The Government Accountability Office (GAO), Congress’ independent, nonpartisan investigative arm, released a report last week calling for greater transparency in the Pentagon’s reporting on funding realignments from its Military Personnel (MILPERS) accounts. The report responds to a provision of the Fiscal Year (FY) 2024 National Defense Authorization Act (NDAA) requiring a GAO review of how the Pentagon manages MILPERS appropriations.

Between FY2013 and FY2023, the Pentagon realigned nearly $32.9 billion from MILPERS to other accounts—resulting in a net transfer of $5.4 billion out of MILPERS during that period. While the Pentagon reports on these transfers, GAO underscored that “information on program level realignments is not required and therefore is not consistently provided in the reports,” and that “information reported by DOD to Congress on total MILPERS realignments are largely aggregated, which can make it difficult for DOD and Congress to identify individual program funding needs.”

The report notes that, according to Pentagon officials, realignments did not negatively impact the ability to fund program obligations between FY2013 – FY2023. However, the report essentially argues that without more detailed reporting on program-level realignments, Congress is forced to take the Pentagon’s word on this. Furthermore, GAO points out that “DOD’s well-documented fiscal challenges make it important that Congress and DOD and its components have reliable, useful, and timely financial information.” Those fiscal challenges include the Pentagon’s ongoing failure to pass an audit. GAO also notes that “since 1995, we have designated DOD’s financial management area as high risk due to long-standing deficiencies in DOD’s systems, processes, and internal controls and have highlighted the need for more effective monitoring and reporting.”

Pentagon officials told GAO that they do not consistently include program-level data because the Pentagon’s Financial Management Regulation doesn’t require this level of detail. However, a September 2012 memo from the Office of the Secretary of Defense specifically stated that financial documentation on MILPERS should include program-level information.

The report notes that “According to a senior official from the Office of the Under Secretary of Defense (Comptroller), the office has recently encouraged the components to consistently identify program-level data in their Reprogramming Action reports.” However, GAO recommends that Office of the Secretary of Defense take further action by revising the Financial Management Regulations to require program-level reporting on MILPERS realignments, and that the service leaders ensure that their active and reserve components implement this revised guidance.

According to GAO, the Pentagon responded to these recommendations by stating “that the Under Secretary of Defense (Comptroller) will revise the Financial Management Regulation to clarify budget structure and reporting requirements for the military personnel active and reserve components.” However, it also stated that “reporting will follow congressional guidance as specified in the annual DOD appropriations acts.” GAO took issue with this apparent qualification, arguing that “it is unclear whether DOD will require the active and reserve components to provide complete information on individual program-level realignments without congressional direction.”

In light of GAO’s findings and recommendations, and the Pentagon’s response, we recommend that Congress step in and formally require the Pentagon to include program-level detail in its reports to Congress on funding realignments.