Sequestration: Comprehensive and Updated Cost Savings Would Better Inform DOD Decision Makers If Future Civilian Furloughs Occur
Published: 2014-06-17T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In March 2013, DOD's discretionary budget was reduced by $37 billion as a result of sequestration—across-the-board spending reductions to enforce certain budget policy goals. In response, the Secretary of Defense implemented an administrative furlough, among other things by placing most of DOD's civilian personnel in a temporary nonduty, nonpay status. An administrative furlough is a planned event by an agency to absorb reductions due to budget situations other than a lapse in appropriations.
GAO was mandated to review DOD's implementation of its administrative furlough. This report (1) examined how DOD implemented its furloughs and any reported cost savings, (2) examined the extent to which DOD utilized up-to-date cost-savings information in the planning and implementation of furloughs, and (3) identified any reported examples of impacts that resulted from the furloughs. GAO reviewed DOD furlough guidance, interviewed officials, and conducted visits at selected sites that were selected to represent different categories of furlough exceptions and potential sequestration impacts, among other things.
section_title: What GAO Found
paragraphs: In January 2013, the Department of Defense (DOD) instructed components to plan for the possibility of up to a 22-day administrative furlough of civilian personnel. On May 14, 2013, the Secretary of Defense issued a memorandum directing up to an 11-day furlough of most of DOD's civilians, and on August 6, 2013, reduced the number of furlough days to 6, resulting in a cost savings of about $1 billion from civilian pay, excluding implementation costs. DOD officials stated the decision to reduce the number of furlough days was due to DOD gaining greater flexibility from fund transfers and reprogrammings that occurred towards the end of the fiscal year. DOD identified categories of furlough exceptions for personnel including those assigned to a combat zone and those necessary to protect safety of life and property. Clarifying guidance was issued to help ensure that borrowed military personnel were not used to compensate for work resulting from the furlough, and to prohibit contracted support from being assigned or permitted to perform additional work or duties to compensate for workload or productivity loss resulting from the furlough. Ultimately, DOD furloughed 624,404 civilians and excepted 142,602 civilians for 6 days.
DOD developed its initial estimated cost savings for the furlough without excluding pay for those excepted from the furlough and did not update its estimate throughout the furlough period as more information became available, such as real-time cost savings and when subsequent decisions were made to reduce the number of furlough days. The initial estimated cost savings were calculated at $300 per person per furlough day, totaling about $2.1 billion for 11 furlough days. When DOD reduced the furlough from 11 to 6 days, the estimated cost savings were reduced by about $900 million. However, the estimated savings per person per day was not updated to reflect actual payroll reductions, in part because, according to DOD officials, there was only 1 week's worth of payroll data available at the time the decision was made. While officials stated that the estimated savings per person per day was not updated because they thought it was sufficient for their purposes and that the decision to reduce the number of furlough days was primarily based on funding received from transfers and reprogramming actions, the determination of exceptions was made 3 months earlier. If this initial estimate had been updated it may have provided more-comprehensive information for DOD officials to consider regarding the length of the furlough and DOD's cost-savings estimate. As DOD continues to face budgetary uncertainty, and in the event of a future furlough, having comprehensive and updated cost information may help better inform decision makers.
Officials at selected sites GAO visited noted a number of actions taken to prepare for the furlough and described impacts of the furlough, such as decline in morale, mission delays, and inconsistencies and clarification issues with the furlough guidance. However, attributing these impacts directly to the furlough is difficult given other factors, such as a civilian hiring freeze and pay freeze that may also have contributed to declining morale. For example, satisfaction with the organization had declined from 63 percent in 2010 to 55 percent in 2013. Furthermore, a longer term impact may result from DOD civilians filing over 32,000 appeals related to the administrative furlough in 2013, most of which have not yet been resolved.
section_title: What GAO Recommends
paragraphs: GAO recommends that DOD update and utilize its furlough cost-savings information as it becomes available in the event that it decides to implement another administrative furlough in the future. DOD partially concurred. GAO continues to believe the findings and recommendation are valid, as discussed in the report.

section_title: Letter
paragraphs: The Department of Defense (DOD) is one of the largest and most  complex organizations in the federal government, with a total workforce  consisting of civilians, military personnel, and contracted support. DOD’s  civilian personnel are critical to achieving the department’s missions by  performing a wide variety of duties including, among other things,  providing care for active-duty personnel and their dependents and  wounded servicemembers, gathering intelligence, managing financial  accounting systems, and providing mission-essential combat-support  functions that traditionally have been performed by military personnel,  such as logistics support and maintenance.
Sequestration—the process of presidentially directed, largely across-the-board spending  reductions under which budget authority is reduced to enforce certain budget policy  goals—was a result of the Budget Control Act of 2011 (Pub. L. No. 112-25 (2011), as  amended). The Budget Control Act of 2011, as implemented by the Office of Management  and Budget, required spending cuts of $37 billion from DOD’s budget in fiscal year 2013  through across-the-board, proportional reductions in funding provided in the  appropriations acts for most defense accounts, including accounts related to DOD’s  civilian workforce and contracted services. not included in the scope of the furlough. In addition, while DOD  continued to use contracted support under existing contracts, and those  employees were not subject to the furlough, according to DOD officials  DOD took actions, such as adjustments to the scope of contracts or  delays in letting new contracts, as part of its efforts to achieve  sequestration reductions.
Recently, we reported on DOD’s approach to sequestration and, as a part  of that review, we provided a brief overview of DOD’s implementation of  the furlough of its civilian personnel. Specifically, we reported that DOD  spending reductions under sequestration affected DOD’s civilian  workforce and many programs and functions, which required DOD to  accept some risk in maintaining the readiness of military forces.
We conducted this review in response to House Report 113-102 of the  House Armed Services Committee, accompanying the bill for the National  Defense Authorization Act for Fiscal Year 2014, which mandated that we  assess how DOD planned for, implemented, and monitored furloughs of  its civilian workforce to include what challenges the department faced in  its implementation and cost savings realized. This report (1) examines  how DOD implemented its civilian workforce furloughs and any reported  cost savings, (2) examines the extent to which DOD utilized up-to-date  cost-savings information in the planning and implementation of civilian  workforce furloughs, and (3) identifies any reported examples of impacts  that resulted from the DOD civilian workforce furloughs.
To address how DOD implemented its civilian workforce furlough, we  obtained and analyzed information and interviewed knowledgeable  officials from the Under Secretary of Defense (Comptroller) (hereafter  referred to as Office of the Comptroller), the Under Secretary of Defense  for Personnel and Readiness, and the Departments of the Army, Navy,  and Air Force. We obtained and analyzed guidance and policy documents  outlining the furlough decisions. To understand how the civilian workforce  furlough was implemented at a local level, we conducted site visits of a  selected shipyard, medical facility providing 24-hour support, and air  operations center. Specifically, we visited Norfolk Naval Shipyard, Brooke  Army Medical Center at Fort Sam Houston, and Air Mobility Command at  Scott Air Force Base. These sites were selected on the basis of DOD’s  memo outlining categories of personnel for exceptions to the furlough,  DOD statements about potential sequestration impacts, and mission- critical occupations as outlined in DOD’s Strategic Workforce Plan.  Information from these site visits is not generalizable, but provides  examples of how the furlough was implemented at these locations. To  examine any reported cost savings that resulted from the DOD civilian  workforce furloughs, we obtained and analyzed information and  interviewed officials from the Office of the Comptroller regarding DOD’s  calculations of the actual cost savings as a result of the administrative  civilian workforce furlough. We assessed DOD’s methods for calculating  actual cost savings for the furlough; however, we did not independently  verify these calculations. The cost savings were calculated from the  civilian pay from those who were furloughed and did not account for other  costs from implementing the furlough, such as administrative costs.
To determine the extent to which DOD utilized up-to-date cost-savings  information in the planning and implementation of civilian workforce  furloughs, we obtained and analyzed information and interviewed officials  from the Office of the Comptroller regarding how the department  calculated the estimated cost savings for the furlough of civilian personnel  in fiscal year 2013. We examined DOD’s methods for calculating  estimated cost savings for the furlough; however, we did not  independently verify the accuracy of these calculations.
To identify any reported examples of impacts that resulted from the DOD  civilian workforce furloughs, we obtained and analyzed information and  interviewed knowledgeable officials at the three selected sites—Norfolk  Naval Shipyard, Brooke Army Medical Center at Fort Sam Houston, and  Air Mobility Command at Scott Air Force Base. Further, we interviewed  officials and obtained information from the Merit Systems Protection  Board providing the status of appeals filed by DOD civilians regarding the  furlough in fiscal year 2013.
We conducted this performance audit from July 2013 to June 2014 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives. For further details, please see  appendix I.
subsections: section_title: Background
paragraphs: The Office of Personnel Management (OPM) has identified two different  kinds of furloughs—an administrative furlough, which is a planned event  by an agency designed to absorb reductions necessitated by downsizing,  reduced funding, lack of work, or other budget situation other than a lapse  in appropriations, and a shutdown furlough, which results from a lapse in  appropriations. DOD had not implemented a department-wide  administrative furlough prior to 2013, according to officials within the  Office of the Under Secretary of Defense for Personnel and Readiness;  however, DOD has implemented shutdown furloughs—once in 1995 and  again in 2013. Since 1980, DOD has conducted furloughs based on gaps  in appropriation during November 14–17, 1995, and during October 1–17,  2013.
DOD’s total workforce has grown since the events of September 2001.  The civilian workforce has grown from about 687,000 full-time equivalents  in fiscal year 2001 to about 782,000 full-time equivalents projected in  fiscal year 2015. DOD’s active and reserve military workforce grew  between fiscal year 2001 and fiscal year 2011 from about 2.25 million to  about 2.27 million, with a budgeted request for a military workforce of  about 2.13 million for fiscal year 2015. Further, DOD has increasingly  relied on contracted support both overseas and in the United States to  perform many of the same functions as civilian employees, including  management support, communication services, and intelligence. DOD’s  total obligations for contracted services grew from about $96 billion in  fiscal year 2001 to about $174 billion for an estimated contracted services  workforce of about 670,000 full-time equivalents in fiscal year 2012.  However, with the drawdown in operations in Iraq and Afghanistan, as  well as changing priorities and missions, most military services project a  decrease in their military and civilian workforce through fiscal year 2017.
For over a decade, strategic human capital management for all federal  civilians—including those at DOD—has been on our High-Risk list  because of the long-standing lack of leadership in this area.  We have  conducted assessments of DOD’s strategic workforce plans since 2008,  and our body of work has found that DOD’s efforts to address mandated  strategic workforce planning requirements have been mixed. In our most  recent report in September 2012 on the department’s overall civilian  strategic workforce plan, we recommended that DOD take a number of  actions, including to provide guidance for developing future strategic  workforce plans that clearly directs the functional communities information that identifies not only the number or percentage of personnel  in its military, civilian, and contractor workforces but also the capabilities  of the appropriate mix of those three workforces. DOD either concurred or  partially concurred with our recommendations, stating that, among other  things, the department was deliberate in applying lessons learned from  previous workforce plans and identifying specific challenges and the  actions being taken to address those challenges to meet statutory  planning requirements by 2015.
DOD defines a functional community as employees who perform similar functions;  functional communities are discussed further in the background section of this report. rest of the federal civilian workforce. DOD was also affected by a  Continuing Resolution that held funding at fiscal year 2012 levels through  March 27, 2013, even though DOD had requested funding increases in  most areas of operations for fiscal year 2013. In addition, in January  2013, DOD reduced its spending to prepare for a potential sequestration,  a process of automatic, largely across-the-board spending reductions  under which budgetary resources are permanently canceled to enforce  certain budget policy goals. DOD took several actions to prepare for a  potential sequestration, such as authorizing components in January 2013  to initiate a hiring freeze as needed, releasing term and temporary  employees, and instructing components to draft plans to include the  possibility of furloughs of up to 22 workdays. On February 20, 2013, DOD  provided Congress with notice of its intent to furlough.
We reported in November 2013 that DOD’s efforts to address  sequestration—a reduction of $37 billion in DOD’s discretionary budget— was a short-term response focused on addressing the immediate funding  reductions for fiscal year 2013. As a result of sequestration and  increased Overseas Contingency Operations requirements, on March 13,  2013, DOD issued guidance for components to plan for a furlough of its  civilian personnel for up to 22 workdays. On March 28, 2013, DOD  reduced the number of planned furlough days from 22 to 14, in response  to the enactment of a defense appropriations act for the remainder of  fiscal year 2013. The Secretary of Defense also decided to apply the  furlough across the department to allow for a reallocation of resources  throughout the department to address national security priorities. DOD  also took other actions across the department to reduce its budget in  response to the sequestration, such as curtailing training for certain units  and postponing planned maintenance.
The size and complexity of DOD’s worldwide operations—involving a  requested base budget of approximately $495.6 billion in fiscal year  2015—and the need to reduce its budget in an ongoing fiscally  constrained environment, require that DOD have accurate, complete, and  timely financial information available to make management decisions. We  have placed DOD on our High-Risk List for financial management  beginning in 1995 because of financial management weaknesses that  affect its ability to control costs; ensure accountability; anticipate future  costs and claims on the budget; detect fraud, waste, and abuse; and  prepare auditable financial statements. DOD is one of the few federal  entities that cannot accurately account for its spending or assets. We  have reported that while DOD has made efforts to improve financial  management, it still has much work to do if it is to meet its long-term  goals of improving financial management and achieving full financial  statement auditability.
section_title: DOD Implemented a 6-Day Administrative Furlough of Its Civilian Personnel and Reported Approximately $1 Billion in Savings
subsections: section_title: DOD Issued Guidance Directing the Implementation of an Administrative Furlough of Its Civilian Personnel
paragraphs: On May 14, 2013, the Secretary of Defense, in an effort to minimize  adverse affects on military readiness, issued a memorandum that  directed a furlough of most of its civilian personnel in response to major  budgetary shortfalls from the sequestration. The memorandum required  most civilians to be furloughed for up to 11 days beginning on July 8,  2013, typically for 1 day per week until September 30, 2013. The  Secretary of Defense also directed all components to monitor funding  closely for the remainder of fiscal year 2013 so that, if the budget situation  permitted, DOD could shorten the length of the furloughs. The  memorandum listed categories of exceptions to the furlough, including  personnel assigned to a combat zone, those necessary to protect the  safety of life and property, and Navy shipyard employees. See appendix  II for a complete list of exceptions granted.
Additionally, the Secretary of Defense’s May 14, 2013, memorandum  included an associated schedule for issuance of furlough proposal notices  at least 30 days in advance of the furlough, allowing at least 7 days for  response by the employee. The memorandum also identified the following  key dates:
May 28–June 5: Furlough proposal notices were to be served to  individual employees subject to furlough.
June 4–June 12: Individual employee reply periods—time allotted for  employees to acknowledge receipt of the furlough proposal notice,  among other things—ended 7 calendar days from when the proposal  was received, unless component procedures allowed for a different  reply period.
June 5–July 5: Furlough decision letters were to be served to  individual employees subject to furloughs, depending on when the  proposal was received and prior to the first day of furlough.
July 8: Furlough period was to begin no earlier than this date.
An attachment to the memorandum noted that defense agencies and  military services should designate a Deciding Official who would be  accountable for making final decisions on furloughs for individual  employees after carefully considering the employee’s reply, if any, and  the needs of the department.
The Assistant Secretary of Defense for Readiness and Force  Management issued clarifying guidance throughout the planning and  implementation of the furlough that, among other things, provided  standard templates for the proposal and decision notice letters to prepare  and issue to civilian employees.provide clarification on the use of leave without pay during the time of the   In addition, guidance was issued to  furlough; to help ensure that borrowed military personnel were not used to  compensate for work resulting from the furlough; and to prohibit  contracted support from being assigned or permitted to perform additional  work or duties to compensate for workload or productivity loss resulting  from the furlough.
Based on the Secretary of Defense’s May 14, 2013, memorandum,  managers were given the authority to develop specific furlough  procedures in order to minimize adverse mission effects and limit the  harm to morale and productivity. The memorandum also noted that  bargaining with unions may be required. As a result, military  departments developed implementing guidance based on the Secretary  of Defense’s memorandum requiring the furlough. For example, the Army  issued a memorandum on command reporting requirements for the  furlough to capture information on the issuance of furlough proposal  notices and decision letters. Also, the Navy issued supplemental  guidance on the scheduling of furloughs that included details on  commander authorities to make decisions on the scheduling of furlough  days for each employee, subject to union negotiation, as appropriate. In  addition, the Air Force excluded from furlough those civilian employees  whose homes were destroyed or rendered uninhabitable by the  Oklahoma tornadoes in 2013.
On August 6, 2013, the Secretary of Defense issued a memorandum  reducing the number of furlough days from 11 to 6 days for most civilians.  This action also cancelled furloughs for Department of Defense Education  Activity instructional and support staff on 10-month contracts, and  required new hires whose furlough period began after July 8, 2013, to  take 2 furlough days per pay period between their furlough start date and  August 17, 2013. As discussed in greater detail later in the report, the  department was able to reduce the number of furlough days after  completing several transfer and reprogramming actions, which gave the  department additional flexibility and resulted in substantial realignment of  funds—about $8.6 billion. Additional guidance was issued after the  reduction in furlough days to address those who took more than 6 days of  furlough, by allowing them to substitute any excess furlough days for  leave. In the event an employee did not have sufficient leave accrued, or  the employee elected not to substitute leave, excess furlough time  remained as unpaid time. Ultimately, DOD reported that it furloughed  624,404 civilians and excepted 142,602 from furlough. Specifically, of the  DOD civilians furloughed, the Army furloughed about 221,000; the Navy  furloughed about 153,000; the Air Force furloughed about 157,000; and  the other DOD agencies furloughed about 93,000 (see table 1 below).
section_title: Managers Were Responsible for Implementing the Administrative Furlough
paragraphs: Based on the Secretary of Defense’s May 14, 2013, memorandum  initiating the furlough, managers carried out the planning and  implementation of the furlough for their respective offices. Specifically, in  addition to the Office of the Secretary of Defense’s efforts to notify its 10  unions with national consultation rights about the decision to furlough,  managers carried out negotiations with over 1,500 local bargaining units  on the implementation of the furlough of civilians, which included issues  such as who would be furloughed, who would be excepted from furlough,  and the scheduled furlough days. Officials at Brooke Army Medical  Center, Norfolk Naval Shipyard, and Air Mobility Command described the  following actions they took to implement the furlough at their sites:
Notification letter process: Officials at these sites described their  process for designating a Deciding Official and the distribution,  receipt, and tracking of furlough notification letters. For example, at  Brooke Army Medical Center, the Deciding Official hand-signed each  furlough notification letter for over 2,700 civilians that were then  distributed to the medical departments to be handed out by the  civilians’ supervisors. If the supervisor was unable to hand-deliver the  notification letter, the letter was mailed to the civilian via regular and  certified mail. The supervisors then followed up with the civilians who  received the letters to obtain their signature or acknowledgement of  receipt of the notification and provided copies to the civilians and  copies to the human resources office to be placed in the official  personnel files.
Work schedules: Civilian personnel were assigned varying schedules  for the furlough, depending on negotiations with unions and  consideration of mission requirements. For example, officials at these  sites said that some offices implemented Friday as civilian furlough  day, while other offices spread out the furlough days of their civilians  across the work week. In addition, some civilians took their furlough  days in clusters rather than just 1 day a week.
Tracking of furlough days: Officials at these sites explained that they  monitored the timecards of civilians who were furloughed to ensure  that they were taking the required number of furlough days and in  order to know when the furlough would end for each civilian based on  their individual schedule or circumstance. For example, officials at Air  Mobility Command explained that their office of financial management  generated reports on the number of furlough hours taken based on  timecard reporting, and when the number of furlough days was  reduced to 6 days, officials audited the timecard system to ensure  civilians under their purview had taken the correct number of furlough  days.
Exceptions process: The exceptions determination process varied at  these sites, and additional exceptions to the furlough were sought and  granted as the department clarified the personnel covered under  categorical exceptions and as commands granted individual  exceptions. For example, officials at Brooke Army Medical Center set  up a team early on to identify and prioritize department needs within  the hospital to ensure they were able to meet the mission of providing  adequate staff and high-quality care to patients. This allowed Brooke  Army Medical Center to identify civilian personnel to except from the  furlough based upon prioritized needs, such as evening shift  supervisors within its nursing department. Also, the Public Works  office at Norfolk Naval Shipyard requested exceptions for some of its  mechanics and utilities staff to provide 24-hour support.
section_title: DOD Reported Cost Savings of Approximately $1 Billion from the Administrative Furlough
paragraphs: As a result of DOD furloughing 624,404 civilians, the Office of the  Comptroller reported that the department saved approximately $1 billion  from the furlough. These cost savings were calculated using Defense  Finance and Accounting Service–reported payroll data by summing the  result of each employee’s hourly pay rate multiplied by the number of  furlough hours recorded in his or her time card. Office of the Comptroller  officials reported they provided DOD components with Defense Finance  and Accounting Service payroll data reports for their respective civilian  employees and requested that they validate the data to ensure that all  employees who were required to be furloughed correctly recorded their  furlough days in the timekeeping systems. The cost savings calculation  did not include the last week of the fiscal year because the last pay period  of the fiscal year—which ran from September 22–October 5, 2013— overlapped with the first week of fiscal year 2014 and included leave  without pay recorded for the government shutdown. Office of the  Comptroller officials stated that the savings amount from the final pay  period in the fiscal year was expected to be minimal as the majority of the  furlough savings were realized by August 24, 2013, when most  furloughed civilians would have taken their required 6 furlough days.
DOD’s reported cost savings of $1 billion does not account for other costs  the department incurred while implementing the furlough, such as  administrative costs from processing furlough notification letters or  developing furlough guidance, as well as costs from the loss of  productivity due to civilians being furloughed. For example, officials we  interviewed at Brooke Army Medical Center stated that many hours were  spent on administrative tasks to prepare for and implement the furlough.  In addition, officials from Army Medical Command explained that there  was a loss of productivity, as staff set aside their primary tasks to  concentrate on implementing the furlough. Further, Marine Corps officials  stated that they spent a majority of their time dealing with the furlough  rather than focusing on day-to-day business, such as developing critical  skills training.
section_title: DOD Did Not Use Comprehensive and Updated Information on Estimated Cost Savings to Inform Its Decisions
paragraphs: DOD developed an estimated cost-savings for the furlough to assist in  planning efforts to meet sequestration cost-reduction targets; however,  DOD did not exclude pay for those excepted from the furlough and did not  update its estimate throughout the furlough period as more information  became available, such as real-time cost savings and when subsequent  decisions were made to reduce the number of furlough days. As noted  earlier, the Secretary of Defense directed a furlough of most of the  department’s civilian personnel in response to major budgetary shortfalls  from the sequestration. The Office of the Comptroller developed an  average estimated cost savings per person per furlough day of  approximately $300. Officials within the Office of the Comptroller stated  that the estimate was developed in order to provide senior leaders within  DOD with information in a short time frame to consider how much could  be saved through a furlough as part of an effort to meet sequestration  cost-reduction targets. The average estimated cost-savings per person  per day was developed prior to the identification of exceptions to the  furlough and used aggregated payroll data from Defense Finance and  Accounting Service and civilian personnel data from the Defense Civilian  Personnel Data System. Upon directing a furlough of 11 days for most  civilian personnel in May 2013, the Office of the Comptroller estimated a  cost savings of approximately $2.1 billion. The Office of the Comptroller  developed the $2.1 billion estimate by multiplying the estimated average  savings of $300 per person per day by the estimated total number of  civilians being furloughed. In the same memorandum directing the 11 day  furlough, the Secretary of Defense included categories of exceptions to  the furlough. When the Office of the Comptroller developed the $2.1  billion estimated savings it accounted for exceptions in their estimated  total number of civilians being furloughed, but not in its average estimated  cost-savings per person per day.
DOD’s total estimated cost savings was not as accurate as it could have  been because it did not account for excepted employees in its average  per person per day estimated cost-savings. As stated above, DOD  excepted142,602 civilian employees, or approximately 18 percent of the  civilian workforce from the furlough. The civilians who were excepted may  have had higher salaries or lower salaries; thus, these exceptions may  have affected the average per day savings. Further the per person per  day cost savings effects the total estimated savings. For example,  assuming the same number of civilians DOD used to calculate its  estimated cost savings were furloughed for 11 days, a $10 difference in  estimated average savings per person per day changes the total  estimated savings by approximately $72 million.
section_title: Wide Range of Impacts Reported from the Implementation of the Administrative Furlough
paragraphs: Officials from selected sites discussed examples of impacts that resulted  from the furlough. Specifically, some officials we interviewed at selected  sites discussed actions taken to prepare for or mitigate potential impacts  resulting from the furlough such as proactive planning efforts, identified  efficiencies, and use of cost savings to offset unfunded requirements.  Officials we interviewed also described specific impacts that they believe  can be attributed to the furlough, such as decline in civilian morale,  attrition, mission delays, inconsistencies and clarification issues with the  furlough guidance, and impacts on servicemembers’ morale. However,  measuring the direct impact of the furlough is difficult since it was a part  of a broader set of sequestration actions that included a civilian hiring  freeze, limits on overtime, and termination of temporary and term hires,  as well as other non-sequestration-related personnel actions, such as a  3-year pay freeze between 2011 and 2013. Further, DOD civilians filed  over 32,000 appeals to the Merit Systems Protection Board related to the  furlough in 2013.
The following are examples of actions taken to prepare for or mitigate  potential impacts reported by officials at the locations we visited from the  implementation of the furlough:
Proactive Planning and Furlough Tracking—Some officials described  proactive planning efforts that took place at their sites to prepare for  the furlough. For example, Brooke Army Medical Center officials  reported setting up a team in February 2013 to conduct worst-case  scenario planning and determine mission priorities for adequate  staffing to help ensure high quality of patient care for a potential  furlough. This team was then able to identify individuals for exception  to the furlough based on their planning efforts once they received the  furlough guidance designating 11 furlough days and categories of  exceptions. Some officials from all three sites also described efforts to  capture potential and realized impacts from the furlough through  various reporting mechanisms, such as a furlough impact log.
Identification of Efficiencies—Some officials provided examples of  individual command efforts to identify and implement efficiencies  during the furlough. For example, some officials at all three sites  noted that because of the limitations placed on overtime during  sequestration and the added impact of the furlough on civilian staff,  approval of overtime was scrutinized at a higher level than before. As  a result, officials at these sites gained a better awareness of the  appropriate use of overtime and reported reductions in the use of  overtime. In addition, officials from Brooke Army Medical Center’s  Emergency Medicine Department stated that they were able to defer  the size of their routine supply purchases after prioritizing spending on  mission-essential needs during the furlough.
Use of Cost Savings to Offset Unfunded Requirements—Some  officials at Norfolk Naval Shipyard and Air Mobility Command  described using the cost savings realized from the reductions in  civilian pay due to the furlough to apply towards other unfunded  requirements. Officials from the Department of the Navy stated that  the individual commands were allowed to use the money saved from  the furloughs based on individual priorities. Brooke Army Medical  Center reported an estimated return of about $3.4 million as furlough  days were reduced from the initially planned 22 days to 6 days. Army  Medical Command initially withheld civilian pay from the medical  facility to account for the estimated cost of furloughing staff for 22  days and later returned the funds to Brooke Army Medical Center as  the length of the furlough was reduced.
The following are examples of impacts reported by officials at the  locations we visited that they believe can be linked to the implementation  of the furlough:
Decline in Morale—Officials at all three sites stated that civilian  morale declined due to the civilian workforce furlough that resulted in  a 20 percent reduction in pay per week for 6 weeks. This was further  exacerbated as some civilians were excepted from furlough while  other civilian colleagues were not, contracted support staff continued  working, and some civilians who were historically deemed “mission  essential” and required to report to the office for events, such as snow  days, were now furloughed. For example, officials at Norfolk Naval  Shipyard reported civilians furloughed within the supporting  commands experienced frustration and a decline in morale as their  civilian colleagues working in the shipyard were not only excepted but  were also working overtime during the furlough period. Officials at  Brooke Army Medical Center described a decline in morale within the  Army inpatient nursing staff because the Air Force excepted its  inpatient nursing staff from furlough while the Army did not.some officials at Brooke Army Medical Center indicated that the  furlough affected some patients who tried to get refills on their  medication prior to the furlough out of fear that they would not have  access to care during the furlough period. In addition, officials at Air  Mobility Command described a decline in morale among civilian staff  who had to take a pay cut while contracted support staff did not.  Further, officials at Air Mobility Command described instances where  some civilians historically considered “mission essential,” such as air  traffic controllers and firefighters, were now furloughed.
Officials at the sites we visited stated that they followed the Secretary of  Defense’s guidance and did not use borrowed military personnel to  compensate for work that would have been conducted by furloughed  civilians. Some officials stated that servicemembers experienced a  decline in morale as they worked longer hours to complete their missions  in the absence of civilians who were furloughed. For example, at Brooke  Army Medical Center, officials stated that they relied on their military  medical staff to work during the furlough. Officials stated that their use of  military personnel only extended to those personnel who were assigned  to their unit and that they did not borrow personnel from other units. While  the term “borrowed military personnel” is not defined in Assistant  Secretary of Defense for Readiness and Force Management’s June 2013  memorandum, the Army’s definition of “borrowed military personnel” only  includes certain uses of military personnel outside of the unit to which  they are assigned.
In December 2013, DOD reported to Congress that the results of OPM’s  recent annual Federal Employee Viewpoint Survey showed its civilian  workforce morale had continued to decline, and that DOD expected the  furloughs to affect employee recruiting and retention in the future. Of  note, the survey showed a decline in satisfaction among DOD  respondents to questions that dealt with job satisfaction (decline from 71  percent in 2010 to 64 percent in 2013), pay (decline from 65 percent in  2010 to 53 percent in 2013), and satisfaction with the organization  (decline from 63 percent in 2010 to 55 percent in 2013). DOD identified  several examples of efforts it was taking to minimize any negative impact  on the morale of the civilian workforce and long-term consequences on  recruiting and retention of the civilian workforce. Most of these actions  were high-level, such as continuing to focus on the Strategic Workforce  Plan and conducting leadership development programs for entry, mid-,  and senior-level personnel. Other examples of actions DOD noted it was  taking to address morale included initiating an enterprise strategic  recruitment effort and the development of a new performance appraisal  system. However, the letter does not provide specifics about these  actions. For example, it does not address how the Strategic Workforce  Plan would minimize the negative impact on morale of the civilian  workforce. The letter also does not provide time frames for when these  actions will be completed.
Attrition as a Result of the Furlough: Officials at Brooke Army Medical  Center and Norfolk Naval Shipyard stated a number of examples  where employees left as a result of the furlough. For example, some  officials at Brooke Army Medical Center we interviewed stated that  they knew of colleagues who left the hospital to work at the  Department of Veterans Affairs since it did not furlough its staff. In  August 2013, the Army Surgeon General made a statement that,  during 2013, 2,700 Army civilian medical doctors, nurses, and other  health workers left their jobs for work elsewhere due to the furlough,  many transferring to the Department of Veterans Affairs. We  examined the attrition rate of civilian personnel at Army Medical  Command and DOD between fiscal years 2009 and 2013.  Specifically, for the Army Medical Command, we found that attrition  rates for on-board civilian medical officers and nurses peaked at 22  percent in fiscal year 2011. For more information on Army Medical  Command and DOD component attrition rates, see appendix III.
Mission Delays—While none of the selected sites we visited indicated  mission failure as a result of the furlough, some officials described  increased challenges in meeting their missions.
Defense Logistics Agency, Maritime support command, officials  from the Norfolk Naval Shipyard stated that, during the furloughs,  they experienced an increased backlog in providing goods and  services in support of shipyard operations. Specifically, the  Defense Logistics Agency, Maritime support command, reported  that the backlog of requests to provide goods and services nearly  doubled during the furlough period, from 330 outstanding requests  on July 3, 2013, to a peak of 614 outstanding requests on July 29,  2013, before dropping down to 465 outstanding requests by  August 13, 2013, as the furlough drew to an end for most civilians.
Norfolk Navy Shipyard officials stated that a building had a fire  alarm malfunction on a Friday during the furlough period and,  because civilian staff were furloughed, no one was able to fix it  until the following Tuesday, so the building had to establish a 24- hour watch over the weekend to ensure a potential fire could be  reported.
Air Mobility Command officials described delays in permanent  changes of station because the furlough occurred in summer—the  peak season for such moves. These officials explained that delays  in permanent changes of station can impact a military  servicemember’s ability to report to his or her next installation on  time.
Guidance Challenges—Some officials stated that they were confused  by the guidance that was provided on implementing the furlough,  while others expressed frustration at the volume of updates to the  guidance. For example, at Brooke Army Medical Center, the Air Force  had not yet transitioned its civilians to Army control through the Base  Realignment and Closure process, and therefore Army and Air  Force civilians were operating under separate guidance during the  furlough. This added to the administrative burden of management at  Brooke Army Medical Center and confusion among staff who work  side-by-side. Specifically, Air Force staff decided to except all of their  in-patient nurses from furlough, while the Army furloughed its in- patient nurses. Further, officials at Brooke Army Medical Center and  Air Mobility Command stated that they received numerous updates to  the furlough guidance, often on a daily basis and from multiple  sources. Officials expressed confusion and sought clarification over  the terms used in the furlough guidance, such as “borrowed military  personnel,” “mission essential,” and “24-hour emergency care.” For  example, the term “borrowed military personnel” was not defined in  the Assistant Secretary of Defense for Readiness and Force  Management’s June 2013 memorandum regarding the use of  borrowed military personnel during the furlough.
Longer Term Impact from DOD Civilian Appeals Filed to Merit  Systems Protection Board—DOD federal civilians filed 32,259  appeals regarding the administrative furlough to the Merit Systems  Protection Board. Once DOD began implementing the furlough on  July 8, 2013, DOD civilians were then eligible to file appeals of the  furlough action to the Merit Systems Protection Board. Figure 1  illustrates the process for filing and adjudicating appeals with the Merit  Systems Protection Board and the status of the DOD civilians’  appeals to the administrative furlough as of March 31, 2014.
All of the 1,101 cases that have been adjudicated to date have been  decided in DOD’s favor, though the Merit Systems Protection Board has  received 8 petitions for review from DOD civilians who have chosen to  appeal the Administrative Judge’s decision in their case. According to the  Merit Systems Protection Board, their current workload is unprecedented,  as they received over 32,000 furlough appeals from DOD employees  alone in 2013—approximately 5 times the number of personnel appeals  they typically receive in 1 year. As a result, the Merit Systems Protection  Board is unable to predict how long it will take to adjudicate all of the  DOD furlough appeals, but the Merit Systems Protection Board has  committed to issuing initial decisions in all furlough appeals by the end of  fiscal year 2015.
section_title: Conclusions
paragraphs: In light of ongoing fiscal uncertainty, and given the toll that furlough  actions can have on mission needs and employee morale, among other  things, it is important that DOD accurately estimate financial actions that  affect its personnel and update these estimates to ensure the most timely  and reliable information is available for effective planning. This includes  taking actions aligned with Standards for Internal Control in the Federal  Government, such as identifying, capturing, and distributing information to  the right people in sufficient detail and at the appropriate time to maintain  its relevance and value to management in controlling operations and  making effective and efficient decisions. DOD’s approach to furloughing  did not adjust to accommodate decisions made to except certain civilian  employees from furlough. Further, because DOD only had 1 week’s worth  of civilian payroll data at the time it reduced the number of furlough days,  it did not track cost savings in real time. Such information could be  considered during any future administrative furlough deliberations to  enable DOD leadership to make informed decisions by having reliable  and accurate cost-savings information as it becomes available. In light of  the current fiscal environment, it is even more critical for DOD to  accurately identify its current and future total workforce priorities and  associated costs. While DOD was able to mitigate the furlough as a result  of transfer and reprogramming actions, DOD may face future furloughs  where it may be limited in how much funding is available to transfer and  reprogram and the length of a potential furlough period may be longer,  thus having comprehensive, up-to-date information for decision makers  would be important.
section_title: Recommendation for Executive Action
paragraphs: To help ensure that DOD is better informed in its decision-making  processes, we recommend that the Secretary of Defense direct the Under  Secretary of Defense (Comptroller) and the Under Secretary of Defense  for Personnel and Readiness to utilize comprehensive and up-to-date  furlough cost-savings information as it becomes available in the event  that DOD decides to implement another administrative furlough in the  future.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to DOD for review and comment. In its  written comments, DOD partially concurred with the recommendation to  utilize comprehensive and up-to-date furlough cost-savings information as  it becomes available in the event that DOD decides to implement another  administrative furlough in the future. DOD’s comments are summarized  below and reprinted in appendix IV.
In its written comments, DOD did not elaborate on why it partially  concurred with the recommendation. DOD stated that it had several  concerns with the findings in the report. The department stated that  important contextual information regarding the size of the total force was  not included in the draft report and elaborated on reasons for growth in  the civilian workforce after the events of September 11, 2001. DOD stated  that without context, readers may believe that the DOD civilian workforce  is not thoughtfully and purposefully sized. However, we disagree with  DOD’s characterization of the draft report. The draft report states that  DOD’s civilian personnel are critical to achieving the department’s  missions by performing a wide variety of duties, and the report  acknowledges that civilians have expanded their responsibilities. Further,  the focus of this report was not on DOD’s total workforce management  but how DOD planned for, implemented, and monitored furloughs of its  civilian workforce to include any challenges the department faced in its  implementation and cost savings realized.  Nonetheless, we have  conducted assessments of DOD’s strategic workforce plans since 2008,  and our body of work has found that DOD’s efforts to address strategic  workforce planning requirements, including assessing the appropriate mix  of civilians, military and contractor personnel, have been mixed. For  example, in our most recent report in September 2012, on the  department’s overall civilian strategic workforce plan, we recommended  that DOD take a number of actions, including providing guidance for  developing future strategic workforce plans that clearly directs the  functional communities to collect information that identifies not only the  number or percentage of personnel in its military, civilian, and contractor  workforces, but also the capabilities of the appropriate mix of those three  workforces. DOD either concurred or partially concurred with our  recommendations, stating that, among other things, the department was  deliberate in applying lessons learned from previous workforce plans and  identifying specific challenges and the actions being taken to address  those challenges to meet statutory planning requirements by 2015. Our  review on DOD’s latest strategic workforce plan will be issued in July  2014.
Although DOD did not specifically state in its letter why it partially  concurred with the recommendation, DOD provided comments related to  the recommendation, and we have addressed them throughout the report  as appropriate. However, we disagree with two of DOD’s specific  comments as discussed below:
DOD commented that we should delete the report’s discussion  regarding DOD being placed on our High Risk List because of  financial management weaknesses that affect its ability to control  costs; ensure accountability; anticipate future costs and claims on  the budget; detect fraud, waste, and abuse; and prepare auditable  financial statements. DOD stated in its comments that this  paragraph “is unrelated to this report on administrative furloughs.”
We disagree. We believe that having accurate financial  information is not only related but very important to the report on  administrative furloughs. Specifically, DOD made the  determination to furlough civilians in response to budgetary  shortfalls, which was part of a larger effort to achieve specific  funding reductions resulting from sequestration. This decision  affected its approximately 770,000 civilian workers – which  included 642,404 civilians being furloughed for 6 days and  142,602 civilians being excepted. We believe that when making  decisions with the goal of reaching a financial target that  negatively affects so many people—including a 20 percent  reduction in pay for 6 weeks—DOD’s ability to accurately account  for spending or assets is an important factor related to this report.  Further, in DOD’s comments, it states that it could not track cost  savings in real time due to system and process limitations. We  believe that this further illustrates the relevance of having  accurate, complete, and timely financial information available to  make management decisions.
DOD commented that we misrepresented information regarding  DOD’s cost savings estimates and recommended alternative  language for the report. Specifically, DOD stated that it excluded  employees categorized as exempt from the cost savings estimate  of $2.1 billion provided to Congress as well as the known  exceptions as part of the per day cost projection developed using  March payroll data. Similarly, DOD commented that the report  misrepresented information provided during various meetings. We  disagree.
We disagree with DOD’s characterization of our report. Our report  accurately reflects information included in DOD’s documents  related to how it calculated its estimated furlough savings and  associated documentation it provided to Congress. As we stated  in the report, DOD calculated a cost estimated savings of $300  per person per day and used this estimate in discussions including  the initial decision to furlough until it decided to reduce the number  of furlough days from 11 to 6 days even though additional  information was available regarding which civilians DOD  excepted, as the exceptions decision was made 3 months earlier.  However, DOD did not initially include or update the estimated  savings per person per day of $300 to account for the 142,602  civilians that were excepted from the furlough. These civilians  excepted from the furlough represent approximately 18 percent of  the total civilian workforce.savings as a result of the civilian workforce furlough, DOD  multiplied the estimated number of civilians to be furloughed by  the estimated savings of $300 per person per day. While DOD did  adjust the numbers of civilians it included in its calculated cost  savings, it never adjusted the per person per day estimate of $300  to account for the 18 percent of the civilian workforce excepted  from the furlough. Further, as we state in the report, should DOD  need to furlough civilians in the future, the incorporation of  information as it becomes available would better inform decision  makers because actions taken regarding DOD’s civilian workforce  affects approximately 770,000 civilians.
To calculate the estimated cost  We are sending copies of this report to other interested congressional  parties; the Secretary of Defense; the Secretaries of the U.S. Army, the  U.S. Navy, and the U.S. Air Force; and, the Commandant of the U.S.
Marine Corps. In addition, this report will be available at no charge on the  GAO website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-3604 or at farrellb@gao.gov. Contact points for our  Office of Congressional Relations and Public Affairs may be found on the  last page of this report. Key contributors to this report are listed in  appendix V.
section_title: Appendix I: Objectives, Scope and Methodology
paragraphs: This report: (1) examines how the Department of Defense (DOD)  implemented its civilian workforce furloughs and any reported cost  savings, (2) examines the extent to which DOD utilized up-to-date cost- savings information in the planning and implementation of civilian  workforce furloughs, and (3) identifies any reported examples of impacts  that resulted from the DOD civilian workforce furloughs.
To address how DOD implemented its civilian workforce furlough, we  obtained and analyzed information and interviewed knowledgeable  officials from the Under Secretary of Defense (Comptroller) (hereafter  referred to as Office of the Comptroller), the Under Secretary of Defense  for Personnel and Readiness, and the Departments of the Army, Navy,  and Air Force. We obtained and analyzed guidance and policy documents  outlining the furlough decision and subsequent reduction in the number of  administrative furlough days. The guidance and policy documentation  included the numbers of civilians furloughed, the categorical exceptions  granted, and the numbers of civilians provided exceptions. In addition, we  examined guidance outlining the decisions directly related to the decision  to implement a furlough as well as guidance imposing limitations on  utilizing other personnel within the department to augment the civilian  workforce during the furlough. We also reviewed the Office of Personnel  and Management’s (OPM) Guidance for Administrative Furloughs, June  10, 2013, and prior GAO reports on sequestration and furloughs within  the federal government, including GAO’s reports on the 2013  sequestration and DOD’s implementation of the sequestration.
To understand how the civilian workforce furlough was implemented at a  local level, we conducted site visits of a selected shipyard, a medical  facility providing 24-hour support, and an air operations center.  Specifically, we visited Norfolk Naval Shipyard, Brooke Army Medical  Center at Fort Sam Houston, and Air Mobility Command at Scott Air  Force Base. These sites were selected on the basis of the Secretary of  Defense memorandum outlining categories of exceptions to the furlough,  DOD statements about potential sequestration impacts, and mission- critical occupations as outlined in DOD’s Strategic Workforce Plan. We  developed a standard set of interview questions to use in discussions with  officials at selected sites regarding what policy and guidance was  generated and how the furlough was implemented, such as information  about employee furlough notification and scheduling of furlough days,  among other things. Information from these sites is not generalizable, but  provides examples of how the furlough was implemented at these  locations.
To examine any reported cost savings that resulted from the DOD civilian  workforce furloughs, we obtained and analyzed information and  interviewed officials from the Office of the Comptroller regarding DOD’s  calculations of the actual cost savings as a result of the administrative  civilian workforce furlough. We assessed DOD’s methods for calculating  actual cost savings for the furlough; however, we did not independently  verify these calculations. The cost savings were calculated from the  civilian pay from those who were furloughed and did not account for other  costs from implementing the furlough, such as administrative costs.
To determine the extent to which DOD utilized up-to-date cost savings  information in the planning and implementation of civilian workforce  furloughs, we obtained and analyzed information and interviewed officials  from the Office of the Comptroller regarding how the department  calculated the estimated cost savings for the furlough of civilian personnel  in fiscal year 2013. We examined DOD’s methods for calculating  estimated cost savings for the furlough; however, we did not  independently verify the accuracy of these calculations. We also reviewed  Standards for Internal Control in the Federal Government for best  practices on using information in decision-making processes.
To identify any reported examples of impacts that resulted from the DOD  civilian workforce furloughs, we obtained and analyzed information and  interviewed knowledgeable officials at each of these sites—Norfolk Naval  Shipyard, Brooke Army Medical Center at Fort Sam Houston, and Air  Mobility Command at Scott Air Force Base. We developed a standard set  of interview questions to use in discussions with selected site officials  regarding any impacts from the furlough in areas such as morale,  guidance, communication, and mission, among other things. Information  from these sites is not generalizable, but provides examples of impacts of  the furlough reported at these locations. We also reviewed the results of  OPM’s 2013 Federal Employee Viewpoint Survey for DOD. While not  specifically addressing sequestration, the survey captures employees’  general perceptions in areas including their work experiences and their  agency that could be affected by sequestration. To assess the reliability  of the survey data, we reviewed reports and other descriptions of the  survey methodology available on the OPM website:  http://www.fedview.opm.gov/2013/.
To analyze workforce and turnover trends from fiscal year 2009 through  2013, we used OPM’s Enterprise Human Resources Integration  Statistical Data Mart (EHRI-SDM), which contains personnel action and  on-board data for most federal civilian employees. We analyzed agency- level EHRI-SDM data for all DOD departments (Army, Navy, Air Force,  and other DOD agencies). We focused on career permanent employees  in our analysis of on-board and separation trends because these  employees represent the long-term employee population and constitute  most of the workforce. To calculate attrition rates, we added the number  of career permanent employees with personnel actions indicating they  had separated from one of the DOD departments (for example, transfers,  resignations, retirements, terminations, and deaths) and divided that by  the 2-year on-board average. We assessed the reliability of the EHRI  data through electronic testing to identify logical inconsistencies, and  followed up with DOD, where necessary, to understand these issues. We  also reviewed our prior work assessing the reliability of these data. On the  basis of this assessment, we believe the EHRI data we used are  sufficiently reliable for the purpose of this report. Further, we interviewed  officials and obtained information from the Merit Systems Protection  Board on the appeals adjudication process and the status of appeals filed  by DOD civilians regarding the furlough in fiscal year 2013.
We conducted this performance audit from July 2013 to June 2014 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: Department of Defense (DOD) Exceptions Granted to the Civilian Workforce in a May 14, 2013 Memorandum
paragraphs: In order to minimize adverse effects on mission, the Secretary of Defense  memorandum issued on May 14, 2013, granted exceptions to the  furlough. Below are the categories of exceptions outlined in the  Secretary’s memorandum:
Combat Zone: All employees deployed (in a Temporary Duty status)  or temporarily assigned (to include Temporary Change of Station) to a  combat zone.
Safety of Life and Property: Those employees necessary to protect  safety of life and property, including selected medical personnel. The  exceptions were to be granted with the understanding that these were  the minimum exceptions needed to maintain operations and provide  security on a 24/7 basis. Similarly, the exceptions for the medical  category were to be approved with the understanding these  exceptions preserve the minimum level of personnel needed to  maintain quality of care in 24/7 emergency rooms and other critical  care areas such as behavioral health, wounded warrior support, and  disability evaluation.
Shipyards: Employees in Navy shipyards. All other depot employees,  whether mission-funded or working capital fund employees, were  subject to furlough.
Intelligence: Furloughs for employees funded with National  lntelligence Program funds were determined by the Director of  National Intelligence.Program funds were subject to furlough.
Employees funded with Military Intelligence
Foreign Military Sales: Foreign Military Sales employees whose  positions were exclusively funded from Foreign Military Sales  Administrative case funds, Foreign Military Sales case funds, and  from Foreign Military Financing accounts. In addition, the Foreign  Military Sales case-funded positions funded in whole or part by DOD  appropriations (to include “pseudo–Foreign Military Sales” cases)  were subject to furlough.
All individuals appointed by the President, with Senate confirmation,  who were not covered by the leave system in title 5, U.S. Code,  chapter 63, or an equivalent formal leave system.
All employees funded by nonappropriated funds (regardless of source  of nonappropriated funding).
All outside-the-contiguous United States foreign national employees.
Any employees who were not paid directly by accounts included in the  Department of Defense–Military budget, such as employees funded  by the Arlington National Cemetery and DOD Civil Works programs.
The exception for Child Development Centers was granted with the  understanding that this was the minimum level needed to maintain  accreditation and maintain high-quality care for children in military  families. Some Department of Defense Education Activity employees,  while not excepted from furlough, may have only been furloughed  when they were in a pay status. Therefore, they were only subject to  furlough for up to 5 days at the beginning of the 2013 school year.
The Secretaries of the military departments and the Principal Staff  Assistants for the defense agencies and field activities, may have  approved up to 50 additional individual, mission-based, exceptions as  needed.
section_title: Appendix III: Analysis of Department of Defense (DOD) Civilian Personnel Attrition Rates
paragraphs: In examining the attrition rate for on-board civilian medical officers and  nurses at Army Medical Command between fiscal years 2009 and 2013,  we found that the attrition rate of on-board civilian nurses and medical  officers at Army Medical Command peaked in fiscal year 2011 at 22  percent and rose again in fiscal year 2013 to 14 percent after declining in  2012, compared to a 10 to 11 percent attrition rate in fiscal year 2009  (see fig. 2 below). Many factors can affect attrition which may be  unrelated to job satisfaction and events such as the furlough. For  example, according to Army Medical Command officials, the command  was affected by the 2005 Base Realignment and Closure process, the  deadline for completion of which was in September of fiscal year 2011.  The Base Realignment and Closure Commission’s recommendations  included transferring personnel from Walter Reed Army Medical Center  and Belvoir Army Community Hospital to the purview of what is now  Defense Health Agency’s National Capital Region Medical Directorate.
In further examining attrition rates across the DOD components between  fiscal years 2009 and 2013, we found the Army overall experienced a  similar peak in attrition rates in 2011, at 11 percent. In addition, the Air  Force’s attrition rates peaked in fiscal year 2012 (9 percent), with the  Navy’s attrition rates increasing between fiscal years 2010 and 2011  (from 6 to 7 percent). Overall, during fiscal year 2013, DOD components  had an attrition rate between 7 percent and 9 percent of on-board civilian  employees, compared to an attrition rate between 6 percent and 8  percent in 2009; see figure 3 below.
section_title: Appendix IV: Comments from the Department of Defense
section_title: Appendix V: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Lori Atkinson, Assistant Director;  Arkelga Braxton; Tim Carr; Grace Coleman; Cynthia Grant; Amber Lopez  Roberts; Rebecca Shea; Norris “Traye” Smith; Amie Steele; John Van  Schaik; and Michael Willems made key contributions to this report.
section_title: Related GAO Products
paragraphs: 2013 Sequestration: Agencies Reduced Some Services and Investments,  While Taking Certain Actions to Mitigate Effects. GAO-14-244.  Washington, D.C.: March 6, 2014.
Sequestration: Observations on the Department of Defense’s Approach in  Fiscal Year 2013. GAO-14-177R. Washington, D.C.: November 7, 2013.
Financial and Performance Management: More Reliable and Complete  Information Needed to Address Federal Management and Fiscal  Challenges. GAO-13-752T. Washington, D.C.: July 10, 2013.
Human Capital: Additional Steps Needed to Help Determine the Right  Size and Composition of DOD’s Total Workforce. GAO-13-470.  Washington, D.C.: May 29, 2013.