First of all, these policies vary by division of government and vary by local, state and Federal. Currently the governement has a broad policy that miles belong to the governement and only a few of the departments actually enforce this. Currently FDA, SEC and others capture the miles of their employees to use on business travel. However, airlines do give miles away to those traveling on governement airfares. Some departments have tried it and given up for the ability to manage it, while others are real stringent, such as some of the
Atomic Commission departments like the Livermore Lab, or the Tennessee Valley Authority. There is a provision in the governement policy that states that miles may be used for upgrades on long haul flights. I do know of many governement employees that have enjoyed several free vacations to Hawaii with tax payer miles. Also, there have been a few cases whereby a governement employee who tried to return his miles to the governement after retiring from service was refused the gesture because they didn't know what to do with them. There are a few states which half heartedly try to manage the miles of state employees, which would ideally include those at state run universities and college athletes, etc. This practice is not widespread and i think only South Dakota is still active in this effort, with Floria and others having "crafted" a legal opinion from the State Sttorney General that capturing miles fo state employess would be illegal since it would require a "second" account to manage just government miles and second accounts aren't allowed by the airlines. Rather weak arguement but it leaves the miles in the hands of the state employees. In the case of the government, it has censored a few employees for "Embezzlement of government property" but those are rare cases. In any of this, there is usally a gap between practive and policy........

Hope this helps.