Coast Guard Budget Request for Fiscal Year 2010 Is 4.2 Percent Higher than the Previous Year’s Enacted Budget, but Long-Term Budget Outlook Remains Uncertain

The Coast Guard’s budget request for fiscal year 2010 is $9.73 billion,  which is approximately $393 million (or 4.2 percent) more than the  service’s enacted budget for fiscal year 2009 (see table 2). Of the $9.73 billion requested for fiscal year 2010, about $6.6 billion, or  approximately 67 percent, is for operating expenses (OE). The OE account  is the primary appropriation that finances the Coast Guard’s activities,  including operating and maintaining multipurpose vessels, aircraft, and  shore units. In comparing the 2010 budget request to the 2009 enacted  budget, funding for the OE account represents an increase of $361 million  (or about 6 percent). The next two largest accounts in the fiscal year 2010  budget request—each with funding at about $1.4 billion—are the  acquisition, construction, and improvements account (AC&I) and the  retired pay account. In  terms of percentage increases in comparing the 2010 budget request to the  2009 enacted budget, the retired pay account reflects the highest  percentage increase (about 10 percent) of all accounts. Regarding the drug interdiction mission,  for example, the fiscal year goal was to achieve a removal rate of at least  28 percent for cocaine being shipped to the United States via non- commercial means. The Coast Guard reported achieving a removal rate of  34 percent. For example, regarding the  search and rescue mission, which has two performance goals, the Coast  Guard reported that one goal was met (saving at least 76 percent of people  from imminent danger in the maritime environment), but the other goal  (saving at least 87 percent of mariners in imminent danger) was narrowly  missed, as reflected by a success rate of about 84 percent. For the other 3 statutory missions—defense readiness, migrant  interdiction, and living marine resources—the Coast Guard reported that it  did not meet fiscal year 2008 performance targets. However, for these  missions, the Coast Guard reported falling substantially short of its  performance target for only one mission—defense readiness. Although  performance for this mission rose slightly—from 51 percent in fiscal year  2007 to 56 percent in fiscal year 2008—the Coast Guard’s goal was to meet  designated combat readiness levels 100 percent of the time. In comparison, the Coast Guard met targets for 6 of its 11 statutory  missions in fiscal year 2007. The Coast Guard Has an Ongoing Modernization Program, but Work Remains to Develop Performance Metrics

The Coast Guard is currently undertaking a major effort—referred to as  the modernization program—which is intended to improve mission  execution by updating the service’s command structure, support systems,  and business practices. However, as we reported in June  2009, the Coast Guard’s efforts to develop applicable performance  measures to evaluate results of the modernization program remain in the  early stages. As an example of its workforce planning challenges, the Coast Guard cites  continued difficulties in hiring and retaining qualified acquisition  personnel—challenges that pose a risk to the successful execution of the  service’s acquisition programs. The Coast Guard Has Taken Steps to Become the Deepwater Systems Integrator, but Some Concerns Remain Regarding Procurement Processes and Cost Reporting

In addition to workforce planning challenges, the Coast Guard faces other  acquisition-related challenges in managing the Deepwater program. Problems in Deepwater Management and Oversight Have Led to Delivery Delays and Other Operational Challenges That the Coast Guard Is Working to Overcome

Other management challenges associated with the Deepwater program  have operational or mission performance implications for the Coast  Guard. Delays in  the delivery of the National Security Cutters and the associated support  assets are expected to lead to a projected loss of thousands of anticipated  cutter operational days for conducting missions through 2017, and may  prevent the Coast Guard from employing the full capabilities of the  National Security Cutters and the support assets for several years. GAO-09-530R. GAO-09-620T. Homeland Security: Observations on the Department of Homeland  Security’s Acquisition Organization and on the Coast Guard’s  Deepwater Program.
Why GAO Did This Study

The U.S. Coast Guard, a component of the Department of Homeland Security (DHS), conducts 11 statutory missions that range from marine safety to defense readiness. To enhance mission performance, the Coast Guard is implementing a modernization program to update its command structure, support systems, and business practices, while continuing the Deepwater program--the acquisition program to replace or upgrade its fleet of vessels and aircraft. This testimony discusses the Coast Guard's (1) fiscal year 2010 budget, (2) mission performance in fiscal year 2008, the most recent year for which statistics are available; and (3) challenges in managing its modernization and acquisition programs and workforce planning. This testimony is based on GAO products issued in 2009 (including GAO-09-530R and GAO-09-620T) and other GAO products issued over the past 11 years--with selected updates in June 2009--and ongoing GAO work regarding the Coast Guard's newest vessel, the National Security Cutter. Also, GAO analyzed budget and mission-performance documents and interviewed Coast Guard officials.

What GAO Found

The Coast Guard's fiscal year 2010 budget request totals $9.7 billion, an increase of 4.2 percent over its fiscal year 2009 enacted budget. Of the total requested, about $6.6 billion (or 67 percent) is for operating expenses--the primary appropriation account that finances Coast Guard activities, including operating and maintaining multipurpose vessels, aircraft, and shore units. This account, in comparing the 2010 budget request to the 2009 enacted budget, reflects an increase of $361 million (about 6 percent). The next two largest accounts in the 2010 budget request, at about $1.4 billion each, are (1) acquisition, construction, and improvements and (2) retired pay--with each representing about 14 percent of the Coast Guard's total request. The retired pay account--with an increase of about $125 million in the 2010 budget request compared to the 2009 enacted budget--is second only to the operating expenses account in reference to absolute amount increases, but retired pay reflects the highest percentage increase (about 10 percent) of all accounts. Regarding performance of its 11 statutory missions in fiscal year 2008, the Coast Guard reported that it fully met goals for 5 missions, partially met goals for 3 missions, and did not meet goals for 3 missions. One of the fully met goals involved drug interdiction. Specifically, for cocaine being shipped to the United States via non-commercial means, the Coast Guard reported achieving a removal rate of about 34 percent compared to the goal of at least 28 percent. Search and rescue was a mission with partially met goals. The Coast Guard reported that it met one goal (saving at least 76 percent of people from imminent danger in the maritime environment) but narrowly missed a related goal (saving at least 87 percent of mariners in imminent danger) by achieving a success rate of about 84 percent. For missions with unmet goals, the Coast Guard reported falling substantially short of performance targets for only one mission--defense readiness. The Coast Guard reported meeting designated combat readiness levels 56 percent of the time compared to the goal of 100 percent. The Coast Guard continues to face several management challenges. For example, GAO reported in June 2009 that although the Coast Guard has taken steps to monitor the progress of the modernization program, development of performance measures remains in the early stages with no time frame specified for completion. Also, as GAO reported in April 2009, although the Coast Guard has assumed the lead role for managing the Deepwater acquisition program, it has not always adhered to procurement processes, and its budget submissions to Congress do not include detailed cost estimates. GAO also reported that the Coast Guard faces challenges in workforce planning, including difficulties in hiring and retaining qualified acquisition personnel. Further, GAO's ongoing work has noted that delays associated with the Coast Guard's newest vessel, the National Security Cutter, are projected to result in the loss of thousands of cutter operational days for conducting missions through 2017. The Coast Guard is working to manage this operational challenge using various mitigation strategies.