Defense Headquarters: DOD Needs to Reassess Personnel Requirements for the Office of Secretary of Defense, Joint Staff, and Military Service Secretariats
Released: 2015-01-21T00:00:00


Highlights: section_title: Why GAO Did This Study
paragraphs: Facing budget pressures, DOD is seeking to reduce headquarters activities of OSD, the Joint Staff, and the military services' secretariats and staffs, which primarily perform policy and management functions. GAO was mandated to review personnel resources devoted to these headquarters organizations from fiscal years 2001 through 2013. This report (1) identifies past trends in personnel resources for these organizations and any plans for reductions; and (2) evaluates the extent to which DOD determines and reassesses personnel requirements for the organizations. GAO analyzed data on authorized military and civilian positions and contracted services from fiscal years 2001 through 2013. GAO reviewed DOD's headquarters reductions plans and processes for determining and reassessing personnel requirements.

section_title: What GAO Found
paragraphs: Over the past decade, authorized military and civilian positions have increased within the Department of Defense (DOD) headquarters organizations GAO reviewed—the Office of the Secretary of Defense (OSD), the Joint Staff, and the Army, Navy, Marine Corps, and Air Force secretariats and staffs—but the size of these organizations has recently leveled off or begun to decline, and DOD's plans for future reductions are not finalized. The increases varied by organization, and DOD officials told GAO that the increases were due to increased mission responsibilities, conversion of functions performed by contracted services to civilian positions, and institutional reorganizations. For example, authorized military and civilian positions for the Army Secretariat and Army Staff increased by 60 percent, from 2,272 in fiscal year 2001 to 3,639 in fiscal year 2013, but levels have declined since their peak of 3,712 authorized positions in fiscal year 2011. In addition to civilian and military personnel, DOD also relies on personnel performing contracted services. Since DOD is still in the process of compiling complete data on personnel performing contracted services, trends in these data could not be identified. In 2013, the Secretary of Defense set a target to reduce DOD components' headquarters budgets by 20 percent through fiscal year 2019, including costs for contracted services, while striving for a similar reduction to military and civilian personnel. However, DOD has not finalized plans to achieve these reductions. DOD was required to report to Congress by June 2014 on efforts to streamline management headquarters, but needed an extension until late summer 2014 for the report due to staff turnover. As of December 2014, DOD's plan had not been issued.

GAO found that DOD headquarters organizations it reviewed do not determine their personnel requirements as part of a systematic requirements-determination process, nor do they have procedures in place to ensure that they periodically reassess these requirements as outlined in DOD and other guidance. Current personnel levels for these headquarters organizations are traceable to statutory limits enacted in the 1980s and 1990s to force efficiencies and reduce duplication. However, these limits have been waived since fiscal year 2002. If the limits were in force in fiscal year 2013, the Army and Navy would exceed them by 17 percent and 74 percent, respectively. Moreover, the limits have little practical utility because of statutory exceptions for certain categories of personnel and because the limits exclude personnel in supporting organizations that perform headquarters-related functions. For example, the organizations that support the Army Secretariat and Army Staff are almost three times as large as the Secretariat and Staff, but personnel who perform headquarters-related functions in these organizations are excluded from the limits. All but one of the organizations GAO reviewed have recognized problems in their existing requirements-determination processes. The OSD, the Navy, and the Marine Corps are taking steps to modify their processes, but their efforts are not yet complete. Without a systematic determination of personnel requirements and periodic reassessment of them, DOD will not be well positioned to proactively identify efficiencies and limit personnel growth within these headquarters organizations. Moreover, until DOD determines personnel requirements, Congress will not have critical information needed to reexamine statutory limits enacted decades ago.

section_title: What GAO Recommends
paragraphs: GAO recommends that DOD (1) conduct a systematic determination of personnel requirements at these headquarters organizations; (2) submit the requirements to Congress with adjustments and recommended modifications to the statutory limits; and (3) periodically reassess personnel requirements within OSD and the military services' secretariats and staffs. Congress should consider using DOD's review of headquarters personnel requirements to reexamine existing statutory limits. DOD partially concurred, stating it will use its existing processes, but will investigate other methods to improve the determination and reporting of requirements. GAO believes the recommendations are still valid, as discussed in the report.

section_title: Letter
paragraphs: The Department of Defense (DOD) has multiple layers of headquarters  management with complex, overlapping relationships among them. Such  layers include, but are not limited to, the Office of the Secretary of  Defense (OSD), the Joint Staff, and the military services’ secretariats and  staffs, which are the highest organizations in DOD responsible for  managing and overseeing the major elements of the department. Like the  rest of the federal government, DOD is operating in a constrained budget  environment and is facing difficult decisions about how to allocate its  resources to meet its broad and varying mission requirements across the  world. One approach the department has pursued in recent years to  realize cost savings is to reduce its headquarters staff. In July 2013, the  Secretary of Defense directed a 20 percent cut in management  headquarters spending throughout the department, to include spending  within headquarters organizations such as OSD, the Joint Staff, and the  military services’ secretariats and military staffs. These cuts, which are to  take place regardless of the budget approved by Congress, are,  according to the Secretary’s guidance, designed to streamline DOD’s  management of its headquarters through efficiencies and elimination of  spending on lower-priority activities. At a time of growing economic and  fiscal constraints and changing national security challenges, it is critical  for DOD to ensure that its headquarters organizations meet mission  requirements in the most efficient and effective manner possible.

DOD’s headquarters organizations have responsibilities that include  developing guidance, reviewing performance, allocating resources, and  conducting mid-to-long-range budgeting as they oversee, direct, and  control subordinate organizations or units. However, accounting for the  resources devoted to headquarters has been a long-standing challenge  for DOD. In October 1997, as part of our review on the mid-1990s military  drawdown, we found that total personnel and costs of defense  headquarters were significantly higher than were being reported.  Specifically, we found that three-fourths of subordinate organizations  excluded from the management headquarters accounting were actually  performing management or management support functions, and such  accounting masked the true size of DOD’s headquarters organizations.  Our more recent work has found that DOD’s challenges in accounting for  headquarters resources have continued. In March 2012, we found that  DOD’s data on its headquarters personnel lacked the completeness and  reliability necessary for use in making efficiency assessments and  decisions. Subsequently, in May 2013, we found several weaknesses in  DOD’s process for sizing its geographic combatant commands, and in  June 2014, we found that DOD did not have an accurate accounting of  the resources being devoted to management headquarters to use a  starting point for tracking reductions to such headquarters. See appendix  I for a discussion of our prior work on defense headquarters, related  recommendations, and their statuses.

House Report 113-102 mandated GAO to review the military and civilian  personnel and contracted services resources devoted to OSD, the Joint  Staff, and the military services’ secretariats and military staffs from fiscal  year 2001 through fiscal year 2013.if any, in personnel resources devoted to OSD, the Joint Staff, and the  secretariats and staffs of the military services and any plans for  reductions to these headquarters organizations; and (2) evaluates the  extent to which DOD determines and reassesses personnel requirements  for these headquarters organizations.

This report (1) identifies past trends,  To address the first objective, we identified sources of information within  DOD that would provide data on the personnel resources of OSD, the  Joint Staff, and the secretariats and staffs for the military services. We  focused on these nine organizations—OSD; the Joint Staff; the Offices of  the Secretary of the Army and Army Staff; the Office of the Secretary of  the Navy and Office of the Chief of Naval Operations; Headquarters,  Marine Corps; and the Offices of the Secretary of Air Force and Air  Staff—because these components represent some of the highest-level  headquarters organizations within DOD and are responsible for  overseeing, directing, and controlling subordinate organizations or units.  Specifically, we obtained and analyzed available data on authorized  military and civilian positions in these headquarters organizations from  fiscal years 2001 through 2013. This time frame allowed us to assess  trends in resources without including nonwar years prior to fiscal year  2001 and to include the most recent data available, for fiscal year 2013.  We obtained and analyzed available data on contracted services  performing functions for the organizations within our review for fiscal year  2013, but in some instances these data were not available. DOD is still in  the process of compiling complete data on contractor full-time  equivalents. Using available data, we also conducted an analysis of  trends in headquarters support costs, including the costs for civilian  compensation and benefits, at the headquarters organizations in our  review for fiscal years 2001 through 2013. See appendixes III through VIII  for the results of these analyses. Unless otherwise noted, we reported  all costs in nominal dollars.

To identify DOD’s plans for reductions to these organizations, we  obtained and reviewed guidance and documentation on steps to  implement DOD’s 20 percent reductions to headquarters budgets starting  in fiscal year 2015, the first budget for which DOD was able to include the  reductions, such as the department-issued memorandum outlining the  reductions and various DOD budget-related documents. We also  obtained data, where available, on the number of authorized positions at  OSD, the Joint Staff, and the secretariats and staffs for the military  services for fiscal year 2013, the most recent fiscal year for which data  were available, as well as data on the number of authorized positions  deemed by these organizations to be performing headquarters functions  and included in DOD’s planned headquarters reductions for fiscal years  2015 through 2019, the time frame DOD identified in its reduction plans.  We assessed the reliability of the data on authorized military and civilian  positions and costs given these and other limitations by interviewing DOD  officials about the data they provided to us and analyzing relevant  personnel and financial-management documentation. We determined that  the data were sufficiently reliable for our purposes of identifying trends in  the authorized positions and headquarters support costs, and DOD’s  plans for reductions to OSD, Joint Staff, and secretariats and staffs for the  military services.

To address the second objective, we obtained and reviewed guidance on  each of these organizations’ processes for determining and reassessing  personnel requirements. We also interviewed officials from each of these  organizations to determine how their processes are implemented. We  then compared the information we obtained on these processes to DOD  and military service guidance, as well as to key elements of a personnel  requirements process. To identify these key elements, we reviewed  documents that address leading practices for workforce planning, in  particular previous GAO work on effective strategic workforce planning,  DOD guidance on manpower management, and workforce planning  guidance issued by the Office of Personnel Management. We then  synthesized common themes from these documents and summarized  these as key elements that should be included in organizations’ personnel  requirements-determination processes. We also identified a standard on  information and communications from internal-control standards for the  federal government and compared this standard to the headquarters- related information provided to Congress in the fiscal year 2015 Defense  Manpower Requirements Report.

We conducted this performance audit from July 2013 to January 2015 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. More details on our objectives,  scope, and methodology can be found in appendix II.
subsections: section_title: Background
paragraphs: DOD Instruction 5100.73, Major DOD Headquarters Activities, defines  major headquarters activities as those headquarters (and the direct  support integral to their operation) whose primary mission is to manage or  command the programs and operations of DOD, its components, and  their major military units, organizations, or agencies. The instruction  provides an official list of the organizations that it covers, including OSD;  the Joint Staff; the Offices of the Secretary of the Army and Army Staff;  the Office of the Secretary of the Navy and Office of the Chief of Naval  Operations; Headquarters, Marine Corps; and the Offices of the Secretary  of the Air Force and Air Staff.

These organizations have responsibilities that include developing  guidance, reviewing performance, allocating resources, and conducting  mid-to-long-range budgeting as they oversee, direct, and control  subordinate organizations or units. In addition to OSD, the Joint Staff, and  the secretariats and staffs of the military services, other headquarters  organizations include portions of the defense agencies, DOD field  activities, and the combatant commands, along with their subordinate  unified commands and respective service component commands.
subsections: section_title: Office of the Secretary of Defense and the Joint Staff
paragraphs: OSD is responsible for assisting the Secretary of Defense in carrying out  his or her duties and responsibilities for the management of DOD.These include policy development, planning, resource management, and  fiscal and program evaluation responsibilities. The staff of OSD  comprises military and civilian personnel and contracted services. While  military personnel may be assigned to permanent duty in OSD, the  Secretary may not establish a military staff organization within OSD.

The Joint Staff is responsible for assisting the Chairman of the Joint  Chiefs of Staff, the military advisor to the President, in accomplishing his  responsibilities for the unified strategic direction of the combatant forces;  their operation under unified command; and their integration into a team  of land, naval, and air forces. The Joint Staff is tasked to provide advice and support to the Chairman and the Joint Chiefs on matters including  personnel, intelligence doctrine and architecture, operations and plans,  logistics, strategy, policy, communications, cyberspace, joint training and  education, and program evaluation. In addition to civilian personnel and  contracted services, the Joint Staff comprises military personnel who  represent, in approximately equal numbers, the Army, the Navy and  Marine Corps, and the Air Force.

section_title: Military Departments
paragraphs: The Office of the Secretary of the Army has sole responsibility within the  Office of the Secretary and the Army Staff for the following functions:  acquisition, auditing, financial management, information management,  inspector general, legislative affairs, and public affairs. Additionally,  there is an Army Staff, which is to furnish professional assistance to the  Secretary and the Chief of Staff of the Army. Headquarters functions to  be performed by the Army Staff include, among others, recruiting,  organizing, training, and equipping of the Army.the Secretary of the Army and the Army Staff comprise military and  civilian personnel and contracted services.

The staff of the Office of  The Office of the Secretary of the Navy is solely responsible within the  Office of the Secretary of the Navy, the Office of the Chief of Naval  Operations, and the Headquarters, Marine Corps, for oversight of the  following functions: acquisition, auditing, financial management,  information management, inspector general, legislative affairs, and public  affairs. The Office of the Chief of Naval Operations is to provide  professional assistance to the Secretary and Chief of Naval Operations in  preparing for the employment of the Navy in areas such as: recruiting,  organizing, supplying, equipping, and training. The Marine Corps also  operates under the authority, direction, and control of the Secretary of the  Navy. Headquarters, Marine Corps, consists of the Commandant of the  Marine Corps and staff who are to provide assistance in preparing for the  employment of the Marine Corps in areas such as recruiting, organizing,  supplying, equipping and training. The staffs of Office of the Secretary  of the Navy, Office of the Chief of Naval Operations, and Headquarters,  Marine Corps, comprise military and civilian personnel and contracted  services.

The Office of the Secretary of the Air Force has sole responsibility and  oversight for the following functions across the Air Force: acquisition,  auditing, financial management, information management, inspector  general, legislative affairs, and public affairs. Staff, which is to furnish professional assistance to the Secretary and the  Chief of Staff of the Air Force. The headquarters functions to be  performed by the Air Staff include recruiting, organizing, training, and  equipping of the Air Force, among others.Secretary of the Air Force and the Air Staff comprise military and civilian  personnel and contracted services.

section_title: Authorized Positions at DOD Headquarters Organizations We Reviewed Have Generally Increased since Fiscal Year 2001, and Plans for Future Reductions are Not Finalized
paragraphs: 10 U.S.C. § 8014. expenditures. In 2013, the Secretary of Defense set a target for reducing  DOD components’ total management headquarters budgets by 20  percent for fiscal years 2014 through 2019, including costs for civilian  personnel and contracted services, while striving for a goal of 20 percent  reductions to authorized military and civilian personnel. However, the  department has not finalized its reduction plans.
subsections: section_title: Number of Authorized Positions at OSD and the Joint Staff Increased since 2001, but Levels Have Begun to Decline or Level Off in Recent Years
paragraphs: OSD experienced an overall increase in its authorized military and civilian  positions from fiscal years 2001 through 2013, representing a net  increase of 20 percent from 2,205 authorized positions in fiscal year 2001  to 2,646 authorized positions in fiscal year 2013. Since fiscal year 2011,  OSD’s authorized positions have slightly decreased from their peak  levels. The number of authorized military and civilian positions within the  Joint Staff remained relatively constant since fiscal year 2005, the first  year we could obtain reliable data, at about 1,262 authorized positions,  with an increase in fiscal year 2012 to 2,599 positions, which Joint Staff  officials said was associated with the realignment of duties from U.S.  Joint Forces Command after its disestablishment.Staff trends are illustrated in figure 1.

section_title: Military Service Secretariats and Staffs Experienced Varied Increases in Authorized Positions since Fiscal Year 2001, and the Increases Have Recently Leveled Off
paragraphs: The military service secretariats and staffs also experienced varied  increases in their number of authorized military and civilian positions from  fiscal years 2001 through 2013.increases are attributed to increased mission responsibilities for the war  and other directed missions such as business transformation, sexual  assault response and prevention, and cyber. In addition, DOD officials  said converting functions performed by contracted services to civilian  positions, and the transfer of positions from other organizations also  contributed to the increases. However, military service officials said that  DOD-wide initiatives and service-specific actions since fiscal year 2010  have generally begun to slow these increases or resulted in declines, as  illustrated in figure 3.

section_title: DOD Plans to Achieve Headquarters Reduction Goals Are Not Finalized
paragraphs: DOD identified planned savings in its fiscal year 2015 budget submission,  but it is unclear how the department will achieve those savings or how the  reductions will affect the headquarters organizations in our review. In  2013, the Secretary of Defense set a target for reducing the headquarters  budgets by 20 percent, to include costs for civilian personnel, contracted  services, facilities, information technology, and other costs that support  headquarters functions. DOD budget documents project the reductions  will yield the department a total savings of about $5.3 billion from fiscal  years 2015 through 2019, with most savings coming in 2019; however,  specific details of the reductions through fiscal year 2019 were not  provided. Moreover, in June 2014, we found that the starting point for the  reductions was not clearly defined so it is difficult to assess whether these  projected savings reflect meaningful savings when the reductions are a  small portion of DOD’s budget.National Defense Authorization Act for Fiscal Year 2014 to report its   DOD was required by Section 904 of the  efforts to streamline management headquarters in June 2014.DOD provided Congress with an interim response stating that, due to the  recent turnover of key staff, it would not develop its initial plan on  streamlining until the end of summer 2014. As of December 2014, DOD’s  plan had not been issued.

Officials from the headquarters organizations in this review stated that  they are using different processes to identify the 20 percent reductions to  their operating budgets. DOD’s guidance called for components to  achieve a 20 percent reduction to their headquarters operating budgets,  while striving for a goal of 20 percent reductions to authorized military and  civilian personnel. According to DOD officials, this flexibility allows DOD  components to determine the most cost-effective workforce—retaining  military and civilian personnel while reducing dollars spent on contracted  services. For example, OSD officials stated that the Under Secretaries of  Defense were asked to strive for a goal of reducing their operating  budgets by 20 percent. However, some OSD senior officials stated that it  was unfair to smaller OSD offices, such as General Counsel, Public  Affairs, and Legislative Affairs, to take the same reduction as the larger  offices, and consequently OSD elected to take larger reductions from the  larger offices of OSD Policy; Acquisitions, Technology and Logistics;  Intelligence; and Personnel and Readiness. OSD officials added that they  are in the process of determining how best to apply the budget  reductions, preferably through attrition. Overall, DOD projected the  reductions will result in at least $1 billion in savings for OSD’s  headquarters over a 5-year period, but it is unclear what the size will  ultimately be.

The Joint Staff projects reductions of about $450,000 from fiscal year  2015 through fiscal year 2019. Joint Staff officials stated that they plan to  reduce the number of authorized positions by about 150 civilian positions  (about 14 percent of their fiscal year 2013 authorized civilian positions)  and by about 160 military positions (about 11 percent of their fiscal year  2013 authorized military positions).

Specifics about the plans for the military service secretariats and staffs  were also in development, as of December 2014. Army officials estimate  a reduction of about 560 civilian full-time equivalent positions in the Army  Secretariat and Army Staff (about 21 percent of fiscal year 2013  authorized civilian positions); however, the officials said that the  reductions in military positions will be determined through an Army review  of military personnel in time for the fiscal year 2017 budget submission.  Additionally, in July 2014, the Secretary of the Army announced plans for  an additional review to determine the optimal organization and strength  and, subsequently, any adjustment of programmed reductions in  Headquarters, Department of the Army, that is to be completed by March  2015. Navy officials stated that the Navy will take 20 percent reductions in  both civilian and military personnel, but the exact reductions through fiscal  year 2019 would not be available before the issuance of the Section 904  report to Congress. A Marine Corps official stated that after submitting its  fiscal year 2015 budget information, the Marine Corps conducted a  structural review over a period of 6 to 8 months that identified a larger  number of positions in Headquarters, Marine Corps, that should be  subject to the reduction. The official further stated that these changes  should better position the Marine Corps to more accurately report its  headquarters structure for the fiscal year 2016 budget, but added that the  actual reductions would likely be different than it originally estimated for  fiscal year 2015. The revised Marine Corps data were not available as of  January 2015. More specific information was available from the Air Force.  In July 2014, the Air Force completed its management headquarters  review and notified Congress of its reorganization plans, including a  reduction of 300 authorized military and civilian positions (about 12  percent of fiscal year 2013 authorized positions) and a 20 percent  reduction to the headquarters operating budgets for the Air Force  Secretariat and Air Staff by fiscal year 2019.

section_title: DOD Headquarters Organizations in Our Review Do Not Systematically Determine or Periodically Reassess Their Personnel Requirements
paragraphs: The headquarters organizations we reviewed—OSD, the Joint Staff, and  the secretariats and staffs for the Army, Navy, and Air Force, and  Headquarters, Marine Corps—do not determine their personnel  requirements as part of a systematic requirements-determination process,  nor do they have procedures in place to ensure that they periodically  reassess them as outlined in DOD and other guidance. Current personnel  levels for these headquarters organizations are traceable to statutory  limits enacted during the 1980s and 1990s to force efficiencies and  reduce duplication. However, these limits have been waived since fiscal  year 2002 and have little practical utility because of statutory exceptions  to certain categories of personnel and because the limits do not include  personnel in supporting organizations that perform headquarters-related  functions. OSD, the Navy, and the Marine Corps have recognized  problems with their existing requirements-determination processes and  are beginning to take steps to modify their processes, but their efforts are  not yet complete. Without systematic determinations of personnel  requirements and periodic reassessments of them using organizational  and workforce analyses, DOD will not be well-positioned to proactively  identify efficiencies and limit personnel growth within these headquarters  organizations. Moreover, until such requirements are determined,  Congress will not have the information needed to reexamine existing  statutory limits.
subsections: section_title: Statutory Limits Placed on Headquarters Sizes Have Been Waived and Are of Limited Utility
paragraphs: Most of the DOD headquarters organizations that we reviewed are  subject to statutory limits on the number of authorized personnel,  although these limits have been waived since fiscal year 2002 and are of  limited utility due to statutory exceptions and exclusions of certain  personnel. Congress placed statutory limits on authorized military and  civilian personnel for the military departments’ secretariats and staffs in  1986, in part, to force a comprehensive management review of  duplication and identify effective solutions to existing personnel  duplication among the services. In 1996, Congress also established a  statutory limit for OSD military and civilian personnel because it was  concerned about the growth of OSD personnel despite a declining  defense budget and military force structure. The military departments’  statutory limits were set at 85 percent of the total number of personnel in  the secretariats and military staffs prior to 1986, while the OSD statutory  limit represented a 15 percent reduction from 1994 personnel levels. The  Joint Staff is not currently subject to a statutory limit.

Although Congress placed statutory limits on the OSD and the military  departments’ secretariats and military staffs, the President has declared a  national emergency each year from fiscal years 2002 to 2014, which had  the effect of waiving the limits for the military departments each year.While the limits have been waived, officials from the Army, Navy, and Air  Force stated that they seek to keep their number of authorized military  and civilian positions within or close to these limits because the waiver is  valid only for 1 year at a time, and they are uncertain whether the waiver  will be granted again. However, we found the secretariats and military  staffs of the departments of the Army and Navy have totals for fiscal year  2013 that would exceed the existing statutory limits were they in effect.  Table 1 shows the statutory limits of the headquarters organizations that  we reviewed and the total number of authorized positions they reported in  fiscal year 2013, including, where applicable, the percentage by which  they vary from the statutory limits.

In addition, the numbers of authorized military and civilian positions  counted against the statutory limits may not accurately reflect or be  inclusive of all personnel supporting the headquarters due to statutory  exceptions and the exclusion of certain personnel in support  organizations conducting headquarters-related functions. Beginning in  fiscal year 2009, Congress provided exceptions to the limitations on  personnel for certain categories of acquisition personnel and for those  hired pursuant to a shortage category designated by the Secretary of  Defense or the Director of the Office of Personnel Management. These  exceptions to the limitations on personnel allow DOD to adjust its  baseline personnel limitation or exclude certain personnel from the  limitation. For example, the Army reported for fiscal year 2015 that it has  1,530 military and civilian personnel that are subject to these exceptions  and therefore do not count against its statutory limits. An official in  OSD’s Office of the Under Secretary for Personnel and Readiness told us  that the exceptions that were added to the statutory limits as of fiscal year  2009 make the statutory limits virtually obsolete.

The statutory limits also do not apply to personnel in supporting  organizations to the military service secretariats and staffs who do  perform headquarters-related functions. For example, the Army and Air  Force each have some personnel within their field operating agencies that  support their military service secretariats or staffs in accomplishing their  mission but which we found are not subject to the statutory limits.  Organizations that support the Air Force Secretariat and Air Staff in  conducting their mission include, but are not limited to, the U.S. Air Force  Cost Analysis Agency, the U.S. Air Force Inspection Agency, the U.S. Air  Force Personnel Center, and the U.S. Air Force Audit Agency, and  include thousands of personnel. As illustrated in figure 4, in the case of  the Army, the organizations and agencies that support the Army  Secretariat and Army Staff are almost three times as large as the  Secretariat and Staff, and include the U.S. Army Finance Command, the  U.S. Army Manpower Analysis Agency, and the U.S. Army Force  Management Support Agency, among others.

By contrast, elements of the Washington Headquarters Services, a  support organization for OSD, are included in OSD’s statutory limits. This  means that some personnel in the Washington Headquarters Services  who conduct management headquarters-related functions count toward  OSD’s statutory limit. In addition, the applicable statute contains a  provision limiting OSD’s ability to reassign functions; specifically, that  DOD may not reassign functions solely in order to evade the personnel  limitations required by the statute. The statutes governing personnel  limitations for the military services’ secretariats and staffs do not contain  similar limitations on the military services’ ability to reassign  headquarters-related functions elsewhere. Military service officials have  explained that the existing statutory limits preclude organizational  efficiencies by causing them to move personnel performing headquarters- related functions elsewhere within the department, including the field  operating agencies. In addition, DOD officials also stated the statutory  limits may have unintended consequences, such as causing DOD to use  contracted services to perform headquarters-related tasks when  authorized military and civilian personnel are unavailable; this contractor  work force is not subject to the statutory limits.

We also found that Headquarters, Marine Corps, plans to revise the  number of military and civilian personnel it counts against the statutory  limits to exclude certain personnel. Officials in Headquarters, Marine  Corps, said that, unlike their counterparts in the other three services, their  headquarters is not entirely a management headquarters activity,  because it incorporates some nonheadquarters functions for  organizational and efficiency reasons, and thus the limits should not apply  to those personnel. However, this planned change seems in contradiction  with the intent of the statute to establish a limit on personnel within the  Navy Secretariat, Office of the Chief of Naval Operations, and  Headquarters, Marine Corps. Also, DOD Instruction 5100.73, Major DOD  Headquarters Activities, states that Headquarters, Marine Corps, is a  management headquarters organization in its entirety, which would  include all its personnel and operating costs. Marine Corps officials told us that DOD plans to revise DOD Instruction 5100.73 to classify only  certain functions within Headquarters, Marine Corps, as management  headquarters activities. According to an official, Headquarters, Marine  Corps,’ personnel totals in fiscal year 2013 do not reflect these changes  and may account for the large percentage difference between the existing  statutory limits and the number of Navy and Marine Corps authorized  personnel in fiscal year 2013. An official from the Department of the Navy  also noted that they have not reexamined the number of personnel who  would fall under the statutory limits since the limit was first waived in  September 2001.

According to internal-control standards for the federal government,  information should be recorded and communicated to others who need it  in a form that enables them to carry out their responsibilities. An  organization must have relevant, reliable, and timely communications as  well as information needed to achieve the organization’s objectives.  However, DOD’s headquarters reporting mechanism to Congress, the  Defense Manpower Requirements Report, reflects a lack of key  information. This annual report to Congress includes information on the  number of military and civilian personnel assigned to major DOD  headquarters activities in the preceding fiscal year and estimates of such  numbers for the current and subsequent fiscal year, as well as the  amount of any adjustment in personnel limits made by the Secretary of  Defense or the secretary of a military department. However, in the most  recent report for fiscal year 2015, only the Army reports information on  the number of baseline personnel within the Army Secretariat and Army  Staff that count against the statutory limits, along with the applicable  adjustments to the limits. Similar information for OSD, the Air Force  Secretariat and Air Staff, the Navy Secretariat, the Office of the Chief of  Naval Operations, and Headquarters, Marine Corps, is not included  because DOD’s reporting guidance does not require this information.  Without information to identify what personnel in each organization are  being counted against the statutory limits, it will be difficult for Congress  to determine whether the existing statutory limits are effective in limiting  personnel growth within the department or should be revised to reflect  current requirements.

section_title: DOD Headquarters Organizations in Our Review Have Not Systematically Determined Personnel Requirements
paragraphs: While the organizations we reviewed are currently assessing their  personnel requirements—driven by department-wide efforts to reduce  management overhead in response to budget constraints—we found that  all of the headquarters organizations within our review have not  determined their personnel requirements as part of a systematic  requirements-determination process. Such systematic personnel- requirements processes are considered a good human-capital practice  across government, including DOD, and these processes include certain  key elements. Among these elements are that organizations should (1)  identify an organization’s mission, functions, and tasks; and (2) determine  the minimum number and type of personnel—military personnel, civilian  personnel, and contracted services—needed to fulfill those missions,  functions, and tasks by conducting a workforce analysis. Such a  workforce analysis should identify mission-critical competencies as well  as gaps and deficiencies, and systematically define the size of the total  workforce needed to meet organizational goals. By contrast, the  headquarters organizations we reviewed use authorized personnel levels  from the previous year as a baseline from which to generate any new  requirements, and these personnel levels are ultimately based not on a  workforce analysis but on the statutory limits that were established by  Congress in the 1980s and 1990s.

According to DOD officials, it is more difficult to determine personnel  requirements for OSD, military service secretariats, or military staffs,  whose tasks include developing policy or strategy, than it is for military  services’ major commands or units that have distinct tasks, such as  repairing aircraft or conducting ship maintenance. DOD officials stated  that headquarters organizations’ workload is unpredictable and not only  includes traditional policy and oversight responsibilities, but also  managing unforeseen events and initiatives, such as the Fort Hood  shooting, Secretary of Defense-directed reductions, and responding to  congressionally mandated reviews or reports. However, systematically  determining personnel requirements for the total force—military  personnel, civilian personnel, and contracted services—by conducting a  workforce analysis, rather than relying on historic personnel levels and  existing statutory limits, would better position these headquarters  organizations to respond to unforeseen events and initiatives by allowing  them to identify critical mission requirements as well as mitigate risks to  the organizations’ efficiency and effectiveness. Without such  determination of personnel requirements for the total force, DOD  headquarters organizations may not be well positioned to identify  opportunities for efficiencies and reduce the potential for headquarters- related growth. In addition, submitting these personnel requirements to  Congress would provide Congress with key information to determine  whether the existing statutory limits on military and civilian personnel are  effective in limiting headquarters personnel growth.

section_title: DOD Headquarters Organizations in Our Review Do Not Have Procedures in Place to Ensure Periodic Reassessment of Headquarters Personnel Requirements
paragraphs: In addition to not systematically determining their personnel requirements,  we also found that the headquarters organizations do not have  procedures in place to ensure that they periodically reassess these  personnel requirements. This is contrary to guidance from DOD and all of  the military services suggesting that they conduct periodic reassessments  of their personnel requirements. For example, DOD guidance states that  existing policies, procedures, and structures should be periodically  evaluated to ensure efficient and effective use of personnel resources,  and that assigned missions should be accomplished using the least costly  mix of military, civilian and contractor personnel. Moreover, the military  services have more specific guidance indicating that personnel  requirements should be established at the minimum essential level to  accomplish the required workload and should be periodically reviewed.  For example, the Air Force states that periodic reviews should occur at  least every 2 years. In addition, systematic personnel requirements  processes are considered a good human-capital practice across  government, including in DOD. These practices call for organizations to  have personnel requirements-determination processes that, among other  things, reassess personnel requirements by conducting analysis on a  periodic basis to determine the most efficient choices for workforce  deployment. These reassessments should include analysis of  organizational functions to determine appropriate structure, including  identifying any excess organizational layers or redundant operations, and  workforce analysis to determine the most effective workloads for efficient  functioning. None of the headquarters organizations we reviewed have  procedures in place to ensure that they periodically reassess their  personnel requirements. This is unlike the military services’ major  commands or units, for which officials within the military departments  stated they do reassess personnel requirements. While Navy officials  stated that the Navy may occasionally reassess the requirements for a  particular organization within the Secretariat or Office of the Chief of  Naval Operations, such reassessments are conducted infrequently and  without the benefit of a standardized methodology. Officials at  Headquarters, Marine Corps, stated that they are beginning to implement  a new requirements-determination process, which requires commanders  to conduct an annual analysis to determine their organizations’ personnel  requirements. However, this process is not expected to be fully  implemented until October 2015.

Officials from headquarters organizations that we reviewed said that they  do not periodically reassess personnel requirements because their  organization’s requirements do not change much from year to year and  they adjust requirements when new missions or tasks are assigned to  their organization. DOD officials also maintained that the process of  reassessing these personnel requirements would be lengthy and require  an increase in personnel to conduct the analysis. Officials also stated that  they believe the department’s recent efficiency efforts have allowed their  organizations to reassess personnel requirements and identify  opportunities for efficiencies. For example, officials stated that they  conducted comprehensive reviews of their organizations’ personnel  requirements as part of the effort to identify efficiencies as directed by  former Secretary of Defense Robert Gates in 2010, as part of the OSD  organizational review conducted by former Secretary of the Air Force  Mike Donley in 2013, and most recently as part of Secretary of Defense  Chuck Hagel’s effort to reduce management headquarters. However,  these reviews have generally been ad hoc and done in response to  internally driven or directed reductions, rather than as part of the  organization’s systematic requirements-determination process.  Conducting periodic reassessments as part of a systematic requirements- determination process, rather than in response to various DOD-directed  efforts, would allow headquarters organizations to proactively identify any  excess organizational layers or redundant operations and to inform  decision making during any future efficiency efforts and budget reviews.  In addition, reassessments of personnel requirements could occur  periodically, not necessarily annually, thereby lessening the amount of  time and labor that headquarters organizations devote to conducting  reassessments. For example, Army guidance states that such  reassessments should occur every 2 to 5 years. Without periodic  reassessment of personnel requirements for the total force, it will be  difficult for the headquarters organizations in our review to be well  positioned to effectively identify opportunities for efficiencies and limit  personnel growth.

section_title: Some Organizations Are Modifying Their Requirements- Determination Processes, but These Efforts Are Not Complete
paragraphs: All but one of the organizations we reviewed have recognized problems  with requirements determination and some are beginning to take steps to  modify their related processes, but these efforts are not yet complete. For  example, OSD conducted a set of studies, directed by the Secretary of  Defense in December 2013, aimed at further improving management and  administration of personnel. According to OSD officials, the data and  insights from these studies will inform DOD-wide business process and  system reviews being directed by the Deputy Secretary of Defense. For  example, officials stated that an OSD-wide process for determining and  reassessing personnel requirements may replace the current process  whereby each OSD office sets its personnel requirements individually.  OSD officials also stated that the new process, if implemented, might  include a standard methodology to help OSD conduct a headquarters  workforce analysis and determine and periodically reassess its personnel  requirements. DOD did not provide a time frame for implementing the  results of the studies and did not confirm whether implementation would  include establishment of an OSD-wide personnel requirements- determination process.

Department of the Navy, Navy Shore Manpower Requirements Determination Final  Report (revised July 17, 2013). methodology for analyzing workload and determining and assessing  personnel requirements. Based on this report, the Navy is conducting its  own review of the shore personnel requirements-determination process,  with the goal of establishing guidance for use in 2015.

In 2011, the Marine Corps developed a standardized approach, known as  the Strategic Total Force Management Planning process, for determining  and reassessing headquarters personnel requirements on an annual  basis. According to Marine Corps officials and guidance, this process  requires commanders to annually assess their organization’s mission,  analyze its current and future organizational structures, conduct a gap  analysis, and develop, execute, and monitor a plan of action to address  any gaps. The Marine Corps is currently revising its guidance to reflect  this new process, and commanders are not required to develop their  requirements and submit an action plan until October 2015. Despite these  efforts, none of these processes have been fully implemented or  reviewed. Therefore, it is too early to know whether the new processes  will reflect the key elements of a personnel requirements-determination  process by enabling the organizations to identify missions, systematically  determine personnel requirements, and reassess them on a periodic  basis using organizational and workforce analysis.

section_title: Conclusions
paragraphs: Over the past decade, OSD, the Joint Staff, and the military service  secretariats and staffs have grown to manage the increased workload  and budgets associated with a military force engaged in conflict around  the world. Today, DOD is facing a constrained budget environment and  has stated that it needs to reduce the size of its headquarters, to include  all components of its workforce–military personnel, civilian personnel, and  contracted services. DOD and the military services have undertaken  reviews to reduce headquarters but these budget-driven efforts have not  been the result of systematic determinations of personnel needs.  Statutory limits on these headquarters have been waived since 2002, but  these limits would likely be counterproductive today were the waiver  dropped, because they were set in the 1980s and 1990s and are  inconsistently applied due to statutory exceptions and DOD’s exclusion of  personnel conducting headquarters-related functions. Specifically, these  limits omit personnel in supporting organizations to the military service  secretariats and staffs that perform headquarters-related functions.  Because of these exceptions and omissions, the statutory limits may be  of limited utility in achieving Congress’s original aim of stemming the  growth of headquarters personnel and reducing duplication of effort. The  existing statutory limits encourage the headquarters organizations to  manage the number of military and civilian personnel requirements at or  near the limit, according to DOD officials, rather than using a systematic  requirements-determination process that establishes the total force that is  truly needed and whether any efficiencies can be identified.

Headquarters organizations in our review have not systematically  determined how many personnel they need to conduct their missions.  While some organizations have begun to take such steps, their plans are  not firm and their processes have not been finalized. Unless the  organizations conduct systematic analyses of their personnel needs for  the total force and establish and implement procedures to ensure that  they periodically reassess those requirements, the department will lack  assurance that its headquarters are sized appropriately. Looking to the  future, systematically determining personnel requirements and conducting  periodic reassessments could inform decision making during any future  efficiency efforts and support budget formulation. In addition, determining  these personnel requirements and submitting the results to Congress as  part of DOD’s Defense Manpower Requirements Report or through  separate correspondence, along with any recommendations about  adjustments needed to the statutory limits, could form a foundation upon  which Congress could reexamine the statutory limits, as appropriate.

section_title: Recommendations for Executive Action
paragraphs: To ensure that headquarters organizations are properly sized to meet  their assigned missions and use the most cost-effective mix of personnel,  and to better position DOD to identify opportunities for more efficient use  of resources, we recommend that the Secretary of Defense direct the  following three actions:  conduct a systematic determination of personnel requirements for  OSD, the Joint Staff, and the military services’ secretariats and staff,  which should include analysis of mission, functions, and tasks, and  the minimum personnel needed to accomplish those missions,  functions, and tasks;  submit these personnel requirements, including information on the  number of personnel within OSD and the military services’  secretariats and staffs that count against the statutory limits, along  with any applicable adjustments to the statutory limits, in the next  Defense Manpower Requirements Report to Congress or through  separate correspondence, along with any recommendations needed  to modify the existing statutory limits; and establish and implement procedures to conduct periodic  reassessments of personnel requirements within OSD and the military  services’ secretariats and staffs.

section_title: Matter for Congressional Consideration
paragraphs: Congress should consider using the results of DOD’s review of  headquarters personnel requirements to reexamine the statutory limits.  Such an examination could consider whether supporting organizations  that perform headquarters functions should be included in statutory limits  and whether the statutes on personnel limitations within the military  services’ secretariats and staffs should be amended to include a  prohibition on reassigning headquarters-related functions elsewhere.

section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to DOD for review and comment. In  written comments on a draft of this report, DOD partially concurred with  the three recommendations and raised concerns regarding what it  believes is a lack of appropriate context in the report. DOD’s comments  are summarized below and reprinted in their entirety in appendix IX.

In its comments, DOD raised concerns that the report lacks perspective  when characterizing the department’s headquarters staff, stating that it is  appropriate for the department to have a complex and multi-layered  headquarters structure given the scope of its missions. We agree that  DOD is one of the largest and most complex organizations in the world,  and make note of its many broad and varied responsibilities in our report.  Notwithstanding these complexities, the department itself has repeatedly  recognized the need to streamline its headquarters structure. For  example, in 2010, the Secretary of Defense expressed concerns about  the dramatic growth in DOD’s headquarters and support organizations  that had occurred since 2001, and initiated a series of efficiency initiatives  aimed at stemming this growth. The Secretary of Defense specifically  noted the growth in the bureaucracy that supports the military mission,  especially the department’s military and civilian management layers, and  called for an examination of these layers. In addition, in January 2012, the  administration released defense strategic guidance that calls for DOD to  continue to reduce the cost of doing business, which includes reducing  the rate of growth in personnel costs and finding further efficiencies in  overhead and headquarters, in its business practices, and in other  support activities. Our report discusses some of the department’s  efficiency-related efforts and thus, we believe it contains appropriate  perspective.

DOD also expressed concerns that the report lacks appropriate context  when addressing the causes for workforce growth, stating that such  growth was in response to rapid mission and workload increases, specific  workforce-related initiatives, realignments, streamlining operations, and  reducing redundancies and overhead. Our draft report noted some of  these causes of headquarters workforce growth, but we have added  additional information to the report on other causes, such as increased  mission responsibilities for the war and other directed missions such as  business transformation, intelligence, cyber, suicide prevention, sexual  assault response and prevention, wounded warrior care, family support  programs, transition assistance and veterans programs, to provide  context and address DOD’s concerns.

DOD partially concurred with the first recommendation that the Secretary  of Defense direct a systematic determination of the personnel  requirements of OSD, the Joint Staff, and the military services’  secretariats and staffs, which should include analysis of mission,  functions, and tasks, and the minimum personnel needed to accomplish  those missions, functions, and tasks. The department noted in its letter  that it will continue to use the processes and prioritization that is part of  the Planning, Programming, Budgeting, and Execution process, and will  also investigate other methods for aligning personnel to missions and  priorities. DOD also stated that it is currently conducting Business  Process and System Reviews of the OSD Principal Staff Assistants,  defense agencies, and DOD field activities to aid in documenting mission  responsibilities to resource requirements. However, the department did  not provide any details specifying whether any of these actions would  include a workforce analysis to systematically determine personnel  requirements, rather than continuing to rely on historic personnel levels  and existing statutory limits as the basis for those requirements, nor does  the department acknowledge the need for such analysis. Moreover,  according to DOD’s implementation guidance for the Business Process  and Systems Review, which we reference in our report, this review is  focused on business processes and supporting information technology  systems within certain defense headquarters organizations, rather than a  systematic determination of personnel requirements for those  organizations. DOD also stated in its comments that headquarters staff  provide knowledge continuity and subject matter expertise and that a  significant portion of their workload is unpredictable. We agree, but  believe that headquarters organizations would be better positioned to  respond to unforeseen events and initiatives if their personnel  requirements were based on workforce analysis, which would allow them  to identify critical mission requirements as well as mitigate risks to the  organizations’ efficiency and effectiveness while still responding to  unpredictable workload. Without a systematic determination of personnel  requirements, DOD headquarters organizations may not be well  positioned to identify opportunities for efficiencies and reduce the  potential for headquarters-related growth.

Several headquarters organizations provided comments on their specific  requirements determination processes in connection with this first  recommendation. The Army noted that it has an established headquarters  requirements determination process in the G-3, supported by the U.S.  Army Manpower Analysis Agency. While the Army does have a  requirements determination process, we note in our report that this  process did not result in the systematic determination of requirements for  the Army Secretariat and Staff; rather, the Army headquarters  organizations we reviewed use authorized personnel levels from the  previous year as a baseline from which to generate any new  requirements, and these personnel levels are ultimately based not on a  workforce analysis, but on the statutory limits that were established by  Congress in the 1980s. In addition, while the Army’s requirements  determination process does call for reassessments of personnel  requirements every 2 to 5 years, Army officials stated that they do not  conduct these periodic reassessments of the personnel requirements for  the Army headquarters organizations in our review, in part because the  U.S. Army Manpower Analysis Agency lacks the authority to initiate such  reassessments or enforce their results. In the letter, the Army also noted  concerns that a statement in our draft report—namely, that the  organizations that support the Army Secretariat and staff are almost three  times as large but are excluded from the statutory limits—may be  misleading and lack appropriate context. In response to the Army’s  concerns and to provide additional context, we have clarified the report’s  language to state that only some personnel in these organizations  support their military service secretariats and staffs in accomplishing their  mission and are not subject to the statutory limits.

The Marine Corps noted that they conducted a full review of force  structure in 2012, which included a Commandant-directed consideration  to look at the functions of every headquarters and staff. We state in our  report that the Marine Corps and others in the department have  previously conducted efficiency-related efforts, which officials believe  have allowed their organizations to reassess personnel requirements and  identify opportunities for efficiencies. However, these reviews have  generally been ad hoc and done in response to internally driven or  directed reductions, rather than as part of an organization’s systematic  requirements-determination process. Having workforce and  organizational analyses as part of a systematic requirements- determination process, rather than in response to DOD-directed efficiency  efforts, would allow headquarters organizations to proactively identify any  excess organizational layers or redundant operations and inform decision  making during future efficiency efforts and budget reviews.

Finally, the Joint Staff stated that it utilizes its existing Joint Manpower  Validation Process as a systematic requirements determination process  when requesting permanent joint manpower requirements, adding that  this process reviews mission drivers, capability gaps, impact  assessments, and determines the correct size and characteristics of all  new billets. However, as we found in May 2013, this process focuses on  requests for additional positions or nominal changes in authorized  positions, rather than evaluating whether authorized positions are still  needed to support assigned missions. Moreover, we found that  personnel levels for the headquarters organizations that we reviewed,  including the Joint Staff, are ultimately not based on a workforce analysis  that systematically defines the size of the total workforce needed to meet  organizational goals. Rather, these organizations use authorized  personnel levels from the previous year as a baseline and do not take  steps to systematically determine and periodically reassess them. Thus,  we continue to believe that DOD should conduct a systematic  determination of personnel requirements, including an analysis of  missions, functions, and tasks to determine the minimum personnel  needed to accomplish those missions, functions, and tasks.

DOD partially concurred with the second recommendation that the  Secretary of Defense direct the submission of these personnel  requirements, including information on the number of personnel within  OSD and the military services’ secretariats and staffs that count against  the statutory limits, along with any applicable adjustments to the statutory  limit, in the next Defense Manpower Requirements Report to Congress or  through separate correspondence, along with any recommendations  needed to modify the existing statutory limits. DOD stated that it has  ongoing efforts to refine and improve its reporting capabilities associated  with these requirements, noting that the department has to update DOD  Instruction 5100.73, Major DOD Headquarters Activities before it can  determine personnel requirements that count against the statutory limits.  In March 2012, we recommended that DOD revise DOD Instruction  5100.73, Major DOD Headquarters Activities, but DOD has not  provided an estimate of when this revised Instruction would be finalized.  DOD also did not indicate in its letter whether the department would  submit personnel requirements that count against the statutory limits in  the Defense Manpower Requirements Report, as we recommend, once  the Instruction is finalized. We believe that submitting these personnel  requirements to Congress in this DOD report would provide Congress  with key information to determine whether the existing statutory limits on  military and civilian personnel are effective in limiting headquarters  personnel growth.

In addition, the Marine Corps provided more specific comments in  connection with the second recommendation, noting that in 2014 it had  reviewed and validated all headquarters down to the individual billet level,  identifying billets that should be coded as performing major DOD  headquarters activities, resulting in a net increase of reported  headquarters structure. The Marine Corps stated they planned to report  this information as part of DOD’s fiscal year 2016 budget and in the  Defense Manpower Requirements Report. Our report specifically notes  the review and the Marine Corps effort to more accurately report its  headquarters structure for the fiscal year 2016 budget. However, until the  department as a whole takes concrete steps to gather reliable information  about headquarters requirements, and report this information to  Congress, neither the department nor Congress will have the information  needed to oversee them.

DOD partially concurred with the third recommendation that the Secretary  of Defense direct the establishment and implementation of procedures to  conduct periodic reassessments of personnel requirements within OSD  and the military service secretariats and staffs. DOD said that it supports  the intent of the recommendation, but such periodic reassessments  require additional resources and personnel, which would drive an  increase in the number of personnel performing major DOD headquarters  activities. Specifically, DOD stated it intends to examine the  establishment of requirements determination processes across the  department, to include the contractor workforce, but this will require a  phased approach across a longer timeframe. However, DOD also did not  provide any estimated timeframes for its examination of this process. As  we noted in the report, reassessments of personnel requirements could  occur periodically, not necessarily annually, thereby lessening the amount  of time and labor that headquarters organizations devote to conducting  reassessments. Further, until a periodic reassessment of requirements  takes place, the department will lack reasonable assurance that its  headquarters are sized appropriately for its current missions, particularly  in light of the drawdown from Iraq and Afghanistan and its additional  mission responsibilities.

In addition, the Marine Corps and the Joint Staff provided specific  comments in connection with the third recommendation in DOD’s letter.  First, the Marine Corps noted that they conduct periodic reviews through  the Quadrennial Defense Review and through force structure review  boards that shape the Marine Corp to new missions and in response to  combatant commander demands. However, these reviews are focused on  forces as a whole and not specifically on headquarters. Second, the Joint  Staff stated that it has set personnel requirements twice since 2008, and  noted that it has taken reductions during various budget- or efficiency- related efforts, such as the Secretary of Defense’s 2012 efficiency review  and the Secretary of Defense’s 20-percent reductions to headquarters  budgets, which is ongoing. However, conducting periodic reassessments  as part of a systematic requirements-determination process, rather than  in response to ad hoc, DOD-directed efficiency efforts, would allow  headquarters organizations to proactively identify any excess  organizational layers or redundant operations. This, in turn, would  prepare the headquarters organizations to better inform decision-making  during any future efficiency efforts and budget reviews.

DOD stated that, although it appreciates our inclusion in the report of a  matter calling for Congress to consider using the results of DOD’s review  of personnel requirements to re-examine the statutory limits, it believes  any statutory limitations on headquarters personnel place artificial  constraints on workforce sizing and shaping, thereby precluding total  force management. Therefore, DOD states that it opposes any legislative  language that imposes restrictions on the size of the department’s  workforce. Both the Marine Corps and Joint Staff provided specific  comments in regard to GAO’s matter for congressional consideration,  although these comments were directed toward the specific statutory  limits for their organizations, not the GAO matter for congressional  consideration itself. As we noted in our report, we believe that the  statutory limits are of limited utility. The intent of this matter is to not to  prescribe specific modifications to the statutory limits on headquarters  personnel to Congress but rather to suggest that Congress consider  making those modifications that it considers most appropriate based on a  review of personnel requirements provided by the department.

Finally, the Army also provided input regarding the overall methodology  behind the report, noting that tracking contract support of headquarters  organizations solely through funding source may skew attempts at  general trend analysis because funding source does not always correlate  to a function being performed in the headquarters. Our report notes some  of the challenges in tracking contract support of headquarters  organizations, but to add context and address the Army’s concerns, we  have modified text in Appendix V, which focuses on the resources of the  Headquarters, Department of the Army. Specifically, we have modified  Figure 12 to note that, according to Army officials, the costs for contracted  services provided from its financial accounting systems may not  accurately reflect costs incurred by the headquarters because the  accounting systems show the funding for contractors but not necessarily  where the contracted work was performed, which is the information  displayed in DOD’s Inventory of Contracted Services.

DOD also provided technical comments, which we have incorporated, as  appropriate.

We are sending copies of this report to the appropriate congressional  committees, the Secretary of Defense, the Chairman of the Joint Chiefs of  Staff, and the Secretaries of the military departments. In addition, the  report is 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) 512-3489 or pendletonj@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix X.

section_title: Appendix I: Prior GAO Work on DOD Headquarters
paragraphs: We have issued several reports since 2012 on defense headquarters and  on the department’s ability to determine the right number of personnel  needed to perform headquarters functions.

In March 2012, we found that while the Department of Defense (DOD)  has taken some steps to examine its headquarters resources for  efficiencies, additional opportunities for savings may exist by further  consolidating organizations and centralizing functions. We also found  that DOD’s data on its headquarters personnel lacked the  completeness and reliability necessary for use in making efficiency  assessments and decisions. In that report, we recommended that the  Secretary of Defense direct the Secretaries of the military  departments and the heads of the DOD components to continue to  examine opportunities to consolidate commands and to centralize  administrative and command support services, functions, or  programs. Additionally, we recommended that the Secretary of  Defense revise DOD Instruction 5100.73, Major DOD Headquarters  Activities, to include all headquarters organizations; specify how  contractors performing headquarters functions will be identified and  included in headquarters reporting; clarify how components are to  compile the information needed for headquarters-reporting  requirements; and establish time frames for implementing actions to  improve tracking and reporting of headquarters resources. DOD  generally concurred with the findings and recommendations in our  March 2012 report. DOD officials have stated that, since 2012,  several efforts have been made to consolidate or eliminate commands  and to centralize administrative and command support services,  functions, or programs. For example, OSD officials said that DOD has  begun efforts to assess which headquarters organizations are not  currently included in its guiding instruction on headquarters, but as of  July 2014, it has not completed its update of the instruction to include  these organizations. DOD officials also identified further progress on  including contractors performing major DOD headquarters activities in  headquarters reporting.

In May 2013, we found that authorized military and civilian positions at  the geographic combatant commands—excluding U.S. Central  Command—had increased by about 50 percent from fiscal year 2001  through fiscal year 2012, primarily due to the addition of new  organizations, such as the establishment of U.S. Northern Command  and U.S. Africa Command, and increased mission requirements for  the theater special operations commands. We also found that DOD’s  process for sizing its combatant commands had several weaknesses,  including the absence of a comprehensive, periodic review of the  existing size and structure of these commands and inconsistent use of  personnel-management systems to identify and track assigned  personnel. DOD did not concur with our recommendation that it  conduct comprehensive and periodic reviews of the combatant  commands’ existing size, but we continue to believe that  institutionalizing a periodic evaluation of all authorized positions would  help to systematically align manpower with missions and add rigor to  the requirements process. DOD concurred with our recommendation  that it revise its guiding instruction on managing joint personnel  requirements—Chairman of the Joint Chiefs of Staff Instruction  1001.01A, Joint Manpower and Personnel Program—to require the  commands to improve its visibility over all combatant command  personnel. DOD has established a new manpower tracking system,  the Fourth Estate Manpower Tracking System, that is to track all  personnel data, including temporary personnel, and identify specific  guidelines and timelines to input/review personnel data. Additionally,  DOD concurred with our recommendation to develop and implement a  formal process to gather information on authorized manpower and  assigned personnel at the service component commands and to  revise DOD’s Financial Management Regulation. As of September  2014, the process outlined by DOD to gather information on  authorized and assigned personnel at the service component  commands is the same as the one identified during our prior work.  DOD concurred with our recommendation to revise volume 2A,  chapter 1 of DOD’s Financial Management Regulation 7000.14R to  require the military departments, in their annual budget documents for  operation and maintenance, to identify the authorized military  positions and civilian and contractor full-time equivalents at each  combatant command and provide detailed information on funding  required by each command for mission and headquarters support,  such as civilian pay, contracted services, travel, and supplies. As of  September 2014, DOD plans to prepare an exhibit that reflects the  funding and full-time equivalent information by combatant command  and include it in an update to the DOD Financial Management  Regulation prior to preparation of the fiscal year 2016 budget estimate  submission.

In June 2014, we found that DOD’s functional combatant commands  have shown substantial increases in authorized positions and costs to  support headquarters operations since fiscal year 2004, primarily to  support recent and emerging missions, including military operations to  combat terrorism and the emergence of cyberspace as a warfighting  domain. Further, we found that DOD did not have a reliable way to  determine the resources devoted to management headquarters as a  starting point for DOD’s planned 20 percent reduction to headquarters  budgets, and thus we concluded that actual savings would be difficult  to track. We recommended that DOD reevaluate the decision to focus  reductions on management headquarters to ensure meaningful  savings and set a clearly defined and consistently applied baseline  starting point for the reductions. Further, we recommended that DOD  track the reductions against the baselines in order to provide reliable  accounting of savings and reporting to Congress. DOD partially  concurred with our recommendation to reevaluate its decision to focus  reductions on management headquarters, questioning, in part, the  recommendation’s scope. We agreed that the recommendation has  implications beyond the functional combatant commands, which was  the scope of our review, but the issue we identified is not limited to  these commands. DOD generally concurred with our two other  recommendations that it set a clearly defined and consistently applied  baseline starting point and track reductions against the baselines. To  address these two recommendations, DOD said that it planned to use  the Future Years Defense Program data to set the baseline going  forward. DOD stated that it was enhancing data elements within a  DOD resource database to better identify management headquarters  resources to facilitate tracking and reporting across the department.

section_title: Appendix II: Objectives, Scope, and Methodology
paragraphs: House Report 113-102 mandated GAO to review the military, civilian  personnel, and contracted services resources devoted to the Office of the  Secretary of Defense (OSD), the Joint Staff, and the military departments’  secretariats and military staffs from fiscal year 2001 through fiscal year  2013. This report (1) identifies past trends, if any, in personnel resources  devoted to OSD, the Joint Staff, and the secretariats and staffs of the  military services and any plans for reductions to these headquarters  organizations; and (2) evaluates the extent to which the Department of  Defense (DOD) determines and reassesses personnel requirements for  these headquarters organizations.

In addition to OSD, the Joint Staff, and the secretariats and staffs of the military  departments, other headquarters organizations include portions of the defense agencies,  DOD field activities, and the combatant commands, along with their subordinate unified  commands and respective service component commands.

Joint Staff J-2 (Intelligence), which receives its personnel and funding  from the Defense Intelligence Agency, provided personnel data that it  deemed sensitive but unclassified, so we excluded it from this report. The  Navy was unable to provide complete personnel data prior to fiscal year  2005 due to a change in personnel management systems used by the  Office of the Chief of Naval Operations. Similarly, Headquarters, Marine  Corps, was unable to provide personnel data prior to fiscal year 2005 due  to a change in personnel management systems. We requested available  data on contracted services performing functions for the organizations  within our review, but we were only able to obtain and analyze information  from OSD and the Army. We compared these data to data we had  obtained from OSD and the Army on authorized military and civilian  positions. We present DOD data on contracted services for context as a  comparison against authorized military and civilian positions. Because we  did not use these data to support our findings, conclusions, or  recommendations, we did not assess their reliability. DOD is still in the  process of compiling complete data on contractor full-time equivalents.

Our review also focused on operation and maintenance obligations— because these obligations reflect the primary costs to support the  headquarters operations of OSD, the Joint Staff, and secretariats and  staffs for the military services—including the costs for civilian personnel,  contracted services, travel, and equipment, among others. Our review  excluded obligations of operation and maintenance funding for DOD’s  overseas contingency operations that were not part of DOD’s base  budget. Unless otherwise noted, we reported all costs in this report in  nominal dollars. Only the Air Force was able to provide historical data for  the entire fiscal year 2001 through fiscal year 2013 time frame, so we  provided an analysis of trends in operation and maintenance obligations  at the individual organizations included in our review for the fiscal years  for which data were available. OSD was unable to provide cost data prior  to fiscal year 2008 because, per National Archives and Records  Administration regulations, it does not maintain financial records older  than 6 years and 3 months. The Joint Staff was unable to provide cost  data prior to fiscal year 2003 due to a change in financial systems. The  Army was unable to provide cost data for fiscal year 2001 in the time  frame we requested for inclusion in this report. The Navy Secretariat was  able to provide cost data for fiscal years 2001 through 2013. However,  the Office of the Chief of Naval Operations was only able to provide cost  data for fiscal years 2009 through 2013 because the Office of the Chief of  Naval Operations did not exist as an independent budget-submitting  office until fiscal year 2009, and it would be difficult to separate out the  Office of the Chief of Naval Operations’ data from other Navy data prior to  fiscal year 2009 in the Navy’s historical data system. Headquarters,  Marine Corps, was unable to provide cost data prior to fiscal year 2005  due to a change in financial systems. Our analyses are found in  appendixes III through VIII.

The availability of historical data limited our analyses of both authorized  military and civilian positions and operation and maintenance obligations  for the reasons identified by the individual included organizations. To  assess the reliability of the data we collected, we interviewed DOD  officials about the data they provided to us and analyzed relevant  personnel and financial-management documentation to ensure that the  data on authorized military and civilian positions and operation and  maintenance obligations were tied to mission and headquarters support.  We also incorporated data-reliability questions into our data-collection  instruments and compared the multiple data sets received from the  included organizations against each other to ensure that there was  consistency in the data that they provided. We determined the data were  sufficiently reliable for our purposes of identifying trends in the personnel  resources and headquarters support costs of OSD, the Joint Staff, and  secretariats and staffs for the military services.

To identify DOD’s plans for reductions to these headquarters  organizations, we obtained and reviewed guidance and documentation on  steps to implement DOD’s 20 percent reductions to headquarters budgets  starting in fiscal year 2015, the first full budget cycle for which DOD was  able to include the reductions, such as the department-issued  memorandum outlining the reductions and various DOD budget-related  documents. We also obtained data, where available, on the number of  positions at OSD, the Joint Staff, and the secretariats and staffs for the  military services for fiscal year 2013 (the most recent fiscal year for which  data were available during our review), as well as the number of positions  deemed by these organizations to be performing headquarters functions  and included in DOD’s planned headquarters reductions for fiscal years  2015 through 2019, the time frame DOD identified in its reduction plans.  We assessed the reliability of the personnel and cost data given these  and other limitations by interviewing DOD officials about the data they  provided to us and analyzing relevant personnel and financial- management documentation. We determined that the data were  sufficiently reliable for our purposes of identifying trends in the personnel  resources and headquarters support costs, and DOD’s plans for  reductions to OSD, the Joint Staff, and secretariats and staffs for the  military services.

To evaluate the extent to which DOD determines and reassesses  personnel requirements for these headquarters organizations, we  obtained and reviewed guidance from OSD, the Joint Staff, and the  secretariats and staffs for the military services regarding each of their  processes for determining and reassessing their respective personnel  requirements. For example, we reviewed the Chairman of the Joint Chiefs  of Staff Instruction 1001.01A (Joint Manpower and Personnel Program);  Air Force Instruction 38-201 (Manpower and Organization, Management  of Manpower Requirements and Authorizations); Army Regulation 570-4  (Manpower and Equipment Control, Manpower Management); Office of  the Chief of Naval Operations Instruction 1000.16K (Navy Total Force  Manpower Policies and Procedures); and Marine Corps Order 5311.1D  (Total Force Structure Process). We also interviewed officials from each  of these organizations to determine how their processes are  implemented, the results of any studies that were conducted on these  processes, and any changes being made to these processes. We then  compared the information we obtained on these processes to key  elements called for in DOD Directive 1100.4 (Guidance for Manpower  Management) and the military services’ guidance we had previously  obtained; specifically, that personnel requirements should be established  at the minimum essential level to accomplish the required workload, and  should be periodically reviewed. We also compared this information to  key elements of a systematic personnel requirements-determination  process, which we obtained from documents that address leading  practices for workforce planning. Specifically, we reviewed prior GAO  work on effective strategic workforce planning, DODs guidance on  manpower management, and workforce planning guidance issued by the  Office of Personnel Management. We then synthesized common themes  from these documents and summarized these as key elements that  should be included in organizations’ personnel requirements- determination processes, namely, that an organization should have a  requirements process that identifies the organization’s mission, functions,  and tasks; determines the minimum number and type of personnel  needed to fulfill those missions, functions, and tasks by conducting a  workforce analysis; and reassesses these requirements on a periodic  basis to determine the most efficient choices for workforce deployment.  We also reviewed DOD Instruction 5100.73 (Major DOD Headquarters  Activities), which guides the identification and reporting of headquarters  information. Finally, we identified a standard on information and  communications from internal-control standards for the federal  government and compared this standard to the headquarters-related  information provided to Congress in the fiscal year 2015 Defense  Manpower Requirements Report.

We obtained and assessed data on the number of management  headquarters personnel in the organizations in our review for fiscal year  2013 and on the Army’s field operating agencies for fiscal years 2001  through 2013. We assessed the reliability of the personnel data through  interviews with Army officials about the data they provided to us and by  conducting data-reliability assessments of the Army personnel data and  the information systems that produced them. We determined that the data  were sufficiently reliable for our purposes. We also met with OSD and the  military services to discuss how these organizations identify these  headquarters personnel. Finally, we reviewed the legislative history of the  statutory personnel limitations for OSD, the Joint Staff, and the services  contained in sections 143, 155, 3014, 5014, and 8014 of Title 10 of the  U.S. Code, and discussed these limits with knowledgeable officials in  OSD, the Joint Staff, and the military services.

We interviewed officials or, where appropriate, obtained documentation  from the organizations listed below:  Office of the Secretary of Defense

Office of the Director of Administration and Management;

Office of Cost Assessment and Program Evaluation; and

Washington Headquarters Services, Financial Management  Directorate.

Directorate of Management, Comptroller;

Manpower and Personnel Directorate; and

Intelligence Directorate.

Department of the Air Force

A1, Joint and Special Activities Manpower Programming Branch.

Assistant Secretary of the Army for Manpower and Reserve Affairs;

G8, Program Analysis and Evaluation; and

Business Operations Directorate, Army Office of Business  Transformation.

Assistant Secretary of the Navy for Manpower and Reserve

Assistant for Administration;

Office of the Chief of Naval Operations, Deputy Chief of Naval  Operations for Integration of Capabilities and Resources,  Programming Division;

Office of the Chief of Naval Operations, Manpower Management;

Office of the Chief of Naval Operations, Assessment Division; and

U.S. Fleet Forces Command.

Headquarters, U.S. Marine Corps

Marine Corps Combat Development Command, Combat  Development and Integration / Total Force Structure Division;

Budget and Execution Division, Programs and Resources; and

Manpower and Reserve Affairs.

We conducted this performance audit from July 2013 to January 2015 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 III: Resources of the Office of the Secretary of Defense (OSD)
paragraphs: Appendix III: Resources of the Office of the  Secretary of Defense (OSD)

OSD is responsible for assisting the Secretary of Defense in carrying out  his or her duties and responsibilities for the management of the  Department of Defense (DOD). These include policy development,  planning, resource management, and fiscal and program evaluation  responsibilities. The staff of OSD comprises military and civilian  personnel and personnel performing contracted services. This appendix  shows how these resources are distributed in the OSD organization, as  well as the changes in these resources from fiscal year 2001 through  fiscal year 2013. Table 2 shows the organizational structure and  composition of OSD for fiscal year 2013, including both authorized  military and civilian positions, as well as estimated contractor full-time  equivalents.

Figure 5 illustrates annual changes in the number of authorized personnel  positions since fiscal year 2001. According to DOD officials, both  authorized military and civilian positions remained relatively unchanged  until fiscal year 2010, when the number of authorized civilians increased  mainly due to the conversion of contracted services to civilian positions  and the conversion of military to civilian positions. This increase in  authorized civilian positions, according to DOD officials, is the result of  attempts to rebalance workload and become a cost-efficient workforce.

Figure 6 shows the headquarters support costs changes associated with  OSD for fiscal year 2008 through fiscal year 2013. Headquarters costs  have experienced an overall increase during the 5-year period, primarily  due to costs for contracted services, but have recently begun to decline,  according to OSD officials, because of sequestration and furloughs.

section_title: Appendix IV: Resources of the Joint Staff
paragraphs: The Joint Staff is responsible for assisting the Chairman of the Joint  Chiefs of Staff, military advisor to the President, in accomplishing his  responsibilities for the unified strategic direction of the combatant forces;  their operation under unified command; and their integration into a team  of land, naval, and air forces. The Joint Staff is tasked to provide advice  and support to the Chairman and the Joint Chiefs on matters including  personnel, intelligence doctrine and architecture, operations and plans,  logistics, strategy, policy, communications, cyberspace, joint training and  education, and program evaluation. In addition to civilian personnel and  personnel performing contracted services, the Joint Staff comprises  military personnel who represent, in approximately equal numbers, the  Army, Navy and Marine Corps, and Air Force. This appendix shows how  these resources are distributed in the Joint Staff, as well as the changes  in these resources from fiscal year 2003 through fiscal year 2013. Table 3  shows the organizational structure and composition of the Joint Staff for  fiscal year 2013, including both authorized military and civilian positions.

Figure 7 illustrates annual changes in the overall number of authorized  personnel positions since fiscal year 2005. Both military and civilian  positions remained relatively unchanged until fiscal year 2012, when,  according to Joint Staff officials, U.S. Joint Forces Command was  disestablished and some of its responsibilities and personnel were moved  to the Joint Staff. According to documentation and interviews with Joint  Staff officials, of those positions acquired by the Joint Staff in fiscal years  2012 and retained in 2013, most of the military positions (415 authorized  positions) and civilian positions (690 authorized positions) are stationed at  Hampton Roads, Virginia, to manage and support the Combatant  Command Exercise Engagement and Training Transformation program  reassigned to the Joint Staff when U.S. Joint Forces Command was  disestablished.

Figure 8 shows the changes in headquarters support costs for the Joint  Staff for fiscal year 2003 through fiscal year 2013. The increase in overall  headquarters support costs from fiscal years 2011 through 2013 was,  according to Joint Staff officials, due to the previously mentioned influx of  civilian personnel to the Joint Staff from U.S. Joint Forces Command  following its disestablishment in fiscal year 2011.

section_title: Appendix V: Resources of the Headquarters, Department of the Army
paragraphs: The Office of the Secretary of the Army has sole responsibility within the  Office of the Secretary and the Army Staff for the following functions:  acquisition, auditing, financial management, information management,  inspector general, legislative affairs, and public affairs. Additionally, there  is an Army Staff, which is to furnish professional assistance to the  Secretary and the Chief of Staff of the Army. Headquarters functions to  be performed by the Army Staff include, among others, recruiting,  organizing, training, and equipping of the Army.the Secretary of the Army and the Army Staff comprise military and  civilian personnel and personnel performing contracted services. This  appendix shows how these resources are distributed in the Army, as well  as the changes in these resources from fiscal year 2001 through fiscal  year 2013. Table 4 shows the organizational structure and composition of  the Army Secretariat and Staff for fiscal year 2013, including both  authorized military and civilian positions, as well as estimated contractor  full-time equivalents.

section_title: Appendix VI: Resources of the Offices of the Secretary of the Navy and Chief of Naval Operations
paragraphs: The Office of the Secretary of the Navy is solely responsible among the  Office of the Secretary of the Navy, the Office of the Chief of Naval  Operations, and the Headquarters, Marine Corps, for oversight of the  following functions: acquisition, auditing, financial management,  information management, inspector general, legislative affairs, and public  affairs. The Office of the Chief of Naval Operations is to provide  professional assistance to the Secretary and Chief of Naval Operations in  preparing for the employment of the Navy in areas such as: recruiting,  organizing, supplying, equipping, and training. The staffs of Office of the  Secretary of the Navy and the Office of the Chief of Naval Operations  comprise military and civilian personnel and personnel performing  contracted services. This appendix shows how these resources are  distributed in the Navy, as well as the changes in these resources from  fiscal year 2001 through fiscal year 2013. Table 5 shows the  organizational structure and composition of the Navy Secretariat and  Office of the Chief of Naval Operations for fiscal year 2013, including both  authorized military and civilian positions.

Figure 13 illustrates annual changes in the number of authorized military  and civilian positions within the Navy Secretariat since fiscal year 2003.  From fiscal years 2003 through 2008, the total number of authorized  positions within the secretariat decreased from fiscal year 2003 to 2004  and remained relatively constant through fiscal year 2008 due to  reductions in its baseline budget, recalculation of civilian pay and  benefits, and internal reorganizations within the Navy, according to  officials within the Navy Secretariat. From fiscal years 2009 through 2013,  authorized civilian positions within the Navy Secretariat have steadily  increased. Navy Secretariat officials attributed this increase primarily to  reorganization of functions across the Department of the Navy that moved  positions into the secretariat and the conversion of contracted services to  civilian positions.

Headquarters support costs for the Navy Secretariat have generally  increased from fiscal years 2001 through 2013, as seen in the inset of  figure 14. According to Navy officials, significant drivers of this overall  increase include continued increases in civilian personnel costs, and  additional contracted services costs to support both a 2005 DOD initiative  and compliance in fiscal years 2011 and 2012 with congressional  direction to improve the auditability of its financial statements.

Figure 15 illustrates annual changes in the number of authorized military  and civilian positions within the Office of the Chief of Naval Operations  since fiscal year 2005. The Office of the Chief of Naval Operations has  experienced some increase in authorized civilian positions over that  period, which Navy officials attributed to conversion of contracted  services to civilian positions and reorganizations of the Office of the Chief  of Naval Operations under new Chiefs of Naval Operations. Our analysis  shows that much of the overall increase in authorized civilian positions at  the Office of the Chief of Naval Operations was offset by decreases in  military positions since fiscal year 2010.

Headquarters support costs for the Office of the Chief of Naval  Operations have generally decreased from fiscal years 2009 through  2013, as seen in the inset of figure 16. According to Office of the Chief of  Naval Operations’ officials, the decrease in costs in fiscal 2010 was the  result of the removal of some centrally managed costs from the Office of  the Chief of Naval Operations budget in 2010 and efforts to convert  contracted services to civilian positions. As seen in figure 16, civilian  personnel costs have increased over the period, which Office of the Chief  of Naval Operations’ officials attributed to the conversion of contracted  services to civilian positions and organizational restructuring that moved  additional civilian positions to the Office of the Chief of Naval Operations  headquarters staff, resulting in higher civilian personnel costs.

section_title: Appendix VII: Resources of the Headquarters, U.S. Marine Corps
paragraphs: The Marine Corps also operates under the authority, direction, and  control of the Secretary of the Navy. Headquarters, Marine Corps,  consists of the Commandant of the Marine Corps and staff who are to  provide assistance in preparing for the employment of the Marine Corps  in areas such as recruiting, organizing, supplying, equipping, and  training. The staff of Headquarters, Marine Corps, comprises military and  civilian personnel and personnel performing contracted services. This  appendix shows how these resources are distributed in the Marine Corps,  as well as the changes in these resources from fiscal year 2005 through  fiscal year 2013. Table 6 shows the organizational structure and  composition of Headquarters, Marine Corps, for fiscal year 2013,  including both authorized military and civilian positions.

Headquarters, Marine Corps, experienced an increase in its overall  number of authorized military and civilian positions from fiscal years 2005  to 2013, as shown in figure 17, but there have been variations within  those years. Headquarters, Marine Corps, officials attributed some of the  increases in authorized positions to the conversion of military positions to  civilian positions, and additional personnel requirements needed to  support the Foreign Counterintelligence Program and National  Intelligence Program and to stand up and operate the National Museum  of the Marine Corps. Headquarters, Marine Corps, officials also explained  that some of the decreases in authorized positions were due to a number  of organizational realignments that transferred civilian positions from  Headquarters, Marine Corps, to operational or field support organizations.

From fiscal years 2005 through 2013, the total headquarters support  costs for Headquarters, Marine Corps, have slightly increased, as seen in  the inset in figure 18, but there has been variation in total costs year-to- year, and costs are down from their peak in fiscal year 2012. As seen in  figure 18, there has been a consistent increase in costs for civilian  personnel from fiscal year 2005 through fiscal year 2012, which the  Marine Corps attributed to the conversion of military positions to civilian  positions, organizational realignments that moved civilian positions to  Headquarters, Marine Corps, and recalculation of civilian pay and  benefits, all of which increased costs for civilian personnel. From fiscal  years 2005 through 2013, other headquarters support costs generally  decreased due to transfers and realignment of resources from  Headquarters, Marine Corps, to other organizations and operating forces.

section_title: Appendix VIII: Resources of the Headquarters, Department of the Air Force
paragraphs: The Office of the Secretary of the Air Force has sole responsibility and  oversight for the following functions across the Air Force: acquisition,  auditing, financial management, information management, inspector  general, legislative affairs, and public affairs. Additionally, there is an Air  Staff, which is to furnish professional assistance to the Secretary and the  Chief of Staff of the Air Force. The headquarters functions to be  performed by the Air Staff include recruiting, organizing, training, and   The staffs of Office of the  equipping of the Air Force, among others.Secretary of the Air Force and the Air Staff comprise military and civilian  personnel and personnel performing contracted services. This appendix  shows how these resources are distributed in the Air Force, as well as the  changes in these resources from fiscal year 2001 through fiscal year  2013. Table 7 shows the organizational structure and composition of the  Air Force Secretariat and Staff for fiscal year 2013, including both  authorized military and civilian positions.

Figure 19 illustrates annual changes in the number of authorized  positions in the Office of the Secretary of the Air Force since fiscal year  2001. The number of authorized military and civilian positions remained  relatively unchanged until fiscal year 2010 when, according to Air Force  officials, the conversion of contracted services to civilian positions and the  conversion of military to civilian positions contributed to the increasing  number of authorized civilian personnel. This increase in authorized  civilian positions, according to DOD officials, is the result of attempts to  rebalance workload and become a cost-efficient workforce. Air Force  officials stated that authorized positions within the secretariat have  gradually decreased from peak levels reached in fiscal year 2010 due to  direction from the Secretary of Defense to hold the number of civilian  positions at or below fiscal year 2010 levels and to cut civilian positions  that had yet to be filled after they had converted contracted services to  civilian positions in previous years.

Figure 20 illustrates annual changes in the number of authorized  positions in the Office of the Chief of Staff of the Air Force since fiscal  year 2001. The total number of authorized military and civilian positions  remained relatively stable until fiscal year 2006, when the number of  authorized military personnel reached its peak level. Since then, the  number of authorized civilian personnel has generally increased, which  an Air Force official said was mainly due to the conversion of contracted  services to civilian positions and the conversion of military to civilian  positions, although these numbers have begun to decline since fiscal year  2011. This increase in authorized civilian positions, according to DOD  officials, is the result of attempts to rebalance workload and become a  cost-efficient workforce.

Figure 21 shows the changes associated with Air Force Secretariat and  Air Staff headquarters support costs for fiscal year 2001 through fiscal  year 2013. According to Air Force officials, the dramatic increase in  civilian personnel costs in fiscal year 2010 was driven by the conversion  of contracted services to civilian positions, resulting in higher costs for  civilian personnel. The subsequent drop in civilian personnel costs was  primarily due to restraints placed on the growth in the number of civilian  positions by Secretary Gates in fiscal year 2010 and the Budget Control  Act of 2011. According to an Air Force official, the rapid spike in other  support costs in fiscal year 2012 was primarily due to the costs for a civil  engineering project billed to the Air Force Secretariat and Staff for  renovating the Air Force Headquarters space in the Pentagon.

section_title: Appendix IX: Comments from the Department of Defense

section_title: Appendix X: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact

section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Richard K. Geiger (Assistant  Director), Tracy Barnes, Gabrielle A. Carrington, Neil Feldman, David  Keefer, Carol D. Petersen, Bethann E. Ritter Snyder, Michael Silver, Amie  Steele, and Cheryl Weissman made key contributions to this report.


Question-summary annotations: questions: question: How do DOD headquarters organizations determine personnel requirements?
answer: GAO found that DOD headquarters organizations it reviewed do not determine their personnel requirements as part of a systematic requirements-determination process, nor do they have procedures in place to ensure that they periodically reassess these requirements as outlined in DOD and other guidance.
child_questions: question: How were current personnel levels determined?
answer: Current personnel levels for these headquarters organizations are traceable to statutory limits enacted in the 1980s and 1990s to force efficiencies and reduce duplication.
child_questions: question: How do current personnel levels compare to those established in the limits?
answer: However, these limits have been waived since fiscal year 2002. If the limits were in force in fiscal year 2013, the Army and Navy would exceed them by 17 percent and 74 percent, respectively.

question: How practical are these limits for current use?
answer: Moreover, the limits have little practical utility because of statutory exceptions for certain categories of personnel and because the limits exclude personnel in supporting organizations that perform headquarters-related functions. For example, the organizations that support the Army Secretariat and Army Staff are almost three times as large as the Secretariat and Staff, but personnel who perform headquarters-related functions in these organizations are excluded from the limits.

question: How are DOD headquarters organizations updating their personnel requirements?
answer: The OSD, the Navy, and the Marine Corps are taking steps to modify their processes, but their efforts are not yet complete.

question: How does the lack of updated requirements negatively affect the DOD?
answer: Without a systematic determination of personnel requirements and periodic reassessment of them, DOD will not be well positioned to proactively identify efficiencies and limit personnel growth within these headquarters organizations.
child_questions: question: Until DOD determines personnel requirements, what will Congress not have?
answer: Moreover, until DOD determines personnel requirements, Congress will not have critical information needed to reexamine statutory limits enacted decades ago.

questions: question: How have budget pressures affected DOD headquarters activities?
answer: Facing budget pressures, DOD is seeking to reduce headquarters activities of OSD, the Joint Staff, and the military services' secretariats and staffs, which primarily perform policy and management functions.

question: What was GAO asked to examine?
answer: GAO was mandated to review personnel resources devoted to these headquarters organizations from fiscal years 2001 through 2013.
child_questions: question: What does this report review?
answer: This report (1) identifies past trends in personnel resources for these organizations and any plans for reductions; and (2) evaluates the extent to which DOD determines and reassesses personnel requirements for the organizations.

question: How did GAO gather data for this report?
answer: GAO analyzed data on authorized military and civilian positions and contracted services from fiscal years 2001 through 2013. GAO reviewed DOD's headquarters reductions plans and processes for determining and reassessing personnel requirements.

questions: question: What did GAO recommend?
answer: GAO recommends that DOD (1) conduct a systematic determination of personnel requirements at these headquarters organizations; (2) submit the requirements to Congress with adjustments and recommended modifications to the statutory limits; and (3) periodically reassess personnel requirements within OSD and the military services' secretariats and staffs.
child_questions: question: What did GAO recommend regarding Congressional action?
answer: Congress should consider using DOD's review of headquarters personnel requirements to reexamine existing statutory limits.

question: How did the DOD respond to these recommendations?
answer: DOD partially concurred, stating it will use its existing processes, but will investigate other methods to improve the determination and reporting of requirements.