Search and rescue has traditionally been the stations’ top  priority. The OIG found that the Coast  Guard generally complied with the intent of the earmark but also  concluded that improving operational readiness at stations would require  a substantial and sustained investment. However, through a combination of data runs and unit surveys performed  at our request, the Coast Guard was able to estimate staffing and  personnel retention expenditures, and develop actual expenditure data for  personal protection equipment (PPE). Using fiscal year 2002 data derived through similar analyses, we  determined that estimated station expenditures for fiscal year 2003  exceeded fiscal year 2002 levels by at least $20.5 million—or $4.8 million  more than the $15.7 million earmarked appropriation. Better Accountability of Expenditures Is Needed to Ensure That Earmarks Are Appropriately Spent

The Coast Guard did not have adequate processes in place to sufficiently  account for the expenditure of the entire $15.7 million earmarked fiscal  year 2003 appropriation or to provide assurance that these earmarked  funds were used appropriately, as set forth by federal management and  internal control guidelines. The purpose of an earmark is to direct an  agency to spend a certain amount of its appropriated funds for a specific  purpose. The plan, although useful as an  indicator of the Coast Guard’s intentions, is not sufficient to show that the  Coast Guard had expended the earmarked appropriation as directed. Conclusions

On the basis of available data and other information, the Coast Guard  appears to have met the Congress’s requirement to spend at least $15.7  million more on multimission stations in fiscal year 2003 than in fiscal year  2002. Recommendation for Executive Action

To improve the Coast Guard’s ability to respond to congressional  oversight and to provide greater assurance that earmarked funds are used  appropriately, we recommend that the Secretary of Homeland Security  direct the Commandant of the Coast Guard to develop, in accordance with  the fiscal year 2004 departmental guidelines, processes to accurately and  completely account for the obligation and expenditure of earmarked  appropriations. Appendix I: Scope and Methodology

We used a variety of approaches in our work to determine the amount of  the general appropriation the Coast Guard expended on multimission  stations in fiscal year 2003 across the four areas covered by the earmark— staffing, personal protection equipment (PPE), personnel retention and  training—and whether this amount exceeded by $15.7 million the level of  effort expended in fiscal year 2002. Coast Guard officials  provided data for three of the four categories. Staffing

The Coast Guard could not provide us with the actual amount of fiscal  year 2003 appropriation funds spent on station staffing because the  agency’s automated databases do not fully identify personnel expenditures  at the station level. Personal Protection Equipment

According to the Coast Guard, the agency estimates it spent approximately  $5 million more for PPE than it planned to spend during fiscal year 2002. However, some information indicates that levels of effort expended on  training station personnel increased in fiscal year 2003.
Why GAO Did This Study

The Coast Guard conducts homeland security and search and rescue operations from nearly 200 shoreside stations along the nation's coasts and waterways. After several rescue mishaps that resulted in the deaths of civilians and station personnel, Congress recognized a need to improve performance at stations and appropriated additional funds to increase stations' readiness levels. For fiscal year 2003, the Coast Guard received designated funds of $15.7 million specifically to increase spending for stations' staffing, personal protection equipment (such as life vests and cold weather protection suits), personnel retention, and training needs. Congress directed GAO to determine if the Coast Guard's fiscal year 2003 outlays for stations increased by this amount over fiscal year 2002 expenditure levels. GAO also assessed the adequacy of the processes used by the Coast Guard to account for the expenditure of designated funds.

What GAO Found

According to our analyses of available data, and anecdotal and other information, it appears that the Coast Guard spent at least $15.7 million more to improve readiness at its multimission stations in fiscal year 2003 than it did the previous year. However, this statement cannot be made with certainty, because the Coast Guard's databases do not fully identify expenditures at the station level. GAO worked with the Coast Guard to develop expenditure estimates for the stations, using budget plans and available expenditure data, and this effort produced full or partial estimates for three of the four categories--staffing, personal protection equipment, and personnel retention efforts. For these three categories, fiscal year 2003 expenditure estimates were at least $20.5 million more than the previous year, or about $4.8 million more than the $15.7 million designated appropriation. Although estimates could not be developed for training expenditures, other available information indicates that training levels increased in fiscal year 2003. Taken together, these results suggest that the Coast Guard complied with Congress' direction to increase spending for stations by $15.7 million. Federal management guidelines and internal control standards call for greater accountability for designated--earmarked--appropriations than was provided by the processes the Coast Guard had in place to track these funds. The purpose of an earmark is to ensure agencies spend a certain amount of their appropriated funds for a specific purpose. Guidelines and standards indicate that agencies should account for the obligation and expenditure of earmarked appropriations--a step the Coast Guard thoroughly implemented only for personal protection equipment. Coast Guard officials developed a plan showing how they planned to spend the earmark, but such a plan, while useful as an indication of an agency's intentions, is not sufficient to show that the earmark was expended in accordance with congressional direction.