DOD obtains nearly all of its clearance investigations through OPM, which is currently responsible for 90 percent of the personnel security clearance investigations for the federal government. DOD retained responsibility for adjudicating clearances of servicemembers, DOD civilians, and industry personnel. Two DOD offices are responsible for adjudicating cases involving industry personnel. The Defense Industrial Security Clearance Office (DISCO) within DSS adjudicates cases that contain only favorable information or minor issues regarding security concerns (e.g., some overseas travel by the individual). The Defense Office of Hearings and Appeals (DOHA) within the Defense Legal Agency adjudicates cases that contain major security issues (e.g., an individual’s unexplained affluence or criminal history) which could result in the denial of clearance eligibility and possibly lead to an appeal. Like servicemembers and federal workers, industry personnel must obtain a security clearance to gain access to classified information, which is categorized into three levels: top secret, secret, and confidential. The level of classification denotes the degree of protection required for information and the amount of damage that unauthorized disclosure could reasonably be expected to cause to national security. For top secret information, the expected damage that unauthorized disclosure could reasonably be expected to cause is “exceptionally grave damage;” for secret information, it is “serious damage;” and for confidential information, it is “damage.” DOD provided information on each issue specified by the mandate, but certain important information on funding, processing times, and quality was limited or absent. DOD divided its nine-page report into five sections, corresponding to the five sections of the law. DOD began with a discussion of the personnel security clearance investigation funding requirements—$178 million for fiscal year 2007 and approximately $300 million for fiscal year 2008—and indicated that funds exist to cover the fiscal year 2007 projected costs. In section two, DOD reported the size of the investigative backlog by showing that 21,817 (48 percent) of the applications for clearance investigations for industry personnel which were still pending as of July 14, 2007, were more than 90 days old. In section three, DOD reported OPM statistics that showed the average number of days required to complete investigations as of May 2007. An initial top secret clearance took an average of 211 days; top secret renewals, an average of 334 days; and all secret/confidential initials and renewals, an average of 127 days. The fourth section of DOD’s report highlighted seven areas that DOD characterized as progress toward implementing planned changes in the process. These areas included timeliness-improvement actions that were DOD-specific (e.g., adding a capability to electronically submit the applicant’s form authorizing the release of medical information) and governmentwide (e.g., submitting all requests for clearances using OPM’s Electronic Questionnaires for Investigations Processing). In the fifth section, the Under Secretary of Defense for Intelligence certified that the department had taken actions to improve the industry personnel clearance program during the 12 months preceding the report date. DOD supported this finding by including a table showing that the monthly average number of completed industry investigations increased from 13,227 in July 2006 to 16,495 in July 2007. Certain important information on three of the mandated issues—the program funding requirements, the average processing time, and quality in the clearance process—was limited or absent. First, DOD reported program-funding requirements covering less than 2 years. DOD reported an annualized projected cost of $178.2 million for fiscal year 2007, a projected funding requirement of approximately $300 million for fiscal year 2008, and a department statement indicating that it was able to fund the industry personnel security clearance program for the remainder of 2007. The mandate directed DOD to report its funding requirements for the program and the Secretary of Defense’s ability to fulfill them. While the report described DOD’s immediate needs and ability to fund those needs, it did not include information on (1) the funding requirements for fiscal year 2009 and beyond, even though the survey used to develop the funding requirements asked contractors about their clearance needs through 2010; and (2) the tens of millions of dollars that the DSS Director testified to Congress in May 2007 were necessary to maintain the infrastructure supporting the industry security clearance program. The OUSD(I) Director of Security and the DSS Director told us that the department did not include funding requirements beyond fiscal year 2008 because of concerns about the accuracy of the data used to identify the requirements. They told us that the funding requirements of the program depend on the estimates of the future number of investigations that DSS will obtain from OPM, which DSS determines using its annual survey. They, as well as the report, indicated that because projections made farther into the future are more likely to be inaccurate, DOD decided not to include funding projections beyond 1 future year in the report. The report also stated that the data used to construct the projected funding requirements are available through fiscal year 2010, but the report did not include that information. DOD regularly submits longer-term financial planning documents to Congress. Specifically, the future years defense program (FYDP), which is submitted annually to Congress, contains detailed data projections for the budget year in which funds are being requested and at least the 4 succeeding years. The FYDP is a long-term capital plan and as such provides DOD and Congress with a tool for looking at future funding needs beyond immediate budget priorities. Second, DOD reported the average investigation times cited earlier but did not include the times for other specific phases of the end-to-end clearance process. DOD reported the average number of days it took to complete investigations for all clearances closed between May 2006 and May 2007 and the average numbers of days to process DOD industry clearances from end to end for all cases adjudicated during the first 6 months of fiscal year 2007. The mandate directed DOD to report the length of the average delay for an individual case pending in the personnel security clearance investigation process. The Intelligence Reform and Terrorism Prevention Act of 2004 requires the processing of at least 80 percent of clearances to be completed within an average of 120 days, including no more than 90 days for the investigation. Although it did not provide times for other clearance phases and was not mandated to do so, DOD’s report stated that a joint study conducted by OPM, DSS, and industry identified average times to complete six discrete phases—including the investigation, the time needed to mail investigation reports from OPM to a DOD adjudication facility, and the adjudication. Our September 2006 report showed that longer delays are found in some phases of the process than in others (e.g., our analysis of 2,259 cases showed that the application-submission phase took an average of 111 days to complete instead of the goal of 14 days) and suggested that monitoring each of the phases would help DOD to identify where actions are needed to improve timeliness. The OUSD(I) Director of Security and the DSS Director told us that because the DOD report included both the average time to complete an investigation and the time to process the clearance from start to finish, the department did not include the times to process the additional discrete phases of the clearance process. While the information included in the report provides visibility to the processing times for the investigation and for the entire process, monitoring and reporting times for each phase would help DOD and Congress to identify where actions are most needed to improve timeliness. Third, DOD documented improvements in the process but was largely silent regarding quality in the clearance processes. While DOD described several changes to the process it characterized as progress, it provided little information on measures of quality used to assess the clearance processes or procedures to promote quality during clearance investigations and adjudications processes. Specifically, the DOD report’s section describing improvements noted that DSS, DOD’s adjudicative community, and OPM are gathering and analyzing measures of quality for the clearance processes that could be used to provide the national security community with a better product. However, the DOD report did not include any of those measures. When we asked the OUSD(I) Director of Security why the measures of quality were not included, he said the department did not include them because stakeholders in the clearance processes have not agreed on how to measure quality. In September 2006, we identified several areas where OPM-supplied investigative reports and DOD adjudicative data were incomplete. We noted that while eliminating delays in the clearance process is an important goal, the government cannot afford to achieve that goal by providing reports of investigations and adjudications that are incomplete in key areas. We additionally noted that the lack of full reciprocity of clearances—when a security clearance granted by one government agency is not accepted by another agency—is an outgrowth of agencies’ concerns that other agencies may have granted clearances based on inadequate investigations and adjudications. In deciding not to provide certain important information in its first annual report to Congress, DOD has limited the information available to Congress as it oversees the effectiveness of DOD’s industry personnel security clearance processes. Specifically, by not including funding requirements for 2009 and beyond, DOD left out information Congress could use in making longer-term appropriation and authorization decisions for this program. In addition, by not including the times to complete phases of the clearance process other than the investigation, DOD makes it less apparent to Congress where the most significant timeliness gains can be made relative to the costs of improving the processes. Finally, by not including measures of quality in the clearance processes, DOD has only partially supported its assertion that it has made improvements to the clearance processes. DOD reported that OPM conducted 81,495 investigations for the department in fiscal year 2005 and 138,769 in fiscal year 2006 and that DOD staff granted clearance eligibility to 113,408 industry personnel in fiscal year 2005 and 144,608 industry personnel in fiscal year 2006.