DoD misses efficiency opportunities due to poor reporting, says GAO

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In searching for efficiencies, the Defense Department may have overlooked opportunities because it lacks complete and reliable information on headquarters resources, according to the Government Accountability Office.

The department may not have identified possible reductions in headquarters personnel and operating costs because it "was working quickly to identify savings in the fiscal year 2012 budget and used a top-down approach that...left limited time for a detailed data-driven analysis," finds a March 21 GAO report (.pdf).

According to GAO auditors, DoD's underlying problem is that it doesn't have a comprehensive picture of headquarters because its internal controls, as designated by DoD Instruction 5100.73, are outdated. In fact, the reporting mechanisms don't accurately track contractors working at headquarters, say report authors. Better reporting would make DoD's efforts to find efficiencies at headquarters considerably easier, said GAO.

"DoD does not have complete and reliable major DOD headquarters activity data available for use in making efficiency assessments and decisions because the department continues to have challenges in identifying and tracking personnel and other resources devoted to headquarters," write GAO report authors.

The report recommends that the department revise DoD Instruction 5100.73 to include all major DOD headquarters activity organizations and specify how contractors with major headquarters functions are to be identified in headquarters reporting. The revision should clarify how components are to compile the activities information required by section 1109 of the 2010 National Defense Authorization Act, and establish time frames for implementing the actions above to improve tracking and reporting headquarters resources.

In a written response to the report, DoD's Deputy Chief Management Officer Elizabeth McGrath said 5100.73 is used to "identify and manage the size of organizations in order to comply with ­statutory limitations, not as a tool to manage the organizational efficiency of the department or its components." (Emphasis in the original quote.) Any changes would have limited impact on department management, she added.

Contractor inventory is managed through the department's "Inventory of Contracts for Services" plan, which was submitted to Congress in November 2011, McGrath wrote, and overall personnel data can be found in the Defense Manpower Requirement report, although it is being revised in order to be more comprehensive and provide greater analytic capability.

Still, GAO reiterates in its report that 5100.73 has implications for the management of the department that extend beyond statutory requirements. Report authors also said that the instruction does not need to be revised, simply updated as it does not include all headquarters activities.

The contractor report to Congress in November 2011 stated that the DoD did not anticipate complete reporting on contractor manpower data until 2016, note GAO authors. Also, DoD's manpower report provides no timeframe for when the fiscal year 2012 inventory would be issued.

"We continue to believe that it is important for DOD to take actions to revise the instruction to include all major DOD headquarters activity organizations, specify how contractors will be identified and included in headquarters reporting, and clarify how components are to report this information as well as establish time frames for implementing these actions to improve tracking and reporting of headquarters resources," write report authors.

For more:
- download the report, GAO-12-345 (.pdf)

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