text: Background Roles and Responsibilities for DOD Real Property The Under Secretary of Defense for Acquisition and Sustainment has overall responsibility and oversight for DOD’s real property and provides overarching guidance and procedures for real property management. The Assistant Secretary of Defense for Energy, Installations, and Environment, assists with developing policy and guidance for real property inventory and serves as the focal point for all matters related to the inventory of real property assets. The military services and WHS are responsible for implementing policies, programs, and procedures in accordance with OSD’s guidance to maintain an accurate and complete real property inventory. They are also responsible for ensuring that real property requirements are being met when other DOD components, such as defense agencies and DOD field activities, utilize real property under their jurisdiction. The defense agencies and DOD field activities are responsible for confirming that all real property assets that they occupy, operate, or maintain are contained within the real property inventory and for reconciling any real property data, when needed, with their supporting military service or WHS. Real Property Inventory Data Real property inventory data are used at the installation, military service, and OSD levels for the recording, planning, managing, and reporting of DOD real property assets, as shown in figure 1. Installation level. Real property officials are to record transactions to document new acquisitions, changes to existing facilities, and disposals and to collect information—including physical characteristics, space usage, and facility condition—on the real property at each installation. Officials are to enter this information into corresponding military service or WHS real property data systems. Installation officials stated they use real property information for a variety of purposes such as prioritizing facilities for sustainment and restoration projects, preparing installation master plans, and conducting fire and safety planning. Service level. Military service headquarters and WHS use inventory information to oversee and manage their real property needs across their installations. For example, according to officials, these data inform how they use property to support their missions and to budget for required sustainment, restoration, or construction of real property. In addition, this information is used to account for real property asset holdings that are included in financial statements prepared to meet federal financial reporting requirements. OSD level. OSD requires that the military services and WHS submit their real property inventories to be compiled into a department-wide data set—RPAD. The OSD focal point is responsible for providing information from the RPAD to assist various OSD offices with responsibilities for budget and mission planning. For example, the information is used in budgeting for sustainment of facilities. Additionally, OSD offices use the information in mission planning for certain DOD components—defense agencies, DOD field activities, and U.S. Special Operations Command—and for certain types of facilities, including sustainable buildings, historic property, and ranges. Moreover, OSD uses this information to meet reporting requirements outside of DOD. These include reports to Congress on the utilization of DOD’s facilities. All executive branch federal agencies are required to annually submit real property data to the General Services Administration to compile into the Federal Real Property Profile. DOD also reports information to the Office of Management and Budget on disposals and square footage of certain types of purposes to meet report requirements for the National Strategy for the Efficient Use of Real Property. OSD provides annual guidance that gives specific requirements for content and format for the military services’ RPAD submissions, including data elements and any associated business rules. For fiscal year 2016, OSD required 216 data elements to be maintained in RPAD and provided a data dictionary, called the Real Property Information Model, which defines these elements. OSD also has a process to verify and validate the data the military services and WHS submitted annually to the RPAD that includes OSD using a verification and validation tool to determine whether each data element has an entry that is in the correct format and complies with established business rules. When data anomalies are discovered with the data, OSD provides the data back to the submitting organization for review and correction as necessary. The military services and WHS certify annually that the real property information submitted to OSD accurately reflects each of their inventories. Some key real property data elements are significant for planning and reporting on real property assets: Operational status. A code used to identify the current operational status of the real property asset, such as whether the site location of the asset is active, the existence of the asset, and the usage of the asset. Asset review. A date used to document any type of review of an asset. DOD requires that each facility be physically inventoried on a cycle—every 5 years for non-historic facilities and every 3 years for historic facilities. Plant replacement value. A calculation of the cost to replace the current physical plant (facilities and supporting infrastructure) using today’s construction costs (labor and materials) and standards (methodologies and codes). Utilization rate. A percentage (on a scale 0 to 150) used to represent the extent to which a real property asset is used by the primary user for the current program based on its design purpose. DOD has not established cutoff points to determine unutilized, underutilized, and utilized real property. However, according to OSD officials, DOD considers a utilization rate of 101 to 150 as over utilized, meaning an asset’s available space is not sufficient to meet the primary user’s space requirement. Facility condition. A measure of a facility’s physical condition that is expressed as a percentage (on a scale of 0 to 100). Factors used to calculate the facility condition include the facility’s estimated deferred maintenance and repair costs and the facility’s plant replacement value. DOD guidance states a condition of 0 to 59 is failing; 60 to 79 is poor; 80 to 89 is fair; and 90 to 100 is good. Figure 2 displays these real property data elements. Real Property and Financial Management DOD has undertaken several financial management improvement initiatives over the years to address deficiencies in business systems, processes, and controls through its Financial Improvement and Audit Readiness (FIAR) Plan. The FIAR Plan guidance includes 40 of the data elements required to be reported to OSD and maintained in RPAD within the scope of the effort. As part of the department’s FIAR effort, each of the military services developed individual plans to prepare their management processes, such as their accountability systems and procedures for real property, which would be tested during financial audit. The military services’ real property efforts to prepare for financial audit have included developing manuals, monitoring activities such as testing of the implementation of real property procedures, and implementation of corrective actions to address identified deficiencies in the processes and procedures. DOD’s Real Property Asset Database Contained Inaccurate Data and Lacked Completeness, Although Certain Data We Reviewed Improved DOD’s RPAD has data quality issues specific to accuracy of certain data elements and completeness of the dataset, although certain data we reviewed improved since fiscal year 2014. Accuracy of data elements and completeness of RPAD are important to OSD, other federal agencies, and Congress because they use this information to determine facility sustainment funding and to understand DOD’s utilization of its real property as a means to identify potential excess property for disposal, among other things. Accuracy of Certain Data in RPAD Improved but Other Data Did Not Comply with Information Requirements We found that accuracy of certain data in the selected set of key data elements we reviewed improved while other data contained discrepancies that resulted in inaccuracies in RPAD for fiscal years 2014 through 2016. For some data we reviewed, the magnitude of such discrepancies decreased while others increased from fiscal year 2014 to fiscal year 2016. Specifically, we found: Operational status. For operational status codes that are not an active status, such as an asset that was determined to be excess or surplus, or disposed, OSD’s business rules require a corresponding date that documents when the status was determined or when a disposal was completed. If the corresponding date is not provided, then the operational status cannot be verified as correct. Our analysis of operational status from fiscal year 2014 through fiscal year 2016 found improvements in data on surplus and disposed facilities. The percentage of surplus and disposed facilities without a valid date improved from 37.5 percent to 0 percent and 3.3 percent to 0.3 percent, respectively. However, the percentage of excess facilities without a valid date increased from 22.7 percent to 47.9 percent. Asset review date. All facilities are required to have a date that documents a physical inventory; these reviews are to be conducted at least every 5 years, unless a historic asset. The percentage of facilities with a review date older than 5 years improved from 34.1 percent in fiscal year 2014 to 22.1 percent in fiscal year 2016. RPAD in fiscal year 2016 indicated that 143,420 facilities had a physical inventory date that was older than 5 years, which suggests that the information for these facilities may not be accurate because the information has not been updated within the required time frame. According to real property installation officials, overdue dates can occur because the physical inventory was either not conducted or the information from the physical inventory was not entered into the military services’ data systems. The percentage of facilities with a missing review date increased from 3.4 percent in fiscal year 2014 to 7.2 percent in fiscal year 2016. Plant replacement value. All facilities are required to have a plant replacement value not less than zero, meaning it cannot be a negative number. For all 3 fiscal years, none of the facilities had a negative plant replacement value and missing entries were an insignificant number. The business rules allow for values of zero though these entries may potentially create problems for other data elements that use plant replacement value as part of their calculation. For example, plant replacement value is a denominator in the formula used to calculate facility condition index. If a plant replacement value is zero, the facility condition index cannot be determined. The percentage of facilities with a plant replacement value of zero declined from 3.4 percent in fiscal year 2014 to 2.3 percent in fiscal year 2016. Utilization rate. All facilities are required to have a utilization rate from 0 to 150. The percentage of facilities missing a utilization rate improved from 23.3 percent in fiscal year 2014 to 2.4 percent in fiscal year 2015 before increasing to 14.4 percent in fiscal year 2016. As such, in fiscal year 2016, about 93,600 facilities did not have an indication of the utilization and this information was not available to users of RPAD. Facility condition index. All facilities are required to have a facility condition from 0 to 100. The percentage of facilities that had missing facility condition entries increased from 0.5 percent in fiscal year 2014 to 5.6 percent in fiscal year 2016. Figure 3 displays our analysis of discrepancies between the information requirements and data entries in RPAD. RPAD Was Incomplete as It Did Not Include All of DOD’s Existing Real Property Assets RPAD did not include all of DOD’s existing real property assets in fiscal years 2014 through 2016, resulting in an incomplete data set. Specifically, we found (1) the military services have not recorded all assets that existed and reflected previously disposed facilities that no longer existed as active in their respective data systems, (2) the military services did not report all assets in the RPAD submission to OSD that were recorded in each military service’s data system, and (3) OSD did not include all assets reported by the military services in RPAD, as shown in figure 4. We and others found instances of facilities that existed that the military services did not record in their data systems and of disposed facilities that no longer existed but were still reflected as active in RPAD. During our 12 site visits, officials at two installations stated that there were real property assets on their installations that were not recorded in their real property data system at the time of our visit. For example, real property officials at an Army installation identified over 2,000 existing assets—primarily linear structures—that were not in the inventory. Real property officials at a Marine Corps installation acknowledged that they were aware of assets that were not recorded in the data system but did not know the quantity of these. The officials stated they were in the process of reconciling the real property inventory with the assets in existence on the installation. In May 2018, Marine Corps Headquarters officials stated they plan to send real property officials to this location from other installations to assist with entering identified assets into the inventory. With the additional support, the officials expect the reconciliation to be completed in fiscal year 2019, 3 years earlier than initially planned. Moreover, in our review of 120 facilities during site visits, we found that 6 of the facilities had been disposed of but were recorded as active in the fiscal year 2015 RPAD data of the Air Force and Army. For example, all four of the Army’s disposals occurred previous to fiscal year 2015 but were not entered into the data system until fiscal year 2016. The changes were made and reflected in the inventory submission for fiscal year 2016. Also, one of the Air Force’s assets, fencing, had been disposed of years ago with the housing project that it enclosed, but was not included in the original disposal documentation. The real property installation officials had identified this omission when reviewing the list of assets that we selected for our review and began documenting the disposal prior to our site visit. DOD reported in its 2017 Agency Financial Report that material weaknesses in its internal controls over real property resulted in, among other things, that the department could not substantiate that all existing assets were recorded in the military services data systems. Similar to our site visit results, the Navy Office of Financial Operations also reported in June 2017 that 15 of 650 real property assets tested from a non- generalizable sample were reported to have been disposed of, but were not recorded as disposed of or removed from the Navy’s data system. Additionally, we found RPAD did not include some facilities that were in the military services’ data systems. The number and total plant replacement value across these three data sets should be identical, but were not in each of the 3 years that we reviewed. This means information on the excluded real property was not available to users of RPAD or to the Federal Real Property Profile. Specifically, The military services did not report all facilities in their data systems to OSD for inclusion into RPAD. Our analysis found the Army, Navy, and Marine Corps did not report to OSD between approximately 40,900 facilities (6.1 percent) and 103,600 facilities (15.9 percent) of the facilities included in their data systems in fiscal years 2014 through 2016. If all of these facilities still existed during those years, these unreported facilities had a total plant replacement value that ranged from $12.8 billion to $56.5 billion during the 3 fiscal years. We could not include the Air Force in this analysis because it was not able to provide its end-of-year real property inventory for fiscal years 2014 through 2016. Air Force officials stated that their contractor did not archive copies of the end-of-year real property inventory for these years but would begin to do so for fiscal year 2017. OSD did not include all facilities reported by the military services and WHS in RPAD. Additionally, our analysis showed that the number of facilities OSD did not include in RPAD ranged from about 3,300 facilities (0.5 percent) to 19,400 facilities (2.6 percent) of the facilities reported by the military services and WHS in fiscal years 2014 through 2016. If all of these facilities still existed during those years, the total plant replacement value of the unreported facilities ranged from $3.4 billion to $21.6 billion. OSD and military service officials agreed that accuracy and completeness issues with real property have been a long standing issue, but stated recent audit efforts associated with FIAR should result in some improvements of the data. For example, military service installations officials stated that they are working to reconcile differences between existing real property and information in their data systems to include adding existing assets that are not in the data system and correcting information on disposed assets. Moreover, military service officials stated that they have emphasized conducting timely physical inventories and require installations to report on the currency of their physical inventories. According to officials, when reporting real property to OSD and when OSD consolidates this information into RPAD, assets with significant errors in their records are excluded to improve the accuracy of the information in the data set. The officials explained as the accuracy of the data improves through physical inventories, fewer assets will be excluded in the reporting process, which will improve completeness of RPAD. However, as we describe further in this report, the audit efforts will not correct all identified accuracy and completeness issues. Deficiencies Exist in DOD’s Processes for Recording and Reporting Real Property Data DOD’s processes for recording and reporting real property data have deficiencies that contribute to inaccuracies and incompleteness in the RPAD data. Specifically, we identified inconsistencies in the military services’ recording of real property transactions and physical inventories of assets. In addition, we found the military services have not corrected identified discrepancies in their real property data reported to OSD in the annual RPAD submissions. DOD Has Processes for Recording and Reporting Real Property Data According to a DOD instruction, OSD must establish, issue, and maintain data requirements for DOD’s real property inventory. As such, DOD requires that the military services maintain an accurate and complete record of their real property, regardless of the organization using or funding the real property. The real property accountable officers at each installation must implement processes to ensure that all real property transactions are auditable and that information recorded, including physical inspections, is accurate, complete and retained in accordance with applicable laws and regulations. OSD also requires that the military services report their real property data for RPAD following OSD requirements and that they utilize OSD’s verification and validation tool to identify discrepancies between data entries and DOD’s real property information requirements. OSD and the military services have developed some procedures to implement these policies. For example, OSD established an annual reporting process, to include defining the specific content and format for the submission of information. Moreover, the military services have developed written procedures that clarify how specific transactions should be conducted. For example, the Marine Corps has developed detailed guidance on control processes for appropriately documenting disposed assets. The Navy has developed procedures for conducting physical inventories. The Army has defined roles and responsibilities for accounting for real property, including changes to facility function (i.e., category code). Lastly, the Air Force has developed overall policies and procedures for accounting for real property that defines the roles and responsibilities of accountable officials. Military Services Did Not Consistently Record Real Property Data The processes for recording real property information include documenting and entering into the data system when transactions— acquisition of, change to, and disposal of a real property asset—or physical inventories occur. To document a transaction or physical inventory, real property installation officials are expected to complete the required supporting records. According to Standards for Internal Control in the Federal Government, appropriately designed control activities could include requiring documentation should be completed within a reasonable time frame after the event occurs. Then, the officials are to promptly enter the updated information into the real property data system. DOD also requires a review of each real property asset record, including a physical inventory of each real property asset every 5 years for non- historic assets or every 3 years for historic assets. Physical inventories help ensure current and accurate information on assets are reflected in the military services’ data systems. Furthermore, the Standards for Internal Control in the Federal Government require agencies to design control activities to achieve objectives, to monitor activities, and to remediate identified deficiencies on a timely basis. Such activities could include appropriately documenting and accurately and timely recording transactions, and implementing procedures to help ensure that processes are monitored and evaluated for deficiencies on an ongoing basis, corrective actions are determined for any identified deficiencies, and these actions are completed and documented to correct deficiencies on a timely basis. Real Property Transactions We and the military services identified that transactions were not being consistently documented with required supporting records or entered into the military services’ data systems within reasonable time frames. Specifically, during our site visits to 12 military services’ installations, officials at 5 installations stated that they were experiencing delays with documenting and entering into the data system some transactions. According to the officials, this occurred due to challenges with obtaining required information from contractors, heavy workloads, and staff shortages. Moreover, the military services found through testing in 2017 that they did not consistently document transactions with required supporting records or enter real property transactions into the data system. The military services conducted these tests as part of their preparation for financial statement audits to identify deficiencies in the recording of real property transactions. The military services were then to develop corrective action plans and remedy any identified deficiencies prior to the department’s audit of the fiscal year 2018 financial statements. Specifically, The Air Force conducted tests in March 2017 and reported that of 271 assets tested, 171 did not have appropriate supporting records. The Air Force also reported in a separate test of 27 assets that 17 of these were not timely or accurately recorded. The Army conducted tests in October 2017 and reported that more than half of the assets selected did not pass its testing for one or more of the 9 key data elements associated with plant replacement value. Lack of adequate supporting records was the most common reason for test failure. The Navy conducted tests in October 2017 and identified documentation issues or key elements that were not timely or accurately entered into its data system for 11 out of 58 assets tested. The Marine Corps conducted tests in July 2017 and identified documentation issues or key elements that were not timely or accurately entered into its data system for 20 of 55 assets tested. Physical Inventories We and the military services have identified that real property installation officials do not consistently document or enter physical inventory information into the military services’ data systems. We found during our site visits to 12 military service installations that for 21 facilities out of 106 facilities tested, real property installation officials had not entered physical inventory information in the military services’ data system within the last 5 years. The 21 facilities we reviewed included 16 from the Air Force (with 2 reflected as being last inventoried in January 1934 or October 1992), 4 from the Army, and 1 from the Marine Corps (which showed as being been last inventoried in November 2003). The military services also identified similar inconsistencies with recording physical inventories in testing of their real property assets as part of their preparation for financial statement audits: The Air Force conducted tests in March 2017 and reported that installation officials, for 89 out of 281 assets tested, did not have complete supporting records or did not timely provide the most recent physical inventory checklist that reconciled with the Air Force’s data system. The Army conducted tests in September 2016 and reported 1 of the 5 installations tested did not have adequate supporting records for asset changes identified in physical inventories. The Navy conducted tests in June 2017, and reported 5,918 of the 34,104 assets tested had not had a physical inventory for more than 5 years. Furthermore, in October 2017, the Navy reported that 9 of 41 assets it tested did not have supporting records that the inventory was performed per DOD requirements for timeliness. The Marine Corps had an external auditor conduct tests in September 2017 and reported that installation officials could not support the last physical inventory performed for 83 of 998 assets tested. The military services did not fully monitor recording processes on an ongoing basis, including evaluating whether or the extent to which activities are being carried out and remediating any identified deficiencies. We found that this occurred in part due to the military services not being required to conduct ongoing monitoring of the processes used for recording real property transactions and physical inventories. According to military service officials, they conduct monitoring of recording and have begun developing corrective action plans as part of the recent audit readiness effort that are based on the Financial Improvement and Audit Readiness Guidance. However, this guidance aimed principally at improving financial reporting addresses 40 of the 216 data elements required to be maintained in RPAD. DOD has not determined to what extent the remaining data elements are a priority for other management purposes beyond financial reporting. Accordingly, the remaining 176 data elements, or approximately 80 percent, are not required to be monitored. For example, the recording of RPAD-required data elements for dates that support an operational status of excess, surplus, and disposed or document when a facility was built are not included in current monitoring efforts. The monitoring of the recording of only about 20 percent of the required data elements in RPAD results in inaccurate and incomplete data not being systemically evaluated and corrective actions not being taken to resolve the issues. Unless the military services are required to monitor on an ongoing basis the processes used for recording all required real property information, DOD will continue to have data quality issues related to accuracy and completeness in the military services’ data systems that will be reflected in RPAD. Military Services Have Not Corrected Identified Discrepancies Reported in Their RPAD Submissions The military services have not corrected identified discrepancies in their real property data reported to OSD in the annual RPAD submissions. OSD provided the military services with a verification and validation tool to identify data that does not comply with information requirements. Specifically, from fiscal years 2014 through 2016, the military services used OSD’s verification and validation tool to identify discrepancies and submitted reports summarizing the results to OSD, but have not corrected all discrepancies identified by the tool. According to real property installation officials, they have not been directed by headquarters to correct discrepancies in their data systems that were identified in their annual RPAD submission. Our review of 120 assets during the 12 installation site visits confirmed that 61 assets with discrepancies in five key data elements tested in the fiscal year 2015 RPAD data set continued to have these discrepancies in 2017. Based on our analysis, the military services have not corrected identified discrepancies in part because OSD’s guidance for annual RPAD reporting does not define which data elements were most significant to the department’s decision making and should be a priority for correction. Furthermore, we found that the guidance does not require the military services to develop and implement corrective action plans to remediate discrepancies in significant data elements in their data systems that are identified by OSD’s verification and validation tool. According to OSD and military service officials, identifying significant data elements could assist with streamlining and prioritization of efforts to improve data quality. In addition, OSD officials agreed that requiring the services to develop and implement corrective action plans would benefit data quality, but stated there are challenges with the verification and validation tool that would need to be addressed to leverage its full potential. By OSD not defining significant data elements and coordinating corrective action plans to remediate discrepancies, the military services may continue to submit information with discrepancies from year to year in some data elements and will miss an opportunity to improve the accuracy of inventory data. DOD Has Not Addressed Risks to Its Ability to Use Information to Manage Its Real Property DOD has not addressed three risks—unfilled real property positions to manage its data, lack of a department-wide approach to improving data quality, and a limited plan for the implementation of its expanded data platform—that diminish its ability to use real property information to manage its real property. Unfilled Real Property Positions We found that DOD has not addressed how it will overcome unfilled real property positions throughout the department, which poses a risk to data quality. For example, real property installation officials at 10 of 12 installations we visited told us that they had unfilled real property positions, including real property accountable officers, engineers, realty specialists, planners, and space management analysts. Real property installation officials told us that their unfilled real property positions contributed to workload backlogs and prevented them from sufficiently maintaining their real property data. The Army, Marine Corps, and Navy completed various workforce plans that found they did not have a sufficiently sized workforce to adequately maintain their real property data: Army: In March 2015, the Army completed a workforce analysis that found current authorized manning documents are short 223 real property positions of the total 495 positions required to perform these functions, which include real property accountable officers and realty specialists. Marine Corps: In August 2016, the Marine Corps identified that it had an immediate need for 20 real property accountable officer positions to effectively maintain its real property data. According to Marine Corps officials, they have since filled 19 of the 20 positions. Navy: For its fiscal year 2018 planning, the Navy identified a need for 63 real property positions—ranging from real property accountable officers to geospatial specialists—to meet real property requirements. The Air Force has not identified the workforce it needs to maintain quality data on its real property, but Air Force officials told us in May 2018, that they are beginning efforts to better understand their workforce needs. OSD and military service officials stated that they continually face challenges due to unfilled real property positions. However, they do not expect to fill all of their authorized positions because senior leadership has prioritized staffing at other offices and military service officials stated that they face challenges in finding qualified applicants for open positions. Despite the recognized needs, DOD has not outlined how it plans to overcome challenges related to its unfilled real property positions. According to an OSD official, OSD cannot direct the military services to fill their real property positions; however, OSD has not coordinated with the military services to identify opportunities to overcome unfilled positions. Potential opportunities may include using available staff more efficiently or evaluating opportunities to better address how they will manage unfilled positions. Lack of a Department-wide Approach to Improving Data Quality Absent a department-wide approach to improving data at various levels within DOD, military service headquarters have individually initiated actions to improve data quality for certain data elements. These efforts are largely uncoordinated and result in inconsistent approaches to address similar data quality risks and may contribute to inefficient use of resources and accuracy issues in the real property data. For example, military service headquarters officials told us they have taken action to improve data quality when they do not receive specific guidance from OSD, including communicating priorities to installations and developing contracts to improve select data elements. We found instances where the military services took different actions to improve their information on utilization rates prior to OSD issuing a memorandum to have a standardized approach to determine this information. For example, the Army developed a database to record space authorization information for each asset. The Marine Corps used a contract to obtain space utilization information at certain installations. Moreover, a Marine Corps headquarters official stated in some cases that after Marine Corps headquarters implemented its own policy and provided guidance to the installations to fill a gap that OSD issued guidance with a different approach. The official stated that the Marine Corps had spent financial resources on a contract to improve a data element that they later had to categorize in a different way due to OSD guidance. Also, real property installation officials at a Marine Corps installation stated that their headquarters had made large-scale changes to the records of their housing assets due to a new approach to determine specific data elements for those assets, which resulted in inaccuracies. Officials noted that headquarters later retracted that approach and restored the records. In addition, we observed in our review of real property records during the site visits that real property installation officials did not apply the same criteria for determining an asset’s operational status for the codes of disposed, closed, and nonfunctional that resulted in inaccuracies. Navy regional command officials provided written guidance and a decision support tool for determining appropriate codes for operational status to help improve accuracy within this data element. However, according to real property installation officials, the Air Force and Army did not have similar guidance. OSD and military service officials agreed that better coordination among OSD and the military services would assist their effort to improve data quality. Limited Plan for Implementation of OSD’s Expanded Data Platform OSD has not fully identified how it will complete implementation of a new module for real property within its expanded data platform, known as the Data Analytics and Integration Support platform, and DOD faces a risk to information accessibility as it may not fully realize the anticipated benefits of the effort. OSD currently uses the platform for generating unique identification numbers for its real property assets and as a dashboard for tools related to military construction planning. However, OSD has neither outlined how it will accomplish its stated objectives and goals for expansion of this platform as OSD’s new data system for real property, nor has it set time frames for the expansion. In September 2017, OSD modified its contract for updating the Data Analytics and Integration Support platform, but that contract does not specify when full implementation of the expansion to include a new module for real property will occur. OSD is planning to expand the use of the Data Analytics and Integration Support platform to make it a near real-time, department-wide information source of required real property information accessible to a greater number of users who manage real property. If implemented, this expanded platform would replace DOD’s annual data call to the military services for end-of-year real property information to compile into the RPAD. Further, the expanded platform would interface daily with the military service data systems. This would provide near real-time information to users for the department-wide management of DOD’s real property. According to OSD officials, users could also access real property information themselves and run their own data analyses when OSD expands this platform to replace the annual data call to the military services. Figure 5 displays a comparison of RPAD to the proposed expansion of the Data Analytics and Integration Support platform. OSD officials told us that the military services will need to ensure their data systems can fully interface with the Data Analytics and Implementation Support platform for full integration to occur. Specifically, the officials stated that the Army’s data system can fully interface with OSD’s expanded platform, but the Navy wants to test how its data system would interface with the platform before it can fully connect. In addition, officials noted that the Air Force’s current data system is the least compatible with OSD’s expanded data platform because it is currently working to design and implement a new data system for real property. OSD and Air Force, Marine Corps, and Navy officials noted that they are aware the military service data systems are not fully integrated with OSD’s expanded data platform. Guidance from DOD and the Office of Management and Budget note that risk management is integral to effective program management. The Standards for Internal Control in the Federal Government states management should define objectives clearly such as through specific and measurable terms that allow for the assessment of performance toward achieving those objectives and that management should identify, analyze, and respond to risks related to achieving defined objectives. The office of the Assistant Secretary of Defense for Energy, Installations, and Environment is responsible for providing the guidance and procedures for implementing real property management policy, including ensuring the information is available to determine if an asset is used effectively. One way an organization can manage risk is by developing a risk management strategy that identifies risks to program objectives, and includes time frames and performance metrics for addressing those risks. DOD has taken some actions that when fully implemented should result in some improvements to select data elements and the potential to enhance information accessibility. However, in part, DOD’s weaknesses with quality information on real property and accessibility to this information continue to exist because DOD has not developed a strategy that identifies and addresses risks, such as those previously described, and includes time frames and performance metrics. OSD and military service officials agreed that a strategy for addressing risks would help the department to further its effort to improve the quality and accessibility of the information. Developing and implementing such a strategy would allow the department to take key steps toward improving its information for managing its real property. Without a strategy for improving the quality of the data and information used to manage its real property, DOD, Congress, the Office of Management and Budget, and the General Services Administration will not have information needed for effective decision making and do not have reasonable assurance that risks to data quality and information accessibility are being managed appropriately. Specifically, information would be limited in decision making related to improving space management at installations, to adequately sustaining DOD’s real property assets, and to accurately generating financial statements. Conclusions DOD’s efforts to reform its real property management is complicated by not having quality data on its large inventory of assets—over 568,000 facilities with an estimated combined plant replacement value of about $1 trillion. An accurate and complete inventory of its assets is essential for DOD to make informed management decisions about its real property. The department has taken action to improve data quality of some data elements through financial improvement and audit readiness efforts. However, deficiencies in the processes for recording and reporting real property data continue to lead to inaccurate and incomplete information. The military services do not require monitoring of the recording of all required real property information, to include evaluating on an ongoing basis whether or to what extent these activities are carried out and remediating any identified deficiencies. In addition, OSD has not defined which data elements were significant to the department’s decision making and which should be a priority for correction. Also, the military services do not have plans to correct the discrepancies in significant data elements in their data systems that are identified by OSD’s verification and validation tool. Without taking actions to address these deficiencies, DOD will continue to have inaccurate and incomplete real property data and unreliable information in RPAD. DOD also has not developed a strategy that establishes time frames and performance metrics to address risks to data quality and information accessibility. Specifically, DOD faces risks related to unfilled real property positions, a lack of a department-wide approach to improving data, and a limited plan for implementation of OSD’s expanded data platform. Without a strategy to address these risks, DOD is missing an opportunity to ensure that the information needed for effective decision making, such as budget decisions and oversight by Congress, is available to meet real property accountability and reporting objectives and to avoid inefficient and potentially costly workarounds, such as additional data calls to installations. Recommendations for Executive Action We are making a total of 6 recommendations to the Department of Defense: The Secretary of the Army should require monitoring of its processes used for recording all required real property information—to include evaluating on an ongoing basis whether or to what extent these activities are being carried out—and remediating any identified deficiencies. (Recommendation 1) The Secretary of the Navy should require monitoring of Navy and Marine Corps processes used for recording all required real property information—to include evaluating on an ongoing basis whether or to what extent these activities are being carried out—and remediating any identified deficiencies. (Recommendation 2) The Secretary of the Air Force should require monitoring of its processes used for recording all required real property information—to include evaluating on an ongoing basis whether or to what extent these activities are being carried out—and remediating any identified deficiencies. (Recommendation 3) The Secretary of Defense should ensure that the Undersecretary of Defense for Acquisition and Sustainment, in collaboration with the military services, defines and documents which data elements within the RPAD submissions are most significant for decision-making. (Recommendation 4) The Secretary of Defense should ensure that the Undersecretary of Defense for Acquisition and Sustainment, in collaboration with the military services, coordinates on corrective action plans to remediate discrepancies in significant data elements in its real property data system that are identified by OSD’s verification and validation tool. (Recommendation 5) The Secretary of Defense should ensure that the Undersecretary of Defense for Acquisition and Sustainment, in collaboration with the military services, develops a strategy that identifies and addresses risks to data quality and information accessibility. At a minimum, this strategy should establish time frames and performance metrics for addressing risks related to (1) unfilled real property positions, (2) a lack of a department- wide approach to improving its data, and (3) implementation of OSD’s expanded data platform. (Recommendation 6) Agency Comments and Our Evaluation We provided a draft of this report to DOD for comment. In written comments, DOD concurred with four recommendations and partially concurred with three recommendations. DOD’s comments are summarized below. DOD also provided technical comments, which we incorporated as appropriate. In written comments, DOD stated that Recommendations 2 and 3 should be combined to more appropriately align with authority and responsibility of the U.S. Navy and U.S. Marine Corps as a single Military Department and DOD concurred with the combination of the two recommendations. Based on these comments, we combined the draft recommendations for separate actions by the Secretary of the Navy and the Commandant of the Marine Corps into one recommendation. In our final report, the action is addressed to the Secretary of the Navy in Recommendation 2 and our total number of recommendations is decreased to six. DOD partially concurred with our recommendation that the Undersecretary of Defense for Acquisition and Sustainment collaborate with the military services to develop a strategy that identifies and addresses risks to data quality and information accessibility (Recommendation 6). We recommended that the strategy, at a minimum, include timeframes and performance metrics for addressing risks and include other specific information. However, DOD stated that it plans to collaborate with the military services on separate service strategies that reflect each military service’s operating environment. We continue to believe that DOD would benefit from one department-wide strategy to improve data quality and information accessibility. For example, we found that the military services’ efforts to improve data quality have been largely uncoordinated and had led to inconsistent approaches, which may have contributed to data inaccuracies. Further, we found that OSD has not fully identified how it will complete implementation of a data platform expansion to include real property information and may not realize the anticipated benefits of the effort. The platform is an effort managed by OSD and would benefit from a single DOD strategy addressing key points noted in our recommendation. Accordingly, we believe our recommendation remains warranted. DOD’s comments are reprinted in their entirety in appendix II. We are sending copies of this report to the appropriate congressional committees and to the Secretary of Defense; the Under Secretary of Defense for Acquisition and Sustainment; the Under Secretary of Defense (Comptroller); and Secretaries of the Departments of Air Force, Army, and Navy, the Commandant of the Marine Corps, and the Director of Washington Headquarters Services. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact Brian J. Lepore at (202) 512-4523 or leporeb@gao.gov or William J. Cordrey at (404) 679-1873 or cordreyw@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs are listed on the last page of this report. GAO staff who made key contributions to this report are listed in appendix III. Appendix I: Physical Inventory For the military services and Washington Headquarters Services’ real property inventories, DOD requires that the data elements shown below in table 1 be validated through a physical inventory of each real property asset. Physical inventories are to be performed every 5 years or every 3 years for historic assets. Appendix II: Comments from the Department of Defense Appendix III: GAO Contacts and Staff Acknowledgments GAO Contacts Staff Acknowledgments In addition to the contacts named above, Gina Hoffman (Assistant Director), Paul Kinney (Assistant Director), Susan Langley (Analyst-in- Charge), Scott Bruckner, Vincent Buquicchio, Josh Edelman, Chad Hinsch, Brad Johnson, Amie Lesser, Carol Petersen, Sam Portnow, Richard Powelson, Michael Silver, and John Yee made key contributions to this report. Related GAO Products DOD Financial Management: The Navy Needs to Improve Internal Control Over Its Buildings, GAO-18-289. Washington, D.C.: May 10, 2018. High-Risk Series: Progress on Many High-Risk Areas, While Substantial Efforts Needed on Others, GAO-17-317. Washington, D.C.: February 15, 2017. Defense Facility Condition: Revised Guidance Needed to Improve Oversight of Assessments and Ratings, GAO-16-662. Washington, D.C.: June 23, 2016. DOD Financial Management: Greater Visibility Needed to Better Assess Audit Readiness for Property, Plant, and Equipment, GAO-16-383. Washington, D.C.: May 26, 2016. Defense Infrastructure: More Accurate Data Would Allow DOD to Improve the Tracking, Management, and Security of Its Leased Facilities, GAO-16-101. Washington, D.C.: March 15, 2016. Underutilized Facilities: DOD and GSA Information Sharing May Enhance Opportunities to Use Space at Military Installations, GAO-15-346. Washington, D.C.: June 18, 2015. Defense Infrastructure: DOD Needs to Improve Its Efforts to Identify Unutilized and Underutilized Facilities, GAO-14-538. Washington, D.C.: September 8, 2014. Defense Infrastructure: Army Brigade Combat Team Inactivations Informed by Analyses, but Actions Needed to Improve Stationing Process, GAO-14-76. Washington, D.C.: December 11, 2013. Federal Real Property: Greater Transparency and Strategic Focus Needed for High-Value GSA Leases, GAO-13-744. Washington, D.C.: September 19, 2013. Military Bases: Opportunities Exist to Improve Future Base Realignment and Closure Rounds, GAO-13-149. Washington, D.C.: March 7, 2013. Military Base Realignments and Closures: Updated Costs and Savings Estimates from BRAC 2005, GAO-12-709R. Washington, D.C.: June 29, 2012. Excess Facilities: DOD Needs More Complete Information and a Strategy to Guide Its Future Disposal Efforts, GAO-11-814. Washington, D.C.: September 19, 2011. Defense Infrastructure: The Enhanced Use Lease Program Requires Management Attention, GAO-11-574. Washington, D.C.: June 30, 2011. Federal Real Property: Progress Made on Planning and Data, but Unneeded Owned and Leased Facilities Remain, GAO-11-520T. Washington, D.C.: April 6, 2011. Military Base Realignment and Closures: DOD Is Taking Steps to Mitigate Challenges but Is Not Fully Reporting Some Additional Costs, GAO-10-725R. Washington, D.C.: July 21, 2010. Defense Infrastructure: Continued Management Attention Is Needed to Support Installation Facilities and Operations, GAO-08-502. Washington, D.C.: April 24, 2008. Federal Real Property: Progress Made Toward Addressing Problems, but Underlying Obstacles Continue to Hamper Reform, GAO-07-349. Washington, D.C.: April 13, 2007. Defense Infrastructure: Issues Need to Be Addressed in Managing and Funding Base Operations and Facilities Support, GAO-05-556. Washington, D.C.: June 15, 2005. Defense Infrastructure: Changes in Funding Priorities and Strategic Planning Needed to Improve the Condition of Military Facilities, GAO-03-274. Washington, D.C.: February 19, 2003. Defense Infrastructure: Military Services Lack Reliable Data on Historic Properties, GAO-01-437. Washington, D.C.: April 6, 2001. Military Infrastructure: Real Property Management Needs Improvement, GAO/NSIAD-99-100. Washington, D.C.: September 7, 1999.
target: DOD manages a portfolio of real property assets that as of fiscal year 2016 reportedly included about 568,000 facilities with a combined plant replacement value of about $1 trillion and 27.2 million acres of land. DOD requires the military services and Washington Headquarters Services to collect and maintain information about each of the assets in their inventories to assist the department with management decision making. In May 2017, the House Armed Services Committee, Subcommittee on Readiness, asked GAO to review DOD's management and use of its real property data. This report evaluates (1) how accurately and completely RPAD reflects DOD's real property assets, (2) DOD's processes to ensure accuracy and completeness in recording and reporting real property data, and (3) DOD's actions to ensure it has addressed risks that may affect the use of real property information for managing its assets. GAO analyzed the RPAD and military services' data for fiscal years 2014-2016; reviewed documentation; conducted site visits; and interviewed DOD officials. GAO found that the Department of Defense's (DOD) Real Property Assets Database (RPAD) contained inaccurate data and lacked completeness, although certain data that GAO reviewed had improved their accuracy since fiscal year 2014. RPAD is a department-wide database of real property data annually compiled by the Office of the Secretary of Defense from the inventories of the military services and DOD's Washington Headquarters Services, which manages real property in the National Capital region. DOD uses RPAD to report on DOD's real property to Congress and other federal agencies, such as the Office of Management and Budget and the General Services Administration to assist in managing federal real property. DOD has weaknesses in its processes for recording and reporting real property data that have led to inaccurate and incomplete information. GAO and others found military services have not consistently recorded real property transactions (i.e., acquisition of, change to, and disposal of a real property asset) and physical inventories of assets. GAO also found that the military services have not corrected identified discrepancies in their data systems, such as missing entries for utilization and facility condition and overdue asset reviews. GAO reviewed records of 120 facilities with identified discrepancies in fiscal year 2015 RPAD data and compared them to the records in the respective data system in 2017 and found that 61 discrepancies remained. The military services had corrected the data in the remaining 59 reviewed facilities in their data systems. DOD's efforts to prepare for an upcoming financial audit have helped identify issues and improve accuracy of some data. However, if DOD does not require the military services to fully monitor recording processes and implement corrective actions to resolve data discrepancies, the department will continue to have incomplete and inaccurate real property data and unreliable RPAD information. DOD has not addressed three risks that can adversely affect its ability to use its information to manage its real property. Specifically, DOD (1) has unfilled real property positions limiting its capacity to manage its data, (2) lacks a department-wide approach to improving its data quality, and (3) has not identified how it will complete implementation of an effort to improve access to data. These risks exist, in part, because DOD has not developed a strategy that identifies and addresses risks with accompanying time frames and performance metrics. If DOD does not develop a strategy that identifies and addresses risks to data quality and information accessibility, DOD may miss the opportunity to reasonably ensure that the information needed for effective decision making by DOD, Congress, and other federal agencies is available to meet real property accountability and reporting objectives.