The Office of Personnel Management (OPM) has identified two different kinds of furloughs—an administrative furlough, which is a planned event by an agency designed to absorb reductions necessitated by downsizing, reduced funding, lack of work, or other budget situation other than a lapse in appropriations, and a shutdown furlough, which results from a lapse in appropriations. DOD had not implemented a department-wide administrative furlough prior to 2013, according to officials within the Office of the Under Secretary of Defense for Personnel and Readiness; however, DOD has implemented shutdown furloughs—once in 1995 and again in 2013. Since 1980, DOD has conducted furloughs based on gaps in appropriation during November 14–17, 1995, and during October 1–17, 2013. DOD’s total workforce has grown since the events of September 2001. The civilian workforce has grown from about 687,000 full-time equivalents in fiscal year 2001 to about 782,000 full-time equivalents projected in fiscal year 2015. DOD’s active and reserve military workforce grew between fiscal year 2001 and fiscal year 2011 from about 2.25 million to about 2.27 million, with a budgeted request for a military workforce of about 2.13 million for fiscal year 2015. Further, DOD has increasingly relied on contracted support both overseas and in the United States to perform many of the same functions as civilian employees, including management support, communication services, and intelligence. DOD’s total obligations for contracted services grew from about $96 billion in fiscal year 2001 to about $174 billion for an estimated contracted services workforce of about 670,000 full-time equivalents in fiscal year 2012. However, with the drawdown in operations in Iraq and Afghanistan, as well as changing priorities and missions, most military services project a decrease in their military and civilian workforce through fiscal year 2017. For over a decade, strategic human capital management for all federal civilians—including those at DOD—has been on our High-Risk list because of the long-standing lack of leadership in this area. We have conducted assessments of DOD’s strategic workforce plans since 2008, and our body of work has found that DOD’s efforts to address mandated strategic workforce planning requirements have been mixed. In our most recent report in September 2012 on the department’s overall civilian strategic workforce plan, we recommended that DOD take a number of actions, including to provide guidance for developing future strategic workforce plans that clearly directs the functional communities information that identifies not only the number or percentage of personnel in its military, civilian, and contractor workforces but also the capabilities of the appropriate mix of those three workforces. DOD either concurred or partially concurred with our recommendations, stating that, among other things, the department was deliberate in applying lessons learned from previous workforce plans and identifying specific challenges and the actions being taken to address those challenges to meet statutory planning requirements by 2015. DOD defines a functional community as employees who perform similar functions; functional communities are discussed further in the background section of this report. rest of the federal civilian workforce. DOD was also affected by a Continuing Resolution that held funding at fiscal year 2012 levels through March 27, 2013, even though DOD had requested funding increases in most areas of operations for fiscal year 2013. In addition, in January 2013, DOD reduced its spending to prepare for a potential sequestration, a process of automatic, largely across-the-board spending reductions under which budgetary resources are permanently canceled to enforce certain budget policy goals. DOD took several actions to prepare for a potential sequestration, such as authorizing components in January 2013 to initiate a hiring freeze as needed, releasing term and temporary employees, and instructing components to draft plans to include the possibility of furloughs of up to 22 workdays. On February 20, 2013, DOD provided Congress with notice of its intent to furlough. We reported in November 2013 that DOD’s efforts to address sequestration—a reduction of $37 billion in DOD’s discretionary budget— was a short-term response focused on addressing the immediate funding reductions for fiscal year 2013. As a result of sequestration and increased Overseas Contingency Operations requirements, on March 13, 2013, DOD issued guidance for components to plan for a furlough of its civilian personnel for up to 22 workdays. On March 28, 2013, DOD reduced the number of planned furlough days from 22 to 14, in response to the enactment of a defense appropriations act for the remainder of fiscal year 2013. The Secretary of Defense also decided to apply the furlough across the department to allow for a reallocation of resources throughout the department to address national security priorities. DOD also took other actions across the department to reduce its budget in response to the sequestration, such as curtailing training for certain units and postponing planned maintenance. The size and complexity of DOD’s worldwide operations—involving a requested base budget of approximately $495.6 billion in fiscal year 2015—and the need to reduce its budget in an ongoing fiscally constrained environment, require that DOD have accurate, complete, and timely financial information available to make management decisions. We have placed DOD on our High-Risk List for financial management beginning in 1995 because of financial management weaknesses that affect its ability to control costs; ensure accountability; anticipate future costs and claims on the budget; detect fraud, waste, and abuse; and prepare auditable financial statements. DOD is one of the few federal entities that cannot accurately account for its spending or assets. We have reported that while DOD has made efforts to improve financial management, it still has much work to do if it is to meet its long-term goals of improving financial management and achieving full financial statement auditability. On May 14, 2013, the Secretary of Defense, in an effort to minimize adverse affects on military readiness, issued a memorandum that directed a furlough of most of its civilian personnel in response to major budgetary shortfalls from the sequestration. The memorandum required most civilians to be furloughed for up to 11 days beginning on July 8, 2013, typically for 1 day per week until September 30, 2013. The Secretary of Defense also directed all components to monitor funding closely for the remainder of fiscal year 2013 so that, if the budget situation permitted, DOD could shorten the length of the furloughs. The memorandum listed categories of exceptions to the furlough, including personnel assigned to a combat zone, those necessary to protect the safety of life and property, and Navy shipyard employees. See appendix II for a complete list of exceptions granted. Additionally, the Secretary of Defense’s May 14, 2013, memorandum included an associated schedule for issuance of furlough proposal notices at least 30 days in advance of the furlough, allowing at least 7 days for response by the employee. The memorandum also identified the following key dates: May 28–June 5: Furlough proposal notices were to be served to individual employees subject to furlough. June 4–June 12: Individual employee reply periods—time allotted for employees to acknowledge receipt of the furlough proposal notice, among other things—ended 7 calendar days from when the proposal was received, unless component procedures allowed for a different reply period. June 5–July 5: Furlough decision letters were to be served to individual employees subject to furloughs, depending on when the proposal was received and prior to the first day of furlough. July 8: Furlough period was to begin no earlier than this date. An attachment to the memorandum noted that defense agencies and military services should designate a Deciding Official who would be accountable for making final decisions on furloughs for individual employees after carefully considering the employee’s reply, if any, and the needs of the department. The Assistant Secretary of Defense for Readiness and Force Management issued clarifying guidance throughout the planning and implementation of the furlough that, among other things, provided standard templates for the proposal and decision notice letters to prepare and issue to civilian employees.provide clarification on the use of leave without pay during the time of the In addition, guidance was issued to furlough; to help ensure that borrowed military personnel were not used to compensate for work resulting from the furlough; and to prohibit contracted support from being assigned or permitted to perform additional work or duties to compensate for workload or productivity loss resulting from the furlough. Based on the Secretary of Defense’s May 14, 2013, memorandum, managers were given the authority to develop specific furlough procedures in order to minimize adverse mission effects and limit the harm to morale and productivity. The memorandum also noted that bargaining with unions may be required. As a result, military departments developed implementing guidance based on the Secretary of Defense’s memorandum requiring the furlough. For example, the Army issued a memorandum on command reporting requirements for the furlough to capture information on the issuance of furlough proposal notices and decision letters. Also, the Navy issued supplemental guidance on the scheduling of furloughs that included details on commander authorities to make decisions on the scheduling of furlough days for each employee, subject to union negotiation, as appropriate. In addition, the Air Force excluded from furlough those civilian employees whose homes were destroyed or rendered uninhabitable by the Oklahoma tornadoes in 2013. On August 6, 2013, the Secretary of Defense issued a memorandum reducing the number of furlough days from 11 to 6 days for most civilians. This action also cancelled furloughs for Department of Defense Education Activity instructional and support staff on 10-month contracts, and required new hires whose furlough period began after July 8, 2013, to take 2 furlough days per pay period between their furlough start date and August 17, 2013.