oversight

Coast Guard: Reorganization Unlikely to Increase Resources or Overall Effectiveness

Published by the Government Accountability Office on 1990-07-12.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

          !&           United   States   General   Accounting         Office

                       Report to Congressional Requesters
GAO                           *



July   1990
                       COAST GUARD
                       Reorganization
                       Unlikely to Increase
                       Resources or Overall
                       Effectiveness




                      REsTRIcrED--       Not to be released outside            the
                      General Accounting   Office unless specifically
                      approved by the Office of Congressional
                      Relations.
                  ~
                                    ,54*           _.    __     ._-
 GAO/RCED-90432
Resources, Community,   and
Economic Development    Division

B-239040

July 12, 1990

Congressional Requesters

In response to requests received from the congressional leadership and the Chairman of the
Senate Foreign Relations Committee, listed at the end of this letter, this report presents our
analysis of selected proposals for alternative organizational placement of the U.S. Coast
Guard. The report details the recent funding history of the Coast Guard and evaluates
organizational alternatives in terms of their likely impact on the essential character and
multimission capabilities of the Service and on its funding. The report also discusses actions
the Coast Guard has taken and will need to take to ensure optimal use of the resources
available to it.

As arranged with your offices, unless you publicly announce its contents earlier, we plan no
further distribution of this report until 30 days from the date of this letter. At that time, we
will send copies to the appropriate congressional committees, the Commandant of the Coast
Guard, and the Secretary of Transportation. We will also make copies available to others on
request.

This work was performed under the direction of Kenneth M. Mead, Director, Transportation
Issues, (202) 275-1000. Major contributors are listed in appendix VI.




J. Dexter Peach
Assistant Comptroller General
Executive Summary


                   The U. S. Coast Guard was a frequent subject of reorganization pro-
Purpose            posals in the 1980s. Much of the impetus for these proposals stemmed
                   from a desire to use the Service to advance particular policies and to
                   increase its funding. Several congressional leaders requested that GAO
                   review options for reorganizing the Coast Guard, including the option of
                   making it independent. In examining this issue, GAO (1) evaluated pro-
                   posed alternatives for organizational placement of the Service, (2)
                   assessed the Service’s recent funding history, and (3) examined actions
                   the Service has taken to enhance its efficiency and effectiveness.


                   Part of the Department of Transportation (nor) since 1967, the Coast
Background         Guard by law is considered at all times to be an armed service of the
                   United States. It nevertheless functions in an essentially civilian
                   capacity, except when directed by the President in time of war or other
                   national emergency to operate as part of the Navy. This dual role makes
                   the Service unique in government. Originally established to enforce cus-
                   toms and other duties, the Service saw its responsibilities multiply
                   almost immediately. The result was the emergence of a multimission
                   form of operations under which Service personnel often perform several
                   missions in the course of a single voyage or patrol. While multimission
                   operations have enabled the Service to adapt to changing circumstances
                   and priorities and take on new responsibilities, they may also have
                   served to encourage a perception that these added duties could be
                   absorbed with little or no increase in resources.


                   While moving the Service or making it independent might enhance its
Results in Brief   effectiveness in certain functional areas, such steps are not likely to
                   increase the resources available to the Service or enhance its overall
                   effectiveness. Such actions might in fact erode the unique dual-role/mul-
                   timission character of the Service and impair its ability to carry out its
                   many transportation-related missions and such other missions as
                   defense readiness and marine environmental protection.

                   Despite a widespread perception to the contrary, the budget of the Coast
                   Guard grew in real terms in the 1980s. In constant 1988 dollars, its
                   budget increased from $1.7 billion to $3.1 billion between fiscal years
                   1980 and 1989-24 percent overall, or an average of 2.4 percent yearly.
                   This budget growth was made possible by funds appropriated for
                   national defense and drug law enforcement, which the Congress added
                   to the Service’s transportation appropriations.




                   Page 4                       GAO,‘RCEl.M@132   Coast Guard Organization   end Funding
Page 3
          JSxecutlve Summary




          within nor. They have also maintained that the Service should not be
          perceived as a divisible entity. To subtract out a mission because of lim-
          ited focus on a single issue would, in their view, have an adverse effect
          on the other services that the Coast Guard provides to the public.

          While making the Service independent might somewhat enhance its
          managerial flexibility, it would be unlikely, in the opinion of most con-
          gressional and other budget experts GAO contacted, to increase the Ser-
          vice’s overall resources. Neither its current budget function
          (transportation) nor its congressional authorization and funding panels
          would be likely to change in the event the Service-in its present form
          and with its current missions-were made independent.

          The potential impact on DOTof the Service’s removal must also be con-
          sidered. Many authorities view DOTas the epitome of the major-purpose
          department, uniting all important aspects of a single function (transpor-
          tation). In this scheme, the Coast Guard performs in the maritime arena
          functions analogous to those of FAA in aviation. Because of its size, it
          also serves as a counterbalance to FAA and prevents nor from being dom-
          inated by a single large element. For a variety of reasons, ncrr is under
          threat today. A number of proposals have called for FAA'S removal from
          the Department. Proposals to remove the Coast Guard must be evalu-
          ated in this context and in terms of their implications for DOT’Scontinued
          effectiveness and viability. The Service’s removal could encourage and
          support separatist efforts that could eventually spell DOT’Send and with
          it the loss of many of the benefits that were argued in support of the
          Department’s creation over 20 years ago.


Funding   During the 198Os, the long-held view of many Coast Guard officials and
          supporters that the Service is underfunded in relation to its diverse and
          ever-expanding responsibilities came to be perceived as a “function 400
          problem.” According to this view, the Service’s placement for budget/
          appropriations purposes in budget function 400 (transportation) penal-
          ized the agency, making it a target of opportunity when the Congress
          sought funds with which to restore cuts the Administration had imposed
          on programs such as mass transit and passenger rail service. GAO'S anal-
          ysis, however, disclosed that while the potential for a “function 400
          problem” existed, the Coast Guard’s budget was not actually harmed by
          competing demands for transportation appropriations because the Con-
          gress was willing and able to make funds available to the Service out of
          defense appropriations and special appropriations for waging the war
          on drugs. The Congress provided these funds in recognition of the Ser-
          vice’s unique dual-role/multimission character and the Service’s impor-
          tant responsibilities in defense readiness and drug interdiction. Between


          P8ge 6                       GAO/BCED@O-132   Coast Guard Orgmhtion   and Fundine
                           Executive   Summary




                           GAO  examined actions the Service took to respond to earlier recommen-
                           dations that it ensure optimal use of resources by developing a perform-
                           ance measurement system. While the Service has taken some steps to
                           develop such a system, much remains to be done. Many of its current
                           measures of efficiency and effectiveness are not useful in evaluating
                           program performance, managing program activities on a daily basis, or
                           making important planning and resource allocation decisions.


GAO Analysis

Organizational Placement   In recent years, the Service’s multimission character has often led to
                           reorganization proposals in which the Service is viewed primarily as a
                           collection of versatile assets available for promoting particular policies
                           or supporting efforts to deal with pressing national concerns. A desire to
                           enhance the Service’s funding can also be discerned as a motive for
                           recent reorganization proposals. The 1966 proposal to transfer the Ser-
                           vice from the Department of the Treasury to the newly proposed DOT
                           exemplifies the modern tendency to focus on the versatility of the Coast
                           Guard’s assets. Likewise, proposals in the early 1980s to move the Ser-
                           vice to the Department of Defense (DOD) and proposals in 1988 to move
                           it back to Treasury as part of a consolidated border control and enforce-
                           ment agency reflect a desire to advance particular policy objectives-in
                           the first instance, strengthening national defense capabilities, and in the
                           second, marshalling federal resources more effectively in support of the
                           war on drugs.

                           However, while making the Service part of DOD or incorporating it into a
                           consolidated border agency might have symbolic value in affirming the
                           nation’s commitment to a strong defense or to law enforcement, it is less
                           clear that such moves would materially improve capabilities in these
                           areas. Moreover, reorganizations that would emphasize a single mission
                           or a narrow range of missions could compromise the Service’s ability to
                           carry out other missions and to meet needs in such important areas as
                           search and rescue, aids to navigation, marine environmental protection,
                           and boating safety.

                           The dual role of the Coast Guard and the diversity of its responsibilities
                           preclude a perfect fit in any organization. However, many believe that
                           DCEoffers the best fit currently available. It was because the majority of
                           the Service’s programs are related to transportation that the Coast
                           Guard was included as part of uor in 1967. Coast Guard officials have
                           consistently maintained since then that the Service’s proper place is


                           Page 5                       GAO/RCED9@132   Cmst Guard Organhtion   and Funding
Contents


Executive Summary                                                                                        4

Chapter 1                                                                                               12
Introduction             Organizational History
                         Objectives, Scope, and Methodology
                                                                                                        12
                                                                                                        16

Chapter 2                                                                                               18
Proposed                 The Service’s Attraction to Reorganizers
                         Evaluation of Recent Proposals Dealing With the Coast
                                                                                                        19
                                                                                                        20
Reorganizations of the       Guard’s Organizational Placement
Coast Guard Are          Conclusions                                                                    33
Unlikely to Improve
Its Funding or
Enhance Its
Capabilities
Chapter 3                                                                                               36
Despite Fiscal           Coast Guard’s Funding Grew Between Fiscal Years 1980
                             and 1989 Despite Federal Budget Constraint
                                                                                                        37
Constraint, the Coast    Coast Guard Has Taken Measures to Meet Expanded                                48
Guard’s Budget Has           Responsibilities
                         Conclusions                                                                    49
Grown        -
Chapter 4                                                                                               52
Outlook for Continued    Need for Tools to Assess Program Performance
                             Previously Identified
                                                                                                        53
Tight Budgets            Longstanding Data Problems May Hamper Efforts to                               59
Underscores Need for         Establish User Fees
                         Conclusions                                                                    61
Coast Guard to           Recommendation to the Secretary of Transportation                              62
Enhance Efficiency
and Effectiveness and
Offset Costs
Appendixes               Appendix I: Selected Early Proposals to Reorganize the                         64
                             Coast Guard and the 1966 Proposal to Create the
                             Department of Transportation



                         Page 8                     GAO/RCED90-132   Coast Guard Organhation   and Funding
                           Executive   Summary




                           fiscal years 1982 and 1989, transfers to the Coast Guard of funds appro-
                           priated for defense amounted to over $1.7 billion, or 9 percent of the
                           Service’s total funding. The Service also received nearly $250 million in
                           funds appropriated under antidrug legislation.


Management Effectiveness   While it has taken some of the necessary first steps, the Service has yet
                           to fully develop and implement a performance management system
                           capable of determining how efficiently it uses resources and how well its
                           programs are achieving their objectives. GAO and others have recom-
                           mended such a system. In the absence of good measures of efficiency
                           and effectiveness, the Service is unable to evaluate its overall perform-
                           ance or ensure optimal use of the limited resources at its disposal. For
                           example, absent good measures of effectiveness in its Recreational
                           Boating Safety Program, the Service is unable to assess the contribu-
                           tions of either its own efforts or state programs it supports to enhance
                           boating safety. Until it develops better measures and employs them in
                           its planning, evaluation, and resource allocation processes, it will lack
                           the means to gauge its overall effectiveness, target its efforts to achieve
                           the greatest impact for each dollar spent, and cope effectively with the
                           vagaries of the annual budget process. It will also be handicapped in its
                           ability to support and persuasively argue its funding requests.


                           To ensure optimal use of current resources and permit it to more accu-
Recommendation to          rately determine and persuasively argue future resource needs, the
the Secretary of           Coast Guard should fully implement GAO'S previous recommendation
Transportation             that it develop managerially useful measures of effectiveness and effi-
                           ciency and incorporate them into a comprehensive system of perform-
                           ance management. Accordingly, GAO recommends that the Secretary
                           direct the Service to improve its current measures and apply them in
                           day-to-day program management as well as in higher-level decision-
                           making related to planning, programming, evaluation, and resource
                           allocation.


                                 met with the Secretary of Transportation and senior Coast Guard
Agency Comments            GAO
                           officials to discuss the contents of this report. These officials generally
                           agreed with GAO'S findings and conclusions. As requested, however, GAO
                           did not obtain formal agency comments on a draft of the report.




                           Page 7                       GAO/RCED90-132.Coast   Guard Organization   and Funding
Abbreviations

ARC       Appalachian Regional Commission
ATON      Aids to Navigation Program
BIS       Bureau of Labor Statistics
CBO       Congressional Budget Office
CR.5      Congressional Research Service
DEA       Drug Enforcement Administration
DOD       Department of Defense
DOT       Department of Transportation
ELT       Enforcement of Laws and Treaties Program
EPA       Environmental Protection Agency
FAA       Federal Aviation Administration
FHWA      Federal Highway Administration
FRA       Federal Railroad Administration
GAO       General Accounting Office
GSA       General Services Administration
HHS       Department of Health and Human Services
INS       Immigration and Naturalization Service
IO        Ice Operations Program
MDZ       maritime defense zone
MEP       Marine Environmental Protection Program
MOE       measures of effectiveness and efficiency
MP        Military Preparedness Program
MS        Maritime Safety Program
NAPA      National Academy of Public Administration
NASA      National Aeronautics and Space Administration
NOAA      National Oceanic and Atmospheric Administration
OMB       Office of Management and Budget
PPBES     Planning, Programming, Budgeting, and Evaluation System
PPBS      Planning, Programming, and Budgeting System
SAR       Search and Rescue Program
SBA       Small Business Administration
IJMTA     Urban Mass Transit Administration
VTS       vessel traffic service


Page 10                    GAO/RCED-90-132   Coast Guard Organization   and Funding
          Contents




          Appendix II: Comparison of Funding for the Coast Guard                           72
              and Other Agencies Shows a Mixed Picture
          Appendix III: Percentage of Total Operating Expenses by                          78
              Program and Total Operating Expenses for the Coast
              Guard
          Appendix IV: Funding for Federal Agencies, Fiscal Years                          79
              1980 to 1989
          Appendix V: Percent Changes in Funding From Fiscal                               80
              Year 1980
          Appendix VI: Major Contributors to This Report                                   81

Tables    Table 3.1: DOD’s Funding Assistance to the Coast Guard                           39
          Table 3.2: Percent Changes in Funding From Fiscal Year                           41
               1980 for DUl’ Agencies
          Table 3.3: President’s Request for the Coast Guard and                           42
              Total Funds Received From All Sources

Figures   Figure 3.1: Coast Guard Funding                                                  38
          Figure 3.2: DOI’ Agencies’ Budgets in Relation to Overall                        40
               Department Budget
          Figure 3.3: Outlays for Budget Categories as a Percentage                        46
               of Total Spending, Fiscal Years 1980 and 1989
          Figure 3.4: Percent Change in Budget Outlays for the                             48
               Coast Guard and the Nondefense Discretionary
               Budget Category Overall, Fiscal Years 1980 to 1989
          Figure 3.5: Distribution of the Coast Guard’s Operating                          50
               Expenses for 1980 and 1989, by Program
          Figure II. 1: Percent Changes in the Budgets of the Coast                        73
               Guard and Independent Agencies Between Fiscal
               Years 1980 and 1989
          Figure 11.2:Percent Changes in the Budgets of the Coast                          74
               Guard and Agencies Sharing Certain Responsibilities
               Between Fiscal Years 1980 and 1989
          Figure 11.3:Percent Changes in the Budgets of the Coast                          75
               Guard and Departmental Agencies Between Fiscal
               Years 1980 and 1989
          Figure 11.4:Percent Changes in the Budgets of the Coast                          76
               Guard and Other Agencies With Law Enforcement
               Responsibilities Between Fiscal Years 1980 and 1989
          Figure 11.5:Percent Changes in the Budgets of the Coast                          77
               Guard, DOD, and the Navy Between Fiscal Years
               1980and1989


          Page 9                      GAO/RCEJMO-132   Coast Guard Organization   and Funding
Chapter 1

Introduction


                           Combining both military and civilian roles and administering a diverse
                           portfolio of missions, the U.S. Coast Guard is a unique institution of gov-
                           ernment. Established in 1915, but tracing its roots virtually to the
                           founding of the republic, the Coast Guard is one of the nation’s five
                           armed forces and has played an important role in every U.S. military
                           conflict and in a broad array of civilian missions as well. The hybrid
                           nature of the Service has given rise over the years to several proposals
                           for reorganization, including some that would likely have led to its aboli-
                           tion, if adopted. In recent years, a renewed emphasis on its military role
                           and its growing involvement in drug interdiction have led to additional
                           proposals for reorganization. In contrast to earlier proposals, prompted
                           primarily by considerations of economy and efficiency, these proposals
                           have aimed principally at improving the Service’s funding and better
                           using its assets and expertise to pursue particular objectives, such as
                           prosecuting the war on drugs.


                           The Coast Guard traces its origins to the Revenue Marine, created by the
Organizational History     first Congress in 1790. The purpose of the new Service was to enforce
                           the collection of customs and tonnage duties. Its responsibilities quickly
                           expanded, however, and within a few years it was involved in activities
                           as diverse as suppression of the slave trade; enforcement of quarantine,
                           immigration, and neutrality laws; protection of natural resources; and
                           assistance to vessels in distress. In 1915, the Revenue Marine, now
                           called the Revenue Cutter Service, was combined with the Life Saving
                           Service, an organization almost as old, to form the Coast Guard. Both
                           organizations had been part of the Department of the Treasury since
                           their inception, and the Coast Guard remained there also from the time
                           of its establishment until its transfer to the newly created Department
                           of Transportation (uor) in 1967.


Emergence of a Dual Role   While the primary function of the Revenue Marine was to serve as a
                           floating police force of the Treasury Department, because no U.S. Navy
                           existed at the time and international tensions and threats to American
                           trade were increasing, Service vessels (cutters) were soon assigned the
                           responsibilities of coastal defense and protection of commerce. Even
                           after the Navy’s establishment in 1798, the Service continued to exercise
                           important national defense functions and worked closely with the new
                           Navy. Revenue cutters were actively engaged in military duties during
                           such major conflicts as the War of 1812, the Mexican War (1846), and
                           the Civil War (1861-65).



                           Page 12                      GAO/RCED-90-132   Coast Guard Organization   and Funding
Page 11   GAO/RC!ED9@132   Caaat Gnud Ck@@nhtion   and Fpndins
chapter   1
Introduction




and highlights the recent reemphasis of its role in maintaining defense
readiness. This role was given new prominence in 1984 through the
signing of an agreement between the Secretaries of Transportation and
the Navy. The agreement provided for the establishment of Atlantic and
Pacific maritime defense zones (MDZ), under which the Coast Guard has
primary responsibility for defending and securing harbors, coastal
areas, and navigable waterways out to 200 miles at sea. Under this
arrangement, the Coast Guard also has responsibility for planning,
training, and exercising with the Navy in coastal defense operations,
including such activities as port security, harbor defense, surveillance,
and anti-terrorist measures. The Coast Guard’s MDZ responsibilities form
an important part of the Service’s defense readiness mission, one of its
three core missions.

The “More” of the slogan refers to the diverse array of activities sub-
sumed under the core missions of maritime safety and maritime law
enforcement. These include some of the oldest as well as some of the
newest responsibilities of the Service. Within the maritime safety mis-
sion, such programs as search and rescue and aids to navigation
represent some of the oldest continuing responsibilities of the Coast
Guard. Other responsibilities within this mission include recreational
boating safety, and licensing and documentation of merchant ship oper-
ators. Within the maritime law enforcement mission, which makes the
Coast Guard the enforcer of all federal laws in waters under U.S. juris-
diction, one of the Service’s oldest responsibilities, the prevention of
smuggling has assumed great contemporary importance in the form of
efforts to interdict the importation of illicit drugs. More recently
acquired responsibilities in this mission area include the enforcement of
fisheries laws, interdiction of illegal immigrants, and enforcement of
international conventions for the prevention of marine environmental
pollution,

 Many of the Coast Guard’s programs have both operational and law
 enforcement elements and thus support both the maritime safety and
 maritime law enforcement missions. Furthermore, many of the Service’s
 peacetime programs-including       ice-breaking operations, port safety and
 security, search and rescue, and aids to navigation-are     also important
 in time of war and thus ensure that the Coast Guard will always be
 ready to carry out its responsibilities under its defense readiness
 mission.




 Page 14                      GAO/RCED9@132   Coast Guard Oganization   and Funding
                       Chapter 1
                       Iutroduction




                       Thus, from a very early date a fundamental feature of the Service that
                       would become the Coast Guard was firmly established. This feature, for-
                       malized in law (14 U.S.C. 3), makes the Service a military organization
                       and at all times a branch of the armed forces committed to maintain its
                       defense readiness and work with the Navy during war or national emer-
                       gency. This feature also makes the Service an organization that in peace-
                       time carries out essentially civilian functions in the maritime arena.


Evolution of the       Closely related to the Service’s dual role is the multimission concept of
Multimission Concept   organization. This concept, central to the Coast Guard’s approach to
                       managing itself, involves sharing resources across roles and missions. It
                       permits the Service to use many of the same human and physical
                       resources to carry out a diverse array of programs at the same time.
                       Thus, the same personnel and facilities may be involved in a single day
                       or in a single patrol in activities as disparate as conducting a search and
                       rescue operation, placing or maintaining navigational aids, interdicting
                       drug smugglers, and preventing illegal immigration. Its multimission
                       character also provides the Service with the ability to adapt, to take on
                       new roles and responsibilities, and to deemphasize or abandon those
                       that have become less important or useful with the passage of time.

                       As the multimission character of the Service developed, its personnel
                       and vessels came increasingly to be viewed within government as a col-
                       lection of versatile assets that could be used to meet a variety of needs
                       in the maritime environment. While frequently the Service had little say
                       regarding the assignment of particular duties-and as a military organi-
                       zation was inclined, in any case, to adopt a “can do” attitude-it   demon-
                       strated a growing ability over time to anticipate and capitalize on
                       opportunities for broadening its sphere of activity. This has been the
                       case particularly with issues emerging as national priorities and likely to
                       provide opportunities for growth and expansion. Notable examples
                       include the Coast Guard’s involvement with Prohibition in the 1920s
                       and early 1930s the development and introduction of long-range radio
                       navigation aids in the immediate post-World War II period, the rapid
                       development of the marine environmental protection mission in the
                       197Os, and the Service’s steadily increasing involvement in the war on
                       drugs in the 1980s.


An Armed Service and   *‘The Coast Guard: An Armed Service and More” is an informal slogan
More                   popularized by the Coast Guard’s current leadership. This phrase sums
                       up the traditional dual role and multimission character of the Service


                       Page 13                      GAO/RCED-90-132   Coast Guard Organization   and Funding
                        Chapter 1
                        Introduction




                        this category has fluctuated from year to year, reflecting its discre-
                        tionary character and its vulnerability to cuts during periods of budget
                        retrenchment. Close behind the capital expense category is retired pay
                        (about 13 percent in fiscal year 1989, or approximately $403 million)
                        which, being a fixed expense, is nondiscretionary and nondeferrable.
                        Together, these three expense categories made up more than 95 percent
                        of the Coast Guard’s budget in fiscal year 1989.

                        Reflecting the great increase in drug interdiction activity during the
                        198Os, over 35 percent of the Coast Guard’s operating budget in fiscal
                        year 1989 ($756 million of $2.1 billion) was devoted to the enforcement
                        of laws and treaties. The Service’s traditional maritime safety programs,
                        search and rescue and aids to navigation, followed at approximately 21
                        percent each ($450 million). Next, in descending order, were marine
                        environmental protection (7 percent, or $149 million), marine safety (6
                        percent, or $134 million), defense readiness (5 percent, or $117 million),
                        and ice operations (3 percent, or $68 million).


                        Out of concern for the ability of the Service to fulfill its roles and carry
Objectives, Scope,and   out its mission responsibilities, the then Speaker of the House, Chairman
Methodology             of the Senate Foreign Relations Committee, and majority and minority
                        leaders of both houses asked us to review options for the Coast Guard’s
                        reorganization. The emphasis in this review was to be on the potential of
                        the various alternatives to enhance the Service’s capabilities, man-
                        power, and equipment and to provide a steady and assured source of
                        funding.

                        Based on the request and subsequent agreement with the requesters’
                        representatives, our objectives were to (1) examine selected options for
                        the organizational placement of the Coast Guard, (2) review the recent
                        funding history of the Service and evaluate possible funding implica-
                        tions of alternative organizational arrangements, and (3) examine
                        actions taken by the Service to enhance efficiency and effectiveness and
                        ensure the optimal use of available resources.

                        Because of time constraints, the scope of our review was confined
                        largely to the 1980-89 period (although we also reviewed selected early
                        proposals for Coast Guard reorganization-see     app. I). The 1980-89
                        period encompasses a number of important developments for the Ser-
                        vice, including the inauguration of an Administration with a conserva-
                        tive view of the role of government, the emergence of a highly



                        Page 16                      GAO/RCED-90-132   Coast Guard Organization   and Funding
                           Chapter 1
                           Introduction




The Balance of Resources   A major concern of Coast Guard managers and supporters is the ade-
                           quacy of resources available for carrying out the Service’s continually
and Responsibilities       expanding responsibilities. While the Coast Guard continues to be
                           assigned new duties as a result of legislation, presidential directives,
                           international conventions, and interagency agreements, many believe
                           the resources to carry out these responsibilities have not increased com-
                           mensurately. The issue of resources has been the subject of numerous
                           examinations, including congressional reports, studies on the Service’s
                           roles and missions, and GAO reviews. In a 1980 report, GAO pointed out
                           that the Coast Guard did not have enough vessels to carry out its mis-
                           sions, that some vessels were in poor operating condition, and that the
                           Service had too few people to meet its responsibi1ities.l GAO also pre-
                           dicted at the time--accurately, as it has turned out-that     the Coast
                           Guard would have problems effectively carrying out its responsibilities
                           in the 1980s. What GAO did not predict-and       probably could not have
                           foreseen-was the dramatic growth in drug smuggling in the 1980s that
                           would necessitate a greatly increased role for the Coast Guard in com-
                           bating this threat and changes in the government’s fiscal policies and
                           spending priorities during the decade that would place added pressure
                           on the Service’s budget.

                           In fiscal year 1989, the strength of the Coast Guard stood at about
                           38,000 active-duty military and 5,400 civilian personnel, compared with
                           a fiscal year 1980 strength of about 39,500 military and 6,300 civilians.
                           In terms of budgetary support, the Coast Guard’s appropriations have
                           fluctuated over the past decade, even when supplemental appropria-
                           tions and transfers from defense appropriations are taken into account.
                           Expressed in constant 1989 dollars, the Service’s total appropriations
                           for fiscal year 1989 ($3.125 billion) were lower by $100 million than
                           those for fiscal year 1982 ($3.225 billion). Nevertheless, for the decade
                           as a whole the Service experienced a moderate, real budget growth rate
                           averaging 2.4 percent annually.

                           By far the greatest portion of the Coast Guard’s budget (68 percent in
                           fiscal year 1989, or $2.1 billion of a total of $3.1 billion) goes to oper-
                           ating expenses, which cover salaries as well as routine maintenance of
                           facilities and equipment and fuel to keep vessels and aircraft running.
                           The next largest component (about 14 percent in fiscal year 1989, or
                           approximately $435 million) consists of capital expenses. The size of


                           ‘The Coast Guard-Limited   Resources Curtail Ability to Meet Responsibilities (CED-80-76,Apr. 3.
                           1980).



                           Page 15                              GAO/RCED-W-132      Coast Guard Organization    and Funding
Chal)rt’r II

Proposed Reorganizations of the Coast Guard
Are Unlikely to Improve Its Fkmding or
Enhance Its Capabilities
               The unique, hybrid character of the Coast Guard-a service organized
               along military lines to carry out primarily civilian, peacetime func-
               tions-has made it a frequent object of reorganization proposals. Early
               in this century, proposals to combine the Coast Guard with the Navy (or
               abolish it altogether) were prompted primarily by concerns for effi-
               ciency and economy in government and a desire to eliminate unneces-
               sary duplication. Later, as the versatility and flexibility of the Coast
               Guard’s multimission assets came to be more widely appreciated, the
               primary motivation for reorganization was often a desire to enlist the
               Service’s assets and particular competence in pursuit of specific policy
               objectives. Such objectives have included better securing the nation’s
               borders against smuggling and illegal immigration, protecting the marine
               environment, and promoting the conservation and development of
               marine and undersea resources.

               The sole reorganization proposal to be implemented to date, the 1966
               proposal to transfer the Coast Guard out of the Treasury Department to
               the new Department of Transportation, is an example of a proposal
               prompted by policy considerations. The policy goal in this case was to
               use the Coast Guard’s vessels, personnel, and expertise in maritime mat-
               ters to help promote the development of a safe, efficient, balanced, and
               integrated national transportation system. Because of the transporta-
               tion-related nature of most of the Coast Guard’s activities, the Service
               was viewed as a logical and essential component of the new department.

               During the 1980s several new proposals for the Coast Guard’s reorgani-
               zation were made, primarily by Members of Congress. While some of
               these proposals were inspired, at least in part, by a desire to advance
               particular policy goals-e.g., strengthening national security and
               defense readiness or more effectively prosecuting the war on drugs-a
               number of them also reflected a concern for the adequacy of the Coast
               Guard’s funding and a desire to enhance financial support for the Ser-
               vice’s diverse and ever-expanding portfolio of missions. Our analysis of
               several of the more prominent of these proposals, including an assess-
               ment of their possible consequences if they were adopted, showed that
               none of them was without risks to the Coast Guard, to the department of
               which it is now a part, or to the policy objectives that the Service’s pro-
               grams currently support. In addition, we found that in the present fed-
               eral budget environment none of them offered much hope for improving
               the Coast Guard’s funding.




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Introduction




constrained federal fiscal environment, the addition of new responsibili-
ties, and the Service’s rapidly growing involvement in the war on drugs.
In addition, this period embraces a number of legislative proposals for
the Coast Guard’s reorganization that reflect the various influences and
forces impinging on the Service during the decade. Our review was con-
ducted between February and October 1989 and was performed at Coast
Guard, MJT,and Navy headquarters in Washington, D.C.

To place Coast Guard organization issues in proper perspective and
obtain an understanding of past reorganization proposals, we reviewed
the legislative and organizational history of the Service, including that
of its earliest antecedents. We reviewed a variety of published histories;
academic studies; and DOT,Coast Guard, and other government reports;
as well as earlier GAO reports dealing with the Service. We also inter-
viewed nor and Coast Guard officials, current and past, as well as
authorities in public administration and political science associated with
bodies such as the National Academy of Public Administration (NAPA)
and the Congressional Research Service (CRS).

To understand current federal fiscal policies and congressional budget
and appropriations processes and to obtain funding information for the
Coast Guard, par, and a variety of other federal agencies, we inter-
viewed congressional staff and representatives of the Budget and
Appropriations Committees, the Congressional Budget Office (CBO), and
the Office of Management and Budget (OMB). We supplemented budget
data with information contained in congressional reports of appropria-
tions and authorization hearings, agencies’ budget documents, and
various specialized publications.

To assess the Coast Guard’s efforts to enhance efficiency and effective-
ness and ensure optimal use of available resources, we interviewed Ser-
vice officials and representatives of DOT,OMB, the Congress and the
Bureau of Labor Statistics (BLS). We also reviewed Coast Guard docu-
ments, including plans, studies, internal memorandums, and
correspondence.




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                       authorities, including the current leadership of the Coast Guard, still
                       believe that nor offers the best organizational home for the Service.

                       The decade of the 1980s saw its share of proposals dealing with organi-
                       zational placement of the Coast Guard. In contrast to earlier proposals,
                       many of these proposals appeared to be prompted by a desire to secure
                       greater and more reliable funding for the Service. Adequate funding has
                       been a concern of Service managers and supporters for many years.
                       With the steady expansion of the Service’s responsibilities in the 1970s
                       and 1980s these concerns have only increased. Recent proposals that
                       are not clearly intended to enhance the Coast Guard’s funding appear to
                       share the goal of enlisting the Service more fully and effectively in the
                       nation’s ongoing war on illicit drugs; However, in these proposals, too, a
                       concern for the Coast Guard’s welfare may be detected in the attempt to
                       identify the Service even more closely than it already is with a policy
                       priority to which the Congress and the executive branch have devoted
                       substantial resources at a time of overall budget constraint.

                       To date, none of these proposals has managed to attract the kind of sup-
                       port needed to bring about major organizational realignment. Whether
                       they or others will do so in the future remains to be seen. This will
                       depend on a number of factors, including the persuasiveness of the
                       rationale advanced for change, the calculus of advantages and disad-
                       vantages perceived by affected parties, and the risks that change would
                       entail for the unique character of the Coast Guard and for its survival
                       over the long term.


                       As noted above, the transfer of the Coast Guard to DOTin 1967 did not
Evaluation of Recent   put an end to proposals that would alter its organizational placement.
Proposals Dealing      During the 1980s such proposals continued at an accelerated rate. The
With the Coast         following discussion deals with some of the more notable legislative pro-
                       posals that were advanced in the decade just completed and attempts to
Guard’s                assess the likely consequences of these reorganization schemes if they
Organizational         were to be adopted. While these proposals differ in their purposes,
                       objectives, and salient features, several general tests seem applicable to
Placement              their evaluation. These tests relate to (1) the potential impact of the pro-
                       posed change on the Coast Guard’s dual-role and multimission character
                       as well as on the diverse programs the Service currently administers, (2)
                       the likely implications of reorganization for the funding of the Coast
                       Guard’s activities and requirements, and (3) the potential of reorganiza-
                       tion for serious, if unintended, adverse consequences.



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                Reorganization is a method through which change, in the name of a
The Service’s   variety of objectives, is sought by presidents, legislators, and others,
Attraction to   Objectives sought may include better organizing the machinery and
Reorganizers    resources of government in pursuit of particular policy goals or in
                response to specific problems, eliminating duplicate and overlapping
                functions, ensuring organizational survival, or achieving organizational
                aggrandizement. The Coast Guard has historically been a frequent object
                of reorganization proposals, largely because of its unique dual-role char-
                acter. Although an armed service, the Coast Guard’s responsibilities in
                peacetime are essentially civilian in nature, including operational, regu-
                latory, and law enforcement functions. This hybrid nature of the Service
                has often attracted the attention of administrative reformers who have
                sought to consolidate like functions as a way of simplifying government
                organization and reducing unnecessary duplication. Repeatedly, going
                back to the early days of the Coast Guard’s antecedents, the Service has
                been confronted with proposals that would combine it with the Navy in
                the name of economy and efficiency. Such proposals continued to be
                made even after the Coast Guard assumed its present identity in 1915.
                (See app. I for a discussion of early reorganization proposals).

                The multimission character of the Coast Guard has also attracted the
                attention of administrative reformers. The broad maritime expertise of
                Coast Guard personnel and the versatility of Service assets result from
                the multimission principle of organization and management. They have
                made the Service an attractive object to those who would marshal1 its
                unique competence and resources in support of particular policy priori-
                ties, such as environmental protection, or in support of major national
                concerns, such as the current war on drugs.

                Notwithstanding the many reorganization proposals in which the Ser-
                vice has figured over the years, only one-the 1966 proposal to transfer
                it from Treasury to the newly created nor-has ever been implemented.
                The establishment of DOTand the Coast Guard’s inclusion as a key con-
                stituent element represented the advent of the modern, major-purpose
                department. The new department brought together agencies repre-
                senting all modes of transportation. It was intended to provide the
                means for formulating coherent national transportation policies and
                developing a balanced and integrated national transportation system.
                Because most of the Coast Guard’s activities involved transportation,
                the new department was also believed to offer the best available organi-
                zational fit for the Service’s multimission portfolio, as well as providing
                it with the opportunity for future growth and expansion. Today, many



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                            Unintended Adverse Impacts: A third test relates to the possibility of
                            adverse impacts from reorganization. It is possible that an otherwise
                            soundly conceived and well-intentioned organizational proposal could
                            carry with it risks of unintended negative consequences. One such risk is
                            that to which the Coast Guard’s current parent agency, DOT,could be
                            exposed in the event of the Service’s transfer to a new home. This risk is
                            in fact a dual one: first, to the integrity of the organizational concept on
                            which DOTwas based; second, and more problematical, to the continued
                            viability of DOTas a cabinet-level department.

                            nor was established in 1967 to bring greater balance, coherence, and
                            integration to transportation policy, planning, and investment. It was
                            meant to bring together under one organizational umbrella a scattered
                            assortment of agencies representing all modes of transportation. In this
                            unifying organizational scheme the Coast Guard, more than any other
                            agency, represented the various facets of waterborne transportation-
                            and continues to do so today.

                            Another important feature of DOT’Sorganizational design-and one
                            which appears to have been crucial to the proposal’s quick acceptance
                            by the Congress, by affected transportation interests, and by the public
                            at large-was that the proposed department was not to be dominated by
                            any single, powerful element or interest. DOT’Sfounders viewed the func-
                            tions of the Coast Guard in water transportation as analogous to those
                            of the Federal Aviation Administration (FAA) in aviation, and the two
                            agencies were together viewed as complementary and counterbalancing
                            elements in the new department. The transfer of the Coast Guard out of
                            DOTwould thus run counter to the intent of the department’s original
                            framers and would leave the department not only diminished but also,
                            potentially, unbalanced. In addition, by compromising the organizational
                            integrity of the department and undermining the rationale for its crea-
                            tion, the removal of the Coast Guard could conceivably further erode
                            the department, giving encouragement to those who, for a variety of
                            reasons, would like to see other organizational elements removed from
                            the DOTorbit. (See app. I for a fuller discussion of the circumstances and
                            considerations leading to DOT’Screation).


Proposals to Transfer the    During the early 198Os, several proposals were made to transfer the
                             Coast Guard to the Department of Defense (DOD), either as a part of the
Coast Guard to the           I\;avy or as a separate organizational entity equivalent in status to the
Department of Defense        Army, Navy, and Air Force. These proposals coincided with the strong
                             emphasis on national defense that was a distinguishing feature of the


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General Tests of Proposals   Impact on Roles, Missions, and Programs: A basic test of any proposal to
                             alter the Coast Guard’s organizational placement is its compatibility
for Reorganizing the Coast   with the Service’s distinctive dual-role/multimission character. Put
Guard                        another way, the Coast Guard, as an intact entity, must fit reasonably
                             well within any proposed organizational scheme if there is to be any
                             assurance of survival in its present form. A Coast Guard that is purely
                             military or purely civilian in nature or one that is composed of special-
                             ized personnel and assets devoted to a single mission or narrow range of
                             missions would clearly be a different organization than the one that has
                             existed for nearly 200 years.

                             Therefore, the question that needs to be examined in connection with
                             any reorganization proposal is what is likely to happen to those Coast
                             Guard programs that do not fit well in the proposed new organizational
                             scheme, that do not bear directly on priority goals and are tangential or
                             irrelevant to the proposed parent agency’s primary interests and con-
                             cerns. It is possible, even likely, that in time such programs would either
                             be spun off or would wane as a result of inattention and lack of support.
                             Either development could erode the Coast Guard’s historic dual-role/
                             multimission character. Dismemberment, whether all at once or as part
                             of a gradual process of losing missions and associated assets, has long
                             been one of the greatest concerns of Coast Guard management. F’urther-
                             more, absent a congressional decision to terminate or drastically scale
                             back programs and missions that might be spun off or eclipsed as a
                             result of the Coast Guard’s reorganization, some other agency or agen-
                             cies would have to fund and administer these programs. The net result
                             could well be greater total cost through duplication of facilities, equip-
                             ment, and personnel and lower overall efficiency and effectiveness
                             through the loss of the Coast Guard’s expertise and multimission
                             flexibility.

                             Impact on Funding: A second test relates to the potential impact of reor-
                             ganization on the funding of the Coast Guard’s activities. Several recent
                             proposals for the Coast Guard’s reorganization appear to have been
                             prompted by concerns about the adequacy of funding for the Service
                             and a desire to ensure increased budget support for its entire range of
                             missions, including personnel and capital requirements. It is appro-
                             priate, therefore, to examine whether a particular proposed organiza-
                             tional change would be likely to bring about other changes-such as a
                             change in congressional committee jurisdiction, in budget/appropriation
                             functions, or in budgetary advocacy and support-that      could translate
                             into increased funding for the Service.



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role/multimission responsibilities. In fact, under normal peacetime cir-
cumstances only a small part of the Coast Guard’s activities are of a true
military nature. In fiscal year 1989, for example, only about 5.5 percent
of the Service’s operating expenses were devoted to military activities
(training, exercises, planning) designed to maintain a state of defense
readiness, compared with about 4.3 percent in fiscal year 1980.

The majority of the Coast Guard’s activities, as noted previously, are
related to transportation. For this reason, all Coast Guard leaders since
1967 have taken the position that the Service’s proper place is within
DOT.Also, Coast Guard officials have long expressed concern about the
ability of the Coast Guard’s peacetime civilian functions to coexist, let
alone thrive, in the essentially war-oriented environment of the Navy
and DOD. In recent years, the Navy, too, has expressed misgivings about
the compatibility of the Coast Guard’s missions with its own and about
the advisability of combining the two services.

With the essential nature of the two services unchanged over many
years, there is little reason to believe that these longstanding concerns
have lost their validity or that the Navy or DOD is more able now than in
the past to offer a congenial home for the Coast Guard’s civilian pro-
grams In fact, by law and longstanding tradition, branches of the U.S.
military- with the notable exception of the Coast Guard-have been
excluded from a domestic civilian law enforcement role. Any substantial
change in this regard- for example, making the Coast Guard part of the
Navy-would      not only require legislative action but would represent a
profound change in attitude concerning the appropriate role of the mili-
tary in our government.

Impact on Funding: The intent of these bills was to associate the Coast
Guard more closely with the Administration’s national defense priorities
and thereby make it a beneficiary of the rapid growth in defense
spending (at a time when federal spending was otherwise severely con-
strained). However, most of those we spoke to on the subject, including
senior Coast Guard officials, did not believe that the Coast Guard would
have benefited-or    would benefit now-from      being part of DOD. As rea-
sons, they cited the Coast Guard’s small size in relation to the size of
other DOD services and the lack of understanding and appreciation of the
Coast Guard’s peacetime missions by these other services and by the
armed services oversight and appropriations panels.

Furthermore, they believed that the Service, under its current Comman-
dant and his predecessor, had done an effective job of emphasizing its


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period and, by emphasizing the military side of the Coast Guard’s dual
role, were intended to position the Service to benefit from the increase in
military spending that marked, in particular, the years 1981 through
1985.

The first such proposal, H.R. 4596, introduced in November 1981, was
offered at a time when the pace and magnitude of the Administration’s
defense buildup had become apparent. It would have made the Coast
Guard a part of the Navy, with the Commandant reporting to the Navy
Secretary, as do the Commandant of the Marine Corps and the Chief of
Naval Operations. The proposal did not attract wide support. Neither
the Coast Guard nor the Navy favored an organizational scheme that
would subject the Coast Guard to the operational control of the Navy in
peacetime. The Navy, moreover, speaking also for DOD, argued that such
control was inconsistent with the diverse missions of the Coast Guard,
which are primarily civilian-oriented and regulatory or law enforcement
in nature. The Navy also objected that from a manpower standpoint its
commitments already exceeded its resources. To integrate the two ser-
vices, it believed, would only exacerbate the resource problem and in all
likelihood would result in decreased effectiveness for both.

To deal with these objections, but still accomplish the goal of identifying
the Coast Guard more closely with national defense priorities and
thereby improve its funding prospects, proposals were introduced in
1982 and 1983 to establish the Coast Guard as a separate military ser-
vice within DOD, independent of Navy control in peacetime. One of these
proposals, H.R. 5567, introduced in February 1982, would have estab-
lished the Coast Guard as a separate department within DOD, headed by
a civilian Secretary of the Coast Guard who would report to the Secre-
tary of Defense. The bill’s sponsor believed that the basic purpose and
duties of the Coast Guard had become obscured in MJTand that the
nation would be better served by putting the Service in the “proper per-
spective,” i.e., as an entity within DOD. The other proposal, H.R. 1767,
was introduced in March 1983. This proposal would have established
the Coast Guard as a service within DOD independent of any military
department except when operating under the direction of the Navy in
time of war or national emergency. Under this bill, the Commandant
would have reported directly to the Secretary of Defense. Neither of
these proposals was adopted.

Impact on Roles, Missions, and Programs: While the Coast Guard under
law is considered to be an armed service at all times, it is the smallest of
the nation’s five armed services and unique among them in having dual-


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                        States entered World War II-the unique status of the Coast Guard per-
                        mitted it to play important military intelligence and security roles that
                        other military services could not so easily have played.


Proposals to Make the    Despite a variety of proposals over the years for creation of a consoli-
                         dated border control and enforcement agency, none has been adopted to
Coast Guard Part of a    date. As far back as 1930, the Hoover Administration recommended uni-
Consolidated Border      fication of the three primary border control units of the day under the
Management Agency       jurisdiction of the Coast Guard. Revived several times since then, pro-
                         posals to create such an entity were put forward most recently in con-
                         nection with deliberations on the comprehensive Anti-Drug Abuse Act
                         of 1988. During 1988, several bills were introduced in both the House
                         and Senate to create within Treasury an Office of Enforcement and
                         Border Affairs headed by an Under Secretary. Reporting to this indi-
                         vidual would be two Assistant Secretaries whose exact titles and duties
                         varied somewhat from bill to bill. Each of these proposals envisioned the
                         transfer of the Coast Guard out of nor and back to Treasury as part of
                         the new, consolidated office of border management. One of the bills
                         (S. 2230) was titled the “Coast Guard and National Border Coordination
                         Revitalization Act of 1988.”

                        An important objective of these proposals was to better coordinate and
                        use the existing resources of government to secure the nation’s borders
                        and control the traffic in illicit drugs and illegal immigrants. The
                        emphasis, therefore, was primarily on the Coast Guard’s law enforce-
                        ment mission and capabilities for preventing smuggling, a traditional
                        responsibility dating back to the days of the Revenue Marine. However,
                        another important objective, at least in some cases, appears to have
                        been a desire to have the Coast Guard benefit to a greater extent than it
                        had already from the vast budgetary resources that the Congress and
                        the executive were allocating to the war on drugs.

                        In recent years, the Coast Guard has played an increasingly important
                        part in the nation’s effort to deal with the problem of drug trafficking
                        and, on a somewhat less dramatic and visible level, the problem of eco-
                        nomic refugees. This is illustrated by the fact that between 1980 and
                         1989 the portion of the Service’s operating expense budget devoted t,o
                        the enforcement of laws and treaties increased from 18.2 to 35.6 per-
                        cent. The Service’s law enforcement role is growing with the encourage-
                        ment of both the Congress and the executive branch and also as part of
                        a strategy on the part of Service officials to play a prominent role in
                        what they perceive as a growth sector of federal activity. The willing


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national defense role and associating itself beneficially with the Admin-
istration’s national defense priorities. The 1984 agreement between DOT
and DOD establishing MDZS was cited as an example. Another example
cited was the funding, materiel, and training support that the Coast
Guard has received in recent years from DOD and through the defense
appropriations process. Between fiscal years 1982 and 1989, such sup-
port amounted to nearly $1.75 billion in total.

Moreover, these commenters expressed doubts about the long-term sus-
tainability of the defense spending levels that characterized the early
and mid-1980s and the wisdom of taking the risky step of reorganization
for the sake of uncertain, short-term financial gain. Many predicted
tight DOD budgets in the years ahead, as the nation’s leaders attempt to
balance competing priorities and address the urgent problem of
mounting deficits. In such a climate, few believed that the Coast Guard’s
placement within DOD would be advantageous in terms of funding the
Service’s broad range of essentially civilian peacetime responsibilities.

Unintended Adverse Impacts: As discussed earlier, removing the Coast
Guard from uor would compromise the basic organizational concept and
policy rationale on which the department was founded, would leave the
department unbalanced and potentially unstable, and could well set the
stage for further damage to its organizational integrity and effective-
ness by providing a precedent for the removal of additional elements. Of
all DOTagencies, the Coast Guard has the broadest responsibilities in the
area of waterborne transportation, particularly with regard to impor-
tant safety functions. Consequently, its removal would impair the
ability to achieve consistency and coherence in safety promotion across
transportation modes. The Coast Guard’s removal would also work
against the development and implementation of a comprehensive
national transportation policy and the ability to foster a balanced and
effectively integrated intermodal system.

Additionally, Coast Guard officials present and past, including a former
commandant, expressed fear that placement of the Service within DOD
would damage its humanitarian image in the eyes of the world, causing
it to lose its unique identity and reputation and leading other nations to
be less willing to welcome it, cooperate with it, and accept its technical,
law enforcement, and other assistance. In this view, the Coast Guard’s
hybrid character and its location within civilian departments for virtu-
ally all of its two centuries have contributed substantially to its interna-
tional acceptance and effectiveness. Even in periods of rising
international tensions-as, for example, in the period before the United


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still need to be carried out by someone. The development of this capa-
bility by another agency could well entail wasteful duplication of facili-
ties, equipment, and personnel and an overall increase in cost to the
public.

Questions also arise about the fate of a consolidated border management
agency and its constituent elements if and when the current crisis
wanes. When concern for securing the nation’s borders against illicit
drugs and illegal immigrants yields priority to new and no less pressing
concerns, what would be the fate of the Coast Guard, particularly of a
Coast Guard with a diminished multimission capability? Would it be
viable? Could it be reconstituted as it was before? Would it be a candi-
date once again for transfer to a new home?

Impact on Funding: Similar questions arise in connection with the
funding of the Coast Guard’s activities. While the Coast Guard has
already benefited substantially from close identification with the drug
war and could be expected to continue to do so as part of a consolidated
border management agency-as long as drug interdiction continued to
be a high national priority- what would the funding picture be if the
strategic emphasis were to shift from interdiction to demand reduction?
There are authorities on the drug problem and some in the Congress
who, even now, question the value of increased interdiction efforts and
favor greater investment of scarce resources in local law enforcement,
education, treatment, and rehabilitation. Linking the Coast Guard’s
future to a current, but possibly transitory, budget priority could trans-
late to a future of resource constraint and austerity for the Service, par-
ticularly to the extent that its multimission capability had been allowed
to erode and it had become more narrowly focused on and specialized in
law enforcement.

Unintended Adverse Impacts: The possibility of unintended negative
consequences for DOTas a result of the Coast Guard’s removal from the
department was discussed previously. These consequences include com-
promise of the department’s organic concept and philosophical under-
pinnings (a major-purpose department uniting all modes of
transportation) and of its ability to promote a balanced, coherent, and
consistent approach to transportation safety, planning, and investment.




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assumption of this role by the Coast Guard demonstrates both its
inherent flexibility and ability to shift priorities and its skill in identi-
fying and capitalizing on opportunities for expansion. As one long-time
observer of the Coast Guard and member of the Coast Guard Auxiliary
has remarked, the Service “has so potentially large a brief that it can
logically involve itself in almost anything taking place on or along the
water.” That this capability may be turned into a strategic tool that the
Service can use to its advantage is something that its leadership clearly
understands.

Impact on Roles, Missions, and Programs: While the Coast Guard’s
growing involvement in border-policing activities may be seen as a way
of securing resources to support a variety of personnel and equipment
needs and missions other than law enforcement, it is not clear that the
Service or the nation would benefit from institutional changes that
would focus solely on the law enforcement mission and ignore the Ser-
vice’s other important responsibilities, such as protecting the marine
environment, promoting safety, and ensuring the security of ports,
harbors, and waterways. Although it would symbolically underscore the
nation’s resolve to spare no effort in combating drugs, the transfer of
the Coast Guard to a Treasury Office of Enforcement and Border Affairs
may represent an unnecessary organizational response to problems
that-while    currently of grave concern-will   not necessarily be a
problem the nation will face in perpetuity.

Even more problematical is the question of what would happen to the
Coast Guard’s multimission character as a result of such an organiza-
tional change. Debate on proposals to transfer the Coast Guard to a new
border management entity would very likely involve consideration of
how well some of the Service’s other responsibilities and activities
would fit in the new organization and whether they belong there. Such
deliberations would thus pose a risk that the Service would be disman-
tled and its duties and assets parceled out. Moreover, even if the Service
were to be transferred intact, non-law enforcement missions might sub-
sequently be found to be incompatible and inconsistent with the main
concerns of the new parent organization and either be starved of sup-
port or eventually spun off. Candidates for such treatment might
include search and rescue activities, aids to navigation, and marine envi-
ronmental protection, among others. In the absence of a clear signal of
policy change from the Congress! these mission responsibilities would




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essential to ensuring the safety and efficiency of waterborne transporta-
tion and preserving the policy rationale on which DOTwas founded. Such
a move, if successful, would likely alter the character of the Coast
Guard and could adversely affect its ability to carry out its remaining
missions and programs. This move could also constitute the kind of dis-
mantling of the Service that its leaders have long-and so far success-
fully-strived   to prevent.

Impact on Funding: Given that this proposal was prompted chiefly by a
desire to see the Coast Guard better funded in relation to its long and
ever-growing list of responsibilities, it is appropriate to assess prospects
for enhanced funding under an organizational scheme that provides for
the Service’s independence. While necessarily speculative, this assess-
ment takes into account the views of congressional staff; DOTand Coast
Guard officials; OMB, CBO, and CRS representatives; and others who are
knowledgeable about the budget/appropriations         process, the current
federal fiscal situation, and the workings of the Congress and the execu-
tive branch.

The view that the Coast Guard’s funding difficulties and uncertainties
have their roots in philosophical disputes surrounding the funding of
particular transportation programs has a number of adherents. How-
ever, this belief may result from an overly narrow perspective on the
current budget environment. Rather than viewing the Coast Guard’s
funding needs as being in competition only with other transportation
programs and priorities, it may be more accurate to view them as being
in competition with the claims of all government programs for their
share of an increasingly constrained federal budget. Considering that
the nondefense discretionary portion of the federal budget-that     por-
tion that provides funding for virtually all nonentitlement civilian pro-
grams-declined from 25.4 to 15.8 percent of the total between fiscal
years 1980 and 1989, it becomes clear that Coast Guard programs are
being forced to compete in an increasingly fierce governmentwide con-
test for resources.

In this contest for funding priority, the Coast Guard has managed to
stay ahead, enjoying gains in real dollars even as many other agencies
and overall nondefense discretionary spending have had real declines.
As discussed in chapter 3, the Congress in recent years has supple-
mented the funding of the Coast Guard’s activities in the transportation
budget (function 400) by providing the Service funds appropriated for
defense (function 050). While this arrangement represents an ad hoc as
opposed to an institutionalized response to the Service’s needs, it does


 Page 30                                G~O/RcED90132   Coast Guard Organ&don   and Pundine
                        Chapter 2
                        Proposed Reorganizations      of the Coast Guard
                        Are Unlikely to Improve    Its Funding or
                        Enhance Ita Capabilities




Proposals to Make the   On October 13, 1988, a bill (S. 2893) was introduced to remove the Coast
                        Guard from DOTand establish it as an independent agency. Because it
Coast Guard an          was introduced late in the 100th Congress and could not be adequately
Independent Agency      considered in the press of last-minute congressional business, the bill
                        was reintroduced (as S. 283) on January 31, 1989, shortly after the con-
                        vening of the 1Olst Congress.

                        In introducing these bills, their sponsor made it clear that his primary
                        concern was with the adequacy and reliability of the Coast Guard’s
                        funding. Citing the important traditional functions of the Coast Guard in
                        search and rescue and maritime safety-as well as more recently
                        assigned duties in such areas as marine environmental protection,
                        enforcement of fishery conservation laws, and drug interdiction-he
                        suggested that the Coast Guard had been seriously hampered in car-
                        rying out its responsibilities by insufficient and unpredictable funding.

                        Reflecting a widely held view regarding the cause of this perceived
                        problem (discussed in depth in ch. 3), he attributed the Service’s diffi-
                        culties to its organizational placement within DOTand its funding
                        through the transportation budget account (budget function 400). In this
                        view, the Coast Guard’s organizational situation makes it an unwitting
                        victim of disputes between the Congress and the Administration over
                        national priorities and transportation funding needs, particularly dis-
                        putes over subsidies for such programs as urban mass transit, passenger
                        rail service, and essential air service to small communities. Establishing
                        the Coast Guard as an independent agency, in the view of the bills’
                        sponsor, would serve to eliminate these problems. In his words:

                        “It would free the service from entanglement with entirely irrelevant budget consid-
                        erations within the Department of Transportation        . [and give it] the stature and
                        the visibility necessary to permit consideration of its funding needs at a higher and
                        more appropriate level of national policy.”

                        Impact on Roles, Missions, and Programs: The removal of the Coast
                        Guard from uor would be unlikely, in and of itself, to compromise the
                        Service’s ability to carry out its traditional dual role or its diverse
                        assortment of missions and programs-provided,         that is, the Service
                        were to remain intact. However, because of the transportation-related
                        nature of much of what the Coast Guard does, there is a distinct possi-
                        bility that em would seek to retain some portion of the Service’s facili-
                        ties! equipment, and personnel. Its motive in doing so would be to
                        continue within the department those functions and activities deemed




                        Page 29                                 GAO/RCED-90-132   Coast Guard Organization   and Funding
Chapter 2
Proposed Reorganizations      of the Coast Guard
Are Unlikely to Improve    Its Punding or
Enhance Its Capabilities




safety are transportation-related activities. In fact, by the Comman-
dant’s estimate, 80 percent of what the Service does concerns transpor-
tation. This being the case, it is difficult to find a persuasive rationale
for changes in appropriations subcommittee jurisdiction. Even if the Ser-
vice were to be separated from DOTand established as an independent
agency, its essential nature would remain unchanged-as long as it
remained an intact entity, doing basically what it does at present as part
of DOT.

Finally, even if it were to occur, a change in authorizing committees or
appropriations subcommittees would not necessarily be beneficial for
the Service. Among the members of its current authorizing and appro-
priations panels are individuals who, in many cases, have had a long
and close association with the Service and understand its programs and
missions well. In a setting where there is intense competition for a
steadily shrinking pot of available funding, it is useful to ask how the
Coast Guard could benefit by coming under the jurisdiction of congres-
sional panels that do not know or understand it as well and where it
would have to build relationships, understanding, and support anew.
Budget authorities we questioned in this regard felt that it was highly
unlikely that the Coast Guard would have fared as well as it did in the
 1980s-or would fare as well in the future-under       the jurisdiction of
any other authorization and appropriations panels. Moreover, as
appendix II shows, the recent funding history of a variety of civilian
agencies offers little grounds for expecting that the Coast Guard would
enjoy more liberal funding as an independent, subcabinet-level agency
under the jurisdiction of the Veterans Administration, Housing and
Urban Development, and Independent Agencies Subcommittees.

Unintended Adverse Impacts: The implications for D(JTof making the
Coast Guard independent are no different than those involved in trans-
ferring the Service to a new home in DOD, Treasury, or some other
agency. Such a step, in other words, would pose the same risks to the
governing organizational concept and policy goals of DOTand to its con-
tinued integrity and effectiveness as a major-purpose department of the
federal government. In addition to making it more difficult to achieve
consistency and balance in such important areas as transportation
safety, planning, research and development, and investment and to pro-
mote the development of a truly integrated multimodal transportation
system, the Coast Guard’s removal from DOTcould well lead to further
erosion of the agency. For a variety of reasons, most having to do with
the current budget crisis, a number of proposals have been made calling
for the removal of FAA from DW. The removal of the Coast Guard-with


Page 32                                 GAO/RCED-90-132   Coast Guard Organization   and Funding
Chapter 2
Proposed Reorganimtions       of the Coast Guard
Are Unlikely to Improve    Its Funding or
Enhance Its Capabilities




recognize materially the Coast Guard’s military readiness mission and
has been a welcome-if not always reliable and predictable-assist    to
the Service.

Whether the gains in funding experienced by the Coast Guard in the
1980-89 period have been commensurate with the increase in assigned
responsibilities is a separate issue, and one we were not asked and are
not in a position to evaluate. Many in the Coast Guard and many of its
supporters in the Congress believe that they have not. It is also true,
however, that this view has held through much of the history of the
Service. Faced with periodic insufficiency of resources, the Coast Guard
has used its considerable flexibility and discretion to shift priorities and
adjust its levels of effort to the level of resources available. Actions
taken by top management in recent years illustrate the determination
and ability of the Coast Guard to adjust the scale and mix of its opera-
tions to the vagaries of the budget process. Admittedly, such actions are
not always easy or without controversy, as illustrated by the strong neg-
ative reactions engendered by decisions in fiscal year 1988 to close,
reduce, and decommission various Coast Guard facilities in the wake of
across-the-board budget cuts.

Closely associated with the notion of an independent Coast Guard is the
idea that the Service might enjoy greater financial success if it were
funded within a different budget function and its budget and programs
were overseen by congressional panels other than those that currently
provide oversight. Again, the idea seems to be that if the Service could
be extricated from the philosophical disputes, competing priorities, and
geographical rivalries that center on transportation and dominate the
attention of the transportation appropriations subcommittees it would
have a better chance of obtaining the funding it believes it needs. Those
budget authorities we consulted pointed out that this notion seems to
overlook the fact that in today’s pressurized fiscal environment all gov-
ernment programs and all appropriations subcommittees are faced with
the kinds of political disagreements, competing priorities, and geograph-
ical rivalries that characterize transportation. There is simply less to go
around than in the past, they noted, and the competition for what
remains is much more intense.

Moreover, this line of reasoning seems to discount the essential nature of
the Coast Guard’s activities. As noted earlier, programs such as search
and rescue, aids to navigation, bridge administration, icebreaking, port
safety and security, commercial vessel safety, and recreational boating



Page 31                                 GAO/RCED-SO-132   Coast Guard Organization   and Fuuding
    Chapter 2
    Propoeed Reorganizations      of the Coast Guard
    Are Unlikely to Improve    Its Funding or
    Enhance Its capabilities




-
    also in terms of their implications for other important national objec-
    tives, for the Coast Guard itself, and for the department of which the
    Service is currently a part.

    A proposal aimed at using the Coast Guard’s versatile assets and per-
    sonnel in pursuit of a single objective or a narrow set of objectives may
    end up compromising the achievement of other important objectives by
    impairing the ability of the Service to function in its traditional dual-
    role/multimission capacity. Such impairment could come about in a
    variety of ways, including by neglect of missions that bear little relation
    to the priorities of the new parent agency, by the transfer to other agen-
    cies of missions that are unwanted or that do not seem to fit, or by DOT’S
    retention of Service assets and personnel deemed indispensable to the
    provision of essential marine transportation services. Possible conse-
    quences would be a diminished ability to support such goals as environ-
    mental protection, national defense, safety of life at sea, or conservation
    of marine resources.

    The possible consequences for DOTof the loss of one of its key elements
    must also be considered. Transfer of the Coast Guard from ncrr could
    compromise the major policy purpose and organizational principles on
    which the department was founded. Intended to unite under one organi-
    zational umbrella entities representing all modes of transportation, nor
    could be seriously diminished and destabilized by the loss of the Coast
    Guard. Moreover, by undermining nor’s integrity and rationale, the Ser-
    vice’s removal could contribute to the department’s further decline,
    lending support to calls for the removal of other elements, notably FAA.

    A common thread linking most recent proposals is the goal of increasing
    the Service’s funding. It is important to appreciate fully the economic
    and institutional factors that militate against a substantial improvement
    in funding under any of the organizational schemes that have been pro-
    posed. In the current fiscal environment, all agencies must compete for
    increasingly scarce resources. While the Coast Guard in recent years has
    not been funded at a level that officials and supporters believe to be
    commensurate with its responsibilities, it has still fared better than
    many other agencies and has generally received more in its annual
    appropriations than the President requested. The Service has benefited
    from substantial funding made available as part of the war on drugs and
    through defense appropriations in support of its military readiness role.
    Moreover, it has been able to use its considerable flexibility and discre-
    tion to adjust levels of effort, shift program priorities, and alter mission
    emphasis in response to the level of funding received.


    Page 34                                 GAO/RCED9@132   Coast Guard Organization   and Fund’
              Chapter 2
              Proposed Reorganizations      of the Coast Guard
              Are Unlikely to Improve    Ita Funding or
              Enhance Its Capabilities




              FAA one of D&S key constituent agencies-could      lend added impetus to
              these calls and, conceivably, lead to the eventual undoing of the Depart-
              ment and with it the loss of most of the advantages that were persua-
              sively argued in support of its creation over 20 years ago.

              Another unintended consequence of removing the Coast Guard from m
              and establishing it as an independent agency could be the loss of the
              kind of advocacy and budget support that a cabinet-level officer can
              provide. While D(JTSecretaries and, before 1967, Secretaries of the Trea-
              sury have not all, or at all times, been staunch supporters of the Ser-
              vice’s budget requests, such support has been an important factor on
              many occasions. In the Treasury years, Secretaries Morgenthau (under
              President Roosevelt) and Dillon (under President Kennedy) stood out as
              strong and effective advocates for the Coast. Guard, willing and able to
              lobby for additional resources for the Service. More recently, DOTSecre-
              taries Burnley and Skinner have strongly supported the Service’s budget
              requests. An independent Coast Guard, headed by a subcabinet-level
              officer-whether    civilian or military-would    not have the representa-
              tion within the highest councils of the executive branch that the Service
              currently enjoys.


              While numerous proposals have been made for alternative placement of
Conclusions   the Coast Guard, only one-the 1966 proposal to transfer the Service
              from Treasury to Dar-has ever been adopted. This record says some-
              thing about the convincingness of arguments advanced for change, the
              perceived balance of advantages and disadvantages involved, and the
              potential risks implicit in the Coast Guard’s move to a new home. Since
              1966, and for many years before that, no reorganization proposal has
              been able to garner the support necessary to bring about fundamental
              change in the nature of the Service or alter its location in the structure
              of government.

              Since 1966, proposals to move the Service have largely focused on two
              considerations: (1) a desire to marshal1 governmental resources in sup-
              port of particular policies and goals or (2) a desire to assist the Coast
              Guard in securing better funding. In some cases, both of these motives
              have been evident. Proposals to reorganize the Service have included:
              (1) transferring it to Defense, (2) moving it back to Treasury, and (3)
              establishing it as an independent agency. These proposals need to be
              evaluated not only in terms of their objectives (stated or implied) but




              Page 33                                 GAO/RCED-90-132   Coast Guard Organhtion   and Funding
Despite Fiscal Constraint, the Coast Guard’s
Budget Has Grown

                The adequacy of the Coast Guard’s funding, particularly in relation to
                the Service’s broad and continually expanding responsibilities, has been
                a matter of concern to its leaders and supporters for many years. As
                discussed in chapter 2, during the past decade the perceived imbalance
                of the Service’s resources and responsibilities came to be identified in
                many minds as a “function 400 problem.” This view holds that the loca-
                tion of the Coast Guard in nor and its funding under the transportation
                budget function oblige it to compete for the limited resources allocated
                to transportation and make it the unwitting victim of disputes between
                the Administration and the Congress over the funding of transportation
                grant programs, such as passenger rail service and urban mass transit.

                We found, however, that despite such disputes and despite increasing
                federal budget constraint, which led to intensified governmentwide com-
                petition for resources, the Coast Guard still managed to achieve respect-
                able budget growth during the 1980s. When funding from all sources,
                including transportation appropriations, is taken into account, the per-
                cent change in the Service’s budget authority increased in real terms by
                24 percent between fiscal years 1980 and 1989. This was the highest
                growth experienced by any nor agency except FAA and far exceeded that
                for ucrr as a whole.

                The budget growth of the Service is attributable principally to the fact
                that it has received substantial funding assistance from sources outside
                the transportation appropriation, notably funds appropriated for
                national defense and funds appropriated to prosecute the war on drugs.
                Without such assistance over the past decade, funding for the Coast
                Guard would have been lower by nearly $2 billion, its annual appropria-
                tion in 7 of 10 years would have been less than the President’s budget
                request, and the “function 400 problem” label would have more accu-
                rately described the Service’s situation.

                The Congress has been willing to provide support from defense appro-
                priations in recognition of the unique dual-role character of the Coast
                Guard and its important responsibilities in the areas of coastal defense
                and military readiness. While some in the Congress and the Administra-
                tion maintain that such transfers violate the budget summit agreements
                governing spending by major budget category, others, including mem-
                bers and staff of the Transportation Appropriations Subcommittees,
                believe that it is a reasonable and appropriate practice that ought to be
                institutionalized. The practice has been continued in the current fiscal
                year, with nearly $300 million in defense appropriations earmarked for
                the Coast Guard.


                Page 36                     GAO/RCED!W132   Coast Guard Organization   and Funding
-
    Chapter 2
    Proposed Reorganlzatio~       of the Coast Guard
    Are Unlikely to Improve    Its Punding or
    Fnhance Its Capabilities




     Implicit in some proposals is the belief that organizational change would
     be accompanied by changes in budget function, congressional committee
    jurisdiction, or budget advocacy that would benefit the Service in its
     quest for more funding. We found little support for this belief. Because
     the Service’s activities are primarily transportation related, there is
     little reason to expect that either its budget function or its congressional
     panels would change in the event of its transfer intact to a new home.
     Even if these were to change, however, there is little reason to expect-
     in the present fiscal climate -that its funding prospects would be
     improved.

    Where the Coast Guard should be located and what responsibilities it
    should exercise are essentially policy matters and, as such, can be
    decided only by the Congress. In incorporating the Service as a key ele-
    ment of ucrr in 1966 and assigning it a variety of new responsibilities
    since then, the Congress has endorsed a certain concept of the Service,
    confirming and strengthening its traditional dual-role/multimission
    character. Many of the reorganization proposals made since 1980 have
    the potential to dramatically alter that unique character and adversely
    affect a number of important policy objectives that the Service and DOT
    currently support. It is important, therefore, to fully consider the poten-
    tial consequences of any proposed reorganization and be as clear as pos-
    sible about the trade-offs and compromises involved. None of the
    proposals made since 1980 has benefited from the kind of analysis and
    debate that accompanied the 1966 proposal to transfer the Service from
    Treasury to DOT.However, only through this kind of scrutiny will it be
    possible to make considered policy decisions and avoid results that may
    be as unwelcome as they are unintended.




    Page 35                                 GAO/RCEDQO-132   Coast Guard Organhation   and Punding
                                  Chapter 3
                                  Despite Fiscal Constraint, the Coast Guard’s
                                  Budget Has Grown




Figure 3.1: Coast Guard Funding
                                  3.5   Dofkn in Billions




                                  2.0


                                  1.5


                                  1.0

                                  0.5



                                   OwBBBwBaaa
                                        1960         1981     1982      1983      1984      1985       1986    1987      1988      1909
                                        Fiscal Ynr


                                        I        Drug Funds
                                                 DOD Transfers
                                                 Coast Guard Funding (Transportation Appropriations)

                                  Note Figures are expressed     in constant 1968 dollars
                                  Source. Coast Guard


                                  Recognizing the Coast Guard’s status as an armed service with impor-
                                  tant defense readiness responsibilities, the Congress provided DOD funds
                                  to the Service starting in fiscal year 1982. With nondefense discre-
                                  tionary spending decreasing as a fraction of the total federal budget
                                  during the 198Os, the Congress thus significantly supported the Service
                                  and, in particular, the military side of its dual role. Between fiscal years
                                   1982 and 1989, transfers to the Coast Guard of funds appropriated for
                                  defense (including payments-in-kind) amounted to approximately $1.7
                                  billion, or almost 9 percent of the Service’s total funding for the period
                                  (see table 3.1).




                                  Page 38                                    GAO/RCED90-132        Coast Guard Organization     and Pundine
                             Chapter 3
                             Despite Fii   Ckmstraint,   the Coast Guard’s
                             Budget Has Grown




                             The Coast Guard’s funding in the 1980s must be viewed in the context of
Coast Guard’s Funding        mounting deficits and an increasingly constrained federal budget. Deficit
Grew Between Fiscal          reduction pressures have meant belt-tightening for most federal agen-
                             cies, the Coast Guard included. However, we found that despite differ-
Years 1980 and 1989          ences between the Administration and the Congress over the funding of
Despite Federal              transportation grant programs, the Coast Guard did not suffer as a con-
Budget Constraint            sequence. The Congress, supportive of the Service and its defense role,
                             augmented its funding with transfers from DOD and other
                             appropriations. I


Coast Guard’s Defense a,nd   Despite increasingly tight federal budgets during the 1980s and a
                             decline in overall spending for nondefense programs, the Coast Guard
Law Enforcement Roles        managed to achieve moderate budget growth in this period. It was able
Make Possible Moderate       to do this largely as a result of congressional funding support for its
Budget Growth                national defense role (military readiness activities) and its steadily
                             increasing involvement in the war on drugs (sea and air drug interdic-
                             tion activities).

                             When funds from all sources are taken into account, the percent change
                             in the Coast Guard’s budget authority from fiscal year 1980 to 1989 in
                             real terms was slightly less than 24 percent, an average real growth of
                             2.4 percent per year. In constant 1988 dollars, the Service’s budget rose
                             from $2.4 billion in fiscal year 1980 to $3.0 billion in fiscal year 1989.
                             There were, however, several marked fluctuations during the 198Os,
                             including sharp increases in fiscal years 1982, 1984, and 1986 attribu-
                             table to fund transfers from DOD, as well as some decreases occasioned
                             by across-the-board budget cuts and other reductions (see fig. 3.1).




                             ‘The Coast Guard’s funding includes payments-in-kind from DOD, DOD funding transfers, and unobli-
                             gated balance transfers.




                             Page 37                                GAO/RCEDw)-132    Coast Guard Orgabation      and Funding
                                        Chapter 3
                                        Despite Fkcal Constraint,     the Coast Guard’s
                                        Budget Has Grown




                                        Our analysis of Amtrak and Urban Mass Transit Administration (UMTA)
                                        funding showed that they both declined during the 1980s and, more-
                                        over, that the Coast Guard, in the final analysis, did not suffer as a con-
                                        sequence of their funding, largely because of the willingness of the
                                        Congress to give the Service funds from defense appropriations and
                                        appropriations for the war on drugs. With DOD and other funds included,
                                        the Coast Guard’s budget remained a fairly stable fraction of the D(JT
                                        budget between fiscal years 1980 and 1989, representing between 9 and
                                        12 percent of DOT’Sbudget authority. FAA, the Federal Highway Adminis-
                                        tration (FHWA), UMTA, and the remaining DOTagencies, taken together,
                                        showed greater variation in their respective shares of D&S overall
                                        budget during the same period (see fig. 3.2).


Figure 3.2: DOT Agencies’ Budgets in
Relation to Overall Department Budget   P-




                                         20

                                         10



                                               lsm       1051       ls2      1983     1984    lses       1986     1987      1986    19m
                                               Year

                                                      J Other DOT Agencies
                                                      8 UMTA
                                                        FHWA


                                                        Coast Guard

                                        Note. Percentages were calculated by usmg actual dollars
                                        Sources. DOT, Coast Guard, and FAA




                                        Page 40                                 GAO/RCED-90-132      Coast Guard Organization   and Funding
                                         Chapter 3
                                         Despite Fiscal Constraint,   the Coast Guard’s
                                         Budget Has Grown




Table 3.1: DOD’s Funding Assistance to
the Coast Guard                          Dollars in thousands
                                                                                           Transfers to
                                                                                   Operating
                                         Fiscal vear                                   funds        CaDital funds            Total fundina
                                         1982                                              $0             $300,000                tioo.coo
                                         1983                                                0                    0                      0
                                         1984                                                0             300,000                 300,000
                                         1985                                          10.500                6.240                  16.740
                                         1986                                         1091365              384,735                 494,100
                                         1987                                          90,000              200,000                 290,000
                                         1988                                         108,000               33,000                 141,000
                                         1989                                         206,000                     0                206,000
                                         Total                                      $523,885           $1.223.975              91.747.840
                                         Note Figures are expressed in actual dollars
                                         Source: Coast Guard


                                         In the latter part of the decade, the Coast Guard also received funds
                                         appropriated under anti-drug abuse legislation to support drug interdic-
                                         tion efforts. Under this legislation, the Coast Guard received $128 mil-
                                         lion and $116 million in fiscal years 1987 and 1989, respectively.


Overall Funding for the                  Long troubled by what they believed to be an imbalance between the
                                         Coast Guard’s resources and assigned responsibilities, a number of Coast
Coast Guard Not Hurt by                  Guard officials and supporters in the 1980s came to view the Service’s
Its Placement in                         placement in ~crr and in particular its funding within the transportation
Transportation Budget                    budget (function 400) as key reasons for the Service’s receiving less gen-
Function                                 erous funding than they believed it deserved. Some, in fact, seemed to
                                         believe that the Service actually suffered as a result of its funding
                                         through the transportation appropriation. They described this in terms
                                         of a “function 400 problem.”

                                         According to this view, the Coast Guard-by virtue of its placement in
                                         DOTand the transportation budget function-is       made the victim of
                                         budget forces and political disputes that have little to do with it and its
                                         missions. Because it is one of the largest ucrr components and has one of
                                         the largest budgets (heavily concentrated in operating and capital
                                         expenses), the Coast Guard is particularly vulnerable when the Con-
                                         gress searches for funds with which to restore cuts the Administration
                                         seeks to impose on popular transportation grant programs, such as pas-
                                         senger rail service (Amtrak) and urban mass transit.



                                         Page 39                                 GAO/RCED-90-132   Coast Guard Organimtion     and Funding
                                         Chapter 3
                                         Despite Fiscal Constraint,    the Coast Guard’s
                                         Budget Has Grown




                                         between fiscal years 1980 and 1989, the cumulative shortfall between
                                         the President’s budget request for the Coast Guard and funds provided
                                         to the Service through transportation appropriations amounted to over
                                         $470 million.

                                         Had the Congress not been willing to support the Coast Guard’s activi-
                                         ties with funds appropriated for national defense and the war on drugs
                                         or, alternatively, to increase the Service’s appropriations within the
                                         transportation budget function, it is clear that the Coast Guard’s
                                         funding during the 1980s would have been considerably less. Under
                                         such circumstances, description of the Service’s funding situation as a
                                         “function 400 problem” might well have been justified.

Table 3.3: President’s Request for the
Coast Guard and Total Funds Received     Dollars in millions
From All Sources                                                                  Transportation
                                                                                  appropriations                       Anti-drug            Total
                                                               PreGic$-H$       (budget function            DOD            abuse           funds
                                         Fiscal year                                         400Y    supplement            funds        received
                                         1980                         $1,637               $1,718                 $0             $0         $1,718
                                         1981                          2,051                2,035                  0              0          2,035
                                         1982                          2,075                2,226                300              0          2,526
                                         1983                          2,303                2,464                  0              0          2,464
                                         1984                          2,550                2,467                300              0          2,767
                                         1985                          2.591                2,581                 17              0          2.598
                                         1986                          2,556                2,285                494              0          2,779
                                         1987                          2,610                2,470                290            128          2,888
                                         1988                          2,768                2,588                141              0          2,729
                                         1989                          2.976                2.811                206            116          3.133
                                         Note Figures are In actual 1988 dollars.
                                         aBetween 1980 and 1989, the Coast Guard’s function 400 appropriations   fell short of the President’s
                                         budget request by a total of $472 million.




Coast Guard Prefers Full                 Acknowledging the importance of DOD and other outside funds to the
                                         Coast Guard, the Commandant testified before the House Transporta-
Fundi ng From Function                   tion Appropriations Subcommittee that if the Service had not received
 “cl*
4wu                                      such assistance, its budget would be notably smaller and some of its mis-
                                         sions would be seriously degraded. However, while the Commandant has
                                         viewed the receipt of DOD funds as vitally important to the Coast
                                         Guard’s operations and has welcomed them, he told us that he would
                                         prefer to be able to count on full funding of the Service’s budget within
                                         the congressionally established transportation budget function.



                                         Page 42                                  GAO/RCED-W132      Coast Guard Organhtion           and Funding
Chapter 3
hpite   Fiscal ckmstraint,   the Coast Guard’s
Budget Has Grown




The possibility that DOD’S funding assistance to the Coast Guard may
end for any number of reasons, including increasing pressure on the
defense budget, makes the Coast Guard uneasy about relying on these
transfers to save it each year from a function 400 budget crisis and
leads it to prefer full funding of the President’s budget request through
the annual transportation appropriation. In fact, the fiscal year 1989
DOD Appropriations Conference Report contained language opposing
continued funding of the Coast Guard out of DOD appropriations. Never-
theless, the practice has been continued in fiscal year 1990 with DOD
funding in the amount of $300 million to be transferred to the Service.:1

While some would like to see funding assistance from DOD made a per-
manent part of the Service’s budget, others believe that such transfers
violate the bipartisan budget summit agreement by moving funds from
the defense budget category to the nondefense discretionary category.
In a June 27,1989, letter to the Chairman of the House Committee on
Appropriations, OMB outlined its objections to the practice:

“This Administration strongly opposes the practice of providing Coast Guard equip-
ment and resources from Department of Defense appropriations . . . [We] are con-
cerned that funding tactics that unfairly divert funds from the Department of
Defense inhibit our ability to provide adequately for our nation’s defense. We also
want to point out that funding domestic discretionary programs such as Coast
Guard in the Defense function is inconsistent with the Bipartisan Budget
Agreement.”

That this view is not unanimously held in the Congress is evident in the
continuation of the practice. A staff member for the House Transporta-
tion Appropriations Subcommittee told us that because the Coast Guard
is an armed service and performs important defense functions, there is
no reason why defense funds should not contribute to the Coast Guard’s
overall appropriation. He added that the Subcommittee believes it
should get a formal function 050 (national defense) budget allocation for
the Coast Guard but has not been able thus far to obtain needed support
for this in the Budget Committee. He acknowledged that ad hoc use of
DOD appropriations to help the Coast Guard may not be the ideal
approach in terms of ensuring reliable and consistent funding of the Ser-
vice’s needs.




.‘An additional $413 million will remain in DOD appropriations to be expended by DOD to build Coast
Guard patrol boats and an Ice breaker.



Page 43                                GAO/RCEJMO-132     Coast Guard Organization    and Funding
                               Chapter 3
                               Despite Fiscal Constraint,   the Coast Guard’s
                               Budget Has Grown




Fiscal Policies of the 1980s   Major factors in the Service’s funding history over the past decade have
                               been budget pressures generated by the fiscal policies and spending pri-
Limited Funding for            orities of the Administration. While federal deficits have accumulated
Nonde fense Discretionary      over several years, the deficit more than doubled between fiscal years
Programs                       1981 and 1989, in part because of the Administration’s massive defense
                               buildup and opposition to raising taxes to generate additional revenues.
                               Faced with a projected deficit for fiscal year 1986 in excess of $200 bil-
                               lion, the Administration and the Congress agreed in 1985 on legislation
                               (commonly known as the “Gramm-Rudman-Hollings Act,” P.L. 99-177)
                               requiring that the budget not exceed specified maximum deficit levels
                               and be reduced over a 6-year period to a balanced budget in 199 1. Legis-
                               lation in 1987 extended the balanced budget target year to 1993 and
                               required that the deficit be eliminated under the legislative budget pro-
                               cess or, failing that, through automatic spending cuts (sequesters).

                               To facilitate budget analysis and agreements on spending priorities and
                               limits, major functions of the government were classified into a few
                               broad spending categories: defense, nondefense discretionary, entitle-
                               ments, and interest payments. The nondefense discretionary spending
                               category encompasses nondefense programs that are subject to annual
                               funding decisions in the appropriations process. The Coast Guard’s
                               funding, like that of other ucrr agencies and most civilian agencies, falls
                               within this category because the Service is treated as a civilian agency
                               for budget purposes.

                               Nondefense discretionary spending has declined as a fraction of the
                               total federal budget, decreasing from 25.3 percent in fiscal year 1980 to
                               an estimated 15.8 percent in fiscal year 1989 (see fig. 3.3). This category
                               was vulnerable to cuts during the 1980s for two reasons. First, the
                               Administration placed a higher priority on building up the nation’s
                               defense. Defense spending increased as a fraction of the total federal
                               budget, from 21.6 percent in fiscal year 1980 to 25.1 percent in fiscal
                               year 1989. But while it increased substantially during the early years of
                               the decade, in each of the last 4 fiscal years it has experienced declines.
                               Second, nondefense discretionary spending was easier to cut in response
                               to the imperatives of deficit reduction than either entitlements or
                               interest payments. Since formulas included in laws establishing entitle-
                               ments determine how much the government is obligated to spend, enti-
                               tlements are essentially nondiscretionary-that      is, not controllable by
                                annual funding decisions. Interest payments, likewise, are nondiscre-
                               tionary and not subject to annual decisions on funding levels. Reflecting
                                accumulating federal budget deficits, spending on interest has increased



                                Page 44                               GAO/RCEDW132   Coast Guard Oqmization   and Funding
chapter 3
Desplte F’iacal Constraint,   the Coast Guard’s
Budget Has Grown




as a fraction of the federal budget, requiring 14.0 percent of total out-
lays in fiscal year 1989, as opposed to 8.6 percent in fiscal year 1980
(see fig. 3.3).




Page 45                                 GAO/lMXD~132   Coast Guard Organktim   and Rwlii
                                       Chapter 3
                                       Despite Fiscal Constraint,         the Coast Guard’s
                                       Budget Has Grown




Figure 3.3: Outlays for Budget
Categories as a Percentage of Total
Spending, Fiscal Years 1980 and 1989   Fiscal Year 1980
                                               ti                                                 ,3&n;ts      and Other Mandatory




                                                                           253%                   Nondefense Discretionary Spending

                                                44.6%
                                        f--\                        -._

                                                                                              -   Defense Spending




                                                        \ -i                _I-
                                                               1                                  6.5%
                                                                                                  Net lntqrest Spending

                                        Fiscal Year 1989
                                               a                                                  Egntit;ts     and Other Mandatory



                                               r%-                                                Nondefense Discretionary Spending




                                                                                                  Defense Spending




                                                                                                  Net interest Spending




                                        Note Figures represent outlays and exclude offsettlng receipts Percentages do not add to 100
                                        because of roundlng
                                        Source The Economvz and Budget Outlook Fiscal Years 1991-1995, CBO, January 1990




                                        Page 46                                       GAO/RCEDW-132    Coast Guard Organization   and Funding
-.
     Chapter 3
     Despite Fiscal Constraint,   the Coast Guard’s
     Budget Has Grown




     Notwithstanding the decline in nondefense discretionary spending as a
     fraction of the total budget during the decade of the 198Os, the Coast
     Guard’s spending increased in real terms between fiscal years 1980 and
     1989 (see fig. 3.4). However, as previously noted, this increase was
     made possible primarily by infusions of funding from the defense
     spending category (transfers of funds from DOD appropriations) and
     from funds appropriated for the war on drugs (one of the few areas of
     rapid growth within the nondefense discretionary spending category).
     Partly because of the benefit of such “outside” assistance, the Coast
     Guard’s total budget grew more than the budgets of nondefense agen-
     cies, such as the Environmental Protection Agency, the Department of
     Health and Human Services, and the National Oceanic and Atmospheric
     Administration. However, the Service’s budget grew less than the
     budgets of some civilian agencies, such as Customs, the Immigration and
     Naturalization Service, and the Drug Enforcement Administration,
     which share with the Coast Guard drug enforcement and border control
     responsibilities. The Service’s budget also grew less than DOD agencies’
     budgets. (See app. V for a comparison of the Coast Guard’s and other
     agencies’ budgets.)




     Page 47                                GAO/RCJZJhfKkl32   Coast Guard Organhation   and Funding
                                         chapter   3
                                         Deepite Fiscal Constraint, the Toilet Guard’s
                                         Budget Has Grown




O&ays for the Coast Guard and the
Nondefense Discretionary Budget          25    Pamntchngmhomlaeo
Category Overall, Fiscal Years 19M) to   1.                                  /
1989                                                                      /jj




                                               -       CoastGuard
                                               mm-11   Nondefense DiacfelklnaIy Budget c&gory




                                         Note: Percent changes were calculated by comparlng the outlays for each year with the fiscal year 1960
                                         outlay. Annual outlay figures were converted Into constant 1988 dollars
                                         Sources: Coast Guard and CBO.


                                         Since 1980, the Congress has assigned additional responsibilities to the
Coast Guard Has                          Coast Guard. For example, the Anti-Drug Abuse Act of 1988 (P.L. lOO-
Taken Measures to                        690) mandated additional responsibility to engage in maritime air sur-
Meet Expanded                            veillance or interdiction in the enforcement of laws relating to drugs. It
                                         has also been assigned additional responsibilities to defend harbors and
Responsibilities                         shipping lanes along our coast in times of war under an agreement
                                         between DOTand DOD covering the establishment of maritime defense
                                         zones (MDZS). Environmental responsibilities have grown under 1980 leg-
                                         islation (P.L. 96-478), giving the Service responsibility for administering
                                         and enforcing compliance with requirements adopted under the Interna-
                                         tional Convention for the Prevention of Pollution from Ships. Finally,
                                         under the Omnibus Diplomatic Security and Antiterrorism Act of 1986,
                                         the Service received increased responsibility to protect ports against ter-
                                         rorist acts.




                                         Page 48                                 GAO/RCEJMO-132      Coast Guard Organization     and Funding
              chapter 3
              Despite Fhcal Constraint,   the Cast   Guard’s
              Budget Has Grown




              The Coast Guard has attempted to meet these responsibilities in part by
              shifting resources among missions and reducing and consolidating sup-
              port functions to free up positions for operations. Analyzing the distri-
              bution of the Coast Guard’s resources, we found significant changes
              between fiscal years 1980 and 1989 (see fig. 3.5). The most dramatic
              change has been in drug enforcement, part of the Enforcement of Laws
              and Treaties Program. In fiscal year 1980, the Service devoted 18.2 per-
              cent of its operating expenses to this program, with 7.3 percent of this
              money allocated to drug enforcement. By fiscal year 1989, the program’s
              share of operating expenses had increased to 35.6 percent, with 24.2
              percent allocated to drug enforcement.

              While the Enforcement of Laws and Treaties Program has grown, other
              Coast Guard programs have declined. In fiscal year 1980, the Search and
              Rescue, Aids to Navigation, Maritime Safety, and Marine Environmental
              Protection Programs accounted for 72 percent of operating expenses.
              For fiscal year 1989, the Service estimates that these programs will
              account for only about 54.7 percent of its operating expenses (see app.
              III).

              In addition to shifting resources among programs, the Coast Guard has
              attempted to deal with budget pressures by seeking internal cost savings
              through a variety of initiatives. In fiscal year 1986, in response to
              funding cuts imposed by deficit reduction measures, the Service scaled
              back operations across the board to achieve savings. In fiscal year 1987,
              management realigned field support functions, reprogramming approxi-
              mately 485 positions to operations and allowing the agency to “grow
              from within.” In fiscal year 1988, management restructured headquar-
              ters units and reportedly saved another 142 positions for use in
              operations.


              Despite the belief of a number of Coast Guard officials and supporters
Conclusions   that the Service has suffered because of its placement in DOTand its
              funding under the transportation budget function, our review of the Ser-
              vice’s total funding during the past decade shows this not to be the case.
              While funding for the Coast Guard has fluctuated since fiscal year 1980,
              when funds from all sources are included, its funding-in   real terms-
              grew by 24 percent over the 1980-89 period. This rate of growth was
              exceeded in DCITonly by FAA, and it far exceeded the rate of budget
              growth for the department as a whole.




              Page 49                                GAO/BCED-SO-132   Coast Guard Organization   and Funding
                                               Chapter 3
                                               Despite Fiscal Constraint,   the Coast Guard’s
                                               Budget Has Grown




Figure 3.5: Distribution   of the Coast Guard’s Operating Expenses for 1980 and 1989, by Program

Fiscal Year 1980                                                        Fiscal Year 1989

                                                  7.3%
                                                  ELT-Drug
                                                  ELT-Other




                                                                                                                               SAR


                                                  SAR

                                                                                                                               ATON



           7               24.4% =         -     ATON                                                                          6%
                                                                                                                               MS
                 )/




                                                  MS                               I                                           ELT-Drug
                                                  7.5%
                                                  MEP
                                               Notes The Coast Guard did not separate out the amount spent for drug InterdIctIon tn ELT In fiscal year
                                               1980 The ftgure used for ELT-Drug tn fiscal year 1980 IS an estimate taken from a January 1988 congres-
                                               slonal staff bneflng given by the Coast Guard
                                               Abbrevtatlons. ELT, Enforcement of Laws and Treaties Program (ELT Drug InterdIctIon of controlled
                                               substances, ELT Other Conservation of flshenes. enforcement of US immigration law and policy), IO,
                                               Ice Operations Program MP, Military Preparedness Program: SAR. Search and Rescue Program, ATON,
                                               Alds to Navlgatlon Program, MS, Maritime Safety Program and MEP. Manne Envlronmental Protectton
                                               Program
                                               Source Coast Guard


                                               The Coast Guard’s funding history in recent years can be best under-
                                               stood in the context of governmentwide fiscal policies and an increas-
                                               ingly constrained federal budget. These conditions have led to increased
                                               competition for resources among all government agencies, especially
                                               agencies-like the Coast Guard-funded      out of the vulnerable


                                               Page 60                                 GAO/RCED-90-132      Coast Guard Organization     and Funding
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Despite Fiscal 0m&raint.,   the Coast Guard’s
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nondefense discretionary portion of the budget. Between fiscal years
1980 and 1989, the nondefense discretionary budget category declined
from 25.4 to 15.8 percent of the total federal budget.

The Coast Guard managed to achieve real budget growth, despite the
decline in nondefense discretionary spending, because of its unique dual-
role character and the willingness of the Congress to support its military
preparedness mission with funds appropriated for defense. It also bene-
fited substantially from funds made available to wage war on illicit
drugs. Whether the Coast Guard will continue to benefit from transfers
of funds appropriated for defense is unclear now that defense is also
vulnerable to the pressures of an increasingly constrained federal
budget.




Page 51                                GAO/RCED90-132   Coast Guard Organization   and Funding
Outlook for Continued Tight Budgets
Underscores Need for Coast Guard to Enhance
Efficiency and Effectiveness and Offset Costs
               Any evaluation of the Coast Guard’s placement and funding issues
               would be incomplete if it did not consider: (1) how well the Service cur-
               rently uses the resources available to it, (2) what it might do to make
               more efficient and effective use of these resources, and (3) how it might
               defray the costs of providing services by charging fees to the individuals
               and groups who use these services. The environment of resource scar-
               city and budget constraint in which the Service has operated in recent
               years is an inescapable reality of government in the 1990s. As govern-
               ment leaders search for ways to balance the demands for new and
               existing services against the imperatives of deficit reduction, Coast
               Guard managers-like     managers of all other federal agencies-will    find
               it increasingly necessary to optimize the use of limited resources and
               identify additional sources of revenue with which to offset costs. Well
               designed and properly used measures of efficiency and effectiveness
               (MOE) could provide the resource optimization tools that the Coast Guard
               will need to achieve the greatest impact for each dollar it spends. Simi-
               larly, as noted by the DCITInspector General and others, soundly based
               and properly justified user fees could generate revenues to offset the
               Coast Guard’s costs of providing services to particular individuals and
               groups.

               Several studies, including internal Coast Guard studies and studies con-
               ducted by GAO and others, have recommended that the Service develop
               managerially useful MOES as the foundation of a performance measure-
               ment and resource allocation system. We decided to revisit this matter
               as part of this review to determine whether the Coast Guard had imple-
               mented these recommendations. We found that while the Service has
               revised its planning and resource allocation system with the declared
               intention of incorporating the use of measures into these functions, the
               revision has not been fully implemented. This lack of implementation is
               due, in part, to the fact that many of the MOES, as currently developed,
               are not useful indicators of program performance. Furthermore, the Ser-
               vice has not addressed specific concerns that we raised in our earlier
               work about the measures that were being used at that time to assess the
               performance of its safety programs. These problems, coupled with a
               lack of clear guidance and accountability for the use of MOES, have pre-
               vented the Coast Guard from effectively integrating them into its basic
               management processes.

               The Coast Guard expends nearly $500 million yearly to provide a
               variety of specialized services to particular individuals and groups.
               Since 198 1, the Administration has offered proposals aimed at recov-
               ering a portion of the costs of such services through user fees that


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                        Outlook for Continued Tight Budgets
                        Underscores Need for Coast Guard to
                        Enhance Efficiency   and Effectiveness and
                        Offset Cost.5




                        would be paid by the actual or potential beneficiaries of these services.
                        For the most part, these proposals have not been adopted by the Con-
                        gress. Part of the reason for their lack of acceptance, reported by us in
                        1987, is the lack of good documentation, particularly data on the cost of
                        providing the services, to support proposed fees. In revisiting this issue
                        in the context of this review, we found that the Coast Guard continues
                        to be hampered in its ability to persuasively advocate user charges by
                        the absence of reliable cost data.


                        MOES assess the success of programs in achieving their goals, MOES for
Need for Tools to       safety programs, for example, assess the programs’ success in
AssessProgram           preventing accidents and their consequences (property damage, injury,
Performance             and death). GAO and others have made several recommendations for the
                        Coast Guard to develop MOESto assess program performance and make
Previously Identified   critical resource allocation decisions. In 1987, as part of a comprehen-
                        sive review of D&S management, we recommended that the Service
                        develop performance measures and use them in planning and resource
                        allocation to promote more effective and efficient use of limited
                        resources and strengthen accountability for program results.’ We
                        pointed out that the Service could improve the management of its pro-
                        grams by clearly defining objectives and evaluating its success in
                        meeting them.

                        Recommendations similar to ours were also made by an internal Coast
                        Guard study group and by nor’s Secretarial Safety Review Task Force.
                        The internal Coast Guard study was performed as an adjunct to the
                        Coast Guard headquarters’ restructuring study to evaluate all MOES then
                        in use in the Service’s programs. It found that the Service’s support and
                        operating programs were not being systematically evaluated to monitor
                        the achievement of goals and that the measures employed were deter-
                        mined more by information that was readily available than by informa-
                        tion that best met the programs’ needs. The study group recommended
                        that the Service make every effort to better measure its effectiveness,

                        In 1988, the DOT Secretarial Task Force, established to review and ana-
                        lyze safety programs throughout the Department,, recommended that the
                        Coast Guard develop (1) performance indicators that better measure its
                        effectiveness in saving lives and (2) improved measures for analyzing
                        the effectiveness of its commercial vessel safety program. According to




                        Page 53                              GAO,:RCED-90-132   Coast Guard Organization   and Funding
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                           Outlook for Continued Tight Budgets
                           Underscores Need for Coast Guard to
                           Enhance Efficiency   and Effectiveness and
                           Offset Costs




                           the task force, measures should provide a more direct link between pro-
                           gram elements and the prevention of property damage, injury, and
                           death.


MOEs Would Permit Better   A performance measurement system is crucial in the Coast Guard
                           because of the frequent need to shift resources in response to changing
Targeting of Limited       national priorities and fluctuations in annual funding. As noted previ-
Resources                  ously, the Service has some flexibility and discretion in determining
                           which of its program areas are in greatest need of resources and in real-
                           locating resources accordingly. Between 1980 and 1989, for example, in
                           response to heightened emphasis on drug interdiction, Service leaders
                           increased the amount of operating expenses devoted to the Enforcement
                           of Laws and Treaties Program by almost 50 percent. This increase was
                           accompanied by decreases in other program areas. Because such shifts
                           can significantly affect the ability of a program to meet its objectives, it
                           is important that they be based on the best information possible. A per-
                           formance measurement system can facilitate such decisions by pro-
                           viding decisionmakers with information on a program’s effectiveness,
                           allowing them to critically assess the likely impacts of shifts in
                           resources.

                           The need for MOES has also been demonstrated on several occasions
                           when the Coast Guard had to decide quickly on resource use in response
                           to budget cuts. For example, as we reported in November 1988, the Ser-
                           vice would have been in a better position to determine which vessel
                           traffic service (VTS) facilities (primarily used to keep vessels from col-
                           liding while transiting harbor areas) to close had it developed and used
                           MOES in managing the v’rs Program.: The factors that the Service used to
                           select VTSfacilities for closure were chosen primarily to satisfy its imme-
                           diate need to reduce operating expenses and gave little consideration to
                           the effectiveness of each facility in enhancing the safety of vessels. Had
                           proper MOES been developed for the VTSProgram, the Coast Guard would
                           have been better able to objectively assess each facility’s performance
                           and thereby identify candidates for closure.

                           The Service, likewise, would have been in a better position to justify its
                           1988 decision to close various Search and Rescue Program (SAR) stations



                           ‘Coast Guard: Better Information Keeded &fore Deciding on Facility Closings (GAO/RED-89-48,
                           Nov. 29. 1988).




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                           Enhance Efficiency   and Effectiveness and
                           Offset Costs




                           if it had been systematically assessing the performance of these sta-
                           tions. SAR stations play an important role in protecting the lives of com-
                           mercial fishermen, recreational boaters, and others involved in accidents
                           at sea and on the nation’s inland waterways. Reacting to an unexpected
                           shortage of operating funds in early 1988, the Service decided to close
                           nine of its SARstations and curtail operations at six others. Because of
                           concerns about the possibility of reduced life-saving capability, how-
                           ever, the Congress directed the Service to reopen closed stations and not
                           close any others until GAO could review and report on the January 1988
                           decision.

                           In examining the supportability of the Service’s decision to close or
                           reduce SAR operations, we found that the criteria it used to evaluate SAR
                           stations did not adequately address such key operational factors as the
                           impact that closure or reduction actions would have on its effectiveness
                           in saving lives or on its ability to perform other missions.3 As with the
                           closures of VTSfacilities, had the Service developed useful MOES for SAR,
                           it would have had the information needed to make defensible decisions
                           on closures and cutbacks in SAR stations. The results of the measures
                           would have served as flags, calling attention to stations which were low
                           in performance and therefore were strong candidates for closure or
                           reduction. Once those stations that rated low on effectiveness had been
                           identified, Service officials could have examined other factors relevant
                           to decisionmaking, such as proximity to a marina, the geography of the
                           area, or the availability of alternative search and rescue capabilities.


MOE& Required as Part of   Recognizing the importance of monitoring program performance, Coast
                           Guard management required in early 1988, as part of a revision to the
Coast Guard’s Revised      Service’s planning and resource allocation system, that MOES be devel-
PI ann.ing and Resource    oped for all of its programs. The revision was intended to incorporate
Allocation System          program evaluation into the existing planning, programming, and
                           budgeting system (PPBS) -a management decisionmaking process
                           designed to determine objectives, select and develop the programs for
                           achieving them, and allocate resources among these programs in a cost-
                           effective manner. Service officials told us that the cornerstone of this
                           process was intended to be the requirement that managerially useful
                           MOES be developed for all programs.




                           ‘Coast Guard: Better Process Xeeded to Justify Closing search and Rescue Stations (GAO/
                           RCED-90-98, Mar. 6. 1990).



                           Page 55                               GAO/RCED-90-132     Coast Guard Organization   and Funding
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                            Outlook for Continued Tight Budgets
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                            Enhance Efficiency   and Effectiveness and
                            Offset costs




                            As part of the overhaul of PPBS, management required that all program
                            offices develop program descriptions to provide a basis for resource
                            allocation decisions and a point of reference for reviewing and evalu-
                            ating their programs’ activities. In preparing descriptions, managers
                            were given instructions to develop measures that would assess the pro-
                            gram’s success in attaining its goals. The program descriptions were sup
                            posed to identify, describe, and validate the measures selected.
                            According to Coast Guard officials, these measures were to be used to
                            assess program performance as part of more comprehensive
                            evaluations.


Problems With MOEs          In October 1988, the Service reported to OMB that it had implemented the
Prevent Implementation of   revised management decisionmaking system-now called the planning,
                            programming, budgeting, and evaluation system (PPBES). We found, how-
Revised Management          ever, that no programs have been evaluated. Officials in the Service’s
System                      Plans and Evaluation Division told us that ad hoc responsibilities and
                            staffing shortfalls had prevented them from evaluating programs as
                            contemplated in the system’s overhaul.

                            Perhaps more telling and to the point, however, our work revealed that
                            the measures have shortcomings that have prevented their use in evalu-
                            ating programs. In examining the MOES, we noted that some do not con-
                            form to requirements outlined in the Coast Guard’s instructions or even
                            to definitions of effectiveness and efficiency measures. The Bridge
                            Administration Program office, for example, rather than identifying and
                            describing its MOES, provided raw data on such things as the number of
                            bridge permits and regulations issued and did not develop a method for
                            determining the efficiency and effectiveness of the program. Such raw
                            data provide no indication of how well the Bridge Administration Pro-
                            gram is achieving its goals.

                            Another program office, the Short Range Aids to Kavigation Program,
                            did not incorporate information on the resources required to perform
                            particular activities into its MOEX For example, program officials
                            attempting to measure efficiency in assessing waterway marking needs
                            merely compare the number of waterways analyzed with the total
                            number of waterways in the district. This measure does not take into
                            account the resources that are required to assess a particular waterway.
                            As a result, managers using this measure cannot accurately determine
                            the program’s efficiency in using resources.




                            Page 56                              GAO/RCEJMO-132   Coast Guard Organization   and Funding
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            Offset Costs




__   ..-.
            Deficiencies in the measures are attributable, in large part, to the lack of
            feedback provided to the program officials who developed them. The
            Service’s Plans and Evaluation Division was responsible for reviewing
            measures and providing feedback to program managers on their ade-
            quacy and conceptual soundness. Division management assigned this
            task to the Productivity Improvement Branch, a unit within the Divi-
            sion. A Branch official told us that Branch staff reviewed the measures
            for all programs and provided the results of their review to others
            within the Division. Division officials acknowledged that they received
            these results and agreed that there were shortcomings in many of the
            measures reviewed. They added, however, that competing demands pre-
            vented them from using the results of the review to provide feedback to
            program managers.

            An official involved in overseeing the development of MOEStold us that
            in addition to their use in evaluating programs, they were intended to be
            used in the day-to-day management of programs. Again, however,
            because of their deficiencies, they are not being used as intended. One
            program official told us that he was reluctant to use measures that have
            been developed for his program because they are managerially useless.
            He added that while officials responsible for reviewing measures told
            him that the measures for his program have shortcomings, they did not
            provide assistance in developing better ones. Other program officials
            told us that they have no plans to use the measures that have been
            developed, while still others said that they do not currently collect the
            type of data necessary to use the measures.

            Although the Service had not developed a formal measurement system
            at the time of our 1987 nor management review, some program offices
            had developed MOESto gauge progress in meeting their programs’ goals.
            We examined the measures then in use in DOTfor evaluating the effec-
            tiveness of safety programs and concluded that accident rates or fatali-
            ties are not appropriate measures for setting safety program goals and
            assessing performance. The measures are not appropriate because a
            falling fatality rate does not necessarily result from the agency’s actions
            or mean that management is making the most productive use of its
            resources. For example, a falling boating fatality rate may reflect a tem-
            porary decline in total recreational boating activity as a result of an eco-
            nomic downturn or a steep increase in fuel prices such as occurred in the
            early 1970s. Moreover! because accident rates and fatalities reflect what
            has already happened, their relevance to the prevention of accidents is
            limited.



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                        Offset Costs




                        As part of our 1987 work, we examined the Coast Guard’s Recreational
                        Boating Safety Program and suggested that the Service would be in a
                        better position to optimize the program’s use of resources if it evaluated
                        the impact of each of the program’s three strategic elements-education
                        of the boating public, enforcement of boating safety laws, and manufac-
                        turers’ compliance with vessel construction standards. Our work in this
                        review shows that the MOES developed by Boating Safety Program offi-
                        cials have not been modified in the manner we suggested. Program man-
                        agers continue to rely on the number of boating fatalities to assess the
                        program’s overall effectiveness.

                        A Boating Safety Program official told us that while program managers
                        have begun to collect data on the effectiveness of each of the three ele-
                        ments of the program, as we suggested, he does not anticipate changing
                        the program’s existing measure of effectiveness. He told us that he
                        believes the measure should assess the program’s bottom-line goal-
                        preventing fatalities-because     this best represents its effectiveness. In
                        contrast, an official in the Plans and Evaluation Division responsible for
                        reviewing all measures told us that it is important for managerial pur-
                        poses to assess the effectiveness of each major element of the program.
                        He added that in the future the Division may assist Boating Safety offi-
                        cials in developing MOES for each of the program’s three strategic
                        elements.

                        Deficiencies in the Service’s MOESof the type discussed above have pre-
                        vented it from conducting comprehensive program evaluations. Officials
                        responsible for developing PPBESacknowledged that they cannot fully
                        implement the system and evaluate programs until useful measures are
                        developed. Our work revealed, moreover, that there are other problems
                        that must also be addressed before measures can be used effectively.


Measures Not Directly   Although MOES are considered the cornerstone of the Service’s revised
                        PPBFS, we could not find a link, either formal or informal, between the
Linked to Resource      use of measures and resource allocation tasks. Service officials were
Allocation Process      unable to show how the new PPBFS integrates the use of measures and
                        program evaluations into the resource allocation process. We found that
                        there are no directives defining how and by whom measures and the
                        results of evaluations should be used. In fact, in our discussions with
                        officials of the Service’s budget division we found that they were una-
                        ware of how measures are intended to be used in carrying out their
                        resource allocation responsibilities.



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                               Chapter 4
                               Outlook for Continued Tit       Budgets
                               Underscores Need for Coast Guard to
                               Enhance Efficiency   and Effectiveness  and
                               Offset Costa




                               According to Service documents, program descriptions (of which mea-
                               sures are supposed to be a part), are intended to guide the Coast Guard’s
                               programming and budgeting actions. In addition, they are supposed to
                               promote the flow of information and ease difficult resource allocation
                               decisions in each budget cycle. However, program descriptions have not
                               been used in the resource allocation process. An official responsible for
                               developing PPBEZStold us that PPBEShas not been implemented in the way
                               he had hoped and expected it would be. Another official involved in
                               developing PPBESacknowledged that responsibilities for using measures
                               have not been clearly defined and told us that management will incorpo-
                               rate more explicit instructions for the use of measures in an upcoming
                               revision to the Service’s planning manual. One top official explained
                               that because of a shortage of staff the Service does not have the luxury
                               of carefully assessing needs and, as a result, resource decisions are often
                               reactive rather than proactive.


                               The urgent need to reduce federal deficits, coupled with a desire to find
 Longstanding Data             ways to support the continuation of popular government services, has
 Problems May Hamper           prompted heightened interest in user fees. The Administration has pro-
 Efforts to Establish          posed a variety of user fees for no-r and recently announced that it
                               intends to recover from users of federally provided transportation ser-
 User Fees                     vices the maximum practical share of costs they impose. The President’s
                               budget for fiscal year 1991 assumes the enactment of legislation to
                               impose a system of user fees for the Coast Guard’s services that would
                               generate an estimated $200 million in revenues in the first year.

                               While most previous attempts to impose user fees on recreational
                               boaters and others who benefit from the Coast Guard’s services have
                                not met with success in the Congress, the DOTSecretary has indicated
                               that his department will seek new and creative ways to apply the user
                                fee principle. However, the Coast Guard continues to be handicapped in
                               justifying and supporting proposals for user fees by a lack of reliable
                                cost data. In addition, the Service lacks effective controls over the col-
                                lection of user fees.


  User Fees Could Offset       While the Coast Guard has traditionally provided services that benefit
                               both the general public and particular user groups, to date the Congress
  Costs of the Coast Guard’s   has authorized only limited user fees for the Coast Guard. User fees are
’ Services                     not charged for most of the Coast Guard’s services, either because fed-
                               eral law (46 USC. 2110) prohibits the charging of such fees or the



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                             Outlook for Continued Tight Budgets
                             Underscores Need for Coast Guard to
                             Enhance Efficiency   and Effectiveness and
                             Offset Costs




                             Coast Guard has been unsuccessful in obtaining approval from the Con-
                             gress to establish fees for these services.

                             Some of the services the Coast Guard provides-such       as defense readi-
                             ness, enforcement of laws and treaties, and the setting of safety stan-
                             dards-clearly    benefit the general public, and user fees would not be
                             appropriate in these instances. However, the Coast Guard provides
                             direct benefits to commercial mariners and recreational boaters through
                             such activities as search and rescue, aids to navigation, marine safety
                             inspections! and marine environmental protection, which in the opinion
                             of DOT’SInspector General are appropriate candidates for financing
                             through user fees. According to a 1988 Inspector General report, the
                             cost of providing these services amounts to $497 million annually.


Earlier Proposals for User   Since 1981, the Administration has been submitting to the Congress pro-
                             posals to impose user fees for the Coast Guard’s services. In only 2
Fees Were Not Well           years, 1985 and 1987, did the Administration find a sponsor to intro-
Formulated or Supported      duce legislation authorizing such fees. No user fees were enacted in
                             either case. This lack of success has been due in part to poorly formu-
                             lated and supported proposals. In 1987, we found that problems in
                             gaining political support and determining how much should be charged
                             to various users were not identified and corrected before the proposals
                             were submitted for congressional action. We recognized that user fees
                             for the Coast Guard’s services are controversial and may never gain
                             enough support to be enacted in the form ucrr would like. However, we
                             pointed out that by submitting inadequately formulated and supported
                             proposals nor reduced its chances for success.


Accounting System Limits     Because of the limitations of its accounting system, the Coast Guard is
                             unable to produce actual cost data by program for purposes of estab-
Coast Guard’s Ability to     lishing and supporting user fees and similar charges. In our earlier work,
Support User Charges         we found that the Coast Guard needed to make substantial changes in
                             its budgeting and accounting systems to provide for an integrated finan-
                             cial management system. Such integration is needed because the Service
                             currently budgets and maintains accounts on the basis of “cost centers”
                             (operating facilities or organizational units). The accounting system is
                             designed to account for expenditures of funds by cost centers, not by
                             programs. Program costs are developed after the fiscal year ends and
                             are based on estimates.




                             Page 60                              GAOIRCED-90-132   Coast Guard Organization   and Funding
                            Chapter 4
                            Outlook for Continued Tight Budgets
                            Underscores Need for Coast Guard to
                            Enhance Efficiency   and Effectiveness and
                            Offset Costs




                            In estimating a program’s costs, the Service determines what its total
                            costs are and then prorates them on the basis of operational reports
                            showing the amount of time spent on a given program activity. Thus, if
                            SAR operations took 10 percent of a cost center’s time, 10 percent of that
                            center’s costs would be charged to SAR. Total SAR costs would be obtained
                            by adding together the SAR cost estimates of all cost centers. This cost
                            estimating process becomes problematic when proposals for user fees
                            are formulated because a direct link between costs, services, and specific
                            users of services must be established under requirements set forth in
                            0MB circulars.


Internal Control            In addition to cost data problems that hamper the Service’s ability to
                            establish and support user fees, there are problems with the Coast
Procedures Not Adequa ,te   Guard’s internal control procedures for collecting and accounting for
to Properly Manage the      fees. The major Coast Guard activity for which user fees have been
Collection of User Fees     authorized and are collected is vessel documentation. DOT’SOffice of
                            Inspector General found that in some instances the Coast Guard lacks
                            effective control over the collection of vessel documentation fees. Spe-
                            cifically, the Inspector General found that there was an absence of con-
                            trols over vessel documentation at the New York Vessel Documentation
                            Office. Thus, the DOTSecretary, in a December 1989 letter to the Presi-
                            dent outlining material and internal control weaknesses in the Depart-
                            ment, reported that there were material weaknesses in the Coast
                            Guard’s policies and collection procedures involving user charges. This
                            judgment was based on an Inspector General audit that evaluated the
                            effectiveness of policies and procedures in establishing and collecting
                             user charges. The audit found that internal control procedures were
                            inadequate to manage and account for fees collected.


                            In recent years, changing priorities, growing demands for services, and
Conclusions                 an increasingly constrained federal budget have required the Coast
                            Guard to shift resources among program areas, streamline its organiza-
                            tion to free up positions for operations, and generally seek ways to
                            enhance productivity and “grow from within.” Several studies have con-
                            cluded that the Service could improve its ability to manage its activities
                            and make difficult resource allocation decisions by developing perform-
                            ance measures (MOES) and integrating these measures into its basic sys-
                            tems for planning, budgeting, and managerial accountability. In
                            examining the actions the Coast Guard has taken in response to past
                            studies, we found that while the Service has taken steps to develop a



                            Page 61                              GAOIRCED-90-132   Coast Guard Organization   and Funding
                   Chapter 4
                   Outlook for Continued Tight Budgets
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                   Enhance Efficiency   and Effectiveness and
                   Offset Costs




     -
                   performance measurement capability, much remains to be done. Short-
                   comings in many of the performance measures that have been developed
                   to date prevent them from being useful in the day-to-day management
                   of programs and in higher-level management decisionmaking. Without
                   managerially useful measures, however, the Coast Guard lacks an
                   important objective means of gauging its performance and improving its
                   use of resources. Moreover, until the Service can evaluate the perform-
                   ance of its programs, both the Coast Guard and others, notably the Con-
                   gress, will find it difficult to accurately assess resource needs.

                   User charges offer a means of recovering the costs of providing services
                   that benefit specific individuals or groups. It has been estimated that the
                   Coast Guard annually expends nearly half a billion dollars providing
                   services that could qualify for funding through user charges. The
                   Administration has offered for fiscal year 1991 a proposal for a variety
                   of user charges for the Coast Guard’s services that would generate an
                   estimated $200 million in revenues in the first year, if enacted. The
                   prospects for the success of this proposal are uncertain, however. Part
                   of the reason is the controversial nature of user fees and the under-
                   standable reluctance of those who are accustomed to receiving a service
                   for free-that   is, paid for with funds derived from general tax reve-
                   nues-to consent to being assessed a charge for the service. However,
                   another reason for its uncertain prospects is that the Coast Guard has
                   been unable in the past to make a convincing case for particular types
                   and levels of user fees. Lacking good cost data for its programs, the Ser-
                   vice has been hampered in its ability to formulate and defend user fee
                   proposals capable of winning the congressional support needed for
                   enactment.


                   In response to recommendations made by us and by others, the Coast
Recommendationto   Guard has taken steps to develop performance measures to improve the
the Secretary of   use of available resources. However, because of weaknesses in the
Transportation     design of many of these measures and an absence of follow-up by man-
                   agement to ensure their refinement and implementation, the measures
                   are not currently used in a significant way in the management of the
                   Coast Guard’s activities or in top-level decisionmaking. Accordingly, we
                   believe that the Secretary should direct the Coast Guard to continue to
                   improve its performance measures and use them in both the day-to-day
                   management of programs and in higher-level decisionmaking for plan-
                   ning, programming, and budgeting. With a well developed system of per-
                   formance measures in place and serving as a foundation for an
                   integrated planning, evaluation, and resource allocation system, the


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Coast Guard would be in a much better position both to ensure the most
effective and efficient use of the limited resources at its disposal and to
more accurately determine and persuasively argue its future resource
requirements.




Page 63                              GAO/RCED@O-132   Coast Guard Organhtion   and Funding
SelectedEarly F!roposalsto Reorganizethe
Coast Guard and the 1966 Proposal to Create
the Department of Transportation
                       Beginning shortly after its establishment and continuing for more than a
                       century thereafter, the Revenue Cutter Service, the prime antecedent of
                       the Coast Guard, was exposed to repeated threats to its survival, mainly
                       proposals for consolidating the Service with the Navy. Some of the pro-
                       posals were motivated primarily by a desire to improve the prospects
                       for promotion, pay, and retirement of Service personnel. Others, how-
                       ever, were intended to eliminate what was viewed as unnecessary and
                       wasteful duplication between the two armed services. An examination
                       of a few of these proposals provides an opportunity to understand how
                       they were viewed by Service supporters and top officials as threats to
                       the organization’s continued existence and the factors that led to their
                       ultimate defeat.


                       Ironically, only 3 years before the Coast Guard’s establishment, the Rev-
1912 Taft Commission   enue Cutter Service was targeted for abolition, and another forerunner,
Report                 the Life-Saving Service, was recommended for transfer from Treasury
                       to the Department of Commerce and Labor. These actions were recom-
                       mended by the Commission on Economy and Efficiency, organized at the
                       request of President Taft to study the organization and functioning of
                       the federal government and to suggest improvements. The Commission
                       stated in its 1912 report that study of the Revenue Cutter Service’s
                       work convinced it that the Service did not have a single duty or function
                       that could not be performed by some other existing agency at least as
                       well and at lower cost. The Commission forecast savings of over a third
                       of the Service’s annual $2.5 million budget if its recommendations were
                       adopted.

                       The Commission suggested that the views of the three cabinet depart-
                       ments most directly concerned -Treasury, Commerce and Labor, and
                       Navy-be sought before the President formally submitted his proposals
                       to the Congress. Commerce and Labor was supportive of the proposal
                       since it stood to gain new resources and responsibilities with the absorp-
                       tion of the Life-Saving Service. It also expected to receive some of the
                       abolished Service’s cutters for the purpose of aiding ships in distress off
                       U.S. coasts. The Kavy was somewhat more ambivalent in its views. Like
                       Commerce and Labor, it coveted the Revenue Cutter Service’s vessels
                       and believed that they should all be transferred to it. It also welcomed
                       the transfer of the Service’s enlisted personnel but not the Service’s
                       officers and cadets who, it maintained, would be of no possible advan-
                       tage but, rather, would seriously threaten personnel harmony. The Navy
                       was also concerned about the compatibility of the Service’s duties with
                       its own national defense mission. All duties that interfere with the


                       Page 64                      GAO/RCEDW-132   Coast Guard Organhation   and Funding
                        Appendix I
                        Selected Early Proposals to Reorganize the
                        Coast Guard and the 1966 Proposal to Create
                        the Department  of Transportation




                        training of personnel for war are “irregular,”          it maintained, and, to a
                        degree, detrimental to the fleet’s efficiency.

                        Not surprisingly, the response of Treasury to the recommendation that
                        one of its services be abolished and another transferred to another
                        department was negative. Treasury also challenged the contention that
                        abolition of the Revenue Cutter Service would result in savings, esti-
                        mating, to the contrary, that $1.1 million more would have to be
                        expended annually to continue the services formerly provided by the
                        revenue cutters.

                        On April 4, 1912, President Taft sent the Commission’s report to the
                        Congress, along with a recommendation that legislation be enacted to
                        implement its proposals, At least two factors combined to prevent this.
                         First, time was running out for the Administration and the President
                        had lost so much support that anything he proposed was apt to be sub-
                        jected to close scrutiny. Second, the proposal to abolish such a venerable
                        institution of government had attracted considerable public notice,
                         including a great deal of press comment favorable to the Service. This
                         sympathetic treatment only intensified after April 14, 1912 (10 days
                         after the President sent his message to the Congress), when the sinking
                        of the Titanic and the loss of over 1,500 lives focused even more atten-
                        tion on an organization that counted the saving of life and property at
                         sea among its principal duties.


                        The first major threat to the fledgling Coast Guard had its origins in the
World War I and the     transfer of the Service to the Navy’s jurisdiction with the United States’
Risk of Absorption by   entry into World War I. At war’s end, the Secretary of the Navy and his
the Navy                Assistant Secretary, Franklin D. Roosevelt, determined that the Coast
                        Guard should remain under the Navy’s control, arguing that to return it
                        to Treasury would only contribute to unnecessary duplication of facili-
                        ties and functions. To this end, they obtained the introduction of a bill in
                        the Congress in January 1919 that provided for the complete integration
                        of the Coast Guard’s personnel, vessels, and stations into the Navy and
                        the closing of redundant shore activities-in     effect, putting an end to
                        the Coast Guard after only 4 years of existence.

                        The Treasury Secretary, to whom a copy of the bill was provided for
                        comment, strongly opposed the proposal. Koting that the Navy had
                        repeatedly sought to gain control of the Revenue Cutter Service and that
                        the Congress had consistently declined to permit this, he argued that the



                        Page 65                             GAOjRCED90-132   Coast Guard Organization   and Funding
                     Appendix I
                     Selected Early Proposals to Reorganize the
                     Coast Guard and the 1966 Proposal to Create
                     the Department  of Transportation




                     Coast Guard should remain under Treasury’s control in peacetime. Dis-
                     puting the alleged savings to be achieved by consolidation, he also
                     claimed that its effect would be to “utterly demoralize the enlisted per-
                     sonnel of the Coast Guard.” He speculated that one of the real motives
                     of the proposal lay in the desire of many Coast Guard officers to retain
                     the temporary ranks to which they had been promoted during the war.

                     Supporters of the Coast Guard in the Congress introduced resolutions to
                     return the Service to Treasury as quickly as possible. A joint resolution
                     calling for this was adopted and sent to the President in February 1919.
                     The matter did not end there, however. As part of what the Treasury
                     Secretary characterized as a “remarkable campaign of propaganda” in
                     favor of the Navy’s retention of their Service, a number of Coast Guard
                     officers contradicted the Secretary’s arguments and insisted that mili-
                     tary efficiency and economy would be enhanced were the Navy to retain
                     the Coast Guard permanently. They also cited the “unsatisfactory”
                     record of cutter construction in prewar years as proof of Treasury’s lack
                     of interest in their Service.

                     Ultimately, with the support of the Coast Guard Commandant and a
                     small group of headquarters officers who favored the Service’s return to
                     Treasury and normal peacetime status, Treasury’s position prevailed.
                     President Wilson issued an executive order on August 28, 1919,
                     directing the Coast Guard’s return to Treasury’s control.

                     In lending his support to the Treasury Secretary’s efforts to retain con-
                     trol of the Coast Guard, the Commandant, Ellsworth P. Bertholf, made a
                     number of observations about the differences between the two services
                     that for him underscored the necessity of keeping them separate in time
                     of peace. In his view, the fundamental reasons for the two services were
                     diametrically opposed. While the Navy exists for the sole purpose of
                     preparing itself for war, the Coast Guard exists to carry out duties that
                     are essentially peacetime functions. The Coast Guard is organized along
                     military lines because that organization best enables it to maintain itself
                     as an emergency service and perform as an adjunct and auxiliary to the
                     Navy in war. Wartime usefulness is thus a by-product of the Coast
                     Guard and not its major reason for being.


                     The next serious threat to the Coast Guard coincided with the deepening
Threats During the   depression of the 1930s and the election of a new President. Worsening
Depression Era       economic conditions and pressures to reduce government spending led



                      Page 66                             GAO/RCED-w132   Coast Guard oganization   and Fundine
Appendix I
Selected Early Proposals to Reorganize the
Coast Guard and the 1966 Proposal to Create
the Department  of Transportation




the Congress in 1932 and 1933 to enact legislation authorizing reorgani-
zation of executive departments in the interest of economy and effi-
ciency and eliminating unnecessary duplication. The unique character of
the Coast Guard as well as its rapid growth and high visibility during
Prohibition made it a prime candidate for scrutiny. It was probable also,
as events subsequently confirmed, that the new President, Franklin
Roosevelt, would continue to hold the view, espoused some years earlier,
that the proper place for the Coast Guard was in the Navy.

The first rumors of the Navy’s takeover began to circulate soon after the
President’s March 1933 inauguration. This time, however, the Comman-
dant and other officials did not wait for official notice of such a move
before attempting to forestall it. They produced a number of letters and
memorandums restating the arguments against consolidation that Com-
mandant Bertholf had offered in 1919. They also developed new argu-
ments, emphasizing the growing importance of the Coast Guard’s marine
law enforcement responsibilities in combating smuggling and illegal
immigration, pointing out that the Navy was specifically precluded by
statute from a civilian law enforcement role, and arguing that there was
little or no overlapping or duplication of effort in the performance of the
respective duties of the two military services. As for any possible sav-
ings to be achieved by consolidation, they maintained that claimed econ-
omies were more illusory than real.

In late 1933, after meeting with the President to discuss Coast Guard
matters, the Commandant submitted a memorandum to the Treasury
Secretary summarizing his view of the risks of such a move. As his pred-
ecessor had done in 1919, he pointed out that the paramount duty of the
Kavy is preparation for war and maintenance of the fleet in readiness. If
the Coast Guard were transferred to the Kavy, its duties would be sacri-
ficed, if necessary, to meet the Navy’s obligations. If appropriations
were not sufficient to maintain the fleet, then those activities having no
direct bearing on readiness-in particular, the activities of the Coast
Guard-would      be sacrificed. Similarly, the best available officers could
be expected to be assigned to purely naval duties, while the less highly
rated would be assigned to the Coast Guard. In every respect, in other
words, the Coast Guard could be expected to be disadvantaged and to
have a status inferior to that of the Kavy.

Despite these arguments and a lack of enthusiasm for transfer on the
part of Treasury officials, such a move appeared virtually certain in late




Page 67                             GAO/RCED!W132   Coast Guard Organization   and Funding
                  Appendix I
                  Selected Early Proposals to Reorganize the
                  Coast Guard and the 1966 Proposal to Create
                  the Department  of Transportation




                  1933, when a committee was formed to consider the question of admin-
                  istration of the Service, in the event of its transfer to the Navy’s juris-
                  diction The committee produced a series of recommendations, the most
                  important of which was that the Coast Guard have a status in the Navy
                  analogous to that of the Marine Corps, with its own Commandant.
                  Addressing the key issue of economy and efficiency, the committee fore-
                  cast minimal annual savings from the transfer. At the same time, it
                  pointed out that the expense of relocating Coast Guard headquarters
                  near those of the Kavy would be considerable.

                  As 1934 progressed, it became increasingly clear that the proposed
                  transfer would not come about, notwithstanding its apparent inevita-
                  bility a few months before. Possible reasons for this, beyond the min-
                  imal savings projected, were the lack of support for the transfer among
                  any organized constituency with the exception of the Navy, the preoccu-
                  pation of the President with weightier matters, and an increasingly
                  organized opposition by Members of the Congress and some of those
                  who more than a decade earlier had supported such a move. In contrast
                  to 1919-20, hardly any Coast Guard personnel in 1933-34 were in favor
                  of transfer to the Navy. As in the earlier episode, this feeling may have
                  had more to do with an appraisal of where they were likely to be better
                  off than with anything else. Similarly, maritime interests in 1933-34,
                  typified by the American Steamship Owners’ Association, expressed
                  their strong opposition to any change in the Coast Guard’s status. In
                   1919-20, these interests were just as strongly opposed to the Coast
                  Guard’s growing involvement in the regulation of commercial vessel
                  safety and had welcomed the Service’s proposed transfer to the Iiavy as
                   a way of reducing, if not altogether eliminating, this unwanted intrusion
                   into their affairs.

                  Finally, the Congress seems to have become increasingly interested in
                  the proposed transfer in 1934 and increasingly determined to oppose it.
                  In January 1934, a congressional delegation met with the President and
                  urged him not to carry out the planned move. By the end of 1934, the
                  transfer was a dead issue.


                  The establishment of the Department of Transportation (nor) in 1967
Creation of the   and the Coast Guard’s transfer from Treasury to the new department
Department of     represent an important watershed. This was the first proposal on the
Transportation    organizational placement of the Coast Guard to be adopted by the Con-
                  gress in the one-and-three-quarters-century history of the Service-and



                   Page 68                             GAO/RCED-90.132   Coast Guard Organization   and Funding
                          Appendix I
                          Selected Early Proposals to Reorganize the
                          Coast Guard and the 1966 Proposal to Create
                          the Department  of Transportation




                          the only such proposal that has been adopted up to this time. This reor-
                          ganization also marks a shift away from proposals focused primarily on
                          considerations of economy, efficiency, and elimination of duplication to
                          proposals aimed at using the Service’s versatile assets to address partic-
                          ular problems or to achieve particular policy objectives, in this case the
                          promotion and facilitation of transportation at the national level.

                          A concern for simplifying the organization of government and elimi-
                          nating unnecessary duplication and overlap can still be discerned in
                          some of the Coast Guard reorganization proposals made since 1967, For
                          the most part, however, the emphasis in this period has been on mar-
                          shalling the unique maritime expertise and multimission assets of the
                          Service to advance broad policy objectives in areas as diverse as envi-
                          ronmental protection, resource conservation and utilization, border con-
                          trol, and national defense.


DOT Represents the        The creation of DOTin 1967 is an example of an idea whose time had
                          finally come. A steadily increasing federal role in transportation and a
Culmination of Years of   growing appreciation of the importance of transportation to the nation’s
Study and Debate          economic well-being and security gave rise to a succession of proposals
                          intended to bring greater balance, coherence, and integration to trans-
                          portation policy, planning, and investment. The need to consolidate and
                          coordinate proliferating federal transportation agencies and the ineffec-
                          tual attempts to do so in the 1930s and 1940s caused the first Hoover
                          Commission in 1949 to conclude that “no single government agency is in
                          a position to evaluate total needs in transportation . . . or the net results
                          of all federal transportation undertakings.”

                          Between 1933 and 1961, there were at least 10 major studies of trans-
                          portation policy. While many of their conclusions on policy were influ-
                          ential, their recommendations on organizational restructuring were, for
                          the most part, not adopted. Independent of these studies were more than
                          a dozen separate proposals to the Congress to create a Department of
                          Transportation or another centralizing agency by another name. These,
                          too, failed to bring about significant change. By 1966, however, condi-
                          tions were apparently favorable for serious consideration of the idea of
                          creating a federal Department of Transportation.

                          The action that triggered the relatively rapid chain of events leading to
                          DOT’Sestablishment was a letter written by outgoing FAA Administrator
                          Il’ajeeb Halaby to President Johnson in June 1965. In it he recommended



                          Page 69                             GAO/RCED-96-132   Coast Guard Organization   and Funding
                            Appendix I
                            Selected Early bposala    to Reorganize the
                            Coast Guard and the 1966 Proposal to Create
                            the Department  of Transportation




                            the creation of a Department of Transportation, with the Federal Avia-
                            tion Administration (FAA) a key part of the new agency, as the only way
                            to ensure that aviation and other transportation modes receive the high-
                            level attention and support required for their proper development. The
                            idea was quickly seized upon by staff of the executive office of the Pres-
                            ident and was unexpectedly announced as an Administration initiative
                            in the President’s State of the Union Address on January 12, 1966. By
                            March 1966, the Administration had submitted its legislative proposal
                            for MJTto the Congress.


Coast Guard Seen as a Key   According to a former D(JTAssistant Secretary for Administration, who
                            was also a member of the task force that devised the nor organizational
Element of the New          concept, the Coast Guard and FAA were both viewed as key elements of
Department                  the new department. Their size as well as the importance and diversity
                            of their programs would provide the crucial mass, in terms of budget
                            and personnel, around which a cabinet-level department could be con-
                            structed. In addition, the Coast Guard was viewed by task force partici-
                            pants as “the FAA of the sea,” its maritime safety and navigation
                            functions being analogous to those of FAA. For tactical reasons, also, it
                            was deemed important that both agencies be part of the new depart-
                            ment. Since Mr. Halaby’s successor as FAA Administrator was not ini-
                            tially enthusiastic about the idea of his autonomous agency becoming a
                            part of the proposed department and since the Treasury Secretary was
                            opposed to losing the Coast Guard, it was felt that neither agency could
                            be persuaded to move to DOTwithout the other. Moreover, the two agen-
                            cies were seen as countervailing and complementary influences; without
                            both, the department would be unbalanced and susceptible to domina-
                            tion by its largest component.

                            The views of Coast Guard personnel on their Service’s transfer to a new
                            organizational home were, understandably, mixed. The Service had been
                            a part of Treasury for 176 years, and there was the normal fear of
                            change and the unknown. Nevertheless, the transfer had its Coast
                            Guard partisans, who viewed the move as an opportunity for the Ser-
                            vice to grow, acquire new duties, and expand into new areas. Moreover,
                            as a member of the task force organizing DOTpointed out, the Coast
                            Guard suffered from a considerable amount of neglect during its last
                            years in Treasury. It was no longer a significant factor in revenue collec-
                            tion (the original purpose of the Revenue Marine), and its maritime
                            safety functions had nothing in common with the rest of Treasury.
                            Although the basic programs of the Coast Guard involved transporta-
                            tion and its responsibilities were broad, appropriations for the Service


                            Page 70                             GAO/RCED+O-132   Coast Guard Organization   and Funding
Appendix 1
&tIactedEarIyPropoaalstoReorganizethe
Ctust Guard and the 1966 Pmposal        to Create
the Deputment of Transportation




were relatively small. In addition, when cuts in government spending
were ordered, Treasury was traditionally the first agency to respond.
This economizing tendency, combined with the Coast Guard’s submerged
position within the department, encouraged deferring capital expendi-
tures and improvements for the Service.

The greatest concern of Coast Guard officials and supporters was that
transfer to uur might serve as the occasion for the fragmentation and
dispersal of the Service’s programs, eroding the multimission concept
and the Service’s ability to function as an armed force in time of war or
national emergency. As a concession to the Service and its supporters,
who might otherwise have resisted the transfer, the Coast Guard was
granted special status in nor’s legislative charter and was to be trans-
ferred as an indivisible unit whose separate identity within the Depart-
ment would be permanently assured.

ucrr came into being on April 1, 1967. Its organizers believed it to be the
embodiment of the most advanced management concepts and the para-
digmatic major-purpose department, vastly superior to the bureau form
of organization characteristic of old-line departments such as Interior,
Treasury, and Commerce. Under D&S matrix organizational design,
Assistant Secretaries have no line authority over the nor agencies repre-
senting the various modes of transportation. Instead, the Assistant Sec-
retaries have functional responsibilities (administration, budgeting,
policy) that cut across bur agencies, and they act as advisers to the DOT
Secretary. The modal administrators, including the Coast Guard Com-
mandant, report in a line capacity directly to the Secretary.




 Page 71                                  GAO/RCED-90-132   Coast Guard Organimtion   and Funding
Appendix II

Comparison of Funding for the Coast Guard
and Other Agencies Shows a Mixed Picture

                       Fiscal retrenchment has resulted in tight budgets for most agencies
                       during the 1980s. To put the Coast Guard’s funding in perspective, we
                       compared its budget growth rate for fiscal years 1980 through 1989
                       with the rates of 14 agencies funded in the nondefense discretionary
                       and defense budget categories. Overall, the Coast Guard’s funding
                       record compared favorably. While the Coast Guard’s funding increased
                       at a greater rate than that of some agencies, it did not increase as much
                       as that of DOD agencies or certain agencies that also have drug enforce-
                       ment and border control responsibilities. We recognize that in making
                       comparisons, budget totals, in themselves, do not explain differences in
                       budget growth rates. Rather, these growth rates reflect the spending
                       priorities of the period. (App. IV lists the 14 agencies and their funding
                       in constant dollars for fiscal years 1980 through 1989.’ App. V shows
                       the percent changes in funding from fiscal year 1980.)


                       Bearing in mind that some recent proposals have called for making the
Coast Guard’s Budget   Coast Guard an independent agency, we compared the Coast Guard’s
Grew More Than the     budget with the budgets of the following independent agencies: the Gen-
Budgets of Some        era1 Services Administration (GSA), the Appalachian Regional Commis-
                       sion (ARC), the Small Business Administration (SBA), and the National
Agencies               Aeronautics and Space Administration (NASA). (See fig. II. 1.) Between
                       fiscal years 1980 and 1989, the GSA and ARC budgets declined by 58 and
                       79 percent, respectively, and the SBA budget grew by only 1 percent.
                       While NASA'S overall budget growth rate of 41 percent for the period
                       exceeded the Coast Guard’s 24-percent rate, before fiscal year 1987
                       NASA'S growth rate was less than that of the Coast Guard. Without $2.1
                       billion for the purchase of a replacement space shuttle, NASA'S budget
                       would have grown less than the Coast Guard’s in fiscal year 1987.




                       ‘By “funding” we mean the authority the Congress gives government agencies to enter into oblige
                       tions that will result in immediate or future outlays.



                       Page 72                               GAO/RCED90-132      Coast Guard Organization    and Funding
                                      Appendix II
                                      Comparison of Funding for the Coast Guard
                                      and Other Agencies Shows a Mixed Picture




Figure 11.1:Percent Changes in the
Budgets of the Coast Guard and
                                      so    Porcontamnga
Independent Agencies Between Fiscal
Years 1980 and 1989                   40
                                      30
                                      20
                                      10
                                       0
                                      -10
                                      -20
                                      40
                                      40
                                      40
                                      40
                                      -70
                                      -so




                                      Note. Budget figures were expressed In constant 1988 dollars
                                      Sources Coast Guard, GSA, Appalachian Reglonal Commlsslon, SBA, and NASA


                                      We also compared the Coast Guard’s budget with the budgets of the
                                      National Oceanic and Atmospheric Administration (NOAA), the Environ-
                                      mental Protection Agency (EPA), the Department of Education (Educa-
                                      tion), and the Department of Health and Human Services (HHS). We
                                      selected NOAAand EPA because each shares a particular responsibility
                                      with the Coast Guard. NOAA and the Coast Guard share responsibility for
                                      enforcing fisheries laws, while EPA and the Coast Guard share certain
                                      responsibilities for protecting the maritime environment. Because of
                                      proposals to make the Coast Guard an independent agency, including
                                      the possibility of making it a departmental-level agency, we also com-
                                      pared the Coast Guard’s budget growth rate with that of the Depart-
                                      ment of Education and the Department of Health and Human Services.
                                      The Coast Guard’s budget grew more proportionately than all of these
                                      agencies’ budgets between fiscal years 1980 and 1989. (See figs. II.2 and
                                      11.3.) While the Coast Guard’s budget increased, EPA'S and HHS'S budgets
                                      declined-z%‘s     by 21 percent and HHS'S by 6 percent. The budgets of
                                      NOM and Education both grew, with increases of 11 and 9 percent,




                                      Page 73                             GAO/RCED-W132     Coast Guard Organization   and Funding
                                        Appendix II
                                        Comparison of Funding for the Coast Guard
                                        and Other Agencies Shows a Mixed Picture




                                        respectively-but  their growth rates were not as great as the Coast
                                        Guard’s 24-percent increase.


Figure 11.2:Percent Changes in the
Budgets of the Coast Guard and          w     PmontctNngo
Agencies Sharing Certain
Responsibilities Between Fiscal Years   40
1980and1989
                                        so




                                        -10




                                              Coast     EPA       MOAA
                                              Guard
                                               Ail-d-
                                        Note: Budget figures were expressed In constant 1988 dollars
                                        Sources Coast Guard, EPA, and NOAA




                                        Page 74                                 GAO/RCED-90-132        Coast Guard organization   and Funding
                                       Appendix II
                                       Comparison of Funding for the Coast Guard
                                       and Other Agencies Shows a Mixed Picture




Figure 11.3:Percent Changes in the
Budgets of the Coast Guard and          50   Polcontchr~
Departmental Agencies Between Fiscal
Years 1980 and 1989




                                       Notes Budget figures were expressed In constant 1988 dollars
                                       Percent change for HHS mcludes dlscrebonary budget authority but does not Include entitlement
                                       programs
                                       Sources Coast Guard, Education. HHS


                                       We compared the Coast Guard’s budget from fiscal years 1980 through
Coast Guard’s Budget                   1989 with the budgets of other agencies that share law enforcement
Grew Less Than the                     responsibilities with the Service, particularly in connection with border
Budgets of Some                        control and the war on drugs. These agencies include the Customs Ser-
                                       vice (Customs), the Drug Enforcement Administration (DEA), and the
Agencies With Law                      Immigration and Naturalization Service (INS). Between fiscal years 1980
Enforcement                            and 1984, the Coast Guard’s budget generally grew at a faster pace than
                                       the budgets of these agencies. However, starting in 1985 the trend was
Responsibilities                       reversed. Although the Coast Guard’s law enforcement mission signifi-
                                       cantly increased during the 1980s the budgets in fiscal year 1989 for
                                       Customs, DEA, and INS were, respectively, 76 percent, 80 percent, and 65
                                       percent above their 1980 budgets, compared with the Coast Guard’s 24-
                                       percent increase. (See fig. 11.4.)




                                       Page 75                                GAO/RCEDW-132       Coast Guard Organization     and Pundiig
                                        Appendix II
                                        Compuiaon   of Funding for the Coast Guard
                                        and Other Agencies Shows a Mixed Picture




Figure 11.4:Percent Changes In the
Budgets of the Coast Guard and Other
                                        loo   prrom(amnga
Agencies With Law Enforcement
Responsibilities Between Fiscal Years    00
1990 and 1999
                                         a0




                                        Note: Budget figures were expressed in constant 1988 dollars.
                                        Sources: Coast Guard, Customs Service, INS, and DEA



                                        In recognition of the defense responsibilities of the Coast Guard, we
DOD’s Budget Grew                       compared its budget with the budgets of DOD and the Navy to determine
More Than the Coast                     the extent to which the Service shared in the defense buildup of the
Guard’s Budget                          1980s. In view of proposals to make the Coast Guard a part of the Navy,
                                        we reviewed the Navy’s budget growth separate from that of DOD.
                                        Between fiscal years 1980 and 1985, both DOD’S and the Navy’s budgets
                                        grew at a faster rate than the Coast Guard’s budget. Starting in 1985,
                                        however, with the exception of 1988, the level of Coast Guard’s budget
                                        growth tended to remain steady, while that of both DOD and the Navy
                                        declined. Comparison of overall growth rates between fiscal years 1980
                                        and 1989 disclosed that DOD’S and the Navy’s budgets grew by 35 and 40
                                        percent, respectively, while the Coast Guard’s budget grew by 24 per-
                                        cent. (See fig. 11.5.)




                                        Page 76                                 GAO/RCED90132           Coast Guard Orgmdzation   and Funding
                                        Appendix II
                                        C4xnparison of Funding for the Coast Guard
                                        and Other Agencies Shows a Mixed Picture




Figure 11.5:Percent Changes in the
Budgets of the Coast Guard, DOD, and    m-w
the Navy Between Fiscal Years 19&Oand
1989
                                        40



                                        so



                                        20



                                        10



                                         0

                                              coasl    Navy      DOD
                                              Quad


                                        Note: Budget figures were expressed in constant 1988 dollars
                                        Sources, Coast Guard and DOD.




                                        Page 77                                 GAO/RCED-9blS2         Chat Guard Organhtion   and Fundins
Percentageof Total Operating Expenses by
Program and Total Operating Expenses for the
Coast Guard

                                                         Percentage of total operating expenses
Programa
--~                    1980        1981        1982         1983       1984         1985      1986                      1987         1988           1989
SAR
__         ~~~~--       26.3        25.0        26.8          26.8           26.0           23.3          20.5           21.6         22.2           21.4
ATON
__-~       ~            244         23.6        23.0          23.7           23.2           21 .a         23.7           21.6         21.3           20.6
 MS
~...     ~              14.2        12.3         8.6           7.6            a.1            6.9           6.4            6.7          6.3            6.0
 MEP                     7.5         6.6         9.8           7.3            7.6            6.8           a.2            7.1          7.1            6.7
~ELT    .-
   Drug                   7.3        11.9        13.1          18.0          19.3           22.0          21 4           23.0         22.5           24.2
~. Flsherres’             0.0         0.0         0.0           0.0           0.0            0.0            0.0            51          5.6            6.9
   Other                10.9         11.9         7.6          104            9.6           10.1          16.1             4.5         4.8            4.5
IO
~-                        5.1         4.5         5.9           1.8           1.7            3.0           3.8             4.8         4.8            4.6
MP                        4.3         4.1         5.2           4.5           4.5            6.0           0.0"            57          5.3            5.2
Total operatrng
expenses In
actual dollars
(millrons)          $1,113.1    $1,335.6    $1,481.9     $1,603.6       $1,690.1       $1,753.4      $1,657.1        $1,895.3     $1,909 1      $2,104.2

                                              Note: Columns may not add to 100 percent because of roundrng
                                              aAbbrevratrons: SAR, Search and Rescue Program; ATON. Aids to Navrgatron Program, MS, Maritime
                                              Safety Program, MEP, Marine Envrronmental Protection Program; ELT, Enforcement of Laws and Trea-
                                              ties Program (Drug lnterdrctron. Fisheries, and Others); IO, Ice Operations Program; MP, Military
                                              Preparedness Program

                                              bFrsherles data not readily avarlable for fiscal years 1980 to 1986

                                              CExcludes fiscal year 1986 funds for defense readiness totalrng $96 9 millron.
                                              Source: Coast Guard.




                                               Page 78                                  GAO/RCEDSO-132          Coast Guard Organization     and Funding
  Ppe

*c&g    for Federal Agencies, FiscaIlYears 1980
to 1989


Dollars In mhons
                                                                  Funding level0
Agencies             1980      1981      1982          1983        1984        1985                1986       1987          1988            1989
Coast Guard         $2,440    $2,636   $3,073        $2,885        $3,127        $2,852        $2,969       $2,987        $2,729           $3,015

2%T                    652       645       641         673           740           802           868         1,060         1,116          1,150
INS                    479       461       536         581           577           642           635           771            741           791
DEA                    286       280       294         299           329           389           369           507            494           514
Navy                67,045    75,130    84,672      95,902        92,655       108,672       102,671        96,691       lOc),300        93,744
DOD                202,557   231,088   260,097     280,445       291,751       314,819       300,oixl      289,038       283,800        273,147
GSA                    614       914       583         702           442           436           431           371            282           256
ARC                    511       444       186         197           183           166           131           109            107           107
SBA                    311       303       293         352           298           306           310           314            314           313
NASA                 7,448     7,154     7,324       7,983         8,184         8,290         8,295        11,143         9,002         10,488
EPA                  8.439     5,674     5,793       5,547         5,920         6,274         5,222         7,141         6,608          6.627
NOAA                 1,083     1,086     11052       1,131         1,147         1,441         1,273         1,119         11141          1,197
Education           20,179    19,295    17,938      18,062        17,448        20,942        19,166        20,359        20,314         21,946
HHSb                24,580    22,623    20,592      21,211        21,527        21,453        21,455        22,618        22,467         23,143
                                        aAnnual budget figures are expressed In constant dollars
                                        bFigures for HHS Include dlscretlonary budget authority but do not include entitlement programs.
                                        Source: InformatIon was provided by the respective agencies.




                                        Page 79                                 GAO/BCELbW132         Coast Guard Organization      and Funding
Appendls      i’

Percent Changesin Funding From F’iscal                                                                               ’
Year 1980


                                                             Percent change from 1980’
Agencies
__-__                            1981       1982      1983       1984    1985   1988             i 987      1988     1989
Coast Guard                           8        26         18          28         17         22       22        12        24
Customs
___-    Service                     -1        -2           3          14         23         33      63         71        76
INS                                   0        12         21          21         34         33       61        55        65
DEA                                 -2          3          5          15         36         36       77        73        80
Navy                                 12        26         43          38         62         53       44        50        40
DOD                                  14        28         38          44         55         48       43        40        35
~.__
GSA                                   49      -5          14        -28        -29       -30      -39       -54       -58
ARC                                -13       -64        -61         -64        -67       -74      -79       -79       -79
SBA                                 -3        -6          13         -4         -2           0         1         1         1
NASA                                 -4        -2           7         10         11         11       50        21        41
EPA                                -33       -31        -34         -30        -26       -38      -15       -22       -21
NOAA                                   0      -3           4            6        33         18        3         5        11
Education                            -4      -11        -10         -14            4       -5          1         1        9
HHS"                                 -8      -16        -14         -12        -13       -13        -8        -9        -6
                   aPercent changes were calculated by comparing the annual budget of each agency with its budget for
                   fiscal year 1980. Budget figures were converted Into constant 1998 dollars.

                   bPercent changes for HHS Include discretionary    budget authority.




                   Page 80                                  GAO/RCED~132           Coast Guard Organhtion     and Funding
Major Contributors to This Report


                        Emi Nakamura, Assistant Director
Resources,              Ralph L. Lowry, Assignment Manager
Community, and          Catherine H. Myrick, Evaluator-in-Charge
                        Donald J. Sangirardi, Evaluator
Economic
Development Division,
Washington, D.C.




(344445)                Page 81                     GAO/RCELHt@132   Coast Guard Organhtion   and Fbnding