The Coast Guard is an Armed Service of the United States and the only military organization within the Department of Homeland Security (DHS). It is the principle federal agency responsible for maritime safety, security, and environmental stewardship through multi-mission resources, authorities, and capabilities. To accomplish its responsibilities, the Coast Guard is organized into two major commands that are responsible for overall mission execution—one in the Pacific area and the other in the Atlantic area. These commands are divided into 9 districts, which in turn are organized into 35 sectors that unify command and control of field units and resources, such as multimission stations and patrol boats. In its fiscal year 2009 posture statement, the Coast Guard reported having nearly 49,100 full-time positions—about 42,000 military and 7,100 civilians. In addition, the agency reported that it has about 8,100 reservists who support the national military strategy or provide additional operational support and surge capacity during times of emergency, such as natural disasters. Finally, the Coast Guard reported that it utilizes the services of about 29,000 volunteer auxiliary personnel who conduct a wide array of activities, ranging from search and rescue to boating safety education. The Coast Guard has responsibilities that fall under two broad missions— homeland security and non-homeland security. The Coast Guard responsibilities are further divided into 11 programs, as shown in table 1. For each of these 11 mission-programs, the Coast Guard has developed performance measures to communicate agency performance and provide information for the budgeting process to Congress, other policymakers, and taxpayers. The Coast Guard’s performance measures are published in various documents, including the Coast Guard’s Posture Statement, which includes the fiscal year 2009 Budget-in-Brief. The Coast Guard’s 2009 Budget-in-Brief reports performance information to assess the effectiveness of the agency’s performance as well as a summary of the agency’s most recent budget request. The performance information provides performance measures for each of the Coast Guard’s mission- programs, as well as descriptions of the measures and explanations of performance results. To carry out these missions, the Coast Guard has a program underway— called the Deepwater program—to acquire a number of assets such as vessels, aircraft, and command, control, communications, computer, intelligence surveillance, and reconnaissance systems. Appendix I provides additional details on specific vessels and aircraft. The Coast Guard began the Deepwater program in the mid-1990s and it is the largest acquisition program in the agency’s history. Rather than using a traditional acquisition approach of replacing individual classes of legacy vessels and aircraft through a series of individual acquisitions, the Coast Guard chose a system-of-systems strategy, that would replace the legacy assets with a single, integrated package. To carry out this acquisition, the Coast Guard decided to use a systems integrator—a private sector contractor responsible for designing, constructing, deploying, supporting, and integrating the various assets to meet projected Deepwater operational requirements at the lowest possible costs, either directly or through subcontractors. In June 2002, the Coast Guard awarded the Deepwater systems integrator contract to Integrated Coast Guard Systems (ICGS)—a business entity led and jointly owned by Lockheed Martin and Northrup Grumman Ship Systems. For 10 years, we have reviewed the Deepwater program and have informed Congress, the Departments of Transportation and Homeland Security, and the Coast Guard of the risks and uncertainties inherent in such a large acquisition. The Coast Guard’s fiscal year 2009 budget is about 6.9 percent higher than its 2008 enacted levels. Major increases in this year’s budget are attributable to operating expenses for the funding of additional marine inspectors and new command and control capabilities. Major increases in this year’s budget are also attributed to acquisition, construction and improvements for continued enhancement and replacement of aging vessels, aircraft, and infrastructure. The Coast Guard expects to meet 6 of 11 performance targets for fiscal year 2007, the same level of performance as fiscal year 2006. The Coast Guard’s budget request in fiscal year 2009 is $9.35 billion, or 6.9 percent more than the enacted fiscal year 2008 budget (see fig. 1). About $6.2 billion, or approximately 66 percent, is for operating expenses. This operating expense funding supports 11 statutorily identified mission- programs and increases in salaries, infrastructure and maintenance costs. This also includes increased funding for additional marine inspectors, new and existing command and control and intelligence capabilities, and to address rulemaking projects. The greatest change from the previous year is in the AC&I request, which at $1.2 billion reflects about a 35 percent increase from fiscal year 2008. This increase includes funding for such things as Deepwater program enhancements to the Coast Guard’s operational fleet of vessels and aircraft, and for continued development of new assets, as well as emergency maintenance. The remaining part of the overall budget request consists primarily of retiree pay and health care fund contributions. If the Coast Guard’s total budget request is granted, overall funding will have increased by over 37 percent (or 17 percent after inflation) since fiscal year 2003. Looking back further, overall funding will have increased by approximately 143 percent (or 87 percent after inflation) since fiscal year 1997. Overall, the Coast Guard’s budget request for homeland security missions represents approximately 40 percent of the overall budget, with the non- homeland security funding representing approximately 60 percent. However, the Coast Guard does not request funding by mission; it does so by appropriation account. Nonetheless, the Coast Guard provides a comparison of homeland security versus non-homeland security funding as part of the President’s fiscal year budget request. According to the Coast Guard, an activity-based cost model is used to estimate homeland security versus non-homeland security funding for its missions. This is done by averaging past expenditures to forecast future spending, and these amounts are revised from the estimates reported previously. Although the Coast Guard reports summary financial data by homeland security and non-homeland security missions to the Office of Management and Budget, as a multi-mission agency, the Coast Guard can be conducting multiple mission activities simultaneously. For example, a multi-mission asset conducting a security escort is also monitoring safety within the harbor and could be diverted to conduct a search and rescue case. As a result, it is difficult to accurately detail the level of resources dedicated to each mission. Figure 2 shows the estimated funding levels for fiscal year 2009 by each mission program. However, actual expenditures are expected to vary from these estimates, according to the Coast Guard. The Coast Guard expects to meet 6 of 11 performance targets in fiscal year 2007, the same overall level of performance as 2006, and overall performance trends for most mission-programs remain steady. In fiscal year 2007, as in fiscal year 2006, the Coast Guard met 5 targets—Ports, Waterways, and Coastal Security; Undocumented Migrant Interdiction; Marine Environmental Protection; Other Law Enforcement; and Ice Operations—and agency officials reported that the Coast Guard expects to meet the target for one additional program, Illegal Drug Interdiction, when results become available in August 2008. This potentially brings the number of met targets to 6 out of 11. In addition, the Coast Guard narrowly missed performance targets for 3 of its non-homeland security mission-programs, Search and Rescue, Living Marine Resources, and Aids to Navigation; and more widely missed performance targets for two other mission-programs, Marine Safety and Defense Readiness. Performance in 6 of 11 Coast Guard mission-programs improved in the last year, although improvements in the Marine Safety and Search and Rescue mission- programs were insufficient to meet 2007 performance targets. Alternatively, while performance decreased for the Ports, Waterways, and Coastal Security program, the performance target was still met. Meanwhile, three mission-programs that did not meet 2007 performance targets, Defense Readiness, Living Marine Resources, and Aids to Navigation, demonstrated lowered performance in 2007 compared to 2006 performance. (See App. II for more information on Coast Guard performance results.) In 2006, we completed an examination of the Coast Guard’s non-homeland security performance measures to assess their quality. We reported that while the Coast Guard’s non-homeland security measures are generally sound and the data used to collect them are generally reliable, the Coast Guard had challenges associated with using performance measures to link resources to results. Such challenges included comprehensiveness (that is, using a single measure per mission-program may not convey complete information about overall performance) and external factors outside of the agency’s control (such as weather conditions, which can, for example, affect the amount of ice that needs to be cleared or the number of mariners who must be rescued). According to Coast Guard officials, new performance measures are currently under development to further capture performance for its mission-programs, and that link resources to results. For example, officials described efforts to develop a new measure that captures an additional segment under its search and rescue mission- program, called Lives Unaccounted For. Also, two new measures are under development to further capture the Coast Guard’s risk management efforts and link resources to results under the ports, waterways and coastal security mission-program. As we have reported, the Coast Guard appears to be moving in the right direction with these efforts. However, since these efforts are long-term in nature, it remains too soon to determine how effective the Coast Guard’s larger efforts will be at clearly linking resources to performance results as certain initiatives are not expected to be implemented until 2010. After the September 11, 2001 terrorist attacks, the Coast Guard’s priorities and focus had to shift suddenly and dramatically toward protecting the nation’s vast and sprawling network of ports and waterways. Coast Guard cutters, aircraft, boats and personnel normally used for non-homeland security missions were shifted to homeland security missions, which previously consumed only a small portion of the agency’s operating resources.