The DOD centrally billed travel card program is part of a governmentwide travel card program started in 1983 with the express purpose of increasing convenience to the traveler and lowering the government’s cost of travel by reducing the need for cash advances to the traveler, and the associated administrative costs. The travel card program includes both the individually billed accounts—accounts held and paid by the individual cardholders—and the centrally billed accounts. In general, individual cardholders use the individually billed accounts to charge nontransportation travel-related expenses, while most DOD services and units used the centrally billed accounts to purchase transportation services, such as airline and train tickets, and to pay expenses incurred for group travel. During fiscal years 2001 and 2002, DOD travelers charged more than $7.1 billion in expenses to the travel card program, with about $2.8 billion related to the use of the centrally billed accounts. Unlike the actual credit cards issued to individuals and some unit credit cards, there are no actual credit cards for the centrally billed accounts used to purchase transportation services. Instead, Bank of America issues account numbers to the government travel office (GTO) for use by the CTO—under contract with each DOD service or service location to provide travel services to military and other DOD personnel—to enable transportation charges on these accounts. Responsibility for making travel arrangements and paying the expenses associated with travel is shared between the DOD local components, contractors, and DFAS—the DOD component responsible for making nearly all of DOD’s payments. The local travel-authorizing official or the resource manager at the DOD component is responsible for determining the necessity of travel, issuing the travel order, certifying the availability of funds, and recording an obligation against a unit’s appropriation. The CTO makes airline reservations, issues airline tickets and charges the centrally billed account upon receipt of a signed travel order, and performs reconciliation between tickets it issued and tickets charged on the Bank of America invoice. The CTO is responsible, in the reconciliation process, for identifying each charge as being associated with a specific travel order. Within each DOD component, the GTO is generally responsible for reviewing the CTO’s reconciliation, making the appropriate changes, certifying or authorizing the Bank of America’s invoice for payment, and filing disputes with Bank of America for charges that the CTO did not record as having issued. After the CTO and GTO perform their monthly reconciliation, the charges are sent to DFAS for payment. Figure 1 shows the design of the processes used to issue an airline ticket on a centrally billed account and reimburse travelers for travel expenses, and explains the roles of different offices in providing reasonable assurance that airline tickets charged to these cards are appropriate and meet a valid government need. Prior to paying the Bank of America invoice, DFAS is responsible for verifying fund availability for each airline ticket presented on the invoice. This process, known as prevalidation, involves DFAS checking each airline charge against the services’ accounting systems to determine that the travel had been approved, and an obligation had been recorded, before approving the corresponding charge for payment. If an obligation exists for the travel order but the amount is not adequate to cover the charge, DFAS is allowed to increase the obligation up to $2,500 to pay for the ticket charge if DFAS is in possession of a valid obligating document. If an obligation has not been recorded in the services’ accounting systems, but a valid obligation document exists, DFAS can also create an automatic obligation up to $2,500 to pay for the ticket charge. If an obligation needs to be created or increased by more than $2,500, DFAS is required to notify the unit and allow the unit 10 calendar days to record the obligation before DFAS is allowed to create the obligation on the unit’s behalf. At the conclusion of travel, the traveler is responsible for preparing his or her DD Form 1351-2, a travel voucher form, within 5 working days after completion of travel to claim reimbursement for official travel. Travelers are to enter all reimbursable expenses on their travel vouchers, and attach all receipts for lodging expenses and for all other expenses over $75. Even if someone else prepares the voucher, the traveler is responsible for the truth and accuracy of the information. According to DOD’s Financial Management Regulation, when the travelers sign the form (and this signature authority must never be delegated), they attest that the statements are true and complete, and that they are aware of their liability for filing a false claim. The travel voucher the traveler signs contains a bolded penalty statement that provides, “there are severe criminal and civil penalties for knowingly submitting a false, fictitious, or fraudulent claim (U.S. Code, Title 18, Sections 287 and 1001 and Title 31, Section 3729).” The authorizing or approving officials review the travel claim for appropriateness, then forward the travel claim to the voucher-processing unit, which might be located at the unit or at DFAS. The voucher- processing unit determines what payments the traveler is entitled to receive and computes the amounts, which are then certified for payment. DFAS then pays the vouchers, generally through an electronic fund transfer directly to the traveler’s bank account. We found numerous instances during fiscal years 2001 and 2002 where DOD travelers submitted travel vouchers and were improperly reimbursed for airline tickets they did not purchase. DOD’s failure to detect or prevent these improper payments was the result of weaknesses in the design of key internal controls, as well as breakdowns in key existing controls. The weaknesses included inadequate travel voucher review, lack of reconciliation between centrally billed account charges—and payments for those charges—and travel claims, and differences in policies as to when an airline ticket should be charged to an individually billed account as opposed to a centrally billed account. These weaknesses were exacerbated by a monitoring system that primarily focused on making payments within prescribed time frames, rather than on making proper and accurate payments. Whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully (1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact; (2) makes any materially false, fictitious, or fraudulent statement or representation; or (3) makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry; shall be fined under this title or imprisoned not more than 5 years, or both. (taken from U.S. Code, Title 18, Section 1001, Statements or Entries Generally). Our data mining of airline ticket data from Bank of America centrally billed account files and about half of DOD’s fiscal year 2001 and 2002 travel vouchers identified about 27,000 travel claims totaling over $8 million for which DOD made potentially improper reimbursements to travelers for airline tickets that DOD purchased with the centrally billed accounts. Because the travelers had not purchased most of the airline tickets we tested, the travelers should not have requested reimbursements, nor should DOD have paid the travelers for the cost of those tickets. Requesting reimbursement for items that the traveler did not pay for may violate the False Claims Act and be punishable by imprisonment or a monetary fine, or both. From the 27,000 potential improper travel claims, we tested a nonrepresentative selection of 124 travelers to whom DOD made 204 travel claim reimbursements that may have contained improper payments. As will be discussed further, the tests we performed on the nonrepresentative selection of 124 travelers confirmed that DOD improperly paid 91 travelers for 123 airline tickets. As will be discussed in detail later, the 123 improper payments included 109 payments that were made to 77 travelers who were paid for airline tickets they did not purchase, and 14 payments in which DOD purchased two airline tickets for the same travel. Thirteen of the 77 travelers we identified submitted multiple travel vouchers requesting reimbursements for the cost of airline tickets that they did not purchase, which might indicate intent to defraud the government. The remaining improper payments were also potentially fraudulent if the traveler intentionally filed false claims or kept the improper payments after they realized that the payment was improper. The other 64 travelers received improper reimbursement for a single ticket. One traveler admitted to us that he knew DOD had improperly reimbursed him for two airline tickets that DOD purchased for his travel in April 2002 and June 2002, but did not notify DOD because he was waiting for DOD to request him to refund the improper payments. Most travelers we interviewed told us that they were not aware that the government had paid them hundreds, and sometimes thousands, of dollars for expenses that they claimed but did not incur. In many instances, the airline ticket receipt or invoice used to support the travelers’ claims contained the 16-digit centrally billed account number, indicating that the airline tickets were paid for using the centrally billed accounts. Table 1 shows eight illustrative examples of the 77 travelers who we identified in this review as submitting improper and potentially fraudulent travel claims. The 8 travelers identified in table 1 did not notify DFAS after they had received improper payments, and only 4 of the 77 travelers that we determined had received improper payments voluntarily refunded the improper payments. The following provides detailed information on three of the cases identified in table 1. Traveler number 1 was a GS-15 who submitted travel vouchers claiming reimbursements for 13 tickets totaling almost $10,000 between August 2001 and May 2002. The traveler told us that he did not notice that he was paid for expenses he did not incur, even though in one instance, DFAS overpaid the traveler more than $3,500 for one round-trip ticket from Washington, D.C., to Singapore.