The program’s budget has grown from  $308 million in fiscal year 1997 to an estimated $734 million in fiscal year  2003—a 138 percent increase after the effect of inflation was held constant  (see fig. DOD’s Report Did Not Thoroughly Address Congressional Concerns

DOD’s May 2003 report did not thoroughly address four of the five  congressional concerns about effective and efficient management of  the SRB program. Second, DOD did not permit us to review the draft guidance, but—based  on DOD’s comments on our 2002 SRB report, excerpts of draft criteria  contained in DOD’s mandated report, and our discussions with DOD  officials—the replacement guidance could expand the SRB program by  giving the services more flexibility in designating occupations as critical  and either eliminate or weaken the requirement for annual SRB program  reviews. Finally, as required by the fifth concern in the mandate, DOD  identified the most salient advantages and disadvantages resulting from  paying SRBs as lump sums. More recently, a DOD official stated that  the new guidance will require periodic reviews, but neither the frequency  nor the details of how these reviews would be conducted was explained. In the  report, DOD did not agree with the congressional concern that program  expenditures needed to match funding levels appropriated specifically for  the SRB program. Evaluation of Services’ Processes for Administering the Program Was Limited

DOD’s limited evaluation of the services’ SRB programs relied primarily  on program descriptions provided by the services. DOD’s report addressed other potential disadvantages of using a lump sum  payment method. Of DOD’s responses to the five  congressional concerns, three were incomplete or nonresponsive—those  regarding program effectiveness and efficiency in correcting retention  shortfalls in critical occupations, DOD actions to match program  execution with appropriations, and DOD’s evaluation of the services’  program administration. A fourth response—regarding replacement  program guidance—did not provide information essential for us to make  an independent determination as to the response’s adequacy. Recommendation for Executive Action

To assist Congress in its efforts to monitor the management of the SRB  program and to ensure that DOD is effectively and efficiently targeting  retention bonuses to critical occupations, we recommend that the  Secretary of Defense direct the Office of the Under Secretary of  Defense for Personnel and Readiness to (1) retain the requirement for  an annual review of the SRB program and (2) develop a consistent set  of methodologically sound procedures and metrics for reviewing the  effectiveness and efficiency of all aspects of each service’s SRB  program administration.
Why GAO Did This Study

The Department of Defense (DOD) uses the Selective Reenlistment Bonus (SRB) program to reenlist military personnel in critical specialties. In fiscal years 1997-2003, the program budget rose 138 percent, from $308 million to $734 million. In fiscal year 2003, the House Appropriations Committee directed the Secretary of Defense to reassess program efficiency and report on five concerns: (1) how effective the program is in correcting retention shortfalls in critical occupations, (2) how replacement guidance will ensure targeting critical specialties that impact readiness, (3) how DOD will match program execution with appropriated funding, (4) how well the services' processes for administering the program work, and (5) advantages and disadvantages of paying bonuses in lump sum payments. The committee also directed GAO to review and assess DOD's report.

What GAO Found

Despite congressional concerns about the SRB program, DOD's May 2003 report stated that the program is managed carefully, bonuses are offered sparingly, and the services need flexibility in administering the program. However, DOD's responses did not thoroughly address four of the five SRB program concerns contained in the mandate. As a result, Congress does not have sufficient information to determine if the program is being managed effectively or efficiently. DOD has not issued replacement program guidance and did not allow us to review the guidance that has been drafted. DOD's report focused primarily on criteria for designating occupations as critical, but the report did not address an important change--the potential elimination of the requirement for conducting annual program reviews. In response to our 2002 report, DOD stated that this requirement would be eliminated from future program guidance. DOD recently told us that the new guidance will require periodic reviews, but neither the frequency nor the details of how these reviews would be conducted was explained. DOD conducted a limited evaluation to address the congressional concern about how well the services are administering their programs. The response consisted largely of program descriptions provided by the services. Among other things, DOD did not use a consistent set of procedures and metrics to evaluate each of the services' programs. Consequently, it is difficult to identify best practices, or to gain other insights into ways in which the effectiveness and efficiency of the services' programs could be improved. DOD thoroughly addressed the congressional concern pertaining to the advantages and disadvantages of paying SRBs as lump sums.