Coast Guard: Comprehensive Blueprint Needed to Balance and Monitor Resource Use and Measure Performance for All Missions
Published: 2003-03-12T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The September 11th attacks decidedly changed the Coast Guard's priorities and markedly increased its scope of activities. Homeland security, a long-standing but relatively small part of the Coast Guard's duties, took center stage. Still, the Coast Guard remains responsible for many other missions important to the nation's interests, such as helping stem the flow of drugs and illegal migration, protecting important fishing grounds, and responding to marine pollution. For the past several years, the Coast Guard has received substantial increases in its budget to accommodate its increased responsibilities. GAO was asked to review the Coast Guard's most recent level of effort on its various missions and compare them to past levels, analyze the implications of the proposed 2004 budget for these levels of effort, and discuss the challenges the Coast Guard faces in balancing and maximizing the effectiveness of all its missions.
section_title: What GAO Found
paragraphs: 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 11th attacks. Predictably, levels of effort related to homeland security remain at much higher levels than before September 11th. Levels of effort for two major nonsecurity missions--search and rescue and aids to navigational--are now relatively consistent with historical levels. By contrast, several other missions--most notably fisheries enforcement and drug interdiction--dropped sharply after September 11th and remain substantially below historical levels. Although the Coast Guard has stated that its aim is to increase efforts in the missions that have declined, continued homeland security and defense demands make it unlikely that the agency, in the short run, can deliver on this goal. The 2004 budget request contains little that would appear to substantially alter the existing levels of effort among missions. The initiatives in the proposed budget relate mainly to enhancing homeland security and search and rescue missions. Although the 2004 budget request represents a sizeable increase in funding (9.6 percent), the Coast Guard still faces fundamental challenges in meeting its new security-related responsibilities while rebuilding its capacity to accomplish other missions that have declined. Given the likely constraints on the federal budget in future years, it is important for the Coast Guard to identify the likely level of effort for each of its missions; lay out a plan for achieving these levels; and tie these levels to measurable outputs and goals, so that the agency and the Congress can better decide how limited dollars should be spent.

section_title: Letter
paragraphs: I am pleased to be here today to discuss the President’s fiscal year 2004  budget request for the Coast Guard and the challenges the agency faces in  this and future budgets. Since the terrorist attacks of September 11, 2001,  the Coast Guard has had to reinvent itself in many respects, shifting its  focus and resources from many of its traditional missions—such as  stemming the flow of illegal drugs and protecting important fishing  grounds—to homeland security. The President’s fiscal year 2004 budget  request for the Coast Guard is $6.8 billion, a 9.6 percent increase in  nominal dollars from the previous year. If the request is approved, about  half of the agency’s operating expenses will be directed to fulfilling  expanded homeland security responsibilities. How—and whether—the  Coast Guard can continue to meet its responsibilities for all of its  missions, given the increased emphasis on and resources required for  homeland security, is a matter of great concern to the Congress.
My testimony today, which is based on recently completed work,  addresses three 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 implications of the proposed 2004 budget for these various  levels of effort; and (3) 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. Although the Coast Guard  Commandant has stated that the Coast Guard would like to return all law  enforcement missions to 93 percent of pre-September 11th levels by the  end of 2003 and 95 percent by the end of 2004, it appears unlikely that the  Coast Guard can meet these goals. Achieving these goals depends heavily  on not having to respond to such contingencies as heightened terror alerts  or deployment of Coast Guard resources in military operations. However,  in the current environment, such contingencies continue to occur, as  evidenced by the recent deployment of several cutters and patrol boats to  the Persian Gulf as part of the Middle East buildup.
The fiscal year 2004 budget request for the Coast Guard contains little that  would substantially change the levels of effort for most missions. The  budget request of $6.8 billion represents an increase of about $592 million,  or almost 10 percent over the previous year. About $168 million is  earmarked for new initiatives, mainly in homeland security and search and  rescue missions. Coast Guard officials said that some of the new  initiatives, such as establishing better intelligence networks, would have  potential benefit for other security-related missions, such as migrant and  drug interdiction, but the initiatives do not directly pertain to augmenting  activities or adding new capacity in those missions that have seen  substantial declines in activity.
Although the Coast Guard has received substantial budget increases in  recent years to deal with its increased responsibilities—a trend that  continues in the proposed budget—the Coast Guard still faces  fundamental challenges in being able to accomplish all the responsibilities  it has been given. 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 budgetary challenge is that, for the foreseeable future, the Coast  Guard must implement a variety of recently mandated homeland security  tasks by taking resources from other activities. Similarly, any unexpected  changes—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. Such challenges 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 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 establishing realistic  level-of-effort targets for its all of missions, a plan for achieving these  targets, and appropriate measurement and reporting of results 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 the Department of Homeland  Security 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.
Overall, after using fiscal year 2003 inflation-adjusted dollars to adjust for  the effects of inflation, the Coast Guard’s budget grew by about 41 percent  between fiscal years 1993 and 2003. However, nearly all of this growth  occurred in the second half of the period. During fiscal years 1993-1998,  after taking inflation into account, the budget remained essentially flat.  (See fig. 1.) Significant increases have occurred since fiscal year 1998.
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 request, Coastal Security represents about one-quarter of the Coast  Guard’s operating budget. Other mission areas, most notably drug  interdiction, have declined substantially as a percentage of the operating  budget.
section_title: Security Emphasis Continues to Affect 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 ports, waterways, and 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. 2.) 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 2, as  well as the other resource hour figures that follow, we have added a line  developed by using a linear regression 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 emphasis in this area. Before September 11th,  such boardings were not done, but as of the first quarter of 2003 there  have been over 550 such boardings. 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 aids to navigation  and search and rescue, have been the least affected by the increased  emphasis on security. 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,  their doing so 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 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 (84.4 percent actual, 85 percent  goal). 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 (98.4 percent actual, 99.7 percent goal).
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. 4.) 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 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  (ONDCP) set this performance goal in 1997, and although they recognize  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. 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 in 2002 than in 2000.
Recently, the Coast Guard Commandant stated that the Coast Guard  intends to return law enforcement missions (drug interdiction, migrant  interdiction, and fisheries enforcement) to 93 percent of pre-September  11th levels 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  distribution of levels of effort among mission areas. 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 the 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. Another $20.8 million of the increase is for the capital  acquisitions request, which totals $797 million. The capital acquisition  request focuses mainly on two projects—the Deepwater Project for  replacing or upgrading cutters, patrol boats, and aircraft, and the  congressionally mandated modernization of the maritime distress and  response system.
subsections: section_title: Operating Expenses Would Increase by $440 Million
paragraphs: About $440 million of the $592 million requested increase is for operating  expenses for the Coast Guard’s mission areas. This requested increase in  operating expenses is 10 percent higher than the amount for operating  expenses in the enacted budget for fiscal year 2003. The requested  increase is made up of the following:    pay increases and military personnel entitlements: $162.5 million;  funding of continuing programs and technical adjustments: $81 million;  (These are multiyear programs that the Coast Guard began in previous  years. Examples include continuing development of information  technology projects and operating new shore facilities started with funds  from previous budgets. Technical adjustments provide for the  annualization of expenditures that received only partial-year funding in the  prior fiscal year.)
Reserve training: $28 million; and    new initiatives: $168.5 million. (These initiatives are described in more  detail below.)
section_title: New Initiatives Relate Primarily to Search and Rescue and Homeland Security
paragraphs: The Coast Guard’s budget request includes three new initiatives—one for  search and rescue and two for homeland security. (See table 2.) As such,  these initiatives do not represent substantial shifts in current levels of  effort among missions. 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 amount requested  for fiscal year 2004 ($26.3 million) 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.
Coast Guard officials said the two initiatives designed mainly for  homeland security purposes would help the Coast Guard in other mission  areas as well. For example, the information-sharing effort under maritime  domain awareness is designed to improve communications between  cutters and land stations. It also pays for equipping cutters with the  universal automated identification system, which allows the Coast Guard  to monitor traffic in its vicinity, including the vessel name, cargo, and  speed. These capabilities are important not only for homeland security  missions, but also for law enforcement and search and rescue, according  to Coast Guard officials. Likewise, the units being added as part of the  homeland security operations initiative will focus primarily on security  issues but will also serve other missions, according to Coast Guard  officials. For example, the new stations that would be established in  Washington and Boston would be involved in search and rescue, law  enforcement, and marine environmental protection.
section_title: Capital Acquisition Budget Focuses on Two Main Projects
paragraphs: The capital acquisition budget request for fiscal year 2004 is $797 million,  an increase of $20.8 million in nominal dollars over fiscal year 2003. The  majority of the request will go to fund two projects—the Integrated  Deepwater System and the Coast Guard’s maritime distress and response  system, called Rescue 21. Other acquisitions include new response boats  to replace 41-foot utility boats which serve multiple missions, more coastal  patrol boats, as well as a replacement icebreaker for the Great Lakes. (See  table 3.)
At $500 million, the Deepwater Project accounts for about 63 percent of  the amount requested for capital acquisitions. This project is a long-term  (20 to 30 years) integrated approach to upgrading cutters, patrol boats,  and aircraft as well as providing better links between air, shore, and  surface assets. When the system is fully operational, it will make the Coast  Guard more effective in all of its missions, particularly law enforcement  where deepwater cutters and aircraft are key to carrying out critical  functions such as drug and migrant interdiction and fisheries enforcement.
Rescue 21, the second major program, provides for the modernization of  the command, control, and communication infrastructure of the national  distress and response system. The current system suffers from aging  equipment, limited spare parts, and limited interoperability with other  agencies. Of particular concern to the Coast Guard and the maritime  community are the current system’s coverage gaps, which can result in  missed maritime distress calls. The Congress has mandated that this  system be completed by the end of fiscal year 2006. The $134 million  request for fiscal year 2004 would keep the project on schedule, according  to Coast Guard officials.
section_title: Significant Challenges Raise Concerns About Coast Guard’s Ability to Accomplish Its Diverse Missions
paragraphs: Despite the billion-dollar (19 percent) budget increase it has received over  the past 2 years, the Coast Guard faces fundamental challenges in  attempting to accomplish 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 other missions, such as enforcement of laws  and treaties, to levels that are more reflective of past years. The fiscal year  2004 budget request does not provide substantial new funding to change  these capabilities, except for homeland security and search and rescue. In  addition, several other challenges further threaten the Coast Guard’s  ability to balance these many missions. The first is directly tied to funding  for the Deepwater Project. The 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 a variety of new mandated homeland  security tasks by taking resources from existing activities. To the extent  that these responsibilities consume resources that would normally go  elsewhere, other missions will be affected. Finally, in its new environment,  the Coast Guard faces the constant possibility that terror alerts, terrorist  attacks, or military actions would require it to shift additional resources to  homeland security missions.
Such challenges raise serious concerns about the Coast Guard’s ability to  be “all things to all people” to the degree that the Coast Guard, the  Congress, and the public desire. 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; developing a comprehensive strategy  for balancing resource use across all of its missions; and developing a  framework for monitoring levels of effort and measuring performance in  achieving mission goals. The Coast Guard has begun some work in these  areas; however, addressing these challenges is likely to be a longer-term  endeavor, and the success of the outcome is not clear.
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 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. And even 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, this 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 Maritime Patrol  Aircraft by 19 months and slowed the conversion and upgrade program for  the 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 legacy assets—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  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  does not keep pace with planning estimates. For example, Coast Guard  officials told us that conversions and upgrades for the 110-foot Patrol Boat  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. Given the funding levels for the  project, these conversions and upgrades have been slowed. 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: A second challenge is that the Coast Guard has been tasked with a myriad  of new homeland security requirements since the fiscal year 2004 budget  request was formulated and 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. 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. 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 more flexibly 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: Several Types of Actions Needed to 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 suggested that the following  actions need to be taken as a more candid acknowledgement 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 itself, 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 is needed for setting and assessing levels of  effort and mission performance. One important effort that has received  relatively little attention, in the understandable need to first put increased  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 the Department of Homeland  Security, 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 2003-2005. 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 they are beginning the process to  develop one. Table 4 provides 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,  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.
Madame Chair, this concludes my testimony today. I would be pleased to  respond to any questions that you or Members of the Subcommittee may  have at this time.
section_title: Contacts and Acknowledgments
paragraphs: For information about this testimony, please contact JayEtta Z. Hecker,  Director, Physical Infrastructure, at (202) 512-2834, or heckerj@gao.gov, or  Margaret T. Wrightson, at (415) 904-2200, or wrightsonm@gao.gov.  Individuals making key contributions to this testimony include Steven  Calvo, Christopher M. Jones, Sharon Silas, Stan Stenersen, Eric Wenner,  and Randall Williamson.