According to Coast Guard officials, much of the additional  $328 million in this fiscal year’s budget request, which is about 4 percent  over and above the fiscal year 2006 budget of $8.1 billion, covers such  things as salary and benefit increases and maintenance. Coast Guard Reported Progress Made in Meeting Program Performance Targets

Even with sustained homeland security responsibilities, aging assets, and a  particularly destructive hurricane season stretching resources across the  agency, in fiscal year 2005 the Coast Guard reported that 7 of its   11 programs met or exceeded program performance targets. In addition,  the agency reported that it anticipates meeting the target for 1 additional  program when final results become available in July 2006, potentially  bringing the total met targets to 8 out of 11 programs. We will provide  final results on this work in a report to be published later this summer. Although the magnitude of Hurricane Katrina required substantial  response and relief efforts, the Coast Guard was well prepared to act  since it places a priority on training and contingency planning. The Coast Guard’s organizational structure and practices facilitated  the agency’s response. In  terms of Coast Guard practices, according to the hurricane and severe  weather plans we reviewed for Coast Guard Districts 7 (Florida region)  and 8 (Gulf region), and discussions we had in Washington, D.C.,  Virginia, Florida, Alabama, and Louisiana with Coast Guard officials  responsible for implementing those plans, the Coast Guard tracks the  likely path of an approaching storm, anticipates the necessary assets to  address the storm’s impact, and repositions personnel and aircraft out  of harm’s way, with a focus on reconstituting assets to respond to local  needs once it is safe to do so. While acknowledging the importance of these operational principles, it  is equally important to note that the response to Hurricane Katrina also  hinged on discipline and adherence to critical plans. The Coast Guard Continues with Organizational Changes and Expanded Partnerships to Meet Growing Responsibilities

Coast Guard organizational changes and expanded partnerships have  helped to alleviate some resource pressures posed by added  responsibilities or further deterioration of assets, as well as help  accomplish its mission responsibilities. Progress Made with Ongoing Acquisition Efforts, but Continued Attention Is Warranted

Our recent reviews indicate that while the Coast Guard has made progress  in managing the Deepwater program, further actions are needed and the  lessons learned from this effort have not been applied to other ongoing  acquisitions. For example, even with the Coast Guard’s improved  management and oversight of its Deepwater program, further steps are  needed before all of our past recommendations for improving  accountability and program management can be considered fully  implemented. The first challenge is to find the  resources to replace some additional assets, not included in the  Deepwater program, for its non-homeland security missions. To report on the status and cost of Coast Guard’s Rescue 21 program, we  drew from our work examining (1) the reasons for significant  implementation delays and cost overruns against Rescue 21’s original 2002  proposal; (2) the viability of the Coast Guard’s revised cost and  implementation schedule that is projected to reach full operational  capability in 2011; and (3) the impact of Rescue 21’s implementation delay  upon the Coast Guard’s field units which are awaiting modernization of  antiquated communications equipment. Programs Meeting Fiscal Year 2005 Performance Targets

U.S. Program Expected to Meet Fiscal Year 2005 Target

Illegal drug interdiction. Maritime Security: Substantial Work Remains to Translate New  Planning Requirements into Effective Port Security.
Why GAO Did This Study

The Coast Guard's fiscal year 2007 budget request total $8.4 billion, an increase of 4 percent ($328 million) over the approved budget for fiscal year 2006 and a slowing of the agency's budget increases over the past 2 fiscal years. This testimony, which is based on both current and past GAO work, synthesizes the results of these reviews as they pertain to meeting performance goals, adjusting to added responsibilities, acquiring new assets (especially the Deepwater program--to replace or upgrade cutters and aircraft, and the Rescue 21 program--to modernize rescue communications), and meeting other future challenges.

What GAO Found

According to the Coast Guard, the agency's fiscal year 2005 performance, as self-measured by its ability to meet program goals, was the highest since the terrorist attacks in September 2001. Even with the need to sustain new homeland security duties, respond to particularly destructive hurricanes, and cope with aging assets, the Coast Guard reported meeting or exceeding performance targets for 7 of 11 mission programs, and it anticipates meeting the target for 1 more program once final results for the year are available. In particular, based on our discussions with Coast Guard and other officials, as well as our review of pertinent documents, the Coast Guard's response to Hurricane Katrina highlighted three elements key to its mission performance: a priority on training and contingency planning, a flexible organizational structure, and the agency's operational principles. Three organizational changes appear to be helping the Coast Guard adjust to added responsibilities. First, according to agency officials, a realigned field structure will allow local commanders to manage resources more efficiently. Second, according to the Coast Guard, a new response team for maritime security is expected to provide greater counterterrorism capability. Finally, new and expanded partnerships inside and outside the federal government have the potential to improve operational effectiveness and efficiency. While some progress in acquisition management has been made, continued attention is warranted. Within the Deepwater program, additional action is needed before certain past recommendations can be considered as fully implemented. Also, the program recently had difficulties in acquiring Fast Response Cutters to replace aging patrol boats. For the Rescue 21 program, deficiencies in management and oversight appear similar to those that plagued the Deepwater program, leading to delays and cost overruns, and demonstrating that the Coast Guard has not translated past lessons learned into improved acquisition practices. Two additional future challenges also bear close attention: deteriorating buoy tenders and icebreakers that may need additional resources to sustain or replace them, and maintaining mission balance while taking on a new homeland security mission outside the agency's traditional focus on the maritime environment.