Specifically, the policy reduces the amount of per diem paid for long-term  TDYs: for TDYs of between 31 and 180 days’ duration, the flat rate per  diem is 75 percent of the locality rate payable for each full day at the  location. For TDYs of greater than 180 days’ duration, the flat rate per  diem is 55 percent of the locality rate. Further, while more than half of depot  officials responding to our questionnaire reported that the policy has  affected civilian employees’ willingness to volunteer for long-term TDYs,  the majority of depot officials reported that the policy has not affected  depot operations. DOD Guidance Regarding the Flat Rate Per Diem Policy Is Unclear

Some aspects of DOD’s flat rate per diem policy, such as the guidance  for lodging receipts and application of the M&IE waiver, are not clear. This  unclear guidance may hinder the policy’s achieving its intended  objectives, such as simplifying travel. Based on results from our questionnaire, we  found that 15 out of 16 depots still require long-term travelers to submit  lodging receipts, which is contrary to the intent of the flat rate per diem  policy to simplify the reimbursement process for long-term travelers. DOD Lacks Procedures to Ensure That Required Processes Are Completed Prior to a Major Change, and Its Assessment of Costs and Benefits Was Not Comprehensive

The Committee does not have procedures to ensure that required  processes are completed prior to finalizing a major JTR change, and its  assessment of costs and benefits was not comprehensive, lacking other  potential costs and benefits that could result from the policy change. The Committee Did Not Ensure That Certain Required Processes Were Completed

The Committee did not ensure that certain required processes to inform  the flat rate per diem policy change were completed prior to the policy’s  approval. The Committee does not have procedures in place to ensure that  required processes, such as completing cost data and budgetary impact  statements and a legal sufficiency review, are completed prior to a major  JTR policy change’s approval. DOD Instruction 7041.03, Economic Analysis for Decision-making, which  applies to all DOD components, establishes their responsibility for  following OMB Circular A-94 guidelines concerning benefit-cost analysis  of federal programs. OMB Circular A-94 states that agencies should  follow the guidelines provided when preparing analyses in support of  federal activities, and that a comprehensive enumeration of the different  types of benefits and costs, monetized or not, can be helpful in identifying  the full range of program effects when conducting a benefit-cost analysis  of a policy. However,  our review of that draft plan, which according to DTMO officials was  drafted in July 2016, found that it does not include an approach to capture  other potential costs and benefits from the policy beyond the cost-savings  of the policy. Further, we  found that DTMO’s site visit to assess the adequacy of the flat rate per  diem policy for long-term TDYs did not include a full assessment of the  policy’s per diem rates. Without  having conducted a comprehensive assessment that incorporated  principles from OMB Circular A-94 and without having a Performance  Measurement Plan that considers other potential costs and benefits  resulting from the flat rate per diem policy, the Committee and DTMO  may not be well positioned to understand whether the policy is cost- beneficial and is meeting set objectives to reduce travel costs without  negatively affecting the traveler and mission. Conclusions

Depot officials have identified various benefits, such as cost savings, as  well as challenges, such as difficulties in finding lodging accommodations  that will accept the flat rate per diem, resulting from DOD’s JTR flat rate  per diem policy. However, certain aspects of DOD’s flat rate per diem  guidance remain unclear to depot officials. Recommendations for Executive Action

We recommend that the Secretary of Defense direct the Per Diem, Travel  and Transportation Allowance Committee, in coordination with the Military  and Civilian Advisory Panels, to take the following four actions to clarify  the flat rate per diem policy and ensure that the department has the full  range of information needed by decision-makers when considering a  major Joint Travel Regulations change:
Revise the Joint Travel Regulations policy related to the flat rate per diem to provide clear language concerning (1) what is meant by proof of lodging, and (2) at what point in the travel process the meals and incidental expenses waiver for actual expenses should be requested and approved;
Establish procedures to ensure that required processes to inform major Joint Travel Regulations policy changes are completed prior to the approval of those changes; Incorporate principles from Office of Management and Budget Circular A-94, including the costs and benefits of effects that may be difficult to quantify or monetize, into future assessments related to major Joint  Travel Regulations changes; and  Incorporate principles from Office of Management and Budget Circular A-94, including the costs and benefits of effects that may be difficult to quantify or monetize, into future assessments related to the flat rate per diem policy, such as the draft Performance Measurement Plan. In written comments reproduced in appendix IV,  DOD concurred with all four recommendations and highlighted the actions  it was taking to address each recommendation. GAO staff members who made key contributions to  this report are listed in appendix V.

Appendix I: Scope and Methodology

To determine the extent to which depot officials identified benefits and  challenges resulting from the flat rate per diem policy, including any  effects on civilian employees and operations at the selected depots, we  focused on the policy’s effects on Department of Defense (DOD) civilian  employees at DOD’s 17 depot maintenance industrial sites. These results were not generalizable but provided important  insights.
Why GAO Did This Study

In response to government-wide direction for agencies to reduce travel costs, in November 2014 DOD changed its JTR by instituting a flat rate per diem policy on long-term TDY travel. This policy reduced the locality rate payable for each full day at the location, depending on the duration of the TDY: for TDYs of between 31 and 180 days the flat rate per diem is 75 percent, and for TDYs of greater than 180 days it is 55 percent.
The National Defense Authorization Act for Fiscal Year 2016 included a provision that GAO assess the impact of DOD's policy change to the JTR on shipyard and depot workers. This report assesses the extent to which (1) depot officials identified benefits and challenges resulting from the policy change, and any effects on civilian employees and operations; (2) DOD established clear guidance regarding the policy; and (3) DOD followed its processes when considering the policy change and included an assessment of benefits and costs. GAO collected and analyzed responses to a questionnaire disseminated at DOD's 17 depot maintenance industrial sites, reviewed relevant documentation, and interviewed cognizant officials.

What GAO Found

Officials at depots responding to a GAO questionnaire identified various benefits, such as cost-savings, and challenges, such as increased processing time for vouchers, resulting from the Department of Defense (DOD) Joint Travel Regulations (JTR) flat rate per diem policy change for long-term temporary duty (TDY) travel. While more than half of depot officials reported that the policy has affected civilian employees' willingness to volunteer for long-term TDYs, a majority of depot officials reported that the policy has generally not affected depot operations.
GAO's review of the JTR and analysis of questionnaire responses found that certain aspects of DOD's flat rate per diem policy are not clear. For example, the requirement to provide lodging receipts for long-term travel was replaced by a requirement to provide proof that lodging costs were incurred, but according to depot officials it is not clear what constitutes proof of lodging. As a result, the majority of the depots still require long-term travelers to submit lodging receipts. Such lack of clarity may hinder DOD's ability to achieve the policy's intended objectives, such as simplifying the administrative aspects of travel.
DOD did not ensure that certain required processes established in DOD guidance were completed prior to the policy's approval, and its assessment of the policy's costs and benefits was not comprehensive. Specifically, GAO found that prior to the flat rate per diem policy's approval certain required steps, such as providing cost data and budgetary impact statements and a legal sufficiency review, were not completed. This occurred because DOD has not established procedures to ensure that these required steps are completed prior to approving a major change to the JTR. Further, although DOD's Defense Travel Management Office (DTMO) estimated total savings of approximately $194 million resulting from the flat rate per diem as of January 2017, GAO found that DOD's cost-savings assessment did not comprehensively consider all potential costs and benefits of the policy change. DOD guidance, which applies to all DOD components, establishes responsibilities for following Office of Management and Budget (OMB) Circular A-94 guidelines concerning benefit-cost analysis of federal programs. OMB Circular A-94 states that a comprehensive enumeration of the different types of benefits and costs, monetized or not, can be helpful in identifying the full range of program effects when conducting a benefit-cost analysis of a policy. However, DTMO's assessment of the JTR policy change was not comprehensive and did not include the full range of potential costs and benefits. For example, it included some potential costs to implement the policy, but not others, such as the cost to update the travel system with the needed functionality to support the policy. DTMO has recently developed a draft Performance Measurement Plan, which officials described as a first step in a larger effort to track and report savings from the flat rate per diem policy. However, GAO's review of the draft plan found that it also does not include a comprehensive approach to capture costs and benefits of the policy. As a result, DOD may not be well positioned to understand whether the flat rate per diem policy is cost-beneficial and meeting its objectives to reduce travel costs without negatively affecting the traveler and the mission.

What GAO Recommends

DOD should clarify certain aspects of the flat rate per diem policy; establish procedures to ensure required steps are completed before major JTR policy changes are approved; and ensure that OMB benefit-cost analysis guidelines are followed in future policy assessments. DOD concurred with all four recommendations and highlighted actions it was taking to address each recommendation.