However, past BRAC budget submissions are not as effective as they can be for monitoring BRAC expenditures because they historically overstate O&M and military construction costs and understate environmental costs. In April 1995, the Congress rescinded an additional $32 million. Reducing the fiscal year 1997 budget by $148 million (the amount of long-term unobligated BRAC balances as of December 31, 1995) would help control the amount of unobligated funds in the BRAC account. Because BRAC construction projects may be canceled as a result of ongoing IG audits, additional reductions in the BRAC budget are possible. Specifically, DOD stated that (1) very little of the $148 million in unobligated funds will remain unobligated at the end of the fiscal year, (2) the approximately $144 million in O&M funds that we identified as unsupported by valid requirements will be used for environmental requirements, and (3) the IG audit data we used was not accurate and IG findings from the past cannot be projected to the 1997 budget. Comments From the Department of Defense

The following are GAO’s comments on the Department of Defense’s (DOD) letter dated June 5, 1996. GAO Comments

1. 2. However, in the past, DOD actions, along with congressional budget reductions and rescissions, were needed subsequent to the appropriation of Base Realignment and Closure (BRAC) funds to control unobligated balances. Given the slower rate of obligations in fiscal year 1996 (see comment 4), the continuing levels of unobligated funds in the BRAC account, and the potential reductions in fiscal year 1997 construction that could be expected to result from IG audits, we continue to believe congressional reductions to the fiscal year 1997 BRAC budget would more closely align funds in the BRAC account with expected expenditures from now to the end of fiscal year 1997. 6. 7.
Why GAO Did This Study

Pursuant to a legislative requirement, GAO reviewed the Department of Defense's (DOD) Base Realignment and Closure (BRAC) accounts, focusing on: (1) the accuracy of BRAC budget estimates; and (2) opportunities to reduce the fiscal year 1997 BRAC budget.

What GAO Found

GAO found that: (1) because BRAC expenditures vary substantially from budget submissions, Congress cannot be assured that appropriated BRAC funds will be used as requested; (2) past DOD budget requests have understated environmental costs and overstated other BRAC costs for military construction and operation and maintenance; (3) DOD had $342 million in unobligated budget balances as of December 1995; (4) although Congress has rescinded some of these high unobligated balances, DOD continues to request funds in advance of its needs; (5) the DOD fiscal year 1997 budget request can be reduced by about $148 million, since funds from prior year appropriations will be available to fund future expenditures; (6) reducing the fiscal year 1997 budget would help control the amount of unobligated funds in the BRAC account; (7) about $144 million in 1996 O&M funds are not supported by valid Army requirements; (8) the DOD Inspector General (IG) identified additional reductions that are possible by eliminating or reducing certain BRAC construction projects; and (9) if the DOD IG identifies reductions in FY 1997 construction projects similar to the reductions identified in 1996 and 1995, the amount of unneeded funds would total $60 million.