Major increases in  this year’s budget are also attributed to acquisition, construction and  improvements for continued enhancement and replacement of aging  vessels, aircraft, and infrastructure. Overall Budget Request is 6.9 Percent Higher than Previous Year’s Enacted Budget

The Coast Guard’s budget request in fiscal year 2009 is $9.35 billion, or 6.9  percent more than the enacted fiscal year 2008 budget (see fig. About  $6.2 billion, or approximately 66 percent, is for operating expenses. Although the Coast Guard reports summary financial data by homeland  security and non-homeland security missions to the Office of Management  and Budget, as a multi-mission agency, the Coast Guard can be conducting  multiple mission activities simultaneously. In fiscal  year 2007, as in fiscal year 2006, the Coast Guard met 5 targets—Ports,  Waterways, and Coastal Security; Undocumented Migrant Interdiction;  Marine Environmental Protection; Other Law Enforcement; and Ice  Operations—and agency officials reported that the Coast Guard expects to  meet the target for one additional program, Illegal Drug Interdiction, when  results become available in August 2008. Coast Guard Continues to Face Challenges in Balancing Its Homeland Security and Non-Homeland Security Missions

After the September 11, 2001 terrorist attacks, the Coast Guard’s priorities  and focus had to shift suddenly and dramatically toward protecting the  nation’s vast and sprawling network of ports and waterways. It is also important to note that assets designed to fulfill  homeland security missions can also be used for non-homeland security  missions. Meeting security requirements for additional LNG terminals:  The Coast Guard is also faced with providing security for vessels  arriving at four domestic onshore LNG import facilities. The Coast Guard  has not requested any additional funding for the construction of these  centers as part of its fiscal year 2009 budget request. Coast Guard Deepwater Program Continues to Experience Challenges and Progress Related to Affordability, Management, and Operations

Over the years, our testimonies on the Coast Guard’s budget and  performance have included details on the Deepwater program related to  affordability, management, and operations. Given the size of Deepwater  funding requirements, the Coast Guard will have a long term challenge in  funding the program within its overall and AC&I budgets. In terms of  management, the Coast Guard has taken a number of steps to improve  program management and implement our previous recommendations. These mitigating measures have resulted in increased costs to maintain the  older 110-foot patrol boats and reallocation of operations across the  various missions. It has  recognized that it needs to increase government management and  oversight and has begun to transfer system integration and program  management responsibilities back to the Coast Guard. For example, delays in the acquisition of new patrol  boats have forced the Coast Guard to incur additional costs to maintain  the older patrol boats. The removal of the 123-foot patrol boats from service has also increased  operational costs in terms of lost or reallocated missions. Coast Guard: Challenges Affecting Deepwater Asset Deployment and  Management and Efforts to Address Them. 7, 2004.
Why GAO Did This Study

The U.S. Coast Guard, a multi-mission maritime military service within the Department of Homeland Security, has requested more than $9 billion for fiscal year 2009 to address its responsibilities for homeland security missions (such as undocumented migrant interdiction) and non-homeland security missions (such as environmental protection). Integral to conducting its missions, is the Deepwater program--a 25-year, $24 billion effort to upgrade or replace vessels and aircraft. This testimony discusses: budget request and trends, and performance statistics, challenges in balancing operations across multiple missions, and Deepwater affordability, management, and its impact on operations. GAO's comments are based on products issued from 1997 to 2008. This testimony also discusses on-going work related to patrol boat operations. To conduct its work, GAO analyzed documentation and interviewed relevant officials.

What GAO Found

The Coast Guard's fiscal year 2009 budget request is approximately 7 percent higher than its fiscal year 2008 enacted budget, generally because of proposed increases in both operating expenses and acquisition, construction, and improvements funding. The Coast Guard expects to meet its performance goals for 6 of its 11 mission areas for fiscal year 2007, similar to the performance it reported for fiscal year 2006. The Coast Guard also continues to develop additional measures to better understand the links between resources expended and results achieved. The Coast Guard continues to face challenges balancing its various missions with its finite resources and has had difficulties funding and executing both its homeland security and non-homeland security missions. GAO's work has shown that the Coast Guard's homeland security requirements continue to increase and that it has been unable to keep up with these rising security demands. For example, the Coast Guard is not meeting its requirements for providing vessel escorts and conducting security patrols. The Coast Guard is also facing additional requirements to conduct more inspections of maritime facilities and provide security at a growing number of facilities that import hazardous cargos. The Deepwater acquisition program continues to be a source of challenges and progress for the Coast Guard. In terms of affordability, the magnitude of Deepwater funding--representing about 11 percent of the agency's proposed fiscal year 2009 budget--presents a long-term challenge. In terms of management, the Coast Guard has made changes to improve program management by moving away from reliance on a system integrator, increasing government monitoring of program outcomes and competitively purchasing selected assets. In terms of operations, delays in the procurement of new patrol boats have increased resource requirements to maintain older legacy patrol boats and keep them operating.