Bainbridge Ethics Paper: Misuse of the GTCC in the Army

The purpose of the travel card program was to help the government reduce its travel costs
and improve convenience for the government employees traveling on official business.
Implemented by banks through the Government Travel Charge Card (GTCC), the travel card
program includes both individually billed accounts (IBA) and centrally billed accounts (CBA)
(Kutz & Ryan, 2002). Individual GTCC cardholders pay for and are later reimbursed for their
travel expenses. On the other hand, paid for directly by the government, units use centrally billed
accounts to pay for their transportation services. While most government employees use the
GTCC for authorized purposes only, the Army has the highest rates of misuse. This ethics paper
will discuss the root cause and impact of GTCC misuse in the Army before analyzing the issue
using the three ethical lenses and recommending a solution based on the ethical lenses. Within
the Army, misuse of the GTCC is a costly ethical problem whose root cause is weak internal
controls, but one that can be managed using the three ethical lenses.

The Root Cause

Picking up from the thesis statement, the root cause of GTCC misuse in the Army is
weak internal controls over IBA GTCCs. This root cause manifests itself in weak overall control
mechanisms and problematic policies and procedures that are not enforced diligently (Kutz &
Ryan, 2002). In most units of the Army, management is mainly concerned with GTCC
delinquencies, that is, GTCC bills that employees have not settled even after the employer has
reimbursed the concerned employees. Management begins demanding action to reduce such
delinquencies only after severe problems become apparent. There are very few indications that
management teams emphasize controls to prevent or detect early the misuse of travel cards.

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In addition, two major weaknesses in the control of travel cards have been identified: the
absence of clear and elaborate policies/processes and limited control of the travel card program,
including audits of travel card use. To begin with, most Army units turn to DOD’s travel
management regulations as their main source of policy guidance for the management of the
travel card program (Kutz & Ryan, 2002). In many areas, however, the present guidance is not
elaborate enough to provide precise, practical, and uniform processes to be used by all Army
units. Secondly, as has been consistently recognized in the DOD’s Inspector General reports,
given its dollar value and compulsory use, the Department’s travel card program needs ongoing
attention, improvement, and oversight (Office of Inspector General, 2018).

Impacts on the Army

The most obvious impact of IBA GTCC misuse is the staggering amount of delinquent
debt. For example, as of March 31, 2002, more than eleven thousand Army cardholders owed the
Bank of America $8.4 million in unsettled bills, often necessitating charge-offs of Army GTCC
accounts. For instance, between November 30, 1998 (when DOD started contracting with the
Bank of America for the travel card program) and March 31, 2002, a span of fewer than four
years, the bank charged off more than 23,000 Army GTCC accounts with close to $34 million in
delinquent debt. Every year, these bad debts and charge-offs impose a heavy financial burden on
the Army in terms of higher fees, forfeited rebates, and significant resources used to pursue and
collect overdue accounts.

Equally important, one would expect the misuse of travel cards to result in disciplinary
actions and security clearances. However, there is little proof of documented disciplinary
measures taken against Army officers who have abused their travel cards (Kutz & Ryan, 2002).
Similarly, most Army travel program managers seem unaware that their staff members abuse

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their travel cards. For example, a civilian employee of the Pentagon used her GTCC for personal
purchases amounting to $3,600, then wrote four NSF checks totaling close to 8,000 to Bank of
America. When the cardholder failed to pay the bill, the bank charged her account off. All the
while, the employee’s boss was unaware of all this.

The Three Ethical Lenses

The misuse of the GTCC represents an ethical issue. Army leaders and personnel alike
stand to gain from analyzing the issue using the three ethical lenses. According to the principles
or rules lens, one should act or be guided by the agreed-upon principles, guidelines, codes, and
values rather than the consequences of their action (Kem, 2018). Going by this perspective,
GTCC misuse costs the Army millions of dollars a year and may not be an issue of concern if the
Army leaders and personnel use the card per the laid down rules. As shown in previous sections,
the policies and procedures guiding the utilization of the card are unclear and inconsistent across
Army units.
By looking through the consequences-based ethical lens, the use and management of the
travel card should be guided by the overarching principle of conferring the greatest benefit to the
greatest majority of the American people, not just the Army (Kem, 2018). An action is
considered ethical if it benefits the majority. Since travel card misuse costs the Army and
deviates taxpayers’ money that could have been spent on protecting America against her
enemies, the prudent use and management of the travel card should be fostered in the interest of
Americans.
The final lens, virtues-based ethics, is more concerned with the kind of person one should
be instead of what the person should do (Trevino & Nelson, 2004; Wong & Gerras, 2015). This
means that the travel card program managers should strive to act prudently and prioritize the

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public’s benefit. Anything other than that, including how personnel uses the card, should not be
an issue of concern.

Recommendations with Lenses Applied

Because the Army leadership manual encourages leaders to test each possible course
against all three lenses (Borderud, 2009), the recommended solution to the problem of misuse of
the GTCC in the Army is a three-part solution. Firstly, given the importance the principles or
rules lens places on agreed-upon values and principles, the Army’s leadership needs to develop
clearer policies and procedures to govern the management of the program. These policies and
procedures must be consistent across all units of the Army. In addition, the policies and
procedures should include clear rules on using the cards. Indeed, as indicated in the “Root
Cause” section, presently, most Army units use DOD’s travel management regulations to
manage their travel card programs. The problem with the regulations is that their wording is too
broad to provide practical guidelines. As a result, the regulations are open to different
interpretations and applied inconsistently across units.
Secondly, looked at from the consequence viewpoint, Army managers of the travel card
program must strive to manage the program to eliminate or at least minimize misuse and fraud.
Such management should proactively seek to know how cardholders use their cards. This part of
the solution is rudimentary when one considers that, every year, the misuse of travel cards costs
the Army millions of dollars, money that could be better spent bolstering the Army’s ability to
defend the country. For example, in 2001, overdue bills and charge-offs set back the Army $2.4
million in lost rebates. In addition, overdue bills and charge-offs cost the Army $1.4 million a
year in increased ATM transaction fees.

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Thirdly, Army managers of the travel card program should go beyond the call of duty
prescribed by virtue ethics – merely to be virtuous people who seek to manage the program
prudently – and become more concerned about the consequences of their managerial actions. In
particular, they should focus on knowing if the processes they have put in place are helping to
prevent or detect travel card misuse. If not, they should take corrective actions. In other words, it
is inadequate to just put in place policies, rules and procedures; they must be enforced.

Conclusion

This ethics paper discussed the root cause and impact of GTCC misuse in the Army. It
has also analyzed the issue using the three ethical lenses (rules, consequences, and virtues)
before recommending a solution based on the ethical lenses. Within the Army, misuse of the
GTCC is a costly ethical problem whose root cause is weak internal controls, but one that can be
managed using the three ethical lenses. The root cause of GTCC misuse in the Army is weak
internal controls over individually billed account (IBA) GTCCs, a problem that manifests itself
in weak overall control mechanisms and problematic policies and procedures that are not
enforced diligently. The impacts are staggering: more than 23,000 delinquent Army GTCC
accounts collectively owe close to $34 million. Fortunately, this problem can be resolved by
applying the three ethical lenses, and the Army could save $3.6 million a year.

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References

Borderud, S. R. (2009). The ethical framework. Fort Bliss, Texas, United States: United States
Army Sergeants Major Academy.
Kem, J. D. (2018, March). Ethical decision making: Using the “Ethical Triangle.” Fort Bliss,
Texas, United States: United States Army Sergeants Major Academy.
Kutz, G. D., & Ryan, J. J. (2002). Travel cards: Control weaknesses leave Army vulnerable to
potential fraud and abuse. Washington, D. C.: United States General Accounting Office.
Office of Inspector General. (2018). DoD reporting of charge card misuse to OMB. Alexandria:
Office of Inspector General.
Trevino, L., & Nelson, K. (2004). Developing ethical organizations: Ethics as organizational
culture. In L. Trevino, & K. Nelson, Managing business ethics: Straight talk about how
to do it (pp. 1-15). Hoboken: John Wiley & Sons.
Wong, L., & Gerras, S. (2015). Character. In L. Wong, & S. Gerras, Lying to Ourselves:
Dishonesty in the Army profession (pp. 1-5). Carlisle: U.S. Army War College Press.