United States Government Accountability Office

GAO Report to Congressional Committees

MILITARY 

PERSONNEL 

Actions Needed to 

Strengthen 

Management of 

Imminent Danger Pay 

and Combat Zone Tax 

Relief Benefits 

September 2006 

 

GAO-06-1011 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

September 2006

MILITARY PERSONNEL

Actions Needed to Strengthen 

Management of Imminent Danger Pay and 

Combat Zone Tax Relief Benefits 

Highlights of GAO-06-1011, a report to 

congressional committees 

www.gao.gov/cgi-bin/getrpt?GAO-06-1011.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Sharon Pickup 

at (202) 512-9619 or pickups@gao.gov. 

Servicemembers who are assigned, 

deployed, or travel on temporary 

duty to certain foreign areas are 

eligible for special pays and 

benefits including (1) imminent 

danger pay (IDP) when the 

Department of Defense (DOD) 

determines that members are 

subject to the threat of physical 

harm or imminent danger and 

(2) combat zone tax relief (CZTR)

benefits, which allow members to

exclude earned income from

federal taxes. If travel to IDP- or 

CZTR-designated areas begins 

during one month and concludes 

during another (known as crossmonth travel), members could 

receive 2 full months of benefits. 

GAO conducted this review under

the Comptroller General’s authority 

to initiate such reviews. GAO 

evaluated DOD’s (1) process for 

reviewing IDP areas and 

(2) internal controls over 

servicemembers’ temporary duty 

travel to areas designated for IDP

and CZTR benefits. GAO is also 

providing information on the

reporting of IDP and CZTR data. 

GAO analyzed legislation, 

guidance, travel vouchers, and

internal control standards and 

interviewed appropriate officials. 

What GAO Recommends

GAO recommends that DOD 

strengthen management of IDP and 

CZTR benefits, and added a matter 

for congressional consideration to 

improve reporting DOD generally

agreed with two recommendations

and disagreed with a third one to

monitor cross-month travel. 

DOD’s processes for reviewing existing IDP areas could be improved. While 

combatant commanders have taken the initiative periodically to make 

recommendations to designate or terminate IDP areas, DOD has not 

conducted annual reviews of existing IDP designations in accordance with 

its guidance to ensure that conditions in these areas continue to warrant 

such designation. Also, DOD has not updated its guidance to reflect current 

responsibilities for initiating annual reviews or to include factors used to 

determine when conditions in foreign areas pose the threat of physical harm 

or imminent danger to servicemembers on duty in these locations. DOD 

conducted 6 annual reviews between 1992 and 2006. When conducting 

reviews, DOD has queried combatant commanders using a set of factors to 

determine the nature of threats to servicemembers. However, DOD has not 

incorporated these factors into its guidance. By conducting annual reviews 

in accordance with its guidance, DOD could strengthen its oversight of IDP 

designations to ensure that conditions in designated areas continue to pose 

the threat of physical harm or imminent danger to servicemembers and that 

these areas should continue to be designated. 

Internal controls over servicemembers’ temporary duty travel to areas 

designated for IDP or CZTR benefits need to be strengthened. While two 

DOD components have instituted policies to regulate and monitor crossmonth travel to these areas, there is no similar departmentwide policy to 

ensure that travel to areas designated for IDP or CZTR benefits needs to 

cross calendar months. Data limitations prevented GAO from determining 

the full extent of temporary duty travel to areas designated for IDP and 

CZTR benefits, as well as how much of this travel crosses calendar months. 

The U.S. Central Command and U.S. Army, Europe—which collectively 

account for 62 percent of IDP areas and 86 percent of CZTR benefit areas—

have developed policies and controls to monitor and regulate cross-month 

travel to areas designated for IDP and CZTR benefits to preclude, in their 

view, the appearance of abuse of these benefits. By establishing internal 

controls such as a departmentwide policy and periodic audits to monitor 

cross-month travel, DOD could ensure all areas are covered and further 

strengthen its management of IDP and CZTR benefits. 

DOD tracks IDP costs and servicemembers’ compensation that qualifies for 

CZTR benefits. While DOD reports the cost of IDP to Congress as part of its 

budget request, the department does not report servicemembers’ 

compensation that qualifies for CZTR benefits. Combat zone tax relief 

benefits could allow servicemembers to exclude a significant portion of their 

income from federal taxes. Reporting data on CZTR benefits to Congress 

could provide information on the extent of this benefit and aid Congress in 

its oversight role. 
Contents 

Letter 1

Results in Brief 5 

Background 9

DOD’s Management of Its Imminent Danger Pay Program Could 

Benefit from Additional Oversight 13 

DOD Does Not Have a Departmentwide Policy to Monitor CrossMonth Travel to Areas Designated for Imminent Danger Pay or 

Combat Zone Tax Relief Benefits 19 

DOD Tracks Imminent Danger Pay and Combat Zone Tax Relief 

Benefits and Reports Some Data to Congress 27 

Conclusions 27

Recommendations for Executive Action 28 

Matter for Congressional Consideration 29 

Agency Comments and Our Evaluation 29 

Appendix I Areas Currently Designated for Imminent Danger 

Pay and Combat Zone Tax Relief Benefits 33 

Appendix II Presidentially Designated Combat Zones and 

Congressionally Legislated Qualified Hazardous 

Duty Areas 35 

Appendix III Military Service Certified as in Direct Support of 

Combat Zone Operations 38 

Appendix IV Scope and Methodology 39 

Appendix V Comments from the Department of Defense 44 

Appendix VI GAO Contact and Staff Acknowledgments 48 

Page i GAO-06-1011 Military Personnel
Tables 

Table 1: Summary of Imminent Danger Pay and Combat Zone Tax 

Relief Benefits 11 

Table 2: Number and Duration of Cross-Month Trips Eligible for 1 

or 2 Months of Imminent Danger Pay or Combat Zone Tax 

Relief Benefits, October 1, 2002, to September 30, 2005 23 

Table 3: Duration of Cross-Month Trips Eligible for 1 or 2 Months 

of Imminent Danger Pay or Combat Zone Tax Relief 

Benefits by Combatant Command, October 1, 2002, to

September 30, 2005 24 

Table 4: Duration of Cross-Month Travel to Areas Not Designated 

for Imminent Danger Pay or Combat Zone Tax Relief 

Benefits, October 1, 2002, to September 30, 2005 25 

Table 5: Port Visits to Areas within the U.S. European Command 

That Are Designated for Imminent Danger Pay or Combat 

Zone Tax Relief Benefits 26 

Table 6: Summary of Areas Designated for Imminent Danger Pay 

and Combat Zone Tax Relief Benefits 33 

Table 7: Combat Zones as of July 2006 36 

Table 8: Qualified Hazardous Duty Areas as of July 2006 37 

Table 9: Areas Certified by DOD Where Military Service Is in Direct 

Support of Combat Zone Operations as of July 2006 38 

Figure 

Figure 1: Terrorist Threat Levels and Associated Number of 

Designated Imminent Danger Pay Areas as of July 2006 18 

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Page ii GAO-06-1011 Military Personnel
United States Government Accountability Office

Washington, DC 20548 

 

September 28, 2006 

Congressional Committees 

In recognition of the dangers military servicemembers face and the 

sacrifices they make on behalf of the United States, Congress has 

established several special pays and benefits. In particular, 

servicemembers who are assigned, deployed, or travel on temporary duty 

to certain foreign areas are eligible for certain special pays and benefits. 

These include (1) imminent danger pay for servicemembers on duty in 

foreign areas designated by the Secretary of Defense in which a 

servicemember is subject to the threat of physical harm or imminent 

danger on the basis of civil insurrection, civil war, terrorism, or wartime 

conditions1

 and (2) combat zone tax relief benefits that permit 

servicemembers to exclude all or a portion of their compensation from 

federal taxes while serving in specific areas designated by the President 

through Executive Order, known as combat zones, or in areas designated 

by Congress, known as qualified hazardous duty areas (see app. I and II).2

 

Servicemembers may also qualify to receive combat zone tax relief 

benefits when they are performing military duty outside of a combat zone 

or in a congressionally established qualified hazardous duty area if 

(1) duty in this area is in direct support of military operations in a combat

zone or qualified hazardous duty area and (2) the duty qualifies a 

servicemember for hostile fire or imminent danger pay based on the risks 

 1

 See 37 U.S.C. 310; Department of Defense Instruction 1340.9, Special Pay for Duty 

Subject to Hostile Fire or Imminent Danger Pay (Apr. 10, 1992), and the Financial 

Management Regulation, Volume 7A, Chapter 10 (Feb. 2006). Servicemembers who have 

been (1) subject to hostile fire or explosion of a hostile mine; (2) on duty in an area in close

proximity to a hostile fire incident and the servicemembers are in danger of being exposed 

to the same dangers; or (3) injured, wounded, or killed by hostile fire, mines, or any kind of

hostile action, receive hostile fire pay instead of imminent danger pay. Commanders at the 

lowest level of command certify that the member has met the requirements for entitlement 

to hostile fire pay within a given month, except when the member is under orders on

official duty in one of the IDP-designated areas listed in appendix I. 

2

 In this report, we used the term combat zone tax relief benefits to describe tax exclusions

provided to servicemembers under 26 U.S.C. §112. However, there are other kinds of tax 

benefits for servicemembers serving in combat zones or qualified hazardous duty areas that 

are not addressed in this report, such as extensions for filing income tax returns and 

exemptions from telephone excise taxes. Servicemembers may have other tax deductions

and exclusions that reduce their taxable income. 

Page 1 GAO-06-1011 Military Personnel
and dangers related to the combat zone.3

 If a servicemember travels to an

area designated for imminent danger pay or combat zone tax relief 

benefits, and the travel begins during one month and concludes during 

another month (known as cross-month travel), the servicemember 

receives 2 full months of the special pay and benefit.4

 Combat zone tax 

relief benefits can provide significant financial benefits, especially if a 

servicemember qualifies for this benefit on more than one occasion during 

a calendar year. 

The Department of Defense (DOD) is responsible for designating 

imminent danger pay areas and certifying locations where military service 

is in direct support of combat zone operations. Over the past few decades, 

DOD has designated an increasing number of areas for imminent danger 

pay. Since imminent danger pay was first authorized on October 1, 1983,

the number of areas designated for this pay has increased from a few to 54 

areas due primarily to the global security environment, according to DOD.5

DOD has stated that a goal is to limit imminent danger pay to only those 

servicemembers who face the threat of physical harm or imminent 

danger,6

 and DOD’s guidance requires at least annual reviews of 

designated areas to determine whether conditions warrant the continued 

designation. In addition, since September 2001, DOD has certified military 

service in several countries as directly supporting combat operations in 

Afghanistan and Iraq. Currently, these locations include Djibouti, Jordan, 

Pakistan, the Philippines, and Yemen, among others (see app. III). 

We have previously reported that clear policies, procedures, criteria, and 

management oversight are needed to help agencies use resources 

effectively and efficiently to meet organizational and program objectives.

7

 3

 26 CFR §1.1121-1(e) and DOD Financial Management Regulation 7A, Chapter 44, 

§440103(c)(6). 

4

 Servicemembers receive imminent danger pay and combat zone tax relief benefits for an

entire month regardless of the amount of time spent in a designated area. These benefits

are not prorated. See 37 U.S.C. §310 and 26 U.S.C. §112. 

5

 Department of Defense Authorization Act, 1984, Pub. L. No. 98-94 §905 (1983). 

6

 Under Secretary of Defense (Personnel and Readiness) Memorandum for Director, Joint

Staff, Annual Review of Designation of Foreign Locations as Imminent Danger Areas for 

Imminent Danger Pay (IDP) Purposes (Jan. 30, 2006). 

7

 GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999), and Internal Control Management and Evaluation 

Tool, GAO-01-1008G (Washington, D.C.: August 2001). 

Page 2 GAO-06-1011 Military Personnel
We also previously reported that the federal government’s total costs to 

provide military compensation are substantial and rising and that the 

nation’s growing fiscal concerns will require DOD and the federal 

government to consider difficult trade-offs in the years ahead.8

 According 

to DOD, since the beginning of the Global War on Terrorism, military basic 

pay has increased approximately 25 percent. DOD has reported paying 

more than $2 billion in hostile fire and imminent danger pay to

servicemembers assigned, deployed, or traveling on temporary duty.9

Furthermore, the Defense Finance and Accounting Service calculated that 

between tax years 2003 and 2005, active duty servicemembers collectively 

qualified to exclude more than $26 billion of their compensation as a result

of performing duty that qualified for combat zone tax relief benefits. This 

amount includes servicemembers who performed duty in areas that DOD 

has designated as in direct support of military operations in combat zones. 

Because of broad congressional interest in military pay and compensation, 

we prepared this report under the authority of the Comptroller General to

conduct evaluations at his own initiative.10 Our objectives were to evaluate 

DOD’s (1) process for reviewing imminent danger pay area designations

and (2) internal controls over servicemembers’ temporary duty travel to

areas designated for imminent danger pay and combat zone tax relief 

benefits. We are also providing information on DOD’s tracking and 

reporting of imminent danger pay and combat zone tax relief benefits to 

Congress. We are addressing this report to you because of your 

jurisdiction over the issues discussed in this report. 

To evaluate DOD’s process for reviewing imminent danger pay area 

designations, to understand how servicemembers become eligible for 

combat zone tax relief benefits, and to understand how DOD reports data 

associated with this pay and benefit, we analyzed legislation, regulations, 

and DOD guidance. We compared this guidance to the objectives and 

 8

 GAO, Military Personnel: DOD Needs to Improve the Transparency and Reassess the 

Reasonableness, Appropriateness, Affordability, and Sustainability of Its Military

Compensation System, GAO-05-798 (Washington: D.C., July 19, 2005), and Global War on 

Terrorism: Observations on Funding, Costs, and Future Commitments, GAO-06-885T 

(Washington, D.C.: July 18, 2006). 

9 We have previously reported on the lack of reliability in DOD’s reported costs related to 

the Global War on Terrorism, including military pay. See GAO, Global War On Terrorism:

DOD Needs to Improve the Reliability of Cost Data and Provide Additional Guidance to 

Control Costs, GAO-05-882 (Washington, D.C.: Sept. 21, 2005) and GAO-06-885T. 

10 31 U.S.C. §717(b)(1)(2000). 

Page 3 GAO-06-1011 Military Personnel
fundamental concepts of internal control defined in Standards for 

Internal Control in the Federal Government.

11 We also held discussions 

with knowledgeable officials from the Office of the Under Secretary of 

Defense (Personnel and Readiness), the Joint Chiefs of Staff, each of the 

services, and the geographic combatant commands.12 We also reviewed 

questionnaires completed by commanders at unified combatant 

commands with geographic responsibility and used by the Office of the 

Under Secretary of Defense (Personnel and Readiness) to evaluate area 

designations and the threat of imminent danger. To understand the extent 

to which DOD has internal controls in place to monitor servicemembers’ 

temporary duty travel to foreign areas designated for imminent danger pay 

or combat zone tax relief benefits, we reviewed DOD’s Foreign Clearance 

Guide that establishes DOD policy for military personnel traveling 

overseas as well as combatant commands’ travel policies. We discussed 

these with officials responsible for approving travel in accordance with 

the Foreign Clearance Guide. We also obtained and analyzed 28,404 travel

vouchers processed by individual servicemembers using the Defense 

Travel System, from October 1, 2002, through September 30, 2005. To

assess the reliability of these data, we interviewed knowledgeable 

officials, reviewed relevant documentation, and conducted electronic 

testing. We found these data to be sufficiently reliable for the purposes of 

our work. However, data limitations prevented us from determining the 

full extent of temporary duty travel to areas designated for imminent 

danger pay or combat zone tax relief benefits, the total number of trips 

taken by individual servicemembers during fiscal years 2003 through 2005,

or how much of this travel crossed calendar months. Furthermore, we 

were unable to extrapolate travel patterns from the Defense Travel System 

to DOD travel as a whole. Under DOD’s Financial Management 

Regulations, authorizing officials are responsible for determining the 

necessity of trips and funds availability for temporary duty travel.13

Further, DOD guidance states that DOD airlift authorizing officials shall 

 11 GAO/AIMD-00-21.3.1. 

12 The Unified Combatant Commands with geographic responsibility are composed of 

forces from two or more services and have broad and continuing missions for specific 

geographic areas. The commands organized on a geographical basis include (1) the U.S.

Central Command, (2) the European Command, (3) the U.S. Northern Command, (4) the

U.S. Pacific Command, and (5) the U.S. Southern Command. None of the U.S. Northern

Command’s geographic area of responsibility is eligible for imminent danger pay or combat

zone tax relief. 

13 DOD Financial Management Regulation 7000.14-R, Volume 9, Chapter 2, Section 

020401(C) (April 2006). (Hereinafter cited as DODFMR, Vol. 9, Ch. 2, Section 020401(C) 

(April 2006)). 

Page 4 GAO-06-1011 Military Personnel
ensure that an official purpose is served by air travel.14 Therefore, we did 

not evaluate whether the purpose of the trips were valid, but we did note 

that the U.S. Central Command and U.S. Army, Europe, have developed 

policies and controls to preclude, in their view, the appearance of abuse of

imminent danger pay and combat zone tax relief benefits. We conducted

our review from October 2005 through July 2006 in accordance with 

generally accepted government auditing standards. See appendix IV for 

more information about our scope and methodology. 

DOD’s processes for reviewing existing imminent danger pay areas can be 

improved. While combatant commanders have taken the initiative 

periodically to make recommendations to designate or terminate imminent 

danger pay areas, DOD has not conducted annual reviews of existing 

imminent danger pay areas in accordance with its guidance to ensure that 

conditions in these areas continue to warrant such designation. Also, DOD 

has not updated its guidance to reflect current responsibilities for 

initiating and managing annual reviews or to include factors used to 

determine when conditions in foreign areas pose the threat of physical 

harm or imminent danger to servicemembers on duty in these locations. 

According to the Standards for Internal Control in the Federal 

Government,

15 clear policies, procedures, and criteria are needed to help 

agencies use resources effectively and efficiently to meet organizational 

and program objectives. The Standards also emphasize the importance of 

management oversight and review to ensure that programs continue to 

meet their intended goals and comply with law and policies. DOD’s 

imminent danger pay guidance requires the unified combatant

commanders to continuously appraise conditions within designated areas

to ensure that these areas continue to present the threat of physical harm

or imminent danger from civil insurrection, civil war, terrorism, or 

wartime conditions, and to submit their recommendations to continue or 

terminate area designations, at least annually, to the Chairman, Joint 

Chiefs of Staff, for review. At any time, unified combatant commanders 

may recommend that additional areas be designated for imminent danger 

pay or that existing area designations be terminated. The Chairman, in 

turn, evaluates designation recommendations and, if the Chairman 

Results in Brief 

 14 DOD Directive 4500.56, DOD Policy on the Use of Government Aircraft and Air Travel, Enclosure 2, Section E.2.1.2 (April 1999). (Hereinafter cited as DODD 4500.56, Section 

E.2.1.2 (Apr. 1999)). 

15 GAO/AIMD-00-21.3.1. 

Page 5 GAO-06-1011 Military Personnel
recommends them for approval, forwards the unified combatant 

commander’s recommendations to the Under Secretary of Defense 

(Personnel and Readiness).16 In practice, however, officials in the Office of 

the Under Secretary of Defense (Personnel and Readiness) have assumed 

responsibility for initiating and directly managing these reviews. However, 

the combatant commanders have not forwarded their recommendations to 

the Chairman, Joint Chiefs of Staff, on existing designations at least 

annually, and the Under Secretary of Defense (Personnel and Readiness) 

has not requested the combatant commanders to do so. Rather, the Office 

of the Under Secretary of Defense (Personnel and Readiness) requested 

the combatant commanders to conduct these reviews six times between 

1992 and 2006, and the 2006 review is ongoing. In the absence of annual 

reviews, unified combatant commanders continued to recommend the 

designation of additional areas for imminent danger pay as well as the 

termination of some designated areas during that time period and the 

overall number of designated areas increased from 34 to 54. According to

DOD, the overall number of designated areas increased during that time 

due to the changing global security environment and the increase in the

number of areas where servicemembers face imminent danger, including

areas supporting Operation Enduring Freedom and Operation Iraqi 

Freedom. When DOD has conducted reviews of areas designated for 

imminent danger pay, it has queried combatant commanders using a set of

factors to determine the nature of threats to servicemembers arising from 

civil war, civil insurrection, terrorism, or wartime conditions within 

designated imminent danger pay areas. However, the department has not 

incorporated these factors into its imminent danger pay guidance. In

addition, DOD has not updated its imminent danger pay guidance since 

1992 to reflect that the Office of the Under Secretary of Defense 

(Personnel and Readiness) has assumed responsibility for initiating 

reviews of imminent danger pay area designations. By conducting annual 

reviews in accordance with its guidance, DOD could strengthen its 

oversight of imminent danger pay designations to ensure that conditions in

designated areas continue to pose the threat of physical harm or imminent 

danger to servicemembers and that these areas should continue to be 

 16 DODI 1340.9 refers to the Assistant Secretary of Defense (Force Management and 

Personnel) rather than the Under Secretary of Defense (Personnel and Readiness). The

Secretary of Defense established the position of the Under Secretary of Defense (Personnel 

and Readiness) in 1994. At this time, the functions, relationships, and authorities assigned 

to the Assistant Secretary of Defense (Force Management and Personnel) were assigned to

the Under Secretary of Defense (Personnel and Readiness). DOD Directive 5124.2, Under 

Secretary of Defense for Personnel and Readiness (P&R), (Oct. 31, 1994). 

Page 6 GAO-06-1011 Military Personnel
designated. Furthermore, updating DOD’s guidance to include the current 

processes and factors used for reviewing and designating imminent danger 

pay areas would clarify responsibilities and establish standard criteria for 

use in meeting the program’s objectives. 

Internal controls over servicemembers’ temporary duty travel to areas 

designated for imminent danger pay or combat zone tax relief benefits 

need to be strengthened. While two DOD components have instituted 

policies to regulate and monitor cross-month travel to these areas, there is 

no similar departmentwide policy to ensure that travel to areas designated

for imminent danger pay or combat zone tax relief benefits need to cross 

calendar months. Data limitations prevented us from determining the full 

extent of temporary duty travel to areas designated for imminent danger 

pay and combat zone tax relief benefits, as well as how much of this travel

crossed calendar months. The U.S. Central Command and U.S. Army, 

Europe—which collectively account for 62 percent of imminent danger 

pay areas and 86 percent of areas designated for combat zone tax relief 

designation—have developed policies and controls to monitor and 

regulate cross-month travel to areas designated for imminent danger pay 

and combat zone tax relief benefits to preclude, in their view, the 

appearance of abuse of these benefits. It is DOD’s policy to minimize the 

number of visits and visitors to overseas areas as well as demands on 

equipment, facilities, time, installation services, and personnel visited. In 

addition, DOD’s temporary duty travel policy and its Foreign Clearance 

Guide,

17 which implements this policy, provide mechanisms for the 

combatant commands to regulate travel to foreign locations. Before any 

DOD servicemember makes an official visit to a foreign country, including 

areas where servicemembers qualify for imminent danger pay or combat 

zone tax relief, the visit must be reviewed and approved by both the U.S. 

embassy in the host country (country clearance) as well as by the 

sponsoring unified commander (theater clearance). DOD’s Foreign 

Clearance Guide permits a unified combatant command to grant theater 

clearance or to delegate this authority to component commands, 

subordinate commands, special agencies, or units to be visited. The 

Standards for Internal Control in the Federal Government18 recommend 

that agencies establish internal controls to monitor and review operations 

and programs to ensure that they meet their goals. Moreover, we consider 

 17 DOD Directive Number 4500.54, Official Temporary Duty Travel Abroad, 

November 21, 2003 and DOD Directive 4500.54-G, Foreign Clearance Guide, June 6, 2006. 

18 GAO/AIMD-00-21.3.1.

Page 7 GAO-06-1011 Military Personnel
establishing such controls, including policies and oversight mechanisms, a 

best practice that can help ensure appropriate application of benefits such 

as imminent danger pay and combat zone tax relief benefits. Two 

components, the Central Command and the U.S. Army, Europe, have 

developed their own policies and internal controls to regulate and monitor 

cross-month travel to preclude, in their view, the perceived abuse of 

imminent danger pay and combat zone tax relief benefits. To enforce its 

policy, the U.S Central Command has established an electronic database 

with internal controls that automatically alert officials to any proposed 

temporary duty travel that crosses calendar months. The U.S. Army, 

Europe, requires that all cross-month travel be approved by at least a 

colonel and its Internal Review and Audit Compliance Office periodically 

reviews travel to specific areas to monitor whether cross-month travel 

occurs. However, DOD’s departmentwide policies do not establish internal 

controls to monitor or regulate cross-month travel, including to foreign 

areas designated for certain special pays and benefits, such as imminent 

danger pay and combat zone tax relief, and, with the exception of U.S. 

Army, Europe, DOD does not conduct periodic audits of cross-month 

travel to determine whether servicemembers are scheduling travel in a 

fiscally responsible manner or attempting to maximize this pay and benefit 

through cross-month travel. Our analysis of 28,404 vouchers for 

temporary duty travel that were processed using the Defense Travel 

System between October 1, 2002, and September 30, 2005, found that 

cross-month travel does occur in 3 percent of the vouchers, thereby 

qualifying the servicemember for 2 full months of imminent danger pay 

and combat zone tax relief. We also obtained data from the U.S. Naval 

Forces, Europe, for 56 ship port visits between fiscal years 2003 and 2005 

to areas designated for imminent danger pay or combat zone tax relief

benefits within the European Command’s area of responsibility. By 

establishing internal controls such as a departmentwide policy and 

periodic audits to monitor cross-month travel, DOD could ensure all areas 

are covered and further strengthen its management of imminent danger 

pay and combat zone tax relief benefits. 

DOD tracks the cost of imminent danger pay and servicemembers’ 

compensation that qualifies for combat zone tax relief benefits. While 

DOD reports the cost of imminent danger pay to Congress as part of its 

budget request, the department does not report servicemembers’ 

compensation that qualifies for combat zone tax relief benefits. Combat 

zone tax relief benefits could allow servicemembers to exclude a 

significant portion of their compensation from federal taxes. For example, 

enlisted personnel and warrant officers may exclude all military 

compensation earned during one month. In 2006, the maximum amount of 

Page 8 GAO-06-1011 Military Personnel
compensation for commissioned officers that is eligible for combat tax 

zone relief is $6,724.50 per month. The reporting of combat zone tax relief 

benefit data to Congress could provide information on the extent of this 

benefit and aid Congress in its oversight role. 

We are making recommendations to strengthen DOD’s internal controls 

and management of imminent danger pay and combat zone tax relief 

benefits, including monitoring travel to areas designated for these benefits, 

as well as to assist Congress in its oversight role. In commenting on a draft

of this report, DOD generally agreed with two of our recommendations 

and disagreed with a third recommendation to monitor cross-month travel. 

DOD believes that it has sufficient travel procedures and reviews over 

cross-month travel. Our work indicates otherwise, and, thus, we continue

to believe that our recommendation has merit. DOD’s comments and our 

evaluation of them can be found at the end of this report. DOD’s 

comments are reprinted in appendix V. In addition, because of the 

substantial tax benefits that servicemembers receive when performing 

duty in combat zones, we have added a matter for congressional 

consideration. Congress should consider requiring DOD to periodically 

report the amount of servicemembers’ total compensation that qualifies 

for combat zone tax relief benefits. 

Congress has given the president the authority to issue executive orders 

designating and terminating areas as combat zones. Since 1950, U.S. 

presidents have designated combat zones in Korea, Vietnam, the Persian 

Gulf area, the Kosovo area, and Afghanistan. U.S. presidents terminated 

combat zone designations for Korea in 1955 and Vietnam in 199619. See 

appendix II for information on the current combat zones. In addition, 

Congress has established qualified hazardous duty areas where 

servicemembers serving in such areas receive the same tax treatment as 

members serving in presidentially designated combat zones.20 Congress 

has specified in this legislation, however, that a servicemember on duty in

a qualified hazardous duty area is only entitled to combat zone tax relief

Background 

 19 See appendix II, table 7 for a list of the regions that constitute the Persian Gulf Area and 

the Kosovo area. 

20 In addition, Congress has also stated that it was the sense of Congress that

servicemembers receiving hostile fire pay or imminent danger pay should receive the same 

treatment under federal income tax laws as servicemembers serving in combat zones. See

Pub. L. No. 106-65, §677 (1999) and Pub. L. No. 106-398, §1089 (2000). 

Page 9 GAO-06-1011 Military Personnel
benefits if that member would also be entitled to hostile fire or imminent 

danger pay. Congress has designated seven qualified hazardous duty areas 

since 1995 (see app. II). 

DOD is responsible for prescribing regulations for imminent danger pay 

and for certifying locations where military service is in direct support of 

combat zone operations. Servicemembers who perform duty in certain

foreign areas may be eligible for imminent danger pay as well as income 

tax relief, in the form of combat zone tax relief benefits, as summarized in 

table 1.21 See appendixes I, II, and III for information about the locations 

designated for imminent danger pay or combat zone tax relief benefits. 

 21 Under Section 5928 of Title 5, U.S. Code and Department of State regulations, federal 

civilian employees serving in foreign areas may be eligible for a danger pay allowance 

when the Secretary of State determines that civil war, civil insurrection, terrorism, or

wartime conditions threaten physical harm or imminent danger to the health or well-being 

of a majority of employees officially stationed or detailed to a post in foreign area. To 

qualify for the danger pay allowance, which is paid for those hours for which employees

receive basic compensation and ranges from 15 to 35 percent of base salary each month 

depending on the level of danger specified for a given area and the presence of 

nonessential personnel and dependents at the post, a federal civilian employee must be

assigned or on detail to a post for at least 4 cumulative hours in 1 day during a given month.

Alternatively, federal civilian employees who accompany U.S. military forces designated by 

the Secretary of Defense as eligible for imminent danger pay receive $225 a month when 

authorized by the Secretary of State. Federal civilian employees may not receive both 

imminent danger pay and danger pay during the same month. Federal civilian employees 

are not eligible for combat zone tax relief benefits. 

Page 10 GAO-06-1011 Military Personnel
Table 1: Summary of Imminent Danger Pay and Combat Zone Tax Relief Benefits 

Benefit Description Dollar amount Authority

Imminent danger pay Compensates a servicemember on duty in foreign areas 

designated by the Secretary of Defense where the 

servicemember is subject to the threat of physical harm or 

imminent danger on the basis of (1) civil insurrection, (2) civil 

war, (3) terrorism, or (4) wartime conditions. Within a 

designated area, DOD may limit imminent danger pay to 

servicemembers who perform duty in an area’s airspace, land, 

or waters, or designate the entire area depending on the threat.

The Secretary of Defense has delegated responsibility for 

designating areas to the Under Secretary of Defense 

(Personnel and Readiness). 

$225/month 

Members receive the 

entire $225 if they serve 

at least part of 1 day in a 

designated zone during 

the month. 

37 U.S.C. 

§310(a)(2)(D) 

DOD Instruction 

1340.9 

Combat zone tax 

relief 

Servicemembers may qualify for combat zone tax relief when

serving in (1) presidentially designated combat zones, 

(2) congressionally legislated qualified hazardous duty areas, 

or (3) areas where the Secretary of Defense has certified 

military service as directly supporting military operations in

combat zones or qualified hazardous duty areas. 

Combat zones A combat zone is any area that the president designates by

executive order as an area in which U.S. Armed Forces are or 

have engaged in combat after June 24, 1950. An area ceases 

to be a combat zone on the dates the president designates by 

executive order. 

Qualified hazardous 

duty areas 

Congress designates qualified hazardous duty areas by 

legislation. Servicemembers on duty in these areas are entitled 

to the same benefits afforded service in a presidentially 

designated combat zone if the Secretary of Defense also 

designates the qualified hazardous duty area for hostile fire or 

imminent danger pay. a

 

26 U.S.C. §112 

Pub. L. No. 104-

117 (1996) 

Pub. L. No. 106-21 

(1999) 

In direct support of 

combat zone 

operations 

The Secretary of Defense has delegated responsibility for 

certifying that areas meet eligibility criteria to the Under 

Secretary of Defense (Personnel and Readiness). Certification 

requires that 

• service is in direct support of military operations in combat 

zones, 

• service qualifies the servicemember for hostile fire payor 

imminent danger pay, and 

• hostile fire pay or imminent danger pay is related to activities

and circumstances in the combat zone or qualified 

hazardous duty area. 

Enlisted personnel and 

warrant officers may 

exclude all military 

compensation earned 

during that month. For 

commissioned officers, 

compensation is free of

federal income tax up to 

the maximum amount of 

enlisted pay plus any 

imminent danger or 

hostile fire pay received. 

In 2006, the maximum 

amount of compensation 

for commissioned officers 

that is eligible for combat 

tax zone relief is

$6,499.50 plus $225 

imminent danger pay, or 

$6,724.50 per month. 

26 C.F.R. §1.112-1 

IRS Revenue 

Ruling 70-671

(1970) 

DOD FMR 

44103(c) 

Source: GAO presentation of DOD Financial Management Regulation and 37 U.S.C. §310, 26 U.S.C. §112, 26 C.F.R. §112-1, Internal

Revenue Service Revenue Ruling 70-671 (1970), Pub. L. No. 104-117 (1996), Pub. L. No. 106-21 (1999) and DOD Financial

Management Regulation 44103(c).

a

Servicemembers who have been (1) subject to hostile fire or explosion of a hostile mine; (2) on duty 

in an area in close proximity to a hostile fire incident and the servicemembers are in danger of being 

exposed to the same dangers; or (3) injured, wounded, or killed by hostile fire, mines, or any kind of 

hostile action, receive hostile fire pay as opposed to imminent danger pay, at a rate of $225 per 

month. Servicemembers receive the entire $225 if they serve at least part of 1 day on a designated

zone during the month. 37 U.S.C. §310. 

Page 11 GAO-06-1011 Military Personnel
The Under Secretary of Defense (Comptroller) in coordination with the 

director of the Defense Finance and Accounting Service is responsible for 

maintaining and updating the Financial Management Regulation, Volume 

7A, that provides financial management policy and procedures for DOD, 

including imminent danger pay and combat zone tax relief benefits. In 

DOD’s imminent danger pay guidance, the Under Secretary of Defense 

(Personnel and Readiness) requires unified combatant commanders to 

continually appraise the conditions within areas designated for imminent 

danger pay to ensure that the designation is warranted, and to forward 

written recommendations, at least annually, to the Chairman, Joint Chiefs 

of Staff, who evaluates these designations to determine whether 

conditions in these areas continue to present the threat of physical harm

or imminent danger from civil war, civil insurrection, terrorism, or 

wartime conditions. The Chairman forwards area designations that he 

recommends for approval to the Under Secretary of Defense (Personnel 

and Readiness) with support for these recommendations. 

The Secretary of Defense has delegated the responsibility for designating 

imminent danger pay areas and certifying military service as in direct 

support of combat zone operations to the Under Secretary of Defense 

(Personnel and Readiness) who is responsible for DOD personnel policy, 

including oversight of military compensation, and as such, serves as the 

focal point for imminent danger pay. DOD’s imminent danger pay guidance 

requires the unified combatant commanders to continuously appraise 

conditions within designated areas to ensure that these areas continue to

present the threat of physical harm or imminent danger from civil 

insurrection, civil war, terrorism, or wartime conditions, and to submit 

their recommendations to continue or terminate area designations, at least 

annually, to the Chairman, Joint Chiefs of Staff, for review. At any time, 

unified combatant commanders may recommend that additional areas be

designated for imminent danger pay or that existing area designations be 

terminated. The Chairman, in turn, evaluates designation 

recommendations and, if the Chairman recommends them for approval, 

forwards the unified combatant commander’s recommendations to the 

Under Secretary of Defense (Personnel and Readiness). In practice, 

however, officials in the Office of the Under Secretary of Defense 

(Personnel and Readiness) have assumed responsibility for initiating and

directly managing these reviews. 

Page 12 GAO-06-1011 Military Personnel
DOD’s processes for reviewing existing imminent danger pay areas and 

combat zones can be improved. While combatant commanders have taken

the initiative periodically to make recommendations to designate or 

terminate imminent danger pay areas, DOD has not conducted annual 

reviews of existing imminent danger pay areas in accordance with its 

guidance to ensure that conditions in these areas continue to warrant such 

designations. Also, DOD has not updated its guidance to reflect that the 

Office of the Under Secretary of Defense (Personnel and Readiness) has 

assumed responsibility for initiating and managing annual reviews. In 

addition, DOD also has not incorporated factors contained in 

questionnaires completed by combatant commanders that the Office of the 

Under Secretary of Defense (Personnel and Readiness) uses to evaluate 

when conditions in foreign areas pose the threat of physical harm or 

imminent danger to servicemembers performing duty in designated 

locations. By conducting annual reviews of existing designations in 

accordance with its guidance, DOD could strengthen its oversight of 

imminent danger pay designations to ensure that conditions in designated

areas continue to pose the threat of physical harm or imminent danger to 

servicemembers and that these areas should continue to be designated. 

Furthermore, updating DOD’s guidance to include the current processes 

and factors used for reviewing and designating imminent danger pay areas 

would clarify responsibilities and establish standard criteria for use in 

meeting the program’s objectives. 

Imminent danger pay was first authorized in October 1983.22 Between 

1992—when DOD revised its guidance to require annual reviews, as 

opposed to semiannual reviews, of imminent danger pay area 

designations—and 2006, the number of designated areas increased from 34 

to 54 areas. (See appendix I for a list of areas currently designated for 

imminent danger pay). 

DOD’s Management of 

Its Imminent Danger 

Pay Program Could 

Benefit from 

Additional Oversight 

DOD Has Not Conducted 

Annual Reviews of 

Imminent Danger Pay 

Designations in 

Accordance with Its 

Guidance 

While DOD guidance requires the combatant commanders to continuously 

appraise conditions in designated areas and to forward recommendations 

to the Chairman, Joint Chiefs of Staff, to continue or terminate these 

designations at least annually, in practice, the Office of the Under 

Secretary of Defense has assumed responsibility for initiating and 

managing these reviews. The combatant commanders have not forwarded 

their recommendations on existing designations to the Chairman, Joint 

 22 Pub. L. No. 98-94 §905 (1983). 

Page 13 GAO-06-1011 Military Personnel
Chiefs of Staff, at least annually, nor has the Under Secretary of Defense 

(Personnel and Readiness) requested the combatant commanders to do so. 

Between 1992 and 2006, the Under Secretary of Defense (Personnel and 

Readiness) requested the unified combatant commanders to conduct six 

reviews of designated imminent danger pay areas. Reviews were 

conducted in 1992, 1993, 1995, 1997, and 2002; the 2006 review is ongoing, 

and officials in the Office of the Under Secretary of Defense (Personnel 

and Readiness) expect to complete it by October. In the absence of annual 

reviews, the combatant commanders have taken the initiative to 

periodically recommend the designation or termination of imminent 

danger pay areas. 

According to DOD officials, the Under Secretary of Defense (Personnel 

and Readiness) deferred several reviews because of anticipated policy 

revisions and concerns about creating additional work for combatant 

commanders while they are engaged in ongoing operations. For instance, 

DOD deferred the 1998 review pending the anticipated revision of its 

imminent danger pay guidance to incorporate criteria for determining 

whether conditions in designated areas continue to pose the threat of 

physical harm or imminent danger from civil war, civil insurrection, 

terrorism, or wartime conditions to servicemembers. However, this 

revision did not occur. The department initiated the ongoing 2006 review 

shortly after we began our review. According to officials from the Office of 

the Under Secretary of Defense (Personnel and Readiness), the 

department deferred reviews between 2002 and 2006 because it did not 

want to create additional work for combatant commanders during ongoing

operations, and department officials also believe that conditions in most 

designated areas had not changed sufficiently since the terrorist attacks of

September 11, 2001, and the start of the Global War on Terrorism to result

in termination of designated areas. Although DOD guidance calls for the 

combatant commanders to forward recommendations to continue or to 

terminate imminent danger pay areas at least annually, this has occurred 

at longer intervals ranging from 2 to 5 years. 

As a result of combatant commander’s recommendations as well as annual

reviews of imminent danger pay areas conducted by the combatant 

commanders at the request of the Under Secretary of Defense (Personnel 

and Readiness), the department has terminated area designations where 

conditions no longer pose the threat of physical harm or imminent danger 

from civil war, civil insurrection, terrorism, or wartime conditions. For 

instance, as a result of the 1993 review, DOD terminated imminent danger 

pay designation for areas including Oman, the United Arab Emirates, 

Bahrain, Qatar, and the Gulfs of Oman and Aden as well as the Arabian 

Page 14 GAO-06-1011 Military Personnel
Sea because the department determined that conditions no longer posed 

the threat of physical harm or imminent danger toward servicemembers. 

The department has also denied requests from unified combatant 

commanders to designate new areas for imminent danger pay when there 

is not sufficient information to demonstrate that conditions pose a threat 

of physical harm or imminent danger to servicemembers on duty in the 

location, based on criteria used in a questionnaire and accompanying 

threat assessments. 

By conducting annual reviews of existing designations in accordance with 

its guidance, DOD could strengthen its oversight of imminent danger pay 

designations to ensure that conditions in designated areas continue to 

pose the threat of physical harm or imminent danger to servicemembers 

and that these areas should continue to be designated. 

DOD Has Not Updated 

Guidance to Reflect 

Current Responsibilities or 

Incorporated Factors to 

Define Criteria 

DOD has not updated its imminent danger pay guidance to (1) reflect the 

responsibility of the Office of the Under Secretary of Defense (Personnel 

and Readiness) for initiating and managing annual reviews of imminent 

danger pay areas or (2) to incorporate factors that DOD uses to evaluate 

and define when servicemembers face imminent danger. Updating 

guidance to include the current processes and factors used for reviewing 

and designating imminent danger pay areas would clarify responsibilities 

and establish standard criteria for use in meeting the objectives of the 

imminent danger pay program. 

First, while DOD’s imminent danger pay area guidance requires the unified 

combatant commanders and Joint Chiefs of Staff to conduct reviews of 

areas designated for imminent danger pay at least annually, in practice, the 

Under Secretary of Defense (Personnel and Readiness) has directly 

managed these reviews since the mid-1990s. However, as previously 

discussed, the combatant commanders have not forwarded 

recommendations on existing designations to the Chairman, Joint Chiefs 

of Staff, on an annual basis in accordance with DOD’s guidance and the 

Under Secretary of Defense (Personnel and Readiness) has not requested 

them to do so on an annual basis. In addition, DOD has not updated its 

imminent danger pay guidance to show that the Under Secretary of 

Defense (Personnel and Readiness) has been assigned the functions, 

relationships, and authorities previously assigned to the position of the 

Assistant Secretary of Defense (Force Management and Personnel). 

Second, the Federal Managers’ Financial Integrity Act of 1982 states that 

agencies must establish internal administrative controls in accordance 

Page 15 GAO-06-1011 Military Personnel
with the standards prescribed by the Comptroller General.23 The 

Comptroller General published these standards in Standards for Internal 

Control in the Federal Government, which sets out management control 

standards for all aspects of an agency’s operations. These standards are 

intended to provide reasonable assurance of meeting agency objectives. 

Two of the standards of internal control—risk assessment and control 

activities—state that an agency should establish clear objectives as well as

appropriate policies, procedures, and plans with respect to its activities to 

ensure effective and efficient use of resources to meet organizational 

objectives.24

Neither the statute that authorizes imminent danger pay nor DOD 

guidance define what constitutes the threat of physical harm or imminent 

danger or contain criteria to determine this. However, in 1997, DOD 

developed a questionnaire that contains specific factors that it continues 

to use to evaluate requests from combatant commands to designate new 

imminent danger pay areas as well as to review existing imminent danger 

pay designations. These factors help DOD to gather consistent information 

that supports its goal to limit imminent danger pay to those members 

placed in direct or imminent danger. The factors consider 

• acts of violence against U.S. personnel, such as assassinations, 

homicides, sabotage, kidnapping, aggravated battery, property damage,

terrorizing, extortion, rioting, and commandeering vessels or hijacking 

aircraft; 

• insurrection, war, or wartime conditions, including fighting that 

occurs sufficiently close to servicemembers that creates a substantial 

probability of death or bodily injury to servicemembers, causes 

servicemembers to fear for their safety, or creates danger to human life 

or property; 

• terrorism conditions, including the existence of terrorist organizations 

that have the intent or ability to harm servicemembers or terrorist 

threat levels indicative of an imminent threat; 

• security environment, that places U.S. forces at risk. DOD also 

considers existing security measures including threat condition levels 

 23 Federal Managers’ Financial Integrity Act of 1982, Pub. L. No. 97-255, §2 (1982). 

24 GAO/AIMD-00-21.3.1.

Page 16 GAO-06-1011 Military Personnel
and operating tempo levels, as well as restrictions on leave and off-duty 

travel and measures taken by the host government to protect 

servicemembers; 

• travel restrictions, including restriction of servicemembers to duty 

stations, installations, or defined sections of the area; and 

• presence of dependents in the area, including school-age dependents, 

whether dependents are targets, and the security measures in place to 

protect them. 

We reviewed 54 completed questionnaires for imminent danger pay—some 

for the same countries over a period of time—that were submitted by 

combatant commands to the Office of the Under Secretary of Defense 

(Personnel and Readiness) between 1998 and 2005. We found that DOD is 

using information supplied on these questionnaires, in conjunction with 

threat assessments, to inform decisions to designate new imminent danger 

pay areas and to review existing designations to ensure that they continue

to be appropriately designated. For instance, DOD denied requests from 

the U.S. Central Command to designate Turkmenistan and Kazakhstan for 

imminent danger pay in 2001 because the support provided in the 

questionnaires did not demonstrate an imminent threat of physical harm 

or danger to servicemembers based on civil war, civil insurrection, 

terrorism, or wartime conditions in those areas. DOD also denied a request 

from the U.S. European Command in 2003 to designate a number of areas, 

including Bulgaria, Romania, Hungary, and Cyprus, for imminent danger 

pay based on the probability of increased danger to military personnel due 

to their involvement in combat operations related to Iraq as well as general

terrorist threats to DOD personnel. The Office of the Under Secretary of 

Defense (Personnel and Readiness) determined that there was not 

sufficient support of an imminent threat of personal harm to 

servicemembers on official duty in these areas. In contrast, DOD has 

designated areas, such as Ethiopia, for imminent danger pay based on 

facts and circumstances that indicate the likelihood that U.S. personnel 

might be harmed as a result of civil unrest. Beginning in 2006, Congress 

authorized the Secretary of Defense to retroactively designate an area for

imminent danger pay, subject to the availability of appropriated funds.25 

 25 National Defense Authorization Act for Fiscal Year 2006, Pub. L. No. 109-163, §636 (2006) 

(codified at 37 U.S.C. §310(c)). 

Page 17 GAO-06-1011 Military Personnel
Despite the demonstrated usefulness of these questionnaires to decision 

makers, DOD has not incorporated factors contained in the questionnaire 

into its imminent danger pay guidance. For example, DOD does not 

include minimum terrorist threat levels, one such potential factor 

identified in the questionnaire, in its imminent danger pay guidance. While 

terrorist threat levels for a country may change over time and are raised 

and lowered on the basis of new information and analysis, in the past DOD 

officials responsible for overseeing imminent danger pay have considered 

establishing minimum terrorist threat levels of “high” or “significant” to 

help assess the imminence of threats and dangers from terrorism. 

Although DOD has yet to do so, we believe that establishing a minimum 

terrorist threat level threshold needed for an area to be designated for 

imminent danger pay could help to limit imminent danger pay to those 

servicemembers who truly face an imminent threat or danger to their lives

and would likely reduce the number of imminent danger pay area 

designations. Currently, DOD identifies terrorist threat levels using the 

Defense Intelligence Agency’s four step scale (see fig. 1) that describes the 

severity of a threat. 26

Figure 1: Terrorist Threat Levels and Associated Number of Designated Imminent

Danger Pay Areas as of July 2006 

Source: Defense Intelligence Agency, Air Force Installation Force Protection Guide, Department of the Army, Physical Security Field 

 Manual, and GAO analysis.

Threat level

High

Significant

Moderate

Low

Threat analysis factors Number of currently 

designated imminent 

danger pay areas Existence of

terrorist group Capability History Intentions

21

8

11

8

Factor must be present

Factor may or may not be present

 26 These steps, from highest to lowest, are high, significant, moderate, and low. The 

categories reflect the existence of terrorist groups as well as their history, capability, and 

intent to harm servicemembers. 

Page 18 GAO-06-1011 Military Personnel
For example, using Defense Intelligence Agency terrorism threat levels, if

current threat levels for designated areas remain constant and DOD was to

establish a minimum terrorist threat level of “significant” for areas to be

designated for imminent danger pay, then designations for 19 currently 

designated areas with threat levels below “significant” would be 

terminated. These areas include Angola, Burundi, Croatia, and Haiti. 

However, 29 areas with “high” or “significant” terrorist threat levels, such 

as Indonesia, the Philippines, Columbia, Iraq, Kuwait, Malaysia, Qatar, and 

Syria, would continue to qualify for imminent danger pay. Due to 

changing world circumstances since July 2006, the terrorist threat levels 

may have changed. 

Internal controls over servicemembers’ temporary duty travel to areas 

designated for imminent danger pay or combat zone tax relief benefits 

need to be strengthened. While two DOD components have instituted 

policies to regulate and monitor cross-month travel to these areas, there is 

no similar departmentwide policy to ensure that travel to areas designated

for imminent danger pay or combat zone tax relief benefits needs to cross 

calendar months. Data limitations prevented us from determining the full 

extent of temporary duty travel to areas designated for imminent danger 

pay and combat zone tax relief benefits, as well as how much of this travel

crossed calendar months. However, the U.S. Central Command and U.S. 

Army, Europe—which collectively account for 62 percent of imminent 

danger pay areas and 86 percent of areas designated for combat zone tax

relief benefits—have developed policies and controls to monitor and 

regulate cross-month travel to areas designated for imminent danger pay 

and combat zone tax relief benefits to preclude, in their view, the 

appearance of abuse of these benefits. Our review of data from DOD’s 

Defense Travel System as well as data for ship port visits to the U.S. 

European Command’s area of responsibility show that cross-month travel 

does occur. By establishing internal controls such as a departmentwide 

policy and periodic audits to monitor cross-month travel, DOD could 

ensure that all areas are covered and further strengthen its management of 

imminent danger pay and combat zone tax relief benefits. 

DOD Does Not Have a 

Departmentwide 

Policy to Monitor 

Cross-Month Travel to 

Areas Designated for 

Imminent Danger Pay 

or Combat Zone Tax 

Relief Benefits 

Page 19 GAO-06-1011 Military Personnel
Internal controls over servicemembers’ temporary duty travel to areas 

designated for imminent danger pay or combat zone tax relief benefits 

need to be strengthened. It is DOD’s policy to minimize the number of 

visits and visitors to overseas areas as well as demands on equipment, 

facilities, time, installation services, and personnel. 27 In addition, DOD’s 

temporary duty travel policy and its Foreign Clearance Guide,

28 which 

implements this policy, provide mechanisms for the unified combatant 

commands to regulate travel to foreign locations. Before any 

servicemember makes an official visit to a foreign country, including areas 

where servicemembers qualify for imminent danger pay or combat zone 

tax relief benefits, the visit must be reviewed and approved by both the 

U.S. embassy in the host country (country clearance) as well as by the 

sponsoring unified commander (theater clearance). DOD’s Foreign 

Clearance Guide permits the unified combatant command to grant theater

clearance or to delegate this authority to component commands, 

subordinate commands, special agencies, or units to be visited. The 

Standards for Internal Control in the Federal Government29 recommend 

that agencies establish internal controls to monitor and review operations 

and programs to provide reasonable assurance that these meet their goals. 

Moreover, we consider establishing such controls, including policies and 

oversight mechanisms, a best practice that can ensure that cross-month 

travel needs to cross calendar months, especially to areas designated for 

imminent danger pay or combat zone tax relief benefits. With the 

exception of U.S. Army, Europe, DOD does not conduct periodic audits of 

cross-month travel. 

No Departmentwide 

Monitoring of Cross-Month 

Travel Occurs, but Two 

Commands Have Taken 

Steps to Regulate CrossMonth Travel 

Although there is no requirement to do so, the U.S. Central Command and 

U.S. Army, Europe—which collectively account for 62 percent of 

imminent danger pay areas and 86 percent of areas designated for combat 

zone tax relief designation—have developed policies and internal controls

to monitor and regulate cross-month travel to areas for which they provide 

theater clearance. According to U.S. Central Command officials, they 

instituted this policy to preclude, in their view, the appearance of abuse of 

imminent danger pay and combat zone tax relief benefits. Specifically, the 

U.S. Central Command—which consists of 29 (approximately 55 percent) 

 27 DOD Directive Number 4500.54, Official Temporary Duty Travel Abroad, November 21, 

2003. 

28 DOD 4500.54-G, DOD Foreign Clearance Guide.

29 GAO/AIMD-00-21.3.1. 

Page 20 GAO-06-1011 Military Personnel
of the areas currently designated for imminent danger pay and 20 

(approximately 71 percent) of the areas currently designated for combat 

zone tax relief benefits—precludes travel that crosses months to its area 

of responsibility. According to U.S. Central Command officials, the 

command instituted this policy in 2003 as a result of the high pace of 

operations and to preclude, in their view, the abuse of imminent danger 

pay and combat zone tax relief benefits. All five sea areas and all but 3 of

the 27 countries in the U.S. Central Command’s area of responsibility are 

designated for imminent danger pay, and 16 of these countries as well as 

all sea areas are designated for combat zone tax relief benefits (see app. I). 

To enforce its policy, the U.S. Central Command has established an 

electronic database with internal controls that automatically alert officials 

to any proposed temporary duty travel that crosses calendar months. 

Officials in the U.S. Central Command’s Travel Clearance Office, which is 

responsible for granting theater clearance, review all requests from 

servicemembers not assigned to the U.S. Central Command to travel to 

countries in the command’s area of responsibility. If the proposed travel 

dates cross calendar months, the Travel Clearance Office requests that the 

traveler changes the dates of the trip or provide justification for why the 

trip needs to occur at that time. According to a command official, 

appropriate justification may include mission requirements or the limited 

availability of flights. However, according to an official, most travelers 

choose to change the dates of travel to avoid crossing months. 

In 2005, U.S. Army, Europe, which was delegated authority by the U.S. 

European Command to approve travel to locations in the former Federal 

Republic of Yugoslavia, instituted a policy precluding cross-month travel—

although this was minimal—to Bosnia-Herzegovina; Croatia; Serbia and 

Montenegro, including Kosovo; Macedonia; and Slovenia in order to 

prevent, in their view, the perceived abuse of combat zone tax relief 

benefits. These areas, excluding Slovenia, are designated for imminent 

danger pay and combat zone tax relief benefits and constitute 

approximately 8 percent of the areas currently designated for imminent 

danger pay and approximately 14 percent of the areas currently designated

for combat zone tax relief benefits. In addition, U.S. Army, Europe, 

requires that a colonel or general officer approve all cross-month travel, 

and its Internal Review and Audit Compliance Office periodically reviews 

travel to specific areas to monitor whether cross-month travel occurs. 

According to an official in the U.S. Army, Europe, Internal Review and 

Audit Compliance Office, cross-month travel accounted for 1.6 percent of

all travel to countries for which U.S. Army, Europe, approves theater 

clearance requests. Although no similar policy precludes cross-month 

Page 21 GAO-06-1011 Military Personnel
travel to Georgia, a country for which the U.S. Marine Corps Forces, 

Europe, has been delegated authority by the U.S. European Command to 

approve travel, an official who is responsible for approving travel to this 

location told us that since January 2005 the U.S. Marine Corps Forces, 

Europe, has monitored travel requests for potential cross-month travel. 

Neither U.S. Naval Forces, Europe, nor U.S. Air Forces in Europe has 

policies to monitor temporary duty travel that crosses calendar months. 

We did not determine the amount of cross-month travel conducted by 

servicemembers under these commands. 

In contrast, neither U.S. European Command (excluding U.S. Army, 

Europe), U.S. Pacific Command, or U.S. Southern Command—which 

collectively account for 20 (about 38 percent) imminent danger pay areas 

and 4 (about 14 percent) combat zone tax relief benefits—have policies 

that address temporary duty travel that crosses calendar months. 

Although two commands have instituted policies and internal controls to

preclude the perceived abuse of imminent danger pay and combat zone 

tax relief by regulating and monitoring cross-month travel, no requirement 

exists for DOD to monitor cross-month travel to 38 percent of areas 

currently designated for imminent danger pay and 14 percent of areas 

currently designated for combat zone tax relief benefits. By establishing 

internal controls, such as a departmentwide policy and periodic audits to

monitor cross-month travel, DOD could ensure that all areas are covered 

and further strengthen its management of imminent danger pay or combat 

zone tax relief benefits. 

Our analysis of data from the Defense Travel System indicates that crossmonth travel does occur during temporary duty travel. We reviewed 28,404 

vouchers for temporary duty travel that were processed using the Defense

Travel System for travel that occurred between fiscal years 2003 and 2005.

During about 18 percent (5,152) of these trips, a servicemember traveled 

to an area that is designated for imminent danger pay or combat zone tax 

relief benefits at some point during the trip regardless of whether the trip 

crossed months. About 93 percent (1,469) of the 1,576 trips that crossed 

calendar months were to countries within the Central Command’s and 

European Command’s areas of responsibility. 

Analysis of Defense Travel 

System Vouchers Indicates 

That Cross-Month Travel 

Occurs 

We found that 1,576 (about 6 percent) of the 28,404 trips processed using 

the Defense Travel System from fiscal year 2003 through fiscal year 2005

involved cross-month travel to an area designated for imminent danger 

pay or combat zone tax relief benefits, including trips during which 

Page 22 GAO-06-1011 Military Personnel
servicemembers were eligible for imminent danger pay or combat zone tax 

relief benefits during 1 or 2 months. For instance, servicemembers 

traveling in areas designated for imminent danger pay or combat zone tax 

relief benefits qualified for 2 full months of imminent danger pay and

combat zone tax relief benefits for 745 (about 3 percent) of the 28,404 

trips. Also, during 831 (about 3 percent) of the 28,404 trips, individual 

servicemembers traveled to areas designated for imminent danger pay or 

combat zone tax relief benefits at some point during a single month, 

although their travel crossed calendar months. As a result, these 

servicemembers qualified for 1 month of imminent danger pay or combat 

zone tax relief benefits. As depicted in table 2, we also found that the 1,576 

cross-month trips ranged in duration from 2 days to more than 15 days. 

Table 2: Number and Duration of Cross-Month Trips Eligible for 1 or 2 Months of

Imminent Danger Pay or Combat Zone Tax Relief Benefits, October 1, 2002, to 

September 30, 2005 

Fiscal year 

2 days or

less

3 to 4 

days

5 to 6 

days

7 to 14 

days 

15 or more 

days

Total

number of 

trips

2003 0 0 1 0 2 3

2004 0 2 7 82 45 136

2005 6 115 154 674 488 1,437

Total number 

of trips 6 117 162 756 535 1,576

Source: GAO analysis of Defense Travel System data. 

Note: The majority of our data reflect travel that occurred during fiscal year 2005. Defense Travel 

System data for fiscal years 2003 and 2004 were minimal because DOD locations were just 

beginning to transition from using approximately 43 legacy systems for processing travel vouchers 

during this time frame. 

The six trips that involved cross-month travel lasting 2 days or less were to 

Afghanistan, Haiti, Iraq, and the Philippines for training, meetings, special 

missions, and site visits. 

Most of these 1,576 cross-month trips were to the U.S. Central Command’s 

area of responsibility and the majority was longer than 7 days in duration, 

as shown in table 3. 

Page 23 GAO-06-1011 Military Personnel
Table 3: Duration of Cross-Month Trips Eligible for 1 or 2 Months of Imminent 

Danger Pay or Combat Zone Tax Relief Benefits by Combatant Command, 

October 1, 2002, to September 30, 2005 

Combatant command 

Trip duration 

Central 

Command

European

Command

Pacific 

Command 

Southern

Command 

Total

trips

2 days or less 3 0 1 2 6

3 to 4 days 100 9 3 5 117

5 to 6 days 117 41 4 0 162

7 to 14 days 628 71 37 20 756

15 or more days 405 95 32 3 535

Total 1,253 216 77 30 1,576

Source: GAO analysis of temporary duty travel vouchers processed using the Defense Travel System. 

The Air Force and the Army account for the majority of cross-month 

travel. In addition, we found that officers at the O-3 and O-4 pay grades 

accounted for the greatest number of cross-month trips by active duty 

officers to areas designated for imminent danger pay and combat zone tax

relief benefits during fiscal years 2003 through 2005. In contrast, officers at 

the O-7, O-8, O-9, and O-10 pay grades made the least number of crossmonth trips to areas designated for imminent danger pay or combat zone 

tax relief benefits. Enlisted servicemembers at the E-3, E-5, and E-6 pay 

grades made the majority of cross-month trips by active duty enlisted 

servicemembers to areas designated for this special pay or benefit during 

fiscal years 2003 through 2005. 

In comparison, we found that 23,083 (about 81 percent) of the 28,404 trips 

processed using the Defense Travel System from fiscal year 2003 through

fiscal year 2005 involved travel to areas that were not designated for either

imminent danger pay or combat zone tax relief during fiscal years 2003 to

2005.

30 Further, we found that 4,414 trips (about 16 percent) of the 28,404 

trips crossed calendar months, but did not include travel to areas 

designated for imminent danger pay or combat zone tax relief benefits. Of 

 30 Between fiscal years 2003 and 2005, individual servicemembers processed 23,253 

vouchers for temporary duty travel to areas not designated for either imminent danger pay 

or combat zone tax relief benefits using the Defense Travel System. However, 170 of these

trips that involved cross-month travel were dropped from our analysis due to incomplete 

data. As a result, in our analysis we used 23,083 vouchers for temporary duty travel to areas 

that were not designated for imminent danger pay or combat zone tax relief benefits. 

Page 24 GAO-06-1011 Military Personnel
these 4,414 trips, 3,058 (about 69 percent) were 7 or more days in duration 

and 1,356 (about 31 percent) were less than a week in duration, as shown 

in table 4. 

Table 4: Duration of Cross-Month Travel to Areas Not Designated for Imminent

Danger Pay or Combat Zone Tax Relief Benefits, October 1, 2002, to September 30, 

2005 

Fiscal Year 

2 days or

less

3 to 4 

days

5 to 6 

days

7 to 14 

days 

15 or more 

days

Total

number of 

trips

2003 0 2 2 5 67 76

2004 32 47 88 181 178 526

2005 223 426 536 1,479 1,148 3,812

Total

number of 

trips 255 475 626 1,665 1,393 4,414

Source: GAO analysis of Defense Travel System data. 

Note: The majority of our data reflect travel that occurred during fiscal year 2005. Defense Travel 

System data for fiscal years 2003 and 2004 were minimal because DOD locations were just 

beginning to transition from using 43 legacy systems for processing travel vouchers during this time 

frame. 

However, due to data limitations, we were unable to determine whether 

this travel was representative of temporary duty travel departmentwide. 

U.S. Navy Ships Make Port 

Visits to Designated Areas 

and These Visits May Cross 

Calendar Months 

Data provided by U.S. Naval Forces, Europe, indicate that some ships 

make port visits to areas designated for imminent danger pay or combat 

zone tax relief benefits, and that some of these port visits cross calendar 

months thus qualifying servicemembers for 2 months of imminent danger 

pay, and more significantly, combat zone tax relief benefits. Although ship 

commanders determine ship movements within an operating area, U.S. 

Naval Forces, Europe, determines the location of port visits based on 

security concerns and joint exercises and operations, among other 

considerations. The U.S. Naval Forces, Europe, provided data on port 

visits made by Navy ships for fiscal years 2003 through 2005 to areas 

designated for imminent danger pay or combat zone tax relief benefits 

within the U.S. European Command’s area of responsibility. According to

these data, for which we did not validate the accuracy, 56 ships made port 

visits to areas designated for imminent danger pay or combat zone tax 

relief benefits within the U.S. European Command’s area of responsibility 

during this time. Seven of these ships made port calls to areas designated 

Page 25 GAO-06-1011 Military Personnel
for imminent danger pay or combat zone tax relief that crossed calendar 

months (see table 5). 

Table 5: Port Visits to Areas within the U.S. European Command That Are Designated for Imminent Danger Pay or Combat

Zone Tax Relief Benefits 

Number of ships making

port calls

Number of port calls that 

crossed calendar months

Country/sea 

area of port 

visit 

Designated for

imminent 

danger pay 

Designated for

combat zone

tax relief 

benefits

Fiscal 

year 

2003

Fiscal 

year 

2004

Fiscal 

year 

2005

Fiscal 

year 

2003

Fiscal 

year 

2004 

Fiscal 

year 

2005 

Purpose of port 

visits 

Croatia June 22, 1992-

present 

November 

1995-present 

4 9 8 2 0 2 Quality of life port 

visit 

Refueling 

Training exercise 

Israel January 31,

2002-present 

January 1, 

2003-July 31, 

2003 

4 5 5 1 1 0 Quality of life port 

visit 

Training exercise 

Mediterranean 

Sea (east of 

30° east) 

March 19 2003-

July 31, 2003 

March 19, 2003-

July 31, 2003 

1 1 0 0 0 0 Quality of life port 

visit 

Turkey March 1, 1998-

present 

September 21,

2001- 

December 31, 

2005 

10 9 0 0 1 0 Quality of life port 

visit 

Source: U.S. Navy, Europe. 

Note: Data provided by the U.S. Naval Forces, Europe, are from fiscal year 2003 through fiscal year

2005. Areas may have been designated for imminent danger pay or combat zone tax relief benefits 

prior to the time of our review, such as was the case with Croatia and Israel. These designations may 

still be in effect. 

According to U.S. Naval Forces, Europe, the purpose of these port visits 

was generally for quality of life reasons or part of training or exercises. 

DOD paid approximately $7.5 million to the 26,849 servicemembers who

qualified for imminent danger pay for 1 month and the 3,284 

servicemembers who qualified for 2 months of imminent danger pay 

because the port visit crossed calendar months. We did not determine how 

much compensation servicemembers qualified to exclude from federal 

taxes as a result of these port visits. 

We focused on port visits made by ships and did not obtain individual 

ships’ logs to determine whether ships crossed into sea areas designated

for imminent danger pay or combat zone tax relief benefits while en route 

to other destinations or while performing operations. We also did not 

Page 26 GAO-06-1011 Military Personnel
obtain similar data for the U.S. Central Command because most ports and 

all sea areas in its area of responsibility are designated for imminent 

danger pay or combat zone tax relief benefits. We also did not obtain this 

information from the U.S. Southern Command or U.S Pacific Command 

because few countries and no sea areas in their areas of responsibility are 

designated for imminent danger pay or combat zone tax relief benefits. 

DOD tracks the cost of imminent danger pay and servicemembers’ 

compensation that qualify for combat zone tax relief benefits. While DOD 

tracks and reports the cost of imminent danger pay to Congress as part of 

its budget request, the department does not report the amount of 

servicemembers’ compensation that qualifies for combat zone tax relief

benefits. Combat zone tax relief benefits could allow servicemembers to 

exclude a significant portion of their compensation from federal taxes. For 

example, enlisted personnel and warrant officers may exclude all military 

compensation earned during one month. For commissioned officers, 

compensation is free of federal income tax up to the maximum amount of 

enlisted pay plus any imminent danger or hostile fire pay received. In 2006, 

the maximum amount of compensation for commissioned officers that is

eligible for combat tax zone relief is $6,499.50 plus $225 imminent danger 

pay, or $6,724.50 per month.31 The Defense Finance and Accounting 

Service reports servicemembers’ compensation that qualifies for combat 

zone tax relief benefits to the services’ financial management offices. 

However, there is no requirement for DOD to report this information to 

Congress. The reporting of combat zone tax relief benefit data to Congress

could provide information on the extent of this benefit and aid Congress in 

its oversight role. 

With concerns about the long-term sustainability of rising costs associated 

with military compensation, it is important that DOD effectively manage 

its imminent danger pay program to ensure that only those 

servicemembers who are subject to the threat of physical harm or 

imminent danger on the basis of civil war, civil insurrection, terrorism, or 

wartime conditions while on duty in a designated foreign area receive 

imminent danger pay. While DOD has significantly increased the number 

of areas designated for imminent danger pay over the past 14 years, it has

DOD Tracks 

Imminent Danger Pay 

and Combat Zone Tax 

Relief Benefits and 

Reports Some Data to 

Congress 

Conclusions 

 31 Servicemembers may have other tax deductions and exclusions that reduce their taxable 

income.

Page 27 GAO-06-1011 Military Personnel
conducted reviews of these areas only six times between 1992 and 2006, 

and the current review is ongoing. In addition, we believe that updating 

guidance to reflect the responsibility of the Office of the Under Secretary 

of Defense (Personnel and Readiness) for reviewing area designations and 

incorporating factors into its guidance to determine what specifically

constitutes imminent danger, would clarify responsibilities and establish 

standard criteria for use in meeting the objectives of the imminent danger 

pay program. 

Clearly, it is important that servicemembers are appropriately

compensated for the duties they perform, particularly when there are risks 

associated with those duties. It is also important that DOD ensure the need 

for cross-month travel as both the U.S. Central Command and U.S. Army, 

Europe, are doing. Although these two commands have instituted policies 

and internal controls to preclude the perceived abuse of imminent danger 

pay and combat zone tax relief by regulating and monitoring cross-month

travel, no requirement exists for DOD to monitor cross-month travel to 38

percent of areas currently designated for imminent danger pay and 14 

percent of areas currently designated for combat zone tax relief benefits. 

Managing these programs effectively is important, as the nation’s growing 

fiscal concerns will require DOD and the federal government to consider 

difficult trade-offs in the years ahead. In addition, internal controls to 

monitor cross-month travel could ensure all designated areas are covered

and further strengthen DOD’s management of imminent danger pay and 

combat zone tax relief benefits. 

Finally, combat zone tax relief benefits can be substantial. Congress may 

benefit from obtaining information on servicemembers’ total 

compensation that qualifies for combat zone tax relief benefits as a means 

to assist in providing oversight of this benefit. 

To strengthen DOD’s internal controls and management of imminent 

danger pay and to monitor cross-month travel, we recommend that the 

Secretary of Defense direct the Under Secretary of Defense (Personnel 

and Readiness) to take the following three actions: 

Recommendations for 

Executive Action 

• Update DOD’s imminent danger pay guidance to (1) reflect the office 

responsible for reviewing and designating imminent danger pay areas 

and (2) incorporate factors that clearly define what constitutes the 

presence of imminent threat or dangers to servicemembers on duty in 

foreign areas. 

Page 28 GAO-06-1011 Military Personnel
• Request the designated organizations to conduct reviews of areas 

designated for imminent danger pay in accordance with DOD’s 

guidance, and, if necessary, update its guidance to reflect the 

appropriate time period for conducting these reviews. 

• Establish departmentwide policies and internal controls that include 

periodic audits to monitor cross-month travel to ensure that the travel 

needs to cross calendar months. 

In light of the substantial tax benefits that servicemembers receive when 

performing duty in combat zones, Congress should consider the following 

action: 

• Require DOD to periodically report the amount of servicemembers’ 

total compensation that qualifies for combat zone tax relief benefits to 

Congress. 

In written comments on a draft of this report, DOD generally concurred 

with two of our three recommendations, but did not concur with our 

recommendation to establish a departmentwide policy and internal 

controls to monitor cross-month travel to ensure that the travel needs to 

cross calendar months. DOD also provided separate technical comments 

which we have incorporated in the report, as appropriate. 

Matter for 

Congressional 

Consideration 

Agency Comments 

and Our Evaluation 

DOD concurred with our recommendation to update DOD’s imminent 

danger pay guidance. DOD acknowledged that there are informal 

processes and additional guidance and concurs that its informal policy 

should be updated to reflect the office currently responsible for the review 

and to provide additional clarification and guidance as to what factors are 

considered in determining whether imminent danger pay is warranted. 

DOD partially concurred with our recommendation to conduct

comprehensive reviews of imminent danger pay area designations, noting 

it had conducted reviews six times since 1992 and expects to complete its 

ongoing review by October 31, 2006. DOD stated that the department 

believes that comprehensive reviews of imminent danger pay should be 

conducted at least biennially. DOD’s current imminent danger pay 

guidance requires at least annual reviews of areas designated for imminent 

danger pay. We continue to believe that DOD should conduct reviews of 

areas designated for imminent danger pay in accordance with its guidance, 

which is reflected in our recommendation. If DOD believes that the 

appropriate time period for conducting these reviews is biennially, as 

Page 29 GAO-06-1011 Military Personnel
reflected in its comments, then DOD should update its imminent danger 

pay guidance accordingly. 

DOD did not concur with our recommendation to establish 

departmentwide policies and internal controls that include periodic audits 

to monitor cross-month travel to ensure that the travel needs to cross 

calendar months. DOD stated in written comments that doing so would 

add unnecessary bureaucracy and cost to its travel system and believes 

that our recommended action is already implemented in existing travel 

procedures that require thorough review and management of the necessity 

and cost-effectiveness of travel by DOD personnel. Further, DOD 

commented that our review found no apparent abuse of cross-month 

travel and the two commands that collectively account for the majority of 

imminent danger pay and combat zone tax relief benefits have developed 

theater-specific policies and controls to monitor and regulate cross-month 

travel. As stated in our scope and methodology and the report, data 

limitations prevented us from determining the full extent of temporary 

duty travel to areas designated for imminent danger pay and combat zone 

tax relief benefits, as well as how much of this travel crossed calendar 

months. Further, we reviewed only temporary duty travel vouchers 

processed using DOD’s Defense Travel System. We did not review travel 

that was processed in DOD’s numerous legacy travel systems, and 

therefore did not reach any conclusions as to whether servicemembers 

have scheduled travel in a fiscally responsible manner or have attempted 

to maximize this pay and benefit by scheduling cross-month travel. We

recognize DOD has procedures in place to review and authorize travel. 

Our recommendation addresses the need to have greater monitoring of 

travel trends. Moreover, although two commands have instituted policies 

and internal controls to preclude the perceived abuse of imminent danger 

pay and combat zone tax relief by regulating and monitoring cross-month

travel, no requirement exists for DOD to monitor cross-month travel to the 

38 percent of areas currently designated for imminent danger pay and the 

14 percent of areas currently designated for combat zone tax relief 

benefits not covered by these two commands. Also, while we recognize 

that these commands currently reflect the majority of areas designated for 

imminent danger pay and combat zone tax relief benefits, security 

conditions are subject to change over time. Therefore, we continue to 

believe our recommendation has merit and that internal controls to 

monitor cross-month travel departmentwide are needed to ensure all 

designated areas are covered and further strengthen DOD’s management 

of imminent danger pay and combat zone tax relief benefits. 

Page 30 GAO-06-1011 Military Personnel
In response to the other written comments provided by DOD, we modified 

the report to acknowledge that the global security environment has played 

a role in the increased number of areas designated for imminent danger 

pay since 1992. In addition, we modified the report to reflect that danger 

pay was first authorized on October 1, 1983, by Public Law 98-94, section

905. 

We are sending copies of this report to congressional committees, the 

Secretary of Defense, the secretaries of the Army, the Navy, the Air Force; 

and the Commandant of the Marine Corps. We will also make copies 

available to other interested parties upon request. In addition, the report

will be available at no charge on the GAO Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please call me at 

(202) 512-9619 or pickups@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. The GAO contact and key contributors are listed in 

appendix VI.

Sharon Pickup 

Director, Defense Capabilities and Management

Page 31 GAO-06-1011 Military Personnel
List of Congressional Committees

The Honorable John Warner 

Chairman 

The Honorable Carl Levin 

Ranking Minority Member 

Committee on Armed Services 

United States Senate 

The Honorable Ted Stevens 

Chairman 

The Honorable Daniel K. Inouye 

Ranking Minority Member 

Subcommittee on Defense 

Committee on Appropriations 

United States Senate 

The Honorable Duncan L. Hunter 

Chairman 

The Honorable Ike Skelton 

Ranking Minority Member 

Committee on Armed Services 

House of Representatives 

The Honorable C.W. Bill Young 

Chairman 

The Honorable John P. Murtha 

Ranking Minority Member 

Subcommittee on Defense 

Committee on Appropriations 

House of Representatives 

Page 32 GAO-06-1011 Military Personnel
Appendix I: Areas Currently Designated for 

Imminent Danger Pay and Combat Zone Tax 

Relief Benefits 

Table 6 identifies the areas designated for imminent danger pay or combat

zone tax relief benefits as of July 2006. 

Table 6: Summary of Areas Designated for Imminent Danger Pay and Combat Zone Tax Relief Benefits 

Area 

Designated for

imminent danger pay

Designated for

combat zone tax 

relief 

Combatant command 

responsible for area 

Adriatic Sea X European Command 

Afghanistan X X Central Command

Albania X European Command

Algeria X European Command

Angola X European Command

Arabian Sea North of 10 degrees North latitude and West 

of 68 degrees East longitude

X X Central Command

Azerbaijan X European Command

Bahrain X X Central Command

Bosnia-Herzegovina X X European Command 

Burundi X European Command

Colombia X Southern Command

Cote d’Ivoire X European Command 

Croatia X X European Command

Democratic Republic of Congo

(formerly Zaire) 

X European Command

Djibouti X X Central Command

East Timor X Pacific Command 

Egypt X Central Command

Eritrea X Central Command

Ethiopia X Central Command

Georgia X European Command

Greece (Athens) X European Command 

Gulf of Aden X X Central Command 

Gulf of Oman X X Central Command 

Haiti X Southern Command

Indonesia X Pacific Command

Ionian Sea north of the 39th parallel X European Command 

Iran X Central Command

Iraq X X Central Command

Israel X European Command

Jordan X X Central Command

Appendix I: Areas Currently Designated for 

Imminent Danger Pay and Combat Zone Tax 

Relief Benefits 

Page 33 GAO-06-1011 Military Personnel
Appendix I: Areas Currently Designated for 

Imminent Danger Pay and Combat Zone Tax 

Relief Benefits 

Area 

Designated for

imminent danger pay

Designated for

combat zone tax 

relief 

Combatant command 

responsible for area 

Kenya X Central Command

Kuwait X X Central Command

Kyrgyzstan X X Central Command

Lebanon X Central Command

Liberia X European Command

Macedonia X X European Command

Malaysia X Pacific Command 

Oman X X Central Command

Pakistan X X Central Command

Persian Gulf X X Central Command 

Philippines X X Pacific Command

Qatar X X Central Command

Red Sea X X Central Command 

Rwanda X European Command

Saudi Arabia X X Central Command 

Serbia and Montenegro, including Kosovoa X X European Command

Sierra Leone X European Command 

Somalia X Central Command

Sudan X Central Command

Syria X X Central Command

Tajikistan X X Central Command

Turkey X European Command

Uganda X European Command

United Arab Emirates X X Central Command 

Uzbekistan X X Central Command

Yemen X X Central Command

Source: DOD data; GAO presentation. 

Note: Although a geographic command, the Northern Command’s area of responsibility—the 

continental United Stated, Alaska, and the surrounding waters as well as the Gulf of Mexico, Puerto 

Rico, and the U.S. Virgin Islands—are not eligible for imminent danger pay because they are not 

foreign areas. 

a

For purposes of this chart, Serbia and Montenegro are presented as one area. However, when 

calculating the number of areas designated for imminent danger pay, Serbia and Montenegro are 

considered separate areas. 

Page 34 GAO-06-1011 Military Personnel
Appendix II: Presidentially Designated 

Combat Zones and Congressionally Legislated Appendix II: Presidentially Designated Qualified Hazardous Duty Areas 

Combat Zones and Congressionally 

Legislated Qualified Hazardous Duty Areas 

Combat Zones A combat zone is any area that the president designates by executive order 

as an area in which U.S. Armed Forces are or have engaged in combat 

after June 24, 1950. An area ceases to be a combat zone on the dates the

president designates by executive order. Since 1950, U.S. presidents have

designated combat zones in Korea, Vietnam, the Persian Gulf, the Kosovo 

area, and Afghanistan. U.S. presidents terminated combat zone 

designations for Korea in 1955 and Vietnam in 1996. 

Enlisted personnel and warrant officers may exclude from taxes all 

military compensation earned during the month that they serve in a 

combat zone. For commissioned officers, compensation is free of federal

income tax up to the maximum amount of enlisted pay plus any imminent 

danger or hostile fire pay received. In 2006, the maximum amount of 

compensation for commissioned officers that is eligible for combat tax 

zone relief is $6,499.50 plus $225 imminent danger pay, or $6,724.50 per 

month.1

 Table 7 depicts the current combat zones. 

 1

 Servicemembers may have other tax deductions and exclusions that reduce their 

otherwise taxable income. 

Page 35 GAO-06-1011 Military Personnel
Appendix II: Presidentially Designated 

Combat Zones and Congressionally Legislated

Qualified Hazardous Duty Areas 

Table 7: Combat Zones as of July 2006 

Combat zones Designated by Date designated 

Afghanistan, including airspace above Executive Order 13239 September 19, 2001 

The Kosovo area including airspace above:

Federal Republic of Yugoslavia (Serbia/Montenegro) 

Albania 

Adriatic Sea 

Ionian Sea north of the 39th parallel 

Executive Order 13119 March 24, 1999

Persian Gulf area, including airspace above: 

• Arabian Sea north of 10 degrees north latitude and west of 68

degrees east longitude 

• Bahrain 

• Gulf of Aden 

• Gulf of Oman 

• Iraq 

• Kuwait 

• Oman 

• Persian Gulf 

• Qatar 

• Red Sea 

• Saudi Arabia 

• United Arab Emirates 

Executive Order 12744 January 17, 1991 

Source: Executive Orders 12744, 13119, and 13239. 

Servicemembers on duty in qualified hazardous duty areas designated by 

Congress are entitled to the same benefits afforded those who serve in a 

presidentially designated combat zone if the Secretary of Defense also 

designates that qualified hazardous duty area for imminent danger pay.2

 If 

Congress designates a qualified hazardous duty area, but the Secretary of 

Defense has not designated the area for imminent danger pay, 

servicemembers deployed to the area are not eligible to receive combat 

zone tax relief unless the qualified hazardous duty area becomes eligible 

for imminent danger pay. If the Secretary of Defense terminates imminent 

danger pay for a qualified hazardous duty area, members no longer receive 

combat zone tax relief benefits. Table 8 depicts the current qualified 

hazardous duty areas. 

Qualified Hazardous 

Duty Areas 

 2

 37 U.S.C. §310. 

Page 36 GAO-06-1011 Military Personnel
Appendix II: Presidentially Designated 

Combat Zones and Congressionally Legislated

Qualified Hazardous Duty Areas 

Table 8: Qualified Hazardous Duty Areas as of July 2006

Qualified hazardous duty area Authority Date designated 

• Bosnia-Herzegovina 

• Croatia 

• Macedonia 

Public Law 104-117 November 21, 1995 

• Federal Republic of Yugoslavia

(Serbia/Montenegro) 

• Albania 

• Adriatic Sea 

• Ionian Sea north of the 39th parallel 

Public Law 106-21 March 24, 1999

Source: Public Laws 104-117 and 106-21. 

Page 37 GAO-06-1011 Military Personnel
Appendix III: Military Service Certified as in

Appendix III: Military Service Certified as in Direct Support of Combat Zone Operations 

Direct Support of Combat Zone Operations 

DOD has certified military service as in direct support of military 

operations in combat zones, thus qualifying servicemembers for combat 

zone tax relief benefits (see table 9). Unlike the other areas identified in 

the table, Jordan is the only area where DOD has certified military service 

as in direct support of combat zone operations as part of both Operation 

Enduring Freedom and Operation Iraqi Freedom. 

Table 9: Areas Certified by DOD Where Military Service Is in Direct Support of

Combat Zone Operations as of July 2006 

Area Date of designation Combat zone Military operation 

• Pakistan 

• Tajikistan 

• Jordan 

September 19, 2001 

• Uzbekistan 

• Kyrgyzstan 

October 1, 2001 

• Philippines January 9, 2002 

• Yemen April 10, 2002 

• Djibouti July 1, 2002 

Afghanistan Operation Enduring 

Freedom 

• Jordan March 19, 2003

• Syria January 1, 2004 

Iraq Operation Iraqi

Freedom 

Sources: DOD Financial Management Regulation and Internal Revenue Service. 

Page 38 GAO-06-1011 Military Personnel
Appendix IV: Scope and Methodology Appendix IV: Scope and Methodology 

To evaluate DOD’s processes for reviewing imminent danger pay areas and 

to understand how servicemembers become eligible for combat zone tax 

relief, we analyzed legislation and DOD regulations and guidance. We

compared these to the objectives and fundamental concepts of internal 

control defined in Standards for Internal Control in the Federal 

Government and Internal Control Management and Evaluation Tool. We

also held discussions with knowledgeable officials from the following 

offices, geographic commands, and services: 

• Commander, Navy Installations, Personnel Support Activity, 

Washington, D.C. 

• Defense Finance and Accounting Service, Indianapolis, Indiana 

• Defense Manpower and Data Center, Monterey, California and 

Arlington, Virginia 

• Defense Travel System Office, Arlington, Virginia

• Department of Defense Inspector General, Inspector General/Hotline 

Cases and Senior Officials Investigation Offices, Arlington, Virginia 

• Joint Chiefs of Staff, Personnel and Policy, Arlington, Virginia

• Office of Management and Budget, Washington, D.C. 

• Under Secretary of Defense (Personnel and Readiness), Arlington, 

Virginia 

• United States Air Forces in Europe, Ramstein Air Force Base, Germany 

• United States Army, Europe, Heidelberg, Germany 

• United States Central Command, MacDill Air Force Base, Tampa, 

Florida 

• United States Department of State, Office of Allowances, Washington, 

D.C. 

• United States European Command, Patch Barracks, Stuttgart, Germany 

• United States Marine Corps Forces, Europe, Boeblingen, Germany 

• United States Naval Forces, Europe, Commander, U.S. Sixth Fleet, 

Naples, Italy 

• United States Pacific Command, Camp H.M. Smith, Honolulu, Hawaii 

United States Southern Command, Miami, Florida 

To gain an understanding of DOD’s rationale for designating certain areas 

and to determine whether DOD followed its policy for designating and 

reviewing imminent danger pay areas and areas certified as in direct 

support of combat zones, we reviewed 54 imminent danger pay area 

questionnaires completed by combatant commanders and used by DOD to 

evaluate area designations and the threat of imminent danger. This 

nonprobability sample of areas was selected to ensure that each 

geographic combatant command was represented. In addition, we sought 

to include imminent danger pay areas where designation was limited to 

either land, or airspace, or water areas, or the designation was for the 

Page 39 GAO-06-1011 Military Personnel
Appendix IV: Scope and Methodology 

entire area including land, air, or water areas. For purposes of our 

analysis, we considered an area to be designated for imminent danger pay 

if DOD had designated any portion of the area (land, airspace, or water) 

for imminent danger pay. We also reviewed other relevant DOD 

documents related to DOD’s review of imminent danger pay and combat 

zone tax relief benefits from 1992 through 2006. We compared these 

against the standards for oversight envisioned in Standards for Internal 

Control in the Federal Government and the Internal Control Management 

and Evaluation Tool. 

To understand how DOD regulates and monitors temporary duty travel,

and cross-month travel in particular, we reviewed DOD’s temporary duty 

travel policy and its Foreign Clearance Guide that establishes DOD policy 

for military personnel traveling overseas. We also reviewed travel policies 

from the U.S Central Command and U.S. Army, Europe. We discussed 

these policies with officials responsible for approving travel in accordance 

with the Foreign Clearance Guide, and compared these with the 

standards for internal control activities contained in the Standards for 

Internal Control in the Federal Government. In addition, we interviewed

personnel in the U.S. Pacific Command and U.S. Southern Command who

are knowledgeable about these command’s travel policies and 

requirements. Because the U.S. European Command does not have a travel 

clearance office, we spoke with service officials at the U.S. European 

Command who are responsible for authorizing travel to certain locations. 

To determine the extent to which servicemembers were making crossmonth trips to areas that would make them eligible to receive imminent 

danger pay and combat zone tax relief benefits, we also analyzed 28,404

travel vouchers obtained from the Defense Travel System for 

servicemembers traveling on temporary duty between October 1, 2002,

and September 31, 2005. In addition, we obtained data from the U.S. Naval 

Forces, Europe, on ship port visits to areas within the U.S. European 

Command’s area of responsibility that are designated for imminent danger 

pay or for combat zone tax relief benefits. We did not obtain similar data 

for the U.S. Central Command because most ports and all sea areas in its 

area of responsibility are designated for imminent danger pay or combat 

zone tax relief benefits. We also did not obtain this information from the 

U.S. Southern Command or U.S. Pacific Command because few countries 

and no sea areas in their areas of responsibility are designated for 

imminent danger pay or combat zone tax relief benefits. Under DOD’s 

Page 40 GAO-06-1011 Military Personnel
Appendix IV: Scope and Methodology 

Financial Management Regulations, authorizing officials are responsible 

for determining the necessity of trips and funds availability for temporary 

duty travel.1 Further, DOD guidance states that DOD airlift authorizing 

officials shall ensure that an official purpose is served by air travel.2

Therefore, we did not evaluate whether the purposes of the trips were 

valid. We analyzed travel vouchers from the Defense Travel System 

because it is the only system that captures temporary duty travel from all 

four services. 

We also reviewed data from the Defense Finance and Accounting Service’s

Operational Data System that captures the balance of travel data for the 

Army that is not processed using the Defense Travel System. Data from 

the Operational Data System frequently were missing information about 

trip destinations. As a result, we were unable to use these data to analyze

cross-month travel to areas designated for imminent danger pay or combat

zone tax relief benefits. We also did not review data processed in the 43 

legacy systems used by the services to process travel vouchers because of

data reliability concerns. 

Due to the large number of countries and sea areas within the U.S. Central 

Command’s area of responsibility that are designated for imminent danger 

pay or combat zone tax relief and because most travel vouchers for 

servicemembers assigned to the U.S. Central Command’s headquarters 

during the time period of our review were not processed using the Defense 

Travel System, we sought to obtain travel data directly from several 

combatant commands. We tested this approach with the U.S. Central 

Command. First, we attempted to obtain data from the U.S. Central 

Command’s finance office that processes travel vouchers. Due to data

limitations and concerns about the accuracy of data in the automated 

business service system, a document processing system used to approve 

travel orders, we were unable to use this approach. Second, we sought to 

use theater clearance requests and approvals to determine the extent of 

cross-month travel to the U.S. Central Command’s area of responsibility. 

However, database limitations prevented us from using this approach. For 

instance, if more than one servicemember was listed on a travel clearance

request submitted to the U.S. Central Command’s travel clearance office,

only the name of the most senior official was listed in the database and 

information on the pay grades of junior servicemembers would not be 

 1

 DODFMR, Vol. 9, Ch. 2, Section 020401(C) (April 2006). 

2

 DODD 4500.56, Section E.2.1.2 (Apr. 1999). 

Page 41 GAO-06-1011 Military Personnel
Appendix IV: Scope and Methodology 

available for analysis. In addition, we could not determine the accuracy of 

travel dates contained in the Travel Clearance Office’s database because 

itinerary changes are not always captured in the database. 

The scope of this review excluded servicemembers deployed or assigned 

to foreign areas. The scope also excluded servicemembers who served as

part of crews on aircraft and, with the exception of data provide by the 

U.S. Naval Forces, Europe, ships because aircraft and ship movements are 

dictated by operational needs and mission requirements, and generally, do

not have the same degree of flexibility associated with scheduling 

temporary duty travel. To assess the reliability of data obtained from the 

Defense Travel System, we (1) reviewed existing documentation related to

the data sources, (2) electronically tested the data to identify problems 

with completeness or accuracy, and (3) interviewed knowledgeable

officials about the data. We found these data to be sufficiently reliable for 

the purposes of this report. 

For purposes of our analysis, we defined cross-month travel as any 

temporary duty travel of 30 days or fewer that begins during one month 

and concludes during the following month. This cross-month travel may 

encompass travel to a single location or multiple locations during a 30-day 

period. During this time, a servicemember may travel to areas designated 

for imminent danger pay or combat zone tax relief, areas not designated 

for these special pays and benefits, or to both areas designated and not 

designated for such benefits. 

However, we do not know the portion of overall travel that these trips 

represent because some DOD locations were not using the Defense Travel

System to process travel vouchers during the time of our review. As a 

result, we cannot extrapolate travel patterns based on the data we 

obtained and analyzed from the Defense Travel System. We also requested 

and received information on GAO’s FraudNet hotline as well as the DOD 

Inspector General hotline on inquiries related to servicemembers 

scheduling cross-month travel to potentially maximize combat zone tax 

relief benefits. GAO’s FraudNet did not receive any calls concerning 

servicemembers scheduling travel to maximize imminent danger pay or 

combat zone tax relief benefits. Two calls received by the DOD Inspector 

General’s hotline were not substantiated. Additionally, we obtained data

from the Defense Finance and Accounting Service to determine the 

compensation excluded from federal taxable wages for servicemembers 

for calendar years 2003 through 2005 as a result of performing military 

service that the Office of the Under Secretary of Defense (Personnel and 

Readiness) certified as in direct support of combat zone operations and 

Page 42 GAO-06-1011 Military Personnel
Appendix IV: Scope and Methodology 

for combat zone tax exclusion overall. We also obtained data from the 

Defense Manpower and Data Center to estimate the total dollar amount of 

imminent danger pay for service members for fiscal years 2003 through 

2005. However, we did not use these data because sufficient information 

was not available from the Defense Manpower and Data Center to validate 

the accuracy of these data for this report. As stated earlier in this report, 

we previously reported on the lack of reliability on DOD’s reported costs 

related to the Global War on Terrorism, including military pay. 

We conducted our review from October 2005 through July 2006 in 

accordance with generally accepted government auditing standards. 

Page 43 GAO-06-1011 Military Personnel
Appendix V: Comments from the Department Appendix V of Defense : Comments from the Department 

of Defense 

Page 44 GAO-06-1011 Military Personnel
Appendix V: Comments from the Department 

of Defense 

Page 45 GAO-06-1011 Military Personnel
Appendix V: Comments from the Department 

of Defense 

Page 46 GAO-06-1011 Military Personnel
Appendix V: Comments from the Department 

of Defense 

Page 47 GAO-06-1011 Military Personnel
Appendix VI: 

A

GAO Contact and Staff 

cknowledgments 

Page 48 GAO-06-1011

Appendix VI: GAO Contact and Staff 

Acknowledgments 

GAO Contact Sharon L. Pickup, (202) 512-9619 or pickups@gao.gov 

In addition to the person named above, Ann Borseth, Assistant Director; 

Krislin Bolling; Alissa Czyz; James Driggins; Ron La Due Lake; Katherine 

Lenane; Grant Mallie; Oscar Mardis; David Mayfield; Ken Patton; Vanessa 

Taylor; and John Van Schaik also made major contributions to this report. 

Military Personnel

Acknowledgments 

(350758) 
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