Since 2001, DOD has prepared reports on the costs of its involvement in  GWOT. Funding for the Global War on Terrorism

Since 2001, Congress has appropriated about $430 billion to DOD and  other U.S. government agencies for military operations and reconstruction  and stabilization activities supporting GWOT. Some funding has also  come through the normal baseline budget appropriated to the  departments. Since  September 2001, DOD has received about $386 billion to fund military  operations supporting GWOT. In addition, about $44 billion has been made  available to U.S. agencies—including DOD, USAID, and State—for  reconstruction and stabilization efforts in Iraq ($34.5 billion) and  Afghanistan ($9 billion) with an additional $400 million for use in Iraq and  Afghanistan through the Commander’s Emergency Response Program. In addition to the funding provided to support military operations,  Congress has appropriated about $44 billion to DOD and other U.S.  government agencies to support important reconstruction and  stabilization activities in Iraq and Afghanistan since 2001. The U.S. Has Reported Hundreds of Billions in Costs of Ongoing Military and Reconstruction and Stabilization Operations, but Data Weaknesses Make It Difficult to Reliably Know Cost of Military Operations

Since GWOT began in 2001, U.S. government agencies have reported  hundreds of billions of dollars in costs for overseas military and  reconstruction operations; however, as we have previously reported, data  reliability and reporting concerns make it difficult to know DOD’s total  GWOT costs. U.S government  agencies have reported costs of about $23 billion for Iraqi reconstruction  and stabilization. This, along with DOD’s cost reliability  and reporting problems, make it difficult for the decision makers to  reliably know how much the war is costing, to determine how  appropriated funds are being spent, and to use historical data to predict  future trends. DOD’s Reported Costs for Military Operations

Since the attacks of September 11, 2001, DOD has reported cumulative  incremental costs of about $273 billion, through the end of April 2006, on  military operations overseas in support of GWOT. The difference between the  amount appropriated and DOD’s reported costs through April 2006 can  generally be attributed to these unreported obligations for intelligence and  Army modular force transformation, as well as funding for procurement,  military construction, and research, development, test, and evaluation,  which can be obligated over multiple years, that has not yet been  obligated. As a result, neither DOD  nor Congress can reliably know how much the war is costing. As we  reported in September 2005, we found numerous problems with DOD’s  processes for recording and reporting costs for GWOT. Factors affecting  the reliability of DOD’s reported costs include long-standing deficiencies  in DOD’s financial management systems and business processes, the use  of estimates instead of actual costs, and the lack of supporting  documentation. In our September 2005 report, we made several recommendations to the  Secretary of Defense to (1) undertake a series of steps to ensure that the  services’ reported GWOT costs are accurate and reliable; (2) direct the  Office of the Under Secretary of Defense (Comptroller) to oversee the  services’ efforts and to develop a systematic process to review and test the  reliability of the overall GWOT reports; (3) expand the department’s  financial management regulation for contingency operations to include  contingencies as large as GWOT; and (4) establish guidelines to control  costs and require the services to keep the Comptroller’s office informed of  their efforts in this area. However, costs are difficult to  predict because they depend on several direct and indirect cost variables. These costs  will require administration decision makers and Congress to consider  difficult trade-offs as the nation faces increasing fiscal challenges in the  years ahead. Future DOD Costs

The future costs associated with DOD’s commitments to GWOT depend on  several variables, including (1) the extent and duration of operations, (2)  the types of facilities that will be required to support troops overseas, and   (3) the amount of equipment that will need to be restored or replaced. Future Nation-Building Costs

Future cost variables for other U.S. government agencies include the  efforts to help form national and provincial governments and build  management capacity in both Afghanistan and Iraq and build capable and  loyal Iraqi and Afghani security forces.
Why GAO Did This Study

After the terrorist attacks of September 11, 2001, the President announced a Global War on Terrorism (GWOT), requiring the collective instruments of the entire federal government to counter the threat of terrorism. Ongoing military and diplomatic operations overseas, especially in Iraq and Afghanistan, constitute a key part of GWOT. These operations involve a wide variety of activities such as combating insurgents, civil affairs, capacity building, infrastructure reconstruction, and training military forces of other nations. The U.S. has reported substantial costs to date for GWOT related activities and can expect to incur significant costs for an unspecified time in the future, requiring decision makers to consider difficult trade-offs as the nation faces increasing long-range fiscal challenges. GAO has issued several reports on current and future financial commitments required to support GWOT military operations, as well as diplomatic efforts to stabilize and rebuild Iraq. This testimony discusses (1) the funding Congress has appropriated to the Department of Defense (DOD) and other U.S. government agencies for GWOT-related military operations and reconstruction activities since 2001; (2) costs reported for these operations and activities and the reliability of DOD's reported costs, and (3) issues with estimating future U.S. financial commitments associated with continued involvement in GWOT.

What GAO Found

Since 2001, Congress has appropriated about $430 billion to DOD and other government agencies for military and diplomatic efforts in support of GWOT. This funding has been provided through regular appropriations as well as supplemental appropriations, which are provided outside of the normal budget process. Since September 2001, DOD has received about $386 billion for GWOT military operations. In addition, agencies including the Department of State, DOD, and the Agency for International Development have received since 2001 about $44 billion to fund reconstruction and stabilization programs in Iraq ($34.5 billion) and Afghanistan ($9 billion) and an additional $400 million to be used in both Iraq and Afghanistan. Since 2001, U.S. government agencies have reported significant costs associated with GWOT, but GAO has concerns with the reliability of DOD's reported cost data. Through April 2006, DOD has reported about $273 billion in incremental costs for GWOT-related operations overseas--costs that would not otherwise have been incurred. DOD's reported GWOT costs and appropriated amounts differ generally because DOD's cost reporting does not capture some items such as intelligence and Army modular force transformation. Also, DOD has not yet used funding made available for multiple years, such as procurement and military construction. GAO's prior work found numerous problems with DOD's processes for recording and reporting GWOT costs, including long-standing deficiencies in DOD's financial management systems and business processes, the use of estimates instead of actual cost data, and the lack of adequate supporting documentation. As a result, neither DOD nor the Congress reliably know how much the war is costing and how appropriated funds are being used or have historical data useful in considering future funding needs. GAO made several recommendations to improve the reliability and reporting of GWOT costs. In addition to reported costs for military operations, U.S. agencies have obligated about $23 billion of $30 billion received for Iraqi reconstruction and stabilization, as of January 2006. U.S commitments to GWOT will likely involve the continued investment of significant resources, requiring decision makers to consider difficult trade-offs as the nation faces increasing fiscal challenges in the years ahead; however, predicting future costs is difficult as they depend on several direct and indirect cost variables. For DOD, these include the extent and duration of military operations, force redeployment plans, and the amount of damaged or destroyed equipment needed to be repaired or replaced. Future cost variables for other U.S. government agencies include efforts to help form governments and build capable and loyal security forces in Afghanistan and Iraq, and meet the healthcare needs of veterans, including providing future disability payments and medical services.