text: Background DOD’s MWR Program Categories and Funding Sources DOD Instruction 1015.10, Military Morale, Welfare, and Recreation (MWR) Programs, establishes policy, assigns responsibilities, and prescribes procedures for operating and managing programs for military MWR programs. Specifically, the policy states that the services are to establish MWR programs in order to maintain individual, family, and mission readiness and that these programs are an integral part of the military and its benefits package. The Office of USD(P&R) oversees DOD’s MWR programs, develops policy, and oversees MWR programs’ funding. DOD’s instruction specifies the purpose of, the funding sources for, and the activities within each of MWR’s three designated program categories—all of which are summarized below in table 1. For a complete listing of the activities by program category, see appendix I. Each service supports MWR programs with a mix of appropriated and nonappropriated funding. According to officials, the services allocate appropriated funding amounts for MWR purposes, which primarily supports Category A and B programs. Nonappropriated funding is government money from sources other than amounts appropriated by Congress and may be generated in a number of ways to support MWR programs. For example, bowling programs, marinas, and golf programs generate nonappropriated funding revenue through participation fees for recreational activities paid by servicemembers and their families. Services must use any nonappropriated funding generated from or associated with MWR programs within their MWR programs. DOD’s MWR Program Funding Targets According to DOD Instruction 1015.10, the MWR programs are divided into three distinct categories, two of which also have specific funding targets. According to DOD’s 2016 report to Congress on appropriated funding support for MWR programs, the funding targets are intended to ensure that the services adequately fund MWR programs instead of requiring the servicemembers and their families to pay out of their own pockets for costs that should be borne by appropriated funding. While DOD Instruction 1015.10 establishes minimum funding targets for MWR Category A and B programs, it directs that the basic funding target, regardless of program category, is to use appropriated funding for 100 percent of costs for which they were authorized. While DOD’s Instruction allows the services to use appropriated funding for 100 percent of authorized costs, according to service officials this is generally not possible given budget constraints. Therefore, for MWR Category A mission sustaining programs, the DOD instruction establishes the funding target—stating that DOD is to use appropriated funding amounts for a minimum of 85 percent of total expenditures. For the MWR Category B community support system programs, the DOD instruction establishes the funding target as DOD’s use of appropriated funding amounts for a minimum of 65 percent of total expenditures. For the MWR Category C recreational activities for servicemembers and their families, appropriated funding support should generally be limited because this category has the highest capability of generating nonappropriated funding revenues. Budget, Funding, and Accounting Processes for MWR Programs Budget Processes The services have annual budget processes for MWR programs that vary based on whether appropriated or nonappropriated funding is being used. For MWR programs supported by appropriated funding, according to officials, the services submit and validate program requirements through DOD’s Planning, Program, Budgeting, and Execution process. DOD and service guidelines for certain MWR programs as well as annual service- issued budget guidance provide input for determining MWR programs’ requirements. Service officials from the Army, the Marine Corps, and the Air Force also stated that they determine program requirements using input from installations and service components, while service officials from the Navy stated that they use a budget model along with performance measures and budget guidance to determine program requirements. The requirements are then submitted to higher level components within the services for review, adjustment, and approval. Once the services validate the requirements, they are provided to the Office of the Secretary of Defense for inclusion in the President’s Budget. Figure 1 provides an overview of the general process the services use to budget for appropriated funding support of MWR activities. Budget processes and authorities for nonappropriated funding, or program-generated revenue, vary by service. Specifically, the services maintain nonappropriated funding budgets and budget approvals at different levels within the service organization. For example, officials stated that Marine Corps and Air Force installations maintain and manage nonappropriated funding generated at their locations while Army and Navy installations submit nonappropriated funding and budgets to a higher level of command, Installation Directorates for the Army and Regions for the Navy, as well as the service headquarters component. The services plan for and manage their nonappropriated funding budgets based on a number of factors, including revenue generated; projected revenues; and the amount, if any, of appropriated funding available. Figure 2 provides an overview of the general process the services use to approve and manage nonappropriated funding generated within the service. Each service uses processes to provide funds for the implementation of its MWR programs. Service officials stated that during program execution the services execute their programs and make adjustments to their budgets based on funding authorized from appropriated funding and nonappropriated funding sources. Commanders have authority over budget implementation and the guidelines and parameters for commanders vary by service. For example, according to Army officials, during the fiscal year Army commanders can change MWR program budgets and have some flexibility to move funding to other non-MWR command priorities. Installations report to the services actual expenditures and income generated, which are included in the services’ annual reports. Figure 3 provides an overview of the general process the services use to provide funding for MWR programs. Each service uses accounting processes for its MWR programs. According to service officials, accounting is handled differently at each service depending on the service’s organizational structure. According to service officials, the Navy and the Marine Corps centrally manage their MWR accounting processes at their service headquarters; the Army manages its accounting process at its headquarters and at the Defense Financial and Accounting Services Nonappropriated Financial Services; and the Air Force manages its accounting process at its Secretariat and at the service components. According to service officials, program managers at the service headquarters and activity level are able to review financial data, such as expenditures and revenues, for MWR programs on a recurring basis. DOD’s Instruction 1015.10 states that the services should identify appropriated and nonappropriated funding accounts in annual budgets, and the services have designated codes to categorize expenditures. Service officials stated they use the codes to report annually to USD(P&R) on MWR programs’ expenditures for both appropriated and nonappropriated funding. The Services Did Not Consistently Meet One of the Two Appropriated Funding Targets and Are Taking Steps to Address This, but DOD Has Not Comprehensively Evaluated the Targets to Ensure They Are Appropriate The services generally met the funding target for fiscal years 2012 through 2017 for MWR Category A mission-sustaining programs, but did not consistently meet the target for Category B programs that provide community support systems to servicemembers and their families during the same time period. Service officials said they are taking steps to meet the Category B target, such as restoring targeted levels of appropriated funding support in future budget planning. Data indicate that the services are getting closer to meeting the target. However, DOD has not comprehensively evaluated the funding targets, which were established more than 20 years ago, to ensure they currently are appropriate. The Services Generally Met the Funding Target for MWR Category A Mission- Sustaining Programs For MWR Category A mission-sustaining programs, the services generally met the 85-percent target for appropriated funding support. Specifically, the Navy and the Air Force consistently met or exceeded the 85-percent funding target in fiscal years 2012 through 2017, and the Army met or exceeded the target every year except for fiscal year 2012 when it reported that 84 percent of its Category A programs were supported with appropriated funds. The Marine Corps exceeded the minimum funding target for Category A programs in fiscal years 2012 through 2017, but consistently fell below the target with appropriated funding support ranging from 77 percent to 84 percent from fiscal years 2013 through 2016. Table 2 provides additional detail on the extent to which each service met the 85-percent funding target for MWR Category A mission- sustaining programs in fiscal years 2012 through 2017. The Services Did Not Consistently Meet the Funding Target for MWR Category B Community Support Programs, but Are Taking Steps to Meet the Target in the Future For MWR Category B community support programs, the services missed the 65-percent target for appropriated funding support with increasing frequency from fiscal years 2012 through 2017. Service officials stated that constrained budgets and competing priorities have made it difficult to allocate the appropriated funding needed to support their programs. However, service officials said they are taking steps to meet the Category B funding target in the future. Specifically, we found that the services collectively missed the funding target over 60 percent of the time from fiscal years 2012 through 2017. All four services missed the funding target in fiscal years 2015 and 2016 with appropriated fund support ranging from 55 to 63 percent. Most recently, in fiscal year 2017 the Army met the 65-percent funding target, but the Navy, the Marine Corps, and the Air Force fell below the 65-percent funding target with appropriated funding support ranging from 60 percent to 62 percent. Although the Air Force did not meet the 65-percent target for fiscal years 2012–2017 citing resource issues, Air Force leadership has increased appropriated funding for the MWR programs each year to help get closer to meeting the Category B funding target. Air Force officials said they plan to continue to increase funding each year so they can meet the target in the future. Table 3 provides additional detail on the extent to which each service met the 65-percent funding target for MWR Category B community support programs in fiscal years 2012 through 2017. The USD(P&R) monitors the services’ compliance in meeting the targets. When a funding target is missed, USD(P&R) officials said a memorandum is sent to the services that asks for a detailed plan on how they will achieve the required level of appropriated funding support for the missed target in the future, and these officials said that each service has provided such a plan when they fell below the 65-percent funding target. In instances when a service does not respond to the initial request for a remediation plan, USD(P&R) officials said a second memorandum is sent notifying the service that they missed the funding target and that they need to submit a plan detailing how they intend to come into compliance. For example, in fiscal year 2015 the Army did not meet the 65-percent funding target for Category B programs. In June 2016, the Assistant Secretary of Defense for Manpower and Reserve Affairs sent the Army a memorandum asking it to submit a plan on how it would meet the target. After not receiving a response, the Assistant Secretary of Defense for Manpower and Reserve Affairs sent the Army a second memorandum in September 2016 that noted the missed target and reiterated the need to submit a plan for achieving compliance with designated funding targets. Following the second memorandum, the Army issued a memorandum in December 2016 stating it would fully fund Category A and B programs to the required targets in fiscal year 2017. Following these communications, in February 2018, the Army sent USD(P&R) its fiscal year 2017 program and metric report showing that it had successfully met the Category A and B funding targets as planned. Service officials said they are taking steps to meet the Category B target, and data from fiscal years 2015 through 2017 indicate that the services are getting closer to meeting it. However, in the prior years when the services have not met appropriated funding targets for Category B programs, officials said that the services have relied on nonappropriated funding as supplemental support to help ensure that such programs continue to operate. Specifically, according to USD(P&R) officials, the services have used nonappropriated funding—that is, revenue generated largely through user fees incurred by servicemembers and their families— to cover MWR program costs for which appropriated funding was authorized. However, the use of nonappropriated funds to cover shortfalls in appropriated funding support for MWR programs has been a long- standing issue about which Congress has previously expressed concern. Specifically, in House Report 104-563, which accompanied H.R. 3230, a bill for the National Defense Authorization Act for Fiscal Year 1997, the House Committee on National Security established the annual DOD Category A and B MWR programs reporting requirement to Congress, after receiving testimony from the services’ MWR managers and noting a disparity in the degree of appropriated funding support afforded these programs particularly in the area of Category A and B programs. While the committee recognized that shortfalls in appropriated funding support for MWR programs requires the use of nonappropriated funding to meet requirements, it also stated that the use of nonappropriated funding resources—soldier, sailor, airman, and Marine money—to subsidize appropriated funding activities should be minimized. While the Army met the Category B funding target for fiscal year 2017, the Navy, the Marine Corps, and the Air Force have each submitted plans and briefed USD(P&R) on how they plan to meet the target in the future. Navy officials said that they acknowledged the Navy’s challenges with meeting the Category B funding target and, as a result, began assessing their Category B programs to eliminate those that had limited use, consolidate some where possible, and implement operational efficiencies. Marine Corps officials indicated that the Marine Corps is committed to preserving valuable MWR programs and restoring appropriate levels of appropriated funding support in future budget planning. Specifically, the Marine Corps plans to readdress appropriated funding levels in the budget planning process in 2019. However, Marine Corps officials noted they may continue to have challenges meeting the 65-percent funding target in fiscal year 2018. Air Force officials said they will continue to advocate for retaining established MWR program funding in the budget process. Air Force officials said that for fiscal years 2014 through 2017, Air Force leadership has increased appropriated funding for the MWR programs each year to help get the Air Force closer to meeting the Category B funding target. DOD Has Not Comprehensively Evaluated the Funding Targets to Ensure They Are Appropriate DOD has not comprehensively evaluated the funding targets for Category A and B programs, which were instituted more than 20 years ago, to ensure they are appropriate. Standards for Internal Control in the Federal Government recommends that management periodically review policies and procedures for continued relevance and effectiveness in achieving an entity’s objectives. According to USD(P&R)officials, a limited evaluation took place prior to 1995 that resulted in the Category A funding target in DOD’s instruction being changed from 100 percent to 85 percent. USD(P&R) officials said that the Category A appropriated funding target was changed because some of the activities within the category have expenses, such as for the food and beverage elements, that are able to generate revenue and thus not authorized to use appropriated funds. USD(P&R) officials stated that since that time there have been no further evaluations of the Category A or Category B targets and agree that it is time to evaluate the current relevance of the targets. Specifically they noted the considerable changes to the budgeting and funding environment that have taken place in the more than 20 years since the Category A funding target was modified. In addition, officials told us they also agree that it is time to evaluate the relevance of the Category B funding target, which has never been modified. Specifically, officials said that the services’ extended engagement in overseas conflicts and constrained budgets have resulted in an operating environment that is substantially different from the peacetime setting in which the targets were first established. Moreover, Standards for Internal Control in the Federal Government requires management to document internal controls to meet operational needs. Documentation of controls, including changes to controls, is evidence that controls are identified, capable of being communicated to those responsible for their performance, and capable of being monitored and evaluated by an entity. Documentation also provides a means to retain organizational knowledge and mitigate the risk of having that knowledge limited to a few personnel, as well as a means to communicate that knowledge as needed to external parties, such as external auditors. As previously stated, officials stated that the Category A funding target was updated sometime prior to 1995; however, officials did not have any specific documentation related to this change. Furthermore, USD(P&R) officials said the targets were developed so long ago that there is a general lack of information on the funding targets’ origins and that they are not sure of the process or methodology that was used to develop them. The amount of time that has passed since Category A’s target was modified, recent challenges in meeting the Category B target, and the general lack of information on the funding targets’ origins raise concerns about the appropriateness and continued relevance and effectiveness of the targets in achieving MWR programs objectives. Until DOD comprehensively evaluates the appropriateness of current targets for Category A and B programs and, based on its evaluation, documents any changes it makes to its funding targets, DOD cannot be certain that the targets reflect the current operating environment and do not pose undue financial burden on the servicemembers. DOD Has Established an Oversight Structure and Performance Measures for MWR Programs but Has Not Developed Measurable Goals for Determining Whether MWR Programs Are Cost-Effective DOD Has Established a Structure to Provide Oversight of MWR Programs DOD has established a structure that specifies roles, responsibilities, and procedures for overseeing MWR programs. Specifically, DOD Instruction 1015.10 assigns roles and responsibilities for oversight of MWR programs to the USD(P&R), the Secretaries of the military departments, and the Chiefs of the military services (i.e., the Chiefs of Staff for the Army and the Air Force, the Chief of Naval Operations, and the Commandant of the Marine Corps). In addition, the services’ respective policies assign roles and responsibilities for MWR program oversight to the commander level. Table 4 summarizes the general oversight roles and responsibilities for DOD’s MWR programs. The first level of oversight responsibility for MWR programs is assigned to the USD(P&R). Specifically, responsibilities include the development of department-level policies, program goals, performance measures, funding targets, and the oversight of appropriated and nonappropriated funding and expenditures for all MWR programs. To help ensure consistent quality, USD(P&R) monitors the services’ compliance in meeting minimum MWR funding targets and performance measures. As previously discussed, if a service misses a funding target, USD(P&R) officials said they ask that service to submit a remediation plan that summarizes its intent to meet the target in the future, as USD(P&R) did in fiscal year 2015 when several services missed appropriated funding targets for Category A and B activities. The second level of oversight is assigned to the Secretaries of the military departments who are responsible for designating a central point of contact within their respective service to facilitate MWR programs policy compliance, coordinating with USD(P&R), and establishing funding priorities and strategy for MWR programs. For example, service officials we met with from the military departments said they have designated their respective Assistant Secretary Offices for Manpower and Reserve Affairs as the central point of contact for the services’ MWR programs. The third level of oversight is assigned to the Chiefs of the military services who are responsible for the development of overall goals and uniform quality measures, which could include performance measures, for MWR programs consistent with the performance measures set by DOD in its instruction. For example, the Commander, Navy Installations Command has developed uniform quality measures for the Navy MWR Fitness program based on items such as customer satisfaction, usage rates, and equipment maintenance, among other things. According to officials, these quality measures provide a common tool to measure customer satisfaction and the quality of each installation’s MWR Physical Fitness program. Additionally, these Chiefs are also responsible for helping to ensure MWR programs are resourced with appropriated and nonappropriated funding according to financial categories and for identifying their respective appropriated and nonappropriated accounts in annual budgets to meet DOD funding goals. Service Chiefs are also responsible for ensuring that military installations operate customer-driven MWR programs that are determined locally by market analysis. Lastly, the services’ respective policies assign roles and responsibilities for MWR program oversight to the commander level. Additionally, according to service officials, commanders assist with preparing an annual briefing for USD(P&R) on their MWR programs, which includes initiatives, challenges, program trends, and financial information. For example, in fiscal year 2017, each of the services reported on new initiatives to support MWR programs for servicemembers and their families, some of which are highlighted in table 5. DOD and the Services Have Performance Measures to Assess MWR Programs but These Measures Lack Measurable Goals for Determining Cost- Effectiveness DOD Instruction 1015.10 identifies six broad categories of performance measures that the services use to assess their respective MWR programs. However, these measures do not include measurable goals, which are needed to assess the cost-effectiveness of the 55 activities that currently make up the MWR programs. Specifically, DOD identifies six broad performance measure categories in its instruction and, according to service officials, the services collect and use various types of information within these categories to periodically assess and adjust these activities, as appropriate. Table 6 summarizes the types of information that DOD requires the services to collect across the six categories established in its instruction. In addition to the information that is to be collected across these six broad categories, DOD established separate, more specific performance measures for 2 of the 55 activities—namely, for Physical Fitness and for Library Programs and Information Services. For the Physical Fitness activity, the services are required to submit annual reports to DOD on their compliance with meeting more specific performance measures in a variety of areas such as administrative operations, staff qualifications, facility equipment, and child play areas. Similarly, DOD requires the services to report on a variety of areas related to the Library Programs and Information Services activity, such as library operation plans, customer programs and service, and technology infrastructure. Unlike the broad measures contained in DOD’s Instruction, the specific performance measures DOD established for the Physical Fitness and Library Programs and Information Services activities tell the services exactly what information to collect and report in each performance measure category instead of the services having to develop specific measures on their own. In an effort to better evaluate MWR programs, the services also have efforts underway that include the following to develop specific performance measures for their programs beyond the broad performance measures contained in DOD Instruction 1015.10. Army. Army officials told us that they partnered with the Army Public Health Center to build evidence-based MWR programs. Based on this review, the Army found that Army MWR Community Recreation and Fitness programs have not been formally evaluated as directed by DOD Instruction 1015.10 requirements to measure and assess programs. Additionally, the Army found that, while the Army Office of the Assistant Chief of Staff for Installation Management provides program oversight, it does not possess the capability to conduct program evaluations. According to the results of the Army Public Health Center report issued in June 2017, the Army initiated a three- phase approach for evaluating its MWR programs. The report showed that assessing the evaluability of the Army MWR programs is phase one. According to the Army, these evaluations will enable the Army to validate program outcomes and better position itself to compete for scarce resources. The report also showed that many of the 13 Army MWR programs selected for review do not have direct links between activities and the priority outcomes with behavioral, social, and physical health, and that they do not have sufficient outcomes data that have been consistently collected. Army officials said that phase two will include the development of formal evaluation plans for selected evaluable MWR programs. Lastly, Army officials said that phase three will be the execution of the evaluation for two selected MWR programs, which is on target to be completed by December 2018. While Army officials are learning how to evaluate programs through this partnership with the Army Public Health Center, they said that they have also learned that these endeavors are costly. Officials said that a very modest program evaluation requires approximately $300,000 to $500,000. Army officials also stated that program evaluation requires support and participation by those organizations and people that deliver the programs. Furthermore, according to Army officials, resource reductions at the operational level (garrisons) are increasingly restrictive, preventing them from collecting critical information to support this multiphase effort. Navy. Navy officials said that they use the MWR Enterprise Modeling System, which is based on performance measures that have been developed and routinely reviewed and updated by headquarters, regional, and installation program managers. The MWR Enterprise Modeling System is used as the baseline for the annual MWR performance data call that measures actual program performance against performance standards. Navy officials said that the performance measures provide the business strategy and guidance to ensure efficient, effective and market-driven delivery of programs and services. Marine Corps. Marine Corps officials said they collaborated with the RAND Corporation to provide an analytically rigorous assessment framework to evaluate program performance. The RAND Corporation provided draft measures of performance. Marine Corps officials said that the RAND Corporation also provided a user guide that outlines an evaluation methodology and ensures consistent and standard application. Marine Corps officials said that they are reviewing the draft measures to determine appropriate data collection and have drafted an implementation plan. Specifically, Marine Corps officials said that they plan to brief Marine Corps installations in June 2018 on the performance measures they plan to collect data from, which will begin in fall 2018. Air Force. Air Force officials said that they are building off the work that the RAND Corporation undertook for the Marine Corps and have also started collaborating with the RAND Corporation. The objective of the Air Force study is to develop an evidence-based evaluation framework for MWR programs that identifies immediate and mid-term outcomes that contribute to airman and family readiness and resilience. Specifically, the goal is to provide the Air Force with logic models and performance measures that are tied to each of the programs and services in the MWR portfolio. Air Force officials said they expect to finish this study by June 2018. However, the officials noted that implementing the performance measures will be a challenge since these types of MWR programs are difficult to measure and hard to capture data for. While both the broad and specific measures established by DOD and the services can provide useful context about the status of individual MWR activities, they do not contain measurable goals that service officials could use to compare program results with costs to determine whether an individual activity is cost-effectively operating. Because the services’ efforts to develop specific performance measures are in early stages of development it is too early to determine whether these efforts will result in measurable goals that can be used to assess the cost-effectiveness of the MWR programs. DOD’s Financial Management Regulation specifies that performance measurement should include program accomplishments in terms of outputs and how those outputs effectively meet intended agency mission goals. Further, cost itself can be a performance metric, but should also be combined with an effectiveness measure, such as the percentage of a goal achieved at a level of expected performance, to ensure that the resulting output is cost effective. Additionally, through our prior work on performance measurement, we have reported that performance goals and measures should align with an agency’s goals and mission. However, in reviewing DOD Instruction 1015.10, we found no mention of any goals, mission, objectives, or purpose for the MWR programs. There is one section entitled “policy” in the instruction that included items that resemble goals. Specifically, the instruction stated that MWR programs: 1. are an integral part of the military and benefits package; 2. build healthy families and communities and provide consistently high- quality support services that are commonly furnished by other employers or by state and local governments to their employees and citizens; 3. encourage positive individual values and aid in recruitment and retention of personnel; and 4. promote esprit de corps and provide for the physical, cultural, and social needs; general well-being; quality of life; and hometown community support of servicemembers and their families. USD(P&R) officials who have responsibility for developing MWR program goals acknowledged that these policy items function as strategic goals but were not clearly identified as such in the instruction and also acknowledged that the instruction does not include measurable goals for assessing cost-effectiveness. In addition, USD(P&R) officials said that they are starting a review of DOD Instruction 1015.10 and did not know yet whether they would make any changes to the goals or expand the reporting requirement to include all 55 activities. Until DOD develops performance measures that include measurable goals, DOD officials and other decision makers, such as Members of Congress, may find it difficult to determine whether the MWR programs and the activities that make up the MWR programs are meeting servicemember needs in a cost-effective manner. Conclusions DOD’s multibillion dollar MWR programs provide a wide range of benefits for servicemembers and their families that ultimately help support military missions and readiness, both in times of war and peace. DOD has established funding targets for providing appropriated funding support for Category A and B MWR programs. However, the funding targets have not been comprehensively evaluated in the last 20 years to determine their current relevance. Until DOD comprehensively evaluates the appropriateness of current funding targets and documents any changes made to the targets, DOD’s funding targets may not reflect the current operating environment, and may be posing an undue burden on the servicemembers. DOD has also not developed performance measures with measureable goals that would allow it to assess the cost- effectiveness of its MWR programs. Without performance measures that include such measurable goals, it will be difficult for DOD and Congress to determine whether the individual activities and overall MWR programs are meeting desired outcomes in a cost-effective manner. Recommendations for Executive Action We are making the following two recommendations to DOD. We recommend that the Secretary of Defense ensure that the USD(P&R), in consultation with the Secretaries of the military departments, comprehensively evaluate the funding targets for Category A and B MWR programs and document any changes made to the targets and the methodology used. (Recommendation 1) We recommend that the Secretary of Defense ensure that the USD(P&R), in consultation with the Secretaries of the military departments, develop measurable goals for its MWR programs’ performance measures to determine the programs’ cost-effectiveness. (Recommendation 2) Agency Comments and Our Evaluation We provided a draft of this report to DOD for review and comment. In its comments, DOD concurred with our recommendations and noted actions that it is taking. DOD’s comments are reprinted in their entirety in appendix II. DOD also provided technical comments, which we incorporated into the report as appropriate. We are sending copies of this report to the appropriate congressional committees; the Secretary of Defense; the Secretaries of the Army, the Navy, and the Air Force; the Commandant of the Marine Corps; and the Under Secretary of Defense for Personnel and Readiness. 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 me at (202) 512-3604 or farrellb@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff members who made key contributions to this report are listed in appendix III. Appendix I: Department of Defense’s Morale, Welfare, and Recreation Program Categories Appendix II: Comments from the Department of Defense Appendix III: GAO Contact and Staff Acknowledgments GAO Contact Staff Acknowledgments In addition to the contact named above, Kimberly A. Mayo, Assistant Director; Rebekah Boone; Mae Frances Jones; Felicia Lopez; Stephanie Moriarty; Cynthia Saunders; John W. Van Schaik; Paul Seely; Carter Stevens; and Roger Stoltz made key contributions to this report.
target: DOD's MWR programs provide servicemembers and their families with three categories of programs: Category A (e.g., fitness and libraries), Category B (e.g., camping and performing arts), and Category C (e.g., golf). DOD oversees the percentage of appropriated funding allocated to MWR programs by category and measures the military services' compliance with established funding targets. DOD set the targets at 85 percent for Category A and 65 percent for Category B. DOD did not set a target for Category C since this category has the ability to generate revenue from user fees. House Report 115-200 accompanying a bill for the National Defense Authorization Act for Fiscal Year 2018 includes a provision for GAO to review DOD' s MWR programs. GAO assessed the extent to which (1) the services have met DOD's established funding targets for each category of MWR programs and DOD has comprehensively evaluated the relevance of its targets, and (2) DOD has oversight structures and performance measures that include measurable goals, including those for cost-effectiveness, by which to review MWR programs. GAO analyzed MWR program information for fiscal years 2012-2017 and compared DOD's MWR policy with guidance for using measures and evaluating goals. The Department of Defense (DOD) established funding targets for two categories of Morale, Welfare, and Recreation (MWR) programs—Category A, which promotes the physical and mental well-being of servicemembers, and Category B, which funds community support systems for servicemembers and their families. These targets are intended to ensure that the military services adequately fund these programs with appropriated funds instead of requiring servicemembers and their families to pay fees out of pocket to cover program costs. However, GAO found the following: In fiscal years 2012-2017, the military services generally met the DOD-set target to provide 85 percent of appropriated funding for Category A programs but not the 65-percent target for Category B programs. Service officials said they are taking steps to meet the Category B target, such as by restoring targeted levels of appropriated funding support in future budget planning. Data GAO reviewed indicate that these steps are helping the services get closer to meeting the target for Category B. DOD has not comprehensively evaluated the targets, established more than 20 years ago, to ensure that they are appropriate. DOD officials said they agree that it is time to evaluate the relevancy of the targets as the current operating environment is fundamentally different than when the targets were established 2 decades ago. Further, DOD officials said that they are unsure of the process or methodology used to originally develop the targets because they have no documentation supporting these decisions. Until DOD comprehensively evaluates the appropriateness of the targets and, based on its evaluation, documents any changes made, it cannot be certain that the targets reflect the current operating environment and do not pose undue financial burden on servicemembers. DOD established oversight structures and performance measures for MWR programs, but has not established measurable goals to assess the cost-effectiveness of the 55 activities that make up MWR programs. DOD's MWR policy identifies six broad performance measure categories for the program. DOD officials responsible for developing MWR program goals acknowledged that DOD's MWR policy does not include measurable goals for assessing the cost-effectiveness of program activities, and do not currently have plans to make any changes to the goals. Service officials told GAO that they collect and use various types of information within the categories to assess specific activities. While both the categories established by DOD and the service-specific efforts provide useful context about the status of individual MWR activities, they do not replace the need for measurable goals that can be used to assess whether the programs are operating cost-effectively. The services are in the early stages of developing more specific performance measures, but it is too early to determine whether these efforts will result in measurable goals that can be used to assess cost-effectiveness. Until DOD develops performance measures that include measurable goals, it cannot ensure that MWR programs meet servicemember needs in a cost-effective manner.