Defense Management:

Proposed Lodging Policy May Lead to Improvements, but More Actions Are Required

GAO-02-351: Published: Mar 18, 2002. Publicly Released: Mar 18, 2002.

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The military services primarily operate two types of hotels, or lodges, to support official travelers. The first, called permanent-change-of-station (PCS) lodges, support military personnel and their families moving to new duty stations. These are intended to provide military travelers and their families with a clean, affordable place to stay while they prepare to move and while they wait for permanent quarters at their new station. The second type, called temporary duty (TDY) lodges, support military and civilians temporarily traveling on official business. PCS lodges are the subject of a proposed policy change by the Department of Defense (DOD). DOD's current policy permits PCS lodges to be managed as part of morale, welfare, and recreation (MWR) programs. The proposed policy would change this practice by requiring separation of lodge revenues from those used for MWR purposes. Except for the Marine Corps, the proposed policy change will not impact the services' MWR programs. Only the Marine Corps currently uses PCS lodge earnings to support its MWR programs. From fiscal years 1996 through 2000, the net profits reported by the Marine Corps' lodges steadily increased from $1.8 million to $5.1 million. Marine Corps officials do not believe the policy change is required and said that, if implemented, the Corps would have to make changes, such as reducing quality-of-life programs at some installations or seeking additional appropriations to compensate for the loss of this revenue. The proposed policy is predicated on resolving a perceived regulatory conflict and achieving other management objectives. DOD officials believe separation of PCS lodging funds from MWR funds is required to resolve a conflict with the Joint Federal Travel Regulation. However, the regulation does not apply to lodging management, and the policy change, by itself, is likely to have little direct effect on DOD's broader management objectives. The services' plans for building new PCS lodges are consistent with department guidance. The proposed change will not, by itself, change that guidance.

Recommendations for Executive Action

  1. Status: Closed - Not Implemented

    Comments: According to OSD officials, DOD's new draft lodging guidance is intended to achieve DOD's desired lodging-program management objectives. Specifically, the draft guidance is designed to ensure that construction of new TDY and PCS lodging is based only on meeting the demand of authorized official travelers, who are TDY and PCS travelers traveling on orders. The Navy did not concur with the draft policy. By memo dated July 13, 2005, the Acting Deputy Secretary of Defense directed that Directives not meeting the criteria as capstone issuances of the Department will become Instructions. Thus, the draft Lodging Directive and Instruction will be merged into one Instruction. The revised estimated completion date is April 30, 2007. Two DOD entities, P&R and AT&L, are currently debating who has authority over DOD policy in this area. They are scheduled to meet to resolve differences before moving forward on policy revisions.

    Recommendation: Regardless of whether the proposed policy is implemented, the assistant secretary for force management policy should provide the military services with a policy framework including improved lodging guidance to help achieve DOD's desired lodging-program management objectives, including consistent lodging policy and operations, reduced room rates, improved lodging facilities, and limitations on new construction not focused on official PCS or TDY travelers.

    Agency Affected: Department of Defense

  2. Status: Closed - Not Implemented

    Comments: DOD's draft lodging policy allows the services to decide to either combine or maintain separate TDY and PCS lodging operations and funds into which lodging revenues are deposited, but the draft policy no longer allows the services to use PCS lodging revenue to support MWR activities. The Navy did not concur with the draft policy DODI 1015.12. By memo dated July 13, 2005, the Acting Deputy Secretary of Defense directed that Directives not meeting the criteria as capstone issuances of the Department will become Instructions. Thus, the draft Lodging Directive and Instruction will be merged into one Instruction. The new expected completion date is April 30, 2007. Two DOD entities, P&R and AT&L are currently debating who has authority over DOD policy in this area. They are scheduled to meet to resolve differences before moving forward on policy revisions.

    Recommendation: If the proposed policy is implemented, the Secretary of DOD, in conjunction with the assistant secretary for force management policy, should clarify the policy with regard to whether DOD expects the services to combine permanent-change-of-station (PCS) and temporary duty (TDY) lodging programs and funds or will allow these separate operations to continue.

    Agency Affected: Department of Defense

  3. Status: Closed - Not Implemented

    Comments: Officials from the Office of the Secretary of Defense (OSD) have drafted new lodging guidance that requires that funds received from PCS lodging operations are deposited in a lodging fund separate from the services' MWR fund. This would prohibit funds from PCS lodging being used to support MWR activities. OSD officials had hoped to implement this new policy by May 2004. Because the Marine Corps is the only service that continues to deposit PCS lodging revenue into its MWR fund, OSD has contacted the Marine Corps to offer their assistance in transitioning the Marine Corps' PCS lodging operations to the lodging fund. The Marine Corps will be provided a short-term waiver, if requested, after the proposed policy is implemented to permit time for their leadership to evaluate lodging management options.

    Recommendation: If the proposed policy is implemented, the Secretary of the Department of Defense (DOD), in conjunction with the assistant secretary for force management policy, should provide the Marine Corps with a short-term waiver, if requested, to permit it time to evaluate policy implementation options.

    Agency Affected: Department of Defense

  4. Status: Closed - Implemented

    Comments: DOD required the Army to discontinue the transfer of lodging revenues to installation morale, welfare, and recreation (MWR) funds and the Army suspended this practice, effective April 1, 2002. In addition, the Department is currently coordinating a draft memorandum requiring the Army to return to the lodging funds the proceeds, already collected from the surcharge on official travelers by installations that were deposited into the installation MWR Funds.

    Recommendation: Regardless of whether the proposed policy is implemented, the assistant secretary for force management policy should require the Army to adhere to DOD's and its own regulations by discontinuing the transfer of lodging revenues (unofficial-traveler surcharge) to installation morale, welfare, and recreation funds and returning the proceeds collected thus far to the Army's lodging fund.

    Agency Affected: Department of Defense

 

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