Reserve Component Travel: DOD Should Assess the Effect of Reservists' Unreimbursed Out-of-Pocket Expenses on Retention
Released: 2017-10-16T00:00:00

Letter

Background

The Selected Reserve comprises over 811,000 full- and part-time members from the military services’ respective National Guard and reserve components, whom DOD can call to active duty to augment military forces in time of war or national emergency. DOD requires these reservists to maintain readiness by participating regularly in training to maintain the military skills needed to perform their mission. About 91 percent of the members of the Selected Reserve, or 735,876 reservists, are part-time, performing military service in addition to their civilian employment and careers. Reservists typically train for about 1 weekend a month and 2 weeks a year. Reservists may also be required to participate in longer duration training to develop and maintain specialized skills related to their military occupation, such as cyber specialists, or to perform other activities such as backfilling positions in other reserve or active units. The following are descriptions of reservists’ required training and other duties:

Annual Training: All six reserve components require an annual training period, typically 2 weeks, to acquire and maintain required military skills.

Inactive Duty Training: This training is commonly referred to as the “1 weekend a month” commitment, and reservists fulfill this commitment in connection with prescribed training or maintenance activities of the units to which they are assigned.

Active Duty for Training: So that reservists acquire and maintain required military skills, individuals serving as reservists participate in training programs such as initial basic training and advanced individual training, and may attend full time specialized schools. The duration of Active Duty for Training varies considerably, from days to several months.

Active Duty Other than Training: All six reserve components may require that reservists perform other support activities, such as backfilling a position in a reserve or active unit.

For a variety of reasons, reservists may not live in the same location where they train. For example, reservists may relocate for their civilian occupation, and officials told us that as reservists are promoted, command opportunities are more geographically dispersed. As a result, travel may be necessary to facilitate their service. DOD’s six reserve components reported paying or reimbursing over $925 million in travel costs for reservists in fiscal year 2015, representing about 4.3 percent of the total obligations identified in the Reserve Personnel accounts. With an actual part-time endstrength of 742,683 reservists in fiscal year 2015, DOD spent an average cost of about $1,246 per reservist. Officials told us that DOD does not specifically collect and track data on reservists’ unreimbursed travel expenses, which are therefore unknown. Officials told us that reservists process their travel claims through DOD-wide or military-service-based electronic data systems, such as the Defense Travel Service or the Air Force’s Reserve Travel System, or sometimes using hard-copy forms, depending on the type of duty performed, the reserve component, and other factors. DOD’s Joint Travel Regulations govern the extent to which reservists are eligible to be reimbursed for travel expenses to participate in required training or in other duties. The regulations authorize the reimbursement of different types of expenses depending on the nature and duration of the assignment. Eligible reimbursements include:

Per diem, which includes reimbursement for food, temporary lodging,

Transportation expenses, ranging from reimbursement for mileage traveled in reservists’ private vehicles to reimbursement for commercial flights;

Permanent Change of Station reimbursements related to reservists changing their home of record to the location of the assignment, such as reimbursement for the movement of household goods; and

Basic Allowance for Housing, which is based on the costs of adequate rental properties for civilians with comparable income levels in the same location as the permanent duty station, which in the case of reservists is generally the location of their home; is received when reservists are in an active duty status, which includes Active Duty for Training and Active Duty Other than Training; and is determined based on the duration of reservists’ active duty assignments.

Reservists also receive cash compensation for the various types of training and other duties they perform; non-cash compensation, such as access to TRICARE Reserve Select and education benefits; and deferred compensation, such as participation in the military retirement system. In addition, reservists may be able to take advantage of a federal tax deduction for out-of-pocket travel expenses associated with their service.

Reservists May Incur Out-of-Pocket Travel Expenses under Certain Conditions

Reservists may incur expenses under certain conditions in connection with their service that are not reimbursable under DOD’s travel regulations. Officials responsible for travel regulations and reserve policy issues told us that this can occur because: (1) the cost to attend Inactive Duty Training is a reservist’s responsibility, except in limited circumstances; and (2) DOD designates longer duration training or assignments as a Permanent Change of Station—a change in a reservist’s home of record—and not as temporary travel.

Travel Expenses to Attend Inactive Duty Training Are the Responsibility of Reservists Except for in Limited Circumstances

Under most circumstances, travel expenses to and from the 1 weekend a month training commitment are reservists’ responsibility with no reimbursement provided, and as a result reservists may incur unreimbursed travel expenses to attend this training. Specifically, the Joint Travel Regulations states that a reserve component member performing Inactive Duty Training ordinarily receives no travel or transportation allowances, particularly when the training duty is performed at the reservist’s assigned unit location. This principle is reflected in travel policy such as the Navy Reserve’s requirement that reservists who live more than 100 miles from their Inactive Duty Training site sign a waiver acknowledging that they will not be reimbursed for travel expenses. Navy travel policy, citing a previous version of the Joint Travel Regulations, states that as part of the requirement to perform Inactive Duty Training, “inherent to this obligation is the travel between the member’s home and the location at which the member normally performs drills” with no reimbursement provided.

To mitigate expenses incurred by reservists traveling long distances, the National Defense Authorization Act for Fiscal Year 2008 established a reimbursement program for Inactive Duty Training whereby each component may, at the discretion of the service Secretary and under certain circumstances, provide reimbursement of up to $300 in expenses for each roundtrip to the training location. The Joint Travel Regulations further specifies that reservists must travel no fewer than 150 miles or greater one way from their primary residence to their normal drilling site to be eligible. DOD spent nearly $33.5 million on Inactive Duty Training travel costs in fiscal year 2015. While each service Secretary decides whether an individual component can participate in the program, the Joint Travel Regulations requires such programs to make servicemembers eligible for reimbursement when they meet one of the following criteria: They are qualified in a skill designated as critically short by the Secretary assigned to a unit of the Selected Reserve with a critical staffing shortage, or in a pay grade in the reservists’ component with a critical staffing shortage; or assigned to a unit or position that is disestablished or relocated as a result of Base Realignment and Closure or other force structure reallocation.

See table 1 for scenarios illustrating reimbursement eligibility for Inactive Duty Training expenses in the Army Reserve.

Three of the six reserve components have established policies to allow for reimbursement of expenses of travel related to Inactive Duty Training, according to component-specific criteria. The Marine Corps Reserve and the Air Force Reserve authorize Inactive Duty Training reimbursement for several occupations, and in the case of the Marine Corps Reserve, entire rank levels. The Army Reserve authorizes reimbursement, but according to its policy targets reimbursements to soldiers and units with the highest payoff in achieving readiness. Specifically, Army Reserve commanders establish Inactive Duty Training reimbursement policy that designates and prioritizes positions, units, and occupational specialties eligible to participate. Both Air National Guard and Army National Guard officials told us that their respective components do not authorize Inactive Duty Training reimbursement. Similarly, Navy officials told us that the Navy does not participate in the reimbursement program, primarily because under its training construct Navy reservists conduct most Inactive Duty Training at a Navy Operational Support Center close to their homes, thereby limiting the training that may occur at a further distance from their homes to a minority of sessions.

Travel distances for reservists to their drilling site may have increased over time. For example, the 2012 Report of the Eleventh Quadrennial Review of Military Compensation noted that reservists traditionally lived near a reserve site or drilling location, but reported that at the time of its review more than 100,000 reservists lived more than 100 miles from their drilling locations. Further, according to a 2008 report by the Commission on the National Guard and Reserves, after Base Realignment and Closure actions some reservists may have fewer locations available to them to perform such training. As a result, reservists may be travelling greater distances to attend such training. Officials also told us that the travel distances required to attend Inactive Duty Training can be further increased as reservists progress in their careers in certain occupational specialties or ranks. For example, officials from the Marine Corps Reserve told us that as reservists are promoted to higher ranks, there are fewer positions, which can result in long-distance travel by reservists, while Army Reserve officials told us that some reservists may turn down command positions to avoid long-distance travel.

DOD’s Joint Travel Regulations Treats Long- Duration Training and Other Assignments of Long-Duration as a Permanent Change of Station

DOD’s Joint Travel Regulations treats Active Duty for Training and other assignments of long-duration as a Permanent Change of Station, or a change in a reservist’s home of record, generally his or her civilian home, and not as Temporary Duty. The treatment of long-duration training or other assignments as a Permanent Change of Station applies equally to reservists and active component members, as DOD travel regulations require all military personnel at a given training or assignment to be in the same status. However, officials told us that due to the interim nature of such assignments reservists are unlikely to move their families, and reservists may incur unreimbursed expenses due to the cost of maintaining two homes. For example, according to a reserve policy official, based on an internal analysis, about two-thirds of Air Reserve members on long-duration training do not move from their civilian homes. Further, the 2012 Report of the Eleventh Quadrennial Review of Military Compensation concluded that reservists would likely return to their civilian homes and employers at the conclusion of their assignments. In addition, officials stated that long-duration training is becoming more common. For example, Army language or medical training can routinely last longer than 140 days and require a Permanent Change of Station.

The treatment of long-duration training and other assignments as a Permanent Change of Station and not as Temporary Duty affects the type of expenses that will be reimbursed and the Basic Allowance for Housing rate received by reservists. A Permanent Change of Station is triggered when Active Duty for Training assignments last 140 days or longer and Active Duty for Other than Training assignments last 181 days or longer. The changes in eligibility for reimbursement discussed below can affect the amounts of reservists’ unreimbursed expenses:

Per diem: Reservists on training or other assignments that are treated as a Permanent Change of Station are not eligible for reimbursement of per diem expenses, including for temporary lodging and meals. Reservists are unlikely to relocate their civilian homes for such long-duration, though interim, training and assignments. They may therefore incur expenses typically associated with a Temporary Duty assignment, such as temporary lodging expenses, but for which they cannot be reimbursed.

Basic Allowance for Housing: Reservists on training or other assignments that are treated as a Permanent Change of Station receive an adjusted Basic Allowance for Housing based on the location of their new duty station. This adjusted housing allowance applies regardless of whether a reservist actually moves his or her civilian home and family to the new duty station. Depending on the new duty location, a reservist may receive Basic Allowance for Housing at a higher or lower rate than the allowance amount based on the location of their civilian home. If a reservist were in Temporary Duty status—training for 139 days or fewer, or an assignment for 180 days or fewer—he or she would continue to receive Basic Allowance for Housing based on the cost of maintaining his or her civilian home.

If reservists decide not to relocate themselves and their families to the location of the long-duration training or assignment, reservists may face unreimbursed costs for maintaining two homes. Once a Permanent Change of Station has been triggered, a reservist is no longer in a Temporary Duty status and may no longer receive per diem for temporary lodging. Reservists must either (1) move to government lodging and forego any Basic Allowance for Housing, or (2) receive Basic Allowance for Housing based on the location of the assignment, which may be higher or lower than the allowance based on the location of their home of record, generally their civilian home. In the first situation, reservists must maintain their civilian home without payment of a Basic Allowance for Housing, and thus may face unreimbursed costs associated with the home’s maintenance. In the second situation, reservists must maintain both their civilian home and a new home with a Basic Allowance for Housing adjusted for the location of the home at the new duty station. Unreimbursed costs may result if the Basic Allowance for Housing adjusted for the location of the new duty station is significantly lower than the housing costs in the area of the reservist’s civilian home. As shown in the 2017 illustrative example in figure 1, reservists receive different levels of payment for the temporary lodging allowance and the Basic Allowance for Housing based on the duration of their Active Duty for Training assignments.

A service Secretary may grant a waiver for individuals attending a training course to maintain Temporary Duty status beyond the 140-day time limit, which normally would require a Permanent Change of Station. However, such waivers apply to all course attendees, whether they are members of the active or reserve components. DOD maintains data on the number of these waivers, but not for the discrete number of waivers for reserve component training. Individual reservists can also apply for a waiver for the rate of their Basic Allowance for Housing payment to be based on the location of their dependents, effectively allowing payment at the geographic rate of a reservist’s civilian home. However, this option is not available to reservists without dependents.

DOD Has Not Fully Assessed the Potential Effect of Unreimbursed Out-of- Pocket Travel Expenses on the Retention of Reservists

Within the last decade, DOD and the services have conducted a few limited assessments of the potential effect of unreimbursed out-of-pocket travel expenses incurred by reservists to perform required training and other reserve activities on retention of reservists. Although various entities have raised concerns regarding reservists’ out-of-pocket travel expenses, the available information is either anecdotal or applicable to only one reserve component or one aspect of travel policy. DOD reports have noted that such unreimbursed travel expenses, among other factors, may be a challenge for reservists and may therefore affect retention. For example, in 2008, the Commission on the National Guard and Reserves reported that travel requirements and associated costs had a negative effect on DOD’s ability to recruit and retain qualified personnel, particularly for leadership positions. In addition, in minutes of its meetings, the Air Reserve Forces Policy Committee has called for changes to the Permanent Change of Station requirement for long- duration training, noting in 2015 that it, “frequently creates financial hardship for RC Airmen who typically maintain a residence near their assigned unit or civilian employer.”

Three DOD studies have explored potential links between reservists’ unreimbursed travel expenses and retention:

A 2012 survey commissioned by the Army Reserve of a small sample of reservist officers potentially eligible for battalion command positions reported that unreimbursed travel costs were among several factors that could influence their decision to apply for these positions.

A 2014 study commissioned by the Marine Corps found that, based on a statistical model of a sample of Marines eligible to participate in its Inactive Duty Training travel reimbursement program between May 2012 and September 2013, the program had increased the Marine Corps’ ability to fill critical positions. The study also included an assessment of the cost of increasing the level of reimbursement for Inactive Duty Training and its possible effect on staffing.

A 2016 survey commissioned by the Army Reserve, drawn from a non-generalizable sample of a few thousand reservists, reported that a significant majority of respondents in 2015 viewed the Inactive Duty Training travel reimbursement program as an incentive for soldier retention.

In addition, during our review, officials from most of the reserve components told us that despite the establishment of the reimbursement program for travel costs associated with Inactive Duty Training, such expenses continue to be a challenge for some reservists. In particular, officials noted that this especially affects personnel who do not qualify for reimbursement. One official noted that, in extreme cases, reservists may find that the cost to attend Inactive Duty Training may exceed drill pay, effectively requiring them to pay out-of-pocket to perform military service.

While these reports and studies have alerted DOD to a potential problem, DOD has not yet assessed the effect of unreimbursed travel expenses on retention of reservists in a comprehensive manner and the related overall cost to the federal government. For example, DOD has not yet systematically collected data and assessed the potential effect of current travel reimbursement policy on retention across all services, as measured by outcomes such as fill rates for critical positions and other metrics, or collected more basic information such as the number of reservists who do not move their home during long-duration training, the distances traveled for Inactive Duty Training, and the amount of unreimbursed expenses incurred by reservists. The 2014 Marine Corps’ study on Inactive Duty Training reimbursement did explore fill rates for its potential effect on critical positions. However, its findings are not necessarily applicable to the other reserve components. In addition, DOD has not conducted an assessment on the issue of Permanent Change of Station rules for long- duration training or other assignments. While travel policy officials noted that there is no requirement for such an assessment, some agreed that more robust information would allow for a better understanding of the situation as well as any potential changes that are necessary in DOD’s travel policy. One travel official stated that until a direct connection between unreimbursed travel expenses and retention or related areas is observed within their component, change is unnecessary.

As of July 2017, DOD and the reserve components were considering changes to reserve travel policy to mitigate the effect of out-of-pocket expenses on reservists. Specifically, these changes include (1) requesting that Congress increase reimbursement for Inactive Duty Training travel expenses from $300 to $500 and (2) increasing the length of time of Temporary Duty travel for training courses or other assignments before such travel is considered a Permanent Change of Station. The Marine Corps Reserve has developed a draft proposal for congressional consideration for an increase in Inactive Duty Training reimbursement, which an official stated was necessary to address the challenge of filling critical occupations. The Military Advisory Panel, which advises on defense travel issues, has considered an increase in the length of time of Temporary Duty travel for training courses or other assignments before a Permanent Change of Station would be required, but no specific proposals have been developed.

Federal internal control standards state that management requires quality information to make informed decisions and evaluate an entity’s performance in achieving key objectives and addressing risk. They further require that management identify, analyze, and respond to risks related to achieving the defined objectives. However, without collecting more comprehensive information on the potential effect of the current travel policy on the retention of reservists, DOD would be considering alternative proposals with only the limited data and analysis available to date. Further, the lack of comprehensive data and analysis on the influence of current travel policies will limit DOD’s ability to reach an analytically based decision which weighs the costs and benefits of any potential changes. In deciding to continue or change current travel policies relating to travel reimbursement without the benefit of quality information, DOD risks not managing the potential influence of these policies on reservists’ retention or agency expenditures.

Conclusions

Reservists often maintain civilian careers and homes that in some cases can require them to travel long distances to perform their part-time military service. In some instances, such as when performing Inactive Duty Training and long-duration Active Duty for Training or other active duty assignments, such service can result in expenses that cannot be reimbursed to the reservist under DOD’s travel policy. Despite long- standing concerns that out-of-pocket travel expenses reservists incur to perform their service may be increasing, DOD does not have sufficient data and analysis on how reservists’ incurring these expenses could negatively affect DOD’s ability to achieve its mission, the overall costs and benefits of DOD’s travel policy, and how various proposed changes to the travel policy could potentially mitigate any of its possible negative effects. As a result, DOD is not well positioned to move forward with possible changes to travel policy absent further analysis.

Recommendation for Executive Action

We recommend that the Under Secretary of Defense for Personnel and Readiness collect quality information and conduct an analysis of the potential effects of unreimbursed travel expenses incurred by reservists to perform military service on DOD’s ability to retain reservists in the force, and respond to these risks by considering the costs and benefits of any possible actions to address the identified issues.

Agency Comments and Our Evaluation

We provided a draft of this report to DOD for review and comment. In its written comments, reproduced in appendix II, DOD concurred with our recommendation.

We are sending copies of this report to appropriate congressional committees, the Secretary of Defense, the Under Secretary of Defense for Personnel and Readiness, the Secretaries of the military departments, and other interested parties. In addition, the report is available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at (213) 830-1011 or vonaha@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix III.

Appendix I: Reserve Components’ Reported Travel Costs for Fiscal Year 2015

To determine DOD’s travel costs for the reserve components, we obtained and reviewed fiscal year 2015 execution cost data, the most recent complete data available, that each reserve component reported on travel costs for training and other activities. These costs are reported in a travel cost exhibit included in each component’s annual Reserve Personnel budget justification document. We did not include any travel costs not included in the reserve components’ Reserve Personnel accounts, such as any travel costs in the components’ respective Operations and Maintenance accounts. We did not include travel costs for the Active Guard and Reserve because individuals serving these components are responsible for the full-time administration of the reserve components and differ significantly from part-time drilling reservists in their responsibilities and associated travel. We also did not include costs for the Individual Ready Reserve because these reservists have different training patterns than other reservists. In table 2, we summarize the costs reported by DOD’s six reserve components for Annual Training, Inactive Duty Training, and all other travel costs for fiscal year 2015 by component.

Appendix II: Comments from the Department of Defense

Appendix III: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, Margaret Best (Assistant Director), Patricia Donahue, Mae Jones, Linda Keefer, Felicia Lopez, Carol Petersen, and Adam Smith made major contributions to this report.