In January 2013, the NDAA for Fiscal Year 2013 was enacted into law. Section 955 of the act required the Secretary of Defense to: develop and implement a plan to achieve savings in the total funding for civilian and contractor workforces that are not less, as a percentage, than savings in funding for basic military personnel pay resulting from reductions in military end strengths from fiscal years 2012 through 2017; ensure that the plan is consistent with policies and procedures required by 10 U.S.C. § 129a, and ensure that the savings are not achieved through unjustified transfers of functions between or among the military, civilian, and service contractor personnel workforces of DOD, consistent with authorities available to the department under sections 129a, 2330a, 2461, and 2463 of Title 10 of the United States Code; provide status reports describing the implementation of the plan in the prior year as part of the budget submitted by the President to Congress for each of fiscal years 2015 through 2018; and in each status report, provide a summary of savings achieved through personnel reductions and the number of military, civilian, and contractor personnel reduced in the prior fiscal year; and in each status report include an explanation where any savings fall short of the annual target. Further, section 955 gives DOD authority to exclude certain civilian and contractor workforces from reporting required reductions. These exclusions are to be related to functions identified as core or critical to the mission of the department. For example, in DOD’s initial and subsequent status reports, DOD excluded the acquisition workforce, its cyber workforce, and medical workforce, among others. DOD’s reports were developed by the OUSD (Comptroller), which is the department’s principal advisor on budgetary and financial matters and is responsible for directing the development and overseeing the execution of DOD’s annual budget. In December 2015 we reported that for DOD’s initial report submitted to Congress in September 2014 and its first status report submitted in February 2015, DOD did not fully address most statutory requirements identified in section 955 of the NDAA for Fiscal Year 2013. Section 955 has six requirements, and we reported that DOD had partially addressed three requirements and did not address the other three requirements. For example, DOD’s September 2014 report to Congress partially addressed the requirement to develop and implement a plan for achieving savings by outlining reductions in its civilian and contracted services workforces, but DOD did not describe a process for implementing the planned reductions. Also, DOD did not address the savings that the department intended to achieve through reductions in the number of military, civilian, and contracted services personnel. Instead, the report outlined reductions in full-time equivalent positions, and it did not outline savings in funding for the contracted services workforce beyond fiscal year 2015. See table 1 for our previous assessment of statutory requirements addressed in DOD’s September 2014 and February 2015 reports on section 955 of the NDAA for Fiscal Year 2013. Based on our December 2015 assessment of DOD’s requirements, we made a number of recommendations for information to be included in status reports to be submitted in fiscal years 2017 and 2018. These recommendations are intended to help ensure that Congress has the necessary information to provide effective oversight over DOD’s workforces and they include providing additional cost savings data and an efficiencies plan, among others. DOD concurred with all of our recommendations and stated that it would take action in its future reports. DOD’s February 2016 status report presents some, but not all, savings data for the military, civilian, and contracted services workforces. Section 955 of the fiscal year 2013 NDAA requires DOD to achieve savings in the total funding for the civilian and contract services workforces from fiscal year 2012 through 2017 that are not less, as a percentage of the funding for basic military personnel pay achieved from reductions in military end strengths over the same time. Further, section 955 requires DOD to submit with its annual budget submission an annual status report in fiscal years 2015 through 2018. DOD’s status reports are to include a summary of the savings achieved in the prior fiscal year, in both costs and numbers of personnel, for military, civilian, and contracted services personnel. Section 955 also provides DOD with the authority to grant exclusions to civilian workforces identified as core or critical to the mission. See table 2 for a summary of DOD’s compliance with selected section 955 reporting requirements. DOD’s February 2016 status report includes actual military average end strength and civilian workforce full-time equivalent savings data for fiscal years 2012 through 2015, or the most current actual data, but it does not include fiscal years 2013 through 2015 cost savings data for the military and civilian workforces. DOD’s status report also includes actual contracted services cost data from fiscal years 2012 through 2015, but it does not include contracted services personnel data for any of the fiscal years. See table 3 for DOD reported military, civilian, and contracted services savings from fiscal years 2012 through 2015. Officials stated that DOD did not include civilian and military workforce costs for fiscal year 2015 because DOD interpreted the statute as requiring them only to report the civilian cost savings achieved when comparing costs from fiscal year 2012 to fiscal year 2017, and not each fiscal year in between. Further, officials stated that they did not include contractor full-time equivalent data for fiscal years 2012 through 2015 because, for section 955 and budget purposes, DOD does not measure contracted services by contractor full-time equivalency. The department did report contractor full-time equivalents in its annual Inventory of Contracted Services, which provides data on contract service execution. Officials stated that the department continues to institutionalize the capabilities associated with the Enterprise-wide Contractor Manpower Reporting Application (ECMRA) across all its components, and which will continue to improve reporting of contractor full-time equivalents for the prior fiscal year. For the budget years, officials stated the DOD will continue to measure dollar amounts budgeted for the contracted services. We reported in November 2015 that DOD continues to face challenges in implementing its ECMRA system. According to DOD officials, implementation of the system began in 2011, but it has yet to be fully institutionalized, and officials were unable to provide a final implementation date. Further, officials stated that DOD did not include full-time equivalents (FTEs) for contracted services in the section 955 report because they were unable to provide an accurate number. We recommended in December 2015 that DOD include in its status reports the costs in civilian personnel and military basic pay for fiscal years 2012 through 2017. DOD concurred with that recommendation, and partially implemented it in its February 2016 status report. In that status update DOD compared costs from fiscal year 2012 with those estimated to be achieved in fiscal year 2017, but it did not include costs associated with reductions for each fiscal year from 2012 through 2017. Furthermore, although DOD included full-time equivalent data from fiscal years 2012 through 2015, we have reported that reductions in full-time equivalents may not be a reliable measure of the costs of the civilian workforce. For example, while FTE’s may go down, costs may go up due to a variety of factors, including annual automatic pay increases. Without DOD’s fully implementing the recommendation to include cost savings information for the prior fiscal year, as required by section 955, Congress may not know whether DOD is on track to meet its reduction requirements. As such, we believe our previous recommendation is still valid. DOD estimates that it will meet its statutory requirement to reduce civilian personnel costs in fiscal year 2017, but that it will not meet its requirement to reduce contracted services costs. Section 955 of the Fiscal Year NDAA states that DOD must reduce its civilian and contractor workforces costs for fiscal years 2012 through 2017 at a rate that is not less, as a percentage of such funding, than the reduction in military personnel basic pay costs. DOD reports that it will reduce military personnel costs by 6.4 percent from fiscal year 2012 through fiscal year 2017, and it estimates that it will reduce civilian personnel costs by 7.1 percent over the same time period. However, DOD does not account for exclusions in its civilian workforce savings calculation, as it uses the average full-time equivalent pay across the civilian workforce. As noted above, section 955 gives DOD the authority to exclude segments of the civilian workforce from the required reductions. DOD excluded approximately 71.6 percent, or about 530,000, of its civilian workforce from the reductions required by statute in fiscal year 2017. These exclusions include workforces in the areas of acquisition, cyber, medical, and safety and security, among others. Because DOD excluded segments of the civilian workforce that may not cost the same as the average full-time equivalent position, its cost estimation calculations may not reflect actual savings. For example, DOD excluded nearly 140,000 civilian acquisition personnel and nearly 60,000 civilian medical personnel in fiscal year 2017. As mentioned above, DOD did not include actual civilian workforce savings from fiscal years 2012 through 2015, and officials noted that even if DOD had included actual civilian personnel cost savings, it would only be an estimation based on their calculation. The officials said that DOD does not have the ability to identify savings for the applicable workforce because of broader limitations inherent in the department’s accounting methodology. For example, the officials stated that the exclusion categories are not part of DOD’s accounting structure and therefore DOD does not have the ability to report specific positions excluded and their associated costs. The officials stated that DOD had held internal discussions regarding changes necessary to the accounting structure that would allow the department to meet various reporting requirements, but it was determined that a solution would be too burdensome to implement in a timely manner without significant costs.