Defense Travel: DOD Should Strengthen Its Ongoing Actions to Reduce Improper Travel Payments

Improper payments—including payments that should not have been made or were made in an incorrect amount—are a long-standing, significant challenge in the federal government. Both GAO and the DOD Inspector General have reported on problems related to improper payments in DOD's travel pay program.

This report examines (1) the amount DOD spent on DTS travel payments for fiscal years 2016 through 2018 and how much of those payments DOD estimated to be improper and the extent to which DOD has (2) implemented its Remediation Plan and (3) identified travel payment errors, the root causes of those errors, and the cost-effectiveness of addressing root causes. GAO analyzed fiscal years 2016 through 2018 data on DTS payments, reviewed DOD's Plan and documentation, interviewed officials about implementation efforts, and surveyed 52 DOD components about steps taken to address improper travel payments.

The Department of Defense's (DOD) Defense Travel System (DTS)—the primary system DOD uses to process travel payments—accounts for most of DOD's travel payments. DOD spent $18.3 billion on DTS travel payments from fiscal years 2016 through 2018, while incurring a reported $965.5 million in improper travel payments. In that period, DOD averaged $6.1 billion in DTS travel payments and $322 million in improper travel payments annually. Not all improper travel payments—such as legitimate payments that initially lacked supporting documentation―represented a monetary loss to the government. Officials said DOD first estimated a monetary loss from improper travel payments in fiscal year 2017. For fiscal years 2017 and 2018 it estimated a total monetary loss of $205 million out of $549 million in improper DTS payments (see fig.).

In October 2016, DOD established a Remediation Plan to reduce improper travel payments and a committee to monitor implementation of the plan at 10 DOD components. DOD selected these 10 components because they accounted for a significant percentage of total travel payments. However, DOD did not take into account the components' own estimates of their improper payment rates. As of March 2019, only 4 of the 9 components that responded to GAO's survey had completed all of the plan's requirements, in part because of a lack of milestones in the plan and ineffective monitoring for required actions. As a result, DOD does not have reasonable assurance that its actions have been sufficient.

DOD has mechanisms to identify errors leading to improper travel payments, and some components have developed specific corrective plans to address the errors. However, GAO found that these efforts did not clearly identify the root causes of the errors, in part because there is no common understanding of what constitutes the root cause of improper travel payments. DOD components also have not incorporated considerations of cost-effectiveness into decisions about whether to take actions that could reduce improper payments. Without addressing these issues, DOD will likely miss opportunities to implement the changes necessary to address the root causes of improper travel payments.

GAO made 5 recommendations, including that DOD consider data on improper payment rates in its remediation approach; define the term “root cause”, and consider cost effectiveness in deciding how to address improper payments. DOD generally concurred with 4 recommendations, but did not concur with revising its approach for selecting components to implement its Remediation Plan, stating that it has already taken actions that address this issue. GAO believes the recommendation remains valid.

Improper payments—payments that should not have been made or were  made in an incorrect amount—are a long-standing, significant problem in  the federal government, estimated at about $151 billion for fiscal year  2018. Both we and the Department of Defense Inspector General  (DODIG) have reported on problems related to improper payments in the  Department of Defense (DOD) travel pay program. DOD travel payments  are made to active and reserve or guard servicemembers and civilian  employees and cover travel for both temporary duty and permanent  change of station. DOD’s Defense Travel System (DTS) is the primary  system used to process travel payments and accounts for most of the  department’s travel payments. For fiscal year 2018, the department  reported $365.32 million in improper payments related to its travel pay  program.

In March 2019, we reported on our priority open recommendations  directed to DOD, including six open recommendations related to improper  payments. For example, in 2013, we reported that DOD’s process for  estimating and reporting improper travel payments needed to be improved to meet statutory requirements and Office of Management and  Budget (OMB) guidance. The Improper Payments Elimination and  Recovery Act of 2010 (IPERA) requires the DODIG to report annually on  DOD’s compliance with statutory requirements for estimating and  reporting improper payments; since 2012, the DODIG has consistently  reported that the department has not met those requirements. For  example, the DODIG found that DOD had not published statistically valid  estimates of improper payments for DOD travel in fiscal years 2015  through 2018. In addition, the DODIG has reported on the actions that  DOD has taken to identify the underlying reasons for improper travel  payments. In 2016, the DODIG reported that DOD’s actions to reduce  estimated improper travel payments were inadequate, because the  corrective actions that DOD components had developed did not include  identifying the underlying reasons that authorizing officials had approved  deficient vouchers for payment. Due, in part, to the DODIG’s findings, in  October 2016, DOD developed a DOD Travel Pay Improper Payments  Remediation Plan (Remediation Plan) to reinforce internal controls and  accountability in the DOD travel pay program and help to reduce improper  payments.

We conducted this work under the authority of the Comptroller General to  assist Congress with its oversight responsibilities. In this report, we  examine (1) the amount DOD spent on DTS travel payments for fiscal years 2016 through 2018 and how much of those payments DOD  estimated to be improper; (2) the extent to which DOD has implemented  its Remediation Plan; and (3) the extent to which DOD has established  mechanisms to identify errors leading to improper travel payments, the  root causes of those errors, and the cost-effectiveness of addressing root  causes.

To address our first objective, we collected data on DTS travel payments  for fiscal years 2016 through 2018, by DOD component and trip purpose,  from the Defense Travel Management Office (DTMO). We used this time  period because DOD issued its plan to remediate improper payments in  2016. We calculated the total payments for that time period, as well as  the average annual payments and subtotals for various categories, such  as the trip purposes that represented the top three highest percentages of  payments. We also collected data from the Defense Finance and  Accounting Service (DFAS) on travel payments made in DTS that were  identified as improper. The data included the dollar amount of those  improper payments that were estimated to result in a monetary loss to the  government, which represent amounts that should not have been paid by  the government and could be recovered.

To assess the reliability of the data we obtained, we reviewed  corroborating documentation, analyzed the data for inconsistencies, and  interviewed service officials about the reliability of the data. We  determined that the data were sufficiently reliable for our reporting  purposes, which were to determine the amount of DOD’s DTS travel  payments and provide insight into the estimated improper travel payment  amounts the department reported for fiscal years 2016 through 2018.  However, we also determined that, based on persistent problems with  DOD’s improper payment estimates that we and the DODIG have  reported since 2013, these data were not sufficiently reliable for other  purposes, such as determining the specific progress DOD has made in  reducing its improper travel payment rates during this time period.

To address our second objective, we reviewed documents and met with  officials to discuss DOD’s implementation of its Remediation Plan. We  also conducted a web-based survey in February and March 2019 of travel  administrators in 52 DOD components to obtain information on their  familiarity with and implementation of the plan. These 52 components  represent the universe of DOD components that manage payments  processed in DTS for official travel by DOD personnel, according to DOD  records, our prior work, and reports by the DODIG. We received 37  completed surveys, for an overall response rate of 71 percent. The survey  results represent the views only of those components that responded and  may not be generalizable to all components.

To address our third objective, we reviewed DOD’s Remediation Plan,  documents related to DOD’s implementation of the Remediation Plan,  and the June 2018 DOD Improper Payments Senior Accountable Officials  Steering Committee Charter. We met with DOD and component officials  to discuss efforts to identify and address root causes of improper travel  payments and conducted a web-based survey of travel administrators in  52 DOD components (as mentioned above) to obtain information on their  efforts to identify and address the root causes of improper travel  payments. We compared the information we obtained with OMB guidance  on how agencies are to identify and address the root causes of improper  payments, as well as the definition of root cause contained in the  template DOD uses for corrective action plans intended to address  improper travel payments. More details on our objectives, scope, and  methodology can be found in appendix II.

We conducted this performance audit from April 2018 to August 2019 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

DOD’s travel pay program is comprised of payments made by the  department to active, reserve, and National Guard service members and  civilian employees for temporary and permanent travel expenses. DOD  travel is generally documented using authorizations and vouchers. Travel  authorizations direct an individual or group of individuals to travel and  provide information regarding what travel expenses are authorized to be  paid. Travelers submit travel vouchers after the travel is completed to  claim reimbursement for the official travel expenses they have incurred.  There are a number of DOD entities involved in creating, reviewing and  approving, paying, and reporting on DOD travel payments:

Travelers are the service-members and civilian employees engaging  in travel who create, amend, and digitally sign travel authorizations  and vouchers and are legally liable for submitting false or fraudulent  claims for payment.

Authorizing officials are responsible for authorizing travel and  controlling the use of travel funds. The DTS Regulations state that  authorizing officials must review, verify, and approve authorizations  prior to travel.

Certifying officers certify vouchers for payment. According to the  DOD guidance on DTS, known as the DTS Regulations, certifying  officers must implement, maintain, and enforce internal procedures  and controls to minimize erroneous payments; they are presumed  negligent and may be pecuniarily liable for all improper payments that  they certify. Authorizing officials who are also certifying officers  review and certify travel vouchers and verify all required supporting  documentation before the vouchers are paid.

The Defense Travel Management Office (DTMO) oversees and  facilitates DTS, including any necessary changes or enhancements to  the system. It establishes and maintains the DTS Regulations, which  define the responsibilities of users by role and the minimum required  training for each user role, among other things. DTMO also maintains  DTS travel payment data that are used for estimating and reporting on  improper payments.

The Defense Finance and Accounting Service (DFAS), as part of  DOD’s efforts to reduce improper travel payments, is responsible for  reviewing a sample of paid DTS travel vouchers to estimate and  report improper travel payments. DFAS also provides data on  improper travel payments to DOD components on a quarterly basis.

The Office of the Under Secretary of Defense (Comptroller)  compiles DOD-wide data on improper payments annually as part of  DOD’s Agency Financial Report. It also oversees and facilitates DOD  efforts to reduce improper travel payments.

Improper Payments Information Act (IPIA)

The Improper Payments Information Act of 2002, which was later  amended by the Improper Payments Elimination and Recovery Act of  2010 (IPERA) and the Improper Payments Elimination and Recovery  Improvement Act of 2012 (IPERIA), defines an improper payment as any  payment that should not have been made or that was made in an  incorrect amount (including overpayments and underpayments) under  statutory, contractual, administrative, or other legally applicable  requirements.

In accordance with OMB guidance, DOD has identified travel pay as  susceptible to improper payments based on the large volume of  transactions and high dollar amount of the program. As a program  considered susceptible to significant improper payments, DOD travel pay  is subject to certain IPIA requirements. Specifically, IPIA, as amended, requires federal executive branch agencies to (1) develop a statistically  valid estimate of the annual amount of improper payments for programs  identified as susceptible to significant improper payments, (2) implement  corrective actions to reduce improper payments and set reduction targets,  and (3) report on the results of addressing these requirements.

IPERA also requires executive agencies’ Offices of Inspector General to  annually determine and report on whether their agencies complied with  certain IPERA-related criteria. These criteria include the requirements to  publish a report for the most recent fiscal year that meets OMB reporting  requirements, publish statistically valid improper payment estimates,  publish and meet reduction targets for improper payment rates, and  publish corrective action plans. If an agency does not meet one or more  of the six IPERA criteria for any of its programs or activities, the agency is  considered noncompliant with IPERA. The DODIG reported that in fiscal  year 2018, DOD travel pay was not in compliance with IPIA, as amended,  for the seventh consecutive year. Specifically, DOD met three of the six  IPERA-related criteria for its travel pay program, by publishing all required  information in the Payment Integrity section of its Agency Financial  Report; conducting program-specific risk assessments; and reporting an  improper payment rate of less than 10 percent for each of the eight  programs that included an improper payment estimate in the fiscal year  2018 Agency Financial Report. However, the DODIG reported that DOD  did not publish reliable improper payment estimates, include all required  elements for the descriptions of corrective action plans, or meet its targets  for reducing improper payments.

To meet IPIA requirements, agencies follow guidance issued by OMB for  estimating improper payments. OMB Circular No. A-123, Appendix C  instructs agencies to obtain the input of a statistician to prepare a  statistical sampling and estimation method that produces statistically valid  estimates of improper payments. Agencies are required to meet a  number of requirements on the content of the sampling plans, including  providing clear and concise descriptions of the methods used that also  address the assumptions used, sample sizes, and precision, among other  aspects. The guidance also says that agencies should incorporate  refinements to their methods based on recommendations from agency  staff or auditors, such as their agency Inspector General or GAO,  whenever possible.

OMB guidance also includes requirements for annual reporting on  improper payment estimates. According to the guidance, when calculating  a program’s annual improper payment amount, agencies should use only  the amount paid improperly. For example, if a $100 payment was due, but  a $110 payment was made erroneously, then the amount applied to the  annual estimated improper payment amount should be $10. In addition,  when an agency’s review is unable to discern whether a payment was  proper as a result of insufficient or lack of documentation, this payment  must also be considered an improper payment.

OMB also requires agencies to identify and report on the root causes of  the improper payments and implement corrective actions to prevent and  reduce these causes for programs that have been identified as  susceptible to significant improper payments, including DOD’s travel pay  program. OMB emphasizes that, in identifying root cause, it is important  to distinguish between what constitutes a root cause that created an error  and an internal control problem that failed to catch an error. The guidance  instructs agencies to implement corrective actions that are responsive to  root causes, are proportional to the severity of the associated amount and  rate of the root cause, and are measurable. It also instructs agencies to  annually review their existing corrective actions to determine whether any  action can be intensified or expanded to achieve its intended result.

Methodology DOD Uses to Calculate Improper Payment Amounts and Rates

To comply with IPIA and OMB requirements, and in response to our prior  recommendations, DFAS updated its statistical sampling plan in fiscal  year 2017 to develop and report improper payment estimates for DTS.  The plan is designed to estimate the dollar amount of improper payments,  which includes both travel payments that were made in excess of the  correct amount (overpayments) and those that were made for less than  the correct amount (underpayments). When DOD is unable to discern  whether a travel payment is proper because there is insufficient or no  documentation to support it, that payment is also included in the improper  payment estimate.

On a monthly basis, DFAS statistically samples paid travel vouchers,  stratified first by component and then by dollar amount. DFAS officials  then conduct a review of the sampled post-payment vouchers to identify  erroneous travel vouchers and the types of errors that were made. Based  on the errors found during the review, DFAS calculates an estimate of the  improper payments for each component. The military services process a  small portion of their travel payments through other disbursing systems  and are responsible for conducting their own post-payment reviews to  estimate the improper payments for those systems. The DOD improper  payment rate is the estimated total of improper payments from all post- payment reviews divided by the total number of payments. For example,  in fiscal year 2018, DOD reported an improper payment rate of 4.59  percent, or $365.32 million of the $7.96 billion total travel payments.

DOD Spent $18.3 Billion on DTS Travel Payments for Fiscal Years 2016 through 2018, Including an Estimated $965.5 million in Improper Travel Payments for Those Years

DOD Data Show an Average of $6.1 Billion a Year in DTS Travel Payments for Fiscal Years 2016 through 2018, and Travel Spending Increased during that Period

Using DTS data, we calculated that DOD had spent an average of $6.1  billion annually on DTS travel payments in fiscal years 2016 through  2018—a total of about $18.3 billion in travel payments for those years.  Travel for active duty servicemembers accounted for the largest portion of  those travel payments. We calculated that DOD components reported  over $9.5 billion in DTS travel payments for active duty servicemembers  in fiscal years 2016 through 2018, accounting for approximately 52  percent of the total travel payments. For the same time period, DTS travel  payments for DOD civilian employees totaled about $5.3 billion (29  percent of the total), and travel payments for Reserve and Guard  members totaled about $3.5 billion (19 percent of the total) (see fig. 1).

DOD data on DTS travel payments show that out of 10 different  categories used to identify the purpose of travel, the category  representing “training” accounted for the largest percentage of the travel  payments. Payments for “training attendance” accounted for about $6.6  billion (36 percent) of the $18.3 billion in total travel payments for fiscal  years 2016 through 2018 (see table 1). Payments for the trip purpose  “other travel” accounted for about $3.1 billion (17 percent) of the total  travel payments for that time period. “Other travel” is any travel for  reasons not covered by the other trip purpose categories; the purpose  must be further specified in the travel authorization. Based on our  analysis, most travel categorized as “other travel” was further specified  with the trip type “routine TDY,” which refers to a travel assignment to a  location other than the employee’s permanent duty station. The two other  trip purposes that accounted for the highest percentage of travel  payments, based on our analysis of the DTS data, are “special mission”  and “site visit,” which each accounted for about $2.9 billion (16 percent) of  the total travel payments for fiscal years 2016 through 2018.

Using DTS data, we also calculated that DOD’s reported total travel  payments increased from fiscal years 2016 through 2018, for a total  increase of approximately $1 billion (16 percent) in nominal dollars and  $0.68 billion (11 percent) in constant dollars during fiscal years 2016  through 2018 (see fig. 2).

The DOD officials we interviewed were unable to explain why travel  payments increased during fiscal years 2016 through 2018 but  speculated that overall increases in DOD’s budget likely corresponded  with additional travel expenses. Officials also stated that travel expenses  are tied to DOD’s mission requirements. For instance, DOD military and  civilian personnel provided support to civil authorities in areas such as  humanitarian assistance and disaster recovery during the period of our  review, according to these officials. Travel by DOD personnel to locations  for these missions would contribute to DOD’s travel expenses.

DOD Estimated an Annual Average of $322 Million in Improper Travel Payments for Fiscal Years 2016 through 2018

According to data provided by DFAS, the annual average of DOD  improper travel payments was about $322 million for fiscal years 2016  through 2018, totaling $965.5 million (or 5.3 percent of total DTS travel  payments) for those years.

For fiscal year 2016, DFAS calculated that an estimated $416.6  million in travel payments (7.3 percent of total fiscal year 2016 DTS  travel payments) were improper.

For fiscal year 2017, DFAS’s estimate of improper payments was  $252.4 million (4.2 percent of total fiscal year 2017 DTS travel  payments). However, data availability issues limited the scope of that  year’s post-payment review, which is used to estimate the improper  payment rate.

For fiscal year 2018, DFAS’s estimate of improper payments was  $296.6 million (4.5 percent of total fiscal year 2018 DTS travel  payments).

These improper payment amounts include both overpayments and  underpayments and do not necessarily indicate a monetary loss to the  government. According to DOD’s Agency Financial Report, payments  identified as improper do not always represent a monetary loss. For  instance, an otherwise legitimate payment that lacks sufficient supporting  documentation or approval is reported as improper but is not considered  a monetary loss if documentation or approval is subsequently provided.  Monetary loss is an amount that should not have been paid and could be  recovered.

With respect to monetary loss, DFAS calculated that of the DTS improper  payments, the department incurred an estimated $205 million (1.6  percent of total DTS travel payments) loss to the government for fiscal  years 2017 and 2018 (see fig. 3). Specifically, for fiscal year 2017,  DFAS calculated an estimated monetary loss of $97.7 million (1.6 percent  of total DTS travel payments), and for fiscal year 2018, it calculated an  estimated monetary loss of $107.3 million (1.6 percent of total DTS travel  payments).

According to DFAS officials, the monetary losses estimated by DFAS  were a result of travel voucher errors such as claiming an expense that is  automatically generated by DTS during the booking process, rather than  updating the travel voucher with the amount actually paid. Other errors  that DFAS considers to indicate a monetary loss to the government  include duplicate paid vouchers, mileage paid incorrectly, lodging  expenses paid twice, and expenses that do not match the receipts (e.g.,  lodging).

DOD Has Taken Steps to Implement Its Remediation Plan, but Its Approach May Not Manage Risk Sufficiently, Many Actions Remain Incomplete, and Communication of Requirements Was Lacking

DOD established and has taken steps to implement a Remediation Plan  aimed at reducing improper travel payments that includes specific  requirements for all DOD components as well as a committee to monitor  the efforts of 10 components that DOD identified as key to addressing  improper travel payments. However, DOD did not consider available data  on improper travel payment rates in its selection of these 10 components  to implement its risk-based approach. Further, the 10 components have  not fully implemented the Remediation Plan requirements, and other  components were generally unaware of the requirements in the  Remediation Plan and DOD’s broader efforts to resolve and mitigate  improper travel payments.

DOD Established a Remediation Plan to Address Improper Travel Payments and a Committee to Monitor Implementation by Key DOD Components

In October 2016, DOD established a Remediation Plan for improper  payments in its travel pay program. The memorandum establishing the  plan specified that it applied to the Military Departments, Defense  Agencies, Joint Staff, and Combatant Commands. The Under Secretary  of Defense (Comptroller) noted in the memorandum that the rate of  improper travel payments had reached an unacceptable level, causing  the department’s program for preventing improper payments to be non- compliant with IPERA. Accordingly, the Remediation Plan specified steps  that DOD components were required to take to reverse the department’s  poor performance. Specifically, it stated that the military services, defense  agencies, DOD field activities, Joint Staff, and combatant commands  must each designate in writing a Senior Accountable Official (SAO)  responsible for implementing the plan’s requirements for that component,  train travelers and approving officials, issue guidance on holding  approving officials pecuniarily liable for improper travel payments, and  prepare component-specific remediation plans and identify corrective  actions, among other things. DOD specified that certain steps were to  be completed by November 1, 2016. The requirements specified in  DOD’s Remediation Plan are listed in table 2.

DOD officials informed us that they also established a Senior Accountable  Official Committee (SAO committee) consisting of the SAOs from the 10  components. The committee provided a mechanism for DOD’s Deputy  Chief Financial Officer to monitor the implementation of the Remediation  Plan’s requirements by those components. The SAO committee included  the four military services and six additional components: the U.S. Special  Operations Command, the Defense Logistics Agency, the Defense  Contract Management Agency, the Defense Information Systems  Agency, the Missile Defense Agency, and the Defense Contract Audit  Agency. An Office of the Under Secretary of Defense (OUSD)  (Comptroller) official told us that DOD did not monitor the implementation  of other components’ efforts to implement the Remediation Plan’s  requirements.

The SAO committee met four times from January 2017 through  September 2017, with a fifth meeting in May 2018. At these meetings,  components represented on the committee discussed approaches they  had taken to prevent improper travel payments and highlighted examples  of best practices to educate travelers and approving officials about how to  avoid improper travel payments. In addition, DFAS officials presented the  results of monthly post-payment reviews to identify the most common  errors associated with improper travel payments. In June 2018, DOD  broadened the scope of the SAO committee and chartered the DOD  Improper Payments Senior Accountable Officials Steering Committee,  which was established to address all programs included in DOD’s  improper payments reporting—not just travel pay. As of May 2019, this  steering committee had met twice, in December 2018 and again in March  2019.

DOD Selected Components for the SAO Committee Based on Total Travel Payments, but Did Not Consider Components’ Improper Payment Rates

DOD identified components to include on the SAO committee based on  fiscal year 2016 DTS travel payments but did not consider components’  improper payment rates as selection criteria. According to OUSD  (Comptroller) officials, DOD used a risk-based approach to select the 10  components to include in the SAO committee, because these  components accounted for the significant majority of the department’s  DTS travel payments. However, as a result of the way in which DOD  reports its estimated rates of improper travel payments, it is unclear  whether there is an association between the volume of DTS travel  payments and improper travel payment rates. DOD officials told us that  they did not use estimated improper travel rates as a selection criterion  because DFAS does not report estimated improper payment rates for all  DOD components in its annual agency financial report. Instead, DFAS  uses a stratified sampling method for the post-payment review of travel  vouchers, which means that the sample sizes for certain individual  components—such as smaller defense agencies—may be too small to be  statistically reliable. As a result, DFAS reports improper payment rates  for the individual military services and U.S. Special Operations  Command, but it reports an aggregate rate for the defense agencies that  DFAS officials told us also includes “joint commands.”

Notwithstanding DOD’s current sampling approach for determining  improper payment rates, DOD has previously reported discrete improper  payment rates for components that are not represented on the SAO  committee, and there may be additional data sources on component- specific improper payment rates. First, a 2016 DODIG report on improper  travel payments presented the results of a DFAS review of DTS vouchers  for 58 DOD components for July through December, 2014, including 48  components not represented on DOD’s SAO committee. Second, DOD  has reported improper payment rates for specific components other than  the military services as part of the Remediation Plan effort. Specifically,  DFAS has reported an improper payment rate for U.S. Special Operations  Command in the quarterly reports it provided to the SAO committee  separately from the aggregate rate it reports for other “joint commands.”  Third, we found that other sources of data on estimated improper travel  payment rates may be available to the department. For example, of the  non-SAO components that responded to our survey, 7 of 28 indicated that  they track their rate of improper travel payments.

Because DOD’s approach to monitoring specific components’  implementation of the Remediation Plan was based solely on the amount  of DTS travel payments, DOD lacks assurance that the components it  selected for greater scrutiny were the ones most at risk for improper travel  payments. Standards for Internal Control in the Federal Government  notes that management can define risk tolerances for defined objectives,  specifically the acceptable level of variation in performance relative to the  achievement of objectives. Federal internal control standards also state  that agencies should evaluate whether a risk-based approach is  appropriately designed by considering whether it is consistent with  expectations for the defined objectives. If the approach is not consistent  with expectations, agencies should revise the approach to achieve  consistency. In this case, DOD decided to accept the risk associated with  targeting its Remediation Plan efforts to only those components that  accounted for most of the department’s total travel payments in fiscal year  2016. However, without including improper payment rates in its analysis,  DOD may have excluded components with lower overall travel payments  that had significant improper payment rates. As a result, DOD cannot be  assured that it has implemented the Remediation Plan in a way that is  both efficient and effective in reducing improper travel payments.

Components that DOD Identified as Key to Addressing Improper Travel Payments Did Not Fully Implement the Remediation Plan

The 10 components that make up the SAO committee and were identified  as key to the effort to reduce improper payments took some steps to  address the Remediation Plan requirements but did not complete all of  the requirements outlined in the Plan. For example, 7 of the 9  components that responded to our survey reported that they had  designated an SAO. Further, these components indicated that their SAOs  had completed some required steps, such as issuing guidance to ensure  that front-end internal controls were in place to prevent improper travel  payments; reviewing training plans to determine their effectiveness in  preventing improper travel payments; and providing initial or refresher  training to all travelers and approving officials, among other actions.  However, none of the components that responded to our survey had  completed all of the requirements by the due date of November 1, 2016.

As of March, 2019, when we surveyed the 10 DOD components, only four  of the 9 components that responded to our survey had completed all of  the requirements (see table 3). For instance, 1 component (the Defense  Information Systems Agency) had not developed a component-level  remediation plan, and 6 of the 10 components had not developed  corrective action plans to address the improper travel payments they  identified, as required by the Remediation Plan. OUSD (Comptroller)  officials told us that they required only the military services to complete  corrective action plans, because these components accounted for about  92 percent of DTS travel payments.

We found that, while DOD established specific milestones for certain  actions in the Remediation Plan, it did not establish milestones for  completing most of the actions. Specifically, as shown in table 2 earlier in  this report, only 5 of the 11 requirements in the Remediation Plan had an  associated due date. Further, while DOD established a mechanism to  monitor whether the components had implemented the Remediation Plan  requirements through the SAO committee, this mechanism was not  effective in holding them accountable for doing so.

For example, at the first SAO committee meeting (January 18, 2017), the  SAOs were told to complete the Remediation Plan requirements by  March 1, 2017, and to be prepared to discuss them at the next SAO  committee meeting. However, at the next meeting (March 29, 2017), only  3 components—the Navy, the Defense Information Systems Agency, and  the Defense Logistics Agency—were prepared to present their  component-level remediation plans to the committee. At the meeting,  the DOD Deputy Chief Financial Officer, serving as the chair of the  committee, emphasized that components needed to document progress  in order to demonstrate that the department was working toward  identifying root causes and implementing corrective action plans to  prevent and reduce improper travel payments. At the May 24, 2018 SAO  committee meeting, 3 additional components—the Air Force, the Defense  Contract Management Agency, and the Missile Defense Agency— presented their plans to the committee. However, as of March 2019, the  U.S. Special Operations Command and the Defense Contract Audit  Agency had still not presented their plans to the committee.

Standards for Internal Control in the Federal Government states that  management should evaluate performance and hold individuals  accountable for their internal control responsibilities. Accountability is  driven by the tone at the top of an organization and supported by the  commitment to integrity and ethical values, organizational structure, and  expectations of competence, which influence the control culture of the  entity. In addition, the standards state that management should establish  and operate monitoring activities to monitor the internal control system  and evaluate the results.

As we stated earlier in this report, DOD has been challenged by  inaccurate and inconsistent estimates of improper payment rates, which  do not allow for reliably tracking the rate of improper travel payments over  time. By establishing milestones, monitoring progress, and holding  component leadership accountable for the implementation of the  requirements of the Remediation Plan, DOD would have greater  assurance that it has taken sufficient actions to reduce improper travel  payments.

Non-SAO Committee Components Took Some Steps to Implement the Remediation Plan Requirements but Were Generally Unaware of DOD’s Actions in this Area

As we noted above, the department memorandum outlining the  Remediation Plan was addressed to all components, and DOD officials  confirmed that, although they monitored implementation of the  Remediation Plan for the 10 components represented on the SAO  committee, the 42 components not represented on the SAO committee  (non-SAO committee components) were still required to complete the  actions specified in the Plan. However, we found that, based on our  survey results, half of the components that responded to our survey were  unaware of the requirements established in the Remediation Plan. Of the  28 non-SAO committee components that completed our survey, 14 (50  percent) responded that they were either not at all familiar with the  Remediation Plan requirements or only slightly familiar with the  requirements. Our survey results and review of DOD documentation also  indicate that many of the 42 non-SAO committee components had taken  some steps to reduce improper payments, consistent with the  Remediation Plan requirements, but had not completed all of the Plan’s  requirements. For example, of the 28 non-SAO committee components  that completed our survey, 10 (36 percent) responded that they had not  designated an SAO or other lead entity in writing, and 8 (29 percent) did  not know whether their component had designated a SAO.

Our survey results also indicate that most of the components not  represented on the SAO committee who responded to our survey were  unaware of department efforts to prevent and reduce improper travel  payments. Specifically, many of the non-SAO committee components had  not been made aware of efforts to implement the Remediation Plan  across the department through mechanisms such as the SAO committee  meeting minutes or quarterly DFAS reports. Sixteen of the 28 non-SAO  committee components who responded to our survey reported that no  one from their organization had ever attended an SAO committee  meeting, and 11 responded that they did not know if anyone from their  component had attended. Further, 15 of the 28 components who  responded to our survey reported that they had never received a copy of  the official SAO committee meeting minutes, and 13 responded that they  did not know whether they had. Nine of the 28 components responded  that they did not receive copies of the DFAS quarterly reports on improper  payments, which are used to track the types of errors that occur in travel  payments and help components to target actions to address them.

Standards for Internal Control in the Federal Government states that  management should internally communicate the necessary quality  information to achieve the entity’s objectives. Communicating quality  information down, across, up, and around reporting lines to all levels of an  entity contributes to the design, implementation, and operating  effectiveness of this principle.

An OUSD (Comptroller) official confirmed that DOD did not take action to  share information on the Remediation Plan requirements or  implementation efforts with components not represented on the SAO  committee. When DOD made the decision to focus the SAO committee  on 10 components, it did not establish a mechanism or document how  information on Remediation Plan efforts would be communicated to the  non-SAO committee components, which are also required to implement  the Plan. As a result, the components that are not represented on the  SAO committee have not benefited from information on the Plan’s  requirements or lessons learned and best practices that were identified  during the SAO committee effort—which may have helped them to reduce  their improper payments. Providing opportunities for all components to  benefit from the Remediation Plan efforts would give DOD greater  assurance that it has taken steps to reduce its overall improper payment  rate.

DOD Has Implemented Mechanisms to Identify Errors Leading to Improper Travel Payments, but these Efforts Do Not Clearly Identify the Root Causes of These Errors or the Cost-Effectiveness of Addressing Them

DOD Identified Errors Leading to Improper Travel Payments but Did Not Clearly Identify the Root Causes of These Errors

DOD has established mechanisms to identify and address the errors that  most frequently lead to improper travel payments, but we found some  limitations with these mechanisms because they did not consistently  identify the root causes of the errors.

DTMO Compliance Tool. In response to a requirement in the National  Defense Authorization Act for Fiscal Year 2012, DTMO developed a  compliance tool that uses a set of digital queries to automatically  review vouchers submitted for payment through DTS to determine  whether they meet criteria that indicate the potential for improper  payment. According to DTMO, as of fiscal year 2018, the tool had  recovered $25 million over 5 years.

If a voucher is flagged by this tool, an email is automatically generated  to the traveler and approving official associated with that voucher with  instructions for correcting the error. For example, the compliance tool  flags vouchers with duplicate expenses, such as expenses for lodging  or rental cars. However, the tool does not flag all potential improper  payments, because it does not identify all types of voucher errors. For  instance, according to DTMO officials, the tool cannot identify  vouchers that have been submitted without required receipts. For  fiscal year 2018, the average rate for DTS vouchers identified as  erroneous by the DTMO compliance tool was 0.044 percent. In  contrast, DOD reported an improper payment rate of 4.5 percent for  DTS vouchers in fiscal year 2018. In addition, the tool does not  identify the root causes leading to those errors. Rather, the tool simply  notifies the traveler and approving official associated with a specific  voucher with characteristics indicative of a potential improper payment  and requests that they amend the voucher to remove any errors.

DFAS Sampling. Each month, DFAS selects a sample of vouchers  that have been processed in DTS and assigns staff to review those  vouchers to determine whether any resulted in an improper payment.  According to DFAS officials, DFAS provides the results of these  reviews to the components represented on the SAO committee. DFAS  also prepares quarterly reports that summarize the most frequent  errors that lead to improper travel payments and presents these  reports for discussion at SAO committee meetings. DFAS reports the  frequency of voucher errors for each military service and U.S. Special  Operations Command and an aggregate rate for defense agencies  and joint commands. The DFAS reports also suggest corrective  actions to address the identified errors. For example, in November  2018, DFAS reported that the voucher error leading to the third largest  amount of improper payments was “Lodging—Paid Without a  Receipt,” which accounted for a total of $21,810 in improper payments  in that month. The corrective action DFAS suggested was for  reviewers or approving officials to verify that receipts were uploaded  to DTS and that any uploaded receipts met the criteria for valid  receipts. If either of these conditions was not met, the reviewer was to  return the voucher to the traveler to correct and resubmit.

However, these corrective actions did not address the root causes of  those errors. Specifically, neither DFAS nor the SAO committee  determined why travelers were not uploading receipts for lodging  expenses or why officials were approving vouchers without receipts.  According to DFAS reports, errors related to missing lodging receipts  were among the top 5 errors from October 2016 through June 2017.  By December 2018, these were was the most common errors DFAS  identified—accounting for a total of $53,125 in improper payments in  that month—yet DOD did not develop corrective actions to address  the root cause (i.e., why travelers were continuing to submit vouchers  without lodging receipts).

SAO Committee Effort. As we discussed earlier in this report,  beginning in January 2017, OUSD (Comptroller) convened five  meetings of the SAOs from 10 components that, according to officials,  accounted for the majority of DOD travel payments in fiscal year 2016.  At these meetings, representatives from the components discussed  approaches they were using to reduce improper travel payments. In  addition, representatives from DTMO and DFAS presented trends  resulting from their efforts to identify improper travel payments using  the DTMO Compliance Tool and DFAS post-pay sampling. These  presentations conveyed information about the types of voucher errors  that were leading to improper travel payments, and SAOs in  attendance discussed how to mitigate those errors. However, our  review of SAO Committee meeting minutes and the remediation plans  prepared by those components represented on the committee found  that the components did not identify the root causes of errors leading  to improper travel payments.

Military Services’ Corrective Action Plans. The military services, in  coordination with OUSD (Comptroller), developed corrective action  plans to address improper travel payments. OUSD (Comptroller)  provided the military services with guidance on developing the  corrective action plans that states that corrective action plans are  required to reduce improper payments, as well as to address specific  audit recommendations and issues of IPERA non-compliance. OUSD  (Comptroller) also provided the military services with a corrective  action plan template that instructs them to describe what the plan is  intended to address, i.e., improper payments, a specific audit  recommendation, or noncompliance issues. The template also defines  root causes as “underlying issues that are reasonably identifiable, can  be controlled by management, and require implementing corrective  actions to mitigate.” As of May 2019, the military services had  prepared 12 corrective action plans for the travel pay area. However,  we found that only 4 of them included specific corrective actions  addressing the root causes of improper travel payments.

We also found that the plans varied in terms of their sophistication in  discussing and identifying root causes. For example, none of the  corrective action plans prepared by the Air Force targeted the root  causes of improper travel payments. By contrast, one of the Navy’s  corrective action plans clearly identified the root cause of an error  (vouchers being approved without the required forms) and specified  10 milestones and associated corrective actions to address the root  cause. Of the Army’s two corrective action plans, one addressed  weaknesses in the Army’s sampling plan for determining improper  payments at overseas offices but did not discuss identifying the root  causes of improper travel payments, and the other required Army  travel management officials at overseas offices to improve their  reporting of improper travel payments to more clearly link corrective  actions with root causes.

While DOD has taken some positive steps to identify the errors that most  frequently lead to improper travel payments, our review found that  component officials do not have a clear understanding of what constitutes  the “root cause” of an improper travel payment. For example, component  officials who responded to our survey consistently mischaracterized root  causes as the specific errors leading to improper payments (e.g., missing  receipts) rather than the underlying reasons for those errors.

Our survey asked respondents if their component had taken steps to  identify the root causes of voucher errors that led to improper travel  payments in fiscal year 2018 and, if so, to provide examples of root  causes they had identified. While 31 of the 37 (84 percent) components  that responded to the question indicated that they had taken steps to  identify root causes, and 28 (76 percent) indicated that they had taken  steps to address those identified root causes, open-ended survey  responses indicated that the components did not understand the term  “root cause.” Specifically, 24 of the 31 (77 percent) components that  provided open-ended responses with examples of the root causes they  identified cited voucher errors—such as missing receipts—rather than  identifying the root causes for why those errors occurred. This indicates  that the 31 components that responded to this question did not  understand the term “root cause”. It also suggests that the number of  components that actually took actions to address root causes is likely  significantly lower than the numbers reported by the survey respondents.

OMB guidance specifies that agencies should ensure they have identified  a true root cause of an improper payment, because it is critical to do so in  order to formulate effective corrective actions. DOD’s Financial  Management Regulation (FMR) states that root causes of improper  payments must be identified and corrective plans developed and  monitored on a regular basis to ensure that future improper payments will  be reduced and eliminated. However, neither DOD’s FMR nor the June  2018 charter for the DOD Improper Payments SAO Steering Committee  defines the term “root cause.” And while DOD has established some  mechanisms to try to help components identify root causes, our survey  demonstrates that many travel management officials at DOD components  do not clearly understand the meaning of root cause. Specifically, of the  31 components that provided examples of what they believed to be the  root causes of voucher errors, only 7 provided examples of actual root  causes. Until DOD defines the term “root cause” to ensure a common  understanding of the term across the department, DOD travel  management officials will likely miss opportunities to make changes that  could help to address the underlying causes of improper travel payments.

DOD Has Not Determined How to Assess the Cost- Effectiveness of Addressing Root Causes Once They Have Been Identified

All of the corrective action plans prepared by the military services that are  intended to identify root causes of improper travel payments specified the  costs associated with implementing the corrective actions. While many of  the actions do not fully address root causes, as previously discussed, it is  important that the department weighs the cost-effectiveness of its actions.  However, we found that the services had not incorporated a consideration  of cost-effectiveness into their decisions on whether to implement those  actions, at least in part because OUSD (Comptroller) had not provided  guidance on how they should assess the cost-effectiveness of potential  corrective actions. Specifically, the template OUSD (Comptroller)  provided to the military services for preparing corrective action plans  neither asked for information on costs nor specified how to determine the  cost-effectiveness of specific corrective actions. In May 2019, an OUSD  (Comptroller) official told us that DOD is considering formulating guidance  on how components should determine cost-effectiveness.

OMB guidance states that agencies should be able to measure the  effectiveness and progress of each individual corrective action on an  annual basis. The guidance further states that agencies should annually  review their existing corrective actions to determine if any existing action  can be intensified or expanded so that it results in a high return on  investment in terms of reduced or prevented improper payments.

Addressing the root causes of improper travel payments can be costly,  requiring investments in technology changes, among others. For  example, component officials whom we interviewed and who responded  to our survey indicated that several of the root causes for improper travel  payments were related to design flaws in DTS. According to DOD  officials, a feature of DTS called “Trip Workbook” is used by travelers to  upload and attach receipts to vouchers. However, “Trip Workbook” is not  visible to approving officials when they process the voucher for approval  and payment. As a result, vouchers are being approved without the  required receipts, because approving officials cannot determine whether  or not the receipts have been attached. Officials stated that changes to  DTS are often costly and can take a long time, and in some instances  they can be more costly than the improper payment amounts they are  intended to reduce. Without clear guidance to assist components in  determining whether proposed corrective actions are cost-effective to  implement, DOD travel management officials will be hampered in making  informed decisions about which actions to implement and which to leave  unfunded.

DOD spent about $6 billion annually in DTS travel payments from fiscal  years 2016 through 2018 for its personnel to travel in support of its  mission, but since 2012 the DODIG has consistently found the DOD  travel program to be non-compliant with statutory requirements to mitigate  improper payments. In 2016, DOD began implementing a Remediation  Plan to address weaknesses in its management of improper travel  payments. However, DOD did not consider component-specific improper  payment rates in addition to overall travel payments when developing its  risk-based approach to monitoring the implementation of the Plan. Thus, DOD lacks assurance that the components it selected for greater scrutiny  were the ones most at risk for improper travel payments. Further, even  the components that DOD determined were critical to implementing the  Remediation Plan did not fully implement the Plan’s requirements,  because DOD had not established milestones for completing all of the  requirements, monitored whether the components had completed them  on time, or held them accountable for completing the requirements. In  addition, DOD did not establish a mechanism to share the results of the  SAO committee’s initiatives to reduce improper payments with travel  management officials across the department, limiting opportunities for the  components that were not represented on the SAO committee to benefit  from Remediation Plan efforts.

DOD has taken some positive steps to identify the errors associated with  improper travel payments but can do more to effectively and efficiently  address the underlying root causes. First, DOD has not established a  common definition of root cause so that travel management officials  across the department can clearly identify actions needed to address  improper travel payments. In the absence of such a definition, the  department is limited in its ability to address the underlying reasons for  improver travel payments. Second, DOD components lack guidance to  assist them in determining the cost-effectiveness of addressing root  causes of improper travel payments. Such guidance would help to  provide assurance that investments are targeted to actions that are cost  effective to implement.

We are making five recommendations to DOD.

The Secretary of Defense should ensure that the Under Secretary of  Defense (Comptroller) revises the approach for selecting components to  implement the DOD Travel Pay Improper Payments Remediation Plan to  consider available improper payment rate data in addition to data on the  components’ amount of travel payments. (Recommendation 1)

The Secretary of Defense should ensure that the Under Secretary of  Defense (Comptroller) expedites completion of the remaining Travel Pay  Improper Payments Remediation Plan requirements by establishing  milestones for the requirements, monitoring whether the components  have completed them on time, and holding components accountable for  completing the requirements. (Recommendation 2)

The Secretary of Defense should ensure that the Under Secretary of  Defense (Comptroller) establishes a mechanism to share the results of  the SAO committee’s initiatives to reduce improper travel payments with  all appropriate travel management officials across the department.  (Recommendation 3)

The Secretary of Defense should ensure that the Under Secretary of  Defense (Comptroller) takes action to ensure a common understanding of  the concept of root cause across the department. This could be done by,  among other actions, revising the Financial Management Regulation or  the charter for the DOD Improper Payments SAO Steering Committee to  include a definition of the term and including a definition of the term in the  mechanism used to share the results of the SAO committee’s initiatives to  reduce improper travel payments with travel management officials across  the department. (Recommendation 4)

The Secretary of Defense should ensure that the DOD Deputy Chief  Financial Officer directs the chairs of the SAO Committee, with the input  of OUSD (Comptroller), DTMO and DFAS, to provide guidance to the  components on how to determine whether actions that would address  root causes are cost effective to implement. (Recommendation 5)

We provided a draft of this report to DOD for review and comment. In its  written comments, reproduced in appendix III, DOD did not concur with  our first recommendation, partially concurred with our second and fifth  recommendations, and concurred with our third and fourth  recommendations and outlined its plan to address them. DOD also  provided technical comments, which we incorporated in the report where  appropriate.

In non-concurring with our first recommendation that OUSD (Comptroller)  revise the approach for selecting components to implement the DOD  Travel Pay Improper Payments Remediation Plan (Remediation Plan) to  consider available improper payment data in addition to the amount of  travel payments of DOD components, DOD stated that OUSD  (Comptroller) had focused implementation of its remediation efforts on the  10 components that accounted for approximately 95 percent of the  department’s travel pay disbursements in DTS. DOD added that this  approach achieved maximum coverage of travel payments, given its time  and resource limitations. DOD also stated that improper payment metrics  reported by DFAS supported this approach, as these data show that the  military services accounted for 92 percent of DTS travel payments and a  majority of improper travel payments.

We acknowledge in our report that DOD identified the 10 components to  include on the SAO committee because these components accounted for  the significant majority of the department’s fiscal year 2016 DTS travel  payments. However, our report also states that it is unclear whether there  is an association between the volume of DTS travel payments and  improper travel payment rates (measured in terms of the percentage of  DTS travel payments made improperly), because DOD does not routinely  collect data on improper travel payment rates for all components even  though—as we also note in our report—such data are available. As a  result, DOD may have excluded components with relatively lower travel  payments but higher rates of improper payments. DOD’s approach can  serve to reduce DOD’s total improper travel payment amounts, but it may  not fully support a key goal of DOD’s Remediation Plan—to reduce the  risk of improper travel payments. Thus, we continue to believe that DOD  should incorporate improper payment rates into its approach to oversee  the implementation of its remediation efforts.

In partially concurring with our second recommendation that OUSD  (Comptroller) expedite completion of the remaining Remediation Plan  requirements by establishing milestones for the requirements, monitoring  whether the components have completed them on time, and holding  components accountable to completing the requirements, DOD stated  that OUSD (Comptroller) will expedite completion of the Remediation  Plan requirements for the six components that have not yet completed  them. DOD specified that OUSD (Comptroller) will establish milestones  for the remaining requirements, monitor their progress, and hold  components accountable for their completion. DOD stated that it would  complete these actions by January 31, 2020. DOD also reiterated that it  does not believe detailed oversight beyond the largest components is  cost-effective, but noted that it would continue to monitor the non-SAO  components and their impact on improper travel payments. The intent of  our recommendation is to ensure that DOD expedites completion of the  Remediation Plan requirements for, at a minimum, the 10 components  that accounted for a significant majority of DOD’s DTS travel payments.  We believe the planned actions that DOD outlined in its response will  meet the intent of our recommendation. Further, as discussed in our  report, requiring additional components to complete the Remediation Plan  requirements may be warranted if those components have relatively high  improper payment rates. Therefore, DOD’s stated plan to monitor other  components and their impact on improper travel payments would be  responsive to our recommendation, provided the department holds non- SAO committee components accountable for addressing high improper  payment rates.

In partially concurring with our fifth recommendation that the DOD Deputy  Chief Financial Officer direct the chairs of the SAO Committee, with the  input of OUSD (Comptroller), DTMO and DFAS, to provide guidance to  the components on how to determine if actions that would address root  causes are cost-effective to implement, DOD stated that OUSD  (Comptroller) will revise the improper payments corrective action plan  template to require reporting components to perform a cost-benefit  analysis to determine the best or most cost-effective solution, resulting in  savings to the department. DOD added that OUSD (Comptroller) will not  provide specific steps to the components on how to determine whether  their actions are, in fact, cost-effective to implement. DOD further stated  that it believes that the criteria and/or appropriate steps to determine  whether corrective actions are cost-effective for a component must be  identified and agreed upon internally within the component. DOD stated  that it would complete these actions by October 31, 2019. The intent of  our recommendation is to ensure that DOD components determine the  cost-effectiveness of actions to address the root causes of improper travel  payments. DOD’s stated plan to require the reporting components to  perform a cost-benefit analysis will meet the intent of our  recommendation, provided that the department ensures that the  components are evaluating the cost-effectiveness of planned corrective  actions that address the root causes of improper travel payments.

We are sending copies of this report to the appropriate congressional  committees, the Secretary of Defense, the DOD Chief Management  Officer, the Under Secretary of Defense (Comptroller), the Secretary of  the Army, the Secretary of the Air Force, the Secretary of the Navy, the  Commandant of the Marine Corps, the Chairman of the Joint Chiefs of  Staff, the Director of the Defense Finance and Accounting Service, and  the Director of the Defense Travel Management Office. In addition, the  report is available at no charge on our website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-2775 or FieldE1@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix IV.

Appendix I: DOD Components Included in GAO’s Web-Based Survey

Defense Media Activity (DMA)  Missile Defense Agency (MDA)

Defense Advanced Research Projects Agency (DARPA)

Defense Commissary Agency (DECA)  Defense Contract Audit Agency (DCAA)  Defense Finance and Accounting Service (DFAS)

Defense Intelligence Agency (DIA)  Defense Logistics Agency (DLA)

Defense Technical Information Center (DTIC)

Defense Technology Security Administration (DTSA)

Department of Defense Education Activity (DODEA)

National Geospatial-Intelligence Agency (NGA)

Defense POW/MIA Accounting Agency (DPAA)

Court of Appeals for the Armed Forces (CAAF)

Uniformed Services University of Health Sciences (USU)

DOD Inspector General (DOD IG)  Defense Contract Management Agency (DCMA)

Defense Security Cooperation Agency (DSCA)

Defense Microelectronics Activity (DMEA)

Test Resource Management Center (TRMC)  Office of the Secretary of Defense (OSD)

Office of General Counsel (OGC)  Defense Human Resources Activity (DHRA)

Component Name  Washington Headquarters Service (WHS)

U.S. Indo-Pacific Command (INDOPACOM)  U.S. Special Operations Command (SOCOM)

Joint Interagency Task Force – West (JIATF-W)

North Atlantic Treaty Organization (NATO)

United Nations Command/US Forces Korea (USFK)

U.S. Military Entrance Processing Command (USMEPCOM)

Components represented on the Senior Accountable Official Committee (SAO committee) since  establishment of the committee. The SAO committee had a total of 13 member components, but DOD  officials told us that 3 components (the Office of the Under Secretary of Defense (Comptroller), the  Defense Finance and Accounting Service, and the Defense Travel Management Office) served in  support roles and were not held accountable for completing the Remediation Plan requirements.

Appendix II: Objectives, Scope, and Methodology

Our objectives were to examine (1) the amount the Department of  Defense (DOD) spent on Defense Travel System (DTS) travel payments  for fiscal years 2016 through 2018 and how much of those payments  DOD estimated to be improper; (2) the extent to which DOD implemented  its Remediation Plan; and (3) the extent to which DOD established  mechanisms to identify errors leading to improper travel payments, the  root causes of those errors, and the cost effectiveness of addressing root  causes.

To address our first objective, we collected DTS data on travel payments  for fiscal years 2016 through 2018, by DOD component and trip purpose,  from the Defense Travel Management Office (DTMO). We used this time  period because DOD issued its plan to remediate improper payments in  2016. We calculated the total payments for that time period, as well as  the average annual payments and subtotals for various categories—such  as the military services and the trip purposes—that represented the top  three highest percentages of payments. We discussed with DTMO  officials how the data were generated and what the data points  represented. We chose to focus on DTS because it is the primary system  for processing travel vouchers for DOD, and the vouchers it processes  account for the majority of DOD travel.

We also collected data from the Defense Finance and Accounting Service  (DFAS) on travel payments made in DTS that were identified as improper,  as well as data on the dollar amount of those improper payments that  were estimated to result in a monetary loss to the government. We  discussed with DFAS officials the methodology that they used to estimate  both the improper payment amounts and the portions of those amounts  that were estimated to be monetary losses to the government. To assess  the reliability of the data we obtained, we reviewed corroborating  documentation, analyzed the data for inconsistencies, and interviewed  service officials about the reliability of the data. We determined that the  data were sufficiently reliable for our reporting purposes, which were to  determine the amount of DOD’s DTS travel payments and to provide  insight into the estimated improper travel payment amounts that the  department reported for fiscal years 2016 through 2018. However, we  also determined that, based on persistent problems with DOD’s improper  payment estimates that we and the DOD Inspector General have reported  since 2013, these data were not sufficiently reliable for other purposes,  such as determining the specific progress DOD has made in reducing its  rates of improper travel payments.

To address our second objective, we reviewed documents and met with  officials to discuss DOD’s implementation of its Remediation Plan. We  also conducted a web-based survey of officials at DOD components. We  administered the survey from February 4 through March 29, 2019,  soliciting information on the extent to which components had  implemented the Remediation Plan, steps the components had taken to  address improper travel payments, the types of issues that frequently  lead to improper travel payments, and challenges associated with  reducing improper travel payments. We sent this survey to 52  components, 37 (71 percent) of whom responded. More specifically, 9 of  10 (90 percent) components represented on the Senior Accountable  Official (SAO) committee (SAO components) responded and 28 of 42  (67 percent) components not represented on the SAO committee (non- SAO components) responded. The survey results represent the views of  only those components that responded and may not be generalizable to all components. The results of our survey provide measures of  component officials’ views at the time they completed the survey in  February and March 2019. Please see appendix I for a list of the 52  components we contacted.

How familiar are you, in responding to this survey on behalf of the #COMPONENT,  with DOD’s Travel Pay Improper Payments Remediation Plan (dated October 1,  2016), if at all? (Response options provided: Checkboxes labeled “Very familiar,”  “Moderately familiar,” “Slightly familiar,” “Not at all familiar,” and “No opinion/no  response.”)

Has a lead entity in the #COMPONENT been designated for implementing DOD’s  Travel Pay Improper Payments Remediation Plan (dated October 1, 2016)  requirements? (Response options provided: Checkboxes labeled “Yes, an office has  been designated the lead for this effort,” “Yes, a person has been designated the lead for  this effort,” “No entity has been designated to lead implementation requirements,” and  “Don’t know”)

Has the #COMPONENT designated in writing a Senior Accountable Official (SAO)?  (An SAO is a Senior Executive Service member, general officer, or flag officer designated  by a component as responsible for reducing improper payments.) (Response options  provided: Checkboxes labeled “Yes,” “No, but my component is represented by an SAO in  another component or organization,” “No,” and “Don’t know.”)

Has the #COMPONENT completed this? (Response options provided:  Checkboxes labeled “Yes,” “No,” and “Don’t know.”)

If yes, what was the month the #COMPONENT completed the action?  (Response option provided: one text box.)

If yes, what was the year the #COMPONENT completed the action?  (Response option provided: one text box.)

Has the #COMPONENT completed any of the following actions?

Review Defense Finance and Accounting Service (DFAS) reports on improper travel  payments. (Response options provided: “Yes,” “No,” “Not applicable (do not receive  DFAS reports),” and “Don’t know.”)

Have representatives of the #COMPONENT attended the quarterly Senior  Accountable Official (SAO) meetings since they were first held in January 2017? An  SAO is a Senior Executive Service member, general officer, or flag officer designated by a  component as responsible for reducing improper payments. (Response options provided:  “Yes, a representative of our component attended all of the meetings,” “Yes, a  representative of our component attended some, but not all, of the meetings,” “No, a  representative of our component has never attended an SAO meeting,” and “Don’t know.”)

Has the #COMPONENT received a copy of the official minutes of the quarterly  Senior Accountable Official (SAO) meetings since they were first held in January  2017? (Response options provided: “Yes, our component received a copy of the minutes  for all of the meetings,” “Yes, our component received a copy of the minutes for some, but  not all, of the meetings,” “No, our component has not received a copy of the minutes for  any of the SAO meetings,” and “Don’t know.”)

Has the #COMPONENT taken steps to identify the root causes of voucher errors  that led to improper travel payments in fiscal year 2018? Note, for the purpose of this  question we define root causes as “the reasons personnel made errors preparing or  approving vouchers,” including but not limited to: travelers were insufficiently trained on  voucher preparation, approvers did not have sufficient time to review vouchers, and/or  Defense Travel System was not effectively designed to process vouchers. (Response  options provided: “Yes,” “No,” and “Don’t know.”)

What are some examples of root causes of voucher errors that the #COMPONENT  identified in fiscal year 2018? (Response option provided: one text box.)

Has the #COMPONENT taken steps to address any identified root causes of  voucher errors that led to improper travel payments in fiscal year 2018? (Response  options provided: “Yes,” “No,” and “Don’t know.”)

What steps have been taken by the #COMPONENT to address the root causes of  voucher errors that led to improper travel payments in fiscal year 2018? (Response  option provided: one text box.)

Because the majority of survey respondents did not provide open-ended  responses to each question, we did not conduct a formal content analysis  of the responses. We determined that the open-ended responses would  not be representative of all components that responded to our survey,  and we therefore present them only as illustrative examples. To analyze  open-ended comments provided by those responding to the survey, GAO  analysts read the comments, jointly developed categories for the  responses, and flagged relevant responses for inclusion in this report.

To address our third objective, we reviewed DOD’s Remediation Plan,  documents related to DOD’s implementation of the Remediation Plan,  such as the minutes of SAO committee meetings, and the June 2018  DOD Improper Payments Senior Accountable Officials Steering  Committee Charter. In addition, we met with DOD and component  officials to discuss efforts to identify and address root causes of improper  travel payments and conducted a web-based survey of travel  administrators in 52 DOD components (summarized above) to obtain  information on their efforts to identify and address the root causes of  improper travel payments. We compared the information we obtained with  OMB guidance on how agencies are to identify and address the root  causes of improper payments, as well as the definition of root cause  contained in the template DOD uses for corrective action plans intended  to address improper travel payments.

We conducted this performance audit from April 2018 to August 2019 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

Appendix III: Comments from the Department of Defense

Appendix IV: GAO Contact and Staff Acknowledgments

In addition to the contact named above, Matthew Ullengren (Assistant  Director), Vincent Buquicchio, Christopher Gezon, Foster Kerrison, Jill  Lacey, Joanne Landesman, Rob Letzler, Kelly Liptan, and Michael Silver  made key contributions to this report.

The Department of Defense reported that its Defense Travel System processed over $965 million in improper payments—payments that should not have been made or were made in an incorrect amount—to service members and civilian employees in fiscal years 2016 through 2018. The system is designed to reimburse individuals after official travel is completed.

DOD has a required plan to prevent and reduce improper travel payments. However, it could do a better job implementing and monitoring it.

We recommended DOD set milestones for and monitor plan implementation, and improve how it identifies root causes of improper travel payments, among other things.