GAO

United States General Accounting Office

Report to Congressional Committees

February 2000 DEFENSE BUDGET

Analysis of Real 

Property Maintenance 

and Base Operations 

Fund Movements

GAO/NSIAD-00-87

Page 1 GAO/NSIAD-00-87 Defense Budget

Contents

Letter 3

Appendixes Appendix I: Objectives, Scope, and Methodology 16

Appendix II: How O&M Funds Can Be Moved 18

Appendix III: Initial Congressional Designations and DOD Obligations

by O&M Unit Training Subactivity 20

Appendix IV: GAO Contacts and Staff Acknowledgments 25

Tables Table 1: Net Difference Between Initial Congressional Designations

and Reported Obligations for O&M Base Operations and Real

Property Maintenance (fiscal years 1994-99) 7

Table 2: Net Difference Between Initial Congressional Designations

and Reported Obligations for Base Operations and Real Property 

Maintenance, by Budget Activity (fiscal years 1996-99) 9

Table 3: Net Difference Between Initial Congressional Designations

and Reported Obligations for O&M Unit Training

(fiscal years 1994-99) 11

Table 4: Net Difference Between Initial Congressional Designations

and Reported Obligations for Army O&M Unit Training Subactivities 

(fiscal years 1997-99) 20

Table 5: Net Difference Between Initial Congressional Designations

and Reported Obligations for Navy O&M Unit Training Subactivities 

(fiscal years 1994 -99) 21

Table 6: Net Difference Between Initial Congressional Designations

and Reported Obligations for Marine Corps O&M Unit Training 

Subactivities (fiscal years 1994-99) 22

Table 7: Net Difference Between Initial Congressional Designations

and Reported Obligations for Air Force O&M Unit Training

Subactivities (fiscal years 1994-99) 22

Figures Figure 1: Service Changes to Initial Congressional Designations-Base 

Operations and Real Property Maintenance (fiscal years 1994-99) 8

Figure 2: Service Changes to Initial Congressional Designations-Unit 

Training (fiscal years 1994-99) 12

Figure 3: How O&M Funds Are Moved Throughout the Fiscal Year 19
Contents

Page 2 GAO/NSIAD-00-87 Defense Budget

Abbreviations

O&M Operation and Maintenance

DOD Department of Defense
Page 3 GAO/NSIAD-00-87 Defense Budget

United States General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-284608 Letr

February 29, 2000 

Congressional Committees

Congressional committees have expressed concerns about the extent to 

which the Department of Defense (DOD) has moved funds that directly 

affect readiness, such as those that finance training, to pay for real property 

maintenance and base operations. The National Defense Authorization Act 

for Fiscal Year 2000 requires that we review the military services’ funding 

and management of real property maintenance and base operations.1

 This 

is the first in a series of GAO reports in response to that requirement. While 

follow-on work will try to shed more light on the relationships between 

readiness, quality of life, and infrastructure funding, this report examines 

trends in funding for real property maintenance, base operations, and unit 

training and operations. The services’ principal source of funding for these 

functions is their operation and maintenance (O&M) appropriations, and 

the services have considerable flexibility in using O&M funds. Although 

these funds cannot generally be traced to their ultimate disposition, 

analyses of budget data can indicate whether the services obligated the 

funds as initially congressionally designated.2

DOD uses real property maintenance funds to maintain and repair 

buildings, structures, warehouses, roadways, runways, railway tracks, and 

utility plants. Base operations funding is used for services such as utilities, 

base communications, snow removal, security, and recreation activities. 

Unit training and operations funds are used to increase units’ proficiency 

through flying and ground operations training and provide these units 

resources such as fuel, support equipment, and spare parts for equipment 

to meet their mission requirements. Throughout the remainder of this 

report, we refer to unit training and operating funds as unit training funds.

As agreed with your offices, we (1) identified the net differences between 

the initial congressional designations of O&M funding for real property 

1

P.L. 106-65, section 365. 

2

We use the term “initial congressional designation” or variations of this term throughout to 

refer to amounts set forth in an appropriation act’s conference report. These recommended 

amounts are not binding unless they are also incorporated directly or by reference into an 

appropriation act or other statute.
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maintenance and base operations and the amounts the services reported as 

obligated, (2) identified the net differences between the initial 

congressional designations of O&M funding for unit training and the 

amounts the services reported as obligated, and (3) determined from 

available DOD reports whether O&M funds were moved from unit training 

to pay for real property maintenance and base operations.

We reviewed funds at the most detailed budget level at which 

congressionally designated funds for the military services are identified, 

the subactivity level. The services’ annual O&M budget requests are aligned 

in broad categories called budget activities. Each budget activity is divided 

into activity groups, which in turn are divided into subactivities. Although 

Congress reviews DOD’s budget proposals for the services at the 

subactivity level, it appropriates funds at the aggregated account level—for 

the Army, the Navy, the Marine Corps, and the Air Force. To indicate how it 

expects O&M funds to be spent, the conferees then designate specific 

amounts for each subactivity in applicable conference reports. We also 

reviewed DOD’s reports on high-priority readiness-related transfers, which 

describe the movement of funds among certain subactivities designated as 

high priority by Congress.3

 While existing reports and budget documents 

provide an indication of whether funds were spent in accordance with 

congressional designations, DOD does not have reliable records of 

transfers and amounts spent by subactivity. Appendix I includes additional 

details on our scope and methodology.

Results in Brief From fiscal year 1994 through 1999, the military services reported 

obligations that were $7.1 billion (8 percent) more for real property 

maintenance and base operations than the $88.6 billion initial 

congressional designations. Almost three-fourths of the total $2.7 billion 

increase from fiscal year 1996 through 1999 was for base operations,4

 with 

the remainder going for real property maintenance. Most of the increases 

went to base operations and real property maintenance subactivities that 

finance functions that the services considered most directly related to 

readiness, such as the cost of utilities and the maintenance of runways.

3

10 U.S.C. 483.

4

We were not able to analyze base operations and real property maintenance separately 

prior to fiscal year 1996 because the services’ budget structures combined the two until 

then.
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For fiscal years 1994 through 1999, the services’ movement of funds into 

and out of unit training varied. In each fiscal year from 1997 through 1999 

(the only years for which detailed Army data is available) the Army 

reported obligations that were $1.1 billion, or about 12 percent, less than 

congressionally designated. The Air Force moved more than $400 million

(3 percent) from unit training for fiscal years 1994 and 1995 and increased 

funding for unit training by $2.6 billion (10 percent) in fiscal years 1996 

through 1999. The Navy and the Marine Corps consistently moved funds 

into unit training, increasing them by a total of $2.1 billion, or 8 percent of 

their combined initial congressional designations.

The Army and the Air Force have moved unit training funds to base 

operations and real property maintenance. Although data on the movement 

of O&M funds between subactivities is limited, DOD’s high-priority 

readiness-related transfer reports show that in fiscal years 1997 and 1998, 

the Army moved $641 million from unit training to real property 

maintenance and base operations and attribute the movement of those 

funds to efficiencies in training. The fiscal year 1998 report states that the 

Air Force moved $35 million from training to base operations and notes 

that commanders increased real property maintenance funding by about 

$155 million, but did not cite the source of those funds.

Background The O&M budget structure is multitiered, with each service’s O&M request 

broken down into four budget activities: (1) operating forces,

(2) mobilization, (3) training5

 and recruiting, and (4) administration and 

servicewide support.6

 Generally, the services consider subactivities within 

the operating forces budget activity to be most directly related to 

readiness. Unit training subactivities are almost all within the operating 

forces activity,7

 whereas real property maintenance and base operations 

subactivities are spread across all four of the budget activities.

5

The training in this budget activity is training and education at military institutions and 

schools, not the unit mission training we refer to in this report.

6

The Marine Corps is an exception with only three budget activities. It does not include the 

mobilization budget activity.

7

Only the Air Force’s airlift operations subactivity is not within the operating forces activity. 

It is in the mobilization activity. 
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After the initial appropriation is made,8 O&M funding levels can fluctuate 

for several reasons. As we recently reported,9

 the services have various 

ways to move funds into or out of subactivities, such as making what DOD 

terms fact-of-life adjustments due to changes that occurred after the budget 

was formulated and moving, or reprogramming, funds from one budget 

activity to another within the same account.10 In addition, increases to 

subactivities often come from special accounts created for unanticipated 

expenditures such as overseas contingencies or supplemental 

appropriations that Congress provides for additional expenses during the 

year.11 The various adjustments that can be made and the timing of those 

adjustments in the budget year are depicted in appendix II.

The House report on the National Defense Authorization Act for Fiscal Year 

1996 noted the Committee’s concerns over the extent of the resources 

provided for training and maintenance that are moved for other uses and 

the effects of such movements on readiness.12 Congress now requires13

DOD to provide detailed data on budget movements for high-priority 

readiness-related subactivities, including the total amounts moved into and 

out of each subactivity and an explanation of the movement.14

8

In conference reports on the appropriations acts, conferees often direct DOD to make 

changes to its budget baseline, or congressional designations. These changes are known as 

unallocated adjustments and general provisions and are not designated by subactivity.

9

Defense Budget: DOD Should Further Improve Visibility and Accountability of O&M Fund 

Movements (GAO/NSIAD-00-18, Feb. 9, 2000).

10DOD financial management regulations, which reflect agreements between DOD and the 

authorization and appropriation committees, provide general guidelines for various 

reprogramming actions. For example, congressional notification is required for O&M 

reprogramming actions of $15 million or more.

11Congress established special accounts for unanticipated expenditures such as overseas 

contingency operations to ensure DOD would have funds for these activities without having 

to shift funds from training, maintenance, or other O&M subactivities.

12House Report 104-131, p.150 (1995).

1310 U.S.C. 483.

14This reporting requirement will expire when DOD submits its annual report for fiscal year 

2000. In our report, Defense Budget (GAO/NSIAD-00-18, Feb. 9, 2000), we suggested that 

Congress consider extending the reporting requirement.
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Services Moved 

Billions Into Base 

Operations and Real 

Property Maintenance

For fiscal years 1994 through 1999, the services’ reported obligations were 

$7.1 billion more for base operations and real property maintenance than 

the $88.6 billion initial congressional designations. This amount represents 

an increase of more than 8 percent and includes all adjustments, such as 

reprogramming actions, statutorily authorized transfers, and supplemental 

appropriations. Table 1 shows for each service the difference between 

initial congressional designations for base operations and real property 

maintenance and the services’ reported obligations. 

Table 1: Net Difference Between Initial Congressional Designations and Reported 

Obligations for O&M Base Operations and Real Property Maintenance (fiscal years 

1994-99)

Note: Amounts may not total due to rounding.

a

Initial congressional designation as reported in appropriations acts conference reports.

b

Navy officials indicated that for fiscal year 1999 reported obligations, not all base operations and real 

property maintenance funds were accounted for in the table. This was due to the Navy restructuring 

these accounts after the initial congressional designation had been made. Some functions, such as 

those associated with equipment maintenance for communication antennas, that were formerly 

considered as base operations and real property maintenance are no longer accounted for in those 

subactivities.

Source: Our analysis based on congressional appropriations acts conference reports and DOD’s O&M 

budget data.

Each of the services moved funds into its base operations and real property 

maintenance subactivities from fiscal years 1994-99. Figure 1 shows that, 

beginning in fiscal year 1996, the Army, the Navy, and the Air Force 

reported obligations more closely aligned with congressionally designated 

amounts than in previous years. However, the trend began to reverse for 

Current dollars in millions

Difference from initial 

congressional designation

Service

Initial

congressional

designationa

Reported

obligations

Percent of

increase

Army $31,511.8 $34,088.0 $2,576.2 8.2

Navyb 21,798.4 22,114.5 316.0 1.4

Marine Corps 6,036.0 6,454.4 418.5 6.9

Air Force 29,241.5 33,069.2 3,827.7 13.1

Total $88,587.7 $95,726.1 $7,138.5 8.1
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the Air Force in fiscal year 1998 and for the Army and the Navy in fiscal 

year 1999, while the Marine Corps trend has remained fairly steady.

Figure 1: Service Changes to Initial Congressional Designations−Base Operations 

and Real Property Maintenance (fiscal years 1994-99)

a

Navy officials indicated that for fiscal year 1999 reported obligations, not all base operations and real 

property maintenance funds were accounted for in the table. This was due to the Navy restructuring 

these accounts after the initial congressional designation had been made. Some subactivities formerly 

considered as base operations and real property maintenance are no longer accounted for in those 

subactivities.

Source: Our depiction based on congressional appropriations acts conference reports and DOD’s 

O&M budget data.

Most Funds Moved Into 

Readiness Related 

Subactivities

We analyzed the changes to base operations and real property maintenance 

funding separately for fiscal years 1996 through 1999. Further, we analyzed 

the movement of funds by budget activity. We were not able to analyze data 

in this way prior to fiscal year 1996 because the services’ budget structure 

combined base operations and real property maintenance. Table 2 shows 

that during fiscal years 1996 through 1999, the services’ reported 

1994 1995 1996 1997 1998 1999

Fiscal year

2000 constant dollars in millions

(400)

(200)

0

200

400

600

800

1,000

1,200

1,400

1,600

Air Force

Army

Marine Corps

Navya
B-284608

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obligations were $2.7 billion (4.5 percent) more for base operations and 

real property maintenance than the initial $61.2 billion congressional 

designation. Most of the identified increase (about $2 billion, or 73 percent) 

was for base operations within the services’ operating forces budget 

activity, which the services consider to be most directly related to 

readiness.

Table 2: Net Difference Between Initial Congressional Designations and Reported Obligations for Base Operations and Real 

Property Maintenance, by Budget Activity (fiscal years 1996-99)

Note: Parentheses denote negative numbers, and amounts may not total due to rounding.

a

Initial congressional designations for these subactivities as reported in appropriations acts conference 

reports. Differences equal reported obligations minus initial congressional designations.

Current dollars in millions

Difference between initial designations and reported obligationsa

Service subactivity

Operating

forces Mobilization

Training and

recruitingb

Administration

and servicewide

 Total

difference

Army

Base operations $1,092.6 c $246.3 ($82.5) $1,256.4

Real property maintenance 295.6 ($11.2)d (126.7) (124.0) 33.6

Subtotal $1,388.2 ($11.2)d $119.6 ($206.5) $1,290.1

Navy

Base operations 26.0 c (124.2) (155.5) (253.7)

Real property maintenance (28.7) c 11.7 (25.0) (41.9)

Subtotal ($2.7) ($112.6) ($180.5) ($295.7)

Marine Corps

Base operations 138.2 c (24.7) 1.3 114.7

Real property maintenance 177.1 c 25.2 2.4 204.8

Subtotal $315.3 $0.6 $3.7 $319.5

Air Force

Base operations 725.8 78.5 (39.6) 135.6 900.3

Real property maintenance 317.6 40.4 92.5 69.2 519.7

Subtotal $1,043.5 $118.9 $52.9 $204.8 $1,420.0

Total 

Base operations 1,982.6 78.5 57.8 (101.1) 2,017.7

Real property maintenance 761.6 29.2 2.8 (77.3) 716.2

Total $2,744.3 $107.6 $60.5 ($178.5) $2,734.0
B-284608

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b

The training in this budget activity is training and education at military institutions and schools, not the 

unit mission training we refer to in this report.

c

The Army and the Navy did not have these subactivities in their mobilization budget activities. The 

Marine Corps does not have a mobilization budget activity.

d

The Army had this subactivity in its mobilization budget activity beginning in fiscal year 1999.

Source: Our analysis based on congressional appropriations acts conference reports and DOD’s O&M 

budget data.

Services’ Movement of Unit 

Training Funds Differs

Over the period studied, the services’ movement of funds for their unit 

training subactivities varied. In fiscal years 1997-99,15 the Army moved

$1.1 billion, about 12.2 percent of the funds congressionally designated for 

unit training, from those subactivities. During fiscal years 1994-99, the Navy 

and the Marine Corps consistently moved funds into unit training, 

increasing them by a total of $2.1 billion, or 8 percent of their combined 

congressional designation. The Air Force moved more than $400 million

(3 percent of its congressionally designated amount) from unit training 

during fiscal years 1994 and 1995 and increased funding for unit training by 

$2.6 billion (10 percent) for fiscal years 1996-99. The reported obligations 

include all adjustments, such as reprogramming actions, statutorily 

authorized transfers, and supplemental appropriations.

15The Army restructured its operating forces budget activity in fiscal year 1997 and did not 

maintain a link between the old and new budget structures. The unit training subactivities 

were affected by this change and data before fiscal year 1997, therefore, is not available for 

them.
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Table 3: Net Difference Between Initial Congressional Designations and Reported 

Obligations for O&M Unit Training (fiscal years 1994-99)

Note: Parentheses denote negative numbers, and amounts may not total due to rounding.

a

Initial congressional designations as reported in appropriations acts conference reports.

b

Army data is for 3-year period, fiscal years 1997-99. Comparable data is not available for prior years. 

Source: Our analysis based on congressional appropriations acts conference reports and DOD’s O&M 

budget data.

Figure 2 shows, by year, the extent to which the services’ reported 

obligations for unit training differed from the initial congressional 

designations for fiscal years 1994 through 1999.

Current dollars in millions

Difference from congressional 

designation

Service

Initial

congressional

designationa

Reported

obligations Percent

Army $8,975.3b $7,876.1b ($1,099.2)b (12.2)b

Navy 23,419.2 25,300.5 1,881.2 8.0

Marine Corps 2,100.0 2,290.4 190.4 9.1

Air Force 36,807.1 38,940.0 2,132.9 5.8
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Figure 2: Service Changes to Initial Congressional Designations−Unit Training 

(fiscal years 1994-99)

Source: Our depiction based on congressional appropriations acts conference reports and DOD’s 

O&M budget data.

Appendix III presents data on each services’ O&M unit training 

subactivities, including the amounts congressionally designated and those 

reported as obligated for fiscal years 1994-99.

Army and Air Force 

Unit Training Funds 

Moved to Base 

Operations and Real 

Property Maintenance

We could not determine the total amount of funds moved from unit training 

into real property maintenance or base operations because funds moved 

out of one DOD subactivity cannot generally be traced to another 

subactivity. However, DOD’s reports on high-priority readiness-related 

transfers for certain subactivities indicate that the Army and the Air Force 

have moved some funds from their unit training subactivities to base 

operations and real property maintenance subactivities in recent years. The 

reports for the Navy and the Marine Corps gave no indications of such fund 

movements.

1994 1995 1996 1997 1998 1999

Air Force

Army

Marine Corps

Navy

Fiscal year

(800)

(600)

(400)

(200)

0

200

400

600

800

1,000

1,200 2000 constant dollars in millions
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Page 13 GAO/NSIAD-00-87 Defense Budget

For example, the reports on high-priority readiness-related transfers for 

fiscal years 1997 and 199816 show that the Army moved a total of

$641 million from its unit training subactivities to the real property 

maintenance and base operations subactivities and attribute the movement 

of those funds to efficiencies in training. Moreover, the Air Force noted in 

its fiscal year 1998 report that $35 million was moved from a unit training 

subactivity to base operations. In the same report, the Air Force noted that 

commanders increased real property maintenance funding by about 

$155 million but did not cite the source of those funds.

The reports on high-priority readiness-related transfers also identified 

additional sources of funds for real property maintenance and base 

operations. For example, in fiscal year 1998, the Air Force moved about 

$347 million into base operations and about $11 million into real property 

maintenance from the Overseas Contingency Operations Transfer Fund 

and the Overseas Humanitarian, Disaster, and Civic Aid transfer account.

Agency Comments and 

Our Evaluation

A draft of this report was provided to DOD for oral comments. The Director 

of Installations Requirements and Management within the Office of the 

Deputy Under Secretary of Defense (Installations) generally agreed with 

the facts presented in the report. He emphasized that many of the funding 

changes noted in our report are caused by reprogramming changes for 

which congressional notification is required. We agree that reprogramming 

is one of the many ways that DOD moves funds. As stated earlier in our 

report, O&M funding levels can fluctuate for several reasons. The amounts 

representing the differences between the initial congressional designation 

and the amounts the services reported as obligated include all adjustments, 

such as fact-of-life changes, unallocated changes, reprogramming actions, 

statutorily authorized transfers, and supplemental appropriations. In 

recognition of these comments, we included a depiction of the types of 

adjustments that can be made as appendix II.

We are sending copies of this report to the Honorable William S. Cohen, 

Secretary of Defense; the Honorable William J. Lynn III, Under Secretary of 

Defense (Comptroller and Chief Financial Officer); the Honorable Louis 

16The report on high-priority readiness-related transfers for fiscal year 1999 was not released 

in time to be reviewed for this report.
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Page 14 GAO/NSIAD-00-87 Defense Budget

Caldera, Secretary of the Army; the Honorable Richard Danzig, Secretary of 

the Navy; General James Jones, Commandant of the Marine Corps; the 

Honorable F. Whitten Peters, Secretary of the Air Force; the Honorable 

Jacob J. Lew, Director, Office of Management and Budget; and interested 

congressional committees and members. Copies will also be made 

available to others upon request.

Please contact me at (202) 512-5140 if you or your staff have any questions 

concerning this report. GAO contacts and staff acknowledgments are listed 

in appendix IV.

Neal P. Curtin

Associate Director

National Security Preparedness Issues
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List of Congressional Committees

The Honorable John W. Warner

Chairman

The Honorable Carl Levin

Ranking Minority Member

Committee on Armed Services

United States Senate

The Honorable Ted Stevens

Chairman

The Honorable Daniel K. Inouye

Ranking Minority Member

Subcommittee on Defense

Committee on Appropriations

United States Senate

The Honorable Floyd D. Spence

Chairman

The Honorable Ike Skelton

Ranking Minority Member

Committee on Armed Services

House of Representatives

The Honorable Jerry Lewis

Chairman

The Honorable John P. Murtha

Ranking Minority Member

Subcommittee on Defense

Committee on Appropriations

House of Representatives
Page 16 GAO/NSIAD-00-87 Defense Budget

Appendix I

Objectives, Scope, and Methodology ApendxiI

As agreed with Defense authorization committees’ staff, we (1) identified 

the net differences between the initial congressional designations1

 of 

operations and maintenance (O&M) funding for real property maintenance 

and base operations and the funding the services reported as obligated, 

(2) identified the net differences between the initial congressional 

designations of O&M funding for unit training and the funding the services 

reported as obligated, and (3) determined from available Department of 

Defense (DOD) reports whether O&M funds were moved from unit training 

to pay for real property maintenance and base operations.

To identify the net differences in the initial congressional designations for 

those subactivities and the amounts obligated for them, we compared O&M 

amounts initially designated by subactivity in conference reports on the 

applicable appropriations acts with amounts reported as obligated for the 

same subactivities in DOD’s budget documents. We used DOD’s reported 

obligation data because no reliable accounting data was available. 

However, our recent financial statement audit results show that DOD’s 

budget data is of limited reliability. Specifically, we reported in May 1999 

that DOD does not know the true amount of funds that are available to 

obligate and spend in its appropriations because obligated balances are not 

always correct or supported and fund control weaknesses impair DOD’s 

ability to properly identify and manage budget authority.2

 In addition, 

because the Army restructured its operating forces budget activity in fiscal 

year 1997, we were limited to using the unit training subactivity data that 

was available after the restructuring.

Officials from each service identified for us O&M subactivities that fund 

unit training. Each service organizes its unit training funds differently into 

particular subactivities. Thus, information on the services’ unit training is 

not comparable. Further, we reviewed base operations and real property 

maintenance separately only for fiscal years 1996-99. Prior to fiscal year 

1996, funds for these functions were maintained in the same subactivities.

1

We use the term “initial congressional designation” or variations of this term throughout to 

refer to amounts set forth in an appropriation act’s conference report. These recommended 

amounts are not binding unless they are also incorporated directly or by reference into an 

appropriation act or other statute.

2

Department of Defense: Status of Financial Management Weaknesses and Actions Needed 

to Correct Continuing Challenges (GAO/T-AIMD/NSIAD-99-171, May 4, 1999).
Appendix I

Objectives, Scope, and Methodology

Page 17 GAO/NSIAD-00-87 Defense Budget

To determine from DOD reports whether the services moved O&M funds 

from unit training to pay for real property maintenance and base 

operations, we reviewed DOD’s high-priority readiness-related transfer 

reports for fiscal years 1997 and 1998 and determined whether they 

included documentation on the movement of funds between subactivities. 

We discussed the relevant information in these reports with service 

officials.

We performed our review at the Office of the Under Secretary of Defense 

(Personnel and Readiness) and the Office of the Deputy Under Secretary of 

Defense (Installations); the budget offices at the Army, the Navy, the 

Marine Corps, and the Air Force headquarters; the Army Forces Command, 

the Commander in Chief Atlantic Fleet, and the Air Combat Command. We 

conducted our review from November 1999 through February 2000 in 

accordance with generally accepted government auditing standards.
Page 18 GAO/NSIAD-00-87 Defense Budget

Appendix II

How O&M Funds Can Be Moved ApendxiI

DOD has considerable flexibility in using O&M funds and can move them in 

several ways. As shown in figure 3, after the initial appropriation is made, 

DOD can adjust funding through

• adjustments directed by Congress in conference reports on 

apropriations acts and

• fact-of-life adjustments DOD believes are necessary due to changes, 

such as unplanned force structure changes, that have occurred since the 

budget was formulated.

After making these initial fund movements, DOD establishes a new 

“adjusted” baseline budget. It can then move funds among subactivities 

through

• reprogramming actions, to move funds from one budget activity to 

another within the same account;

• statutorily authorized transfers, to move funds from other Defense 

appropriations (such as Procurement);

• transfers from congressionally established, centrally managed accounts 

(such as for overseas contingencies);

• supplemental appropriations that Congress provides for additional 

expenses during the year; and 

• rescissions, with which Congress cancels appropriated funds.
Appendix II

How O&M Funds Can Be Moved

Page 19 GAO/NSIAD-00-87 Defense Budget

Figure 3: How O&M Funds Are Moved Throughout the Fiscal Year

a

In the conference report on the appropriations act, conferees often direct DOD to make changes to its 

budget baseline. These changes are known as unallocated adjustments and general provisions.

Source: Our depiction, based on Defense Financial Management Regulation DOD 7000.14-R, 

conference reports on the appropriations acts, and interviews with officials from the Office of the Under 

Secretary of Defense (Comptroller).
Page 20 GAO/NSIAD-00-87 Defense Budget

Appendix III

Initial Congressional Designations and DOD 

Obligations by O&M Unit Training Subactivity ApendxiI

In this appendix, we present information on services’ O&M unit training 

subactivities, including the amounts congressionally designated and those 

reported as obligated by the services for fiscal years 1994 through 1999.

Table 4: Net Difference Between Initial Congressional Designations and Reported 

Obligations for Army O&M Unit Training Subactivities (fiscal years 1997-99)

Notes: The data for the Army is only for fiscal years 1997-99 because it restructured its budget in fiscal 

year 1997 for these subactivities. Amounts may not total due to rounding.

a

These O&M subactivities are located in the operating forces budget activity, which the Army considers 

to be most directly related to unit training and operations.

b

Initial congressional designations for each O&M subactivity as reported in conference reports on DOD 

appropriations acts, fiscal years 1997-99.

Current dollars in millions

Army O&M subactivitya

Initial

designationb

Reported

obligations

Net

difference

Fiscal year 1997

Divisions $1,276.6 $998.5 ($278.1)

Corps combat forces 369.1 257.2 (111.8)

Corps support forces 276.2 310.8 34.5

Echelon above corps forces 442.7 411.1 (31.5)

Land forces operations support 634.4 816.7 182.3

Subtotal $2,998.9 $2,794.3 ($204.6)

Fiscal year 1998

Divisions 1,173.5 886.2 (287.3)

Corps combat forces 332.9 229.9 (103.0)

Corps support forces 323.2 259.7 (63.5)

Echelon above corps forces 440.5 394.8 (45.8)

Land forces operations support 658.1 670.9 12.9

Subtotal $2,928.2 $2,441.6 ($486.7)

Fiscal year 1999

Divisions 1,172.9 940.6 (232.3)

Corps combat forces 299.7 224.7 (75.0)

Corps support forces 316.4 259.7 (56.7)

Echelon above corps forces 434.6 425.2 (9.4)

Land forces operations support 824.6 790.0 (34.6)

Subtotal $3,048.2 $2,640.2 ($408.0)

Total $8,975.3 $7,876.1 ($1,099.2)
Appendix III

Initial Congressional Designations and DOD 

Obligations by O&M Unit Training 

Subactivity

Page 21 GAO/NSIAD-00-87 Defense Budget

Source: Our analysis based on congressional appropriations acts conference reports and DOD’s O&M 

budget data.

Table 5: Net Difference Between Initial Congressional Designations and Reported 

Obligations for Navy O&M Unit Training Subactivities (fiscal years 1994 −99)

Note: Amounts may not total due to rounding.

a

These O&M subactivities are located in the operating forces budget activity, which the Navy considers 

to be most directly related to unit training and operations.

b

Initial congressional designations for each O&M subactivity as reported in conference reports on DOD 

appropriations acts, fiscal years 1994-99.

Current dollars in millions

Navy O&M subactivitya

Initial

designationb

Reported

obligations

Net

difference

Fiscal year 1994

Mission and other ship operations $1,932.1 $2,149.2 $217.1

Mission and other flight operations 1,776.5 1,971.9 195.4

Subtotal $3,708.5 $4,121.1 $412.6

Fiscal year 1995

Mission and other ship operations 1,891.2 2,046.3 155.1

Mission and other flight operations 1,922.6 2,174.8 252.2

Subtotal $3,813.8 $4,221.2 $407.4

Fiscal year 1996

Mission and other ship operations 1,885.2 1,985.9 100.7

Mission and other flight operations 1,796.3 1,966.7 170.4

Subtotal $3,681.5 $3,952.6 $271.0

Fiscal year 1997

Mission and other ship operations 1,895.7 1,924.1 28.3

Mission and other flight operations 1,767.4 1,873.6 106.3

Subtotal $3,663.1 $3,797.7 $134.6

Fiscal year 1998

Mission and other ship operations 2,108.1 2,216.9 108.8

Mission and other flight operations 2,357.7 2,449.9 92.2

Subtotal $4,465.8 $4,666.8 $201.0

Fiscal year 1999

Mission and other ship operations 1,987.9 2,083.3 95.4

Mission and other flight operations 2,098.6 2,457.9 359.2

Subtotal $4,086.5 $4,541.1 $454.6

Total $23,419.2 $25,300.5 $1,881.2
Appendix III

Initial Congressional Designations and DOD 

Obligations by O&M Unit Training 

Subactivity

Page 22 GAO/NSIAD-00-87 Defense Budget

Source: Our analysis based on congressional appropriations acts conference reports and DOD’s O&M 

budget data.

Table 6: Net Difference Between Initial Congressional Designations and Reported 

Obligations for Marine Corps O&M Unit Training Subactivities (fiscal years 1994-99)

Note: Amounts may not total due to rounding.

a

These O&M subactivities are located in the operating forces budget activity, which the Marine Corps 

considers to be most directly related to unit training and operations.

b

Initial congressional designations for each O&M subactivity as reported in conference reports on DOD 

appropriation acts, fiscal years 1994-99.

Source: Our analysis based on congressional appropriations acts conference reports and DOD’s O&M 

budget data.

Table 7: Net Difference Between Initial Congressional Designations and Reported 

Obligations for Air Force O&M Unit Training Subactivities (fiscal years 1994−99)

Marine Corps O&M subactivitya

Initial

designationb

Reported

obligations

Net

difference

Fiscal year 1994

Operational forces $304.1 $314.1 $10.0

Fiscal year 1995

Operational forces 318.6 367.0 48.4

Fiscal year 1996

Operational forces 344.1 367.8 23.7

Fiscal year 1997

Operational forces 365.3 394.7 29.4

Fiscal year 1998

Operational forces 378.1 392.1 14.1

Fiscal year 1999

Operational forces 389.8 454.7 64.9

Total $2,100.0 $2,290.4 $190.4

Current dollars in millions

Air Force O&M subactivity

Initial

designationb

Reported

obligations

Net

difference

Fiscal year 1994

Primary combat forcesa $2,544.9 $2,480.6 ($64.3)

Primary combat weaponsa 458.1 470.5 12.4

Continued
Appendix III

Initial Congressional Designations and DOD 

Obligations by O&M Unit Training 

Subactivity

Page 23 GAO/NSIAD-00-87 Defense Budget

Current dollars in millions

Air Force O&M subactivity

Initial

designationb

Reported

obligations

Net

difference

Combat enhancement forcesa 319.4 275.1 (44.3)

Air operations traininga 489.0 484.7 (4.3)

Combat communicationsa 561.8 536.5 (25.3)

Airlift operationsc 1,566.4 1,316.6 (249.8)

Subtotal $5,939.6 $5,563.9 ($375.7)

Fiscal year 1995

Primary combat forcesa 2,868.1 2,731.6 (136.5)

Primary combat weaponsa 542.6 503.3 (39.3)

Combat enhancement forcesa 404.1 294.0 (110.1)

Air operations traininga 583.6 627.0 43.4

Combat communicationsa 844.4 924.7 80.3

Airlift operationsc 1,182.6 1,299.9 117.3

Subtotal $6,425.3 $6,380.4 ($44.9)

Fiscal year 1996

Primary combat forcesa 2,713.9 2,508.2 (205.7)

Primary combat weaponsa 389.7 402.2 12.5

Combat enhancement forcesa 257.1 259.9 2.8

Air operations traininga 655.5 617.3 (38.2)

Combat communicationsa 846.5 1,065.1 218.6

Airlift operationsc 1,533.8 1,639.7 105.9

Subtotal $6,396.6 $6,492.3 $95.7

Fiscal year 1997

Primary combat forcesa 1,950.7 2,280.2 329.5

Primary combat weaponsa 394.4 394.3 (0.1)

Combat enhancement forcesa 253.2 252.8 (0.4)

Air operations traininga 515.8 585.8 70.0

Combat communicationsa 913.3 1,105.1 191.8

Airlift operationsc 1,584.2 1,660.3 76.1

Subtotal $5,611.6 $6,278.4 $666.8

Fiscal year 1998

Primary combat forcesa 2,572.8 2,926.7 353.9

Primary combat weaponsa 457.9 414.7 (43.2)

Combat enhancement forcesa 256.2 253.0 (3.2)

Air operations traininga 617.8 728.0 110.2

Combat communicationsa 981.9 1,148.9 167.0

Continued from Previous Page
Appendix III

Initial Congressional Designations and DOD 

Obligations by O&M Unit Training 

Subactivity

Page 24 GAO/NSIAD-00-87 Defense Budget

Note: Amounts may not total due to rounding.

a

These O&M subactivities are located in the operating forces budget activity, which the Air Force 

considers to be most directly related to unit training and operations.

b

Initial congressional designations for each O&M subactivity as reported in conference reports on DOD 

appropriations acts, fiscal years 1994-99.

c

Although this subactivity is located in the mobilization budget activity, it is a congressionally 

designated high-priority readiness-related subactivity and the Air Force also considers it to be unit 

training.

Source: Our analysis based on congressional appropriations acts conference reports and DOD’s O&M 

budget data.

Current dollars in millions

Air Force O&M subactivity

Initial

designationb

Reported

obligations

Net

difference

Airlift operationsc 1,908.1 2,053.6 145.5

Subtotal $6,794.8 $7,524.9 $730.1

Fiscal year 1999

Primary combat forcesa 2,355.4 2,463.9 108.5

Primary combat weaponsa 234.3 230.0 (4.3)

Combat enhancement forcesa 196.0 216.9 20.8

Air operations traininga 567.9 718.2 150.3

Combat communicationsa 958.7 1,094.9 136.2

Airlift operationsc 1,326.8 1,976.1 649.3

Subtotal $5,639.2 $6,700.1 $1,060.9

Total $36,807.1 $38,940.0 $2,132.9

Continued from Previous Page
Page 25 GAO/NSIAD-00-87 Defense Budget

Appendix IV

GAO Contacts and Staff Acknowledgments ApendxiIV

GAO Contacts Brenda Farrell (202) 512-3604

Janet Keller (757) 552-8133

Staff 

Acknowledgments

In addition to those named above, Douglas Mills, Laura Talbott, Janine 

Cantin, Janine Prybyla, Stacey Keisling, Harry Jobes, Julia Kennon, and 

Stefano Petrucci made key contributions to this report.

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