What We Did
We determined whether the Department’s efforts to minimize, identify, report, and recover improper payments on the shipment of household goods were sufficient, effective, and in compliance with applicable laws and regulations.
What We Found
U.S. Transportation Command officials were taking action to minimize the number of overpayments made on the shipment of household goods by implementing the Defense Personal Property System. However, for the period July 2010 through March 2012, General Services Administration (GSA) post-payment audits identified 15,081 automated invoices and 1,313 paper invoices with potential overpayments that DoD had not detected. The Surface Deployment and Distribution Command (SDDC) and the Defense Finance and Accounting Service (DFAS) did not obtain information from GSA that could assist in identifying and preventing the improper payments. SDDC did not make system change requests to detect payment errors such as statute of limitations violations, duplicate payments, and inaccurate shipping weights. DFAS did not report the overpayments as required by improper payment guidance.
As a result, DoD lost use of $4.6 million of overpayments, and DFAS underreported the number of improper payments.
DFAS identified that 142,636 of 229,411 processed line items contained accounting errors related to shipments of household goods during FY 2012. DFAS accounting technicians manually corrected the errors at a cost of about $2.6 million to the Military Departments and Defense Agencies. The accounting errors occurred primarily because DoD shipment counselors entered invalid accounting data into the Defense Personal Property System.
If the Department made needed improvements to prevent accounting errors within the first year of the 6-year Future Years Defense Program, $13 million of costs can be saved over the remaining 5 years.
What We Recommend
We recommended the Commander, SDDC, use GSA data to improve compliance and implement automated controls over the input of Household Goods information. We also recommended the Director, DFAS, report improper payment information in accordance with guidance.
Management Comments and Our Response
The Deputy Commander, U.S. Transportation Command, agreed with six recommendations and disagreed with three. The Director, DFAS Indianapolis agreed with three recommendations. As a result of the comments from U.S. Transportation Command, we deleted one draft recommendation. All other comments from the Deputy Commander, U.S. Transportation Command and the Director, DFAS Indianapolis were responsive.