United States General Accounting Office

GAO Report to Congressional Requesters

May 1997 ENVIRONMENTAL

PROTECTION

Status of Defense

Initiatives for Cleanup,

Technology, and

Compliance

GAO/NSIAD-97-126

GAO United States

General Accounting Office

Washington, D.C. 20548

National Security and

International Affairs Division

B-276461 

May 29, 1997

The Honorable James M. Inhofe

Chairman

The Honorable Charles S. Robb

Ranking Minority Member

Subcommittee on Readiness

Committee on Armed Services

United States Senate

The Department of Defense (DOD) spends about $5 billion annually to

fulfill its environmental mission. In response to your February 3, 1997,

request, we examined selected aspects of DOD’s environmental mission.

Specifically, this report addresses (1) the time lag between obligations and

expenditures for environmental cleanup and its impact on achieving actual

cleanup, (2) the basis for funding overseas cleanup, (3) DOD proposal to

enter into multistate cooperative agreements for technology certification,

and (4) DOD’s need for and efforts toward uniform tracking and

management of programs involving compliance with environmental laws

and regulations.

Background DOD and other federal facilities are subject to the same environmental,

safety, and health laws and regulations as private industry. To fulfill its

environmental mission, DOD organized its program into five elements:

compliance, cleanup, conservation, pollution prevention, and technology.

This report covers three elements that use about $4.2 billion (90 percent)

of DOD’s approximately $4.6 billion funding for environmental protection

for fiscal year 1997. They are

• cleanup ($2 billion), which includes identification, investigation, and

cleanup of contamination from hazardous substances and waste on active,

closing, and formerly used DOD sites;

• technology ($0.2 billion), under which DOD invests in research,

development, demonstration, and validation of new technologies to

support the other elements of its environmental program; and

• compliance ($2 billion), which ensures adherence to environmental laws

and regulations of federal, state, and local jurisdictions. DOD funds

domestic cleanup primarily from the Defense Environmental Restoration

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Account (DERA).1 Other environmental activities such as overseas cleanup,

technology certification, and environmental compliance, are funded

directly from several appropriation accounts, primarily operations and

maintenance. In August 1996, we reported on the status of major defense

initiatives for cleanup, technology, and compliance.2

Results in Brief Of the $1.413 billion made available for environmental cleanup through the

fiscal year 1996 Defense Environmental Restoration Account, DOD reported

that it obligated $1.409 billion by the end of that fiscal year, and expended

$385 million. As a result, reported expenditures for actual cleanup have

not proceeded as rapidly as the obligations shown in DOD’s annual cleanup

report to Congress.

The primary reasons cited by the defense components for cleaning up

overseas sites have been responses to concerns about U.S. personnel

health and safety, and compliance with host nation laws or agreements

and U.S. standards. Defense components reported that $102 million had

been obligated for overseas cleanup during fiscal years 1993-96.

DOD told us that it plans to enter into cooperative agreements with states

and local governments regarding the certification of environmental

technologies. DOD identified candidate technologies for such agreements

and expects to sign the first agreement by the end of fiscal year 1997. DOD

officials have not estimated the costs for expected cooperative agreements

in fiscal years 1997 or 1998 because they do not view the use of these

agreements as a separate program and they expect cost savings to offset

expenditures.

DOD compliance project and cost data, as reported in the 1996

Environmental Quality Annual Report to Congress, are not complete or

accurate. The DOD-wide funding totals for environmental compliance did

not account for all funds or major projects. The report omitted about

$250 million in funding and failed to include some major Navy projects.

Also, compliance activities with widely varying characteristics are now

being combined in DOD’s classification categories. Projects with

1

Most DOD cleanup actions are funded through DERA and the Base Realignment and Closure (BRAC)

account. Congress established DERA in 1984 to fund the cleanup of old contamination sites on active

DOD installations and formerly used defense sites, and it later established the BRAC account for

closing installations. For fiscal year 1997, the reported DERA funding totaled $1.3 billion, and BRAC

expenditures totaled $0.7 billion. BRAC expenditures were discussed in Military Bases: Potential

Reductions to the Fiscal Year 1997 Base Closure Budget (GAO/NSIAD-96-158, July 7, 1996).

2

Environmental Protection: Status of Defense Initiatives for Cleanup, Compliance, and Technology

(GAO/NSIAD-96-155, Aug. 2, 1996).

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compliance milestones in the year 2000 and beyond are now included with

installations already out of compliance. Thus, DOD, the Environmental

Protection Agency, and Congress lack the data for environmental

compliance they need to conduct oversight functions. Because DOD has

indicated a reluctance to take the necessary actions to correct the

problems noted in the report, we are suggesting that Congress may wish to

consider requiring DOD to ensure that the problems are addressed.

DOD Funds for

Cleanup Were

Expended Over

Several Years

In response to our and Congress’ concerns, DOD reported that

environmental funds obligated for actual cleanup at active installations

and formerly used defense sites reached about 61 percent in fiscal year

1995 and were projected to reach about 74 percent in fiscal year 1997.3

Although DOD reported obligating increasing amounts of funds for actual

cleanup activities, a significant portion of these funds will not actually be

expended until after the year of obligation. Officials from the Office of the

Secretary of Defense (OSD) stated that the expenditure of these funds is

based on the amount of work that is completed satisfactorily by

contractors.4

 Expenditures are made after a contractor completes a

portion of the contract and submits a bill for the work done, and the

government validates the bill and writes a check to pay it.

Table 1 shows that funds appropriated to DERA for fiscal years 1990-95 are

reported by the defense components as expended over a period of years,

with less than 30 percent expended in the year of appropriation, except for

fiscal year 1995.5 DOD officials told us that the expenditure rates were

generally better than the first-year expenditure rate of 22 percent, which

was established as reasonable in a December 1993 joint Office of

Management and Budget and Congressional Budget Office letter on outlay

rates. OSD officials stated that the expenditure data were obtained from

requests to defense components—the Army, the Navy, the Marine Corps,

the Air Force, and the Defense Logistics Agency (DLA)—for data because

OSD lacks direct access to such defense component reported expenditures.6

3

This figure was taken from the President’s budget submission for fiscal year 1997.

4

We use the term expenditure to refer to the amount of checks issued or other payments made. DOD’s

July 1996 Financial Management Regulation indicates that the terms disbursement, outlay, and

expenditure may be used interchangeably.

5

DOD officials told us that the percent for this year may be higher than in other years because of

rescissions. The total appropriation dropped by $300 million, causing reported expenditures for that

year to become a larger percentage of the total program funding.

6

We have issued a series of reports over the past few years documenting deficiencies in the

Department’s ability to reliably account for and report on its expenditures.

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 Expenditure data showing further breakdowns of cleanup phases, such as

study, oversight, and actual cleanup, were not available for fiscal years

1990-95 but were available for fiscal year 1996.

Table 1: Reported Expenditures From

Cleanup Funds for All Phases of

Cleanup as a Percentage of

Environmental Account

Appropriations (fiscal years 1990-95)

Percent expended Fiscal year

appropriations FY 90 FY 91 FY 92 FY 93 FY 94 FY 95 FY 96

1990 22.6 44.3 18.2 5.4 2.0

1991 21.4 43.7 18.2 4.6 a

1992 26.1 42.5 16.8 a a

1993 27.2 42.6 14.4 4.6

1994 24.5 40.0b 15.0

1995 37.1 32.8

aThe fiscal year 1995 and 1996 expenditure data for the fiscal year 1991 and 1992 appropriation

years were not available at the time of our review.

bAccording to OSD, the Army’s portion of expenditures for this year was estimated based on input

from other defense components and Army data before and after the fiscal year 1995 time frame.

Source: Office of the Deputy Under Secretary of Defense for Environmental Security.

In fiscal year 1996, the defense components and the Defense Finance and

Accounting Service (DFAS) began preparing reports on the components’

accountability for environmental restoration funds. A specific goal for

establishing the reporting requirement was to track expenditures by

phase, such as cleanup in the year of appropriation and subsequent fiscal

years. DFAS data did not include all reported obligations in its first report.

However, it did account for $1.2 billion of the $1.4 billion reported

amounts obligated by DOD in fiscal year 1996 and $325 million of the

$385 million reported expenditures by DOD. Table 2 shows the fiscal 

year 1996 DERA expenditure plan in the fiscal year 1997 President’s budget

submission and the end-of-year obligations and expenditures for fiscal

year 1996 by phase, as reported by DFAS.

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Table 2: Reported Obligations and

Expenditures as a Percentage of DERA

Funding for Fiscal Year 1996 by Phase Budget plan Obligations Expenditures

Dollars in millions

Phase Dollars Dollars Percent Dollars Percent

Total $1,413a $1,206b 85 $325 23

Cleanup 911 757 83 176 19

Study 319 329c 103c 91 29

Oversight 183 120 65 58 32

aThe funding, as reported in the budget submission, is $2 million greater than that reported by

DFAS. The higher total includes $1.4 million carried over from prior years, which the DFAS report

does not include.

bDFAS data did not account for all obligations and expenditures.

cAlthough DFAS accounted for less than the total amount obligated, obligations for the study

phase were more than originally estimated.

Source: The President’s fiscal year 1997 budget submission for budget plan data and DFAS for

obligation and expenditure data.

According to DFAS report data as of September 30, 1996, DOD expended 

23 percent of the total $1.413 billion of the DERA budget plan in fiscal 

year 1996. The reported first-year expenditures for study and oversight,

29 and 32 percent of budget, respectively, exceeded the expenditure rate

for cleanup.

DFAS officials acknowledge that they cannot presently track detailed

breakouts, such as by cleanup phase, of all expenditure data after the first

year. Officials told us they recently identified problems in capturing Army

and Navy environmental restoration program continuing obligations and

expenditures against the fiscal year 1996 appropriation—the first reporting

year. According to DFAS, the Army’s accounting system does not allow

identification of specific program elements beyond the first year for

operation and maintenance. Although they agreed that they could provide

aggregate expenditure data, Navy officials stated their accounting system

does not permit tracking expenditures by phase of cleanup beyond the

appropriation year, and the Navy did not submit fiscal year 1996 data in

the first quarter of fiscal year 1997. The Air Force had prior difficulty

reporting expenditures but believes it has resolved the problems. OSD

officials said they were working with the Army and the Navy to resolve

these reporting problems.

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Cleanup of Overseas

Sites Is Largely for

Host Country and U.S.

Requirements

According to DOD officials, reasons for cleaning up overseas sites are to

(1) respond to known imminent and substantial endangerment to human

health and safety due to environmental contamination caused by DOD

operations; (2) ensure that U.S. forces are able to conduct operations; and

(3) respond to requirements stipulated by host nations, which are laid out

in Status of Forces Agreements or other legal authorities. The degree of

cleanup is negotiated with the host nation before starting work. DOD told

us that it uses either host nation laws as the standard for cleaning up or

U.S. standards, such as the National Contingency Plan under the

Comprehensive Environmental Response, Compensation, and Liability Act

of 1980, as amended, when host nation standards are not specified.

DOD does not routinely report overseas cleanup data, such as numbers,

values, or reasons for cleanup. In response to your 1996 inquiry, we asked

DOD to provide such information on a one-time basis. Although the data

were not complete, we believe the preliminary data provide some useful

insight. Information provided by defense components indicates that 69 of

355 overseas cleanup projects with documentation of the reason for

cleanup were based on host country laws or host nation agreements. Army

officials stated that many of the 195 cleanups for which documents did not

show a reason also related to host country laws or requirements.

Our August 1996 report provides a breakdown of the total reported

$102 million for overseas cleanup, including information on the number of

sites and projects and funding for fiscal years 1993-96 by service. Table 3

shows the basis for and number of overseas cleanup projects reported by

defense components. Host nation laws or agreements were cited as the

basis for 3 of the Army’s 7 projects for which a basis was reported and for

33 of the Navy’s 40 projects. The Marine Corps cited health risks as the

basis for projects; the Air Force cited various policies, standards,

instructions, and host nation agreements; and DLA cited U.S. responsibility

and host nation laws.

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Table 3: Overseas Cleanup Projects

Identified by Defense Component and

the Basis Cited for Cleanup (fiscal

years 1993-96)

Basis cited by service component

Component

U.S.

standards

Host nation

agreement

Host

nation law

Basis not

documented Othera Total

Army 0 0 3 195b 4 202

Navy 0 26c 7 0 7 40

Marine Corps 2 0 0 0 0 2

Air Force 56d 31e 0 0 17 104

DLA 5 0 2 0 0 7

Total 63 57 12 195 28 355

a Other category includes training requirements, surveys, and DOD and Air Force policies.

bThe Army did not report a basis for action for 195 of the 202 projects, but officials told us most, if

not all, of the Army’s overseas cleanup expenditures are based on host nation laws or

agreements.

cThese projects were based on final standards governing the cleanup, which are a combination

of the overseas environmental baseline guidance document standards, host nation laws, and

international and Status of Forces Agreements.

dOf the 56 projects, 22 were based on DOD’s Overseas Environmental Baseline Guidance

Document standards, which provide implementation guidance, procedures, and criteria for

environmental compliance at overseas installations.

eThese projects were based on the host nation’s final standards governing the cleanup.

Source: Defense components.

In reviewing data provided by the Air Force and the Navy, OSD officials

stated that there was no official DOD guidance on overseas cleanup before

late 1995. They stated that data before 1996 were not easily categorized

due to difficulties in differentiating cleanup expenses from compliance

expenses overseas. Funding for both overseas cleanup and compliance

comes from operation and maintenance funds, according to OSD officials,

and some cleanup costs, such as those that refer to Overseas

Environmental Baseline Guidance Document standards, may actually have

been compliance activities. DOD officials are reviewing Air Force and Navy

data to determine the correct basis for cleanup. Also, DOD Inspector

General officials told us that they plan to determine the basis for cleanup

as part of a planned review of overseas cleanup issues.

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Cooperative

Agreements for

Technology

Certifications Are Not

Yet Established

At OSD’s request, Congress authorized the Secretary of Defense, in fiscal

year 1997, to enter into cooperative agreements with states and local

governments to certify new environmental technologies.7

 State

environmental authorities supervise many environmental activities and

may require demonstration of a new technology before authorizing its use.

DOD officials believe state expertise can be used to address environmental

requirements cost-effectively, improve operational effectiveness, and

achieve wider acceptability of technologies. According to DOD, cooperative

agreements would provide a mechanism for several states to view a

demonstration of an environmental technology in one location and

approve and certify the technology. Under the new law, DOD officials

identified potential technologies for consideration and anticipated

entering into the first of expected cooperative agreements by the end of

fiscal year 1997. However, DOD has not estimated the costs involved in

entering into cooperative agreements because officials do not view the use

of these agreements as a separate program and they expect savings to

offset agreement costs.

Legislative Requirements

for Cooperative

Agreements

The Defense Authorization Act for Fiscal Year 1997 allows DOD to enter

into cooperative agreements for obtaining assistance in demonstrating

environmental technologies, collecting and analyzing data from those

demonstrations, and implementing quality assurance and quality control

programs.8

 The act requires that the Secretary report annually to Congress

on the number of agreements reached and the states involved, nature of

the technology involved in each agreement, and funds obligated or

expended by DOD during that year for each agreement. The Secretary’s

authority to enter into agreements terminates at the end of fiscal year

2001.

No Agreements to Date DOD has not yet entered into any cooperative agreements, but it expects to

do so by the end of September 1997. To date, DOD has not estimated costs

for agreements. DOD officials stated that they view cooperative agreements

as tools to enhance existing environmental programs rather than as a

separate program. Consequently, they told us they have not developed

documents to describe overall goals or project costs.

7

National Defense Authorization Act for Fiscal Year 1997, Public Law 104-201, September 23, 1996.

8

To qualify for a cooperative agreement, the Secretary of Defense must determine that the technology

could significantly benefit DOD and that there is no private market for the technology without

certification.

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DOD officials have not estimated costs for cooperative agreements, but

they expect any added costs to be minimal partly because the number of

technology demonstrations would be reduced. According to DOD officials,

each agreement could have different related costs, including employee

salaries for demonstration site visits, employee travel costs to

demonstration sites, and the cost of analyses required for state reciprocity.

DOD expects funding for cooperative agreements to come from projected

savings in other environmental funds.

DOD officials stated that, before the law’s enactment, they had used the

demonstration technology approach. For example, DOD worked with the

Departments of Energy and Interior, the Environmental Protection Agency

(EPA), and western states to demonstrate a system that measures

subsurface conditions. If the system is employed, the parties expect it to

reduce the number of core samples and monitoring wells needed to screen

sites effectively. In another example, the Navy worked with other federal

and state entities and a commercial company to demonstrate new methods

to clean up polychlorinated biphenyls, pesticides, and halogenated

compounds from soil, sediments, liquids, and other materials. We

requested DOD cost and milestone dates, but they stated they had no

definitive information.

Potential Technologies and

States Identified for

Cooperative Agreements

DOD has identified over 100 technologies as potential candidates under the

new law. For example, table 4 shows 12 projects in DOD’s Environmental

Security Technology Certification Program that could be developed as

cooperative agreements.9 OSD officials stated that DOD is now deciding

which technologies, potential uses, and regulatory agencies (federal, state,

or local) might be involved in demonstration projects. DOD plans to select

technologies based on urgency, acceptability, and utility, and then expects

to match validated technology needs with each location.

9

The program aims to demonstrate and validate technologies that meet DOD environmental needs and

environmental security objectives.

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Table 4: Candidates Identified by DOD

for the Use of Cooperative Agreements

as Part of Its Environmental Security

Technology Certification Program Project Demonstration state

Number of states where

technology could be

applied

Recycling of waste acids New York 5

Site characterization system Louisiana 50

Containment and recycling of small

arms ammunition

Kentucky 50

High-temperature destruction of

hazardous waste

Virginia 9

Oxidation of explosives in water Nebraska 12

Underground barrier wall California 45

Groundwater recirculation wells Massachusetts 4

Seismic detection of dense liquids Pennsylvania 50

Fuel contamination treatment California 51a

Fiber-optic sensors Washington 12

Removal of lead-based paint Illinois 51a

Water oxidation Arkansas 5

aIncludes Washington, D.C.

Source: Office of the Deputy Under Secretary of Defense for Environmental Security.

Need to Improve Data

Used for Compliance

Oversight Continues

DOD has modified its environmental reporting, but environmental

compliance project and cost data reported by the defense components in

the 1996 Environmental Quality Annual Report to Congress were not yet

complete or accurate. Environmental projects of widely varying

compliance status are being included in DOD’s compliance categories

because changes in DOD’s policy now combine previously distinct

categories and not all service data systems can provide the data for the

revised reporting categories.

DOD Initiatives to Improve

Compliance Management

Began in 1995

We and OSD have noted that DOD’s budget execution and financial reporting

do not provide DOD or Congress with the information needed to provide for

oversight of compliance. In 1995, DOD began an environmental quality

initiative to promote consistency in compliance definitions, categories,

and requirements. It planned to identify goals; strategies; budget items;

and measures of performance for compliance, conservation, and pollution

prevention. Accordingly, for the fiscal year 1998 budget planning process,

DOD’s Office of the Under Secretary of Defense for Environmental Security

established new policies and goals for classifying compliance projects and

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obtaining needed compliance data. For fiscal year 1999 planning, DOD

officials have added explanatory footnotes to budget preparation

instructions.

OSD officials stated that they asked the defense components to provide

funding breakdowns by project and environmental area (such as

compliance or pollution prevention) to support fiscal year 1998 data in

next year’s annual report for fiscal year 1996. However, they told us that

such detail may not be included in the report because data reported by the

services were not consistent and could not be standardized for reporting.

Compliance Data Are Not

Complete or Accurate

Although the environmental quality report for the first time included

individual projects at installations, the data were incomplete because they

did not account for all environmental funding or include all projects

costing $300,000 or more. For instance, the report discussed

environmental quality programs, including technology, and showed 

$2.33 billion planned for DOD’s fiscal year 1997 environmental quality

program worldwide.10 However, the President’s 1998 budget for fiscal

year 1997 totaled $2.58 billion.11

The report’s breakout of projects costing $300,000 or more omitted some

projects. Not all costs would be expected to be included in detail because

much of DOD’s spending is for recurring costs that are not project based,

and many projects fall under the report’s $300,000 threshold. However, the

Army’s, the Air Force’s, and the Marine Corps’ detailed project lists

accounted for 36, 27, and 25 percent, respectively, of the total they

planned to spend, but the Navy’s project lists accounted for only 6 percent.

Our visits to Navy locations showed that more projects were eligible to be

reported. For example, the fiscal year 1995 DOD Environmental Quality

Annual Report released in December 1996 showed that the U.S. Atlantic

Fleet planned 4 fiscal year 1997 projects costing $300,000 or more, but data

at the U.S. Atlantic Command showed 21 approved projects costing

$300,000 or more for fiscal year 1997.

The Navy reported planned spending of about $737 million for its fiscal

year 1997 U.S. environmental quality program, but it reported 56 projects

10According to DOD, its environmental quality program is divided into six major functions: planning,

compliance, pollution prevention, conservation, education and training, and environmental

technology.

11Our draft report reflected a difference of over $200 million based on the 1997 President’s budget for

fiscal year 1997, a total of $2.55 billion ($220 million greater than the $2.33 billion in DOD’s annual

report).

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costing $300,000 or more, valued at about $41 million (about 6 percent of

its reported total). In discussing this issue, Navy headquarters officials

stated that (1) most Navy projects fall under the $300,000 reporting

threshold, but the project amounts may later increase; (2) some proposed

requirements may be validated later; and (3) new requirements may arise

after approval. However, the supporting documentation we examined,

such as U.S. Atlantic Fleet project costs, indicated that although better

data were available at the time, the Navy did not provide that information

to DOD.

Also, reported summary and detailed data are not always accurate. Our

comparison of planned funding for environmental quality for fiscal 

year 1997, as estimated in DOD’s two most recent reports, varied

significantly in aggregate totals by state and other localities. DOD’s planned

environmental quality funding for fiscal year 1997 in the two most recent

reports was similar in total but varied widely for aggregations, even at the

state level. The total difference between the fiscal year 1994 report at

$2.083 billion and the fiscal year 1995 report at $2.016 billion was a

reduction of about $67 million, a difference of only 3 percent. Even though

it is reasonable to expect year-to-year differences in program estimates,

more than half of the states and localities varied by significant amounts.

Allocations for 29 states and other localities for fiscal year 1997 varied by

more than either $30 million or 30 percent from the plans as estimated in

DOD’s fiscal year 1994 report versus the fiscal year 1995 report. Data from

only nine states and other localities varied by less than 10 percent from

one report to the next. Table 5 shows the variations exceeding $10 million.

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Table 5: Fiscal Year 1997 Planned

Spending in Fiscal Year 1994 and 1995

Defense Environmental Quality

Reports

Dollars in millions

State

Fiscal year

1994 dollars

Fiscal year

1995 dollars

Dollar

difference

Percent

difference

Colorado $21.9 $33.3 $11.5 53

Connecticut 20.8 9.5 –11.3 –54

District of Columbia 234.6 172.0 –62.6 –27

Florida 100.1 63.2 –36.9 –37

Hawaii 89.8 53.7 –36.0 –40

Louisiana 31.0 16.4 –14.6 –47

Missouri 30.4 10.9 –19.5 –64

New Jersey 16.8 46.7 29.8 177

Ohio 20.9 45.7 24.8 118

Pennsylvania 26.2 39.0 12.8 49

Rhode Island 5.9 25.7 19.8 337

Virginia $344.1 $302.4 $-41.7 –12

Source: Defense Environmental Quality Program Annual Reports to Congress, Fiscal Years 1994

and 1995.

In discussing state-level variances, DOD officials told us they believe some

major changes could be attributed to practices such as initially identifying

funds for a nationwide initiative to a single headquarters unit and then

later identifying specific locations. Also, major decisions, such as closing

of bases through the base closure process, could cause some significant

changes. In addition, DOD advised us that requirements generated under

federal, state, and local environmental statutes and regulations become

effective without regard to DOD’s budget cycle, and may necessitate shifts

in funding. DOD stated the extent of variance would preclude meaningful

year-to-year comparisons of spending in different states.

Our comparison of fiscal year 1997 allotments to individual installations

with information in DOD’s December 1996 report for fiscal year 1995

showed significant differences at the selected installations. Records at

these installations showed that all had changes to their programs from that

reflected in the DOD reports. Some programs were reported with

reasonable accuracy, whereas others showed large differences in costs

and projects in the 1995 report. (Except as described below, neither we

nor DOD has followed up to reconcile the differences.) For example:

• Fort Bliss, Texas, data in DOD’s report showed $25 million planned for the

environmental quality program for fiscal year 1997, including 21 projects

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costing over $300,000 or more each, totaling $14.5 million. Data at that

location in January 1997 showed only $18.8 million for the fiscal year 1997

environmental quality program. Of the original 21 projects, 4 were

discontinued, 3 were deferred, 4 were funded early, and 4 were funded at

less than $300,000, the minimum for inclusion in the report. In addition,

seven new projects were added at a reported total cost of $4.4 million.

• DOD’s report showed $24 million in expenditures at Navy Public Works

Center, Norfolk, Virginia, for fiscal year 1996, but data at the Center

showed it had spent only about $9.5 million for that period. An installation

official said that the Center had incorrectly reported its fiscal year 1996

program to higher levels. We requested, but have not received, data on

planned projects costing $300,000 or more for fiscal year 1997.

• Data in DOD’s report from Quantico Marine Corps Base, Virginia, showed a

total of $22.5 million. The total was $5.9 million higher than the

$16.6 million that service officials reported. The Navy, which coordinates

Marine Corps input, erroneously made two changes that affected the data.

The Navy counted an $8.9 million military construction sanitary landfill

project twice and erroneously assessed a $3-million environmental budget

reduction. Quantico’s current fiscal year 1997 environmental program has

increased to $17.3 million.

• Data from Aberdeen Proving Ground, Maryland, were relatively more

accurate: the fiscal year 1995 report showed $24.9 million planned for

fiscal year 1997, and data at the installation showed planned fiscal 

year 1997 funding of $21.7 million. However, the installation’s data showed

a greater portion of projects costing $300,000 or more. Nine projects were

added, increasing the projects’ total, previously valued at $6.3 million, to

$11.7 million.

Widely Varying Activities

Are Included Within DOD’s

New Compliance

Categories

We reported in March12 and August 1996 that changes made by DOD in

definitions for EPA classes used to set priorities for compliance projects in

DOD’s fiscal year 1998 budget could increase the number of highest priority

projects. These changes could dilute the usefulness of the highest priority

category by reducing management oversight. Our follow-up work indicates

that the defense components have encountered difficulty in providing data

in the new categories.

We also reported in March 1996 that, for its fiscal year 1998 budget

process, DOD developed new definitions for four of the five EPA classes. We

agreed with DOD’s general approach but expressed concern that the class

12Environmental Protection: Issues Facing the Energy and Defense Environmental Management

Programs (GAO/T-RCED/NSIAD-96-127, Mar. 21, 1996).

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definitions in DOD’s plan (1) were a significant departure from DOD’s past

definitions, (2) differed from EPA’s definitions, and (3) expanded the

number of projects that qualify for funding under compliance Class I

without distinguishing among different project types, as shown in the

following examples:

• Although EPA explicitly limits Class I to facilities currently out of

compliance, as documented by notices of violation or consent agreements,

DOD’s new definition added projects to address requirements in facilities

that may not be out of compliance for 2 or more years.

• DOD’s descriptions also indicated that items that EPA includes in Class III

(such as inventories, surveys, studies, and assessments) could also be

routinely funded as Class I projects.

• EPA stated that designating a project as Class III does not mean the project

is necessarily less important than one in Classes I or II. Nonetheless, the

inclusion of greater numbers of indistinguishable projects under a

redefined Class I could reduce management oversight. OSD officials stated

it was not their intent to dilute the compliance priority setting process. As

we reported in August 1996, DOD said it would act to ensure that priorities

are not diluted in the compliance priority setting process. We have not yet

seen changes to do this.

After we issued our March and August 1996 reports, DOD updated its

environmental compliance guidance (DOD Instruction 4715.6) to reflect the

new definitions. Our discussions and review of records showed some

concerns about the definitions. For example, in a December 1996

memorandum, the Army’s Training and Doctrine Command stated that it

disagreed with DOD’s revised policy because it is not consistent with the

original class definitions. It stated that clear, logically consistent, and

stable definitions are useful in managing an environmental program and

that changing the definition of classes will make it harder to track, justify,

and explain requirements.

The data gathered by DOD under the old or new system do not meet EPA’s

data needs. According to an April 1996 EPA memorandum, DOD agreed to

separately provide EPA with project-level data and supplemental project

listings with the details needed to support EPA’s automated system. EPA had

believed that the additional detail would allow it to recategorize DOD

projects under EPA definitions for governmentwide comparability.

However, the data DOD provided to EPA varied by service and omitted

elements such as federal facility identification numbers and unique project

numbers. Also, the Navy did not specify statutory authority data needed by

Page 15 GAO/NSIAD-97-126 Environmental Protection
B-276461 

EPA, and DOD did not provide compliance status information. Without the

compliance status information beyond DOD’s classification, it is difficult to

determine or compare the urgency of projects.

In discussing this issue, an OSD official did not agree that the changes in

compliance classes have reduced oversight. The official stated that, even

though individual organizations may have opposed the changes, Army

headquarters has agreed to the change. Furthermore, the official said DOD

provided the same data to EPA last year as it did to Congress and that EPA

had not requested additional information this year. According to EPA, it

was too late in the budget cycle to ask DOD for additional fiscal year 1997

data.

Conclusions and

Recommendations

We support DOD’s continuing efforts to resolve defense components’

information system weaknesses that limit the accuracy and completeness

of reported data. We also agree with DOD’s efforts to provide project-level

data for compliance oversight but believe that the initiative is impeded by

the decision to combine previously distinct compliance categories and the

services’ inability to provide the requested project-level data. Therefore,

we recommend that the Secretary of Defense direct the

• Secretaries of the Army, the Navy, and the Air Force to establish

milestones and time frames for providing environmental compliance

funding estimates, obligations, and expenditures, including data at the

project level and

• Deputy Under Secretary of Defense for Environmental Security to

reconsider changes in compliance class definitions so that the data permit

better oversight and are more consistent with governmentwide reporting

to EPA.

Matter for

Congressional

Consideration

DOD’s inconsistent funding and reporting practices can lead to adverse

budget consequences. DOD’s planned actions appear to be insufficient to

ensure that only the highest priority projects are funded. Because DOD’s

comments indicate that it does not plan to take the necessary actions to

correct the problems identified in this report, Congress may wish to

consider requiring DOD to issue guidance for environmental compliance

funding. As stated in our recommendations, the guidance should address

(1) milestones and time frames needed for obtaining environmental

compliance funding estimates, obligations, and expenditures, including

Page 16 GAO/NSIAD-97-126 Environmental Protection
B-276461 

project-level data and (2) changes to DOD’s compliance class definitions

that are more consistent with governmentwide reporting to EPA.

Agency Comments

and Our Evaluation

DOD stated that it partially concurred with our recommendations, but that

(1) existing milestones were sufficient and the military departments were

improving their ability to meet them and (2) DOD recently reviewed the

classification systems for environmental projects and made minor

modifications. DOD indicated that it was working to improve the accuracy

of the annual report’s list of projects in excess of $300,000 and to monitor

the execution of those projects during a semi-annual review process.

However, DOD noted that, at both the summary and project levels,

expenditure reporting depends on the appropriation from which the

efforts are funded. DOD also indicated that the EPA classification system is

not sufficient to support budget development or longer range financial

planning.

Despite DOD’s partial concurrence with our recommendations, we are

concerned that its response actually means that little additional effort will

be taken to address the issues related to the accuracy and completeness of

data, and the dilution of priorities by combining previously distinct

compliance categories. For example, DOD’s comments give no specific

indication as to how DOD intended to improve the accuracy of the data or

how it would overcome the difficulties in tracking, justifying, and

explaining environmental requirements within DOD’s broadened class

definitions.

DOD’s comments are reprinted in appendix I. DOD also provided suggested

editorial and technical changes and supplied updated information. We

have incorporated this additional information in the report where

appropriate.

Scope and

Methodology

To determine the time lag between obligations and expenditures for

environmental cleanups and its impact on achieving actual cleanup, we

collected and analyzed DFAS reports on cleanup-phase expenditures for

fiscal years 1990-96. We discussed the reports and their accuracy with

officials from the Office of the Under Secretary of Defense for

Environmental Security, and the Office of Program Integration. We

compared data for locations visited with corresponding DOD databases, but

we did not verify overall database accuracy. However, we have issued a

series of reports over the past few years documenting deficiencies in the

Page 17 GAO/NSIAD-97-126 Environmental Protection
B-276461 

Department’s ability to reliably account for and report on its expenditures.

Consequently, it was not practical for us to identify, collect, and report

more reliable expenditure data as a part of this assignment.13

To determine the basis for funding overseas cleanup, we obtained and

analyzed documents provided by the defense components on cleanup

costs by project for fiscal years 1993-96. We also discussed overseas

cleanup issues with DOD officials from the Offices of International Affairs

and Program Integration. We discussed the accuracy of the data and

specific errors discovered by officials but did not verify the reports to

overseas source data. We also obtained, reviewed, and analyzed laws,

regulations, and other relevant documents.

To determine the status of DOD’s proposal to enter into multistate

cooperative agreements for technology certifications, we obtained and

examined listings of potential projects and related data. We discussed

related issues with officials from the Office of the Under Secretary of

Defense for Environmental Security.

To obtain information on DOD’s compliance programs and tracking and

management system, we met with and obtained information from officials

in the headquarters offices of EPA and the Office of the Deputy Under

Secretary of Defense for Environmental Security and in headquarters and

field offices of the Army, the Navy, the Air Force, and the Marine Corps.

We discussed issues with DOD officials from the Army Training and

Doctrine Command, Fort Monroe, Virginia; Air Force Materiel Command,

Wright-Patterson Air Force Base, Ohio; and U.S. Atlantic Fleet, Norfolk,

Virginia. We reviewed pertinent documents, laws, and regulations as they

related to various projects, but did not verify the extent to which projects

would comply with applicable laws and regulations. We visited and

obtained information on program planning, budget execution,

requirements determination, resource allocation, and financial operations

for fiscal years 1994-2001 from the following military installations:

Aberdeen Proving Ground, Maryland; Fort Bliss, Texas; Kirtland Air Force

Base, New Mexico; Quantico Marine Corps Base, Virginia; Navy Public

Works Center and Naval Station, Norfolk, Virginia; and Naval Air Facility,

El Centro, California. The locations selected were from installations with

larger compliance funding for each service in the eastern, central, and

western United States.

13In DOD Problem Disbursements (GAO/AIMD-97-36R, Feb. 20, 1997), we identified significant errors

in DOD expenditure reports.

Page 18 GAO/NSIAD-97-126 Environmental Protection
B-276461 

We conducted our work from November 1996 to March 1997 in

accordance with generally accepted government auditing standards.

Unless you publicly announce its contents earlier, we plan no further

distribution of this report until 30 days from its issue date. At that time, we

will send copies to appropriate congressional committees, the Secretaries

of Defense, the Army, the Navy, and the Air Force; the Commandant,

Marine Corps; and the Director, Office of Management and Budget. We will

also make copies available to others on request.

If you or your staff have any questions concerning this report, please

contact me on (202) 512-8412. Major contributors to this report are listed

in appendix II.

David R. Warren, Director

Defense Management Issues

Page 19 GAO/NSIAD-97-126 Environmental Protection
Contents

Letter 1

Appendix I 

Comments From the

Department of

Defense

22

Appendix II 

Major Contributors to

This Report

29

Tables Table 1: Reported Expenditures From Cleanup Funds for All

Phases of Cleanup as a Percentage of Environmental Account

Appropriations

4

Table 2: Reported Obligations and Expenditures as a Percentage

of DERA Funding for Fiscal Year 1996 by Phase

5

Table 3: Overseas Cleanup Projects Identified by Defense

Component and the Basis Cited for Cleanup

7

Table 4: Candidates Identified by DOD for the Use of Cooperative

Agreements as Part of its Environmental Security Technology

Certification Program

10

Table 5: Fiscal Year 1997 Planned Spending in Fiscal Year 1994

and 1995 Defense Environmental Quality Reports

13

Abbreviations

BRAC Base Realignment and Closure account

DERA Defense Environmental Restoration Account

DFAS Defense Finance and Accounting Service

DLA Defense Logistics Agency

DOD Department of Defense

EPA Environmental Protection Agency

OSD Office of the Secretary of Defense

Page 20 GAO/NSIAD-97-126 Environmental Protection
Page 21 GAO/NSIAD-97-126 Environmental Protection
Appendix I 

Comments From the Department of Defense

Note: GAO comments

supplementing those in

the report text appear at

the end of this appendix.

DOD comments identified

as editorial are not

included.

See pp. 16-17.

Page 22 GAO/NSIAD-97-126 Environmental Protection
Appendix I 

Comments From the Department of Defense

See pp. 16-17.

See pp. 16-17.

Page 23 GAO/NSIAD-97-126 Environmental Protection
Appendix I 

Comments From the Department of Defense

Now on p. 1.

See comment 1.

Now on p. 2.

See comment 1.

Now on p. 2.

See comment 2.

Now on p. 2.

See comment 1.

Now on p. 2.

See comment 3.

See comment 4.

See comment 4.

Page 24 GAO/NSIAD-97-126 Environmental Protection
Appendix I 

Comments From the Department of Defense

Now on p. 3.

See comment 1.

Now on p. 3.

See comment 5.

Now on p. 3.

See comment 1.

Now on p. 5.

See comment 1.

Now on p. 10.

See comment 6.

Now on p. 11.

See comment 3.

Now on p. 11.

See comment 7.

Now on p. 13.

See comment 8.

Now on p. 13.

See comment 7.

Page 25 GAO/NSIAD-97-126 Environmental Protection
Appendix I 

Comments From the Department of Defense

Now on p. 15.

See comment 7.

Now on p. 15

See comment 4.

Now on p. 15.

See comment 9.

Now on p. 15.

See comment 10.

Now on p. 16.

See comment 6.

Page 26 GAO/NSIAD-97-126 Environmental Protection
Appendix I 

Comments From the Department of Defense

The following are GAO’s comments on the Department of Defense’s (DOD)

letter dated April 23, 1997.

GAO Comments 1. We revised our report to reflect DOD’s suggested changes.

2. We did not make the suggested change because the term “most”

accurately describes that a large percentage but not all of DOD cleanup

actions are funded through the Defense Environmental Restoration

Account and the Base Realignment and Closure account. For example,

Defense Logistics Agency cleanups are commonly funded through its

working capital fund.

3. DOD acknowledged that its annual report did not reflect all of the

defense agencies’ projects. However, it indicated that the understatement

was only $40 million, and not the $250 million we reported. Even though

DOD’s annual report lists technology as one of its six major environmental

quality program functions, DOD officials told us they did not consider

technology as part of the environmental quality program and thus

excluded such amounts from reported totals. Our calculations, showing a

difference of $250 million between the President’s budget and the annual

report, included totals for the defense agencies and technology programs

that DOD omitted. The President’s 1998 budget for fiscal year 1997 totaled

$2.58 billion, including technology. The $2.37 billion excludes technology.

Since the President’s budget included technology programs and the annual

report did not indicate that technology programs were being excluded

from reported totals, we have not changed our calculations.

4. We recognize that DOD defines Class I to include (1) requirements that

will be out of compliance if funds are not provided in the fiscal year

requested and (2) inventories, surveys, studies, and assessments required

by various federal, state, and local laws to stay in compliance. We

addressed the impact of DOD’s expanded Class I definitions and the

differences between DOD and Environmental Protection Agency (EPA)

definitions in prior reports.1

 The EPA Class II definition recognizes those

requirements that need funding by the end of the fiscal year, and the 

Class III definition recognizes what is needed to maintain compliance

beyond the near term. In addition, we recognize that inventories and

assessments may be required by law, but note that EPA’s definition

1

Environmental Protection: Status of Defense Initiatives for Cleanup, Compliance, and Technology

(GAO/NSIAD-96-155, Aug. 2, 1996) and Environmental Protection: Issues Facing the Energy and

Defense Environmental Management Programs (GAO/T-RCED/NSIAD-96-127, Mar. 21, 1996).

Page 27 GAO/NSIAD-97-126 Environmental Protection
Appendix I 

Comments From the Department of Defense

necessitates current non-compliance with requirements to warrant

inclusion in Class I, whereas DOD’s definition does not.

5. We revised the report to be more precise. The data presented in table 1

show that a significant portion of obligated cleanup funds are not

expended in the year in which they are obligated.

6. Our draft report cited a 1994 working group that the Office of the

Secretary of Defense (OSD) Deputy Comptroller established to develop

budgeting procedures for compliance activities. We deleted reference to

that working group because DOD officials stated that they intended for the

authorization for an environmental security working group to be limited to

cleanup activities.

7. OSD officials told us the components were to provide the collected data

to DOD in April 1996, and much of the data were provided late. As indicated

in our report, we noted similarities at service installations in that project

amounts may later increase, proposed requirements may be validated

later, and new requirements may arise after approval. We also noted that

additional Navy data were available at the time the Navy provided

information to DOD.

8. We revised our report to reflect the challenges DOD encounters with

respect to new requirements that arise during a fiscal year, and the

necessary funding shifts associated with these requirements.

9. We did not state that DOD contemplated classification changes. We

indicated only that DOD officials had stated they would ensure that

priorities are not diluted.

10. We revised our report to be more precise. We indicated that data

gathered by DOD under its old or new systems do not meet EPA’s needs.

Page 28 GAO/NSIAD-97-126 Environmental Protection
Appendix II 

Major Contributors to This Report

National Security and

International Affairs

Division, Washington,

D.C.

Charles I. Patton, Jr.

Uldis Adamsons

Elizabeth G. Mead

Robert B. Brown

Richard Meeks

Joanne Jurmu

George Shelton

Dallas Field Office David Marks

Norfolk Field Office Ed Soniat

Johnnie Phillips

Office of the General

Counsel

Lynn Gibson

Margaret Armen

(709221) Page 29 GAO/NSIAD-97-126 Environmental Protection
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