DEPARTMENT OF HOMELAND SECURITY 

Office of Inspector General 

FY 2003 Mission Performance

United States Coast Guard 

OIG-04-43 September 2004 

Offi ce of Audits 

Clark Kent Ervin

Inspector General

Offi ce of Inspector General 

U.S. Department of Homeland Security 

Washington, DC 20528 

Preface 

The Department of Homeland Security (DHS) Office of Inspector General (OIG) was established 

by the Homeland Security Act of 2002 (Public Law 107-296) by amendment to the Inspector 

General Act of 1978. This is one of a series of audit, inspection, investigative, and special reports 

prepared by the OIG as part of its DHS oversight responsibility to identify and prevent fraud, 

waste, abuse, and mismanagement. 

This report assesses the strengths and weaknesses of the program or operation under review. It 

is based on interviews with employees and officials of relevant agencies and institutions, direct 

observations, and a review of applicable documents. 

The recommendations herein have been developed to the best knowledge available to the OIG, 

and have been discussed in draft with those responsible for implementation. It is my hope that 

appreciation to all of those who contributed to the preparation of this report. 

this report will result in more effective, efficient, and economical operations. I express my 

Contents

Introduction.......................................................................................................................................... 3

 Results in Brief .............................................................................................................................. 5

 Background .................................................................................................................................... 6

Barriers to Sustained or Improved Mission Performance

 in FY 2004 and Beyond .............................................................................................................. 10

Barrier 1: Performance Management System Incomplete .................................................... 11

Barrier 2: Growing Workload and Continued High Operating Tempo ................................. 14

Barrier 3: Deteriorating Fleet Readiness ............................................................................. 16

Appendices 

Appendix A: Coast Guard Missions ........................................................................................ 19

Appendix B: Purpose, Scope, and Methodology ..................................................................... 22

Appendix C: Major Contributors To This Report .................................................................... 24

Appendix D: Report Distribution............................................................................................. 25

Abbreviations 

AOPS Abstract of Operations

CBP U.S. Customs and Border Protection

Committee Senate Committee on Appropriations

Coast Guard United States Coast Guard

D.C. District of Columbia

DHS Department of Homeland Security

DOD Department of Defense

DOT Department of Transportation 

FY 2003 Mission Performance United States Coast Guard Page 1
Contents

EPA Environmental Protection Agency 

EEZ Exclusive Economic Zone 

FL State of Florida 

FY Fiscal Year 

GAO United States General Accounting Offi ce 

JRC Joint Requirements Council 

MA Commonwealth of Massachusetts 

MTSA Maritime Transportation Security Act of 2002 

OIG Office of Inspector General 

OMB Office of Management and Budget 

PART Program Assessment Rating Tool 

PWCS Port, Waterways, and Coastal Security 

SAR Search and Rescue 

TACLET Tactical Law Enforcement Team 

U.S. United States of America 

VA Commonwealth of Virginia 

WA State of Washington 

Page 2 FY 2003 Mission Performance United States Coast Guard 
OIG

Department of Homeland Security 

Offi ce of Inspector General 

Introduction 

This report presents the results of the Office of Inspector General’s (OIG) review 

of the United States Coast Guard’s (Coast Guard) mission performance for fi scal 

year (FY) 2003. This report responds to the Homeland Security Act of 2002 

mandate that the OIG assess annually the performance by the Coast Guard of all 

of its missions. The objectives of our review were to determine how the level of 

effort directed toward each mission has changed since September 11, 2001, and to 

identify the consequences resulting from the change in mission emphasis. 

The Coast Guard is a multi-mission agency with a longstanding federal leadership 

role in protecting life and property at sea, such as directing search and rescue 

operations for mariners in distress and responding to major oil spills. The Coast 

Guard is responsible, too, for interdicting drugs and migrants. Furthermore, the 

Coast Guard is a military service responsible for protecting the U.S. maritime 

domain of ports, waterways, coastal zones, and the marine transportation 

system so that terrorist do not use or exploit it as a means to attack U.S. 

territory, population, and critical infrastructures. The Coast Guard increased 

emphasis on its ports, waterways, and coastal security (PWCS) mission after the 

September 11th terrorist attacks. 

The Homeland Security Act of 2002 provisions that drive our annual assessments 

focus on preserving the Coast Guard’s mission performance.1 Those provisions 

restrict the Department of Homeland Security (DHS) from reducing the Coast 

Guard’s missions or its capabilities to perform them, while ensuring that the 

Coast Guard remains intact at the newly created department. Additionally, 

the provisions require the OIG to assess and examine non-homeland security 

missions, which are identified as: marine safety; search and rescue; aids 

to navigation; living marine resources (fisheries law enforcement); marine 

1 Homeland Security Act of 2002, Public Law 107-296, Section 888, Preserving Coast Guard Mission Performance, November 25, 2002. 

FY 2003 Mission Performance United States Coast Guard Page 3 
environmental protection; and ice operations. These missions, and the 

homeland security missions such as, ports, waterways, and coastal security; drug 

interdiction; migrant interdiction; defense readiness; and other law enforcement 

are described in Appendix A of this report. 

Four months prior to the enactment of the Homeland Security Act, the Senate 

Committee on Appropriations (Committee) noted that the Coast Guard acted 

with extraordinary professionalism and heroism following the terrorist attacks 

of September 11th.

 2 The Committee noted that historically the Coast Guard 

has shifted its mission emphasis rapidly, but the extent of the shift to domestic 

homeland security that followed the events of September 11th was unprecedented 

in its history. However, at the same time, the Committee noted concerns about 

the Coast Guard’s ability to achieve mission balance and adequately address its 

other critical missions, including search and rescue, drug and migrant interdiction, 

aids to navigation, and ensuring the safety and integrity of domestic fi shing 

grounds. The Committee mentioned information provided by the Department of 

Transportation (DOT) OIG that showed a surge in port security efforts, along with 

reduced efforts in other missions compared to pre-September 11th levels. 

We conducted the audit between April 2003 and February 2004 at the Coast 

Guard headquarters and selected field locations. Our review assessed the Coast 

Guard’s level of effort and performance of homeland security missions, as well as 

non-homeland security missions, for the period covering October 1, 2000, through 

September 30, 2003. We also identified barriers to sustaining or improving the 

performance of those missions in future periods. See Appendix B for specifi c 

information on our audit scope and methodology. 

In June 2003, the United States Government Accountability Offi ce (GAO)3 

initiated a review of the Coast Guard’s changed level of effort for its homeland 

security and non-homeland security missions and the effect this has had on 

mission performance. We coordinated with the GAO team. The GAO’s 

conclusions are discussed on pages 8 and 9 of this report. 

Since the GAO recently addressed how well the Coast Guard performed its 

missions in FY 2003 and whether the Coast Guard restored its non-homeland 

security missions to their pre-September 11th levels,4

 we focused our report on the 

barriers to improved or sustained mission performance in FY 2004 and beyond. 

2

 Senate Report 107–224, Department Of Transportation and Related Agencies Appropriations Bill, 2003, July 26, 2002. 3

 Effective July 7, 2004, the GAO changed its name from the General Accounting Offi ce. 4

 GAO Report: Relationship Between Resources Used and Results Achieved Needs to Be Clearer, report number GAO-04-432, March 22, 

2004, and GAO Testimony: Key Management and Budget Challenges for Fiscal Year 2005 and Beyond, report number GAO-04-636T, 

April 7, 2004.

Page 4 FY 2003 Mission Performance United States Coast Guard 
Results in Brief

The Coast Guard faces three major barriers to improving or sustaining its mission 

performance in FY 2004 and beyond: 

1. The lack of a comprehensive and fully defined performance management 

system. 

2. The growing workload and demand for experienced and trained Coast 

Guard personnel. 

3. The deteriorating readiness condition of its aged cutter and aircraft fl eet. 

The lack of a comprehensive and fully defined performance management system 

impedes the Coast Guard’s ability to gauge its performance, allocate resources 

effectively, and target areas for improved performance. The Coast Guard has 

yet to define comprehensively a management system that includes the inputs, 

outputs, and outcomes of its missions, which are needed to gauge and improve 

performance. For example, for search and rescue, the number of mariners in 

distress saved is a good indicator of outcome; however, resource hours underrepresent the effort put into this mission by omitting the many hours of watch 

standing at stations. Without more complete information, the Coast Guard has 

limited ability to identify and target cost effective improvements to mission 

performance. 

The workload demands on the Coast Guard will continue to increase as it 

implements the Maritime Transportation Security Act of 2002 (MTSA). Under 

MTSA, the Coast Guard must conduct risk assessments of all vessels and facilities 

on or near the water; develop national and area maritime transportation security 

plans; and approve port, facility, and vessel security plans. This complex work 

requires experienced and trained personnel, presenting a major challenge for the 

Coast Guard, which has in recent years suffered from declining experience levels 

among its personnel. Insofar as the Coast Guard relies on experienced senior 

personnel to coach and train junior personnel and new recruits on the job, mission 

performance is at risk. 

In addition to implementing MTSA, growing homeland security demands, such as 

added PWCS patrols, result in a continued high operating tempo. Sustaining this 

high operating tempo will be a major challenge for Coast Guard personnel and 

will tax its infrastructure, especially its aged cutter and aircraft fl eet. The Coast 

Guard reported that mission sustainment is at risk due to cutters and aircraft that 

FY 2003 Mission Performance United States Coast Guard Page 5 
are aging, technologically obsolete, and require replacement and modernization. 

Currently, the Coast Guard is experiencing serious cracking in the hulls of the 110 

foot cutters and engine power loss on the HH-65 Dolphin helicopters, resulting in 

operating restrictions. These problems adversely affect the Coast Guard’s mission 

readiness and ultimately mission performance. 

In light of the outstanding recommendations made by the GAO for improving 

the Coast Guard’s performance management system, and the ongoing Coast 

Guard efforts to improve its performance management system, we are making no 

recommendations in this report on performance management. However, to deal 

with its readiness problems, we are recommending that the department and the 

Coast Guard expedite the review and approval of the Coast Guard’s proposals to 

update the Integrated Deepwater System requirements and acquisition program 

baseline to ensure that these needs are addressed in the formulation of the FY 

2006 budget request and the Future Years Homeland Security Plan for 2007-2011. 

On July 29, 2004, we sent a draft copy of this report to the Coast Guard and DHS, 

asking for a response within 30 days. However, as of September 30, 2004, we 

have not received responses. Therefore, we are issuing the final report without the 

benefit of the Coast Guard’s and DHS’ responses. 

Background 

The terrorist attacks of September 11th changed the nation’s priorities and affected 

the scope of activities for many federal agencies. This is especially true of the 

Coast Guard. The attacks prompted the nation to evaluate its vulnerability to 

terrorism, and the evaluation focused considerable attention on the nation’s vast 

and sprawling network of ports and waterways. Resulting legislation added to, 

rather than subtracted from, the Coast Guard’s many mission responsibilities. The 

effect of these changes on the Coast Guard, and how to manage them, continues 

to be a matter of intense congressional interest. 

Coast Guard’s Many Missions 

Notwithstanding this increased security focus, Congress enacted the Homeland 

Security Act of 2002, which explicitly focused on preserving the Coast Guard’s 

mission performance.5 Provisions of the law restrict the DHS from reducing the 

5

 Homeland Security Act of 2002, Public Law 107-296, Section 888, Preserving Coast Guard Mission Performance, November 25, 2002. 

Page 6 FY 2003 Mission Performance United States Coast Guard 
Coast Guard’s missions or its capabilities to perform them, while ensuring that 

the Coast Guard remains intact at the department. Congress identifi ed the Coast 

Guard’s major missions and designated each as either a “homeland security” 

mission or a “non-homeland security” mission. Homeland security missions 

include: 

Ports, Waterways, and Coastal Security: Conducting harbor patrols, vulnerability 

assessments, and other security efforts to prevent or minimize damage from 

maritime terrorist attacks. 

Drug Interdiction: Enforcing applicable laws and treaties by conducting patrols 

to intercept drug smugglers to reduce the flow of illegal drugs into the country by 

sea. 

Migrant Interdiction: Enforcing applicable laws and treaties by conducting 

patrols to intercept at sea and eliminate the flow of undocumented migrants 

entering the U.S. via marine routes. 

Defense Readiness: Maintaining military readiness and capabilities to assist and 

support the U.S. Navy. 

Other Law Enforcement: Enforcing laws and treaties not pertaining to drugs, 

migrants, or domestic fisheries, which are categorized separately. It includes 

enforcement activities pertaining to boating while intoxicated, hijacking or 

stealing vessels, and arms smuggling. The Coast Guard recently began reporting 

its mission activities for protecting the Exclusive Economic Zone (EEZ) from 

foreign fishermen under “Other Law Enforcement” as a homeland security 

mission. 

Non-homeland security mission operations include: 

Marine Safety: Inspecting vessels for compliance with regulations to improve 

safety and eliminate fatalities and injuries for merchant mariners, vessel 

passengers, and recreational boaters. 

Search and Rescue: Responding to distress calls to save lives and property in 

peril. 

FY 2003 Mission Performance United States Coast Guard Page 7 
Aids to Navigation: Building and maintaining a network of manned and 

unmanned aids to navigation, such as buoys. 

Living Marine Resources: Enforcing applicable laws and treaties to protect U.S. 

fishing grounds by conducting patrols and inspecting domestic fi shing fl eets. The 

Coast Guard recently changed reporting and budgeting for its mission activities 

for protecting the EEZ from foreign fishermen from “Living Marine Resources” 

to “Other Law Enforcement.” 

Marine Environmental Protection: Responding to incident reports to minimize 

the adverse effects of marine pollution, such as oil and other hazardous materials. 

Ice Operations: Breaking polar ice, as scheduled, to facilitate movement of 

critical goods and personnel to research stations, and breaking winter ice, as 

needed, in domestic ports and waterways to facilitate year-round commerce. 

To perform its many missions, the Coast Guard had about 44,500 full-time 

positions, primarily military, at the end of FY 2003. This represents a 3.6 % 

increase from the FY 2002 level. The Coast Guard utilizes a wide range of 

aircraft and vessels, including small boats used near shore and deepwater cutters, 

i.e., vessels 65 feet or greater in length. The Coast Guard fleet consists of about 

200 cutters and patrol boats, about 1,600 small boats, and 189 aircraft (52 fi xed 

wing and 137 helicopters). The Coast Guard operates about 224 stations and 

command centers along the nation’s coasts and waterways. In addition, the Coast 

Guard has about 8,000 reservists and is actively supported and assisted by the 

36,000 volunteers of the Coast Guard Auxiliary. 

Related GAO Reviews 

The GAO recently reported on how well the Coast Guard performed its missions 

in FY 2003 and whether the Coast Guard restored its non-homeland security 

missions to their pre-September 11th levels.6 GAO concluded that during 

FY 2003, resource hours for most homeland security missions were up, while 

most non-homeland security mission hours were below pre-September 11th levels, 

even though the Coast Guard experienced a 32 % budget increase and a 9 % 

increase in personnel since September 11th. For example, resource hours for the 

living marine resources and search and rescue missions declined 26 % and 22 %, 

6

 GAO Report: Relationship Between Resources Used and Results Achieved Needs to Be Clearer, report number GAO-04-432, March 22, 

2004, and GAO Testimony: Key Management and Budget Challenges for Fiscal Year 2005 and Beyond, report number GAO-04-636T, 

April 7, 2004. 

Page 8 FY 2003 Mission Performance United States Coast Guard 
respectively. Conversely, resource hours for PWCS were up more than twelvefold since pre-September 11th. 

GAO further reported that the Coast Guard’s FY 2003 performance results did not 

mirror the downward trends in resource use for non-homeland security missions, 

but instead program results were generally stable or improved and performance 

targets were generally met. GAO noted that sufficient data were available for 

only seven of Coast Guard’s eleven programs. Therefore, GAO did not fully 

analyze performance for the marine safety, marine environmental protection, drug 

interdiction, and PWCS missions. The Coast Guard met or exceeded performance 

goals for five missions: search and rescue, foreign fish enforcement, aids to 

navigation, living marine resources, and ice operations missions. However, the 

Coast Guard did not meet performance goals for migrant interdiction and defense 

readiness. 

GAO also reported that Coast Guard officials attributed achieving performance 

goals with reduced resource hours to other factors affecting mission performance, 

such as increased operating efficiencies and unexpected events. The Coast Guard 

implemented strategies such as using new technology, better operational tactics, 

improved intelligence, and stronger partnerships with other federal, state, and 

local agencies. For example, in the City of New York, the Coast Guard works 

with the New York Police Department with respect to joint training and fi rst 

responder exercises, as well as sharing communication, intelligence, and assets. 

However, the Coast Guard has limited information for assessing the impact of the 

above factors on performance results. 

GAO repeatedly reported deficiencies with the Coast Guard’s performance 

management system, calling for a strategy for balancing missions, better 

performance measures, management information, and program evaluation. GAO 

made five recommendations for improving the Coast Guard’s performance 

management system.7

 Specifically, these recommendations included: 

(1) Developing a long-term strategic plan for balancing resources among 

missions; 

(2) Developing a useful reporting system for Congress that includes input, 

output, and outcome measures; 

7 GAO Report: Strategy Needed for Setting and Monitoring Levels of Effort for All Missions, report number GAO-03-155, 

November 2002, and GAO Report: Relationship Between Resources Used and Results Achieved Needs to Be Clearer, report 

number GAO-04-432, March 2004. 

FY 2003 Mission Performance United States Coast Guard Page 9 
(3) Developing an effective way to share information on partnership efforts 

systematically and to re-examine past recommendations for operational 

effi ciencies; 

(4) Setting a time frame for plans to implement a system to account for program 

resources accurately; and 

(5) Developing a strategy for identifying and assessing factors affecting program 

performance. 

While the Coast Guard agreed to these recommendations and is drafting a 

strategic plan or blueprint to address them, the Coast Guard has not set a 

timeframe for its completion, according to the GAO. 

Barriers To Sustained Or Improved Mission Performance 

in FY 2004 and Beyond 

The Coast Guard faces three major barriers to improving or sustaining its mission 

performance in FY 2004 and beyond: 

1. The lack of a comprehensive and fully defined performance management 

system. 

2. The growing workload and demand for experienced and trained Coast 

Guard personnel. 

3. The deteriorating readiness condition of its aged cutter and aircraft fl eet. 

The ability of the Coast Guard to gauge its performance, allocate resources 

effectively, and target areas for improved performance is impeded by its lack 

of complete management information. However, the Coast Guard faces more 

urgent challenges to sustain or improve mission performance in FY 2004. These 

major challenges include meeting the MTSA implementation requirements, which 

not only add workload, but also stretch the growing demands for trained Coast 

Guard personnel. In addition, these personnel readiness difficulties are matched 

by materiel readiness problems, as high operating tempos wear down the Coast 

Guard’s aged cutter and aircraft fl eet assets. 

Page 10 FY 2003 Mission Performance United States Coast Guard 
Barrier 1: Performance Management System Incomplete 

The lack of a comprehensive and fully defined performance management system 

impedes the Coast Guard’s ability to gauge its performance, allocate resources 

effectively, and target areas for improved performance. The Coast Guard has 

yet to define comprehensively a management system that includes the inputs, 

outputs, and outcomes of its missions, which are needed to gauge and improve its 

performance. However, the Coast Guard has begun development of a risk based 

performance management system. It is aimed at identifying the impact of changes 

in Coast Guard activities in terms of risk and, thereby, helping the Coast Guard to 

manage its resources more effectively and improve overall performance. 

Understanding Inputs and Matching Costs 

The Coast Guard does not have a basis for measuring and matching inputs to 

mission performance and, therefore, has relied on resource hours to build and 

justify budgets and allocate costs to missions. However, resource hours indicate 

only part of the effort involved in accomplishing the Coast Guard’s missions. 

The resource hours that the Coast Guard reports are based on its Abstract of 

Operations (AOPS) management information system, which logs the hours that 

Coast Guard major assets--cutters, boats, and aircraft--are being used. AOPS does 

not include partners’ efforts or the work of Coast Guard personnel that does not 

involve such assets. The resource hours of approximately 23 % of Coast Guard 

personnel are not entered in AOPS because their efforts do not require the use of 

the Coast Guard boats, cutters, or aircraft. 

The effect of this unaccounted for effort on performance varies among missions. 

For example, the Coast Guard’s inputs to performance of some major safety and 

crisis response missions are not measured accurately by AOPS because they are 

performed substantially ashore. For example: 

 The GAO noted that Coast Guard’s marine safety and marine 

environmental protection missions are primarily a shore based effort not 

reflected in AOPS. 

 Additionally, search and rescue (SAR) mission efforts are understated. 

The Coast Guard reported about 62,000 resource hours for SAR in 

FY 2003, which understated the effort by omitting the many hours of 

FY 2003 Mission Performance United States Coast Guard Page 11 
watch standing. We estimate Coast Guard stations and command centers 

spent over 1.5 million hours standing watches that were focused on 

listening for distress calls. These resource hours should be considered in 

gauging the effort the Coast Guard puts into the SAR mission. 

 Furthermore, the Coast Guard Auxiliary’s hours spent searching for 

mariners in distress under the direction of the Coast Guard SAR 

Coordinator are not counted. 

Without more complete information, the Coast Guard has limited ability to 

identify and target cost effective improvements to the performance of these 

missions. For example, would greater maritime domain awareness allow the 

Coast Guard to deploy assets less for searching and more for affecting the rescue? 

Changing the nature of SAR operations from “look for” to “go get” would 

obviously be more effective and cost effective. However, lack of data undermines 

the Coast Guard’s ability to estimate and evaluate trade-offs in information 

technology investments needed to improve the Coast Guard’s maritime domain 

awareness, versus continued labor and capital-intensive deployments of cutters 

and aircraft. 

Additional significant Coast Guard and partnership efforts are not accounted for, 

even though the results of these efforts are reflected in performance output and 

outcome measures and are key to accomplishing the Coast Guard’s missions. For 

example, the Coast Guard has several law enforcement detachments on board 

U.S. Navy and other allied Navy vessels in support of the drug interdiction effort; 

however, these mission hours are not being captured in AOPS. 

Further, the manner in which the Coast Guard accounts for the resources that 

are dedicated to its law enforcement missions is flawed. While the percentage 

of resource hours reported for each mission is used to assess the Coast Guard’s 

mission balance and justify its budget requests, resource hours are not always a 

reliable indicator of the Coast Guard’s true mission emphasis. The hours an asset 

is used are counted as “resource” hours. A resource hour for an infl atable small 

boat, a high-endurance cutter, a helicopter, and a jet are all counted the same. 

Therefore, resource hour statistics do not reflect the Coast Guard’s investment in 

capital and operating costs for performing missions. For example, resource hours 

alone do not indicate the Coast Guard’s relative emphasis on its counter drug 

mission. From FY 2001 to FY 2003, the Coast Guard reported that the percentage 

of resource hours devoted to drug interdiction decreased from 20.8 % to 9.5 %. 

However, during that period, the Coast Guard used larger cutters working offshore 

Page 12 FY 2003 Mission Performance United States Coast Guard 
in conjunction with surveillance aircraft and armed helicopters, which represent 

the major share of the Coast Guard’s capital and fleet operating cost investments. 

Measuring Results and Readiness 

The Coast Guard does not have the output and outcome measures and goals 

needed to gauge the results of some of its major missions or the readiness of all 

Coast Guard units. For example, the Coast Guard has not defined the measures 

and performance targets for PWCS, even though it reported over 245,000 PWCS 

resource hours in FY 2003, which was about a third of the total annual mission 

resource hours available. Further, the demands of homeland security missions 

now require all Coast Guard operational units to achieve and sustain a high state 

of operational readiness, underscoring the need for expanded status reporting. 

However, the Coast Guard’s readiness reporting is limited only to gauging the 

military readiness of select cutters, patrol boats, and port security units performing 

the defense mission. 

The readiness of these select units to perform other missions may not be 

accurately reflected in readiness reports because the criteria for evaluating 

readiness may not include the specialized equipment or skills needed to perform 

the other missions. Moreover, the readiness of other Coast Guard units is not 

indicated. The Coast Guard’s Readiness Management System initiative seeks 

to address this gap, providing decision-makers with the information needed. 

However, defi ning specific, useful criteria and standards for extending military 

readiness reporting to other Coast Guard missions and additional operational 

units will be a challenge given their multi-mission nature. The Coast Guard 

relies on its operational units to respond capably as needed to perform any of its 

major missions, including the added jobs of protecting the homeland. A system 

is needed to gauge the results of its major missions and the readiness of all Coast 

Guard units. 

Further, the need for a better system for measuring Coast Guard’s mission 

performance is shown in the program ratings assigned to the missions that 

have been subject to the Office of Management and Budget (OMB)’s program 

assessment rating process. To enhance the practical use of performance 

information, OMB, in collaboration with other federal agencies, has developed a 

FY 2003 Mission Performance United States Coast Guard Page 13 
process for assigning performance ratings to programs - the Program Assessment 

Rating Tool (PART) - and criteria for assessing program performance and 

management. So far, OMB has rated five Coast Guard mission programs. Three 

mission programs scored a “Results Not Demonstrated.” As shown on Table 

Table 1 - PART Results 

Mission Rating 

Aids to Navigation Results Not Demonstrated 

Living Marine Resources Moderately Effective 

Drug Interdiction Results Not Demonstrated 

Marine Environmental 

Protection Moderately Effective 

Search & Rescue Results Not Demonstrated 

Barrier 2: Growing Workload and Continued High Operating Tempo 

The continued growth in homeland security demands, especially PWCS 

operations, is a barrier to the Coast Guard’s sustaining or improving performance 

in its other missions. Although additional total operating resources are budgeted 

for the Coast Guard, the growing security demands will be a barrier to restoring 

the level of effort devoted to non-homeland security missions to their preSeptember 11th levels. The Coast Guard will continue to need to “surge” 

operations in response to elevated threat levels, meet growing security demands, 

accomplish MTSA implementation tasks, and support other operations such as the 

war in Iraq. Therefore, while the Coast Guard has budgeted for a reduced effort 

in homeland security missions, PWCS will continue to require current levels of 

personnel, if not more, especially with the new security requirements of MTSA. 

Growing Homeland Security Workload 

The MTSA requires the Coast Guard to undertake a variety of new homeland 

security initiatives, in addition to its current security role commitments. Under 

MTSA, the Coast Guard is required to conduct risk assessments of all vessels and 

facilities on or near the water, develop national and area maritime transportation 

Page 14 FY 2003 Mission Performance United States Coast Guard 
security plans, approve port, facility, and vessel security plans, and implement 

a Sea Marshal program8

. In addition, all commercial vessels are to be equipped 

with an automatic identification system allowing the Coast Guard to track vessels 

in U.S. waters. 

The Coast Guard estimated a need for 600 additional active duty and civilian 

personnel to implement and enforce MTSA. The timing of the passage of 

the MTSA did not allow the Coast Guard to budget for this increase in its 

FY 2004 budget request. While the Coast Guard’s FY 2005 budget request 

includes $101 million for MTSA implementation, the Coast Guard is recalling 

450 reservists to active duty as a stopgap measure. 

However, many reserve personnel do not have the requisite training, experience, 

and qualifications to perform their MTSA duties and responsibilities. While Coast 

Guard officials said that reservists could qualify as inspectors after completing 

online correspondence courses, an unspecified period of on-the-job training, and 

some formalized classroom training, the Coast Guard has not specifi ed where 

the reservists will be assigned or how long it would take for them to obtain 

the required training, experience, and certification needed to enforce MTSA 

requirements properly. 

Personnel readiness issues, such as the lack of experienced personnel, the 

decreasing average experience levels at stations reliant on senior personnel to 

coach and train junior personnel on the job, and the inadequate training at Coast 

Guard field units, have been longstanding problems as reported by the DOT OIG.9 

Continued High Operating Tempo 

Growing workload demands on the Coast Guard are likely to continue and its high 

operating tempo is also likely to continue. The Coast Guard reports that, from 

FY 2001 through FY 2003, the total level of effort measured in resource hours 

has increased almost 20 %, while homeland security mission hours increased 

82 %. Resource hours devoted to homeland security missions have increased, 

primarily due to the PWCS mission, from 58,448 hours in FY 2001 to 245,669 

hours in FY 2003, or a 320 % increase. Furthermore, the Coast Guard’s FY 2004 

8

 Under the Sea Marshal program the Coast Guard identifies, boards, and escorts high-risk vessels to prevent unauthorized persons from 

taking control of the vessel while in U.S. waters. 

9

 DOT OIG Report: Use of Fiscal Year 2002 Funds to Improve the Operational Readiness of Small Boat Stations and Command Centers 

(Revised), report number MH-2003-028, April, 15, 2003; Audit of the Small Boat Station Search and Rescue Program, report number MH2001-094, September 14, 2001. 

FY 2003 Mission Performance United States Coast Guard Page 15 
projections indicate a continuation of this trend. The trend in high operating 

tempo raises concern about the capacity of the Coast Guard to meet the “surge” 

demands of a major crisis that would need a sustained response. 

Continued high operating tempo will wear down Coast Guard assets faster than 

previously planned, requiring additional maintenance, repair, or replacement of 

engines and other components that wear with use. As the average age of Coast 

Guard surface and aviation fleets continues to grow, more maintenance due to 

stress and fatigue is required. Consequently, the surface and aviation fl eet will 

become less efficient. The effects of high operating tempo become even more 

apparent during the surge periods of elevated threat levels. 

Barrier 3: Deteriorating Fleet Readiness 

Given its aging surface and aviation fleet, the Coast Guard’s ability to balance its 

missions and maintain its performance is a major challenge. The Coast Guard 

reported that mission sustainment is at risk due to cutters and aircraft that are 

aging, technologically obsolete, and require replacement and modernization. 

Currently, the Coast Guard is experiencing serious cracking or breaches in 

the hulls of its 110 foot cutters and engine power losses on its HH-65 Dolphin 

helicopters. These operating restrictions adversely affect the Coast Guard’s 

mission readiness. 

The Coast Guard’s cutter fleet is deteriorating. Since FY 2003, unscheduled 

maintenance increased 41%. For example, according to Coast Guard maintenance 

records, 20 of the 49 110 foot cutters have been characterized as being in serious 

condition requiring significant hull sustainment, such as a recently renovated 

cutter that needed about 30 % of its hull replaced. As a result of the deteriorating 

condition of the cutter fleet, the Coast Guard is accelerating efforts to develop the 

Fast Response Cutters and Offshore Patrol Cutters program under its Integrated 

Deepwater System acquisition project. 

The Coast Guard’s aviation fleet is deteriorating as well. The fleet of 95 HH-65 

Dolphin helicopters is experiencing increased in-flight engine power losses. By 

mid-FY 2004, the HH-65 fleet reported 70 in-flight power loss mishaps, up from 

the 32 such mishaps during FY 2003, and the 32 mishaps reported between FYs 

2000 and 2002. As a result, the Coast Guard placed operational restrictions 

on these aircraft to mitigate the safety risks associated with the in-fl ight power 

losses. These operational restrictions have further diminished the operational 

capability of the HH-65 fleet and reduced the Coast Guard’s mission performance 

Page 16 FY 2003 Mission Performance United States Coast Guard 
capability. For example, the restrictions have reduced the HH-65’s ability to 

deploy from cutters, limiting the aircraft’s ability to conduct missions such as 

search and rescue or the law enforcement operations that are usually conducted 

from Coast Guard cutters. The Coast Guard recently accelerated its acquisition 

of the Multi-Mission Cutter Helicopter under development by the Integrated 

Deepwater System acquisition project and began replacing the engines of its HH65 helicopter fl eet. 

To deal with its deteriorating materiel readiness issues, the Coast Guard is 

relying on the Integrated Deepwater System to replace or modernize its fl eet of 

aging, technologically obsolete cutters, aircraft, and support systems with an 

integrated, interoperable network centric system capable of supporting its mission 

needs. However, the Coast Guard has yet to redefine fully its mission needs to 

reflect changed requirements and priorities since September 11th or restructure 

the Integrated Deepwater System acquisition project accordingly. The current 

Deepwater system is based on a 1998 baseline. The Coast Guard decided that it 

needs to update that baseline to refl ect post-September 11th missions. The Coast 

Guard proposed the addition of several functional capabilities to the Deepwater 

system to reflect its maritime homeland security duties. Specifically, on May 25, 

2004, the Coast Guard proposed a revised missions need statement for validation 

by the department’s Joint Requirements Council (JRC). The proposal addresses 

the Coast Guard’s changed requirements and priorities since September 11th. 

However, the Coast Guard has yet to provide the information and analysis 

requested by the JRC at the May 25 meeting to support the proposal. Until that 

information is provided, the JRC cannot approve it. With validation and approval 

of the updated Integrated Deepwater System requirements by the JRC, the Coast 

Guard would then seek approval from the department’s Investment Review 

Board of a revised acquisition program baseline. Scheduling for such Investment 

Review Board deliberations has not been set. However, the development of 

the department’s FY 2006 budget request and Future Years Homeland Security 

Plan for 2007-2011 is under way. The FY 2006 budget request is necessarily 

based on the Coast Guard’s currently approved program. However, the resource 

level budgeted in FY 2006 for the Integrated Deepwater System may not match 

the needs of the Coast Guard’s updated program requirements. Therefore, to 

ensure that the Coast Guard’s changed requirements and priorities are addressed 

in formulation of the FY 2006 budget request, we are making the following 

recommendations. 

FY 2003 Mission Performance United States Coast Guard Page 17 
Recommendation 1: We recommend that the Commandant of the Coast Guard 

expedite responses to departmental inquiries and deliberations on the Coast 

Guard’s proposal to update requirements for the Integrated Deepwater System 

and revise the acquisition program baseline to ensure that those needs are 

addressed in the formulation of the FY 2006 budget request. 

Recommendation 2: We recommend that the Under Secretary for Management 

expedite the department’s review of the Coast Guard’s proposal to update its 

requirements for the Integrated Deepwater System and revise the acquisition 

program baseline to ensure that those needs are addressed in the formulation of 

the FY 2006 budget request. 

Recommendation 3: We recommend that the Commandant of the Coast 

Guard ensure that the Coast Guard’s FY 2006 budget request and Future Years 

Homeland Security Plan for 2007-2011 are revised to reflect the approved 

changed requirements and priorities of the Integrated Deepwater System 

acquisition project. 

On July 29, 2004, a copy of our draft report was provided to the Coast Guard 

and DHS Management Directorate for comment. We requested that both the 

Coast Guard and Management Directorate respond to the draft report within 30 

days. As of September 30, 2004, we have not received comments from either. 

Therefore, we consider our recommendations unresolved. 

Page 18 FY 2003 Mission Performance United States Coast Guard 
Appendix A 

Coast Guard Missions 

 Homeland Security Missions: 

Ports, Waterways and Coastal Security (PWCS): The Coast Guard patrols 

harbors, waterways, and the coasts to provide a deterrent presence and rapid 

response capability. The Coast Guard conducts these harbor patrols, along with 

vulnerability assessments, intelligence gathering and analysis, in an effort to 

prevent maritime terrorist attacks, reduce America’s vulnerability to terrorism, 

and minimize the damage from attacks that could occur. The Coast Guard’s 

responsibilities for coastal security are shared and coordinated with the U.S. 

Navy and responsibilities for port security are shared and coordinated with U.S. 

Customs and Border Protection (CBP). 

Drug Interdiction: The Coast Guard deploys to and patrols high drug traffi cking 

areas, gathers intelligence, intercepts and boards suspect vessels, and apprehends 

smugglers at sea. The Coast Guard conducts these counter drug patrols and 

boardings in an effort to stem the importation of illegal drugs. The Coast Guard’s 

responsibilities for drug interdiction are shared by seven federal departments 

under the auspices of the Office of National Drug Control Policy. The Coast 

Guard’s counter drug operations are largely conducted in tandem with CBP and 

the Navy. 

Migrant Interdiction: The Coast Guard deploys to and patrols areas prone to 

illegal immigration, including areas between the Bahamas, Cuba, Haiti and the 

U.S. The Coast Guard responds to intelligence on voyages along the east and 

west coasts and throughout U.S. territories in the Pacific in an effort to curtail 

illegal immigration. The Coast Guard shares migrant interdiction responsibility 

with other DHS components. 

Other Law Enforcement: The Coast Guard is a maritime police force, the only 

military service with law enforcement authority, and specifically charged with 

enforcing the provisions of federal laws and treaties. “Other law enforcement” 

pertains to enforcement of laws, regulations, or international agreements unrelated 

to domestic fisheries, marine sanctuaries, drug trafficking, or illegal immigration. 

This includes maritime activities in support of other federal, state, and local law 

enforcement agencies. Examples of other laws the Coast Guard enforces include 

provisions against trespassing, intoxicated boaters, vandalism, theft of assets, and 

destruction of maritime property. The Coast Guard recently began reporting its 

mission activities for protecting the EEZ from foreign fisherman under “other law 

enforcement” as a homeland security mission. 

FY 2003 Mission Performance United States Coast Guard Page 19 
Appendix A 

Coast Guard Missions 

Defense Readiness: The Coast Guard deploys with U.S. Navy Fleet and 

participates with the Department of Defense (DOD) military and humanitarian 

operations around the globe. The Coast Guard deploys cutters and boats in and 

around military bases, homeports and harbors, including combat and combat 

support zones, to protect naval forces and DOD supply operations. 

 Non-Homeland Security Missions: 

Marine Safety: The Coast Guard marine safety efforts pertain to three separate 

segments: maritime worker fatality and injury prevention; passenger vessel 

safety; and recreational boating fatality and injury prevention. The Coast Guard 

safety programs aim to ensure the safety of crewmembers and passengers by 

preventing accidents from happening, responding to accidents when they occur, 

and investigating accidents to prevent them from happening again. 

Search and Rescue: The Coast Guard stands watch, monitoring radios 

for distress calls, coordinates efforts to find lost or endangered mariners, 

and evacuates threatened or injured mariners. The Coast Guard is the sole 

government agency that has expertise, assets, and around-the-clock, on-call 

readiness to conduct search and rescue missions in all areas of the maritime 

environment. Annually, the Coast Guard responds to approximately 40,000 calls 

for assistance. 

Aids to Navigation: The aids to navigation program consists of long range and 

short range aids. Long range devices, or radio aids, provide continuous, accurate 

all-weather positioning capability to military and civilian maritime and aviation 

transportation users, in order to prevent disasters, collisions, and wrecks of vessels 

and aircraft. Short range aids to navigation are combinations of visual, sound, 

and radar enhanced signals placed on floating and fixed stations in the maritime 

environment. These are lighthouses, ranges, beacons, and buoys that mariners 

use for positioning during the coastal, harbor approach, and restricted phases 

of navigation. The Coast Guard maintains this extensive system and monitors 

marine traffic through traffic service centers. 

Living Marine Resources: The Coast Guard is the only government agency 

with maritime authority and infrastructure to provide federal law enforcement 

presence over the U.S. EEZ. The U.S. EEZ is the largest in the world, covering 

3.4 million square miles of ocean and 95,000 miles of coastline. Commercial 

and recreational fisheries contribute approximately $50 billion annually to the 

U.S. economy. Responsible management of ocean resources is critical as the 

Page 20 FY 2003 Mission Performance United States Coast Guard 
Appendix A 

Coast Guard Missions 

world’s population continues to grow, demanding increased food sources. The 

Coast Guard recently changed its reporting and budgeting policy and procedures 

for protecting the EEZ from foreign fisherman from “living marine resources” to 

“other law enforcement.” 

Marine Environmental Protection: The Coast Guard conducts outreach and 

inspections, often in tandem with marine safety operations, to prevent marine 

pollution. The Coast Guard’s preparedness and response program seeks to 

minimize the impact of discharges of oil and releases of hazardous materials 

into the maritime environment. The Coast Guard shares responsibility with the 

Environmental Protection Agency (EPA) for spills of national signifi cance that 

overwhelm local response capabilities. The EPA and Coast Guard operate the 

national incident command system, which responds to the release of hazardous 

materials. 

Ice Operations: The Coast Guard’s heavy icebreaking capability facilitates year 

round maritime commerce. Marine traffic is sustained only with the Coast Guard 

icebreaking services, when ice forms in critical waterways. The Coast Guard 

also conducts polar operations to facilitate the movement of critical goods and 

personnel in support of scientific and national security activity. 

FY 2003 Mission Performance United States Coast Guard Page 21 
Appendix B 

Purpose, Scope, and Methodology 

Purpose, Scope, and Methodology 

This report presents the results of our audit of the Coast Guard’s mission 

performance for FY 2003. This report is the first of a series of OIG reports in 

response to the Homeland Security Act of 2002 requirement that we conduct an 

annual review assessing the Coast Guard’s mission performance. Our objectives 

for this review were to determine how the level of effort directed toward each 

mission has changed since September 11, 2001; to identify the consequences 

resulting from the change in mission emphasis; and to identify barriers to 

sustaining or improving the performance of these missions in future periods. To 

accomplish these objectives, we analyzed the Coast Guard’s abstract of operations 

database and other mission performance data. The audit covered the Coast 

Guard’s level of effort and performance results for the period October 1, 2000, 

through September 30, 2003. 

Since the GAO recently addressed how well the Coast Guard performed its 

missions in FY 2003 and whether it restored its non-homeland security missions 

to their pre-September 11th levels, we focused our work on the barriers to 

sustained or improved mission performance in FY 2004 and beyond. We 

coordinated our review with the GAO. 

We identified barriers through our recent and ongoing audits, including the audit 

of the Re-Engining of the HH-65 Helicopter.10 We also reviewed DOT OIG 

reports and OMB’s program assessment rating tool and performance ratings for 

Coast Guard mission programs. 

We met with officials and obtained data from the Coast Guard Headquarters in 

Washington D.C., including the Program Executive Office for the Integrated 

Deepwater System. We also met with, observed, or obtained data from the 

following Coast Guard Commands and operating units: 

 Coast Guard District Headquarters: District 1 in Boston MA; District 5 in 

Portsmouth, VA; District 7 in Miami, FL; and District 13 in Seattle, WA. 

 Maintenance and Logistics Command Atlantic in Norfolk, VA. 

 Groups Commands and Small Boat Stations in Boston, MA; Miami FL; 

Key West FL; and Seattle WA. 

10 See DHS OIG audit report, Re-Engining of the HH-65 Helicopter, report number OIG-04-050, for more information. 

Page 22 FY 2003 Mission Performance United States Coast Guard 
Appendix B 

Purpose, Scope, and Methodology 

 Air Stations in Cape Cod, MA; Opa Locka, FL; and Port Angeles WA. 

 Marine Safety Offices in Boston, MA; Hampton Roads, VA; Miami, FL; 

and Seattle, WA. 

 Tactical Law Enforcement Team (TACLET) in Opa Locka, FL. 

We reviewed decision memoranda for the Department’s Investment Review 

Board and Joint Requirements Council to ascertain the status and plans for the 

Coast Guard’s Integrated Deepwater System major acquisition program. We also 

discussed our findings and recommendations with the Coast Guard’s Program 

Executive Office for the Integrated Deepwater System and the department’s 

Office of Program Analysis and Evaluation. 

We conducted our audit between April 2003 and February 2004 under the 

authority of the Inspector General Act of 1978, as amended, and according to 

generally accepted government auditing standards. 

Throughout the audit, we worked closely with Coast Guard offi cials. We 

appreciate the cooperation and courtesies extended to the audit team by these 

officials. Major OIG contributors to the audit are identified in Appendix D. The 

principal OIG points of contact for the audit are J. Richard Berman, Assistant 

Inspector General for Audits, at (202) 254-4100 and Edward M. Stulginsky, 

Deputy Assistant Inspector General for Program Audits, at (202) 254-0037. 

FY 2003 Mission Performance United States Coast Guard Page 23 
Appendix C 

Major Contributors to this Report 

The following individuals contributed significantly to this report: 

Mr. Phillip Maulden, Project Manager 

Mr. Sam Bellino, Audit Manager 

Mr. David Engelen, Management Analyst 

Mr. Paul Streit, Management Analyst 

Page 24 FY 2003 Mission Performance United States Coast Guard 
Appendix D 

Report Distribution 

Department of Homeland Security 

Secretary 

Deputy Secretary 

Undersecretary for Management 

General Counsel 

Chief of Staff 

DHS Office of Program Analysis & Evaluation 

DHS OIG Liaison 

DHS Public Affairs 

U.S. Coast Guard

Commandant 

Chief of Staff 

Audit Liaison 

Office of Management and Budget 

Chief, Homeland Security Branch 

DHS OIG Budget Examiner 

Congress 

Congressional Oversight and Appropriations Committees, as appropriate 

FY 2003 Mission Performance United States Coast Guard Page 25 
Additional Information and Copies 

To obtain additional copies of this report, call the Office of Inspector General (OIG) 

at (202) 254-4100, fax your request to (202) 254-4285, or visit the OIG web site at 

www.dhs.gov/oig. 

OIG Hotline 

To report alleged fraud, waste, abuse or mismanagement, or any other kind of criminal 

or noncriminal misconduct relative to department programs or operations, call the OIG 

Hotline at 1-800-323-8603; write to Department of Homeland Security, Washington, DC 

20528, Attn: Office of Inspector General, Investigations Division – Hotline. The OIG 

seeks to protect the identity of each writer and caller.