Global War on Terrorism: DOD Needs to Take Action to Encourage Fiscal Discipline and Optimize the Use of Tools Intended to Improve GWOT Cost Reporting

Abstract : Our analysis of DOD s fiscal year 2007 reported obligations through June 2007 shows that, at that time, DOD s reported GWOT obligations were almost equal to all GWOT obligations for fiscal year 2006. After GWOT obligations are reported for the remaining 3 months of fiscal year 2007, total obligations will significantly exceed those for fiscal year 2006. Further, changes to the President s fiscal year 2008 GWOT request for DOD have been submitted to the Congress to fund operational requirements that were not funded in the original request. As of June 2007, which represents 9 months (75 percent) of fiscal year 2007, DOD s reported obligations of about $95.4 billion were already roughly equal to reported obligations of about $98.4 billion for all of fiscal year 2006. In the three months of fiscal year 2007 remaining to be reported, DOD will continue to incur and report obligations, which are averaging about $10.6 billion a month. This increase in fiscal year 2007 reported obligations is due in part to the cost of deploying an additional 30,000 troops to support operations in Iraq as part of the surge strategy and the deployment of additional personnel to Afghanistan to provide increased security against an anticipated insurgent offensive. Since these additional forces were not fully in place until the end of June, it is likely that the full financial effect of these and other ongoing operations in theater will not be seen until obligations have been reported for the last 3 months of fiscal year 2007, beginning with the July cost-of-war report. Also adding to the increased fiscal year 2007 obligations is DOD s need to repair or replace billions of dollars worth of equipment after nearly 6 years of ongoing operations. Consequently, obligations for procurement, which include aircraft, munitions, vehicles, communications and electronics equipment account for nearly a quarter of reported obligations in fiscal year 2007 through June 2007 about $21.5 billion.