Army National Guard: Inefficient, Error-Prone Process Results in 
Travel Reimbursement Problems for Mobilized Soldiers (16-MAR-05, 
GAO-05-400T).							 
                                                                 
This testimony outlines (1) the impact of the recent increased	 
operational tempo on the process used to reimburse Army Guard	 
soldiers for travel expenses and the effect that travel 	 
reimbursement problems have had on soldiers and their families;  
(2) the adequacy of the overall design of controls over the	 
processes, human capital, and automated systems relied on for	 
Army Guard travel reimbursements; (3) whether the Department of  
Defense's (DOD) current efforts to automate its travel		 
reimbursement process will resolve the problems identified; and  
(4) other DOD actions to improve the accuracy and timeliness of  
Army Guard travel reimbursements.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-400T					        
    ACCNO:   A19478						        
  TITLE:     Army National Guard: Inefficient, Error-Prone Process    
Results in Travel Reimbursement Problems for Mobilized Soldiers  
     DATE:   03/16/2005 
  SUBJECT:   Army personnel					 
	     Erroneous payments 				 
	     Human capital management				 
	     Human capital planning				 
	     Human capital policies				 
	     Internal controls					 
	     Late payments					 
	     Military pay					 
	     National Guard					 
	     Program evaluation 				 
	     Strategic planning 				 
	     Travel						 
	     Travel allowances					 
	     Travel costs					 
	     Reimbursements from government			 
	     Vouchers						 
	     Defense Integrated Military Human			 
	     Resource System					 
                                                                 
	     DOD Operation Iraqi Freedom			 
	     Operation Enduring Freedom 			 
	     Operation Noble Eagle				 

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GAO-05-400T

United States Government Accountability Office

GAO Testimony

Before the Subcommittee on Government Management, Finance, and
Accountability, Committee on Government Reform, House of Representatives

For Release on Delivery Expected at 2 p.m. EST Wednesday, March 16, 2005

ARMY NATIONAL GUARD

 Inefficient, Error-Prone Process Results in Travel Reimbursement Problems for
                               Mobilized Soldiers

Statement of Gregory D. Kutz, Director Financial Management and Assurance

John J. Ryan, Assistant Director Office of Special Investigations

GAO-05-400T

[IMG]

March 16, 2005

ARMY NATIONAL GUARD

Inefficient, Error-Prone Process Results in Travel Reimbursement Problems for
Mobilized Soldiers

                                 What GAO Found

Mobilized Army Guard soldiers have experienced significant problems
getting accurate, timely, and consistent reimbursements for out-of-pocket
travel expenses. These weaknesses were more glaring in light of the
sustained increase in mobilized Guard soldiers following the terrorist
attacks of September 11, 2001. To its credit, the Defense Finance and
Accounting Service (DFAS) hired over 200 new personnel to address travel
voucher processing backlogs and recently upgraded their training. However,
Guard soldiers in our case study units reported a number of problems they
and their families endured due to delayed or unpaid travel reimbursements,
including debts on their personal credit cards, trouble paying their
monthly bills, and inability to make child support payments.

Examples of Problems Encountered by Case Study Units

Number of affected Army Guard unit soldiers in unit Problems encountered
and status

             Maryland 115th 107 of 107 Soldiers housed off-post were denied   
                                       per diem                               
            Military Police            authorization. Some paid for meals out 
                                                                    of pocket 
                                             while others hitchhiked and rode 
                                                                     bicycles 
                                           3.5 miles to post dining facility. 
                                                                      Unpaid. 

Mississippi 20th 75 of 75 Soldiers were erroneously required to pay to eat

Special Forces	government-provided meals at mess hall. Partially paid.

Mississippi 114th 76 of 76 Soldiers were denied authorization for

Military Police	proportional meal rate for meal expenses that we estimated
to be about $6,000 each. Unpaid.

           Pennsylvania 876th 36 of 37       Despite filing identical monthly 
                                                           vouchers, soldiers 
           Engineer Battalion          were paid amounts ranging from $0 to   
                                       $1,718.                                
                                         DFAS adjustments caused overpayments 
                                                                      of $200 
                                       to about $1,350, resulting in debts to 
                                                                    soldiers. 

Source: GAO.

The soldier bears primary responsibility for travel voucher preparation,
including obtaining paper copies of various types of authorizations. DFAS
data indicate that it rejected and asked soldiers to resubmit about 18
percent of vouchers during fiscal year 2004-a churning process that added
to delays and frustration. Also, existing guidance did not clearly address
the sometimes complex travel situations of mobilized Army Guard soldiers,
who were often housed off-post due to overcrowding on military
installations. Further, DOD continued to be noncompliant with a law that
requires payment of late payment interest and fees when soldiers' travel
reimbursements are not timely. With respect to human capital, GAO found a
lack of oversight and accountability and inadequate training. Automated
systems problems, such as nonintegration of key systems involved in
authorizing and paying travel expenses and failure to automate key
processes, also contributed to the inefficient, error-prone process. DOD
has been developing and implementing the Defense Travel System (DTS) to
resolve travel-related deficiencies. However, DTS will not address some of
the key systems flaws. For example, DTS is currently not able to process
mobilized soldier travel authorizations and vouchers and identify and
calculate late payment interest and fees.

                 United States Government Accountability Office

Mr. Chairman and Members of the Subcommittee:

Thank you for the opportunity to discuss controls over travel
reimbursement payments to mobilized Army National Guard (Army Guard)
soldiers. In October 2002, we reported1 that the Defense Finance and
Accounting Service (DFAS) did not have systems in place to identify late
travel reimbursements and could not identify the soldiers who were not
paid within 30 days of submission of an approved travel voucher and who
should have been paid late payment interest and fees required pursuant to
the Travel and Transportation Reform Act of 1998 (TTRA).2 This affected
numerous soldiers whose vouchers were paid late. Further, during our
audits of Army Guard and Army Reserve military payroll controls,3 soldiers
told us about problems with delayed and inaccurate travel cost
reimbursements and meal cost authorizations and entitlements. Because of
the severity of these complaints, this Committee, as well as other
requesters, asked us to examine the effectiveness of the process used to
reimburse Army Guard soldiers for travel expenses and the effect that
travel reimbursement problems have had on soldiers and their families.
Today, I will highlight the results of our review for which our detailed
report is being released at this hearing.4

Since the September 11, 2001, terrorist attacks, the operational tempo for
the military services has greatly increased, with corresponding increases
in the basic administrative tasks necessary to keep soldiers paid, fed,
and housed. Over 186,500 Army Guard soldiers5 were mobilized from
September 14, 2001, through September 30, 2004, to serve in Operations
Noble Eagle, Enduring Freedom, and Iraqi Freedom. Army Guard soldiers
called to active service are entitled to be reimbursed for authorized
travel expenses incurred. The Department of Defense (DOD) is to provide a

1 GAO, Travel Cards: Control Weaknesses Leave Army Vulnerable to Potential
Fraud and Abuse, GAO-03-169 (Washington, D.C.: Oct. 11, 2002).

2 Pub. L. No. 105-264, 112 Stat. 2350 (Oct. 19, 1998).

3 GAO, Military Pay: Army National Guard Personnel Mobilized to Active
Duty Experienced Significant Pay Problems, GAO-04-89 (Washington, D.C.:
Nov. 13, 2003), and Military Pay: Army Reserve Soldiers Mobilized to
Active Duty Experienced Significant Pay Problems, GAO-04-911 (Washington,
D.C.: Aug. 20, 2004).

4 GAO, Army National Guard: Inefficient, Error-Prone Process Results in
Travel Reimbursement Problems for Mobilized Soldiers, GAO-05-79
(Washington, D.C.: Jan. 31, 2005).

5 Total numbers include Army Guard soldiers mobilized more than once.

Guard soldier traveling on official business with transportation, lodging,
and food, or to reimburse the soldier for reasonable and necessary
authorized expenses if the soldier purchases them.6 In short, the soldier
is to be made whole for authorized out-of-pocket expenses, with timely and
accurate reimbursements for travel expenses.

Within the United States, Army Guard soldiers have guarded the Pentagon,
airports, nuclear power plants, and domestic water supplies as part of the
homeland security effort. Overseas, they continue to perform highly
dangerous peacekeeping missions and force protection operations in Iraq,
Afghanistan, and other countries. When government-provided meals and
housing were not available to some Guard soldiers, they lived off the
local economy-purchased food at restaurants and groceries, and housing at
hotels-and later submitted requests to the Army for reimbursement of their
out-of-pocket expenses.

Because our preliminary assessment determined that the current
authorization, request, review, and approval processes used to pay travel
reimbursements to active service Army Guard soldiers relied extensively on
paper-intensive, nonintegrated systems, and error-prone manual transaction
entry that did not provide an adequate audit trail or a reliable
population of transactions, we could not effectively statistically test
current processes and controls. Instead, we systematically assessed the
effectiveness of the overall design of controls at work in the key areas
of processes, people (human capital), and automated systems through case
studies of 10 selected units of Army Guard soldiers mobilized to active
service in support of Operations Iraqi Freedom, Noble Eagle, and Enduring
Freedom during the period from October 2001 through November 2003. In
addition, we audited a nonrepresentative selection of individual travel
vouchers that were paid 120 days or more from the date the travel ended
and travel vouchers selected from the unit case studies. We used this
approach to provide a more detailed perspective on the design of controls
and the nature of deficiencies in the three phases of the travel and
reimbursement process: (1) authorization; (2) travel voucher preparation,
unit review, and transmission; and (3) computation office review and
payment. Further details on our scope and methodology and the results of
the case studies can be found in our related report.

6 Joint Federal Travel Regulation (JFTR)/Joint Travel Regulation (JTR),
app. O, para. T4020.B.2, change 203/457, November 1, 2003.

Summary

Today, I will summarize the results of our work with respect to (1) the
impact of the recent increased operational tempo on the effectiveness of
the process used to reimburse Army Guard soldiers for travel expenses and
the effect that travel reimbursement problems have had on soldiers and
their families; (2) the adequacy of the overall design of controls over
the processes, human capital, and automated systems relied on to provide
timely travel cost reimbursements and accurate meal authorizations and
entitlements to mobilized7 Army Guard soldiers; (3) whether DOD's current
efforts to automate its travel reimbursement process will resolve the
problems identified; and (4) DOD actions to improve the accuracy and
timeliness of mobilized Army Guard travel reimbursements.

The current inefficient, paper-intensive, error-prone travel reimbursement
process has resulted in inaccurate, delayed, and denied travel payments
for mobilized Army Guard soldiers. Our case study units experienced a
broad range of reimbursement problems that included disputed amounts for
meals that we estimated to be as high as about $6,000 for each of 76
soldiers in one case study that remained unpaid by the end of our review.
Other problems included vouchers that were submitted 5 or more times
before being paid and thousands of dollars in debts levied on soldiers,
some in excess of $10,000, when the approval for the meal component of
their per diem reimbursement was rescinded after the vouchers had been
paid.

Until DOD improves the antiquated process that requires Army Guard
soldiers to accumulate, retain, and submit numerous paper documents,
reimbursement problems and inefficiencies will likely continue. For
example, reports prepared by DFAS' Contingency Travel Operations Office
(DFAS CTO) indicated that the percentage of unpaid travel claims returned
to soldiers increased from 11 percent in fiscal year 2002 to 18 percent in
fiscal year 2004. Of approximately 930,000 travel vouchers received during
this period, DFAS CTO rejected and returned about 139,000 to soldiers for
additional paper documentation or to correct other processing
deficiencies. This repeated churning of vouchers frustrated soldiers and
added to the volume of claims to be processed, which, in turn, overwhelmed
DFAS CTO's resources and contributed to reimbursement problems.

7 In this report, the terms "mobilized" or "mobilized to active service"
refer to soldiers called to duty under the authority of Title 10 or Title
32, United States Code.

The lack of clear, complete, and accurate policies and procedures-the
foundation of the process for authorizing travel entitlements and
reimbursements-also contributed to inaccurate, delayed, and denied travel
reimbursements. Specifically, existing guidance did not clearly address
the sometimes complex travel situations of Army Guard soldiers who have
been called from their civilian lives to military service since the
September 11, 2001, terrorist attacks. For example, as military activity
increased for Operation Iraqi Freedom, and Army Guard, Army Reserve, and
active Army soldiers were preparing for duty, some of the installations to
which Army Guard soldiers were assigned did not have available government
housing. As a result, the soldiers were housed off-post in commercial
hotels or apartments. This created novel situations that were not
specifically addressed in regulations.

Further, inappropriate policy and guidance on how to identify and pay
soldiers entitled to late payment interest and fees because of late travel
reimbursement meant that DOD continued to be noncompliant with TTRA. As a
result, although DOD paid no late payment interest or fees to Army Guard
soldiers through April 2004, we found a number of cases in which soldiers
should have been paid interest and indications that thousands more may be
entitled to TTRA payments.

With respect to human capital, we found weaknesses, including (1) a lack
of leadership and oversight and (2) a lack of adequate training provided
to Army Guard soldiers and DFAS CTO voucher examiners. The lack of
leadership and oversight over the travel reimbursement process precluded
the development of strong overarching internal controls. Specifically, the
Army is not using performance metrics to identify and correct systemic
problems or to measure performance. The Army Guard soldiers with whom we
spoke told us that they had received either inadequate or no training on
travel voucher preparation and review. DFAS officials told us that during
early 2003, about 200 voucher examiners were hired and received on-the-job
training that proved to be inadequate to respond to the number and
complexity of the travel vouchers submitted during this period.

The lack of automation also hampered oversight and service to soldiers
trying to cope with the travel reimbursement process. The key DOD
processes involved in authorizing and reimbursing travel expenses to
mobilized Army Guard soldiers are "stove-piped" and not automatically
integrated, resulting in a process that is dependent on paper production.
These problems are also a major factor in the churning issue discussed
previously-the thousands of vouchers that are rejected and returned for

missing documentation. Specifically, the Army does not have automated
systems for some critical travel process functions for the Army Guard,
such as preparation of travel vouchers, statements of non-availability
(SNA), and temporary change of station orders.

DOD recognizes it needs to improve the paper-intensive, manual travel and
reimbursement process and has been developing and implementing the Defense
Travel System (DTS) to resolve these deficiencies. However, deployment of
DTS will not resolve all of the problems we found in reimbursement of
travel expenses to mobilized Army Guard soldiers. For example, DTS is
currently not able to process travel authorizations and vouchers for
mobilized Army Guard soldiers. Given that the effort has been under way
for about 8 years and will not address key issues specific to mobilized
Army Guard soldiers, it is likely that the department will be relying on
the existing paper-intensive, manual, error-prone system for the
foreseeable future.

The report we are releasing at today's hearing includes 23 recommendations
to correct deficiencies we identified regarding the processes, human
capital, and automated systems relied on to provide timely travel cost
reimbursements and accurate meal authorizations and entitlements to
mobilized Army Guard soldiers. In its comments on a draft of this report,
DOD agreed with 21 of our 23 recommendations and outlined its actions to
address the deficiencies noted in our report, including steps to clarify
circumstances where Army Guard soldiers were entitled to per diem for
meals

DOD partially agreed with two recommendations regarding the need for an
automated, centralized system for SNAs and the need for DTS to include
capabilities to identify, calculate, and pay late payment interest and
fees required pursuant to TTRA. Due to the financial burdens on the
affected soldiers documented in this report, we continue to believe that
DOD should implement measures to resolve these matters both on an interim
and long-term basis.

Weaknesses in Error-Prone, Manual Travel Reimbursement Process Were
Exacerbated by Increased Operational Tempo

The paper-intensive process used by DOD to reimburse Army Guard soldiers
for their travel expenses was not designed to handle the dramatic increase
in travel vouchers since the terrorist attacks of September 11, 2001, and
the subsequent military activity. The increased operational tempo resulted
in backlogs in travel voucher processing as DFAS CTO struggled to keep up
with both the increased volume and complexity of the travel vouchers
submitted. For example, the monthly volume of travel vouchers being
submitted to DFAS CTO increased from less than 3,200 in October 2001 to
over 50,000 in July 2003 and remained at levels over 30,000 through
September 2004. To its credit, to address the large volume of vouchers
received and the unprocessed backlog, DFAS increased its staffing by over
200 new personnel and reported an average processing time of 8 days for
its part of the process in September 2004.

Increased Operational While the inefficient, manual travel and
reimbursement process may have Tempo Initially offered some capability to
process travel vouchers during periods of low Overwhelmed Process activity
when relatively few Army Guard members were mobilized, the

current increased operational tempo has strained the process beyond its
limits. As shown in figure 1, the monthly travel voucher volume has
remained above 30,000 since the July 2003 peak.

Figure 1: Number of Army Guard and Reserve Travel Vouchers Received by
DFAS CTO from October 2001 to September 2004

                       Number of vouchers received 60,000

                                     50,000

                                     40,000

                                     30,000

                                     20,000

                               10,000 Oct.0 Jan.

.Apr

.Ju

                                   Oct. Jan.

.Apr

.Ju

                                   Oct. Jan.

.Apr

Ju. Sep.

2001 2002 2003 2004 Time frame

Source: DFAS CTO Indianapolis.

In addition to the rising volume, the increased complexity of the vouchers
received further slowed down the process. As military activity increased
for Operation Iraqi Freedom and Army Guard, Army Reserve, and active Army
soldiers were preparing for duty, not all of the installations to which
Army Guard soldiers were assigned had available government housing. As a
result, the soldiers were housed off-post in commercial hotels or
apartments. This created a number of novel situations that were not
specifically addressed in regulations, as discussed later.

During this time frame, DFAS CTO staffing levels were not keeping pace
with the rising volume of vouchers. However, while DFAS CTO employed less
than 50 personnel in October 2001, this number more than doubled by
February 2003 and was increased further to about 240 in June 2003,
including 83 Army Guard and Army Reserve soldiers, as shown in figure 2.

Figure 2: Staffing Levels at DFAS CTO from October 2001 to September 2004

                              Number of personnel

.Oct. Dec. Feb. Apr

nJu

. Au

.g

.Oct. Dec. Feb. Apr

un. AJ

                            ug. Oct. Dec. Feb. Apr.

un. AuJ

g.Sep.

2001 2002 2003 2004

Time frame Source: DFAS CTO Indianapolis.

A DFAS CTO official told us that the office was not properly staffed to
process travel vouchers at the beginning of 2003 when the volume started
to increase. Inadequate staffing and the time necessary to train new staff
created a backlog of travel vouchers at DFAS CTO, ballooning to over
18,000 vouchers in March 2003.

Impact That Travel Reimbursement Problems Have Had on Army Guard Soldiers
and Their Families

The majority of soldiers in our 10 case study units reported problems
related to reimbursements for meal expenses that included late payments,
underpayments, and overpayments resulting in debts to some soldiers in
excess of $10,000. For example, we estimated that about $324,000 was paid
more than a year late to 120 soldiers for meal expenses based on the
proportional meal rate for their locality. One individual responsible for
submitting his unit's vouchers to DFAS CTO told us that he called the
process "the travel voucher lottery" because "you never knew whether, or
how much, you might get paid." These issues were caused by weaknesses in
the process used to pay Army Guard travel reimbursements; the human
capital practices in this area, including the lack of adequate training;
and nonintegrated automated systems. Table 1 summarizes the experiences of
Army Guard soldiers in 10 units. Further details on our case studies are
included in our companion report.

Table 1: Examples of Problems Encountered by Case Study Units

Number of affected Examples of problems encountered and Army Guard unit
soldiers in unit status

Alabama 20th Special Forces

             6 of 209 DOD rescission of authorized reimbursement of

a

meal expenses resulted in debts for soldiers.

                         California 19th Special Forces

30 of 66	Soldiers' travel vouchers were initially rejected because split
locations on vouchers did not coincide with information on travel orders.
Partially paid.

California 185th Armor

58 of 85	Soldiers were underpaid per diem due to DFAS CTO errors and
soldiers' lack of supporting documentation. Soldiers eventually received
reimbursement, ranging from $20 to over $3,000. Paid up to 4 months late.

Georgia 190th 32 of 101 Soldiers incurred over $200,000 of debt due to Military
                Police confusion over rules concerning commuting

a

areas and per diem for meals.

Louisiana 239th Military Police

124 of 124	Soldiers were required to pay to eat government-provided meals
at mess hall. Paid 6 months late.

Maryland 115th 107 of 107 Soldiers housed off-post were denied per diem Military
                                     Police

authorization for meals. Some paid for meals out of pocket while others
hitchhiked and rode bicycles 3.5 miles to post dining facility. Unpaid.

Mississippi 20th 75 of 75 Soldiers were required to pay to eat

Special Forces 	government-provided meals at mess hall. Partially paid.

Number of affected Examples of problems encountered and Army Guard unit
soldiers in unit status

               Mississippi 114th 120 of 120 Soldiers were frustrated by       
                                            process to obtain                 
          Military Police (first               authorization for proportional 
                                                           meal rate for meal 
                   mobilization)             expenses that we estimated to be 
                                                                 about $2,700 
                                                   each. Paid 14 months late. 

         Mississippi 114th 76 of 76     Under similar circumstances, soldiers 
                                                                         were 
           Military Police          denied authorization for proportional     
                                    meal rate                                 
                   (second          for meal expenses that we estimated to be 
                                                                        about 
             mobilization)                               $6,000 each. Unpaid. 

         Pennsylvania 876th 36 of 37   Soldiers were deployed to Germany, and 
                                                                          all 
         Engineer Battalion          were entitled to same monthly            
                                     reimbursement.                           
                                       Despite filing identical vouchers with 
                                                                       proper 
                                     documentation, the soldiers were paid    
                                     varying                                  
                                     amounts, ranging from $0 to $1,718 for 1 
                                                                       month. 
                                      DFAS adjustments caused overpayments of 
                                     $200 to about $1,350, resulting in debts 
                                                                           to 
                                                                   asoldiers. 

            Virginia 20th 51 of 65 Soldiers were paid varying amounts for     
                                   meal                                       
           Special Forces                  reimbursements due to inconsistent 
                                       interpretation of SNA documentation at 
                                                                         DFAS 
                                                         CTO. Partially paid. 

Source: GAO.

aThe soldiers' wages are generally garnished to repay debts, unless a
waiver is granted.

During our audit of selected travel vouchers, we identified some that were
paid as much as 16 months after travel ended. Table 2 shows examples of
the extent of delays experienced by soldiers in obtaining payment for
travel expenses.

                      Table 2: Problems with Late Payments

                                 Days from 
             Soldier Amount  submission to 
            rank and      of    payment of 
               state voucher       voucher               Problems encountered 
                        $779           493 Soldier was paid about 1 1/2 years 
            Corporal                       after                              
          California                          submitting voucher eight times. 
                                       237   Soldier received partial payment 
            Sergeant  $1,269                                               in 
                Utah                          September 2003 after submitting 
                                                                      voucher 
                                               five times since October 2002. 

                Sergeant  $1,387  481        National Guard authorization for 
             First Class                       reimbursement was not promptly 
                Colorado              provided, which soldier claims affected 
                                      his ability to maintain child support   
                                                                    payments. 

Sergeant $682 82 Soldier's command did not file travel Texas voucher when
promised.

Source: GAO analysis.

In another instance, Army Guard soldiers called to federal duty to provide
security at the Denver International Airport in early 2002 experienced
significant delays in getting reimbursed for travel expenditures. The
soldiers were provided lodging but not meals and were not authorized per
diem for meals on their orders. More than a year elapsed during which the
Army Guard Adjutant General with authority over the respective soldiers
and Army National Guard Bureau officials worked to obtain and provide the
proper authorization to reimburse all the soldiers' travel expenses. In
the interim, Army Guard soldiers experienced financial hardships. For
example, one soldier's family had to rely on the spouse's salary to pay
bills, and another's child support payments were late or less than the
minimum required payments.

Travel and Reimbursement Process, Human Capital, and Systems Deficiencies

Deficiencies in three key areas-process, human capital, and systems- were
at the core of the travel and reimbursement problems we identified.
Policies and guidance, the foundation of the process for authorizing
travel entitlements and reimbursements, were not always known by the
mobilized soldiers nor were they well understood by local base personnel,
and the authorizations were not documented on their mobilization orders or
travel orders. Human capital weaknesses included a lack of leadership and
oversight in addition to inadequate training. Further, the lack of systems
integration and automation along with other systems deficiencies
contributed significantly to the travel reimbursement problems we
identified.

Process Deficiencies

Lack of Clear Guidance on Travel Entitlements, Including Late Payment
Interest and Fees

The lack of clear procedural guidance contributed to the inaccurate,
delayed, and denied travel reimbursements we identified and created
problems not only for Army Guard soldiers but for numerous other personnel
involved with authorizing travel entitlements. Prior to September 11,
2001, most travel guidance addressed relatively routine travel for brief
periods and was not always clearly applicable to situations Army Guard
soldiers encountered, particularly when they could not avail themselves of
government-provided meals due to the nature of their duty assignments. In
October 2001, although the Army issued new guidance that was intended to
address travel entitlements unique to Army and Army Guard soldiers
mobilized for the war on terrorism, it was not wellunderstood.
Furthermore, inappropriate policy and guidance on how to identify and pay
soldiers entitled to late payment interest and fees because of late travel
reimbursement meant that DOD continued to be noncompliant with TTRA. We
found a number of cases in which soldiers should have been paid late
payment interest and indications that thousands more may be entitled to
late payment interest.

We found that a key factor contributing to delays and denials of Army
Guard reimbursements for out-of-pocket meal expenses was a lack of clearly
defined guidance. We noted that the existing guidance (1) provided unclear
eligibility criteria for reimbursement of out-of-pocket meal expenses, (2)
lacked instructions for including meal entitlements on mobilization
orders, and (3) contained inadequate instructions for preparing and
issuing SNAs.

Two primary sources of guidance used by both Army Guard soldiers and
travel computation office personnel for information on travel entitlements
were (1) the Army's personnel policy guidance (PPG) for military personnel
mobilized for Operations Iraqi Freedom, Enduring Freedom,

and Noble Eagle; and (2) DOD's Joint Federal Travel Regulation (JFTR). We
found that both Army Guard soldiers and travel computation personnel had
difficulty using these sources to find the information necessary about the
rules regarding travel-related entitlements.

Table 3 shows the sources of common problems related to meal expense
reimbursements experienced by soldiers in our case studies.

Table 3: Sources of Problems Experienced by Army Guard Case Study Units in
Obtaining Reimbursements for Meal Expenses

                               Source of problem

                               Unclear eligibility               
                                 criteria for            Lack of 
                                  reimbursement of      specific  Confusing   
                                out-of-pocket meal  entitlements  nonstandard 
            Case study units       expenses            on orders         SNAs 

                         Alabama 20th Special Forces X

California 19th Special Forces X

            California 185th Armor X Georgia 190th Military Police X

Louisiana 239th Military Police X X

Maryland 115th Military Police X X

Mississippi 20th Special Forces X X X

Mississippi 114th Military Police X X

Pennsylvania 876th Engineers X

Virginia 20th Special Forces X

Source: GAO.

Unclear eligibility criteria. We found that guidance did not adequately
address some significant conditions that entitled a soldier to
reimbursement of authorized meal expenses. For example, although the JFTR
entitled soldiers to reimbursement for meal expenses when transportation
was not reasonably available between government meal facilities and place
of lodging,8 the term "reasonably available" was not defined. The PPG
directed the maximum use of installation facilities, and if not feasible,
then "multi-passenger vehicles9 should be used" to transport

8 JFTR, ch. 4, para. U4400-B3c, change 193, January 1, 2003. 9 PPG
(reformatted April 2004), ch. 8-2,a, (6) (c).

soldiers to installation facilities. However, the PPG is silent regarding
what constitutes adequate transportation, particularly when transportation
to government meal facilities is necessary for Army Guard soldiers who
cannot be housed in government facilities. As discussed in our companion
report, we found disagreements between the soldiers and their command
officials about the adequacy of transportation to government meal
facilities and their entitlement to get reimbursed for eating at
commercial facilities closer to their lodgings. Without clear guidance on
these issues, Army decisions will continue to appear arbitrary and unfair
to soldiers.

Lack of specific entitlements on orders. Army and Army Guard policies and
procedures do not provide for mobilization orders issued to Army Guard
soldiers to clearly state that these soldiers should not be required to
pay for meals provided to them at government dining facilities. As a
result, we noted instances in which mobilized soldiers arrived at
government mess halls carrying mobilization orders that did not
specifically state that the soldiers could eat free of charge and were
inappropriately required to pay for their meals. Consequently, many Guard
soldiers were unable to obtain reimbursement for their out-of-pocket costs
in a timely manner.

The PPG states, "TCS soldiers who are on government installations with
dining facilities are directed to use mess facilities. These soldiers are
not required to pay for their meals."10 In addition, the PPG states,
"Basic Allowance for Subsistence11 will not be reduced when government
mess is used for soldiers in a contingency operation."12 As such, an Army
Guard soldier called to active service is entitled to eat at a government
mess hall without charge and concurrently entitled to receive BAS as part
of his military pay.13 However, the PPG does not provide guidance
addressing the

10 PPG, ch. 8-2a(5).

11 BAS is included in the Army Guard soldier's compensation and is not a
travel entitlement. For example, BAS is a continuation of the military
tradition of providing room and board (or rations) as part of a service
member's pay. The monthly BAS rate is based on the price of food and is
readjusted yearly based upon the increase of the price of food as measured
by the Department of Agriculture food cost index. As of January 2004, BAS
ranged from $175.23 a month for officers to $262.50 a month for enlisted
service members.

12 PPG, ch. 8-2a(5).

13 PPG, para. 8-2.a.(5) (reformatted April 2004). See also 37 U.S.C. S:
1009(d), which provides that a soldier's BAS is not to be reduced when the
soldier is temporarily assigned to duty away from the soldier's permanent
duty station.

content of mobilization orders for Army Guard soldiers with respect to
meal entitlements.

In response to questions we posed to officials representing the
Mississippi Adjutant General's office regarding why mobilization orders
did not include adequate provisions about food entitlements, they
explained that the individual mobilization orders that are prepared by the
Adjutant General's staff are very basic and include only the travel
allowances and actions that are necessary to get the individual from the
home station to the mobilization station. The Adjutant General office
received no guidance on what should be stated in the orders with respect
to soldiers eating free of charge at government installations or any other
conditions that may entitle Army Guard soldiers to per diem to compensate
them for their outof-pocket meal costs. In addition, our companion report
provides examples where Army officials were not always aware that Army
Guard soldiers called to active duty were entitled to BAS in addition to
meal entitlements while they were serving under mobilization orders or
temporary change of station (TCS) orders.

Confusing, nonstandard SNAs. Lack of standardization and changing guidance
has resulted in SNAs of various form and content, signed by officials at
different levels of authority. Consequently, travel computation office
reviewers were unable to consistently determine the validity of SNAs. Our
work identified travel computation office reviewers who rejected soldiers'
requests for reimbursements even though they were supported by valid SNAs.

The most recent PPG guidance authorizes the installation commander to
determine whether to issue an SNA14 based on each unit's situation and the
availability of government housing.15 The guidance states that when
government or government-contracted quarters are not available, soldiers
will be provided certificates or SNAs for both lodging and meals to
authorize per diem. However, the guidance does not specify the form and
content of the SNAs. Consequently, we found that the form of the SNA and
the content of the information on the form varied at the discretion of the
issuing command.

14 PPG, ch. 8-2, .a, (5). 15 PPG, ch. 8-2, .a, (6) (c).

Late Payment Interest and Fees Guidance Thwarts Intent of the Law

For example, one installation stamped the soldiers' orders and handwrote
an SNA identification number in a block provided by the stamp. Another
location provided a written memo that stated that the meal component of
per diem was authorized because there were no food facilities at the
government installation. Another provided a single SNA with a roster
attached that listed the names of the soldiers who were authorized per
diem. The variety of SNA formats can cause confusion for the soldier, who
does not know what documentation is needed for reimbursement and whether
the travel computation office will accept it. The travel computation
office personnel can also be confused about the criteria for a valid SNA.

Our work found instances in which installation commands denied soldiers'
requests for SNAs. In response to our inquiries, we found that commands do
not generally document their rationale for denying SNAs and there is no
requirement for them to do so. This lack of documentation can leave
soldiers even more confused and frustrated when seeking answers as to why
their requests for per diem were denied. GAO's Standards for Internal
Control in the Federal Government require the maintenance of related
records and appropriate documentation that provide evidence of execution
of control activities.

Inappropriate policy and guidance, issued by DFAS Indianapolis, combined
with the lack of systems or processes designed to identify and pay late
payment interest and fees, leave DOD in continued noncompliance with TTRA.
As a result, through at least April 2004, DFAS Indianapolis had made no
required payments of late payment interest and/or late payment fees to
soldiers for travel reimbursements paid later than 30 days after the
submission of a proper voucher. For example, of 139 individual vouchers we
selected to determine why these took a long time to process, we identified
75 vouchers that were properly submitted by Army Guard soldiers that
should have received late payment interest totaling about $1,400.

In addition, DFAS data showed indications that thousands of other soldiers
may be due late payment interest. For example, during the period October
1, 2001, through November 30, 2003, dates in the DFAS Operational Data
Store showed that about 85,000 vouchers filed by mobilized Army Guard
soldiers were paid more than 60 days after the date travel ended. If the
dates on these vouchers were correct, the soldiers who submitted proper
vouchers within 5 days of the date travel ended would be entitled to late
payment interest if they were not paid within the 30-day limit.

TTRA and federal travel regulations16 require the payment of a late
payment fee consisting of (1) late payment interest, generally equivalent
to the Prompt Payment Act Interest Rate; plus (2) a late payment fee
equivalent to the late payment charge that could have been charged by the
government travel card contractor. Late payment interest and fees are to
be paid to soldiers if their reimbursements are not paid within 30 days of
the submission of a proper voucher.

Although DFAS issued guidance related to TTRA in April 2003,
interpretation of the guidance limited the payment of late payment
interest and fees to only the final settlement travel voucher17 for all
travel under a particular travel order. This practice contributed to
continued noncompliance with the law because it effectively excluded large
numbers of monthly or accrual vouchers18 from consideration of late
payment interest and fees.

As a result of our work, in May 2004 DFAS clarified that all travel
voucher reimbursements are subject to late payment interest and fees.
However, subsequent to DFAS's dissemination of its May 2004 clarification
guidance, we found late vouchers for which DFAS did not pay late payment
interest and fees. For example, the final vouchers for 63 soldiers with
the Georgia Army National Guard's 190th Military Police Company were
processed late in April 2004 without payment of late payment interest or
fees, even though they were covered by DFAS guidance issued in 2003. The
payments were made a total of 81 days after the supervisory signatures,
thus making the payments 51 days over the 30 days allowed for payment. We
notified DFAS officials of the oversight and they subsequently made the
interest payments.

Human Capital Issues 	With respect to human capital, we found weaknesses
including (1) a lack of leadership and oversight and (2) a lack of
adequate training provided to Army Guard soldiers and travel computation
office examiners. GAO's Standards for Internal Control in the Federal
Government state that

16 FTR, 41 C.F.R. S: 301 71.210.

17 A settlement voucher is the final travel voucher submitted at the end
of a period of travel, including an extended period of travel.

18 An accrual travel voucher is a claim for partial payment of travel
expenses that can be filed by travelers whose travel time extends beyond
30 days. The traveler should file an accrual travel voucher within 5
working days after the end of every 30 calendar-day period.

Lack of Leadership and Oversight

effective human capital practices are critical to establishing and
maintaining a strong internal control environment. Specifically,
management should take steps to ensure that its organization can promptly
identify problems and respond to changing needs, and that appropriate
human capital practices are in place and operating effectively. Without an
overall leadership structure in place, neither the Army nor the Army Guard
had developed and implemented processwide monitoring and performance
metrics necessary to promptly identify and resolve problems causing
late-paid travel vouchers. We also found that lack of adequate training
for soldiers and newly hired DFAS CTO personnel was a contributing factor
to some travel voucher processing deficiencies.

No one office or individual was responsible for the end-to-end Army Guard
travel reimbursement process. The lack of overall leadership and
fragmented accountability precluded the development of strong overarching
internal controls, particularly in the area of program monitoring. Neither
the Army nor the Army Guard were systematically using performance metrics
to gain agencywide insight into the nature and extent of the delays to
measure performance and to identify and correct systemic problems. Our
Standards for Internal Control in the Federal Government require agencies
to have internal control procedures that include top-level reviews by
management that compare actual performance to expected results and analyze
significant differences.

As shown in figure 3, internal reports prepared by DFAS CTO show that
missing travel orders was the primary reason why it did not accept
vouchers for payment. DFAS CTO reported that it rejected about 104,000, or
approximately 17 percent, of 609,000 vouchers during the period July 2003
through September 2004, with missing travel authorizations accounting for
over half of the rejected vouchers. While this churning process appeared
to be a primary factor in payment delays and soldier frustration, DFAS
CTO, Army, or Army Guard offices had not performed additional research to
determine the root cause of this and other voucher deficiencies.

Figure 3: Army Reserve and Army Guard Travel Vouchers Returned by DFAS CTO
from July 2003 through September 2004

Vouchers returned 60,000

54,630

50,000

40,000

30,000

                                     23,685

20,000

13,919

10,000

0

Missing travel Incomplete Missing Other authorizations or incorrectly
necessary reasons (orders) prepared signatures

Reason for returns

Source: DFAS CTO Indianapolis.

Similarly, our analysis of a selection of individual travel vouchers also
disclosed that some vouchers were returned to soldiers because of missing
documentation or the lack of required signatures. However, neither DOD
management officials nor we could determine the root cause of all
instances of missing information. Some soldiers told us that DFAS CTO lost
documentation that they had submitted. DFAS CTO also experienced problems
with faxed vouchers, which caused vouchers and supporting documentation
not to be printed and processed in some cases. According to a DFAS CTO
official, DFAS was unaware that faxed vouchers were not printing until a
soldier complained that DFAS was not receiving his faxes. DFAS did not
monitor incoming faxes, even though it reported that faxed travel vouchers
account for approximately 60 percent of the total mobilized Army Guard and
Reserve travel vouchers it received. These problems obstructed the normal
handling of a number of those vouchers. In an effort to resolve this
problem, DFAS CTO, in March 2004, ceased relying on an automatic print
function of the fax system software and began manually printing vouchers.

As shown in figure 4, our audit of a nonrepresentative selection of 139
travel vouchers (69 computed by DFAS CTO and 70 by USPFOs) found

significant delays occurred between the date of the reviewer's signature
and the date that the travel computation office accepted the voucher. Some
of these delays were caused by the time needed to correct vouchers that
were deficient and resubmit them to DFAS CTO or another USPFO travel
computation office.

Figure 4: Time Intervals between Reviewer Approval and Travel Computation
Office Acceptance for 139 Selected Travel Vouchers

Vouchers 80

70 67

60

50

40

30

25

20 1513 15

10

4

0                                      
     2 days  3 days 1 to 3 3 to 6 6 to 12   More 
     or less  to 1  months months months    than 
             month                        1 year 

Time interval

Source: GAO analysis.

We determined that the travel computation office rejected 32 of the
72 travel vouchers delayed for more than 3 days because of missing
documentation or the lack of required signatures and sent them back to
the soldiers for corrections. A lack of documentation or other information
prevented us from determining the reason for delays of more than 3 days
for the remaining travel vouchers.

The Army's lack of processwide oversight, including monitoring of the
rejection and return of vouchers by DFAS CTO and other travel
computation offices, resulted in undetected delays in reimbursement,
leading to unnecessary frustration with the Army's travel and
reimbursement process and potential financial difficulty for the
soldier. Further, without establishing and monitoring program metrics,
management had no assurance that it had identified where the
breakdowns were occurring and could not take the appropriate steps to

resolve any identified problems. For example, although the Army relied on
the individual unit reviewer for assurance that travel vouchers were
properly reviewed and transmitted promptly to the travel computation
offices, the Army did not establish and monitor performance metrics to
hold these reviewers accountable for their critical role in the process.

Further, although metrics were available on the average time DFAS CTO took
to pay travel vouchers after receipt, the Army did not have statistical
data on supplemental vouchers that could help provide additional insight
into the extent and cause of processing errors or omissions by voucher
examiners, unit reviewers, or Army Guard soldiers. Several of our case
studies indicate that accuracy may be an important issue. For example, one
method DFAS CTO uses to correct a voucher error or omission is to process
a supplemental voucher.19 According to DFAS data, DFAS CTO processed about
251,000 vouchers related to Army Guard soldiers mobilized during the
period October 1, 2001, through November 30, 2003, of which over 10,600
were supplemental vouchers. However, DFAS CTO officials could not tell us
how many of these were due to errors or omissions by DFAS examiners or
other factors. Our audit of 69 supplemental vouchers for the California
185th case study unit showed that 41 were due to DFAS CTO errors and the
remaining 28 were due to errors or omissions on the part of the soldiers.

Finally, we noted that although DFAS CTO established a toll-free number
(1-888-332-7366) for questions related to Army Guard and Reserve
contingency travel, DFAS did not have performance metrics to identify
problem areas or gauge the effectiveness of this customer service effort.
For example, DFAS did not systematically record the nature of the calls to
the toll-free number. According to DFAS data, this number, staffed by 30
DFAS employees, received over 15,000 calls in June 2004. By monitoring the
types of calls and the nature of the problems reported, important
information could have been developed to help target areas where training
or improved guidance may be warranted. Further, DFAS had not established
performance metrics for its call takers in terms of the effectiveness of
resolved cases or overall customer service.

19 The term "supplemental voucher" as used in this context refers to
travel vouchers processed for the purpose of correcting an error in a
previous partial or accrual travel voucher submitted and paid prior to the
completion of an extended period of travel.

Inadequate Training Results in Late or Inaccurate Reimbursements

Although Army regulations specify the responsibilities of soldiers, they
do not require that soldiers be trained on travel entitlements and their
role in the travel reimbursement process. Some of the Army Guard soldiers
that we spoke with told us that they had received either inadequate or no
training on travel voucher preparation and review. In addition, a DFAS CTO
official told us that the on-the-job-training provided to its new
personnel in early 2003 initially proved to be inadequate. Army Guard
soldiers in our case studies told us that they asked DFAS representatives
or used the Internet in attempts to find, interpret, and apply DFAS
guidance, which by itself proved to be insufficient and required many
trialand-error attempts to properly prepare travel vouchers. As a result,
many soldiers did not receive their travel payments on time.

Army Guard soldiers. Army Guard soldiers in our case studies told us that
they were confused about their responsibilities in the travel voucher
reimbursement process because they had not been sufficiently trained in
travel voucher processes related to mobilization. For example, prior to
September 11, 2001, most travel guidance addressed the criteria for single
trips or sequential trips and was not always clearly applicable to
situations in which Army Guard soldiers could be authorized short
intervals of travel for temporary duty at different locations within their
longer term mobilization. This "overlapping travel" proved to be
problematic for Army Guard soldiers trying to understand their travel
voucher filing requirements and travel computation office examiners
responsible for reviewing travel vouchers.

In addition, we found indications that some soldiers were not aware of
DOD's requirement to complete a travel voucher within 5 days of the end of
travel or the end of every 30-day period in cases of extended travel. For
example, as shown in figure 5, in our selection of 139 vouchers, 99 (71
percent) of the Army Guard soldiers did not meet the 5-day requirement.
Fifty-two Army Guard soldiers submitted their vouchers more than 1 year
late.

Figure 5: Timing from the End of Travel to Soldier Submissions for 139
Selected Travel Vouchers

Vouchers 60

                                       52

50

40

30

20

10

0                                    
5 days 6 days  1 to 3 3 to 6 6 to 12   More 
     or     to    months months months    than 
    less                                
          1 month                       1 year 

Time interval

Source: GAO analysis.

Of the 59 Army Guard soldiers that we could locate and interview, 23 said
that they lacked understanding about procedures, or lacked knowledge or
training about the filing requirements. Eight Army Guard soldiers said
that they procrastinated or forgot to file their travel vouchers on time.
The remaining 28 said that they could not remember anything about the
specific voucher we asked about or did not respond to our inquiries.

DFAS CTO personnel. DFAS CTO also had challenges training its examiner
staff. The increase in mobilizations since September 11, 2001, and
resulting increase in travel voucher submissions put a strain on DFAS
CTO's ability to make prompt and accurate travel reimbursements to Army
Guard soldiers. As discussed previously, DFAS CTO hired more than 200
staff from October 2001 through July 2003, which brought the total number
of staff to approximately 240. The training of these new employees was
delivered on-the-job. Training time depended on the individual and type of
work. For example, according to a DFAS CTO official, it took from 1 to 3
months for a voucher examiner to reach established standards. The DFAS CTO
official told us that, in some cases, on-the-job training proved to be
inadequate and contributed to travel reimbursement errors during this
period.

Our work indicated that mistakes by DFAS CTO contributed to reimbursement
problems. For example, our California case study indicated that 33
soldiers were initially underpaid a total of almost $25,000 for meals,
lodging, and incidental expenses when personnel at DFAS CTO based travel
cost calculations on an incorrect duty location and a corresponding
incorrect per diem rate. Although these soldiers eventually received the
amounts they were due, the corrections took months to resolve.

System Problems

Lack of Integrated Systems

The lack of integrated and automated systems results in the existing
inefficient, paper-intensive, and error-prone travel reimbursement
process. Specifically, the Army does not have automated systems for some
critical Army Guard travel process functions, such as preparation of
travel vouchers, SNAs, and TCS orders, which precludes the electronic
sharing of data by the various travel computation offices. In addition,
system design flaws impede management's ability to comply with TTRA,
analyze timeliness of travel reimbursements, and take corrective action as
necessary.

The DOD Task Force to Reengineer Travel stated in a January 1995 report20
that the travel process was inefficient because systems involved with
travel authorizations were not integrated with systems involved with
travel reimbursements. Similarly, as we have reported and testified,21
decades-old financial management problems related to the proliferation of
systems, due in part to DOD components receiving and controlling their own
information technology investment funding, result in the current
fragmented, nonstandardized systems.

Lacking either an integrated or effectively interfaced set of travel
authorization, voucher preparation, and reimbursement systems, the Army
Guard must rely on a time-consuming collection of source documents and
error-prone manual entry of data into a travel voucher computation system,
as shown in figure 6. For example, if the system that created the

20 U.S. Department of Defense, Report of the Department of Defense Task
Force to Reengineer Travel (Washington, D.C.: January 1995).

21 GAO, DOD Business Systems Modernization: Billions Continue to Be
Invested with Inadequate Management Oversight and Accountability,
GAO-04-615 (Washington, D.C.: May 27, 2004), and Department of Defense:
Long-standing Problems Continue to Impede Financial and Business
Management Transformation, GAO-04-907T (Washington, D.C.: July 7, 2004).

mobilization order, the Automated Fund Control Order System (AFCOS),
interfaced with the travel voucher computation system, a paper copy of the
mobilization order would not be necessary because it would be
electronically available. In turn, a portion of Army Guard and Army
Reserve vouchers returned by DFAS CTO to soldiers because of these missing
orders-a significant problem as discussed previously-could have been
eliminated.

Figure 6: Overview of the Design of Systems and Travel Applications Used
for Army Guard Travel

                                  Source: GAO.

                           Lack of Automated Systems

Further, the lack of an integrated travel system and consequent
"workarounds" increase the risk of errors and create the current
inefficient process. As noted previously, several separate WINIATS systems
at DFAS and the USPFOs can process travel vouchers for mobilized Army
Guard soldiers. These databases operate on separate local area networks
that do not exchange or share data with other travel computation offices
to ensure travel reimbursements have not already been paid. Instead, as
shown in figure 6, multiple WINIATS systems transmit data to the DFAS
Operational Data Store (ODS)-a separate database that stores disbursement
transactions. As a result, when a soldier submits a voucher, voucher
examiners must resort to extraction and manual review of data from ODS.
Next, voucher examiners research and calculate previous payments-advances
or interim payments-made by other Army WINIATS systems. This information
is then manually entered into WINIATS for it to compute the correct travel
reimbursement for the current claim. In addition to being time consuming,
this manual workaround can also lead to mistakes. For example, a Michigan
soldier was overpaid $1,384 when two travel computation offices paid him
for travel expenses incurred during the same period in August and
September 2002. This overpayment was detected by DFAS CTO when the soldier
filed his final voucher in August 2003.

DOD lacks an automated system for preparing travel vouchers, which hinders
the travel reimbursement process. As shown in figure 6, soldiers manually
prepare their paper travel vouchers and attach many paper travel
authorizations and receipts and distribute them via mail, fax, or e-mail
to one of the travel computation offices. The lack of an integrated
automated system increases the risk of missing documents in voucher
submissions, which results in an increased number of vouchers rejected and
returned by DFAS CTO. In addition, the Army currently lacks an automated
centralized system to issue uniquely numbered and standard formatted SNAs
regarding housing and dining facilities for mobilized soldiers. The lack
of automated centralized standard data precludes electronic linking with
any voucher computation system and the reduction of paperwork for
individual soldiers, as they must obtain and accumulate various paper
authorizations to submit with their vouchers.

Further, the Army lacks an automated system for producing TCS orders. As
illustrated at the top of figure 6, the various mobilization stations use
a word processing program to type and print each individual TCS order to
move a soldier to such places as Afghanistan and Iraq. Similar to the
process for SNAs, mobilization stations maintain separate document files
for each TCS order issued. The absence of a standard automated system

Other System Problems

Defense Travel System Deficiencies

used by each of the mobilization stations prevents the Army from
electronically sharing TCS data with other systems, such as a voucher
computation system. Consequently, the process will remain vulnerable to
delays for returned voucher submissions as mobilized Army Guard soldiers
continue to receive paper SNAs and TCS orders. Finally, even if the Army
automates the TCS, SNA, and voucher preparation processes, as discussed
previously, these new automated systems would need to be either integrated
or interfaced with a voucher computation system to decrease the amount of
time from initiation of travel to final settlement of travel expenses.

We found that many Army Guard USPFOs did not populate key data fields in
WINIATS as directed by DFAS Indianapolis. As a result, complete and
accurate information was not available for a variety of management needs.
For example, dates such as the voucher preparation date, supervisor review
date, and the travel computation office receipt date, are key in providing
DOD management with the information necessary to comply with TTRA, which
requires DOD to reimburse soldiers for interest and fees when travel
vouchers are paid late. In addition, these dates are essential in
providing management with performance information that can help DOD
improve its travel reimbursement process. Our analysis of 622,821 Army
Guard travel voucher transactions filed from October 1, 2001, through
November 30, 2003, and processed by DFAS CTO and the USPFOs found that at
least one of these key dates was not recorded in ODS for 453,351, or
approximately 73 percent, of the transactions.

In cases in which the key dates necessary to perform the evaluation were
being captured, incorrect entries were not detected. A WINIATS
representative told us that the system was not designed with certain edit
checks to detect data anomalies such as those caused by erroneous data
entry. We found that 52 of 191 in our nonrepresentative selection of
travel vouchers filed by soldiers had incorrect dates recorded in ODS
(e.g., the date of supervisory review predated the date of travel ended by
nearly a year) and that these data entry errors were not detected. Without
system edit checks to detect data anomalies, the accuracy and reliability
of the data are questionable, and consequently, management cannot carry
out its oversight duties.

Although DOD recognized the need to improve the travel reimbursement
process in the 1990s and has been developing and implementing DTS, this
system is currently not able to process mobilized travel authorizations
(e.g., mobilization orders, TCS orders, and SNAs) and vouchers and,

therefore, does not provide an end-to-end solution for paying mobilized
Army Guard soldiers for travel entitlements. Furthermore, DFAS auditors
have reported additional problems with DTS. Given DOD's past failed
attempts at developing and implementing systems on time, within budget,
and with the promised capability, and that the effort has already been
under way for about 8 years, it is likely that the department will be
relying on the existing paper-intensive, manual system for the foreseeable
future.

At the end of fiscal year 2003, DOD reported investing about $288 million
in DTS. In 2003, Program Management Office-Defense Travel System (PMO-DTS)
estimated an additional $251 million was needed for DTS to be fully
operational at the end of fiscal year 2006, resulting in an estimated
total development and production cost of over 10 years and $539 million.
This cost estimate does not include deploying DTS to the majority of the
Army Guard USPFOs. Although the Army Guard supplies most of the mobilized
soldiers in support of the global war on terrorism, DTS deployment to the
54 USPFOs is not scheduled to begin until fiscal year 2006. The Army is
expected to fund the majority of the costs to field the program to the
USPFOs, where mobilized Army Guard travel begins. The DTS total life cycle
cost estimate, including the military service and Defense agencies, is
$4.39 billion.22

DTS Is Not an End-to-End Solution for Paying Mobilized Army Guard
Soldiers' Travel Entitlements

While DTS purports to integrate the travel authorization, voucher
preparation, and approval and payment process for temporary duty (TDY)
travel, it does not integrate travel authorizations and reimbursements for
mobilized Army Guard soldiers. DOD officials have stated that currently
DTS cannot process mobilized Army Guard travel reimbursements involving
various consecutive and/or overlapping travel authorizations. DOD
officials acknowledged that DTS would not produce the various travel
authorizations related to mobilization travel, because DOD is presently
designing a pay and personnel system, the Defense Integrated Military
Human Resources System (DIMHRS), which will accomplish this task. DOD's
current strategy is for DTS to electronically capture the travel
authorization information from DIMHRS, after which a soldier would use DTS
to prepare and submit a travel voucher. This would require that

22 The life cycle cost estimate is the cost estimate for fiscal years 1996
through 2016 for the DOD business travel function expressed in constant
fiscal year 2003 dollars. It includes investment costs for fiscal years
1996 through 2006, operations costs for fiscal years 2003 through 2016,
and alternate system (status quo) phase-out costs for fiscal years 1996
through 2006.

DIMHRS have the capability to electronically capture the various
authorizations applicable to Army Guard travel, such as mobilization and
temporary change of station orders, and that SNAs are generated from a
standard, automated system that can effectively interface with DTS. DOD
officials do not plan to implement DIMHRS at the Army Guard until March
2006. As a result, the timing and ability of the Army Guard to process
mobilization travel vouchers through DTS appears to hinge on the
successful development and implementation of DIMHRS and its interface with
DTS.

DTS Does Not Compute Late Payment Interest and Fees

DTS is not being designed to identify and calculate travelers' late
payment interest and fees in accordance with TTRA. As discussed earlier in
this statement, DOD's current travel computation system does not
automatically identify and calculate the TTRA late payment interest and
fees. Furthermore, no controls are in place to ensure that the manual
calculation is performed and that the interest and fee amounts are entered
into the system for payment. According to DTS officials, DOD has not
directed that DTS be designed to include such a feature. As a result, as
currently designed, DTS provides no assurance that late payment interest
and fees will be paid to travelers as required pursuant to TTRA.

Other Auditors Identify Problems with DTS

A DFAS Kansas City Statistical Operations and Review Branch report23
identified several significant problems with the current DFAS
implementation. Specifically, for the first quarter of fiscal year 2004,
DFAS reported a 14 percent inaccuracy rate in DTS travel payments of
airfare, lodging, and meals and incidental expenses. This report cited
causes similar to those we identified in the areas of traveler preparation
of claims and official review of claims. In addition to these
deficiencies, DFAS noted errors in DTS calculations for meals and
incidental expenses.

Another DFAS Internal Review report,24 dated June 15, 2004, indicated that
improvements were needed in DTS access controls to prevent or detect
unauthorized access to sensitive files. DFAS Internal Review reported that

23 Defense Finance and Accounting Service, Statistical Operations and
Review Branch, Military & Civilian Pay Services Defense Travel System:
Results of Post Payment Reviews, 1st Quarter, FY 2004 (Kansas City, Mo.:
undated).

24 Defense Finance and Accounting Service Internal Review, Review of the
Defense Travel System (DTS) (Arlington, Va.: June 15, 2004).

Actions to Improve Accuracy and Timeliness of Mobilized Army Guard Travel
Reimbursements

because PMO-DTS had not established standard user account review and
maintenance procedures, DTS is vulnerable to unauthorized individuals
gaining access to the system and confidential information, resulting in
potential losses to DOD employees and the government. The report also
noted that DTS was not adequately retaining an audit trail of
administrative and security data, leaving management unable to investigate
suspicious activities or research problem transactions.

DOD, the Army, the National Guard Bureau, and DFAS reported several
positive actions during the course of our work that, if implemented as
reported, should improve the accuracy and timeliness of travel
reimbursements to Army Guard soldiers. Because these actions were
relatively recent, we could not evaluate their effectiveness.

For example, DFAS officials also told us that they have taken several
steps to reduce the number of vouchers being returned to the soldiers due
to missing signatures and missing mobilization orders. DFAS and the
National Guard Financial Services Center-a field operating agency of the
Chief, National Guard Bureau, that performs selected financial services-
entered into a Memorandum of Agreement effective February 2004 whereby
DFAS will obtain the assistance of the National Guard to address problems
with certain vouchers that would otherwise be returned to soldiers.
According to DFAS CTO data, since the implementation of the agreement
through the end of fiscal year 2004, 13,523 travel vouchers were
coordinated with the National Guard in this manner rather than initially
being sent back to the soldiers for correction.

In the human capital area, DFAS CTO enhanced its training program for
voucher examiners. For example, DFAS CTO used computer-based training to
provide new personnel an initial overview of WINIATS and voucher
computation procedures. In addition, a DFAS CTO official told us that a
40-hour course, which was designed specifically to address the types of
vouchers received by DFAS CTO, has been established to train new
employees.

In addition, to help ensure that the Army Guard receives timely and
accurate travel reimbursements, other immediate steps are needed to
mitigate the most serious problems we identified. Accordingly, in our
related report (GAO-05-79), we made 19 short-term recommendations to the
Secretary of Defense to address weaknesses we identified that included the
need for (1) mobilization and related travel orders to clearly state meal
entitlements, (2) standardization of the form and content of

Conclusions

SNAs for contingency operations, and (3) appointment of an ombudsman with
accountability for resolving problems Army Guard soldiers encounter at any
point in the travel authorization and reimbursement process. We also made
4 recommendations as part of longer term initiatives to reform travel,
pay, and personnel systems, including the need to integrate or interface
automated travel vouchers, SNAs, TCS orders, mobilization orders, and
other relevant systems. In its comments on a draft of our companion
report, DOD agreed with 21 of our 23 recommendations and outlined its
actions to address the deficiencies noted in our report. DOD partially
concurred with 2 recommendations regarding the need for an automated,
centralized system for SNA per diem authorizations and the need for DTS to
include capabilities to identify, calculate, and pay late payment interest
and fees required pursuant to TTRA. Due to the financial burdens on the
affected soldiers documented in our report, we continue to believe that
DOD should implement measures to resolve these matters both on an interim
and long-term basis.

As Army Guard soldiers heed the call to duty and serve our country in
vital and dangerous missions both at home and abroad, they deserve nothing
less than full, accurate, and timely reimbursements for their
out-of-pocket travel expenses. However, just as we recently reported for
Army Guard and Reserve pay, our soldiers are more often than not forced to
contend with the costly and time-consuming "war on paper" to ensure that
they are properly reimbursed. The process, human capital, and automated
systems problems we identified related to Army Guard travel reimbursement
are additional examples of the broader, long-standing financial management
and business transformation challenges faced by DOD. Similar to our
previously reported findings for numerous other DOD business operations,
the travel reimbursement process has evolved over years into the
stovepiped, paper-intensive process that exists today and was ill-prepared
to respond to the current large and sustained mobilizations. Without
systematic oversight of key program metrics, breakdowns in the process
remain unidentified and effective controls cannot be established and
monitored.

Finally, DOD's long-standing inability to develop and implement systems
solutions on time, within budget, and with the promised capability appears
to be a critical impediment in this area. The problems we identified with
DOD's longer term automated systems initiatives-DIMHRS and DTS- raise
serious questions of whether and when mobilized soldiers' travel
reimbursement problems will be resolved.

Contact and Acknowledgments

(192160)

For further information about this testimony, please contact Gregory D.
Kutz at (202) 512-9095 or [email protected]. Staff making key contributions to
this report include Paul S. Begnaud, Norman M. Burrell, Mary Ellen
Chervenic, Francine M. DelVecchio, Lauren S. Fassler, Dennis B. Fauber,
Wilfred B. Holloway, Patty P. Hsieh, Charles R. Hodge, Jason M. Kelly,
Stephen Lipscomb, Julia C. Matta, Sheila D. Miller, John Ryan, Bennett E.
Severson, Robert A. Sharpe, Patrick S. Tobo, and Jenniffer F. Wilson.

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