DOD identifies 32 accounts for fiscal year 2017 under the appropriation category of O&M, including both base and OCO funding. Among the military services, each of their components receives its own O&M appropriations and has corresponding accounts—active (Army, Navy, Marine Corps, and Air Force), reserve (Army Reserve, Navy Reserve, Marine Corps Reserve, and Air Force Reserve), and National Guard (Army National Guard and Air National Guard). Additionally, there are O&M accounts for defense-wide and other DOD programs, such as the defense health program. In support of DOD’s budget request included in the annual President’s budget, DOD financial management officials prepare separate congressional budget justification materials by account for O&M base and O&M OCO. Each set of O&M budget justification materials is divided first into budget activities, such as operating forces and mobilization for the military services’ O&M accounts. For some O&M accounts, the budget activities are then divided into activity groups. For example, the defense- wide budget justification materials for O&M are divided by activity group, which represent a defense agency. For other O&M accounts, the budget activities are further divided into subactivity groups. For example, the military service justification materials for O&M are divided first into various activity groups, such as installation support and weapons support, and then into subactivity groups, such as depot maintenance and operating support for installations. DOD submits to Congress annual budget justification materials that provide details at the budget activity, activity group, or subactivity group level. Congress separately appropriates amounts for O&M base and O&M OCO activities into existing O&M base accounts. Congress directs how O&M funds are to be spent by designating specific amounts at the activity level in conference reports or explanatory statements accompanying annual appropriations acts. DOD financial management officials execute both O&M base and O&M OCO funds from the base O&M account. For example, Army financial management officials execute both O&M base funding and O&M OCO funding from the Army base O&M account. DOD conducts an annual process for determining its budget request and allocating resources. This includes developing a 5-year funding plan by appropriation that identifies the immediate budget priorities and future projections for the next 4 fiscal years, and is called the Future Years Defense Program. The Future Years Defense Program reflects decisions made in DOD’s annual budget process and represents estimated funding that the President requests from Congress for the current budget year and at least the 4 fiscal years following it. In 1987, Congress directed the Secretary of Defense to submit the 5-year funding plan, in part, to establish a mechanism to help inform DOD and Congress on current and planned funding needs as decisions are made. The 5- year funding plans are specific to DOD’s total base funding and do not include OCO funding. Provisions of annual defense appropriations and authorization acts provide DOD with authority to transfer funds. DOD can realign funds (1) between appropriations accounts through transfers and (2) within an account’s budget activity from the same appropriations account through reprogrammings. While transfers require statutory authority, DOD officials may also realign, or reprogram, O&M base funds within an appropriations account’s budget activity as part of their duty to manage their funds and do not require statutory authority to do so. For both transfers and reprogrammings, Congress requires notification of DOD’s fiscal year baseline for application of reprogramming and transfer authorities prior to funds becoming available for reprogramming or transfer. Further, if a transfer or reprogramming exceeds threshold amounts established by Congress, prior approval of a congressional committee is required. For example, effective for fiscal year 2015, the basic reprogramming threshold for O&M that requires DOD to notify Congress in writing was a cumulative increase or decrease of $15 million. However, the military services can transfer or reprogram funds that are below threshold amounts between budget activities within O&M base accounts without requiring written congressional approval. DOD’s enacted funding for O&M base has generally increased each year since fiscal year 2009, with the exception of fiscal year 2013. Enacted funding, set by Congress, establishes how much the department can obligate in a given fiscal year, unless the amounts are subsequently adjusted through additional congressional action or DOD’s use of its authorities to transfer funds between appropriations accounts. Based on DOD’s data, enacted funding for O&M base in nominal dollars increased by 7 percent from about $185.0 billion in fiscal year 2009 to about $198.5 billion in fiscal year 2016 (see figure 1). Our analysis of the budget year of DOD’s 5-year funding plans for O&M base from fiscal years 2009 through 2016 found that since fiscal year 2011, DOD consistently planned for more O&M base funding than Congress enacted. The 5-year funding plans—also known as the Future Years Defense Plan—consist of a budget year (first fiscal year) and out- years (4 subsequent fiscal years beyond the budget year), and are intended to help inform Congress on current and future planned funding needs. Congress enacted more funding than DOD planned in the fiscal year 2009 budget year and the amount enacted was the same as planned in the fiscal year 2010 plan. Since 2011 the enacted amount was less than the planned amount by between 1.8 and 7.2 percent. Figure 2 provides details on DOD’s funding plans and enacted amounts for O&M base. Further, between the funding plans for fiscal year 2009 and fiscal year 2015, planned O&M base funding in the out-years was adjusted downward relative to the previous year until fiscal year 2016, when it slightly increased. For example, in the fiscal year 2011 plan, DOD estimated that its planned funding in the out-years would increase by 12.9 percent ($27.4 billion) between the first and the last out-year of the plan (fiscal years 2012-2015), but in the fiscal year 2012 plan, DOD decreased its estimate of planned funding in the out-years (fiscal years 2013-2016) as compared to the fiscal year 2011 plan by 8.4 percent ($18.1 billion). The decrease relative to the previous year continued until the fiscal year 2016 plan when DOD adjusted its plans upward for fiscal years 2018 and 2019 from the amounts in the fiscal year 2015 plan, as shown above in figure 2. We found that various factors influenced the changes in the out-year amounts since the fiscal year 2009 plan. For example, according to DOD documents, the 5-year plan for fiscal year 2011 reflected the defense objectives outlined in the 2010 Quadrennial Defense Review and the corresponding increase in requirements to carry out those objectives. The department then began to reduce its planned growth in fiscal year 2012, as compared to fiscal year 2011, according to DOD budget documents and DOD officials, based on a variety of initiatives intended to improve the efficiency of DOD’s business operations by reducing excess overhead costs. In fiscal years 2013 through 2015, DOD further reduced its base O&M funding plans as it realigned its entire discretionary budget closer to expected appropriations. According to DOD documents and officials, this was achieved through a combination of continued efficiency initiatives and economic adjustments, among other reductions. However, in fiscal year 2016, DOD’s funding plans did not include further reductions. According to DOD’s fiscal year 2016 budget request and DOD officials, the department concluded that it could not execute its updated defense strategy at the expected appropriation level. Congress made additional funding available to DOD’s O&M base programs and activities in fiscal years 2009 through 2016. Specifically, Congress made additional funding available to DOD’s O&M base in two areas: OCO funding for programs and activities requested in the base budget and OCO funding for readiness-related efforts. OCO Funding for Programs and Activities Requested in the Base Budget: In fiscal years 2009 through 2016, according to DOD’s data, Congress made additional funding available by designating O&M supplemental or OCO funding to be used for certain O&M base programs and activities for which DOD had requested O&M base funding. For example, Congress directed additional funding from fiscal years 2009 through 2016, ranging from $405 million in fiscal year 2013 to $9.2 billion in fiscal year 2014. According to DOD officials and budget documents, Congress gave the department the approval to transfer this OCO funding for base programs and activities. OCO Funding for Readiness-Related Efforts: In fiscal year 2015, Congress provided $1 billion in OCO funding to be used for supporting DOD’s readiness efforts. According to DOD officials, this OCO funding could be used to support O&M base programs and activities that relate to readiness-related efforts, such as increased training, depot maintenance, and operations support for installations. Conversely, the sequestration in fiscal year 2013 reduced DOD’s O&M base funding when across-the-board spending reductions were applied to all nonexempt appropriations accounts across the government. The reductions resulted in a decrease of $11.9 billion to DOD’s O&M base, to $182.8 billion, the lowest level since fiscal year 2009. Figure 3 shows DOD’s enacted funding for O&M base with changes directed by Congress and as a result of sequestration. Our analysis of DOD data for the military services’ and defense-wide agencies’ O&M accounts—from fiscal years 2009 through 2015—found that DOD realigned $146.9 billion by transfers between O&M base, O&M OCO, and other appropriations accounts and reprogrammings within O&M accounts.