DOD operates one of the largest and most complex health care systems in the nation and has a dual health care mission—readiness and benefits. DOD’s health care system is referred to as the Military Health System. The readiness mission provides medical services and support to the armed forces during military operations and involves deploying medical personnel and equipment as needed to support military forces throughout the world. The benefits mission provides medical services and support to members of the armed forces, their family members, and others eligible for DOD health care, such as retired service members and their families. DOD’s health care mission is carried out through military hospitals and clinics throughout the United States and overseas, commonly referred to as military treatment facilities, as well as through civilian health care providers. Military treatment facilities comprise DOD’s direct care system for providing health care to beneficiaries. The Assistant Secretary of Defense (Health Affairs) is responsible for ensuring the effective execution of DOD’s health care mission and exercises authority, direction, and control over medical personnel authorizations and policy, facilities, funding, and other resources within DOD. The Director of TRICARE Management Activity, as seen in figure 1, reports to Health Affairs. TRICARE Management Activity develops and maintains the facilities planning, design, and construction criteria in support of DOD’s health care mission, and serves as the focal point for all issues pertaining to the acquisition, sustainment, renewal, and modernization of the full range of facilities within the Military Health System. Figure 1 displays the organizational structure of the Military Health System. TRICARE Management Activity is responsible for the acquisition of all military health care facilities worldwide, including the development and issuance of medical facility policy, programming, budgeting, design, and construction of all projects. Moreover, it is responsible for the development, issuance, and maintenance of health care facilities planning and technical criteria as well as the management of financial resources for all planning, design, and construction of projects. The Navy Bureau of Medicine and Surgery, the headquarters command for Navy Medicine, oversees the delivery of health care for the Navy and Marine Corps. It exercises direct control over naval hospitals, clinics, medical centers, dental centers, and preventative medicine units within the United States and overseas, and provides professional and technical guidance for the design, construction, staffing, and equipping of medical assets. Navy Medicine West is the regional command that helps manage and plan for the Navy’s health care delivery and military treatment facilities in the Pacific region. Under Navy Medicine West’s responsibility are all Navy military treatment facilities on the West coast, in Hawaii, Japan, and Guam. DOD’s Unified Facilities Criteria 4-510-01 (Unified Facilities Criteria) provide mandatory design and construction criteria for facilities in DOD’s medical military construction program. This subpart of the Unified Facilities Criteria is primarily focused on how military treatment facilities are to be designed and constructed, but also requires that the military services submit planning documentation as part of the pre-design considerations that TRICARE Management Activity uses to issue a design authorization and approve a proposed project for funding. This planning documentation includes a DD Form 1391 (Military Construction Project Data), project narrative, program for design, equipment planning, project books and an economic analysis. Design authorizations are issued to a design agent, which is designated by the Secretary of Defense as being responsible for the design and construction of proposed facilities. In the case of Guam, Naval Facilities Engineering Command is the designated design agent responsible for military construction. In addition to the above policy guidance and criteria for the planning of military treatment facilities, Office of Management and Budget guidance requires federal agencies to develop and implement internal controls to ensure, among other things, that programs achieve their desired objectives; and that programs operate and resources are used consistent with agency missions, in compliance with laws and regulations, and with minimal potential for waste, fraud, and mismanagement. Internal control, in its broadest sense, includes the plan of organization, policies, methods and procedures adopted by program management to meet its goals. In addition to the standards for internal control identified by Office of Management and Budget, GAO has also identified standards for internal controls, which include (among other things) control activities. Control activities include policies, procedures, techniques, and mechanisms that enforce management’s directives, which can include a wide range of activities such as approvals, authorizations, verifications; and documentation, which should be readily available for examination. Medical Facilities on Guam The current Naval Hospital Guam and its associated military treatment facilities, including a branch medical clinic and branch dental clinic on Naval Base Guam, help support the operational readiness of the United States and allied forces operating in the Pacific region. These facilities have been in operation for over 50 years. The naval hospital provides services for active duty servicemembers and their family members stationed on Guam. Transient active duty servicemembers, military retirees (transient and living on Guam) and their family members, National Guard members, and officials from other federal agencies also receive health care from the naval hospital. In addition to the Navy-operated military treatment facilities on Guam, the Air Force’s 36th Medical Group located at Andersen Air Force Base operates a medical and dental clinic, renovated in 2006, that delivers primary medical and dental care to DOD beneficiaries in and around Andersen Air Force Base, which is on the northern part of the island. A civilian hospital—Guam Memorial Hospital—as well as community health clinics are also on Guam. According to Navy planning documents, Military Health System beneficiaries typically do not use the services of Guam Memorial Hospital or the community health clinics, and will only be referred there by Naval Hospital Guam in the case of an emergency that occurred in closer proximity to Guam Memorial Hospital. The United States and Japan held a series of sustained security consultations, referred to as the Defense Policy Review Initiative, which were aimed at reducing the burden of the U.S. military presence on Japanese communities and strengthening the U.S.-Japan security alliance. By 2006, these consultations established the framework for the future U.S. force structure in Japan, including the relocation of military units from Okinawa, Japan to Guam. An estimated 8,600 Marines and their estimated 9,000 dependents are expected to relocate from Okinawa, Japan to Guam. In addition, the United States plans to expand the capabilities and presence of the Army, Navy, and Air Force on Guam over the next several years. As such, the military population on Guam is expected to grow by over 160 percent, from 15,000 to over 39,000 by 2020. The Deputy Secretary of Defense established the Joint Guam Program Office to facilitate, manage, and execute requirements associated with the relocation of U.S. Marine Corps assets from Okinawa, Japan to Guam. The Joint Guam Program Office is also expected to lead the coordinated planning efforts and synchronize the funding requirements between DOD components, and to work closely with other stakeholders, such as the government of Japan. The Joint Guam Program Office receives planning assistance from the Naval Facilities Engineering Command in conducting analyses and developing an acquisition strategy for infrastructure needed to support DOD operational requirements. The Naval Facilities Engineering Command executes contracts for construction and infrastructure projects including those funded by contributions from the government of Japan. To accommodate the additional inpatient and outpatient requirements resulting from the expected increase in the military population on Guam, the Navy plans to expand inpatient and outpatient care in the replacement hospital and move primary outpatient and dental care to the two new branch health clinics. According to Navy officials, the development of the requirements for the clinics allowed the Navy to retain the size and footprint of the initially planned version of the replacement hospital, which was already programmed and approved by TRICARE Management Activity in 2004, prior to the announcement of the Defense Policy Review Initiative. The hospital will be funded through DOD military construction appropriations, while the two outpatient primary care clinics are to be funded through a special Department of the Treasury account established to hold funds contributed by the government of Japan as part of the agreement to realign military units from Japan to Guam. Although the Navy’s proposed military treatment facility solution on Guam expands on the health care services currently offered on Guam, the Navy determined that patients requiring care not offered on Guam will continue to be medically evacuated to other military treatment facilities, such as Naval Hospital Okinawa, Tripler Army Medical Center in Hawaii, or Naval Medical Center San Diego. The Navy determined that to accommodate the additional inpatient and outpatient requirements for active duty and family member populations on Guam following the military buildup, it would need to construct three military treatment facilities consisting of a replacement hospital and two branch health clinics. However, prior to the announced realignment of troops from Okinawa, Japan to Guam, the Navy had already determined that the current hospital was outdated and did not meet modern facility standards such as efficient space configurations, and the building’s structure does not meet modern seismic codes. Additionally, Navy planning documents show that from a functional perspective, the current hospital is poorly designed to provide efficient health care delivery. Navy officials said that preliminary planning efforts for replacing Naval Hospital Guam started in the 1990s, but it was not until early 2004 that planning began in earnest. By 2005, the Navy was in the process of designing a replacement hospital. The Navy’s original plans for a replacement hospital were predicated on a beneficiary population of around 19,700 and were to include all outpatient primary care, including dental care, within the hospital, while closing the current branch medical clinic and branch dental clinic on Naval Base Guam. When the military realignment was subsequently announced in 2006, Navy officials said all design plans were put on hold in accordance with direction from TRICARE Management Activity, and the Navy reassessed its health care requirements for Guam.