In November 1993, Congress enacted a law concerning homosexual conduct in the armed forces and required the Secretary of Defense to prescribe regulations to implement that policy. Following the enactment of the law, DOD issued its implementing guidance, including Department of Defense Instruction 1304.26, Qualification Standards for Enlistment, Appointment, and Induction. Under that instruction, applicants for enlistment, appointment, or induction shall not be asked or required to reveal their sexual orientation, nor shall they be asked to reveal whether they have engaged in homosexual conduct, unless independent evidence is received indicating that an applicant engaged in such conduct or the applicant volunteers a statement that he or she is homosexual or bisexual, or words to that effect. This is generally referred to as the “Don’t Ask, Don’t Tell” policy. In exchange for the services’ silence (“don’t ask”) about a person’s homosexuality prior to induction, gay and lesbian servicemembers, as a condition of continued service, agree to silence (“don’t tell”) about this aspect of their lives. According to our analysis of DMDC data, 3,664 active duty servicemembers were separated under the homosexual conduct policy from fiscal years 2004 through 2009. (See table 1.) This figure represents servicemembers who were on active duty at the time of their separation, including members of the Reserve or National Guard components of the military services who were on active duty for 31 or more consecutive days before their dates of separation. These servicemembers are included in the figure because according to DMDC, a servicemember in the Reserves or National Guard who was separated after at least 31 consecutive days of active duty service is considered to be an active duty separation. Of the 3,664 servicemembers separated from fiscal years 2004 through 2009, DOD granted “honorable” separations to 2,084 members (57 percent), “general (under honorable conditions)” separations to 369 servicemembers (10 percent), and “under other than honorable conditions” separations to 95 servicemembers (3 percent). DOD classified the separation of 2 servicemembers (less than 1 percent) as “bad conduct,” which is a type of punitive separation applicable to enlisted personnel only. DOD also granted “uncharacterized” or entry-level separations to 1,037 servicemembers (28 percent), and classified 77 separations (2 percent) as “unknown or not applicable” for servicemembers separated under the policy. The following figures present demographic breakdowns for separated servicemembers. Figure 1 shows the percentage of servicemembers separated under DOD’s homosexual conduct policy from fiscal years 2004 through 2009 by race, and figure 2 shows other demographic information for these servicemembers, including rank, length of service upon separation, gender, and military branch. In 2005, we reported on the number of servicemembers separated under the policy who held skills in critical occupations and important foreign languages and the costs of recruiting and training replacements for servicemembers separated under the homosexual conduct policy for the period covering fiscal year 1994 through fiscal year 2003. However, the information in the 2005 report cannot be compared to the information in this report for two reasons. First, for this report, we asked the services to provide the most current and complete guidance to help us determine criteria for describing critical occupations and important foreign languages. The services provided enlistment bonus lists, critical skills retention bonus lists, service-specific critical occupations lists, and foreign language proficiency bonus lists. We have added these criteria in order to provide a more comprehensive picture of how the services described critical occupations and important foreign languages from fiscal years 2004 through 2009. Second, in 2005, the services were unable to provide us with the training costs of Marine Corps personnel, the training costs of the medical professionals for each of the services, and the recruiting and training costs of each service’s officers. For the current report, the Marine Corps provided data on the cost to train its personnel; the services provided data on the cost to train medical professionals; and the Air Force, Navy, and Marine Corps provided data on the cost of recruiting officers. The Army was not able to provide data on the cost of officer recruiting in time for the data to be included in our analyses. The Army, Air Force, and Marine Corps provided data on the cost of training officers. However, we did not include the cost of training Navy officers because the Navy provided data that were not specific to the occupational specialties of the separated officers. In order to be consistent with our methodology of calculating training cost calculations that are specific to the occupational specialties of separated servicemembers, we did not include the incomplete Navy data. In addition, in 2005, DOD was not able to provide us with information on the administrative costs of separating servicemembers under the homosexual conduct policy. For the current report, the Air Force, the Army, and the Marine Corps provided us with this information. The Navy explained that it was not able to provide this information because changes in separation processes from fiscal years 2004 through 2009 prevented Navy officials from providing an accurate administrative cost estimate in time for the data to be included in our analyses. The analyses in this report were current as of November 30, 2010. As a result, the personnel and cost data provided in the 2005 report are not comparable to the information provided in this report. Based on our analysis of DMDC data, 3,664 servicemembers were separated under the homosexual conduct policy from fiscal years 2004 through 2009, and based on our analysis of information provided by the services, 1,458 (40 percent) of these servicemembers held skills in a critical occupation, an important foreign language, or both, as determined by us and the services. Servicemembers with critical occupations and important foreign language skills are not necessarily mutually exclusive groups because some critical occupations, such as cryptologic linguists and interrogators, require an important foreign language skill. According to our analysis, 7 servicemembers held a critical occupation and also held an important foreign language skill. Based on our analysis of DMDC data, of the 3,664 servicemembers who were discharged under the homosexual conduct policy from fiscal years 2004 through 2009, 1,442 (39 percent) of them held skills in critical occupations. Based on interviews with service officials, we and the services determined for the purposes of this report that an occupation was “critical” if it received a bonus under DOD’s Enlistment Bonus program, Accession Bonus for New Officers in Critical Skills program, Selective Reenlistment Bonus program, or Critical Skills Retention Bonus program. These bonus programs provide monetary incentives to individuals to help the services maintain adequate numbers of personnel in designated critical occupations. We also used service-specific critical occupations lists to determine critical occupations, such as the Air Force Stressed Career Fields List, the Marine Top Ten Critical Occupations List, and the list of occupations deemed critical under the Marine 202K Sustainment Plan. Table 2 shows, by service, a breakdown of the 1,442 servicemembers who held critical occupations and were separated from fiscal years 2004 through 2009. The reported number of separated Navy and Air Force servicemembers who held skills in critical occupations could be an underestimation. The Navy was not able to provide the information necessary to determine whether separated Navy servicemembers held occupations on the enlistment bonus lists because of the manner in which the Navy assigns occupational specialties to its recruits. Also, while the Navy does offer accession bonuses to new officers, Navy officials could not determine which bonuses were offered during the fiscal years of our study. Thus, we could not include any Navy occupations that were eligible for Accession Bonuses for New Officers in Critical Skills. While the Air Force was able to provide the occupational specialties eligible for enlistment bonuses from fiscal years 2006 through 2009, it was unable to provide the occupational specialties eligible for enlistment bonuses in fiscal years 2004 and 2005 because Air Force data were incomplete. Of the total population separated under the policy, 625 servicemembers (17 percent) were separated with less than 3 months of military service, 394 servicemembers (11 percent) were separated within 3 to 6 months of military service, 657 servicemembers (18 percent) were separated within 6 months to 1 year of military service, 706 servicemembers (19 percent) were separated within 1 to 2 years of military service, and 1,282 servicemembers (35 percent) were separated with 2 years or more of military service. We analyzed the lengths of service for the 1,442 servicemembers separated under the homosexual conduct policy who held skills in critical occupations from fiscal years 2004 through 2009. Figure 3 shows the amount of time served prior to separation by servicemembers who held skills in critical occupations. (For more detailed information on the length of service of servicemembers separated under the homosexual conduct policy who held skills in critical occupations, see table 18 in app. IV.) Of the 1,442 separated servicemembers who held skills in critical occupations, 148 (10 percent) of them held skills in intelligence-related critical occupations. The services reviewed the critical occupations held by the servicemembers separated under the homosexual conduct policy and designated the critical occupations that they deemed to be intelligence related. Examples of intelligence-related critical occupations include human intelligence collector, cryptologic technician (interpretive), intelligence specialist, and airborne cryptologic language analyst. Table 3 shows a breakdown, by service, of the 148 separated servicemembers who held intelligence-related critical occupations during the 6-year period. Of those separated who held skills in critical occupations, 1,425 were enlisted servicemembers and 17 were officers. Separated servicemembers with critical occupations served an average of 22 months, which is about 26 months less than the typical initial service contract of most enlistees and the typical officer-commissioning contract. As shown in table 4, the most common critical occupations held by separated servicemembers across all services were infantryman and military police. (See table 17 in app. IV for a more detailed list, by service, of the most common occupations held by separated servicemembers.) Based on our analysis of DMDC data, of the 3,664 servicemembers separated for homosexual conduct from fiscal years 2004 through 2009, 23 (less than 1 percent) of them held skills in an important foreign language. Based on interviews, we and the services determined for the purposes of this report that a language was “important” if a financial incentive was provided under the Foreign Language Proficiency Bonus (FLPB) program. This bonus program provides incentives for the acquisition, maintenance, and enhancement of foreign language skills at a particular proficiency level. The FLPB is used to increase strategic language capability throughout DOD by (1) encouraging servicemembers with foreign language proficiency to self-identify and sustain proficiency; (2) providing servicemembers an incentive to acquire foreign language skills, improve foreign language skills, or both; (3) providing servicemembers whose military specialty requires a foreign language with an incentive to expand their proficiency to other foreign languages and dialects; and (4) creating a cadre of language professionals operating at the highest levels of proficiency. Table 5 shows a breakdown across all services of the 23 servicemembers who held important foreign language skills and were separated under the homosexual conduct policy during the 6-year period. Of the 23 servicemembers separated who held skills in an important foreign language, 22 were enlisted servicemembers and 1 was an officer. Separated servicemembers with an important foreign language skill served an average of 26 months, which is about 22 months less than the typical initial service contract of most enlistees and the typical officer- commissioning contract. To assess listening, reading, and speaking proficiencies, DOD uses an 11-point scale that represents the degree of competence in the language in which a member possesses the highest proficiency. The scale includes numeric values of 00 (no proficiency), 06 (memorized proficiency), 10 (elementary proficiency), 16 (elementary proficiency plus), 20 (limited working proficiency), 26 (limited working proficiency plus), 30 (general professional proficiency), 36 (general professional proficiency plus), 40 (advanced professional proficiency), 46 (advanced professional proficiency plus), and 50 (functionally native proficiency). To receive the FLPB, servicemembers must attain a minimum of 20/20 or higher on the scale in any two modalities (listening, reading, or speaking). As shown in table 6, the most common important language skills held by separated servicemembers were Arabic and Spanish. Of the total population separated under the policy, 625 servicemembers (17 percent) were separated with less than 3 months of military service, 394 servicemembers (11 percent) were separated within 3 to 6 months of military service, 657 servicemembers (18 percent) were separated within 6 months to 1 year of military service, 706 servicemembers (19 percent) were separated within 1 to 2 years of military service, and 1,282 servicemembers (35 percent) were separated with 2 years or more of military service. We analyzed the lengths of service for the 23 servicemembers separated under the homosexual conduct policy who held skills in important foreign languages from fiscal years 2004 through 2009. Figure 4 shows the amount of time served prior to separation by servicemembers who held skills in important foreign languages. (For more detailed information on the length of service of servicemembers separated under the homosexual conduct policy who held skills in important foreign languages, see table 19 in app. IV.) Using available DOD cost data, we calculated that it cost DOD approximately $193.3 million ($52,800 per separation) in constant fiscal year 2009 dollars to separate and replace the 3,664 servicemembers separated under the homosexual conduct policy from fiscal years 2004 through 2009. This figure represents about $185.6 million in recruiting and training costs for replacing servicemembers separated under the policy and about $7.7 million in certain administrative costs for which we were able to obtain data. (See fig. 5 for the services’ cost of administering DOD’s homosexual conduct policy.) In calculating the services’ costs to recruit and train replacements, we used variable costs and excluded fixed costs to the extent possible because, according to service officials, there would likely be no significant increase in fixed costs when recruiting and training a relatively small number of replacement personnel. For example, in fiscal year 2009, the Army separated 195 servicemembers under the homosexual conduct policy. This means that in fiscal year 2009, the Army would have needed to recruit 195 replacements. In that same year, the Army recruited about 70,000 soldiers. Thus, in order to replace the 195 separated servicemembers in fiscal year 2009, the Army would have needed to recruit .003 percent more soldiers than it would have otherwise recruited. According to Army officials, because this .003 percent of additional recruiting represents such a small portion of total recruiting, there would likely be no need to increase recruiting infrastructure or hire more recruiting personnel. Because the services do not use “fixed costs” and “variable costs” as categories in their recruiting and training budgets, we provided each service with a common set of criteria to define these terms, and asked each service to determine the fixed and variable components of their cost data and provide us with variable costs. However, each of the services tracks and maintains data in different ways, which in some cases affected their ability to provide us with only variable costs. For example, while the Army and Air Force were able to provide us with variable recruiting and training costs, the Navy was not able to provide variable recruiting and training costs, and the Marine Corps was not able to provide variable training costs. In these cases, Navy and Marine Corps officials explained that they were not able to provide data with only variable costs because of the way their services track these data. While the Navy and Marine Corps track the total budgets of recruiting and training commands and individual courses, they do not track individual cost elements of these totals. For this reason, they were not able to determine the fixed and variable components of their cost data. To the extent that recruiting and training cost data provided by the services contain fixed costs, this would result in an overestimation of replacement costs. To calculate the administrative cost of carrying out separations, we asked the services to identify the legal and nonlegal processes associated with the separation process and requested data on personnel involved in carrying out these tasks. Using these data and military pay rates, we calculated administrative costs. While the Air Force, Army, and Marine Corps provided us with this information, the Navy did not provide data on the legal and nonlegal processes associated with carrying out separations. The Navy explained that it was not able to provide this information because changes in separation processes from fiscal years 2004 through 2009 prevented Navy officials from providing an accurate administrative cost estimate in time for the data to be included in our analyses. Because the Navy did not provide data on administrative costs, our calculation of these costs is an underestimation of DOD’s likely total administrative costs. ($6,490.4) ($50.1) ($66.6) ($14,056.9) ($10,502.) ($2,901.2) ($21,290.5) ($90,.7) The Air Force provided a single cost that included recruiting and training costs combined. All of the services were able to provide data related to the cost to recruit and train servicemembers. Based on these data, we calculated that it cost DOD about $185.6 million in constant fiscal year 2009 dollars to recruit and train replacements for the 3,664 servicemembers separated under the homosexual conduct policy from fiscal years 2004 through 2009. Our calculation includes the cost to the services to recruit a new servicemember, provide him or her with basic training, and graduate the servicemember from initial skills training in the occupational specialty in which a servicemember had been separated. Our calculation of replacement costs concludes with the end of initial skills training because, according to each of the military services, this is the point in a servicemember’s career at which he or she is considered minimally qualified to perform required tasks within a separated servicemember’s occupational specialty. To the extent possible, we included variable recruiting and training costs in our calculations, such as recruiting bonuses and consumable supplies used by trainees, and excluded fixed costs, such as the cost of recruiting and training infrastructure or recruiter and instructor salaries. This approach was taken because there would likely be no significant increase in fixed costs when recruiting and training a relatively small number of replacement personnel. As shown in table 7, our calculations for the services’ replacement costs amount to about $19.4 million for the Air Force, $39.4 million for the Army, $22.0 million for the Marine Corps, and $104.9 million for the Navy. The Navy recruiting and training cost calculation is larger than the other services’ calculations because according to Navy officials, the Navy recruiting and training cost data contain both fixed and variable costs. The services were able to provide data related to the cost to recruit replacement servicemembers. We calculated that from fiscal year 2004 through 2009, it cost DOD about $25.2 million in constant fiscal year 2009 dollars to recruit replacements for servicemembers separated under the homosexual conduct policy. This calculation represents about 14 percent of the total calculated replacement cost associated with separating servicemembers under DOD’s homosexual conduct policy. Recruiting costs include, but are not limited to, the costs associated with enlistment bonuses; recruit travel; and recruiting support, such as the processing of a recruit’s paperwork. As shown in table 8, the Navy’s cost to recruit replacements was the largest among the services because, according to Navy officials, the Navy included both fixed and variable costs in its recruiting estimates. According to Army and Marine Corps officials, the recruiting cost data provided by the Army and Marine Corps consist of variable costs. In addition, while the Air Force, Navy, and Marine Corps provided data on the cost of recruiting officers, the Army was not able to provide data on the cost of recruiting officers in time for the data to be included in our analyses. The Air Force could not provide disaggregated recruiting and training costs and instead provided a replacement cost estimate that combines variable recruiting and training costs. The services were able to provide data related to the cost to train replacement servicemembers through initial occupational training. We calculated that from fiscal year 2004 through 2009, it cost DOD about $141.0 million in constant fiscal year 2009 dollars to train replacements for servicemembers separated under the homosexual conduct policy. This calculation represents about 76 percent of the total calculated replacement cost associated with separating servicemembers under DOD’s homosexual conduct policy. Costs associated with basic training and initial skills training include, but are not limited to, clothing and equipment, supplies, student travel, administration of courses of instruction, replacement servicemembers’ salaries and benefits during training, and overhead costs associated with training centers. As shown in table 9, there is variation in the size of our calculations of the services’ cost to train replacement servicemembers. For example, the Navy’s cost to train replacements was the largest among the services because the Navy included both fixed and variable costs in its training estimates. Although the Marine Corps included fixed and variable costs in its training estimates, the Navy separated over twice as many servicemembers as the Marine Corps. Moreover, according to the Marine Corps, a significant proportion of its servicemembers’ training is carried out by other services. However, the Marine Corps does not track the cost of training it receives from the other services and therefore could not provide us with comprehensive data on the cost to train Marine Corps personnel. Marine Corps officials explained that the other services that train Marine Corps servicemembers may contribute up to 60 percent of the total cost of training in the occupational specialties held by Marine Corps servicemembers separated under the policy from fiscal years 2004 through 2009. As can be seen in table 9, the Air Force is not included because it could not provide disaggregated recruiting and training costs and instead provided a replacement cost estimate that combines variable recruiting and training costs. While the Army, Air Force, and Marine Corps provided data on the cost of training officers, we did not include the cost of training Navy officers because the Navy provided data that were not specific to the occupational specialties of the separated officers. In order to be consistent with our methodology of calculating training cost calculations that are specific to the occupational specialties of separated servicemembers, we did not include the incomplete Navy data. To the extent that recruiting and training cost data provided by the services contain fixed costs, this would result in an overestimation of replacement costs. However, we were not able to determine the extent of the replacement cost overestimation. The Air Force, Army, and Marine Corps were able to provide estimates on the administrative costs associated with separating servicemembers under DOD’s homosexual conduct policy. The Navy explained that it was not able to provide this information because changes in separation processes from fiscal years 2004 through 2009 prevented Navy officials from providing an accurate administrative cost estimate in time for the data to be included in our analyses. Using the estimates of the Air Force, Army, and Marine Corps, we calculated that from fiscal years 2004 through 2009, it cost DOD about $7.7 million in constant fiscal year 2009 dollars to separate 2,751 servicemembers from the three services under DOD’s homosexual conduct policy. As shown in table 10, our calculation of the services’ administrative costs for implementing the homosexual conduct policy includes two types of costs: legal and nonlegal. Legal administrative costs amounted to about $2.5 million (33 percent) of the total administrative cost, while nonlegal administrative costs amounted to about $5.2 million (67 percent) of the total administrative cost. Legal administrative costs involve the costs associated with the services’ review of homosexual conduct cases. According to the services, the legal costs include paralegal work, attorneys’ counseling of servicemembers, and board hearings. With the exception of the Navy, the services were able to identify approximately 3,700 cases associated with DOD’s homosexual conduct policy from fiscal years 2004 through 2009. These cases include board cases (cases in which a service board and legal officials reviewed a case), nonboard cases (cases in which legal officials reviewed a case, but it was not reviewed by a service board), and unsubstantiated cases (cases in which legal officials reviewed a case, but the case did not result in a separation). Table 11 shows the legal administrative costs by military service and types of cases for the 6-year period. According to the services, the nonlegal costs include commanders’ inquiries, pastoral counseling of servicemembers, and the processing of separation paperwork. As shown in table 12, these activities occur at successive levels of command within and outside of the servicemember’s unit. Because the Navy was not able to provide data on administrative costs in time for the data to be included in our analyses, our calculation of these costs is an underestimation of DOD’s likely total administrative costs. We were not able to determine the extent of the administrative cost underestimation. We provided a draft of this report to DOD for review and comment. DOD did not have any comments on the report. We are sending copies of this report to the appropriate congressional committees; the Secretary of Defense; the Secretaries of the Army, the Navy, and the Air Force; the Commandant of the Marine Corps; and the Director, Office of Management and Budget. The report also is available at no charge on the GAO Web site at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-5257 or merrittz@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Key contributors to this report are listed in appendix V. In conducting our review of the Department of Defense’s (DOD) homosexual conduct policy, the scope of our work included active duty separations under the homosexual conduct policy across all of the service components—the Air Force, Army, Marine Corps, and Navy—for the period covering fiscal years 2004 through 2009. We also obtained the total number of Reserve and National Guard servicemembers separated under the policy during the same period of time. However, we did not include Reserve and National Guard servicemembers in our analysis because according to the Defense Manpower Data Center (DMDC), DOD only collects data on separations for homosexual conduct for the active duty members of the Air Force, Army, Marine Corps, and Navy. According to an official with DMDC, the official tracking of separations for homosexual conduct began in 1997, at which time it was decided to include only active duty servicemembers. Data on servicemembers separated under DOD’s homosexual conduct policy were obtained from DMDC and each of the military services and are current as of November 30, 2010. To determine the extent to which servicemembers with skills in critical occupations were separated under DOD’s homosexual conduct policy, we obtained data from DMDC on the occupational specialties held by the servicemembers separated under the policy from fiscal years 2004 through 2009. We interviewed officials from the Office of the Under Secretary of Defense for Personnel and Readiness and the offices within the services that are responsible for managing occupational specialties and administering bonus programs. Based on interviews, we and the services determined for the purposes of this report that an occupation was “critical” if a financial incentive was provided under any of the enlistment, reenlistment, or retention bonus programs under Department of Defense Instruction 1304.29. This instruction prescribes procedures with regard to Enlistment Bonuses (monetary incentives provided to individuals enlisting in a military service for a period of time and, if applicable, in a specific military skill experiencing critical shortages); Selective Reenlistment Bonuses (monetary incentives provided to individuals to maintain adequate numbers of enlisted personnel in critical skills needed to sustain the career force); Critical Skills Retention Bonuses (monetary incentives provided to individuals to maintain adequate numbers of officers or enlisted personnel with designated critical skills needed to sustain the career force); and Accession Bonuses for New Officers in Critical Skills (monetary incentives to individuals who accept commissions or appointments as an officer and serve on active duty in a military service in a skill the service has designated a critical officer skill). However, the Navy was not able to provide the information necessary to determine whether separated Navy servicemembers held occupations on the enlistment bonus lists because of the manner in which the Navy assigns occupational specialties to its recruits. Also, while the Navy does offer accession bonuses to new officers, Navy officials could not determine which bonuses were offered under Department of Defense Instruction 1304.29 or during the fiscal years of our study. Thus, we could not include any Navy occupations that were eligible for Accession Bonuses for New Officers in Critical Skills. The reported number of separated Navy servicemembers who held skills in critical occupations would be an underestimation. While the Air Force was able to provide the occupational specialties eligible for enlistment bonuses from fiscal years 2006 through 2009, the Air Force was unable to provide the occupational specialties eligible for enlistment bonuses in fiscal years 2004 and 2005 because the Air Force’s data were incomplete. Thus, the reported number of separated Air Force servicemembers who held skills in critical occupations would be underestimated. We used the Army’s Top 25 Priority Occupations Lists in lieu of the Army’s Enlistment Bonus lists because the Army noted that the occupations on the Top 25 Priority Occupations Lists better represent the Army’s critical occupations for enlistment. We also included occupations found on additional lists that the services used to describe critical occupations for certain fiscal years during the period of our review, including the Air Force Stressed Career Fields List (fiscal years 2008 and 2009), the Marine Top Ten Critical Occupations List (fiscal years 2004 through 2009), and the list of occupations deemed critical under the Marine 202K Sustainment Plan (fiscal years 2007 through 2009). We then compared the occupations of the separated servicemembers to our lists of critical occupations, by fiscal year. To assess the number of servicemembers separated under DOD’s homosexual conduct policy who held skills in intelligence-related critical occupations, we asked the services to analyze the critical occupations held by the servicemembers separated under the homosexual conduct policy and designate the critical occupations that the services deemed intelligence related. To determine the extent to which servicemembers with skills in important foreign languages were separated under DOD’s homosexual conduct policy, we obtained data from DMDC on the foreign language information (i.e., foreign language, proficiency score, date of proficiency certification, and year of separation) of each enlisted servicemember and officer separated under the policy during the period of our review. We interviewed officials from the Office of the Under Secretary of Defense for Personnel and Readiness and the offices within the services that are responsible for determining foreign language requirements and administering bonus programs. Based on interviews, we and the services determined for the purposes of this report that a language was “important” if a financial incentive was provided under the Foreign Language Proficiency Bonus (FLPB) program. The FLPB provides a monetary incentive for the acquisition, maintenance, and enhancement of foreign language skills at or above proficiency levels required for occupational and functional performance. The FLPB is used to increase strategic language capability by (1) encouraging servicemembers with foreign language proficiency to self-identify and sustain proficiency; (2) providing servicemembers an incentive to acquire foreign language skills, improve foreign language skills, or both; (3) providing servicemembers whose military specialties require a foreign language with an incentive to expand their proficiency to other foreign languages and dialects; and (4) creating a cadre of language professionals operating at the highest levels of proficiency. To ensure that we considered the most comprehensive set of critical languages skills for each service, we also used additional lists that the services utilized to describe these language skills. Specifically, from fiscal year 2004 through fiscal year 2005, each of the services used its own specific list to determine which languages would qualify a servicemember to receive an FLPB. Subsequently, in January of fiscal year 2006, the Defense Language Office published its first annual Strategic Language List (SLL). In the SLL, DOD prioritizes languages for which (1) DOD has current and projected requirements, (2) training and testing will be provided, (3) incentives will be applied, and (4) other resources will be allocated. The SLL does not preclude the services from providing incentives for other languages for which they may have requirements. Therefore, from fiscal year 2006 through fiscal year 2009, each service created its own SLL based on both the DOD-wide SLL and the service’s specific language capabilities and requirements. Since fiscal year 2006, the services have each used their own SLLs to determine the languages for which their servicemembers would receive FLPBs. To assess the number of servicemembers separated under DOD’s homosexual conduct policy who held an important foreign language skill, we identified each servicemember with language skills, determined whether the languages qualified for FLPB in the year of the servicemember’s separation, reviewed the servicemember’s proficiency scores in those languages to determine whether the servicemember met the minimum requirements, and determined whether the servicemember’s annual proficiency certification was within 12 months of separation. To calculate certain costs associated with administering DOD’s homosexual conduct policy, we determined both the cost of recruiting and training through initial occupational training of the replacements of separated servicemembers and the services’ administrative costs incurred when separating servicemembers under the policy. We determined that a replacement cost methodology is the most appropriate approach, and it allows us to produce the most accurate calculation based on the nature of the data provided by the services. The replacement cost methodology allows us to calculate the cost to the services to recruit a new servicemember, provide him or her with basic training, and graduate the servicemember from initial skills training in the occupational specialty in which a servicemember had been separated. Our calculation of replacement costs concludes with the end of initial skills training since, according to each of the military services, this is the point in a servicemember’s career at which he or she is considered minimally qualified to perform required tasks within a separated servicemember’s occupational specialty. To calculate the recruiting and training costs associated with replacing servicemembers separated under DOD’s homosexual conduct policy, we collected recruiting and training cost data from the services. To the extent possible, we used variable costs and excluded fixed costs to calculate the services’ costs to recruit and train replacements. Because the services do not use “fixed costs” and “variable costs” as categories in their recruiting and training budgets, we provided each service with a common set of criteria to define these terms and asked each service to determine the fixed and variable components of its cost data. Each of the services tracks and maintains data in different ways, which in some cases affected their ability to provide us with only variable costs. In regard to recruiting cost data, the Army and Marine Corps were able to provide data that according to officials consist of only variable costs. However, according to Navy officials, the Navy was not able to fully disaggregate fixed and variable costs, and so our Navy recruiting calculations include some fixed costs. The Army was not able to provide data on the cost of officer recruiting in time for the data to be included in our analyses. In regard to training cost data, the Navy and Marine Corps were not able to fully disaggregate fixed and variable costs. The Army and Air Force were able to provide training data, according to officials, that consist of only variable costs. To the extent that any data provided by the services contain fixed costs, this would result in an overestimation of calculated costs. However, we were not able to determine the exact extent of this overestimation. We reviewed the methodology and data used by the services to develop their cost estimate data for recruiting and training, and determined that they were reliable for our purposes of calculating replacement costs. Recruiting costs: To calculate the recruiting costs associated with replacing servicemembers separated under DOD’s homosexual conduct policy, we collected fiscal year data from the Army, Marine Corps, and Navy for the average cost to recruit active duty enlisted servicemembers and officers. We interviewed service officials who are knowledgeable about their services’ recruiting costs and request variable cost data for certain tasks involved in the recruiting of servicemembers. The services’ recruiting costs include, but are not limited to, the costs associated with enlistment bonuses; recruit travel; and recruiting support, such as the processing of a recruit’s paperwork. The Army provided data on the average variable cost to recruit one enlisted servicemember in each fiscal year but did not provide data on officer recruiting in time for the data to be included in our analyses. Marine Corps officials explained that the Marine Corps provided data on the average variable cost to recruit enlisted servicemembers, as well as the average variable cost to recruit officers in each fiscal year. According to Navy officials, the Navy was not able to fully disaggregate fixed and variable costs, and so our Navy recruiting calculations include some fixed costs. We multiplied each of these averages by the number of separated servicemembers for each service to calculate a fiscal year total. Finally, we converted these fiscal year totals to fiscal year 2009 dollars and summed our calculations for each fiscal year within each service. These figures represent the total cost of recruiting replacements for separated servicemembers in the Army, Navy, and Marine Corps. The Air Force provided recruiting costs as part of an overall figure that includes both Using these overall figures, we followed training and recruiting costs. the same approach described above. Training cost: These costs include compensation costs and other costs. Compensation costs: Using service-specific training course lengths and DOD data on military compensation, we calculated the amount of pay and benefits received by replacement servicemembers during training. We interviewed service officials who are knowledgeable about their services’ compensation procedures and requested data on the amounts of pay and benefits received by servicemembers. To calculate the cost of compensation for one enlisted servicemember or officer in the Army, Marine Corps, and Navy, we first multiplied fiscal year weekly compensation data provided by the services by the standard number of weeks spent in each service’s basic training. The Navy provided fiscal year compensation data for the entire length of basic training. For occupational specialty training, we multiplied the weekly compensation rate by the length of initial skills training for each relevant occupation for all three of these services. To address occupations for which data on training length were not available, we used averages for the length of basic and initial skills training for that service’s separated occupations in that fiscal year. Next, we converted all calculations into fiscal year 2009 dollars, and then summed our calculations for each fiscal year within each service. These figures represent the total compensation received during basic training and occupational specialty training for separated servicemembers in each service. The Air Force includes the value of pay and benefits provided to servicemembers in its overall recruiting and training cost estimate. Other training costs: To calculate other training costs associated with replacing servicemembers separated under DOD’s homosexual conduct policy, we collected fiscal year data from the Army, Marine Corps, and Navy for the costs to complete each service’s basic training program and the initial skills training of the specific occupational specialties contained within each service’s group of separated servicemembers. We interviewed service officials who are knowledgeable about their services’ training procedures and requested cost data for the training of servicemembers. The costs associated with basic training and initial skills training include, but are not limited to, clothing and equipment, supplies, student travel, administration of courses of instruction, and overhead associated with training centers. We determined the length of each service’s basic training and asked each service to provide the average variable cost for basic training in the fiscal year a servicemember was separated. We also asked the services to identify the average length of each initial skills course and provide the average variable cost for an individual servicemember to finish the initial skills training for each relevant occupational specialty. According to data provided by the services, the cost and length of training servicemembers in different occupational specialties can vary widely. By using training cost data that are specific to occupational specialties of the separated servicemembers, we produced the most accurate calculation possible, based on available data. To calculate the cost of training, we multiplied the average basic and occupational training costs by the number of servicemembers who held that occupation in the year of their separation. Based on our requests, the services supplied cost estimate data for the cost of basic training and of training for each relevant occupational specialty for which they had data. If there were occupations for which data were missing or unavailable, we calculated an overall average training cost for relevant occupations for the service and the fiscal year in which we were missing data. We then used that average as the training cost for the separated servicemembers, and followed the approach described above. Finally, we converted these fiscal year totals to fiscal year 2009 dollars and summed our calculations for each fiscal year within each service. These figures represent the total cost of training replacements for separated servicemembers in each service. The Air Force provided variable training cost data as part of an overall figure that includes both training and recruiting costs. To calculate the administrative cost of carrying out separations, we asked the services to identify the legal and nonlegal processes associated with the separations process. According to the services, the legal processes may include paralegal work, attorneys’ counseling of servicemembers, and board hearings. According to the services, the nonlegal costs may include commanders’ inquiries, pastoral counseling of servicemembers, and the processing of separation paperwork. To collect information on the types of costs the services incur when separating servicemembers, we interviewed and gathered data from service officials who are knowledgeable about their services’ separations procedures and requested cost data for certain tasks involved in the separation of servicemembers and on the personnel involved in carrying them out. Using these data and military pay rates, we calculated administrative costs. While the Air Force, Army, and Marine Corps provided us with this information, the Navy did not provide data on the legal and nonlegal processes associated with carrying out separations. Navy officials explained that changes in separation processes from fiscal years 2004 through 2009 prevented them from providing data on the personnel involved in carrying out key tasks in time for the data to be included in our analyses. Because the Navy did not provide data on administrative costs, our calculation of these costs is an underestimation of DOD’s likely total administrative costs. For legal and nonlegal administrative costs, we asked the Air Force, Army, and Marine Corps to provide a list of the tasks carried out during separation of a servicemember under DOD’s homosexual conduct policy, identify the positions of officials involved in carrying out these tasks, estimate the average amount of time required for each task, and identify the rank and years of service of the type of official who would typically carry out the task. With this information, we multiplied the time it typically takes to complete a task by the hourly pay rate of the official who typically performs the task, using the salary information from DOD’s pay tables for fiscal year 2009, which are in fiscal year 2009 dollars. We repeated this type of calculation for each task on a service’s list of tasks performed during a separation. Next, we summed the cost of each of these tasks to calculate a service’s total per-case administrative cost of processing this type of separation. Finally, we multiplied this cost by the number of separated servicemembers in each fiscal year to calculate each service’s total administrative cost of separating servicemembers under DOD’s homosexual conduct policy. For legal administrative costs, we calculated these costs for the three different types of homosexual conduct cases that a service processes: board cases, nonboard cases, and unsubstantiated cases. For nonlegal administrative costs, we calculated costs for the three levels of command at which a service typically processes homosexual conduct separations: company or flight, battalion and above or squadron and above, and outside of the separated servicemember’s chain of command. Finally, we summed each of the three service’s costs to calculate per-service totals for legal and nonlegal administrative costs over the 6-year period of our study. The analyses in this report were current as of November 30, 2010. To calculate DOD’s total cost to replace the 3,664 servicemembers separated under DOD’s homosexual conduct policy, we summed the total recruiting and training costs from each service in order to calculate a single, DOD-wide calculation of the cost to recruit and train replacements for the servicemembers separated from fiscal year 2004 through fiscal year 2009. We added this total to the administrative total to determine the overall total cost to DOD of implementing the homosexual conduct policy during this period. We were unable to determine the extent of the overestimation of replacement costs, the underestimation of the administrative costs, or the resulting net impact on our calculation of the overall total cost. We assessed the reliability of all data provided by DOD and the services for each of our objectives by (1) reviewing existing information about the data and the systems that produced them and (2) interviewing agency officials knowledgeable about the data to determine the steps taken to ensure the accuracy and completeness of the data. We assessed the reliability of DMDC’s Active Duty Personnel Transaction Fiscal Year End DADT Files, Active Duty Personnel Master End Strength Fiscal Year End Files and Monthly Files, and Active Duty Language Fiscal Year End Files by (1) performing electronic testing of the required data elements, (2) reviewing existing information about the data and the system that produced them, and (3) interviewing agency officials knowledgeable about the data. In addition, we assessed the reliability of the services’ cost data by (1) reviewing existing information about the data and the systems that produced them and (2) interviewing agency officials knowledgeable about the data. We determined that the data sets were sufficiently reliable for the purposes of presenting separations, personnel information for separated servicemembers, and costs associated with administering the homosexual conduct policy. We conducted this performance audit from January 2010 through January 2011 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. As shown in table 13, DOD separated a total of approximately 1.2 million servicemembers for all reasons, including voluntary reasons, from fiscal years 2004 through 2009. Of the approximately 1.2 million servicemembers separated by the services, the services granted “honorable” separations to about 74 percent, “general” separations to about 6 percent, “under other than honorable” separations to about 5 percent, “dishonorable dismissal” separations to less than 1 percent, “bad conduct” separations to about 1 percent, and “uncharacterized” separations to about 10 percent. About 4 percent of the separations were classified “unknown or not applicable.” Tables 14 and 15 show separations for known reasons for enlisted servicemembers and officers, by number of separations and per fiscal year. According to our analysis of DMDC data, 577 Reserve and National Guard servicemembers were separated under the homosexual conduct policy from fiscal years 2004 through 2009. (See table 16.) The Reserve and National Guard separations represent about 14 percent of the total population of active, reserve, and guard servicemembers separated under the homosexual conduct policy. Table 17 lists the most common occupations held by separated servicemembers, by service, from fiscal years 2004 through 2009. Approximately 472 servicemembers (33 percent) separated under the homosexual conduct policy who held skills in critical occupations were separated after 2 years or more of service, as shown in table 18. Approximately 11 servicemembers (48 percent) separated under the homosexual conduct policy who held skills in important foreign languages were separated after 2 years or more of service, as shown in table 19. In addition to the contact named above, key contributors to this report were Elizabeth C. McNally, Assistant Director; Clarine S. Allen; Christina E. Bruff; Grace A. Coleman; K. Nicole Harms; Grant M. Mallie; Charles W. Perdue; Steven R. Putansu; Terry L. Richardson; Amie M. Steele; Christopher W. Turner; Jack B. Wang; Erik S. Wilkins-McKee; and Kimberly Y. Young. Military Training: DOD Needs a Strategic Plan and Better Inventory and Requirements Data to Guide Development of Language Skills and Regional Proficiency. GAO-09-568. Washington, D.C.: June 19, 2009. Defense Management: Preliminary Observations on DOD’s Plans for Developing Language and Cultural Awareness Capabilities. GAO-09-176R. Washington, D.C.: November 25, 2008. Military Personnel: Evaluation Methods Linked to Anticipated Outcomes Needed to Inform Decisions on Army Recruitment Incentives. GAO-08-1037R. Washington, D.C.: September 18, 2008. Military Personnel: Strategic Plan Needed to Address Army’s Emerging Officer Accession and Retention Challenges. GAO-07-224. Washington, D.C.: January 19, 2007. Differing Scope and Methodology in GAO and University of California Reports Account for Variations in Cost Estimates for Homosexual Conduct Policy. GAO-06-909R. Washington, D.C.: July 13, 2006. Military Personnel: Preliminary Observations on Recruiting and Retention Issues within the U.S. Armed Forces. GAO-05-419T. Washington, D.C.: March 16, 2005. Military Personnel: Financial Costs and Loss of Critical Skills Due to DOD’s Homosexual Conduct Policy Cannot Be Completely Estimated. GAO-05-299. Washington, D.C.: February 23, 2005. Military Personnel: Observations Related to Reserve Compensation, Selective Reenlistment Bonuses, and Mail Delivery to Deployed Troops. GAO-04-582T. Washington, D.C.: March 24, 2004. Military Personnel: DOD Needs More Effective Controls to Better Assess the Progress of the Selective Reenlistment Bonus Program. GAO-04-86. Washington, D.C.: November 13, 2003. Military Personnel: Management and Oversight of Selective Reenlistment Bonus Program Needs Improvement. GAO-03-149. Washington, D.C.: November 25, 2002. Foreign Languages: Human Capital Approach Needed to Correct Staffing and Proficiency Shortfalls. GAO-02-375. Washington, D.C.: January 31, 2002. Military Personnel: Perceptions of Retention-Critical Personnel Are Similar to Those of Other Enlisted Personnel. GAO-01-785. Washington, D.C.: June 28, 2001. Military Attrition: Better Data, Coupled with Policy Changes, Could Help the Services Reduce Early Separations. GAO/NSIAD-98-213. Washington, D.C.: September 15, 1998. DOD Training: Many DOD Linguists Do Not Meet Minimum Proficiency Standards. GAO/NSIAD-94-191. Washington, D.C.: July 12, 1994. Homosexuals in the Military: Policies and Practices of Foreign Countries. GAO/NSIAD-93-215. Washington, D.C.: June 25, 1993. Defense Force Management: DOD’s Policy on Homosexuality. GAO/NSIAD-92-98. Washington, D.C.: June 12, 1992. Defense Force Management: Statistics Related to DOD’s Policy on Homosexuality. GAO/NSIAD-92-98S. Washington, D.C.: June 12, 1992.

Summary: From fiscal years 1994 through 2009, the Department of Defense (DOD) separated over 13,000 active military servicemembers under its homosexual conduct policy. These separations represent about 0.37 percent of the 3.6 million members separated for all reasons, including expiration of terms of service and retirement. In 2005, GAO reported on the number of separated servicemembers under DOD's homosexual conduct policy who held critical skills and the costs associated with administering the policy from fiscal years 1994 through 2003. GAO was asked to examine data from fiscal years 2004 through 2009 to determine (1) the extent to which the policy has resulted in the separation of servicemembers with skills in critical occupations and important foreign languages and (2) the services' costs for certain activities associated with administering the policy. GAO obtained and analyzed DOD personnel and cost data; examined DOD regulations and policy documents; and conducted interviews with officials from the Office of the Under Secretary of Defense for Personnel and Readiness, the Defense Manpower Data Center, and each of the military services. GAO provided a draft of this report to DOD for review and comment. DOD did not have any comments on the report. According to GAO's analysis of Defense Manpower Data Center data, 3,664 servicemembers were separated under DOD's homosexual conduct policy from fiscal years 2004 through 2009. Of the 3,664 separations, 1,458 of these separated servicemembers held a critical occupation or an important foreign language skill as determined by GAO and the services. More specifically, 1,442 (39 percent) of the servicemembers separated under the policy held critical occupations, such as infantryman and security forces, while 23 (less than 1 percent) of the servicemembers held skills in an important foreign language, such as Arabic or Spanish. Seven separated servicemembers held both a critical occupation and an important foreign language skill. However, the number of separated servicemembers with critical occupations could be an underestimation because of a number of factors. For example, the Air Force provided the occupations eligible for enlistment bonuses from fiscal years 2006 through 2009, but could not provide this information for fiscal years 2004 and 2005 because the Air Force's data were incomplete. Using available DOD cost data, GAO calculated that it cost DOD about $193.3 million ($52,800 per separation) in constant fiscal year 2009 dollars to separate and replace the 3,664 servicemembers separated under the homosexual conduct policy. This $193.3 million comprises $185.6 million in replacement costs and $7.7 million in administrative costs. The cost to recruit and train replacements amounted to about $185.6 million. In calculating these costs, GAO included variable costs, such as recruiting bonuses, and excluded fixed costs, such as salaries and buildings, to the extent possible because according to service officials there would likely be no significant increase in fixed costs when recruiting and training a relatively small number of replacement personnel. Each of the services tracks and maintains data in different ways, which in some cases affected their ability to provide GAO with only variable costs. For example, while the Army and Air Force could disaggregate variable and fixed recruiting and training costs, the Navy could not disaggregate variable and fixed recruiting and training costs, and the Marine Corps could not disaggregate variable and fixed training costs. To the extent that recruiting and training cost data provided by the services contain fixed costs, this is an overestimation of replacement costs. Administrative costs amounted to about $7.7 million and include costs associated with certain legal activities, such as board hearings, and nonlegal activities, such as processing separation paperwork. The Air Force, Army, and Marine Corps provided GAO with administrative cost estimates; however, Navy officials explained that changes in separation processes from fiscal years 2004 through 2009 prevented them from providing an accurate administrative cost estimate in time for the data to be included in GAO's analyses. Because the Navy did not provide these data, GAO's calculation is an underestimation of DOD's likely total administrative costs. Because of data limitations, GAO was unable to determine the extent of the overestimation of the replacement costs, the underestimation of the administrative costs, or the resulting net impact on GAO's total calculations.