Skip to Highlights
Highlights

Servicemembers who are assigned, deployed, or travel on temporary duty to certain foreign areas are eligible for special pays and benefits including (1) imminent danger pay (IDP) when the Department of Defense (DOD) determines that members are subject to the threat of physical harm or imminent danger and (2) combat zone tax relief (CZTR) benefits, which allow members to exclude earned income from federal taxes. If travel to IDP- or CZTR-designated areas begins during one month and concludes during another (known as cross-month travel), members could receive 2 full months of benefits. GAO conducted this review under the Comptroller General's authority to initiate such reviews. GAO evaluated DOD's (1) process for reviewing IDP areas and (2) internal controls over servicemembers' temporary duty travel to areas designated for IDP and CZTR benefits. GAO is also providing information on the reporting of IDP and CZTR data. GAO analyzed legislation, guidance, travel vouchers, and internal control standards and interviewed appropriate officials.

Skip to Recommendations

Recommendations

Matter for Congressional Consideration

Matter Status Comments
In light of the substantial tax benefits that servicemembers receive when performing duty in combat zones, Congress may wish to consider requiring DOD to periodically report the amount of servicemembers' total compensation that qualifies for combat zone tax relief benefits to Congress.
Closed - Not Implemented
This matter has not been considered by Congress.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense To strengthen DOD's internal controls and management of imminent danger pay and to monitor cross-month travel, the Secretary of Defense should direct the Under Secretary of Defense (Personnel and Readiness) to update DOD's imminent danger pay guidance to (1) reflect the office responsible for reviewing and designating imminent danger pay areas and (2) incorporate factors that clearly define what constitutes the presence of imminent threat or dangers to servicemembers on duty in foreign areas.
Closed - Implemented
DOD has an informal process for designating and reviewing imminent danger pay. This informal process is contained in draft DOD Instruction 1340.9, "Special Pay for Duty Subject to Hostile Fire or Imminent Danger Pay," and provides guidance as to what factors are considered in designating and reviewing imminent danger pay area designations. DOD concurred that the informal policy should be updated to reflect the office currently responsible for the review and to provide additional clarification and guidance as to what factors are considered in determining whether imminent danger pay is warranted. As of April 2010, DOD has updated and issued DODI 1340.09.
Department of Defense To strengthen DOD's internal controls and management of imminent danger pay and to monitor cross-month travel, the Secretary of Defense should direct the Under Secretary of Defense (Personnel and Readiness) to request the designated organizations to conduct reviews of areas designated for imminent danger pay in accordance with DOD's guidance, and, if necessary, update its guidance to reflect the appropriate time period for conducting these reviews.
Closed - Implemented
In April 2007, DOD completed a review of areas designated for imminent danger pay. As a result of the review DOD designated one new area and terminated the imminent danger pay area designation for 6 areas including (1) Bosnia-Herzegovina, (2)Croatia, (3)Macedonia, (4) Georgia, (5)Angola, and (6)Sierra Leone. Public Laws 104-117 and 106-21 designated Bosnia-Herzegovina, Croatia, and Macedonia as qualified hazardous duty areas. While serving in these areas, servicemembers are entitled to exclude most, if not all, of the pay they earn from federal taxation. However, this tax exclusion only applies if the servicemember is also entitled to imminent danger pay or hostile fire pay when serving in the area. Therefore, effective November 1, 2007, servicemembers in Bosnia-Herzegovina, Croatia, and Macedonia will no longer be entitled to exclude income earned in these areas from federal income taxation. Servicemembers serving in Serbia and Montenegro will continue to qualify for tax exclusion because Executive Order 13119 separately designated Serbia and Montenegro as combat zones.
Department of Defense To strengthen DOD's internal controls and management of imminent danger pay and to monitor cross-month travel, the Secretary of Defense should direct the Under Secretary of Defense (Personnel and Readiness) to establish departmentwide policies and internal controls that include periodic audits to monitor cross-month travel to ensure that the travel needs to cross calendar months.
Closed - Not Implemented
DOD did not concur with this recommendation. DOD believes that these actions would add unnecessary bureaucracy and cost to DOD's travel system. Further, DOD commented that existing DOD travel procedures require thorough review and management of the necessity and cost-effectiveness of travel by DOD personnel. The Joint Travel Regulations and the Joint Federal Travel Regulations already include requirements to authorize only travel that is necessary to accomplish the mission and when the mission cannot be met by other means. DODD 4500.54, "Official Temporary Duty Travel Abroad," adds additional requirements to ensure that foreign travel is even more closely scrutinized by adding country and/or theater clearance requirements. These existing requirements already adequately control and monitor cross-month travel.

Full Report