Defense accused of flouting travel rules and wasting millions

Defense Department employees milked taxpayers for tens of millions of dollars by purchasing thousands of unauthorized or unjustified premium class travel tickets, witnesses told lawmakers Thursday afternoon.

During fiscal years 2001 and 2002, Defense Department personnel spent almost $124 million on about 68,000 airline tickets that included at least one leg of premium class service, primarily business class, according to the General Accounting Office. But the majority of employees who flew premium class did not have proper justification or authorization to do so, officials from the watchdog agency told legislators Thursday during a hearing before the Senate Permanent Subcommittee on Investigations. Defense also lacked adequate financial management controls to identify and stop travel abuses, GAO officials said.

"Breakdowns in internal controls and a weak control environment resulted in a significant level of improper premium class travel and millions of dollars of unnecessary costs being incurred annually," testified Gregory Kutz, GAO's director of financial management and assurance. Kutz estimated that Defense could have saved taxpayers up to $30 million if proper procedures had been followed.

In a report (GAO-04-88) released at the hearing, GAO estimated that high-ranking civilian employees and and military service members, including senior executives and presidential appointees, accounted for almost half of all premium class travel. The amount that Defense spent on premium tickets alone during the two fiscal years exceeded the total travel and transportation expenses-including airfare, lodging and meals-spent by 12 other major federal agencies.

"Apparently, some high-ranking bureaucrats feel they are entitled to luxury air travel," said Sen. Charles Grassley, R-Iowa. "We've got people who are supposed to be public servants stretching their legs with a hot towel and a cocktail, even if it costs the taxpayer thousands of dollars more."

In response to GAO's findings, Defense has formed a task force to diagnose and propose remedies to premium class travel problems, Charles Abell, assistant secretary of Defense for force management, told the committee.

"Since we are just beginning this comprehensive analysis of premium class travel, I cannot tell you exactly how we will address all the issues raised in the GAO report," Abell said. "However, the department's creation of this new task force underscores how seriously we take the type of problems identified by the GAO."

He added that Defense recently received approval to begin implementing the Defense Travel System, which he said would help with oversight and management of the department's travel program. The paperless end-to-end travel management system is operating at 24 sites now and will replace 43 legacy systems when fully launched in 2006.

Kutz said GAO has issued 16 recommendations to the Defense Department on how to reform travel procedures and management. He said the department agreed with the recommendations and has begun to implement them.

However, some lawmakers say Defense cannot be counted on to make the necessary reforms alone.

Committee Chairman Sen. Norm Coleman, R-Minn., said he would join Grassley in drafting new legislation to prevent unauthorized travel by including oversight of centrally billed travel accounts in the Credit Card Abuse Prevention Act of 2003. And Rep. Jan Schakowsky, D-Ill., said she plans to introduce legislation that will prevent Defense from receiving budget increases until the department can balance its budget.

"The irony is that these problems are occurring at the Department of Defense, an institution that places a premium on discipline, the chain of command and accountability," Schakowsky said. "That makes the culture of waste, fraud and abuse that seems to permeate all aspects of DoD's fiscal operations all the more intolerable. This has to stop. It's unfair to our soldiers and to U.S. taxpayers."

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