I don't know what timeframe your friend served, but when I was in the Air Force, leadership was constantly making a big deal about FWA (fraud, waste, and abuse). Now I wonder if it was in response to them finding out about schemes like these.

I also remember our shop being under (unwritten!) pressure from the squadron commander to spend every cent we were budgeted for (without going over!) to make sure we got at least that much last year.