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DoD Officials Did Not Take Appropriate Action When Notified of Potential Travel Card Misuse at Casinos and Adult Entertainment Establishments DODIG-2016-127

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Objective

We determined whether DoD cardholders who used Government travel cards at casinos and adult entertainment establishments for personal use sought or received reimbursement for their charges. We also determined whether disciplinary action had been taken when personnel misused Government travel cards and if the misuse was reported to the appropriate security office.

This audit was a follow-up to a previous report we had issued, Report No. DODIG-2015-125, “DoD Cardholders Used Their Government Travel Cards for Personal Use at Casinos and Adult Entertainment Establishments,” May 19, 2015.  In response to that report, the Senate Committee on Armed Services requested an additional review. We performed this audit in response to that request.

Finding

We determined that DoD management (cardholder’s commander or supervisor) and travel card officials did not take appropriate action when notified by the DoD OIG, during the previous audit, that cardholders had potentially misused their travel card. In this follow-up audit, we reviewed management’s actions for 30 nonstatistically selected cardholders with the highest dollar amount of high-risk transactions that had been referred to management in the prior audit. During this audit, we found that:

  • DoD management and travel card officials did not perform adequate reviews for the sampled cardholders;
  • DoD management did not take action to eliminate additional misuse;
  • DoD management did not initiate travel voucher reviews for cardholders with travel card personal use to determine whether there were improper payments; specifically, 22 of 29 cardholders (1 cardholder did not have travel vouchers during the period of review) sought and received reimbursements on 131 vouchers totaling $8,544 that directly reimbursed or indirectly may have reimbursed the cardholder’s personal use of the travel card (see Appendix D for DoD management collection efforts of overpayments); and
  • DoD management did not consistently consider the security implications of improper personal use of the travel card; specifically, only 2 of 30 cardholders (5 cardholders did not have security clearances) were reported to the appropriate adjudicative facility prior to this audit (see Appendix E for DoD management actions on security clearances).

This occurred because Defense Travel Management Office officials and DoD management for the 30 selected cardholders did not emphasize proper use of the travel card, and DoD policy did not sufficiently specify what actions DoD officials should take when misuse was identified. As a result,

  • the travel card program remained vulnerable to continued misuse;
  • DoD had less money available for legitimate travel expenses because of the travel overpayments;
  • DoD experienced potential national security vulnerabilities due to the untimely reporting or non‑reporting of derogatory information regarding misuse of Government travel cards to the DoD Consolidated Adjudications Facility, resulting in the delay or lack of adjudication (decision on security clearance eligibility) for cleared DoD cardholders with financial concerns or personal conduct issues; and
  • cardholders were not offered assistance for financial concerns and gambling addictions.

Recommendations

We made several recommendations to address these problems. See the Recommendations section of the finding in the report. We recommend that the Under Secretary of Defense for Intelligence:

  • report travel card misuse under investigation to the appropriate facility and the report outcome of the investigation; and
  • report misuse of travel cards in a timely manner on individuals without a security clearance.

We recommend that the Director, Defense Travel Management Office, improve the identification of personal use of the travel card and disciplinary actions taken by revising the “Government Travel Charge Card Regulations.”

Management Comments and Our Response

The Director, Counterintelligence and Security, responding for the Under Secretary of Defense for Intelligence, agreed with the recommendation, and addressed the specifics of the recommendation. Specifically, the Director stated the recommended requirements will be added to DoD 5200.02-R, which was converted to a manual and is expected to be published by December 31, 2016. Comments from the Deputy Assistant Secretary for Military Personnel Policy, responding for the Director, Defense Travel Management Office, agreed with the recommendations but did not address the specifics of the recommendations on what actions that the Defense Travel Management Office would take to update the “Government Travel Charge Card Regulations.” We request additional comments for these recommendations.

This report is a result of Project No.D2014-D000CL-0201.000.

This report is a result of Project No.D2015-D000CL-0221.000.