Coast Guard: Challenges during the Transition to the Department of Homeland Security
Published: 2003-04-01T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Coast Guard is one of 22 agencies being placed in the new Department of Homeland Security (DHS). With its key roles in the nation's ports, waterways, and coastlines, the Coast Guard is an important part of enhanced homeland security efforts. But it also has important nonsecurity missions, such as search and rescue, fisheries and environmental protection, and drug and migrant interdiction. GAO has conducted a number of reviews of the Coast Guard's missions and was asked to testify about the Coast Guard's most recent level of effort for its various missions and the major operational and organizational challenges facing the agency during its transition into the newly created DHS.
section_title: What GAO Found
paragraphs: Data on the most recent levels of effort for the Coast Guard's various missions show clearly the dramatic shifts that have occurred among its missions since the September 11, 2001, attacks. Predictably, levels of effort related to homeland security remain at much higher levels than before September 11th. Other missions, such as search and rescue, have remained at essentially the same levels. In contrast, several other missions--most notably fisheries enforcement and drug interdiction--dropped sharply after September 11th and remain substantially below historical levels. Continued homeland security and military demands make it unlikely that the agency, in the short run, can increase efforts in the missions that have declined. Further, the fiscal year 2004 budget request contains little that would substantially alter the existing levels of effort among missions. The Coast Guard faces fundamental and daunting challenges during its transition to the new department. Delays in the planned modernization of cutters and other equipment, responsibility for new security-related tasks as directed under the Maritime Transportation Security Act (MTSA), and mandatory responses to unexpected events, such as terrorist attacks or extended terror alerts, will have an impact on the Coast Guard's ability to meet its new security-related responsibilities while rebuilding its capacity in other missions. Also, as one of the agencies being merged into the new department, the Coast Guard must deal with a myriad of organizational, human capital, acquisition, and technology issues. The enormity of these challenges requires the development of a comprehensive blueprint or strategy that addresses how the Coast Guard should balance and monitor resource use among its various missions in light of its new operating reality.

section_title: Letter
paragraphs: The Coast Guard is one of 22  agencies being placed in the new  Department of Homeland Security  (DHS).  With its key roles in the  nation’s ports, waterways, and  coastlines, the Coast Guard is an  important part of enhanced  homeland security efforts.  But it  also has important nonsecurity  missions, such as search and  rescue, fisheries and environmental  protection, and drug and migrant  interdiction.  GAO has conducted a  number of reviews of the Coast  Guard’s missions and was asked to  testify about the Coast Guard’s  most recent level of effort for its  various missions and the major  operational and organizational  challenges facing the agency during  its transition into the newly created  DHS.
Data on the most recent levels of effort for the Coast Guard’s various  missions show clearly the dramatic shifts that have occurred among its  missions since the September 11, 2001, attacks.  Predictably, levels of effort  related to homeland security remain at much higher levels than before  September 11th.  Other missions, such as search and rescue, have remained  at essentially the same levels. In contrast, several other missions—most  notably fisheries enforcement and drug interdiction—dropped sharply after  September 11th and remain substantially below historical levels.  Continued  homeland security and military demands make it unlikely that the agency, in  the short run, can increase efforts in the missions that have declined.   Further, the fiscal year 2004 budget request contains little that would  substantially alter the existing levels of effort among missions.
The Coast Guard faces fundamental and daunting challenges during its  transition to the new department.  Delays in the planned modernization of  cutters and other equipment, responsibility for new security-related tasks as  directed under the Maritime Transportation Security Act (MTSA), and  mandatory responses to unexpected events, such as terrorist attacks or  extended terror alerts, will have an impact on the Coast Guard’s ability to  meet its new security-related responsibilities while rebuilding its capacity in  other missions.  Also, as one of the agencies being merged into the new  department, the Coast Guard must deal with a myriad of organizational,  human capital, acquisition, and technology issues.  The enormity of these  challenges requires the development of a comprehensive blueprint or  strategy that addresses how the Coast Guard should balance and monitor  resource use among its various missions in light of its new operating reality.
In order to monitor resource use  and measure performance, GAO  recommended in November 2002  that the Coast Guard develop a  long-term blueprint or strategy  outlining how resources will be  distributed across missions, a time  frame for achieving this desired  balance, and a useful format for  reporting progress to the Congress.  The Coast Guard agreed with the  need for such a strategy and has  started to develop one.
Number of Resource Hours Spent on Drug Interdiction, by Quarter, October 1997-December  2002. www.gao.gov/cgi-bin/getrpt?GAO-03-534T.
To view the full testimony, including the scope  and methodology, click on the link above.  For more information, contact JayEtta Hecker  at (206) 512-2834 or heckerj@gao.gov.
Drug interdiction is one of several missions with levels of effort that are substantially below those  that existed prior to the September 11th attacks.  The dotted line shows actual quarter-by-quarter  totals; the thicker line is a regression line showing the general trend.
Mr. Chairman and Members of the Subcommittee:  I am pleased to be here today to discuss major operational and  organizational challenges facing the Coast Guard during this period of  transition into the newly created Department of Homeland Security (DHS).  The creation of DHS represents one of the largest reorganizations and  consolidations of government agencies, personnel, programs, and  operations in recent history. Creating this new department means merging  22 agencies—with their disparate organizational structures, cultures, and  systems—into a cohesive working unit. For these and other reasons, we  have designated the implementation and transformation of DHS as a high- risk area.
As one of the agencies being merged into the new department, the Coast  Guard must deal with a myriad of organizational, human capital, process,  and technology challenges and, at the same time, carry out its expanding  mission responsibilities. But the Coast Guard, even as a separate entity,  was rapidly reinventing itself in many respects in the wake of the  September 11, 2001, terrorist attacks. After the attacks, the Coast Guard’s  priorities and focus had to shift suddenly and dramatically toward  protecting the nation’s vast and sprawling network of ports and  waterways. Cutters, aircraft, boats, and personnel normally used for  traditional missions—such as drug and migrant interdiction, fisheries  enforcement, and marine environmental protection—were shifted to  homeland security functions, which previously consumed only a small part  of the agency’s operating resources. As we have recently reported, the  Coast Guard has begun restoring activity levels for many of its traditional  missions, but doing so is a work in process.
To help meet its increased homeland security responsibilities and restore  activity levels for its traditional missions, the Coast Guard has received  substantial budget increases over the last 2 years. This trend continued  with the President’s fiscal year 2004 budget request for the Coast Guard of  $6.8 billion—a 9.6 percent increase over the previous year. Still, despite  the large budget increases for the Coast Guard since September 11th, there  is much congressional concern about how—and whether—the Coast  Guard can continue to meet its responsibilities for all of its missions, given  the increased emphasis on and additional resources required for homeland  security.
My testimony today, which is based on recently completed work,  addresses two topics: (1) the most recent levels of effort for the Coast  Guard’s various missions, and how these levels compare to those in the  past; (2) the challenges the Coast Guard faces in balancing its resources  among its missions and ensuring and maximizing its effectiveness in each  of its missions. The scope and methodology of our review is described in  the appendix.
The most recent levels of effort for the Coast Guard’s various missions— as measured by the use of multiple-mission resources such as cutters,  patrol boats, and aircraft—show clearly the dramatic increase in the  amount of time spent on homeland security following the September 11th  attacks. In the months after the attacks, as the initial surge in homeland  security activities was abating, activity in many other missions began  returning to pre-September 11th levels, but some have not yet recovered.  For example, the amount of resource hours currently being spent on  search and rescue and maintaining aids to navigation are fairly consistent  with traditional levels over the last 5 years. However, there have been  substantial declines from traditional levels of time spent on two law  enforcement missions—fisheries enforcement and drug interdiction. The  fiscal year 2004 budget request for the Coast Guard, which includes a $592  million increase over the 2003 budget, does not include initiatives that  would substantially reverse these declines. The majority of this increase  would cover pay increases for current or retired employees or continue  certain programs already under way, such as upgrades to information  technology. About $168.5 million of the increase would fund new  initiatives, most of which relate either to homeland security or to search  and rescue. As such, these initiatives do not represent substantial shifts in  current levels of effort among missions. This situation is further  exacerbated by the diversion of Coast Guard resources to respond to  heightened terror alerts at home and military operations in the Middle  East.
The Coast Guard faces fundamental challenges in being able to  accomplish all of its new homeland security responsibilities, while  rebuilding capacity in other missions to pre-September 11th levels. For  example, the Coast Guard’s Deepwater Project, a modernization effort for  cutters, patrol boats, and aircraft, has already experienced delays in the  delivery of key assets, jeopardizing the agency’s future ability to carry out  a number of missions at optimum levels. This situation could worsen  because the Coast Guard has tied successful completion of the project to  levels of funding that are beyond what has been available. Another  challenge involves the implementation of the Maritime Transportation  Security Act of 2002 (MTSA), which requires the Coast Guard to undertake  a variety of new homeland security tasks. Since an implementation  strategy has not yet been fully developed for MTSA, and funding to  accomplish implementation is not provided in the fiscal year 2004 budget  request, for the foreseeable future, the Coast Guard will need to absorb the  costs related to these tasks within its operating budget. Similarly, any  unexpected events—such as terrorist attacks or extended terror alerts— could also result in using resources for homeland security purposes that  would normally be used for other missions. Further, the Coast Guard’s  expanded role in homeland security and its relocation in the newly created  DHS have changed many of its priorities and working parameters; its  adjustment to this new environment is a work in progress. Altogether,  these factors raise serious concerns about the Coast Guard’s ability to  meet traditional expectations across the broad range of all of its missions.  In recent reports,  we have pointed to several steps that are needed in  such an environment. One is to continue finding ways to operate more  efficiently to maximize the existing resources available. Another is to  develop a comprehensive blueprint or strategy for accomplishing mission  responsibilities. This blueprint needs to recognize the new operating  reality created by the Coast Guard’s increasing homeland security role and  translate that reality into (1) realistic level-of-effort targets for all of its  missions, (2) a plan for achieving these targets with appropriate  performance measurements, and (3) a framework for monitoring and  reporting on levels of effort and performance in achieving mission goals so  that the agency and the Congress can better decide how limited dollars  can be spent.
subsections: section_title: Background
paragraphs: The Coast Guard, which became a part of DHS on March 1, 2003, has a  wide variety of both security and nonsecurity missions. (See table 1.) The  Coast Guard’s equipment includes 141 cutters, approximately 1,400 small  patrol and rescue boats, and about 200 aircraft. Coast Guard services are  provided in a variety of locations, including ports, coastal areas, the open  sea, and in other waterways like the Great Lakes and the Mississippi River.  The Coast Guard’s installations range from small boat stations providing  search and rescue and other services to marine safety offices that  coordinate security and other activities in the nation’s largest ports.
As an organization that is also part of the armed services, the Coast Guard  has both military and civilian positions. At the end of fiscal year 2002, the  agency had over 42,000 full-time positions—about 36,000 military and  about 6,600 civilians. The Coast Guard also has about 7,200 reservists who  support the national military strategy and provide additional operational  support and surge capacity during emergencies, such as natural disasters.  In addition, about 36,000 volunteer auxiliary personnel assist in a wide  range of activities from search and rescue to boating safety education.
The events of September 11th caused the Coast Guard to direct its efforts  increasingly into maritime homeland security activities, highlighted by the  Coast Guard’s establishing a new program area: Ports, Waterways, and  Coastal Security (coastal security). Prior to September 11th, activities  related to this area represented less than 10 percent of the Coast Guard’s  operating budget, according to Coast Guard officials. In the fiscal year  2004 budget request, coastal security represents about one-quarter of the  Coast Guard’s planned operating budget. Other mission areas, most  notably drug interdiction, have declined substantially as a percentage of  the operating budget.
section_title: The Coast Guard’s Emphasis on Security Continues to Affect Its Levels of Effort in Some Missions
paragraphs: The emphasis the Coast Guard placed on security after September 11th  has had varying effects on its level of effort among all of its missions, as  measured by the extent to which multiple-mission resources (cutters,  other boats, and aircraft) are used for a particular mission. The most  current available data show that some security-related missions, such as  migrant interdiction and coastal security, have grown significantly since  September 11th. Other missions, such as search and rescue and aids to  navigation remained at essentially the same levels as they were before  September 11th. However, the level of effort for other missions, most  notably the interdiction of illegal drugs and fisheries enforcement, is  substantially below pre-September 11th levels.
subsections: section_title: Missions with Increased Levels of Resources
paragraphs: Missions such as coastal security, and migrant interdiction have  experienced increased levels of effort. Coastal security has seen the most  dramatic increase from pre-September 11th levels. (See fig. 1.) For  example, it went from 2,400 resource hours during the first quarter of  1999, peaked at 91,000 hours during the first quarter of fiscal year 2002  (immediately after September 11, 2001), and most recently stood at nearly  37,000 hours for the first quarter of fiscal year 2003. In figure 1, as well as  the other resource figures that follow, we have added a line developed by  using linear regression techniques to show the general trend for the  period. It is important to note that while such lines depict the trend in  resource hours to date, they should not be taken as a prediction of future  values. Other activity indicators, such as sea marshal boardings, also  demonstrate an increased level of emphasis. Before September 11th, such  boardings were not done; but there were over 550 boardings during the  first quarter of 2003. Similarly, vessel operational control actions have  risen by 85 percent since the fourth quarter of fiscal year 2001.
Given the emphasis on homeland security, it is not surprising that efforts  to interdict illegal immigrants have also increased. For example, during  the first quarter of 2003, the level of effort in this area was 28 percent  higher than it was for the comparable period in 1998.
section_title: Missions with a Steady State of Resources
paragraphs: Some of the Coast Guard’s traditional missions, such as providing aids to  navigation and search and rescue, have been the least affected by the  increased emphasis on security. (See fig. 2.) While resource hours for both  of these missions have declined somewhat since the first quarter of fiscal  year 1998, the overall pattern of resource use over the past 5 years has  remained consistent. Although search and rescue boats and buoy tenders  were used to perform homeland security functions immediately after  September 11th, these activities did not materially affect the Coast Guard’s  ability to carry out its search and rescue or aids to navigation missions.
Search and rescue boats were initially redeployed for harbor patrols after  the September 11th terrorist attacks; but the impact on the mission was  minimal because the deployments occurred during the off-season, with  respect to recreational boating. Similarly, some boats that normally serve  as buoy tenders—an aids to navigation function—were used for security  purposes instead; but they were among the first to be returned to their  former missions. For the first quarter of fiscal year 2003, the number of  resource hours spent on these missions was very close to the number  spent during the comparable quarter of fiscal year 1998.
Performance measurement data further demonstrates the relatively  minimal impact on these missions resulting from the Coast Guard’s  emphasis on homeland security. For example, for search and rescue, the  Coast Guard was within about half a percentage point of meeting its target  for saving mariners in distress in 2002. Likewise, data show that with  respect to its aid to navigation mission, in 2002 the Coast Guard was about  1 percent from its goal of navigational aid availability.
section_title: Missions with a Decline in Resource Hours
paragraphs: A number of missions have experienced declines in resource hours from  pre-September 11th levels, including drug interdiction, fisheries  enforcement (domestic and foreign), marine environmental protection,  and marine safety. In particular, drug enforcement and fisheries  enforcement have experienced significant declines. Compared with the  first quarter of 1998, resource hours for the first quarter of fiscal year 2003  represent declines of 60 percent for drug interdiction and 38 percent for  fisheries enforcement. (See fig. 3.) In fact, resource hours for these areas  were declining even before the events of September 11th; and while they  briefly rebounded in early 2002, they have since continued to decline. A  Coast Guard official said the recent decline in both drug enforcement and  fisheries can be attributed to the heightened security around July 4, 2002,  and the anniversary of the September 11th terrorist attacks, as well as the  deployment of resources for military operations. They said the decline will  likely not be reversed during the second quarter of 2003 because of the  diversion of Coast Guard cutters to the Middle East and the heightened  security alert that occurred in February and March 2003.
The reduction in resource hours over the last several years in drug  enforcement is particularly telling. In the first quarter of 1998, the Coast  Guard was expending nearly 34,000 resource hours on drug enforcement,  and as of first quarter of 2003, the resource hours had declined to almost  14,000 hours—a reduction of nearly two-thirds. Also, both the number of  boardings to identify illegal drugs and the amount of illegal drugs seized  declined from the first quarter of fiscal year 2000. The Coast Guard’s goal  of reducing the flow of illegal drugs based on the seizure rate for cocaine  has not been met since 1999. During our conversations with Coast Guard  officials, they explained that the Office of National Drug Control Policy set  this performance goal in 1997, and although they recognize that they are  obligated to meet these goals, they believe the goals should be revised.
Our review of the Coast Guard’s activity levels in domestic fishing shows  U.S. fishing vessel boardings and significant violations identified are both  down since 2000. Similarly, the Coast Guard interdicted only 19 percent as  many foreign vessels as it did in 2000. The reduced level of effort  dedicated to these two missions is likely linked to the Coast Guard’s  inability to meet its performance goals in these two areas. For instance, in  2002 the Coast Guard did not meet its goal of detecting foreign fishing  vessel incursions, and while there is no target for domestic fishing  violations, there were fewer boardings and fewer violations detected in  2002 than in 2000.
Recently, the Coast Guard Commandant stated that the Coast Guard  intends to return the level of resources directed to law enforcement  missions (drug interdiction, migrant interdiction, and fisheries  enforcement) to 93 percent of pre-September 11th levels (using a baseline  of the 8 quarters prior to September 11, 2001) by the end of 2003 and 95  percent by the end of 2004. However, in the environment of heightened  security and the continued deployment of resources to the Middle East,  these goals will likely not be achieved, especially for drug interdiction and  fisheries enforcement, which are currently far below previous activity  levels.
section_title: Fiscal Year 2004 Budget Request Will Not Substantially Alter Current Levels of Effort
paragraphs: The Coast Guard’s budget request for fiscal year 2004 does not contain  initiatives or proposals that would substantially alter the current levels of  effort among missions. The request for $6.8 billion represents an increase  of about $592 million, or about 9.6 percent in nominal dollars, over the  enacted budget for fiscal year 2003. The majority of this increase covers  pay increases for current or retired employees or continues certain  programs already under way, such as upgrades to information technology.  About $168.5 million of the increase would fund new initiatives, most of  which relate either to homeland security or to search and rescue. As such,  these initiatives do not represent substantial shifts in current levels of  effort among missions.
However, the 2004 budget request does address a long-standing  congressional concern about the Coast Guard’s search and rescue mission.  The search and rescue initiative is part of a multiyear effort to address  shortcomings in search and rescue stations and command centers. In  September 2001, the Department of Transportation Office of the Inspector  General reported that readiness at search and rescue stations was  deteriorating. For example, staff shortages at most stations required  crews to work an average of 84 hours per week, well above the standard  (68 hours) established to limit fatigue and stress among personnel. The  initiative seeks to provide appropriate staffing and training to meet the  standards of a 12-hour watch and a 68-hour work week. The Congress  appropriated $14.5 million in fiscal year 2002 and $21.7 million in fiscal  year 2003 for this initiative. The increased amount requested for fiscal year  2004 ($26.3 million) for search and rescue would pay for an additional 390  full-time search and rescue station personnel and for 28 additional  instructors at the Coast Guard’s motor lifeboat and boatswain’s mate  schools.
section_title: Significant Challenges Raise Concerns about Coast Guard’s Ability to Accomplish Its Diverse Missions
paragraphs: The Coast Guard faces fundamental challenges in balancing resource use  among its missions and accomplishing everything that has come to be  expected of it. We have already described how the Coast Guard has not  been able, in its current environment, to both assimilate its new homeland  security responsibilities and restore levels of effort for all other missions.  Several other challenges further threaten the Coast Guard’s ability to  balance these diverse missions. For example, the Coast Guard’s  Deepwater Project has already experienced delays in delivery of key  assets and could face additional delays if future funding falls behind what  the Coast Guard had planned. Such delays could also seriously jeopardize  the Coast Guard’s ability to carry out a number of security and nonsecurity  missions. Similarly, for the foreseeable future, the Coast Guard must  absorb the cost of implementing a variety of newly mandated homeland  security tasks by taking resources from ongoing activities. Funding for  these tasks are not provided in the fiscal year 2004 budget request. The  Coast Guard also faces the constant possibility that future terror alerts,  terrorist attacks, or military actions will likely require it to shift additional  resources to homeland security missions. Finally, the Coast Guard’s  transition to DHS brings additional challenges, particularly with respect to  establishing effective communication links and building partnerships both  within DHS and with external agencies.
Such challenges raise serious concerns about the Coast Guard’s ability to  accomplish all of its responsibilities and balance the level of effort among  all missions in an environment where it strives to be “all things to all  people,” and attempts to do so as one of many agencies in a cabinet  department whose primary mission is homeland security. In past work, we  have pointed to several steps that the Coast Guard needs to take in such  an environment. These include continuing to address opportunities for  operational efficiency, especially through more partnering and developing  a comprehensive blueprint or strategy for balancing and monitoring  resource use across all of its missions.
subsections: section_title: Continued Funding Shortfalls Could Delay the Deepwater Project and Adversely Affect the Coast Guard’s Mission Capabilities
paragraphs: Under current funding plans, the Coast Guard faces significant potential  delays and cost increases in its $17 billion Integrated Deepwater Project.  This project is designed to modernize the Coast Guard’s entire fleet of  cutters, patrol boats, and aircraft over a 20-year period. Given the way the  Coast Guard elected to carry out this project, its success is heavily  dependent on receiving full funding every year. So far, that funding has not  materialized as planned. Delays in the project, which have already  occurred, could jeopardize the Coast Guard’s future ability to effectively  and efficiently carry out its missions, and its law enforcement activities— that is, drug and migrant interdiction and fisheries enforcement—would  likely be affected the most, since they involve extensive use of deepwater  cutters and aircraft.
Under the project’s contracting approach, the responsibility for  Deepwater’s success lies with a single systems integrator and its  contractors for a period of 20 years or more. Under this approach, the  Coast Guard has started on a course potentially expensive to alter. It is  based on having a steady, predictable, annual funding stream of $500  million in 1998 dollars over the next 2 to 3 decades. Already the funding  provided for the project is less than the amount the Coast Guard planned  for. The fiscal year 2002 appropriation for the project was about $28  million below the planned level, and the fiscal year 2003 appropriated level  was about $90 million below the planning estimate. Further, the  President’s fiscal year 2004 budget request for the Coast Guard is not  consistent with the Coast Guard’s deepwater funding plan. If the requested  amount of $500 million for fiscal year 2004 is appropriated, it would  represent another shortfall of $83 million, making the cumulative shortfall  about $202 million in the project’s first 3 years, according to Coast Guard  data. If appropriations hold steady at $500 million (in nominal dollars)  through fiscal year 2008, the Coast Guard estimates that the cumulative  shortfall will reach $626 million.
The shortfalls in the last 2 fiscal years (2002 and 2003) and their potential  persistence could have serious consequences. The main impact is that it  would take longer and cost more in the long run to fully implement the  deepwater system. For example, due to funding shortfalls experienced to  date, the Coast Guard has delayed the introduction of the new maritime  patrol aircraft by 19 months and slowed the conversion and upgrade  program for its 110-foot patrol boats. According to the Coast Guard, if the  agency continues to receive funding at levels less than planned, new asset  introductions—and the associated retirement of costly, less capable Coast  Guard resources—will continue to be deferred.
The cost of these delays will be exacerbated by the accompanying need to  invest additional funds in maintaining current assets beyond their planned  retirement date because of the delayed introduction of replacement  capabilities and assets, according to the Coast Guard. For example,  delaying the maritime patrol aircraft will likely require some level of  incremental investment to continue safe operation of the current HU-25 jet  aircraft. Similarly, a significant delay in the scheduled replacement for the  existing 270-foot medium endurance cutter fleet could require an  unplanned and expensive renovation for this fleet.
System performance—and the Coast Guard’s capability to effectively carry  out its mission responsibilities—would also likely be impacted if funding  for the Deepwater Project does not keep pace with planning estimates. For  example, Coast Guard officials told us that conversions and upgrades for  its 110-foot patrol boats would extend its operating hours from about 1,800  to 2,500 per year. Once accomplished, this would extend the time these  boats could devote to both security and nonsecurity missions. As with the  maritime patrol aircraft, reductions in funding levels for the project have  slowed the conversions and upgrades for these vessels, which in turn, has  prevented enhancements in mission performance that newer vessels  would bring. Coast Guard officials also said that with significant,  continuing funding shortfalls delaying new asset introductions, at some  point, the Coast Guard would be forced to retire some cutters and  aircraft—even as demand for those assets continues to grow. For example,  in 2002, two major cutters and several aircraft were decommissioned  ahead of schedule due to their deteriorated condition and high  maintenance costs.
section_title: Some New Homeland Security Duties Are Not Fully Factored into the Coast Guard’s Distribution of Resources
paragraphs: The Coast Guard has also been tasked with a myriad of new homeland  security requirements, but funding to implement them is not provided in  either the enacted fiscal year 2003 budget or the fiscal year 2004 budget  request. As a result, the Coast Guard will have to meet many of these  requirements by pulling resources from other activities. Under the  Maritime Transportation Security Act (MTSA), signed into law in  November 2002, the Coast Guard must accomplish a number of security- related tasks within a matter of months and sustain them over the long  term. For example, MTSA requires the Coast Guard to be the lead agency  in conducting security assessments, developing plans, and enforcing  specific security measures for ports, vessels, and facilities. In the near  term, the Coast Guard must prepare detailed vulnerability assessments of  vessels and facilities it identifies to be at high risk of terrorist attack. It  must also prepare a National Maritime Transportation Security Plan that  assigns duties among federal departments and agencies and specifies  coordination with state and local officials—an activity that will require  substantial work by Coast Guard officials at the port level. The Coast  Guard must also establish plans for responding to security incidents,  including notifying and coordinating with local, state, and federal  authorities.
Because the fiscal year 2004 budget request was prepared before MTSA  was enacted, it does not specifically devote funding to most of these port  security responsibilities. Coast Guard officials said that they will have to  absorb costs related to developing, reviewing, and approving plans,  including the costs of training staff to monitor compliance, within their  general budget. Coast Guard officials expect that the fiscal year 2005  budget request will contain funding to address all MTSA requirements. In  the meantime, officials said that the Coast Guard would have to perform  most of its new port security duties without additional appropriation, and  that the funds for these duties would come from its current operations  budget. The costs of these new responsibilities, as well as the extent to  which they will affect resources for other missions, are not known.
section_title: External Uncertainties Place Additional Strain on Resources
paragraphs: Security alerts, as well as actions needed in the event of an actual terrorist  attack, can also affect the extent to which the Coast Guard can devote  resources to missions not directly related to homeland security. For  example, Coast Guard officials told us that in the days around September  11, 2002, when the Office of Homeland Security raised the national threat  level from “elevated” to “high risk,” the Coast Guard reassigned cutters  and patrol boats in response. In February 2003, when the Office of  Homeland Security again raised the national threat level to high risk, the  Coast Guard repositioned some of its assets involved in offshore law  enforcement missions, using aircraft patrols in place of some cutters that  were redeployed to respond to security-related needs elsewhere. While  these responses testify to the tremendous flexibility of a multi-mission  agency, they also highlight what we found in our analysis of activity-level  trends—when the Coast Guard responds to immediate security needs,  fewer resources are available for other missions.
The Coast Guard’s involvement in the military buildup for Operation  Enduring Freedom in the Middle East further illustrates how such  contingencies can affect the availability of resources for other missions.  As part of the buildup, the Coast Guard has deployed eight 110-foot boats,  two high-endurance cutters, four port security units, and one buoy tender  to the Persian Gulf. These resources have come from seven different Coast  Guard districts. For example, officials from the First District told us they  sent four 110-foot patrol boats and three crews to the Middle East. These  boats are multi-mission assets used for fisheries and law enforcement,  search and rescue and homeland security operations. In their absence,  officials reported, the First District is using other boats previously devoted  to other tasks. For instance, buoy tenders have taken on some search and  rescue functions, and buoy tenders and harbor tug/icebreakers are  escorting high-interest vessels. Officials told us that these assets do not  have capabilities equivalent to the patrol boats but have been able to  perform the assigned mission responsibilities to date.
section_title: Transition to Homeland Security Poses Additional Challenges
paragraphs: The creation of DHS is one of the largest, most complex restructurings  ever undertaken, and the Coast Guard, as one of many agencies joining the  department, faces numerous challenges, including organizational, human  capital, acquisition, process and technology issues. One particularly  formidable challenge involves establishing effective communication links  and building partnerships both within DHS and with external  organizations. While most of the 22 agencies transferred to DHS report to  under secretaries for the department’s various directorates, the Coast  Guard remains a separate entity reporting directly to the Secretary of DHS.  According to Coast Guard officials, the Coast Guard has important  functions that will require coordination and communication with all of  these directorates, particularly the Border and Transportation Security  Directorate. For example, the Coast Guard plays a vital role with Customs,  Immigration and Naturalization Service, the Transportation Security  Administration, and other agencies that are organized in the Directorate of  Border and Transportation Security. Because the Coast Guard’s homeland  security activities require interface with these and a diverse set of other  agencies organized within several DHS directorates, communication,  coordination, and collaboration with these agencies is paramount to  achieve department-wide results.
Effective communication and coordination with agencies outside the  department is also critical to achieving the homeland security objectives,  and the Coast Guard must maintain numerous relationships with other  public and private sector organizations outside DHS. For example,  according to Coast Guard officials, the Coast Guard will remain an  important participant in the Department of Transportation’s (DOT)  strategic planning process, since the Coast Guard is a key agency in  helping to maintain the maritime transportation system. Also, the Coast  Guard maintains navigation systems used by DOT agencies such as the  Federal Aviation Administration. In the homeland security area,  coordination efforts will extend well beyond our borders to include  international agencies of various kinds. For example, the Coast Guard,  through its former parent agency, DOT, has been spearheading U.S  involvement in the International Maritime Organization. This is the  organization that, following the September 11th attacks, began  determining new international regulations needed to enhance ship and  port security. Also, our work assessing efforts to enhance our nation’s port  security has underscored the formidable challenges that exist in forging  partnerships and coordination among the myriad of public and private  sector and international stakeholders.
section_title: Several Types of Actions Needed to Help Address Challenges
paragraphs: In previous work, we have examined some of the implications of the Coast  Guard’s new operating environment on the agency’s ability to fulfill its  various missions. This work, like our testimony today, has pointed to the  difficulty the Coast Guard faces in devoting additional resources to  nonsecurity missions, despite the additional funding and personnel the  agency has received. In particular, we have recommended that the  following actions be taken as a more candid acknowledgment of the  difficulty involved:    Opportunities for increased operational efficiency need to be explored.  Over the past decade, we and other outside organizations, along with the  Coast Guard, have studied Coast Guard operations to determine where  greater efficiencies might be found. These studies have produced a  number of recommendations, such as shifting some responsibilities to  other agencies. One particular area that has come to the forefront since  September 11th is the Coast Guard’s potential ability to partner with other  port stakeholders to help accomplish various security and nonsecurity  activities involved in port operations. Some effective partnerships have  been established, but the overall effort has been affected by variations in  local stakeholder networks and limited information-sharing among ports.
A comprehensive blueprint or strategy is needed for setting and  assessing levels of effort and mission performance. One important effort  that has received relatively little attention, while the Coast Guard has  understandably put its homeland security responsibilities in place, is the  development of a plan that proactively addresses how the Coast Guard  should manage its various missions in light of its new operating reality.  The Coast Guard’s adjustment to its new post-September 11th  environment is still largely in process, and sorting out how traditional  missions will be fully carried out alongside new security responsibilities  will likely take several years. But it is important to complete this plan and  address in it key elements and issues so that it is both comprehensive and  useful to decision makers who must make difficult policy and budget  choices. Without such a blueprint, the Coast Guard also runs the risk of  continuing to communicate that it will try to be “all things to all people”  when, in fact, it has little chance of actually being able to do so.  The Coast Guard has acknowledged the need to pursue such a planning  effort, and the Congress has directed it to do so. Coast Guard officials told  us that as part of the agency’s transition to DHS, they are updating the  agency’s strategic plan, including plans to distribute all resources in a way  that can sustain a return to previous levels of effort for traditional  missions. In addition, the Congress placed a requirement in MTSA for the  Coast Guard to submit a report identifying mission targets, and steps to  achieve them, for all Coast Guard missions for fiscal years 2003 to 2005.  However, this mandate is not specific about the elements that the Coast  Guard should address in the report.
To be meaningful, this mandate should be addressed with thoroughness  and rigor and in a manner consistent with our recent recommendations; it  requires a comprehensive blueprint that embodies the key steps and  critical practices of performance management. Specifically, in our  November 2002 report on the progress made by the Coast Guard in  restoring activity levels for its key missions, we recommended an  approach consisting of a long-term strategy outlining how the Coast Guard  sees its resources—cutters, boats, aircraft, and personnel—being  distributed across its various missions, a time frame for achieving this  desired balance, and reports with sufficient information to keep the  Congress apprised not only of how resources were being used, but what  was being accomplished. The Coast Guard agreed that a comprehensive  strategy was needed, and believes that it is beginning the process of  developing one. Table 2 provides a greater explanation of what this  approach or blueprint would entail.
The events of recent months heighten the need for such an approach.  During this time, the budgetary outlook has continued to worsen, further  emphasizing the need to look carefully at the results being produced by  the nation’s large investment in homeland security. The Coast Guard must  be fully accountable for investments in its homeland security missions and  able to demonstrate what these security expenditures are buying and their  value to the nation. At the same time, recent events also demonstrate the  extent to which highly unpredictable homeland security events, such as  heightened security alerts, continue to influence the amount of resources  available for performing other missions. The Coast Guard needs a plan  that will help the agency, the Congress, and the public understand and  effectively deal with trade-offs and their potential impacts in such  circumstances.