Summary

Since 2001, Congress has provided the Department of Defense (DOD) with $888 billion in supplemental and annual appropriations, as of June 2009, primarily for Overseas Contingency Operations (OCO). DOD's reported annual obligations for OCO have shown a steady increase from about $0.2 billion in fiscal year 2001 to about $162.4 billion in fiscal year 2008. For fiscal year 2009 OCO, Congress provided DOD with about $65.9 billion in the fiscal year 2009 DOD Appropriations Act and about $80.0 billion in a supplemental appropriation enacted in June 2009. A total of $59.6 billion has been obligated through the second quarter of fiscal year 2009 through March 2009. The United States' commitments to OCO will likely involve the continued investment of significant resources, requiring decision makers to consider difficult trade-offs as the nation faces an increasing long-range fiscal challenge. The magnitude of future costs will depend on several direct and indirect cost variables and, in some cases, decisions that have not yet been made. DOD's future costs will likely be affected by the pace and duration of operations, the types of facilities needed to support troops overseas, redeployment plans, and the amount of equipment to be repaired or replaced. DOD compiles and reports monthly and cumulative incremental obligations incurred to support OCO in a monthly report commonly called the Contingency Operations Status of Funds Report. DOD leadership uses this report, along with other information, to advise Congress on the costs of the war and to formulate future OCO budget requests. DOD reports these obligations by appropriation, contingency operation, and military service or defense agency. DOD has prepared monthly reports on the obligations incurred for its involvement in OCO since fiscal year 2001. Section 1221 of the National Defense Authorization Act for Fiscal Year 2006 requires us to submit quarterly updates to Congress on the costs of Operation Iraqi Freedom and Operation Enduring Freedom based on DOD's monthly cost-of-war reports. This report, which responds to this requirement, contains our analysis of DOD's reported obligations for overseas contingencies through March 2009. Specifically, we assessed (1) DOD's cumulative appropriations and reported obligations for military operations in support of overseas contingencies and (2) DOD's fiscal year 2009 reported obligations from October 2008 through March 2009, the latest data available for OCO by military service and appropriation account.

As of March 2009, Congress has appropriated a total of about $888 billion primarily for OCO since 2001. Of that amount, about $65.9 billion was appropriated in the fiscal year 2009 DOD Appropriations Act and about $80 billion was appropriated in the June 2009 supplemental appropriation for a total of about $145.9 billion for use in fiscal year 2009. DOD has reported obligations of about $714.3 billion for OCO from fiscal year 2001 through fiscal year 2008 and for fiscal year 2009 (October 2008 through March 2009). The $173.7 billion difference between DOD's appropriations and reported obligations can generally be attributed to the remaining fiscal year 2009 appropriations; multiyear funding for procurement; military construction; and research, development, test, and evaluation from previous OCO-related appropriations that have yet to be obligated; and obligations for classified and other items, which DOD considers to be non-OCO related, that are not reported in DOD's cost-of-war reports. As part of our ongoing work, we are reviewing DOD's process for reporting its OCO-related obligations.