast, for fiscal year 2014, DOD relied on the military departments and other defense agencies (referred to as components) to remit funds to the DOD Comptroller, which took 24 months to complete. As a result, hiring, training, and other initiatives were delayed. Congress also took action in 2016 to reduce the amount of funding carried over from year to year, which totaled $875 million at the beginning of fiscal year 2016, or nearly twice the amount DOD eventually obligated for that year (see figure). GAO estimates that the amount of carryover funds at the beginning of fiscal year 2018 will be reduced to about $156 million.
In the past year, DOD has taken several actions to improve its management and oversight of DAWDF, including issuing an updated acquisition workforce strategic plan and DAWDF operating guidance. For example, DOD's August 2016 DAWDF guidance required components to submit annual and 5-year spending plans and formalized the requirement to hold a midyear review to assess DAWDF execution and discuss best practices. However, GAO found that DOD components identified more than $3 billion in potential DAWDF funding requirements for fiscal years 2018 through 2022, which may exceed available funding over this period. Clearly aligning DAWDF funding with DOD's strategic plan—as GAO recommended in June 2012—may help DOD determine how to prioritize these requirements. GAO also found that components' guidance, practices, and views on whether they could use DAWDF to pay for personnel to manage the fund varied. Further, GAO found components did not have processes to verify the accuracy and completeness of data reported on DAWDF-funded initiatives. Internal control standards indicate that consistent policies and accurate data can help ensure that funds are used effectively and as intended. Without such controls, DOD could be missing opportunities to use DAWDF more effectively to improve its acquisition workforce.

What GAO Recommends

DOD should (1) clarify whether DAWDF funds could be used to pay for personnel to help manage the fund and (2) ensure that DOD components have processes in place to verify the accuracy and completeness of DAWDF data. DOD partially concurred with both recommendations, and has taken or plans to take actions to address them.