Today’s Army faces an enormous challenge to balance risks and resources in order to meet its many missions. Since 1990, active Army ranks have been reduced from 770,000 to 495,000 personnel, a reduction of about 36 percent. Simultaneously, world events have dictated that forces be trained and ready to respond to potential high-intensity missions in areas such as Korea and the Persian Gulf while conducting peace enhancement operations around the world. The Army currently has 10 active combat divisions compared to the 18 it had at the start of Operation Desert Storm in 1991. Four of the 10 divisions are considered contingency divisions and would be the first to deploy in the event of a major theater war. These units are the 82nd Airborne, 101st Air Assault, 3rd Infantry, and 1st Cavalry divisions. The 2nd Infantry Division, while not a contingency force division, is already deployed in Korea. The remaining five divisions, which are the focus of my testimony, are expected to deploy in the event of a second simultaneous or nearly simultaneous major theater contingency or as reinforcements for a larger-than-expected first contingency. These units are the 1st Armored, 1st Infantry, 4th Infantry, 10th Infantry, and 25th Infantry divisions. Also, these divisions have been assigned the bulk of the recent peacekeeping missions in Bosnia and Haiti, and the 4th Infantry division over the last 2 years has been conducting the Army’s advanced war-fighting experiment. Appendix I provides a list of the Army’s current active divisions and the locations of each division’s associated brigades. In the aggregate, the Army’s later-deploying divisions were assigned 66,053, or 93 percent, of their 70,665 authorized personnel at the beginning of fiscal year 1998. However, aggregate numbers do not adequately reflect the condition that exists within individual battalions, companies, and platoons of these divisions. This is because excess personnel exist in some grades, ranks, and skills, while shortages exist in others. For example, while the 1st Armored Division was staffed at 94 percent in the aggregate, its combat support and service support specialties were filled at below 85 percent, and captains and majors were filled at 73 percent. In addition, a portion of each later-deploying division exists only on paper because all authorized personnel have not been assigned. All these divisions contain some squads, crews, and platoons in which no personnel or a minimum number of personnel are assigned. Assigning a minimum number of personnel to a crew means having fewer personnel than needed to fully accomplish wartime missions; for example, having five soldiers per infantry squad rather than nine, tank crews with three soldiers instead of four, or artillery crews with six soldiers rather than nine. We found significant personnel shortfalls in all the later-deploying divisions. For example: At the 10th Infantry Division, only 138 of 162 infantry squads were fully or minimally filled, and 36 of the filled squads were unqualified. At the 2nd and 3rd brigades of the 25th Infantry Division, 52 of 162 infantry squads were minimally filled or had no personnel assigned. At the 1st Brigade of the 1st Infantry Division, only 56 percent of the authorized infantry soldiers for its Bradley Fighting Vehicles were assigned, and in the 2nd Brigade, 21 of 48 infantry squads had no personnel assigned. At the 3rd Brigade of the 1st Armored Division, only 16 of 116 M1A1 tanks had full crews and were qualified, and in one of the Brigade’s two armor battalions, 14 of 58 tanks had no crewmembers assigned because the personnel were deployed to Bosnia. In addition, at the Division’s engineer brigade in Germany, 11 of 24 bridge teams had no personnel assigned. At the 4th Infantry Division, 13 of 54 squads in the engineer brigade had no personnel assigned or had fewer personnel assigned than required. The significance of personnel shortfalls in later-deploying divisions cannot be adequately captured solely in terms of overall numbers. The rank, grade, and experience of the personnel assigned must also be considered. For example, captains and majors are in short supply Army-wide due to drawdown initiatives undertaken in recent years. The five later-deploying divisions had only 91 percent and 78 percent of the captains and majors authorized, respectively, but 138 percent of the lieutenants authorized. The result is that unit commanders must fill leadership positions in many units with less experienced officers than Army doctrine requires. For example, in the 1st Brigade of the 1st Infantry Division, 65 percent of the key staff positions designated to be filled by captains were actually filled by lieutenants or captains that were not graduates of the Advanced Course. We found that three of the five battalion maintenance officers, four of the six battalion supply officers, and three of the four battalion signal officers were lieutenants rather than captains. While this situation represents an excellent opportunity for the junior officers, it also represents a situation in which critical support functions are being guided by officers without the required training or experience. There is also a significant shortage of NCOs in the later-deploying divisions. Again, within the 1st Brigade, 226, or 17 percent of the 1,450, total NCO authorizations, were not filled at the time of our visit. As was the case in all the divisions, a significant shortage was at the first-line supervisor, sergeant E-5 level. At the beginning of fiscal year 1998, the 5 later-deploying divisions were short nearly 1,900 of the total 25,357 NCOs authorized, and as of February 15, 1998, this shortage had grown to almost 2,200. In recent years, in reports and testimony before the Congress, we discussed the Status of Resources and Training System (SORTS), which is used to measure readiness, and reported on the need for improvements. SORTS data for units in the later-deploying divisions have often reflected a high readiness level for personnel because the system uses aggregate statistics to assess personnel readiness. For example, a unit that is short 20 percent of all authorized personnel in the aggregate could still report the ability to undertake most of its wartime mission, even though up to 25 percent of the key leaders and personnel with critical skills may not be assigned. Using aggregate data to reflect personnel readiness masks the underlying personnel problems I have discussed today, such as shortages by skill level, rank, or grade. Compounding these problems are high levels of personnel turnover, incomplete squads and crews, and frequent deployments, none of which are part of the readiness calculation criteria. Yet, when considered collectively, these factors create situations in which commanders may have difficulty developing unit cohesion, accomplishing training objectives, and maintaining readiness. Judging by our analysis of selected commanders’ comments submitted with their SORTS reports and other available data, the problems I have just noted are real. However, some commanders apparently do not consider them serious enough to warrant a downgrade in the reported readiness rating. For example, at one engineer battalion, the commander told us his unit had lost the ability to provide sustained engineer support to the division. His assessment appeared reasonable, since company- and battalion-level training for the past 4 months had been canceled due to the deployment of battalion leaders and personnel to operations in Bosnia. As a result of this deployment, elements of the battalion left behind had only 33 to 55 percent of its positions filled. The commander of this battalion, however, reported an overall readiness assessment of C-2, which was based in part on a personnel level that was over 80 percent in the aggregate. The commander also reported that he would be able to achieve a C-1 status in only 20 training days. This does not seem realistic, given the shortages we noted. We found similar disconnects between readiness conditions as reported in SORTS and actual unit conditions at other armor, infantry, and support units. Many factors have contributed to shortfalls of personnel in the Army’s later-deploying divisions, including (1) the Army’s priority for assigning personnel to units, commands, and agencies; (2) Army-wide shortages of some types of personnel; (3) peacekeeping operations; and (4) the assignment of soldiers to joint and other Army command, recruiting, and base management functions. The Army uses a tiered system to allocate personnel and other resources to its units. The Army gives top priority to staffing DOD agencies; major commands such as the Central Command, the European Command, and the Pacific Command; the National Training Center; and the Army Rangers and Special Forces Groups. These entities receive 98 to 100 percent of the personnel authorized for each grade and each military occupational specialty. The 2nd Infantry Division, which is deployed in Korea, and the four contingency divisions are second in priority. Although each receives 98 to 100 percent of its aggregate authorized personnel, the total personnel assigned are not required to be evenly distributed among grades or military specialties. The remaining five later-deploying divisions receive a proportionate share of the remaining forces. Unlike priority one and two forces, the later-deploying units have no minimum personnel level. Army-wide shortages of personnel add to the shortfalls of later-deploying divisions. For example, in fiscal year 1997, the Army’s enlistment goal for infantrymen was 16,142. However, only about 11,300 of those needed were enlisted, which increased the existing shortage of infantry soldiers by an additional 4,800 soldiers. As of February 15, 1998, Army-wide shortages existed for 28 Army specialties. Many positions in squads and crews are left unfilled or minimally filled because personnel are diverted to work in key positions where they are needed more. Also, because of shortages of experienced and branch-qualified officers, the Army has instituted an Officer Distribution Plan, which distributes a “fair share” of officers by grade and specialty among the combat divisions.