Homeland Defense: Action Needed to Improve Cost Reporting for DOD's Aerospace Control Alert Mission
Published: 2013-09-09T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: To protect U.S. airspace, DOD performs the Aerospace Control Alert mission, which includes military forces arrayed in a rapid response posture to conduct both air sovereignty and air defense operations against airborne threats over the United States and Canada. The National Defense Authorization Act for Fiscal Year 2013 required that the Secretary of Defense submit a report to Congress that provides a cost-benefit analysis and risk-based assessment of the Aerospace Control Alert mission as it relates to expected future changes to the budget and force structure of the mission. The act also requires that GAO review DOD's report and submit any findings to the congressional defense committees. In response to this mandate, GAO examined (1) DOD's April 2013 reporting of a risk-based assessment and cost-benefit analysis of the Aerospace Control Alert mission as they relate to expected future changes to the budget and force structure of that mission and (2) the extent to which DOD has reported the total cost of the Aerospace Control Alert mission. GAO reviewed DOD's April 2013 report to Congress and Aerospace Control Alert budget justification displays, and interviewed knowledgeable DOD officials.
section_title: What GAO Found
paragraphs: In its April 2013 report to Congress, the Department of Defense (DOD) did not provide any new analyses, but provided the results of previous analyses related to the Aerospace Control Alert mission because, according to DOD officials, DOD was not expecting any future changes to the budget or force structure of the mission, including consideration of any basing location alternatives. DOD's April 2013 report summarized the results of three risk assessments that were conducted to support DOD's 2012 decision on which two alert basing locations could be removed from 24-hour alert status with the least amount of risk. The North American Aerospace Defense Command (NORAD), the Office of the Secretary of Defense Office of Cost Assessment and Program Evaluation, and the Continental U.S. NORAD Region performed these assessments and all concluded that, given the 2012 DOD decision that two alert basing locations would be removed from 24-hour alert status, the removal of the locations at Duluth, Minnesota, and Langley, Virginia, would provide the least increase in risk. DOD's April 2013 report also summarized a cost savings estimate developed after the decision to remove these basing locations from 24-hour alert status.
Along with the submission of DOD's budget requests for fiscal years 2010-14, the Air Force reported cost information for components of the Aerospace Control Alert mission in budget displays required by the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, but DOD did not report the comprehensive cost of the Aerospace Control Alert mission. Standards for Internal Control in the Federal Government notes that financial information is needed for periodic external reporting and, on a day-to-day basis, to make operating decisions, monitor performance, and allocate resources. The Air Force provided budget displays containing information related to Air Force and Air National Guard military personnel costs, flying hours, and certain other costs along with DOD's budget justification materials for fiscal years 2010-14. However, DOD did not report other military service costs associated with the Aerospace Control Alert mission. The National Defense Authorization Act for Fiscal Year 2013 now requires, in addition to the Air Force cost information required by the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, that DOD provide a consolidated budget justification display that fully identifies the Aerospace Control Alert budget for each of the military services and encompasses all programs and activities of the Aerospace Control Alert mission for each of the following: procurement; operations and maintenance; research, development, testing, and evaluation; and military construction. According to DOD officials, such a display is being developed for inclusion with the fiscal year 2015 budget submission. These consolidated budget displays should help provide a more complete picture of Aerospace Control Alert mission costs. However, other military personnel costs, including those associated with the Army and the Army National Guard personnel providing ground-based air defense capabilities, support the mission as well. Inclusion of this information, in addition to the information required in the budget justification displays, could provide decision makers with more comprehensive cost information to make fully informed resource allocation decisions to support the Aerospace Control Alert mission.
section_title: What GAO Recommends
paragraphs: GAO recommends that DOD, as it expands its cost reporting in response to current reporting requirements, ensure that all personnel costs related to the Aerospace Control Alert mission, including those of the Army and Army National Guard, are included in DOD's budget displays. DOD concurred with GAO's recommendation.

section_title: Letter
paragraphs: As a part of the federal government’s efforts to protect U.S. airspace, the  Department of Defense (DOD) performs Operation Noble Eagle, which  consists of several missions. One such mission is the Aerospace Control  Alert mission, which includes military forces arrayed in a rapid response  posture to conduct both air sovereignty and air defense operations  against airborne threats over the United States and Canada. These  forces include fighter aircraft and personnel available 24 hours a day,  every day, to deter, respond to, and if necessary defeat airborne threats  at 16 Aerospace Control Alert basing locations across the contiguous  United States as well as in Alaska and Hawaii. These alert basing  locations make up a portion of the Aerospace Control Alert mission and  include pilots, command and control personnel, fighter aircraft, refueling  tankers, airborne early warning aircraft, and aircraft maintenance  personnel. The Army and the U.S. Coast Guard also support the  Aerospace Control Alert mission; the Army provides ground-based air  defense systems and personnel while the U.S. Coast Guard provides  alert helicopters. The Aerospace Control Alert mission represents the last  line of the air defense of the United States. In 2012, in response to the  Secretary of Defense’s efficiency initiatives, DOD decided that its  Aerospace Control Alert basing locations in Duluth, Minnesota, and in  Langley, Virginia, could be taken off 24-hour alert status, with minimal  impact on overall mission capabilities.
We previously reported on improvements and challenges regarding the  planning and management of the Aerospace Control Alert mission,  including challenges faced by the North American Aerospace Defense  Command (NORAD) and DOD in their ability to balance risks, costs, and  benefits associated with that mission. Specifically, in January 2009, we  reported on shortcomings in DOD’s approach to the mission, including  NORAD’s difficulty in determining the appropriate numbers and types of  units, personnel, and aircraft for the mission. In January 2012, we  reported again on the Aerospace Control Alert mission and noted that  NORAD had not included a prioritized list of metropolitan areas and  critical infrastructure in its risk assessments and that it did not incorporate  into these assessments assumptions associated with all three elements  of risk: threat, vulnerability, and consequence. Finally, in February 2013,  we reported on the analyses DOD used to support its decision to take the  alert basing locations in Duluth, Minnesota, and in Langley, Virginia, off  24-hour alert status. Our report summarized the three risk assessments  conducted by DOD to inform the decision of which of the basing locations,  once removed from 24-hour alert status, would have the least impact on  operational effectiveness. Our report also summarized the estimated cost  savings that DOD expected as a result of these changes.
Effective January 2013, the National Defense Authorization Act for Fiscal  Year 2013 required the Secretary of Defense to submit a report to  Congress, not later than April 1, 2013, that provided a cost-benefit  analysis and risk-based assessment of the Aerospace Control Alert  mission as it relates to expected future changes to the budget and force  structure of such mission. On April 18, 2013, DOD submitted its report to Congress. The act also requires that GAO conduct a review of the DOD  report and submit a report on the findings of that review to the  congressional defense committees. In response to this mandate, we  examined (1) DOD’s reporting of a risk-based assessment and cost- benefit analysis of the Aerospace Control Alert mission as they relate to  expected future changes to the budget and force structure of the mission  and (2) the extent to which DOD has reported the total cost of the  Aerospace Control Alert mission.
To address our objectives, we reviewed relevant documents and  interviewed knowledgeable officials from DOD’s Office of the Under  Secretary of Defense (Comptroller), Office of the Assistant Secretary of  Defense for Homeland Defense and Americas’ Security Affairs, Office of  the Secretary of Defense Office of Cost Assessment and Program  Evaluation, Joint Staff, NORAD/U.S. Northern Command, U.S. Pacific  Command, Departments of the Army and Air Force, National Guard  Bureau and Air National Guard, Continental U.S. NORAD Region (a  component of NORAD that directs aerospace control for the continental  United States, with the exception of Alaska), and U.S. Army North. To  examine DOD’s reporting of a risk-based assessment and cost-benefit  analysis in the April 2013 DOD Report on the Aerospace Control Alert  Mission Cost-Benefit Analysis and Risk-Based Assessment, we examined  the risk assessment and cost-benefit analysis information contained in the  2013 DOD report and supporting documentation and testimonial evidence  provided by DOD during the course of our review. To examine the extent  to which DOD reported the total cost of the Aerospace Control Alert  mission, we analyzed the costs included in Air Force budget displays for  the Aerospace Control Alert mission for fiscal year 2010 through fiscal  year 2014 and compared this information with mission-related costs identified during the course of our review by DOD officials associated with  the mission, as well as with Standards for Internal Control in the Federal  Government.
We conducted this performance audit from April 2013 until September  2013 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: DOD Does Not Anticipate Future Budget or Force Structure Changes and 2013 Report to Congress Provides Results of Previous Analyses We Reported on in February 2013
paragraphs: In its April 2013 report to Congress, in response to the National Defense  Authorization Act for Fiscal Year 2013 requirement that DOD provide a  cost-benefit analysis and a risk-based assessment of the Aerospace  Control Alert mission as it relates to expected future changes to the  budget and force structure of such mission,report on any new analyses because, according to DOD officials, DOD  was not weighing competing Aerospace Control Alert basing location  alternatives in response to any future budget or force structure changes.  DOD reported on its previous analyses that consisted of (1) three risk  assessments DOD conducted to support the 2012 decision that  determined which two alert basing locations could be reduced with the  least amount of risk and (2) cost savings estimates DOD developed after  making the 2012 decision to take two alert basing locations (one in  Duluth, Minnesota, and the other in Langley, Virginia) off 24-hour alert  status.
DOD did not conduct or  In our prior reports on the Aerospace Control Alert mission, we stated that  GAO’s risk-based management framework noted that risk assessments  should contain three key elements: an analysis of threat, an estimation of  vulnerability, and an identification of consequences. Following a decision by DOD that two alert basing locations should be taken off 24- hour alert status, three risk assessments were conducted to support the  2012 decision of which two locations, once removed from 24-hour alert  status, would have the least amount of increase in risk to the overall  Aerospace Control Alert mission. DOD’s April 2013 report provided a  summary of the final results of these three risk assessments. These risk  assessments were performed by NORAD, the Office of the Secretary of  Defense Office of Cost Assessment and Program Evaluation, and the  Continental U.S. NORAD Region, which included consideration of threat,  vulnerability, and consequence. All three of these assessments came to  similar conclusions regarding which of the two alert locations would cause  the least increase in risk if taken off of 24-hour alert status.
NORAD’s risk assessment analysis was based on quantitative modeling  of fighter basing and, in our February 2013 report, we noted that NORAD  had improved its risk analysis by changing some of the assumptions used   We also discussed the  to address vulnerability and consequence.separate analysis conducted by the Office of Cost Assessment and  Program Evaluation, which similarly relied on modeling to aid its  evaluation of risk. Finally, in our February 2013 report, we described the  analysis resulting from a panel of subject matter experts convened by  Continental U.S. NORAD Region, which reached conclusions consistent  with NORAD and the Cost Assessment and Program Evaluation  modeling. NORAD officials stressed to us that there was an increase in  risk that resulted from removing two basing locations from 24-hour alert  status, but the risk assessments informed decision making as to which  two bases removal would have the least increase in risk. According to  DOD officials, no additional risk analysis was conducted following these  three studies.
According to DOD officials, DOD does not expect to make future changes  to the budget and force structure of the mission beyond the decision  already made to remove two sites from 24-hour alert status. In addition,  the April 2013 DOD report notes that any further reductions in 24-hour  alert sites would affect cross-border operations with Canada as well as  mission accomplishment.
Regarding the cost savings estimate, DOD’s April 2013 report states that  removing the 24-hour alert status from the Duluth and Langley alert  basing locations would result in an estimated savings of over $73 million  over the fiscal year 2013-17 time period. The report states that these  estimated cost savings are primarily from shifting personnel from full-time  to part-time status at the two sites no longer on 24-hour alert status. We  reported on these same cost savings estimates in February 2013 and  noted that the cost savings were estimated by the Air Force after the  decision was made to eliminate alert basing locations at Duluth,  Minnesota, and Langley, Virginia, from 24-hour alert status.
section_title: DOD Has Not Reported Comprehensive Cost Information for the Aerospace Control Alert Mission
paragraphs: DOD has reported Air Force cost information for the Aerospace Control  Alert mission in its budget displays but has not yet reported the  comprehensive cost of the mission. Standards for Internal Control in the  Federal Government notes that financial information is needed for  periodic external reporting and, on a day-to-day basis, to make operating  decisions, monitor performance, and allocate resources. Pertinent cost  information should be identified, captured, and distributed in a form and  time frame that permits people to perform their duties efficiently. Accurate  and timely reporting of operational and financial data can assist program  managers in determining whether they are meeting their agencies’ plans  and meeting their goals for accountability for effective and efficient use of  resources. Without comprehensive cost information, decision-makers  may not know what resources are allocated and used in support of the  Aerospace Control Alert mission.
Pub. L. No. 110-417, § 354 (2008). weak internal controls limited DOD’s ability to accurately identify Air  Sovereignty Alert mission expenditures. In addition, according to Air  National Guard officials, not all National Guard Bureau costs are included  in total Aerospace Control Alert mission costs. For example, the Air Force  calculates the costs for each basing location based on formulas that do  not consider the base’s location and the unit’s home station. However,  according to Air National Guard officials, the actual costs of each basing  location can vary depending on a number of factors, such as whether the  personnel at the location are Air National Guard or active duty Air Force  personnel or whether the assigned unit is home-based or a detachment  unit—temporarily relocated from their usual duty station. The Air Force  budget justification displays submitted for fiscal years 2010-14 include  personnel costs for Air Force, Air National Guard, and Air Force Reserve  personnel, but do not include costs, such as military personnel costs, that  other military services have in conjunction with the Aerospace Control  Alert mission.
In addition to the 2009 requirement, the National Defense Authorization  Act for Fiscal Year 2013 requires that DOD provide a consolidated budget  justification display that fully identifies the Aerospace Control Alert budget  for each of the military services and encompasses all programs and  activities of the Aerospace Control Alert mission for each of the following:  (1) procurement; (2) operations and maintenance; (3) research,  development, testing, and evaluation; and (4) military construction.  However, the act does not require any additional military personnel cost  reporting. DOD has not yet developed a consolidated budget display in  response to this new requirement. However, according to DOD officials,  such a display is being developed for inclusion with the department’s  fiscal year 2015 budget submission to include the four budget categories  specifically identified by the act. As a result, DOD’s consolidated budget  display for the fiscal year 2015 budget submission may not include  military personnel costs associated with the other services, particularly  the Army.
The consolidated budget displays required by the Duncan Hunter  National Defense Authorization Act for Fiscal Year 2009 and the National  Defense Authorization Act for Fiscal Year 2013 should help provide  Congress and senior DOD decision makers with a more complete picture  of Aerospace Control Alert mission costs. However, in addition to Air  Force, Air National Guard, and Air Force Reserve personnel costs,  personnel costs from the other DOD components also support the  mission—including the Army and the Army National Guard personnel  providing ground-based air defense capabilities in support of the mission.  Unless this additional information is included in DOD’s revised budget  display, DOD decision makers will not have comprehensive cost  information to make fully informed resource allocation decisions to  support the Aerospace Control Alert mission.
section_title: Conclusions
paragraphs: The Aerospace Control Alert mission is critical to defending U.S.  airspace. Once completed, the budget justification displays required by  the Duncan Hunter National Defense Authorization Act for Fiscal Year  2009 and the National Defense Authorization Act for Fiscal Year 2013  should aid in the identification of many program and activity costs for  each of the military services associated with the Aerospace Control Alert  mission. A comprehensive identification and reporting of all costs  associated with the mission, including all military personnel costs, could  aid DOD in exercising effective management of this mission and its  associated resources. Comprehensive reporting of all costs of the mission  would also provide the Congress with a fuller accounting of these costs to  aid in its oversight of the mission.
section_title: Recommendation for Executive Action
paragraphs: As DOD expands its cost reporting in the consolidated budget justification  displays as required by section 354 of the Duncan Hunter National  Defense Authorization Act for Fiscal Year 2009 and section 352 of the  National Defense Authorization Act for Fiscal Year 2013, we recommend  that the Secretary of Defense direct the Under Secretary of Defense  (Comptroller) and responsible DOD organizations, as appropriate, to  ensure that all Aerospace Control Alert program and activity costs for  each of the military services are captured, including military personnel  costs of the Army and Army National Guard.
section_title: Agency Comments and Our Evaluation
paragraphs: In written comments on a draft of this report, DOD concurred with our  recommendation to ensure that all Aerospace Control Alert program and  activity costs for each of the military services are captured, including  those of the Army and Army National Guard. DOD stated that the Office  of the Secretary of Defense (Comptroller) will include these costs in its  Fiscal Year 2015 budget submission. DOD’s written comments are  reprinted in their entirety in appendix I.
We are sending copies of this report to the Secretaries of Defense and  Homeland Security; the Commanders of NORAD, U.S. Northern  Command, and U.S. Pacific Command; the Secretaries of the Army and  of the Air Force; the Commandant of the Coast Guard; the Chief of the  National Guard Bureau; and the Director of the Office of Management  and Budget. In addition, this report will be available at no charge on our  website at http://www.gao.gov.
If you or your staff members have any questions about this report, please  contact me at (202) 512-4523 or leporeb@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 who made key contributions to this  report are listed in appendix II.
section_title: Appendix I: Comments from the Department of Defense
section_title: Appendix II: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
paragraphs: Brian J. Lepore, (202) 512-4523 or leporeb@gao.gov.
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, key contributors to this report  were Mark A. Pross, Assistant Director; Adam Anguiano; Brent Helt; Mae  Jones; Jeff Tessin; and Michael Willems.