Congress has established four military ranks above the rank of colonel (for the Army, Air Force, and Marine Corps) and captain (for the Navy). Table 1 displays the pay grade designation, title of rank, and insignia worn by officers at general and flag officer ranks. Within the Office of the Under Secretary of Defense for Personnel and Readiness, the Officer and Enlisted Personnel Management office is responsible for general and flag officer matters, including the application of related legislation. Each of the services and the Joint Staff has a general officer matters office that is responsible for management of general and flag officers within their organization. Management of reserve component general and flag officers falls under the service general officer matters offices, the service reserve chiefs, and the National Guard Bureau. Their responsibilities include managing the selection, promotion, assignment, and retirement of general /flag officers in addition to coordination with other DOD and non-DOD organizations. The Reserve Forces Policy Board, acting through the Assistant Secretary of Defense for Reserve Affairs, is the principal policy adviser to the Secretary of Defense on matters relating to the reserve components. The Board was created by an act of Congress in 1952. Among its duties, the Board evaluates proposals by its members or other agencies for changes to existing laws and policies and recommends appropriate actions. The Board is composed of 24 members, including a civilian chairman and the assistant secretaries of the Army, Navy, and Air Force responsible for reserve components. The Fiscal Year 1997 National Defense Authorization Act directed the Secretary of Defense to review existing statutory general and flag officer authorizations and submit a report to Congress. The act also directed GAO to evaluate DOD’s study. The military services and Joint Staff conducted their own studies. On the basis of these study results, DOD developed a draft report; however, it never issued a final report. We testified on DOD’s study in April 1997 and issued a report in June 1997 that discussed the draft DOD report. Congress included similar mandate language in the Fiscal Year 2003 National Defense Authorization Act. As in 1997, the Secretary of Defense was directed to review existing statutory general and flag officer authorizations and submit a report to Congress. The report was to include any recommendations (together with the rationale) concerning revision of the limitations on general and flag officer grade authorizations. The act also stated that certain provisions of the Fiscal Year 1997 National Defense Authorization Act would apply. One of the applicable provisions from the 1997 act directed GAO to evaluate DOD’s study. To respond to the 2003 mandate, the Office of the Secretary of Defense contracted with the Logistics Management Institute (LMI) to assess and validate general and flag officer requirements. The results of the requirements study were expected to serve as a baseline of validated general and flag officer positions and provide a basis for future efforts, such as identifying innovative ways to manage senior leadership. The Assistant Secretary of Defense (Force Management Policy) established a working panel and a senior panel to support LMI’s review. The working panel was chaired by the Director, Officer and Enlisted Personnel Management, and included representatives from the military services’ and Joint Staff’s general and flag officer management offices and from the Office of the Secretary of Defense. The senior panel was chaired by the Deputy Assistant Secretary of Defense for Military Personnel Policy, with participation by the service personnel chiefs, the Joint Staff’s Director for Manpower and Personnel, and representatives from the Office of the Secretary of Defense. The general and flag officer study was completed in March 2003. DOD subsequently submitted its report to Congress on March 31, 2003. DOD has conducted several previous reviews of its general and flag officer requirements. In the 1997 draft report, DOD identified a need for 1,472 general and flag officers, including 1,018 active component and 454 reserve component officers. According to DOD, the 1997 study was the first to integrate active and reserve component requirements. A 1988 DOD study found a requirement for 1,436 general and flag officer positions. A 1978 DOD study identified a requirement for 1,419 general and flag officers. In 1972, DOD identified a requirement for 1,304 general and flag officers. Congressional authorizations for general and flag officers typically have been lower than requirements identified in DOD’s studies. The general and flag officer study validated total requirements for 1,630 general and flag officer positions. Congress, since fiscal year 1996, has authorized the services a total of 1,311 general and flag officers, a difference of 319. DOD, in the March 2003 report to Congress, recommended no additional authorizations to meet validated requirements. DOD did not explain its rationale for keeping authorizations at current levels, except to say that other options for managing general and flag officers were being considered. The report also did not provide the requirements data generated by the general and flag officer study, nor did it address the magnitude or the impact of the gap between requirements and authorizations. The general and flag officer study validated requirements for a total of 1,630 general and flag officer positions, including 1,039 validated requirements in the active component and 591 validated requirements in the reserve component. Tables 2 and 3 display results from DOD’s study. Title 10 of the U.S. Code establishes service-specific ceilings for active duty general and flag officers that total 877. Title 10 also authorizes 12 general and flag officer positions to be allocated by the Chairman of the Joint Chiefs of Staff to the services for joint duty positions. These authorizations, called the “Chairman’s 12,” do not count against the service ceilings. In addition, DOD is authorized a maximum of 422 reserve component general and flag officers. Title 10 of the U.S. Code establishes service ceilings for reserve component general and flag officers. Congress last revised service ceilings in fiscal year 1996. Table 4 displays congressional authorizations for general and flag officers. On the basis of the general and flag officer study results, DOD found that the number of validated requirements for general and flag officer positions exceeded the number of general and flag officers currently authorized under law. DOD concluded in its March 2003 report to Congress that all current authorizations for active and reserve general and flag officers were needed. Although DOD’s report made several recommendations concerning management of general and flag officers, DOD recommended no change to the authorized number of general and flag officers or their grades at this time. DOD, in the March 2003 report, did not explain its rationale for keeping general and flag officer authorizations at current levels. DOD’s stated rationale for not requesting additional authorizations was that before the department considers proposing a legislative increase in authorizations, it must look at other innovative ways to meet these requirements. DOD did not specify the options it would consider except to say that it intended to review its overall senior leadership needs, including both civilian and military leaders, and might seek authority to manage senior leaders under an overall ceiling. DOD stated that until this review was complete, the services would continue to meet their internal and external general and flag officer requirements using available management tools as “workarounds,” such as use of individuals selected for promotion to higher grades and frocking authority. DOD did not state when this review would be complete. In the March 2003 report, DOD did not address the magnitude or the impact of the gap between validated requirements and authorizations. The general and flag officer study summarized the validated requirements by active and reserve component, by service, and by grade. More detailed data was provided in a database of validated requirements that was developed as part of the study. However, the March 2003 report did not disclose this data or address the magnitude of the gap between validated requirements and authorizations. The total gap between validated requirements and authorizations was 319. In the active component, the study validated requirements for 1,039 general and flag officer positions, compared with 889 authorizations (a difference of 150). In the reserve component, the study validated requirements for 591 general and flag officer positions, compared with 422 authorizations (a difference of 169). These gaps are illustrated in figure 1. While the March 2003 report noted that the services would continue to use frocking and other “workarounds” to meet requirements, it did not address the impact of these workarounds. Following are examples of workaround issues that DOD did not address in its report: How do the services determine which positions to fill with an officer at a lower grade? Are some validated requirements going unfilled altogether? Do officers at lower pay grade levels have legal authority to carry out all duties required of a general and flag officer position? Does the practice of assigning lower grade officers to general and flag officer positions affect the ability of an organization to perform its mission? What is the impact of these workarounds on the overall management of general and flag officers and of officers in lower grades? Are there benefits to using these workarounds, such as providing developmental opportunities for officers in lower grades? Do the benefits outweigh any negative effects of using these workarounds? To what extent have each of the services used these workarounds? DOD used an established methodology known as job evaluation to assess general and flag officer requirements. Job evaluation methodologies have been widely used in the United States to assess job value and rank one job against another. One limitation of job evaluation is that it has numerous subjective features, including the selection of job factors to be assessed. The factors used in DOD’s study were subject to differing interpretations. Another limitation is that the methodology is based on an existing organizational structure at a designated point in time. The methodology is not designed to capture new or emerging needs, such as those resulting from DOD transformation efforts or other changes in the department. Periodic updates could capture changes in requirements. Such limitations do not invalidate DOD’s methodology; however, an explicit acknowledgment and assessment of these limitations would have provided more context for the study results.