Key Issues > Duplication & Cost Savings > GAO's Action Tracker > DOD's Eligibility Determinations for Living Quarters Allowance (2016-14)
defense icon, source: [West Covina, California] Progressive Management, 2008

Defense: DOD's Eligibility Determinations for Living Quarters Allowance (2016-14)

The Department of Defense (DOD) could potentially achieve cost savings by monitoring its components’ reviews of eligibility determinations for the over $500 million spent annually on living quarters allowance (LQA) for civilian employees to better ensure that DOD components are not improperly providing this allowance.

Action:

The Secretary of Defense should require the Deputy Assistant Secretary of Defense for Civilian Personnel Policy or the Defense Civilian Personnel Advisory Service (DCPAS), as delegated, to monitor reviews of living quarters allowance (LQA) eligibility determinations conducted by Department of Defense (DOD) components.

Progress:

As of August 2018, DOD had taken steps to improve oversight of LQA determinations by DOD components; however, it had not issued guidance that requires the Deputy Assistant Secretary of Defense for Civilian Personnel Policy or DCPAS to monitor reviews of LQA eligibility determinations by DOD components, as GAO recommended in June 2015. DOD concurred with the recommendation.  For example, at the direction of DCPAS, DOD components completed reviews and submitted reports of overseas allowances paid to a sampling of overseas employees for calendar years 2015 and 2016. Components determined that 11 out of 258 employees had erroneously been granted LQA in calendar year 2015, and, according to DCPAS officials, 3 out of 276 employees were erroneously granted LQA in calendar year 2016. DCPAS officials also stated in August 2018 that a memorandum directing a calendar year 2017 review was being drafted. 

Additionally, in January 2018, the Under Secretary of Defense for Personnel and Readiness issued a memorandum that clarified LQA eligibility requirements as applied and interpreted in recent Office of Personnel Management compensation claim decisions and the Department of State Standardized Regulations. The memorandum also required components to screen relevant records and determine if there are any employees who are no longer eligible to receive LQA based on the compensation claim decisions and Department of State Standardized Regulations. According to DCPAS officials, in August 2018, DOD was revising DOD’s LQA instruction to incorporate the new LQA guidance from the January 2018 memorandum. 

However, it is unclear whether the revised instruction once issued will require the Office of the Deputy Assistant Secretary or DCPAS to monitor the reviews conducted by DOD components to identify any potentially inconsistent eligibility determinations and ensure corrective action is taken, as was the intent of GAO’s June 2015 recommendation. DOD’s annual reviews of overseas allowances and its updating of the instruction are positive interim steps, but until DOD also requires the Deputy Assistant Secretary of Defense for Civilian Personnel Policy or DCPAS to monitor DOD components’ reviews of LQA determinations, there is no assurance that such monitoring will be regularly conducted in the future. Despite the steps listed above that DCPAS has taken to improve oversight of LQA determinations, they still have not issued guidance consistent with what GAO recommended in 2015.

Implementing Entity:

Department of Defense
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