What GAO Found The Department of Defense (DOD) uses three key processes to determine service member cost-of-living allowances (COLA), with separate programs for service members living in the continental U.S. (CONUS) and outside the continental U.S. (OCONUS). These processes include data on military household spending from the Department of Labor’s Bureau of Labor Statistics, location-specific surveys of shopping patterns, and retail price data for the goods and services that service members typically buy. DOD uses these processes to develop comparative prices for locations where it stations service members. DOD uses average CONUS prices as a baseline for determining eligibility for COLA. Using these processes, DOD determines a COLA rate for each eligible location. Payments to service members in these locations vary based on their spendable income and number of dependents. The department also tracks foreign currency fluctuations relative to the dollar to help determine COLA payments in OCONUS locations. DOD’s Process for Determining COLA Rates, Calendar Year 2024 DOD’s processes for determining COLA rates CONUS and OCONUS have several weaknesses. Additionally, information about COLA rates can be better communicated to service members. Specifically: DOD’s survey for determining service members’ shopping patterns does not use sound sampling practices. DOD does not…
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Military Personnel: DOD Should Improve Processes for Determining Cost-of-Living Allowances
Source: US GAO Reports — US Government, Public Domain