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Report to Congressional Addressees: 

January 2006: 

DOD Business Transformation: 

Defense Travel System Continues to Face Implementation Challenges: 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-18]

GAO Highlights: 

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

Why GAO Did This Study: 

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 Found: 

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: 

[See PDF for image] 

[End of figure] 

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. 

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. 

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. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Ongoing DTS Testing Remains a Concern: 

DTS Has Corrected Some Previously Reported Travel Problems: 

DTS Faces Challenges in Making DTS a Standard DOD Travel System: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: Scope and Methodology: 

Appendix II: Comments from the Department of Defense: 

Appendix III: GAO Contacts and Staff Acknowledgments: 

Related GAO Products: 

Table: 

Table 1: Summary of Premium-Class Travel Analysis: 

Figures: 

Figure 1: Defense Travel System Processes: 

Figure 2: Delay in the Development and Implementation of DTS: 

Figure 3: Limitations of DTS Testing: 

Figure 4: Current DTS System Interfaces: 

Figure 5: DTS System Interfaces That Need to Be Developed: 

Letter January 9, 2006: 

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.[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 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 vouchers[Footnote 8] for the 
period October 1, 2004, to December 31, 2004,[Footnote 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.[Footnote 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.[Footnote 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),[Footnote 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.[Footnote 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: 

[See PDF for image] 

[End of figure] 

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.[Footnote 14] An AO is 
then responsible for certifying a travel voucher for payment by 
electronically signing the document.[Footnote 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. 

* 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.[Footnote 
16] 

* 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.[Footnote 17] 

* 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.[Footnote 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.[Footnote 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: 

[See PDF for image] 

[End of figure] 

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.[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 
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).[Footnote 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.[Footnote 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: 

[See PDF for image] 

[End of figure] 

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 time[Footnote 26] 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. 

* 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). 

* 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.[Footnote 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.[Footnote 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.[Footnote 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[Footnote 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.[Footnote 31] Table 1 presents a 
summary of our analysis. 

Table 1: Summary of Premium-Class Travel Analysis: 

Defense component: Army; 
Potential premium-class travel: 93; 
Improperly approved: premium-class travel: 46; 
Properly approved: premium-class travel: 4; 
No documentation received: 4; 
Documentation inconclusive: 39. 

Defense component: Navy; 
Potential premium-class travel: 40; 
Improperly approved: premium-class travel: 13; 
Properly approved: premium-class travel: 9; 
No documentation received: 0; 
Documentation inconclusive: 18. 

Defense component: Air Force; 
Potential premium-class travel: 157; 
Improperly approved: premium-class travel: 9; 
Properly approved: premium-class travel: 0; 
No documentation received: 131; 
Documentation inconclusive: 17. 

Defense component: DOD agencies; 
Potential premium-class travel: 118; 
Improperly approved: premium-class travel: 0; 
Properly approved: premium-class travel: 6; 
No documentation received: 110; 
Documentation inconclusive: 2. 

Defense component: Total; 
Potential premium-class travel: 408; 
Improperly approved: premium-class travel: 68; 
Properly approved: premium-class travel: 19; 
No documentation received: 245; 
Documentation inconclusive: 76. 

Source: GAO analysis of DOD data. 

[End of table] 

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.[Footnote 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.[Footnote 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: 

* 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. 

* 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,[Footnote 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.[Footnote 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.[Footnote 
36] Further, we estimated that 29 percent of the travel vouchers lacked 
adequate receipts for the amounts claimed.[Footnote 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: 

[See PDF for image] 

[End of figure] 

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: 

[See PDF for image] 

[End of figure] 

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,[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 42] To address this issue, the statutory 
requirements of the Ronald W. Reagan National Defense Authorization Act 
for Fiscal Year 2005[Footnote 43] 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.[Footnote 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: 

* automating approval of changes to authorized travel expenses; 

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

* simplifying display of flights; 

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

* 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.[Footnote 45] These requirements were also 
contained in the previous document issued by the Joint Financial 
Management Improvement Program in November 2001.[Footnote 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.[Footnote 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),[Footnote 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: 

* GSA city pair fares with capacity limits,[Footnote 49] 

* GSA city pair fares,[Footnote 50] and: 

* 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,[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 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.[Footnote 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,[Footnote 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. 

* 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.[Footnote 58] Also, 
assuming that the lodging was booked through DTS, it knows the rate 
that is expected to be paid. 

* 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). 

* 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. 

* 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.[Footnote 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: 

* 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; 

* 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; 

* 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; 

* 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; 

* 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; 

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

* 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; 

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

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

* 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 [Hyperlink, 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 [Hyperlink, 
williamsm1@gao.gov] or Keith A. Rhodes at (202) 512-6412 or [Hyperlink, 
rhodesk@gao.gov]. 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. 

Signed by: 

McCoy Williams: 
Director: 
Financial Management and Assurance: 

Signed by: 

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: 

[End of section] 

Appendixes: 

Appendix I: Scope and Methodology: 

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: 

* 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: 

* 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 
locations[Footnote 60] 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.[Footnote 
61] 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. 

[End of section] 

Appendix II: Comments from the Department of Defense: 

DEFENSE FINANCE AND ACCOUNTING SERVICE ARLINGTON: 
1851 SOUTH BELL STREET: 
ARLINGTON, VA 22240-5291: 

DEC 14 2005 

Mr. McCoy Williams: 
Director, Financial Management and Assurance: 
U.S. Government Accountability Office:
Washington, D.C. 20548: 

Mr. Williams, 

This is the Department of Defense (DoD) response to the GAO draft 
report (06-18), 'DOD BUSINESS TRANSFORMATION: Defense Travel System 
Continues to Face Implementation Challenges,' dated November 10, 2005 
(GAO Code 192146). 

The enclosed DoD response is provided as an attachment. 

Thank you the opportunity to review this draft report and provide 
comments. 

If you have any questions please do not hesitate to contact the primary 
action officer, Philip Puckett, 703-607-3797. 

Signed by: 

Zack E. Gaddy: 
Director: 

Enclosure: As stated: 

GAO DRAFT REPORT DATED NOVEMBER 2005: 
GAO-06-18: 

"DOD BUSINESS TRANSFORMATION: Defense Travel System Continues to Face 
Implementation Challenges" 

DEPARTMENT OF DEFENSE RESPONSE: 

RECOMMENDATION 1: The GAO recommended that the Secretary of Defense 
direct the DTS-PMO to effectively implement the disciplined processes 
necessary to provide reasonable assurance that: (1) requirements are 
properly documented and (2) requirements are adequately tested. (p. 
56/GAO Draft Report): 

DOD RESPONSE: Concur. DTS is under DOD Instruction 5000.2 and complies 
with its program documentation (e.g., ORD, TEMP). The PMO-DTS and the 
prime contractor will continue to improve processes and oversight by 
continuously monitoring and adjusting the below processes to ensure 
proper requirements documentation and testing. 

The prime contractor is Software Engineering Institute - Capability 
Maturity Model Integration (SEI-CMMI) Level 5 certified. The DOD 
requirement is Level 3. 

The requirements GAO reviewed were primarily focused on the reservation 
model. The DTS software has just completed a favorable Operational 
Assessment (OA) with the Madison Release and was found to be suitable, 
survivable and effective. DOD will work to continuously improve all 
requirements generation and testing. 

Listed below are key steps in our requirements and testing processes. 

* PMO-DTS Integrated Product Team leads define and validate functional 
requirements for all new components of the DTS system. 

* These functional requirements are approved by the DTS-PMO before they 
are provided to the various entities who implement DTS application 
components and interfaces. 

* These high level requirements are decomposed into system and software 
requirements that are approved by the PMO before software design is 
completed. 

* Software requirements are approved by the PMO before the software is 
released for system testing. Software test activities are planned and 
executed against the documented system and software requirements. 

* Software is then independently tested to verify requirements are 
operationally effective. 

RECOMMENDATION 2: The GAO recommended that the Secretary of Defense 
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. (p. 56/GAO Draft Report): 

DOD RESPONSE: Concur. DTS is under DOD Instruction 5000.2. The PMO-DTS 
and the prime contractor will continue to improve processes and 
oversight by continuously monitoring and adjusting the below processes 
to properly test new or modified system interfaces so that intended 
functionality is operating properly prior to software updates being 
provided to DTS users. 

* PMO-DTS will capture data interaction within each of the external 
systems with which DTS interfaces. This data gathering should ensure 
that the external system is correctly processing data received from DTS 
and that it is correctly generating the data provided to DTS. 

* Before any software that impacts external interfaces is released into 
production, a System Qualification Test (SQT) is performed. External 
partners are selected for participation in this test based on the 
impact the changes have on their day-to-day operations. All new system 
interfaces are tested before the external system is certified for 
connection to DTS. 

* During this test, each of the external system interfaces is 
exercised, and the results of the exchanged data elements are tested 
within the system. This test does not validate the processing within 
the external system, but it validates the responses received by DTS. 

RECOMMENDATION 3: The GAO recommended that the Secretary of Defense 
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. (p. 56/GAO Draft 
Report): 

DOD RESPONSE: Concur. All commercial travel service contracts that are 
governed by the PMO-DTS contain appropriate language reflecting the 
Department's policies on the use of premium class travel. However, the 
PMO - DTS does not have jurisdiction over all Commercial Travel Offices 
(CTOs). The PMO-DTS can ensure all future CTOs contracted with DOD for 
official travel services adhere to the Department's policy on use of 
premium class travel, even in those instances where it is listed as the 
only available airfare. The requirement to have contracted CTOs adhere 
to the Department's policy does not in itself preclude government 
purchase or reimbursement for unauthorized premium travel. 
Additionally, PMO-DTS will incorporate system and travel review changes 
to ensure CTOs are following the policy by periodically reviewing 
premium class travel authorizations. 

RECOMMENDATION 4: The GAO recommended that the Secretary of Defense 
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. (p. 56/GAO Draft Report): 

DOD RESPONSE: Concur. Although DTS currently conducts front-end policy 
checks and flags 'out-of-policy' items for both the Traveler and 
Authorizing Official (AO), Travelers and AOs must be trained and then 
required to be fiscally responsible when making and approving travel 
authorizations and vouchers. DTS presently allows for conditional 
routing the transaction to the next layer of management within an 
organization when deviating from policy. Moreover, a memorandum will be 
prepared notifying the Service Secretaries and heads of DOD agencies to 
reemphasize that AOs must ensure that travelers provide adequate 
justification for exceptions from Department policy and the importance 
of the AOs not approving any travel authorization or voucher in which 
exceptions are not properly justified. 

RECOMMENDATION 5: The GAO recommended that the Secretary of Defense 
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. (p. 56/GAO Draft Report): 

DOD RESPONSE: Concur. Existing TDY processing of business travel is 
much more expensive than DTS. Maintaining existing legacy travel 
systems when DTS is available is not cost effective, and it offers the 
Services and Defense Agencies a costly alternative to DTS that is often 
chosen simply because it is comfortable and familiar. The Office of the 
Under Secretary of Defense (Personnel & Readiness) is preparing a 
memorandum directing increased DTS use by the Services and Agencies. 
This high-level mandate should increase DTS usage. 

RECOMMENDATION 6: The GAO recommended that the Secretary of Defense 
direct the PMO-DTS to develop and implement the means to automate the 
approval of changes to authorized travel expenses, where possible. (p. 
56/GAO Draft Report): 

DOD RESPONSE: Concur. Automating the approval of changes to authorized 
travel expenses, where possible, is in keeping with the DTS vision of 
providing a seamless, paperless, end-to-end travel management process. 
Current DTS functionality allows for approval of changes to expenses 
when the voucher is approved by the AO/Certifying Official for payment 
in a single process (i.e., when there is no need to approve changes 
prior to approving the voucher). Approval of the voucher electronically 
sends updated financial transactions to the accounting system for all 
approved changes and subsequently (without additional human 
intervention) sends the disbursing transactions to facilitate payment 
to the traveler. 

To further streamline the process, DOD will research policy and 
applicable financial regulations to determine if it is permissible to 
automatically approve vouchers without audit flags, and to 
electronically bypass the AO/Certifying step in the settlement process. 
If an audit flag was set, the voucher would still need to be routed to 
the AO for approval. 

RECOMMENDATION 7: The GAO recommended that the Secretary of Defense 
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. (p. 56/GAO Draft Report): 

DOD RESPONSE: Concur. PMO-DTS will consider the use of commercial data 
bases to identify unused airline tickets for which reimbursement should 
be obtained. To this end, the Airline Reporting Commission may be part 
of this solution, and this initiative can possibly be expanded Federal 
Government-wide through on-going collaborative: 

[End of section] 

Appendix III: GAO Contacts and Staff Acknowledgments: 

GAO Contacts: 

McCoy Williams, (202) 512-6906 or [Hyperlink, williamsm1@gao.gov], 
Keith A. Rhodes, (202) 512-6412 or [Hyperlink, rhodesk@gao.gov]: 

Acknowledgments: 

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. 

[End of section] 

Related GAO Products: 

Army National Guard: Inefficient, Error-Prone Process Results in Travel 
Reimbursement Problems for Mobilized Soldiers. [Hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-05-400T]. Washington, D.C.: March 
16, 2005. 

Army National Guard: Inefficient, Error-Prone Process Results in Travel 
Reimbursement Problems for Mobilized Soldiers. [Hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-05-79]. Washington, D.C.: January 
31, 2005. 

DOD Travel Cards: Control Weaknesses Led to Millions of Dollars of 
Improper Payments. [Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-
576]. Washington, D.C.: June 9, 2004. 

DOD Travel Cards: Control Weaknesses Led to Millions in Fraud, Waste, 
and Improper Payments. [Hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-04-825T]. Washington, D.C.: June 9, 2004. 

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.: March 31, 2004. 

Travel Cards: Internal Control Weaknesses at DOD Led to Improper Use of 
First and Business Class Travel. [Hyperlink, http://www.gao.gov/cgi-
bin/getrpt?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. [Hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO-04-88]. Washington, D.C.: October 24, 2003. 

(192146): 

FOOTNOTES 

[1] Department of Defense, Report of the Department of Defense Task 
Force to Reengineer Travel (Arlington, Va.: January 1995). 

[2] 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." 

[3] See the Related GAO Products section at the end of this report. 

[4] GAO, DOD Business Transformation: Preliminary Observations on the 
Defense Travel System, GAO-05-998T (Washington, D.C.: Sept. 29, 2005). 

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

[6] Flight information includes items such as departure and arrival 
times, airports, and the cost of the airline ticket. 

[7] Defense Finance and Accounting Service, Military and Civilian Pay 
Services Defense Travel System. 

[8] We analyzed 170 travel vouchers, and at the time of our review 3 
vouchers in our sample had not yet been completed and submitted. 

[9] The vouchers selected for review were those trips in DTS where (1) 
the trip started on or after October 1, 2004, and (2) the trip ended on 
or before December 31, 2004. 

[10] Office of the Under Secretary of Defense (Comptroller): Department 
of Defense Travel Reengineering Pilot Report to Congress (Arlington, 
Va.: June 1997). 

[11] The protestor, Electronic Data Systems Corporation (EDS), had 
alleged that the department improperly evaluated the two offers by (1) 
undervaluing the estimated savings to the department by EDS's proposed 
accelerated DTS deployment schedule, (2) failing to hold "discussions" 
with EDS on the proposed accelerated deployment schedule, and (3) 
omitting from consideration certain department evaluation team members' 
concerns about BDM's staffing level for operation and maintenance of 
the DTS. Matter of Electronic Data Systems Corporation, B-280133; B- 
280133.2 (Sept. 3, 1998). 

[12] IOC represents the first attainment of the minimum capability to 
effectively employ a system of approved specific characteristics. 

[13] According to the PMO-DTS, the $44 million associated with the 
restructuring of the contract is part of the overall contract amount of 
$264 million. 

[14] AOs are appointed as accountable officers and shall be pecuniarily 
liable for erroneous payments from negligent performance of duties in 
accordance with DOD Financial Management Regulation 7000.14-R, vol. 5, 
ch. 33. 

[15] DOD policy permits the AO to also serve as the certifying 
official, but PMO-DTS officials stated that by practice, AOs do not 
approve and certify the same vouchers. Certifying officials are also 
pecuniarily liable for erroneous payments, but may be relieved from 
liability if they were not negligent in the performance of their 
duties. 

[16] GAO, Travel Cards: Internal Control Weaknesses at DOD Led to 
Improper Use of First and Business Class Travel, GAO-04-88 (Washington, 
D.C.: Oct. 24, 2003), and Travel Cards: Internal Control Weaknesses at 
DOD Led to Improper Use of First and Business Class Travel, GAO-04-229T 
(Washington, D.C.: Nov. 6, 2003). 

[17] GAO, DOD Travel Cards: Control Weaknesses Led to Millions of 
Dollars Wasted on Unused Airline Tickets, GAO-04-398 (Washington, D.C.: 
Mar. 31, 2004). 

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

[19] Department of Defense Office of the Inspector General, Allegations 
to the Defense Hotline on the Management of the Defense Travel System, 
D-2002-124 (Arlington, Va.: July 1, 2002). 

[20] Disciplined processes for software development and implementation 
include a wide range of activities, including project planning and 
oversight, requirements management, risk management, and testing. 

[21] Prior to the August 2005 system update, DTS used a 4-hour flight 
window for domestic flights and a 12-hour flight window for foreign 
flights. The current window is 12 hours for domestic flights and 24 
hours for foreign destinations. The system is also now expected to 
display up to 25 flights for the flight window. 

[22] A flight window is the amount of time before and after a specified 
time and is used for determining the flights that should be displayed. 
For example, if the flight window is 4 hours and estimated departure 
time is 9:00 a.m., then the flight window that is used for displaying 
available flights is from 7:00 a.m. to 11:00 a.m. 

[23] GAO, Indian Trust Funds: Challenges Facing Interior's 
Implementation of New Trust Asset and Accounting Management System, 
GAO/T-AIMD-99-238 (Washington, D.C.: July 14, 1999). 

[24] A system that is used to offer and purchase travel services and 
related products. For example, according to one GDS (SABRE), it now 
includes more than 400 airlines, 64,000 hotels, 32 car rental 
companies, 9 cruise lines, 35 railroads, and 220 tour operators. In 
2004, more than 900 travel providers displayed information about their 
products and services through the SABRE system, and an estimated $70 
billion worth of travel-related products were sold. 

[25] The purpose of end-to-end testing is to verify that a defined set 
of interrelated systems, which collectively support an organizational 
core business area or function, interoperate as intended in an 
operational environment. 

[26] Elapsed flight time is the amount of time the flight is scheduled 
to be in the air, rather than the total trip time. For example, one 
flight displayed in DTS showed an elapsed flight time of 3 hours and 20 
minutes with a total trip time of about 9 hours. 

[27] GAO-05-998T. 

[28] GAO-04-88, GAO-04-398, and GAO-04-576. 

[29] GAO-04-576. 

[30] GAO-04-88. 

[31] To assess the use of premium-class travel, we obtained databases 
from Bank of America and the PMO-DTS, which provided information on the 
actual travel transactions and traveler information for the period 
October through December 2004. The Bank of America database contained 
all DOD transactions for the first quarter of fiscal year 2005, and the 
PMO-DTS database contained all vouchers processed by DTS for the same 
period. We eliminated all airfare transactions that were (1) less than 
$200, (2) not processed through DTS, and (3) determined to be economy 
class. As a result, we identified 419 cases that could involve premium- 
class travel. 

[32] Department of Defense Civilian Personnel Joint Travel Regulations, 
paras. C2000 and C2204 and Department of Defense Joint Federal Travel 
Regulations, paras. U3100 and U3125. 

[33] Request for documentation was made on May 19, June 9, July 11, 
August 8, and August 22, 2005. 

[34] Aberdeen Proving Ground, Maryland; Buckley Air Force Base, 
Colorado; Defense Logistics Agency, Virginia; Headquarters Marine 
Corps, Virginia; and Naval Operations Headquarters, Virginia. 

[35] We analyzed 170 travel vouchers, and at the time of our review, 3 
vouchers in our sample had not yet been completed and submitted. The 
selected vouchers were drawn from the first quarter of fiscal year 2005 
(October through December 2004). 

[36] We are 95 percent confident that the total number of travel 
vouchers that were paid even though there was not reasonable assurance 
that the amount of the reimbursement was accurate was between 13 
percent and 25 percent. 

[37] We are 95 percent confident that the total number of travel 
vouchers that lacked adequate receipts for the amounts claimed was 
between 22 percent and 36 percent. 

[38] An ERP solution is an automated system consisting of multiple, 
integrated functional modules that perform a variety of business- 
related tasks, such as payroll, general ledger accounting, and supply 
chain management. 

[39] As defined by the World Wide Web Consortium "Web services provide 
a standard means of interoperating between different software 
applications, running on a variety of platforms and/or frameworks. Web 
services are characterized by their great interoperability and 
extensibility thanks to the use of [the Extensible Markup Language 
(XML)], and they can then be combined in a loosely coupled way in order 
to achieve complex operations." XML is a flexible, nonproprietary set 
of standards for annotating or "tagging" information so that it can be 
transmitted over a network such as the Internet and readily interpreted 
by disparate computer systems. 

[40] GAO, DOD Business Systems Modernization: Billions Being Invested 
without Adequate Oversight, GAO-05-381 (Washington, D.C.: Apr. 29, 
2005). 

[41] GAO-05-381. 

[42] GAO, DOD Business Systems Modernization: Billions Continue to Be 
Invested with Inadequate Management Oversight and Accountability, GAO- 
04-615 (Washington, D.C.: May 27, 2004), and GAO-05-381. 

[43] Ronald W. Reagan National Defense Authorization Act for Fiscal 
Year 2005, Pub. L. No. 108-375, § 332, 118 Stat. 1811, 1851-56 (Oct. 
28, 2004) (codified, in part, at 10 U.S.C. §§ 186, 2222). 

[44] GAO, Department of Defense: Long-standing Problems Continue to 
Impede Financial and Business Management Transformation, GAO-04-907T 
(Washington, D.C.: July 7, 2004). 

[45] Office of Management and Budget, Office of Federal Financial 
Management, Exposure Draft: Core Financial System Requirements, OFFM- 
NO-0105 (Washington, D.C.: February 2005). 

[46] Joint Financial Management Improvement Program, Federal Financial 
Management System Requirements: Core Financial System Requirements, 
JFMIP-SR-02-01 (Washington, D.C.: November 2001). 

[47] GAO-04-398. 

[48] According to ARC, it was established by the travel industry to 
provide prompt, efficient, secure distribution and settlement of travel 
purchased in the United States. It also is a recognized travel industry 
data store and provider of travel industry knowledge and insight. 
According to DOD, ARC provides information on a subscription basis. 

[49] These fares are lower in cost and the terms and conditions are 
similar to GSA city pair fares except the airline limits the number of 
seats that can be sold. However, they are refundable, changeable, and 
have no advance ticketing requirements. These fares are not always 
available, especially for last-minute or peak-season travel. 

[50] GSA awards contracts to the airlines to provide flight services. 
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. 

[51] The $188 represents a one-way fare, which is how the GSA city pair 
fares are shown. 

[52] Other types of restrictions include purchasing the ticket in 
advance or staying over a specified number of days. 

[53] Under the JFTR and JTR, if a DOD traveler arranges travel through 
a noncontract CTO, DOD will reimburse the cost of a restricted ticket 
only up to the cost of the least expensive unrestricted ticket. 

[54] 26 C.F.R. § 1.62-2; see also, Revenue Ruling 2003-106, November 3, 
2003; Revenue Procedure 97-45, October 14, 1997. 

[55] Internal Revenue Service, Travel, Entertainment, Gift, and Car 
Expenses, Publication 463 (Washington, D.C.: 2004). 

[56] IRS Publication 463. 

[57] Data mining applies a search process to a data set, analyzing for 
trends, relationships, and interesting associations. For instance, it 
can be used to efficiently query transaction data for characteristics 
that may indicate potentially improper activity. 

[58] For example, the employee may have been authorized to travel to 
Washington, D.C., but stayed in Arlington, Virginia, which is located 
near Washington, D.C. 

[59] GAO, Financial Management: Effective Internal Control Is Key to 
Accountability, GAO-05-321T (Washington, D.C.: Feb. 16, 2005). 

[60] Aberdeen Proving Ground, Maryland; Buckley Air Force Base, 
Colorado; Defense Logistics Agency, Virginia; Headquarters Marine 
Corps, Virginia; and Naval Operations Headquarters, Virginia. 

[61] We analyzed 170 travel vouchers, and at the time of our review 3 
vouchers in our sample had not yet been completed and submitted. 

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