Specifically, each of the military  services either over- or underestimated actual obligations for fuel  consumption spending when compared to their budget estimates. Military Services’ Reported Actual Spending on Fuel Consumption Decreased from Fiscal Years 2012 through 2015 but Differed from Budget Estimates

In fiscal years 2012 through 2015, the military services’ reported a  decrease in total obligations for fuel consumption spending from a high of  about $13 billion in fiscal year 2012 to a low of about $10.1 billion in fiscal  year 2015. DOD Does Not Fully Reconcile Differences in Reported Fuel Consumption Spending and Does Not Include Certain Fuel Consumption Data in Annual Budget Requests

DOD takes some steps to report fuel consumption data in annual budget  estimates, but it does not fully reconcile differences between the military  services’ reported actual fuel consumption spending and DLA’s reported  fuel sales and does not include certain data that the Congress could use  to evaluate the military services’ funding requests for fuel. For each  budget request, DOD validates the military services’ fuel consumption  data by reviewing the military services’ fuel consumption estimates to  ensure that the estimates align with DOD’s overall funding priorities,  among other steps. For  example, in the President’s budget request for fiscal year 2016 that was  submitted to Congress in February 2015, DOD reported that the Navy’s  actual obligations for fuel consumption spending in fiscal year 2014 were  about $2.7 billion less than what DLA’s fuel sales data show was sold to  the Navy in that year. Fuel Volume Data and O&M Base Obligations Are Not Included in Budget Requests

We also found, however, that DOD’s annual budget requests do not  provide information in two areas that could be used by Congress to  evaluate the military services’ funding requests for fuel. Unless DOD reports more complete  information on its actual and estimated fuel consumption, Congress will  not have full visibility over the amount of fuel volume the military services  require on an annual basis for their activities, or trends in the military  services’ spending for non-war-related fuel consumption, which has  varied considerably from budget estimates. Having an approach to reconcile  differences would provide DOD with a means to understand any  discrepancies in its fuel consumption data and determine whether any  actions are needed to better assess the accuracy of the military services’  actual fuel consumption spending that it reports to Congress in annual  budget requests. Recommendations for Executive Action

In order to improve the accuracy of the information included in the O&M  budget justification material submitted to Congress and provide complete  information to review the military services’ fuel consumption spending  requests, we recommend that the Secretary of Defense direct the Under  Secretary of Defense (Comptroller), in consultation with the military  services and DLA, to take the following two actions:
Develop an approach to reconcile data on fuel consumption reported  by the military services and fuel sales to the military services reported  by DLA and take any appropriate corrective actions to improve the  accuracy of actual fuel consumption spending data, and
Report complete fuel consumption information to Congress, to include  actual and estimated fuel volume and actual O&M base obligations for  fuel consumption spending separate from O&M OCO obligations. DOD concurred with the first recommendation that it develop an approach  to reconcile the military services’ and DLA fuel consumption data. DOD did not concur with the second recommendation that it report more  complete fuel consumption information to Congress. DOD also  stated that manually identifying these data would be extremely labor  intensive. Appendix I: Objectives, Scope, and Methodology

Our objectives were to (1) describe the military services’ reported actual  spending on fuel consumption compared to their budget estimates since  2012 and factors that were reported to have contributed to any  differences; (2) assess the steps the Department of Defense (DOD) takes  to report accurate and complete fuel consumption data in its annual  budget requests; and (3) evaluate the extent to which DOD’s approach for  determining the fiscal year 2017 standard price charged to fuel customers  is consistent with federal budget guidance and leading practices for a  credible and well-documented cost estimate.
Why GAO Did This Study

DOD and the military services estimate total funding needs for fuel in annual budget requests by using planned consumption (measured in barrels of fuel) and a standard price per barrel set by DOD.
Senate Report 114-49, accompanying a bill for the National Defense Authorization Act for fiscal year 2016, included a provision for GAO to review DOD's approach to estimating fuel consumption. Among other objectives, this report (1) describes the military services' reported actual spending on fuel consumption compared to their budget estimates since 2012, and factors that were reported to have contributed to any differences, and (2) assesses the steps DOD takes to report accurate and complete fuel consumption data in annual budget requests. GAO analyzed DOD budget documents, including military service and DLA fuel data for fiscal years 2012 through 2015 and interviewed DOD officials responsible for preparing fuel consumption budget materials.

What GAO Found

The military services' total obligations for fuel consumption spending decreased from a high of about $13 billion in fiscal year 2012 to a low of about $10.1 billion in fiscal year 2015 but differed from budget estimates, which officials largely attributed to changes in operations and training that affected fuel consumption. Specifically, each of the military services either over- or underestimated its actual fuel consumption spending when compared to budget estimates (see figure).
Military Services' Reported Actual Versus Estimated Fuel Consumption Spending, Fiscal Years 2012 through 2015
The Department of Defense (DOD) takes some steps to report fuel consumption data in annual budget requests, but it does not fully reconcile differences in the military services' reported actual fuel consumption data and does not include some fuel consumption data. For each budget request, DOD validates the military services' fuel consumption data by ensuring that the budget estimates align with DOD's funding priorities, among other steps. However, GAO's analysis found differences between the military services' reported fuel consumption spending and Defense Logistics Agency (DLA) data on fuel sales to them. For example, DOD reported that the Navy's actual obligations for fuel consumption spending in fiscal year 2014 were about $2.7 billion less than what DLA's fuel sales data show was sold. DOD had not established an approach to reconcile such differences. Having an approach to reconcile differences would provide DOD with a means to determine if any actions are needed to better assess the accuracy of the military services' reported fuel consumption data. Further, GAO's analysis found that DOD's budget requests for fuel did not include details in two areas that could be used by Congress to evaluate funding requests for fuel. First, the budget requests excluded fuel volume data that were collected during the budget development process. Fuel volume data would provide another measure of fuel consumption to justify DOD's funding requests. Second, the requests did not separate actual fuel consumption spending for day-to-day activities, such as training, from war-related spending, which has varied considerably from budget estimates. Without additional data in these two areas, Congress does not have full visibility over the amount of fuel volume the military services require for their activities or trends in fuel consumption spending for non-war-related purposes.

What GAO Recommends

GAO recommends that DOD (1) develop an approach to reconcile the military services' and DLA fuel consumption data and (2) report more complete fuel consumption data to Congress. DOD concurred with the first recommendation and did not concur with the second recommendation, stating that providing additional fuel consumption information could be useful, but doing so would be difficult and labor intensive. GAO believes the recommendation remains valid to ensure that Congress has information to assess trends in fuel consumption, as discussed in the report.