United States General Accounting Office 

GAO Report to Congressional Requesters 

October 2003 TRAVEL CARDS 

Internal Control 

Weaknesses at DOD 

Led to Improper Use 

of First and Business 

Class Travel 

GAO-04-88


a
Highlights of GAO-04-88, a report to 

congressional requesters 

Ineffective oversight and 

management of the Department of 

Defense’s (DOD) travel card 

program, which GAO has 

previously reported on, have led to 

concerns about DOD’s use of first 

and business class airfares. GAO 

was asked to (1) identify the 

magnitude of premium class travel, 

(2) determine if DOD’s key internal 

control activities operated 

effectively and provide examples of 

control breakdowns, and (3) assess 

DOD’s monitoring and key 

elements of the control 

environment. 

To reduce improper premium class 

October 2003 

TRAVEL CARDS 

Internal Control Weaknesses at DOD Led 

to Improper Use of First and Business 

Class Travel 

Breakdowns in internal controls and a weak control environment resulted in 

improper first and business class travel and increased costs to taxpayers. 

Based on extensive analysis of records obtained from Bank of America, GAO 

found that DOD spent almost $124 million on about 68,000 premium class 

related tickets—primarily business class—during fiscal years 2001 and 2002. 

Each premium class ticket costs the government up to thousands of dollars 

more than a comparable coach class ticket. GAO’s work also indicated that 

civilian supervisors, managers, and executives and senior military officers 

accounted for almost 50 percent of the premium class transactions, and for 

27 of the 28 most frequent premium class travelers. GAO considers travel by 

high-ranking officials to be a sensitive payment area because of its 

susceptibility to abuse. 

Breakdowns in key internal controls resulted in a significant level of 

improper premium class travel. GAO estimated that 72 percent of DOD’s 

fiscal year 2001 and 2002 premium class travel was not properly authorized, 

and 73 percent was not properly justified. 

Examples of Improper Premium Class Travel 

travel and related DOD costs, GAO 

makes several recommendations 

for improving controls over 

authorization and justification, 

policies and procedures, and 

monitoring and oversight of first 

and business class travel. 

DOD officials concurred with all of 

GAO’s recommendations and said 

that some actions have already 

been initiated. 

Cost of Estimated 

Rank/grade premium cost of coach 

of traveler class trips class trips Reason travel was improper 

GS-15 $35,000 $7,000 Traveler approved own first class travel based on 

medical condition that was later determined to not 

meet stringent first class criteria. 

Presidential 68,000 17,000 First and business class travel was authorized by a 

appointee subordinate using a blanket order. 

GS-14 and 21,000 2,500 The travel order authorizing relocation costs for the 

family traveler and his family did not authorize premium 

class travel. 

GS-15 3,300 200 First class ticket not authorized by the Secretary of 

Defense or designee as required. 

GS-15 4,500 600	 Eighteen months after the trip, the traveler’s 

supervisor (not a medical authority) provided a 

note regarding a medical need as the justification 

for business class. 

Source: GAO analysis of premium class travel transactions and supporting documentation. 

Further, DOD did not have accurate and complete data on the extent of 

premium class travel and performed little or no monitoring of this travel. In 

regard to the control environment, GAO found that DOD (1) issued policies 

that were inconsistent with General Service Administration governmentwide 

travel regulations, (2) did not require military services to issue and update 

premium class policies to implement DOD’s travel regulations consistently, 

and (3) did not issue guidance on how to document the authorization and 

justification of premium class travel. As a result of GAO’s audit, DOD has 

begun updating its travel regulations to more clearly state when premium 

www.gao.gov/cgi-bin/getrpt?GAO-04-88. class travel can be authorized and to emphasize that it must only be used 

To view the full product, including the scope when exceptional circumstances warrant the additional cost. 

and methodology, click on the link above. 

For more information, contact Gregory Kutz at 

(202) 512-9505 or kutzg@gao.gov. 
Contents


Letter


Results in Brief 


Background 


Extent of Premium Class Travel Is Significant 


Key Internal Controls Were Ineffective 


Lack of Monitoring and Control Environment Weaknesses 


Contributed to Improper Use of Premium Class Travel 

Conclusions 

Recommendations for Executive Action 

Agency Comments and Our Evaluation 

1 

3 

6 

8 

10 

22 

33 

34 

36 

Appendixes 

Appendix I: Objectives, Scope, and Methodology 38 

Appendix II: Process to Obtain Premium Class Travel 43 

Appendix III:	 GAO Contacts and Staff Acknowledgments 45 

GAO Contacts 45 

Acknowledgments 45 

Tables Table 1: 

Table 2: 

Table 3: 

Table 4: 

Table 5: 

Table 6: 

DOD Premium Class Travel for Fiscal Years 2001 and 


2002


Estimate of Fiscal Year 2001 and 2002 DOD Premium Class 


Travel Transactions That Failed Control Tests


Examples of Improper Use of Premium Class Travel 


Examples of Travelers Who Frequently Used Premium 


Travel


Fiscal Years 2001 and 2002 DOD Premium Class Travel 


Population Subjected to Sampling 


Fiscal Years 2001 and 2002 Premium Class Travel Charged 


to the Centrally Billed Accounts Adjusted for Coding 


Errors


9 

11 

14 

18 

40 

41 

Figures Figure 1: Sample Premium Class Authorization Form 30 

Figure 2: Sample Medical Condition Form 32 

Figure 3: Standard Process to Obtain Premium Class Travel When 

Multiple Classes of Service Are Available 44 

Page i GAO-04-88 DOD Premium Class Travel 
This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

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other material, permission from the copyright holder may be necessary if you wish to 

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Page ii GAO-04-88 DOD Premium Class Travel 
Page 1 GAO-04-88 DOD Premium Class Travel 

A

United States General Accounting Office 

Washington, D.C. 20548 

October 24, 2003


The Honorable Charles E. Grassley


Chairman 


Committee on Finance


United States Senate 


The Honorable Norm Coleman


Chairman


Permanent Subcommittee on Investigations


Committee on Governmental Affairs


United States Senate


The Honorable Janice Schakowsky 


House of Representatives 


This report is a continuation of our series of reports on the Department of 


Defense’s (DOD) management of its various credit card programs. In fiscal 


years 2002 and 2003, we issued a series of testimonies1

 and reports2


addressing problems that the Army, Navy, and Air Force had in managing 


individually billed travel card accounts. These testimonies and reports 


showed high delinquency rates and significant potential fraud and abuse 


related to DOD’s travel program. Due to these concerns, you asked us to 


audit controls over the other major form of payment used by DOD for 


travel expenses—centrally billed accounts. Our audits in these areas 


provide examples of DOD’s long-standing financial management problems, 


which are pervasive, complex, and deeply rooted in virtually all business 


operations throughout the department. Such problems led us in 1995 to put 


DOD financial management on our list of high-risk areas—areas that are


1

U.S. General Accounting Office, Travel Cards: Control Weaknesses Leave Army Vulnerable 

to Potential Fraud and Abuse, GAO-02-863T (Washington, D.C.: July 17, 2002), and Travel 

Cards: Control Weaknesses Leave Navy Vulnerable to Fraud and Abuse, GAO-03-148T 

(Washington, D.C.: Oct. 8, 2002). 

2

U.S. General Accounting Office, Travel Cards: Control Weaknesses Leave Army Vulnerable 

to Potential Fraud and Abuse, GAO-03-169 (Washington, D.C.: Oct. 11, 2002), Travel Cards: 

Control Weaknesses Leave Navy Vulnerable to Fraud and Abuse, GAO-03-147 (Washington, 

D.C.: Dec. 23, 2002), and Travel Cards: Air Force Management Focus Has Reduced 

Delinquencies, but Improvements in Controls Are Needed, GAO-03-298 (Washington, D.C.: 

Dec. 20, 2002). 

Page 1 GAO-04-88 DOD Premium Class Travel 
highly vulnerable to fraud, waste, and abuse—in the federal government, a 

designation that continues today.

3 

The centrally billed accounts are used by most DOD services and units to 

purchase transportation services such as airline and train tickets, facilitate 

group travel, and pay for other travel-related expenses,4

 while the 

individually billed accounts are used by individual travelers for lodging, 

rental cars, and other travel expenses. For fiscal years 2001 and 2002, DOD 

travelers incurred $7.1 billion in expenses on the centrally billed and 

individually billed travel card accounts, with about $2.8 billion related to 

the use of centrally billed accounts. This report addresses the first part of 

your request related to controls over premium class travel charged to 

centrally billed accounts. Federal travel regulations define premium class 

travel as any class of accommodation above coach class, that is, first or 

business class. We plan to report to you separately on the results of our 

overall audit of the controls over the centrally billed account travel 

program. 

Because DOD disburses funds directly to Bank of America under a 

governmentwide travel card contract for charges made to the centrally 

billed accounts, the use of these accounts for improper5

 transportation, in 

particular the more expensive premium class travel, results in direct 

increased cost to the government. Governmentwide General Services 

Administration (GSA) regulations and internal DOD regulations state that 

travelers must use coach class accommodations for official business air 

travel—both domestic and international—except when a traveler is 

specifically authorized to use premium class. The regulations also state 

that travelers on official government travel must exercise the same 

3

U.S. General Accounting Office, High-Risk Series: An Overview, GAO/HR-95-1 

(Washington, D.C.: February 1995), and High-Risk Series: An Update, GAO-03-119 

(Washington, D.C.: January 2003). 

4

The Air Force is an exception to this general rule. The Air Force equally uses both centrally 

billed and individual billed accounts for purchasing airline transportation. 

5

We define improper premium class travel transactions as those in which travelers did not 

have specific authorization to use premium class accommodations or those transactions 

that were properly authorized but did not provide specific justification for premium class 

travel that was consistent with DOD regulation or policy. We also considered transactions 

improper if premium class travel was authorized under DOD policy or procedures that were 

inconsistent with the Federal Travel Regulation or the guidance provided in our Standards 

for Internal Control in the Federal Government (GAO/AIMD-00-21.3.1) and our Guide for 

Evaluating and Testing Controls Over Sensitive Payments (GAO/AFMD-8.1.2). 

Page 2 GAO-04-88 DOD Premium Class Travel 
standard of care in incurring expenses that a prudent person would 

exercise if traveling on personal business. Premium class flights are not 

something travelers are entitled to simply because certain conditions exist. 

Rather, GSA and DOD require that, when possible, travelers plan their 

travel in advance to avoid the necessity for premium class travel. 

As you requested, the objective of our audit was to assess the adequacy of 

internal controls over the authorization and issuance of fiscal years 2001 

and 2002 premium class tickets charged to DOD’s centrally billed travel 

accounts. Specifically, we (1) identified the extent to which DOD uses the 

centrally billed travel accounts to purchase premium class travel, 

(2) determined if DOD’s key internal control activities operated effectively 

and provided reasonable assurance that premium class travel was 

purchased appropriately and identified examples of control breakdowns, 

and (3) assessed DOD’s oversight and monitoring of the use of premium 

travel and key elements of the control environment. 

To meet our objectives, we (1) extracted premium class transactions from 

Bank of America databases of charges made to DOD’s centrally billed 

accounts for fiscal years 2001 and 2002, (2) reviewed federal laws and 

regulations and DOD policies and procedures on premium class travel, and 

(3) interviewed DOD officials on processes and procedures in place to 

authorize and justify premium class travel. We tested a statistical sample of 

premium class travel transactions and conducted other audit work to 

evaluate the design and implementation of key internal control procedures 

and activities. We used data mining to identify additional instances of 

improper premium class travel based on the frequency and dollar amount 

of premium class travel. Appendix I provides details on our scope and 

methodology. 

We conducted our audit work from November 2002 through August 2003 in 

accordance with U.S. generally accepted government auditing standards, 

and we performed our investigative work in accordance with standards 

prescribed by the President’s Council on Integrity and Efficiency. We 

received oral comments on a draft of this report from DOD, Army, Navy, 

Marine Corps, and Air Force officials on September 10, 2003. We addressed 

the comments in the “Agency Comments and Our Evaluation” section, and 

incorporated those comments in the final report where appropriate. 

Results in Brief	 Breakdowns in specific internal controls, ineffective oversight, and a poor 

control environment over the use of DOD’s premium class travel resulted in 

Page 3 GAO-04-88 DOD Premium Class Travel 
improper first and business class travel and increased costs to taxpayers. 

Based on our analysis of charges made to DOD’s centrally billed accounts, 

we found that for fiscal years 2001 and 2002, DOD spent almost 

$124 million on over 68,000 airline tickets that included at least one leg of 

premium class service, primarily business class. The price difference 

between a premium class ticket and a coach class ticket ranged from a few 

dollars to thousands of dollars. Based on our statistical sample, we 

estimated that senior civilian and military employees—including seniorlevel executives and presidential appointees with Senate confirmation— 

accounted for almost 50 percent of premium class travel. 

Breakdowns in key internal control activities resulted in a significant level 

of improper premium class travel. Specific control breakdowns included 

lack of (1) proper authorization of premium class travel—documentation 

directing the traveler to fly on official government business had to 

specifically mention that the individual could travel in premium class and 

the authorizing travel documents had to be signed by an official who was 

not the traveler or a subordinate6

—and (2) proper justification of premium 

class travel—documentation had to reflect that the circumstances under 

which premium class travel was used were consistent with criteria set out 

in governmentwide and DOD regulations or policies. Our statistical sample 

results showed that an estimated 72 percent of DOD fiscal year 2001 and 

2002 premium class travel was not properly authorized, and 73 percent was 

not properly justified. One example of improper travel we identified was 

for a DOD civilian employee and three family members who flew a 

combination of first and business class when they relocated from London 

to Honolulu. The travel order for the employee and his family did not 

authorize them to fly premium class, yet premium class tickets totaling 

almost $21,000 were issued, compared to an estimated cost of $2,500 for 

coach class tickets. Consequently, the government incurred more than 

$18,000 in additional cost. 

Our data mining work also determined that although frequent premium 

class travelers were generally authorized to travel premium class, the 

authorization was not properly justified. Of the 28 most frequent first and 

business class DOD travelers, only 3 did not receive proper authorization 

for this class of travel. These 3 travelers lacked proper authorization 

6

Although DOD policies do not address subordinates approving their supervisors’ premium 

class travel, we consider this to be a control weakness, as it increases the opportunity for 

high-ranking employees to bypass internal controls over travel. 

Page 4 GAO-04-88 DOD Premium Class Travel 
because they either approved their own premium class travel or had their 

subordinates do so. However, the 28 most frequent travelers still had a high 

rate of improper use of first and business class travel because their 

justification—often for mission requirements or medical condition—was 

not supported by the documentation provided or did not adhere to the 

governmentwide and DOD travel regulations. In other cases, the 

justification provided by frequent travelers was questionable because the 

documentation was not adequate to determine whether the transaction met 

DOD’s criteria. 

Lack of management oversight and a weak overall control environment 

also contributed to improper premium class travel. Specifically, DOD did 

not collect data on the extent of business class travel—the bulk of DOD’s 

premium class travel—and therefore performed little or no monitoring of 

this type of travel. In addition, DOD’s first class travel data, which DOD is 

required to report to GSA annually, were incomplete. As a result, DOD was 

not aware of the improper use of premium class travel and did not have 

data available to identify trends and determine whether alternate, less 

expensive means of transportation were available. Further, weaknesses in 

the control environment, primarily related to policies and procedures, 

exacerbated weak internal control procedures and contributed to 

ineffective oversight of premium class travel. Specifically, we found that 

DOD (1) issued polices that were inconsistent with GSA’s governmentwide 

travel regulations, (2) did not require the military services to issue and 

update premium class policies that consistently implemented DOD’s travel 

regulations, and (3) did not issue guidance on how to document the 

authorization and justification of premium class travel. As a result of our 

audit, DOD has begun updating its travel regulations to more clearly 

articulate the circumstances under which premium class travel is 

authorized. In addition, the updated regulations, in the context of lengthy 

travel, emphasize that premium class travel must not be common practice 

and that such services should only be used in exceptional circumstances. 

This report contains recommendations to DOD aimed at reducing improper 

premium class travel and related DOD travel costs. Our recommendations 

address the need to improve internal controls to provide reasonable 

assurance that authorization and justification for premium class travel are 

appropriate, monitor the extent of premium class travel, modify policies 

and procedures to make them consistent with GSA regulations, and issue 

policies prohibiting subordinates or the travelers themselves from 

authorizing the travelers’ premium class travel. In oral comments on a draft 

of this report, DOD officials concurred with our recommendations to 

Page 5 GAO-04-88 DOD Premium Class Travel 
resolve the control weaknesses. Because two of their proposed actions 

represented alternative approaches to mitigate identified weaknesses, we 

modified those recommendations to recognize that the intent of those 

recommendations could be addressed in different ways. 

Background	 DOD uses a combination of governmentwide and DOD guidance as the 

policy and procedural foundation for incurring premium class travel. The 

Federal Travel Regulation (FTR), issued by GSA, implements statutory and 

Office of Management and Budget (OMB) requirements and policies for 

travel by federal civilian employees and others authorized to travel at 

government expense, including guidelines governing the use of premium 

class travel. The purpose of the FTR is to ensure that official travel is 

conducted responsibly and at a minimal administrative expense. Pursuant 

to various statutes, DOD issued the Joint Federal Travel Regulations 

(JFTR), which applies to uniformed service members, and the Joint Travel 

Regulations (JTR), which applies to DOD civilian personnel. The DOD 

travel regulation for military personnel mirrors the GSA regulation, and 

DOD travel regulations for civilian personnel are subject to GSA’s travel 

regulation. In addition, each military service has issued implementing 

guidelines that, to varying degrees, provide additional guidance on when 

premium class travel is authorized. 

GSA and DOD regulations authorize the use of premium class travel under 

specific circumstances. The JTR and the JFTR limit the authority to 

authorize first class travel to the Secretary of Defense, his or her deputy, or 

other officials as designated by the Secretary of Defense. However, while 

both the JTR and JFTR provide that the authority to authorize first class 

travel may be delegated and re-delegated, the regulations specify that the 

authority must be delegated to “as high an administrative level as 

practicable to ensure adequate consideration and review of the 

circumstances necessitating the first class accommodations.” Further 

guidance is found in a DOD directive on transportation and traffic 

management, which specifically states that the secretaries within their 

military services and secretariats are the authorizing authorities for first 

class travel. The service secretaries may re-delegate authorizing authority 

for first class travel to under secretaries, service chiefs or their vice and/or 

deputy chiefs of staff, and four-star major commanders or their three-star 

vice and/or deputy commanders, but authorizing authority may not be 

delegated to anyone other than these officials. DOD regulations also 

require that authorization for premium class accommodations be made in 

advance of the actual travel unless extenuating circumstances or 

Page 6 GAO-04-88 DOD Premium Class Travel 
emergency situations make advance7

 authorization impossible. Specifically, 

the JTR and JFTR state that first class accommodation is authorized only 

when at least one of the following conditions exists: 

•	 coach class airline accommodations or premium class other than first 

class airline accommodations are not reasonably available; 

•	 the traveler is so handicapped or otherwise physically impaired that 

other accommodations cannot be used, and such condition is 

substantiated by competent medical authority; or 

• exceptional security circumstances require such travel. 

The JTR and JFTR allow the transportation officer,

8

 in conjunction with the 

official who issued the travel order, to approve premium class travel other 

than first class. In accordance with the FTR, DOD restricts premium class 

travel to the following eight circumstances: 

•	 regularly scheduled flights between origin and destination provide only 

premium class accommodations, and this is certified on the travel 

voucher; 

•	 coach class is not available in time to accomplish the purpose of the 

official travel, which is so urgent it cannot be postponed; 

•	 premium class travel is necessary to accommodate the traveler’s 

disability or other physical impairment, and the condition is 

substantiated in writing by competent medical authority; 

•	 premium class travel is needed for security purposes or because 

exceptional circumstances make its use essential to the successful 

performance of the mission; 

7

First class accommodations may be used without authorization only when regularly 

scheduled flights between the authorized origin and destination (including connecting 

points) provide only first class accommodations. 

8

The JFTR delegates to the services the authority to determine who may approve premium 

other than first class travel. The service regulations call for the same authorizing official as 

the JTR. 

Page 7 GAO-04-88 DOD Premium Class Travel 
•	 coach class accommodations on authorized/approved foreign carriers 

do not provide adequate sanitation or meet health standards; 

•	 premium class accommodations would result in overall savings to the 

government because of subsistence costs, overtime, or lost productive 

time that would be incurred while awaiting coach class 

accommodations; 

• transportation is paid in full by a nonfederal source; or 

•	 travel is to or from a destination outside the continental United States, 

and the scheduled flight time (including stopovers) is in excess of 14 

hours. However, a rest stop is prohibited when travel is authorized by 

premium class accommodations. 

Both GSA and DOD regulations allow a traveler to upgrade to premium 

class other than first class travel at personal expense, through redemption 

of frequent traveler benefits. GSA also identified agency mission as one of 

the criteria for premium class travel. Appendix II includes more detailed 

information concerning the process by which DOD military and civilian 

personnel would properly obtain premium class airline tickets. 

Extent of Premium 

Class Travel Is 

Significant 

For fiscal years 2001 and 2002, DOD spent nearly $124 million on over 

68,000 airline tickets containing at least one leg of premium class travel.

9 

Since DOD did not maintain centralized data on premium class travel, we 

extracted this information from Bank of America’s fiscal years 2001 and 

2002 databases of DOD centrally billed account travel, which included over 

5.3 million transactions for airline tickets valued at over $2.4 billion. 

Although we were able to report this aggregate information, we were 

unable to obtain any breakdowns of the data, such as the amount of 

premium class travel by military service or the amount of premium class 

travel used for domestic versus overseas flights. As discussed later in this 

report, because DOD does not obtain or maintain management information 

on premium class travel, it cannot monitor its proper use, identify trends, 

or determine alternate, less expensive means of transportation. 

9

In addition to the over 68,000 premium class travel transactions purchased by DOD, DOD 

travelers upgraded over 3,100 coach tickets to business or first class tickets at no cost to the 

government. 

Page 8 GAO-04-88 DOD Premium Class Travel 
As shown in table 1, the total dollar amount DOD spent on travel that 

included at least one leg of premium class airfare was about $57 million in 

fiscal year 2001 and about $67 million in fiscal year 2002. First class travel 

accounted for 2.4 percent of the total dollars spent for premium class travel 

for the 2 fiscal years, while business class accounted for the remaining 97.6 

percent. 

Table 1: DOD Premium Class Travel for Fiscal Years 2001 and 2002 

Number of transactions Dollar amounts (in thousands) 

2001 2002 Total 2001 2002 Total 

First class 688 552 1,240 $1,302 $1,596 $2,898 

Business class 32,771 34,079 66,850 55,852 65,095 $120,947 

Total premium travel 33,459 34,631 68,090 $57,154 $66,691 $123,845 

Source: GAO analysis of Bank of America data. 

Note: Transactions include at least one leg of premium class travel. 

DOD’s premium class air travel accounts for a very small percentage of 

DOD travel overall.10 It represents 1 percent of total DOD airline 

transactions and 5 percent of total DOD dollars spent on airline travel 

charged to the centrally billed accounts. However, to put the amount that 

DOD spends on premium class travel in perspective, we noted that the $124 

million DOD spent on premium class related travel during these 2 fiscal 

years exceeded the total travel and transportation expenses—including 

airfare, lodging, and meals—spent by 12 major agencies covered by the 

Chief Financial Officers Act of 1990, including the Social Security 

Administration; the Departments of Energy, Education, Housing and Urban 

Development, and Labor; and the National Aeronautics and Space 

Administration. The difference between a premium class ticket and a 

comparable coach class ticket can range from negligible—particularly if 

the traveler traveled within Europe—to thousands of dollars. In one 

instance, a traveler’s first class flight between Washington and Los Angeles 

was 14 times, or about $3,000 more than, the price of a coach class flight. 

10DOD reported almost $10.8 billion in travel-related expenses for fiscal years 2001 and 2002 

combined. 

Page 9 GAO-04-88 DOD Premium Class Travel 
We also found that higher-ranking civilian personnel and military officials 

accounted for a large part of premium class travel. Based on our statistical 

sample, we estimated that DOD civilian employees under the General 

Schedule (GS) grade GS-13 to GS-15 (supervisors and managers), Senior 

Executive Service (SES) (career senior executives), presidential 

appointees with Senate confirmation, and DOD senior military officers O-4 

and above accounted for almost 50 percent of premium class travel. The 

remaining 50 percent in our statistical sample comprised mostly other 

officers, senior enlisted personnel, and technical or professional staff. We 

consider travel by high-ranking officials, in particular senior-level 

executives, to be a sensitive payment area because of its susceptibility to 

abuse or noncompliance with laws and regulations.11 

Key Internal Controls 

Were Ineffective Internal control activities help ensure that management’s directives are carried 

out. The control activities should be effective and efficient in accomplishing the 

agency’s control objectives. GAO’s Standards for Internal Control in the 

Federal Government (GAO/AIMD-00-21.3.1, November 1999) 

Significant breakdowns in key internal control activities resulted in a 

significant level of improper premium class travel and increased DOD 

travel cost. Specifically, we estimated, based on our statistical sample, that 

72 percent of the DOD centrally billed travel transactions containing 

premium class travel for fiscal years 2001 and 2002 were not properly 

authorized, and 73 percent were not properly justified. (See app. I for 

further details of our statistical sampling test results.) Using our statistical 

sample and data mining results, we found numerous examples of premium 

class travel without authorization or adequate justification, illustrating the 

improper use of premium class travel and the resulting increase in travel 

costs. Further, we used data mining techniques to identify the most 

frequent users of premium class travel. Our analysis of these cases showed 

that almost all were senior-level employees whose travel, although properly 

authorized, generally was not adequately justified. 

11GAO/AFMD-8.1.2. 

Page 10 GAO-04-88 DOD Premium Class Travel 
Results of Statistical 

Sampling Work 

We selected two key transaction-level controls for statistical sampling 

testing. As shown in table 2, we estimated that 72 percent of premium class 

travel was unauthorized. Because the FTR and DOD regulations provide 

that premium class travel must be specifically authorized, transactions that 

failed this test also failed the justification test. In addition, we found two 

transactions in our statistical sample were properly authorized but failed 

the justification test as they were not supported by the documentation 

provided or did not adhere to the FTR and DOD travel regulations. 

Table 2: Estimate of Fiscal Year 2001 and 2002 DOD Premium Class Travel 

Transactions That Failed Control Tests 

Estimated percentage


failure rate in key 


Control test internal controlsa


Not properly authorized by a designated official at equal or 

higher rank/grade to the traveler 

Not properly justified 

Source: GAO analysis of DOD premium class travel transactions and supporting documentation. 

Note: Our testing excluded all business class transactions costing less than $750. We determined that 

many of these lower dollar transactions were covered by a blanket authorization for certain intraEuropean flights. Although, as discussed in this section, we did not believe the blanket authorization 

was valid, we eliminated these transactions from our sample to avoid possible skewing of the results. 

a

The numbers represent point estimates for the population based on our sampling tests. Information 

about the confidence intervals for our sample estimates is presented in app. I. 

Proper Authorization Did Not Requiring premium class travel to be properly authorized is the first step in 

Exist 	 preventing improper premium class travel. The FTR requires premium 

class travel to be specifically authorized. DOD specifies that premium class 

travel must be authorized in advance of travel, unless extenuating or 

emergency circumstances make authorization impossible, in which case 

the traveler is required to request written approval from the appropriate 

authority as soon as possible after the travel. In addition to the FTR and 

DOD regulations, we also applied the criteria set forth in our internal 

control standards12 and sensitive payments guidelines13 in evaluating the 

proper authorization of premium class travel. For example, while DOD 

12GAO/AIMD-00-21.3.1. 

13GAO/AFMD-8.1.2. 

Page 11 GAO-04-88 DOD Premium Class Travel 

72 

73 
travel regulations and policies do not address subordinates authorizing 

their supervisors’ premium class travel, our internal control standards 

consider such policy to be flawed; therefore, a premium class transaction 

that was approved by a subordinate would fail the control test. Using these 

guidelines, we found that transactions failed the authorization test in the 

following three categories: (1) the premium class airline ticket was 

purchased, but the authorization of premium class travel was not noted on 

either the travel order or on additional documentation supporting the travel 

order, (2) the travel order authorizing premium class travel was not signed, 

and (3) premium class travel was authorized by a subordinate. 

Premium class travel not specifically authorized. Based on our 

statistical sample, we estimated that the travel order and other supporting 

documentation for 64 percent of the premium class transactions did not 

specifically authorize the traveler to fly premium class, and thus the 

commercial travel office should not have issued the premium class ticket. 

Further, we estimated that 5 percent of the transactions lacking specific 

authorization were intra-European flights covered under a blanket 

authorization issued in February 2002 by the U.S. Army Transportation 

Management Center, Europe, located in Germany. The blanket 

authorization permitted the commercial travel office to automatically 

purchase business class tickets on 65 flights between Frankfurt, Munich, or 

Stuttgart and other selected European cities. The blanket authorization 

stated that business class was authorized for these routes because it was 

the lowest unrestricted fare. Consequently, DOD considered these 

transactions to have been authorized. However, we disagree that a blanket 

authorization can be used for premium class travel because it is not 

consistent with GSA and DOD requirements that all premium class travel 

be specifically authorized and, wherever possible, minimized. Further, the 

importance of having individual authorization for premium class travel is 

illustrated by our independent evaluation of the 65 flights, which showed 

that business class tickets were not necessarily equal to or lower than the 

cost of unrestricted coach, as claimed in the blanket authorization. For 

example, according to the travel agency that served GAO, the business fare 

between Munich, Germany, and Tbilisi, Georgia (located near Turkey), was 

$3,232 and the unrestricted economy fare was $992, a difference of $2,240. 

Travel order not signed. We also estimated that 6 percent of premium 

class transactions were related to instances where the travel order 

authorizing business class was not signed at all or the travel order 

authorizing first class was not signed by the service secretary or his 

designee, as required by DOD regulations. Ensuring that travel orders are 

Page 12 GAO-04-88 DOD Premium Class Travel 
signed by an appropriate official is a key control to preventing improper 

premium class travel. If the travel order is not signed, or not signed by the 

individual designated to do so, DOD has no assurance that the substantially 

higher cost of the premium class tickets was properly reviewed and 

represented an efficient use of government resources. 

Premium travel authorized by a subordinate. We estimated that 2 

percent of the premium class transactions involved situations where a 

subordinate approved a superior’s travel. Although these limited instances 

do not necessarily indicate the existence of a significant systemic problem, 

allowing subordinates to approve their supervisors’ premium class travel is 

synonymous to self-approval and reduces scrutiny of premium class 

requests. Our internal control standards state that “Transactions and other 

significant events should be authorized and executed only by persons 

acting within the scope of their authority. This is the principal means of 

assuring that only valid transactions to exchange, transfer, use, or commit 

resources and other events are initiated or entered into.” 

Valid Justification for Premium Another internal control weakness identified in the statistical sample was 

Travel Often Did Not Exist	 that the justification used for premium class travel was not always 

provided, not accurate, and/or not complete enough to warrant the 

additional cost to the government. As previously stated, premium class 

travel is not an entitlement. In fact, recent changes to the DOD regulations 

state that premium class travel, in the context of lengthy flights, should 

only be used when exceptional circumstances warrant and that alternatives 

should be explored to minimize unnecessary premium class travel. In 

reviewing whether premium class travel was justified, we looked at 

whether there was documented authorization and, if there was, whether 

the authorization for premium class travel was supported by evidence of a 

valid reason. As shown in table 2, an estimated 72 percent of premium class 

transactions were not authorized and therefore could not have been 

justified. An additional 2 transactions in the statistical sample were 

authorized but not justified in accordance with DOD’s criteria. In one 

instance for example, although the flight time exceeded 14 hours, the 

traveler had a layover in route, which should have precluded the traveler 

from being authorized premium class travel. 

Examples of Improper Use Table 3 contains specific examples of unauthorized travel from both our 

of Premium Class Travel	 statistical samples and data mining work. The table also contains examples 

of premium class travel that was unjustified. Without authorization or 

adequate justification, these cases illustrate the improper use of premium 

Page 13 GAO-04-88 DOD Premium Class Travel 
class travel and the resulting increase in travel costs. Following the table is 

more detailed information on some of these cases. 

Table 3: Examples of Improper Use of Premium Class Travel 

Cost of Estimated 

premium cost of 

Grade/ Class of ticket coach fare 

Traveler Source ranka Itinerary ticket paid ticketb Reason for exception 

Data GS-14 One-way from First and $20,943 $2,500c Travel order did not authorize use of first 

mining London to Honolulu business or business class travel. Transaction 

for a family of four for failed authorization and justification. 

relocation purposes 

Statistical GS-15 Los Angeles to First 3,253 238c Travel order did not authorize first class 

sample Washington, D.C. travel. Transaction failed authorization 

and back and justification. 

Statistical GS-13 Austin to London Business 4,066 1,606 Travel order did not authorize business 

sample and from London to class travel. Transaction failed 

San Diego authorization and justification. 

Statistical GS-13 San Diego to Busan, Business 3,695 2,161 Travel order did not authorize business 

sample Korea, and back class travel. Transaction failed 

authorization and justification. 

Statistical O-5 London to Lisbon, Business 1,338 672 Travel order did not authorize business 

sample Spain class travel. Transaction failed 

authorization and justification. 

Statistical GS-13 Washington, D.C. to Business 4,319 1,450c Travel order authorizing business class 

sample Taipei, and back travel was not signed. Transaction failed 

authorization and justification. 

Statistical GS-13 San Francisco to Business 3,168 610c Travel order authorizing business class 

sample Tokyo, and back travel was not signed. Transaction failed 

authorization and justification. 

Data CW-4 Washington, D.C. to Business 9,530 2,501 Blanket travel order authorizing 

mining Tashkent, premium class travel was used. 

Uzbekistan, and Transaction failed authorization and 

back justification. 

9 Statistical GS-13 Tucson to Bahrain Business 8,308 4,966 Business class travel authorized based 

sample and Bahrain to Los on flight lasting more than 14 hours; 

Angeles however, traveler had rest stop en route. 

Transaction passed authorization but 

failed justification. 

Page 14 GAO-04-88 DOD Premium Class Travel 

1 

2 

3 

4 

5 

6 

7 

8 
(Continued From Previous Page) 

Cost of Estimated 

premium cost of 

Grade/ Class of ticket coach fare 

Traveler Source ranka Itinerary ticket paid ticketb Reason for exception 

Data GS-15 Washington, D.C. to Business 4,525 570c Business class travel authorized but no 

mining Amsterdam, and justification provided on the order. Over 

back 18 months after the trip occurred, the 

traveler’s supervisor—not a physician— 

wrote a note stating that he authorized 

premium class based on a medical 

need. Transaction passed authorization 

but failed justification test. 

Statistical Political Washington, D.C. to Business 3,485 1,530c Business class travel authorized on 

sample appointee London, then Paris basis that travel is mission essential, but 

to Moscow no additional information provided. 

Travel was to a conference in Moscow. 

Transaction passed authorization but 

failed justification. 

Source: GAO analysis of premium class travel transactions and supporting documentation. 

a

GS designates General Schedule pay schedule. O designates a military oficer. CW designates a 

military chief warrant officer. 

b

Source of estimated coach fares is GSA city pair or expedia.com. 

c

Fares do not include all applicable taxes and airport fees. 

•	 Traveler #1 is a GS-14 at the Department of the Navy; he along with three 

family members flew a combination of first and business class when 

they were relocated from London to Honolulu. The cost to the 

government for those four first and business class tickets was almost 

$21,000, compared to an estimated total cost of about $2,500 for four 

coach class tickets. An audit of the travel orders for this trip indicated 

that the DOD civilian employee and his family were not authorized to fly 

first or business class. Consequently, the traveler failed both the 

authorization and the justification test. Despite the lack of specific 

authorization, the traveler was issued premium class tickets for this trip, 

resulting in additional cost to the government of more than $18,000. 

Upon being contacted, the traveler agreed that his travel order did not 

specifically state that premium class was authorized, and stated that he 

inquired about business class tickets from the commercial travel office 

because his flight lasted more than 14 hours. Based on the issuance of 

premium class tickets for other permanent change-in-station moves 

exceeding 14 hours in total travel time, the commercial travel office 

issued the premium class tickets to the traveler. 

•	 Traveler #4 is a GS-13 at the Department of the Navy. In March 2002, the 

traveler flew business class round-trip from San Francisco to Osaka, 

Page 15 GAO-04-88 DOD Premium Class Travel 

10 

11 
Japan, where he had an overnight layover before proceeding to Busan, 

Korea. The travel order DOD provided us did not authorize business 

class travel. Further, because the traveler had an overnight layover in 

route to Korea, the 14-hour rule would not apply. The cost of the ticket 

was $3,695, compared to an estimated cost of $2,161 for a comparable 

unrestricted ticket in coach. Without authorization or valid justification, 

the additional $1,534 spent on the business class ticket was improper. 

•	 Traveler #7 is a GS-13 in the Navy. In March 2002, the traveler flew 

business class from San Francisco to Tokyo on a ticket costing $3,168. 

Although the flight to Tokyo lasted more than 14 hours, the use of 

premium class travel was not properly authorized because the travel 

order was not signed by the appropriate official. In comparison, the 

estimated cost of an unrestricted government fare in coach was $610. 

•	 Traveler #9 was a GS-13 in the Department of the Army who flew most 

of his trip from Tucson to Bahrain and then from Bahrain to Los Angeles 

in business class, at a cost of $8,308. The estimated cost of an 

unrestricted coach class ticket for the same route was $4,966. The 

justification for the additional cost of the business class ticket was that 

the flight lasted more than 14 hours. However, the traveler stopped 

overnight in London at the government’s expense on both the outbound 

and return portions of the trip. The FTR and JTR specifically prohibit 

premium class flights when the traveler has a rest stop en route at the 

government’s expense. 

•	 Traveler #10 was a GS-15 in the Department of the Navy who flew 

premium class from Washington, D.C., to Amsterdam and back on the 

basis of a medical condition. The duration of the flight each way was 

about 8 hours and cost $4,525. The estimated cost of an unrestricted 

government fare coach class ticket for the same route was $570. The 

supporting documentation provided to us included a note, written by the 

traveler’s supervisor, that was prepared more than 18 months after the 

travel, stating that the traveler had a medical condition requiring the 

premium class ticket. However, the note was not signed by a doctor nor 

did it reference a medical professional who recommended the need for 

premium class seating. The traveler informed us that his supervisor 

wrote the medical note after our inquiry into his case. In addition, none 

of the other 9 flights taken by the traveler cited a medical condition, and 

the traveler flew coach class on a number of flights that lasted longer 

than his flight from Washington, D.C., to Amsterdam. According to the 

Page 16 GAO-04-88 DOD Premium Class Travel 
traveler, he never had been properly authorized to fly business class on 

the basis of a medical condition. 

•	 Traveler #11 was a political appointee and a member of the Commission 

on the Future of the United States Aerospace Industry (Commission), an 

organization that was almost entirely funded by DOD and for which 

DOD paid the cost of all airline tickets for Commission members and 

staff. The traveler flew business class from Washington, D.C., to London, 

and then traveled by rail from London to Brussels and onto Paris. In 

Paris, the traveler took a business class flight to Moscow to attend a 2-

day conference. According to the travel order, business class travel was 

authorized because it was mission essential. However, the travel order 

did not indicate why the cost of business class travel for a trip to a 

conference was mission essential. Further, mission essential is not a 

DOD criterion for authorizing business class travel. Our data mining 

efforts found that DOD paid the travel of a total of 13 individuals—6 

commissioners and 7 commission staff—to attend the Moscow 

conference after stopping off in London, Brussels, and Paris. The 6 

commissioners flew business class for all of the flights, while the 

commission staff flew coach to London and on the return flights, and 

flew business class while in Europe. None of the commissioners were 

government employees; however, all of the staff were employed by DOD 

and other agencies. The average cost of the airline tickets for all 6 

commissioners was about $7,500 while the average cost of the airline 

tickets for the staff was about $3,100. The official told us he authorized 

premium class travel for the commissioners because they were highsalaried individuals from the private sector who were donating 10 days 

of their time to the government with no compensation. However, neither 

the FTR nor the DOD travel regulations authorize premium class travel 

based on a person’s salary or whether he or she is donating time to the 

government. 

Frequent Premium Class 

Travelers 

Our work also included data mining to identify the individuals who traveled 

premium class most frequently. We analyzed the 68,090 premium class 

transactions during fiscal years 2001 and 2002 and identified 28 of the most 

frequent premium class travelers. As indicated by the examples in table 4, 

the frequent travelers were almost all senior DOD personnel. Specifically, 

we found that all but 1 of the 28 most frequent travelers were at least GS-13 

civilians or O-4 military officials. Although these frequent travelers were 

generally authorized to fly premium class by someone at the same or a 

higher level, we determined that many of the transactions were improper 

Page 17 GAO-04-88 DOD Premium Class Travel 
because their justification was not supported by the documentation 

provided or did not adhere to the FTR and DOD travel regulations. Other 

cases involving frequent travelers were questionable because the 

justification documentation was not adequate to determine whether the 

transaction met DOD’s criteria. 

Table 4: Examples of Travelers Who Frequently Used Premium Travel 

Number/ 

cost of 

Grade/ premium Justification for GAO’s concern with premium 

Traveler rank class trips premium travel class travel Response by traveler or traveler’s staff 

GM-14 14/$88,000 Doctor’s note Traveler took 45 flights—14 Traveler admitted to inconsistent application 

claims medical premium and 31 coach class trips of medical necessity. Traveler considered 

necessity during fiscal years 2001 and 2002. extra room in business class to be more 

Many coach class trips were comfortable for long flights. 

similar in duration to premium 

class trips. 

O-8 16/$68,000 Blanket 1. A blanket authorization was The general’s aide said that in the future he 

authorization used to justify premium class will pay closer attention to the requirements 

used to justify travel. for premium class travel before obtaining 

premium class 2. Premium travel was premium class travel. The general’s aide 

authorized by a subordinate. also said that in the future he will also get 

3. Not all premium class flights an independent authorization for premium 

met premium class criteria. class travel when the criteria for premium 

class travel are met. 

PASa 17/$68,000 First and 1. Blanket authorization was The traveler's aide said that she will get the 

business class used to justify first and Deputy Secretary's approval for first class 

travel justified business class travel. travel and only schedule the traveler for first 

through a blanket 2. Premium travel was or business class when alternative seating 

order based on authorized by a subordinate. is not available. 

medical condition 3. Traveler flew in coach class 

on some flights. 

Page 18 GAO-04-88 DOD Premium Class Travel 

1 

2 

3 
(Continued From Previous Page) 

Number/ 

cost of 

Grade/ premium Justification for GAO’s concern with premium 

Traveler rank class trips premium travel class travel Response by traveler or traveler’s staff 

PASa 15/$70,000	 Claimed mission 

essential, so that 

the traveler would 

be ready for 

meetings upon 

arrival at 

destination 

1. DOD travel regulations do not 

list mission essential as a 

basis to justify premium class 

travel. 

2.	 Traveler submitted 

justification and obtained 

specific authorization for 

many trips; however, the 

justification was not always 

accurate and did not consider 

alternatives to the more 

expensive premium class 

travel. 

3. Most flights were less than 14 

hours. 

4. Some premium class flights 

were not authorized. 

Traveler’s assistant said that the traveler 

flies premium class to minimize his time 

away from the office. However, the assistant 

could not demonstrate a cost savings 

caused by lost productivity. Traveler’s 

assistant also said that even though the 

flights did not exceed 14 hours, the traveler 

should be able to fly premium class 

because of the importance of the traveler’s 

work. The traveler’s assistant did not 

explain the reasons some premium class 

flights were not authorized. 

GS-15 11/$35,000 Medical Travel orders were not signed, but Traveler told us he was not aware that first 

necessity the official authorizing the travel class had to be approved by the Under 

was the traveler himself. First Secretary of the Navy. Traveler is no longer 

class travel was not authorized by authorized to travel premium class. 

the Under Secretary of the Navy, 

as required by Navy regulations. 

SESb 10/$48,000	 Claimed mission 

essential, so that 

the traveler would 

be ready for 

meetings upon 

arrival at 

destination 

1. DOD travel regulations do not 

list mission essential as a 

basis to justify premium class 

travel. 

2. Some premium class flights 

were less than 14 hours. 

3. 	 Business class was taken on 

return flights. 

4. Specific justification was not 

always accurate. 

The traveler said that he did not make his 

flight arrangements. The traveler’s assistant 

had no explanation for why some premium 

class trips were not always authorized, or 

why the specific justification was not 

accurate. The traveler’s assistant said that 

the traveler did not want to leave the day 

before to avoid the additional cost of a 

business class flight. 

SES 13/$56,000 Medical Medical note and Under Secretary The traveler has retired. The individual who 

necessity of the Navy authorization were assisted in assembling the documentation 

dated in 1993 and travel was in said there was nothing more current to 

2000 and 2001. Current travel justify the first class travel than the 1993 

order signed by a subordinate. doctor’s note and the 1993 Under Secretary 

of the Navy’s authorization. 

Source: GAO analysis of premium class travel transactions and supporting documentation. 

a

Presidential appointment with Senate confirmation. 

b

Senior Executive Service appointment. 

Our work indicated that the most frequent travelers were, in most 

instances, authorized to obtain premium class travel by people at the same 

Page 19 GAO-04-88 DOD Premium Class Travel 

4 

5 

6 

7 
or higher levels. Only 3 of the 28 most frequent travelers failed the 

authorization test because they or their subordinates authorized their 

travel orders. More often, justification provided by frequent travelers failed 

the justification test or the justification was not adequate to permit us to 

determine whether the transaction complied with the FTR and DOD travel 

regulations. The following provides further details on some of the cases in 

table 4. 

•	 Frequent traveler #1 was a GM-14 at the Navy who took 45 round-trip 

flights during our 2-year audit period. The traveler flew business class 

on 14 international trips costing about $88,000 but also took 31 domestic 

trips, in coach class, costing about $12,000. Attached to the travel order 

for each trip was a doctor’s certification noting that, for health reasons, 

the traveler needed to fly in premium class. However, we found that the 

medical certification did not indicate whether premium class travel was 

needed on all flights or flights of certain duration, but that many of the 

traveler’s domestic trips, which he took in coach class, were almost as 

long as some of the international flights he took in business class. For 

example, the traveler regularly flew in coach class from Washington, 

D.C., to cities in California and, in one instance, to Honolulu. The flight 

times for individual legs of these trips ranged from about 5 to 7 hours. 

The traveler’s business class flights included flights from Washington, 

D.C., to Frankfurt or Amsterdam. Those flights lasted about 7 hours. 

When we discussed the trips with this traveler, he stated that although 

some of the domestic flights that he took were similar in duration to the 

international flights, his flights to Europe were generally evening flights 

and the extra room provided in business class enabled him to be less 

confined and to be ready for meetings the next day. The traveler’s 

discussion with us and the nature of his coach and premium travel 

raises questions regarding his medical need to fly business class. 

•	 Frequent traveler # 3 is an assistant secretary of defense in Washington, 

D.C., who used a blanket order to authorize and justify business and first 

class travel based on an unspecified medical condition. We identified a 

total of 17 first and business class tickets for this traveler totaling nearly 

$68,000. Neither the travel orders nor the travel vouchers included a 

physician’s certification identifying the medical justification to fly first 

or business class. In addition, the traveler occasionally flew in coach 

class. About a month after we requested additional documentation for 

these airline tickets, DOD provided us with a letter from a physician 

dated September 11, 2001, requesting that the traveler be authorized to 

fly first class so that the traveler could stretch his legs. The records DOD 

Page 20 GAO-04-88 DOD Premium Class Travel 
provided concerning the 17 flights indicated that the travel office did not 

attempt to satisfy the traveler’s need for space by reserving a bulkhead 

seat or purchasing two coach seats, in accordance with DOD 

requirements. We estimate that the total cost of these flights, if flown in 

coach class, would have been about $17,000. The individual who made 

the premium class reservations told us that she had not been trained on 

the limitations associated with premium class travel. She also told us 

that in the future she would get the Deputy Secretary’s approval for first 

class travel and that she would attempt to limit premium class travel to 

instances in which less expensive alternatives were not available. 

•	 Frequent traveler #5 was a GS-15 in the Navy who took 11 first class 

flights totaling over $35,000 from San Diego to east coast cities including 

Washington, D.C., during fiscal years 2001 and 2002. The traveler 

justified the 11 flights based on a certification from a medical authority 

based on his size and medical condition. However, because his first 

class travel was not authorized by the Under Secretary of the Navy, as 

required by Navy regulations, we contacted the traveler to obtain further 

information on his condition. We estimate that the total cost of these 

flights if all flown in coach class would have been about $7,000. 

According to the traveler, his condition was not so severe that he would 

meet the stringent first class criteria of being “so handicapped or 

otherwise physically impaired that other accommodations cannot be 

used.” Consequently, the traveler told us he was no longer authorized to 

use first class. 

•	 Traveler #6 in table 4 was a deputy assistant secretary at DOD who flew 

premium class on 10 flights from September 2000 through September 

2001 at a cost of approximately $48,000. A review of the travel orders 

and additional documentation supporting this travel showed that the 

individual consistently documented the reasons he needed to fly 

premium class. However, sometimes the justification provided did not 

appear applicable to the trip in question. For example, during a 12-day 

period in late August 2001, the traveler flew business class from 

Washington, D.C., to six European cities and South Africa at a cost of 

over $8,800. He then flew business class from South Africa to Atlanta, 

and first class from Atlanta to Washington, D.C. The documentation 

supporting the trip was an order, signed by the military assistant to the 

under secretary, that authorized the traveler to fly first class from 

Washington, D.C., to Tampa, Florida—destinations that are different 

from the itinerary in question. Both the traveler and his former secretary 

told us they did not recall making these flight arrangements. 

Page 21 GAO-04-88 DOD Premium Class Travel 
In none of the cases in our statistical sample and data mining for which 

authorization for premium class was given based on medical needs did 

DOD submit the medical certification for an informed and independent 

review. Our analysis found that 12 of the 28 frequent premium class 

travelers justified their more expensive flights with a medical condition. 

Further, as discussed in the examples, we identified several anomalies in 

the application of medical condition justification, as evidenced by travelers 

who used both coach and premium class accommodations during flights of 

similar duration and during the same period. This may indicate that 

additional steps should be taken to verify the validity of the medical 

certification. During testing, an Army official at the Traffic Management 

Office informed us that his office forwards all medical certifications to the 

Surgeon General for an opinion before recommending to the Secretary of 

the Army that approval be granted for first class travel. The official stated 

that he did not believe that he was competent to conclude on the medical 

certification. 

Lack of Monitoring and 

Control Environment 

Weaknesses 

Contributed to 

Improper Use of 

Premium Class Travel 

Management and employees should establish and maintain an environment 

throughout the organization that sets a positive and supportive attitude toward 

internal control and conscientious management. A positive control environment 

is the foundation for all other standards. It provides discipline and structure as 

well as the climate which influences the quality of internal control. GAO’s 

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

21.3.1, November 1999) 

Agency internal control monitoring assesses the quality of performance over 

time. It does this by putting procedures in place to monitor internal control on 

an ongoing basis as a part of the process of carrying out its regular activities. It 

includes ensuring that managers and supervisors know their responsibilities for 

internal control and the need to make internal control monitoring part of their 

regular operating processes. Ongoing monitoring occurs during normal 

operations and includes regular management and supervisory activities, 

comparisons, reconciliations, and other actions people take in performing their 

duties. GAO’s Internal Control Standards: Internal Control Management and 

Evaluation Tool (GAO-01-1008G, August 2001) 

DOD and the services performed no monitoring and oversight activities to 

obtain assurance that premium class travel was authorized in accordance 

with regulations. Further, during fiscal years 2001 and 2002, control 

environment weaknesses exacerbated already weak key internal controls 

Page 22 GAO-04-88 DOD Premium Class Travel 
described in the previous section. Consequently, DOD did not have an 

effective internal control environment, particularly in regard to policies 

and procedures, to provide assurance that premium class travel costs are 

incurred only when necessary. Specifically, we found that DOD and the 

military services did not (1) obtain or maintain centralized management 

data on the extent to which military and civilian personnel used premium 

class accommodations for their travel, (2) issue adequate policies related 

to the approval of premium travel, and (3) require consistent 

documentation to justify premium class travel. Until we initiated this audit, 

DOD’s management had not provided an appropriate “tone at the top” to 

encourage the appropriate use of premium class travel. During the course 

of our work, DOD updated the JTR and JFTR in April 2003 to articulate 

more clearly and to make more stringent the circumstances under which 

premium class travel can be authorized. In addition, the updated JTR and 

JFTR emphasize, in the context of lengthy flights, that premium class travel 

must not be common practice and must only be used when exceptional 

circumstances warrant. The JTR and JFTR also provide examples of when 

premium class travel should not be authorized. 

Monitoring and Oversight 

Needs Improvement 

Ineffective oversight of the use of premium class travel was a key 

contributor to weaknesses in the overall control environment. In general, 

effective oversight activities would include management review and 

evaluation of the process for issuing premium class travel and independent 

evaluations of the effectiveness of internal control activities. Program 

monitoring provides DOD management an opportunity to obtain 

reasonable assurance that premium class travel is only obtained with 

proper authorization and justification. This is particularly important 

because of both the sensitivity and high cost of premium class travel. 

However, DOD and the services performed no monitoring and oversight 

activity to obtain assurance that premium class travel was authorized in 

accordance with rules and regulations. In addition, as mentioned 

previously, DOD and the services did not perform reviews to identify the 

extent of premium class travel. Consequently, it is not surprising that DOD 

and the services were not aware of the extent of improper premium class 

transactions. 

Our internal control standards state that separate evaluations of control 

should depend on the assessment of risks and the effectiveness of ongoing 

monitoring procedures. Our Sensitive Payments Guide lists executive 

travel as a high-risk area susceptible to abuse or noncompliance with laws 

and regulations. However, we found no evidence of any audits or 

Page 23 GAO-04-88 DOD Premium Class Travel 
evaluations of premium class travel. Further, DOD’s failure to adequately 

monitor premium class travel has resulted in an environment in which 

there is limited possibility that improper premium class travel will be 

identified. 

The lack of oversight is further demonstrated by the fact that travelers, 

supervisors/managers, and employees at the commercial travel offices 

(CTO) responsible for issuing airline tickets to the travelers are not 

adequately informed of governmentwide and DOD travel regulations 

concerning premium class travel. DOD officials told us that they do not 

verify whether CTO employees receive training in DOD travel regulations 

relating to the more expensive premium class travel, and DOD does not 

track training provided to CTO staff on premium class travel. Thus it was 

not surprising that officials authorizing the travel and the travelers were 

not aware of the stringent regulations associated with premium class 

travel. For example, several DOD travelers and officials told us that they 

thought DOD travel regulations entitled travelers to business class travel 

when their flights exceeded 14 hours. These individuals were not aware 

that the FTR provides that, in order to qualify for business class travel, 

travelers have to proceed directly to work upon arriving at the duty 

location. In addition, several DOD travelers and officials from the 

government and CTOs indicated to us that the numerous CTOs with which 

DOD contracted did not consistently apply the premium class criteria. A 

representative from one CTO informed us that his office issued premium 

class travel if premium class was mentioned on the travel order, even if 

justification for obtaining premium class travel was flawed, for example, 

the flight was not at least 14 hours. 

DOD Did Not Maintain 

Centralized Management 

Data on Premium Class 

Travel 

The Military Traffic Management Command (MTMC), which is responsible 

for tracking DOD’s first class travel, understated the cost and frequency of 

first class travel reported to GSA. In addition, MTMC did not track, and 

therefore did not know, the number of business class trips DOD travelers 

took during fiscal years 2001 and 2002 or the cost of these premium class 

trips. As a result, DOD did not have the data needed for monitoring and 

oversight activities or for identifying trends and determining alternate, less 

expensive means of transportation. 

Page 24 GAO-04-88 DOD Premium Class Travel 
The FTR14 requires DOD, along with all other executive and legislative 

branch agencies, to provide GSA annual reports listing all instances in 

which the organizations approved the use of first class transportation 

accommodations. According to the first class travel reports that MTMC 

submitted to GSA for fiscal years 2001 and 2002, DOD civilian and military 

personnel took less than 1,000 first class flight segments15 totaling less than 

$600,000. These data are supposed to represent all first class transportation 

expenses, whether charged on the centrally billed accounts or the 

individually billed accounts. According to the individual responsible for 

compiling this report, the roughly 1,000 first class segments were identified 

in what is essentially a data call process in which MTMC personnel 

aggregated information provided by the CTOs on the number and cost of 

first class tickets they issued.16 

However, our analysis of Bank of America airline transaction data indicates 

that both the number and cost of the first class tickets reported by DOD are 

significantly understated. Based on our analysis, DOD did not report more 

than half of fiscal years 2001 and 2002 first class segments. As shown in 

table 1, we found that DOD used the centrally billed accounts to purchase 

1,240 airline tickets that contained at least one first class portion. These 

1,240 tickets, which did not include first class tickets purchased using the 

individually billed accounts, contained over 2,000 separate segments with 

first class accommodations, compared to the less than 1,000 flight 

segments DOD reported to GSA. These first class tickets costs of about 

$2.9 million were almost 5 times the amount DOD reported to GSA. 

The differences between the first class travel that we identified and the 

amount DOD reported can in part be attributed to omissions in DOD’s 

methodology for identifying first class tickets. The airlines use a variety of 

letter codes to identify first class fares, and we found that in extracting first 

class data DOD omitted several of the first class codes used by some 

airlines. Further, a comparison of MTMC’s report and our analysis of the 

Bank of America transaction file showed that a number of cities were 

omitted from its analysis of first class travel. For example, while DOD data 

14This requirement was prescribed at the direction of OMB. See OMB Bulletin 93-11. 

15A flight segment is any portion of a ticket with a separate flight number. 

16The contracts between DOD services and the CTOs responsible for issuing tickets to 

travelers specify that CTOs provide reports to MTMC on the number and cost of first class 

tickets. 

Page 25 GAO-04-88 DOD Premium Class Travel 
indicated that no first class flight was taken into Washington, D.C., during 

fiscal year 2001, we found 88 first class flights into Washington, D.C., during 

fiscal year 2001, including first class round-trips from Washington, D.C., to 

Honolulu, San Francisco, Denver, St. Louis, and Los Angeles. 

We also found that DOD did not obtain or maintain centralized data on 

premium class travel other than first class, that is, business class. 

Consequently, DOD did not know, and was unable to provide us with data 

related to, the extent of its premium class travel. As mentioned previously, 

we were able to obtain such data through extensive analysis and 

extractions of DOD travel card transactions from databases provided by 

Bank of America. 

Control Environment Is 

Flawed by Inconsistencies 

in Premium Class Travel 

Guidance 

DOD travelers must follow a complicated array of premium class travel 

guidance. The applicability of specific regulations depends on whether the 

traveler is civilian or military. For DOD civilians, GSA’s FTR governs travel 

and transportation allowances. DOD’s JTR and individual DOD and military 

service directives, orders, and instructions supplement the FTR. For 

military personnel, DOD’s JFTR governs travel and transportation 

allowances. Individual DOD and military service directives, orders, and 

instructions supplement the JFTR. The executive branch policy on the use 

of first class travel applicable to the FTR, JTR, and JFTR is found in OMB 

Bulletin 93-11. When a subordinate organization issues an implementing 

regulation or guidance, the subordinate organization may make the 

regulations more stringent, but generally may not relax the rules 

established by higher-level guidance. 

Inconsistencies have accumulated within the various premium class travel 

regulations because DOD did not revise DOD directives, or require the 

military services to revise their travel policies or implementing guidance, 

when it modified the JTR or JFTR. For example, DOD first issued the JTR 

in 1965 and since then had modified it 450 times through April 2003, 

including 30 modifications since October 2000. While the JFTR has had 

fewer modifications—196 through April 2003—the JFTR has also been 

modified 30 times since October 2000. Despite these changes, DOD and the 

services frequently have not modified their directives and guidance to 

reflect these changes. For example, DOD Directive 4500.9 was last revised 

in 1993, while DOD Directive 4500.56 was last updated in 1997. Further, the 

Navy Passenger Transportation Manual was last updated in 1998; Marine 

Corps Order P4600.7C, Marine Corps Transportation Manual, was last 

changed in 1992; and while Air Force Instruction 24-101, Passenger 

Page 26 GAO-04-88 DOD Premium Class Travel 
Movement, was last updated in 2002, it contains some provisions that are 

contrary to our Guide for Evaluating and Testing Controls Over Sensitive 

Payments and our Standards for Internal Control in the Federal 

Government. 

The proliferation of different internal DOD regulations and a failure by 

DOD to clearly explain the relationship of its different regulations have 

created confusion for travelers and officials, as evidenced by instances, 

discussed previously, in which premium class travel had been 

inappropriately approved. Inconsistencies also exist because DOD and its 

components have elected to authorize the use of premium class travel in 

different circumstances or have described the authorization to use 

premium class travel using different language. For example, see the 

following: 

•	 DOD Directive 4500.9,

17 Transportation and Traffic Management (last 

updated in 1993), contains a section establishing the authority to use 

premium class flights that differs in several aspects from GSA’s FTR and 

DOD’s JTR and JFTR as well as other directives issued by DOD. 

Specifically, DOD Directive 4500.9 grants blanket authority for highranking officials to use premium class travel when traveling overseas on 

official government business. This policy contradicts and is less 

stringent than the FTR, which does not cite rank as a condition for 

obtaining premium class travel. The JTR and JFTR (both modified in 

2003) also do not cite rank as a criterion for allowing business class 

travel for international flights. Further, DOD’s General Counsel staff told 

us this provision was superseded by DOD Directive 4500.56. 

•	 GSA’s FTR authorizes agencies to approve the use of first class or 

business class accommodations when required by an agency’s mission, 

but neither the JTR nor the JFTR adopts this authorization. In contrast, 

DOD Directive 4500.9 states that the use of business class on domestic 

travel18 may be authorized when necessitated by mission requirements.19 

17DOD Directive 4500.9, Transportation and Traffic Management, para. 3.4.3, December 29, 

1993. 

18As noted above, a subsequent DOD directive states that all DOD travel outside the 

continental United States is subject to the JTR and the JFTR. 

19DOD Directive 4500.9, Transportation and Traffic Management, para. 3.4.3.1.3, 

December 29, 1993. 

Page 27 GAO-04-88 DOD Premium Class Travel 
•	 GSA’s FTR states that premium other than first class travel may be 

authorized when the origin and/or destination of travel is outside the 

continental United States and the scheduled flight time is in excess of 14 

hours. However, the FTR prohibits premium class travel if the traveler is 

authorized a rest stop en route or a rest period upon arrival at the duty 

site. In contrast, DOD’s JTR and JFTR that were in effect at the time of 

our audit did not indicate whether a rest period upon arrival at the duty 

station prohibited the authorization of premium class travel. Both DOD 

directives on travel (4500.9 and 4500.56) do not directly address whether 

premium class travel is allowed if the flight exceeds 14 hours. Further, 

the services’ implementing guidance is inconsistent in its application of 

the 14-hour rule. For example, the Army policy20 adopts the FTR “rest 

period upon arrival” limitations, but did not define what is considered a 

“rest period.” The Navy policy21 prohibits a “rest period en route.” The 

Air Force policy22 states that Air Force travelers might be authorized 

business class accommodations if they are required to perform a full day 

(8 hours) of work immediately upon arrival. Finally, the Marine Corps23 

implementing guidance does not address this matter. 

•	 GSA and DOD travel regulations authorize premium class 

accommodations when they are paid for by a nonfederal source. 

However, the Navy travel policy24 prohibits the use of first class 

accommodations even when those accommodations are paid for by a 

nonfederal source, such as when a professional association pays for the 

travel of a Navy employee. 

DOD Does Not Have a DOD and the services have not defined a standard format for documenting 

Standard Format for authorization and justification for premium class travel. Because premium 

Documenting Premium travel is to be taken only on an exception basis after all other alternatives 

have been exhausted, the documentation for authorization and justification Class Travel should be held to the highest standards to provide reasonable assurance 

20Secretary of the Army Travel Policy, para. 3.B.8, last updated on March 26, 2003.


21OPNAVINST 4650.15, ch. 2, enc. 1, para. 5.c (8), issued on July 7, 1998.


22Air Force Instruction 24-101, para. 2.7, issued March 25, 2002. 


23Marine Corps policy guidance, issued as Marine Corps Order 4600.25C on March 15, 1978. 


24OPNAVINST 4650.15, ch. 2, enc. 1, para. 5.c.(7), July 7, 1998. 


Page 28 GAO-04-88 DOD Premium Class Travel 
that in every case the substantially higher premium travel cost is 

warranted. In DOD’s case, because authorization and justification for 

premium travel is not consistently documented, it does not have a 

documentation trail indicating that the appropriate official approved the 

travel order and there was adequate justification for the additional cost 

associated with a premium class ticket. 

The JTR and JFTR state that approval for premium class travel should be 

obtained in advance of travel, except in extenuating/emergency 

circumstances that make authorization impossible, and specify the 

circumstances under which premium travel is to be permitted. However, 

the JTR and JTFR do not provide clear and consistent procedures for 

documenting the approval of premium class travel and the type of 

supporting documentation to be maintained. In contrast, other federal 

agencies have issued clear and consistent guidelines related to the 

documentation of premium class travel. For example, the Department of 

Agriculture (USDA) approves the use of premium class accommodations 

on a case-by-case basis and specifies that premium travel be approved by 

the under secretary except when frequent travel benefits are used. The 

justification must include the specific circumstances relating to the 

criteria, such as a medical justification from a competent medical authority, 

which must include a description of the employee’s disability, medical 

condition, or special need; approximate duration of the medical condition 

or special need; and a recommendation of a suitable means of 

transportation based on medical condition or special need. In addition, 

USDA requires that the traveler prepare a report documenting first class 

travel that details the traveler’s name, address, rank, dates of travel with 

originating and destination cities, the reason for obtaining first class travel 

and the costs of both the coach fare and the first class fare. As shown in 

figure 1, other agencies, such as the National Institutes of Health (NIH), 

have standard forms that travelers must complete when requesting 

approval for any travel other than coach class accommodations. 

Information required includes the traveler’s identifying information, the 

reason for requesting premium class travel, and a comparison of the cost of 

premium and coach class travel. Such a form would help eliminate the 

failure to obtain specific authorization for premium class travel that we 

identified in our statistical testing. 

Page 29 GAO-04-88 DOD Premium Class Travel 
Figure 1: Sample Premium Class Authorization Form 

Source: NIH. 

Page 30 GAO-04-88 DOD Premium Class Travel 
Further, we found that other agencies used a separate form to document a 

medical condition and to justify premium class travel. As shown in figure 2, 

the disabilities or other special needs form used by NIH requires detail on 

the nature of the disability or special need and the signature of both the 

employee and a competent medical authority. NIH’s policies state that the 

medical statement should specifically address why it is necessary to use 

upgraded accommodations. The form also limits the authority to a period 

of 6 or 12 months from the initial date of approval depending on the nature 

of the disability or special need. In the instance of a permanent disability, 

NIH policy is that authorized use of premium class accommodations is 

valid for up to 3 years. Resubmission is necessary to ensure that there 

continues to be a need for the approval and to keep the authorization 

records current. 

Page 31 GAO-04-88 DOD Premium Class Travel 
Figure 2: Sample Medical Condition Form 

Source: NIH. 

Page 32 GAO-04-88 DOD Premium Class Travel 
DOD Issued New 

Regulations to Better Define 

When Premium Class Travel 

Is Authorized 

During the course of our work, in April 2003, DOD updated the JTR25 and 

JFTR26 to articulate more clearly and make more stringent the 

circumstances under which premium class travel may be authorized. In 

addition, the updated JTR and JFTR emphasize, in the context of lengthy 

flights, that premium class travel must not be common practice and must 

only be used when exceptional circumstances warrant. They also provide 

examples of when premium class travel should not be authorized. 

The revised JTR and JFTR better define the circumstances in which 

premium class other than first class travel, that is, business class, is 

authorized for DOD travelers on flights to and/or from points outside the 

continental United States when the scheduled flight time exceeds 14 hours. 

Most notably, the revised regulations prohibit the use of business class 

travel when travelers are authorized a “rest period” or an overnight stay 

upon arrival at their duty stations. The modified regulations now explicitly 

state that business class accommodations are not authorized on the return 

leg of travel. This is a further restriction on premium class travel; before 

April 2003, DOD did not expressly prohibit travelers from using premium 

class travel on their return trips to the United States. 

Finally, in its revised regulations, DOD provides specific guidance on how 

the proposed use of business class accommodations should be considered 

by officials and travelers. DOD states that, in the context of authorizing 

business class accommodations for flights scheduled to exceed 14 hours, 

“business class accommodations must not be common practice” and that 

such service should be used only in exceptional circumstances. Further, 

DOD directs order-issuing officials to “consider each request for business 

class service individually.” We agree with DOD that decisions regarding the 

use of premium class travel should be made on a case-by-case basis and 

based on a preference for coach class. 

Conclusions	 The ineffective management and oversight of premium class travel 

provides another example of why DOD financial management is one of our 

“high-risk” areas, with the DOD highly vulnerable to fraud, waste, and 

abuse. DOD does not have the management controls in place to identify 

25JTR Change 450, April 1, 2003. 

26JFTR Change 196, April 1, 2003. 

Page 33 GAO-04-88 DOD Premium Class Travel 
issues such as improper use of premium class travel. As a result, millions of 

dollars of unnecessary costs are incurred annually. Because premium class 

travel is substantially more costly than coach travel, it should only be used 

when absolutely necessary, and the standards for approval and justification 

must be high. During our audit, DOD began taking steps to improve its 

policies and procedures for premium class travel. DOD must build on these 

improvements and establish strong controls over this sensitive area to 

provide reasonable assurance that its travel dollars are spent in an 

economical and efficient manner. 

Recommendations for 	 We are making the following recommendations to improve internal control 

over the authorization and justification of premium class travel and to Executive Action 	 strengthen the control environment as part of an overall effort to reduce 

improper premium class travel and related DOD costs. 

Key Internal Control 

Activities 

Because of the substantial cost and sensitive nature of premium class 

travel, we recommend that the Secretary of Defense direct the appropriate 

under secretary of defense, assistant secretary of defense, or military 

service officials to direct the implementation of specific internal control 

activities over the use of premium travel. While a wide range of activities 

can contribute to a system that provides reasonable assurance that 

premium class travel is authorized and justified, at a minimum, the internal 

control activities should include the following: 

•	 Reiterate to DOD’s personnel the policy that premium class travel be 

authorized and justified only on a case-by-case basis. 

•	 Require the travel offices to issue premium class tickets only if properly 

authorized and justified and documented accordingly. 

• Prohibit the use of blanket authorization for premium class travel. 

Overall Program We recommend that the Secretary of Defense direct the appropriate under 

Management and secretary of defense, assistant secretary of defense, or military service 

Environment officials to establish policies and procedures to incorporate the regulations 

specified in GSA’s FTR as well as guidance specified in our Standards for 

Internal Control and our Guide for Evaluating and Testing Controls Over 

Sensitive Payments, including the following: 

Page 34 GAO-04-88 DOD Premium Class Travel 
•	 Develop procedures to identify the extent of premium class travel, 

including all business class travel, and monitor for trends and potential 

misuse. 

•	 Develop procedures to identify all first class fare codes so that DOD can 

prepare complete and accurate first class travel reports. 

•	 Develop a management plan requiring that audits of DOD’s issuance of 

premium class travel are conducted regularly and the results of these 

audits reported to senior management. Audits of premium class travel 

should include reviews of whether commercial travel offices adhere to 

all governmentwide and DOD regulations for issuing premium class 

travel. 

•	 Periodically provide notices to travelers and supervisors/managers that 

specifically identify 

• the limitations on premium class travel, 

•	 the limited situations in which premium class travel may be 

authorized, and 

• how the additional cost of premium class travel can be avoided. 

•	 Provide training to travelers and supervisors/managers that identifies 

DOD’s premium class policies and procedures. 

•	 Train or make training materials available to the commercial travel 

offices so that they may train their employees on premium class policies 

and procedures. 

•	 Require that premium class travel be approved by individuals who are at 

least of the same rank/grade as the travelers. 

•	 Specifically prohibit the travelers themselves or their subordinates from 

approving requests for premium class travel. 

•	 Use a standardized format or modify the format of the existing travel 

order to document the request and authorization of premium class 

travel. The standardized form or modified travel order should contain 

sufficient information to provide a clear audit trail that documents why 

Page 35 GAO-04-88 DOD Premium Class Travel 
the additional cost of premium class travel was a necessary expense 

that could not have been avoided. 

•	 Develop a policy that articulates what constitutes adequate support to 

substantiate medical, disability, or special needs. Such a policy should 

address the length of time a medical certification is valid. 

•	 Determine the feasibility of requiring that the medical certification for 

premium class travel be reviewed by an independent medical 

professional to verify that the medical condition justifies the additional 

cost of premium class travel. 

•	 Revise DOD’s directives on travel, when necessary, to ensure that they 

are at least consistent with, or more stringent than, GSA’s travel 

regulations. For example, issue the update to DOD Directive 4500.9 that 

removes the provision authorizing certain presidential appointees and 

three-star and four-star generals/admirals to fly premium class on flights 

when flying to or from overseas destinations. 

•	 Revise the military service directives, orders, and policies to make them 

consistent with the JTR and JFTR. 

Agency Comments and 

Our Evaluation 

On September 10, 2003, DOD, Air Force, Army, Marine Corps, and Navy 

officials representing the offices of the under secretaries of defense for 

Acquisitions Technology and Logistics, Personnel and Readiness, and 

Comptroller provided oral comments on a draft of this report. The officials 

said they agreed with the findings presented in the draft report and 

generally concurred with our recommendations for resolving the control 

weaknesses. The officials explained that because responsibility for travel 

program management is spread across three under secretaries, they were 

not yet sure who would be responsible for monitoring implementation of 

the recommendations. 

Those DOD officials pointed out that two of our recommendations could be 

addressed in different ways than contemplated in the draft report. First, 

they said the justification for premium class travel could be documented by 

modifying or augmenting the existing DOD travel order rather than using a 

separate form. We have modified the text of these recommendations to be 

less prescriptive as to the corrective actions and instead focus on the intent 

of the recommendations for having clear, well-supported justifications and 

written audit trails of the authorization to spend additional funds on 

Page 36 GAO-04-88 DOD Premium Class Travel 
premium class travel. Second, in regard to training commercial travel office 

personnel on premium class travel limitations, they expressed a preference 

for DOD providing training materials to the commercial travel offices so 

that they, rather than DOD, could train their personnel, and facilitating justin time or other training for commercial travel office personnel. 

As agreed with your offices, unless you announce the contents of this 


report earlier, we will not distribute it until 30 days from its date. At that 


time, we will send copies to interested congressional committees; the 


Secretary of Defense; the Under Secretary of Defense, Comptroller; the 


Secretary of the Army; the Secretary of the Navy; the Secretary of the Air 


Force; and the Director of the Defense Finance and Accounting Service. We


will make copies available to others upon request. In addition, the report 


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


Please contact Gregory D. Kutz at (202) 512-9505 or kutzg@gao.gov, John J.


Ryan at (202) 512-9587 or ryanj@gao.gov, or John V. Kelly at (202) 512-6926 


or kellyj@gao.gov if you or your staffs have any questions concerning this 


report. Major contributors to this report are acknowledged in appendix III.


Gregory D. Kutz 


Director


Financial Management and Assurance


Robert J. Cramer


Managing Director


Office of Special Investigations


Page 37 GAO-04-88 DOD Premium Class Travel 
Appendix I 

Objectives, Scope, and Methodology


We audited the controls over the authorization and issuance of premium 

class travel charged to the Department of Defense’s (DOD) centrally billed 

travel accounts during fiscal years 2001 and 2002. Our assessment covered 

the following: 

•	 The extent to which DOD uses the centrally billed travel accounts to 

purchase premium class travel. 

•	 Testing a statistical sample of premium class transactions to assess the 

implementation of key management controls and processes for 

authorizing and issuing premium class travel, including approval by an 

authorized official and justification in accordance with regulations. We 

also identified other selected transactions throughout the premium 

class travel transactions to determine if indications existed of improper 

transactions. 

•	 DOD’s oversight and monitoring of the use of premium travel and key 

elements of the control environment, including the (1) consistency of 

premium class travel procedures among the services and (2) adequacy 

of documentation to justify the additional cost of premium class travel. 

Magnitude of Premium 

Class Travel 

To assess the magnitude of use of premium class travel, we obtained from 

Bank of America a database of fiscal year 2001 and 2002 travel transactions 

charged to DOD’s centrally billed travel card accounts. We queried the 

database to isolate those transactions specifically related to airline travel. 

The airline industry uses certain fare and service codes to indicate the class 

of service purchased and provided. The database contained transactionspecific information, including the fare and service codes used to price the 

tickets DOD purchased. We identified the fare basis codes that 

corresponded to the issuance of first, business and coach class travel. 

Using these codes, we selected all airline transactions that contained at 

least one leg in which DOD paid for premium class travel accommodations. 

We also used these data to identify the number of transactions in which 

DOD purchased an entirely coach class ticket, but the transactions 

contained at least one segment of the ticket that was upgraded to a 

premium class accommodation. 

Page 38 GAO-04-88 DOD Premium Class Travel 
Appendix I


Objectives, Scope, and Methodology


Evaluate Effectiveness of 

Controls through Statistical 

Sampling and Data Mining 

We tested a statistical sample of premium class transactions to assess the 

implementation of key management controls and processes for approving 

and issuing premium class travel, and used data mining for additional 

examples of transactions that illustrate improper or questionable premium 

class travel. The population from which we selected our transactions for 

testing was the set of positive debit transactions for both first and business 

class travel that were charged to DOD’s centrally billed travel accounts 

during fiscal years 2001 and 2002. Because our objective was to test 

controls over travel card expenses, we excluded credits and miscellaneous 

debits (such as fees) that would not have been for ticket purchases from 

the population of transactions. 

We further limited the business class transactions to those costing more 

than $750 because many intra-European flight business class tickets cost 

less than $750 and the corresponding coach class tickets were not 

appreciably less. By eliminating from our sample business class 

transactions less than $750, we avoided the possibility of selecting a large 

number of transactions in which the difference in cost was not significant 

enough to raise concerns of the effectiveness of the internal controls. The 

total number of transactions excluded was 15,887, costing approximately 

$8 million. While we excluded business class transactions costing less than 

$750, we (1) did not exclude all intra-European flights and (2) potentially 

excluded nonauthorized business class flights. Limitations of the database 

prevented a more precise methodology of excluding lower cost business 

class tickets. 

To test the implementation of key control activities over the issuance of 

premium class travel transactions, we selected a stratified random 

probability sample from the subset of centrally billed account transactions 

containing at least one premium class leg and in which the business class 

ticket cost more than $750. Specifically, we selected 15 first class 

transactions from a population of 1,240 transactions, totaling about 

$3 million, and 122 business class transactions from a population of about 

51,000 transactions, totaling about $113 million. For each transaction 

sampled, we requested that DOD provide us the travel order, travel 

voucher, travel itinerary, and other related supporting documentation. We 

used that information to test whether documentation existed that 

demonstrated that DOD had adhered to key internal controls over 

authorizing and justifying the premium class ticket. Based on the 

information DOD provided, we assessed whether a valid official approved 

the premium class travel and whether the premium class travel was 

justified in accordance with DOD regulations. The results of the samples of 

Page 39 GAO-04-88 DOD Premium Class Travel 
Appendix I


Objectives, Scope, and Methodology


these control attributes can be projected to the population of transactions 

at DOD only, not to individual services or locations. 

Based on the sampled transactions, we also estimated the percentage of 

premium class travel taken by civilian supervisors, managers, and 

executives, or senior military officers. With this statistically valid 

probability sample, each transaction in the population had a nonzero 

probability of being included, and that probability could be computed for 

any transaction. Each sample element was subsequently weighted in the 

analysis to account statistically for all the transactions in the population, 

including those that were not selected. Because we followed a probability 

procedure based on random selections, our sample is only one of a large 

number of samples that we might have drawn. Since each sample could 

have provided different estimates, we express our confidence in the 

precision of our particular sample's estimates as 95 percent confidence 

intervals (e.g., plus or minus 7 percentage points). These are intervals that 

would contain the actual population value for 95 percent of the samples we 

could have drawn. As a result, we are 95 percent confident that each of the 

confidence intervals in this report will include the true values in the study 

population. All percentage estimates from the sample of premium class air 

travel have sampling errors (confidence interval widths) of plus or minus 

9 percentage points or less. Table 5 and table 6 summarize the population 

of DOD airline travel transactions containing at least one premium class leg 

charged to DOD’s centrally billed accounts in fiscal years 2001 and 2002 

and the subpopulation subjected to testing. 

Table 5: Fiscal Years 2001 and 2002 DOD Premium Class Travel Population Subjected to Sampling (Dollars in Thousands) 

Total population of Excluded transactions Subjected to sampling 

premium class (business class costing less (first class and business class 

transactions than $750) costing more than $750) Transactions tested 

Class Transactions Dollars Transactions Dollars Transactions Dollars Transactions Dollars 

First 1,409 $2,969 - - 1,409 $2,969 15 $34 

Business 66,681 120,876 15,887 $8,149 50,794 112,727 122 289 

Total 68,090 $123,845 15,887 $8,149 52,203 $115,696 137 $323 

Source: GAO analysis of Bank of America data. 

Page 40 GAO-04-88 DOD Premium Class Travel 
Appendix I


Objectives, Scope, and Methodology


Table 6: Fiscal Years 2001 and 2002 Premium Class Travel Charged to the Centrally Billed Accounts Adjusted for Coding Errors 

(Dollars in Thousands) 

Subjected to sampling 

(first class and business class Subsequently determined Population adjusted for coding 

costing more than $750) premium less than first class errors 

Class Transactions Dollars Transactions Dollars Transactions Dollars 

First 1,409 $2,969 (169) ($71) 1,240 $2,898 

Business 50,794 112,727 169 71 50,963 112,798 

Total 52,203 $115,696 0 0 52,203 $115,696 

Source: GAO analysis of Bank of America data. 

In addition to our audit of a DOD-wide statistical sample of transactions, 

we also selected other transactions identified by our data mining efforts for 

audit. Our data mining identified individuals who frequently flew using first 

or business class accommodations, frequent trips to one location, and trips 

involving family travel. For data mining transactions, we also requested 

that DOD provide us the travel order, travel voucher, travel itinerary, and 

any other supporting documentation that could provide evidence that the 

premium class travel was properly authorized and justified in accordance 

with DOD policies. If the additional documentation provided indicated that 

the transactions were proper and valid, we did not pursue further 

documentation of those transactions. If the additional documentation was 

not provided or if it indicated further issues related to the transactions, we 

obtained and reviewed additional documentation or information about 

these transactions. 

Control Environment	 To assess the overall control environment for premium class travel, we 

obtained an understanding of the travel process, including authorization of 

premium class travel, by interviewing officials from the Department of the 

Army, Department of the Navy, Department of the Air Force, and Defense 

Finance and Accounting Service. We reviewed applicable policies and 

procedures and program guidance that they provided. We visited two Army 

units, three Navy units, three Air Force units, and two Marine Corps units 

to gain an understanding of the travel process, including the management 

of premium class travel. We used as our primary criteria applicable laws 

and regulations, including GSA’s Federal Travel Regulation and DOD’s 

Joint Travel Regulations and Joint Federal Travel Regulations. We also 

used as criteria our Standards for Internal Control in the Federal 

Page 41 GAO-04-88 DOD Premium Class Travel 
Appendix I


Objectives, Scope, and Methodology


Government1 and our Guide to Evaluating and Testing Controls Over 

Sensitive Payments.2

 To assess the management control environment, we 

applied the fundamental concepts and standards in our internal control 

standards to the practices followed by management in the areas reviewed. 

We did not audit the Defense Finance and Accounting Service’s centrally 

billed travel card payment process. We also did not audit electronic data 

processing controls used in processing centrally billed account 

transactions. The sites reviewed received paper monthly bills containing 

the charges for their purchases and used manual processes for much of the 

period we audited, which reduced the importance of electronic data 

processing controls. 

We briefed DOD managers, including DOD officials in the Office of the 

Under Secretary of Defense (Comptroller), the Defense Finance and 

Accounting Service, and the Office of Inspector General; Army officials in 

the Office of Deputy Chief of Staff for Logistics; Navy officials in the Office 

of the Assistant Secretary of the Navy for Financial Management and 

Comptroller; Air Force officials in the Office of the Deputy Chief of Staff 

for Installation and Logistics; and Marine Corps officials in the Office of 

Deputy Chief of Staff for Installations and Logistics. On August 8, 2003, we 

provided DOD officials with a draft of this report. We obtained oral 

comments from DOD, Air Force, Army, Marine Corps, and Navy officials 

representing the offices of the under secretaries of defense for Acquisitions 

Technology and Logistics, Personnel and Readiness, and Comptroller on 

September 10, 2003. We summarized those comments in the “Agency 

Comments and our Evaluation” section. We conducted our audit work from 

November 2002 through August 2003, in accordance with U.S. generally 

accepted government auditing standards, and we performed our 

investigative work in accordance with standards prescribed by the 

President’s Council on Integrity and Efficiency. 

1

GAO/AIMD-00-21.3.1. 

2

GAO/AFMD-8.1.2. 

Page 42 GAO-04-88 DOD Premium Class Travel 
Appendix II 

Process to Obtain Premium Class Travel


The process for obtaining premium class travel begins when a DOD civilian 

employee or member of the military or the employee’s supervisor 

determines that he or she needs to travel and the traveler is notified to 

initiate a travel request. If the traveler determines that he or she needs 

premium class travel, the traveler submits the travel request, along with 

justification for premium travel, to his or her supervisor for approval. Once 

the supervisor reviews the travel request, along with the required 

supporting documentation, such as a doctor’s note supporting a specific 

physical condition and the necessity for premium travel, it is forwarded to 

the official who signs the order. For first class travel, the secretary within 

the military service or a designee reviews the request and justification for 

first class travel for consistency with DOD regulations. In the case of 

premium class other than first class transportation, the local transportation 

officer or other appropriate authority reviews the request and justification. 

The order-signing official reviews the travel request and documentation 

and determines if there is adequate support for the premium travel. If the 

travel is properly supported and justified, then the premium class travel is 

approved and the official signs the travel request to generate a travel order. 

If adequate support does not exist for the class of travel requested, then the 

request for premium travel is denied. 

The travel order is issued, signed by the official, and delivered to the 

government travel office (GTO),1

 or the commercial travel office (CTO)2 

acting on behalf of the government. Either the GTO or CTO verifies the 

existence of documentation and checks for an authorizing signature. The 

CTO then issues the premium class ticket and charges the centrally billed 

account. The CTO is not supposed to use the centrally billed account to 

purchase a premium class ticket until the traveler or the official provides 

the CTO with a signed travel order authorizing the premium class travel. 

Figure 3 provides a graphic description of the process to obtain premium 

class travel. 

1

The GTO is staffed by government employees who are required to monitor the activities of 

the commercial travel office. 

2

The CTO is staffed by employees of a company that has been contracted to serve as a travel 

agency for DOD or the military service. 

Page 43 GAO-04-88 DOD Premium Class Travel 
Appendix II


Process to Obtain Premium Class Travel


Figure 3: Standard Process to Obtain Premium Class Travel When Multiple Classes of Service Are Available 

Traveler completes travel 

request and includes 

justification for premium 

travel. 

Start 

Traveler 

Yes 

Approved travel order is 

delivered to GTO or CTO. 

CTO or GTO 

C/G 

GTO or CTO verifies 

existence of documentation, 

and checks for signature. 

CTO or GTO 

C/G 

Traveler Official 

Commercial Travel Office or 

Government Travel Office 

(GTO) 

C/G 

Is request for Legend

first class 

travel? 

Traveler 

Yes 

No 

No 

Traveler is denied premium 

class travel and starts 

process over. 

Traveler 

Traveler has 

provided adequate 

support for class 

of travel? 

Traveler 

Commercial 

Travel Office 

(CTO) 

C 

CTO issues premium class 

ticket and charges 

centrally billed account. 

CTO 

C 

Process complete 

Secretary or designee 

reviews request and 

documentation. 

Secretary 

Secretary 

Travel order is issued and 

Secretary/designee or official 

signs indicating approval. 

Official Secretary 

Official reviews request and 

documentation 

Official 

Source: GAO analysis of DOD data. 

Page 44 GAO-04-88 DOD Premium Class Travel 
Appendix III 

GAO Contacts and Staff Acknowledgments 


GAO Contacts	 John V. Kelly, (202) 512-6926 

Tuyet-Quan Thai, (206) 287-4889 

Acknowledgments	 Staff making key contributions to this report were Kris Braaten, Beverly 

Burke, Francine DelVecchio, Lisa Hansen, Kenneth M. Hill, Aaron Holling, 

Jeffrey Jacobson, Julie Matta, Karlin Richardson, John Ryan, Sidney H. 

Schwartz, and Scott Wrightson. 

(192078) Page 45 GAO-04-88 DOD Premium Class Travel 
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