Rich G -
A passive booking occurs when a travel agent types in a flight in the agency computer without actually "selling" the seat from the airline's inventory. It is technically possible to actually issue a paper ticket from a passive booking. This is legally used in cases where the agency books a reservation over the phone with an airline such as Southwest and then generates an itinerary for the client.
Here is an example of how a travel agent can use a passive booking to "abuse" the airline inventory system. Suppose a discount seat is not available on a flight a passenger requests. The agency actively books the flight at a higher fare so that the passenger has a reservation with the airline. The agency then creates a second record (PNR) using a passive booking at the lower fare and issues the ticket off the passive booking at the lower fare and thus bypasses the airline's yield management system.
The new software is designed to automatically compare the issued ticket with with the reservation booked in the airline computer and pick up any discrepancies. It is also designed to search through the agency computers and look for double bookings, even ones booked passively.
Hope that helps.