GAO: Pentagon Wasted $100 Million on Unused Airline Tickets

WASHINGTON, D.C.–Senate Governmental Affairs Committee Chairman Susan Collins (R-ME) today said she is troubled to learn that the Department of Defense (DOD) has wasted more than $100 million in unused airline tickets because of poor internal control and accounting. According to two General Accounting Office (GAO) reports released at a Governmental Affairs Committee hearing today, DOD spent millions on unused airline tickets and in some cases, paid for airline tickets twice or reimbursed employees for tickets they did not pay for.

“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. It is equally disturbing that some Department of Defense employees either failed to seek refunds for tickets purchased, but not used, and in some cases, sought reimbursement for tickets they did not even pay for. This may constitute fraud and theft from the federal government,” said Senator Collins.

According to the GAO reports, during 2001 and 2002, the Pentagon purchased 41,000 airline tickets that were not used and not processed for a refund. These tickets were bought through the Pentagon’s centrally billed accounts, which function as a credit card and are paid directly by the federal government. DOD did not have sufficient controls in place to identify unused tickets, seek refunds or verify travel orders, making the system vulnerable to fraud.

In addition, the report uncovered one particular case where the employee claimed reimbursement for 13 airline tickets totaling nearly $10,000 and claimed he “did not notice the additional funds in his account.”

The GAO estimates that the DOD potentially reimbursed employees as much as $8 million for tickets that DOD — not the employees — had purchased.

“It is disturbing to learn that DOD was not aware of these financial problems until GAO called it to their attention,” said Senator Collins. “Problems like this demonstrate why for the past nine years, DOD financial management has been on the GAO’s list of high-risk areas, which are considered highly vulnerable to waste, fraud, and abuse.”

The DOD concurred with the numerous recommendations for reform outlined by the GAO. Reforms include

— Implementing procedures to systematically ensure that unused tickets billed through the central account are refunded.
— Submitting claims to the airlines to recover funds for unused tickets.
— Implementing physical safeguards over centrally billed account numbers.

In addition to adopting the recommendations of the GAO, Senator Collins said, “The Department of Defense must send a clear message to employees that they must submit unused tickets for reimbursement and that collecting reimbursement for a ticket for which an employee did not pay is fraud and will not be tolerated.”

The GAO reports are available online at and .