Financial Management

GAO's tests of 225,000 Navy payroll and personnel records for one pay period found overpayments to 134 Navy civilians, which represented less than one-tenth of one percent of the accounts tested. Although GAO tallied $62,500 in overpayments to these persons, the total amount overpaid is likely to be far greater because some of these erroneous payments continued for nearly one year. The causes of these overpayments included the following: (1) The Defense Finance and Accounting Service did not check to see whether civilian employees were paid from multiple databases for the same time period and (2) reconciliations between civilian payroll and personnel systems were infrequent and did not provide for systematic follow-ups to investigate and correct discrepancies. Navy payroll operations are susceptible to additional improper payments because (1) a large number of payroll personnel are granted virtually unrestricted access to both pay and personnel data, (2) ineffective audit trails do not always identify who made data changes, and (3) inactive payroll accounts are maintained on the active payroll database.

GAO found that: (1) 134 of 225,000 Navy civilians were overpaid a total of at least $62,500 in 1 year; (2) these overpayments were due to the Defense Finance and Accounting Service's (DFAS) failure to determine if individual civilian employees were paid from multiple databases for the same time period and infrequent reconciliations between civilian payroll and personnel systems; (3) the Navy's civilian payroll operations are susceptible to additional improper payments as a result of many personnel having unrestricted access to payroll data, DFAS inability to identify database changes, and DFAS maintenance of inactive payroll accounts on the active payroll database; and (4) the rapid consolidation of civilian payroll accounts into the Defense Civilian Payroll System could exacerbate control weaknesses if vulnerabilities are not adequately addressed.

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.

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