Under Presidential Decision Directive (PDD) 39 (U.S. Policy on Counterterrorism, June 1995), the National Security Council (NSC) is to coordinate interagency terrorism policy issues and review ongoing crisis operations and activities concerning foreign terrorism and domestic terrorism with significant foreign involvement. An NSC-chaired coordinating group is to ensure the PDD is implemented but does not have authority to direct agencies’ activities. Among its general mission responsibilities, the Office of Management and Budget (OMB) is to evaluate the effectiveness of agency programs, policies, and procedures; assess competing funding demands among agencies; set funding priorities; and develop better performance measures and coordinating mechanisms. Further, according to PDD 39, OMB is to analyze the adequacy of funding for terrorism-related programs and ensure the adequacy of funding for research, development, and acquisition of counterterrorism-related technology and systems on an ongoing basis. Under PDD 39, the State Department and the Department of Justice, through the Federal Bureau of Investigation (FBI), have lead federal agency responsibility for dealing with terrorist incidents overseas and domestically, respectively. Numerous federal departments, agencies, bureaus, and offices also have terrorism-related programs and activities that are funded through annual and supplemental appropriations. (See app. I for a list of federal entities with terrorism-related programs and activities.) Terrorism-related funding requests include nearly $290 million provided under the 1995 Emergency Supplemental Appropriations Act (P.L. 104-19) in the aftermath of the domestic terrorist attack in Oklahoma City and $1.1 billion proposed for counterterrorism programs within a number of agencies in fiscal year 1996 supplemental appropriations and fiscal year 1997 budget amendments. The Government Performance and Results Act (Results Act) of 1993 is intended to improve the management and accountability of federal agencies. The Results Act seeks to shift the focus of federal management and decision-making from activities that are undertaken to the results of activities as reflected in citizens’ lives. Specifically, it requires federal agencies to prepare multiyear strategic plans and annual performance plans, establish program performance measures and goals, and provide annual performance reports to the Congress. Agencies submitted the first strategic plans to OMB and the Congress by September 30, 1997; the first annual performance plans, covering fiscal year 1999, are to be submitted to the Congress after the President’s budget submission in 1998. In recent years, several efforts have been undertaken to coordinate federal programs that cut across agencies to help ensure that national needs are being effectively targeted. These efforts have shown that coordinating crosscutting programs takes time and sustained attention and, because of the statutory bases of crosscutting programs, may require congressional involvement to integrate the federal response to national needs. With the large number of government entities involved, the federal effort to combat terrorism is one example of a crosscutting program to which Results Act principles and measures might be applied. Federal agencies are not required to account separately for their terrorism-related programs and activities. Because most federal agencies do not isolate or account specifically for terrorism-related funding, it is difficult to determine how much the government budgets and spends to combat terrorism. Key agencies provided us their estimates of terrorism-related spending, using their own definitions. These estimates totaled nearly $7 billion for unclassified programs and activities for fiscal year 1997, and should be considered a minimum estimate of federal spending for unclassified terrorism-related programs and activities. The amounts for governmentwide terrorism-related funding and spending are uncertain because (1) definitions of antiterrorism and counterterrorism vary from agency to agency; (2) in most cases agencies do not have separate budget line items for terrorism-related activities; (3) some agency functions serve more than one purpose, and it is difficult to allocate costs applicable to terrorism alone (e.g., U.S. embassy security measures protect not only against terrorism but also against theft, compromise of classified documents, and violent demonstrations); (4) some agencies, such as the Departments of Energy and Transportation, have decentralized budgeting and accounting functions and do not aggregate terrorism-related funding agencywide; (5) programs and activities may receive funding from more than one appropriation within a given agency, which makes it difficult to track collective totals; and (6) appropriations legislation often is not clear regarding which amounts are designated to combat terrorism. At our request, the primary agencies leading or supporting operational crisis response and management activities under PDD 39 provided spending data for fiscal years 1994 to 1996 (not all agencies were able to provide historical data prior to fiscal year 1996) and estimates for fiscal year 1997 (see table 1). Figure 1 indicates that DOD spent the largest share of estimated terrorism-related funds for fiscal year 1997, followed by the Department of Energy. While DOD and the Department of Energy estimated spending accounted for 76 percent of the unclassified fiscal year 1997 terrorism-related funds, other agencies’ resources dedicated to combating terrorism have significantly increased in recent years. For example, FAA resources tripled (in current dollars) during fiscal years 1994-97, and FBI resources increased five-fold. FAA increased equipment purchases and aviation security operations, and the FBI nearly tripled the authorized staffing level dedicated to combating terrorism, with the largest staff increase occurring in fiscal year 1997. There is no interagency mechanism to centrally manage funding requirements and requests to ensure an efficient, focused governmentwide application of federal funds to numerous agencies’ programs designed to combat terrorism. Given the high national priority and magnitude of this nearly $7-billion federal effort, sound management principles dictate that (1) governmentwide requirements be prioritized to meet the objectives of national policy and strategy and (2) spending and program data be collected from the federal agencies involved to conduct annual, crosscutting evaluations of their funding requests based on the threat and risk of terrorist attack and to avoid duplicated efforts or serious funding gaps. Neither NSC nor OMB currently performs these functions for the governmentwide program to combat terrorism. Rather, each agency is responsible for identifying and seeking funding for its priorities within its own budget allocation, and OMB reviews the budget requests on an agency-by-agency basis. Because individual agencies continue to propose new programs, activities, and capabilities to combat terrorism, annual crosscutting evaluations of agency budget requests for such programs would be prudent to help avoid duplicated efforts. Under PDD 39, NSC is to ensure the federal policy and strategy for combating terrorism is implemented. Although PDD 39 establishes interagency coordinating and working groups under the auspices of NSC to handle policy and operational issues related to combating terrorism, these groups operate on a consensus basis, do not have decision-making authority, and do not establish governmentwide resource priorities for combating terrorism. Moreover, PDD 39 does not assign responsibility to NSC to ensure that terrorism-related requirements and related funding proposals (1) are analyzed and reviewed to ensure they are based on a validated assessment of the terrorism threat and risks of terrorist attack, (2) provide a measured and appropriate level of effort across the federal government, (3) avoid duplicative efforts and capabilities, and (4) are prioritized governmentwide in a comprehensive strategy to combat the terrorist threat. PDD 39 requires OMB to analyze the adequacy of funding for terrorism-related programs, technology, and systems. Further, OMB’s general mission responsibilities include evaluating the effectiveness of federal programs and policies, assessing competing funding demands, and setting funding priorities. However, PDD 39 does not specifically require OMB to prioritize terrorism-related requirements governmentwide or to gather funding data across agencies and perform the crosscutting analyses of agencies’ funding proposals necessary to ensure the efficient use of federal resources. OMB examiners who review individual agencies’ terrorism-related funding requests explained that although they do not review activities and programs to combat terrorism on a crosscutting basis as such, they often discuss funding issues with each other during their reviews. Further, they bring issues they identify during their reviews to the attention of senior OMB officials. For example, OMB said it reviewed the FBI’s funding requests for a hazardous materials laboratory capability and for increased staffing to combat terrorism. However, because OMB did not provide evidence of its reviews, we could not verify the extent to which OMB considered the capabilities of other federal laboratories or analyzed the FBI’s request for increased staffing based on workload data and on the threat and risk of terrorism. Further, because terrorism-related funding requirements and proposals have not been prioritized across agencies, OMB could not have fully considered tradeoffs among competing demands. For this reason, it is unclear, for example, whether OMB’s denial of an FBI request for an aircraft that the FBI said was required for counterterrorism and other operations was based on an assessment of terrorism-related priorities across the government or of only the FBI’s funding requests. OMB stated that in addition to its examination of agencies’ funding requests, it has met its responsibilities under PDD 39 by reviewing DOD’s counterterrorism program baseline funding and program submission, participating in interagency meetings designed to better identify terrorism-related budget functions that are imbedded in broader funding accounts, and reviewing specific technology proposals (such as FAA proposals for explosives detection technology). Also, consistent with its role, OMB prepared the President’s $1.1-billion request for terrorism-related programs and activities. We submitted a letter of inquiry to OMB to obtain information about OMB’s role in reviewing federal agencies’ budget requests and spending to combat terrorism. Our questions and OMB’s written response appear in appendixes II and III, respectively. While OMB said that it analyzes individual agencies’ funding requests—and some examiners say they share information during their examinations—OMB does not regularly perform crosscutting analyses of requirements, priorities, and funding for the overall federal effort to combat terrorism.