WASHINGTON -- An audit by the inspector general of the U.S. Defense Department found a "high risk" that department employees in metro Washington were flagrantly abusing transportation benefits.

Auditors identified more than 14,000 Defense employees who filed incomplete enrollment applications, and nine out of 14 employees from a selected sample overstated their benefit by an average of $42 monthly.

Additionally, employees who should have been withdrawn from the program because of a change in status continued to receive benefits despite their ineligibility.

"These findings indicate a high risk that DoD employees will not file forms to indicate status changes or to withdraw from the program, will commit fraud to receive benefits more than once in the same distribution period, and will obtain and concurrently hold both transit subsidy benefits and subsidized parking benefits," the report said.

In response to the findings, David Chu, Defense undersecretary for personnel and readiness, said the department is revising its employee transit benefit policy and would soon issue new guidelines.

Transportation benefits are enormously popular among federal workers in centers like metro Washington, helping defray commuting and parking costs for tens of thousands of employees, for whom such fees can easily top $12 a day.

Federal agencies in the capital region, which includes Washington and nearby counties of Maryland and Virginia, are required to provide the subsidies for employees who use mass transit or participate in van pools.

The benefits are aimed at reducing traffic congestion and pollution by encouraging employees to use mass transit.

They are supposed to equal an employee's personal commuting costs up to $110 per month. Last year, Defense spent nearly $36 million on the transit benefits for 33,770 employees.

The IG investigation was a follow-up to a report last April by the Government Accountability Office that found federal employees were fraudulently selling Metro fare cards on eBay, inflating transportation expenses and falsifying applications to obtain benefits for which they were ineligible.

"These employees are likely the tip of a much larger number of violations of law," said Gregory D. Kutz, managing director for forensic audits and special investigations at GAO, in written testimony submitted to the Senate Homeland Security and Governmental Affairs Committee.

GAO estimated that the amount of potentially fraudulent transit benefits claimed during 2006 by employees at all federal agencies in the Washington metropolitan area was at least $17 million, and likely more.