Coast Guard is failing to invest adequately in shore facilities, audit finds
Crumbling infrastructure increasingly jeopardizes operations.
The Coast Guard's budget for modernizing its shore facilities is far below industry standards and the service's own accepted threshold, contributing to a severe maintenance backlog, auditors in the Homeland Security Department Inspector General's Office found in a report released Tuesday.
What's more, auditors said the service has repeatedly -- in violation of White House budget regulations -- tapped maintenance dollars to upgrade or expand facilities to compensate for the funding gap. Because the Coast Guard funded maintenance only at the minimum level in recent years (2 percent of the total value of infrastructure), tapping that money for facility upgrades only added to the maintenance backlog.
"The gap in shore acquisition, construction and improvements funding and the inappropriate use of maintenance funds could hasten the deterioration of the U. S. Coast Guard's critical shore facilities and ultimately affect its overall operational capability," the auditors wrote.
Industry standard holds that investment in facilities improvements should be about 2 percent of the total value of the infrastructure, and maintenance should be funded between 2 percent and 4 percent. While the Coast Guard holds more than 22,000 shore facilities valued at $7.4 billion, it funded shore acquisition, construction and improvements on average only 0.3 percent of plant replacement value between 2003 and 2006, resulting in a funding gap of $511 million.
Shifting maintenance funds to cover the shortfall violates requirements established by Office of Management and Budget Circular No. A-11 and Federal Accounting Standards Advisory Board Statement No. 6.
Auditors recommended the service develop a plan to fully fund acquisition, construction and improvements, as well as maintenance, according to industry standard and Coast Guard policy; develop controls to comply with spending regulations; create more realistic accounts of acquisition and maintenance backlogs; and identify inappropriate expenditures since Oct. 1, 2002, and notify Congress of violations as warranted.
The Coast Guard concurred with the auditors' findings and recommendations.
Coast Guard Commandant Adm. Thad Allen raised the issue of crumbling shore facilities in testimony before the House Appropriations Committee on March 5.
"Vital shore infrastructure required to maintain our front line assets is in critical need of renovation and repair," Allen said. "Ultimately, the future operational success of the Coast Guard is dependent upon a comprehensive recapitalization of front line assets and shore and support infrastructure."
The Coast Guard is requesting $50 million for shore facilities in 2009-an increase of $12.1 million over this year's budget.