From: | Aimee Houghton <aimeeh@igc.org> |
Date: | Thu, 11 Apr 1996 20:55:50 -0700 (PDT) |
Reply: | cpeo-military |
Subject: | DERA Devolvement Report |
From: Aimee Houghton <aimeeh@igc.org> *************** WARNING **************** This is a VERY LONG file. I suggest downloading the document first and then start reading. Aimee Houghton __________________________________ Report to the Congress on the Devolvement of the Defense Environmental Restoration Account (DERA) March 31, 1996 CONTENTS SECTION PAGE Executive Summary............................................................I 1.0 Introduction.............................................................1 2.0 Answers to Congressional Questions.......................................3 2.1 Ensuring Consistent funding and accountability......................4 2.2 Monetary Savings and Administrative Efficiencies...................5 2.3 ODUSD(ES) Funding and Staffing Reductions.......................6 LIST OF TABLES TABLE PAGE Comparison of Attributes of OSD Account with Four Seperate Accounts (Component Cleanup Approriation) Based on Component TOA Alternative.............................................................2 LIST OF FIGURES (not included in this electronic version) FIGURE PAGE 1 Account Comparison Before and After Devolvement...........................1 APPENDIX A. Benefits of Devolvement to Four Separate Accounts B. Background of the Defense Environmental Restoration Program C. Conference Report Language D. Legislative Proposal ------------ EXECUTIVE SUMMARY This report was prepared in response to questions from Congress on a proposed legislative change to devolve the Defense Environmental Restoration Account (DERA) from a single account at the Office of the Secretary of Defense (OSD) to a separate account for each Military Department and one DoD-wide account. Congress will continue to have the same level and extent of visibility into DERA as it did prior to devolvement. Indeed, Congress' visibility into DERA increased dramatically in FY96, when DoD introduced the Relative Risk Site Evaluation process into the cleanup program. Congress now receives a list of all DERA projects by high, medium and low relative risk categories. This effort will continue under devolvement. In relation to devolvement the conferees requested the following information: how DoD will ensure consistent funding and accountability identification of monetary savings and administrative efficiencies funding and staffing reductions for the office of the Deputy Under Secretary of Defense for Enviromental Security [ODUSD(ES)] CONSISTENT FUNDING AND ACCOUNTABILITY The Military Departments and OSD will ensure consistent funding and accountability through actions accomplished through devolvement. The primary benefit of devolvement is that it will bring to bear all of the institutional controls of the DoD's internal budget development and review process conducted by the Military Departments and OSD. At the Military Department level, incorporation of DERA into the Planning, Programming and Budgeting System (PPBS) process will allow competition for resources, and encourage program managers to consider fiscal constraints when negotiating restoration schedules. At the OSD level, strong oversight through the PPBS process will improve outyear planning and ensure consistent and comparable data from the military departments. OSD will accomplish this through DoD Directives, establishing goals, reviewing Military Department plans to meet the goals and monitoring execution of the plans. Other benefits include: aligning responsibility, accountability, and funding within each department, providing Departments with access to appropriated funds earlier in the fiscal year, and focusing DoD oversight on evaluating the Military Departments' performance at achieving DoD established goals. MONETARY SAVINGS AND ADMINISTRATIVE EFFICIENCES Devolvement will streamline the flow of funds and increase the ownership of those funds creating some administrative efficiencies. The changed account structure is not expected to reduce near-term funding requests for DERA, but support the continuation of the recent trend toward stable funding and reduce, or eliminate, any unanticipated cost growth in the future, resulting in more timely cleanup of sights. ODUSD(ES) will actively manage the program through policy making, goal setting, and measurement of performance leading to a consistent program appropriately sized to deal with the environmental restoration problems caused by past activities. FUNDING AND STAFF REDUCTIONS ODUSD(ES) is responsible for the program and policy development, strategic planning , analyzing data from the Departments to evaluate adherence to DoD established policies and goals. In FY1995, the ODUSD(ES) expended $5.64 million in DERA funds. ODUSD(ES) budgeted $3.98 million for FY1996 and the outyears, but because of Senate Armed Services Committee report language (Report 104-112) decreasing ODUSD(ES) funding by $1 million, ODUSD(ES) has reduced planned expenditures for FY1996 to $2.98 million, and has budgeted $2.98 million for FY 1997 and beyond. Further cuts would reduce the capacity to perform adequate oversight and provide effective direction. Many factors were involved in the analysis of alternatives leading to devolvement. Reducing risk to human health and the environment, as a basic objective of the Defense Environmental Restoration Program (DERP), was paramount. Other factors, such as stakeholder involvement, responsibilities for building and reviewing the budget, and effects on relationships with regulators were also considered. Based on the answers to the conferee questions in the FY 1996 Department of Defense Authorization Act, DoD recommends that Congress approve the legislative proposal to devolve DERA (Appendix D). The proposal is contained in DoD's FY 1997 Omnibus Bill package. ------------ 1.0 INTRODUCTION In a May 3, 1995 memorandum, the Deputy Secretary of Defense (DEPSECDEF) devolved the Environmental Restoration, Defense (ER,D) Account, also referred to as the Defense Environmental Restoration Account (DERA), to the Department of Defense (DoD) Components. Full implementation of devolvement requires modification of the statutory framework of DERA. Figure 1 shows the basic difference in account structure before and after devolvement. The Conference Report (104-450) accompanying the fiscal year (FY) 1996 DoD Authorization Act states that if DoD intends to pursue legislation to authorize devolvement for FY 1997, the Secretary of Defense should submit a report to Congress no later than March 31, 1996. The requirements for that report are describes in the Conference Report as follows: The conferees are concerned the devolution of DERA would impede congressional oversight of the management and use of funds authorized for and appropriate to the account. In relation to devolvement, the conferees desire a thorough description of the means by which the Department of Defense would ensure consistent funding and accountability for environmental restoration activities. Moreover, the Department of Defense needs to identify the monetary savings and administrative efficiencies associated with DERA devolvement. The Department of Defense must also specify funding and staffing reductions for the Office of the Under Secretary of Defense for Environmental Security that would result from DERA devolution. This report will meet the requirements of the Conference Report and consists of the following sections. Section 2.0 addresses the issues and questions mentioned above. Appendix A summarizes the benefits for DoD and Congress for devolvement to four separate accounts. Appendix B provides a brief background of the Defense Environmental Restoration Program (DERP). The Conference Report language is included in Appendix C and Appendix D is the legislative proposal to devolve DERA. ------------- 2.0 ANSWERS TO CONGRESSIONAL QUESTIONS Since 1984, the Defense Environmental Restoration Program (DERP) has had a large growth in requirements, greatly increased management attention, and significantly improved relationships with regulators and stakeholders. Bearing in mind that DERA is a large centrally managed account, and recognizing the maturity of DoD's cleanup program, DoD decided to analyze the account structure to determine if a different method might increase accountability and efficiency. The Office of the Deputy Under Secretary of Defense for Environmental Security [ODUSD(ES)] participated with the Under Secretary of Defense (Comptroller) [US(C)] and the Director of Program Analysis and Evaluation (DPA&E) to conduct the analysis. Several alternatives were analyzed from many perspectives. Alternatives included: the "original system" where the Components submitted unconstrained requirements to the OSD, who developed the current and outyear budgets and distributed funds to the Components; the "current system" where the Components are given a funding target in the Future Year's Defense Plan (FYDP) while the account remains in the Office of the Secretary of Defense (OSD), who develops the current and outyear budgets and distributes funds; an OSD account in the current year with Components specific Total Obligatory Authority (TOA) in the outyears; a separate account for each of the three Military Departments and a DoD-wide account; and incorporating DERA into the Components Base Operations account. The perspectives included each phase of the program development cycle; that is the planning, programming, budgeting, and execution phases. Devolvement to four separate accounts was selected as the best option for the environmental restoration program for a number of reasons. By using the full power of the DoD's planning, programming, and budgeting system to determine the appropriate level of investment based on a review of requirements, the full power of the PPBS system is brought to bear on the program. In addition to better and more accurate budgeting, the oversight by the OSD will be more clearly focused on results. To protect current activities from bearing the burden of paying for restoration of contamination related to past operations and practices, the DERA account has been "fenced." The fence on appropriated funds in the Component or DoD-wide account will remain in effect to prevent erosion of the appropriated funds to pay other bills or migration of funds into the account. Important considerations that pertain to direction and consistency of the program, internal and external perceptions, and acceptance on the part of regulators and other stakeholders were considered in the decision to devolve to four separate accounts. Devolvement will not impede Congressional oversight of the management and use of funds authorized and appropriated to DERA. 2.1 ENSURING CONSISTENT FUNDING AND ACCOUNTABILITY Over the last several years, DoD and the Components have made great strides in moving DoD cleanup forward. The rate at which sites are proceeding to the remedial action phase is at an all time high. Devolvement is considered to be another step by OSD to make the program as effective as possible. With devolvement, OSD is putting responsibility, accountability and funding together within each Military Department. Full integration of the environmental restoration program into the planning, programming and budgeting system (PPBS) at the Component level will bring the institutional checks and balances of that system to bear. Including environmental restoration in the program and budget reviews by the Components' financial managers will allow restoration requirements to compete with other mission requirements, improve the planning and execution of the restoration program, thus minimizing the requirements to make last minute adjustments to mission requirements in order to fund restoration shortfalls. In addition, it will encourage environmental restoration program managers to consider fiscal realities when negotiating restoration schedules. In order to be competitive with other mission requirements, environmental restoration will need to demonstrate accountability and efficiency. The increased scrutiny and application of proven financial management procedures will lead to program stability and improved accountability and efficiency. Inclusion of the environmental restoration account within each Department will lead to broader support within each Department on the need for environmental restoration. This inclusion increases the military chain-of-command's awareness of the environment and its responsibility for environmental restoration. By creating separate appropriations for the Military Departments and maintaining a central DoD-wide appropriation, funds will be dispensed more quickly and provide all stakeholders with the clearest view of the Component environmental restoration programs. Creating four separate accounts limits the flexibility to move funds during execution; however, there have been very few reprogramming actions among Components and those few have only involved a minor percentage of the appropriated funds. As part of the PPBS, ODUSD(ES) establishes program goals based on reduction of risk to human health and the environment. These goals are cornerstones on which the Components build their plans for execution of the program. The Component plans are reviewed. to ensure they are built toward achieving the established goals. Adjustments to the Component plans are made, if necessary, and then are combined to formulate the DoD budget. After the DoD budget submission and Congressional appropriation, the Components execute the program as established in their plans. ODUSD(ES) and the Components use a set of performance measures to evaluate the execution of the plan against the established goals. Reporting requirements for these reviews have been expanded to collect data concerning funding, costs to complete the program execution, and reduction of risk to human health and the environment. Based on this evaluation, adjustments to the program are made through program management guidance from OSD to the Components or through refining of the goals of the program. ODUSD(ES) will continue to provide leadership and program development guidance to the Components under devolvement. In its leadership and oversight roles, ODUSD(ES) will serve as the central program advocate to maintain and further enhance the credibility of the program by assuring accountability. ODUSD(ES), in its oversight role, will ensure standardization across the Components and the consistency of the restoration program. ODUSD(ES) will provide oversight of long-term and short-term planning and execution of the DERP, with clear goals and guidance to the Components. Effective performance measures and other program management indicators have been developed and are used to evaluate whether the goals of the DERP are being met and the pertinent guidance implemented. Improved data gathering and management activities (since 1992) have served many purposes. Under devolvement, ODUSD(ES) will use the data to determine the magnitude of the program, to measure progress in cleaning up sites and to manage the program. Comparable data from site-to-site and Component-to-Component will aid in establishing consistency and accountability. Program oversight includes regular examination of both financial and management information, which could be incorporated into mutually supportive management information systems. ODUSD(ES) conducts in-progress reviews to measure progress toward annual goals, as depicted in the execution plan that accompanies the President's budget. The execution plan constitutes a step toward meeting the goals of the program set forth by the OSD. If a Component does not plan to meet the established goals, institutional enforcement mechanisms may be applied. Such circumstances will be examined for their effect on strategic planning and the following year's budgets. ------------- 2.2 Monetary Saving and Administrative Efficiencies The creation of separate appropriations avoids the current problem of making appropriate and timely decisions about allocations of funds among the Components when the DoD DERA budget request or recissions are made during the year of execution. Congress will have the clearest view of each Component's program and the performance of each of those programs and consequently be able to make more informed authorization and appropriation decisions. Since devolvement is only a different account structure, it is not expected to reduce near-term funding requests for DERA, but should support the continuation of the recent trend towards stable funding and reduce, or eliminate, any unanticipated cost growth in the future, resulting in more timely cleanup of sites. As the Components identify requirements they will continue to look for the most cost effective method for fulfilling those requirements to avoid funding environmental restoration at the expense of mission requirements. By subjecting environmental restoration requirements to the scrutiny of financial managers during the strategic planning and budgeting process within the Components, environmental restoration program managers are motivated to consider fiscal realities when negotiating restoration schedules. Devolvement creates new incentives for cost savings because the components will be spending funds from their own accounts as opposed to an OSD account. Financial managers will be better able to apply proven financial management techniques and challenge the program to increase efficiencies. Under devolvement, more departmental control systems are applied to the planning and execution of the program. Once Component budgets are finalized, pass through all levels of scrutiny, and become authorized and appropriated, the flow of funds from the DoD Comptroller to the executing organization will be greatly streamlined. Reporting obligation and outlay rates, as well as indicating how those obligations and outlays affect restoration progress by phase and relative risk category are very basic but effective program management and financial management tools. Reporting data in a timely and consistent manner, by month, at the end of the fiscal year, and during the annual budget review contributes greatly to effective evaluation of performance measures for DoD's internal management purposes. The ability reconcile information in the annual report to Congress with DERA budget and execution data enhances the credibility of information in both reporting mechanisms. Integrating the management data with the budget system, such as the DERA cost report that the Defense Finance Accounting Service is currently implementing, will provide more timely and accurate information. ------------- 2.3 ODUSD(ES) Funding and Staffing Reductions ODUSD(ES) creates the program policies, goals, expectations and performance measures to oversee the execution of DERP. These policies, goals, expectations and measures result from the program requirements levied by the Congress, regulatory agencies and senior DoD officials. Since 1992, staff has been added to cover increasing responsibilities in the areas of program and policy development, strategic planning, analyzing data that evaluates adherence to broad policies and goals, reviewing the extent to which Component programs have achieved stated goals, developing and instituting changes to policies and goals, if necessary, and answering congressional inquiries. DoD maintains the policy and oversight function at the OSD level, which will prevent the Components from setting individual goals and expectations that may be inconsistent with Congressional, regulator or DoD intentions. The ODUSD(ES) staff will continue to develop and maintain DoD policy and goals, and measure Component progress against those goals, regardless of the status of devolvement. Under devolvement, there continues to be a central DoD office for oversight of the management and use of funds at the aggregate policy or program issue level. Questions that deal with a particular Service will be answered specifically by that Service. ODUSD(ES) will continue to communicate the status of the program to regulators, communities, and other stakeholders. The staff monitors progress of Base Realignment and Closure (BRAC) cleanup against specific BRAC goals as well as active base restoration activities against specific DERA restoration goals. These activities will still include review of Component program and budget submissions for adherence to policy and goals, review of program execution, preparing the annual report to congress, preparing supporting legislation for the DoD Authorization and Appropriations bills, and commenting on environmental legislation, such as Superfund reauthorization. Other responsibilities of the ODUSD(ES) staff include: expanding stakeholder involvement and Superfund reauthorization. The Cleanup within ODUSD(ES) originally had only twelve professionals and two support staff. Two of the twelve professional positions have been eliminated and the cleanup office is now staffed to operate in a devolved environment. This equates to a 17% reduction professional staff. While the nature of ODS's oversight changes under devolvement, the quantity of work changes little. Indeed, in the transition to devolvement, OSD'S workload has increased. In FY 1995, ODUSD(ES) expended $5.64 million in DERA funding. ODUSD(ES) budgeted $3.98 million for FY 1996 and the outyears, but because of Senate Armed Services Committee report language (Report 104-112) decreasing ODUSD(ES) funding by $1 million, ODUSD(ES) has reduced planned expenditures for FY 1996 to $2.98 million, and has budgeted $2.98 million for FY 1997 and beyond. Further cuts would reduce the capability to perform oversight and conduct activities to maximize the performance of the program. As described above, the oversight functions are many. ODUSD(ES) activities that are curtailed by devolvement are offset by a significantly larger oversight role intended to ensure that Components fulfil their obligations in the management of the DERP. ODUSD(ES) quality assurance and quality control functions are critical in identifying activities that could lead to divergent Component programs; inappropriate realignment of funds into or out of the restoration accounts; and proper adherence to the covenants of the program, protecting human health and the environment. Evaluation of performance measures and other program management indicators requires substantial effort. Since regulators and other stakeholders consider the environmental restoration program a unified activity, rather than individual programs of each Component, OSD must continue to plan, oversee, and defend the program from an overall DoD perspective and provide information on implementation to those stakeholders. ------------- APPENDIX A BENEFITS OF DEVOLVEMENT TO FOUR SEPARATE ACCOUNTS Devolvement causes a number of actions to occur that have direct and indirect benefits to DERP. Some of those actions are: Integrating environmental restoration into the Planning, Programming and Budget System (PPBS) process of each Component; - aligning responsibility, accountability, and funding within each Department; - computing restoration accounts within each Department; providing access to restoration funds earlier in the process; focusing ODUSD(ES) oversight; building broad overall consensus within Components on the need for environmental restoration; providing an opportunity to reward good performance; allowing better outyear planning when combined with stable funding. Full Integration of Environmental Restoration Into the Planning, Programming and Budgeting System Process. Before devolvement, each Component was given a TOA for all of its programs. DERA funding, being in a single account at OSD, was distributed to the Components above and beyond their TOA. The DERA funds were "fenced" from all other DoD programs and could not be used to make up shortfalls. In that sense, DERA funds were considered separate from, and not a part of, Military Department TOA. However, if requirements exceeded resources, the Military Departments were required to provide funding. The single greatest benefit to devolution is that fir the first time the environmental restoration program is fully integrated into the DoD PPBS process. It places environmental restoration into the mainstream resource allocation decision process beginning at the Component level making it an internal program of the Components. It also gives the environmental restoration program the full scrutiny applied to the overwhelming majority of other DoD programs. Decisions to increase or decrease funding for environmental restoration are considered with all other requirements of the Components. This results in consensus from all program managers in resource allocation decisions. These allocation decisions must still pass the scrutiny of programming and budget reviews within the OSD. Allocations will have the full backing, understanding and active participation of not just the environmental constituents, but of the military and civilian leadership within the Component. Any increases or decreases to environmental restoration funding will be fully understood by the Components. ------------- Aligns Responsibility, Accountability, and Funding Prior to devolvement, responsibility for program execution and accountability for meeting program goals and objectives rested with the Components, but funding remained the province of ODUSD(ES). The Components submitted environmental restoration funding requirements to ODUSD(ES). ODUSD(ES) reviewed the requirements and either reallocated existing DERA funds to cover existing shortfalls, or more commonly sought additional funding for the program, either from within OSD and more recently, from within the Military Departments. With devolvement, responsibility, accountability and funding are all under the individual Components. Each Component evaluates whether there is sufficient funding for environmental restoration to support cleanup based on relative risk, or to meet the commitments in signed legal agreements with regulators. Each Component builds plans to meet the goals established by OSD and is accountable for executing those plans. The Components have always executed the program, actually done the cleanup work, and dealt directly with regulators and community leaders on cleanup of contamination at military bases. The Components have signed agreements with the federal and state regulators, requiring the commitment of future funding. With devolvement, the Components will have better input to funding decisions throughout the PPBS process because their agreements should consider both the requirements to restore the environment and the availability of resources to accomplish that restoration. Devolvement of environmental restoration means that cleanup funding is now an internal cost to the Components. The funding will remain fenced in the year of execution to prevent the restoration program from being used to makeup for shortfalls in other areas. The management scrutiny by OSD in the planning and programming phases will prevent the program from being used as a bill payer for other programs before the year of execution. ----------- Provides Early Access to Funds at the Beginning of the Fiscal Year After the President signs the annual DoD Authorization and Appropriation bills prepared by the Congress, the Office of Management and Budget and the Office of the Secretary of Defense Comptroller begin a series of actions to distribute the new fiscal year funds to the Components. Before devolvement, ODUSD(ES)was required to allocate Congressional changes in the funding and incorporate other management adjustment with the funds distribution. This process has taken up to two months. With devolvement, environmental restoration funding will go directly to the Components. This will shorten allocation timelines and should improve overall execution performance. *********** APPENDIX B BACKGROUND TO THE DEFENSE ENVIRONMENTAL RESTORATION PROGRAM Existing laws and regulations require DoD to properly address contaminated sites based on procedures, requirements, and standards specified in those laws and regulations. In recognition of the effect on DoD of the laws and regulations, the FY1984 Defense Appropriations Act provided funding for the restoration program and initiated environmental restoration activities at FUDS. In October 1986, Congress passed the Superfund Amendments and Reauthorization Act (SARA), which formally established DERA and authorized the Secretary of Defense to carry out the restoration program. Supported by DoD, some members of Congress asserted that the costs of environmental could not, and should not, compete with requirements related to the readiness mission of the DoD. To protect current activities from bearing the burden of paying for restoration and contamination related to past operations and practices, the DERA account has been "fenced." While the fence is written as a prohibition against moving DERA funds into other accounts during execution, the fence has the effect of protecting the entire operations and maintenance account from being available. Under a devolved program, restoration requirements first compete at a Service level and then at the DoD level, but the fence would remain around the separate environmental restoration accounts providing the same protections subsequent to appropriation. ---------- Basic Tenet of Risk Reduction Remains Unchanged The objective of the restoration program has always been to reduce the risk to human health and the environment from contamination from past DoD activities. In 1995, OSD instituted its relative risk site evaluation framework to aggressively manage risk reduction efforts consistently across the Components. This in keeping with the original Congressional concern that the program be driven by the requirement to reduce the risk to human health and the environment. In addition, the relative risk concept is used to sequence restoration. More serious threats to human health and the environment carry more weight and are scheduled for restoration before lesser threats, to the extent consistent within legal requirements. Lower risks are moved in the sequence for restoration where budget constraints, slower technical progress on higher risk sites, or engineering and business judgment dictate. In the early years of the restoration program, risk to human health and the environment was not accepted as a traditional responsibility of DoD and projects based on this requirement were not competitive for budgeting priority within Components. Over the years, the Components have increasingly become committed to the mission of minimizing the risk to human health and the environment. Civilian and military leaders have advanced to their current positions while living day to day with the operation of the environmental restoration program. The military chain-of-command, from the base level environmental coordinator to senior policy decision makers in the Pentagon, has increased its awareness of the relationship between the environment mission requirements to maintain mission readiness, the environment must be protected. External Factors In addition to being more visible internally, environmental restoration has significantly improved its external visibility. Other stakeholders, in addition to regulators, are now deeply involved in the process to cleanup military installations. Restoration Advisory Boards (RABS) are an integral part of the program. A RAB is a group consisted of DoD, regulators, and community members formed to act as a forum for discussion and exchange of information between agencies and the community and to provide an opportunity for stakeholders to review progress and participate in dialogue with the decision makers at DoD installations (and formerly used defense sites) undergoing restoration activities. RABs are involved in reviewing and commenting on relative risk site evaluations which lead to development of restoration program requirements. Staying attuned to public concerns about the cleanup program helps create meaningful dialogue on the program. The climate surrounding the program has changed substantially since 1986. From a regulatory perspective, the program has matured from having an adversarial relationship with the regulators to a relationship that fosters partnering. Regulators are no longer dictating terms of federal facility agreements. The process of negotiating federal facility agreements is now more good faith negotiation and, in many cases, compromising to reach a mutually acceptable form of agreement. The recent discussions of the Federal Facility Environmental Restoration Dialogue Committee are encouraging flexible milestones and priority setting. The Planning, Programming and Budgeting System DoD will ensure appropriate visibility and commitment of necessary resources to accomplish the activities of the PPBS. Before 1992, the management and oversight of the program by OSD consisted of performing of activities for the PPBS process including generating projections for program requirements for the budget and FYDP years. Management and oversight included promulgation of policy and management guidance and conduct of quarterly in-progress reviews during the year of execution. The reviews focused primarily on the status of sights and obligation of funds. Beginning in 1992, OSD increased the oversight of the restoration program to include conducting more involved planning, programming and budgeting activities. The methods by which the Components establish program requirements and the process for review of those requirements by OSD have been significantly refined since the inception of the program. ODUSD(ES) establishes program goals based on reduction of risk to human health and the environment. These goals are the cornerstones upon which the Components build their plans for execution of the program. The Component plans are reviewed to ensure they are built toward achieving the established goals. Adjustments to the Component's plans are made, if necessary, and are then combined to formulate the DoD budget. After the DoD budget submission and Congressional appropriation, the Components execute the program as established in their plans. ODUSD(ES) and the Components use a set of performance measures to evaluate the execution of the plan against the established goals. Reporting requirements for these reviews have been expanded to collect data concerning budgets, costs to complete the program execution, and reduction of risk to human health and the environment. Based on this evaluation, adjustments to the program are made through program management guidance from OSD to the Components or through refining of the goals of the program. Prior to devolvement, the Components developed their restoration requirements separately from the mission requirements. Once the restoration requirements were identified, the Components compared their requirements to the resources available. If a Component needed additional resources for restoration, then the Component had to reduce mission resources to fund the requirements. DoD added resources to restoration in the late 1980s and the early 90s. So even before devolvement, restoration competed with mission requirements for Defense resources. With the expanded management scrutiny, growth in requirements, and maturity of the program, DERA should be managed like other DoD programs contained in Military Department TOA. Alternatives and Analysis Leading to Devolvement The external and internal factors discussed above affecting the program were all considered in the analysis leading to the decision to devolve. A multi-disciplinary, multi-service team was convened in the fall of 1994 to review DERP and BRAC environmental restoration program. The team was tasked to address the following topics: obligation and outlay rates for remediation activities; growth in spending; annual change in number of sites; cost to complete restoration activities; a plan to devolve, including modifications to existing policies and procedures, identification of other steps that would be required to devolve, and changes in oversight tools that would be required for effective oversight. The team looked at several options for devolvement and met regularly to discuss the pros and cons of each. Discussions included comparing the management structure under devolvement with that of other similarly managed programs. The team approach brought to bear the ideas, concerns and strengths of each group involved in the process. Table 1 shows the differences between pre-devolvement and post-devolvement in distinct aspects of the DoD program management structure. The decision to devolve was made by the DEPSECDEF on May 3, 1995 Under devolvement each Service receives its own transfer appropriation. The FUDS portion of the program will stay in the ODUSD(ES) account in FY 1997. The Army will remain Executive Agent but should not be responsible for the costs of restoration of contamination which they did not generate. The Army will continue to act as the executing agency for the Agency for Toxic Substances Disease Registry (ATSDR) program and the executive agent for the Defense State Memorandum of Agreement (DSMOA) program. This will make each Service account depict the requirements for that Service only. At the end of the analysis that led to devolvement, the funds in the single OSD account were distributed to the Services using the FYDP estimates submitted by the Services and reconciled by ODUSD(ES). The FY 1997 budget submissions from the Services and OSD are based on devolvement. ----------- Table 1 COMPARISON OF ATTRIBUTES OF OSA ACCOUNT WITH FOUR SEPARATE ACCOUNTS (COMPONENT CLEANUP APPROPRIATION) BASED ON COMPONENT TOA ALTERNATIVE DEFENSE PLANNING GUIDANCE Central Account (Before Devolvement) OSD establishes program goals Component Restoration Appropriation (After Devolvement) OSD establishes program goals PROGRAMMING Central Account (Before Devolvement) Requirements compete for increased funding in OSD Components submit to ODUSD(ES) ODUSD(ES) officially submits to OSD OSD reviews central account ODUSD(ES) functional lead/Components assist OSD adjusts central account Component Restoration Appropriation (After Devolvement) Requirements compete for funding with other Component programs Components include in POM submission OSD and ODUSD(ES) review like other programs OSD lead/ODUSD(ES) and Components assist OSD adjusts Components accounts BUDGET BUILD Central Account (Before Devolvement) Component Program Manager submits budget to ODUSD(ES); no Financial Management review in Component ODUSD(ES) submits budget to USD(C) Component Restoration Appropriation (After Devolvement) Component Financial Management reviews budget Component includes in budget submission as a separate account OSD/OMB BUDGET REVIEW Central Account (Before Devolvement) USD(C)/OMB review validity, execution, and other factors ODUSD(ES) defends with Component backup PBD reflects full review; FYDP updated for central account Component Restoration Appropriation (After Devolvement) USD(C)/OMB review like all other programs Components defend with ODUSD(ES) backup PBD sets Component funding level in FYDP PRESIDENT'S BUDGET Central Account (Before Devolvement) ODUSD(ES) assembles Component input and submits to USD(C) USD(C) submits through OMB to Congress; as part of defense-wide O&M J books ODUSD(ES) testifies with Component backup Component Restoration Appropriation (After Devolvement) Component prepares and submits budget through OSD/OMB Components prepare J books and submit through OSD and OMB to Congress as part of O&M J books ODUSD(ES) overview with Component specific testimony CONGRESSIONAL ACTION Central Account (Before Devolvement) Central ER,D authorization and appropriation Component Restoration Appropriation (After Devolvement) Component ER authorization and appropriation EXECUTION Central Account (Before Devolvement) ODUSD(ES) distributes among Components Component Restoration Appropriation (After Devolvement) Allocation goes to Components: no inter-Component transfer is possible ************* NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1996 CONFERENCE REPORT S1124 Restriction on devolving the Defense Environmental Restoration Account to the military services In a memorandum dated May 3, 1995, the Deputy Secretary of Defense announced a proposal to devolve the Defense Environmental Restoration Account (DERA), a single transfer account administered by the Department of Defense, to four separate transfer accounts administered by the individual military services. The execution of the Deputy Secretary of Defense's proposal would require modification to the DERA statutory framework. The conferees are concerned the devolution of DERA would impede Congressional oversight of the management and use of funds authorized for and appropriated to the account. In relation to devolvement, the conferees desire a thorough description of the means by which the Department of Defense would ensure consistent funding and accountability for environmental restoration activities. Moreover, the Department of Defense needs to identify the monetary savings and administrative efficiencies associated with DERA devolvement. The Department of Defense must also specify funding and staffing reductions for the Office of the Deputy Under Secretary of Defense for Environmental Security that would result from DERA devolution. The conferees agree that, in the event that the Department of Defense intends to pursue legislation to authorize devolvement for fiscal year 1977, the Secretary of Defense must submit a report to Congress no later than March 31, 1996. The report should provide full justification for DERA devolvement and address the matters outlined above. In the absence of the requested information this year, the conferees decline to authorize a change to the existing statutory scheme for DERA at this time. ********* APPENDIX D PROPOSED LEGISLATIVE CHANGE SEC___. DEVOLUTION OF ENVIRONMENTAL RESTORATION Section 2703 of title 10, United States Code, is amended to read as follows: "Sec.2703. Environmental restoration transfer accounts "(a) ESTABLISHMENT OF TRANSFER ACCOUNTS.- "(1) ESTABLISHMENT.-There is hereby established in the Department of Defense and each of the Military Departments, an account to be known as the "Environmental Restoration Account" (hereinafter in this section referred to as the "transfer accounts"). All sums appropriated to carry out the functions of the Secretary of Defense and the Secretaries of the Military Departments relating to environmental restoration under this chapter or to environmental restoration under any other provision of law shall be appropriated to their respective transfer accounts. "(2) REQUIREMENT OF AUTHORIZATION OF APPROPRIATIONS.- No funds may be appropriated to the transfer accounts unless such sums have been specifically authorized by law. "(3) AVAILABILITY OF FONDS IN TRANSFER ACCOUNTS.- Amounts appropriate to the transfer accounts shall remain available until transferred under subsection (b). "(b) AUTHORITY TO TRANSFER TO OTHER ACCOUNTS.- Amounts in their respective transfer accounts shall be available to be transferred by the Secretary of Defense or the Secretaries of the Military Departments to any appropriation account or fund of their departments for obligation from that account or fund to which transferred. "(c) OBLIGATION OF TRANSFERRED AMOUNTS.- Funds transferred under subsection (b) may only be obligated or expended from the account or fund to which transferred in order to carry out the functions of the Secretary of Defense or the Secretaries of the Military Departments under this chapter or environmental restoration functions under any other provision of law. "(d) BUDGET REPORTS.- In proposing the budget for any fiscal year pursuant to section 1105 of title 31, the President shall set forth separately the amounts requested for environmental restoration programs by the Department of Defense and the Military Departments under this chapter or any other Act. "(e) AMOUNTS RECOVERED UNDER CERCLA.- Amounts recovered under section 107 or section 113 of CERCLA for response actions of the Secretary of Defense or Secretary of a Military Department shall be credited to their respective transfer account. "(f) PAYMENTS OF FINES AND PENALTIES.- None of the funds appropriated to the transfer accounts for fiscal years 1995 through 1999 may be used for the payment of a fine or penalty imposed against the Department of Defense unless the act or omission for which the fine or penalty is imposed arises out of any activity funded by the transfer account. "(g) CONFORMING AMENDMENT.- Reference to the "Defense Environmental Restoration Account" elsewhere in the law shall be construed as referring to the "Environmental Restoration Account" of the Department of Defense and each of the Military Departments. Sectional Analysis The proposal modifies the authorization and appropriation of the Environmental Restoration, Defense Account. It changes the existing authorization of one central transfer account by providing additional transfer accounts for each of the Military Departments. The legislation would also provide for the direct appropriation of Environmental Restoration funds into these newly established transfer accounts. The amendment is required to implement the Department's decision to devolve the Environmental Restoration Program to the Military Departments. Devolving the Account to the Military Departments will involve them more directly in validating the cleanup efforts and balancing the cleanup programs with other military requirements in the budget preparation. PROBLEM: Without this amendment, the Department's decision to devolve the Environmental Restoration Program to the Military Departments cannot be fully implemented. EXPECTED IMPROVEMENT: Devolvement will provide the Military Departments with greater over the execution of the cleanup program and more incentive to ensure environmental restoration efforts are prioritized appropriately. BUDGET IMPACT: The amendment does not impact environmental restoration requirements. | |
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