Service members stationed in high-cost areas may not always receive cost-of-living allowances that reflect local prices, according to a Government Accountability Office report released Thursday.
The Department of Defense uses location-specific surveys, price data, and military spending data to set cost-of-living allowances, known as COLAs.
Service members stationed in Hawaii, Japan, Alaska, Germany, and Virginia receive COLA to help offset higher living costs. Payments also vary based on the number of dependents in a household.
The GAO said most COLA payments go to service members stationed outside the continental United States, known as OCONUS, rather than those stationed within the continental United States, or CONUS. Auditors cited inconsistencies in how the department calculated payments for OCONUS and CONUS duty locations.
The report also found differences in the amount and type of information local commands gave service members in areas that receive COLA. In some cases, service members reported confusion about what they were entitled to receive or why payments changed.
Investigators said some Defense Department personnel told them changes in COLA made household budgeting difficult.
“In nine of the 17 discussion group summaries we held in locations that receive a COLA, participants mentioned that COLA fluctuates so much that they cannot rely on it as part of their budgets,” the report said.
The report cited one example in Japan, where a senior officer linked COLA issues to readiness.
“Eating a beans and rice diet has a direct impact on our ability to fight,” he told auditors.
The GAO recommended that the Defense Department align CONUS and OCONUS payments for dependents, apply its location-cost processes more consistently, use random sampling for service members’ shopping patterns, and require local commands to provide COLA information to service members.
The department agreed with the first two recommendations, but did not agree with using random sampling. It partially agreed with requiring local commands to provide information, saying the Defense Travel Management Office already maintains public information and that the department does not have a central point of contact for COLA inquiries.