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IG: Cash incentives, closer tracking could cut PCS costs

Jun. 17, 2014 - 12:21PM   |  
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The military services are paying millions more than they should for expenses associated with permanent change-of-station moves — including some costs that should be paid by troops, according to a recent report from the Defense Department inspector general.

DoD doesn’t have the controls in place to “provide reasonable assurance” that its PCS program is as cost-efficient as it could be, auditors stated in their May 21 report.

By law, DoD also could reduce PCS costs by giving troops a cash incentive to shed unwanted or unneeded belongings and reduce the weight of their household goods shipments, but DoD has not created such a program, auditors said. They advised setting up a working group to study the feasibility of offering these incentives.

In legislation passed 13 years ago, Congress gave DoD the ability to pay a service member a share of the money the government saves when the total weight of the service member’s household goods is less than the average weights of those shipped and stored by other service members in the same paygrades and comparable PCS circumstances.

Defense officials have never launched an effort to develop a policy for offering such incentives.

The services also need to better track some expenses in the process for moving household goods, and make sure they are using the most cost-effective methods, according to the report.

Overpaying for expired benefits

For example, the services had paid about $5 million as of February for long-term storage for more than 2,700 active duty-service troops whose entitlement to that storage had expired. The services also continue to pay storage costs for long-term storage for more than 600 retired and separated service members after their entitlement expired.

In one case, the Army paid for a soldier’s storage since 1988 — 26 years — although the soldier’s entitlement to that storage expired in 1991.

In that case, the Army paid about $1,587 to store 380 pounds for 254 months after the entitlement expired, said Army spokesman Wayne Hall. The soldier, who was an E-5 when he moved to Germany for a three-year assignment in January 1988, has left the Army.

The Army stopped paying for the storage in June 2012, a month after moving from a manual system to a more efficient system for managing long-term storage, Hall said.

“As soon as it was discovered, it was converted to the owner’s expense,” he said.

The government won’t seek reimbursement from the soldier, Hall said, because it was the Army’s oversight. If the owner wants to retrieve his stored belongings, he’ll have to pay the warehouse for storage since June 2012, and for transportation of the items.

Better tracking in the works

Service officials told the IG they are taking action to better track such long-term storage entitlements and ensure that service members assume financial responsibility for storage costs after their entitlement has expired.

The Army, for example, will establish a system by July 31 to monitor and track expired long-term storage, and set up standard procedures to convert expiring long-term storage to the service members’ expense. The Navy set up procedures in 2011, the Air Force in April. Marine Corps officials say they will have their procedures set up within about four months.

Auditors also found that the services sometimes pay excessively for local moves, and suggested that DoD impose weight limits for certain local moves. At the moment, there are no weight limits for troops who make local moves “for the convenience of the government,” including moves related to retirements and separations.

In six examples of local moves provided by the Army and Air Force, DoD paid a total excess of $9,484 by allowing the service members to move 28,058 pounds more than their normal entitlement for PCS moves.

DoD paid $6,591 of that excess from PCS funds, and the remaining $2,893 came from operation and maintenance funds.

The Air Force provided an example of one service member who moved 75,100 pounds of household goods locally.

Under regulations establishing weight limits for other PCS moves, the member would have been allowed to move only 13,000 pounds.

By not imposing a weight limit, DoD paid an extra $28,000 for that single move.

DoD transportation policy officials responded to the IG that they believe troops should not be penalized for the excess costs of local moves that are required by the government.

But while auditors acknowledged that such moves “may warrant some flexibility,” they still feel DoD still “could reduce the costs of some local moves by establishing weight allowances.”

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