DOD's current Financial Management Regulation (FMR) does not require the military to specifically report procurement expenditures for equipment reset in detail.
Under the current circumstances, GAO reports Congress does not have the transparency it needs to "exercise effective oversight and to determine if the amount of funding appropriated for equipment reset has been most appropriately used for the purposes intended."
GAO recommended the Pentagon revise the FMR and begin reporting more details regarding procurement expenditures, a suggestion which the DOD rejected.
According to DOD, implementing GAO's suggestion would be "unwieldy and cost-prohibitive," and would add too much complexity and duplication to existing reports.
In response, GAO added an additional recommendation to its report--one directed at Congress.
Because the department did not agree with our recommendation, we have added a matter for congressional consideration suggesting that Congress should consider directing the Secretary of Defense to direct the Under Secretary of Defense, Comptroller, to amend the FMR in order to require a more detailed accounting of reset obligations and expenditures within the procurement accounts.
The Pentagon also rejected the GAO's second recommendation: that the military re-assess its equipment reset priorities to ensure funding is directed at those troops already deployed or preparing for deployment, rather than fulfilling long-term modernization plans.
GAO cited the Army's $2.4 billion planned expenditure to upgrade 400 Abrams Tanks and more than 500 Bradleys, which aren't necessary for Iraq or Afghanistan, but would accelerate the Army's long-term modernization program by 1-2 years.
The report also points out that current operational needs would be better served if the Marine Corps didn't worry about replacing or upgrading Humvees stateside while there is such a demand for MRAPs in Iraq and Afghanistan.
The Pentagon responded that the military services constantly assess and adjust their equipment reset requirements, and that all immediate operational needs have been met.
Complete report d07814.pdf