	Background

Having sufficient quantities of qualified personnel to design, oversee, and  acquire space assets—on which DOD expects to spend $8 billion in fiscal  year 2013—is critical to DOD’s ability to carry out its mission. Funding for other DOD civilian personnel is  generally located in the O&M appropriation. Following the implementation of the Acquisition Improvement Plan, as  part of the budget process for fiscal year 2012 the Air Force requested  that Congress approve a pilot program to move funding for SMC  acquisition civilian personnel to its RDT&E appropriation. The Air Force Did Not Evaluate the Impact of the Pilot Program

Department of Defense, Fiscal Year 2013 President’s Budget Submission: Air Force  Justification Book Volume 2, Research, Development, Test & Evaluation. Further, the Air Force has not made plans to evaluate the outcome of the  pilot program. However, Air Force  financial management officials told us that moving funding to its RDT&E  appropriation would not necessarily mean that space acquisition  personnel would be excluded from any general reductions to civilian  personnel funding, and SMC officials confirmed that SMC acquisition  civilian personnel funding has continued to be impacted by general  reductions following the pilot program. Office of the Under Secretary of Defense  (Comptroller) officials told us that—while they do not have an opinion of  the pilot program—they are relying on the Air Force to report to them on  the pilot’s outcomes. However, because the Air Force did not establish  clear and consistent program objectives or a data collection plan to  evaluate the benefits of its pilot program, they were unable to evaluate  whether potential impacts resulting from the pilot were advantages or  disadvantages. Without establishing goals and completing a data  collection plan to evaluate the pilot program, the Air Force also has not  applied the remaining two established practices—developing processes  for approving, reporting, and monitoring the pilot program as well as  communicating evaluation results to stakeholders. The Air Force Used Existing Approval Processes Identified by DOD to Realign Funds Appropriated for Acquisition Civilian Personnel to Other Programs

Following the move of SMC acquisition civilian personnel funding to its  RDT&E appropriation, the Air Force did not obligate $29.5 million of the  $187.1 million appropriated for SMC acquisition civilian personnel in fiscal  year 2012, and Air Force officials told us that these funds were unneeded  due to the civilian hiring controls the Air Force began implementing in  May 2011. Specifically, the Air Force used the following processes to realign SMC  acquisition civilian personnel funding to other purposes:
First, the Air Force realigned $6.7 million to other programs within its  RDT&E appropriation, including $5.7 million to the Small Business  Innovative Research fund.fund did not require congressional notification because it did not use  DOD’s general transfer authority and was used to address mandatory  spending requirements; the realignment of an additional $1 million to  other Air Force needs was below the $10 million threshold DOD has  identified for prior approval by the congressional defense committees. According to Air Force officials, the Omnibus Reprogramming request  process does not identify where specific funds are realigned to—instead  the request identifies funding increases or decreases by individual  program. Recommendation for Executive Action

To determine the impact of moving funds for SMC acquisition civilian  personnel to the RDT&E appropriation, and whether this change should  be expanded to other acquisition civilian workforce communities, we  recommend that the Secretary of the Air Force direct the Assistant  Secretary of the Air Force for Acquisition, in conjunction with the Assistant  Secretary of the Air Force for Financial Management and Comptroller, to  take the following four actions:
Develop objectives that link to the goals of the pilot program. Develop processes and procedures for approving, reporting, and  monitoring the pilot program. Develop and implement a data collection and analysis plan for  evaluating pilot performance. Communicate the evaluation results to stakeholders. Agency Comments and Our Evaluation

In written comments on a draft of this report, DOD concurred with our four  recommended actions (see app. In concurring with our  recommendations, DOD stated that the Air Force will evaluate the pilot  program to ensure any conversion places the control of the resources at  the appropriate level as they are vetted through the Air Force for  approval.
Why GAO Did This Study

The United States and DOD depend on space assets to support national security, civil, and commercial activities. Having sufficient quantities of qualified personnel to acquire space assets--on which DOD expects to spend $8 billion in fiscal year 2013--is critical to DOD's ability to carry out its mission. Approximately 1,800 federal civilians at the Air Force SMC manage the acquisition of space systems. During fiscal year 2012, the Air Force implemented a pilot program that moved $187.1 million for SMC's acquisition civilian personnel from its O&M to its RDT&E appropriation.
GAO was mandated to review the Air Force pilot program. This report addresses (1) the extent to which the Air Force evaluated the impact of the pilot, and (2) the processes in place to manage realignment of the funds. GAO obtained and reviewed documentation of the pilot implementation; compared the implementation with established practices GAO has identified for implementing and evaluating pilot programs; and interviewed officials at the Air Force and DOD. GAO also reviewed applicable regulations and guidance about realigning funds and interviewed knowledgeable officials.

What GAO Found

The Air Force did not evaluate its pilot program that moved funding for Space and Missile Systems Center (SMC) acquisition civilian personnel from its 1-year Operation and Maintenance (O&M) appropriation to its 2-year Research, Development, Test, and Evaluation (RDT&E) appropriation. In addition, the Air Force is considering using this pilot program to inform funding changes for other sections of its civilian workforce. GAO's prior work has identified the following practices for implementing and evaluating pilot programs: (1) develop objectives that link to the goals of the pilot; (2) develop processes for monitoring the pilot; (3) develop and implement a data collection and analysis plan for evaluating the pilot; and (4) communicate evaluation results to stakeholders. When implementing the pilot program, the Air Force did not follow these practices, and primarily focused on ensuring that administrative changes were made accurately such as ensuring employees received pay on time. For example, while a variety of potential goals were identified for the pilot program by the Air Force in various documents; they were not clear or consistent. As a result, anecdotal opinions on the advantages or disadvantages of the pilot varied significantly. Air Force acquisition officials stated that the pilot program could protect the funding from general reductions, while conversely, Air Force financial management officials said that the pilot would not necessarily mean that space acquisition personnel would be excluded from general reductions to civilian personnel funding. Further, Office of the Under Secretary of Defense (Comptroller) officials stated that they are relying on the Air Force to report to them on the pilot's outcomes, but the Air Force has not completed a data collection plan to evaluate the pilot program and has not developed processes for monitoring the pilot program and communicating evaluation results to stakeholders. Without systematically evaluating the pilot program, the Air Force cannot determine if there is an advantage to expanding the pilot to other sections of the civilian workforce.
The Air Force used existing approval processes identified by DOD to realign funds appropriated for acquisition civilian personnel to other purposes. Following the move of SMC acquisition civilian personnel funding to its RDT&E appropriation, the Air Force determined that $29.5 million of the $187.1 million appropriated for SMC acquisition civilian personnel in fiscal year 2012 was unneeded due to the civilian hiring controls the Air Force began implementing in May 2011. The Air Force realigned these funds to other requirements. Specifically, the Air Force realigned $6.7 million to other programs within its RDT&E appropriation--including $5.7 million to the Small Business Innovative Research fund--and obtained prior approval from Congress to realign $22.8 million out of the RDT&E appropriation as part of an Omnibus Reprogramming request. The Omnibus Reprogramming request process does not identify where specific funds are to be realigned--instead the request identifies funding increases or decreases by individual program.

What GAO Recommends

GAO recommends that the Air Force evaluate the pilot program, to determine the impact of moving funding for acquisition civilian personnel to the RDT&E appropriation, and the value of expanding this change to other Air Force civilian workforces. In written comments on a draft of this report, DOD concurred with all four recommendations.