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				 

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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

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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, todayï¿½s 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 DTSï¿½s 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. Todayï¿½s 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 departmentï¿½s 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 DODï¿½s 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 GAOï¿½s 2006 review, 
DODï¿½s 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 managementï¿½s ability to monitor progress 
toward the DOD vision of DTS as the standard travel system. 
Additionally, the continued use of the departmentï¿½s 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 DTSï¿½s requirements 
management and system testing practices. GAO found that DTSï¿½s 
requirements were still inadequate. GAO noted that until DOD improves 
DTSï¿½s requirements management practices, the department will not have 
reasonable assurance that DTS can provide the intended functionality. 

Additionally, GAOï¿½s 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 
savingsï¿½personnel savings and reduced commercial travel office fees. 
GAOï¿½s 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, GAOï¿½s 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] 

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