YOKOSUKA NAVAL BASE, Japan — The Defense Department did not calculate an accurate cost savings during its furlough of more than 600,000 civilian employees last year, says a General Accountability Office report that also noted a backlog of furlough appeals and sagging employee morale.
The GAO report, released Tuesday, calls into question whether the Pentagon furloughed the correct number of people to achieve the personnel savings it sought to meet the mandated federal budget cuts known as sequestration.
As the Pentagon planned to reduce its 2013 budget by $37 billion because of sequestration, it planned for a furlough that valued the cost savings of furloughing its 767,006 civilian employees at $300 per day, per person, according to the GAO report.
On the basis of that figure, DOD then exempted 142,602 employees from furlough, without examining the salaries of those employees.
"While DOD did adjust the numbers of civilians it included in its calculated cost savings, it never adjusted the per person, per day estimate of $300 to account for the 18 percent of the civilian workforce excepted from the furlough," according to the GAO report.
Under an 11-day furlough, a scant $10 swing in average savings per person, per day, alters the government's bottom line by $72 million, according to the report. Since the figures were never recalculated, it's unknown how much money was actually saved, and whether managers could have made different decisions regarding furloughs.
DOD partially concurred with the GAO's finding but did not explain why in its official response. Instead, the DOD response contained a list of suggested wording for the final GAO report, such as changing "did not track cost savings in real time" to "could not track cost saving in real time due to system and process limitations."
The Pentagon had planned for a 22-day furlough that later changed to 14 days, and then 11 days. In September 2013, congressional committees approved about $8.6 billion of DOD's financial transfer and reprogramming requests, allowing DOD to cut the furlough days to six.
DOD reported saving $1 billion due to the furlough. However, the report stated that the figure did not take into account the administrative costs of preparing for the furlough, or the lost productivity as staff set aside their primary tasks.
"Further, Marine Corps officials stated that they spent a majority of their time dealing with the furlough rather than focusing on day-to-day business, such as developing critical skills training," according to the report.
Because the furlough occurred during the summer, the Air Force's Air Mobility Command reported to GAO that it adversely affected changes of station and reporting dates to new commands.
The furlough also had significant effects on the military medical system.
Effects of the furlough included an outflow of 2,700 Army civilian doctors and medical workers to the Veterans Administration – which wasn't affected by the furlough – and other organizations, according to the report.
At Brooke Army Medical Center in San Antonio, one of the military's largest hospitals, conflicting policies caused confusion and management difficulties, the GAO said. For example, Air Force inpatient nurses were exempted from furlough, while Army inpatient nurses were not.
Meanwhile, job satisfaction after sequestration and three years of pay freezes fell from 71 percent in 2010 to 64 percent in a 2013 survey taken as the furlough decision was being formulated.
The Merit Systems Protection Board has received more than 32,000 appeals from civilian employees because of loss of wages, a caseload five times higher than normal for the quasi-judicial government board.
All of the 1,101 cases it has ruled on have been decided in DOD's favor, said the GAO.
The board hopes to have initial decisions for all cases done by September 2015, according to the report.