Recommendation: The Secretary of Defense should ensure that the Assistant Secretary of Defense for Energy, Installations, and Environment revises its guidance on privatized military housing to include a requirement that the military departments incorporate measures of future sustainment into their assessments of privatized housing projects. (Recommendation 3)

Agency: Department of Defense
Status: Open

Comments: DOD concurred with this recommendation in its response to our report. In its response, the department stated that it was working with the military departments to determine appropriate measures of future sustainment and would revise its guidance to require the military departments to incorporate measures of future sustainment into their assessments of privatized housing projects. In May 2019, an official from the Office of the Assistant Secretary of Defense for Sustainment stated that DOD anticipates being able to issue this guidance sometime in calendar year 2019.

Recommendation: The Secretary of Defense should ensure that the Assistant Secretary of Defense for Energy, Installations, and Environment takes steps to resume issuing required reports to Congress on the financial condition of privatized housing in a timely manner. (Recommendation 4)

Agency: Department of Defense
Status: Open

Comments: DOD concurred with this recommendation in its response to our report and stated that it was working to further streamline the reporting format and data collection process to ensure more timely reporting to Congress. Subsequently, in September 2018 DOD issued its report to Congress on the financial condition of privatized housing covering fiscal years 2015 and 2016, and in May 2019 DOD issued the report covering fiscal year 2017. An official from the Office of the Assistant Secretary of Defense for Sustainment noted in May 2019 that the next report will cover updated reporting requirements from the National Defense Authorization Act for Fiscal Year 2019. The official said that DOD was in the process of reviewing its schedule to determine when it will be able to submit the report covering fiscal year 2018, with the expectation that the submission will be made in December 2019 or no later than March 2020. The official added that collection, reconciliation, and coordination of the information in the report remains the biggest challenge to timely submittal, as well as other privatized housing-related work requirements. Because it is unclear whether future reports reflecting the updated reporting requirements will be submitted in a timely manner, we will continue to monitor DOD's response to this recommendation.

Recommendation: The Secretary of Defense should ensure that the Assistant Secretary of Defense for Energy, Installations, and Environment reports financial information on future sustainment of each privatized housing project in its reports to Congress. (Recommendation 5)

Agency: Department of Defense
Status: Open

Comments: DOD concurred with this recommendation in its response to our report and stated that it would ensure that financial information on future sustainment of each privatized housing project would be included in the report to Congress on privatized housing covering fiscal year 2017. However, the report covering fiscal year 2017 was issued in May 2019 and did not include financial information on the future sustainment of each privatized housing project. We will continue to monitor any actions DOD takes to implement this recommendation.

Recommendation: The Secretary of Defense should ensure that the Assistant Secretary of Defense for Energy, Installations, and Environment provides guidance directing the military departments to assess the significance of the specific risks to individual privatized housing projects resulting from the reductions in the basic allowance for housing and identify courses of action to respond to any risks based on their significance. (Recommendation 6)

Agency: Department of Defense
Status: Open

Comments: DOD concurred with this recommendation in its response to our report. In its response, the department stated that it would issue guidance to the military departments to annually report on their assessment of the specific risk of changes in the basic allowance for housing to individual privatized housing projects and identify any courses of action to respond to the risks based on their significance. In May 2019, an official from the Office of the Assistant Secretary of Defense for Sustainment stated that DOD anticipates being able to issue this guidance sometime in calendar year 2019.

Recommendation: The Secretary of Defense should ensure that the Assistant Secretary of Defense for Energy, Installations, and Environment finalizes guidance in a timely manner that clearly defines the circumstances in which the military departments should provide notification of project changes and which types of project changes require prior notification or prior approval. (Recommendation 7)

Agency: Department of Defense
Status: Open

Comments: DOD concurred with this recommendation in its response to our report. In its response, the department stated that DOD has coordinated draft guidance with the military departments which it expected to issue in fiscal year 2018. However, in May 2019, an official from the Office of the Assistant Secretary of Defense for Sustainment stated that the guidance has been delayed due to other pressing requirements and DOD now anticipates being able to issue this guidance sometime in calendar year 2019.

Recommendation: The Secretary of Defense should ensure that the Assistant Secretary of Defense for Energy, Installations, and Environment revises its guidance on privatized military housing to require the military departments to define their risk tolerances regarding the future sustainability of their privatized housing projects. (Recommendation 8)

Agency: Department of Defense
Status: Open

Comments: DOD concurred with this recommendation in its response to our report. In its response, the department stated that it would revise its privatized housing guidance to require the military departments to define their risk tolerances regarding future sustainability of privatized housing projects. In May 2019, an official from the Office of the Assistant Secretary of Defense for Sustainment stated that DOD anticipates being able to issue this guidance sometime in calendar year 2019.

Recommendation: To ensure that the Defense Civilian Personnel Advisory Service (DCPAS) and DOD components are determining LQA eligibility consistently with DOD's LQA Instruction, the DSSR, and OPM compensation claim decisions, the Secretary of Defense should direct the Under Secretary of Defense for Personnel and Readiness to require the Deputy Assistant Secretary of Defense for Civilian Personnel Policy or DCPAS, as delegated, to monitor reviews of LQA eligibility determinations conducted by DOD components.

Agency: Department of Defense
Status: Open

Comments: DOD concurred with this action, and as of December 2019, 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. 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, 2016, and 2017. According to DCPAS officials, in DOD's 2017 review of overseas allowances, one employee was identified as having erroneously received LQA. This number is lower than the three employees identified during the 2016 review and lower than the 11 employees identified in the 2015 review. Additionally, in September 2019, the Deputy Assistant Secretary of Defense for Civilian Personnel Policy issued a memorandum requesting DOD components to complete a review of overseas allowances and differentials, including LQA, paid to overseas employees during calendar year 2018. 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. Finally, according to DCPAS officials, in December 2019, 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 recommendation.