General Services Administration's Actions To Collect and Improve Controls Over Refunds Owed by the Airline Industry

GAO was asked to review the system used by the Nation's air carriers to reimburse the Government when higher priced tickets purchased with Government Transportation Requests were exchanged for tickets of lower values. Specifically, GAO was asked to establish why over $3 million due the Government was outstanding and what actions have been taken by the General Services Administration (GSA) to recover refunds since it has Government-wide responsibility for the travel program. Consistent with this request, GAO limited its review to those refunds owed the Government because Federal travelers changed their itinerary or changed from a higher to a lower class of service. GAO did not address the problem of entirely unused tickets.

In its review, GAO found that, since at least the 1970's, the Nation's airlines have failed to promptly remit millions of dollars in refunds due the Federal Government. This situation exists primarily because Federal agencies, Government travelers, and the airlines fail to follow a special procedure set up by the airlines to refund money owed the Federal Government. This procedure is basically the same as that available to the general public, except that the airlines do not give cash to Government travelers. Instead, the travelers are given data for their agencies to use in requesting the refunds. The procedure permits voluntary refunds by the airlines without a request from Federal agencies. However, most airlines were not making refunds without being billed, and there were discrepancies in record retention policies between the airlines and many Federal agencies. To correct these deficiencies, GSA has taken steps to recover the funds and to prevent future problems. For example, GSA clarified its regulation to require that carriers remit Government refunds without the Federal agency submitting a special request and asked Federal agencies to open their records to help determine the amount of refunds owed the Government. As a result of the improvements in the regulations, about $3.0 million in refunds have been collected by GSA.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: John F. Simonette Team: General Accounting Office: Accounting and Financial Management Division Phone: (202) 275-1581