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Unused seats cost Defense $100-million

By Associated Press
Published June 9, 2004

WASHINGTON - The Defense Department spent an estimated $100-million in six years for airline tickets that were not used and failed to seek refunds even though the tickets were reimbursable, congressional investigators say.

The department compounded the problem by reimbursing employee claims for tickets bought by the Pentagon, the investigators said.

To demonstrate how easy it was to have the Pentagon pay for airline travel, the investigators posed as Defense employees, had the department generate a ticket and showed up at the ticket counter to pick up a boarding pass.

Congress' General Accounting Office issued the findings in two reports on the Pentagon's lack of control over airline travel, copies of which the Associated Press obtained Tuesday. A report issued in November found that the Pentagon bought 68,000 first-class or business-class airline seats for employees who should have flown coach.

"At a time when our soldiers are patrolling the streets of Iraq in unarmored Humvees, and when the Bush administration is asking for record defense spending, Secretary (Donald H.) Rumsfeld is letting hundreds of millions of dollars that could be used to protect our troops and our country go to waste," said Rep. Jan Schakowsky, D-Ill., one of three lawmakers who ordered the studies.

The GAO estimated that between 1997 and 2003, the Defense Department bought at least $100-million in tickets that were not used or used only partially by a passenger who did not complete all legs of a flight. The waste went undetected because the department relied on individuals to report the unused tickets. They did not.

The Defense Department said in a written statement that it is working to ensure that it receives credit in the future for each unused ticket.

"We take this deficiency in our procedures very seriously and are moving swiftly to establish proper management controls. The long-term answer will be the automated Defense Travel System (DTS) that controls the travel order and payment process from beginning to end," the statement said.

"DOD is researching the data presented in the GAO report and will continue to pursue the amounts we determine are recoupable."

The reimbursable tickets had no advanced purchase requirements, minimum or maximum stays or penalties for changes or cancellations under department agreements with the airlines.

"The millions of dollars wasted on unused airline tickets provides another example of why DOD financial management is one of our high-risk areas, with DOD highly vulnerable to fraud, waste and abuse," the GAO said.

Two of the three lawmakers who asked for the study were Republicans, and both were highly critical of the Pentagon's lack of financial control.

Sen. Charles Grassley, R-Iowa, said, "It's outrageous that the Defense Department would be sending additional federal tax dollars to the airlines by way of unused passenger tickets. And the fact that the Defense Department didn't even know it was wasting this money is even worse than $100-million down a rat hole."

Sen. Susan Collins, R-Maine, commented: "At a time of war, when our first priorities must be to support our troops and fight the war on terrorism, it is disconcerting to learn that so many taxpayer dollars are being wasted on unused airline tickets."

While one GAO report focused on the unused tickets, the second investigation found potential fraud.

It said the department paid travelers for tickets the department already bought and reimbursed employees for tickets that had not been authorized.

A limited review of records for 2001 and 2002 identified 27,000 transactions totaling more than $8-million in reimbursements to employees for tickets bought by the government. These figures represent only a small portion of the potential fraud, the GAO said.

It is a crime for a government employee to knowingly request reimbursement for goods and services he or she did not buy.

One DOD traveler stole a department account number to pay for more than 70 airline tickets that totaled more than $60,000, which he sold at a discount to co-workers and their family members for personal travel. The individual admitted guilt, lost all pay, received a dishonorable discharge and was sentenced to five years' confinement.

Among the examples of possible fraud:

Within a nine-month period, an employee claimed reimbursement for 13 tickets paid for by the department, contending he did not know he received almost $10,000 more than he paid in travel expenses.

Within a 27-month period, a traveler submitted a dozen vouchers claiming some $6,800 in airline tickets the department bought. When notified the department was refusing payments on five of the six claims, the traveler submitted six additional claims. The DOD initiated action to collect money for three of the claims but could find no records of the other three.

A traveler said he did not notice the government had deposited $3,700 into his checking account to pay for an airline ticket that had been paid for by the government.

[Last modified June 9, 2004, 01:00:39]

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