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Highlights

The Department of Defense (DOD) paid active duty military personnel over $18 billion in housing allowances in fiscal year 2010. DOD sets housing allowance rates annually based on market costs of rent, utilities, and renter's insurance. Also, DOD has identified 26 installations significantly impacted by expected growth in personnel due to various rebasing actions. The Senate report accompanying a bill for the National Defense Authorization Act for Fiscal Year 2011 (S. 3454) directed GAO to review DOD's rate-setting process, among other issues. GAO determined (1) whether there are enhancements to strengthen DOD's rate-setting process and (2) whether service members have encountered challenges in obtaining off-base housing. GAO reviewed program documents, including a 2010 DOD report to Congress, analyzed data, and interviewed DOD officials and subject matter experts.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense To enhance the transparency of the housing allowance rates, the Secretary of Defense should direct the Director of the Defense Travel Management Office to revise policies to provide information on the three costs that comprise the housing allowance rate (rent, utilities, and renter's insurance) by geographic area and housing profile to installation housing officials to better ensure local-market-based accuracy and to service members to increase understanding of the rate when selecting housing.
Closed - Implemented

Recommendation status is Closed - Implemented.

Starting with the housing allowance rates for 2012, which were published in December 2011, DOD published a breakdown of the three components of the housing allowance rate for each of the military housing areas. As a result, installation officials and service members now have access to information about the costs that comprise the housing allowance rate, which should help installation officials to use their knowledge of the local market area to help ensure the accuracy of the rates and help service members to make more informed decisions about costs in their area based on the data that DOD used to set the housing allowance rate.
Department of Defense To enhance the accuracy of the housing allowance rates, the Secretary of Defense should direct the Director of the Defense Travel Management Office to more fully assess the benefits and drawbacks of revising the definition of "available" rental properties used for data collection purposes, either for all military housing areas or only those military housing areas that meet a certain low vacancy threshold.
Closed - Implemented

Recommendation status is Closed - Implemented.

In comments on the draft report, DOD stated that it would direct the data collection contractor to accept properties advertised for rent even if they would not be available for occupancy until a future date to address the concern that many of the most desirable properties are never vacant. As a result, the contractor revised the definition of "available" in its data collection guidance to installations and its training course on the data collection process to clarify that the data submissions can include properties that will be available at a future date. This clarification should help officials in areas with low vacancy rates to identify and submit additional properties that are more representative of the current market costs for adequate housing for comparable civilians in the same area, potentially increasing the accuracy of housing allowance rates in the area.
Department of Defense To promote more accurate budgeting by DOD, the Secretary of Defense should direct the Under Secretary of Defense (Comptroller) and the military services to more fully identify the causes of inaccurate cost estimates for the Basic Allowance for Housing program and develop and implement procedures to improve these estimates. At a minimum, these procedures should include processes to more accurately estimate the number of service members who will receive the allowance.
Closed - Implemented

Recommendation status is Closed - Implemented.

In June and July 2011, the Office of the Under Secretary of Defense (Comptroller) led a working group of representatives of the active, reserve, and guard components of each military service to better understand and document the military services' procedures for estimating housing allowance costs and better understand the causes of inaccuracies in past estimates. The working group identified issues and recommended actions for the active and reserve components to implement to improve the process to estimate housing allowance costs. The Office of the Under Secretary of Defense (Comptroller) and the military services have begun to implement some of the recommended actions, as well as other actions designed to help improve the accuracy of housing allowance estimates. For example, the working group identified an issue that some components used a quarterly report from the Defense Manpower Data Center to check the number of personnel receiving the housing allowance while others did not use this data. The working group recommended that the Office of the Under Secretary of Defense (Comptroller) provide the report to all components and that office now provides the report to the components. We believe that the increased attention to this issue should help improve the accuracy of housing allowance cost estimates.
Department of Defense To ensure that current or future growth installations that experience housing challenges have access to information on tools to address these challenges, the Secretary of Defense should direct the Under Secretary of Defense (Acquisition, Technology and Logistics) and the Office of the Deputy Assistant Secretary of Defense (Installations and Environment) to develop a communications process so that installations can more routinely share best practices and their use of tools and mechanisms to address housing challenges.
Closed - Implemented

Recommendation status is Closed - Implemented.

In January 2014, the Office of the Deputy Under Secretary of Defense for Installations and Environment updated its web site to provide links to the housing web sites of each of the military services, providing access to information about housing in one centralized location. As a result, installation officials have improved access to information on the various tools that other services may be using to address housing challenges.

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