When One Military Service Pays Another's Members, Overpayments May Result

Gao ID: AFMD-81-41 April 14, 1981

GAO reviewed procedures and controls relating to military pay cross disbursements and the reconciliation of accounting data to pay data at all military service finance centers to determine if the military services were following the applicable guidance in reporting and controlling cross disbursements and if the services' systems were effective in preventing or detecting pay errors and irregularities.

In a test of almost 3,000 cross disbursement cases, 160 payments were found which had not been charged to the members' pay accounts and represented potential overpayments. The cross disbursements not posted were from several months to over a year old. Disbursing officers in many cases did not adhere to prescribed procedures in reporting cross disbursements. Also, the military finance centers failed to establish or carry out required controls that were designed to ensure the prompt receipt of all military pay cross disbursement data. An important basic control consists of a reconciliation which compares the charges made by disbursing officers to military pay appropriations to amounts charged to members' pay amounts. Although this control is applicable to both pay disbursements within the services and cross disbursement payrolls, it was not used by the Army and Marine Corps and ineffectively used by the Navy and Air Force. Because of the general lack of effective internal controls, GAO believes that there may be many more cross disbursement payments than those identified which have not been posted to pay accounts. It also believes that fraud could go undetected unless the procedures and controls are improved.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: John F. Simonette Team: General Accounting Office: Accounting and Financial Management Division Phone: (202) 275-1581


The Justia Government Accountability Office site republishes public reports retrieved from the U.S. GAO These reports should not be considered official, and do not necessarily reflect the views of Justia.