All corrective actions detailed in this plan are to be completed by December 1999. The Army May Have Difficulty Achieving Material Weakness Plan’s Completion Date

The Army has made some progress by developing a material weakness plan, but it may have difficulty achieving the plan’s December 1999 completion date for the following three reasons. Second, as of October 1997, critical subplans outlining how the Army intends to meet its milestones had not been developed for the costing system and the computer-based methodology. The material weakness plan acknowledges this problem, stating that “. . .managers at all levels do not have the information needed to improve work performance, improve organizational efficiency, and determine and support staffing needs, manpower budgets, and personnel reductions.”
The Army’s plan contains some logical steps to correct this material weakness, including the Army’s two near-term solutions to identifying the number of institutional positions based on an analysis of the workload. For this reason, our review primarily focused on these initiatives. Without a detailed implementation schedule, however, the Army lacks the tools it needs to ensure that it can meet the milestones in the material weakness plan. However, the subplan detailing the specific steps and milestones for implementing the system has not been developed. Even though redesign efforts began in January 1995, there has been no net decrease in the number of major commands, and two of the redesign studies have been canceled. Also, the dollar and personnel savings estimates are overstated. Also, most of the 4,000 active Army positions that were to be transferred from institutional to operational forces were based on assumptions that may not occur. The pamphlet is consistent with this principle, stating that “clear performance measures should be identified to gauge organizational progress.”

		Redesign Effort Has Not Resulted in Major Organizational Changes or Efficiencies

The Army’s institutional redesign effort has not reduced the number of major commands, even though redesign documents state that the Army will strive to do so. The Army also created a new major command—the Space and Missile Defense Command. If the Army reduced its reliance on active military institutional personnel, more military personnel would be available for operational units, including deployable support units, which have historically experienced shortfalls.Although the number of Army institutional positions has decreased since 1992, Army data show that the proportion of active Army institutional to operational forces has remained at about 29 percent and is projected to remain at this level through fiscal year 2003, as shown in figure 3. According to an official from this office, limited cost data were included in the memorandum because the offices responsible for the initiatives did not provide cost data in a timely manner. Such a methodology is essential for the Army to make data-based decisions on how to allocate resources among institutional organizations, have assurance the highest priority functions are funded, and be aware of the risks in not funding some institutional functions. As a result, further reductions or retention of institutional personnel may result without the benefits of workload analysis and assessments of risks and tradeoffs. To improve the Army’s ability to make informed, analysis-based decisions on benefits, risks, and tradeoffs in realigning major command organizations and functions, we recommend that the Secretary of the Army require that workload-based analyses, such as the 12-step methodology, be used to demonstrate the benefits, risks, and tradeoffs of Force XXI institutional redesign decisions. To assess the extent to which the Army’s streamlining initiatives identified opportunities to reduce Army personnel devoted to institutional functions and realize savings, we reviewed streamlining guidance and interviewed knowledgeable officials from the Office of the Assistant Secretary of the Army for Manpower and Reserve Affairs; the Directorate of Force Programs within the Deputy Chief of Staff for Operations and Plans; the Assistant Secretary of the Army for Financial Management and Comptroller; the Deputy Chief of Staff for Logistics; Forces Command; Training and Doctrine Command; and Army Materiel Command. Additional copies are $2 each.
Why GAO Did This Study

Pursuant to a legislative requirement, GAO reviewed the extent to which the Army has: (1) taken corrective action to resolve its material weakness in determining institutional personnel requirements; and (2) identified opportunities to reduce personnel and realize savings through its Force XXI Institutional Redesign Effort.

What GAO Found

GAO noted that: (1) the Army developed a corrective action plan to resolve its material weakness in determining institutional personnel requirements but may have difficulty achieving the plan's completion date; (2) two critical subplans have been developed, one that implements a new costing system and another that develops a new computer-based methodology--the Army Workload Performance System (AWPS); (3) without specific steps and milestones for both of these efforts, the Army lacks the tools it needs to ensure that the plan will be completed by December 1999; (4) milestones for both efforts have slipped from original estimates, and in the case of the computer-based methodology, the Army has missed some of its interim goals; (5) in addition, a plan initiative to ensure that major commands use a 12-step methodology to analyze workload may not be implemented on time unless more personnel are assigned to the office responsible for this effort; (6) the Army's institutional redesign effort has not resulted in a reduction in major command headquarters, and the dollar and position savings identified are overstated; (7) one redesign initiative resulted in the redesignation of a major command as a subcommand; (8) however, the Army also created a new command, resulting in no net decrease in the number of commands; (9) also, the Army transferred a command but did not recognize it to achieve efficiencies; therefore, this effort produced virtually no decrease in the command's 9,000 positions; (10) the Army transferred about 2,800 active Army positions from institutional to operational forces based on two initiatives, but these initiatives did not produce the anticipated savings, and personnel cuts had to be made elsewhere; (11) the Army's efforts to establish workload-based requirements and redesign institutional functions have produced few results; (12) Army personnel trend data from 1992-2003 show that the Army has not been successful in reducing the proportion of institutional to operating forces within the active Army; (13) in addition, the Army does not currently have a workload basis for allocating its personnel resources among institutional organizations and ensuring that the highest priority functions are funded first; (14) as a result, the Army may not have the analysis it needs to efficiently allocate many of the institutional positions that are programmed to be eliminated by fiscal year 2003 or additional reductions mandated by the Quadrennial Defense Review; and (15) without senior leadership attention, the Army's current initiatives may not achieve meaningful and measurable changes.