Overseas Allowances:

Improvements Needed in Administration

NSIAD-90-46: Published: Feb 12, 1990. Publicly Released: Feb 12, 1990.

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Pursuant to a legislative requirement, GAO assessed the adequacy of military overseas housing allowances and the timeliness of cost-of-living adjustments to allowances.

GAO found that: (1) a lack of internal controls resulted in inaccurate and incomplete data to support allowance rates; (2) the rental allowance was adequate since it was based on actual rent paid; (3) the non-rent portion of the allowance was based on inaccurate computations for utility, maintenance, and moving expenses; (4) the Department of Defense (DOD) Per Diem, Travel, and Transportation Allowance Committee did not always follow its policy for adjusting cost-of-living and housing allowances when required; and (5) the Committee did not timely collect and use cost-of-living and housing survey data.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: JFTR has been updated to incorporate the thrust of the recommendation.

    Recommendation: To strengthen controls over the current data collection and analysis processes, the Secretary of Defense should require the Per Diem Committee to communicate clear delegations of authority and responsibility so that overseas commands can be held accountable for the quality of their surveys.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: DOD is not using BLS data, but existing commissary and exchange survey data which provides more accurate information.

    Recommendation: To strengthen controls over the current data collection and analysis processes, the Secretary of Defense should require the Per Diem Committee to utilize prices from the Bureau of Labor Statistics (BLS) for applicable items in the market basket rather than adjusting the prices from the quarterly District of Columbia retail price survey, and where those prices are not available, develop new measures for average U.S. data that would make the prices more accurate and timely.

    Agency Affected: Department of Defense

  3. Status: Closed - Implemented

    Comments: The availability of funds will determine the pace of progress of implementation. The Per Diem Committee has implemented portions of the recommendation under its control. Using standard statistical testing will require additional funds. GAO will continue to monitor.

    Recommendation: To strengthen controls over the current data collection and analysis processes, the Secretary of Defense should require the Per Diem Committee to modernize and automate the cost-of-living adjustments analysis process to include standard statistical testing and documenting criteria used in decisionmaking.

    Agency Affected: Department of Defense

  4. Status: Closed - Not Implemented

    Comments: The agency does not agree with the recommendation and no action is planned. GAO will continue to monitor.

    Recommendation: To strengthen controls over the current data collection and analysis processes, the Secretary of Defense should require the Per Diem Committee to test its market basket assumptions to determine whether the basket adequately reflects high cost items unique to overseas locations.

    Agency Affected: Department of Defense

  5. Status: Closed - Implemented

    Comments: The definition of reasonable expense was established. The resale survey results are expected during fiscal year 1992. Operation Desert Storm caused a delay in collecting survey results. A summary of analysis of resale data and impact on reimbursement methodology and actual rates established for moving-in expenses is estimated to be completed in late 1993. GAO will continue to monitor.

    Recommendation: The Secretary of Defense should direct the Per Diem Committee to submit a report prior to establishing a reimbursement methodology for moving-in expenses that would address the resale value of items included in the allowance, and the definition of what constitutes a reasonable expense.

    Agency Affected: Department of Defense

  6. Status: Closed - Implemented

    Comments: DOD is developing a test methodology to ensure statistically accurate, complete, and representative surveys. The first worldwide survey of utility costs using the newly devised survey instrument was completed in December 1992, and results are under review. GAO will continue to monitor.

    Recommendation: The Secretary of Defense should direct the Per Diem Committee to develop and document uniform policies and guidance, based on standard statistical methods, to ensure that surveys are accurate, complete, and representative.

    Agency Affected: Department of Defense

  7. Status: Closed - Implemented

    Comments: The Joint Federal Travel Regulation was amended in March 1990. Messages were sent to local commands. GAO will continue to monitor.

    Recommendation: The Secretary of Defense should direct the Per Diem Committee to ensure that local command policy directives or information provided with respect to housing do not serve to undermine the intent of the overseas housing allowances program.

    Agency Affected: Department of Defense

  8. Status: Closed - Implemented

    Comments: The test was implemented in FY 1991.

    Recommendation: The Secretary of Defense should direct the Chairman of the Per Diem Committee to develop statistical sampling procedures for collecting living pattern information.

    Agency Affected: Department of Defense

  9. Status: Closed - Implemented

    Comments: Guidelines for training survey coordinators have been finalized.

    Recommendation: To strengthen controls over the current data collection and analysis processes, the Secretary of Defense should require the Per Diem Committee to develop guidelines on the minimum training survey coordinators and points of contact at the overseas commands should have on the cost-of-living adjustments methodology.

    Agency Affected: Department of Defense

  10. Status: Closed - Implemented

    Comments: DOD is assessing various alternatives for collecting and processing retail prices. Automation depends on the availability of funds, but in the interim, a LOTUS program is being used. GAO will continue to monitor.

    Recommendation: The Secretary of Defense should direct the Chairman of the Per Diem Committee to evaluate the cost-effectiveness of automating the system for collecting and analyzing living patterns and retail prices and to automate the system if appropriate.

    Agency Affected: Department of Defense

 

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