GAO

United States General Accounting Office

Report to the Chairman, Committee on 

the Budget, House of Representatives

April 2001 ENVIRONMENTAL 

LIABILITIES

DOD Training Range 

Cleanup Cost 

Estimates Are Likely 

Understated

GAO-01-479

Page 1 GAO-01-479 Training Range Cleanup

Letter 3

Appendix I Objectives, Scope, and Methodology 26

Appendix II Comments From the Department of Defense 28

Appendix III GAO Contact and Staff Acknowledgments 34

Figures

Figure 1: Signs Warning of the Dangers and Presence of

Unexploded Ordnance at Fort McClellan 11

Figure 2: Examples of Unexploded Ordnance Found on Training

Ranges 12

Abbreviations

CERCLA Comprehensive Environmental Response, Compensation,

and Liability Act

DOD Department of Defense

DOE Department of Energy

DUSD(ES) Deputy Under Secretary of Defense for Environmental

Security

EPA Environmental Protection Agency

SARA Superfund Amendments and Reauthorization Act

SFFAS Statement of Federal Financial Accounting Standards

Contents
Page 2 GAO-01-479 Training Range Cleanup
Page 3 GAO-01-479 Training Range Cleanup

April 11, 2001

The Honorable Jim Nussle

Chairman

Committee on the Budget

House of Representatives

Dear Mr. Chairman:

The previous chairman of your Committee expressed concern about the

long-term budgetary implications associated with the environmental

cleanup of the Department of Defense’s (DOD) training ranges. The

chairman requested that we review (1) the potential magnitude of the cost

to clean up these ranges in compliance with applicable laws and

regulations, (2) the scope and reliability of DOD’s training range inventory,

and (3) the methodologies used to develop cost estimates. This report

conveys the results of that review. He also requested a similar review of

certain other DOD property that has associated environmental cleanup

and disposal costs on which we will issue a separate report at a later date.

This report focuses on DOD’s efforts to collect, analyze, and report

information on its training ranges and the potential cleanup costs1

 of

 1

Federal accounting standards define environmental cleanup costs as the cost of removing,

containing, and/or disposing of (1) hazardous waste from property or (2) material and/or

property that consists of hazardous waste at permanent or temporary closure or shutdown

of associated property, plant, and equipment. Hazardous waste is a solid, liquid, or gaseous

waste, or combination of these wastes, which because of its quantity, concentration, or

physical, chemical, or infectious characteristics may cause or significantly contribute to an

increase in mortality or an increase in serious irreversible, or incapacitating reversible,

illness or pose a substantial present or potential hazard to human health or the

environment when improperly treated, stored, transported, disposed of, or otherwise

managed. Cleanup may include, but is not limited to, decontamination, decommissioning,

site restoration, site monitoring, closure, and postclosure costs.

United States General Accounting Office

Washington, DC 20548
Page 4 GAO-01-479 Training Range Cleanup

unexploded ordnance2 or other constituent contamination3 on these

training ranges.4

DOD has estimated that millions of acres of training ranges in the United

States and its territories are contaminated with unexploded ordnance that

could potentially harm the public and the environment if not properly

managed or cleaned up. With the increase in DOD downsizing and

resulting base closures in recent years, large numbers of military

properties are being turned over to non-DOD ownership and control.

Although DOD has procedures to mitigate the risk to human health and

the environment, the transfer of ownership results in the public being put

at greater risk of sickness, injury, or even death from unexploded

ordnance or its constituent contamination. DOD is subject to various laws

that govern remediation of contamination on military installations and

standards establishing requirements for DOD to recognize and report the

costs of managing and cleaning up these properties.

We conducted our work in accordance with generally accepted

government auditing standards from May 2000 through March 2001.

Further details on our scope and methodology are in appendix I.

DOD does not have complete and accurate data needed to estimate

training range cleanup costs. The two primary elements needed to develop

these costs are (1) an accurate and complete training range inventory and

(2) a consistent cost methodology. Because DOD does not have a

complete inventory and has not used a consistent cost methodology, the

amounts reported for training range cleanup cannot be relied upon and are

 2

Unexploded ordnance are munitions that have been primed, fused, armed, or otherwise

prepared for action, and have been fired, dropped, launched, projected, or placed in such a

manner as to constitute a hazard to operations, installation, personnel, or material and

remain unexploded either by malfunction, design or any other cause.

3

Military munitions may contain many constituents that can pollute the soil and water

supplies. These constituents can be released by the detonation of ordnance or from

damaged or deteriorated unexploded ordnance. Constituents that may be released include

propellants, explosives, pyrotechnics, chemical agents, metal parts, and other inert

components.

4

The cleanup of unexploded ordnance and other constituent contamination on training

ranges will be referred to in this report as training range cleanup. This does not include the

cleanup of nontraining range sites containing unexploded ordnance or sites such as

manufacturing facilities, munitions burial pits, or open burn and open detonation sites.

Results in Brief
Page 5 GAO-01-479 Training Range Cleanup

likely significantly understated. For example, in its fiscal year 2000

financial statements, DOD reported its liability for the cleanup of training

ranges at approximately $14 billion.5

 However, other DOD estimates show

that its liability for training range cleanup could exceed $100 billion.

Without complete and accurate data, it is impossible to determine whether

these amounts represent a reasonable estimate of the long-term budget

implications of cleaning up DOD’s training ranges.

The military services have not performed complete inventories of their

ranges, fully identifying the types and extent of the unexploded ordnance

present and the associated contamination. Recently, DOD began the initial

compilation of training range data in response to the Senate Report

accompanying the National Defense Authorization Act for Fiscal Year 2000

(Report 106-50, May 17, 1999), which called for a complete estimate of the

current and projected costs for unexploded ordnance remediation6

 at

active facilities, installations subject to base realignment and closure, and

formerly used defense sites, including all training ranges. However, DOD’s

initial data collection efforts in response to the Senate Report were

delayed in part because DOD did not issue formal guidance to the services

for collecting the range information until October 2000—17 months after

the date of the Senate Report, which directed DOD to prepare a report to

the congressional defense committees by March 1, 2001. However, as of

March 30, 2001, this report had not been issued. In addition to the delay,

the guidance when issued was not comprehensive enough to develop a

complete and accurate inventory. In an attempt to meet the March 1, 2001,

deadline in the Senate Report, DOD officials limited the scope of the

information gathered and analyzed. For example, DOD did not direct the

services to collect information or report on the unexploded ordnance

constituent contamination of soil, ground water, and surface water, or

water ranges. As a result, the March 2001 report will not be complete or

accurate.

Federal financial accounting standards have required that DOD report a

liability for the estimated cost of cleaning up its training ranges in its

annual financial statements since fiscal year 1997, although DOD did not

begin to do so until fiscal year 1999. Since DOD had not completed an

inventory of its ranges, the services have used varying methods to estimate

 5

DOD Fiscal Year 2000 Agency-wide Financial Statements, February 15, 2001.

6

Unexploded ordnance remediation also includes the cleanup of other constituent

contamination associated with unexploded ordnance.
Page 6 GAO-01-479 Training Range Cleanup

the size and condition of the ranges necessary to estimate the cost of

cleanup for financial statement reporting purposes. For example, in fiscal

year 2000, the Navy estimated training range acreage based upon limited

surveys completed in 1995 through 1997 and applied a cleanup cost factor

of $10,000 an acre to the total. The Army, lacking detailed knowledge of its

ranges, estimated the number of closed ranges and applied historical costs

from other cleanup efforts. These ad hoc measures do not substitute for

the comprehensive inventory of training ranges needed to develop

reasonable environmental liability estimates for the financial statements.

In addition, environmental liability costs reported in the financial

statements for training range cleanup are not consistently calculated and

reported across the services. To date, the services have not been provided

adequate guidance to develop consistent cost estimates. As a result, the

services have independently developed cost estimates and used different

methodologies for estimating the cost of cleaning up training ranges for

financial statement reporting. DOD officials told us that they planned to

use a standard methodology for estimating the cleanup costs in the March

2001 report; however, this methodology was available but not used by the

services for the fiscal year 2000 financial statements. Also, the

assumptions and cost factors DOD planned to use in the model for

estimating the training range cleanup costs for the March 2001 report have

not been independently validated as required by DOD policy to ensure

reliable estimates. DOD is planning to validate this cost estimating model

later in 2001.

Service officials have told us they are unsure whether the standard

methodology used to estimate training range cleanup costs for the March

2001 report will be used in the future for estimating the cleanup liability

reported in the financial statements. However, without a consistent

methodology, cleanup costs reported in the financial statements and other

reports will not be comparable and have limited value to management

when evaluating cleanup costs of each the services’ training ranges and

budgeting for the future.

The problems we have identified with DOD’s accumulation of its inventory

and cost data on training range cleanup demonstrate that DOD does not

have the top management focus and leadership necessary to reliably

report estimates of training range cleanup costs. The need for similar

programmatic leadership has been previously recognized and
Page 7 GAO-01-479 Training Range Cleanup

recommended by the Defense Science Board7 in 1998. The Defense

Science Board found that DOD had no specific unexploded ordnance

remediation policy, goals, or program. In addition, several members of

Congress have recently written letters to the Secretary of Defense to

express similar concerns about the need for high-level attention and

resources to address training range cleanup issues.

We are making recommendations to address (1) the need for DOD

leadership in managing the reporting of training range liabilities and

(2) developing and implementing guidance to ensure that DOD has a

complete inventory of all training ranges and that a consistent cost

methodology is used in reporting training range cleanup liabilities.

In commenting on a draft of this report, DOD concurred with our

recommendations. The additional information that DOD provided in

response to one of our recommendations is discussed in the “Agency

Comments and Our Evaluation” section.

DOD is subject to various laws dating back to the Comprehensive

Environmental Response, Compensation, and Liability Act (CERCLA) as

amended by the Superfund Amendments and Reauthorization Act (SARA)

of 1986 that govern remediation (cleanup) of contamination on military

installations. DOD must also follow federal accounting standards that

establish requirements for DOD to recognize and report the estimated

costs for the cleanup of training ranges in the United States and its

territories. Increasing public concern about potential health threats has

affected not only the present operations of these training ranges but also

the management, cleanup, and control of this training range land that has

been, or is in the process of being, transferred to other agencies and public

hands.

DOD defines a range as any land mass or water body that is used or was

used for conducting training, research, development, testing, or evaluation

of military munitions or explosives. DOD classifies its ranges into the

following five types.

 7

The Defense Science Board is a federal advisory committee established to provide

independent advice to the Secretary of Defense.

Background

Training Range

Classification
Page 8 GAO-01-479 Training Range Cleanup

• Active ranges are currently in operation, construction, maintenance,

renovation, or reconfiguration to meet current DOD component training

requirements and are being regularly used for range activities. Examples

of these ranges would include ranges used for bombing, missiles, mortars,

hand grenades, and artillery testing and practice.

• Inactive ranges are ranges that are not currently being used as active

ranges. However, they are under DOD control and are considered by the

military to be a potential active range area in the future, and have not been

put to a new use incompatible with range activities.

• Closed ranges have been taken out of service and are still under DOD

control but DOD has decided that they will not be used for training range

activities again.

• Transferred ranges have been transferred to non-DOD entities such as

other federal agencies, state and local governments, and private parties,

and are those usually associated with the formerly used defense sites8

program.

• Transferring ranges are in the process of being transferred or leased to

other non-DOD entities and are usually associated with the base

realignment and closure program.

Congress addressed environmental contamination at federal facilities

under SARA in 1986. This legislation established, among other provisions,

the Defense Environmental Restoration Program and the Defense

Environmental Restoration Account as DOD’s funding source under the

Act. The goals of the Defense Environmental Restoration Program include

(1) identification, investigation, research and development, and cleanup of

contamination from hazardous substances, pollutants, and contaminants

and (2) correction of other environmental damage such as detection and

disposal of unexploded ordnance which creates an imminent and

substantial danger to the public health or welfare or to the environment.

The Office of the Deputy Under Secretary of Defense for Environmental

Security (DUSD(ES)) was created in 1993. That office has overall

responsibility for environmental cleanup within DOD and includes the

Office of Environmental Cleanup that manages the Defense Environmental

Restoration Program.

 8

Formerly used defense sites are properties that were formerly owned, leased, possessed,

or operated by DOD.

Requirements to Address

and Report Training Range

Cleanup Liabilities
Page 9 GAO-01-479 Training Range Cleanup

Carrying out any remediation or removal actions under applicable

environmental laws, including SARA, would likely require the immediate

or future expenditure of funds. Federal accounting standards determine

how those expenditures are accounted for and reported. The Chief

Financial Officers’ Act of 1990, as expanded by the Government

Management and Reform Act of 1994, requires that major federal agencies,

including DOD, prepare and submit annual audited financial statements to

account for its liabilities, among other things. Two federal accounting

standards, Statement of Federal Financial Accounting Standards (SFFAS)

Nos. 5 and 6, establish the criteria for recognizing and reporting liabilities

in the annual financial statements, including environmental liabilities.

SFFAS No. 5, Accounting for Liabilities of the Federal Government,

defines liability as a probable future outflow of resources due to a past

government transaction or event. SFFAS No. 5 further states that

recognition of a liability in the financial statements is required if it is both

probable and measurable. Effective in 1997, SFFAS No. 5 defines probable

as that which is more likely than not to occur (for example, greater than a

50 percent chance) based on current facts and circumstances. It also

states that a future outflow is measurable if it can be reasonably

estimated. The statement recognizes that this estimate may not be precise

and, in such cases, it provides for recognizing the lowest estimate of a

range of estimates if no amount within the range is better than any other

amount. SFFAS No. 6, Accounting for Property, Plant, and Equipment,

further defines cleanup costs as costs for removal and disposal of

hazardous wastes or materials that because of quantity, concentration, or

physical or chemical makeup may pose a serious present or potential

hazard to human health or the environment.

The Office of the Under Secretary of Defense (Comptroller) issues the

DOD Financial Management Regulation containing DOD’s policies and

procedures in the area of financial management, which require the

reporting of environmental liabilities associated with the cleanup of

closed, transferred, and transferring ranges in the financial statements.9

DOD has taken the position that the cleanup of these ranges is probable

and measurable and as such should be reported as a liability in its financial

statements. Under the presumption that active and inactive ranges will

 9

DOD Financial Management Regulation, Volume 4, Chapter 13, Accrued Environmental

and Nonenvironmental Disposal Cost Liabilities and Chapter 14, Accrued Environmental

Restoration (Cleanup) Liabilities, October 1999; and Volume 6B, Chapter 10, Notes to the

Financial Statements, December 2000.
Page 10 GAO-01-479 Training Range Cleanup

operate or be available to operate indefinitely, the DOD Financial

Management Regulation does not specify when or if liabilities should be

recognized in the financial statements for these ranges.

The Senate Report accompanying the National Defense Authorization Act

for Fiscal Year 2000 directed DOD to provide a report to the congressional

defense committees, no later than March 1, 2001, that gives a complete

estimate of the current and projected costs for all unexploded ordnance

remediation. As of March 30, 2001, DOD had not issued its report. For the

purposes of the March 2001 report, DOD officials had stated that they

would estimate cleanup costs for active and inactive training ranges just as

they would for closed, transferred, and transferring ranges. Thus, the

cleanup costs shown in this report would have been significantly higher

than the training range liabilities reported in the financial statements,

which only include estimates for closed, transferred, and transferring

ranges. However, in commenting on a draft of our report, DOD officials

informed us that they would not be reporting the cleanup costs of active

and inactive training ranges in their March report.

As DOD downsizing and base closures have increased in recent years,

large numbers of military properties have been, and are continuing to be,

turned over to non-DOD ownership and control, resulting in the public

being put at greater risk. DOD uses a risk-based approach when

transferring ranges from its control to reduce threats to human health and

the environment. DOD attempts to mitigate risk to human health on

transferred and transferring ranges. In instances where DOD has not

removed, contained, and/or disposed of unexploded ordnance and

constituent contamination from training ranges prior to transfer, it

implements institutional controls to restrict access to transferring ranges

and to transferred ranges where risks are found. Institutional controls

include implementing community education and awareness programs,

erecting fences or barriers to control access, and posting signs warning of

the dangers associated with the range. Figure 1 shows signs posted at Fort

McClellan, Alabama, warning of unexploded ordnance. Fort McClellan has

been designated for closure under the base realignment and closure

program and, as such, is in the process of transferring base properties out

of DOD control.

Senate Reporting Directive

Training Ranges Pose

Significant Risk
Page 11 GAO-01-479 Training Range Cleanup

Figure 1: Signs Warning of the Dangers and Presence of Unexploded Ordnance at

Fort McClellan

Source: General Accounting Office.

DOD officials have estimated that approximately 16 million acres of

potentially contaminated training ranges have been transferred to the

public or other agencies. The risk to the public was further discussed by

an Environmental Protection Agency (EPA) official in a letter dated

April 22, 1999, to DUSD(ES). The EPA official cautioned that many

training ranges known or suspected to contain unexploded ordnance and

other hazardous constituents have already been transferred from DOD

control, and many more are in the process of being transferred, and the

risks from many of these have not been adequately assessed. The letter

went on to state that risks correspondingly increase as ranges that were

once remote are encroached by development or as the public increases its

use of these properties. An example of the development of sites adjacent

to training ranges is the planned construction of two schools and a

stadium by the Cherry Creek School District adjacent to the Lowry

Bombing Range, a transferred range, near Denver. Construction is

expected to begin in May 2001.

Most training range contamination is a result of weapons systems testing

and troop training activities conducted by the military services.

Unexploded ordnance consists of many types of munitions, including hand

grenades, rockets, guided missiles, projectiles, mortars, rifle grenades, and
Page 12 GAO-01-479 Training Range Cleanup

bombs. Figure 2 shows examples of some of the typical unexploded

ordnance that has been removed from training ranges.

Figure 2: Examples of Unexploded Ordnance Found on Training Ranges

Source: U.S. Army Corps of Engineers.

Risks from this unexploded ordnance can encompass a wide range of

possible outcomes or results, including bodily injury or death, health risks

associated with exposure to chemical agents, and environmental

degradation caused by the actual explosion and dispersal of chemicals or

other hazardous materials to the air, soil, surface water, and groundwater.

For example, according to an EPA report,10 EPA surveyed 61 current or

former DOD facilities containing 203 inactive, closed, transferred, and

transferring ranges and identified unexploded ordnance “incidents” at 24

facilities. These incidents included five accidental explosions, which

resulted in two injuries and three fatalities. According to an EPA official,

the three fatalities identified in their limited survey were two civilian DOD

contractors and one military service member.

 10Used or Fired Munitions and Unexploded Ordnance at Closed, Transferred, and

Transferring Military Ranges (September 2000, EPA 505-R-00-01).
Page 13 GAO-01-479 Training Range Cleanup

Although DOD reported its unexploded ordnance cleanup liability on

training ranges at about $14 billion in its fiscal year 2000 agencywide

financial statements, it is likely that the financial statements are

substantially understated. Further, significant cleanup costs will not be

included in the planned March 2001 report. DOD officials and Members of

Congress have expressed concern over the potential liability the

government may be faced with but are still uncertain how large the

liability may be. Various estimates have shown that cleanup of closed,

transferred, and transferring training ranges could exceed $100 billion. For

example:

• In preparation for DOD’s planned issuance of the Range Rule,11 DOD began

an analysis of the potential costs that may be incurred if the Rule was

implemented. The Rule was intended to provide guidance to perform

inventories and provide cleanup procedures at closed, transferred, and

transferring ranges. The Rule was withdrawn in November 2000 and the

cost analysis was never formally completed. However, a senior DOD

official said that initial estimates in the cost analysis that was developed in

2000 put the cleanup costs of training ranges at about $40 billion to

$140 billion for closed, transferred, and transferring training ranges.

• DOD estimated that its potential liability for cleanup of unexploded

ordnance might exceed $100 billion as noted in a conference report to the

National Defense Authorization Act for Fiscal Year 2001 (Report 106-945,

October 6, 2000).

DOD will not respond fully to the Senate Report request for reporting the

costs of cleaning up unexploded ordnance on its training ranges. DOD

officials informed us that due to time constraints, the training range

liability to be reported in the March 2001 report would not be complete or

comprehensive because the required information could not be collected in

time for analysis and reporting. A DUSD(ES) official said that the March

2001 report will include a discussion of the limitations and omissions.

DOD officials stated that they have deferred the collection and analysis of

 11DOD’s Range Rule was a proposed regulation that defined a process to identify closed,

transferred, and transferring ranges and address risk to human health and the environment

posed by unexploded ordnance on these ranges. The Office of Management and Budget,

EPA, and federal land managers were extensively involved in the rulemaking process. On

November 13, 2000, DOD withdrew the Range Rule from the rulemaking process because

DOD, EPA, and federal land managers could not reach consensus on several key issues

including how explosives safety would be handled under the Rule, concurrence on

remedial actions, and who decides the remedy.

DOD’s Reported

Cleanup Costs Are

Likely Substantially

Understated

Significant Cleanup Costs

Will Not Be Reported in

the March 2001 Report
Page 14 GAO-01-479 Training Range Cleanup

key data elements. Some of the items that were excluded are the costs to

clean up the soil and groundwater resulting from unexploded ordnance

and constituent contamination. These omitted costs could be significant.

Further, the March 2001 report will not include information on water

ranges. DOD’s 1996 Regulatory Impact Analysis12 reported that DOD had

approximately 161 million acres of water training ranges, almost 10 times

the size of the estimated closed, transferred, and transferring land ranges.

In commenting on a draft of this report, DOD stated that the 161 million

acres of water ranges are active training ranges, the majority of which are

open-ocean, deep water, restricted access areas and most are outside the

territorial waters of the United States. DOD also stated that the majority of

water ranges are not likely to cause an imminent and substantial danger to

public health and safety or the environment. However, until a complete

and accurate inventory is performed, DOD will be unable to determine

whether some water ranges meet the reporting requirement of SFFAS No.

5 and, thus, must be reported in the financial statements.

The DOD Comptroller has revised the DOD Financial Management

Regulation to clarify DOD’s fiscal year 2000 financial statement reporting

requirements for training range cleanup costs. The revision includes

guidance that requires the reporting of the cleanup costs of closed,

transferred, and transferring ranges as liabilities in the financial

statements. DOD has indicated that the costs to clean up these training

ranges is probable and measurable and as such should be reported as a

liability in the financial statements. We concur with DOD that these costs

should be reported in the financial statements as liabilities because they

are probable and measurable.

Specifically, they are probable because DOD is legally responsible for

cleaning up closed, transferred, and transferring ranges which were

contaminated as a result of past DOD action. For example, under SARA,

DOD is responsible for the cleanup of sites that create an imminent and

substantial danger to public health and safety or the environment. In

addition, these training range cleanup efforts are measurable. DOD has

prior experience in training range cleanup under the formerly used

 12DOD’s 1996 Regulatory Impact Analysis was an analysis of the estimated costs to

implement the Range Rule when it was first proposed in 1997. As stated earlier, a recent

analysis was never formally completed due to DOD’s withdrawal of the Range Rule.

Financial Statement

Liability Also Understated
Page 15 GAO-01-479 Training Range Cleanup

defense sites program and has used this experience to develop a

methodology to estimate future cleanup costs. However, as explained later

in this report, DOD has not based its reported financial statement liability

for cleanup of these ranges on a complete inventory or consistent cost

methodology, resulting in estimates that range from $14 billion to over

$100 billion.

In addition, we believe that certain active and inactive sites may have

contamination that should also be recorded as a liability in the financial

statements because these sites meet criteria in federal accounting

standards for recording a liability. The DOD Financial Management

Regulation does not include instructions for recognizing a liability for

training range cleanup costs on active and inactive ranges in the financial

statements. Although cleanup of active and inactive ranges would not

generally be recognized as a liability in the financial statements, there are

circumstances when an environmental liability should be recognized and

reported for these ranges. A liability should be recognized on active and

inactive ranges if the contamination is government related, the

government is legally liable, and the cost associated with the cleanup

efforts is measurable. For example, contaminants from an active training

range at the Massachusetts Military Reservation threaten the aquifer that

produces drinking water for nearby communities. The problem was so

severe that in January 2000, EPA issued an administrative order under the

Safe Drinking Water Act requiring DOD to cleanup several areas of the

training range. According to a DOD official, the cleanup effort could cost

almost $300 million. As a result, the cleanup of this contamination is

probable (since it is legally required) and measurable. Thus, this liability

should be recognized in the financial statements under SFFAS No. 5.

Although DOD and the services have collected information on other

environmental contamination under the Defense Environmental

Restoration Program for years, they have not performed complete

inventories of training ranges to identify the types and extent of

contamination present. To accurately compute the training range

liabilities, the military services must first perform in-depth inventories of

all of their training ranges. Past data collection efforts were delayed

because the services were waiting for the promulgation of the Range Rule

which has been withdrawn. DOD recently began collecting training range

data to meet the reporting requirements for the Senate Report. However,

as stated previously, DOD has limited its data collection efforts and will

not be reporting on the cleanup of water ranges or the unexploded

ordnance constituent contamination of the soil and water.

Training Range

Inventories Are Not

Complete
Page 16 GAO-01-479 Training Range Cleanup

The Army, under direction from DUSD(ES), proposed guidance for the

identification of closed, transferred, and transferring ranges with the

preparation and attempted promulgation of the Range Rule. In anticipation

of the Range Rule, DOD prepared a Regulatory Impact Analysis report in

1996, recognizing that the cleanup of its closed, transferred and

transferring training ranges was needed and that the cleanup costs could

run into the tens of billions of dollars.

To address inventories of its active and inactive ranges, DOD issued

Directive 4715.11 for ranges within the United States and Directive 4715.12

for ranges outside the United States in August 1999. These directives

required that the services establish and maintain inventories of their

ranges and establish and implement procedures to assess the

environmental impact of munitions use on DOD ranges. However, the

directives did not establish the guidance necessary to inventory the ranges

nor establish any completion dates. Although the directives assigned

responsibility for developing guidance to perform the inventories, DOD

has not developed the necessary guidance specifying how to gather the

inventory information or how to maintain inventories of the active and

inactive training ranges.

Since fiscal year 1997, federal accounting standards have required the

recognition and reporting of cleanup costs, as mentioned earlier. However,

DOD did not report costs for cleaning up closed, transferred, and

transferring training ranges until the services estimated and reported the

training range cleanup costs in DOD’s agencywide financial statements for

fiscal year 1999. Agencywide financial statements are prepared in

accordance with the DOD Financial Management Regulation, which is

issued by the DOD Comptroller and incorporates Office of Management

and Budget guidance on form and content of financial statements.

In an attempt to comply with the mandates in the Senate Report, DOD

embarked on a special effort to collect training range data necessary to

estimate potential cleanup costs. The Senate Report directed DOD to

report all known projected unexploded ordnance remediation costs,

including training ranges, by March 1, 2001, and to report subsequent

updates in the Defense Environmental Restoration Program annual report

to Congress. While the Senate Report did not expressly direct DOD to

identify an inventory of training ranges at active facilities, installations

subject to base realignment and closure, and formerly used defense sites,

the data necessary to fully estimate costs of unexploded ordnance—

normally located on training ranges—could only be attained in

Previous Inventory

Initiatives

Senate Report Expedited

DOD Inventory Data

Collection
Page 17 GAO-01-479 Training Range Cleanup

conjunction with the performance of a complete and accurate inventory

that includes training ranges.

Although the Senate Report’s directives were dated May 1999, DOD did not

provide formal guidance to the services for collecting training range data

until October 2000—17 months later. As a first step in February 2000, the

Under Secretary of Defense for Acquisition, Technology, and Logistics

assigned the responsibility to the Office of the Director of Defense

Research and Engineering, in coordination with DUSD(ES), for obtaining

the range data and preparing the report. On October 23, 2000, DUSD(ES)

issued specific guidance to the military services instructing them to gather

range information and detailing some of the specific information needed.

Although DOD instituted an Unexploded Ordnance Inventory Working

Group in March 2000 to work with the services to develop specific

guidance, service officials told us that DOD had not clearly told them what

was required or when it was required until shortly before the official

tasking was issued on October 23, 2000. Once officially tasked to gather

range information, the services were given until January 5, 2001, to gather

and provide it to DOD for analysis by a DOD contractor.

Lacking specific guidance from DOD to inventory their ranges, but

recognizing that they would eventually be tasked to gather range

information in anticipation of the Range Rule or for the Senate Report,

each of the services developed its own survey questionnaires to begin

gathering range information before the formal guidance was issued. The

Navy took a proactive approach and began developing a questionnaire in

late 1999. The questionnaire was issued to the Navy commands in

December 1999. The Army and the Air Force also developed their own

questionnaires and issued them in September 2000. Because the formal

guidance was issued after the services had begun their initial data

collection, the services had to collect additional data from their respective

units or other sources. According to DOD officials, the training range

inventory information gathered from these questionnaires for the March

2001 report will also be used in the future as a basis for financial statement

reporting.

Although the scope of ranges in the United States and its territories is not

fully known—because DOD does not have a complete inventory of

training ranges—DOD estimates that over 16 million acres of land on

closed, transferred, and transferring ranges are potentially contaminated

with unexploded ordnance. DOD also estimates that it has about 1,500

contaminated sites. Many former military range sites were transferred to

Range Identification Is

Difficult and Costly
Page 18 GAO-01-479 Training Range Cleanup

other federal agencies and private parties. Training ranges must be

identified and investigated to determine type and extent of contamination

present, risk assessments performed, cleanup plans developed, and

permits obtained before the actual cleanup is begun. These precleanup

costs can be very expensive. For example, the Navy estimates that these

investigative costs alone are as much as $3.96 million per site.

Identifying the complete universe of current and former training ranges is

a difficult task. Ranges on existing military bases are more easily

identifiable and accessible. More problematic, however, are those ranges

that were in existence decades ago, that have been transferred to other

agencies or the public, and records of the ranges’ existence or the

ordnance used cannot always be found. Special investigative efforts may

be necessary to identify those locations and ordnance used. In preparing

for World War I and World War II, many areas of the country were used as

training ranges. In some instances, documentation on the location of

and/or the types of ordnance used on these ranges is incomplete or cannot

be found. For example, unexploded ordnance was unexpectedly found by

a hiker in 1999 at Camp Hale in Colorado, a site used for mountain training

during World War II and since transferred to the U.S. Forest Service.

Because additional live rifle grenades were found in 2000, the Forest

Service has closed thousands of acres of this forest to public use pending

further action. This site also serves as an example of the difficulty in

identifying and cleaning up unexploded ordnance in rough mountain

terrain and dense ground cover.

In addition to not having an accurate and complete inventory of its

training ranges, DOD has just recently focused on development of a

consistent methodology for estimating its training range cleanup cost

estimates. However, DOD is using different methodologies for estimating

cleanup costs for the annual financial statements and the March 2001

report. While DOD is using a standard methodology for estimating and

reporting its cleanup costs for the March 2001 report, that methodology

was not used to estimate the training range cleanup costs for the fiscal

year 2000 financial statements. In addition, each of the services is using

different methodologies for calculating cleanup cost estimates for

reporting its liabilities in the financial statements. Without a consistent

methodology, cleanup costs reported in the financial statements and other

reports will not be comparable and have limited value to management

when evaluating cleanup costs of each the services’ training ranges and

budgeting for the future.

Cost Methodologies

Are Inconsistent
Page 19 GAO-01-479 Training Range Cleanup

Because the military services do not apply a consistent cost methodology

to compute the liabilities for their financial statements, any comparison

among the training range liabilities across the services will not be

meaningful. DOD is reporting a liability of about $14 billion for fiscal year

2000 for cleaning up closed, transferred, and transferring training ranges.

Of the $14 billion, the Navy is reporting a liability of $53.6 million. The

Navy, based on limited surveys completed in 1995 through 1997, estimated

the number and size of its training ranges and applied a $10,000 an acre

cleanup cost factor to compute its liability. The Navy based its estimates

on the assumption of cleaning up its closed, transferred, and transferring

ranges to a “low” cleanup/remediation level. The low cleanup/remediation

level means that the training ranges would be classified as “limited public

access” and be used for things such as livestock grazing or wildlife

preservation, but not for human habitation.

The Army recognized the largest training range cleanup liability for fiscal

year 2000. It reported a $13.1 billion liability for cleaning up closed,

transferred, and transferring ranges. The $13.1 billion was comprised of

$8 billion to clean up transferred ranges, $4.9 billion for the cleanup of

closed ranges, and $231 million for the cleanup of transferring ranges.13

The Army used an unvalidated cost model to compute the $8 billion costs

of cleaning up transferred ranges and used a different cost methodology

for estimating the $4.9 billion for closed ranges. The Air Force reported a

liability of $829 million for both fiscal years 1999 and 2000 based on a 1997

estimate of 42 closed ranges, using a historical cost basis for estimating its

liability.

According to DOD officials, DOD has standardized its methodology for

estimating and reporting the unexploded ordnance cleanup costs that will

be reported in the March 2001 report. DOD’s cost model used to compute

the unexploded ordnance cleanup costs from its training ranges has not

been validated. The original cost model was initially developed by the Air

Force in 1991 and has been used by government agencies and the private

sector to estimate other environmental cleanup costs not associated with

training range cleanup. A new module was recently added to the cost

model to estimate costs for removing unexploded ordnance and its

 13The amount reported for transferred and transferring ranges included the cleanup of

nontraining range sites containing unexploded ordnance, such as ordnance disposal sites

and ordnance manufacturing facilities.

Fiscal Year 2000 Financial

Statement Liabilities

DOD Used a Standard Cost

Methodology for March

2001 Report
Page 20 GAO-01-479 Training Range Cleanup

constituents from former training ranges. The new module uses cost data

developed by the U.S. Army Corps of Engineers from past experiences in

cleaning up training ranges on formerly used defense sites.

DOD officials told us that they believe that this model is the best one

available to compute the cleanup costs. However, the assumptions and

cost factors used in the model were not independently validated to ensure

accurate and reliable estimates. DOD Instruction 5000.61 requires that cost

models such as this must be validated to ensure that the results produced

can be relied upon. We did not evaluate this model, but we were informed

that DOD is in the process of developing and issuing a contract to have

this model validated. A DOD official also informed us that DOD is

currently considering requiring that the cost model be used as a standard

for the military services’ valuation of their cleanup cost estimates used to

report liabilities in the financial statements.

Until DOD standardizes and validates its costing methodology used for

estimating and reporting all cleanup cost estimates for training range

cleanup and requires its use DOD-wide, it has no assurance that the

military services will compute their cleanup costs using the same

methodology. As a result, the services will in all probability continue to

produce unreliable and differing estimates for their various reporting

requirements.

DOD lacks leadership in reporting on the cleanup costs of training ranges.

DUSD(ES) was created in 1993 as the office responsible for environmental

cleanup within DOD. However, this office has focused its principal efforts

on the cleanup of other types of environmental contamination, not

unexploded ordnance. Although requirements for reporting a training

range environmental liability have existed for years, DOD has not

established adequate or consistent policies to reliably develop the cost of

the cleanup of training ranges and to oversee these costing efforts.

Similar to the problems noted previously in this report concerning the

inventory delays and lack of guidance, the Defense Science Board, in 1998,

reported that DOD had not met its management responsibility for

unexploded ordnance cleanup. It reported that there were no specific

DOD-wide unexploded ordnance cleanup goals, objectives, or

management plans. The report went on to say that unexploded ordnance

cleanup decisions are made within the individual services, where

remediation requirements are forced to compete against traditional

Lack of Leadership

and Focus Hinders

DOD Progress in

Reporting Training

Range Cleanup Costs

Defense Science Board

Findings and

Recommendations
Page 21 GAO-01-479 Training Range Cleanup

warfighting and toxic waste cleanup requirements. This competition has

resulted in unexploded ordnance cleanup efforts being relegated to

“house-keeping duties” at the activity or installation level, according to the

Board’s report.

To address DOD’s unmet management responsibilities for unexploded

ordnance cleanup, the Defense Science Board recommended the

establishment of an Office of Secretary of Defense focal point for

oversight of unexploded ordnance cleanup activities within DOD. This

recommendation was made even though DUSD(ES) had overall

responsibility for environmental cleanup under the Defense

Environmental Restoration Program. According to the Director of DOD’s

Environmental Cleanup Program, a single focal point for managing the

cleanup of unexploded ordnance has still not been formally designated. A

focal point with the appropriate authority could be a single point of

contact who could manage and oversee the development of a complete

and accurate training range inventory, the development of a consistent

cost methodology across all services, and the reporting of the training

range liability for the financial statements and other required reports.

The Department of Energy (DOE) has been successful in its identification

and reporting of thousands of environmentally contaminated sites, with

cleanup liabilities reported at $234 billion in fiscal year 2000. Initially, in

the early 1990s, DOE was unable to report the estimated cleanup costs.

However, through substantial effort and support of DOE leadership, DOE

was able to receive a clean, or unqualified, audit opinion,14 for its fiscal

year 1999 and 2000 financial statements. DOE’s efforts provide a useful

example to DOD in its efforts to identify and report cost estimates on its

contaminated sites.

After 50 years of U.S. production of nuclear weapons, DOE was tasked

with managing the largest environmental cleanup program in the world.

DOE has identified approximately 10,500 release sites from which

contaminants could migrate into the environment. DOE has made

substantial progress in defining the technical scope, schedules, and costs

of meeting this challenge, and in creating a plan to undertake it. DOE

 14An unqualified, or clean, audit opinion means that the auditor believes that information

presented in the financial statements as a whole is presented fairly, in all material respects,

in accordance with generally accepted accounting principles.

Department of Energy

Process to Identify and

Estimate the Cost to Clean

Up Hazardous Waste Sites

Provides a Useful Example
Page 22 GAO-01-479 Training Range Cleanup

officials told us that in order to build a reliable database and management

program for contaminated sites, the process requires a significant

investment in time and manpower.

DOE officials stated that they began their data collection and management

program process in the early 1990s and are continuing to build and update

their database. However, they emphasized that their efforts, similar to

DOD’s current efforts, started with an initial data call to collect

preliminary information to identify the sites. They said the next step

involved sending teams to each of the sites to actually visit and observe

the site, sometimes taking initial samples, to further identify and confirm

the contaminants, and to help assess the risk associated with the site

contamination. The information gathered was entered into a central

database in 1997 to be used for management and reporting purposes. In

1999, DOE completed entering baseline data for all known cleanup sites.

In addition to the above steps, once a site was selected for cleanup, a

much more involved process was done to further test for and remove the

contaminants. However, until a site is fully cleaned up, each site is

reviewed and cost estimates are reviewed annually and any changes in

conditions are recorded in the central database.

DOE officials told us that in addition to providing the necessary leadership

and guidance to inventory and manage their sites, another key to this

success was establishing a very close working relationship between the

program office and the financial reporting office to ensure consistent and

accurate reporting of their cleanup liabilities.

As military land, including training ranges, is transferred to the public

domain, the public must have confidence that DOD has the necessary

leadership and information to address human health and environmental

risks associated with training range cleanup. Also, the Congress needs

related cost information to make decisions on funding needed. DOD’s

recent efforts to develop the information needed to report training range

cleanup costs for the required March 2001 report represent an important

first step in gathering the needed data. However, accurate and complete

reporting can only be achieved if DOD compiles detailed inventory

information on all of its training ranges and uses a consistent and valid

cost methodology. Because of the complexity of the data gathering

process and the many issues involved in the cleanup of training ranges, top

management leadership and focus is essential. A senior-level official with

appropriate management authority and resources is key to effectively

Conclusions
Page 23 GAO-01-479 Training Range Cleanup

leading these efforts to produce meaningful and accurate reports on

training range cleanup costs.

We recommend that the Secretary of Defense designate a focal point with

the appropriate authority to oversee and manage the reporting of training

range liabilities.

We also recommend that the Secretary of Defense require the designated

focal point to work with the appropriate DOD organizations to develop

and implement guidance for inventorying all types of training ranges,

including active, inactive, closed, transferred, and transferring training

ranges. We recommend that this guidance, at a minimum, include the

following requirements:

• key site characterization information for training ranges be collected for

unexploded ordnance removal;

• identification of other constituent contamination in the soil and/or water;

• performance time frames, including the requirements to perform the

necessary site visits to confirm the type and extent of contamination; and

• the necessary policies and procedures for the management and

maintenance of the inventory information.

We further recommend that the Secretary of Defense require the

designated focal point to work with the appropriate DOD organizations to

develop and implement a consistent and standardized methodology for

estimating training range cleanup costs to be used in reporting its training

range cleanup liabilities in DOD’s agency-wide annual financial statements

and other reports as required. In addition, we recommend that the

Secretary of Defense require that the designated focal point validate the

cost model in accordance with DOD Instruction 5000.61.

Further, we recommend that the Secretary of Defense require the DOD

Comptroller to revise the DOD Financial Management Regulation to

include guidance for recognizing and reporting a liability in the financial

statements for the cleanup costs on active and inactive ranges when such

costs meet the criteria for a liability found in the federal accounting

standards.

Recommendations
Page 24 GAO-01-479 Training Range Cleanup

In commenting on a draft of this report, DOD stated that it has made

significant progress in estimating and reporting environmental liabilities

on its financial statements; however, much work remains to be done.

DOD’s response also indicated that as the department increases its

knowledge related to this area, the appropriate financial and functional

policies will be updated to incorporate more specific guidance for

recognizing and reporting environmental liabilities.

DOD concurred with our recommendations, but provided several

comments in response to our recommendation that the Secretary of

Defense require the DOD Comptroller to revise the DOD Financial

Management Regulation to include guidance for recognizing and reporting

a liability in the financial statements for the cleanup costs on active and

inactive ranges when such costs meet the criteria for a liability.

DOD stated that it revised Volume 6B, Chapter 10, of the DOD Financial

Management Regulation to clarify instances when a liability should be

recognized for an active or inactive range on an active installation.

However, this revision of the DOD Financial Management Regulation does

not address the recognition of an environmental liability at active and

inactive ranges in accordance with the criteria of SFFAS No. 5. For

example, as stated in our report, the total $300 million cleanup cost

estimate on the active range at the Massachusetts Military Reservation

should be recognized as a liability in accordance with the criteria in

SFFAS No. 5.

DOD further stated that since it intends to continue to use its active and

inactive ranges in the foreseeable future, the removal of ordnance to

maintain safety and usability is considered an ongoing maintenance

expense. DOD stated that this expense is not accrued as a liability except

in those few specific instances in which an environmental response

action—beyond what is necessary to keep the range in operation—is

probable and the costs of such a response is measurable. Although this

position is consistent with SFFAS No. 5, it is not specifically indicated in

the DOD Financial Management Regulation.

Finally, DOD stated that as the Department gains additional experience in

this area, it will review appropriate chapters in the DOD Financial

Management Regulation to determine what, if any, additional specific

guidance may need to be included regarding recognizing and reporting

liabilities. While we agree that such a review is appropriate, we continue

to recommend that the DOD Financial Management Regulation be revised

Agency Comments

and Our Evaluation
Page 25 GAO-01-479 Training Range Cleanup

to include guidance in those instances when active and inactive ranges

meet the criteria in SFFAS No. 5.

DOD also provided several technical comments, which we have

incorporated in the report as appropriate.

We are sending copies of this report to the Honorable John Spratt,

Ranking Minority Member, House Committee on the Budget, and to other

interested congressional committees. We are also sending copies to the

Honorable Donald H. Rumsfeld, Secretary of Defense; the Honorable

David R. Oliver, Acting Under Secretary of Defense for Acquisition,

Technology, and Logistics; and the Honorable Mitchell E. Daniels, Jr.,

Director of the Office of Management and Budget. Copies will be made

available to others upon request.

Please contact me at (202) 512-9095 if you or your staff have any questions

about this report. Other GAO contacts and key contributors to this report

are listed in appendix III.

Sincerely yours,

Gregory D. Kutz

Director

Financial Management and Assurance
Appendix I: Objectives, Scope, and

Methodology

Page 26 GAO-01-479 Training Range Cleanup

Our objectives were to review DOD’s ongoing efforts to (1) gather and

collect information on its training ranges and issues affecting the

successful completion of the inventory and (2) recognize environmental

liabilities associated with the cleanup of unexploded ordnance from its

training ranges, including DOD’s efforts to develop and implement a

methodology to develop cost estimates. The focus of our review was on

DOD efforts to gather and collect information on its training ranges and

the environmental costs associated with the cleanup of the training ranges.

As a result, other sites containing unexploded ordnance were not included

in the scope of our review. These sites include munitions manufacturing

facilities, munitions burial pits, and open burn and open detonation sites

used to destroy excess, obsolete, or unserviceable munitions. To

accomplish these objectives, we:

• reviewed relevant standards and guidance applicable to environmental

liabilities including Statement of Federal Financial Accounting Standards

(SFFAS) No. 5, Accounting for Liabilities of the Federal Government;

SFFAS No. 6, Accounting for Property, Plant, and Equipment; and DOD

Financial Management Regulation, Volume 6B, Chapter 10, and Volume 4,

Chapters 13 and 14;

• reviewed DOD guidance to the military services for performing the

training range inventory survey;

• reviewed the military services’ survey documents used to collect

information on training ranges;

• interviewed officials from the Deputy Under Secretary of Defense for

Environmental Security (DUSD(ES)); Director Defense Research and

Engineering; U.S. Army Corps of Engineers; and the Army, Navy, and Air

Force involved in planning and conducting the data collection efforts and

analyzing the data;

• interviewed an official from the Office of the Under Secretary of Defense

(Comptroller);

• interviewed officials from the U.S. Environmental Protection Agency;

• interviewed environmental officials from the states of Colorado and

Alabama;

• interviewed officials from the Department of Energy;

• interviewed the contractor selected by DOD, which assisted in planning

and analyzing the data and preparing the cost analysis for the March 2001

report; and

• visited two locations—Lowry Bombing Range, Denver, and Ft. McClellan,

Anniston, Alabama—to gain insight into the complexities involved in

estimating liabilities for training range cleanup.

Appendix I: Objectives, Scope, and

Methodology
Appendix I: Objectives, Scope, and

Methodology

Page 27 GAO-01-479 Training Range Cleanup

We did not audit DOD’s financial statements and therefore we do not

express an opinion on any of DOD’s environmental liability estimates for

fiscal year 1999 or 2000. We conducted our work in accordance with

generally accepted government auditing standards from May 2000 through

March 2001. On March 29, 2001, DOD provided us with written comments

on our recommendations, which are discussed in the “Agency Comments

and Our Evaluation” section and are reprinted in appendix II. DOD also

provided comments on several other matters, which we have incorporated

in the report as appropriate but have not reprinted.
Appendix II: Comments From the Department

of Defense

Page 28 GAO-01-479 Training Range Cleanup

Appendix II: Comments From the

Department of Defense
Appendix II: Comments From the Department

of Defense

Page 29 GAO-01-479 Training Range Cleanup
Appendix II: Comments From the Department

of Defense

Page 30 GAO-01-479 Training Range Cleanup
Appendix II: Comments From the Department

of Defense

Page 31 GAO-01-479 Training Range Cleanup
Appendix II: Comments From the Department

of Defense

Page 32 GAO-01-479 Training Range Cleanup
Appendix II: Comments From the Department

of Defense

Page 33 GAO-01-479 Training Range Cleanup
Appendix III: GAO Contact and

Staff Acknowledgments

Page 34 GAO-01-479 Training Range Cleanup

Dianne Guensberg, (202) 512-5285

Staff making key contributions to this report were Paul Begnaud, Roger

Corrado, Francine DelVecchio, and Stephen Donahue.

Appendix III: GAO Contact and Staff

Acknowledgments

GAO Contact

Acknowledgments

(918991)
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