GAO: Overseas housing benefits need more DOD oversight

A house sits for rent in Landstuhl, Germany.


By JOHN VANDIVER | STARS AND STRIPES Published: June 17, 2015

STUTTGART, Germany — The Defense Department needs to more carefully scrutinize who is entitled to overseas housing allowance to avoid repeating past mistakes that have cost the government more than $100 million in recent years, the Government Accountability Office concluded in a review published Tuesday.

Steps have been taken to clarify past confusion over housing allowance eligibility rules, the GAO said, but DOD’s personnel office has “not carried out their responsibility for monitoring the implementation and effectiveness of DOD’s LQA Instruction.”

“Without fulfilling this responsibility, DOD cannot ensure the consistent application of LQA eligibility requirements throughout the department, and is at risk for future erroneous payments of this allowance to its civilian employees overseas,” the report continued.

GAO’s analysis of how the military implements Living Quarters Allowances overseas was prompted by widespread confusion over the rules related to eligibility for the benefit, which costs the government about $550 million annually.

The most notable debacle came in 2013 when DOD informed nearly 700 overseas civilians in the Pacific and Europe they had been paid LQA in error, which meant those workers would be required to reimburse the government for past payments unless they received special debt waivers. In most cases, those waivers were granted, but the episode caused considerable angst among the overseas workforce. DOD blamed the problem on bureaucratic confusion over complicated housing allowance rules.

The Pentagon is currently revising its guidance to service components to help clarify past points of dispute, spelling out in greater detail what disqualifies employees from receiving housing allowances.

For example, DOD, citing State Department regulations, maintains that employees who enter government civilian service while overseas must have been initially recruited from the U.S. and cannot have transferred to another commercial employer before joining government service.

In the past, it was fairly routine for an employee to be recruited overseas as a defense contractor and bounce between contracts before picking up a government service job with housing benefits. Another common practice was for separating servicemembers overseas to take a temporary government job without housing benefits while they waited for a government service position with the benefit to open.

DOD maintains such cases violated existing rules, but regulations at the time were vague, resulting in many disputes over what was allowed.

However, amid all the past confusion DOD failed to consult with the State Department — the agency responsible for the overarching regulations that govern overseas housing allowances — to clarify the intent of language in the regulations.

Going forward, “DOD has an opportunity to work with State to ensure that State has the information it needs to determine whether the DSSR (Department of State Standardized Regulations) needs to be revised. Doing so would help reduce the risk of future misinterpretation of terms related to LQA eligibility requirements,” GAO stated.

The State Department told GAO it is conducting a review of housing allowance rules that could result in more revisions and updates to regulations.

In a written response, DOD concurred with the GAO’s recommendations and said it also is in the process of revising its guidance to service components.


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