Military Operations: Fiscal Year 2003 Obligations Are Substantial, but May Result in Less Obligations Than Expected
Published: 2003-09-17T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Global War on Terrorism (GWOT)--principally involving operations in Afghanistan and Iraq--is being funded in fiscal year 2003 by Congress's appropriation of almost $69 billion, including almost $16 billion in a transfer fund called the Iraqi Freedom Fund. To assist Congress in its oversight of funding for GWOT, GAO examined the obligation of GWOT funds and the implications for additional funding in fiscal year 2003 and the President's request for fiscal year 2004 funds for several operations in Southwest Asia that were canceled after the budget was submitted.
section_title: What GAO Found
paragraphs: While funds obligated by DOD for GWOT, including the war with Iraq, in fiscal year 2003 are substantial--about $39 billion through June 2003--the funds appropriated by Congress appear to be sufficient for fiscal year 2003, and some of the services may not obligate all of the funds they were appropriated for fiscal year 2003. For example, at the end of June 2003, with 75 percent of the fiscal year completed, the services' percentage of GWOT operation and maintenance funds that had been obligated ranged from a low of 65 percent for the Army to a high of 78 percent for the Marine Corps. In contrast, the percentage of military personnel funds obligated by the three-fourths of-the-fiscal-year mark by the services ranged from 72 to 75 percent of GWOT appropriations. The military services believe they will obligate all the fiscal year 2003 funds appropriated to them. In addition, the services have received billions of dollars more in transfers from the Iraqi Freedom Fund. But GAO's analysis suggests that they may not need all the funds transferred as well as further transfers in fiscal year 2003 for operation and maintenance, since considerable unobligated fiscal year 2003 funds remain in their direct appropriations. Since DOD terminated Operations Desert Spring and Northern and Southern Watch in Southwest Asia in March 2003, the funds ($1.4 billion) that were included in the President's fiscal year 2004 budget to support those operations next year may no longer be necessary.

section_title: Letter
paragraphs: Following the terrorist attacks of September 11, 2001, the United  States began military operations to combat terrorism both in the United  States and overseas. Military operations to defend the United States from  terrorist attacks are known as Operation Noble Eagle. Overseas operations  to combat terrorism are known as Operation Enduring Freedom and have  taken place principally in Afghanistan. In March 2003, the United States  began Operation Iraqi Freedom to change the government in Iraq.  Together, these three operations are known as the Global War on  Terrorism (GWOT). To support GWOT in fiscal year 2003, Congress  appropriated $68.7 billion to the Department of Defense (DOD) in the  Consolidated Appropriations Resolution, 2003, and Emergency Wartime  Supplemental Appropriations Act, 2003. Of the $68.7 billion appropriated,  almost $16 billion was appropriated in the Wartime Supplemental for a  transfer account called the Iraqi Freedom Fund.
To assist Congress in its oversight role, we reviewed the fiscal year 2003  funding for the GWOT. Specifically, we reviewed the services’ obligation  rates for GWOT-related activities and what those obligation rates suggest  about the services’ needs to draw from the Iraqi Freedom Fund during  fiscal year 2003. We also reviewed the President’s request for fiscal year  2004 funds for Operations Northern Watch, Southern Watch, and Desert  Spring, which DOD subsequently terminated in March 2003. We provided  briefings to the House and Senate Appropriations Committee staff and  House and Senate Armed Services Committee staff as well as the House  and Senate Budget Committee staff in June and July 2003. This report  updates the information we provided during the briefings.
To accomplish this review, we obtained the most recently available  DOD data on the services’ obligation of fiscal year 2003 GWOT funds. We  interviewed DOD and service officials responsible for preparing budgets  and estimating costs and force levels. We also interviewed resource  management officials from most of the major commands involved in  Operation Iraqi Freedom. We focused our work on the obligation of funds  appropriated for operation and maintenance and military personnel  because they represented the large majority of funds obligated in fiscal  year 2003 through June 2003. A detailed discussion of our scope and  methodology is contained in appendix I.
subsections: section_title: Background
paragraphs: From the end of the Persian Gulf War in February 1991 through June 2003,  the DOD reported that it had obligated over $86.203 billion for incremental  costs it had incurred for its overseas contingency operations. These  operations included the enforcement of no-fly zones, humanitarian  assistance, and peace enforcement operations, as well as operations to  combat terrorism. In fiscal year 2003, these costs were incurred preparing  for and undertaking GWOT, including the 2003 war against Iraq. In  addition, U.S. military forces are continuing to participate in contingency  operations in the Balkans. Figure 1 shows the location of DOD’s  contingency operations for fiscal year 2003.
Most of the costs associated with GWOT fall into two accounts—operation  and maintenance and military personnel. Operation and maintenance  account funds obligated in support of GWOT are used for a variety of  purposes, including transportation of personnel, goods, and equipment;  unit operating support costs; and intelligence, communications, and  logistics support. Military personnel funds obligated in support of  GWOT cover the pay and allowances of mobilized reservists as well as  special payments or allowances for all qualifying military personnel  both active and reserve, such as imminent danger pay and family  separation allowance.
section_title: Unobligated Balances Late in the Fiscal Year Raise Doubts about Services’ Ability to Fully Obligate Their Fiscal Year 2003 GWOT Funds and Justification for Iraqi Freedom Fund Transfers
paragraphs: The services were appropriated about $34 billion to their operation and  maintenance accounts and about $15 billion to their military personnel  accounts for fiscal year 2003 to support the war in Iraq and Operations  Enduring Freedom and Noble Eagle. It appears that while the funds  obligated for these operations—about $39 billion as of the end of  June 2003—are substantial, the proportion of appropriated funds that  have been obligated as of that date is lower than the proportion of the  fiscal year elapsed as of that same date except for the Marine Corps. In  this regard, through June 2003, which represents three-fourths of the fiscal  year, three of the four services had not obligated more than 68 percent of  the operation and maintenance funds appropriated for GWOT, while the  Marine Corps had obligated 78 percent.
subsections: section_title: Fiscal Year 2003 Funding for the Global War on Terrorism
paragraphs: To support GWOT in fiscal year 2003, Congress appropriated $68.7 billion  to DOD in the Consolidated Appropriations Resolution, 2003, and  Emergency Wartime Supplemental Appropriations Act, 2003. According to  the conference report that accompanied the legislation, Congress included  $6.1 billion for Operations Noble Eagle and Enduring Freedom in the  Consolidated Appropriations Resolution of February 2003. In March 2003,  the President requested that Congress appropriate $74.8 billion for GWOT,  including the conduct of military operations in Iraq and reconstruction and  relief there. Of this amount, $62.6 billion was identified in the President’s  budget for DOD’s GWOT military operations. In developing the President’s  request, DOD assumed, among other things, that the war with Iraq would  be a short conflict, would involve a two-front war using Turkey as a  staging area, and there would be a rapid redeployment and demobilization  of Reserve and National Guard troops following the cessation of combat  operations. In April 2003, Congress appropriated $79.2 billion, including  $62.6 billion for DOD to cover all GWOT, including the war with Iraq, in  the Emergency Wartime Supplemental Appropriations Act of April 2003.  Although the services received their Consolidated Appropriations  Resolution, 2003, funds for fiscal year 2003 in February 2003, they did not  receive their first allocation of funds from the Emergency Supplemental  until May 2003 and their second allocation until July 2003. Before  receiving these monies, the services used funds from the Consolidated  Appropriations and their base programs, obligating $25.9 billion for  GWOT. DOD’s statement of its requirements for the supplemental  appropriation included reimbursing the services’ accounts for costs  incurred and financing the costs associated with military operations  against Iraq.
Neither the President’s request for funds nor the appropriations act  allocated the funds to specific operations. Of the funds appropriated  to DOD by the Emergency Wartime Supplemental, $46.699 billion was  appropriated directly to the services’ and other defense agencies’  appropriations accounts and $15.679 billion to a transfer fund called the  Iraqi Freedom Fund. Tables 1 and 2 show the operation and maintenance  and the military personnel appropriations provided to the services  for GWOT.
To assess the extent to which funds appropriated for GWOT have been  obligated, we compared the latest available obligation reports for  GWOT with the funds appropriated to each of the services’ operation and  maintenance and military personnel accounts. We then compared the  proportion of the funds obligated to the proportion of the fiscal year that  had elapsed to ascertain if funds were obligated at a level commensurate  with that point in the fiscal year. We recognize that funds are not obligated  equally each month throughout the fiscal year but believe that the further  into the fiscal year the closer to 100 percent obligations should be relative  to appropriations if all appropriated funds are likely to be obligated. The  results of this analysis are discussed in the following sections of this  report. We discussed our analysis with DOD representatives at the Office  of the Secretary of Defense (Comptroller) and each of the services’ budget  offices, who disagreed with our methodology. These representatives  believed that the analysis should take into account the fact that the  supplemental appropriation was not available until mid-April 2003 and that  funds were not provided to the services until the beginning of May 2003.
We recognize that the supplemental funding was not provided to the  services until May 2003. At the same time, DOD had to conduct Operations  Noble Eagle and Enduring Freedom from the first day of fiscal year 2003  and subsequently prepare for war in Iraq, deploy over 100,000 military  personnel to the Persian Gulf, and conduct major combat operations, all  before receiving supplemental funding. As discussed earlier, to fund these  operations in advance of receiving supplemental funding, the services  used funds from the Consolidated Appropriations and their base  programs. In doing so, DOD reported that it had obligated $25.9 billion for  GWOT in fiscal year 2003 through April 2003. Therefore, we believe that  assessing how much of the services’ direct GWOT appropriations have  been obligated relatively late in the fiscal year provides a reasonable  measure of how quickly the services are obligating their GWOT  appropriations and the likelihood that they will obligate all the funds  appropriated to them. Our analysis suggests that the services have no need  for further transfers from the Iraqi Freedom Fund in fiscal year 2003, that  all the funds transferred to their operation and maintenance accounts may  not be obligated, and that any transferred funds unobligated at the end of  the fiscal year should be transferred back to the Iraqi Freedom Fund.
section_title: Proportion of Operation and Maintenance Funds Obligated Is Lower Than Proportion of Fiscal Year Elapsed Except for the Marines Corps
paragraphs: Our analysis of the percentage of fiscal year 2003 GWOT operation  and maintenance funds obligated by the services compared with the  proportion of the fiscal year elapsed (i.e., October 1, 2002, through  June 2003, the latest month for which obligation data are available for all  the services) shows that the proportion of available appropriations that  have been obligated as of a particular date is lower than the proportion of  the fiscal year elapsed as of that same date for three of the four military  services, notwithstanding that funds obligated to date include those  required to cover the preparation of military forces for the war with Iraq  and the expense of transporting them and their equipment from the United  States and elsewhere to the Persian Gulf. Therefore, we believe the actual  operation and maintenance obligations made in fiscal year 2003 could be  less than the funds available for obligation in fiscal year 2003. By the end  of June 2003, only one of the services, the Marine Corps, had obligated  more than 75 percent of the funds appropriated for operation and  maintenance, while the other three services had obligated between 65 and  68 percent, although three-fourths of the fiscal year had already elapsed,  raising doubts about whether all the services will be able to obligate their  entire fiscal year 2003 GWOT operation and maintenance funds in the  remaining 3 months of fiscal year 2003. For example, the Army, by the end  of June 2003, had obligated 65 percent of its directly appropriated funds  for GWOT. Figure 2 displays the obligations through June 2003 for each of  the military services.
As can be seen in figure 2, the percentage of directly appropriated  operation and maintenance funds that were obligated as of June 30, 2003,  ranged from a low of 65 percent for the Army to a high of 78 percent for  the Marine Corps.
Based on our analysis, we believe that in fiscal year 2003 the services, with  the possible exception of the Marine Corps, may not obligate all operation  and maintenance funds appropriated to them for GWOT. The services,  however, believe that they will obligate all or almost all of these funds.  This may in fact be the case, but except for the Marine Corps, if the  services do obligate all these funds it will require a faster rate of obligation  of funds—greater than the rate at which they have been obligating funds in  recent months. We recognize that estimating the costs of ongoing military  operations is difficult because operational requirements can differ  substantially from what was assumed in developing budget estimates.  This has been the case in Iraq, where actual operations have differed from  some of the assumptions. For example, a second front using Turkey as a  staging area never materialized, there has not been a rapid redeployment  and demobilization of Reserve and National Guard troops, one major Army  division expected to deploy did not, and transportation costs were lower  than predicted. Some of these differences, such as the lack of a rapid  redeployment and demobilization, are resulting in higher than expected  costs, while other differences, for example, the decision to not deploy one  of the Army’s divisions, are resulting in lower than expected costs.  However, in light of the rate of obligations made through June and the  information presented below, we continue to believe that actual  obligations of GWOT operation and maintenance funds for fiscal year 2003  may be less than the total GWOT operation and maintenance  appropriations available for obligation in fiscal year 2003.
According to the Army’s obligation plan, the Army expects to obligate  $6 billion during the last 3 months of fiscal year 2003. Through June 2003,  the Army had obligated $11.315 billion. Combining the funds obligated  through June and the Army’s estimate for the balance of fiscal year 2003  indicates that the Army will obligate a total of $17.315 billion—$98 million  less than the $17.413 billion it received in direct operation and  maintenance appropriations for GWOT. It should be noted, however, that  the Army’s actual June obligations of $2.38 billion are higher than the  $2.2 billion it planned to obligate in June. Whether the Army will obligate  all its fiscal year 2003 GWOT operation and maintenance funds depends on  whether its obligations for the last 3 months of the fiscal year continue at  or near the June 2003 rate or fall to the levels expected in its obligation  plan. In discussing the results of our analysis with the Army, Army officials  told us that preliminary reports indicate that their July obligations will be  about $3 billion. However, their preliminary June obligation estimate was  higher than their actual June obligations, which underscores the difficulty  in projecting costs and the need to closely monitor the obligation of  GWOT funds.
The Marine Corps expects to obligate approximately $591 million for force  reconstitution (the repair of damaged equipment and the replacement of  munitions, spare parts or equipment lost in war) during the last 3 months  of the fiscal year. However, in discussing our analysis with the Marine  Corps, Marine Corps officials involved with budgeting for ongoing military  operations told us that constraints in depot and contractor capacity could  lead the Marine Corps to obligate fewer funds in fiscal year 2003 than  planned for depot maintenance, which accounts for $50 million to  $70 million of its $591 million reconstitution estimate.
Through June 2003, which is the first 9 months of fiscal year 2003, the  Air Force had obligated $6.0 billion, or 68 percent, of its direct GWOT  operation and maintenance appropriation. Most of the Air Force’s aircraft  have redeployed from Operation Iraqi Freedom, and the Air Force’s role in  that operation has been reduced. According to Air Force officials, in  March 2003, the Air Force had 1,000 aircraft deployed in support of the  war in Iraq and by late June the number had been reduced to 276. The  Air Force’s June 2003 obligation of its GWOT operation and maintenance  appropriation was $76 million less than its May 2003 obligation of  that appropriation.
The Navy had obligated $3.7 billion, or 67 percent, of its direct GWOT  appropriation through June 2003. According to Navy officials, all Navy  ships that deployed to support Operation Iraqi Freedom have been  redeployed, and Navy activity is back to pre-Operation Iraqi Freedom  levels. Furthermore, Navy officials with the Pacific Fleet (the Navy’s major  force provider for Operation Iraqi Freedom) told us that their GWOT  obligations were lower than they had estimated, due in part to lower fuel  and airlift costs. In discussing our analysis with Navy headquarters  officials, they said that while a shorter duration of combat operations  resulted in certain costs not accruing or accruing at the estimated levels,  other operational factors and costs occurred that were substituted and  more than offset estimated fuel and airlift savings. Based on obligations  through June 2003, we believe the Navy may not be able to obligate its  entire fiscal year 2003 GWOT operation and maintenance appropriation by  the end of fiscal year 2003.
section_title: Military Personnel Funds Are Being Obligated at a Faster Rate Than Operation and Maintenance Funds
paragraphs: The services have been obligating their funds for military personnel at a  faster rate than that for their operation and maintenance funds. As figure 3  shows, with three-fourths of the fiscal year gone, the Army and the  Marine Corps had each obligated about three-fourths of their GWOT  appropriations for military personnel costs while the Navy and Air Force  had each obligated slightly less than three-fourths of their respective  GWOT appropriation.
According to DOD’s July 2, 2003, report on fiscal year 2003 appropriations,  the services will obligate their entire fiscal year 2003 GWOT military  personnel appropriations. Service officials told us that they believe they  will use their entire GWOT military personnel appropriation because the  planned demobilization of reserve component personnel has not occurred.  In addition, the Army has not been able to redeploy its troops from Iraq as  originally planned, which increased the Army’s costs for the special pays  and allowances, such as imminent danger pay and family separation  allowance, which some deployed military personnel are entitled to receive.
section_title: DOD is Transferring Additional Funds to the Military Services
paragraphs: In addition to the direct appropriations included in the Emergency  Wartime Supplemental Appropriations Act, Congress also established the  Iraqi Freedom Fund, which provides the services with additional funds to  cover their GWOT costs. Congress appropriated almost $15.7 billion to  this Fund and made it available to DOD through September 30, 2004. DOD  must notify Congress at least 5 days in advance of such transfers, but  congressional approval to make the transfers is not required. Once DOD  transfers funds to the services’ operation and maintenance or military  personnel accounts during fiscal year 2003, the funds must be obligated by  September 30, 2003, or they should be transferred back to the Iraqi  Freedom Fund.
On August 11, 2003, DOD notified the Congressional Defense Committees  of its intention to make an initial transfer of $4.8 billion from the Iraqi  Freedom Fund to various service and DOD agency accounts. Of the  $4.8 billion, about half ($2.4 billion) would be transferred to the services’  operation and maintenance accounts; the balance would be transferred  to defensewide operation and maintenance and to a variety of  procurement and research, development, test, and evaluation accounts.  The August 11, 2003, notification did not include any transfers to the  services’ military personnel accounts. Of the amount to be transferred to  the services’ operation and maintenance accounts,    $1,097.3 million would be transferred to the Army,    $683.7 million would be transferred to the Navy,    $285.9 million would be transferred to the Marine Corps, and    $377.5 million would be transferred to the Air Force.
These transfers will increase the amount of funds in the services’ fiscal  year 2003 operation and maintenance accounts available for GWOT.
section_title: The Termination of Operations Northern Watch, Southern Watch, and Desert Spring Obviates the Need for Requested Fiscal Year 2004 Funds for These Operations
paragraphs: Since the 1991 war with Iraq, the United States has been conducting  operations in Southwest Asia to monitor Iraq’s compliance with various  United Nations resolutions. Operations Northern and Southern Watch  enforced the no-fly zones over Iraq. Operation Desert Spring, an Army  operation, rotated forces in and out of Kuwait to train with the Kuwaiti  military. From the inception of operations through June 2003, costs for  these operations have totaled $11.4 billion. Since fiscal year 2002, funds  for these operations have been included in the services’ base programs.
In March 2003, DOD terminated Operations Northern and Southern Watch  and Operation Desert Spring. The President’s fiscal year 2004 budget  request, which was submitted in February 2003, before the termination of  these operations, included approximately $1.4 billion for these operations.  We briefed the Senate and House Committees on Appropriations on the  termination of these operations in early June 2003 and suggested that  since the operations have ended there was no need to provide funds for  them in fiscal year 2004, although there could be further costs associated  with shutting them down in fiscal year 2003 between the time they were  terminated in March 2003 and September 2003.
The Army agreed that it would not require any funding in fiscal year 2004  for Operation Desert Spring, and the Air Force agreed that it would not  require funding for Northern Watch, but it disagreed with congressional  action to eliminate funding for Operation Southern Watch. The Air Force  asked that the funds for Operation Southern Watch be restored because  it believed it needed these funds to maintain the bases that were  previously used for Operation Southern Watch and that now support the  ongoing operations.
section_title: Conclusions
paragraphs: Our analysis of the obligation of funds to support GWOT in fiscal year 2003  suggests that the funds appropriated to the services for that purpose,  particularly for operation and maintenance, could be sufficient to cover  their fiscal year 2003 costs. On August 11, 2003, DOD notified Congress of  its intent to initially transfer $2.4 billion from the Iraqi Freedom Fund to  the services’ operation and maintenance accounts. Collectively, with the  funds DOD has transferred from the Iraqi Freedom Fund to the military  services and the large amount of unobligated funds remaining in the  services’ fiscal year 2003 GWOT operation and maintenance  appropriations except for the Marine Corps as of the end of June 2003,  obligating these funds between July and September 30, 2003, could  be challenging.
In March 2003, DOD terminated Operations Northern Watch, Southern  Watch, and Desert Spring. Therefore, the funds requested for these  Operations in the President’s fiscal year 2004 budget request for DOD may  no longer be necessary as requested.
section_title: Recommendations for Executive Action
paragraphs: To ensure that funds already appropriated, including funds transferred  from the Iraqi Freedom Fund, to the military services for GWOT are fully  utilized and that additional funds are not transferred to the military  services’ operation and maintenance and military personnel accounts from  the Iraqi Freedom Fund until they are needed, we recommend that the  Secretary of Defense (1) monitor the obligation of funds in the services’  operation and maintenance accounts, including the GWOT funds,  (2) ensure that all funds transferred to the services’ operation and  maintenance accounts that are not likely to be obligated by the end of  fiscal year 2003 are transferred back to the Fund as allowed by the  Wartime Supplemental Appropriation, and (3) closely review the  executability of further funding transfers from the Iraqi Freedom Fund to  ensure the funds will be obligated as planned.
section_title: Matter for Congressional Consideration
paragraphs: Because Operations Northern Watch, Southern Watch, and Desert Spring  were canceled in March 2003, after the President’s fiscal year 2004 budget  submission, Congress may wish to delete the funds requested for this  purpose from the fiscal year 2004 DOD appropriations.
section_title: Agency Comments and Our Evaluation
paragraphs: In official oral comments on a draft of this report, DOD agreed with our  recommendation to ensure that all funds transferred to the services’  operation and maintenance accounts that are not likely to be obligated by  the end of fiscal year 2003 are transferred back to the Iraqi Freedom Fund.  DOD had concerns with our other two recommendations dealing with (1)  monitoring the obligation of GWOT funds and (2) prohibiting the transfer  of funds from the Iraqi Freedom Fund until the services provide obligation  reports showing that a large percentage of their current GWOT  appropriations, such as 90 percent, have been obligated and suggested  some revisions. Based on DOD’s comments we have revised our  recommendations as discussed below.  DOD agrees with our revised  recommendations.
With respect to our recommendation that the Secretary of Defense  monitor the obligation of GWOT funds in the services’ operation and  maintenance accounts, including those transferred from the Iraqi Freedom  Fund, DOD noted that when the supplemental funds are released to the  components those funds become part of the appropriation and are not  separately identified as GWOT funds.  DOD further noted that it could not  separately monitor GWOT funds because they are not identified separately  in the accounting systems. As a result, we revised our recommendation to  state that the Secretary of Defense monitor the obligation of funds in the  services’ operation and maintenance accounts, including the GWOT funds.
DOD did not agree with our recommendation that the Secretary of  Defense prohibit further transfers until the services provide obligation  reports showing that a large percentage of their current GWOT  appropriations, such as 90 percent, have been obligated.  DOD noted that  our recommendation ignores the funding pipeline issues; specifically that  it takes time for the funds to be released, received by the services, and  obligated. DOD said that to arbitrarily suggest that 90 percent of an  account must be obligated before additional funds could be transferred  into the account would create an unnecessary burden on the services, lead  to "stop-go" funding decisions, and have a negative impact on normal  operating procedures. We did not cite a specific figure in our draft  recommendation; rather we suggested that a large percentage of the  services’ current GWOT appropriations, such as 90 percent, be obligated  before making further transfers. However, in light of DOD's concerns we  revised our recommendation to state that the Secretary of Defense closely  review the executability of further funding transfers from the Iraqi  Freedom Fund to ensure the funds will be obligated as planned.
We are sending copies of this report to interested congressional  committees; the Secretary of Defense; the Under Secretary of Defense  (Comptroller); and the Director, Office of Management and Budget. Copies  of this report will also be made available to others upon request. In  addition, this report will be available at no charge on the GAO Web site at  http://www.gao.gov.
If you have any questions regarding this report, please call me on  (757) 552-8100. Principal contributors to this report were Steve Sternlieb,  Carole Coffey, George Duncan, Matt Ullengren, and James Reynolds.
section_title: Appendix I: Scope and Methodology
paragraphs: To examine the adequacy of funding for the Global War on Terrorism  (GWOT), we reviewed (1) the President’s fiscal year 2003 budget request  for supplemental appropriations, (2) applicable laws and accompanying  reports appropriating funds for GWOT, and (3) DOD reports on the  obligation of funds. We also obtained budget estimates from the services  and their key elements involved in GWOT operations. We also met with  service officials to discuss world events that may have had an impact on  their budget estimates and their obligation patterns. We compared the  latest available obligation reports against total available appropriated  funds. We then compared the proportion of appropriated funds obligated  with the proportion of the fiscal year that had elapsed to ascertain how  rapidly funds were being obligated. We recognized that funds are not  obligated equally each month throughout the fiscal year but believe  that the further into the fiscal year the closer to 100 percent obligations  should be relative to appropriations if all appropriated funds are likely to  be obligated. We focused our work on the obligation of funds appropriated  for operation and maintenance and military personnel because they  represented the large majority of funds obligated in fiscal year 2003  through June 2003. During that period $866 million of the $38.9 billion in  reported obligations was obligated for what the Department of Defense  categorized as investment.
To determine if there is a continued need for fiscal year 2004 funds for  Operations Southern Watch, Northern Watch, and Desert Spring, we met  with service officials and reviewed documents to determine the status of  the three operations. We reviewed the President’s fiscal year 2004 budget  request for the Department of Defense to determine the total requested for  the three operations.
We visited the following locations during our review:    Office of the Secretary of Defense (Comptroller), Washington, D.C.    Office of the Secretary of Defense (Reserve Affairs), Washington, D.C.    Department of the Army, Headquarters, Washington, D.C.    U.S. Army Reserve Command, Fort McPherson, Ga.    U.S. Army Forces Command, Fort McPherson, Ga.    U.S. Army National Guard, Arlington, Va.    U.S. Army Europe, Heidelberg, Germany.    U.S. Army Pacific Command, Fort Shafter, Hawaii    Department of the Air Force, Headquarters, Washington, D.C.    U.S. Air National Guard, Arlington, Va.    U. S. Air Force Europe, Ramstein Air Base, Germany.    Pacific Air Force, Hickham Air Base, Hawaii    Department of the Navy, Headquarters, Washington, D.C.    United States Marine Corps, Headquarters, Washington, D.C.    Naval Reserve Forces Command, New Orleans, La.    United States Marine Corps Reserve Forces, New Orleans, La.    Marine Forces, Pacific, Camp Smith, Hawaii    Pacific Fleet, Pearl Harbor, Hawaii  We also obtained information from the Army Material Command,  Alexandria, Virginia.
We performed our work from February through September 2003 in  accordance with generally accepted government auditing standards.