DOD Travel Cards
Control Weaknesses Led to Millions in Fraud, Waste, and Improper Payments Gao ID: GAO-04-825T June 9, 2004In November 2003, GAO testified on the significant level of improper premium class travel purchased with centrally billed accounts. These findings led to concerns over the Department of Defense's (DOD) overall management of the centrally billed account program. At the request of this Committee, Senator Grassley, and Representative Schakowsky, GAO performed work to determine whether DOD controls were adequate to protect the centrally billed accounts from fraud, waste, and abuse. This testimony focuses on whether DOD (1) paid for airline tickets that it did not use and did not process for refund, (2) improperly reimbursed travelers for the cost of airline tickets paid for with centrally billed accounts, and (3) adequately secured access to centrally billed accounts against improper and fraudulent use. This testimony also addresses the internal control breakdowns that led to instances of fraud, waste, and abuse and DOD's corrective actions. In two companion reports issued today, DOD concurred with the 31 recommendations GAO made-- including moving to a well- managed individually billed account program--to improve the management of unused tickets, recover the value of outstanding unused tickets, prevent and detect improper payments, reduce the risk that airline tickets are issued on invalid travel orders, and improve security over the centrally billed accounts.
A weak control environment and breakdowns of key controls over the centrally billed accounts led to millions of dollars wasted on unused airline tickets, reimbursements to travelers for improper and potentially fraudulent airline ticket claims, and issuance of airline tickets based on invalid travel orders. In some instances where the centrally billed accounts were compromised, DOD did not pay for the airline tickets because DOD disputed those charges. However, not all DOD units disputed unauthorized charges. As a result, DOD is vulnerable to paying for fraudulent charges. A major contributing factor to these problems is that DOD's travel order, ticket issuance, and travel voucher systems are not integrated, and DOD had not designed compensating procedures to reconcile data in these systems. Thus, DOD was unable to detect instances where (1) the absence of a travel voucher might indicate that an airline ticket was unused, (2) travelers improperly claimed reimbursement for tickets they did not purchase, and (3) an authorized individual did not approve the travel order submitted to obtain an airline ticket. Other causes are excessive reliance on DOD travelers to report unused tickets, inadequate voucher review, and weak centrally billed account safeguards.
GAO-04-825T, DOD Travel Cards: Control Weaknesses Led to Millions in Fraud, Waste, and Improper Payments
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Testimony:
Before the Committee on Governmental Affairs, U.S. Senate:
For Release on Delivery Expected at 10 a.m. EDT Wednesday, June 9,
2004:
DOD Travel Cards:
Control Weaknesses Led to Millions in Fraud, Waste, and Improper
Payments:
Statement of Gregory D. Kutz,
Director, Financial Management and Assurance:
John J. Ryan,
Assistant Director, Office of Special Investigations:
GAO-04-825T:
GAO Highlights:
Highlights of GAO-04-825T, a testimony before the Committee on
Governmental Affairs, United States Senate
Why GAO Did This Study:
In November 2003, GAO testified on the significant level of improper
premium class travel purchased with centrally billed accounts. These
findings led to concerns over the Department of Defense‘s (DOD) overall
management of the centrally billed account program. At the request of
this Committee, Senator Grassley, and Representative Schakowsky, GAO
performed work to determine whether DOD controls were adequate to
protect the centrally billed accounts from fraud, waste, and abuse.
This testimony focuses on whether DOD (1) paid for airline tickets
that it did not use and did not process for refund, (2) improperly
reimbursed travelers for the cost of airline tickets paid for with
centrally billed accounts, and (3) adequately secured access to
centrally billed accounts against improper and fraudulent use. This
testimony also addresses the internal control breakdowns that led to
instances of fraud, waste, and abuse and DOD‘s corrective actions.
In two companion reports issued today, DOD concurred with the 31
recommendations GAO made”including moving to a well-managed
individually billed account program”to improve the management of unused
tickets, recover the value of outstanding unused tickets, prevent and
detect improper payments, reduce the risk that airline tickets are
issued on invalid travel orders, and improve security over the
centrally billed accounts.
What GAO Found:
A weak control environment and breakdowns of key controls over the
centrally billed accounts led to millions of dollars wasted on unused
airline tickets, reimbursements to travelers for improper and
potentially fraudulent airline ticket claims, and issuance of airline
tickets based on invalid travel orders.
Problem identified: Unused airline tickets:
* 58,000 airline tickets”primarily fiscal years 2001 and 2002 tickets”
with a residual value of more than $21.1 million were unused and not
refunded as of October 2003;
* Many more tickets are partially unused with unknown residual value;
* $100 million in potential unused tickets from fiscal years 1997 to
2003;
Illustrative example(s):
Some unused tickets are first or business class tickets that cost
thousands of dollars:
* $9,800 round trip from Washington, D.C. to Canberra, Australia;
* $3,400 round trip from Washington, D.C. to San Diego, Calif.
Problem identified: Reimbursements to travelers for improper and
potentially fraudulent airline ticket claims:
* About 27,000 potential improper reimbursements totaling more than $8
million identified at the Army, Marine Corps, and Navy during fiscal
year 2001 and 2002;
* 123 of 204 transactions selected for testing were improper and
potentially fraudulent;
* Air Force Audit Agency estimated that losses for the Air Force due
to improper payments to be $6.5 million over 6 years.
Illustrative example(s):
Some travelers submitted multiple claims for tickets they did not
purchase, which could be indicative of intent to defraud the
government:
* A GS-15 received 13 improper payments totaling almost $10,000 but
claimed he did not notice the overpayments;
* A GS-13 repeatedly submitted false claims for airline ticket
reimbursements after being told they were improper;
Problem identified: Centrally billed accounts not adequately secured
against improper and fraudulent use:
* No verification that travel order is valid before airline tickets
are charged to the centrally billed accounts and obligations recorded
to pay for the airline tickets;
* Centrally billed account numbers were compromised and used for
personal gain;
Illustrative example(s):
* Using a basic scheme to defraud, GAO obtained a round-trip airline
ticket from Washington, D.C. to Atlanta, Ga. that was paid for by DOD;
* A DOD traveler used a centrally billed account number to purchase
over 70 airline tickets costing over $60,000, which he resold at a
discount.
Source: GAO analysis of DOD data.
[End of table]
In some instances where the centrally billed accounts were compromised,
DOD did not pay for the airline tickets because DOD disputed those
charges. However, not all DOD units disputed unauthorized charges. As a
result, DOD is vulnerable to paying for fraudulent charges. A major
contributing factor to these problems is that DOD‘s travel order,
ticket issuance, and travel voucher systems are not integrated, and
DOD had not designed compensating procedures to reconcile data in these
systems. Thus, DOD was unable to detect instances where (1) the absence
of a travel voucher might indicate that an airline ticket was unused,
(2) travelers improperly claimed reimbursement for tickets they did not
purchase, and (3) an authorized individual did not approve the travel
order submitted to obtain an airline ticket. Other causes are excessive
reliance on DOD travelers to report unused tickets, inadequate voucher
review, and weak centrally billed account safeguards.
www.gao.gov/cgi-bin/getrpt?GAO-04-825T.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Gregory Kutz at (202)
512-9505 or kutzg@gao.gov.
[End of section]
Madame Chairman and Members of the Committee:
Thank you for the opportunity to discuss the Department of Defense's
(DOD) management of its centrally billed accounts. This testimony is a
continuation of previous work we performed on weaknesses in controls
over DOD's premium class travel acquired using the centrally billed
travel accounts.[Footnote 1] Our two related reports,[Footnote 2]
released today and developed at the request of this Committee, Senator
Grassley, and Representative Schakowsky, describe additional problems
we identified in DOD's controls over the centrally billed accounts.
These weaknesses, and other weaknesses we had previously reported upon
related to DOD's management of the individually billed
accounts,[Footnote 3] are illustrative of DOD's long-standing financial
management problems, which are pervasive, complex, and deeply rooted in
virtually all business operations. Such problems led us in 1995 to put
DOD financial management on our list of high-risk areas--those that are
highly vulnerable to fraud, waste, and abuse--a designation that
continues today.[Footnote 4]
The centrally billed accounts are used by most DOD services and units
to purchase transportation services such as airline and train tickets,
facilitate group travel, and procure other travel-related
expenses.[Footnote 5] In contrast, the individually billed travel
accounts are used by individual travelers primarily for lodging, rental
cars, and other travel expenses. Further, unlike the individually
billed travel accounts, where travelers are responsible for all charges
and for remitting payments for the monthly bill, charges for centrally
billed accounts are billed directly to the government for payment. For
fiscal years 2001 and 2002, DOD travelers incurred $7.1 billion in
expenses on the centrally billed and individually billed travel card
accounts, with about $2.8 billion related to the use of centrally
billed accounts.
Today, we will share our perspective on whether DOD (1) paid for
airline tickets that it did not use and did not process for refund, (2)
improperly reimbursed travelers for the cost of airline tickets paid
for using centrally billed accounts, and (3) adequately secured access
to the centrally billed accounts against improper and fraudulent use.
We will also address the internal control breakdowns that led to these
instances of fraud, waste, and abuse and DOD's corrective actions.
Summary:
Weaknesses in the design and implementation of key internal controls
over the centrally billed accounts led to millions of dollars wasted on
airline tickets that were unused and not refunded, and millions more
where DOD made payments to travelers for improper and potentially
fraudulent claims the travelers filed for airline tickets that DOD--and
not the traveler--purchased. The weaknesses were also highlighted when
DOD issued us an airline ticket and recorded an obligation to pay for
that ticket based on a fictitious travel order we prepared. We also
found that some DOD centrally billed accounts had been compromised and
used for personal gain.
Limited data provided by DOD's five most frequently used airlines
indicated that DOD had purchased--primarily in fiscal years 2001 and
2002--about 58,000 tickets with a residual (unused) value of $21.1
million that were unused and not refunded as of October 2003. In
addition, three airlines reported that DOD had purchased more than
81,000 airline tickets costing more than $62 million that it used only
partially, that is, at least one leg had not been used. We also found
that DOD was not aware of the magnitude of these unused tickets, and
therefore did not know their number or dollar value. Based on further
assessment of the limited airline data, we determined that it is
possible that DOD had purchased, since 1997, more than $100 million in
airline tickets with its centrally billed accounts that it did not use
and did not process for refunds. The millions of dollars in airline
tickets were wasted because DOD did not have a systematic process to
identify and process unused airline tickets.
We also found that DOD made millions of dollars of improper
reimbursements to travelers who filed potentially fraudulent claims for
airline tickets that DOD, and not the travelers, paid for using the
centrally billed accounts. Some DOD travelers submitted multiple claims
for airline tickets they did not purchase, which could indicate an
intent to defraud the government. During fiscal years 2001 and 2002,
these improper reimbursements were made on about 27,000 transactions
totaling more than $8 million. We identified the $8 million through
data mining of limited fiscal year 2001 and 2002 travel voucher data
provided by the Army, Navy, and Marine Corps. Further testing of a
nonrepresentative selection of 204 potentially improper claims for
airline tickets confirmed that 123 payments totaling about $97,000 were
improper. For example, one traveler received 13 improper payments
totaling almost $10,000 for airline tickets he did not purchase, yet
claimed that he did not realize he was overpaid. In another case, one
traveler continued to file false claims and eventually received
improper payments of $3,600 despite repeated notification that his
claims were improper.
The lack of adequate security over the centrally billed accounts also
exposed these accounts to improper and fraudulent use. We found that
DOD allowed the centrally billed accounts to be used for payment of
airline tickets without verifying the validity of the travel order. Our
investigation demonstrated the ease with which an unauthorized
individual could obtain an airline ticket using a fictitious travel
order. Specifically, we found that DOD readily issued an airline
ticket--for which we were able to obtain a boarding pass--on the
receipt of a fictitious travel order, and automatically recorded an
obligation to pay for the airline ticket issued on the basis of the
fictitious travel order. The lack of adequate security also resulted in
some DOD centrally billed accounts being compromised and used for
personal gain. For instance, a military service member used the
centrally billed accounts to buy airline tickets costing more than
$60,000 and sold them at a discounted rate to coworkers and family
members. Because DOD disputed these unauthorized transactions once they
were identified as unauthorized, DOD received credits from Bank of
America and did not incur losses. However, some DOD locations did not
file disputes for unauthorized items or track their resolution. As a
result, DOD could have paid for fraudulent transactions from
compromised accounts.
Weaknesses in the design of internal controls, specifically the lack of
interface between DOD's travel order, ticket issuance, and travel
voucher systems, and the lack of compensating procedures to reconcile
data from these systems, were major contributing factors to the fraud,
waste, and improper payments we identified. For example, without
reconciling data from the ticket issuance to the travel voucher system,
DOD could not identify instances where the absence of a travel voucher
indicates that travel was canceled and the airline ticket was unused,
or that an airline ticket claimed on a travel reimbursement was
improper. Without an interface between the travel order and ticket
issuance systems, DOD could not determine that a travel order was valid
before ticket issuance. Again, DOD did not implement compensating
procedures to verify that the travel order was valid before it paid
Bank of America for the airline tickets. Other internal control
weaknesses included excessive reliance on DOD travelers to report
unused tickets, inadequate supervisory review of vouchers, and lack of
physical safeguards over centrally billed accounts.
As discussed in the two reports released today, DOD agreed with all 31
of our recommendations to improve internal controls over the centrally
billed accounts. In particular, DOD agreed that using a well-controlled
individually billed account program to pay for airline tickets would
transfer responsibility for all charges to the individual cardholder
and reduce the financial exposure resulting from the weaknesses in the
controls over DOD's centrally billed accounts. DOD has also begun to
take corrective actions in a number of areas. DOD has convened task
forces and working groups to address the deficiencies we have
identified, taken actions to attempt to recover the $21.1 million in
tickets identified as unused and not refunded, and recovered more than
$50,000 of the $100,000 in improper payments we identified.
Millions of Dollars Wasted on Airline Tickets that Were Unused and Not
Refunded:
Our analysis of limited airline data found that DOD had purchased
millions of dollars in airline tickets that it did not use and did not
process for refund. Because DOD did not maintain data on unused
tickets, DOD was not aware of this problem prior to our audit. Further
assessment of the data indicated that it is possible that since 1997,
DOD purchased more than $100 million in airline tickets with its
centrally billed accounts that it did not use and did not process for
refunds.
As shown in table 1, data provided by five of DOD's most frequently
used airlines[Footnote 6] showed that about 58,000 tickets with a value
of $21.1 million were purchased with DOD's centrally billed accounts
but were unused and not refunded. DOD was not aware of these unused
tickets and did not know their number or dollar value. The $21.1
million we identified included more than 48,000 tickets valued at $19.2
million that were fully unused, and $1.9 million in the unused
(residual) value of about 10,000 partially used tickets,[Footnote 7]
that is, at least one leg had not been used. These tickets were
primarily acquired during fiscal years 2001 and 2002, although some
were also purchased during fiscal years 1999, 2000, and 2003.
Table 1: Known Value of Unused and Unclaimed Airline Tickets, November
1998 through December 2002:
Airline: American;
Number of tickets: 15,877[A];
Known unused value of fully and partially unused airline tickets
(dollars in millions): $4.1[A].
Airline: Delta;
Number of tickets: 15,588;
Known unused value of fully and partially unused airline tickets
(dollars in millions): $6.4.
Airline: Northwest;
Number of tickets: 3,479;
Known unused value of fully and partially unused airline tickets
(dollars in millions): $2.3[B].
Airline: United;
Number of tickets: 16,283;
Known unused value of fully and partially unused airline tickets
(dollars in millions): $6.0.
Airline: US Airways;
Number of tickets: 6,719;
Known unused value of fully and partially unused airline tickets
(dollars in millions): $2.3.
Airline: Total;
Number of tickets: 57,946;
Known unused value of fully and partially unused airline tickets
(dollars in millions): $21.1.
Source: GAO analysis of Bank of America and airline data.
[A] In total, American Airlines reported 24,013 tickets with residual
value of more than $6.2 million that were fully or partially unused. We
excluded 8,136 American Airlines unused tickets totaling more than $2.1
million from our analysis because either (1) less than 6 months had
passed since the tickets were purchased and when American Airlines
provided the file or (2) Bank of America data did not confirm whether
the tickets were fully or partially unused.
[B] Values represent the amount Bank of America reported for tickets
Northwest identified as being unused.
[End of table]
In addition to the known, unused value of $21.1 million, DOD also
failed to claim refunds on an additional 81,000 partially unused
tickets purchased at more than $62 million, of which the residual value
is unknown. This is because Delta, Northwest, and United airlines,
which provided us with these data, informed us that their ticket data
are not maintained in a format that would allow them to easily quantify
the remaining unused value.
The data the five airlines provided in response to our request for
fiscal years 2001 and 2002 unused ticket data were not uniform,
complete, or consistent. For example, while American, Delta, Northwest,
and United provided some data on partially unused tickets, US Airways
did not provide any. Further, while Delta, Northwest, and United
provided data on the total purchase price of tickets that were
partially unused, American Airlines was the only airline that provided
data on the purchase price and unused value of its partially unused
tickets. The airlines cited difficulties with accessing their
historical files as the reason for not being able to fully respond to
our request. The airlines pointed out that to provide additional
information, they would have had to access information that had been
stored in archived computer files, and in some instances, the computer
files had been eliminated and the only documentation that remained were
paper records of the flights.
Also as we reported previously, DOD's failure to monitor premium class
travel had resulted in more than 70 percent of premium class travel
being unauthorized and unjustified, and thus increased cost to
taxpayers.[Footnote 8] Although we found that the vast majority of the
wasted airline tickets were for coach class travel, the most egregious
examples of waste related to premium class tickets costing thousands of
dollars that DOD--and thus the taxpayers--paid for that were not used
and therefore provided no benefit to the government or the taxpayers.
For example, United Airlines reported that a Navy traveler used the
centrally billed account to purchase a round-trip business-class ticket
costing $9,800 from Washington D.C., to Canberra, Australia. Table 2
shows examples of first and business class tickets purchased for travel
through December 2002 that were identified as unused--and were not
refunded--as of October 2003.
Table 2: Examples of Unused and Unclaimed Premium Class Tickets:
Ticket itinerary: 1;
Ticket itinerary: Round trip -Washington, D.C. to Canberra, Australia;
Ticket price: $9,800.
Ticket itinerary: 2;
Ticket itinerary: Round trip -Atlanta, Georgia to Muscat, Oman;
Ticket price: $8,100.
Ticket itinerary: 3;
Ticket itinerary: Round trip -Washington, D.C. to Canberra and
Honolulu;
Ticket price: $8,000.
Ticket itinerary: 4;
Ticket itinerary: Round trip -Washington, D.C. to Tokyo, Japan;
Ticket price: $7,300.
Ticket itinerary: 5;
Ticket itinerary: One way -Stuttgart, Germany to Honolulu;
Ticket price: $4,800.
Ticket itinerary: 6;
Ticket itinerary: One way -Washington, D.C. to Brussels, The
Netherlands;
Ticket price: $2,800.
Ticket itinerary: 7;
Ticket itinerary: One way -Washington, D.C. to Chicago, Illinois;
Ticket price: $900.
Source: GAO.
[End of table]
Based on further assessment of the limited airline data, we determined
that it is possible that DOD purchased at least $100 million in airline
tickets that were unused and not refunded since 1997, the oldest year
for which centrally billed account data were available. This amount is
derived by using data provided by the airlines for fiscal year 2002 to
calculate the total value of unused tickets as a percentage of total
tickets purchased using the centrally billed accounts, and applying the
resulting percentage to the almost $8 billion in total value of tickets
purchased with a centrally billed account since 1997. Federal agencies
are authorized to recover payments made to airlines for tickets that
agencies acquired but did not use.[Footnote 9] Consequently, DOD might
be entitled to recover the value of the unused and unrefunded tickets
from the airlines.
Because DOD did not maintain data on unused tickets, DOD would have to
rely on the airlines to provide the relevant data needed to claim
refunds. While the airlines provided us with at least 1 year of the
data we requested, some airline representatives expressed concerns
about the feasibility and costs of providing additional unused ticket
data. However, unused tickets from these 5 airlines and the more than
85 other airlines that DOD uses represent a potentially substantial
government claim. To assist DOD in claiming refunds or converting the
unused tickets to future use, we provided DOD with a list of the unused
ticket information we received from the airlines in December 2003. As
will be discussed in further detail below, DOD has taken actions to
request repayment of the over $21 million in known unused tickets from
the airlines.
Reimbursements for Improper and Potentially Fraudulent Airline Ticket
Claims Could Total Millions of Dollars:
We found that breakdown in internal controls resulted in numerous
instances during fiscal years 2001 and 2002 where DOD travelers
submitted improper claims and subsequently received improper
reimbursements for airline tickets they did not purchase. Requesting
reimbursement for items that the traveler did not pay for may violate
the False Claims Act and be punishable by imprisonment or a monetary
fine, or both. Although limitations in DOD data prevented us from
accurately estimating the magnitude of these improper reimbursements,
our data mining of limited DOD data indicated that the potential
improper claims could total more than $8 million dollars.
Magnitude of Potentially Improper Payments:
During fiscal years 2001 and 2002, DOD spent over $10.8 billion on
travel and transportation expenses for DOD military and civilian
personnel, of which about $2.8 billion were charged to the centrally
billed accounts, and the remaining $8 billion through voucher
settlement.[Footnote 10] However, significant limitations related to
DOD travel and transportation data prevented us from accurately
estimating the magnitude of improper payments DOD made to travelers for
improper and potentially fraudulent claims travelers filed for airline
tickets that DOD--and not the traveler--purchased. Specifically, travel
voucher data received from the Army, Navy, and Marine Corps covered
only about $4.5 billion of the $8 billion in total travel voucher
expenses.[Footnote 11] Despite these limitations, our data mining of
about 50 percent of voucher data identified about 27,000 travel claims
totaling over $8 million for which DOD made potentially improper
reimbursements to travelers for airline tickets that had actually been
paid for using DOD centrally billed accounts. Although we were unable
to obtain Air Force data in a format that would help us identify
instances of improper payments, the Air Force Audit Agency[Footnote 12]
reported that the Air Force also improperly paid travelers for the cost
of airline tickets purchased with centrally billed accounts and
estimated that the improper payments cost the Air Force $6.5 million
over 6 years.
Results of Improper Payment Testing:
To determine whether DOD improperly paid travelers for the airline
tickets purchased with centrally billed accounts, we tested 204 travel
claims selected from the 27,000 potentially improper travel claims we
identified through data mining. We selected the 204 travel claims
containing about $154,000 in potentially improper payments using a
nonrepresentative methodology. Our tests--which consisted of reviewing
what the travelers claimed as reimbursable expenses, what DOD paid, and
what was purchased using the centrally billed accounts--confirmed that
DOD made 123 improper payments totaling more than $97,000 to 91
travelers.[Footnote 13] Fifteen of the 123 improper payments had been
identified prior to our audit because the travelers voluntarily
notified DOD of the improper payments, or because DOD found that the
payments were improper through its own voucher audits. Further, in
response to our audit, DOD collected more than $42,500 from 46
travelers for 63 improper airfare payments, and is in the process of
recovering the remaining improper payments:
We found that improper payments fell into two categories. The first
category, which is linked to DOD's unused ticket problem, comprises 15
instances totaling almost $16,000. In these instances, DOD and the
traveler each purchased one airline ticket for the same
travel,[Footnote 14] and DOD properly reimbursed the traveler for the
airline ticket used and charged to the traveler's individually billed
account. However, lack of reconciliation procedures, which I will
discuss in further detail below, resulted in DOD not being able to
detect that a payment for an airline ticket purchased and paid for by
the traveler corresponded to an unused airline ticket purchased with a
centrally billed account.
The second, and more typical, category of improper payments were made
to 76 travelers for airline tickets they simply did not purchase. Only
4 travelers notified the Defense Finance and Accounting Service--and
made restitution--on the improper payments prior to our audit. The
remaining improper payments would also be fraudulent if the travelers
intentionally filed false claims.
Examples of Improper Payments:
Travelers who had not purchased airline tickets should not have
requested reimbursements, nor should DOD have paid the travelers for
the cost of the airline tickets. Knowingly requesting reimbursement for
items that the traveler did not pay for may violate the False Claims
Act and be punishable by imprisonment or a monetary fine, or both.
Although most of the 76 travelers we identified submitted improper
claims once, several travelers we identified repeatedly submitted
claims for airline tickets they did not purchase, which could indicate
an intent to defraud the government. For example:[Footnote 15]
* A GS-15 submitted claims--and received payments--for 13 airline
tickets totaling almost $10,000 that he did not purchase. One of these
claims was for an international ticket costing more than $3,500.
Despite receiving almost $10,000 over a 9-month period, the traveler
informed us that he did not notice that he had received payments for
expenses he did not incur.
* Despite six notifications by DFAS from March 2001 to July 2002 that
his vouchers contained improper airfare claims, a GS-13 acquisition
specialist continued to submit false airfare claims from August 2002 to
June 2003. This employee ultimately received $3,600 in payments for six
improper claims. To circumvent proper review of his vouchers, the
traveler scribbled his own name as the approving official and approved
his own voucher. The traveler also took other questionable actions
related to travel. For example, the traveler used the individually
billed travel card to obtain two unrestricted coach class tickets for
family members to fly to Germany. These unrestricted coach class
tickets were normally priced at $2,800 each compared to the reduced
government rate of $546 per person, which the traveler was able to
obtain by using the individually billed card. The traveler also rented
luxury vehicles--Mercedes Benz and Lincoln Navigator--while on
government travel, typically at a rental rate of more than $100 a day.
* Another traveler, an E-9, represented to us that he knew that he
received $1,400 in payments for two airline tickets he did not
purchase. The traveler did not take actions to notify DFAS of the
overpayment. The traveler kept the payment until our audit.
Because of potential fraud, we have referred these cases to the DOD
Office of Inspector General for further inquiry, and potential referral
to the appropriate U.S. Attorney for further consideration.
Inadequate Security over the Centrally Billed Accounts Increased Risk
of Fraud and Abuse:
We also found that inadequate security resulted in improper and
fraudulent use of the centrally billed accounts. Specifically, DOD did
not adequately protect the centrally billed accounts from being used to
purchase airline tickets based on fictitious travel orders and from
being compromised and used for personal gain. These weaknesses exposed
the centrally billed accounts to increased risk of fraud and abuse.
Airline Ticket Purchased Based on Fictitious Travel Order:
We found that DOD allowed the centrally billed accounts to be used for
payment of airline tickets without verifying the validity of the travel
order. Consequently, we performed additional work during fiscal year
2004 to determine whether our concerns were warranted, or whether DOD
could detect instances where invalid travel orders are used to obtain
airline tickets. Our tests were also designed to determine whether
current DOD controls could detect a ticket that is partially unused,
and process that ticket for refund.
Our work involved creating, in February 2004, a fictitious travel order
using fictitious names for the traveler and approving official. We had
a GAO employee sign the travel order as the approving official using
the fictitious name. We called a commercial travel office (CTO)
assigned to one of the locations where we performed our testing and
requested that they purchase a round trip airline ticket from
Washington, D.C., to Atlanta, Ga. Upon receiving a faxed copy of our
fictitious order, the CTO issued the airline ticket and charged it to a
centrally billed account. The CTO then notified us that the ticket was
issued and on the day of the scheduled flight, we went to the airline's
ticket counter at the airport and picked up a boarding pass for the
outbound flight from Washington, D.C., to Atlanta (see fig. 1).
Figure 1: Boarding Pass for Airline Ticket Charged to a Centrally
Billed Account for Fictitious Traveler:
[See PDF for image]
[End of figure]
Two months later, we obtained and reviewed the Bank of America invoice
for the centrally billed account the CTO used to purchase the
unauthorized ticket. The documentation indicated that DOD made payment
to Bank of America without being aware that the travel order was
fictitious, or that it had issued an airline ticket based on a
fictitious travel order. Because it did not verify that the travel
order was valid, DOD allowed its system to create an obligation to pay
for the ticket. Further, DOD had not by that time detected that the
return portion of the airline ticket was unused. Consequently, DOD had
not processed a refund for the unused portion. After we informed DOD
about the airline ticket that we obtained using the fictitious travel
order, DOD requested and received a refund from the airline for the
ticket we obtained.
Centrally Billed Accounts Were Compromised and Used Fraudulently:
During fiscal years 2001 and 2002, some DOD centrally billed accounts
were compromised and fraudulently used for personal gain. We detected
these fraudulent activities by reviewing Bank of America data and
making inquiries of DOD officials. In many instances, DOD had detected
the fraudulent transactions, and did not incur losses, because it
disputed these transactions with the Bank of America. For example:
* Between August 2001 and March 2002, a Navy seaman used the centrally
billed accounts to purchase over 70 tickets totaling more than $60,000.
The 70 unauthorized tickets were identified by the CTO as unauthorized,
that is, tickets they did not issue while reconciling tickets they had
issued to the Bank of America invoices. According to the Naval Criminal
Investigative Service (NCIS), to which this case was referred, the
seaman called the airlines and purchased the tickets by giving them the
centrally billed account numbers, which he found printed on his travel
itineraries. Some of the 70 airline tickets were obtained for the
seaman's own travel, but in many instances the tickets were sold at a
discounted rate to other Navy personnel and their family members.
* Similarly, a Marine Corps corporal used the centrally billed account
number printed on his itinerary to fraudulently purchase, through the
internet, 11 airline tickets and a hotel accommodation totaling $3,360
between July and October 2000. The charges were identified as
unauthorized by the CTO during the reconciliation process, and disputed
with Bank of America.
In the above cases, DOD identified and disciplined the military
personnel and did not incur financial losses. This is because, in both
cases, DOD officials filed disputes with Bank of America upon receiving
notification from the CTO that they had no record of having issued the
airline ticket or making the hotel accommodation, and thus the
transactions appeared to be unauthorized. Monitoring of the disputes
also helped DOD officials conclude that the transactions were
fraudulent, and resulted in Bank of America reimbursing DOD for the
fraudulent transactions.
The examples above indicated the importance of identifying unauthorized
transactions and filing disputes. However, our audit also found that
not all DOD offices filed disputes. During fiscal years 2001 and 2002,
5 of the 11 units we visited did not file disputes. Other DOD units
that did file disputes did not do so consistently. Although some
transactions that appeared to be unauthorized could ultimately be
traced to tickets actually purchased by DOD, other unauthorized
transactions occurred because the centrally billed accounts were
compromised and used fraudulently. Without disputing or researching
centrally billed account transactions that appear to be unauthorized,
DOD is exposed to significant risks that centrally billed accounts
would be compromised, similar to the two cases discussed above, but
without detection.
Weaknesses in Design and Implementation of Key Internal Controls
Contributed to Fraud, Waste, and Abuse:
We found that the lack of interface among DOD's primary travel systems-
-travel order, ticket issuance, and travel voucher--was the common
underlying cause and major contributing factor that allowed the fraud,
waste, and abuse we identified to occur without detection. DOD had
intended that the Defense Travel System (DTS) would address this
fundamental weakness; however, DTS had experienced cost and schedule
delays. In the interim, DOD had either not designed adequate
compensating procedures, such as reconciliation of data from these
systems, or had not effectively implemented procedures it had in place,
such as verifying the validity of all travel orders before paying Bank
of America for airline ticket charges. Other weaknesses that
contributed to the fraud, waste, and abuse we identified above included
excessive reliance on travelers to report unused tickets, lack of
adequate supervisory review of travel claims, and inadequate safeguards
of centrally billed account numbers.
Lack of Integrated Travel Systems and Effective Compensating Procedures
Contributed to Fraud, Waste, and Abuse:
DOD's travel systems--specifically the travel order, obligations,
ticket issuance, and travel voucher processing--are not integrated.
DOD's current travel systems do not have the ability to route only
valid travel orders to the CTO for ticket issuance, or routinely match
travel vouchers to tickets issued through the centrally billed accounts
before making voucher or centrally billed account payments. We also
found that DOD had not designed controls, or implemented effective
controls, to compensate for these system weaknesses.
We found that DOD had not designed other procedures to link or
reconcile tickets issued using the centrally billed accounts to the
voucher system. A link or reconciliation between these two types of
data would assist DOD in preventing or detecting both unused tickets
and improper payments. For example, if DOD compared ticket issuance and
voucher data, DOD could detect instances where a lack of a travel
voucher might indicate that the ticket was unused. Further follow-up
would confirm that a number of these tickets are unused and therefore,
could result in actions to claim a refund on those tickets. Without
reconciling these two types of records, DOD cannot obtain reasonable
assurance that centrally billed account charges represent airline
tickets that are eventually used. Reconciliation would also enable DOD
to detect instances where a traveler submitted a claim for airfare for
which a corresponding ticket was issued using the centrally billed
accounts. In these instances, if the traveler submitted evidence that
he bought another airline ticket, DOD would detect that the airline
ticket purchased with the centrally billed account was unused, or, if
such evidence was not submitted, that the airfare claim should be
rejected.
We also found that, in instances where DOD designed compensating
procedures to address lack of system integration, DOD did not
effectively implement these procedures. As mentioned previously, DOD
travel systems did not have the ability to route only valid travel
orders to the CTO for ticket issuance.[Footnote 16] Without this
capacity, DOD was unable to detect from its systems instances where a
travel order was not approved by an authorized individual and should
not be used as the basis for airline ticket issuance and payment. One
compensating procedure would involve DOD providing the CTOs with a list
of approving officials, or these officials' signature cards, to aid in
determining the validity of the travel orders the CTO received before
tickets are issued. DOD had chosen not to implement this front-end
procedure, electing instead to focus on back-end procedures. However,
our work found flaws in DOD implementation of these back-end
procedures.
The back-end procedure requires that DOD verify that an obligation
exists for each airline ticket charged on the centrally billed
accounts--a process called prevalidation--before payment is made to the
Bank of America. This procedure is intended to provide DOD with
assurance that, prior to payment of the Bank of America invoice,
airline ticket charges on the centrally billed accounts are supported
by valid travel orders. By verifying that an obligation exists for the
travel order that authorizes each airline ticket charged on the Bank of
America's invoice, the prevalidation process could identify instances
where obligations have not been established, which could indicate that
the travel order might not be valid, such as the fictitious order we
faxed to DFAS to obtain the airline ticket we described previously.
However, the Financial Management Regulations (FMR) allows DFAS--DOD's
disbursing organization--to record a new obligation, or increase an
existing obligation, up to $2,500 for transactions that fail
prevalidation if DFAS is in possession of a valid obligating document.
The FMR also defines a valid obligating document to include a travel
order.[Footnote 17] Thus, if DFAS receives a travel order from the CTO,
DFAS is not required to determine the validity of the travel order if
the airline ticket charge is less than $2,500.[Footnote 18] However, as
discussed previously, the CTOs forwarded the travel orders to DFAS
without verifying that these orders were valid. Therefore, DFAS does
not have reasonable assurance that the obligations it creates based on
the travel orders the CTO provided were approved by individuals who
have the authority to authorize the travel. As our investigative work
demonstrated, failure to determine the validity of all travel orders
for which a corresponding obligation had not been created resulted in
DOD creating an obligation to pay for the airline ticket we obtained
based on the fictitious travel order.
DOD officials informed us that DTS, currently being developed to
replace the more than 30 travel systems now operating within the
department, will provide an integrated process of preparing travel
orders and making travel arrangements, including airline reservations,
and filing and paying travel vouchers. According to these officials, it
will also include a capability to routinely match travel vouchers to
tickets issued through the centrally billed accounts. DTS was
originally scheduled to be fully operational in 2002, but has
experienced cost and schedule delays. According to the program
management office, DTS will be operational for about 80 percent of DOD
personnel in 2006.
Excessive Reliance on Travelers to Report Unused Tickets:
Another contributing factor to unused and unrefunded tickets is DOD's
excessive reliance on travelers to report unused tickets to the CTOs.
Appropriate reporting of unused tickets is needed to help DOD request
refunds in a timely manner so that scarce resources are returned to the
government. DOD travel and financial management regulations require
that travelers notify the appropriate CTO when a ticket is unused and
to return the unused ticket to the CTO for refund. According to bank
data, DOD received credits amounting to about 9 percent of the airline
tickets purchased through the CTOs during fiscal years 2001 and 2002,
indicating that some DOD travelers followed the unused ticket
requirements. However, DOD did not implement control procedures to
systematically determine the extent to which DOD travelers adhered to
the unused ticket requirements, and to identify instances in which they
did not.
We identified a number of control breakdowns due to excessive reliance
on travelers to notify DOD of unused tickets. Figure 2 illustrates the
many ways in which a ticket can be unused and not refunded. Internal
control breakdown 1 could occur if the traveler does not notify the CTO
of an unused paper ticket. Control breakdown 2 occurs if the ticket is
electronic, but the CTO had not implemented a system to monitor the
ticket databases maintained by the airlines to determine whether the
ticket is unused. Control breakdown 3 occurs if the CTO does not
consistently monitor unused tickets, and therefore could not identify
all unused tickets. Control breakdown 4 occurs if the CTO identifies or
is notified of an unused ticket, but fails to process a refund.
Finally, breakdown 5 occurs in the event that the CTO or the government
travel office (GTO) does not track the status of refunds from the
airlines, and therefore was not aware that a refund was not given.
Figure 2: Possible Control Breakdowns in the Unused Ticket Process:
[See PDF for image]
[End of figure]
Inadequate Voucher Review Contributed to Improper Payments:
We found that some improper and potentially fraudulent payments for
airline tickets could be prevented if DOD approving officials conducted
adequate review of the travel vouchers and the supporting documentation
before authorizing the vouchers for payment. DOD's financial management
regulations require that approving officials review travel vouchers for
accuracy before authorizing them for payment. Many of the airline
receipts submitted as supporting documentation for the improper claim
clearly showed that the airline ticket was purchased using the
centrally billed accounts. In these instances, if the approving
officials had conducted careful review of the travel vouchers and
supporting documentation, the official would have noted that the
traveler was not entitled to the travel reimbursement. Further, the
reviewing officials should have been knowledgeable that local and
component policy called for centrally billed accounts to be used to
purchase the airline tickets that were claimed as a reimbursable
expense on the vouchers.
Lack of Physical Safeguards Exposed Centrally Billed Accounts to
Fraudulent Activities:
DOD was exposed to fraudulent activities because DOD did not adequately
safeguard the centrally billed account numbers. These accounts require
safeguarding because stolen account numbers can be used fraudulently
for personal gain. We determined that a major contributing factor to
DOD's accounts being compromised was that many DOD units did not
adequately protect centrally billed account numbers. Of the 11 CTOs we
visited to observe control procedures and conduct statistical sampling,
8 printed the centrally billed account credit card number used to
purchase the airline ticket on the trip itinerary that was given to
each traveler along with the airline ticket. In these instances, the
CTOs could have safeguarded these accounts by limiting the accounts'
identity to the last four digits or simply not printing the account
number on the traveler's copy of the itinerary. In fiscal year 2003,
some CTOs improved their safeguards of the centrally billed account
numbers by printing only the last four digits of the credit account
number. However, not all CTOs have implemented this safeguard. We also
found that copies of these itineraries were maintained at CTO offices
that were accessible to any traveler who required assistance with
travel reservations. Further, at the Pentagon, the GTO stored the
reconciliation packages in boxes with the centrally billed account
numbers prominently written on the outside of the boxes in an office
that was not secured. Failure to safeguard centrally billed account
numbers creates unnecessary risks that expose the government to
fraudulent activities.
Corrective Actions Related to DOD's Management of the Travel Card
Programs:
During fiscal years 2002 and 2003, we issued a series of
testimonies[Footnote 19] and reports[Footnote 20] that focused on
problems that the Army, Navy, and Air Force had in managing the
individually billed travel card accounts. These testimonies and reports
showed high delinquency rates and significant potential fraud and abuse
related to DOD's individually billed travel card program. However, in a
recent report[Footnote 21] concerning control weaknesses with DOD
travel we recognized improvements that DOD has made in the management
of the individually billed accounts. These improvements point to the
possibility of using this program as the principal means of acquiring
tickets, thereby reducing the government's risk of losses arising from
the use of centrally billed accounts.
In response to our testimonies and reports on the individually billed
accounts, the Congress took actions in the fiscal year 2003
appropriations and authorization acts[Footnote 22] and the fiscal year
2004 authorization act[Footnote 23] requiring (1) the establishment of
guidelines and procedures for disciplinary actions to be taken against
cardholders for improper, fraudulent, or abusive use of government
travel cards; (2) the denial of government travel cards to individuals
who are not creditworthy; (3) split disbursements[Footnote 24] for
paying a portion of the expenses claimed on a travel voucher directly
to the credit card bank and the remainder to the cardholder; and (4)
offset of delinquent travel card debt against the pay or retirement
benefits of DOD civilian and military employees and retirees.
DOD has implemented many of the legislatively mandated improvements--
most notably the implementation of split disbursements and salary
offsets and the reduction in the numbers of individuals with access to
the travel cards. According to Bank of America, the delinquency rates
we noted in our prior reports at the Army, Navy, and Air Force have
decreased. For example, the monthly delinquency rate at the Navy had
decreased from an average of about 11 percent during fiscal year 2002
to an average of less than 7 percent in fiscal year 2003. Similarly,
during that same period, the Army's average monthly delinquency rate
decreased from about 14 percent to an average of about 9 percent.
Although these rates are still substantially above the agency goal of
4.5 percent, the proper implementation of split disbursements should
continue to reduce these delinquency rates.
The use of a well-controlled individually billed account travel program
as the principal mechanism for acquiring airline tickets will help
limit the government's financial exposure by reducing the magnitude of
unused tickets and improper payments, and preventing improper and
fraudulent use from inadequate security over centrally billed accounts.
However, the use of the individually billed accounts to acquire airline
tickets would only minimize, not eliminate, the necessity of
implementing internal controls over the centrally billed account
program. DOD would still need to maintain a centrally billed account
structure to purchase airline tickets for travelers who have been
denied individually billed accounts, infrequent travelers whose
individually billed credit cards have been canceled, and new employees
who have not yet acquired individually billed accounts.
In addition, DOD has taken actions to improve management of its
centrally billed account travel program based on the results of our
premium class travel and unused airline ticket reports. Specifically,
DOD commissioned a task force to establish policies and procedures
intended to help prevent unauthorized use of premium class travel. The
March 16, 2004, report by the premium class task force contained
corrective actions in the areas of policy and controls of travel
authorization, ticket issuance, and internal control oversight to
address our recommendations. Many of the task force's recommendations
have been implemented.
In the area of unused tickets, DOD issued claim letters in late
February to five airlines requesting repayment of the over $21 million
in known unused tickets and programmed letters for claims against other
airlines. The responses from the airlines have been varied. One airline
indicated that they needed further information to process refunds,
while another airline informed DOD that it may not be able to
accommodate DOD's refund claims due to its weak financial position. To
date, DOD has not exerted its rights afforded by federal law[Footnote
25] to offset payments due to the airlines for the amount of unused
tickets. As a result, to date none of the potentially over $21 million
of unused ticket money has been returned to DOD by the airlines.
Conclusion:
The millions of dollars wasted on unused airline tickets, improper
payments, and fraudulent activities provide another example of why DOD
financial management is one of our "high-risk" areas, with DOD highly
vulnerable to fraud, waste, and abuse. While DOD has acknowledged the
control weaknesses we identified and has taken actions to address some
of these weaknesses, DOD needs to take a more active role in
identifying and resolving control weaknesses. In each case identified
in our two most recently issued reports, DOD officials acknowledged
that they were not aware of these significant and long-standing control
breakdowns prior to our audit. DOD must proactively identify control
weaknesses and implement a system of internal controls that provide
reasonable assurance to both DOD senior management and the taxpayers
that the billions of dollars in travel expenses paid for with centrally
billed accounts are spent prudently. As our nation continues to be
challenged with growing budget deficits and increasing pressure to
reduce spending levels, it is important that DOD improve its management
of the travel program, which will save millions of dollars annually.
Madam Chairman and Members of the Committee, this concludes my prepared
statement. I would be pleased to respond to any questions that you may
have.
For further information regarding this testimony, please contact
Gregory D. Kutz at (202) 512-9505 or [Hyperlink, kutzg@gao.gov], John
J. Ryan at (202) 512-9587 or [Hyperlink, ryanj@gao.gov], John V. Kelly
at (202) 512-6926 or [Hyperlink, kellyj@gao.gov], or Tuyet-Quan Thai at
(206) 287-4889 or [Hyperlink, thait@gao.gov].
Individuals making key contributions to this testimony included Beverly
Burke, Matthew Brown, Francine DelVecchio, Aaron Holling, Jeffrey
Jacobson, Barbara Lewis, Julie Matta, Kristen Plungas, and Sidney H.
Schwartz.
(192131):
FOOTNOTES
[1] U.S. General Accounting Office, Travel Cards: Internal Control
Weaknesses at the 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 the DOD Led to Improper Use of First and
Business Class Travel, GAO-04-229T (Washington, D.C.: Nov. 6, 2003).
[2] U.S. General Accounting Office, DOD Travel Cards: Control
Weaknesses Led to Millions of Dollars Wasted on Unused Airline Tickets,
GAO-04-398 (Washington, D.C.: Mar. 31, 2004), and DOD Travel Cards:
Control Weaknesses Resulted in Millions of Dollars of Improper
Payments, GAO-04-576 (Washington, D.C.: June 9, 2004).
[3] U.S. General Accounting Office, Travel Cards: Control Weaknesses
Leave Army Vulnerable to Potential Fraud and Abuse, GAO-03-169
(Washington, D.C.: Oct. 11, 2002), Travel Cards: Control Weaknesses
Leave Army Vulnerable to Potential Fraud and Abuse, GAO-02-863T
(Washington, D.C.: July 17, 2002), Travel Cards: Control Weaknesses
Leave Navy Vulnerable to Fraud and Abuse, GAO-03-147 (Washington, D.C.:
Dec. 23, 2002), Travel Cards: Control Weaknesses Leave Navy Vulnerable
to Fraud and Abuse, GAO-03-148T (Washington, D.C.: Oct. 8, 2002), and
Travel Cards: Air Force Management Focus Has Reduced Delinquencies, but
Improvements in Controls Are Needed, GAO-03-298 (Washington, D.C.: Dec.
20, 2002).
[4] U.S. General Accounting Office, High-Risk Series: An Overview, GAO/
HR-95-1 (Washington, D.C.: February 1995), and High-Risk Series: An
Update, GAO-03-119 (Washington, D.C.: January 2003).
[5] The Air Force is an exception to this general rule. The Air Force
equally uses both centrally billed and individually billed accounts for
purchasing airline tickets.
[6] The five most frequently used airlines accounted for more than 80
percent of airline tickets DOD purchased in fiscal years 2001 and 2002.
[7] These 10,000 tickets were from American Airlines, the only airline
that provided us the residual value of partially unused tickets.
[8] GAO-04-88.
[9] 31 U.S.C. § 3726(h).
[10] Voucher settlements are made in payments of travel expenses
travelers incur through the individually billed accounts or other
means.
[11] Even though the Army, Navy, and Marine Corps provided us with
travel voucher data, we were unable to obtain assurance concerning the
completeness and reliability of these data. In addition, the Air Force
did not provide data in the format we requested to enable analysis.
[12] Air Force Audit Agency, Centrally Billed Accounts for Travel,
F2003-003-FB1000 (Washington, D.C., Apr. 24, 2003).
[13] The remaining 32 travelers did not submit improper or fraudulent
claims.
[14] For example, if the airline has no record that a ticket was
purchased using the centrally billed account, the traveler would have
to purchase another ticket. In other instances, emergency circumstances
such as weather problems might require that the traveler purchase
another ticket at the airport.
[15] See our related report, GAO-04-576, for further examples of
improper payments.
[16] Requiring airline tickets purchased with centrally billed accounts
to be issued based on valid travel orders is the first step in
preventing DOD from purchasing airline tickets that are not for
official government business.
[17] Some DOD units, such as a number of Navy units, require that DFAS
return all airline ticket transactions that failed the prevalidation
test to the units that created the travel order so that the units can
record the obligations. This is not a DOD-wide practice. Instead, DFAS
records the obligation to pay for the airline ticket and then notifies
the unit that an obligation was created. It is expected that each
unit's resource manager would conduct timely review of the obligations
DFAS created for validity, as DOD has only 60 days to dispute invalid
charges. Based on previous work we performed on the Navy's review of
unliquidated obligations, which found that Navy fund managers failed to
review unliquidated obligations over $50,000, and the work we performed
on unused tickets, which found Air Force's monitoring of open travel
orders to be ineffective, we again raise questions as to whether each
unit's resource manager would review obligations in a timely manner to
detect inaccurate obligations created by DFAS.
[18] If an obligation needs to be created or increased by more than
$2,500, DFAS is to notify the unit that created the travel order, and
give the unit 10 days to record that obligation before DFAS could
record the obligation.
[19] GAO-02-863T and GAO-03-148T.
[20] GAO-03-169, GAO-03-147, and GAO-03-298.
[21] U.S. General Accounting Office, DOD Travel Cards: Control
Weaknesses Led to Millions of Dollars Wasted on Unused Airline Tickets,
GAO-04-398 (Washington, D.C.: Mar. 31, 2004).
[22] Department of Defense Appropriations Act, 2003, Pub. L. No. 107-
248, 116 Stat. 1519 (2002), and the Bob Stump National Defense
Authorization Act for Fiscal Year 2003, Pub. L. No. 107-314, 116 Stat.
2458 (2002).
[23] National Defense Authorization Act for Fiscal Year 2004, Pub. L.
No. 108-136, 117 Stat. 1392 (2003).
[24] Split disbursement is a process in which DOD pays the travel-card-
issuing bank directly for charges incurred on the travel card and
claimed on the travel voucher. Additional money owed to the traveler is
deposited directly into the traveler's bank account. Split
disbursements are mandatory for all military and DOD civilian
personnel. See the National Defense Authorization Act for Fiscal Year
2004, Pub. L. No. 108-136, § 1009, 117 Stat. 1392, 1587 (2003), 10
U.S.C. § 2784a.
[25] 31 U.S.C. § 3716(e).
