Defense Travel System: Overview of Prior Reported Challenges
Faced by DOD in Implementation and Utilization (15-APR-08,
GAO-08-649T).
In 1995, the Department of Defense (DOD) began an effort to
implement a standard departmentwide travel system, the Defense
Travel System (DTS). This testimony is based on previously issued
GAO reports and testimonies that highlighted challenges
confronted by DOD in the implementation of DTS. More
specifically, today's testimony focuses on prior GAO reporting
concerning (1) the lack of quantitative metrics to measure the
extent to which DTS is actually being used, (2) weaknesses with
DTS's requirements management and system testing, and (3) two key
assumptions related to the estimated cost savings in the
September 2003 DTS economic analysis were not reasonable. Today's
testimony also highlights some actions that DOD could explore to
help streamline its administrative travel processes such as using
a commercial database to identify unused airline tickets.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-08-649T
ACCNO: A81698
TITLE: Defense Travel System: Overview of Prior Reported
Challenges Faced by DOD in Implementation and Utilization
DATE: 04/15/2008
SUBJECT: Airlines
Cost analysis
Cost effectiveness analysis
Data collection
Data integrity
Defense appropriations
Defense cost control
Defense economic analysis
Defense procurement
Economic analysis
Financial management
Interagency relations
Military forces
Military personnel
Program evaluation
Program management
Reporting requirements
Requirements definition
Standards evaluation
Systems conversions
Systems testing
Travel
Travel costs
Official travel
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-08-649T
* [1]Summary
* [2]Background
* [3]DTS Faced Numerous Challenges
* [4]Streamlining DOD Travel Processes
* [5]Concluding Remarks
* [6]Contacts and Acknowledgments
* [7]GAO's Mission
* [8]Obtaining Copies of GAO Reports and Testimony
* [9]Order by Mail or Phone
* [10]To Report Fraud, Waste, and Abuse in Federal Programs
* [11]Congressional Relations
* [12]Public Affairs
This is the accessible text file for GAO report number GAO-08-649T
entitled 'Defense Travel System: Overview of Prior Reported Challenges
Faced by DOD in Implementation and Utilization' which was released on
April 16, 2008.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as part
of a longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to [email protected].
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
Testimony:
Before the Subcommittee on Oversight and Investigations, Committee on
Armed Services, House of Representatives:
United States Government Accountability Office:
GAO:
For Release on Delivery:
Expected at 3:00 p.m. EDT:
Tuesday, April 15, 2008:
Defense Travel System:
Overview of Prior Reported Challenges Faced by DOD in Implementation
and Utilization:
Statement of McCoy Williams:
Managing Director Financial Management and Assurance:
GAO-08-649T:
GAO Highlights:
Highlights of GAO-08-649T, a testimony before the Subcommittee on
Oversight and Investigations, Committee on Armed Services, House of
Representatives.
Why GAO Did This Study:
In 1995, the Department of Defense (DOD) began an effort to implement a
standard departmentwide travel system, the Defense Travel System (DTS).
This testimony is based on previously issued GAO reports and
testimonies that highlighted challenges confronted by DOD in the
implementation of DTS. More specifically, today�s testimony focuses on
prior GAO reporting concerning (1) the lack of quantitative metrics to
measure the extent to which DTS is actually being used, (2) weaknesses
with DTS�s requirements management and system testing, and (3) two key
assumptions related to the estimated cost savings in the September 2003
DTS economic analysis were not reasonable. Today�s testimony also
highlights some actions that DOD could explore to help streamline its
administrative travel processes such as using a commercial database to
identify unused airline tickets.
What GAO Found:
Overhauling the department�s antiquated travel management practices and
systems has been a daunting challenge for DOD. In several prior reports
and testimonies, GAO identified several key implementation issues
regarding DOD�s ability to make DTS the standard travel system for the
department. Specifically, GAO reported that DTS was not being used to
the fullest extent possible, and DOD lacked comprehensive data to
effectively monitor its utilization. At the time of GAO�s 2006 review,
DOD�s utilization data were based on a model that was developed in
calendar year 2003. However, the model had not been completely updated
to reflect actual DTS usage at that time. The lack of up-to-date
utilization data hindered management�s ability to monitor progress
toward the DOD vision of DTS as the standard travel system.
Additionally, the continued use of the department�s legacy travel
systems resulted in the underutilization of DTS and adversely affected
the expected savings that DTS could achieve.
Furthermore, GAO previously reported weaknesses in DTS�s requirements
management and system testing practices. GAO found that DTS�s
requirements were still inadequate. GAO noted that until DOD improves
DTS�s requirements management practices, the department will not have
reasonable assurance that DTS can provide the intended functionality.
Additionally, GAO�s 2006 report of the September 2003 DTS economic
analysis found that the two key assumptions used to estimate annual net
savings were not based on reliable information. Two cost components
represented the majority of the over $56 million in estimated net
savings�personnel savings and reduced commercial travel office fees.
GAO�s analysis found that $24.2 million in personnel savings related to
the Air Force and the Navy were not supported.
* Air Force and Navy DTS program officials stated that they did not
anticipate a reduction in the number of personnel, but rather the
shifting of staff from the travel function to other functions.
* The Naval Cost Analysis Division stated that the Navy will not
realize any tangible personnel cost savings from the implementation of
DTS.
In regard to the commercial travel office fees, GAO�s 2006 reporting
disclosed that the economic analysis assumed that 70 percent of all DTS
airline tickets would either require no intervention or minimal
intervention from the commercial travel offices resulting in an
estimated annual net savings of $31 million. However, the support
provided by the DTS program office was an article in a trade industry
publication. The article was not based on information related to DTS,
but rather on the experience of one private-sector company. In
addition, GAO identified concepts that the department can adopt to
streamline its travel management practices.
What GAO Recommends:
In its January and September 2006 reports, GAO made several
recommendations aimed at improving the management of DTS. In commenting
on these reports, DOD generally agreed with the recommendations and
described efforts to address them. In commenting on the draft of the
September 2006 report, DOD disagreed with the finding that the reported
savings were unrealistic. However, DOD did not provide any data to
support its assertion.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-649T]. For more
information, contact McCoy Williams at (202) 512-2600 or
[email protected].
[End of section]
Mr. Chairman and Members of the Subcommittee:
Thank you for the opportunity to discuss our two reports[Footnote 1]
and related testimonies[Footnote 2] regarding the problems encountered
by the Department of Defense (DOD) in its efforts to implement the
Defense Travel System (DTS). In 1995, the 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 system was not
integrated. To address these concerns, DOD established the Project
Management Office--Defense Travel System (PMO-DTS) to acquire travel
services that would be used DOD-wide as the department's standard end-
to-end travel system.[Footnote 3] The department estimated that DTS
would be deployed at an estimated 11,000 locations during fiscal year
2007. The September 2003 economic analysis noted that DTS, when fully
implemented, would result in annual net savings of over $56 million
during fiscal years 2009 to 2016. In December 2003, the department's
Chief Information Officer approved funding for DTS of approximately
$564 million. Of this amount, the contract for the design, development,
and deployment of DTS was for about $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 contracted commercial travel offices.
My testimony today is based on our prior reports and testimonies
[Footnote 4] and I will highlight three key findings we previously
reported upon.
* The department did not have quantitative metrics to measure the
extent to which DTS was actually being used.
* DOD had not addressed several functional problems associated with
weak requirements management and system testing.
* Two key assumptions related to the estimated cost savings in the
September 2003 DTS economic analysis were not reasonable.
Finally, I will highlight suggestions of actions that the department
could explore to help streamline its travel processes.
The underlying work done to support our reports and testimonies was
performed in accordance with generally accepted government auditing
standards. Details on our scope and methodology are discussed in each
respective report and testimony.
Summary:
Our prior reports and testimonies[Footnote 5] related to DTS have
highlighted various management challenges that DOD confronted in
attempting to make DTS the standard end-to-end travel system for the
department. For example, our 2006 report noted that the department did
not have quantitative metrics to measure the extent to which DTS was
being used. At the time of our review in 2006, the reported DTS
utilization rates were based on a methodology that was developed using
estimated data, and PMO-DTS program officials acknowledged that the
model had not been updated with actual data as DTS continued to be
implemented at the 11,000 sites. As a result, the PMO-DTS relied on
outdated information in calculating DTS utilization rates that were
reported to DOD management and the Congress. Additionally, we have
previously reported the continued use of the department's legacy travel
systems resulted in the underutilization of DTS and adversely affected
the savings DTS could achieve.
We also reported in 2006 that DOD had not addressed several functional
problems associated with weak requirements management and system
testing. Requirements represent the blueprint that system developers
and program managers use to design, develop, test, and implement a
system. Because requirements provide the foundation for system testing,
they must be complete, clear, and well documented to design and
implement an effective testing program. Adequately defined and tested
requirements are one of the key elements to help reduce a project's
risks to acceptable levels.[Footnote 6] We identified 246 unique
General Services Administration (GSA) city pair flights that should
have been identified on one or more DTS flight displays according to
the DOD requirements. However, 87 of these flights did not appear on
one or more of the required listings. As a result, DTS users did not
have access to needed flight information.
Furthermore, our 2006 report noted that DOD's September 2003 DTS
economic analysis found that two key assumptions used to estimate cost
savings were not well supported. Two primary areas represented the
majority of the over $56 million of estimated annual net savings DTS
was expected to realize--personnel savings of $24.2 million and reduced
commercial travel office fees of $31 million. The $24.2 million
estimated annual personnel savings were attributed to the Air Force and
Navy.[Footnote 7] However, Air Force and Navy DTS officials stated that
they did not anticipate a reduction in the number of personnel with the
full implementation of DTS, but rather the shifting of staff to other
functions. Further, the Naval Cost Analysis Division stated that the
Navy will not realize any tangible personnel cost savings from the
implementation of DTS. DOD officials responsible for reviewing economic
analyses stated that while shifting personnel to other functions is
considered a benefit, it should be considered an intangible benefit
rather than tangible dollar savings since the shifting of personnel
does not result in a reduction of DOD expenditures.
In regard to the estimated annual savings of $31 million attributed to
lower commercial travel office fees, we requested, but the PMO-DTS
could not provide, any analysis of travel data to support the
assumption that 70 percent of all airline tickets would be considered
"no touch"--meaning that there would be no or minimal intervention by
the commercial travel office, thereby resulting in lower commercial
travel office fees. We found that the 70 percent assumption was based
on an article that appeared in a travel industry trade publication.
[Footnote 8]
In addition, as noted in our January 2006 report,[Footnote 9]
opportunities existed to achieve the vision of a travel system that
reduces the administrative burden and cost while supporting DOD's
mission. At that time, some of the actions we suggested that the
department could take to help streamline its travel management
practices, included (1) automating approval of changes to authorized
travel expenses, (2) using a commercial database to identify unused
airline tickets, and (3) utilizing restricted airfares where cost
effective.
In our two reports, we made 14 recommendations to help improve the
department's management and oversight of DTS. In commenting on our
reports, the department generally agreed with the recommendations and
described its efforts to address them. However, in commenting on a
draft of our September 2006 report,[Footnote 10] DOD disagreed with our
finding that the estimated personnel savings are unrealistic. The
department's comments noted that DOD is facing an enormous challenge
and continues to identify efficiencies and eliminate redundancies to
help leverage available funds. In our response, we noted that the
department provided no new data that countered our finding.
Background:
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 travel
process. In January 1995, the task force issued the Report of the
Department of Defense Task Force to Reengineer Travel.[Footnote 11] On
December 13, 1995, the Under Secretary of Defense for Acquisition,
Technology, and Logistics 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. 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.[Footnote
12] Furthermore, 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 the TDY travel system. To address these concerns,
the department awarded a firm fixed-price, performance-based services
contract in May 1998. 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.
DTS Faced Numerous Challenges:
Our reports and testimonies[Footnote 13] related to DTS have
highlighted various management challenges that have confronted DOD in
attempting to make DTS the standard end-to-end travel system for the
department. The issues we have reported on include underutilization of
DTS, weaknesses in DTS's requirements management and system testing
practices, and the adequacy of the economic analysis. These reported
weaknesses are summarized below.
* DTS underutilization. Our January 2006 and September 2006
reports[Footnote 14] noted the challenge facing the department in
attaining the anticipated DTS utilization. More specifically, as
discussed in our September 2006 report, we found that the department
did not have reasonable quantitative metrics to measure the extent to
which DTS was actually being used. The reported DTS utilization was
based on a DTS Voucher Analysis Model[Footnote 15] that was developed
in calendar year 2003 using estimated data, but over the years had not
been completely updated with actual data.
The DTS Voucher Analysis Model was prepared in calendar year 2003 and
based on airline ticket and voucher count data that were reported by
the military services and defense agencies, but the data were not
verified or validated. Furthermore, PMO-DTS officials acknowledged that
the model had not been completely updated with actual data as DTS
continued to be implemented at the 11,000 sites. At the time, we found
that the Air Force was the only military service that submitted monthly
metrics to the PMO-DTS officials for use in updating the DTS Voucher
Analysis Model. Rather than reporting utilization based on individual
site system utilization data, DOD relied on outdated information in the
reporting of DTS utilization to DOD management and the Congress. We
have previously reported[Footnote 16] that best business practices
indicate that a key factor of project management and oversight is the
ability to effectively monitor and evaluate a project's actual
performance against what was planned. In order to perform this critical
task, best business practices require the adoption of quantitative
metrics to help measure the effectiveness of a business system
implementation and to continually measure and monitor results, such as
system utilization. The lack of accurate and pertinent utilization data
hindered management's ability to monitor its progress toward the DOD
vision of DTS as the standard travel system as well as to provide
consistent and accurate data to Congress.
DTS's reported utilization rates for the period October 2005 through
April 2006 averaged 53 percent for Army, 30 percent for Navy, and 39
percent for Air Force. Because the PMO-DTS was unable to identify the
total number of travel vouchers that should have been processed through
DTS (total universe of travel vouchers), we reported that these
utilization rates may have been over-or understated. PMO-DTS program
officials confirmed that the reported utilization data were not based
on complete data because the department did not have comprehensive
information to identify the universe or the total number of travel
vouchers that should be processed through DTS. PMO-DTS and DTS military
service officials agreed that the actual DTS utilization rate should be
calculated by comparing actual vouchers processed in DTS to the total
universe of vouchers that should be processed in DTS. The universe
would exclude those travel vouchers that could not be processed through
DTS, such as those related to permanent change of station travel.
The underutilization of DTS also adversely affected the estimated
savings. As discussed in our September 2005 testimony[Footnote 17]
there were at least 31 legacy travel systems operating within the
department at that time. The testimony recognized that some of the
existing travel systems, such as the Integrated Automated Travel
System, could not be completely eliminated because the systems
performed other functions, such as permanent change of station travel
claims that DTS could not process.
However, in other cases, the department was spending funds to maintain
duplicative systems that performed the same function as DTS. Since
these legacy systems were not owned and operated by DTS, the PMO-DTS
did not have the authority to discontinue their operation. We have
previously stated that this issue must be addressed from a
departmentwide perspective.
Further, because of the continued operation of the legacy systems at
locations where DTS had been fully deployed, DOD components were paying
the Defense Finance and Accounting Service (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 noted
that for the 5-month period, October 1, 2004, to February 28, 2005, the
Army spent about $5.6 million more to process 177,000 travel vouchers
manually rather than processing the vouchers electronically using DTS.
* Requirements management and system testing. Our January 2006 and
September 2006 reports[Footnote 18] noted problems with DTS's ability
to properly display flight information and traced those problems to
inadequate requirements management and system testing. As of February
2006, we found that similar problems continued to exist. Once again,
these problems could be traced to ineffective requirements management
and system testing processes. Properly defined requirements are a key
element in systems that meet their cost, schedule, and performance
goals since the requirements define the (1) functionality that is
expected to be provided by the system and (2) quantitative measures by
which to determine through testing whether that functionality is
operating as expected.
Requirements represent the blueprint that system developers and program
managers use to design, develop, and acquire a system. Requirements
represent the foundation on which the system should be developed and
implemented. As we have noted in previous reports,[Footnote 19] because
requirements provide the foundation for system testing, they must be
complete, clear, and well documented to design and implement an
effective testing program. Absent this, an organization is taking a
significant risk that its testing efforts will not detect significant
defects until after the system is placed into production. We reported
in September 2006[Footnote 20] that our analysis of selected flight
information disclosed that DOD did not have reasonable assurance that
DTS displayed flights in accordance with its stated requirements. We
analyzed 15 domestic GSA city pairs,[Footnote 21] which should have
translated into 246 GSA city pair flights for the departure times
selected. However, we identified 87 flights that did not appear on one
or more of the required listings based on the DTS requirements.
After briefing PMO-DTS officials on the results of our analysis in
February 2006, the PMO-DTS employed the services of a contractor to
review DTS to determine the specific cause of the problems and
recommend solutions. In a March 2006 briefing, the PMO-DTS acknowledged
the existence of the problems and identified two primary causes. First,
part of the problem was attributed to the methodology used by DTS to
obtain flights from the Global Distribution System (GDS). The PMO-DTS
stated that DTS was programmed to obtain a "limited" amount of data
from GDS in order to reduce the costs associated with accessing GDS.
This helps to explain why flight queries we reviewed did not produce
the expected results. To resolve this particular problem, the PMO-DTS
proposed increasing the amount of data obtained from GDS. Second, the
PMO-DTS acknowledged that the system testing performed by the
contractor responsible for developing and operating DTS was inadequate,
and therefore, there was no assurance that DTS would provide the data
in conformance with the stated requirements. This weakness was not new,
but rather reconfirmed the concerns discussed in our September 2005
testimony and January 2006 report[Footnote 22] related to the testing
of DTS.
* Validity of economic analysis. As noted in our September 2006
report,[Footnote 23] our analysis of the September 2003 economic
analysis found that two key assumptions used to estimate cost savings
were not based on reliable information. Consequently, the economic
analysis did not serve to help ensure that the funds invested in DTS
were used in an efficient and effective manner. Two primary areas--
personnel savings of $24.2 million and reduced commercial travel office
fees of $31 million--represented the majority of the over $56 million
of estimated annual net savings DTS was expected to realize. However,
the estimates used to generate these savings were unreliable.
The personnel savings of $24.2 million was attributable to the Air
Force and Navy.[Footnote 24] The assumption behind the personnel
savings computation was that there would be less manual intervention in
the processing of travel vouchers for payment, and therefore, fewer
staff would be needed. However, based on our discussions with Air Force
and Navy DTS program officials, it was questionable how the estimated
savings would be achieved. Air Force and Navy DTS program officials
stated that they did not anticipate a reduction in the number of
personnel with the full implementation of DTS, but rather shifting
staff to other functions. According to DOD officials responsible for
reviewing economic analyses, while shifting personnel to other
functions was considered a benefit, it should have been considered an
intangible benefit rather than tangible dollar savings since the
shifting of personnel did not result in a reduction of DOD
expenditures. Also, as part of the Navy's overall evaluation of the
economic analysis, program officials stated that "the Navy has not
identified, and conceivably will not recommend, any personnel billets
for reduction." Finally, the Naval Cost Analysis Division's October
2003 report on the economic analysis noted that it could not validate
approximately 40 percent of the Navy's total costs, including personnel
costs, in the DTS life-cycle cost estimates because credible supporting
documentation was lacking. The report also noted that the PMO-DTS used
unsound methodologies in preparing the DTS economic analysis.
We also reported in 2006 that according to DOD's September 2003
economic analysis, it expected to realize annual net savings of $31
million through reduced fees paid to the commercial travel offices
because the successful implementation of DTS would enable the majority
of airline tickets to be acquired with either no or minimal
intervention by the commercial travel offices. These are commonly
referred to as "no touch" transactions. However, DOD did not have a
sufficient basis to estimate the number of transactions that would be
considered "no touch" since the (1) estimated percentage of
transactions that can be processed using "no touch" was not supported
and (2) analysis did not properly consider the effects of components
that use management fees, rather than transaction fees, to compensate
the commercial travel offices for services provided. The weaknesses we
identified with the estimating process raised serious questions as to
whether DOD would realize substantial portions of the estimated annual
net savings of $31 million. DOD arrived at the $31 million of annual
savings in commercial travel office fees by estimating that 70 percent
of all DTS airline tickets would be considered "no touch" and then
multiplying these tickets by the savings per ticket in commercial
travel office fees. However, we found that the 70 percent assumption
was not well supported. We requested, but the PMO-DTS could not
provide, an analysis of travel data supporting its assertion. Rather,
the sole support provided by the PMO-DTS was an article in a travel
industry trade publication.[Footnote 25] The article was not based on
information related to DTS, but rather on the experience of one private-
sector company.
Streamlining DOD Travel Processes:
As noted in our January 2006 report,[Footnote 26] opportunities existed
at that time to better achieve the vision of a travel system that
reduces the administrative burden and cost while supporting DOD's
mission. Some of the suggested proposals are highlighted below.
* Automating approval of changes to authorized travel expenses. The
business process used at the time by DTS designated the traveler's
supervisor as the authorizing official responsible for authorizing
travel and 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 authorizing official was 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 authorizing official was required to
approve the $5 difference. If the difference was caused by two
different items, then each item required approval. Similarly, if the
actual expenses are $505, then the authorizing official was required to
specifically approve this $5 increase. This policy appeared 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 authorizing official was 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
was less than the amount authorized does not pose any more risk than
processing a travel claim that equals the authorized amount since the
key was whether the claim is valid rather than whether the amount
equals the funding initially authorized and obligated in the financial
management system.
* Using commercial databases to identify unused airline tickets. We
have previously reported that DOD had not recovered millions of dollars
in unused airline tickets.[Footnote 27] One action that DOD was taking
to address the problem was requiring the commercial travel offices to
prepare reports on unused airline tickets. While this action was a
positive step forward, it required (1) the commercial travel offices to
have an effective system of performing this function and (2) DOD to
have an effective program for monitoring compliance. At the time, we
suggested that a third party service, commonly referred to as the
Airlines Reporting Corporation,[Footnote 28] might provide DOD with the
necessary information to collect unused airline tickets in an automated
manner. If the information from the Airlines Reporting Corporation was
utilized, DOD would not have to rely on the reports prepared by the
commercial travel offices and would have been able to avoid the costs
associated with preparing the unused airline ticket reports. According
to DOD officials, at the time of our review, this requirement had not
yet been implemented in all the existing commercial travel office
contracts, and therefore, the total costs of preparing the unused
airline ticket reports were unknown.
* Utilizing restricted airfares where cost effective. DOD's business
rules and the design of DTS provided that only unrestricted airfares
should be displayed. However, adopting a "one size fits all" policy did
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 was a fee for changing flights.[Footnote 29] The Federal Travel
Regulation and DOD's Joint Travel Regulations 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.
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 have been to establish guidance on when
unrestricted and restricted airfares should be used and then monitor
how that policy was implemented. Although development of the guidance
is an important first step, we previously stated that management also
needs to determine (1) whether the policy was being followed and (2)
what changes are needed to make it more effective.
Concluding Remarks:
In our two reports we made 14 recommendations to help improve the
department's management and oversight of DTS and streamline DOD's
administrative travel processes. In commenting on our reports, the
department generally agreed with the recommendations and described its
efforts to address them. The implementation of our recommendations will
be an important factor in DTS's achieving its intended goals. We will
be following up to determine whether and if so, to what extent, DOD has
taken action to address our recommendations in accordance with our
standard audit follow-up policies and procedures. We would be pleased
to brief the Subcommittee on the status of the department's actions
once we have completed our follow-up efforts.
Mr. Chairman, this concludes my prepared statement. We would be happy
to answer any questions that you or other members of the Subcommittee
may have at this time.
Contacts and Acknowledgments:
For further information about this testimony, please contact McCoy
Williams at (202) 512-2600 or [email protected].
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this testimony. In addition to
the above contacts, the following individuals made key contributions to
this testimony: Darby Smith, Assistant Director; Evelyn Logue,
Assistant Director; J. Christopher Martin, Senior-Level Technologist;
F. Abe Dymond, Assistant General Counsel; Beatrice Alff; Francine
DelVecchio; and Tory Wudtke.
[End of section]
Footnotes:
[1] GAO, DOD Business Transformation: Defense Travel System Continues
to Face Implementation Challenges, [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-06-18] (Washington, D.C.: Jan. 18, 2006) and Defense
Travel System: Reported Savings Questionable and Implementation
Challenges Remain, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-
980] (Washington, D.C.: Sept. 26, 2006).
[2] GAO, Defense Travel System: Estimated Savings Are Questionable and
Improvements Are Needed to Ensure Functionality and Increase
Utilization, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-208T]
(Washington, D.C.: Nov. 16, 2006), and DOD Business Transformation:
Preliminary Observations on the Defense Travel System, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-05-998T] (Washington, D.C.: Sept.
29, 2005).
[3] DOD expects DTS to perform all functions related to travel or
ensure that other systems are provided with adequate information to
provide this functionality. For example, obligating funds associated
with travel is a necessary function, and DTS is expected to (1) make
sure that adequate funds are available before authorizing travel either
through information contained in its system or by obtaining the
necessary information from another system, (2) obligate funds through
issuance of approved travel orders, and (3) provide DOD's financial
management systems with the necessary information so that those systems
can record the obligation. Since DTS is required to ensure that all
travel-related functionality is properly performed, DOD commonly refers
to DTS as an "end-to-end travel system."
[4] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-18],
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-980], [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-07-208T], and [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-05-998T].
[5] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-18],
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-980], [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-07-208T], and [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-05-998T].
[6] "Acceptable levels" refers to the recognition that any systems
acquisition effort will have risks and will suffer the adverse
consequences associated with defects in the processes. However,
effective implementation of disciplined processes, which include:
project planning and management, requirements management, risk
management, quality assurance, and testing, reduces the possibility of
the potential risks actually occurring and prevents significant defects
from materially affecting the cost, timeliness, and performance of the
project.
[7] The economic analysis identified annual savings of $11.3 million
and $12.9 million for the Air Force and Navy, respectively.
[8] American Express News Releases: American Express' Interactive
Travel Update, (New York, N.Y.: Aug. 11, 2003), [hyperlink,
http://corp.americanexpress.com/gcs/cards/us/ni/pr/081303.aspx].
[9] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-18].
[10] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-980].
[11] DOD, Report of the Department of Defense Task Force to Reengineer
Travel (Washington, D.C.: January 1995).
[12] Office of the Under Secretary of Defense (Comptroller), Department
of Defense Travel Reengineering Pilot Report to Congress (June 1997).
[13] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-998T],
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-18], [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-06-980], and GAO-07-208T.
[14] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-18] and
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-980].
[15] DOD developed a model in calendar year 2003 that compares the
expected usage against the actual usage. The expected usage was
obtained by using historical data, such as ticket counts, to determine
the expected number of vouchers processed by a given location. For
example, if a location had 1,000 vouchers as its expected number of
vouchers per the model, but processed 750 actual vouchers through DTS,
then the PMO model considered that that location had achieved a 75
percent utilization rate. The model then took the individual
computations for each DTS location and "rolled them up" to determine
the total utilization for individual service performance on a monthly
basis.
[16] GAO, Financial Management Systems: Additional Efforts Needed to
Address Key Causes of Modernization Failures, GAO-06-184 (Washington,
D.C.: Mar. 15, 2006), and Financial Management Systems: Lack of
Disciplined Processes Puts Implementation of HHS' Financial System at
Risk, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-1008]
(Washington, D.C.: Sept. 23, 2004).
[17] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-998T].
[18] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-18] and
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-980].
[19] See, for example, [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-04-1008] and GAO, Army Depot Maintenance: Ineffective
Oversight of Depot Maintenance Operations and System Implementation
Efforts, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-441]
(Washington, D.C.: June 30, 2005).
[20] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-980].
[21] GSA awards contracts to airlines to provide flight services
between pairs of cities. This is commonly referred to as the GSA city
pair program. Under this program (1) no advanced ticket purchases are
required, (2) no minimum or maximum length of stay is required, (3)
tickets are fully refundable and no charges are assessed for
cancellations or changes, (4) seating is not capacity controlled (i.e.,
as long as there is a coach-class seat on the plane, the traveler may
purchase it), (5) no blackout dates apply, (6) fare savings average 70
percent over regular walk-up fares, and (7) fares are priced on one-way
routes permitting agencies to plan for multiple destinations. We
selected the first 15 city pairs that were provided by DOD to GSA in
support of a GSA study on accuracy of flight displays and fare
information by DTS and the GSA eTravel providers.
[22] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-998T] and
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-18.
[23] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-980].
[24] The economic analysis identified annual savings of $11.3 million
and $12.9 million for the Air Force and Navy, respectively.
[25] American Express News Releases: American Express' Interactive
Travel Update, (New York, N.Y.: Aug. 11, 2003), [hyperlink,
http://corp.americanexpress.com/gcs/cards/us/ni/pr/081303.aspx].
[26] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-18].
[27] GAO, DOD Travel Cards: Control Weaknesses Led to Millions of
Dollars Wasted on Unused Airline Tickets, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-04-398] (Washington, D.C.: Mar.
31, 2004).
[28] According to the Airlines Reporting Corporation, it was
established by the travel industry to provide prompt, efficient, secure
distribution and settlement of travel purchased in the United States.
[29] Other types of restrictions include purchasing the ticket in
advance or staying over a specified number of days.
[End of section]
GAO's Mission:
The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting
its constitutional responsibilities and to help improve the performance
and accountability of the federal government for the American people.
GAO examines the use of public funds; evaluates federal programs and
policies; and provides analyses, recommendations, and other assistance
to help Congress make informed oversight, policy, and funding
decisions. GAO's commitment to good government is reflected in its core
values of accountability, integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through GAO's Web site [hyperlink, http://www.gao.gov]. Each
weekday, GAO posts newly released reports, testimony, and
correspondence on its Web site. To have GAO e-mail you a list of newly
posted products every afternoon, go to [hyperlink, http://www.gao.gov]
and select "E-mail Updates."
Order by Mail or Phone:
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or
more copies mailed to a single address are discounted 25 percent.
Orders should be sent to:
U.S. Government Accountability Office:
441 G Street NW, Room LM:
Washington, D.C. 20548:
To order by Phone:
Voice: (202) 512-6000:
TDD: (202) 512-2537:
Fax: (202) 512-6061:
To Report Fraud, Waste, and Abuse in Federal Programs:
Contact:
Web site: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]:
E-mail: [email protected]:
Automated answering system: (800) 424-5454 or (202) 512-7470:
Congressional Relations:
Ralph Dawn, Managing Director, [email protected]:
(202) 512-4400:
U.S. Government Accountability Office:
441 G Street NW, Room 7125:
Washington, D.C. 20548:
Public Affairs:
Chuck Young, Managing Director, [email protected]:
(202) 512-4800:
U.S. Government Accountability Office:
441 G Street NW, Room 7149:
Washington, D.C. 20548:
*** End of document. ***