The IG gathered all credit charge transactions at casinos – which totaled more than $3.2 million – and then eliminated transactions that appeared likely for professional use. The remaining charges – about $952,258 – are likelypersonal because they exceeded per diem amounts, daily transaction limits or ATM withdrawal limits.

The charges are spread across 4,437 transactions from about 2,636 cardholders, while about 646 cardholders charged $96,576 at adult entertainment venues, according to the report.

The total amount is just a small fraction of the 20 million transactions totaling around $3.4 billion that Defense Department charge cardholders maid from July 1, 2013 to June 30, 2014, according to the report.

A British military joint terminal attack controller inspects a firing range through night vision goggles during exercise Rim of the Pacific (RIMPAC) 2014 at Joint Base Pearl Harbor-Hickam, Hawaii, July 15, 2014. RIMPAC is a U.S. Pacific Fleet-hosted biennial multinational maritime exercise designed to foster and sustain international cooperation on the security of the world's oceans. (U.S. Air Force photo by Senior Airman James Richardson/Released)

Some specific incidents include:

  • A Defense Logistics Agency employee who used their charge card 29 times over two years to get nearly $5,000 in cash while not actually traveling, according to the report. The DLA employee spent about $3,366 at the Maryland Live! Casino in Hanover, Md. Three charges totaling $402 at the casino were declined.
  • A petty officer first class from the Naval Special Warfare Group, who spent about $1,116 at adult entertainment venues during 17 days of travel to El Paso, Texas. In total he spent about $1,758 on his trip but was only supposed to receive $151.50 in meals and incidental expenses, because his meals were paid for, according to the IG report.
  • An Army Reserve sergeant first class spent about $16,415 using their charge card at a resort and casino – while not on official travel, according to the IG report. Over that same time, more than $14,478 in charges were declined for being over the daily ATM dollar limit or the card's transaction limit.

Ultimately the Defense Department financial management regulations need to be updated to better prevent these types of abuses from occurring, according to the report. The system should prohibit certain merchant types that would be considered high risk for abuse, and require charge card managers to review declined charges to see the specific reasons why.

The use of software to help analyze charge card data and identify misuse is currently optional, according to the report. DoD should make its use mandatory.

Unless DoD puts into place stronger credit card charges these kinds of abuses will continue to happen, according to the report. The IG recommended that the Defense Travel Management Office form a working group to identify techniques or tools that could help prevent this abuse in the future.

Sen. Tom Carper, D-Del., the ranking member of the Senate Homeland Security and Governmental Affairs Committee, called the report "deeply troubling" and "inexcusable."

"It's clear that the Pentagon can and should take immediate steps to prevent future misuse of travel cards," Carper said. "The good news is that the Inspector General's report outlines several recommendations that can quickly be implemented by not only the Department of Defense, but also other federal agencies."

He said he will work with other Members of Congress to make sure the Defense Department takes immediate action and to make sure those lessons are applied across the entire federal government.

The Defense Travel Manage Office responded to the findings in the report by saying the overall amounts were negligible when compared to the overall size of the program and that delinquency and among cardholders was lower than industry averages.

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