DOD Business Transformation: Defense Travel System Continues to  
Face Implementation Challenges (18-JAN-06, GAO-06-18).		 
                                                                 
The Department of Defense (DOD) has been working to develop and  
implement a standard end-to-end travel system for the last 10	 
years. Over the past several years numerous GAO reports and	 
testimonies have highlighted problems with DOD's travel practices
that resulted in wasteful spending of millions of dollars. In	 
response, the department has noted that the Defense Travel System
(DTS), in part, will help correct these problems. Because of the 
widespread congressional interest in DTS, GAO initiated the audit
under the statutory authority of the Comptroller General of the  
United States. The objectives of the audit were to (1) determine 
if DOD effectively tested key DTS functionality, (2) ascertain if
DTS will correct the weaknesses previously identified, (3)	 
identify the challenges that remain, and (4) identify		 
opportunities to streamline DOD's travel process.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-18						        
    ACCNO:   A44398						        
  TITLE:     DOD Business Transformation: Defense Travel System       
Continues to Face Implementation Challenges			 
     DATE:   01/18/2006 
  SUBJECT:   Defense cost control				 
	     Defense economic analysis				 
	     Internal controls					 
	     Operational testing				 
	     Performance measures				 
	     Program evaluation 				 
	     Program management 				 
	     Systems analysis					 
	     Travel						 
	     Travel costs					 
	     Program implementation				 
	     Defense Travel System				 

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO Product.                                                 **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
******************************************************************
GAO-06-18

     

     * Report to Congressional Addressees
          * January 2006
     * DOD Business Transformation
          * Defense Travel System Continues to Face Implementation Challenges
     * Contents
          * Results in Brief
          * Background
               * DOD Travel Process
               * Previously Reported DOD Travel Issues
          * Ongoing DTS Testing Remains a Concern
          * DTS Has Corrected Some Previously Reported Travel Problems
               * Duplicate Payments Related to CBA
               * Improper Premium-Class Travel
               * Unused Airline Tickets
               * Accuracy of Travel Voucher Reimbursements Questionable
          * DTS Faces Challenges in Making DTS a Standard DOD Travel System
               * Interfaces Are Critical to Implementing an End-to- End
                 System
               * Interfaces with Private- Sector Systems Are Critical
               * Underutilization of DTS Affects Estimated Savings
               * Additional Actions Can Be Taken to Streamline DOD Travel
                 Process
               * Automating Approval of Changes to Authorized Travel Expenses
               * Using Commercial Databases to Identify Unused Airline
                 Tickets
               * Simplify the Display of Flights
               * Utilizing Restricted Airfares Where Cost Effective
               * Using Automated Methods to Reduce Hard Copy Receipt
                 Requirements
          * Conclusions
          * Recommendations for Executive Action
          * Agency Comments and Our Evaluation
     * Scope and Methodology
     * Comments from the Department of Defense
     * GAO Contacts and Staff Acknowledgments
     * Related GAO Products

Report to Congressional Addressees

January 2006

DOD BUSINESS TRANSFORMATION

Defense Travel System Continues to Face Implementation Challenges

Contents

Table

Figures

January 18, 2006Letter

Congressional Addressees

Over 10 years ago, the Department of Defense (DOD) Task Force to
Reengineer Travel issued a report that pinpointed three principal causes
for DOD's inefficient travel system: (1) travel policies and programs were
focused on compliance with rigid rules rather than mission performance,
(2) travel practices did not keep pace with travel management improvements
implemented by industry, and (3) the travel systems were not integrated.1
To address these concerns, DOD established the Project Management
Office-Defense Travel System (PMO-DTS) to acquire travel services that
would be used DOD-wide. The Defense Travel System (DTS) is envisioned as
being the department's standard end-to-end travel system.2

The department currently estimates that DTS will be fully deployed at all
intended locations by the end of fiscal year 2006, with an estimated total
development and production cost of approximately $474 million. Of this
amount, the contract for the design, development, and deployment of DTS is
worth approximately $264 million. The remaining costs are associated with
areas such as the operation and maintenance of DTS, operation of the
PMO-DTS, the voucher payment process, and management and oversight of the
numerous commercial travel offices (CTO).

Over the past several years, our reports and testimonies have highlighted
problems with DOD's travel practices that resulted in wasteful spending of
millions of dollars.3 In responses to some of our reports, the department

has noted that DTS, in part, will help correct these problems. In
September 2005, we testified on our preliminary results regarding this
audit of DTS.4

Our audit objectives were to (1) determine if DOD effectively tested key
DTS functionality related to flights and fare information, (2) ascertain
if DTS will correct the internal control weaknesses and improper payments
previously identified, (3) identify the challenges that remain in ensuring
DTS achieves its goal as DOD's standard travel system, and (4) identify
opportunities for DOD to streamline the entire travel process. To address
the first objective, we reviewed two key DTS flight-related requirements
and the related testing to determine if the desired functionality was
effectively implemented. To address the second objective, we analyzed (1)
our prior reports and testimonies, (2) selected Defense Finance and
Accounting Service (DFAS) reports, and (3) DOD congressional testimonies
to identify the specific problems that DTS was intended to resolve.
Further, we randomly selected for review travel vouchers drawn from the
first quarter of fiscal year 2005 (October through December 2004) to
determine if DTS calculation problems identified by DFAS had been
resolved.5 To address the third objective, we discussed with the PMO-DTS
the deployment of DTS as it relates to the transmission of data, such as
finance and accounting information, between DTS and the other systems
belonging to DOD, as well as private sector businesses. We also analyzed
DOD data related to the utilization of DTS. To address the fourth
objective, we analyzed the department's current travel processes,
discussed them with the PMO-DTS, and reviewed our past reports that
discussed federal agency travel practices. We determined that the DOD data
we used as the basis for our evaluation in this report were sufficiently
reliable by (1) performing electronic testing of required data elements,
(2) reviewing existing information about the data and the system that
produced them, and (3) interviewing agency officials knowledgeable about
the data.

Because of the widespread congressional interest in DTS, this assignment
was performed at our initiative under the statutory authority provided to
the Comptroller General of the United States. Our work was performed from
October 2004 through October 2005 in accordance with U.S. generally
accepted government auditing standards. Details on our scope and
methodology are included in appendix I. We requested comments on a draft
of this report from the Secretary of Defense or his designee. We received
written comments from the Director, DFAS, which are reprinted in appendix
II.

Results in Brief

DTS's development and implementation have been problematic, especially in
the area of requirements and testing key functionality to ensure that the
system would perform as intended. Thus, it is not surprising that critical
flaws have been identified, resulting in significant schedule slippages
between the planned and actual deployment dates of the system. As
originally envisioned, the initial deployment of DTS was to commence
within 120 days after the effective date of contract award in September
1998, with complete deployment to approximately 11,000 locations by April
2002. However, that date has been changed to September 2006-a slippage of
over 4 years. Our recent analysis of selected requirements for one key
area disclosed that system testing was ineffective in ensuring that the
promised capability was delivered as intended. For example, we found that
DOD did not have reasonable assurance that flight information was properly
displayed.6 This problem was not detected prior to deployment since DOD
failed to properly test the system interfaces through which the data are
accessed for display. Accordingly, DOD travelers might not have received
accurate information on available flights, which could have resulted in
higher travel costs. PMO-DTS officials have acknowledged that the problem
has existed since the initial deployment of DTS in February 2002. PMO-DTS
officials stated that the problem was corrected in an August 2005 release
of the software. However, we found that the August 2005 release did not
fully address this problem. Our review found that as of the September 2005
release, the PMO-DTS had reasonable assurance that DTS was properly
displaying the correct General Services Administration (GSA) city pair
airfares, but DOD still lacks reasonable assurance that the flight
information displayed was accurate.

DTS has corrected some of the previously reported internal control
weaknesses, while others remain. We previously reported that as a result
of a breakdown in internal controls and a weak control environment, DOD
has (1) paid for improper premium-class travel, (2) failed to redeem
unused airline tickets, and (3) paid twice for the same airline ticket
when using the centrally billed accounts (CBA). In commenting on our
reports and in congressional testimony, the department has stated that
DTS, to varying degrees, will help resolve these problems. In addition to
our prior reports, DFAS's Kansas City Statistical Operations and Review
Branch has previously reported inaccuracies with DTS's travel payments of
airfare, lodging, meals, and incidental expenses.7

First, although DOD has taken numerous actions to improve existing
guidance and controls related to premium-class travel, including system
changes in DTS, our results indicate that unauthorized premium-class
travel continues. This continuing problem is not the fault of DTS but
rather is caused by the lack of adherence to departmental policy. Second,
as currently designed, DTS cannot determine whether a traveler has not
used all or a portion of an airline ticket; rather, the traveler has to
request that the CTO process a credit for the unused portion of the
airline ticket. To address this unused airline ticket problem, the
department now requires certain CTOs to run unused ticket reports that
identify tickets that were not used within a specified time period,
usually 30 days past the trip date. Third, in regard to duplicate payment
for the same ticket, we have observed that DTS is designed to ensure that
tickets purchased through the CBAs cannot be claimed on the individual's
travel voucher as a reimbursement to the traveler for airfare expenses,
thus eliminating this problem of paying twice for the same ticket.

Finally, we randomly sampled 170 travel vouchers8 for the period October
1, 2004, to December 31, 2004,9 to ascertain if the problems previously
reported by DFAS had been resolved. For the attributes tested, we found
that DTS calculated the lodging and meal reimbursements correctly based
upon information provided by the traveler. However, we identified
instances in which human error, either by the traveler or the authorizing
officials (AO) resulted in questionable payments to the traveler. For
example, our random sample identified a case where the traveler claimed a
travel advance received as a travel expense. Since travel advances are not
eligible for reimbursement, the payment for this claim resulted in a
duplicate payment to the traveler-for the advance and for the actual
expenses paid for using the advance. On the other hand, we also identified
an example where a traveler deducted a travel advance received on the
traveler's personal credit card from the travel claim. Since the traveler
was responsible for repaying the advance received, this deduction should
not have been made, and the traveler was underpaid. In all cases, the AOs
did not detect these errors during review of the travel claims.

To become the standard travel system within DOD, DTS has faced and will
continue to face challenges-some of which are beyond the control of DTS.
Two of those challenges are (1) developing needed interfaces and (2)
underutilization of DTS at sites where it has been deployed. To date, DTS
has developed 36 interfaces with various DOD business systems, and going
forward, interfaces will have to be developed with at least 18 additional
business systems. According to the PMO-DTS, DOD has spent over $30 million
on developing and testing the interfaces. Some of these systems, such as
the Army's General Fund System, are critical to DOD's modernization of
business systems and operations. According to the PMO-DTS, the
availability of funding to develop the interfaces is uncertain. Unless
these interfaces are successfully developed and implemented, it will be
virtually impossible for DTS to be a truly end-to-end travel system.

In addition, the continued use of the existing legacy travel systems at
locations where DTS is already deployed results in the underutilization of
DTS and reduces the savings that DTS was planned to achieve. For example,
the Army has acknowledged that legacy systems are operating at locations
where DTS has been deployed. As a result, DOD is spending funds on
duplicative systems-legacy systems and DTS. Additionally, because of the
continued operation of the legacy systems at locations where DTS has been
fully deployed, DOD components may pay DFAS a higher fee for processing
manual travel vouchers as opposed to processing the travel voucher
electronically through DTS. For example, for the period October 1, 2004,
to February 28, 2005, the Army paid DFAS over $6 million to process
177,000 travel vouchers manually-$34 per travel voucher, in contrast to
about $186,000 to process 84,000 travel vouchers electronically-$2.22 per
voucher. Overall, for this 5-month period, it cost the Army about $5.6
million more to process these travel vouchers manually as opposed to
electronically using DTS.

In its 1995 report entitled Report of the Department of Defense Task Force
to Reengineer Travel, the department noted that the existing process was a
complex system that imposed exorbitant administrative costs on the
traveler and DOD to ostensibly ensure that travel funds are not wasted.
The report concluded that the process focused on (1) compliance with rigid
rules rather than on mission performance, (2) outmoded travel practices,
and (3) "stovepiped" administrative processes, and that the department
needed to address these problems. While DTS has reduced some of the
administrative burden, opportunities exist to further reduce the
administrative burden and cost while supporting the DOD mission. While
some of the opportunities could be implemented by DOD policy changes,
others will require coordination with other organizations such as, the
Internal Revenue Service (IRS). Examples of possible changes in DOD's
travel management practices include automating approval of changes to
approved travel expenses and simplifying the display of airline flight
information.

We are making ten recommendations to the Secretary of Defense aimed at
improving the department's management and oversight of DTS and
streamlining its administrative travel processes. In its written comments
on a draft of this report, DOD agreed with all of our recommendations and
briefly outlined its actions for addressing them. We have reprinted DOD's
written comments in appendix II.

Background

Twelve years ago, in September 1993, the National Performance Review
called for an overhaul of DOD's temporary duty (TDY) travel system. In
response, DOD created the DOD Task Force to Reengineer Travel to examine
the process. The task force's January 1995 report pinpointed three
principal causes for DOD's inefficient travel system: (1) travel policies
and programs were focused on compliance with rigid rules rather than
mission performance, (2) travel practices did not keep pace with travel
management improvements implemented by industry, and (3) the travel system
was not integrated.

On December 13, 1995, the Under Secretary of Defense for Acquisition and
Technology and the Under Secretary of Defense (Comptroller)/Chief
Financial Officer issued a memorandum, "Reengineering Travel Initiative,"
establishing the PMO-DTS to acquire travel services that would be used
DOD-wide. Additionally, in a 1997 report to the Congress, the DOD
Comptroller pointed out that the existing DOD TDY travel system was

never designed to be an integrated system.10 The report stated that
because there was no centralized focus on the department's travel
practices, the travel policies were issued by different offices and the
process had become fragmented and "stovepiped." The report further noted
that there was no vehicle in the current structure to overcome these
deficiencies, as no one individual within the department had specific
responsibility for management control of DOD TDY travel.

To address these concerns and after the use of competitive procedures, the
department awarded a firm fixed-price, performance-based services contract
to BDM International, Inc. (BDM) in May 1998. In September 1998, GAO
denied a bid protest challenging the department's selection of BDM.11
Under the terms of the contract, the contractor was to start deploying a
travel system and to begin providing travel services for approximately
11,000 sites worldwide within 120 days of the effective date of the
contract, completing deployment approximately 38 months later. The
contract specified that upon DTS achieving initial operational capability
(IOC),12 BDM was to be paid a onetime deployment fee of $20 for each user
and a transaction fee of $5.27 for each travel voucher processed. The
estimated cost for the contract was approximately $264 million. Prior to
commencing the work, BDM was acquired by TRW, Inc. (TRW), which became the
contractor of record.

The operational assessment of DTS at Whiteman Air Force Base, Missouri,
from October through December 2000, disclosed serious failures. For
example, the system's response time was slower than anticipated, the
result being that it took longer than expected to process a travel
order/voucher. Because of the severity of the problems, in January 2001 a
joint memorandum was issued by the Under Secretary of Defense
(Comptroller) and the Deputy Under Secretary of Defense (Acquisition,
Technology and Logistics) directing a functional and technical assessment
of DTS. The memorandum also directed that a determination be made of any
future contract actions that would be necessary, based on the assessment
results. In July 2001, the Under Secretary of Defense (Comptroller) and
the Under Secretary of Defense (Acquisition, Technology and Logistics)
approved proceeding with DTS and restructuring the contract with TRW.

The TRW contract was restructured through a series of contract
modifications, which were finalized on March 29, 2002. The government
agreed to provide TRW consideration in the amount of about $44 million for
the restructure of the contract. TRW agreed to release and discharge the
government from liability and agreed to waive any and all liabilities,
obligations, claims, and demands related to or arising from its early
performance efforts under the original contract. Northrop Grumman
subsequently acquired TRW in December 2002 and, as such, is now the
contractor of record.

The first deployment of DTS was at Ellsworth Air Force Base, South Dakota,
in August 2001. As of September 2005, DTS has been deployed to
approximately 5,600 locations. The department currently estimates that DTS
will be fully deployed to all 11,000 locations by the end of fiscal year
2006, with an estimated total development and production cost of
approximately $474 million. Of this amount, the contract for the design,
development, and deployment of DTS, as restructured, is worth
approximately $264 million-the same amount as estimated in the original
contract that was agreed to with BDM.13 The remaining costs are DOD
internal costs associated with areas such as the operation and maintenance
of DTS, the operation of the PMO-DTS, the voucher payment process, and
management and oversight of the numerous CTO contractors.

DOD Travel Process

DTS automates and integrates the department's three travel processes:
authorization, reservations, and payment to the traveler. Figure 1 depicts
the designated DOD travel process using DTS.

Figure 1: Defense Travel System Processes

The three essential players in the processing of a travel authorization
and related payment are the traveler, the CTO, and the AO. The traveler
generates a travel authorization and enters the appropriate information
into DTS, such as travel dates, departure and arrival airports, and hotel
and rental car arrangements. When the traveler is finished, DTS sends a
prebuilt passenger name record to the CTO. If possible, requested
arrangements will automatically book without CTO intervention. In cases
where the travel arrangements do not automatically book, the CTO must
intervene and take additional steps to book the requested arrangements.
Next, the traveler's AO receives an e-mail notification from DTS stating
that there is a travel authorization awaiting review and approval.

The AO is a key internal control point in the travel authorization
process. AO responsibilities include reviewing the travel authorization
for compliance with travel laws, regulations, and policies; determining if
the trip is mission essential and funds are available; assigning the
proper line of accounting prior to authorization; reviewing all policy
exceptions, and approving or rejecting the travel authorization as
appropriate. When the AO approves a travel authorization by electronically
signing the document in DTS, DTS routes the approved travel authorization
to the CTO for ticketing, sends an obligation transaction to the
appropriate accounting system and notifies the traveler via e-mail that
the travel authorization has been approved.

When the trip is complete, the traveler creates a travel voucher for
reimbursable travel-related expenses from the travel authorization data
stored in DTS, and electronically signs the voucher. DTS electronically
routes the travel voucher to the AO for approval.14 An AO is then
responsible for certifying a travel voucher for payment by electronically
signing the document.15 DTS submits the certified travel voucher to DFAS
for payment through electronic interfaces, which records the information
in the appropriate accounting and disbursing systems.

Previously Reported DOD Travel Issues

Over the past several years, we have reported pervasive weaknesses in
DOD's travel program. These weaknesses have hindered the department's
operational efficiencies and have left it vulnerable to fraud, waste, and
abuse. These weaknesses are highlighted below.

o On the basis of statistical sampling, we estimated that 72 percent of
the over 68,000 premium-class airline tickets DOD purchased for fiscal
years 2001 and 2002 were not properly authorized and that 73 percent were
not properly justified. During fiscal years 2001 and 2002, DOD spent
almost $124 million on airline tickets that included at least one leg of
the trip in premium-class-usually business class. Because each
premium-class ticket costs the government up to thousands of dollars

more than a coach class ticket, unauthorized premium-class travel resulted
in millions of dollars of unnecessary costs annually.16

o Because of control breakdowns, DOD paid for airline tickets that were
neither used nor processed for refund-amounting to about 58,000 tickets
totaling more than $21 million for fiscal years 2001 and 2002. DOD was not
aware of this problem before our audit and did not maintain any data on
unused tickets. Based on limited data provided by the airlines, it is
possible that the unused value of the fully and partially unused tickets
that DOD purchased from fiscal year 1997 through fiscal year 2003 with its
CBA could be at least $100 million.17

o We found that DOD sometimes paid twice for the same airline ticket-first
to Bank of America for the monthly DOD credit card bill, and second to the
traveler, who was reimbursed for the same ticket. Based on our mining of
limited data, the potential magnitude of the improper payments was 27,000
transactions for over $8 million. For example, DOD paid a Navy GS-15
civilian employee approximately $10,000 for 13 airline tickets he had not
purchased.18

Ongoing DTS Testing Remains a Concern

DTS development and implementation have been problematic, especially in
the area of requirements and testing key functionality to ensure that the
system would perform as intended. Given the lack of adherence to such key
practices, it is not surprising that critical flaws have been identified
after deployment, resulting in significant schedule slippages. In July
2002, a DOD Inspector General's report noted that in early 1999, it was
evident that the commercial-off-the-shelf software would require extensive
modification in order to meet DOD's needs.19 Further, the report pointed
out that operational problems continued to arise during the third phase of
the system testing in the fall of 2000. As originally envisioned, the
initial deployment of DTS was to commence 120 days after the effective
date of the contract award in September 1998, with complete deployment to
approximately 11,000 locations by April 2002. However, that date has been
changed to September 2006-a slippage of over 4 years. Figure 2 shows the
schedule slippage between the planned and actual implementation of DTS.

Figure 2: Delay in the Development and Implementation of DTS

Our recent analysis of selected requirements disclosed that the testing of
DTS is not always adequate prior to updated software being released for
use by DOD personnel. System testing is a critical process utilized by
organizations to improve an entity's confidence that the system will
satisfy the requirements of the end user and will operate as intended.
Additionally, an efficient and effective system testing program is one of
the critical elements that needs to be in place in order to have
reasonable assurance

that an organization has implemented the disciplined processes necessary
to reduce software development project risks to acceptable levels.  20

In one key area, our review identified instances in which the testing of
DTS was inadequate, which precluded DOD from having reasonable assurance
that DTS displayed the proper flights and airfares. For example, DOD
officials stated that prior to an August 2005 system update, DTS should
have displayed 12 flights, if that many flights were available, within a
flight window.21 DTS program officials and Northrop Grumman personnel
acknowledged that this particular system requirement had never been tested
because DOD failed to document the requirement until January 2005. Because
a system requirement covering this feature had never been defined and
communicated to the contractor, there was no reasonable assurance that DTS
would display the envisioned number of flights and related airfares within
a given flight window.22 As we have noted in previous reports,
requirements that are not defined are unlikely to be tested, with the
resulting consequence that they are even less likely to be satisfied.23

We also noted that even when the requirements were properly defined, the
DOD tests for determining whether DTS displayed the proper flights and
airfares did not provide reasonable assurance that the (1) proper flights
were displayed and (2) airfares for those flights were displayed.
Specifically, DTS uses a commercial product to obtain information from the
database that contains the applicable flight and airfare information-

commonly referred to as a global distribution system (GDS).24  In testing
whether DTS displayed the proper flights and airfares, the information
returned from the commercial product was compared with the information
displayed in DTS and was found to be in agreement. However, the commercial
product did not provide all of the appropriate flights or airfares to DTS
that were contained in the GDS. Since the PMO-DTS neither performed an
end-to-end test nor made sure that the information returned from this
commercial product was in agreement with the information contained in the
GDS, it did not have reasonable assurance that DTS was displaying the
proper flight and airfare information to the users.25 According to DOD
officials, this system weakness was detected by users complaining that DTS
did not display all relevant flights and airfares. Figure 3 illustrates
the inadequacy of the DTS testing.

Figure 3: Limitations of DTS Testing

PMO-DTS officials acknowledged that these two problems have been ongoing
since the initial implementation of DTS. Accordingly, as a result of these
two weaknesses, DOD travelers might not have received accurate information
on available flights and airfares, which could have resulted in higher
travel costs. Further, PMO-DTS officials have stated that the two problems
were corrected as part of the August 2005 DTS system update. However, we
found that the problems have not been entirely corrected as of the
September 2005 release. In reviewing the documentation relating to the
September 2005 release, we found that (1) the requirements generally
described the functionality that was expected relating to the display of
flights and airfares except that the specific flight order was not
adequately documented and (2) testing was inadequate to provide reasonable
assurance that the DTS system requirements associated with the reservation
module were properly tested.

Our analysis found that the documentation relating to the testing for the
September 2005 release provided reasonable assurance that the proper GSA
city pair airfares were displayed for a given flight. However, this
documentation did not provide reasonable assurance that the proper flights
were displayed. Although we were told by PMO-DTS officials that the
testing efforts had checked the number of flights displayed in the GDS to
those that were displayed by DTS to ensure that DTS was properly
displaying the available flights, adequate documentation was not retained
to verify that this comparison had been made. In November 2005 we
performed a limited test and found that the system did not properly
display the GSA city pair flights between Chicago, Illinois and Dayton,
Ohio. Our analysis also identified other problems in the display of flight
information.

More specifically, for the reservation module our analysis found that the
flights actually displayed in DTS did not meet the stated DOD
requirements. According to PMO-DTS officials, DTS is required to display
up to 25 flights within a 12-hour flight window for domestic flights, with
the GSA city pair flights shown first. When more than one flight is
available within a category, the flights should then be sorted first by
the elapsed flight time26 and then by the earliest departure time. Our
review found that the testing performed for the September 2005 release did
not provide reasonable assurance that these requirements were met. Our
analysis of two frequently used city pairs DOD tested disclosed that DTS
(1) displayed more than the 25 flights, (2) included flights that were
outside the flight window, and (3) did not display the flights in the
proper order. The following examples illustrate these problems.

o The testing documentation showed that 29 flights were displayed for the
Chicago, Illinois, to Dayton, Ohio, flight and that 11 of these flights
were outside the flight window. For example, the stated departure time was
9:00 a.m. which means that flights from 3:00 a.m. and 3:00 p.m. should be
considered for inclusion. Furthermore, 60 percent of the first 10 flights
were outside of this window and leaving at such times as 3:45 p.m. (fourth
item on the display) and 8:55 p.m. (eighth item on the display).

o Although the stated requirement was to show the flights with GSA city
pairs first, sorted by elapsed flight and earliest departure times, the
testing documentation showed for an October 18, 2005, departure time, that
the first flight displayed in DTS left Washington, D.C., at 6:45 a.m. and
arrived at Columbus, Ohio at 9:30 a.m. with an elapsed flight time of 1
hour and 55 minutes when the user entered a 9:00 a.m. departure time.
However, the documentation also showed that 6:55 a.m. (eleventh item on
the display) and 1:35 p.m. (thirteenth item on the display) departing
flights were also available with elapsed times of about 1 hour and 25
minutes. Based on the stated requirement, these two flights should have
been shown first and second on the display since they had shorter elapsed
flight times and were also GSA city pair flights. Furthermore, the flights
with the shortest elapsed flight times were direct flights while the first
flight involved stopping at another airport before arriving at Columbus,
Ohio.

We believe that one factor contributing to the failure to detect the
errors in displaying the flights in the proper order was that the stated
requirements for the order had not been properly documented. Specifically,
the requirements that were included in the testing documentation stated
that the flights were to be displayed in the following order: GSA city
pair flights with capacity limits, GSA city pair flights, and all other
unrestricted flights. These requirements did not contain additional
information to state that elapsed flight time and earliest departure time
should also be considered in the display. As we noted in our September
2005 testimony, requirements that are not defined are unlikely to be
tested.27

PMO-DTS officials stated that subsequent to the September 2005 release,
they had identified the flight order display problem and that it had been
corrected in a subsequent release. Our limited test in November 2005
showed that the flights were now displayed in the proper order for the two
city pairs for which we had identified problems in the September 2005
testing. PMO-DTS officials stated that they would investigate the reasons
(1) that more than 25 flights were displayed, (2) why flights that were
outside the 12-hour flight window were displayed, and (3) why all GSA city
pair fights were not included in the display.

DTS Has Corrected Some Previously Reported Travel Problems

DTS has corrected one of the previously reported travel problems, but
others remain. We have previously reported that a breakdown in internal
controls and a weak control environment have led to potential fraud,
waste, and abuse of hundreds of millions of dollars being improperly spent
on DOD travel.28  Specifically, DTS has resolved the problem related to
duplicate payment for airline tickets purchased through CBAs. However,
problems remain related to improper premium-class travel, unused tickets
that are not refunded, and accuracy of travelers' claims. The three
remaining problems cannot be resolved solely within DTS and will take
departmentwide action to address.

Duplicate Payments Related to CBA

Based upon our observations, we found that DTS was designed to ensure that
a ticket purchased through CBAs cannot be claimed on the individual's
travel voucher as a reimbursement for airfare to the traveler. We have
previously reported that the department sometimes paid for the same
airline ticket twice when the CBAs were used.29 As part of our statistical
sample discussed later, we found 14 travel vouchers for which an airline
ticket purchased with a CBA was included on the voucher; however, the
traveler did not receive reimbursement for the claim.

Improper Premium-Class Travel

While DOD has taken actions to improve existing guidance and controls
related to premium-class travel, including system changes in DTS, we
identified instances in which unauthorized premium-class travel continues.
In November 2003, the Under Secretary of Defense for Personnel and
Readiness formed a task force to address our prior recommendations  30
that focused on three major areas: (1) policy and controls of travel
authorization, (2) ticket issuance and reporting, and (3) internal control
and oversight. Subsequently, several policy changes were made to improve
the control and accountability over premium-class travel. For example, the
approval level for first-class travel was elevated to a three-star general
and for business-class travel to a two-star general or civilian
equivalent. Other changes included strengthening the description of
circumstances when premium-class travel may be used to more clearly show
that it is an exceptional circumstance and not a common practice. In all
cases, AOs must have their own premium-class travel approved at the next
higher level. These changes also set a broad policy that CTOs are not to
issue premium-class tickets without proper authorization. In September
2004, the PMO-DTS made system changes to DTS that blocked eight fare codes
that were considered to be premium-class fare codes from being displayed
or selected by the traveler through DTS. According to the PMO-DTS, the
airline industry does not have standardized fare code indicators to
identify first-class, business-class, and economy-class. Subsequently, DOD
found that economy class fare codes were being blocked using the eight
codes and, in May 2005, reduced the list to three codes. According to
PMO-DTS officials, these three codes are consistently used among the
various airlines to designate premium-class travel.

Despite these various changes in policy and to DTS, we continue to
identify instances in which premium-class travel is occurring without the
proper authorization. Our analysis disclosed at least 68 cases that
involve improper premium-class travel.31 Table 1 presents a summary of our
analysis.

Table 1: Summary of Premium-Class Travel Analysis

                                        

  Defense      Potential    Improperly      Properly            No Documentation 
 component premium-class      approved      approved documentation  inconclusive 
                  travel                                  received 
                         premium-class premium-class               
                                travel        travel               
 Army                 93            46             4             4            39 
 Navy                 40            13             9             0            18 
 Air Force           157             9             0           131            17 
 DOD                 118             0             6           110             2 
 agencies                                                          
 Total               408            68            19           245            76 

Source: GAO analysis of DOD data.

DOD regulations require that authorization for premium-class
accommodations be made in advance of travel unless extenuating
circumstances or emergency situations make advance authorization
impossible. Further, consistent with the Federal Travel Regulation, DOD
restricts premium-class travel to one of the following eight
circumstances: (1) regularly scheduled flights between origin and
destination provide only premium-class accommodations, and this is
certified on the travel voucher; (2) coach class is not available in time
to accomplish the purpose of the official travel, which is so urgent it
cannot be postponed; (3) premium-class travel is necessary to accommodate
the traveler's disability or other physical impairment, and the condition
is substantiated in writing by competent medical authority; (4)
premium-class travel is needed for security purposes or because
exceptional circumstances make its use essential to the successful
performance of the mission; (5) coach-class accommodations on
authorized/approved foreign carriers do not provide adequate sanitation or
meet health standards; (6) premium-class accommodations would result in
overall savings to the government because of subsistence costs, overtime,
or lost productive time that would be incurred while awaiting coach-class
accommodations; (7) transportation is paid in full by a nonfederal source;
and (8) travel is to or from a destination outside the continental United
States, and the scheduled flight time is in excess of 14 hours.32 However,
a rest stop is prohibited when travel is authorized for premium-class
accommodations. Based upon the documentation provided by DOD, we found
that none of the 68 cases meet the above criteria or were approved at the
appropriate level.

Further, as shown in table 1, we were unable to ascertain if premium-class
travel occurred for 321 travel legs. For 245 travel legs, no documentation
was received, and for 76 travel legs, the documentation provided was
inconclusive. On numerous occasions, we requested that the DOD components
provide us with documentation, such as ticket stubs or travel itineraries,
to substantiate whether the travel legs were premium- or economy-class
travel. If the documentation indicated premium-class travel, we requested
that the proper authorization and justification be provided.33 At the end
of September 2005, the DOD components had not provided the requested
documentation for 245 travel legs. Therefore, we could not ascertain
and-more importantly-on the basis of the documentation provided, DOD is
not in position to determine, if the airfare was for premium-class or
economy-class travel.

Specific examples of the 68 instances of improperly approved premium-class
travel are highlighted below:

o A Navy senior Chief Petty Officer (E-8) flew from Norfolk via Detroit to
Seattle, Seattle to Los Angeles, drove from Los Angeles to San Diego, and
flew first class from San Diego via Detroit to Norfolk. The traveler
charged $1,578 on the government travel card for travel from Norfolk to
Seattle and San Diego to Norfolk, whereas GSA city pair fare was only
$359. Similarly, the traveler paid $298 to fly from Seattle to Los Angeles
compared to the GSA city pair fare of $149. The CTO remarked on the travel
authorization that it would not issue a first-class ticket without
properly approved documentation and the lowest government fare was $414.
The traveler submitted the travel voucher and the approving official
(civilian GS-9) approved the premium-class travel costs without
documentation of proper authorization from a premium-class approving
official. According to a Navy official, the traveler purchased his own
ticket at the airport. However, this has no bearing on the fact that
reimbursement was made without the proper authorization.

o A Department of the Army civilian employee (GS-12) flew from Columbia,
South Carolina, via Atlanta, Georgia, to Gulf Port, Mississippi, to attend
a conference. One leg of the return trip included a first-class flight.
From our review and analysis of Bank of America data and the travel
voucher, DOD paid $1,107 for the airfare. The cost of a GSA city pair
round trip airfare was $770. According to information provided by the
Army, the traveler informed the Army that he was meeting another traveler
at the destination; they were going to share a rental car; and there were
no seats available on the flight the other traveler had booked. Therefore,
the individual selected a flight arriving as close as possible to the time
of the traveler he was meeting. The justification provided by the traveler
is not in accordance with DOD's criteria. As a result, the premium-class
fare was not properly approved.

Fifty-eight of the 68 travel legs identified as premium-class travel were
for international travel, mostly intra-European flights. For 31 of the 58
travel legs, the CTOs claimed that these flights were the lowest
unrestricted fares available, and therefore it is not necessary to obtain
permission for premium-class travel. However, effective August 16, 2004,
paragraph U3125-B5.b of the Joint Federal Travel Regulations (JFTR) and
paragraph C2204-B.5.b of the Joint Travel Regulations (JTR) require the
approval of premium-class travel under these circumstances. More
specifically, the JFTR and JTR state that "When regularly scheduled
flights between the authorized origin and destination (including
connection) points provide only premium-class accommodations, the member
must certify these circumstances on the travel order attachment." In the
absence of specific authorization/approval from the designated authority,
the member is financially responsible for all additional costs resulting
from premium-class airline accommodations use. The 58 travel legs were
identified as business class and therefore should have been approved in
accordance with DOD's policy. However, the CTOs failed to notify the
traveler that these travel legs were coded business class, and therefore,
approval by higher authority was required. Unless the CTOs adhere to the
applicable policy, improperly approved premium-class travel will continue.
It is incumbent upon DOD to ensure that the CTOs are knowledgeable about
the department travel policies and that those policies are followed.

Unused Airline Tickets

DTS still does not have the capability to determine whether a traveler
does not use all or a portion of an airline ticket and obtain a refund as
required. To address this problem, DOD directed that all new CTO contract
solicitations require CTOs to prepare unused airline ticket reports which
identify tickets that were not used within a specified period, usually 30
days past the trip date, so that they can be canceled and processed for
refund. Additionally, the various DOD components were directed to modify
existing CTO contracts to require the CTOs to process refunds for unused
airline tickets. However, according to DOD officials, this requirement has
not yet been implemented in all existing CTO contracts.

At the five locations we visited,  34 each CTO was preparing the unused
airline ticket report; however, the frequency varied. The CTOs at the Army
and Air Force locations prepared the required report on a daily and
monthly basis, respectively. According to Army and Air Force officials,
the reports are prepared for each location currently using DTS. For the
third quarter of fiscal year 2005, the Army had unused airline tickets of
approximately $14 million, and the Air Force had about $2 million of
unused airline tickets submitted for refund. The Navy requires its CTO to
produce the unused ticket report on a weekly basis. Our review of the
Navy's unused airline ticket report for the week ended July 17, 2005,
indicated that the Navy was in the process of obtaining refunds of about
$800,000. The Marine Corps prepared unused airline ticket reports on a
monthly basis. For the third quarter of fiscal year 2005, the Marine Corps
had approximately $1.4 million in unused airline tickets refunded. Army,
Navy, and Marine Corps representatives stated that the reports prepared by
their CTOs also included dollar amounts that are the result of travelers
notifying the CTOs that all or a portion of their ticket was not used.
They could not ascertain the amount that related directly to the work of
the CTOs. According to Air Force personnel, the unused airline ticket
report only includes tickets that were found by the CTO and then canceled
and refunded.

Accuracy of Travel Voucher Reimbursements Questionable

DFAS has previously reported problems with the accuracy of DTS travel
payments. For the first quarter of fiscal year 2004, DFAS reported a 14
percent inaccuracy rate in the DTS travel payments of airfare, lodging and
meals, and incidental expenses. Our analysis of 170 travel vouchers
disclosed that for the two attributes that are directly related to the
operation of the DTS system-computation of lodging reimbursement and meals
and incidental expenses (per diem)-the DTS calculations were

correct in all instances on the basis of the information provided by the
traveler.35

However, we continue to identify numerous instances in which employee
errors led to inaccurate reimbursements. In some cases, errors occurred
because incorrect data were entered into DTS by the traveler. In other
cases, the reviews by the AO were inadequate. In regard to the AO reviews,
on the basis of our sample, we estimated that 18 percent of the travel
vouchers were paid even though there was not reasonable assurance that the
amount of the reimbursement was accurate.  36 Further, we estimated that
29 percent of the travel vouchers lacked adequate receipts for the amounts
claimed.37 Furthermore, for the 49 travel vouchers lacking receipts, we
saw no evidence that the AOs were provided with the appropriate receipts
by the traveler.

The JFTR and JTR state that receipts are required for all lodging expenses
regardless of amount and for all individual official travel expenses of
$75 or more. The receipt must show when specific services were rendered,
and the traveler must attach the required receipts to the travel voucher.

In one case, the traveler was reimbursed for expenses claimed in excess of
$500, even though none of the required receipts were available for review
and approval by the AOs. Additionally, we identified eight vouchers in
which the claims for reimbursement of rental car expenses were not in
accordance with DOD policy. The JFTR and JTR state that when rental car
usage is authorized for official business by the AOs, reimbursement is
authorized for rental car expenses, such as the rental costs, taxes and
local assessments on rental car users, gasoline, parking, road/tunnel
tolls, and any per-day administrative fee required by the rental car
agreements. When a compact rental car (the "standard" for TDY travel) does
not meet requirements, the AOs may authorize vehicles appropriate for the
mission. In all eight cases, we found that the traveler did not provide
justification for the non-compact rental cars and the AOs did not require
the justification to be documented in accordance with DOD policy.

The AO's review and approval of the traveler's voucher is intended to
ensure that only authorized, properly supported travel charges are
reimbursed and that the amounts are accurate and properly calculated. Our
analysis clearly indicates that DOD reimbursed travelers for amounts
claimed despite the lack of the required documentation. According to DOD
regulations, "the AO (s') signature on the expense report certifies that
the travel was taken, that the charges are reasonable . . . and that the
payment of the authorized expenses is approved." While the AO's signature
indicates that the payment is approved, it falls short of ensuring that
amounts claimed are reasonable in the cases in which receipts for airfare
and lodging are not provided. Further, inadequate reviews by the AO's
resulted in some travelers being reimbursed more than entitled and other
travelers having to pay for legitimate travel expenses out of their own
pockets.

DTS Faces Challenges in Making DTS a Standard DOD Travel System

DOD's goal of making DTS the standard travel system within the department
depends upon the development, testing, and implementation of system
interfaces with the myriad of related DOD systems, as well as
private-sector systems, such as the system used by the credit card company
that provides DOD military and civilian employees with travel cards. While
DOD has developed 31 system interfaces, the PMO-DTS is aware of at least
18 additional DOD business systems for which interfaces must be developed.
To date, DOD has reported that the development and testing of the system
interfaces has cost over $30 million. Developing the interfaces is time
consuming and costly. Additionally, the underutilization of DTS at the
sites where it has been deployed is also hindering the department's
efforts to have a standard travel system. Furthermore, the
underutilization affects the estimated savings that are to be derived from
the use of DTS departmentwide.

Interfaces Are Critical to Implementing an End-to-End System

One of DOD's long-standing problems has been the lack of integrated
systems. To address this issue and minimize the manual entry of data,
interfaces between existing systems must be developed to provide the
exchange of data that is critical for day-to-day operations. For example,
DTS needs to know before permitting the authorization of travel that
sufficient funds are available to pay for the travel-information that
comes from system(s) other than DTS-and once the travel has been
authorized, another system needs to know this information so that it can
record an obligation and provide management and other systems with
information on the funds that remain available. Interfaces are also needed
with private-sector systems, such as the system used by the credit card
company that provides DOD personnel with travel cards. Figure 4 identifies
the 36 DOD business systems for which the interfaces with DTS have already
been developed and implemented.

Figure 4: Current DTS System Interfaces

Figure 5 illustrates the additional 18 DOD business systems for which
interfaces with DTS must be developed in the future.

Figure 5: DTS System Interfaces That Need to Be Developed

While DOD was able to develop and implement interfaces with the 36
systems, the development of each remaining interface will present the
PMO-DTS with challenges. For example, the detailed requirements for each
of the remaining interfaces have not yet been defined. Such requirements
would define (1) what information will be exchanged and (2) how the data
exchange will be conducted. This is understandable in some cases, such as
for the Army General Fund Financial Enterprise

Resource Planning (ERP) system,38 which is a relatively new endeavor
within the department, so it will be some time before DOD is in position
to start development of the interface. Additionally, the development of
the DTS interfaces depends on other system managers achieving their time
frames for implementation. For example, the Navy ERP system is one of the
DOD systems with which DTS is to interface and exchange data. Any
difficulties with the Navy's ERP implementation schedule could adversely
affect DTS's interface testing and, thereby, result in a schedule slippage
for the interface's implementation. The above two factors also affect
DTS's ability to develop reliable cost estimates for the future
interfaces.

Interfaces with Private-Sector Systems Are Critical

Besides the DOD systems, DTS must also develop effective interfaces with
several private-sector systems. For example, DTS must interface with the
department's credit card provider and the four GDSs used by the various
CTOs that support DOD's travel activities. The information from the credit
card provider is used for such items as (1) supporting and automating the
CBA reconciliation process for credit card charges and (2) providing the
traveler with the credit card charges to assist in the preparation of the
travel voucher and the payment process. The interfaces with the four GDSs
are necessary since DTS must support the GDS that has been selected by a
CTO servicing a given DOD location. For example, CTO A has selected SABRE
as its GDS and services base A, while CTO B has selected Apollo as its GDS
and services base B. In order for DTS to properly display the reservation
information to personnel at base A, it must have a connection to SABRE,
while in order to perform the same function at base B, it must have a
connection to Apollo.

Further complicating DTS's operation is the fact that not all airlines use
a GDS. Fees are charged by the GDS for displaying and booking reservations
and to the CTO for making travel arrangements. Providing the travel
services directly to the traveler could eliminate these costs and is one
reason that some travel service providers have decided not to use a GDS.
According to DTS officials, the ability to directly connect travel service
suppliers and customers is being explored. For example, they are currently
negotiating with an airline to bring its flight and airfare information
into

DTS, rather than going through a GDS, by using an existing internet
technology commonly referred to as Web services.39

Underutilization of DTS Affects Estimated Savings

Another challenge in establishing DTS as a standard travel system within
DOD is the continued use of the existing legacy travel systems, which are
controlled and operated by the various DOD components. Currently, at least
31 legacy travel systems are continuing to be operated within the
department. As we have previously reported, because each DOD component
receives its own funding for the operation, maintenance, and modernization
of its own systems, there is no incentive for DOD components to eliminate
duplicative travel systems.40 We recognize that some of the existing
travel systems, such as the Integrated Automated Travel System version
6.0, cannot be completely eliminated because they perform functions, such
as permanent change of station travel claims that DTS cannot. However, in
other cases, the department is spending funds on duplicative systems that
perform the same functions as DTS. The funding of multiple systems that
perform the same functions is one of the reasons why the department has at
least 4,150 business systems.41 Since these legacy systems are not
controlled and operated by the PMO-DTS, it does not have the authority to
discontinue their operation.

Over the past several years, we have been critical of the department's
inability to effectively control its business systems investments.42 To
address this issue, the statutory requirements of the Ronald W. Reagan

National Defense Authorization Act for Fiscal Year 200543 are aimed at
improving the department's business systems management practices. The act
directs DOD to put in place a definite management structure responsible
for the control and accountability over business systems investments, by
establishing a hierarchy of investment review boards from across the
department, and directs that the boards use a standard set of investment
review and decision-making criteria to ensure compliance and consistency
with the department's business enterprise architecture. The continuation
of the status quo should not be tolerated. It is the investment review
boards' responsibility to ensure the funds are not being spent on the
legacy systems at those locations where DTS has been fully deployed.
Allowing such expenditures to occur will only perpetuate the current
parochialism and cultural resistance to change that is prevalent
throughout the department. We have previously reported that cultural
resistance and stovepiped operations have all contributed significantly to
the failure of previous attempts to implement broad-based management
reforms at DOD.44 The department has acknowledged that it confronts
decades-old problems deeply grounded in the bureaucratic history and
operating practices of a complex, multifaceted organization and that many
of these practices were developed piecemeal and evolved to accommodate
different organizations, each with its own policies and procedures.

Because of the continued operation of the legacy systems at locations
where DTS has been fully deployed, DOD components pay DFAS higher
processing fees for processing manual travel vouchers as opposed to
processing the travel vouchers electronically through DTS. According to an
April 13, 2005, memorandum from the Assistant Secretary of the Army
(Financial Management and Comptroller), DFAS was charging the Army $34 for
each travel voucher processed manually and $2.22 for each travel voucher
processed electronically-a difference of $31.78. The memorandum further
noted that for the period October 1, 2004, to February 28, 2005, at
locations where DTS had been deployed, the Army paid DFAS approximately $6
million to process 177,000 travel vouchers manually-$34 per travel
voucher, versus about $186,000 to process 84,000 travel vouchers
electronically-$2.22 per voucher. Overall, for this 5-month period, the
Army reported that it spent about $5.6 million more to process these
travel vouchers manually as opposed to electronically using DTS.

The military services have recognized the importance of utilizing DTS to
the fullest extent possible. The Army issued a memorandum in September
2004 directing each Army installation to fully disseminate DTS to all
travelers within 90 to 180 days after IOC at each installation. The
memorandum included a list of sites to which DTS should be fully
disseminated and the types of vouchers that must be processed through DTS.
Furthermore, the memorandum noted that travel vouchers that could be
processed in DTS should not be sent to DFAS for processing. In a similar
manner, in February 2005, the Marine Corps directed that upon declaration
of DTS's IOC at each location, commands will have DTS fully fielded within
90 days and will stop using other travel processes that DTS has the
capability to process. The Air Force issued a memorandum in November 2004
that stressed the importance of using DTS when implemented at an
installation. The Navy issued a similar directive in June 2005.

Despite these messages, DTS remains underutilized by the military
services. Some of the military services, and in particular, the Army, have
taken steps to monitor DTS's usage, but others, such as the Marine Corps,
do not capture the data necessary to assess the extent to which DTS is
being underutilized. The lack of pertinent data hinders management's
ability to monitor its progress toward the DOD vision of DTS as the
standard travel system. Until DOD develops and implements an effective
strategy for overcoming resistance, parochialism, and stovepiped
operations, transformation efforts, as envisioned by the 1995 task force
report, will not be successful and the department will be faced with the
continued proliferation of numerous business systems that are
nonintegrated, duplicative, and waste limited resources.

Additional Actions Can Be Taken to Streamline DOD Travel Process

In its 1995 report, the DOD Task Force to Reengineer Travel noted that the
existing process was complex and imposed exorbitant administrative costs
on DOD to ostensibly ensure that travel funds are not wasted. The task
force concluded that the DOD travel system focused on (1) compliance with
rigid rules rather than on performance of the mission, (2) outmoded travel
practices, and (3) a nonintegrated travel system and that the department
needed to address these problems. While DTS has reduced some of the
administrative burden, other opportunities exist to further achieve the
vision of a travel system that reduces the administrative burden and cost
while supporting DOD's mission. While some of the opportunities could be
implemented by DOD policy changes, others will require coordination with
other organizations such as IRS. Examples of the possible changes in DOD's
travel management practices include the following:

o automating approval of changes to authorized travel expenses;

o utilizing commercial databases to identify unused airline tickets and
obtain refunds;

o simplifying display of flights;

o utilizing airfares other than the GSA city pair fares, where cost
effective; and

o using automated methods to reduce hard copy receipt requirements.

Automating Approval of Changes to Authorized Travel Expenses

The current business process used by DTS designates the traveler's
supervisor as the AO responsible for authorizing travel and then approving
the travel voucher and making sure the charges are appropriate after the
travel is complete. Furthermore, should the actual expenses claimed on the
travel voucher differ from the authorized estimate of expenses, the AO is
required to approve these deviations as well. For example, if the
estimated costs associated with the travel authorization are $500 and the
actual expenses are $495, then the AO must specifically approve the $5
difference. If the difference is caused by two different items, then each
item must be approved. Similarly, if the actual expenses are $505, then
the AO must specifically approve this $5 increase. This policy appears to
perpetuate one of the problems noted in the 1995 DOD report-compliance
with rigid rules rather than focusing on the performance of the mission.

One practice that could be used to reduce the administrative burden on the
traveler and the AO is to automatically make the adjustments to the travel
claim when the adjustments do not introduce any risk or the cost of the
internal control outweighs the risk. For example, processing a travel
claim that is less than the amount authorized does not pose any more risk
than processing a travel claim that equals the authorized amount since the
key is whether the claim is valid rather than whether the amount equals
the funding initially authorized and obligated in the financial management
system. The concept of using tolerances and making accounting entries is
discussed in the Exposure Draft: Core Financial System Requirements that
was published by the Office of Federal Financial Management.45 These
requirements were also contained in the previous document issued by the
Joint Financial Management Improvement Program in November 2001.46

Using Commercial Databases to Identify Unused Airline Tickets

We have previously reported that DOD has not recovered millions of dollars
in unused airline tickets.47 As discussed previously, one action that DOD
is taking to address the problem is requiring the CTOs to prepare reports
on the unused airline tickets. While this action is a positive step
forward, it requires (1) the CTOs to have an effective system of
performing this function and (2) DOD to have an effective program for
monitoring compliance.

A third party service, commonly referred to as the Airlines Reporting
Corporation (ARC),48 may provide DOD with the necessary information to
collect unused airline tickets in an automated manner. DTS officials have
stated that they have had discussions with ARC, but were uncertain of the
cost of obtaining and utilizing the data provided by ARC. If the
information from ARC was utilized, DOD would not have to rely on the
reports prepared by the CTOs and would be able to avoid the costs
associated with preparing the unused airline ticket reports. According to
DOD officials, this requirement has not yet been implemented in all the
existing CTO contracts, and therefore, the total costs of preparing the
unused airline ticket reports is not known.

Besides using ARC for the unused airline tickets, DOD could use the
information from ARC to provide assurances that the airfares claimed by
travelers are correct. A case in point is an example we found in our
review of premium-class travel. Since the ticket was obtained through a
transaction outside of DTS, it was not included in the results previously
discussed. We found that an Air Force senior executive purchased an
airline ticket from Albuquerque, New Mexico to Europe with stopovers in
France, Great Britain, Denmark, and Germany. He originally purchased a
round-trip airline ticket using his government travel card for $3,159. The
traveler then exchanged the ticket at an airport and received a $1,303
credit on the government travel card. We examined Bank of America data and
confirmed that a refund of $1,303 was posted to the account. While in
Munich, Germany, the traveler exchanged the ticket again and was charged
an additional $515. The total airfare cost for this part of the trip was
$2,371; however, the traveler submitted a voucher claiming the original
estimated cost of $3,159 and included a handwritten receipt. The approving
official approved the travel voucher, and the traveler was reimbursed
$3,159, an overpayment of $788. Additionally, the traveler purchased an
airfare ticket in Copenhagen to fly to Hamburg, and we found that the
traveler submitted a receipt and requested a reimbursement of $628, even
though Bank of America showed that ticket cost only $523-a potential
overpayment of $105. As a result of these various transactions the
traveler was potentially improperly reimbursed at least $893.

Since ARC maintains ticketing data, such as passenger name, ticket number,
flight information, and fees paid for over 3 years, access to ARC would
allow DOD to obtain the entire history of refunds and exchanges associated
with a given ticket number. This information would permit DOD to not only
identify unused airline tickets, but also unreported refunds such as those
in the previous example. Since ARC is the organization that assigns
tickets numbers, DOD could easily query the trips of interest. Under this
concept, DOD could take the ticket numbers and query ARC to validate that
the (1) ticket had been used and (2) ultimate price paid for the ticket
after any refunds. Any tickets associated with trips that had been
completed but not yet used would be identified in this process, which
would allow DOD to begin taking the necessary actions to ensure it
received the reimbursement for the portion of the unused airline ticket.
This information would also be useful in identifying refunds provided to
travelers that were not shown on the travel vouchers.

Simplify the Display of Flights

The current DTS business rules require the system to display multiple
airfares for the same flight. DTS displays airfares in the following
order, if seats are available on a given flight:

o GSA city pair fares with capacity limits,49

o GSA city pair fares,50 and

o other unrestricted fares-if GSA city pair fares are not available on
that flight.

Following the above criteria, for a flight from Washington, D.C. (Ronald
Reagan National Airport), to Dallas/Fort Worth, the GSA city pair fare
with capacity limits, which is $188,51 would be shown along side the GSA
city pair fare of $341, assuming that seats were available for both fares.
We believe that the process could be simplified if only the lowest
available airfare was displayed-in this case, $188. Using the above
flight, DTS should only display the GSA city pair fare with capacity
limits for the given flight, if seats are available, since it was the
lowest-cost unrestricted airfare, rather than showing both fares.
Furthermore, if a lower unrestricted fare was available, that fare, rather
than the GSA city pair fare, should be shown. This approach would be in
accordance with the GSA city pair program since it allows for other
unrestricted fares to be accepted when the selected airfare is (1) lower
than the GSA city pair fare and (2) available to the general public.
Implementation of this change would require DTS to change its business
process. Currently, if travelers have to change their flights and the
fares are not the same, they have to go through the approval process
because it necessitates change in the amount of funds obligated to pay for
the flights. In reality, approving an airfare change from a GSA city pair
fare with capacity limits to a GSA city pair fare should be "automatic"
since a GSA city pair flight and airfare were being used and this airfare
could have been selected by the traveler when the travel authorization was
originated. Additionally, the automatic approval of such an increase would
help alleviate concerns the travelers may have about amending travel
authorization while in a travel status.

Utilizing Restricted Airfares Where Cost Effective

DOD's business rules and the design of DTS provide that only unrestricted
airfares should be displayed. However, adopting a "one size fits all"
policy does not provide an incentive to the traveler to make the best
decision for the government, which was one of the stated changes
documented in the 1995 DOD report. Other airfares, generally referred to
as restricted airfares, may be less expensive than a given GSA city pair
fare and other unrestricted airfares. However, as the name implies, these
fares come with restrictions. For example, within the GSA city pair fare
program, changes can be made in the flight numerous times without any
additional cost to the government. Generally, with restricted airfares
there is a fee for changing flights.52

The Federal Travel Regulation and DOD's JFTR and JTR allow travelers to
take restricted airfares, including on those airlines not under the GSA
city pair contract, if the restricted airfare costs less to the
government. However, DOD's regulations do not address reimbursement above
the applicable unrestricted airfare if that charge was incurred for the
convenience of the government. For example, assume that the GSA city pair
rate between city A and city B was $300 and a traveler selected a
restricted airfare for $250. If the traveler incurred a $35 change fee for
personal reasons, then the traveler would be allowed to claim for
reimbursement the $35 fee since the total price of the ticket ($285) was
less than the GSA city pair fare. On the other hand, if the traveler
incurred a $70 fee and the change was for the convenience of the
government, it is not clear under DOD's regulations that the traveler
would receive

reimbursement for the entire $320.53 Furthermore, even if the traveler
felt certain that no changes would be required, DTS does not display
restricted air fares. Additionally, at the present time, DOD does not have
quantifiable information available that can be used to ascertain if the
use of restricted airfares would be advantageous to the department.

Adopting a standard policy of using one type of airfare-unrestricted or
restricted-is not the most appropriate approach for DOD to follow. A
better approach would be to establish guidance on when unrestricted and
restricted airfares should be used and then monitor how that policy is
implemented. For example, travelers could be instructed to select
restricted airfares when (1) the certainty of the trip occurring is highly
probable, (2) the cost differential between unrestricted and restricted
airfare would cover the costs of at least one change fee, and (3) the
restricted airfare meets mission requirements. Once these business rules
were defined, DTS could be modified to incorporate them into its displays
of available flights, which would assist the traveler in identifying
restricted airfares that may be of interest and in compliance with DOD
guidance. Although development of the guidance is an important first step,
management also needs to determine (1) whether the policy was being
followed and (2) what changes are needed to make it more effective. For
example, a periodic review of the change fees associated with restricted
airfares could be made to determine such items as (1) whether, after
consideration of these fees, savings were accruing to the department and
(2) if the change fees were significant, the reasons for those change
fees. Since DTS could be modified to capture the change fees as a separate
expense item, such quantifiable data would assist in this analysis.

Using Automated Methods to Reduce Hard Copy Receipt Requirements

While receipts provide valuable information that is necessary to validate
claims, as noted in our sample results, the omission of receipts was a
significant problem in our review of the travel vouchers. In some cases,
DOD may be able to change its policy and reduce the number of receipts
required and the associated administrative burden without adversely
affecting its ability to ensure a claim is proper. However, in some cases,
IRS regulations mandate that DOD obtain receipts. For example, IRS has
prescribed certain guidelines relating to the requirement for receipts
associated with travel expenses.54 In this regard, receipts are not
required for expenses less than $75 (except for lodging) and
transportation expenses where receipts are not readily available.55

Automated methods could be used to reduce the number of receipts that the
traveler is currently required to provide without compromising internal
controls. Currently, a DOD traveler is required to provide a copy of the
receipt associated with the airline ticket, except when the ticket is
purchased via the CBA. However, adequate information may be available from
automated sources that would provide at least the same degree of assurance
as the receipts. Specifically, when the airline ticket is acquired using a
government credit card, the appropriate information is available from the
credit card company in an automated form that can be used to validate the
claim on the voucher. Besides the airline tickets, information on the
government charge card could also be used to validate the claim for
reimbursement for travel fees paid to the CTO and fuel charges.
Furthermore, if DOD gained access to the information contained in ARC as
discussed previously, then this information could be used to further
support the costs associated with the travel claim.

Other automated methods that may be able to produce reasonable assurance
of the claim may require consultation with IRS. For example, IRS requires
that lodging expenses be supported by receipts showing (1) the name and
location of the hotel; (2) the dates the employee stayed there; and (3)
separate amounts for charges such as lodging, meals, and telephone
calls.56 In the case of federal travel, such information is critical to
determining whether the individual is receiving duplicate reimbursement.
For example, if the employee was reimbursed $70 for lodging expenses,
which included a $5 meal, then that employee could be compensated for the
meal twice-once under the per diem allowance paid and then again under the
lodging expenses. The information currently displayed by the government
charge card vendor does not provide this level of detail. However, other
automated techniques may provide reasonable assurance that the objective
of not paying expenses twice is achieved. Conceptually, using data-mining
techniques,57 an entity could achieve reasonable assurance that the claims
for lodging were reasonable and did not include duplicate charges. The
following is one conceptual approach that could be used.

o DTS knows (1) the dates the employee claimed lodging expenses, (2) the
amount of lodging expenses claimed each day, and (3) the location where
those expenses should have been incurred.58 Also, assuming that the
lodging was booked through DTS, it knows the rate that is expected to be
paid.

o The government charge card system knows the (1) transaction date of the
payment made to the lodging provider, (2) total amount paid, (3) name of
lodging provider, and (4) location of lodging provider (city, state, and
zip code).

o Comparison of data from DTS and the government charge card would
indicate whether the claim for lodging costs was greater than or equal to
the amount claimed on the travel voucher, which would provide reasonable
assurance that the costs had been incurred.

o Although the comparison of the DTS information to the charge card
information would provide reasonable assurance that the charges claimed
were actually incurred, it would not provide reasonable assurance that the
costs claimed did not include duplicate charges. Reasonable assurance that
the amounts actually claimed represented the actual charges for those
items can be obtained by using the data already captured (or available)
through two methods. First, since DTS knows the travel claims for a large
number of individuals, it will have a high probability of knowing (1) the
lodging expenses incurred by others at that facility and (2) the
applicable tax rate for lodging associated with a given zip code. For
example, if 10 travelers stay within a given zip code and the tax rate is
5 percent, then it is reasonable to expect that another claim in that zip
code with a 5 percent tax rate is reasonable. Second, it may be possible
to compare the rate claimed by multiple individuals at a given facility
even though those individuals may not have been associated with the trip
or stayed at the facility on the same day. For example, if 5 travelers
stayed at hotel A during a 6-month period and all of them claimed the same
for lodging and taxes, then it would be reasonable to assume that this
figure was the actual amount paid. Using these techniques, anomalies could
be detected.

The term "reasonable assurance" is important because no matter how well
designed and operated, an internal control system cannot provide absolute
assurance that agency objectives will be met. Furthermore, an important
concept in internal control considerations is the relationship between
costs and benefits.59 Because techniques and technology may allow DOD to
achieve the reasonable assurances needed by IRS that, in effect, require
DOD to obtain lodging and similar receipts, DOD could explore with IRS
acceptable approaches for reducing the number of receipts required for the
paper-based receipt process. Reducing the need for paper receipts would
also reduce the administrative burden on the travelers and the AOs and the
costs incurred by DOD for capturing and storing these receipts.

Conclusions

Overhauling DOD's financial management and business operations-one of the
largest and most complex organizations in the world-represents a daunting
challenge. DTS, intended to be the department's end-to-end travel
management system, illustrates some of the obstacles that must be overcome
by DOD's array of transformation efforts. With over 3.3 million military
and civilian personnel as potential travel system users, the sheer size
and complexity of the undertaking overshadows any such project in the
private sector. Nonetheless, standardized business systems across the
department will be the key to achieving billions of dollars of annual
savings through successful DOD transformation. As we have previously
reported, because each DOD component receives its own funding for the
operation, maintenance, and modernization of its own systems,
nonintegrated, parochial business systems have proliferated-4,150 business
systems throughout the department by a recent count. The elimination of
stovepiped legacy travel systems and cheaper electronic processing, which
could be achieved with the successful implementation of DTS, is critical
to realizing the anticipated savings. Further, opportunities exist to
streamline the department's overall travel management practices thereby
reducing the administrative burden and cost without affecting internal
controls and, in some cases, improving internal controls over the
department's travel management practices.

Recommendations for Executive Action

To improve the department's management and oversight of DTS and streamline
its administrative process for travel, we recommend that the Secretary of
Defense take the following 10 actions:

o direct the PMO-DTS to effectively implement the disciplined processes
necessary to provide reasonable assurance that (1) requirements are
properly documented and (2) requirements are adequately tested;

o direct the PMO-DTS to properly test new or modified system interfaces so
that the intended functionality is properly operating prior to a software
update being provided to DTS users;

o direct the PMO-DTS to require that all CTOs adhere to the department's
policy on the use of premium-class travel, even in those instances where
it is listed as the only available airfare;

o direct the Secretaries of the Army, Navy, and Air Force, as well as the
heads of all DOD agencies, to reemphasize that travelers are to justify
exceptions from department policy and the importance of the authorizing
officials not approving any travel authorization in which exceptions are
not properly justified;

o direct the Secretaries of the Army, Navy, and Air Force, as well as the
heads of all DOD agencies, to routinely monitor, such as on a quarterly
basis, information on the number and cost of processing travel vouchers
outside of DTS and initiate action to eliminate funding for legacy
systems, where applicable;

o direct the PMO-DTS to develop and implement the means to automate the
approval of changes to authorized travel expenses where possible;

o direct the PMO-DTS to consider the viability of using commercial
databases to identify unused airline tickets, for which reimbursement
should be obtained and help improve the assurance that the actual travel
taken was consistent with the information shown on the travel voucher;

o direct the PMO-DTS to consider simplifying the display of airfares in
DTS;

o direct the PMO-DTS to determine the feasibility of utilizing restricted
airfares, where cost effective; and

o direct the PMO-DTS to work with IRS to develop an approach that will
permit the use of automated methods to reduce the need for hard copy
receipts to satisfy requirements to substantiate travel expenses.

Agency Comments and Our Evaluation

We received written comments on a draft of this report from the Director,
DFAS, which are reprinted in appendix II. DOD concurred with all our
recommendations and identified actions it plans to take to improve the
department's management and oversight of DTS and streamline its
administrative travel process. For example, DOD stated that it will
continuously monitor and adjust its processes to ensure requirements are
properly documented and tested. Additionally, DOD noted that the PMO-DTS
will incorporate system and travel review changes to ensure CTOs are
following departmental policy by periodically reviewing premium-class
travel authorizations. DOD's comments also noted that the department will
consider the use of commercial databases to identify unused airline
tickets for which reimbursement should be obtained. DOD noted that this
effort could be expanded governmentwide through ongoing collaborative
efforts with GSA.

We are sending copies of this report to the Secretary of Defense; Under
Secretary of Defense (Comptroller); the Under Secretary of Defense
(Acquisition, Technology and Logistics); and the Director, Office of
Management and Budget. Copies of this report will be made available to
others upon request. In addition, the report is available at no charge on
the GAO Web site at http://www.gao.gov . If you or your staff have any
questions on matters discussed in this report, please contact McCoy
Williams at (202) 512-6906 or [email protected] or Keith A. Rhodes at
(202) 512-6412 or [email protected] . Contact points for our Offices of
Congressional

Relations and Public Affairs may be found on the last page of this report.
Key contributors to this report are listed in appendix III.

McCoy Williams Director Financial Management and Assurance

Keith A. Rhodes Chief Technologist Applied Research and Methodology Center
for Engineering and Technology

List of Congressional Addressees

The Honorable John Warner Chairman The Honorable Carl Levin Ranking
Minority Member Committee on Armed Services United States Senate

The Honorable Ted Stevens Chairman The Honorable Daniel Inouye Ranking
Minority Member Subcommittee on Defense Committee on Appropriations United
States Senate

The Honorable Susan Collins Chairman The Honorable Joseph Lieberman
Ranking Minority Member Committee on Homeland Security and Governmental
Affairs United States Senate

The Honorable Charles Grassley Chairman Committee on Finance United States
Senate

The Honorable Norm Coleman Chairman Permanent Subcommittee on
Investigations Committee on Homeland Security and Governmental Affairs
United States Senate

The Honorable Tom Coburn Chairman The Honorable Thomas Carper Ranking
Minority Member Subcommittee on Federal Financial Management, Government 
Information, and International Security Committee on Homeland Security and
Governmental Affairs United States Senate

The Honorable Mark Dayton United States Senate The Honorable Duncan Hunter
Chairman The Honorable Ike Skelton Ranking Minority Member Committee on
Armed Services House of Representatives

The Honorable C. W. Bill Young Chairman The Honorable John Murtha Ranking
Minority Member Subcommittee on Defense Committee on Appropriations House
of Representatives

The Honorable Tom Davis Chairman The Honorable Henry Waxman Ranking
Minority Member Committee on Government Reform House of Representatives

The Honorable William Lacy Clay House of Representatives

The Honorable Paul Kanjorski House of Representatives

The Honorable Edolphus Towns House of Representatives

Scope and Methodology Appendix I

To determine if the Department of Defense (DOD) effectively tested key
Defense Travel System (DTS) functionality associated with flights and
airfares, we reviewed two key DTS flight-related requirements and the
related testing to determine if the desired functionality was effectively
implemented.

To determine if DTS will correct the problems previously identified with
DOD travel, we analyzed past GAO reports and testimonies, selected Defense
Finance and Accounting Service (DFAS) reports, and DOD congressional
testimonies. In this regard, we focused on how DTS addresses issues
related to premium-class travel, unused tickets, and centrally billed
accounts (CBA) and the accuracy of claims for travel reimbursement. More
specifically, to determine if DTS will correct the weaknesses related to
premium-class travel, we

o identified and tested all individually billed account (IBA) and CBA
premium-class travel transactions processed by DTS for the first quarter
of fiscal year 2005 (October through December 2004) for proper approval
and justification and

o obtained an understanding of the process to purchase properly approved
and justified premium-class travel through DTS, and of the controls in DTS
to prevent a traveler from purchasing premium-class travel without proper
approval.

To assess the use of premium-class travel for IBA, we obtained from Bank
of America a database of fiscal year 2005 first quarter (October through
December 2004) air travel transactions charged to IBA accounts. The
database contained transaction specific information, such as the price of
the ticket, ticket number, name of passenger, date and destination of
travel, and service code (first, business, or coach class seating
accommodations). We also obtained from the Project Management
Office-Defense Travel System (PMO-DTS) a database containing all vouchers
processed by DTS for the same time period. We extracted all unique Social
Security Numbers (SSN) from the PMO-DTS database and compared the
information with the data from Bank of America. This comparison resulted
in the identification of the IBA transactions that could be potential
premium-class airline tickets. We eliminated all airfare charges that were
less than $200, which created a listing of 380 potential premium-class
travel IBA charges. In those instances in which there was insufficient
information in DTS to ascertain if a premium-class airline ticket had been
purchased, we requested additional information from the military services,
such as travel itinerary or ticket stub providing information on the class
of service (economy, business, first) purchased. We reviewed the travel
authorization and all supporting documentation to determine the class of
service provided and determined if there was proper approval and
justification for premium-class travel.

To ascertain if the CBAs were being used for the purchase of premium-class
travel, we followed the same methodology used in reviewing IBAs. Our
comparison resulted in the identification of 244 potential CBA
premium-class travel transactions. The CBA listing only contained the
travelers' names and not their respective SSNs, therefore we requested
additional information from the military services. In performing our
analysis of the IBA and CBA, besides the $200 criteria mentioned above, we
also eliminated all airfare transactions that were not processed through
DTS or that we determined were economy-class airfare transactions. This
process resulted in the identification of potentially 419 transactions in
which a premium-class ticket could have been issued.

To address the issue of unused airline tickets, we discussed with the
PMO-DTS specific actions that were being taken and visited five locations1
to ascertain if the commercial travel offices were preparing the unused
airline ticket reports. In regard to the duplicate payment for airline
tickets purchased through the CBA, we reviewed DTS controls to ascertain
if they were designed to ensure that tickets purchased through the CBA
cannot be claimed on an individual's travel voucher as a reimbursement to
the traveler.

To test for the accuracy of travel voucher reimbursements, we utilized the
DTS database previously mentioned covering the first quarter of fiscal
year 2005. From this database, we extracted all temporary duty travel
vouchers where the travel occurred from October 1, 2004 to December 31,
2004. We assumed a 10 percent rate of control violations, and we desired a
precision of +/- 5 percentage points at the 95 percent confidence level.
These parameters, along with an assumed 80 percent response rate, led to a
sample size of 173 travel vouchers.2 Because we followed a probability
procedure based on random selections, our sample is only one of a large
number of samples that we might have drawn. Since each sample could have
provided different estimates, we express the precision of our particular
sample's results as a 95 percent confidence interval (e.g., plus or minus
5 percentage points). This is the interval that would contain the actual
population value for 95 percent of the samples we could have drawn. As a
result, we are 95 percent confident that each of the confidence intervals
in this report will include the true values in the study population.

To identify some of the challenges confronting DOD in making DTS the
department's standard travel system, we discussed with PMO-DTS officials
their implementation strategy and reviewed past GAO reports and
testimonies related to the department's efforts to improve the accuracy
and reliability of the information in its business systems. Additionally,
we analyzed data on the number of systems interfaces that have been
developed and implemented to date and those that need to be developed in
the future. We also discussed with the PMO-DTS some of the specific
actions that could be taken to further streamline the department's travel
management practices. In this regard, we reviewed past GAO reports that
discuss specific actions agencies can take to streamline their respective
travel management practices.

We assessed the reliability of the DOD data used for our audit by (1)
performing electronic testing of required data elements, (2) reviewing
existing information about the data and the system that produced them, and
(3) interviewing agency officials knowledgeable about the data. We
determined that the data were sufficiently reliable for the purpose of
this audit. We performed our audit work from October 2004 through October
2005 in accordance with U.S. generally accepted government auditing
standards.

We requested comments on a draft of this report from the Secretary of
Defense or his designee. We received written comments from the Director,
DFAS, which are reprinted in appendix II.

Comments from the Department of Defense Appendix II

GAO Contacts and Staff Acknowledgments Appendix III

McCoy Williams, (202) 512-6906 or [email protected] Keith A. Rhodes,
(202) 512-6412 or [email protected]

In addition to the above contacts, the following individuals made key
contributions to this report: Darby Smith, Assistant Director; J.
Christopher Martin, Senior Level Technologist; F. Abe Dymond, Assistant
General Counsel; Beatrice Alff; Francine DelVecchio; Thomas Hackney;
Gloria Hernandez-Saunders; Wilfred Holloway; Jason Kelly; Sheila Miller;
Robert Sharpe; Patrick Tobo; and Adam Vodraska.

Related GAO Products

Army National Guard: Inefficient, Error-Prone Process Results in Travel
Reimbursement Problems for Mobilized Soldiers. GAO-05-400T . Washington,
D.C.: March 16, 2005.

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

DOD Travel Cards: Control Weaknesses Led to Millions of Dollars of
Improper Payments. GAO-04-576 . Washington, D.C.: June 9, 2004.

DOD Travel Cards: Control Weaknesses Led to Millions in Fraud, Waste, and
Improper Payments. GAO-04-825T . Washington, D.C.: June 9, 2004.

DOD Travel Cards: Control Weaknesses Led to Millions of Dollars Wasted on
Unused Airline Tickets. GAO-04-398 . Washington, D.C.: March 31, 2004.

Travel Cards: Internal Control Weaknesses at DOD Led to Improper Use of
First and Business Class Travel. GAO-04-229T . Washington, D.C.: November
6, 2003.

Travel Cards: Internal Control Weaknesses at DOD Led to Improper Use of
First and Business Class Travel. GAO-04-88 . Washington, D.C.: October 24,
2003.

(192146)

www.gao.gov/cgi-bin/getrpt? GAO-06-18 .

To view the full product, including the scope

and methodology, click on the link above.

For more information, contact McCoy Williams at (202) 512-6906 or Keith
Rhodes at (202) 512-6412.

Highlights of GAO-06-18 , a report to congressional addressees

January 2006

DOD BUSINESS TRANSFORMATION

Defense Travel System Continues to Face Implementation Challenges

The Department of Defense (DOD) has been working to develop and implement
a standard end-to-end travel system for the last 10 years. Over the past
several years numerous GAO reports and testimonies have highlighted
problems with DOD's travel practices that resulted in wasteful spending of
millions of dollars. In response, the department has noted that the
Defense Travel System (DTS), in part, will help correct these problems.
Because of the widespread congressional interest in DTS, GAO initiated the
audit under the statutory authority of the Comptroller General of the
United States. The objectives of the audit were to (1) determine if DOD
effectively tested key DTS functionality, (2) ascertain if DTS will
correct the weaknesses previously identified, (3) identify the challenges
that remain, and (4) identify opportunities to streamline DOD's travel
process.

What GAO Recommends

GAO is making 10 recommendations to DOD, including the following: (1)
properly test new or modified system interfaces, (2) obtain data on
utilization of DTS, and (3) streamline DOD's travel management practices.
DOD concurred with all of the recommendations and described its efforts to
address them.

DTS development and implementation have been problematic, especially in
the area of testing key functionality to ensure that the system will
perform as intended. Consequently, critical flaws have been identified
that resulted in significant schedule slippages between the planned and
actual system deployment, as shown below.

DTS Schedule Slippages

GAO's recent analysis of selected requirements related to DTS's
reservation module disclosed that system testing was ineffective in
ensuring that the promised capability has been delivered as intended. For
example, GAO found that DOD did not have reasonable assurance that DTS
properly displayed flight and airfare information. This problem was not
detected prior to deployment, since DOD failed to properly test system
interfaces.

While DTS has corrected some of the previously reported travel problems,
others remain. Specifically, DTS has resolved the problem related to
duplicate payment for airline tickets purchased with the centrally billed
accounts. However, problems remain related to improper premium-class
travel, unused tickets that are not refunded, and accuracy of travelers'
claims. These remaining problems cannot be resolved solely within DTS and
will take departmentwide action to address.

GAO also identified two key challenges facing DTS in becoming DOD's
standard travel system: (1) developing needed interfaces and (2)
underutilization of DTS at sites where it has been deployed. While DTS has
developed 36 interfaces with various DOD business systems, it will have to
develop interfaces with at least 18 additional systems-not a trivial task.
Additionally, the continued use of the existing legacy travel systems
results in underutilization of DTS and affects the savings that DTS was
planned to achieve. Furthermore, GAO has identified concepts that the
department can adopt to streamline its travel management practices.
*** End of document. ***