The Defense Environmental Restoration Program promotes and coordinates cleanup of hazardous substances associated with past DOD activities. Funding for cleanup at operational installations and formerly used defense sites has come from the Defense Environmental Restoration Account (DERA) since 1984. Cleanup associated with installations designated for closure or realignment has been funded through the Base Realignment and Closure (BRAC) process since 1991. Under its statutory reporting requirements, DOD annually reports to Congress by providing information on installation cleanup sites, including, for example, background, status, progress made, and cost incurred and remaining to complete cleanup. Since fiscal year 1993, the report has listed when installation cleanup activity schedules are impeded by a lack of funding. The Deputy Under Secretary of Defense, Environmental Security, formulates policy and provides oversight for the Defense Environmental Restoration Program at operational and BRAC installations and formerly used defense sites. In fiscal year 1997, the centralized DERA was partitioned into five environmental restoration accounts: Army, Navy (including Marine Corps), Air Force, formerly used defense sites, and defense-wide. The components plan, program, and budget for the individual installation cleanup projects. The Army, as executive agent for DOD, implements the program at formerly used defense sites through the U.S. Army Corps of Engineers. DOD planning and budget guidance, as well as headquarters and component instructions, govern departmentwide planning, programming, and budgeting for the environmental restoration program. The Army, the Navy, and the Air Force headquarters allocate funds to intermediate commands, which ultimately allocate funds for cleanup at specific installations. Other defense components, such as the Defense Logistics Agency (DLA), directly allocate funds to specific locations for cleanups, and the Army Corps of Engineers executes funding for formerly used defense sites. The impact of overall planning and budget guidance is not necessarily traceable to specific installations or sites. The way components allocate funding is described in appendix II. For fiscal year 1995, Congress appropriated $400 million less than DOD requested for cleanup at operational installations and formerly used defense sites and rescinded another $300 million from the amount that had been appropriated. For fiscal year 1996, Congress appropriated $200 million less than DOD requested. Table 1 shows fiscal years’ 1993 to 1997 DERA funding decreased from $1.638 billion to $1.314 billion. For fiscal years 1995 and 1996, appropriations for DOD’s environmental cleanup program were less than requested. For fiscal year 1995, Environmental Security either provided written guidelines on how to determine which projects to fund or conferred with component officials verbally on how funds should be used. For fiscal year 1996, no guidance was given because the congressional appropriation specified distribution of funds among services. Environmental Security’s November 1994 guidance to the defense components emphasized cleanup of sites that are the highest priority to stakeholders (those having interest in cleanup activities, such as the community surrounding the installation) and regulators’ considerations included by (1) involving stakeholders in decision-making, (2) taking interim remedial actions (early response action that is identified and implemented at any time during the study or design phases of cleanup) instead of continuing studies, (3) giving priority to higher relative risk sites, (4) deferring studies that are not essential for safety or compliance with agreements, (5) reviewing expense data, (6) considering innovative technologies and generic remedies, and (7) funding field locations according to their fair share. The guidance was not installation specific and service officials made the site decisions. Environmental Security officials stated that they discussed guidance with the defense components on how to implement the rescission. Considerations addressed included not deobligating funds for site projects already underway, limiting medium or low relative risk site work, limiting studies while ensuring a proper mix of study and cleanup, and deferring projects scheduled to begin in the later months of the fiscal year. The officials stated that they were unable to issue written guidance because there was about a month between hearing about the proposed rescission and the actual rescission. DOD’s fiscal year 1996 appropriations act stipulated how the $1.42 billion for environmental restoration was to be distributed to the components. Environmental Security officials stated that, as a consequence, no further guidance was provided to defense components regarding the funding change. DOD’s annual reports to Congress for fiscal years 1995 and 1996 show that an increasing number of installations reported that their cleanup schedules were affected by fund limits. Some installations that received less funding than planned reported schedule delays, while others did not. However, some installations that received more funding than planned also reported unspecified schedule delays. Reported cleanup schedule delays increased from 6 in fiscal year 1993 to 204 and 481 in fiscal years 1995 and 1996, respectively. In fiscal year 1997, reported funding schedule delays decreased to 135. Installations with the largest budget increases and decreases reported schedule delays with about equal frequency, and not all of the installations with the largest decreases reported schedule delays due to funding. Beginning in fiscal year 1993, DOD’s annual cleanup reports to Congress have identified installations where cleanup schedules were delayed by funding. Other causes for delays identified in the annual reports were technical, contracting, personnel, and regulatory. The reports further specified which of the four phases of cleanup (studies, interim actions, design, or actual cleanup) were affected. The greatest number of installations reporting cleanup schedule delays due to funding was in fiscal years 1995 and 1996. Figure 1 shows delays of cleanup schedules due to funding at installations, as reported by DOD, for fiscal years 1993-97. Among the installations that reported cleanup delays caused by funding limitations were facilities that received some of the largest increases in funding as well as facilities that received less funding than planned. Twelve of 23 Army facilities with the greatest total decreases between budget requests and funding in 1995 and 1996 reported schedule delays in one or both years. However, 16 of 23 Army facilities with the largest increases in funding also reported schedule delays. None of the 16 facilities that reported schedule delays despite receiving more funding than originally planned identified specific delays in the annual reports. Some facilities—for example, White Sands Missile Range, New Mexico—reported that their ability to undertake certain future actions depended on the availability of funding. Table 2 identifies selected installations that reported schedule impacts caused by funding. The table includes installations receiving net funding of at least $9 million less than planned for fiscal years 1995 and 1996 combined and shows which of the four cleanup phases were reported to be affected. DOD’s annual reports contain narratives of activity progress associated with a specific installation. Sometimes included in this description is reference to funding effects. Examples of report narrative in fiscal year 1995 are: Adak Naval Air Facility: “Several activities planned in were deferred due to funding cutbacks, including IRAs [interim remedial action] at SWMUs . Removal Actions at two PCB sites; and a basewide Remedial Investigation and Feasibility Study.” Aberdeen Proving Ground: “Several activities were not completed or delayed because of funding cutbacks, including, the J-Field FS [feasibility study], RI characterization activities at Canal Creek, and RI/FS activities at the Westwood and Other Aberdeen Areas.” Twin Cities Army Ammunition Plant: “Closure of the [Grenade Range and Outdoor Firing Range] areas was hindered as a result of funding cutbacks.” However, not all installations that reported schedule delays due to funding provided a narrative reference to the effect in DOD’s annual reports. For example, although funding schedule delays were reported for Robins AFB and Oceana Naval Air Station as shown in table 2, no description of these delays were provided in narratives. Overall, of the 204 installations reporting a schedule delay due to funding in fiscal year 1995, 42 described the nature of the effect in the report’s progress narratives. In fiscal year 1996, 190 of 481 installations described the effect in narratives. In discussing these reports, DOD and service officials stated that there is no requirement to provide detailed narratives. In discussing defensewide reports of funding impacts, an Environmental Security official noted that installations may be aware of some changes in funding planned and allocated by projects but not others. The official said his experience indicated that specific funding changes may sometimes be affected by other changes, especially among installations with similar priorities. Although DOD developed information on the effect of receiving less funding than it requested, the actual changes were often different than envisioned. Environmental Security officials prepared a May 1995 list that identified specific locations and sites that could be potentially affected by the $500 million in budget decreases. That list identified 5 programs and specific sites at 409 potentially affected locations. In discussing a draft of this report, DOD and service officials emphasized that variances should be expected in envisioned versus actual impacts in quick reaction responses such as the May 1995 list. Officials said this was especially true in this case because actual expenditures by mid-year would already have varied from plans available at headquarters. The May 1995 list and our visits to locations selected from it indicated that as DOD components made specific decisions, the potential effects of receiving less than requested during fiscal years 1995 and 1996 did not always occur as initially envisioned by DOD and that the results of funding changes varied widely at the affected locations. For example: Dugway Proving Ground, Utah, was identified to receive about $22 million less than requested, according to the list, for a medium relative risk priority site and a site not yet evaluated. However, Army records showed that the installation has 199 sites identified and actually received an increase of $631,000. An installation official stated that they were not aware of a potential reduction during that time period. Dahlgren Naval Surface Warfare Center, Virginia, was identified to receive $1.6 million less than requested according to the list but received $9.5 million less according to Navy data. Command officials overseeing cleanup at the center stated that funding was reduced because its projects were not known to be executable.