DOD Business Transformation: Status of DOD's Actions on Previous Recommendations for the Defense Travel System
Published: 2009-03-05T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In 1995, the Department of Defense (DOD) began an effort to implement a standard departmentwide travel system--the Defense Travel System (DTS). As part of its ongoing monitoring, GAO's April 2008 testimony before this subcommittee highlighted challenges confronted by the department in its implementation efforts. GAO's testimony today is based on its current follow-up work conducted at the request of this subcommittee, as well as the Subcommittee on Readiness. GAO's testimony today focuses on the actions DOD has taken to (1) implement previous GAO recommendations regarding implementation of DTS and related travel policies, (2) phase out legacy travel systems and their associated costs, and (3) implement electronic travel voucher processing. To address these objectives, GAO (1) analyzed specific documentation, such as test documentation, travel policies, and budget data, and (2) interviewed appropriate DOD travel personnel.
section_title: What GAO Found
paragraphs: GAO has made 14 recommendations aimed at improving DOD's management oversight and implementation of DTS and related travel policies to make DTS the standard departmentwide travel system. GAO considers 7 of the 14 recommendations closed and the remaining 7 recommendations as being open. The 7 closed recommendations pertained to premium-class travel, unused airline tickets, use of restricted airfare, proper testing of system interfaces, and streamlining of certain travel processes, such as the process for approving travel voucher expenses. GAO's analysis of the 7 closed recommendations found that the actions taken by the department responded to the intent of the recommendations. Of the 7 open recommendations, 3 related to the adequacy of DTS's requirements management and system testing, 3 to DTS underutilization, and 1 to developing an approach that will permit the use of automated methods to reduce the need for hard copy receipts to substantiate travel expenses. In the area of requirements management and testing, GAO found that while DTS's requirements management and testing process has improved, problems still persist. The problems were generally related to missing documentation, the limited scope of requirements testing performed, or both. In the area of DTS utilization, GAO found that the department still does not have in place the metrics to determine the number of manual travel vouchers that should have been processed through DTS. Further, DOD does not have accurate and complete information on the number of legacy travel systems that are still in use by the military services. Defense Travel Management Office (DTMO) data indicates that there are 23 legacy travel systems, but military services' data identify 12--10 of which are on the DTMO list. In addition, GAO found that the department lacks visibility of the cost to operate and maintain these legacy systems. The DTMO and the military services could only provide limited cost data for each identified legacy travel system and the department's fiscal year 2009 information technology budget contained cost data for only 3 of the 23 systems on the DTMO list. According to the military services, some of the legacy systems will be needed even after DTS has been deployed to all intended locations because DTS will not include certain functionality, such as the processing of civilian permanent duty travel. Without a valid inventory of legacy travel systems, it is unlikely that DOD management or the Congress will receive reliable reports regarding when duplicative systems are likely to be eliminated and the annual savings available from avoiding the associated operating and maintenance costs. Finally, GAO found that there is a significant difference between the costs of processing a travel voucher manually and electronically. Based upon departmental data , the fee charged to process a travel voucher manually is about 15 times greater than electronic voucher processing--approximately $37 manually and $2.50 electronically. Shutting down legacy travel systems, which require manual processing, would provide cost savings to the department related to the processing of travel vouchers.

section_title: Letter
paragraphs: Thank you for the opportunity to discuss our prior work and the  preliminary results of our ongoing review of the Defense Travel System  (DTS). This body of work was undertaken in response to a joint request by  your subcommittee and the Subcommittee on Readiness, House  Committee on Armed Services, and builds on prior GAO reports. In  December 1995, the Department of Defense (DOD) established the  Program Management Office—Defense Travel System (PMO-DTS) to begin  improving the department’s travel operations by replacing existing travel  systems with a single departmentwide system—DTS. This endeavor was  in response to the 1995 DOD Travel Reengineering Report issued by the  DOD Task Force to Reengineer Travel that pinpointed the following three  principal causes for the department’s inefficient travel system: (1) travel  policies and programs focused on compliance with rigid rules rather than  mission performance, (2) travel practices that did not keep pace with  travel management improvements implemented by industry, and  (3) nonintegrated travel systems.
Today, our testimony will focus on the actions DOD has taken to  implement previous GAO recommendations regarding implementation of  DTS and related travel policies,   phase out legacy travel systems and their associated costs, and  implement electronic travel voucher processing.
We have discussed the preliminary findings included in this testimony with  DOD officials. After completing additional work, we plan to issue a report  on the status of DOD’s actions on GAO’s previous recommendations,  which will include any further recommendations needed to improve the  department’s implementation of DTS and ensure its success in the future.
To address the first objective, for those recommendations that department  officials said were implemented, we analyzed specific documentation,  such as test documentation, to assess whether we concurred with their  assertions. For the remaining recommendations, we identified specific  actions the department had taken, or planned to take, and provided our  perspective on whether those actions did or would respond to the  recommendations and intent. We also met with officials from the Defense  Travel Management Office (DTMO), the PMO-DTS, and the prime  contractor, as appropriate, to obtain an understanding of the status of the  recommendations. To address the second objective we obtained an  understanding of the military services plans for phasing out of the legacy  travel systems. Additionally, we obtained and analyzed listings of legacy  travel systems from DTMO and the military services and reviewed fiscal  year 2009 budget data to identify the legacy travel systems used by each  service, and the cost associated with operating and maintaining these  systems. Finally, to address the cost-effectiveness of processing travel  vouchers, we reviewed the methodology used by DFAS to determine the  cost charged to a customer for processing a travel voucher electronically  versus manually. We performed our work from July 2008 through March  2009 in accordance with U.S. generally accepted government auditing  standards. Details on our scope and methodology are included in appendix  I. We discussed the preliminary findings included in this testimony with  DOD officials responsible for this program.
subsections: section_title: Background
paragraphs: In September 1993, the National Performance Review called for an  overhaul of DOD’s temporary duty (TDY) travel system. In response, DOD  created a task force to examine the department’s travel operations. The  task force found that those operations were costly, inefficient, fragmented,  and did not adequately support DOD’s mission travel needs. On December  13, 1995, the Under Secretary of Defense for Acquisition and Technology  (AT&L) and the Under Secretary of Defense (Comptroller)/Chief Financial  Officer issued a memorandum, “Reengineering Travel Initiative,” which  established the PMO-DTS and tasked it with acquiring travel services that  would be used DOD-wide. In a 1997 report to the Congress, the DOD  Comptroller reported that the existing DOD TDY travel systems were  never designed to be integrated. The report stated that because there was  no centralized focus on the department’s travel practices, the travel  policies were issued by different organizations and the process had  become fragmented and “stovepiped.” The report further noted that there  was no vehicle in the current structure to overcome these deficiencies as  no single individual or organization within the department had specific  responsibility for management control of DOD TDY travel.
In 1998, the department initiated efforts to develop and implement DTS to  provide the department with a single, integrated, end-to-end travel system.  According to DTMO officials, the department projects that DTS will be  deployed to all intended locations—about 9,800— during fiscal year 2009.  In response to congressional concerns regarding the implementation and  operation of DTS, the John Warner National Defense Authorization Act for  Fiscal Year 2007 directed that the department have an independent  assessment of DTS to determine the most cost-effective method of  meeting DOD’s travel requirements. The assessment, which was  completed by the Institute for Defense Analyses (IDA) in March 2007,  focused on three mandatory elements specified in the legislation. The first  two pertained to the department’s travel reservation process and the third  to the feasibility of making the DTS financial infrastructure mandatory for  all DOD travel transactions and phasing out legacy travel systems.
The IDA study found that the department’s mid-February 2007 updates to  DTS effectively addressed the underlying issues and concerns raised by  the study regarding continued use of DTS’s travel reservation process and  recommended its continued use. Regarding the feasibility of making DTS  mandatory for all DOD travel transactions, the study concluded that while  the institute found that legacy systems are being used even when DTS  could be used, there were situations—such as certain travel types (e.g.,  permanent change of station) that DTS cannot accommodate and sites  where DTS has not yet been fielded—that must be addressed before the  use of DTS can be made mandatory DOD-wide. As a result, the study  recommended that DOD mandate the use of DTS for all travel that it is  currently capable of supporting.
section_title: DOD Has Made Progress in Addressing GAO Recommendations, but Additional Actions Are Needed
paragraphs: Our January 2006 and September 2006 reports contained 14  recommendations aimed at improving DOD’s management oversight and  implementation of DTS and related travel policies. DOD officials have  indicated that the department has taken action to close all 14 of our  recommendations. However, based upon our work to date to validate  DOD’s actions, we consider 7 of the 14 recommendations as closed and  the remaining 7 open. The 7 closed recommendations pertained to  premium-class travel, unused airline tickets, use of restricted airfare,  proper testing of system interfaces, and streamlining of certain travel  processes, such as the process for approving travel voucher expenses. Our  preliminary analysis of the 7 closed recommendations found that the  actions taken by the department responded to the intent of our  recommendations; however, we need to perform additional work to  validate the department’s closed status regarding these recommendations.  Of the 7 open recommendations, 3 related to the adequacy of DTS’s  requirements management and system testing, 3 related to DTS  underutilization, and 1 related to developing an approach that will permit  the use of automated methods to reduce the need for hard copy receipts to  substantiate travel expenses. Below are two examples of where DOD has  acted upon our prior recommendations and two examples where the  recommendations remain open.
Premium-class travel. We reported in January 2006 that the commercial  travel offices (CTO) were not adhering to the department’s policy  restricting the use of premium-class travel and recommended that the  department take action to ensure that CTOs do so. Because each  premium-class ticket costs the government up to thousands of dollars  more than a coach-class ticket, unauthorized premium-class travel can  result in millions of dollars in unnecessary travel costs annually. Our  preliminary work found that the department has made changes to DTS  requiring approval of premium-class travel by the authorizing official prior  to the issuance of the airline ticket to the traveler by the CTO.  Additionally, in October 2007, DOD released a Web-based management  tool, which captures premium-class travel approvals and provides monthly  reports related to premium-class travel to DTMO. Further, according to  DOD officials, the CTO contracts include a monthly reporting requirement  regarding premium-class travel. The department’s actions are responsive  to the intent of our recommendation.
Unused airline tickets. We reported in January 2006 that DOD had not  recovered millions of dollars in airline tickets that DOD travelers  purchased but did not use. To address this issue, we recommended that  the department consider the viability of using commercial databases to  identify unused airline tickets, for which reimbursement should be  obtained, and to help ensure that the actual travel taken was consistent  with the information shown on the travel voucher. In its efforts to  implement this recommendation, DTMO found that commercial sources  could not readily identify unused airline tickets. In implementing this  recommendation, DTMO officials acknowledged that the ongoing CTO  initiative, which is scheduled for completion by June 2009, requires CTOs  to identify and cancel an unused airline ticket 30 days after the planned  trip date and then initiate the refund process. CTOs will be required to  provide monthly unused airline ticket reports. DTMO officials stated that  as the department negotiates new CTO contracts, this reporting  requirement will be included in all new contracts. The department’s  actions are responsive to the intent of our recommendation.
Requirements management and system testing. Our January 2006 and  September 2006 reports noted problems with DTS’s ability to properly  display flight information and traced those problems to inadequate  requirements management and system testing. Specifically, the system was  not displaying all eligible flights that travelers could choose within their  anticipated departure and arrival times due to inadequately defined  requirements. Properly defined requirements are a key element in  developing and implementing systems that meet their cost, schedule, and  performance goals since requirements define the (1) functionality that is  expected to be provided by the system and (2) quantitative measures by  which to determine through testing whether that functionality is operating  as expected. We recommended that DOD implement the processes  necessary to provide reasonable assurance that requirements are properly  documented and adequately tested and to simplify the display of airfares  in DTS. To determine if the department acted on our three previous  recommendations, we selected 90 requirements related to DTS’s display of  flight information for detailed review and analysis of the testing  performed. We also selected an additional 119 requirements that were  covered by DOD’s testing process that was newly implemented in July  2007. Based upon our preliminary analysis and discussions with DTMO,  PMO-DTS, and the prime contractor for the development and  implementation of DTS, we found that while DTS’s requirements  management and testing process has improved, problems still persist. The  problems were generally related to missing documentation, the limited  scope of requirements testing performed, or both. For example, one  requirement indicated that DTS should not allow a traveler to select flight  departure or arrival dates that were outside the established itinerary trip  dates. Our review of DOD’s test of this requirement showed that only 3 of  the 6 boundary conditions needed to fully test this requirement had been  tested. Neither DOD nor its contractor could provide documentation  supporting testing for the day after the traveler’s departure date, the day  before the arrival date, and the day after the arrival date. Based on our  analysis, this requirement was not adequately tested.
Another requirement indicated that if the contract carrier for the specified  General Services Administration (GSA) city pair is Southwest, then DTS  shall identify the available flights based on Southwest’s published Y-class  fares for the specified city pair. Our analysis found that the test  documentation associated with this requirement only displayed the flights  for GSA limited availability fares, which did not include the Southwest      Y-class fares called for by the requirement. Therefore, this requirement  was not adequately tested.
Our review of the 119 requirements included in DOD’s new testing process  disclosed that the process does not fully address the problems related to  weak requirements management and system testing that we identified in  our prior DTS reports. For example, we found that requirements were not  adequately tested. The three recommendations we made in the area  remain open. The department has provided additional documentation and  we are in the process of analyzing the documentation to determine the  extent to which the revised requirement management and testing  processes have improved.
DTS underutilization. Our January 2006 and September 2006 reports  noted the challenge facing the department in attaining planned DTS  utilization. More specifically, as discussed in our September 2006 report,  we found that while the military services have issued various  memorandums that mandate the use of DTS to the fullest extent possible  at those sites where DTS has been deployed, sites were still using legacy  travel systems to process TDY travel. Additionally, we found that the  department did not have reasonable quantitative metrics to measure and  reliably report on the extent to which DTS was actually being used. As of  the issuance of our September 2006 report, DTS utilization rates reported  by DOD were based on the DTS Voucher Analysis Model developed in  calendar year 2003 using military service data, which were not verified or  validated. Furthermore, PMO-DTS officials acknowledged that the model  had not been updated with actual data over the years. As a result,  estimated DTS utilization reported to DOD management and the Congress  was questionable. In our September 2006 report, we recommended that  (1) the department develop a process by which the military services would  use validated quantitative data from DTS and their individual legacy  systems to identify the total universe of DTS-eligible transactions on a  monthly basis and (2) these data be used to update the DTS Voucher  Analysis Model to report actual DTS utilization rates.
Our preliminary observations show that while the department has taken  some action to implement this recommendation, DOD still does not have  reasonable quantitative metrics to measure the extent of DTS utilization as  its metrics continue to be based, at least in part, on estimates. DTMO  officials stated that DOD no longer uses the DTS Voucher Analysis Model  to report DTS utilization. Instead, in March 2007, DTMO began  consolidating travel voucher processing data provided by the military  services and publishing this information in the Defense Travel Enterprise  Quarterly Metrics Reports. These reports include metrics for DTS fielding,  DTS voucher processing, and DTS reservation module usage  performance. These reports are provided to DOD management and the  military services and include military service data for legacy systems and  data available from DTS. The Defense Travel Enterprise Quarterly Metrics  Report states that the number of TDY vouchers processed in legacy  systems is an estimate because of limitations in DTMO’s ability to collect  these data from the legacy systems of the military services and defense  agencies. Military service officials stated that they are unable to determine  the number of legacy system vouchers that should have been processed by  DTS (total universe of travel vouchers). As of September 30, 2008, DTS’s  reported voucher processing utilization rates were 73 percent for the  Army, 64 percent for the Navy, and 49 percent for the Air Force.
Because the department is unable to identify the total universe of travel  vouchers, the estimated utilization rates may be over- or understated and  the three recommendations in this area remain open. In our September  2006 report, we reported that the DTS utilization rate should be  calculated by comparing actual vouchers processed in DTS to the total  universe of vouchers that should be processed in DTS. The universe would  exclude those travel vouchers that could not be processed through DTS,  such as those related to permanent change of station or deployment travel.
section_title: DOD Lacks Complete and Accurate Information About Legacy Travel Systems
paragraphs: A key component of DOD’s efforts to transform its travel process is the  elimination of the department’s legacy travel systems. As highlighted in the  1995 DOD Travel Reengineering Report, continued use of legacy travel  systems not only diminishes the efficiency of the department’s travel  operations, it also results in additional costs. Our preliminary work found  that the department has not yet identified and validated the number of  legacy travel systems still used by the military services and the cost of  operating them. Information provided by DTMO indicates that the military  services are still using 23 legacy travel systems. However, information  provided by the military services identified only 12 legacy travel systems— 10 of which were included on the DTMO list. Regarding potential savings,  other than budget information provided by the military services for four  legacy travel systems, cost information for the other legacy travel systems  was not provided.
We reviewed the department’s fiscal year 2009 information technology  budget in an attempt to identify the universe of legacy travel systems and  their associated operating and maintenance costs. However, 20 of the 23  systems on DTMO’s list were not identified in the budget. Without a valid  inventory of legacy travel systems, it is unlikely that DOD management or  the Congress—in particular, this subcommittee—will receive reliable  reports regarding when these systems are likely to be eliminated and the  continuing annual cost to operate and maintain them. Furthermore,  without accurate information about legacy travel systems, DOD is at risk  of not fully achieving its goal of eliminating stovepiped legacy travel  systems.
Some legacy travel systems will be used for the foreseeable future even  after DTS is deployed to all its intended locations during fiscal year 2009.  For example, the Air Force has indicated that it will continue to operate  and maintain the Reserve Travel System to process permanent duty travel  by civilians. Similarly, the Army will continue to operate and maintain its  Windows Integrated Automated Travel System for the same purpose. This  functionality is not in DTS and the department does not currently have a  time frame for including this functionality.
section_title: Electronic Processing of Travel Vouchers Is More Cost Effective
paragraphs: Continued operation of legacy travel systems, particularly where DTS has  been deployed, diminishes savings available through electronic processing  of travel vouchers and related travel information. At present, it is not  possible to measure the lost savings because DOD has not identified the  total universe of travel vouchers that it ideally should be processing  electronically, nor does DOD have accurate information about legacy  travel systems currently in use.
As long as the military services continue to use legacy travel systems, they  will continue to rely on manual versus electronic voucher processing even  at locations where DTS has been deployed. As a result, these DOD  components pay DFAS higher fees to process travel vouchers. Given that  the Army is DFAS’s largest customer of manually processed travel  vouchers, DFAS officials stated that the Army will benefit the most from  the electronic voucher processing capabilities that DTS provides. DFAS  provides only limited manual travel voucher processing for the Navy and  the Air Force. As new functionality is added to DTS, the use of legacy  travel systems should decrease, resulting in a reduction of the aggregate  DFAS cost to process manual vouchers. For example, the department  reported that in fiscal year 2008, the Army processed more than 1.5 million  vouchers, and about 1.1 million of those vouchers were processed through  DTS. However, as discussed above, both DFAS and Army officials  acknowledged that they are unable to determine how many of the  remaining 400,000 legacy system travel vouchers should have been  processed by DTS (the total universe of travel vouchers).
In addition, our preliminary work to review the reasonableness of the  rates DFAS charges for electronic and manual travel voucher processing  identified some calculation errors. For fiscal year 2009, DFAS estimates it  will charge DOD components an average of $2.47 for travel vouchers  processed electronically and $36.52 for travel vouchers processed  manually. However, in reviewing the price computation, we found that  DFAS allocated too much general and administrative cost to its travel  voucher processing activities. DFAS personnel were unaware of the error  until our review, but indicated that it was most likely a misinterpretation  of the guidance.
section_title: Concluding Remarks
paragraphs: Overhauling DOD’s financial management and business operations  represents a daunting challenge. DTS implementation is an example of the  difficulties the department faces in achieving transformation of its travel  operations through implementation of best practices and a standardized  travel system. With over 3.3 million military and civilian personnel as  potential travel system users, at approximately 9,800 locations around the  world, the sheer size and complexity of the undertaking overshadows any  such project in the private sector. As we have previously reported,  because each DOD component receives its own funding for the operation,  maintenance, and modernization of its own systems, nonintegrated, local  business systems have proliferated throughout the department. The  elimination of stovepiped legacy systems and use of less expensive  electronic processing, which could be achieved with the successful  implementation of DTS, are critical to realizing the anticipated savings.
In closing, we also would like to reiterate that following this testimony, we  plan to issue a report on the status of DOD’s actions on GAO’s previous  recommendations, which will include any further recommendations  needed to improve the department’s implementation of DTS and ensure its  success in the future.
Mr. Chairman, this concludes my prepared statement. We would be happy  to answer any questions that you or other members of the subcommittee  may have at this time.
section_title: Contacts and Acknowledgments
paragraphs: For further information about this testimony, please contact Asif A. Khan  at (202) 512-9095 or khana@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this testimony. In addition to the above contacts, the following  individuals made key contributions to this testimony: Darby Smith,  Assistant Director; Evelyn Logue, Assistant Director; J. Christopher  Martin, Senior-Level Technologist; F. Abe Dymond, Assistant General  Counsel; Jehan Abdel-Gawad; Beatrice Alff; Margaret Mills; and   John Vicari.
section_title: Appendix I: Scope and Methodology
paragraphs: To determine the status of our 14 recommendations to improve the  Department of Defense’s (DOD) travel processes and Defense Travel  System (DTS) implementation, we met with representatives of the Defense  Travel Management Office (DTMO) and the Program Management Office- Defense Travel System (PMO-DTS) to obtain an understanding of actions  taken, under way, or planned by the department in response to our  recommendations. We obtained and analyzed documentation, such as  policies, procedures, and testing documentation, that supported the  actions DOD has taken. More specifically, to determine the specific  actions taken related to our previous recommendations on requirements  management and system testing, in November 2008, we analyzed 90  requirements and reviewed relevant documentation to determine if the  requirements had been tested and the result of the tests. The requirements  selected for review related primarily to the display of flight information— since that was an area of concern in our prior work. Subsequently, in  January 2009, we analyzed another 119 requirements because the  program’s requirements management and testing practices changed in July  2007, and we wanted to verify whether the changes had been effectively  implemented. We discussed the results of our requirements management  and system testing analysis with representatives of the DTMO, the PMO- DTS, and the prime contractor. For some recommendations, such as the  one related to premium-class travel, we obtained a demonstration of the  new procedures that had been implemented and reviewed reports  produced by DTS when premium-class travel was taken. Furthermore, to  obtain an understanding of the actions taken to address the concerns we  had reported regarding DTS utilization, we met with officials in the DTMO,  PMO-DTS, and travel management representatives of the military services.
To assess DOD’s plans regarding the use of legacy travel systems after the  DTS is fully implemented, we obtained legacy travel system inventory data  from the DTMO and compared them with data obtained from military  service personnel responsible for travel for their respective components to  determine if there were any differences. We also obtained from the  military services a listing of the legacy travel systems that will continue to  operate once the DTS is deployed to all intended locations and the  rationale for the continued operation of these systems. To determine the  cost to operate and maintain the legacy travel systems, we requested  information from the DTMO and the military services. In addition, we  reviewed the department’s fiscal year 2009 information technology budget  request to identify the universe of legacy travel systems and their  associated operating and maintenance costs.
To assess the reasonableness of DOD’s cost estimates for processing  travel vouchers electronically versus manually, we met with Defense  Finance and Accounting Service (DFAS)-Indianapolis officials to obtain an  understanding of the methodology used to determine the price charged a  customer to process a travel voucher. More specifically, we (1) obtained  and analyzed documentation supporting the methodology used by the  DFAS to compute the cost estimates for electronically and manually  processing a travel voucher and (2) used our cost assessment guide as a  reference to determine whether the DFAS considered all appropriate and  reasonable cost elements in developing its computation of costs for  processing manual and electronic travel vouchers.
We conducted fieldwork from July 2008 through March 2009 in  accordance with generally accepted government auditing standards. Those  standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings and  conclusions based on our audit objectives. We believe that the evidence  obtained provides a reasonable basis for the preliminary findings and  conclusions presented in this testimony based upon the audit objectives.  We discussed the preliminary findings included in our testimony with DOD  officials. After completing additional work, we plan to issue a report on  the status of DOD’s actions on GAO’s previous recommendations, which  will include any further recommendations needed to improve the  department’s implementation of DTS and ensure its success in the future.
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