Military Pay
Army Reserve Soldiers Mobilized to Active Duty Experienced Significant Pay Problems Gao ID: GAO-04-990T July 20, 2004In light of GAO's November 2003 report highlighting significant pay problems experienced by Army National Guard soldiers mobilized to active duty in support of the global war on terrorism and homeland security, GAO was asked to determine if controls used to pay mobilized Army Reserve soldiers provided assurance that such pays were accurate and timely. GAO's audit used a case study approach to focus on controls over three key areas: processes, people (human capital), and automated systems.
The processes and automated systems relied on to provide active duty pays, allowances, and tax benefits to mobilized Army Reserve soldiers are so error-prone, cumbersome, and complex that neither DOD nor, more importantly, Army Reserve soldiers themselves, could be reasonably assured of timely and accurate payments. Weaknesses in these areas resulted in pay problems, including overpayments, and to a lesser extent, late and underpayments of soldiers' active duty pays and allowances at eight Army Reserve case study units. Specifically, 332 of 348 soldiers (95 percent) we audited at eight case study units that were mobilized, deployed, and demobilized at some time during the 18-month period from August 2002 through January 2004 had at least one pay problem. Many of the soldiers had multiple problems associated with their active duty pays and allowances. Some of these problems lingered unresolved for considerable lengths of time, some for over 1 year. Further, nearly all soldiers began receiving their tax exemption benefit at least 1 month late. These pay problems often had a profound adverse impact on individual soldiers and their families. For example, soldiers were required to spend considerable time, sometimes while deployed in remote, hostile environments overseas, seeking help on pay inquiries or in correcting errors in their active duty pays, allowances, and related tax benefits. The processes in place to pay mobilized Army Reserve soldiers, involving potentially hundreds of DOD, Army, and Army Reserve organizations and thousands of personnel, were deficient with respect to (1) tracking soldiers' pay status as they transition through their active duty tours, (2) carrying out soldier readiness reviews, (3) after-the-fact report reconciliation requirements, and (4) unclear procedures for applying certain pay entitlements. With respect to human capital, weaknesses identified at our case study units included (1) insufficient resources allocated to key unit-level pay administration responsibilities, (2) inadequate training related to existing policies and procedures, and (3) poor customer service. Several automated systems issues also contributed to the significant pay errors, including nonintegrated systems and limited processing capabilities.
GAO-04-990T, Military Pay: Army Reserve Soldiers Mobilized to Active Duty Experienced Significant Pay Problems
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Testimony:
Before the House Committee on Government Reform, Subcommittee on
Government Efficiency and Financial Management, House of
Representatives:
For Release on Delivery Expected at 2 p.m. EST Tuesday, July 20, 2004:
MILITARY PAY:
Army Reserve Soldiers Mobilized to Active Duty Experienced Significant
Pay Problems:
Gregory D. Kutz:
Director:
Financial Management and Assurance:
Geoffrey B. Frank:
Assistant Director:
Financial Management and Assurance:
John J. Ryan:
Assistant Director:
Office of Special Investigations:
GAO-04-990T:
GAO Highlights:
Highlights of GAO-04-990T, a testimony to the Chairman, Committee on
Government Reform, Subcommittee on Government Efficiency and Financial
Management, House of Representatives:
Why GAO Did This Study:
In light of GAO‘s November 2003 report highlighting significant pay
problems experienced by Army National Guard soldiers mobilized to
active duty in support of the global war on terrorism and homeland
security, GAO was asked to determine if controls used to pay mobilized
Army Reserve soldiers provided assurance that such pays were accurate
and timely. GAO‘s audit used a case study approach to focus on
controls over three key areas: processes, people (human capital), and
automated systems.
What GAO Found:
The processes and automated systems relied on to provide active duty
pays, allowances, and tax benefits to mobilized Army Reserve soldiers
are so error-prone, cumbersome, and complex that neither DOD nor, more
importantly, Army Reserve soldiers themselves, could be reasonably
assured of timely and accurate payments. Weaknesses in these areas
resulted in pay problems, including overpayments, and to a lesser
extent, late and underpayments of soldiers‘ active duty pays and
allowances at eight Army Reserve case study units. Specifically, 332
of 348 soldiers (95 percent) we audited at eight case study units that
were mobilized, deployed, and demobilized at some time during the
18-month period from August 2002 through January 2004 had at least one
pay problem.
Pay Experiences at Eight Army Reserve Case Study Units:
[See PDF for image]
[End of figure]
Many of the soldiers had multiple problems associated with their active
duty pays and allowances. Some of these problems lingered unresolved
for considerable lengths of time, some for over 1 year. Further,
nearly all soldiers began receiving their tax exemption benefit at
least 1 month late. These pay problems often had a profound adverse
impact on individual soldiers and their families. For example,
soldiers were required to spend considerable time, sometimes while
deployed in remote, hostile environments overseas, seeking help on pay
inquiries or in correcting errors in their active duty pays,
allowances, and related tax benefits.
The processes in place to pay mobilized Army Reserve soldiers,
involving potentially hundreds of DOD, Army, and Army Reserve
organizations and thousands of personnel, were deficient with respect
to (1) tracking soldiers‘ pay status as they transition through their
active duty tours, (2) carrying out soldier readiness reviews,
(3) after-the-fact report reconciliation requirements, and (4) unclear
procedures for applying certain pay entitlements. With respect to
human capital, weaknesses identified at our case study units included
(1) insufficient resources allocated to key unit-level pay
administration responsibilities, (2) inadequate training related to
existing policies and procedures, and (3) poor customer service.
Several automated systems issues also contributed to the significant
pay errors, including nonintegrated systems and limited processing
capabilities.
What GAO Recommends:
We provided a draft report detailing the results of our audit findings
to DOD for review and comment on July 9, 2004. The draft report
contains a series of 15 recommended actions. After receiving and
considering DOD‘s comments, we plan to finalize and issue the report.
To its credit, DOD has already taken a number of actions in response to
our report on the Army National Guard.
www.gao.gov/cgi-bin/getrpt?GAO-04-990T.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Gregory D. Kutz at
(202) 512-9095 or Kutzg@gao.gov.
[End of Section]
Mr. Chairman and Members of the Subcommittee:
Thank you for the opportunity to discuss controls over payroll payments
to mobilized Army Reserve soldiers. In November 2003, we reported on
significant pay problems experienced by mobilized Army National Guard
soldiers. We also testified on this matter before the full committee in
January 2004. Because of the severity of the problems identified for
these mobilized Army National Guard soldiers, you, as well as other
requestors,[Footnote 1] asked us to examine the accuracy and timeliness
of payroll payments to mobilized Army Reserve soldiers.
In response to the September 11 attacks, many Army Reserve soldiers
were activated to federal duty. A reported 98,000 Army Reserve
soldiers--almost half of the soldiers in the Army's selected reserve--
had been mobilized to active duty at some point since September 2001.
These forces were deployed on various important missions across the
United States and overseas in support of Operations Noble Eagle,
Enduring Freedom, and Iraqi Freedom. Their missions consisted mostly of
combat support missions, such as supply, medical, and transportation
operations, as well as military police and intelligence functions.
Given the critical and continuing roles Army Reserve soldiers play in
carrying out vital military and security missions, effective controls
are needed to provide timely and accurate pays and allowances to these
soldiers. Pay-related problems are not only costly and time-consuming
to resolve, but result in financial hardship for soldiers and their
families.
Because current Department of Defense (DOD) operations used to pay
mobilized Army Reserve soldiers relied extensively on error-prone,
manual transactions entered into multiple, nonintegrated systems, we
did not statistically test controls in this area. Instead, we audited
eight Army Reserve units as case studies to provide a detailed
perspective on the nature of payroll deficiencies with respect to Army
Reserve soldiers. Each of these units had mobilized, deployed, and
demobilized at some time during the 18-month period from August 2002
through January 2004. Appendix I provides details on the 14 pays and
allowances we audited for these case study units, as well as an
explanation of the three phases of an active duty mobilization
(mobilization, deployment, and demobilization). Appendix II provides
further details on our scope and methodology.
We found that Army Reserve soldiers experienced very similar problems
to those we identified for Army National Guard soldiers. We provided a
draft report detailing the results of our audit findings to DOD for
review and comment on July 9, 2004. The draft report contains a series
of 15 recommended actions. After receiving and considering DOD's
comments, we plan to finalize and issue the report. To its credit, DOD
has recognized the seriousness of these problems and has already taken
a number of actions in response to our report on the Army National
Guard, which I will address later in this testimony.
Today, I will summarize the results of our work with respect to (1) the
pay experiences of Army Reserve soldiers at our case study units and
(2) deficiencies in the three key control areas of processes, people,
and automated systems.
Summary:
Overall, 332 of the 348 (95 percent) Army Reserve soldiers from our
eight case study units had at least one pay problem associated with
their mobilization. Of these soldiers, 256 soldiers received an
estimated $247,000 in overpayments, 294 soldiers received about $51,000
in underpayments, and 245 soldiers received about $77,000 in late
payments of their active duty pays and allowances. In addition, none of
the 303 soldiers who deployed to designated combat zones received their
combat zone tax exclusion benefits on time. Some of these problems
lingered unresolved for considerable lengths of time--some for over one
year. A brief summary of the results of our audits at each of our case
study units is provided in appendix III.
The consequences of inaccurate, late, and missing payments, and
associated erroneous debts had a profound financial impact on
individual soldiers and their families. At one unit, several soldiers
told us that they had to borrow money from friends and relatives in
order to pay their bills when they initially deployed overseas.
Soldiers and their families were required to spend considerable time,
sometimes while the soldiers were deployed in remote, hostile
environments overseas, in repeated attempts to address concerns over
their pay and allowances, and related tax benefits.
Weaknesses in processes, human capital, and automated systems were
associated with pay problems we identified. With respect to processes,
until DOD improves the cumbersome and complex processes used to pay
mobilized Army Reserve personnel, the Army, the Defense Finance and
Accounting Service (DFAS), and, most importantly, the mobilized Army
Reserve soldiers, cannot be reasonably assured of timely and accurate
payroll payments. These processes, involving potentially hundreds of
DOD, Army, and Army Reserve organizations and thousands of personnel,
were not well understood or consistently applied with respect to
maintaining accountability over soldiers and their associated pays,
allowances, and tax benefits as the soldiers moved through the various
phases of active duty mobilization.
In the human capital area, we found weaknesses including (1)
insufficient resources allocated to key unit-level pay administration
responsibilities, (2) inadequate training related to existing policies
and procedures, and (3) poor customer service. The lack of sufficient
numbers of well-trained, competent military pay professionals can
undermine the effectiveness of even a world-class integrated pay and
personnel system. A sufficient number of well-trained military pay
staff is particularly crucial given the extensive, cumbersome, and
labor-intensive process requirements that have evolved to support
active duty pay to Army Reserve soldiers.
Automated systems weaknesses also contributed to the pay problems we
found. For example, nonintegrated systems and limitations in system
processing capabilities further constrained DOD's ability to provide a
most basic service to these personnel, many of whom were serving under
difficult conditions in the Middle East. The Defense Joint Military Pay
System-Reserve Component (DJMS-RC)--originally designed to process
payroll payments to personnel on weekend drills, on short periods of
fewer than 30 days of annual active duty, or for training--is now being
used to pay Army Reserve soldiers for up to 2 years. Army officials
told us that the system is now stretched to the limits of its
functionality. DFAS has established "workarounds" intended to
compensate for the DJMS-RC system limitations, which further compound
the human capital issues. Overall, we found the current stove-piped,
nonintegrated systems were labor-intensive and required extensive
error-prone manual data entry and reentry.
Case Studies Illustrate Significant Pay Problems:
We found significant problems with the active duty pays, allowances,
and related tax benefits received by the soldiers at the eight Army
Reserve units we audited. The eight units we audited were:
* 824th Quartermaster Company - Ft. Bragg, N.C.
* 965th Dental Company - Seagoville, Tex.
* 948th Forward Surgical Team - Southfield, Mich.
* 443rd Military Police Company - Owings Mills, Md.
* FORSCOM Support Unit - Finksburg, Md.
* 629th Transportation Detachment - Ft. Eustis, Va.
* 3423rd Military Intelligence Detachment - New Haven, Conn.
* 431st Chemical Detachment - Johnstown, Pa.
These units were deployed to help perform a variety of critical
domestic and overseas combat support operations, including supply,
medical, and transportation operations, as well as military police and
intelligence functions.
For the eight units we audited, we found numerous and varied pay
problems. For those problems that we could quantify,[Footnote 2] we
identified about $375,000 in errors. These problems consisted of
underpayments, overpayments, and late payments that occurred during all
three phases of Army Reserve mobilization to active duty. For the 18-
month period from August 2002 through January 2004, we identified
overpayments, underpayments, and late payments at the eight case study
units estimated at $247,000, $51,000, and $77,000, respectively.
Footnote 3] Overall, we found that 332 of the 348 soldiers (95 percent)
from our case study units had at least one pay problem associated with
their mobilization to active duty. Table 1 shows the number of soldiers
at our case study units with at least one pay problem during each of
the three phases of active duty mobilization.
Table 1: Pay Problems at Eight Case Study Units:
Army Reserve unit: 824th Quartermaster Company, N.C;
Soldiers with pay problems: Mobilization: 11 of 68;
Soldiers with pay problems: Deployment: 50 of 68;
Soldiers with pay problems: Demobilization: 13 of 68.
Army Reserve unit: 965th Dental Company, Tex;
Soldiers with pay problems: Mobilization: 25 of 93;
Soldiers with pay problems: Deployment: 86 of 93;
Soldiers with pay problems: Demobilization: 7 of 93.
Army Reserve unit: 948th Forward Surgical Team, Mich;
Soldiers with pay problems: Mobilization: 5 of 20;
Soldiers with pay problems: Deployment: 20 of 20;
Soldiers with pay problems: Demobilization: 18 of 20.
Army Reserve unit: 443rd Military Police Company, Md;
Soldiers with pay problems: Mobilization: 67 of 121;
Soldiers with pay problems: Deployment: 114 of 121;
Soldiers with pay problems: Demobilization: 17 of 121.
Army Reserve unit: FORSCOM Support Unit, Md;
Soldiers with pay problems: Mobilization: 0 of 1;
Soldiers with pay problems: Deployment: 1 of 1;
Soldiers with pay problems: Demobilization: 1 of 1.
Army Reserve unit: 629th Transportation Detachment, Va;
Soldiers with pay problems: Mobilization: 5 of 24;
Soldiers with pay problems: Deployment: 24 of 24;
Soldiers with pay problems: Demobilization: 1 of 24.
Army Reserve unit: 3423rd Military Intelligence Detachment, Conn;
Soldiers with pay problems: Mobilization: 10 of 11;
Soldiers with pay problems: Deployment: 10 of 11;
Soldiers with pay problems: Demobilization: 9 of 11.
Army Reserve unit: 431st Chemical Detachment, Pa;
Soldiers with pay problems: Mobilization: 6 of 10;
Soldiers with pay problems: Deployment: 10 of 10;
Soldiers with pay problems: Demobilization: 0 of 10.
Source: GAO analysis.
[End of table]
Some of the pay problems we identified included the following.
* Forty-seven soldiers deployed overseas with the 824th Quartermaster
Company from North Carolina improperly received hardship duty pay,
totaling about $30,000, for up to 5 months after departing from their
overseas duty locations.
* Nine soldiers of the 824th Quartermaster Company improperly received
family separation allowance payments totaling an estimated $6,250 while
serving at Ft. Bragg, their unit's home station.
* Forty-nine soldiers with the 824th Quartermaster Company did not
receive the hardship duty pay they were entitled to receive when they
arrived at their designated duty locations overseas until about 3
months after their arrival.
* Ten soldiers with the 443rd Military Police Company had problems with
their overseas housing allowance associated with their deployment in
Iraq, including five soldiers who were underpaid about $2,700 and seven
who did not receive their last allowance until more than 2 months after
their active duty tour ended.
* A soldier with the 443rd MP Company who demobilized from an active
duty deployment in August 2002, subsequently received erroneous active
duty payments of about $52,000 through May 2004. These erroneous
payments were not detected and stopped by DOD. The soldier contacted us
to ask for our assistance in resolving this matter.
* A soldier from the 965th Dental Company who received an emergency
evacuation from Kuwait as a result of an adverse reaction to anthrax
and antibiotic inoculations he received in preparation for his overseas
deployment, continued to receive about $2,900 in improper hostile fire
and hardship duty payments after his return from Kuwait.
* A soldier with the 3423rd Military Intelligence Detachment did not
receive an estimated $3,000 in family separation allowance payments
associated with his active duty mobilization.
* Two soldiers received tens of thousands of dollars in active duty
pays and allowances over the course of a year or more even though they
never mobilized with their units.
* Nearly, all of the soldiers in the seven case study units that
deployed overseas experienced late payments related to their combat
zone tax exclusion benefit.
In some cases, the problems we identified may have distracted these
professional soldiers from mission requirements, as they spent
considerable time and effort while deployed attempting to address these
issues. Further, these problems likely had an adverse effect on soldier
morale.
Mobilized Army Reserve Pay Process, Human Capital, and Systems
Deficiencies:
Deficiencies in three key areas--process, human capital, and automated
systems--were at the heart of the pay problems we identified. Process
deficiencies included weaknesses in (1) tracking and maintaining
accountability over soldiers as they moved from location to location to
carry out their mobilization orders, (2) carrying out soldier readiness
programs (SRPs)--primarily at the mobilization stations, (3)
distributing and reconciling key pay and personnel reports during
mobilizations, and (4) determining eligibility for the family
separation allowance associated with active duty mobilizations. Human
capital weaknesses included insufficient resources, inadequate
training, and poor customer service. Finally, the automated systems
supporting pays to mobilized Army Reserve soldiers were ineffective
because they were not integrated and had limited processing
capabilities.
Process Deficiencies:
A substantial number of payment errors we found were caused, at least
in part, by design weaknesses in the extensive, complex set of
processes and procedures relied on to provide active duty pays,
allowances, and related tax benefits to mobilized Army Reserve
soldiers. Complex, cumbersome processes, developed in piecemeal fashion
over a number of years, provide numerous opportunities for control
breakdowns. We identified issues with the procedures in place for both
determining eligibility and processing related transactions of active
duty pay to mobilized Army Reserve soldiers. These process weaknesses
involved not only the finance and military pay component of the Army,
Army Reserve, and DFAS, but the Army's operational and personnel
functions as well.
Flaws in Maintaining Accountability over Soldiers throughout
Mobilization:
Mobilization policies and procedures did not provide the Army with
effective accountability and visibility over soldiers' locations to
provide reasonable assurance of accurate and timely payments to
mobilized Army Reserve soldiers. Reserve soldiers pass through four
main transitions during the course of a typical mobilization cycle,
including transitions from (1) their home stations to their designated
mobilization station, (2) the mobilization station to their assigned
deployment location, (3) the deployment location to their
demobilization station, and (4) the demobilization station back to
their home station.
Soldiers' active duty pays, allowances, and related tax benefits are
closely tied to soldiers' locations. For example, timely data regarding
the dates soldiers arrive at and leave designated locations are
essential for accurate and timely hardship duty pays, allowances, and
related combat zone tax exclusion benefits. To effectively account for
soldiers' movements during these transitions, unit commanders, unit
administrators, as well as individuals assigned to personnel and
finance offices across the Army Reserves, Army mobilization stations,
and in theater Army locations must work closely and communicate
extensively to have the necessary data to pay Army Reserve soldiers
accurately and on time throughout their active duty tours.
However, we identified several critical flaws in the soldier
accountability procedures in place during the period of our audit.
Specifically, we identified flawed procedures for accountability over
(1) soldiers that are supposed to go through processing for
mobilization and demobilization, and (2) dates of soldiers' arrival to
and departure from designated hardship duty deployment locations.
Mobilization Station Accountability:
We found that effective procedures were not in place to monitor and
validate the propriety of active duty pays to mobilized Army Reserve
soldiers. The accountability controls in place at Army mobilization
stations responsible for unit mobilization and demobilization
processing were not effective in detecting any missing Army Reserve
soldiers assigned to units passing through those locations. As a result
of these control design flaws, several soldiers received up to a year
of active duty pay based on issued mobilization orders, even though the
soldiers never reported for active duty.
Illustrative Cases:
Flaws in Soldier Location Accountability Procedures Resulted in
Erroneous Active Duty Payments;
* A soldier assigned to the 965th Dental Company received a
mobilization order, but based on a discussion with his commander about
a medical condition, was told he would be transferred to a unit that
was not mobilizing. However, the unit commander did not provide a list
of the unit's mobilizing soldiers to the UPC and did not provide any
information on this soldier indicating that he would not be reporting
to the unit's mobilization station. Consequently, neither the UPC nor
the mobilization station personnel had any means of detecting that a
soldier had not mobilized with his unit and therefore was improperly
receiving active duty pays. As a result, the soldier's pay was started
on February 11, 2003, and continued through February 2004, resulting in
more than $36,000 in overpayments. This improper active duty pay was
stopped only after we identified the error and notified Army officials;
* A soldier contacted GAO in March 2004 to inquire as to why he had
been receiving active duty pay for almost a year even though,
according to the soldier, he was not mobilized to active duty during
that time. Subsequent inquiry determined that, at least on paper, the
soldier was transferred from Maryland's 443rd Military Police Company
to Pennsylvania's 307th Military Police Company in February 2003, and
was mobilized to active duty with that unit in March 3, 2003.
Applicable active duty pays and allowances for the soldier were
initiated based on these March 3, 2003, orders. After the 307th
military police company demobilized in February 2004, the soldier‘s
mobilization order was revoked. Nonetheless, available pay
documentation indicated the soldier continued receiving erroneous
active duty pay and allowances for basic pay, and allowances for
subsistence, housing, and family separation totaling an estimated
$52,000 through May of 2004.
[End of table]
Deployment Accountability:
Flaws in soldier accountability procedures associated with overseas
deployment locations resulted in payment errors for almost all of the
soldiers in our case study units. Soldiers were generally paid late or
underpaid location-based incentives upon their initial arrival into
designated hardship duty and hostile fire locations. Subsequently, they
were often overpaid these same location-based entitlements because
these payments continued, sometimes for long periods of time, after
soldiers left designated overseas locations. Army local area servicing
finance locations are to obtain documentation--flight manifests, for
example--showing soldier arrival and departure date information to use
as a basis for starting and stopping location-based pays, allowances,
and associated tax benefits. However, despite diligent efforts by Army
local area servicing finance officials to develop and maintain accurate
documentation showing soldiers at the designated deployment locations,
we found indications that this information was often not timely or
accurate for the soldiers at our case study units.
One of our case study units, the 443rd MP Company, relied on an
extraordinary, labor-intensive workaround to ensure that necessary
documentation supporting any changes in the location of the unit's
soldiers, as well as other pay-support documentation, was received by
the unit's area servicing location while the soldiers were deployed in
Iraq.
Individual Case Illustration: Biweekly Flights to Transmit Unit Pay
Documents;
* While deployed to guard Iraqi prisoners at Camp Cropper in Iraq, the
unit commander of the 443rd Military Police Company assigned a sergeant
to help address myriad pay complaints. The sergeant was deployed to
Iraq as a cook, but was assigned to assist in pay administration for
the unit because he was knowledgeable in DJMS-RC procedures and pay-
support documentation requirements and was acquainted with one of the
soldiers assigned to the unit's servicing finance office in Camp
Arifjan, Kuwait. Every 2 weeks, for about 5 months, the sergeant
gathered relevant pay-support documentation from the unit's soldiers,
took a 1 hour and 15 minute flight to the Kuwait airport, and then
drove an hour to the Army finance office at Camp Arifjan. The day
following the sergeant's biweekly journey to Camp Arifjan, the
sergeant worked with the Army finance officials at Camp Arifjan to
enter transactions into DMO, often for 8-12 hours, to get unit
soldiers' pay entitlements started or corrected, particularly hardship
duty pays requiring manual input every month.
[End of table]
These flawed procedures, which were relied on to account for Army
Reserve soldiers' actual locations and their related pay entitlements
while deployed, resulted in pay problems in all seven of our case study
units that deployed soldiers overseas. For example:
* All 49 soldiers who deployed overseas with our 824th Quartermaster
Company case study unit were underpaid their hardship duty pay when
they first arrived at the designated location. Subsequently, almost all
solders in the unit were overpaid their hardship duty pay--most for up
to 5 months--after they left the designated location, and some
continued to receive these payments even after they were released from
active duty. In total, we identified about $30,000 in improper hardship
duty payments received by this unit's soldiers.
* Seventy-six soldiers with the 965th Dental Company received improper
hardship duty payments totaling almost $47,000 after they had left
their hardship duty location.
* None of the 24 soldiers deployed with the 629th Transportation
Detachment received hardship duty pay for the months they arrived and
departed the hardship duty areas. In addition, they did not receive
hostile fire pay for almost 3 months after their arrival at their
assigned overseas deployment locations.
The debts created by overpayment of these location-based payments
placed an additional administrative burden on both the soldiers and the
department to calculate, monitor, and collect the overpaid amounts.
Lack of Clear Pay Review Procedures at Mobilization Stations:
Some of the pay problems we found were associated with flawed
procedural requirements for the pay support review, which is part of
the SRP process carried out at Army mobilization stations. Procedures
followed by Army mobilization station finance officials during the SRP
were inconsistent with respect to what constitutes a "thorough review"
of soldiers' pay support documentation to determine if it is current
and complete and has been entered into the DJMS-RC pay system.
While finance officials at some mobilization stations carried out one-
on-one detailed pay reviews with each soldier, as well as a unit-wide
finance briefing, finance officials at other mobilization stations
carried out less thorough procedures. At two mobilization stations,
finance officials provided only a unit-wide briefing and did not meet
individually with the soldiers to conduct a detailed review of their
military pay accounts. We found far fewer pay problems (excluding
location-based pays) for the soldiers who went through the individual
detailed pay reviews during the SRP than the soldiers who received less
thorough or no individual reviews of their pay entitlements at their
mobilization stations.
Inadequate Processes for Key Pay and Personnel Reconciliation Reports:
Design flaws in the procedures in place to obtain and reconcile key pay
and personnel reports impaired the Army's ability to detect improper
active duty payments. As discussed previously, we identified several
cases in which such improper payments continued for over a year without
detection.
The Army Reserve pay review and validation procedures were initially
designed for pays to Army Reserve soldiers performing weekend drills,
annual training, and short-term active duty mobilizations of 30 days or
fewer. Correspondingly, pay and personnel reconciliation processes in
place during our audit were focused primarily on requirements for unit
commanders to reconcile data for reserve soldiers while they are in an
inactive (weekend drilling only) status.
Specifically, current Army Reserve procedures require that unit
commanders review a key report, the Unit Commanders Pay Management
Report,[Footnote 4] for soldiers in their units performing weekend
drill activities, for short-term active duty mobilization activities,
and in planning for lengthy active duty mobilizations. However, these
procedures do not clearly require unit commanders to review this key
report for Army Reserve soldiers in subsequent phases of their active
duty mobilization tours. The unit commander at one of our case study
units, the 965th Dental Company, stated that he did not believe that a
review and reconciliation was needed. Instead, he stated he relied on
the unit's soldiers to identify any pay problems. However, in light of
the extensive manual entry, and nonintegrated systems currently relied
on for mobilized Army Reserve soldiers' pay, the timely and complete
reconciliation of comparable pay and personnel data in these key
reports can serve as an important detective control to identify any pay
errors shortly after they have occurred.
In addition, Army guidance does not specify how deployed units are to
receive these reports. Distribution of these reports is particularly
problematic for units deployed in remote locations overseas. Unit
commanders for several of our case study units stated they did not
receive these key reports while deployed. Had those reports been
available and reconciled, they could have been used to identify and
correct improper active duty payments, such as the large, erroneous
active duty overpayments discussed previously.
Family Separation Allowance Eligibility Requirements Are Not Clear:
The existing procedures for applying eligibility requirements for
activated Army Reserve soldiers' family separation allowance payments
were not clear. These flawed procedural requirements for paying family
separation allowance led to varying interpretations and pay errors for
Army Reserve soldiers at the implementing Army home stations and
mobilization stations.
DOD policy clearly provides that soldiers are entitled to receive
family separation allowance if their family does not reside near the
duty station, which is generally defined as within 50 miles.[Footnote
5] However, DOD guidance and the form for implementing this policy were
not clear because they did not provide for a determination that the
soldier's family does not live near the soldier's duty station.
Specifically, they did not require soldiers to certify that (1) they
live over 50 miles away from the unit's home station and do not commute
daily, or (2) the soldier's commander has certified the soldier's
required commute to the duty station is not reasonable. As a result, we
found inconsistencies as to when soldiers received family separation
allowance. For example, soldiers from the 824th Quartermaster Company
received family separation allowance payments while stationed at their
Ft. Bragg home station even though they lived within 50 miles of the
base and no documentation was available showing the unit commander
authorized an exception. In contrast, 14 soldiers with Maryland's 443rd
Military Police Company who lived over 50 miles away from their home
station, including several soldiers from Puerto Rico, did not receive
family separation allowance based on their arrival at their home
station.
Human Capital Issues:
Human capital weaknesses also contributed to the pay problems mobilized
Army Reserve soldiers experienced in our eight case study units. Our
Standards for Internal Control in the Federal Government state that
effective human capital practices are critical to establishing and
maintaining a strong internal control environment, including actions to
ensure that an organization has the appropriate number of employees to
carry out assigned responsibilities. Even in an operational environment
supported by a well-designed set of policies and procedures and a
world-class integrated set of automated pay and personnel systems, an
effective human capital strategy--directed at ensuring that sufficient
numbers of people, with the appropriate knowledge and skills, are
assigned to carry out the existing extensive, complex operational
requirements--is essential. Such a human capital strategy supporting
accurate and timely active duty payments to mobilized Army Reserve
soldiers must encompass numerous DOD components spread across the world
that are now involved in carrying out the extensive coordination,
manual intervention, and reconciliations required to pay mobilized Army
Reserve soldiers.
Well-trained pay-support personnel throughout various DOD components
are particularly critical given the extensive, cumbersome, and labor-
intensive process requirements that have evolved to provide active duty
payments to mobilized Army Reserve soldiers. We encountered many
sincere and well-meaning Army, Army Reserve and DFAS personnel involved
in authorizing and processing active duty payments to these soldiers.
The fact that mobilized Army Reserve soldiers received any of their
entitled active duty pays, allowances, and tax benefits accurately and
on-time is largely due to the dedication and tireless efforts of many
of these pay-support personnel to do the right thing for these
mobilized Army Reserve soldiers. However, in conjunction with our case
studies, we observed the following human capital weaknesses in the
current processes and organizational components now relied on to pay
mobilized Army Reserve soldiers: (1) inadequate resources provided to
support unit-level pay management, (2) inadequate pay management
training across the spectrum of pay-support personnel, and (3) customer
service breakdowns.
Inadequate Resourcing for Critical Unit Administrator Positions:
Vacancies and turnover in key unit administrator positions, and the
deployment of unit administrators to fill other military requirements,
impaired a unit's ability to carry out critical pay administration
tasks that could have prevented or led to early detection of pay
problems associated with our case study units. In addition to pay
administration responsibilities, unit administrator duties include
duties for personnel and supply operations. We were told that vacancies
in unit administrator positions were difficult to fill and often
remained vacant for many months because Army policy requires the
individual filling the unit administrator position have a "dual"
status, which means the individual must perform duties both in the
capacity of an Army Reserve military occupation specialty as well as
unit administrator.
For example, at the 948th Surgical Team, the unit administrator
position was vacant prior to and during the unit's mobilization. We
were informed that the 948th Surgical Team had difficulty filling the
vacancy because of its dual status--i.e., the individual must have (1)
a medical background to meet the unit's mission requirements, and (2)
knowledge and experience performing the personnel, payroll, and supply
tasks of a unit administrator. In the absence of the unit
administrator, the unit commander assigned a sergeant with limited
knowledge of pay entitlements and DJMS-RC processing requirements to
help carry out some of the unit administrator's pay management duties.
The sergeant told us that during a 2-week period during late April
2003, she spent about 100 hours attempting to resolve the unit's pay
problems, while concurrently carrying out her duties as a health
specialist.
Inadequate Pay Management Training:
In addition to concerns about the level of resources provided to
support critical unit administrator positions, we identified instances
in which the lack of adequate training on pay management duties and
responsibilities provided to unit administrator and finance office
personnel contributed to soldiers' pay problems. Further, we found that
unit commanders did not always support these important pay management
duties. Our Standards for Internal Control in the Federal Government
provide that management should establish and maintain a positive and
supportive attitude toward internal controls and conscientious
management.
Several of the individuals serving as unit administrators in our case
study units informed us that they had received limited or no formal
training covering unit administrator pay management responsibilities
and that the training they did receive did not prepare them for
mobilization issues associated with supporting and processing active
duty pays. Moreover, few of these unit administrators had completed all
of the required training on active duty pays and allowance eligibility
and processing requirements. Unit administrators have responsibility
for a variety of pay-related actions, including working with the unit
soldiers to obtain critical pay support documentation, maintaining
copies of pay support records, providing pay-transaction support
documentation to the UPC, and reviewing pay reports for errors. Without
adequate training, unit administrators may not be aware of these
critical pay management responsibilities.
Lack of training contributed to a number of pay errors that unit
administrators could have prevented:
* At the 824th Quartermaster unit, while our audit of unit pay reports
showed that the unit administrator reviewed the documents, we saw no
indication that she used this information to identify and stop an
overpayment of $18,000 to one soldier in her unit. As a result, the
erroneous pay was allowed to continue for another 5 months.
* Several soldiers with the 965th Dental Company did not receive
promotion pay increases and other entitlements for over 2 months
because the unit administrator failed to process necessary pay-support
documentation--available at the time of unit's initial SRP--until after
the unit was deployed on active duty.
* At the 443rd Military Police Company, the unit's finance
sergeant[Footnote 6] who was assigned pay management responsibilities
did not gather and submit current documentation needed to support
active duty pays, such as documents showing soldiers' marital status
and number of dependents. As a result, soldiers from this unit
experienced overpayments, underpayments, and late payments associated
with their housing and cost of living allowances.
Inadequate training of military pay technicians at Army finance offices
at mobilization and demobilization stations, and at area servicing
finance locations (for deployed soldiers), also adversely affected the
accuracy and timeliness of pays to mobilized Army Reserve soldiers. Few
of the military finance personnel responsible for processing pay
information at the mobilization and demobilization stations and at the
area servicing finance office for deployed units had formal training on
DJMS-RC pay procedures. Instead, several of the military pay
technicians and supervisors we talked to at the Army mobilization and
demobilization stations told us they relied primarily on on-the-job
training to become knowledgeable in the pay eligibility and pay
transaction processing requirements for mobilized Army Reserve
soldiers. For example, military pay personnel at the Defense Military
Pay Office at Ft. Eustis informed us that instead of receiving formal
training on active duty pay entitlements or DJMS-RC pay processing,
they became knowledgeable in mobilization and demobilization pay
processing procedures by processing hundreds of soldiers within 2 to 3
weeks of being assigned these responsibilities. They also said they
contacted full-time civilians in the finance office, as well as UPC and
DFAS officials, by telephone for assistance.
Also, few of the Army finance personnel at overseas area servicing
finance locations received formal training on Army Reserve pay
eligibility and DJMS-RC processing requirements before assuming their
duties. These personnel had primary responsibility for supporting
active duty payments to mobilized Army Reserve soldiers deployed
overseas, including responsibility for processing location-based
active duty payments to these soldiers. Camp Arifjan was the Army
location assigned responsibility for processing pay to mobilized Army
Reserve soldiers deployed in Kuwait and Iraq during 2003. Officials
from the 336th Command, the Army command with oversight responsibility
for Camp Arifjan, confirmed that while finance personnel at Camp
Arifjan received training in the pay eligibility and pay processing
procedures for active duty Army soldiers, they were not adequately
trained in pay eligibility and processing procedures for Army Reserve
soldiers.
We were told of instances in which Army finance personnel were unable
to help Reserve soldiers resolve their pay problems. For example, the
948th Surgical Team contacted an Army finance unit located in Kandahar,
Afghanistan, to request its assistance in resolving the unit's pay
problems. However, the finance personnel at that location were unable
to help resolve the 948th Surgical Team's pay problems because they
said they had not had training in this area and were not familiar with
DJMS-RC processing requirements and procedures. All 20 soldiers with
the 948th Surgical unit experienced pay problems associated with their
location-based hardship duty payments, which required manual processing
every month by the unit's area servicing finance office.
Further, we saw little evidence that the unit commanders of our case
study units received any training on their role in supporting their
unit administrators in these important pay management responsibilities.
For example, at one of our case study units, the 965th Dental Company,
the unit commander informed us that he did not support the review of
pay management reports because soldiers had the capability to review
their pay online and would use this capability to identify and report
any pay problems. However, as discussed earlier, while we identified
numerous instances in which soldiers received overpayments or had other
pay problems, we saw little indication that these soldiers found and
reported these problems prior to our audit. Moreover, we identified two
instances in which soldiers did not report that they had received tens
of thousands of dollars in improper active duty payments.
Customer Service Breakdowns:
Our audit work at eight case study units identified significant soldier
concerns with both the level and quality of customer service they
received related to their active duty pays, allowances, and tax
benefits. The soldiers' concerns centered around three distinct areas:
(1) the accessibility of customer service, (2) the ability of customer
service locations to help soldiers, and (3) the treatment of soldiers
requesting assistance. Servicing soldiers and their families with pay
inquiries and problems is particularly critical in light of the error-
prone processes and limited automated system processing capabilities.
Ultimately, pay accuracy is left largely to the individual soldier.
Although there are several sources that soldiers can turn to for pay
issue resolution, including an online system and a toll free phone pay
assistance number, soldiers at our case study units experienced
problems in accessing these sources. Mission requirements and the
distance between deployment locations and field finance offices often
impaired the soldiers' ability to utilize the in-theater customer
service centers. Also, soldiers did not always have Internet and
telephone access to utilize sources through these media. The lack of
Internet access for deployed soldiers was particularly problematic
because it limited soldiers' access to pay, allowance, and tax benefit
data reflected in their leave and earnings statements. Lacking leave
and earnings statements, soldiers had no means to determine the
propriety of their active duty payments. For example, soldiers with the
948th Surgical Team told us that their inability to access the leave
and earnings statements adversely affected their overall morale.
Even when mobilized reservists were able to contact customer service
sources, their pay issues often continued because the office they were
instructed to contact was unable to address their inquiry or correct
their problem. In some cases, customer service sources failed to help
soldiers because they lacked an understanding of what was needed to fix
the problems. When representatives of the 948th Surgical Team contacted
their parent company for help in correcting pay problems, personnel
with the parent company informed them that they could not fix the
unit's pay problems because they (incorrectly) believed that the unit
was paid through the Army's active duty pay system. Soldiers at other
units were redirected from one source to another. Soldiers were not
aware of which sources could address which types of problems, and more
significantly, the customer service sources themselves often did not
know who should correct a specific problem.
An Army Reserve major's experience illustrates the time and frustration
that is sometimes involved with soldiers' attempts to obtain customer
service for correcting errors in active duty pays, allowances, and
related tax benefits.
Individual Case Illustration: Extensive, Time-consuming Action Required
to Resolve Pay Issue;
* A soldier from Maryland was mobilized in March 2003 from the Army's
Individual Ready Reserve to active duty to serve as a liaison between
the Army and Air Force to help coordinate ground and air combat
operations in Iraq. After completing his 2-month active duty tour and
returning to an inactive reserve status in May 2003, he contacted Army
officials to inform them that he was continuing to receive active duty
pays and volunteered to immediately repay these erroneous overpayments.
In July 2003, he wrote a check for $6,150.75 after receiving
documentation showing his debt computation. However, he continued to
receive Leave and Earnings Statements indicating that he had an
outstanding debt. He contacted his Army demobilization finance office
to determine how to get the erroneous outstanding debt removed from
his pay records. After being referred by officials at that location to
various DFAS locations (including once being told, "There is nothing
more I can do for you."), he contacted us for assistance. After DFAS
recomputed the soldier's debt as a result of our inquiry, the soldier
was informed that he owed an additional $1,140.54, because the original
debt computation did not fully consider the erroneous combat zone tax
exclusion benefits he received. Overall, he spent nearly a year after
his 2-month active duty tour ended, and about 20 phone calls, faxes,
and letters in contacting at least seven different DOD representatives
at five different customer service centers to correct active duty pay
and allowance overpayments and associated combat tax exclusion benefit
problems.
[End of table]
Finally, soldiers expressed concern about the treatment they sometimes
received while attempting to obtain customer service. Soldiers
expressed concern that certain customer service representatives did not
treat soldiers requesting assistance respectfully. For example, one
soldier who attempted to make corrections to his Certificate of
Discharge or Release from Active Duty (DD 214) informed us that
mobilization station personnel told him that the citations and dates of
service he was trying to add "didn't matter." Additionally, some
soldiers told us that when they raised concerns about the quality of
customer service they received with respect to their pay inquiries and
concerns, they were sometimes ignored. For example, soldiers with
Connecticut's 3423rd Military Intelligence Detachment told us they
contacted the local Inspector General because they believed that
finance personnel at their deployment location had both actively tried
to impair the payment of their active duty entitlements and had tried
to intimidate and discourage the unit's soldiers from seeking help
elsewhere. However, they were not aware of any action taken as a result
of their concerns.
Systems Problems:
Weaknesses in automated systems contributed significantly to the
underpayments, overpayments, and late payments we identified. These
weaknesses consisted of (1) nonintegrated systems with limited system
interfaces and (2) limited processing capabilities within the pay
system. The Army and DFAS rely on the same automated pay system to
authorize and process active duty pays for Army Reserve soldiers as
they use for Army National Guard soldiers. In addition, similar to the
Army National Guard, the Army Reserve's personnel and order-writing
systems are not integrated with the pay system. Consequently, many of
the systems problems experienced by mobilized Army Reserve soldiers are
similar to those that we identified in our report on pay issues
associated with mobilized Army National Guard soldiers.[Footnote 7]
Because of the automated systems weaknesses, both Army Reserve and
active Army personnel must put forth significant manual effort to
accurately process pays and allowances for mobilized Army Reserve
soldiers. Moreover, to compensate for the lack of automated controls
over the pay process, both DFAS and the Army place substantial reliance
on the review of pay reports to identify pay errors after the fact.
Part of this reliance includes the expectation that soldiers review
their own leave and earnings statements, even though these statements
do not always provide clear explanations of all payments made. Finally,
because of DJMS-RC's limitations, the system cannot simply stop
withholding taxes for soldiers in designated combat zone locations.
Instead, for these soldiers, the system withholds taxes and then pays
the soldiers the amount that was withheld at least a month after the
soldiers were first entitled to receive this benefit.
Automated Systems Are Not Integrated and Have Limited Interfaces:
The key pay and personnel systems involved in authorizing, entering,
processing, and paying mobilized Army Reserve soldiers are not
integrated and have only limited interfaces. Figure 1 provides an
overview of the key systems involved in authorizing, entering,
processing, and making active duty payments to mobilized Army Reserve
soldiers.
Figure 1: Key Systems Involved in Authorizing, Entering, Processing,
and Paying Mobilized Army Reserve Soldiers Are Not Effectively
Integrated or Interfaced:
[See PDF for image]
Note:
1 - Regional Level Application System (RLAS):
2 - Tactical Personnel System (TPS):
3 - Transition Processing (TRANSPROC) System:
4 - Defense Military Pay Office (DMO):
5 - Total Army Personnel Database - Reserve (TAPDB-R):
6 - Defense Joint Military Pay System - Reserve Component (DJMS-RC):
[End of figure]
Lacking either an integrated or effectively interfaced set of personnel
and pay systems, DOD must rely on error-prone, manual data entry from
the same source documents into multiple systems. We found numerous
instances in which pay-affecting personnel information was not entered
promptly into the pay system, resulting in numerous pay errors.
We found several instances in which soldiers that were promoted while
on active duty did not receive their pay raises when they should have
because the promotion information was not promptly recorded in DJMS-RC.
For example, one Army Reserve soldier's promotion was effective on July
1, 2003. However, the soldier's promotion was not processed in the pay
system until October 2003, which delayed an increase in both his basic
pay and basic allowance for housing. The soldier received his promotion
pay, including back pay, in late October 2003, resulting in late
payments totaling over $2,700.
Lacking an effective interface between pay and personnel systems, DOD
and the Army must rely on after-the-fact detective controls, such as
pay and personnel system data reconciliations to identify and correct
pay errors occurring as a result of mismatches between personnel and
pay system data. However, even these reconciliations will not identify
soldiers that are being paid for active duty while in inactive status
because the Army Reserve personnel system currently does not maintain
data to indicate whether or not soldiers are on active duty.
Limited Automated Processing Capabilities:
DJMS-RC was not designed to pay Army Reserve soldiers for active duty
tours longer than 30 days. According to DOD officials, requiring DJMS-
RC to process various types of pays for active duty tours that exceed
30 days has stretched the system's automated processing capabilities.
Because of the system's limitations, the Army and DFAS were required to
make monthly error-prone manual inputs for certain active duty pays,
such as hardship duty pay. We found many instances in which these
manual inputs resulted in payment errors. Moreover, because of the way
in which hardship duty pay was processed and reported on soldiers'
leave and earnings statements, mobilized Army Reserve soldiers could
not always determine whether they received all of their entitled pays
and allowances. In addition, because of current processing limitations,
DJMS-RC cannot process a required tax exclusion promptly for soldiers
in a combat zone. This processing limitation has resulted in late
payments of this benefit for all entitled Army Reserve soldiers.
Hardship Duty Pay:
During our audit period, we found numerous errors in hardship duty pay
as a result of a DJMS-RC processing limitation that required the use of
a miscellaneous payment code for processing this type of pay. Because
of the use of this miscellaneous code instead of a code specifically
for hardship duty pay, this pay could not be automatically generated on
a monthly basis once a soldier's eligibility was established.
Therefore, hardship duty pay had to be manually entered every month for
eligible soldiers.
We found that nearly all soldiers in our case studies who were eligible
for hardship duty pay experienced problems with this pay, including
late payments, underpayments, and overpayments. For example, the 965th
Dental Company's soldiers from Seagoville, Texas, experienced both
underpayments and overpayments. Specifically, all 85 soldiers deployed
to Kuwait were underpaid a total of approximately $8,000 for hardship
duty pay they were entitled to receive during their deployment
overseas. Subsequently, 76 of the unit's soldiers were overpaid a total
of almost $47,000 because they continued to receive hardship duty
payments for more than 6 months after they had left the theater.
Both underpayments and overpayments, as well as late payments, of
hardship duty pay occurred largely because of the reliance on manual
processing of this pay every month. The errors often occurred because
local area finance personnel did not receive accurate or timely
documentation such as flight manifests or data from the Tactical
Personnel System indicating when soldiers arrived or left the theater.
As a result, finance personnel did not start these payments on time,
and did not stop these payments as of the end of the soldiers' active
duty tour date recorded in DJMS-RC.
Use of the miscellaneous code to process hardship duty pay also
precluded the use of system edits as backup controls to prevent
overpayments. Because a miscellaneous code is used for various types of
payments, DFAS could not set up an edit to stop hardship duty pay after
a soldier's active duty tour ended in the event finance personnel
mistakenly continued to manually process hardship duty pay. Similarly,
DFAS could not establish an edit to prevent duplicate payments of
hardship duty pay processed using the miscellaneous code. As a result,
hardship duty pay could be entered more than once for a soldier in a
given month without detection. From our case studies, we identified
three soldiers who each received two hardship duty payments for one
month, resulting in total overpayments of $250.
Use of the miscellaneous payment code also made it difficult for
soldiers to understand, and determine the propriety of, some of the
payments reflected on their leave and earnings statements. Hardship
duty pay and other payments that are processed using the miscellaneous
code are reported on leave and earnings statements as "other credits."
Furthermore, the leave and earnings statements did not provide any
additional information about what the "other credits" were for unless
pay clerks entered additional explanations in the "remarks" section of
the statement, which they rarely did. As a result, lacking any
explanations, soldiers often had no means to determine if these types
of payments were appropriate and accurate.
Unit commanders told us that they relied on soldiers to identify any
pay problems based on their review of their leave and earnings
statements. However, because leave and earnings statements do not
always provide adequate information or, as discussed previously, may
not be available to soldiers while deployed, reliance on the soldiers
to identify pay errors is not an effective control.
Combat Zone Tax Exclusion:
In addition to soldiers' pay problems that occurred primarily because
of the extensive use of manual processes, soldiers also experienced
systematic problems with automated payments related to their combat
zone tax exclusion, which resulted in late payments of this benefit for
all soldiers in the seven case study units that deployed overseas.
Soldiers are entitled to the combat zone tax exclusion for any month in
which the soldier performs active service in a designated combat zone
area.[Footnote 8]
Because DJMS-RC was designed as a pay system for Army Reserve soldiers
in weekend drill status, it does not have the processing capability to
halt the withholding of applicable income taxes. Therefore, as a
workaround procedure to compensate for this limitation, an automated
process was established whereby the system first withholds taxes
applicable to payments made while soldiers are in a combat zone, and
then later reimburses soldiers for these withheld amounts in the
following month. As a result of this workaround process, with few
exceptions, Army Reserve soldiers who served in a designated combat
zone received their combat zone tax exclusion benefit at least one
month late.
Soldiers experienced longer delays in receiving this benefit if they
arrived in a combat zone after the midmonth cutoff for DJMS-RC
processing, which is approximately on the seventh day of each month. In
these cases, entitlement to the tax exclusion was not recognized until
the following month, which then delayed the soldier's receipt of his
combat zone tax benefit until the next month--the third month the
soldier was deployed in the combat zone. For example, members of the
824th Quartermaster Company that deployed to Afghanistan arrived in
country on July 14, 2003, but did not receive their first combat zone
tax exclusion reimbursements until early October, almost 3 months after
they became eligible for the exclusion.
Actions to Improve Accuracy and Timeliness of Mobilized Army Guard and
Reserve Pay:
DOD and the Army have reported a number of relatively recent positive
actions with respect to processes, human capital practices, and
automated systems that, if implemented as reported, should improve the
accuracy and timeliness of active duty pays, allowances, and related
tax benefits provided to mobilized Army Reserve soldiers. Payroll
payments to mobilized Army Reserve soldiers rely on many of the same
processes and automated systems used for payments to mobilized Army
National Guard soldiers. Consequently, actions to improve the accuracy
and timeliness of Army Reserve soldier payments are closely tied to
actions taken in response to several of the recommendations in our
November 2003 Army National Guard pay report.[Footnote 9]
Because many of DOD's actions in this area were implemented in the fall
of 2003 or later, they were not in place soon enough to have had a
positive impact on mobilized Army Reserve soldiers' payments that we
audited through January 2004. However, if implemented as reported to
us, many of DOD's actions in response to the recommendations in our
November 2003 report should help reduce the incidence of the types of
pay problems we identified for Army National Guard soldiers as well as
those identified in the Army Reserve case study units I have presented
today.
With respect to the process deficiencies and related recommendations,
DOD reported implementing additional procedural guidance intended to
help minimize the pay problems attributable to non-standard or unclear
procedures. One of the purposes of this guidance is to eliminate any
questions regarding which DOD entity is responsible for resolving a
soldier's pay issues or questions. Further, as of January 2004, DOD
reported establishing a new procedure under which DFAS assumed
responsibility (from the Army finance offices located in various
overseas locations) for all monthly manual entry of mobilized Army
Reserve and Army National Guard soldiers' location-based hardship duty
pays.
DOD also reported completing several actions related to our previous
recommendations to improve the human capital practices related to
payments to mobilized Army soldiers. For example, the Army reported
that it had taken action to provide additional training for Army
finance personnel at overseas finance locations and at mobilization and
demobilization stations, as well as for those Army finance personnel
scheduled for deployment. This training was directed at better ensuring
that these personnel are adequately trained on existing and new pay
eligibility and pay processing requirements for mobilized Army National
Guard and Army Reserve soldiers. DOD also reported establishing a new
policy in January 2004 directed at more clearly affixing responsibility
for addressing soldiers' pay problems or inquiries. Under this new
policy, the Army National Guard established a pay ombudsman to serve as
the single focal point for ensuring coordinated, prompt customer
service on all Army National Guard soldiers' pay problems.
With respect to automated systems, the Army and DFAS have acknowledged
serious deficiencies in the current automated systems used to pay
mobilized Army Reserve soldiers, and report that they have implemented
a number of significant improvements, particularly to reduce an
estimated 67,000 manual monthly entries for hardship duty pay. For
example, in response to our recommendations in the National Guard
report, DOD reported taking actions to (1) automate manual monthly
hardship duty pay in March 2004, (2) eliminate the use of "other
credits" for processing hardship duty pay and instead process these
pays using a unique transaction code to facilitate implementing a
system edit to identify and stop erroneous payments, (3) compare active
duty release dates in the Army's system used to generate Release From
Active Duty Orders with soldiers' end of active duty tour dates shown
in DJMS-RC to identify and stop any erroneous active duty payments, and
(4) increase the reliability and timeliness of documentation used to
support soldiers' arrival at and departure from designated overseas
locations.
Further, DOD has a major system enhancement effort underway in this
area--the Defense Integrated Military Human Resources System (DIMHRS).
As an interim measure, DOD is now pursuing Forward Compatible Payroll
(FCP). FCP is intended to replace payroll systems now used to pay Army
military personnel and help eliminate several of the labor-intensive,
error-prone workarounds necessitated by current DJMS-RC processing
limitations. As of May 2004, FCP was expected to be operational for all
Army Reserve soldiers by March 2005.
Concluding Comments:
The increased operating tempo for Army Reserve and Army National Guard
active duty mobilizations has stressed the current processes, human
capital, and automated systems relied on to pay these soldiers. The
significant number of problems we identified associated with active
duty pay, allowances, and related tax benefits provided to mobilized
Army Reserve soldiers at eight case study locations raises serious
concerns about whether current operations can be relied on to provide
accurate and timely payments. These pay problems caused considerable
frustration, adversely affected soldiers' morale, and placed an
additional unnecessary burden on both the soldiers and their families.
Further, if not effectively addressed, these pay problems may
ultimately have an adverse impact on Army Reserve reenlistment and
retention.
Strengthening existing processes, human capital practices, and
automated systems is critical to preventing, or at minimum, promptly
detecting and correcting the errors we identified. In this regard, DOD
and the Army have reported a number of relatively recent positive
actions intended to improve the accuracy and timeliness of active duty
pays, allowances, and related tax benefits provided to mobilized Army
Reserve soldiers. DOD's completed and planned near-term actions, if
implemented as reported, should reduce the number of pay problems.
However, mobilized Army Reserve soldiers cannot be reasonably assured
of accurate and timely active duty pays, allowances, and related tax
benefits until DOD completes a reengineering of all the processes,
human capital practices, and automated systems supporting this critical
area. Fully and effectively addressing Army Reserve soldiers pay
problems will require priority attention and sustained, concerted,
coordinated efforts by DFAS, the Army, and the Army Reserve to build on
actions taken and planned.
Finally, I commend the Chairman and Vice Chairman for holding an
oversight hearing on this important issue. Your Committee's continuing
interest and diligence in overseeing efforts to effectively and
efficiently support our Army Guard and Reserve forces will be essential
in bringing about comprehensive and lasting improvements to many
decades-old, entrenched problems. We are committed to continuing to
work with you and DOD to identify and monitor actions needed to bring
about comprehensive and lasting solutions to long-standing problems in
its business and financial management operations.
Mr. Chairman, this concludes my statement. I would be pleased to answer
any questions you or other members of the Committee may have at this
time.
Contacts and Acknowledgments:
For further information about this testimony, please contact Gregory D.
Kutz at (202) 512-9095 or [Hyperlink, kutzg@gao.gov]. Individuals
making key contributions to this testimony include James D. Berry Jr.,
Amy C. Chang, Francine M. DelVecchio, Geoffrey B. Frank, Jennifer L.
Hall, Ken Hill, Kristi L. Karls, Jason M. Kelly, Tram Le, Julia C.
Matta, Jonathan T. Meyer, Michelle Philpott, John J. Ryan, Jenniffer
F. Wilson, Leonard E. Zapata.
[End of section]
Appendix I: Background:
While on active duty, all Army Reserve soldiers earn various
statutorily authorized types of pays and allowances. The types and
amounts of pay and allowances that Army Reserve soldiers are eligible
to receive vary depending upon rank and length of service, dependency
status, skills and certifications acquired, duty location, and the
difficulty of the assignment. While Army Reserve soldiers mobilized to
active duty may be entitled to receive over 50 types of pays and
allowances, we focused on 14 types of pays and allowances applicable to
the Army Reserve units we selected for case studies. As shown in table
2, we categorized these 14 pay and allowance types into two groups: (1)
pays, including basic pay, medical and dental and foreign language
proficiency skill-based pays, and location-based hostile fire and
hardship duty pays, and (2) allowances, including allowances for
housing, subsistence, family separation, and cost of living for the
continental United States.[Footnote 10]
Table 2: Active Duty Pays and Allowances Associated with Case Study
Units:
Pays: Basic pay;
Description: Salary;
Dollar amount: Varies depending on rank and years of service.
Pays: Hazardous duty pay (Jump pay);
Description: Pay for parachute jumping;
Dollar amount: $150 per month.
Pays: Aviation career incentive pay;
Description: Pay for officers performing operational flying duty;
Dollar amount: Varies from $125 to $840 per month based on years of
aviation service.
Pays: Foreign language proficiency pay;
Description: Pay for specialized foreign language skills;
Dollar amount: Varies depending on proficiency but may not exceed $300
per month.
Pays: Hardship duty location pay for designated areas;
Description: Pay when assigned to duty in specified locations;
Dollar amount: $50, $100, or $150 per month (depending on duty
location).
Pays: Hardship duty location pay for certain places (phase out began
on January 1, 2002);
Description: Pay to enlisted soldiers when assigned to duty in
specified locations;
Dollar amount: Varies from $8 to $22.50 per month depending on rank.
Pays: Medical and dental pay;
Description: Various special entitlements and incentives for medical
and dental professionals;
Dollar amount: Varies from $100 per month to $3,000 per month
depending on medical specialty, professional qualifications, and
creditable service.
Pays: Hostile fire/imminent danger pay;
Description: Full pay for any portion of month when assigned to a
location subject to or in close proximity to hostile fire or assigned
to duty in a designated imminent danger location;
Dollar amount: $150 per month through September 30, 2002, $225 per
month, effective October 1, 2002, through December 31, 2004.
Allowances: Basic allowance for housing;
Description: Meant to offset the cost of housing when member does not
receive government-provided housing;
Dollar amount: Varies depending on location, rank, and whether member
has dependents.
Allowances: Basic allowance for subsistence;
Description: Meant to offset costs for a member's meals;
Dollar amount: Varies depending on whether member is officer or
enlisted.
Allowances: Family separation allowance I;
Description: Meant to offset added housing expenses resulting from
forced separation from dependents;
Dollar amount: Equivalent to monthly basic allowance for housing for
member of same rank without dependents.
Allowances: Family separation allowance II;
Description: Meant to offset certain expenses resulting from forced
separation from dependents;
Dollar amount: $100 per month from January 1, 1998, through September
30, 2002; $250 per month effective October 1, 2002, through December
31, 2004.
Allowances: Cost of living allowance in the continental United States;
Description: Meant to provide compensation for variations in costs
(other than housing) in the continental United States;
Dollar amount: Varies depending on location, rank, years of service,
and whether member has dependents.
Allowances: Overseas housing allowance;
Description: Meant to provide compensation for variations in housing
costs overseas;
Dollar amount: Varies depending on location, rank and whether the
member has dependents.
Source: GAO.
[End of table]
Mobilization Phases:
As shown in figure 2, three key phases are associated with the pays and
allowances applicable to mobilized Army Reserve soldiers: (1)
mobilization: starting applicable active duty pays and allowances, (2)
deployment: starting and stopping applicable location-based active duty
pays while continuing other nonlocation-based active duty pay and
allowance entitlements, and (3) demobilization: stopping active duty
pays and allowances.
Figure 2: Three Key Phases for Active Duty Pays to Army Reserve
Soldiers:
[See PDF for image]
[End of figure]
Mobilization:
During mobilization, units receive alert orders and begin preparing for
active duty by conducting Soldier Readiness Processing (SRP) at the
unit's home station. Among other things, the SRP is intended to ensure
that each soldier's financial records are in order. The unit
administrator is supposed to gather all necessary documentation for
each soldier and send it to the U.S. Army Reserve Pay Center (UPC).
There, pay technicians enter transactions to initiate basic pays and
allowances for the mobilized soldiers based on soldiers' mobilization
orders and documentation sent by the unit.
After the initial SRP, soldiers go as a unit to an assigned active duty
Army mobilization station, where they undergo a second SRP. As part of
this second SRP, finance personnel at the mobilization station are
responsible for confirming or correcting the results of the first SRP,
including obtaining any necessary documentation and promptly initiating
appropriate active duty pay and allowance transactions that were not
initiated during the first SRP.[Footnote 11]
Deployment:
While deployed on active duty, there are several active Army and DFAS
components involved in paying mobilized Army Reserve personnel. The
Army area servicing finance office, which may be within the United
States or in a foreign country, is responsible for initiating pays
earned while the soldier is located in certain specified locations,
such as location-based pays for hostile fire and hardship duty. Pay
technicians at these area servicing finance offices are responsible for
starting these types of pays for each soldier based on documentation,
such as annotated battle rosters or flight manifests, showing when
soldiers arrived at these designated locations.
While the designated Army area servicing finance offices have primary
responsibility for administering pay for deployed Army Reserve
soldiers, finance personnel at the cognizant mobilization station or at
the UPC can also enter certain pay-altering transactions that occur
during deployments, such as those related to a soldier's early
separation from active duty. In addition, the UPC has responsibility
for entering all monthly nonlocation-based, nonautomated pay and
allowance transactions, such as foreign language proficiency pay.
Demobilization:
Upon completion of an active duty tour, Army Reserve soldiers normally
return to the same active Army locations from which they were mobilized
for demobilization processing before returning to their home stations.
There, each soldier should receive a copy of the Release from Active
Duty (REFRAD) order and a Form DD 214, Certificate of Release or
Discharge from Active Duty. Pay technicians at the demobilization
station are required to use the date of release from active duty shown
on these documents as a basis for stopping all Army Reserve soldiers'
active duty pay and allowances. The UPC is responsible for
discontinuing monthly input of all nonlocation-based, nonautomated pays
and allowances. If the demobilization station did not take action to
stop active duty pays for demobilized Army Reserve soldiers, or if a
soldier did not return to the demobilization station for active duty
out-processing, the responsibility for stopping active duty pays and
allowances falls to the soldier's unit or the UPC.
[End of section]
Appendix II: Scope and Methodology:
Because current DOD operations used to pay mobilized Army Reserve
soldiers relied extensively on error-prone, manual transactions entered
into multiple, nonintegrated systems, we did not statistically test
controls in this area. Instead, we audited eight Army Reserve units as
case studies to provide a detailed perspective on the pay experiences
of mobilized Army Reserve soldiers. Each of these units had mobilized,
deployed, and demobilized at some time during the 18-month period from
August 2002 through January 2004. Using data supplied by the Army
Reserve Headquarters Operations Center, we selected case study units
that had a variety of deployment locations and missions.
To identify the pay experiences associated with each case study unit,
we obtained and analyzed DJMS-RC pay transaction extracts and other
available documentation. We also conducted follow-up inquiries with
cognizant personnel at the Army Reserve Command, Regional Readiness
Command, and the Army Reserve Pay Center. Because our objective was to
provide insight into the pay experiences of mobilized Army Reserve
soldiers, we did not perform an exact calculation of the net pay
soldiers should have received. Our audit results reflect only problems
that we identified and we counted problems only once in the phase in
which they first occurred, even though the problems we identified
sometimes extended into subsequent phases. Soldiers in our case study
units may have experienced additional pay problems that we did not
identify.
For purposes of characterizing pay and allowance problems for this
report, we defined overpayments and underpayments as those that were in
excess of (overpayment) or less than (underpayment) the entitled
payment. We considered as late payments any active duty pay or
allowance paid to the soldier over 30 days after the date on which the
soldier was entitled to receive such payments. In addition, while we
did not attempt to calculate the exact impact of any soldier over,
under, and late payments on their combat zone tax exclusion benefits,
we did examine readily available data to determine the extent to which
our case study unit soldiers' experienced problems with their entitled
combat zone tax exclusion benefits.
In addition, we conducted a number of other procedures, including:
* Observing procedures and practices followed by the various DOD
components involved in providing active duty pays and allowances to
Army Reserve soldiers;
* Interviewing recently demobilized soldiers about their pay
experiences while mobilized; and:
* Reviewing selected edit and validation checks in DJMS-RC, and certain
data entry processes for DJMS-RC.
We conducted our audit work from November 2003 through June 2004 in
accordance with U.S. generally accepted government auditing standards.
Further details on our scope and methodology will be provided in our
soon-to-be-issued report.
[End of section]
Appendix III: Summaries of Case Studies:
We audited the pay experiences of soldiers in the following eight Army
Reserve units as case studies of the effectiveness of the processes,
human capital practices, and automated systems in place over active
duty pays, allowances, and related tax benefits:
* 824th Quartermaster Company, Fort Bragg, N.C.
* 965th Dental Company, Seagoville, Tex.
* 948th Forward Surgical Team, Southfield, Mich.
* 443rd Military Police Company, Owings Mills, Md.
* FORSCOM Support Unit, Finksburg, Md.
* 629th Transportation Company, Ft. Eustis, Va.
* 3423rd Military Intelligence Detachment, New Haven, Conn.
* 431st Chemical Detachment, Johnstown, Pa.
These case studies are presented to provide an overview of the types
and causes of any pay problems experienced by these units. We selected
regional readiness commands that had a large number of activated
Reserve units that had mobilized, deployed, and returned from their
tour of active duty in support of Operations Noble Eagle, Enduring
Freedom, and Iraqi Freedom. From the list of units assigned to these
Readiness Commands, we selected eight case studies that had a variety
of deployment locations and missions, including both overseas and
continental U.S. deployments.
824th Quartermaster Company Fort Bragg, NC:
Number of mobilized unit soldiers' pays audited: 68:
Period of mobilization: February 2003 to September 2003:
Principal deployment location: Kuwait and surrounding locations,
Afghanistan, and Fort Bragg, NC:
Deployment duties: Rigged parachutes for individual soldiers and large
equipment drops.
Number of unit soldiers with at least one problem with active duty pay
and allowance entitlements: 58 of 68:
Unit Pay and Allowance Problems Identified (by Phase):
Phase: Mobilization;
Number of soldiers with pay problems: 11 of 68.
Phase: Deployed;
Number of soldiers with pay problems: 50 of 68.
Phase: Demobilization;
Number of soldiers with pay problems: 13 of 68.
Source: GAO.
[End of table]
Overpayments identified (number of soldiers affected): $60,000 (57):
Late payments identified (number of soldiers affected): $3,000 (9):
Underpayments identified (number of soldiers affected): $10,000 (49):
Combat zone tax exclusion benefit problems identified: All 49 soldiers
deployed overseas received their combat zone tax exclusion benefit at
least 1 month late, totaling about $20,000. In addition, approximately
$1,300 was over-withheld from 5 soldiers.
Examples of specific problems identified:
* Nine soldiers were paid family separation allowance even though they
remained at their home station and worked within their normal commuting
distance of fewer than 50 miles. Another soldier did not receive his
entitled family separation allowance, totaling $1,400, until the end of
his active duty tour.
* Forty-nine soldiers were underpaid hardship duty pay:
* Forty-seven soldiers continued to receive hardship duty pay payments
for up to 5 months following their return home, totaling $30,000.
* Forty-four soldiers that were deployed overseas were overpaid hostile
fire pay.
* One soldier who demobilized early due to a medical condition
continued to receive active duty pay and entitlements until the end of
January 2004 when we identified the error, resulting in an overpayment
of about $18,000.
965th Dental Company Seagoville, Tex:
Number of mobilized unit soldiers' pays audited: 93:
Period of mobilization: February 2003 through July 2003:
Principal deployment location: Camp Arifjan, Kuwait:
Deployment duties: Provided emergency dental services:
Number of unit soldiers with at least one problem with active duty pay
and allowance entitlements: 89 of 93:
Pay and Allowance Problems Identified (by Phase):
Phase: Mobilization;
Number of soldiers with pay problems: 25 of 93.
Phase: Deployed;
Number of soldiers with pay problems: 86 of 93.
Phase: Demobilization;
Number of soldiers with pay problems: 7 of 93.
Source: GAO.
[End of table]
Overpayments identified (number of soldiers affected): $100,000 (86):
Late payments identified (number of soldiers affected): $16,000 (86):
Underpayments identified (number of soldiers affected): $27,000 (65):
Combat zone tax exclusion benefit problems identified: 75 of the 85
soldiers deployed overseas received their combat zone tax exclusion
benefit 2 to 3 months late, totaling approximately $24,000. In
addition, we identified $200 in over-withholdings and $300 in under-
withholdings.
Examples of specific problems identified:
* Eighty-five soldiers were underpaid for hardship duty pay of $8,000:
* Sixty-six soldiers received hardship duty pay totally $47,000 for at
least 6 months after leaving Kuwait.
* One soldier received mobilization orders but did not report to the
unit's mobilization station. Nonetheless, he received $36,000 of active
duty pay for over 12 months. These overpayments continued until we
discovered them during our audit.
* Another soldier received hostile fire pay, hardship duty pay, family
separation allowance, and the combat zone tax exclusion benefits that
he was no longer entitled to receive after he left his designated
overseas deployment location early as a result of severe illness
incurred during his active duty mobilization.
* One soldier received a duplicate basic allowance for housing
allowance payment of $6,600.
948th Forward Surgical Team, Southfield, MI:
Number of mobilized unit soldiers' pays audited: 20:
Period of mobilization: January 2003 to September 2003:
Principal deployment location: Kandahar, Afghanistan:
Deployment duties: Provide emergency medical care to soldiers and
civilians in the field:
Number of unit soldiers with at least one problem with active duty pay
and allowance entitlements: 20 of 20:
Pay and Allowance Problems Identified (by Phase):
Phase: Mobilization;
Number of soldiers with pay problems: 5 of 20.
Phase: Deployed;
Number of soldiers with pay problems: 20 of 20.
Phase: Demobilization;
Number of soldiers with pay problems: 18 of 20.
Source: GAO.
[End of table]
Overpayments identified (number of soldiers affected): $20,700 (20):
Late payments identified (number of soldiers affected): $5,600 (20):
Underpayments identified (number of soldiers affected): $2,000 (5):
Combat zone tax exclusion benefit problems identified: All 20 unit
soldiers deployed overseas received their combat zone tax exclusion
benefits at least 1 month late, totaling $15,300. In addition, we
identified $130 that was over-withheld.
Examples of specific problems identified:
* After arriving in Afghanistan, (1) 19 soldiers waited 47 days to
receive their initial hostile fire pay, (2) 19 soldiers received their
February hardship duty pay in April, and (3) 20 soldiers waited 67 days
before receiving their initial combat zone tax exclusion benefit.
* A sergeant spent 100 hours in late April 2003 attempting to resolve
the unit's pay problems. Several soldiers were forced to borrow money
to meet financial obligations.
* Nineteen soldiers continued to receive hardship duty pay for a period
ranging from 1 to 5 months after leaving Afghanistan.
443rd Military Police Company, Owings Mills, MD:
Number of mobilized unit soldiers' pays audited: 121:
Period of mobilization: February 2003 to January 2004:
Principal deployment location: Camp Cropper, Baghdad Airport, Iraq:
Deployment duties: Guard Iraqi prisoners at Camp Cropper:
Number of unit's soldiers with at least one problem with active duty
pay and allowance entitlements: 119 of 121:
Pay and Allowance Problems Identified (by Phase):
Phase: Mobilization;
Number of soldiers with pay problems: 70 of 121.
Phase: Deployed;
Number of soldiers with pay problems: 114 of 121.
Phase: Demobilization;
Number of soldiers with pay problems: 17 of 121.
Source: GAO.
[End of table]
Overpayments identified (number of soldiers affected): $25,000 (48):
Late payments identified (number of soldiers affected): $20,000 (110):
Underpayments identified (number of soldiers affected): $15,000 (114):
Combat zone tax exclusion benefit problems identified: One hundred
twelve of the 114 unit soldiers deployed overseas received their combat
zone tax exclusion benefits at least 1 month late, totaling an
estimated $33,000. In addition, we identified $600 in under-withholding
and $400 over-withholdings.
Examples of specific problems identified:
* Bi-weekly trips to Kuwait were required for 5 months to address unit
pay issues.
* One hundred thirteen soldiers did not receive their last month's
hardship duty pay.
* Six unit soldiers were paid beyond their date of separation from the
Army, including 1 soldier who was overpaid about $10,500.
FORSCOM Support Unit Finksburg, MD:
Number of mobilized unit soldiers' pays audited: 1:
Period of mobilization: March 2003 to May 2003:
Principal deployment location: Camp Doha, Qatar:
Deployment duties: Provided briefings to the Air Force's 379th
Expeditionary Force on the status and positions of Army and other
coalition ground forces:
Number of unit soldiers with at least one problem with active duty pay
and allowance entitlements: 1 of 1:
Pay and Allowance Problems Identified (by Phase):
Phase: Mobilization;
Number of soldiers with pay problems: 0 of 1.
Phase: Deployed;
Number of soldiers with pay problems: 1 of 1.
Phase: Demobilization;
Number of soldiers with pay problems: 1 of 1.
Source: GAO.
[End of table]
Overpayments identified (number of soldiers affected): $8,000 (1):
Late payments identified (number of soldiers affected): $300 (1):
Underpayments identified (number of soldiers affected): $0 (1):
Combat zone tax exclusion benefit problems identified: This soldier
received his combat zone tax exclusion benefit after he demobilized, an
estimated $2,500 late.
Examples of specific problems identified:
* Nearly a year of an estimated 20 phone calls, faxes, and letters to
DFAS and Army customer service representatives at five locations were
required to identify and resolve an overpayment of $8,000.
* Did not receive any hostile fire pay until after he demobilized.
* Soldier continued to receive active duty pays and allowances for a
month after demobilizing.
629th Transportation Detachment Fort Eustis, VA:
Number of mobilized unit soldiers' pays audited: 24:
Period of mobilization: March 2003 to January 2004:
Principal deployment location: Kuwait:
Deployment duties: Tracking logistics supplies in and out of Kuwait:
Number of unit soldiers with at least one problem with active duty pay
and allowance entitlements: 24 of 24:
Pay and Allowance Problems Identified (by Phase):
Phase: Mobilization;
Number of soldiers with pay problems: 5 of 24.
Phase: Deployed;
Number of soldiers with pay problems: 24 of 24.
Phase: Demobilization;
Number of soldiers with pay problems: 1 of 24.
Source: GAO.
[End of table]
Overpayments identified (number of soldiers affected): $3,000 (24):
Late payments identified (number of soldiers affected): $14,000 (23):
Underpayments identified (number of soldiers affected): $2,000 (24):
Combat zone tax exclusion benefit problems identified: While we did not
attempt to quantify, nearly all soldiers deployed overseas received
their combat zone tax exclusion benefit at least 1 month late.
Examples of specific problems identified:
* Twenty-three of 24 soldiers deployed to Kuwait received duplicate
payments of $75 for hostile fire pay during their initial month of
deployment.
* Twenty-three of 24 soldiers were underpaid hardship duty pay for 1 to
2 months during their overseas deployment.
3423rd Military Intelligence Detachment New Haven, CT:
Number of mobilized unit soldiers' pays audited: 11:
Period of mobilization: December 2002 to December 2003:
Deployment location: Ft. Belvoir, Virginia:
Deployment duties: Analyzed intelligence information for U.S. Army
Intelligence and Security Command:
Number of unit soldiers with one (or more) problems with pay and
allowance entitlements associated with active duty mobilization: 11 of
11:
Pay and Allowance Problems Identified (by Phase):
Phase: Mobilization;
Number of soldiers with pay problems: 10 of 11.
Phase: Deployed;
Number of soldiers with pay problems: 9 of 11.
Phase: Demobilization;
Number of soldiers with pay problems: 9 of 11.
Source: GAO.
[End of table]
Overpayments identified (number of soldiers affected): $18,500 (10):
Late payments identified (number of soldiers affected): $5,000 (9):
Underpayments identified (number of soldiers affected): $4,000 (6):
Combat zone tax exclusion benefit problems identified: None, because
the soldiers were not eligible for this benefit.
Examples of specific problems identified:
* Nine soldiers erroneously began receiving the overseas cost of living
allowance, rather than the continental U.S. cost of living allowance,
at the beginning of the mobilization. This created $3,500 in
overpayments and $700 in late payments for the unit.
* Nine soldiers continued to receive their active duty pays and
entitlements for 13 to 28 days after demobilization, resulting in
$14,000 in overpayments.
431st Chemical Detachment Johnstown, PA:
Number of mobilized unit soldiers' pays audited: 10:
Period of mobilization: January 2003 to July 2003:
Principal deployment location: Kuwait and surrounding locations:
Deployment duties: Monitor battlefields for sign of nuclear,
biological, or chemical agents:
Number of unit soldiers with at least one problem with active duty pay
and allowance entitlements: 10 of 10:
Pay and Allowance Problems Identified (by Phase):
Phase: Mobilization;
Number of soldiers with pay problems: 2 of 10.
Phase: Deployed;
Number of soldiers with pay problems: 10 of 10.
Phase: Demobilization;
Number of soldiers with pay problems: 0 of 10.
Source: GAO.
[End of table]
Overpayments identified (number of soldiers affected): $12,000 (10):
Late payments identified (number of soldiers affected): $1,000 (8):
Underpayments identified (number of soldiers affected): $2,000 (10):
Combat zone tax exclusion benefit problems identified: While we were
unable to quantify, nearly all soldiers deployed overseas received
their combat zone tax exclusion benefit at least 1 month late.
Examples of specific problems identified:
* While deployed to Kuwait, (1) 8 of 10 soldiers did not receive their
first month's hostile fire pay and (2) all 10 soldiers did not receive
hardship duty pay for the first month after arrival overseas.
* All 10 soldiers continued to receive hardship duty pay payments for
up to 7 months following their return home, despite the unit
administrator's attempts to get the pay stopped through the unit's
chain of command. The unit administrator also accessed the pay hotline
at 888-PAY-ARMY, but was placed on hold for such a long time that she
gave up.
(192140):
FOOTNOTES
[1] Other requestors for this audit were Chairman Tom Davis of the
House Committee on Government Reform, Chairman Christopher Shays of the
Subcommittee on National Security, Emerging Threats and International
Relations of the House Committee on Government Reform, and Congressman
Ed Schrock.
[2] Because of the lack of supporting documents, we were unable to
determine the amounts involved for some of the active duty entitlements
we audited and consequently, did not count these as errors. In
addition, because our objective was to provide perspective on our case
study units' pay experiences and not to make exact calculations of
active duty entitlements, we likely did not identify all of the pay
problems related to the active duty mobilizations of our case study
units.
[3] For the pay problems we identified, we defined over-and
underpayments as those pays or allowances for mobilized Army Reserve
soldiers during the period from August 1, 2002 through January 31,
2004, that were in excess (overpayment) or less than (underpayment) the
entitled payment. We considered as late payments any active duty pays
or allowances paid to the soldier over 30 days after the date on which
the soldier was entitled to receive such pays or allowances. As such,
these payments were those that, although late, addressed a previously
unpaid entitlement. We did not include any erroneous debts associated
with these payments as pay problems. In addition, we used available
data to identify about $19,000 in collections against identified
overpayments through February 2004. We did not attempt to estimate
payments received against identified underpayments. We have provided
documentation for the pay problems we identified to cognizant DOD
officials for further research to determine whether additional amounts
are owed to the government or the soldier.
[4] These reports provide summaries of pay-and personnel-related
information on soldiers in the unit.
[5] DOD's FMR defines within a reasonable commuting distance as within
50 miles one way, unless the soldier is commuting daily. The FMR also
permits the commander to authorize a soldier to receive FSA payments,
even though the soldier's dependents live within 50 miles of the
soldier's duty station, based on a determination that the required
commute is not reasonable.
[6] For this unit, the unit administrator did not deploy with the unit.
Consequently, the unit's pay management responsibilities were assigned
to a finance sergeant deployed with the unit.
[7] U.S. General Accounting Office, Military Pay: Army National Guard
Personnel Mobilized to Active Duty Experienced Significant Pay
Problems, GAO-04-89 (Washington, D.C.: Nov. 13, 2003).
[8] 26 U.S.C. Section 112.
[9] GAO-04-89
[10] The law makes a distinction between the terms "pays" and
"allowances" which together make up a service member's overall
compensation package. Generally, the term pay includes basic pay,
special pay, retainer pay, incentive pay, retired pay, and equivalent
pay, but does not include allowances. 37 U.S.C. Section 101(21). DOD
defines allowance as "a monetary amount paid to an individual in lieu
of furnished quarters, subsistence, or the like." DOD Financial
Management Regulation, vol. 7A, Definitions, para. 15 (February 2001).
While generally items considered as "pay" are taxable for federal
income tax purposes, except for the cost of living allowance for the
continental United States, most allowances, such as those for housing,
subsistence, and family separation, are not.
[11] Transactions to initiate and terminate pays for all mobilized Army
Reserve soldiers entitled to receive special medical and dental pay
entitlements are entered and processed centrally at DFAS-IN.
