DOD Business Transformation: Defense Travel System Continues to Face Implementation Challenges
Published: 2006-01-18T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Department of Defense (DOD) has been working to develop and implement a standard end-to-end travel system for the last 10 years. Over the past several years numerous GAO reports and testimonies have highlighted problems with DOD's travel practices that resulted in wasteful spending of millions of dollars. In response, the department has noted that the Defense Travel System (DTS), in part, will help correct these problems. Because of the widespread congressional interest in DTS, GAO initiated the audit under the statutory authority of the Comptroller General of the United States. The objectives of the audit were to (1) determine if DOD effectively tested key DTS functionality, (2) ascertain if DTS will correct the weaknesses previously identified, (3) identify the challenges that remain, and (4) identify opportunities to streamline DOD's travel process.
section_title: What GAO Found
paragraphs: DTS development and implementation have been problematic, especially in the area of testing key functionality to ensure that the system will perform as intended. Consequently, critical flaws have been identified that resulted in significant schedule slippages between the planned and actual system deployment. GAO's recent analysis of selected requirements related to DTS's reservation module disclosed that system testing was ineffective in ensuring that the promised capability has been delivered as intended. For example, GAO found that DOD did not have reasonable assurance that DTS properly displayed flight and airfare information. This problem was not detected prior to deployment, since DOD failed to properly test system interfaces. While DTS has corrected some of the previously reported travel problems, others remain. Specifically, DTS has resolved the problem related to duplicate payment for airline tickets purchased with the centrally billed accounts. However, problems remain related to improper premium-class travel, unused tickets that are not refunded, and accuracy of travelers' claims. These remaining problems cannot be resolved solely within DTS and will take departmentwide action to address. GAO also identified two key challenges facing DTS in becoming DOD's standard travel system: (1) developing needed interfaces and (2) underutilization of DTS at sites where it has been deployed. While DTS has developed 36 interfaces with various DOD business systems, it will have to develop interfaces with at least 18 additional systems--not a trivial task. Additionally, the continued use of the existing legacy travel systems results in underutilization of DTS and affects the savings that DTS was planned to achieve. Furthermore, GAO has identified concepts that the department can adopt to streamline its travel management practices.

section_title: Letter
paragraphs: Over 10 years ago, the Department of Defense (DOD) Task Force to  Reengineer Travel issued a report that pinpointed three principal causes for  DOD’s inefficient travel system: (1) travel policies and programs were  focused on compliance with rigid rules rather than mission performance,  (2) travel practices did not keep pace with travel management  improvements implemented by industry, and (3) the travel systems were  not integrated.  To address these concerns, DOD established the Project  Management Office—Defense Travel System (PMO-DTS) to acquire travel  services that would be used DOD-wide.  The Defense Travel System (DTS)  is envisioned as being the department’s standard end-to-end travel system.
The department currently estimates that DTS will be fully deployed at all  intended locations by the end of fiscal year 2006, with an estimated total  development and production cost of approximately $474 million. Of this  amount, the contract for the design, development, and deployment of DTS  is worth approximately $264 million. The remaining costs are associated  with areas such as the operation and maintenance of DTS, operation of the  PMO-DTS, the voucher payment process, and management and oversight of  the numerous commercial travel offices (CTO).
Over the past several years, our reports and testimonies have highlighted  problems with DOD’s travel practices that resulted in wasteful spending of  millions of dollars.  In responses to some of our reports, the department has noted that DTS, in part, will help correct these problems.  In September  2005, we testified on our preliminary results regarding this audit of DTS.
Our audit objectives were to (1) determine if DOD effectively tested key  DTS functionality related to flights and fare information, (2) ascertain if  DTS will correct the internal control weaknesses and improper payments  previously identified, (3) identify the challenges that remain in ensuring  DTS achieves its goal as DOD’s standard travel system, and (4) identify  opportunities for DOD to streamline the entire travel process. To address  the first objective, we reviewed two key DTS flight-related requirements  and the related testing to determine if the desired functionality was  effectively implemented. To address the second objective, we analyzed   (1) our prior reports and testimonies, (2) selected Defense Finance and  Accounting Service (DFAS) reports, and (3) DOD congressional  testimonies to identify the specific problems that DTS was intended to  resolve. Further, we randomly selected for review travel vouchers drawn  from the first quarter of fiscal year 2005 (October through December 2004)  to determine if DTS calculation problems identified by DFAS had been  resolved.  To address the third objective, we discussed with the PMO-DTS  the deployment of DTS as it relates to the transmission of data, such as  finance and accounting information, between DTS and the other systems  belonging to DOD, as well as private sector businesses.  We also analyzed  DOD data related to the utilization of DTS.  To address the fourth objective,  we analyzed the department’s current travel processes, discussed them  with the PMO-DTS, and reviewed our past reports that discussed federal  agency travel practices.  We determined that the DOD data we used as the  basis for our evaluation in this report were sufficiently reliable by  (1) performing electronic testing of required data elements, (2) reviewing  existing information about the data and the system that produced them,  and (3) interviewing agency officials knowledgeable about the data.
Because of the widespread congressional interest in DTS, this assignment  was performed at our initiative under the statutory authority provided to  the Comptroller General of the United States. Our work was performed  from October 2004 through October 2005 in accordance with U.S. generally  accepted government auditing standards.  Details on our scope and  methodology are included in appendix I.  We requested comments on a  draft of this report from the Secretary of Defense or his designee.  We  received written comments from the Director, DFAS, which are reprinted in  appendix II.
subsections: section_title: Background
paragraphs: Twelve years ago, in September 1993, the National Performance Review  called for an overhaul of DOD’s temporary duty (TDY) travel system.  In  response, DOD created the DOD Task Force to Reengineer Travel to  examine the process. The task force’s January 1995 report pinpointed three  principal causes for DOD’s inefficient travel system: (1) travel policies and  programs were focused on compliance with rigid rules rather than mission  performance, (2) travel practices did not keep pace with travel  management improvements implemented by industry, and (3) the travel  system was not integrated.
On December 13, 1995, the Under Secretary of Defense for Acquisition and  Technology and the Under Secretary of Defense (Comptroller)/Chief  Financial Officer issued a memorandum, “Reengineering Travel Initiative,”  establishing the PMO-DTS to acquire travel services that would be used  DOD-wide.  Additionally, in a 1997 report to the Congress, the DOD  Comptroller pointed out that the existing DOD TDY travel system was never designed to be an integrated system. The report stated that because  there was no centralized focus on the department’s travel practices, the  travel policies were issued by different offices 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 one  individual within the department had specific responsibility for  management control of DOD TDY travel.
To address these concerns and after the use of competitive procedures, the  department awarded a firm fixed-price, performance-based services  contract to BDM International, Inc. (BDM) in May 1998.  In September  1998, GAO denied a bid protest challenging the department’s selection of  BDM. Under the terms of the contract, the contractor was to start  deploying a travel system and to begin providing travel services for  approximately 11,000 sites worldwide within 120 days of the effective date  of the contract, completing deployment approximately 38 months later. The  contract specified that upon DTS achieving initial operational capability  (IOC), BDM was to be paid a onetime deployment fee of $20 for each user  and a transaction fee of $5.27 for each travel voucher processed. The  estimated cost for the contract was approximately $264 million.  Prior to  commencing the work, BDM was acquired by TRW, Inc. (TRW), which  became the contractor of record.
The operational assessment of DTS at Whiteman Air Force Base, Missouri,  from October through December 2000, disclosed serious failures. For  example, the system’s response time was slower than anticipated, the  result being that it took longer than expected to process a travel  order/voucher. Because of the severity of the problems, in January 2001 a  joint memorandum was issued by the Under Secretary of Defense  (Comptroller) and the Deputy Under Secretary of Defense (Acquisition,  Technology and Logistics) directing a functional and technical assessment  of DTS.  The memorandum also directed that a determination be made of  any future contract actions that would be necessary, based on the  assessment results. In July 2001, the Under Secretary of Defense  (Comptroller) and the Under Secretary of Defense (Acquisition,  Technology and Logistics) approved proceeding with DTS and  restructuring the contract with TRW.
The TRW contract was restructured through a series of contract  modifications, which were finalized on March 29, 2002.  The government  agreed to provide TRW consideration in the amount of about $44 million  for the restructure of the contract.  TRW agreed to release and discharge  the government from liability and agreed to waive any and all liabilities,  obligations, claims, and demands related to or arising from its early  performance efforts under the original contract.  Northrop Grumman  subsequently acquired TRW in December 2002 and, as such, is now the  contractor of record.
The first deployment of DTS was at Ellsworth Air Force Base, South  Dakota, in August 2001. As of September 2005, DTS has been deployed to  approximately 5,600 locations.  The department currently estimates that  DTS will be fully deployed to all 11,000 locations by the end of fiscal year  2006, with an estimated total development and production cost of  approximately $474 million.  Of this amount, the contract for the design,  development, and deployment of DTS, as restructured, is worth  approximately $264 million—the same amount as estimated in the original  contract that was agreed to with BDM. The remaining costs are DOD  internal costs associated with areas such as the operation and maintenance  of DTS, the operation of the PMO-DTS, the voucher payment process, and  management and oversight of the numerous CTO contractors.
subsections: section_title: DOD Travel Process
paragraphs: DTS automates and integrates the department’s three travel processes:  authorization, reservations, and payment to the traveler. Figure 1 depicts  the designated DOD travel process using DTS.
The three essential players in the processing of a travel authorization and  related payment are the traveler, the CTO, and the AO.  The traveler  generates a travel authorization and enters the appropriate information  into DTS, such as travel dates, departure and arrival airports, and hotel and  rental car arrangements.  When the traveler is finished, DTS sends a  prebuilt passenger name record to the CTO. If possible, requested  arrangements will automatically book without CTO intervention. In cases  where the travel arrangements do not automatically book, the CTO must  intervene and take additional steps to book the requested arrangements.  Next, the traveler’s AO receives an e-mail notification from DTS stating that  there is a travel authorization awaiting review and approval.
The AO is a key internal control point in the travel authorization process.  AO responsibilities include reviewing the travel authorization for  compliance with travel laws, regulations, and policies; determining if the  trip is mission essential and funds are available; assigning the proper line of  accounting prior to authorization; reviewing all policy exceptions, and  approving or rejecting the travel authorization as appropriate. When the AO  approves a travel authorization by electronically signing the document in  DTS, DTS routes the approved travel authorization to the CTO for ticketing,  sends an obligation transaction to the appropriate accounting system and  notifies the traveler via e-mail that the travel authorization has been  approved.
When the trip is complete, the traveler creates a travel voucher for  reimbursable travel-related expenses from the travel authorization data  stored in DTS, and electronically signs the voucher.  DTS electronically  routes the travel voucher to the AO for approval. An AO is then  responsible for certifying a travel voucher for payment by electronically  signing the document. DTS submits the certified travel voucher to DFAS  for payment through electronic interfaces, which records the information  in the appropriate accounting and disbursing systems.
section_title: Previously Reported DOD Travel Issues
paragraphs: Over the past several years, we have reported pervasive weaknesses in  DOD’s travel program. These weaknesses have hindered the department’s  operational efficiencies and have left it vulnerable to fraud, waste, and  abuse. These weaknesses are highlighted below.
On the basis of statistical sampling, we estimated that 72 percent of the  over 68,000 premium-class airline tickets DOD purchased for fiscal  years 2001 and 2002 were not properly authorized and that 73 percent  were not properly justified. During fiscal years 2001 and 2002, DOD  spent almost $124 million on airline tickets that included at least one leg  of the trip in premium-class—usually business class.  Because each  premium-class ticket costs the government up to thousands of dollars more than a coach class ticket, unauthorized premium-class travel  resulted in millions of dollars of unnecessary costs annually.
Because of control breakdowns, DOD paid for airline tickets that were  neither used nor processed for refund—amounting to about 58,000  tickets totaling more than $21 million for fiscal years 2001 and 2002.  DOD was not aware of this problem before our audit and did not  maintain any data on unused tickets. Based on limited data provided by  the airlines, it is possible that the unused value of the fully and partially  unused tickets that DOD purchased from fiscal year 1997 through fiscal  year 2003 with its CBA could be at least $100 million.
We found that DOD sometimes paid twice for the same airline ticket— first to Bank of America for the monthly DOD credit card bill, and  second to the traveler, who was reimbursed for the same ticket. Based  on our mining of limited data, the potential magnitude of the improper  payments was 27,000 transactions for over $8 million. For example,  DOD paid a Navy GS-15 civilian employee approximately $10,000 for 13  airline tickets he had not purchased.
section_title: Ongoing DTS Testing Remains a Concern
paragraphs: DTS development and implementation have been problematic, especially in  the area of requirements and testing key functionality to ensure that the  system would perform as intended.  Given the lack of adherence to such  key practices, it is not surprising that critical flaws have been identified  after deployment, resulting in significant schedule slippages. In July 2002, a  DOD Inspector General’s report noted that in early 1999, it was evident that  the commercial-off-the-shelf software would require extensive  modification in order to meet DOD’s needs. Further, the report pointed  out that operational problems continued to arise during the third phase of  the system testing in the fall of 2000.   As originally envisioned, the initial  deployment of DTS was to commence 120 days after the effective date of  the contract award in September 1998, with complete deployment to  approximately 11,000 locations by April 2002.  However, that date has been  changed to September 2006—a slippage of over 4 years. Figure 2 shows the  schedule slippage between the planned and actual implementation of DTS.
Our recent analysis of selected requirements disclosed that the testing of  DTS is not always adequate prior to updated software being released for  use by DOD personnel.  System testing is a critical process utilized by  organizations to improve an entity’s confidence that the system will satisfy  the requirements of the end user and will operate as intended.  Additionally,  an efficient and effective system testing program is one of the critical  elements that needs to be in place in order to have reasonable assurance that an organization has implemented the disciplined processes necessary  to reduce software development project risks to acceptable levels.
In one key area, our review identified instances in which the testing of DTS  was inadequate, which precluded DOD from having reasonable assurance  that DTS displayed the proper flights and airfares.  For example, DOD  officials stated that prior to an August 2005 system update, DTS should  have displayed 12 flights, if that many flights were available, within a flight  window. DTS program officials and Northrop Grumman personnel  acknowledged that this particular system requirement had never been  tested because DOD failed to document the requirement until January  2005.  Because a system requirement covering this feature had never been  defined and communicated to the contractor, there was no reasonable  assurance that DTS would display the envisioned number of flights and  related airfares within a given flight window. As we have noted in  previous reports, requirements that are not defined are unlikely to be  tested, with the resulting consequence that they are even less likely to be  satisfied.
We also noted that even when the requirements were properly defined, the  DOD tests for determining whether DTS displayed the proper flights and  airfares did not provide reasonable assurance that the (1) proper flights  were displayed and (2) airfares for those flights were displayed.   Specifically, DTS uses a commercial product to obtain information from the  database that contains the applicable flight and airfare information— commonly referred to as a global distribution system (GDS).In testing  whether DTS displayed the proper flights and airfares, the information  returned from the commercial product was compared with the information  displayed in DTS and was found to be in agreement. However, the  commercial product did not provide all of the appropriate flights or airfares  to DTS that were contained in the GDS. Since the PMO-DTS neither  performed an end-to-end test nor made sure that the information returned  from this commercial product was in agreement with the information  contained in the GDS, it did not have reasonable assurance that DTS was  displaying the proper flight and airfare information to the users.  According to DOD officials, this system weakness was detected by users  complaining that DTS did not display all relevant flights and airfares.   Figure 3 illustrates the inadequacy of the DTS testing.
PMO-DTS officials acknowledged that these two problems have been  ongoing since the initial implementation of DTS.  Accordingly, as a result of  these two weaknesses, DOD travelers might not have received accurate  information on available flights and airfares, which could have resulted in  higher travel costs.  Further, PMO-DTS officials have stated that the two  problems were corrected as part of the August 2005 DTS system update.   However, we found that the problems have not been entirely corrected as  of the September 2005 release.  In reviewing the documentation relating to  the September 2005 release, we found that (1) the requirements generally  described the functionality that was expected relating to the display of  flights and airfares except that the specific flight order was not adequately  documented and (2) testing was inadequate to provide reasonable  assurance that the DTS system requirements associated with the  reservation module were properly tested.
Our analysis found that the documentation relating to the testing for the  September 2005 release provided reasonable assurance that the proper  GSA city pair airfares were displayed for a given flight.  However, this  documentation did not provide reasonable assurance that the proper flights  were displayed.  Although we were told by PMO-DTS officials that the  testing efforts had checked the number of flights displayed in the GDS to  those that were displayed by DTS to ensure that DTS was properly  displaying the available flights, adequate documentation was not retained  to verify that this comparison had been made.  In November 2005 we  performed a limited test and found that the system did not properly display  the GSA city pair flights between Chicago, Illinois and Dayton, Ohio.  Our  analysis also identified other problems in the display of flight information.
More specifically, for the reservation module our analysis found that the  flights actually displayed in DTS did not meet the stated DOD  requirements.  According to PMO-DTS officials, DTS is required to display  up to 25 flights within a 12-hour flight window for domestic flights, with the  GSA city pair flights shown first.  When more than one flight is available  within a category, the flights should then be sorted first by the elapsed  flight time and then by the earliest departure time.  Our review found that  the testing performed for the September 2005 release did not provide  reasonable assurance that these requirements were met. Our analysis of  two frequently used city pairs DOD tested disclosed that DTS (1) displayed  more than the 25 flights, (2) included flights that were outside the flight  window, and (3) did not display the flights in the proper order.  The  following examples illustrate these problems.
The testing documentation showed that 29 flights were displayed for the  Chicago, Illinois, to Dayton, Ohio, flight and that 11 of these flights were  outside the flight window.  For example, the stated departure time was  9:00 a.m. which means that flights from 3:00 a.m. and 3:00 p.m. should be  considered for inclusion.  Furthermore, 60 percent of the first 10 flights  were outside of this window and leaving at such times as 3:45 p.m.  (fourth item on the display) and 8:55 p.m. (eighth item on the display).
Although the stated requirement was to show the flights with GSA city  pairs first, sorted by elapsed flight and earliest departure times, the  testing documentation showed for an October 18, 2005, departure time,  that the first flight displayed in DTS left Washington, D.C., at 6:45 a.m.  and arrived at Columbus, Ohio at 9:30 a.m. with an elapsed flight time of  1 hour and 55 minutes when the user entered a 9:00 a.m. departure time.   However, the documentation also showed that 6:55 a.m. (eleventh item  on the display) and 1:35 p.m. (thirteenth item on the display) departing  flights were also available with elapsed times of about 1 hour and 25  minutes.  Based on the stated requirement, these two flights should have  been shown first and second on the display since they had shorter  elapsed flight times and were also GSA city pair flights.  Furthermore,  the flights with the shortest elapsed flight times were direct flights while  the first flight involved stopping at another airport before arriving at  Columbus, Ohio.
We believe that one factor contributing to the failure to detect the errors in  displaying the flights in the proper order was that the stated requirements  for the order had not been properly documented.  Specifically, the  requirements that were included in the testing documentation stated that  the flights were to be displayed in the following order: GSA city pair flights  with capacity limits, GSA city pair flights, and all other unrestricted flights.   These requirements did not contain additional information to state that  elapsed flight time and earliest departure time should also be considered in  the display.  As we noted in our September 2005 testimony, requirements  that are not defined are unlikely to be tested.
PMO-DTS officials stated that subsequent to the September 2005 release,  they had identified the flight order display problem and that it had been  corrected in a subsequent release.  Our limited test in November 2005  showed that the flights were now displayed in the proper order for the two  city pairs for which we had identified problems in the September 2005  testing.  PMO-DTS officials stated that they would investigate the reasons  (1) that more than 25 flights were displayed, (2) why flights that were  outside the 12-hour flight window were displayed, and (3) why all GSA city  pair fights were not included in the display.
section_title: DTS Has Corrected Some Previously Reported Travel Problems
paragraphs: DTS has corrected one of the previously reported travel problems, but  others remain.  We have previously reported that a breakdown in internal  controls and a weak control environment have led to potential fraud,  waste, and abuse of hundreds of millions of dollars being improperly spent  on DOD travel.Specifically, DTS has resolved the problem related to  duplicate payment for airline tickets purchased through CBAs.  However,  problems remain related to improper premium-class travel, unused tickets  that are not refunded, and accuracy of travelers’ claims.  The three  remaining problems cannot be resolved solely within DTS and will take  departmentwide action to address.
subsections: section_title: Duplicate Payments Related to CBA
paragraphs: Based upon our observations, we found that DTS was designed to ensure  that a ticket purchased through CBAs cannot be claimed on the individual’s  travel voucher as a reimbursement for airfare to the traveler. We have  previously reported that the department sometimes paid for the same  airline ticket twice when the CBAs were used. As part of our statistical  sample discussed later, we found 14 travel vouchers for which an airline  ticket purchased with a CBA was included on the voucher; however, the  traveler did not receive reimbursement for the claim.
section_title: Improper Premium-Class Travel
paragraphs: While DOD has taken actions to improve existing guidance and controls  related to premium-class travel, including system changes in DTS, we  identified instances in which unauthorized premium-class travel continues.
In November 2003, the Under Secretary of Defense for Personnel and  Readiness formed a task force to address our prior recommendations that  focused on three major areas: (1) policy and controls of travel  authorization, (2) ticket issuance and reporting, and (3) internal control  and oversight. Subsequently, several policy changes were made to improve  the control and accountability over premium-class travel.  For example, the  approval level for first-class travel was elevated to a three-star general and  for business-class travel to a two-star general or civilian equivalent.  Other  changes included strengthening the description of circumstances when  premium-class travel may be used to more clearly show that it is an  exceptional circumstance and not a common practice.  In all cases, AOs  must have their own premium-class travel approved at the next higher  level. These changes also set a broad policy that CTOs are not to issue  premium-class tickets without proper authorization.  In September 2004,  the PMO-DTS made system changes to DTS that blocked eight fare codes  that were considered to be premium-class fare codes from being displayed  or selected by the traveler through DTS.  According to the PMO-DTS, the  airline industry does not have standardized fare code indicators to identify  first-class, business-class, and economy-class.  Subsequently, DOD found  that economy class fare codes were being blocked using the eight codes  and, in May 2005, reduced the list to three codes.  According to PMO-DTS  officials, these three codes are consistently used among the various airlines  to designate premium-class travel.
Despite these various changes in policy and to DTS, we continue to identify  instances in which premium-class travel is occurring without the proper  authorization.  Our analysis disclosed at least 68 cases that involve  improper premium-class travel. Table 1 presents a summary of our  analysis.
DOD regulations require that authorization for premium-class  accommodations be made in advance of travel unless extenuating  circumstances or emergency situations make advance authorization  impossible.  Further, consistent with the Federal Travel Regulation, DOD  restricts premium-class travel to one of the following eight circumstances:  (1) regularly scheduled flights between origin and destination provide only  premium-class accommodations, and this is certified on the travel voucher;  (2) coach class is not available in time to accomplish the purpose of the  official travel, which is so urgent it cannot be postponed; (3) 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; (4) premium-class travel is needed for  security purposes or because exceptional circumstances make its use  essential to the successful performance of the mission; (5) coach-class  accommodations on authorized/approved foreign carriers do not provide  adequate sanitation or meet health standards; (6) 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;   (7) transportation is paid in full by a nonfederal source; and (8) travel is to  or from a destination outside the continental United States, and the  scheduled flight time is in excess of 14 hours. However, a rest stop is  prohibited when travel is authorized for premium-class accommodations.   Based upon the documentation provided by DOD, we found that none of  the 68 cases meet the above criteria or were approved at the appropriate  level.
Further, as shown in table 1, we were unable to ascertain if premium-class  travel occurred for 321 travel legs.  For 245 travel legs, no documentation  was received, and for 76 travel legs, the documentation provided was  inconclusive.  On numerous occasions, we requested that the DOD  components provide us with documentation, such as ticket stubs or travel  itineraries, to substantiate whether the travel legs were premium- or  economy-class travel. If the documentation indicated premium-class travel,  we requested that the proper authorization and justification be provided.  At the end of September 2005, the DOD components had not provided the  requested documentation for 245 travel legs. Therefore, we could not  ascertain and—more importantly—on the basis of the documentation  provided, DOD is not in position to determine, if the airfare was for  premium-class or economy-class travel.
Specific examples of the 68 instances of improperly approved premium- class travel are highlighted below:   A Navy senior Chief Petty Officer (E-8) flew from Norfolk via Detroit to  Seattle, Seattle to Los Angeles, drove from Los Angeles to San Diego,  and flew first class from San Diego via Detroit to Norfolk.  The traveler  charged $1,578 on the government travel card for travel from Norfolk to  Seattle and San Diego to Norfolk, whereas GSA city pair fare was only  $359.  Similarly, the traveler paid $298 to fly from Seattle to Los Angeles  compared to the GSA city pair fare of $149.  The CTO remarked on the  travel authorization that it would not issue a first-class ticket without  properly approved documentation and the lowest government fare was  $414. The traveler submitted the travel voucher and the approving  official (civilian GS-9) approved the premium-class travel costs without  documentation of proper authorization from a premium-class approving  official. According to a Navy official, the traveler purchased his own  ticket at the airport. However, this has no bearing on the fact that  reimbursement was made without the proper authorization.
A Department of the Army civilian employee (GS-12) flew from  Columbia, South Carolina, via Atlanta, Georgia, to Gulf Port, Mississippi,  to attend a conference.  One leg of the return trip included a first-class  flight.  From our review and analysis of Bank of America data and the  travel voucher, DOD paid $1,107 for the airfare.  The cost of a GSA city  pair round trip airfare was $770.  According to information provided by  the Army, the traveler informed the Army that he was meeting another  traveler at the destination; they were going to share a rental car; and  there were no seats available on the flight the other traveler had booked.  Therefore, the individual selected a flight arriving as close as possible to  the time of the traveler he was meeting. The justification provided by the  traveler is not in accordance with DOD’s criteria.  As a result, the  premium-class fare was not properly approved.
Fifty-eight of the 68 travel legs identified as premium-class travel were for  international travel, mostly intra-European flights. For 31 of the 58 travel  legs, the CTOs claimed that these flights were the lowest unrestricted fares  available, and therefore it is not necessary to obtain permission for  premium-class travel.  However, effective August 16, 2004, paragraph  U3125-B5.b of the Joint Federal Travel Regulations (JFTR) and paragraph  C2204-B.5.b of the Joint Travel Regulations (JTR) require the approval of  premium-class travel under these circumstances.   More specifically, the  JFTR and JTR state that “When regularly scheduled flights between the  authorized origin and destination (including connection) points provide  only premium-class accommodations, the member must certify these  circumstances on the travel order attachment.”  In the absence of specific  authorization/approval from the designated authority, the member is  financially responsible for all additional costs resulting from premium-class  airline accommodations use. The 58 travel legs were identified as business  class and therefore should have been approved in accordance with DOD’s  policy.  However, the CTOs failed to notify the traveler that these travel legs  were coded business class, and therefore, approval by higher authority was  required.  Unless the CTOs adhere to the applicable policy, improperly  approved premium-class travel will continue.  It is incumbent upon DOD to  ensure that the CTOs are knowledgeable about the department travel  policies and that those policies are followed.
section_title: Unused Airline Tickets
paragraphs: DTS still does not have the capability to determine whether a traveler does  not use all or a portion of an airline ticket and obtain a refund as required.  To address this problem, DOD directed that all new CTO contract  solicitations require CTOs to prepare unused airline ticket reports which  identify tickets that were not used within a specified period, usually 30  days past the trip date, so that they can be canceled and processed for  refund. Additionally, the various DOD components were directed to modify  existing CTO contracts to require the CTOs to process refunds for unused  airline tickets.  However, according to DOD officials, this requirement has  not yet been implemented in all existing CTO contracts.
At the five locations we visited, each CTO was preparing the unused  airline ticket report; however, the frequency varied. The CTOs at the Army  and Air Force locations prepared the required report on a daily and  monthly basis, respectively.  According to Army and Air Force officials, the  reports are prepared for each location currently using DTS. For the third  quarter of fiscal year 2005, the Army had unused airline tickets of  approximately $14 million, and the Air Force had about $2 million of  unused airline tickets submitted for refund. The Navy requires its CTO to  produce the unused ticket report on a weekly basis. Our review of the  Navy’s unused airline ticket report for the week ended July 17, 2005,  indicated that the Navy was in the process of obtaining refunds of about  $800,000.  The Marine Corps prepared unused airline ticket reports on a  monthly basis. For the third quarter of fiscal year 2005, the Marine Corps  had approximately $1.4 million in unused airline tickets refunded. Army,  Navy, and Marine Corps representatives stated that the reports prepared by  their CTOs also included dollar amounts that are the result of travelers  notifying the CTOs that all or a portion of their ticket was not used.  They  could not ascertain the amount that related directly to the work of the  CTOs.  According to Air Force personnel, the unused airline ticket report  only includes tickets that were found by the CTO and then canceled and  refunded.
section_title: Accuracy of Travel Voucher Reimbursements Questionable
paragraphs: DFAS has previously reported problems with the accuracy of DTS travel  payments.  For the first quarter of fiscal year 2004, DFAS reported a 14  percent inaccuracy rate in the DTS travel payments of airfare, lodging and  meals, and incidental expenses.  Our analysis of 170 travel vouchers  disclosed that for the two attributes that are directly related to the  operation of the DTS system—computation of lodging reimbursement and  meals and incidental expenses (per diem)—the DTS calculations were correct in all instances on the basis of the information provided by the  traveler.
However, we continue to identify numerous instances in which employee  errors led to inaccurate reimbursements.  In some cases, errors occurred  because incorrect data were entered into DTS by the traveler.  In other  cases, the reviews by the AO were inadequate.  In regard to the AO reviews,  on the basis of our sample, we estimated that 18 percent of the travel  vouchers were paid even though there was not reasonable assurance that  the amount of the reimbursement was accurate. Further, we estimated  that 29 percent of the travel vouchers lacked adequate receipts for the  amounts claimed. Furthermore, for the 49 travel vouchers lacking  receipts, we saw no evidence that the AOs were provided with the  appropriate receipts by the traveler.
The JFTR and JTR state that receipts are required for all lodging expenses  regardless of amount and for all individual official travel expenses of $75 or  more.  The receipt must show when specific services were rendered, and  the traveler must attach the required receipts to the travel voucher.
In one case, the traveler was reimbursed for expenses claimed in excess of  $500, even though none of the required receipts were available for review  and approval by the AOs.  Additionally, we identified eight vouchers in  which the claims for reimbursement of rental car expenses were not in  accordance with DOD policy. The JFTR and JTR state that when rental car  usage is authorized for official business by the AOs, reimbursement is  authorized for rental car expenses, such as the rental costs, taxes and local  assessments on rental car users, gasoline, parking, road/tunnel tolls, and  any per-day administrative fee required by the rental car agreements. When  a compact rental car (the “standard” for TDY travel) does not meet  requirements, the AOs may authorize vehicles appropriate for the mission.   In all eight cases, we found that the traveler did not provide justification for  the non-compact rental cars and the AOs did not require the justification to  be documented in accordance with DOD policy.
The AO’s review and approval of the traveler’s voucher is intended to  ensure that only authorized, properly supported travel charges are  reimbursed and that the amounts are accurate and properly calculated. Our  analysis clearly indicates that DOD reimbursed travelers for amounts  claimed despite the lack of the required documentation.  According to DOD  regulations, “the AO (s’) signature on the expense report certifies that the  travel was taken, that the charges are reasonable . . . and that the payment  of the authorized expenses is approved.” While the AO’s signature indicates  that the payment is approved, it falls short of ensuring that amounts  claimed are reasonable in the cases in which receipts for airfare and  lodging are not provided. Further, inadequate reviews by the AO’s resulted  in some travelers being reimbursed more than entitled and other travelers  having to pay for legitimate travel expenses out of their own pockets.
section_title: DTS Faces Challenges in Making DTS a Standard DOD Travel System
paragraphs: DOD’s goal of making DTS the standard travel system within the  department depends upon the development, testing, and implementation of  system interfaces with the myriad of related DOD systems, as well as  private-sector systems, such as the system used by the credit card company  that provides DOD military and civilian employees with travel cards.  While  DOD has developed 31 system interfaces, the PMO-DTS is aware of at least  18 additional DOD business systems for which interfaces must be  developed.  To date, DOD has reported that the development and testing of  the system interfaces has cost over $30 million.  Developing the interfaces  is time consuming and costly.  Additionally, the underutilization of DTS at  the sites where it has been deployed is also hindering the department’s  efforts to have a standard travel system.  Furthermore, the underutilization  affects the estimated savings that are to be derived from the use of DTS  departmentwide.
subsections: section_title: Interfaces Are Critical to Implementing an End-to- End System
paragraphs: One of DOD’s long-standing problems has been the lack of integrated  systems.  To address this issue and minimize the manual entry of data,  interfaces between existing systems must be developed to provide the  exchange of data that is critical for day-to-day operations.  For example,  DTS needs to know before permitting the authorization of travel that  sufficient funds are available to pay for the travel—information that comes  from system(s) other than DTS—and once the travel has been authorized,  another system needs to know this information so that it can record an  obligation and provide management and other systems with information on  the funds that remain available.  Interfaces are also needed with private- sector systems, such as the system used by the credit card company that  provides DOD personnel with travel cards.  Figure 4 identifies the 36 DOD  business systems for which the interfaces with DTS have already been  developed and implemented.
Figure 5 illustrates the additional 18 DOD business systems for which  interfaces with DTS must be developed in the future.
While DOD was able to develop and implement interfaces with the 36  systems, the development of each remaining interface will present the  PMO-DTS with challenges.  For example, the detailed requirements for  each of the remaining interfaces have not yet been defined.  Such  requirements would define (1) what information will be exchanged and   (2) how the data exchange will be conducted.  This is understandable in  some cases, such as for the Army General Fund Financial Enterprise Resource Planning (ERP) system, which is a relatively new endeavor  within the department, so it will be some time before DOD is in position to  start development of the interface.  Additionally, the development of the  DTS interfaces depends on other system managers achieving their time  frames for implementation.  For example, the Navy ERP system is one of  the DOD systems with which DTS is to interface and exchange data.  Any  difficulties with the Navy’s ERP implementation schedule could adversely  affect DTS’s interface testing and, thereby, result in a schedule slippage for  the interface’s implementation.  The above two factors also affect DTS’s  ability to develop reliable cost estimates for the future interfaces.
section_title: Interfaces with Private- Sector Systems Are Critical
paragraphs: Besides the DOD systems, DTS must also develop effective interfaces with  several private-sector systems. For example, DTS must interface with the  department’s credit card provider and the four GDSs used by the various  CTOs that support DOD’s travel activities. The information from the credit  card provider is used for such items as (1) supporting and automating the  CBA reconciliation process for credit card charges and (2) providing the  traveler with the credit card charges to assist in the preparation of the  travel voucher and the payment process. The interfaces with the four GDSs  are necessary since DTS must support the GDS that has been selected by a  CTO servicing a given DOD location. For example, CTO A has selected  SABRE as its GDS and services base A, while CTO B has selected Apollo as  its GDS and services base B. In order for DTS to properly display the  reservation information to personnel at base A, it must have a connection  to SABRE, while in order to perform the same function at base B, it must  have a connection to Apollo.
Further complicating DTS’s operation is the fact that not all airlines use a  GDS.  Fees are charged by the GDS for displaying and booking reservations  and to the CTO for making travel arrangements. Providing the travel  services directly to the traveler could eliminate these costs and is one  reason that some travel service providers have decided not to use a GDS.   According to DTS officials, the ability to directly connect travel service  suppliers and customers is being explored. For example, they are currently  negotiating with an airline to bring its flight and airfare information into DTS, rather than going through a GDS, by using an existing internet  technology commonly referred to as Web services.
section_title: Underutilization of DTS Affects Estimated Savings
paragraphs: Another challenge in establishing DTS as a standard travel system within  DOD is the continued use of the existing legacy travel systems, which are  controlled and operated by the various DOD components.  Currently, at  least 31 legacy travel systems are continuing to be operated within the  department.  As we have previously reported, because each DOD  component receives its own funding for the operation, maintenance, and  modernization of its own systems, there is no incentive for DOD  components to eliminate duplicative travel systems. We recognize that  some of the existing travel systems, such as the Integrated Automated  Travel System version 6.0, cannot be completely eliminated because they  perform functions, such as permanent change of station travel claims that  DTS cannot.  However, in other cases, the department is spending funds on  duplicative systems that perform the same functions as DTS.  The funding  of multiple systems that perform the same functions is one of the reasons  why the department has at least 4,150 business systems. Since these  legacy systems are not controlled and operated by the PMO-DTS, it does  not have the authority to discontinue their operation.
Over the past several years, we have been critical of the department’s  inability to effectively control its business systems investments. To  address this issue, the statutory requirements of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 are aimed at  improving the department’s business systems management practices. The  act directs DOD to put in place a definite management structure  responsible for the control and accountability over business systems  investments, by establishing a hierarchy of investment review boards from  across the department, and directs that the boards use a standard set of  investment review and decision-making criteria to ensure compliance and  consistency with the department’s business enterprise architecture.  The  continuation of the status quo should not be tolerated. It is the investment  review boards’ responsibility to ensure the funds are not being spent on the  legacy systems at those locations where DTS has been fully deployed.  Allowing such expenditures to occur will only perpetuate the current  parochialism and cultural resistance to change that is prevalent throughout  the department. We have previously reported that cultural resistance and  stovepiped operations have all contributed significantly to the failure of  previous attempts to implement broad-based management reforms at  DOD. The department has acknowledged that it confronts decades-old  problems deeply grounded in the bureaucratic history and operating  practices of a complex, multifaceted organization and that many of these  practices were developed piecemeal and evolved to accommodate different  organizations, each with its own policies and procedures.
Because of the continued operation of the legacy systems at locations  where DTS has been fully deployed, DOD components pay DFAS higher  processing fees for processing manual travel vouchers as opposed to  processing the travel vouchers electronically through DTS.  According to  an April 13, 2005, memorandum from the Assistant Secretary of the Army  (Financial Management and Comptroller), DFAS was charging the Army  $34 for each travel voucher processed manually and $2.22 for each travel  voucher processed electronically—a difference of $31.78.  The  memorandum further noted that for the period October 1, 2004, to  February 28, 2005, at locations where DTS had been deployed, the Army  paid DFAS approximately $6 million to process 177,000 travel vouchers  manually—$34 per travel voucher, versus about $186,000 to process 84,000  travel vouchers electronically—$2.22 per voucher.  Overall, for this 5- month period, the Army reported that it spent about $5.6 million more to  process these travel vouchers manually as opposed to electronically using  DTS.
The military services have recognized the importance of utilizing DTS to  the fullest extent possible. The Army issued a memorandum in September  2004 directing each Army installation to fully disseminate DTS to all  travelers within 90 to 180 days after IOC at each installation. The  memorandum included a list of sites to which DTS should be fully  disseminated and the types of vouchers that must be processed through  DTS. Furthermore, the memorandum noted that travel vouchers that could  be processed in DTS should not be sent to DFAS for processing.  In a  similar manner, in February 2005, the Marine Corps directed that upon  declaration of DTS’s IOC at each location, commands will have DTS fully  fielded within 90 days and will stop using other travel processes that DTS  has the capability to process.  The Air Force issued a memorandum in  November 2004 that stressed the importance of using DTS when  implemented at an installation. The Navy issued a similar directive in June  2005.
Despite these messages, DTS remains underutilized by the military  services. Some of the military services, and in particular, the Army, have  taken steps to monitor DTS’s usage, but others, such as the Marine Corps,  do not capture the data necessary to assess the extent to which DTS is  being underutilized. The lack of pertinent data hinders management’s  ability to monitor its progress toward the DOD vision of DTS as the  standard travel system.  Until DOD develops and implements an effective  strategy for overcoming resistance, parochialism, and stovepiped  operations, transformation efforts, as envisioned by the 1995 task force  report, will not be successful and the department will be faced with the  continued proliferation of numerous business systems that are  nonintegrated, duplicative, and waste limited resources.
section_title: Additional Actions Can Be Taken to Streamline DOD Travel Process
paragraphs: In its 1995 report, the DOD Task Force to Reengineer Travel noted that the  existing process was complex and imposed exorbitant administrative costs  on DOD to ostensibly ensure that travel funds are not wasted. The task  force concluded that the DOD travel system focused on (1) compliance  with rigid rules rather than on performance of the mission, (2) outmoded  travel practices, and (3) a nonintegrated travel system and that the  department needed to address these problems. While DTS has reduced  some of the administrative burden, other opportunities exist to further  achieve the vision of a travel system that reduces the administrative burden  and cost while supporting DOD’s mission.  While some of the opportunities  could be implemented by DOD policy changes, others will require  coordination with other organizations such as IRS. Examples of the  possible changes in DOD’s travel management practices include the  following:  automating approval of changes to authorized travel expenses;  utilizing commercial databases to identify unused airline tickets and   simplifying display of flights;  utilizing airfares other than the GSA city pair fares, where cost effective;   using automated methods to reduce hard copy receipt requirements.
section_title: Automating Approval of Changes to Authorized Travel Expenses
paragraphs: The current business process used by DTS designates the traveler’s  supervisor as the AO responsible for authorizing travel and then approving  the travel voucher and making sure the charges are appropriate after the  travel is complete. Furthermore, should the actual expenses claimed on the  travel voucher differ from the authorized estimate of expenses, the AO is  required to approve these deviations as well.  For example, if the estimated  costs associated with the travel authorization are $500 and the actual  expenses are $495, then the AO must specifically approve the $5 difference.  If the difference is caused by two different items, then each item must be  approved. Similarly, if the actual expenses are $505, then the AO must  specifically approve this $5 increase.  This policy appears to perpetuate one  of the problems noted in the 1995 DOD report—compliance with rigid rules  rather than focusing on the performance of the mission.
One practice that could be used to reduce the administrative burden on the  traveler and the AO is to automatically make the adjustments to the travel  claim when the adjustments do not introduce any risk or the cost of the  internal control outweighs the risk. For example, processing a travel claim  that is less than the amount authorized does not pose any more risk than  processing a travel claim that equals the authorized amount since the key is  whether the claim is valid rather than whether the amount equals the  funding initially authorized and obligated in the financial management  system. The concept of using tolerances and making accounting entries is  discussed in the Exposure Draft: Core Financial System Requirements  that was published by the Office of Federal Financial Management. These  requirements were also contained in the previous document issued by the  Joint Financial Management Improvement Program in November 2001.
section_title: Using Commercial Databases to Identify Unused Airline Tickets
paragraphs: We have previously reported that DOD has not recovered millions of  dollars in unused airline tickets. As discussed previously, one action that  DOD is taking to address the problem is requiring the CTOs to prepare  reports on the unused airline tickets.  While this action is a positive step  forward, it requires (1) the CTOs to have an effective system of performing  this function and (2) DOD to have an effective program for monitoring  compliance.
A third party service, commonly referred to as the Airlines Reporting  Corporation (ARC), may provide DOD with the necessary information to  collect unused airline tickets in an automated manner.  DTS officials have  stated that they have had discussions with ARC, but were uncertain of the  cost of obtaining and utilizing the data provided by ARC.  If the information  from ARC was utilized, DOD would not have to rely on the reports  prepared by the CTOs and would be able to avoid the costs associated with  preparing the unused airline ticket reports.  According to DOD officials,  this requirement has not yet been implemented in all the existing CTO  contracts, and therefore, the total costs of preparing the unused airline  ticket reports is not known.
Besides using ARC for the unused airline tickets, DOD could use the  information from ARC to provide assurances that the airfares claimed by  travelers are correct.  A case in point is an example we found in our review  of premium-class travel.  Since the ticket was obtained through a  transaction outside of DTS, it was not included in the results previously  discussed.  We found that an Air Force senior executive purchased an  airline ticket from Albuquerque, New Mexico to Europe with stopovers in  France, Great Britain, Denmark, and Germany.  He originally purchased a  round-trip airline ticket using his government travel card for $3,159.  The  traveler then exchanged the ticket at an airport and received a $1,303 credit  on the government travel card. We examined Bank of America data and  confirmed that a refund of $1,303 was posted to the account.  While in  Munich, Germany, the traveler exchanged the ticket again and was charged  an additional $515. The total airfare cost for this part of the trip was $2,371;  however, the traveler submitted a voucher claiming the original estimated  cost of $3,159 and included a handwritten receipt. The approving official  approved the travel voucher, and the traveler was reimbursed $3,159, an  overpayment of $788.  Additionally, the traveler purchased an airfare ticket  in Copenhagen to fly to Hamburg, and we found that the traveler submitted  a receipt and requested a reimbursement of $628, even though Bank of  America showed that ticket cost only $523—a potential overpayment of  $105.  As a result of these various transactions the traveler was potentially  improperly reimbursed at least $893.
Since ARC maintains ticketing data, such as passenger name, ticket  number, flight information, and fees paid for over 3 years, access to ARC  would allow DOD to obtain the entire history of refunds and exchanges  associated with a given ticket number.  This information would permit  DOD to not only identify unused airline tickets, but also unreported  refunds such as those in the previous example.  Since ARC is the  organization that assigns tickets numbers, DOD could easily query the trips  of interest. Under this concept, DOD could take the ticket numbers and  query ARC to validate that the (1) ticket had been used and (2) ultimate  price paid for the ticket after any refunds. Any tickets associated with trips  that had been completed but not yet used would be identified in this  process, which would allow DOD to begin taking the necessary actions to  ensure it received the reimbursement for the portion of the unused airline  ticket.  This information would also be useful in identifying refunds  provided to travelers that were not shown on the travel vouchers.
section_title: Simplify the Display of Flights
paragraphs: The current DTS business rules require the system to display multiple  airfares for the same flight.  DTS displays airfares in the following order, if  seats are available on a given flight:  GSA city pair fares with capacity limits, GSA city pair fares, and   other unrestricted fares—if GSA city pair fares are not available on that  flight.
Following the above criteria, for a flight from Washington, D.C. (Ronald  Reagan National Airport), to Dallas/Fort Worth, the GSA city pair fare with  capacity limits, which is $188, would be shown along side the GSA city  pair fare of $341, assuming that seats were available for both fares.  We  believe that the process could be simplified if only the lowest available  airfare was displayed—in this case, $188.  Using the above flight, DTS  should only display the GSA city pair fare with capacity limits for the given  flight, if seats are available, since it was the lowest-cost unrestricted  airfare, rather than showing both fares.  Furthermore, if a lower  unrestricted fare was available, that fare, rather than the GSA city pair fare,  should be shown.  This approach would be in accordance with the GSA city  pair program since it allows for other unrestricted fares to be accepted  when the selected airfare is (1) lower than the GSA city pair fare and   (2) available to the general public. Implementation of this change would  require DTS to change its business process. Currently, if travelers have to  change their flights and the fares are not the same, they have to go through  the approval process because it necessitates change in the amount of funds  obligated to pay for the flights.  In reality, approving an airfare change from  a GSA city pair fare with capacity limits to a GSA city pair fare should be  “automatic” since a GSA city pair flight and airfare were being used and this  airfare could have been selected by the traveler when the travel  authorization was originated.  Additionally, the automatic approval of such  an increase would help alleviate concerns the travelers may have about  amending travel authorization while in a travel status.
section_title: Utilizing Restricted Airfares Where Cost Effective
paragraphs: DOD’s business rules and the design of DTS provide that only unrestricted  airfares should be displayed.  However, adopting a “one size fits all” policy  does not provide an incentive to the traveler to make the best decision for  the government, which was one of the stated changes documented in the  1995 DOD report. Other airfares, generally referred to as restricted airfares,  may be less expensive than a given GSA city pair fare and other  unrestricted airfares.  However, as the name implies, these fares come with  restrictions.  For example, within the GSA city pair fare program, changes  can be made in the flight numerous times without any additional cost to the  government.  Generally, with restricted airfares there is a fee for changing  flights.
The Federal Travel Regulation and DOD’s JFTR and JTR allow travelers to  take restricted airfares, including on those airlines not under the GSA city  pair contract, if the restricted airfare costs less to the government.   However, DOD’s regulations do not address reimbursement above the  applicable unrestricted airfare if that charge was incurred for the  convenience of the government. For example, assume that the GSA city  pair rate between city A and city B was $300 and a traveler selected a  restricted airfare for $250. If the traveler incurred a $35 change fee for  personal reasons, then the traveler would be allowed to claim for  reimbursement the $35 fee since the total price of the ticket ($285) was less  than the GSA city pair fare. On the other hand, if the traveler incurred a $70  fee and the change was for the convenience of the government, it is not  clear under DOD’s regulations that the traveler would receive reimbursement for the entire $320. Furthermore, even if the traveler felt  certain that no changes would be required, DTS does not display restricted  air fares.  Additionally, at the present time, DOD does not have quantifiable  information available that can be used to ascertain if the use of restricted  airfares would be advantageous to the department.
Adopting a standard policy of using one type of airfare—unrestricted or  restricted—is not the most appropriate approach for DOD to follow.  A  better approach would be to establish guidance on when unrestricted and  restricted airfares should be used and then monitor how that policy is  implemented. For example, travelers could be instructed to select  restricted airfares when (1) the certainty of the trip occurring is highly  probable, (2) the cost differential between unrestricted and restricted  airfare would cover the costs of at least one change fee, and  (3) the restricted airfare meets mission requirements.  Once these business  rules were defined, DTS could be modified to incorporate them into its  displays of available flights, which would assist the traveler in identifying  restricted airfares that may be of interest and in compliance with DOD  guidance.  Although development of the guidance is an important first step,  management also needs to determine (1) whether the policy was being  followed and (2) what changes are needed to make it more effective. For  example, a periodic review of the change fees associated with restricted  airfares could be made to determine such items as (1) whether, after  consideration of these fees, savings were accruing to the department and  (2) if the change fees were significant, the reasons for those change fees.   Since DTS could be modified to capture the change fees as a separate  expense item, such quantifiable data would assist in this analysis.
section_title: Using Automated Methods to Reduce Hard Copy Receipt Requirements
paragraphs: While receipts provide valuable information that is necessary to validate  claims, as noted in our sample results, the omission of receipts was a  significant problem in our review of the travel vouchers.  In some cases,  DOD may be able to change its policy and reduce the number of receipts  required and the associated administrative burden without adversely  affecting its ability to ensure a claim is proper. However, in some cases, IRS  regulations mandate that DOD obtain receipts.  For example, IRS has  prescribed certain guidelines relating to the requirement for receipts  associated with travel expenses. In this regard, receipts are not required  for expenses less than $75 (except for lodging) and transportation  expenses where receipts are not readily available.
Automated methods could be used to reduce the number of receipts that  the traveler is currently required to provide without compromising internal  controls.  Currently, a DOD traveler is required to provide a copy of the  receipt associated with the airline ticket, except when the ticket is  purchased via the CBA. However, adequate information may be available  from automated sources that would provide at least the same degree of  assurance as the receipts. Specifically, when the airline ticket is acquired  using a government credit card, the appropriate information is available  from the credit card company in an automated form that can be used to  validate the claim on the voucher. Besides the airline tickets, information  on the government charge card could also be used to validate the claim for  reimbursement for travel fees paid to the CTO and fuel charges.   Furthermore, if DOD gained access to the information contained in ARC as  discussed previously, then this information could be used to further  support the costs associated with the travel claim.
Other automated methods that may be able to produce reasonable  assurance of the claim may require consultation with IRS.  For example,  IRS requires that lodging expenses be supported by receipts showing   (1) the name and location of the hotel; (2) the dates the employee stayed  there; and (3) separate amounts for charges such as lodging, meals, and  telephone calls. In the case of federal travel, such information is critical to  determining whether the individual is receiving duplicate reimbursement.  For example, if the employee was reimbursed $70 for lodging expenses,  which included a $5 meal, then that employee could be compensated for  the meal twice—once under the per diem allowance paid and then again  under the lodging expenses. The information currently displayed by the  government charge card vendor does not provide this level of detail.   However, other automated techniques may provide reasonable assurance  that the objective of not paying expenses twice is achieved.  Conceptually,  using data-mining techniques, an entity could achieve reasonable  assurance that the claims for lodging were reasonable and did not include  duplicate charges. The following is one conceptual approach that could be  used.
DTS knows (1) the dates the employee claimed lodging expenses,   (2) the amount of lodging expenses claimed each day, and (3) the  location where those expenses should have been incurred. Also,  assuming that the lodging was booked through DTS, it knows the rate  that is expected to be paid.
The government charge card system knows the (1) transaction date of  the payment made to the lodging provider, (2) total amount paid,   (3) name of lodging provider, and (4) location of lodging provider (city,  state, and zip code).
Comparison of data from DTS and the government charge card would  indicate whether the claim for lodging costs was greater than or equal to  the amount claimed on the travel voucher, which would provide  reasonable assurance that the costs had been incurred.
Although the comparison of the DTS information to the charge card  information would provide reasonable assurance that the charges  claimed were actually incurred, it would not provide reasonable  assurance that the costs claimed did not include duplicate charges.    Reasonable assurance that the amounts actually claimed represented  the actual charges for those items can be obtained by using the data  already captured (or available) through two methods.  First, since DTS  knows the travel claims for a large number of individuals, it will have a  high probability of knowing (1) the lodging expenses incurred by others  at that facility and (2) the applicable tax rate for lodging associated with  a given zip code.  For example, if 10 travelers stay within a given zip  code and the tax rate is 5 percent, then it is reasonable to expect that  another claim in that zip code with a 5 percent tax rate is reasonable.   Second, it may be possible to compare the rate claimed by multiple  individuals at a given facility even though those individuals may not  have been associated with the trip or stayed at the facility on the same  day.  For example, if 5 travelers stayed at hotel A during a 6-month  period and all of them claimed the same for lodging and taxes, then it  would be reasonable to assume that this figure was the actual amount  paid.  Using these techniques, anomalies could be detected.
The term “reasonable assurance” is important because no matter how well  designed and operated, an internal control system cannot provide absolute  assurance that agency objectives will be met. Furthermore, an important  concept in internal control considerations is the relationship between costs  and benefits. Because techniques and technology may allow DOD to  achieve the reasonable assurances needed by IRS that, in effect, require  DOD to obtain lodging and similar receipts, DOD could explore with IRS  acceptable approaches for reducing the number of receipts required for the  paper-based receipt process.  Reducing the need for paper receipts would  also reduce the administrative burden on the travelers and the AOs and the  costs incurred by DOD for capturing and storing these receipts.
section_title: Conclusions
paragraphs: Overhauling DOD’s financial management and business operations—one of  the largest and most complex organizations in the world—represents a  daunting challenge.  DTS, intended to be the department’s end-to-end travel  management system, illustrates some of the obstacles that must be  overcome by DOD’s array of transformation efforts.  With over 3.3 million  military and civilian personnel as potential travel system users, the sheer  size and complexity of the undertaking overshadows any such project in  the private sector.  Nonetheless, standardized business systems across the  department will be the key to achieving billions of dollars of annual savings  through successful DOD transformation.  As we have previously reported,  because each DOD component receives its own funding for the operation,  maintenance, and modernization of its own systems, nonintegrated,  parochial business systems have proliferated—4,150 business systems  throughout the department by a recent count. The elimination of  stovepiped legacy travel systems and cheaper electronic processing, which  could be achieved with the successful implementation of DTS, is critical to  realizing the anticipated savings.  Further, opportunities exist to streamline  the department’s overall travel management practices thereby reducing the  administrative burden and cost without affecting internal controls and, in  some cases, improving internal controls over the department’s travel  management practices.
section_title: Recommendations for Executive Action
paragraphs: To improve the department’s management and oversight of DTS and  streamline its administrative process for travel, we recommend that the  Secretary of Defense take the following 10 actions:  direct the PMO-DTS to effectively implement the disciplined processes  necessary to provide reasonable assurance that (1) requirements are  properly documented and (2) requirements are adequately tested;     direct the PMO-DTS to properly test new or modified system interfaces  so that the intended functionality is properly operating prior to a  software update being provided to DTS users;  direct the PMO-DTS to require that all CTOs adhere to the department’s  policy on the use of premium-class travel, even in those instances where  it is listed as the only available airfare;   direct the Secretaries of the Army, Navy, and Air Force, as well as the  heads of all DOD agencies, to reemphasize that travelers are to justify  exceptions from department policy and the importance of the  authorizing officials not approving any travel authorization in which  exceptions are not properly justified;  direct the Secretaries of the Army, Navy, and Air Force, as well as the  heads of all DOD agencies, to routinely monitor, such as on a quarterly  basis, information on the number and cost of processing travel vouchers  outside of DTS and initiate action to eliminate funding for legacy  systems, where applicable;  direct the PMO-DTS to develop and implement the means to automate  the approval of changes to authorized travel expenses where possible;   direct the PMO-DTS to consider the viability of using commercial  databases to identify unused airline tickets, for which reimbursement  should be obtained and help improve the assurance that the actual  travel taken was consistent with the information shown on the travel  voucher;  direct the PMO-DTS to consider simplifying the display of airfares in   direct the PMO-DTS to determine the feasibility of utilizing restricted  airfares, where cost effective; and   direct the PMO-DTS to work with IRS to develop an approach that will  permit the use of automated methods to reduce the need for hard copy  receipts to satisfy requirements to substantiate travel expenses.
section_title: Agency Comments and Our Evaluation
paragraphs: We received written comments on a draft of this report from the Director,  DFAS, which are reprinted in appendix II.  DOD concurred with all our  recommendations and identified actions it plans to take to improve the  department’s management and oversight of DTS and streamline its  administrative travel process.  For example, DOD stated that it will  continuously monitor and adjust its processes to ensure requirements are  properly documented and tested.  Additionally, DOD noted that the PMO- DTS will incorporate system and travel review changes to ensure CTOs are  following departmental policy by periodically reviewing premium-class  travel authorizations.  DOD’s comments also noted that the department will  consider the use of commercial databases to identify unused airline tickets  for which reimbursement should be obtained.  DOD noted that this effort  could be expanded governmentwide through ongoing collaborative efforts  with GSA.
We are sending copies of this report to the Secretary of Defense; Under  Secretary of Defense (Comptroller); the Under Secretary of Defense  (Acquisition, Technology and Logistics); and the Director, Office of  Management and Budget. Copies of this report will be made available to  others upon request. In addition, the report is available at no charge on the  GAO Web site at http://www.gao.gov. If you or your staff have any questions  on matters discussed in this report, please contact McCoy Williams at (202)  512-6906 or williamsm1@gao.gov or Keith A. Rhodes at (202) 512-6412 or  rhodesk@gao.gov.  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report.   Key contributors to this report are listed in appendix III.
section_title: Scope and Methodology
paragraphs: To determine if the Department of Defense (DOD) effectively tested key  Defense Travel System (DTS) functionality associated with flights and  airfares, we reviewed two key DTS flight-related requirements and the  related testing to determine if the desired functionality was effectively  implemented.
To determine if DTS will correct the problems previously identified with  DOD travel, we analyzed past GAO reports and testimonies, selected  Defense Finance and Accounting Service (DFAS) reports, and DOD  congressional testimonies.  In this regard, we focused on how DTS  addresses issues related to premium-class travel, unused tickets, and  centrally billed accounts (CBA) and the accuracy of claims for travel  reimbursement.  More specifically, to determine if DTS will correct the  weaknesses related to premium-class travel, we  identified and tested all individually billed account (IBA) and CBA  premium-class travel transactions processed by DTS for the first quarter  of fiscal year 2005 (October through December 2004) for proper  approval and justification and   obtained an understanding of the process to purchase properly  approved and justified premium-class travel through DTS, and of the  controls in DTS to prevent a traveler from purchasing premium-class  travel without proper approval.
To assess the use of premium-class travel for IBA, we obtained from Bank  of America a database of fiscal year 2005 first quarter (October through  December 2004) air travel transactions charged to IBA accounts. The  database contained transaction specific information, such as the price of  the ticket, ticket number, name of passenger, date and destination of travel,  and service code (first, business, or coach class seating accommodations).   We also obtained from the Project Management Office—Defense Travel  System (PMO-DTS) a database containing all vouchers processed by DTS  for the same time period. We extracted all unique Social Security Numbers  (SSN) from the PMO-DTS database and compared the information with the  data from Bank of America.  This comparison resulted in the identification  of the IBA transactions that could be potential premium-class airline  tickets.  We eliminated all airfare charges that were less than $200, which  created a listing of 380 potential premium-class travel IBA charges. In those  instances in which there was insufficient information in DTS to ascertain if  a premium-class airline ticket had been purchased, we requested additional  information from the military services, such as travel itinerary or ticket  stub providing information on the class of service (economy, business,  first) purchased.  We reviewed the travel authorization and all supporting  documentation to determine the class of service provided and determined  if there was proper approval and justification for premium-class travel.
To ascertain if the CBAs were being used for the purchase of premium- class travel, we followed the same methodology used in reviewing IBAs.   Our comparison resulted in the identification of 244 potential CBA  premium-class travel transactions. The CBA listing only contained the  travelers’ names and not their respective SSNs, therefore we requested  additional information from the military services.  In performing our  analysis of the IBA and CBA, besides the $200 criteria mentioned above, we  also eliminated all airfare transactions that were not processed through  DTS or that we determined were economy-class airfare transactions.  This  process resulted in the identification of potentially 419 transactions in  which a premium-class ticket could have been issued.
To address the issue of unused airline tickets, we discussed with the PMO- DTS specific actions that were being taken and visited five locations to  ascertain if the commercial travel offices were preparing the unused airline  ticket reports.  In regard to the duplicate payment for airline tickets  purchased through the CBA, we reviewed DTS controls to ascertain if they  were designed to ensure that tickets purchased through the CBA cannot be  claimed on an individual’s travel voucher as a reimbursement to the  traveler.
To test for the accuracy of travel voucher reimbursements, we utilized the  DTS database previously mentioned covering the first quarter of fiscal year  2005.  From this database, we extracted all temporary duty travel vouchers  where the travel occurred from October 1, 2004 to December 31, 2004.  We  assumed a 10 percent rate of control violations, and we desired a precision  of +/- 5 percentage points at the 95 percent confidence level.  These  parameters, along with an assumed 80 percent response rate, led to a  sample size of 173 travel vouchers. 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 the precision of our  particular sample’s results as a 95 percent confidence interval (e.g., plus or  minus 5 percentage points).  This is the interval 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.
To identify some of the challenges confronting DOD in making DTS the  department’s standard travel system, we discussed with PMO-DTS officials  their implementation strategy and reviewed past GAO reports and  testimonies related to the department’s efforts to improve the accuracy and  reliability of the information in its business systems. Additionally, we  analyzed data on the number of systems interfaces that have been  developed and implemented to date and those that need to be developed in  the future.  We also discussed with the PMO-DTS some of the specific  actions that could be taken to further streamline the department’s travel  management practices.  In this regard, we reviewed past GAO reports that  discuss specific actions agencies can take to streamline their respective  travel management practices.
We assessed the reliability of the DOD data used for our audit by   (1) performing electronic testing of required data elements, (2) reviewing  existing information about the data and the system that produced them,  and (3) interviewing agency officials knowledgeable about the data.  We  determined that the data were sufficiently reliable for the purpose of this  audit.  We performed our audit work from October 2004 through October  2005 in accordance with U.S. generally accepted government auditing  standards.
We requested comments on a draft of this report from the Secretary of  Defense or his designee.  We received written comments from the Director,  DFAS, which are reprinted in appendix II.
section_title: Comments from the Department of Defense
section_title: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Acknowledgments
paragraphs: In addition to the above contacts, the following individuals made key  contributions to this report: Darby Smith, Assistant Director; J. Christopher  Martin, Senior Level Technologist; F. Abe Dymond, Assistant General  Counsel; Beatrice Alff; Francine DelVecchio; Thomas Hackney; Gloria  Hernandez-Saunders; Wilfred Holloway; Jason Kelly; Sheila Miller; Robert  Sharpe; Patrick Tobo; and Adam Vodraska.
section_title: Related GAO Products
paragraphs: Army National Guard: Inefficient, Error-Prone Process Results in Travel  Reimbursement Problems for Mobilized Soldiers.  GAO-05-400T.  Washington, D.C.: March 16, 2005.
Army National Guard: Inefficient, Error-Prone Process Results in Travel  Reimbursement Problems for Mobilized Soldiers.  GAO-05-79. Washington,  D.C.: January 31, 2005.
DOD Travel Cards: Control Weaknesses Led to Millions of Dollars of  Improper Payments.  GAO-04-576.  Washington, D.C.: June 9, 2004.
DOD Travel Cards: Control Weaknesses Led to Millions in Fraud, Waste,  and Improper Payments. GAO-04-825T. Washington, D.C.: June 9, 2004.
DOD Travel Cards: Control Weaknesses Led to Millions of Dollars Wasted  on Unused Airline Tickets.  GAO-04-398.  Washington, D.C.: March 31,  2004.
Travel Cards: Internal Control Weaknesses at DOD Led to Improper Use of  First and Business Class Travel.  GAO-04-229T.  Washington, D.C.:  November 6, 2003.
Travel Cards: Internal Control Weaknesses at DOD Led to Improper Use of  First and Business Class Travel.  GAO-04-88.  Washington, D.C.:   October 24, 2003.