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Variable Housing Allowance: Rate Setting Criteria and Procedures Need To Be Improved

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Report Type Reports and Testimonies
Report Date Sept. 30, 1981
Report No. FPCD-81-70
Subject
Summary:

Pursuant to a congressional request, GAO evaluated the Department of Defense's (DOD) methods for computing fiscal years (FY) 1981 and 1982 variable housing allowances (VHA) which were authorized for qualified members of the uniformed services.

The GAO evaluation indicated that Congress needs to correct certain weaknesses in VHA legislation, and DOD needs to correct certain procedural problems. GAO found that the basis DOD used to compute VHA rates is what service members say they are paying for housing. Such a basis introduces not only the potential for abuse, but also for uncontrolled cost growth that will not be visible to Congress until after it has occurred. Also, GAO stated that it is questionable whether, in the early years of the program, this method will enable service members to obtain adequate housing. GAO believes that a better basis for establishing a housing allowance would be some external measure of what the members' civilian peers pay for housing.

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