Background

The Army Guard is the oldest component of any of the uniformed services.   It traces its roots to the colonial militia, and claims a “birth”of 1636.   Today,  the Army Guard exists in 54 locations that include all 50 states, the District  of Columbia, and three territories: Guam, the Virgin Islands, and Puerto  Rico.  There are about 2,300 Army Guard units within these locations and  over 350,000 Army Guard members.  During peacetime, Army Guard units  report to the adjutant generals of their states or territories, or in the case of  the District of Columbia, to the Commanding General.  Each adjutant  general reports to the governor of the state, or in the case of the District of  Columbia, the mayor.
At the state level, the governors have the ability, under the Constitution of  the United States, to call up members of the Army Guard in times of  domestic emergency or need.  The Army Guard’s state mission is perhaps  the most visible and well known.  Army Guard units battle fires or help  communities deal with floods, tornadoes, hurricanes, snowstorms, or other  emergency situations.  In times of civil unrest, the citizens of a state rely on  the Army Guard to respond, if needed.  During national emergencies,  however, the President has the authority to mobilize the Army Guard,  putting them in federal duty status.  While federalized, the units answer to  the Combatant Commander of the theatre in which they are operating and,  ultimately, to the President.  Even when not federalized, the Army Guard  has a federal mission to maintain properly trained and equipped units,  available for prompt mobilization for war, national emergency, or as  otherwise needed.  Nonfederalized Army Guard members’ pay and  allowances are paid with state funds while federalized Army Guard  members’ pay and allowances are paid with federal funds.
Typically, Army Guard members enlist for 8 years and are entitled to a  number of benefits while serving in the Army Guard, including those for  health care, life insurance, and other state-specific benefits. After their  enlistment periods, former Army Guard members are entitled to veterans’  benefits, such as veterans’ health care and burial benefits.
Army Guard members are required to attend one drill weekend each month  and one annual training period (usually 2 weeks in the summer) each year.   Initially, all nonprior service personnel are required to attend initial entry  training, also known as Basic Training.  After Basic Training, soldiers go to  their Advanced Individual Training, which teaches them the special skills  they will need for their jobs in the Army Guard.  This training can usually be  scheduled to accommodate civilian job or school constraints.  The Army  Guard has armories and training facilities in more than 2,800 communities.
The Army Guard is a partner with the active Army and the Army Reserves  in fulfilling the country's military needs.  The National Guard Bureau  (NGB) assists the Army Guard in this partnership.  NGB is a joint bureau of  the Departments of the Army and the Air Force and is charged with  overseeing the federal functions of the Army Guard and the Air Guard.  In  this capacity, NGB helps the Army Guard and the Air Guard procure  funding and administer policies.  NGB also acts as a liaison between the  Departments of the Army and Air Force and the states.
All Army forces are integrated under DOD’s “total force” concept.  DOD’s  total force concept is based on the premise that it is not practically feasible  to maintain active duty forces sufficient to meet all possible war  contingencies.  Under this concept, DOD’s active and reserve components  are to be blended into a cohesive total force to meet a given mission.
On September 14, 2001, the President declared a national emergency as a  result of the terrorist attacks on the World Trade Center and the Pentagon  and the continuing and immediate threat of further attacks on the United  States.  Concurrent with this declaration, the President authorized the  Secretary of Defense to call troops to active duty pursuant to 10 U.S.C.  Section 12302.  The Secretary of Defense delegated to the Secretary of the  Army the authority to order Army Guard soldiers to active duty as part of  the overall mobilization effort.  Approximately 93,000 Army Guard soldiers  were activated as of March 2003.  At that time, Army Guard soldiers  accounted for 34 percent of the total reserve components mobilized in  response to the terrorist attacks on September 11, 2001.
The active duty federal missions established in response to the September  2001 national emergency were categorized into two operations: Operation  Enduring Freedom and Operation Noble Eagle.  In general, missions to  fight terrorism outside the United States were categorized under Operation  Enduring Freedom, while missions to provide domestic defense were  categorized as Operation Noble Eagle.  For example, Army Guard soldiers  participated in direct combat in Afghanistan under Operation Enduring  Freedom.  U.S. homeland security missions, such as guarding the Pentagon,  airports, nuclear power plants, domestic water supplies, bridges, tunnels,  and other military assets were conducted under Operation Noble Eagle.    The Army Guard also supported federal peacekeeping operations in  Southwest Asia with Operation Desert Spring and in Kosovo with  Operation Joint Guardian under various other military operations.
While on active duty, all Army Guard soldiers earn various statutorily  authorized pays and allowances.   The types of pay and allowances Army  Guard 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 Guard soldiers  mobilized to active duty may be entitled to receive additional pays and  allowances, we focused on 14 basic types of pays and allowances  applicable to the Army Guard units we selected for case studies.  As shown  in table 1, we categorized these 14 pay and allowance types into two  groups: (1) pays, including basic pay, special duty assignment pay,  parachute jumping 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.
In addition, Army Guard soldiers may be eligible for tax advantages  associated with their mobilization to active duty.  That is, mobilized Army  Guard soldiers assigned to or working in a combat zone are entitled to  exclude from taxable income certain military pay that would otherwise be  taxable.
As shown in figure 1, there are three key phases associated with starting  and stopping relevant pays and allowances for mobilized Army Guard  soldiers: (1) initial mobilization (primarily through the Soldier Readiness  Processing), (2) deployment, which includes carrying out assigned mission  operations while on active duty, and (3) demobilization.
Army Guard units and state-level command support components, as well as  active Army finance components and DFAS, have key roles in this process.   In addition, there are five key computer systems involved in authorizing,  entering, and processing active duty pays to mobilized Army Guard soldiers  through the three key phases of their mobilization:  Army’s standard order writing system, Automated Fund Control Order  System (AFCOS);  Army Guard’s personnel system, Standard Installation Division  Personnel Reporting System (SIDPERS);  Army Guard’s pay input system, JUMPS Standard Terminal Input System   active Army’s pay input system, Defense Military Pay Office System  (DMO); and  DFAS’ Army Guard and Reserve pay system, DJMS-RC.

		Initial Mobilization Phase

During the initial mobilization, units receive an alert order and begin a  mobilization preparation program, Soldier Readiness Processing (SRP).  The financial portion of the SRP is conducted by one of the 54 United  States Property and Fiscal Offices (USPFO) to verify the accuracy of pay  records for each soldier and to make changes to pay records based on  appropriate supporting documentation for the pays and allowances that the  soldiers will be entitled to receive when initially mobilized.  If  documentation, such as birth certificates for dependents or parachute  jumping certifications, is missing, soldiers have a few days to obtain the  necessary documents. The unit commander is responsible for ensuring that  all personnel data for each soldier under their command are current.
When the unit receives a mobilization order, USPFO pay technicians are  responsible for initiating basic pay and allowances by manually entering  the start and stop dates into DJMS-RC for the active duty tour that appears  on each soldier’s mobilization order.  Army Guard pay technicians use  JUSTIS to access and record data in DJMS-RC.   By entering the soldier’s  Social Security number and mobilization order number into JUSTIS, the  pay technician can view the pay data in DJMS-RC, ensure that they are  complete, and enter any missing data supported by documentation  provided by the soldier.  If done correctly, soldiers will start to receive  basic pay, basic allowances for housing, basic allowances for subsistence,  and jump pay automatically based on the start date entered into DJMS-RC.
After soldiers complete their initial SRP and receive individual mobilization  orders, they travel as a unit to a mobilization station.  At the mobilization  station, mobilized Army Guard personnel undergo a second SRP review.  In  this second SRP, mobilization station personnel are responsible for  confirming or correcting the results of the first SRP, including making  necessary reviews to ensure that each soldier’s records are current.   Mobilization pay technicians are required to promptly initiate pays that  were not initiated during the first SRP and enter appropriate pay changes  into DJMS-RC.   The mobilization station commander is required to certify  that the unit is ready for mobilization, including ensuring that all authorized  active duty pays are in place for the soldiers in the unit, at the end of this  process.
DJMS-RC will generate certain pays and allowances automatically for each  2-week pay period until the stop date entered in DJMS-RC.  If entered  correctly, the stop date in DJMS-RC will be the end of active duty tour date  documented on the soldier’s mobilization orders.  This automated feature is  intended to prevent erroneous payments to soldiers beyond their  authorized active duty status.  However, human intervention is required  when a pay or allowance error is detected or an event occurs that requires  a change in the soldier’s pay and personnel file.  For example, a change in  dependent status, such as marriage or divorce, a promotion, jump pay  disqualification, or being demobilized before an active duty tour ends  would change or eliminate some of the pays and allowances a soldier  would be entitled to receive.  All pays and allowances and subsequent  changes are documented in the Master Military Pay Account (MMPA)—the  central pay record repository in DJMS-RC for each soldier.

		Deployed Phase

While deployed on active duty, there are several Army Guard (USPFO),  active Army, and DFAS components involved in paying mobilized Army  Guard personnel.   The active Army 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 deployed, such as hostile fire pay and  hardship duty pay.  Pay technicians start hostile fire pay for each soldier  listed on a battle roster or flight manifest.  Thereafter, hostile fire pay is  automatically generated each pay period.  Other location-based pays, such  as hardship duty, require pay transactions each month. The servicing  finance office for the deployed phase is under the jurisdiction of the active  Army.   Active Army servicing finance offices use DMO to enter pay  transactions into DJMS-RC.  Under certain conditions, either active Army  pay servicing offices or USPFOs can process applicable pay-altering  transactions, such as those related to a soldier’s early separation from  active duty or a soldier’s death.

		Demobilization Phase

Upon completion of an active duty tour, soldiers normally return to the  same Army locations from which they were mobilized for demobilization  out-processing before returning to their home units.  Demobilization  personnel, employed by the active Army or Army Guard, are required to  provide each soldier with a Release from Active Duty (REFRAD) order and  a Form DD 214, Certificate of Release or Discharge from Active Duty.  The  demobilization station pay technicians are to use these documents as a  basis for deactivating the soldier’s active duty pay and allowances as of the  date of release from active duty.  At this time, the supporting USPFO is  responsible for discontinuing monthly input of all nonautomated pays and  allowances.  If the demobilization station did not take action to return a  soldier to a demobilized status, the state USPFO has this responsibility.

		Military Pay Systems Environment

In 1995, the Army decided to process pays to mobilized Army Guard  soldiers from the DJMS-RC system rather than the active Army payroll  system used to pay mobilized Army Guard soldiers previously.  According  to the then Deputy Assistant Secretary of the Army (Financial Operations),  this decision was made as an interim measure (pending the conversion to a  single system to pay both active and reserve component soldiers) based on  the belief that DJMS-RC provides the best service to the reserve component  soldiers.  DJMS-RC is a large, complex, and sensitive payroll computer  application used to pay Army and Air National Guard and Army and Air  Force Reserve personnel. DFAS has primary responsibility for developing  guidance and managing operations of the system.  DFAS Indianapolis is the  central site for all Army military pay and is responsible for maintaining over  1 million MMPAs for the Army.  Each MMPA contains a soldier’s pay-related  personnel, entitlement, and performance data.  All pay-related transactions  that are entered into DJMS-RC, through JUSTIS and DMO, update the  MMPA.  Personnel data contained in the MMPA are generated from  SIDPERS—a personnel database maintained and used by the Army Guard  at the 54 state-level personnel offices to capture data on personnel-related  actions (e.g. discharge, promotion, demotion actions that impact soldiers’  pay).
DFAS Denver is responsible for designing, developing, and maintaining  customer requirements for the Military and Civilian Pay Services business  line, and its Technical Support Office designs and maintains the DJMS-RC  core pay software. DFAS-Indianapolis serves as a “gatekeeper” in that it  monitors the daily status of data uploaded to DJMS-RC to ensure that all  transactions are received and processed in DJMS-RC.  Users can sign on to  DJMS-RC directly through online interactive software used for file transfer  transactions, online queries of MMPAs, and downloads of data files and  various DJMS-RC reports.
JUSTIS is the pay input subsystem used by the 54 state-level Army Guard  commands, including the USPFOs, to update DJMS-RC.  Database  management of JUSTIS is decentralized in that each of the 54 sites owns  and maintains its own JUSTIS database.  This subsystem processes  transactions for submission to DJMS-RC to create payments for Army  National Guard soldiers.  JUSTIS receives certain pay-affecting personnel  data from SIDPERS.
JUSTIS receives a limited amount of mobilization order data directly from  AFCOS.  These systems share the same operating system platform and  certain database tables.  However, additional data needed to create pay  transactions associated with active duty pay and allowances must be  entered manually into JUSTIS from hard copies of mobilization orders.   DMO is the pay input subsystem used by active Army finance offices and  the DOD military pay offices, including those in overseas locations such as  Europe, Korea, and Iraq, to update DJMS-RC.   This pay input subsystem  can be used by active Army finance offices to create transactions for  military pay and allowances that are not reported at the time of  mobilization for upload to DJMS-RC and for active Army finance offices to  use to enter location-based pays, such as hostile fire and hardship duty  pays and combat zone tax exclusion transactions.

	Case Studies Illustrate Significant Pay Problems

We found significant pay problems at the six Army Guard units we audited.   These problems related to processes, human capital, and systems.  The six  units we audited, including three special forces and three military police  units, were as follows: Special forces units  Colorado B Company, 5th Battalion, 19th Special Forces  Virginia B Company, 3rd Battalion, 20th Special Forces  West Virginia C Company, 2nd Battalion, 19th Special Forces  Mississippi 114th Military Police Company  California 49th Military Police Headquarters and Headquarters   Maryland 200th Military Police Company In addition, we conducted a limited review of the pay experiences of a  seventh unit mobilized more recently and deployed to Iraq in April 2003— the Colorado Army Guard’s 220th Military Police Company—to determine  the extent to which the pay problems we found in our six case study units  persisted.  As shown in figure 2, these units were deployed to various  locations in the United States and overseas in support of Operations Noble  Eagle and Enduring Freedom.
These units were deployed to help perform a variety of critical mission  operations, including search and destroy missions in Afghanistan against  Taliban and al Qaeda forces, guard duty for al Qaeda prisoners in Cuba,  providing security at the Pentagon shortly after the September 11, 2001,  terrorist attacks, and military convoy security and highway patrols in Iraq.
For the six units we audited, we found significant pay problems involving  over one million dollars in errors.  These problems consisted of  underpayments, overpayments, and late payments that occurred during all  three phases of Army Guard mobilization to active duty.  Overall, for the 18- month period from October 1, 2001, through March 31, 2003, we identified  overpayments, underpayments, and late payments at the six case study  units estimated at $691,000, $67,000, and $245,000, respectively.  In  addition, for one unit, these pay problems resulted in largely erroneous  debts totaling $1.6 million.  Overall, we found that 450 of the 481 soldiers  from our case study units had at least one pay problem associated with  their mobilization to active duty.  Table 2 shows the number of soldiers  with at least one pay problem during each of the three phases of active duty  mobilization.
Due to the lack of supporting documents at the state, unit, and battalion  levels, we may not have identified all of the pay problems related to the  active duty mobilizations of these units.  We have provided documentation  for the pay problems we identified to appropriate DOD officials for further  research to determine whether additional amounts are owed to the  government or the soldiers.  The payment problems we identified at the six  case study units did not include instances of fraudulent payments, which  were a major finding resulting from the further investigation of improper  payments found in our 1993 audit of Army military payroll.  Nonetheless,  we found the inaccurate, late, and missing pays and associated erroneous  debts found during our current audit had a profound financial impact on  individual soldiers and their families.  Some of the pay problems we  identified included the following.
DOD erroneously billed 34 soldiers in a Colorado National Guard  Special Forces unit an average of $48,000 each.  Though we first notified  DOD of these issues in April and sent a follow-up letter in June 2003, the  largely erroneous total debt for these soldiers of about $1.6 million  remained unresolved at the end of our audit in September 2003.
As a result of confusion over responsibility for entering transactions  associated with a Colorado soldier’s promotion, the soldier’s spouse had  to obtain a grant from the Colorado National Guard to pay bills while  her husband was in Afghanistan.
Some soldiers did not receive payments for up to 6 months after  mobilization and others still had not received certain payments by the  conclusion of our audit work.
Ninety-one of 100 members of a Mississippi National Guard military  police unit that was deployed to Guantanamo Bay, Cuba, did not receive  the correct amount of Hardship Duty Pay.
One soldier from the Mississippi unit was paid $9,400 in active duty pay  during the 3 months following an early discharge for drug-related  charges.
Forty-eight of 51 soldiers in a California National Guard military police  unit received late payments because the unit armory did not have a copy  machine available to make copies of needed pay-related documents.
Four Virginia Special Forces soldiers who were injured in Afghanistan  and unable to resume their civilian jobs experienced problems in  receiving entitled active duty pays and related health care.
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 may adversely affect the Army’s ability to  retain these valuable personnel. Appendixes I–VI provide details of the pay  experiences of the soldiers at the case study units we audited.

	Significant Weaknesses in Processes over Mobilized Army Guard Pay

Procedural requirements, particularly in light of the potentially hundreds of  organizations and thousands of personnel involved, were not well  understood or consistently applied with respect to determining (1) the  actions required to make timely, accurate active duty pays to mobilized  Army Guard soldiers and (2) the component responsible, among Army  Guard, active Army, and DFAS, for taking the required actions.  Further, we  found instances in which existing guidance was out of date—some of  which still reflected practices in place in 1991 during Operation Desert  Storm.  These complex, cumbersome processes, which were developed in  piecemeal fashion over a number of years, provide numerous opportunities  for control breakdowns.  We found that a substantial number of payment  errors were caused, at least in part, by unclear procedural requirements for  processing active duty pay and allowance entitlements to mobilized Army  Guard soldiers.

		Complex, Cumbersome, and Evolving Processes

Overall, as shown in figures 3, 4 and 5, we found that an extensive,  cumbersome, and labor-intensive process has evolved to pay mobilized  Army Guard soldiers for their active duty service.
While figures 3, 4 and 5 provide an overview of the process, particularly of  the types of DOD organizations involved, they do not fully capture the  numbers of different DOD components involved.  Specifically, thousands of  Army Guard (individual units and state-level organizations), active Army,  and DFAS components may be involved in authorizing, processing, and  paying mobilized Army Guard soldiers, including   an estimated 2,300 local Army Guard home units, unit commanders, and  unit administrators that are involved in maintaining up-to-date soldier  personnel and related pay records;  54 state-level Army Guard commands, including both USPFOs and state- level personnel offices involved in authorizing and starting active duty  pay transactions;  active Army finance offices or DOD Military Pay Offices at over 15  mobilization stations across the United States that are involved in  processing Army Guard personnel to and from their active duty  locations;  28 active Army area servicing finance offices at over 50 locations  worldwide that are involved in servicing Army Guard soldiers’ location- based active duty pays;  DFAS-Indianapolis—the central site for processing Army Guard  soldiers’ active duty pays;  DFAS-Denver—the central site for maintaining the pay system used to  pay Army Guard soldiers;   DFAS-Cleveland—the central site for handling soldier military pay   The Army National Guard Financial Services Center—the Army Guard  organization responsible for providing guidance, training, and oversight  and coordination for active duty pays to Army Guard personnel.
Several of these organizations with key roles in payroll payments to  mobilized Army Guard soldiers, including DOD, DFAS, Army, and the Army  Guard, have issued their own implementing regulations, policies, and  procedures.  In addition, we found unwritten practices in place at some of  the case study locations we audited.   Existing written policies and  procedures are voluminous—the DOD Financial Management Regulations  (FMR) guidance on pay and allowance entitlements alone covers 65  chapters.  As a result of their size and continually evolving nature as legal,  procedural, and system requirements change, we found that policies and  procedures were not well understood or consistently applied across the  potentially hundreds of organizations and thousands of personnel involved  in paying mobilized Army Guard personnel.  These processes have been  developed in piecemeal fashion over a number of years to accommodate  changing legislative requirements, DOD policies, and the unique operating  practices of different DOD organizations and systems involved in these  processes.
As discussed in the following sections, these extensive and evolving  policies and procedures were confusing both across various organizations  and personnel involved in their implementation and, more importantly, to  the Army Guard soldiers who are the intended beneficiaries.  In addition,  these cumbersome policies and procedures contributed to the pay errors  we identified.

		Procedural Requirements Not Clear

We found instances in which unclear procedural requirements for  processing active duty pays contributed to erroneous and late pays and  allowances to mobilized Army Guard soldiers.  For example, we found  existing policies and procedural guidance were unclear with respect to the  following issues.
Amending active duty orders.  A significant problem we found at the  case study locations we audited concerned procedures that should be  followed for amending active duty orders.  We found instances at two of  our case study locations in which military pay technicians at either a  USPFO or an active Army finance office made errors in amending existing  orders.  These errors resulted in establishing virtually all prior pays made  under the original orders as debts.  A major contributor to the pay errors  we found in this area was that existing procedures did not clearly state how  USPFO and active Army finance personnel should modify existing order  tour start and stop information in the pay system when necessary without  also unintentionally adversely affecting previous pays and allowances.   Also, these procedures did not warn USPFO and active Army personnel  that using alternative methods will automatically result in an erroneous  debt assessment and garnishment of up to two-thirds of the soldier’s pay.
We identified over $1 million in largely erroneous debt transactions as a  result of breakdowns in this area. At the Colorado Special Forces unit, we  found that actions taken by the Colorado USPFO in an attempt to amend 34  soldiers’ orders resulted in reversing the active pay and allowances the  soldiers received for 11 of the 12 months they were deployed on active duty  in Afghanistan and instead establishing these payments as debts.  These 34  soldiers received notice on their Leave and Earnings Statements that they  owed the government an average of approximately $48,000 per soldier, for  a total largely erroneous debt of $1.6 million.  Although we informed DOD  of this problem in April 2003, as of the end of our audit fieldwork in  September 2003, the problems at the Colorado Special Forces unit had not  been resolved.  DOD officials did advise us that, as a result of our work,  they implemented a software change on September 18, 2003, intended to  help avoid such problems in the future.  Specifically, we were told new  warning messages have been added to JUSTIS that will appear when a  transaction is entered to cancel or amend a tour of duty.  The new warnings  will advise that the transaction will or could result in a collection action  and will ask the pay technician to confirm that is their intent.  While we did  not verify the effectiveness of this change, it has the potential to reduce pay  problems associated with errors made in amending orders.
Required time frames for processing pay transactions.  Written  requirements did not exist with respect to the maximum amount of time  that should elapse between the receipt by the responsible Army Guard or  Army pay office of proper documentation and processing the related pay  transaction through the pay system.  While some of the locations we  audited had established informal processing targets, for example, 3 days,  we also found numerous instances in which available documentation  indicated lengthy delays in processing pay transactions after pay offices  received supporting documentation.  These lengthy processing delays  resulted in late payroll payments to deployed soldiers.
Required monthly reconciliations of pay and personnel data.  The  case study units lacked specific written requirements for conducting and  documenting monthly reconciliations of pay and personnel mismatch  reports and unit commanders’ finance reports.  Available documentation  showed that these controls were either not done or were not done  consistently or timely.  Because, as discussed later in this report, the  processing of Army Guard pay relies on systems that are not integrated or  effectively interfaced, these after-the-fact detective controls are critical to  detecting and correcting erroneous or fraudulent pays.
To be effective, the 54 state-level Army Guard commands must individually  reconcile common data elements in all 54 state-operated personnel  databases for Army Guard personnel with corresponding DJMS-RC pay  records at least monthly. Because of the lack of clarity in existing  procedural requirements in this area, we found that several of the locations  we visited had established standard but undocumented reconciliation  practices.  However, at the six case study locations we audited, we found  that although all the USPFOs told us they received monthly SIDPERS and  DJMS-RC mismatch reports, they did not always fully reconcile and make  all necessary system corrections each month.  Lacking specific written  policies and procedural requirements for such reconciliations, several of  the case study locations we audited established a standard, but  undocumented, practice of reconciling roughly a third of the common data  elements every month, so that all elements were to be reconciled and all  necessary corrective actions taken over a 3-month period.  However,  documentation was not always retained to determine the extent to which  these reconciliations were done and if they were done consistently.
Our findings are similar to those in reports from Army Guard operational  reviews.  For example, the results of the most recent reviews at three of the  six case study locations we audited showed that state Army Guard  personnel were not performing effective reconciliations of pay and  personnel record discrepancies each month.  One such report concluded,  “Failure to reconcile the Personnel/Pay Mismatch listing monthly provides  a perfect opportunity to establish fraudulent personnel or pay accounts.”
Several of the instances we identified in which soldiers received pay and  allowances for many months after their release from active duty likely  would have been identified sooner had USPFO military pay personnel  investigated the personnel/pay mismatch report discrepancies more  frequently.   For example, at one case study unit, 34 soldiers received pay  for several months past their official discharge dates.  Although records  were not available to confirm that these overpayments were reported as  discrepancies on monthly mismatch reports, the USPFO military pay  supervisor told us that at the time the mismatch reports were not being  used to identify and correct pay-affecting errors.
As discussed later, at another case study unit, a mobilized soldier was  released from active duty and discharged from the Army in June 2002,  earlier than his planned release date due to alleged involvement in drug- related activities. But, the soldier continuied to receive active duty pay. The  soldier’s SIDPERS personnel record on July 2, 2002, to reflect the  discharge.  According to pay records, the soldier’s pay continued until the  USPFO military pay supervisor identified the discrepancy on the  September 25, 2002, personnel/pay mismatch report and initiated action  that stopped the soldier’s pay effective September 30, 2002. However,  because this discrepancy was not identified until late September, the  soldier received $9,400 in extra pay following his discharge from the Army.
In addition, while as discussed previously, we found a number of instances  in which Army Guard soldiers’ active duty pays continued after their  demobilization, available documentation showed only one instance in the  six case study units we visited in which a reconciliation of the unit  commander’s finance report resulted in action to stop improper active duty  pay and allowances.  Specifically, available documentation shows that an  administrative clerk’s review of this report while the unit was mobilized in  Guantanamo Bay, Cuba, resulted in action to stop active duty pay and  allowances to a soldier who was previously demobilized.   However, it is  also important to note that while these reconciliations are an important  after-the-fact detective control, they are limited because they can only  detect situations in which payroll and personnel records do not agree.  A  number of pay errors we identified resulted from the fact that neither  personnel nor pay records were updated.
Soldiers returning from deployments earlier than their units.   For  four of our case study units, we found instances in which Army Guard  soldiers’ active duty pays were not stopped at the end of their active duty  tours when they were released from active duty earlier than their units.  We  found procedural guidance did not clearly specify how to carry out  assigned responsibilities for soldiers who return from active duty earlier  than their units.  DFAS-Indianapolis guidance provides only that “the  supporting USPFO will be responsible for validating the status of any  soldier who does not return to a demobilized status with a unit.”  The  guidance did not state how the USPFO should be informed that a soldier  did not return with his or her unit, or how the USPFO was to take action to  validate the status of such soldiers.  At one of our case study locations,  officials at the USPFO informed us that they became aware that a soldier  had returned early from a deployment when the soldier appeared at a  weekend drill while his unit was still deployed.
Data input and eligibility requirements for housing and family  separation allowances.  Our audit work at two of our case study  locations indicated that procedural guidance was not clear with respect to  transaction entry and eligibility requirements for the basic allowance for  housing and the family separation allowance, respectively.  For example,  during our audit work at one of our case study locations, we determined  that because of inconsistent interpretations of existing guidance for  “dependents” in entering transactions to start paying soldiers’ basic  allowance for housing, a number of Maryland soldiers were not paid the  correct amount.  At another case study location, we found that existing  guidance on eligibility determination was misinterpreted so that soldiers  were erroneously refused the “single parent soldiers family separation  allowance” to which they were entitled.

		Organizational Responsibilities Not Clear

We also found that existing policies and procedures were unclear with  respect to organizational responsibilities.  Confusion centered principally  around pay processing responsibility for Army Guard soldiers as they move  from state control to federal control and back again.  To be effective,  current processes rely on close coordination and communication between  state (Army Guard unit and state-level command organizations) and federal  (active Army finance locations at mobilization/demobilization stations and  at area servicing finance offices).  However, we found a significant number  of instances in which critical coordination requirements were not clearly  defined.
Individual Case Illustration: Confusion over Responsibility for Entering Pay  Transactions Results in Family Obtaining a Grant to Pay Bills   A sergeant incurred pay problems during his mobilization and deployment to Afghanistan  in support of Operation Enduring Freedom that caused financial hardship for his family  while he was deployed.  In this case, the active Army and his state's USPFO were  confused as to responsibility for processing pay input transactions associated with a  promotion.  Specifically, pay input transactions were required for his promotion from a  sergeant first class (E-7) to master sergeant (E-8), his demotion back to an E-7, and a  second promotion back to an E-8.  The end result was the soldier was overpaid during  the period of his demotion. DFAS garnished his wages and collected approximately  $1,100 of the soldier's salary.  These garnishments reduced the soldier's net pay to less  than 50 percent of the amount he had been receiving.  As a result, the soldier's wife had  to obtain a grant of $500 from the Colorado National Guard's Family Support Group to  pay bills.
DFAS Indianapolis mobilization procedures authorize the Army Guard’s  USPFOs and the active Army’s mobilization station and in-theater finance  offices to enter transactions for deployed soldiers.  However, we found  existing guidance did not provide for clear responsibility and  accountability between USPFOs and active Army mobilization stations and  in-theater servicing finance offices with respect to responsibility for  entering transactions while in-theater and terminating payments for  soldiers who separate early or who are absent without leave or are  confined.  For example, at one of our case study locations, we found that  this broad authority for entering changes to soldiers’ pay records enabled  almost simultaneous attempts by two different pay offices to enter pay  transactions into DJMS-RC for the same soldier.
As shown in the following illustration, at another case study location we  found that, in part because of confusion over responsibility for starting  location-based pays, a soldier was required to carry out a dangerous  multiday mission to correct these payments.
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Individual Case Illustration: Difficulty in Starting In-Theatre Pays A sergeant with the West Virginia National Guard Special Forces unit was stationed in  Uzbekistan with the rest of his unit, which was experiencing numerous pay problems.  The sergeant told us that the local finance office in Uzbekistan did not have the systems  up and ready, nor available personnel who were familiar with DJMS-RC. According to the  sergeant, the active Army finance personnel were only taking care of the active Army  soldiers’ pay issues. When pay technicians at the West Virginia USPFO attempted to  help take care of some of the West Virginia National Guard soldiers’ pay problems, they  were told by personnel at DFAS-Indianapolis not to get involved because the active Army  finance offices had primary responsibility for correcting the unit’s pay issues.
Eventually, the sergeant was ordered to travel to the finance office at Camp Doha,  Kuwait, to get its assistance in fixing the pay problems. As illustrated in the following  map. This trip, during which a soldier had to set aside his in-theatre duties to attempt to  resolve Army Guard pay issues, proved to be not only a major inconvenience to the  sergeant, but was also life-threatening. At Camp Doha (an established finance office), a  reserve pay finance unit was sent from the United States to deal with the reserve  component soldiers’ pay issues. The sergeant left Uzbekistan for the 4-day trip to Kuwait.  He first flew from Uzbekistan to Oman in a C-130 ambulatory aircraft (carrying wounded  soldiers). From Oman, he flew to Masirah Island. From Masirah Island he flew to Kuwait  International Airport, and from the airport he had a 45-minute drive to Camp Doha. The  total travel time was 16 hours. The sergeant delivered a box of supporting documents  used to input data into the system. He worked with the finance office personnel at Camp  Doha to enter the pertinent data on each member of his battalion into DJMS-RC. After 2  days working at Camp Doha, the sergeant returned to the Kuwait International Airport,  flew to Camp Snoopy in Qatar, and from there to Oman. On his flight between Oman and  Uzbekistan, the sergeant’s plane took enemy fire and was forced to return to Oman. No  injuries were reported. The next day, he left Oman and returned safely to Uzbekistan.
While guidance that permits both Army Guard and active Army military pay  personnel to enter transactions for mobilized Army Guard soldiers  provides flexibility in serving the soldiers, we found indications that it also  contributed to soldiers being passed between the active Army and Army  Guard servicing locations.  For example, at another of our case study  locations, we were told that several mobilized soldiers sought help in  resolving active duty pay problems from the active Army’s mobilization  station finance office at Fort Knox and later the finance office at Fort  Campbell.  However, officials at those active Army locations directed the  soldiers back to the USPFO because they were Army Guard soldiers.
We also found procedures were not clear on how to ensure timely  processing of active duty medical extensions for injured Army Guard  soldiers.  Army Regulation 135-381 provides that Army Guard soldiers who  are incapacited as a result of injury, illness, or disease that occured while  on active duty for more than 30 consecutive days are eligible for continued  health benefits.  That is, with medical extension status, soldiers are entitled  to continue to receive active duty pays, allowances, and medical benefits  while under a physician’s care.
At the Virginia 20th Special Forces, B Company, 3rd Battalion, we found that  four soldiers were eligible for continued active duty pay and associated  medical benefits due to injuries incurred as a result of their involvement in  Operation Enduring Freedom.  Although these injuries precluded them  from resuming their civilian jobs, they experienced significant pay  problems as well as problems in receiving needed medical care, in part, as a  result of the lack of clearly defined implementing procedures in this area.   All four soldiers experienced pay disruptions because existing guidance  was not clear on actions needed to ensure that these soldiers were retained  on active duty medical extensions.  One of the soldiers told us, “People did  not know who was responsible for what.  No one knew who to contact or  what paperwork was needed….”  As a result, all four have experienced  gaps in receiving active duty pay and associated medical benefits while  they remained under a physician’s care for injuries received while on their  original active duty tour.
Individual Case Illustration: Unclear Regulations for Active Duty Medical  Extension Four soldiers who were injured while mobilized in Afghanistan for Operation Enduring  Freedom told us that customer service was poor and no one was really looking after  their interest or even cared about them. These problems resulted in numerous personal  and financial difficulties for these soldiers.    ·  “Not having this resolved means that my family has had to make greater sacrifices and  it leaves them in an unstable environment. This has caused great stress on my family  that may lead to divorce.” ·  “My orders ran out while awaiting surgery and the care center tried to deny me care.
My savings account was reduced to nearly 0 because I was also not getting paid while  I waited. I called the Inspector General at Walter Reed and my congressman. My  orders were finally cut. In the end, I was discharged 2 weeks before my care should  have been completed because the second amendment to my orders never came and I  couldn’t afford to wait for them before I went back to work. The whole mess was  blamed on the ‘state’ and nothing was ever done to fix it.”  ·  One sergeant was required to stay at Womack, the medical facility at Fort Bragg,  North Carolina, while on medical extension. His home was in New Jersey. He had not  been home for about 20 months, since his call to active duty. While he was recovering  from his injuries, his wife was experiencing a high-risk pregnancy and depended upon  her husband’s medical coverage, which was available while he remained in active duty  status. Even though she lived in New Jersey, she scheduled her medical appointments  near Fort Bragg to be with her husband. The sergeant submitted multiple requests to  extend his active duty medical extension status because the paperwork kept getting  lost. Lapses in obtaining approvals for continued active duty medical extension status  caused the sergeant’s military medical benefits and his active duty pay to be stopped  several times. He told us that because of gaps in his medical extension orders, he was  denied medical coverage, resulting in three delays in scheduling a surgery. He also  told us he received medical bills associated with his wife’s hospitalization for the  delivery of their premature baby as a result of these gaps in coverage.

		Guidance Outdated

We found several instances in which existing DOD and Army regulations  and guidance in the pay and allowance area are outdated and conflict with  more current legislative and DOD guidance.  Some existing guidance  reflected pay policies and procedures dating back to Operations Desert  Shield and Desert Storm in 1991.  While we were able to associate pay  problems with only one of these outdated requirements, there is a risk that  they may also have caused as yet unidentified pay problems.  Further,  having out-of-date requirements in current regulations may contribute to  confusion and customer service issues.
For example, the National Defense Authorization Act for Fiscal Year 1998  replaced the basic allowance for quarters and the variable housing  allowance with the basic allowance for housing.  However, volume 7A,  chapter 27 of the DOD FMR, dated February 2002, still refers to the basic  allowance for quarters and the variable housing allowance.  The act also  replaced foreign duty pay with hardship duty pay.  Yet, chapter 8 of Army  Regulation 37-104-4 (Military Pay and Allowances Policy and Procedures –  Active Component) still refers to foreign duty pay.
Further, current DFAS and Army mobilization procedural guidance directs  active Army finance units to use transaction codes to start soldiers’  hardship duty pays that are incorrect.  Effective December 2001, DOD  amended FMR, Volume 7A, chapter 17, to establish a new “designated area”  hardship duty pay with rates of $50, $100, or $150 per month, depending on  the area.  However, DFAS guidance dated December 19, 2002, directed  mobilization site finance offices to use transaction codes that resulted in  soldiers receiving a prior type of hardship duty pay that was eliminated in  the December 2001 revisions.  At one of our case study locations, we found  that because the active Army finance office followed the outdated DFAS  guidance for starting hardship duty pays, 91 of 100 Mississippi military  police unit soldiers deployed to Cuba to guard al Qaeda prisoners were  paid incorrect amounts of hardship duty pay.
In addition, Army Regulation 37-104-4, dated September 1994, which was  still in effect at the end of our audit work, provides that mobilized Army  Guard soldiers are to be paid through the active Army pay system—the  Defense Joint Military Pay System-Active Component (DJMS-AC).  This  procedure, in effect during the mobilizations to support Operations Desert  Shield and Desert Storm, was changed in 1995.  Specifically, in 1995, it was  agreed that Army Guard personnel would no longer be moved to the active  duty pay system, DJMS-AC, when mobilized to active duty, but would  remain on the DJMS-RC system.  Maintaining such outdated references in  current policies may have contributed to confusion by USPFO and active  Army finance personnel regarding required actions, particularly in light of  the extensive set of policies and procedures now in effect in this area.

	Human Capital Issues Affect Ability to Pay Mobilized Army Guard Soldiers Promptly and Accurately

With respect to human capital, we found weaknesses, including   (1) insufficient resources allocated to pay processing, (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 Guard soldiers.  GAO’s Standards for Internal  Control in the Federal Government states that effective human capital  practices are critical to establishing and maintaining a strong internal  control environment.  Specifically, management should take steps to  ensure that its organization has the appropriate number of employees, and  that appropriate human capital practices, including hiring, training, and  retention, are in place and effectively operating.

		Insufficient Numbers of Military Pay Processing Personnel

Our audit identified concerns with the numbers of knowledgeable  personnel dedicated to entering and processing active duty pays and  allowances to mobilized Army Guard soldiers.  As discussed previously,  both active Army and Army Guard military pay personnel play key roles in  this area.   Army Guard operating procedures provide that the primary  responsibility for administering Army Guard soldiers’ pay as they are  mobilized to active duty rests with the 54 USPFOs.  These USPFOs are  responsible for processing pay for drilling reservists along with the  additional surge of processing required for initiating active duty pays for  mobilized soldiers.
Our audit work identified concerns with the human capital resources  allocated to this area, primarily with respect to the Army Guard military  pay processing at the state-level USPFOs.  Specifically, we identified  concerns with (1) the number of staff on board in the military pay sections  of the USPFOs, (2) the relatively lower grade structure for nonsupervisory  personnel in the USPFOs’ military pay sections in comparison with the  grades for similar positions in other sections of the USPFO which led to  difficulty in  recruiting and retaining military pay processing personnel, and  (3) as discussed in the following section, few of the military pay  technicians on board at the six locations we audited had received formal  training on pay eligibility and pay processing requirements for mobilized  Army Guard personnel.
NGB provides annual authorization for the overall staffing levels for each  state.  Within these overall staffing authorizations, each state allocates  positions to each of the sections within a USPFO, including the military pay  section and other sections such as vendor and contract pay.   We compared  the actual number of personnel on board to the NGB-authorized staffing  level for the military pay sections at the case study locations we audited.   During our audit period, two of the six case study locations had fewer  military pay technicians on board than they were authorized.
Officials at several of the six case study units also stated that restrictions  on rank/grade at which USPFOs are allowed to hire personnel for their  military pay sections made it difficult to recruit and retain employees.  For  example, a USPFO official told us that retaining personnel in the military  pay section of the USPFOs was particularly difficult because similar  administrative positions in other sections of the USPFO were typically  higher paying and provided better benefits than the positions in the military  pay section.  The highest pay grade of the nonsupervisory pay technicians  at the six case study units was a GS-7, and the majority of personnel were  in the GS-6 pay grade.
Although the Army and DFAS have established an agreement that in part  seeks to ensure that resources are available to provide appropriately  skilled pay personnel at mobilization stations to support surge processing,  no such contingency staffing plan exists for the USPFOs.  Specifically, a  November 2002 memorandum of understanding between the Army and  DFAS states that the active Army has primary responsibility to provide  trained military or civilian resources to execute active duty pay and  allowance surge processing requirements.  However, this memorandum  does not address the resources needed for surge processing at USPFOs.  As  discussed previously, pay problems at the case study units were caused in  part by USPFO military pay sections attempting to process large numbers  of pay transactions without sufficient numbers of knowledgeable  personnel.
Lacking sufficient numbers of personnel undermines the ability of the  USPFO pay functions to carry out established control procedures.  For  example, our audits at several of the six case study units showed that there  were no independent reviews of proposed pay transactions before they  were submitted to DJMS-RC for processing.  Such independent supervisory  reviews are required by DJMS-RC operating procedures.  However, a  USPFO official told us that because of the limited number of pay  technicians available to process pay transactions—particularly when  processing massive numbers of transactions to start active duty pays at the  same time—this requirement was often not followed.
The Chief of Payroll at one of our case study locations told us that because  they were currently understaffed, staff members worked 12 to 14 hours a  day and still had backlogs of pay start transactions to be entered into the  pay system.  We were also told that two of our other case study locations  experienced backlogs and errors in entering pay start transactions when  they were processing large numbers of Army Guard soldiers during initial  mobilizations. Military pay personnel told us that they were able to avoid  backlogs in processing pay start transactions during mobilization  processing by conscripting personnel from other USPFO sections to help in  assembling and organizing the extensive paperwork associated with  activating appropriate basic pays, entitlements, and special incentive pays  for their mobilized Army Guard soldiers.

		Training on Pay Entitlement and Processing Requirements Critical

In addition to concerns about the numbers of personnel onboard at the  USPFO military pay offices involved in processing pay transactions for our  case study units, we identified instances in which the personnel at military  pay offices at both the USPFOs and the active Army finance offices did not  appear to know the different aspects of the extensive pay eligibility or  payroll processing requirements used to provide accurate and timely pays  to Army Guard soldiers.  There are no DOD or Army requirements for  military pay personnel to receive training on pay entitlements and  processing requirements associated with mobilized Army Guard soldiers or  for monitoring the extent to which personnel have taken either of the  recently established training courses in the area.  Such training is critical  given that military pay personnel must be knowledgeable about the  extensive and complex pay eligibility and processing requirements.  We  also found that such training is particularly important for active Army pay  personnel who may have extensive experience and knowledge of pay  processing requirements for regular Army soldiers, but may not be well  versed in the unique procedures and pay transaction entry requirements for  Army Guard soldiers.
During our work at the case study units, we identified numerous instances  in which military pay technicians at both the USPFOs and active Army  finance office locations made data coding errors when entering transaction  codes into the pay systems.  We were told that these errors occurred  because military pay personnel—particularly those at the active Army  finance office locations—were unfamiliar with the system’s pay processing  requirements for active duty pays to mobilized Army Guard personnel.   Correcting these erroneous transactions required additional labor-intensive  research and data entry by other more skilled pay technicians.  As  discussed previously, we also found that pay technicians did not  understand how to properly code data on the soldiers’ dependents status,  which is used to determine housing allowances, into the pay system.  As a  result, we identified cases in which soldiers were underpaid housing  allowances to which they were entitled.
Personnel at active Army finance offices told us that while they are readily  familiar with the pay processing requirements for active Army personnel  (using DJMS-AC), they had little experience with, or training in, the policies  and procedures to be followed in entering pay transactions into DJMS-RC.   An Army finance office official told us that handling two sets of pay  transaction processing procedures is often confusing because they are  often required to process a large number of both active Army personnel  and Army Guard and other reserve personnel using different processes and  systems at the same time.
While the Army Guard offers training for their military pay technicians, we  found that there was no overall monitoring of Army Guard pay personnel  training.  At several of the case study locations we audited, we found that  Army Guard pay technicians relied primarily on on-the-job-training and  phone calls to the Army Guard Financial Services Center in Indianapolis or  to other military pay technicians at other locations to determine how to  process active duty pays to activated Army Guard personnel.
Beginning in fiscal year 2002, the Army Guard began offering training on  mobilization pays and transaction processing to the USPFO military pay  technicians.  However, there is no requirement for USPFO pay technicians  to attend these training courses.  In addition, available documentation  showed that two of the five scheduled courses for fiscal year 2003 were  canceled—one because of low registration and one because of schedule  conflicts.
Only two of the six case study locations we audited tracked the extent to  which pay technicians have taken training in this area.  We were told that  few of the military pay technicians at the state Army Guard USPFOs we  audited had formal training on JUSTIS, DJMS-RC, or mobilization pay  processing requirements and procedures.  Throughout our case studies, we  found numerous errors that involved some element of human capital.  One  payroll clerk told us that she had not received any formal training on how  to operate JUSTIS when she was assigned to the job.  Instead, she stated,  she has learned how to operate the system through on-the-job training and  many phone calls to system support personnel in Indianapolis.  She  estimated that she was not fully comfortable with all the required  transaction processing procedures until she had been on the job for about 7  years.
In addition, unit commanders have significant responsibilities for  establishing and maintaining the accuracy of solders’ pay records.  U.S.  Army Forces Command Regulation 500-3-3, Reserve Component Unit  Commander’s Handbook (July 15, 1999) requires unit commanders to (1)  annually review and update pay records for all soldiers under their  command as part of an annual soldier readiness review and (2) obtain and  submit supporting documentation needed to start entitled active duty pay  and allowances based on mobilization orders.  However, we saw little  evidence the commanders of our case study units carried out these  requirements.  Further, neither Army Guard unit commanders nor active  Army commanders were required to receive training on the importance of  the pay to on-board personnel reconciliations, discussed previously, as an  after-the-fact detective control to proactively identify Army Guard soldiers  who should no longer receive active duty pays.  We were told that this was  primarily because unit commanders have many such administrative duties,  and without additional training on the importance of these actions, they  may not receive sufficient priority attention.
The lack of unit commander training on the importance of these  requirements may have contributed to the pay problems we identified at  our case study units.   For example, at our Virginia case study location, we  found that when the unit was first mobilized, USPFO pay personnel were  required to spend considerable time and effort to correct hundreds of  errors in the unit’s pay records dating back to 1996.  Such errors could have  been identified and corrected during the preceding years’ readiness  reviews.  Further, we observed many cases in which active duty pays were  not started until more than 30 days after the entitled start dates because  soldiers did not submit the paperwork necessary to start these pays.
Customer Service Concerns  Through data collected directly from selected soldiers and work at our six  case study locations, we identified a recurring soldier concern with the  level and quality of customer service they received associated with their  pays and allowances when mobilized to active duty.  None of the DOD,  Army, or Army Guard policies and procedures we examined addressed the  level or quality of customer service that mobilized Army Guard soldiers  should be provided concerning questions or problems with their active  duty pays.  However, we identified several sources that soldiers may go to  for customer service or information on any such issues.  These include  the military pay section of the USPFO of their home state’s Army Guard,  the designated active Army area servicing finance office,  and  a toll free number, 1-888-729-2769 (Pay Army).
While soldiers had multiple sources from which they could obtain service,  we found indications that many Army Guard soldiers were displeased with  the customer service they received.  We found that not all Army Guard  soldiers and their families were informed at the beginning of their  mobilization of the pays and allowances they should receive while on  active duty.  This information is critical for enabling soldiers to identify if  they were not receiving such pays and therefore require customer service.   In addition, as discussed later in this report, we found that the  documentation provided to Army Guard soldiers—primarily in the form of  leave and earnings statements—concerning the pays and allowances they  received did not facilitate customer service.  Our audit identified customer  service concerns at all three phases of the active duty tours and involving  DFAS, active Army, and Army Guard servicing components.
Consistent with the confusion we found among Army Guard and active  Army finance components concerning responsibility for processing pay  transactions for mobilized Army Guard soldiers, we found indications that  the soldiers themselves were similarly confused.  Many of the complaints  we identified concerned confusion over whether Army Guard personnel  mobilized to active duty should be served by the USPFO because they were  Army Guard soldiers or by the active Army because they were mobilized to  federal service.
One soldier told us that he submitted documentation on three separate occasions to  support the housing allowance he should have received as of the beginning of his  October 2001 mobilization.  Each time he was told to resubmit the documentation  because his previously submitted documents were lost.  Subsequently, while he was  deployed, he made additional repeated inquiries as to when he would receive his  housing allowance pay.  He was told that it would be taken care of when he returned  from his deployment.  However, when he returned from his deployment, he was told that  he should have taken care of this issue while he was deployed and that it was now too  late to receive this allowance.
Data collected from Army Guard units mobilized to active duty indicated  that some members of the units had concerns with the pay support  customer service they received associated with their mobilization— particularly with respect to pay issues associated with their demobilization.   Specifically, of the 43 soldiers responding to our question on satisfaction  with customer support during the mobilization phase, 10 indicated  satisfaction, while 15 reported dissatisfaction.  In addition, of the 45  soldiers responding to our question on customer support following  demobilization, 5 indicated satisfaction while 29 indicated dissatisfaction.   Of the soldiers who provided written comments about customer service,  none provided any positive comments about the customer service they  received, and several had negative comments about the customer service  they received, including such comments as “nonexistent,” “hostile,” or  “poor.” For example, a company commander for one of our case study units  told us that he was frustrated with the level of customer support his unit  received during the initial mobilization process.  Only two knowledgeable  military pay officials were present to support active duty pay transaction  processing for the 51 soldiers mobilized for his unit.  He characterized the  customer service his unit received at initial mobilization as time consuming  and frustrating.
Personnel we talked with at the Colorado special forces unit we audited  were particularly critical of the customer service they received both while  deployed in Afghanistan and when they were demobilized from active duty.   Specifically, unit officials expressed frustration with being routed from one  office to another in their attempts to resolve problems with their active  duty pays and allowances. For example, the unit administrator told us he  contacted the servicing area active Army finance office for the 101st  Airborne in West Virginia because his unit was attached to the 101st   when  they were deployed. The finance office instructed him to contact the  USPFO in West Virginia because, although he was from a Colorado unit, his  unit was assigned to a West Virginia Army Guard unit.  However, when he  contacted the West Virginia USPFO for service, officials from that office  instructed him to contact the USPFO in his home state of Colorado to  provide service for his pay problems.

	Systems Problems Hamper Prompt and Accurate Army Guard Pay

Several systems issues were significant factors impeding accurate and  timely payroll payments to mobilized Army Guard soldiers, including    the lack of an integrated or effectively interfaced pay system with both  the personnel and order-writing systems,  limitations in DJMS-RC processing capabilities, and  ineffective system edits of payments and debts.
DOD has a significant system enhancement project under way to improve  military pay. However, given that the effort has been under way for about 5  years and DOD has encountered challenges fielding the system, it is likely  that the department will continue to operate with existing system  constraints for at least several more years.
Our findings related to weaknesses in the systems environment were  consistent with issues raised by DOD in its June 2002 report to the  Congress on its efforts to implement an integrated military pay and  personnel system.  Specifically, DOD’s report acknowledged that major  deficiencies in the delivery of military personnel and pay services to ensure  soldiers receive timely and accurate personnel and pay support must be  addressed by the envisioned system.  Further, the report indicated these  deficiencies were the direct result of the inability of a myriad of current  systems with multiple, complex interfaces to fully support current business  process requirements.
Figure 6 provides an overview of the five systems currently involved in  processing Army Guard pay and personnel information.

		Lack of Integrated Systems

The five key DOD systems involved in authorizing, entering, processing,  and paying mobilized Army Guard soldiers were not integrated.  Lacking  either an integrated or effectively interfaced set of personnel and pay  systems, DOD must rely on error-prone, manual entry of data from the  same source documents into multiple systems.  With an effectively  integrated system, changes to personnel records automatically update  related payroll records from a single source of data input.  While not as  efficient as an integrated system, an automatic personnel-to-payroll system  interface can also reduce errors caused by independent, manual entry of  data from the same source documents into both pay and personnel  systems.  Without an effective interface between the personnel and pay  systems, we found instances in which pay-affecting information did not get  entered into both the personnel and pay systems, thus causing various pay  problems—particularly late payments.
We found that an existing interface could be used to help alert military pay  personnel to take action when mobilization transactions are entered into  the personnel system.  Specifically, Army Guard state personnel offices  used an existing interface between SIDPERS and JUSTIS to transmit data  on certain personnel transactions (i.e., transfers, promotions, demotions,  and address changes) to the 54 USPFOs to update the soldier’s pay records.   However, this personnel-to-pay interface (1) requires manual review and  acceptance by USPFO pay personnel of the transactions created in  SIDPERS and (2) does not create pay and allowance transactions to update  a soldier’s pay records.  For example, when Army Guard soldiers change  from inactive drilling status to active duty status, state personnel offices  create personnel-related transactions in SIDPERS, but associated pay- related transactions to update the soldier’s pay records are not  automatically created in JUSTIS.  USPFO pay personnel are not aware that  a pay-related transaction is needed until they receive documentation from  the soldier, the soldier’s unit commander, or the monthly personnel/pay  mismatch report.  Automated improvements, such as an administrative  action transmitted through the personnel-to-payroll interface, could be  used to proactively alert USPFOs of certain pay-impacting transactions that  are created in SIDPERS as a means to help ensure timely and accurate pay.
In our case studies, we found instances in which mobilization order data  that were entered into SIDPERS were either not entered into DJMS-RC for  several months after the personnel action or were entered inconsistently.   At the case study locations we audited, we found several instances in  which Army Guard soldiers received amended or revoked orders that were  entered into SIDPERS but were not entered into DJMS-RC.  We also found  instances in which personnel pay-affecting changes such as changes in  family separation allowance, basic allowance for housing, and active duty  pay increases from promotions, were not entered into the pay system  promptly.  Consequently, these soldiers either received active duty pays  they were not entitled to receive—some for several months—or did not  timely receive active duty pays to which they were entitled.
Individual Case Illustration:  Overpayment due to Lack of Integrated Pay and  Personnel Systems A soldier with the Mississippi Army National Guard was mobilized in January 2002 with  his unit and traveled to the mobilization station at Fort Campbell.  The unit stayed at Fort  Campbell to perform post security duties until June 2002.  On June 14, 2002, the E-4  specialist received a "general" discharge order from the personnel office at Fort  Campbell for a drug-related offense.  However, he continued to receive active duty pay,  totaling approximately $9,400, until September 2002.  Although the discharge  information was promptly entered into the soldier's personnel records, it was not entered  into the pay system for almost 4 months.  This problem was caused by weaknesses in  the processes designed to work around the lack of integrated pay and personnel  systems.  Further, the problem was not detected because reconciliations of pay and  personnel data were not performed timely.  Specifically, it was not until over 3 months  after the soldier's discharge, through its September 2002 end-of-month reconciliation,  that the Mississippi Army National Guard USPFO identified the overpayment and took  action on October 2, 2002, to stop the individual's pay.  However, collection efforts on the  $9,400 overpayment did not begin until July 2003, when we pointed out this situation to  USPFO officials.
The lack of an integrated set of systems was also apparent in the  relationship between JUSTIS and the order writing system—AFCOS.   Currently, certain personnel and order information entered and stored in  the AFCOS database is automatically filled in the JUSTIS input screens  pertaining to active duty tours for state missions upon entry of the soldier’s  Social Security Number and order number.  This auto-fill functionality  eliminates the need for some error-prone, manual reentry of data into  JUSTIS.  However, currently, manual entry of data from a hard copy of the  soldier’s orders and other documentation is required to initiate the soldier’s  pay and allowances—a procedure that defeats the purpose of an effective  interface.  For example, at one of the case study units we audited, USPFO  pay personnel had to manually enter the soldier’s active duty tour start and  stop dates into JUSTIS from a hard copy of the actual mobilization order.
When we brought this to the attention of NGB officials, they stated that  providing the auto-fill functionality to the mobilization input screens would  require minimal programming changes.  NGB officials stated that they  planned to release a programming software change to all 54 USPFOs that  would allow the start and stop dates to be automatically filled into the  mobilization screens to reduce the need for reentry of some mobilization  information.  Because this software change was scheduled to occur after  the conclusion of our fieldwork, we did not verify its effectiveness.  In any  case, while this proposed programming change may be beneficial, it does  not eliminate the need for manual entry and review of certain other  mobilization data needed to initiate a soldier’s basic pay and allowances.

		Pay System Has Limited Active Duty Pay Processing Capabilities

DOD has acknowledged that DJMS-RC is an aging, COBOL/mainframe- based system. Consequently, it is not surprising that we found DFAS  established a number of “workarounds”—procedures to compensate for  existing DJMS-RC processing limitations with respect to processing active  duty pays and allowances to mobilized Army guard soldiers.  Such manual  workarounds are inefficient and create additional labor-intensive, error- prone transaction processing.  We observed a number of such system  workaround procedures at the case study units we audited.
For example, for the special forces units we audited, our analysis disclosed  a workaround used to exclude soldiers’ pay from federal taxes while in  combat. Specifically, DJMS-RC was not designed to make active duty pays  and exclude federal taxes applicable to those pays in a single pay  transaction. To compensate for this system constraint, DFAS established a  workaround that requires two payment transactions over a 2-month payroll  cycle to properly exempt soldiers’ pay for the combat zone tax exclusion.   That is, for those soldiers entitled to this exclusion, DJMS-RC withholds  federal taxes the first month, identifies the taxes to be refunded during end- of-month pay processing, and then makes a separate payment during the  first pay update the following month to refund the taxes that should not  have been withheld.  Soldiers’ taxes could not be refunded the same month  because the DJMS-RC refund process occurs only one time a month.
In addition, because of limited DJMS-RC processing capabilities, the Army  Guard USPFO and in-theatre active Army area servicing finance office pay  technicians are required to manually enter transactions for nonautomated  pay and allowances every month.  DJMS-RC was originally designed to  process payroll payments to Army Reserve and Army Guard personnel on  weekend drills or on short periods of annual active duty (periods of less  than 30 days in duration) or for training.  With Army Guard personnel now  being paid from DJMS-RC for extended periods of active duty (as long as 2  years at a time), DFAS officials told us that the system is now stretched  because it is being used to make  payments and allowances that it was not  structured or designed to make, such as hostile fire pay and the combat  zone tax exclusion.  Many of these active duty pay and allowances require  manual, monthly verification and reentry into DJMS-RC because, while  some pays, such as basic active duty pay and jump pay, can be generated  automatically, DJMS-RC is not programmed to generate automatic payment  of certain other types of pay and allowances.
For example, each month USPFO pay personnel are responsible for  entering into JUSTIS special duty assignment pay, foreign language  proficiency pay, and high altitude low opening (HALO) pay, and Army area  servicing finance offices are responsible for entering into DMO hardship  duty pay, for deployed soldiers entitled to these types of pays and for which  a performance certification is received from the respective unit  commanders.  However, because pay transactions must be manually  entered every month soldiers are entitled to receive these pays, it is often  difficult to ensure that mobilized soldiers receive their entitled  nonautomated pays and allowances.  For example, we found a number of  instances in which soldiers were underpaid their entitled jump, foreign  language proficiency, special duty assignment, or hardship duty pays  because pay technicians inadvertently omitted the monthly manual input  required to initiate these types of pays every month.
At one of the case study units, we found USPFO pay personnel had a  procedure in place to help prevent inadvertently omitting month-to-month  entry of nonautomated pays for entitled soldiers.  Specifically, pay  personnel at the USPFO in Maryland used a warning screen within JUSTIS  as a mechanism to alert them that soldiers were eligible to receive that  particular pay component that month.  Although this does not alleviate the  problem of month-to-month manual entry, the warning screen could be  used to help preclude some of the pay problems we found resulting from  failures to enter transactions for nonautomated, month-to-month pay and  allowance entitlements.
Further, these month-to-month pays and allowances were not separately  itemized on the soldiers’ leave and earnings statements in a user-friendly  format.
In contrast, at four of our six case study units, we found that a significant  number of soldiers were overpaid their entitled automated pays when they  were demobilized from active duty before the stop date specified in their  original mobilization orders.  This occurred because pay technicians did  not update the stop date in DJMS-RC, which is necessary to terminate the  automated active duty pays when soldiers leave active duty early.  For  example, the military finance office in Kuwait, which was responsible for  paying Virginia 20th Special Forces soldiers in the fall of 2002, did not stop  hostile fire and hardship duty pays as required when these soldiers left  Afghanistan in October 2002.  We found that 55 of 64 soldiers eligible for  hostile fire pay were overpaid for at least 1 month beyond their departure  from Afghanistan.
Individual Case Illustration:  Problems in Deciphering a Leave and Earnings  Statement  An Army National Guard Special Forces sergeant believed that he was not receiving  certain active duty pays and allowances during his mobilization to active duty in support  of Operation Enduring Freedom. On March 23, 2002, the sergeant wrote a letter from  Afghanistan to a fellow battalion soldier back in his home state, discussing his pay  problems. The sergeant stated that he was not receiving his special duty assignment pay  from November 2001 to March 2002. The sergeant’s letter also stated he was not  receiving his hostile fire pay and combat zone tax exclusion. His letter concluded, “Are  they really fixing pay issues or are they putting them off till we return? If they are waiting,  then what happens to those who (god forbid) don’t make it back?”  The sergeant was  killed in action in Afghanistan on April 15, 2002, before he knew if his pay problems were  resolved. Our review determined that some of the sergeant’s pays were started up to 2  months late, but others had actually been paid properly. The sergeant apparently was not  aware of receiving these payments because of the way they were combined.
Soldiers’ pays may appear as lump sum payments under “other credits” on  their leave and earnings statements.  In many cases these other credit pay  and allowances appeared on their leave and earning statements without  adequate explanation.  As a result, we found indications that Army Guard  soldiers had difficulty using the leave and earnings statements to determine  if they received all entitled active duty pays and allowances.  In addition,  several Army Guard soldiers told us that they had difficulty discerning from  their leave and earnings statements whether lump sum catch-up payments  fully compensated them for previously underpaid active duty pay and  allowance entitlements.  Without such basic customer service, the soldiers  cannot readily verify that they received all the active duty pays and  allowances to which they were entitled.
As shown in the example leave and earnings statement extract included in  figure 7, an Army Guard soldier who received a series of corrections to  special duty assignment pay along with a current special duty assignment  payment of $110 is likely to have difficulty discerning whether he or she  received all and only entitled active duty pays and allowances.

		System Edits Do Not Prevent Large Payments or Debts

While DJMS-RC has several effective edits to prevent certain  overpayments, it lacks effective edits to reject large proposed net pays over  $4,000 at midmonth and over $7,000 at end-of-month before their final  processing.  DOD established these thresholds to monitor and detect  abnormally large payments.  As a result of the weaknesses we identified,  we found several instances in our case studies in which soldiers received  large lump sum payments, probably related to previous underpayments or  other pay errors, with no explanation.  Further, the lack of preventive  controls over large payments poses an increased risk of fraudulent  payments.   DJMS-RC does have edits that prevent soldiers from (1) being  paid for pay and allowances beyond the stop date for the active duty tour,  (2) being paid for more than one tour with overlapping dates, or (3) being  paid twice during a pay period.
Each month, DFAS Indianapolis pay personnel receive an Electronic Fund  Transfer Excess Dollar Listing after the electronic fund transfer payment  has been processed in DJMS-RC and deposited to the soldier’s bank  account.  DJMS-RC does not contain edit checks to reject payments over  the threshold amounts or to require review and approval of payments over  these amounts prior to their final processing.  For example, at one of the  case study units we audited, DJMS-RC did not have edit checks to prevent  one soldier from receiving an erroneous electronic payment totaling  $20,110 without prior approval (see the individual case illustration below  for details).  In addition, our analysis showed 76 other payroll-related  payments during the period October 1, 2001, through March 31, 2003, of  over $7,000 (net) each that were paid by DJMS-RC.  Because the Electronic  Fund Transfer Excess Dollar Listing is printed after the payment is made,  timely detection of errors is critical to help ensure that erroneous payments  are recovered and that fraud does not occur.
Similarly, DJMS-RC does not have system edits to prevent large debts from  being assessed without review and approval prior to being processed and  does not provide adequate explanations for pay-related debt assessments.  Our case studies identified individuals who received debt notices in excess  of $30,000 with no explanation.  At five of the 6 units audited, we identified  86 individuals who had total pay and allowance debts of approximately  $300,000 as of March 31, 2003.
Individual Case Illustration: System Edits Do Not Prevent Large Payments and  Debts  A sergeant with the Colorado Army National Guard, Special Forces, encountered  numerous severe pay problems associated with his mobilization to active duty, including  his deployment to Afghanistan in support of Operation Enduring Freedom. The  sergeant’s active duty pay and other pay and allowances should have been stopped on  December 4, 2002, when he was released from active duty. However, because the  sergeant’s mobilization orders called him to active duty for 730 days and not the 365  days that he was actually mobilized, and the Army area servicing finance office at the  demobilization station, Fort Campbell, did not enter the release from active duty date  into DJMS-RC, the sergeant continued to improperly receive payments, as if he were still  on active duty, for 2 and a half months after he was released from active duty totaling  over $8,000. The sergeant was one of 34 soldiers in the company whose pay continued  after their release from active duty. In an attempt to stop the erroneous payments, in  February 2003, pay personnel at the Colorado USPFO created a transaction to cancel  the tour instead of processing an adjustment to amend the stop date consistent with the  date on the Release from Active Duty Order. When this occurred, DJMS-RC  automatically processed a reversal of 11 months of the sergeant’s pay and allowances  that he earned while mobilized from March 1, 2002, through February 4, 2003, which  created a debt in the amount of $39,699 on the soldier’s pay record; however, the  reversal should have only been from December 5, 2002, through February 4, 2003. In  April 2003, at our request, DFAS-Indianapolis personnel intervened in an attempt to  correct the large debt and to determine the actual amount the sergeant owed. In May  2003, DFAS-Indianapolis erroneously processed a payment transaction instead of a debt  correction transaction in DJMS-RC. This created a payment of $20,111, which was  electronically deposited to the sergeant’s bank account without explanation, while a debt  of $30,454 still appeared on his Leave and Earnings Statement. About 9 months after  his demobilization, the sergeant’s unpaid debt balance was reportedly $26,559, but the  actual amount of his debt had not yet been determined as of September 2003.
In addition, we found that current procedures used to notify soldiers of  large payroll-related debts did not facilitate customer service.  Under  current procedures, if a soldier is determined to owe the government  money while on active duty, he is assessed a debt and informed of this  assessment with a notation of an “Unpaid Debt Balance” in the remarks  section of his Leave and Earnings Statement.  A soldier at one of our case  study units told us that he was not notified in advance of his receipt of his  Leave and Earnings Statement that he had a debt assessment and that two- thirds of his pay would be garnished. As a result, he was not able to plan his  financial affairs to avoid late payments on his car and other loans.
This debt assessment notification procedure is even more egregious when  debts, particularly large debts, are assessed in error and up to two-thirds of  the soldier’s pay may be garnished to begin repaying the erroneous debt.   For example, at our case study units, we found that the only notice several  soldiers received when they were erroneously assessed payroll debts was  an “Unpaid Debt Balance” buried in the remarks section of their Leave and  Earnings Statements.  One such assessment showing a $39,489.28 debt is  shown in figure 8.

		Status of System Redesign Efforts

DOD has a major system enhancement effort under way in this area  described as the largest personnel and pay system in the world in both  scope and number of people served—the Defense Integrated Military  Human Resources System (DIMHRS).  One of the major benefits expected  with DIMHRS is “service members receiving accurate and timely pay and  benefits.”  Begun in 1998, DIMHRS is ultimately intended to replace more  than 80 legacy systems (including DJMS-RC) and integrate all pay,  personnel, training, and manpower functions across the department by  2007.
By the end of fiscal year 2003, DOD reporting shows that it will have  invested over 5 years and about $360 million in conceptualizing and  planning the system.  In 2002, DOD estimated that integrated personnel and  pay functions of DIMHRS would be fully deployed by fiscal year 2007. It  also reported a development cost of about $427 million.  However, our  review of the fiscal year 2004 DOD Information Technology budget request  shows that DOD is requesting $122 million and $95 million, respectively, for  fiscal years 2004 and 2005.   In addition, the department reported that the  original DIMHRS project completion milestone date has slipped about 15  months.
Part of the requested funding for fiscal year 2004 was to acquire a payroll  module, Forward Compatible Payroll.  According to program officials, this  module, in conjunction with a translation module and a Web services  component, is to replace DJMS-RC and DJMS-AC systems by March 2006,  with the first deployment to the Army Reserve and Army Guard in March  2005.
In assessing the risks associated with DIMHRS implementation as part of  its fiscal year 2004 budget package, DOD highlighted 20 such risks.  For  example, DOD reported a 60 percent risk associated with “Service issues  with business process reengineering and data migration.”  The  department’s ability to effectively mitigate such risks is of particular  concern given its poor track record in successfully designing and  implementing major systems in the past.  Consequently, given the  schedule slippages that have already occurred combined with the many  risks associated with DIMHRS implementation, Army Guard soldiers will  likely be required to rely on existing pay systems for at least several more  years.

	Army Guard Active Duty Pay Problems Continue with Current Deployments to Iraq

Our limited review of the pay experiences of the soldiers in the Colorado  Army Guard’s 220th Military Police Company, which was mobilized to active  duty in January 2003, sent to Kuwait in February 2003, and deployed to Iraq  on military convoy security and highway patrol duties in April 2003,  indicated that some of the same types of pay problems that we found in our  six case study units continued to occur.   Of the 152 soldiers mobilized in  this unit, we identified 54 soldiers who our review of available records  indicated were either overpaid, underpaid, or received entitled active duty  pays and allowances over 30 days late, or for whom erroneous pay-related  debts were created.  We found that these pay problems could be attributed  to control breakdowns similar to those we found at our case study units,  including pay system input errors associated with amended orders, delays  and errors in coding pay and allowance transactions, and slow customer  service response.  For example, available documentation and interviews  indicate that while several soldiers submitted required supporting  documentation to start certain pays and allowances at the time of their  initial mobilization in January 2003, over 20 soldiers were still not receiving  these pays in August 2003.  Colorado USPFO military pay-processing  personnel told us they are reviewing pay records for all deployed soldiers  from this unit to ensure that they are receiving all entitled active duty pays  and allowances.

	Conclusions

The extensive problems we identified at the case study units vividly  demonstrate that the controls currently relied on to pay mobilized Army  Guard personnel are not working and cannot provide reasonable assurance  that such pays are accurate or timely.  The personal toll that these pay  problems have had on mobilized soldiers and their families cannot be  readily measured, but clearly may have a profound effect on reenlistment  and retention.  It is not surprising that cumbersome and complex processes  and ineffective human capital strategies, combined with the use of an  outdated system that was not designed to handle the intricacies of active  duty pay and allowances, would result in significant pay problems.  While it  is likely that DOD will be required to rely on existing systems for a number  of years, a complete and lasting solution to the pay problems we identified  will only be achieved through a complete reengineering, not only of the  automated systems, but also of the supporting processes and human  capital practices in this area.  However, immediate actions can be taken in  these areas to improve the timeliness and accuracy of pay and allowance  payments to activated Army Guard soldiers.  The need for such actions is  increasingly imperative in light of the current extended deployment of  Army Guard soldiers in their crucial role in Operation Iraqi Freedom and  anticipated additional mobilizations in support of this operation and the  global war on terrorism.  Immediate steps to at least mitigate the most  serious of the problems we identified are needed to help ensure that the  Army Guard can continue to successfully fulfill its vital role in our national  defense.

	Recommendations for Executive Action

We recommend that the Secretary of Defense direct the Secretary of the  Army, in conjunction with the Under Secretary of Defense (Comptroller),  to take the following actions to address the issues we found with respect to  the existing processes, human capital, and automated systems relied on to  pay activated Army Guard personnel.

		Process

Establish a unified set of policies and procedures for all Army Guard,  Army, and DFAS personnel to follow for ensuring active duty pays for  Army Guard personnel mobilized to active duty.
Establish performance measures for obtaining supporting  documentation and processing pay transactions (for example, no more  than 5 days would seem reasonable).
Establish who is accountable for stopping active duty pays for soldiers  who return home earlier than their units.
Clarify the policies and procedures for how to properly amend active  duty orders, including medical extensions.
Require Army Guard commands and unit commanders to carry out  complete monthly pay and personnel records reconciliations and take  necessary actions to correct any pay and personnel record mismatches  found each month.
Update policies and procedures to reflect current legal and DOD  administrative requirements with respect to active duty pays and  allowances and transaction processing requirements for mobilized  Army Guard soldiers.

		Human Capital

Consider expanding the scope of the existing memorandum of  understanding between DFAS and the Army concerning the provision of  resources to support surge processing at mobilization and  demobilization sites to include providing additional resources to  support surge processing for pay start and stop transaction  requirements at Army Guard home stations during initial soldier  readiness programs.
Determine whether issues concerning resource allocations for the  military pay operations identified at our case study units exist at all 54  USPFOs, and if so, take appropriate actions to address these issues.
Determine whether issues concerning relatively low-graded military pay  technicians identified at our case study units exist at all 54 USPFOs, and  if so, take appropriate actions to address these issues.
Modify existing training policies and procedures to require all USPFO  and active Army pay and finance personnel responsible for entering pay  transactions for mobilized Army Guard soldiers to receive appropriate  training upon assuming such duties.
Require unit commanders to receive training on the importance of  adhering to requirements to conduct annual pay support documentation  reviews and carry out monthly reconciliations.
Establish an ongoing mechanism to monitor the quality and completion  of training for both pay and finance personnel and unit commanders.
Identify and evaluate options for improving customer service provided  to mobilized Army Guard soldiers by providing improved procedures for  informing soldiers of their pay and allowance entitlements throughout  their active duty mobilizations.
Identify and evaluate options for improving customer service provided  to mobilized Army Guard soldiers to ensure a single, well-advertised  source for soldiers and their families to access for customer service for  any pay problems.
Review the pay problems we identified at our six case study units to  identify and resolve any outstanding pay issues for the affected soldiers.

		Systems

			Interim Improvements to Current Automated Pay System Structure

Evaluate the feasibility of using the personnel-to-pay interface as a  means to proactively alert pay personnel of actions needed to start  entitled active duty pays and allowances.
Evaluate the feasibility of automating some or all of the current manual  monthly pays, including special duty assignment pay, foreign language  proficiency pay, hardship duty pay, and HALO pay.
Evaluate the feasibility of eliminating the use of the “other credits” for  processing hardship duty (designated areas), HALO pay, and special  duty assignment pay, and instead establish a separate component of pay  for each type of pay.
Evaluate the feasibility of using the JUSTIS warning screen to help  eliminate inadvertent omissions of required monthly manual pay inputs.
Evaluate the feasibility of redesigning Leave and Earnings Statements to  provide soldiers with a clear explanation of all pay and allowances  received so that they can readily determine if they received all and only  entitled pays.
Evaluate the feasibility of establishing an edit check and requiring  approval before processing any debt assessments above a specified  dollar amount.
Evaluate the feasibility of establishing an edit check and requiring  approval before processing any payments above a specified dollar  amount.

			Longer-Term System Improvements

As part of the effort currently under way to reform DOD’s pay and  personnel systems—referred to as DIMHRS—incorporate a complete  understanding of the Army Guard pay problems as documented in this  report into the requirements development for this system.
In developing DIMHRS, consider a complete reengineering of the  processes and controls and ensure that this reengineering effort deals  not only with the systems aspect of the problems we identified, but also  with the human capital and process aspects.

	Agency Comments and our Evaluation

In its written comments, DOD concurred with our recommendations and  identified actions to address the identified deficiencies. Speciifically, DOD’s  response outlined some actions already taken, others that are underway,  and further planned actions with respect to our recommendations. If  effectively implemented, these actions should substantially resolve the  deficiencies pointed out in our report. DOD’s comments are reprinted in  appendix VIII.
As agreed with your office, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 30 days from its  date.  At that time, we will send copies of the report to interested  congressional committees.  We will also send copies of this report to the  Secretary of Defense, the Under Secretary of Defense (Comptroller), the  Secretary of the Army, the Director of the Defense Finance and Accounting  Service, the Director of the Army National Guard, and the Chief of the  National Guard Bureau.  We will make copies available to others upon  request.  In addition, the report will be available at no charge on the GAO  Web site at http://www.gao.gov.  If you or your staff have any questions  regarding this report, please contact me at (202) 512-9505 or  kutzg@gao.gov or Geoffrey Frank, Assistant Director, at (202) 512-9518 or  frankg@gao.gov.

Colorado Army National Guard B Company, 5th Battalion, 19th Special Forces

On December 5, 2001, the Colorado Army National Guard’s B Company, 5th  Battalion, 19th Special Forces, was mobilized to active duty on orders for a  2-year period—through December 4, 2003.  The unit was mobilized at Fort  Knox and subsequently deployed in Afghanistan, Uzbekistan, and  surrounding areas to search for Taliban and al Qaeda terrorists as part of  Operation Enduring Freedom.  The unit returned to Fort Campbell for  demobilization and was released from active duty on December 4, 2002—1  year before the end of the unit’s original mobilization orders.  A timeline of  the unit’s actions associated to its mobilization under Operation Enduring  Freedom is shown in figure 9.
As summarized in table 3, the majority of soldiers from Colorado’s B  Company experienced some sort of pay problem during one or more of the  three phases of their active duty mobilization.   Overall, all 62 soldiers with  the company had at least one pay problem associated with their  mobilization.  These pay problems included not receiving entitled pays and  allowances at all; not receiving some entitled pays and allowances within  30 days; and for some, overpayments of pays and allowances.  Specifically,  we found (1) 56 soldiers did not receive certain pay and allowance  entitlements at all, or within 30 days of their initial mobilization, (2) 61  soldiers either did not receive, or did not receive within 30 days, the hostile  fire pay or other “high-risk location” pays they were entitled to receive  based on their deployment in Uzbekistan and Afghanistan, and (3) 53  soldiers either improperly continued to receive hostile fire pay after leaving  high-risk locations overseas or continued to receive paychecks, as if they  were still on active duty status, for over 2 months beyond their release from  active duty.
In total, we identified estimated overpayments of $494,000, underpayments  of $28,000, and late payments of $64,000, associated with the pay problems  we found.  Of the estimated $494,000 in overpayments, we identified about  $88,000 that was subsequently collected from the soldiers of Colorado’s B  Company.  In addition, in trying to correct overpayments associated with  Colorado B Company’s departure from high-risk locations and release from  active duty, the Defense Finance and Accounting Service (DFAS) billed 34  of the unit’s soldiers an average of $48,000 each, for a largely erroneous  total debt of over $1.6 million.
Many soldiers with the company characterized the service they received  from the state United States Property and Fiscal Office (USPFO) and the  active Army finance offices while deployed in Afghanistan and surrounding  areas as “poor” or “openly hostile.”  Some of the soldiers in the unit  expressed significant dissatisfaction with the time and effort they, or their  spouses were required to spend attempting to identify and correct their  pay.
These pay problems had a variety of adverse effects.  The labor-intensive  efforts by the special forces soldiers to address pay problems, in some  cases, distracted them from important mission operations.  In addition,  several soldiers told us that the numerous pay problems they encountered  would play a major role in their decision whether to reenlist. According to  several soldiers from Colorado’s B Company, the combined effect of   (1) recurring pay problems, (2) having two-thirds of their monthly training  paychecks garnished to pay off often erroneous payroll-related debts, and  (3) receiving poor payroll customer service during their active duty tours  adversely affects morale and may have an adverse effect on a soldier’s  willingness to continue his or her service with the Army Guard.   For  example, a unit official advised us that as of September 30, 2003, three  soldiers had left B Company primarily due to frustration over pay  problems.  The unit official indicated that he expected additional soldiers  would depart as a result of the current debt problems.

	Mobilization Pay Problems

As summarized in table 4, we identified a number of pay problems  associated with eight different types of active duty pays and allowances  related to the unit’s mobilization to active duty.  These problems resulted  from failure to enter data, data entry errors, or late entry of data needed by  Army Guard USPFO military pay personnel and by active Army military pay  personnel at the unit’s mobilization station to start active duty pays.  We  also found that these pay problems were exacerbated by breakdowns in  customer service.
In total, 56 out of 62 soldiers did not receive certain pays and allowances at  all, or in a timely manner, after being activated on December 5, 2001.  As  illustrated in table 4, 11 soldiers did not receive entitled Jump pay within 30  days of entitlement, 10 did not receive HALO pay within 30 days of  entitlement, and 41 soldiers did not receive at least 1 month of their special  duty assignment pay.
According to DFAS procedures, the unit’s Army Guard USPFO should have  initiated these pays.  In addition, these problems could have been  minimized if they were identified and corrected by the Army mobilization  station finance office at Fort Knox during the soldier readiness processing  at that location.  According to Army regulations, the active Army  mobilization station is required to conduct a soldier readiness program to  review every mobilizing soldier’s pay account for accuracy.  In essence,  under Department of Defense (DOD) guidance, the active Army  mobilization stations are to act as a “safety net” to catch and correct any  errors in soldiers’ active duty pays and allowances before they are  deployed on their active duty missions.
The underpayments and late payments resulted in adverse financial  repercussions for a number of the unit’s members and their families.  We  were told that many of the unit members’ spouses tried to contact the  soldiers while they were deployed to find out why they were not receiving  the anticipated funds. We were told that neither the spouses nor the  soldiers received clear guidance on whom to contact to address their pay  concerns.  For example, some soldiers sought help from the active Army’s  finance offices at Fort Knox and Fort Campbell.  However, upon contacting  officials at those locations, soldiers were told that the active Army could  not help them because they were Army Guard soldiers and should  therefore contact their home state Army Guard USPFO.  According to  DFAS officials, the active Army finance offices have the capability to  service Army Guard soldiers.  Fort Knox and Fort Campbell finance  personnel were either unaware of their capability or unwilling to take the  actions needed to address the unit’s active duty pay concerns.
Colorado’s B Company soldiers turned back to the USPFO for assistance.   Although the USPFO did process a number of transactions to start entitled  active duty pays and allowances for the unit’s soldiers, such pays were  started more than 30 days after the date they were entitled to receive such  pays.  In one case, a soldier’s spouse had to obtain a $500 grant from the  Colorado National Guard in order to pay bills while her husband was on  active duty.

	Deployment Pay Problems

Colorado’s B Company was deployed to Uzbekistan and Afghanistan in  February 2002.  As summarized in table 5, we identified pay problems  associated with the hostile fire pay, combat zone tax exclusion, and  hardship duty pay that unit soldiers were entitled to receive based on their  deployment to Afghanistan and surrounding areas.
Specifically, after arriving in Afghanistan, some soldiers in Colorado’s B  Company received these pays sporadically, were not paid at all, were paid  but for inexplicable dollar amounts, or were overpaid their entitled active  duty pays and allowances while deployed.  For example, 16 of the 62  soldiers in B Company received the wrong type of hardship duty pay,  formerly called Foreign Duty Pay, in addition to the correct hardship duty  location pay while they were deployed in Afghanistan.
We found that these pay problems could be attributed, in part, to the active  Army servicing finance office’s lack of knowledge about how to process  transactions through the Defense Joint Military Pay System-Reserve  Component system (DJMS-RC) to start location-based pays and allowances  for the unit’s soldiers.  For example, we were told that because active Army  in-theater finance personnel were unfamiliar with the required procedures  to follow in starting hardship duty pays, they entered transactions that  resulted in soldiers receiving two different location-based types of hardship  duty pay for the same duty.  Further, Army Guard soldiers told us the active  Army finance office could not effectively answer questions concerning  their pay entitlements or transaction processing documentation  requirements.  After not receiving any pay support from the active Army  servicing finance location, the unit’s soldiers told us they contacted their  Army Guard USPFO in Colorado for assistance.   However, Colorado  USPFO officials informed them that they did not have the capability to start  location-based pays and allowances for Army Guard soldiers.
A frequent complaint we received from Colorado’s B Company soldiers  concerned the circular nature of any attempts to get assistance on pay  issues while deployed overseas.    B Company’s soldiers told us they spent  significant amounts of time and effort trying to correct the pay problems  while deployed on critical mission operations in Afghanistan and  surrounding areas—time and focus away from the mission at hand.  For  example, as discussed in greater detail in our West Virginia case study  summary, a soldier from that unit took several days away from his unit to  get location-based pay started for both the West Virginia and Colorado  special forces units. We were also told that some members of the unit used  their satellite radios to attempt to resolve their pay problems while  deployed in Afghanistan.   In addition, several of the unit’s soldiers told us  their ability to identify and correct pay problems while deployed was  impaired by limited access to telephones, faxes, e-mail, and their current  Leave and Earnings Statements.

	Pay Problems Associated with Demobilization and Release from Active Duty

In the late summer to early fall of 2002, soldiers from Colorado’s B  Company began returning from Afghanistan and surrounding areas to Fort  Campbell to begin their demobilization from active duty.  However, the  active Army’s finance office at Fort Campbell failed to properly stop  soldiers’ pay as of their demobilization dates, which for most of the unit’s  soldiers was December 4, 2002.    As summarized in table 6, 39 of the unit’s  62 soldiers continued to receive active duty pay and allowances, some   until February 14, 2003—2 and a half months after the date of their release  from active duty.
We found that both the active Army servicing finance location for the unit  while it was in Afghanistan and at Fort Campbell upon its return to the  United States did not take action to stop active duty pays and allowances.   According to DFAS procedures, the finance office at the servicing  demobilization station is to conduct a finance out-processing, which would  include identifying and stopping any active duty pays that soldiers were no  longer entitled to receive.   According to DFAS-Indianapolis Reserve  Component mobilization procedures, the local servicing active Army  finance office also has primary responsibility for entering transactions to  stop hardship duty pay, hostile fire pay, and the combat zone tax exclusion  when soldiers leave an authorized hostile fire/combat zone.  However, in  this case, that office did not take action to stop these types of pay and  allowances for many of the unit’s soldiers.  For example, military pay  personnel at Fort Campbell failed to deactivate hostile fire pay for 41 out of  62 B Company soldiers.  With regard to customer service, some soldiers in  the unit told us that upon their return from overseas deployments, they  were informed that they should have corrected these problems while in- theater, despite the fact that these problems were not detected until the  demobilization phase.
Colorado’s B Company demobilization was complicated by the fact that the  unit did not demobilize through the same active Army location used to  mobilize the unit. DFAS procedures provide that Army Guard soldiers are  to demobilize and have their active duty pays stopped by the installation  from which they originally mobilized.  However, the unit received orders to  demobilize at Fort Campbell rather than Fort Knox where they originally  mobilized.  According to Fort Campbell personnel, Colorado’s B Company  out-processed through the required sections, including finance, during their  demobilization.  Nonetheless, the finance office at that active Army  location failed to stop all active duty pays and allowances when the unit  was demobilized from active duty.  Fort Campbell finance office personnel  we interviewed were not present during B Company’s demobilization and  had no knowledge of why pay was not stopped during the demobilization  process.
Failure to stop location-based and other active duty pays and allowances  for the unit’s soldiers resulted in overpayments.  As a result of the Colorado  USPFO’s errors made in attempting to amend the unit’s orders to reflect an  earlier release date than the date reflected in the unit’s original mobilization  orders, large debts were created for many soldiers in the unit.   Specifically,  largely erroneous soldier debts were created when personnel at the  Colorado USPFO inadvertently revoked the soldiers’ original mobilization  orders when attempting to amend the orders to reflect the unit’s actual  release date of December 4, 2002—1 year before the end of the unit’s  original orders.  As a result, 34 soldiers received notice on their Leave and  Earnings Statements that rather than a debt for the 2 and a half months of  active duty pay and allowances they received after their entitlement had  ended, they owed debts for the 11 months of their active duty tour—an  average of $48,000 per soldier, for a total debt of $1.6 million.
Several of the soldiers in the company noticed the erroneous debt and  called their unit commander.  Some of the soldiers wanted to settle the debt  by writing a check to DFAS.  However, they were told not to because the  exact amount of each soldier’s debt could not be readily determined and  tracking such a payment against an as-yet undetermined amount of debt  could confuse matters.  Meanwhile, some soldiers now returned from  active duty, resumed participation in monthly training, and began having  two-thirds of their drill pay withheld and applied to offset their largely  erroneous debt balances.  We were told that it would take approximately 4  to 5 years for the soldiers to pay off these debts using this approach.
On April 17, 2003, and in a subsequent June 20, 2003, letter, we brought this  matter to the attention of DFAS and the DOD Comptroller, respectively.   Table 7 provides an overview of the actions leading to the creation of  largely erroneous payroll-related debts for many of the unit’s soldiers and  DOD’s actions to address these largely erroneous debts.
Despite considerable time and effort of DFAS and others across the Army  Guard and Army, as of the end of our fieldwork in September 2003,  Colorado’s B Company debt problems had not been resolved.  In fact, for  one sergeant, his pay problems were further complicated by these efforts.  For example, in attempting to reduce the soldier’s recorded $30,454 debt by  $20,111, DFAS instead sent the soldier a payment of $20,111. As of  September 2003, about 9 months after his demobilization, the sergeant’s  reported unpaid debt balance was $26,806, but the actual amount of his  debt remained unresolved.

Virginia Army National Guard B Company, 3rd Battalion, 20th Special Forces

On January 2, 2002, the Virginia Army National Guard’s B Company, 3rd  Battalion, 20th Special Forces, was called to active duty in support of  Operation Enduring Freedom for a 1-year tour.  The unit in-processed at  Fort Pickett, Virginia, and departed for Fort Bragg, North Carolina.  The  unit mobilized at Fort Bragg and for the next several months performed  various duties on base until May 2002.   In early May 2002, Virginia’s B  Company deployed to Afghanistan to perform search and destroy missions  against al Qaeda and Taliban terrorists.  Although several of B Company’s  soldiers returned from Afghanistan during August and September 2002,  most of the unit’s members returned to Fort Bragg for demobilization  during October 2002 and were released from active duty on January 2, 2003.   A timeline of the unit’s actions associated with its mobilization under  Operation Enduring Freedom is shown in figure 10.
As summarized in table 8, the majority of soldiers from Virginia’s B  Company experienced some sort of pay problem during one or more of the  three phases of their active duty mobilization.   Overall, 64 of the 65 soldiers  with the company experienced at least one pay problem associated with  their mobilization.  These pay problems included not receiving entitled  pays and allowances at all; not receiving some entitled pays and allowances  within 30 days; and for some, overpayments of pays and allowances.   Specifically, we found (1) 31 soldiers did not receive certain pay and  allowance entitlements at all, or within 30 days of their initial mobilization  entitlement, or were overpaid, (2) 63 soldiers either did not receive, or did  not receive within 30 days, the hardship duty pay or other high-risk location  pays they were entitled to receive based on their deployment to  Afghanistan, and (3) 60 soldiers improperly continued to receive hardship  duty pay or hostile fire pay after leaving high-risk locations overseas.
In total, we identified estimated overpayments of $25,000, underpayments  of $12,000, and late payments of $28,000 associated with the pay problems  we found.   Of the estimated $25,000 in overpayments, we identified about  $2,000 that was subsequently collected from the soldiers.
Our audit showed that the pay problems experienced by Virginia’s B  Company were the result of a number of factors, including late submission  of required pay support documents, incorrect pay inputs by Army  personnel, and an active Army in-theater finance office’s lack of knowledge  about the unit’s presence in Afghanistan.
These pay problems had a number of adverse effects.  Several B Company  soldiers we interviewed expressed dissatisfaction with the time and effort  they, or their spouses, were required to spend attempting to identify and  correct problems with their pay.  Another complaint concerned the circular  nature of any attempts to get assistance.  For example, we were told the  USPFO referred soldiers to the active Army finance office and that office  referred them back to the USPFO.  Virginia USPFO officials informed us  that the circular nature of giving assistance to soldiers was sometimes  unavoidable.  For example, they said that once soldiers left their home unit  and the Fort Bragg and in-theater finance offices assumed pay  responsibilities, the USPFO informed soldiers and their spouses to contact  these active Army finance offices to discuss active duty payment problems.   USPFO officials acknowledged that in instances in which the active Army  finance office did not resolve soldiers’ pay problems, USPFO staff would  try to fix the problems.
According to several soldiers, the combined effect of recurring pay  problems and receiving poor payroll customer service during their active  duty tours adversely affects morale and may have a negative effect on the  soldiers’ willingness to continue serving with the Army National Guard.   Several soldiers told us that the numerous pay problems they encountered  would play a major role in their decisions whether to reenlist.

	Mobilization Pay Problems

As summarized in table 9, we identified a number of pay problems  associated with the unit’s mobilization to active duty.  These problems  resulted from failures by unit soldiers to provide necessary documentation  to initiate certain pays, and data entry errors or late entry of data needed to  start active duty pays by Army Guard USPFO military pay personnel and/or  by active Army military pay personnel at the unit’s mobilization station.
We identified 31 out of 65 soldiers from Virginia’s B Company who did not  receive certain types of pay at all, were not paid in a timely manner, or were  overpaid after being activated on January 2, 2002.  The types of pay for  which most problems occurred during mobilization were parachute jump  pay, foreign language proficiency pay, HALO pay, and basic pay.  As shown  in table 9, we identified 8 soldiers who were underpaid for jump pay, 10  soldiers who were underpaid for foreign language pay, and 10 soldiers who  were overpaid for HALO pay.
Prior to being mobilized, the soldiers in Virginia’s B Company attended a  soldier readiness program at the USPFO at Fort Pickett, Virginia.  Part of  this program was intended to ensure that soldiers had proper  administrative paperwork and financial documents necessary to start all  entitled active duty pays at mobilization.   Virginia USPFO personnel who  conducted the finance portion of B Company’s soldier readiness program  verified soldiers’ supporting financial documentation and updated, if  necessary, each soldier’s Master Military Pay Accounts (MMPA).
This verification process disclosed that many soldiers had unresolved pay  errors that had occurred as far back as 1996.  According to U.S. Army  Forces Command Regulation 500-3-3, these problems should have been  corrected during required annual soldier readiness reviews conducted at  the unit’s home station.  As part of our analysis of the unit’s pay, we  determined that some of these long-standing pay problems had been  resolved.  For example, over $22,500 was processed for 52 B Company  soldiers’ and included in soldiers’ pay distributions from October 2001 to  March 2003.  USPFO officials told us that they have been working with a  sergeant from Virginia’s B Company who performed a detailed analysis of  soldiers’ long-standing pay problems in addition to pay problems that  occurred subsequent to January 2002 for the majority of their mobilization.   This sergeant performed these pay-related tasks in addition to his mission- related duties as a professional engineer.
After leaving the unit’s home station, B Company traveled to Fort Bragg, its  active Army mobilization station.  Fort Bragg personnel conducted a  second soldier readiness program that was intended to identify and fix any  pay issues not resolved at the home station.  According to USPFO officials  and active Army finance office officials at Fort Bragg, problems with jump  pay and foreign language pay occurred at mobilization because the  necessary documentation to support jump pay eligibility or language  proficiency for a number of soldiers was not always provided to the USPFO  or the mobilization station.  For example, of the 8 soldiers in the unit who  were underpaid for jump pay, 4 did not receive jump pay until mid- February 2002 and 1 did not begin to receive jump pay until mid-March.  In  another instance, we identified 10 soldiers who were eligible to receive  foreign language proficiency pay in January 2002, but did not receive  payments for 1 or more months after they became eligible.
Further, nine soldiers in the unit were eligible for HALO pay in January  2002.  However, again, in part because of the lack of proper documentation  from the unit’s soldiers, but also because of pay input errors at the active  Army finance unit at Fort Bragg, pay problems occurred for seven of the  nine soldiers during January 2002, the initial month of their mobilization.   The seven soldiers eligible for HALO pay received both jump pay as well as  HALO pay during January 2002, which resulted in overpayments to these  soldiers.  These overpayments occurred because Fort Bragg, unaware that  the USPFO had previously processed HALO pay for these soldiers,  processed HALO pay a second time, based on supporting documentation  received from the unit.  Also, we found that two soldiers, who were not  eligible to receive HALO pay, received HALO pay for 3 months and another  soldier received HALO pay starting in January but did not become eligible  for this pay until mid-April 2002.  Documentation was not available to  explain these errors.

	Deployment Pay Problems

In May 2002, Virginia’s B Company left Fort Bragg and traveled to  Afghanistan to assist in missions against al Qaeda and Taliban forces.   While in Afghanistan, the soldiers encountered additional pay problems  related to hardship duty pay, special duty assignment pay, and, to a lesser  extent, hostile fire pay and basic pay.  Also, the soldiers experienced  problems in receiving the full amounts of their entitled HALO pay.  Table 10  summarizes the pay problems we identified for the unit while it was  deployed.
Once the soldiers arrive in-theater, an active Army finance office assigned  to the unit is responsible for initiating assignment and location-based pays  for the unit’s soldiers in DJMS-RC.  However, we found that the active Army  in-theater finance offices did not always know which units they were  responsible for servicing or their location.  The in- theater finance office for  Virginia’s B Company, located in Kuwait, did not start these pays as  required.  We were told that this occurred because finance personnel in  Kuwait did not know that B Company had arrived in Afghanistan.  Virginia’s  B Company soldiers, who were not regularly receiving their leave and  earnings statements while in Afghanistan, told us they became concerned  that they were not receiving pays they were entitled to while deployed  based on conversations with their spouses.
After attempts to initiate location-based pays at the battalion finance unit in  Afghanistan were unsuccessful because finance personnel at that location  were not familiar with DJMS-RC’s transaction processing requirements for  starting these types of pay, two soldiers were ordered to travel to Camp  Snoopy, Qatar, where another Army finance office was located.  Attempts  to start assignment and location-based pays for the unit’s soldiers at Camp  Snoopy were also unsuccessful.  One of the soldiers told us that they flew  to Kuwait because they were advised that the finance unit at that active  Army finance office was more knowledgeable about how to enter the  necessary transactions into DJMS-RC to pay the unit’s soldiers.  The soldier  told us he took an annotated battle roster listing the names of all Virginia’s  B Company soldiers deployed in and around Afghanistan at that time and  the dates they arrived in country with him as support for starting the unit’s  in theater-based pays.  Finally, at Kuwait the appropriate in-theater pays  were activated and the two soldiers returned to Afghanistan.  As shown in  figure 11, the entire trip required interim stops at eight locations because of  limited air transportation and took about a week.
Despite this costly, time-consuming, and risky procedure to start location- based pays for the unit, 63 of Virginia’s B Company soldiers, who became  eligible for hardship duty pay in May 2002, not receive their location-based  pay entitlements until July 2002.
Problems with special duty assignment pay also occurred during the unit’s  deployment.  We found that both underpayments and overpayments of this  type of pay were made as a result of confusion about who was responsible  for making the manual monthly transactions necessary for entitled soldiers  in the unit to receive these pays..  For example, 10 soldiers in B Company  did not receive at least 1 month of entitled special duty assignment pay.   Conversely, overpayments of this type of pay were made when B Company  left Afghanistan and returned to Fort Bragg to demobilize in October 2002,  and both the active Army finance office at Fort Bragg and the Virginia  USPFO entered special duty assignment pay transactions for the unit’s  eligible soldiers.  Fort Bragg processed October and November 2002  special duty assignment duty payments for 24 of the unit’s soldiers in  December 2002.  Virginia’s USPFO, unaware that Fort Bragg had made  these payments in December 2002, also paid all 24 eligible soldiers special  duty assignment pay for October and November 2002 several months later.   USPFO officials explained that their military pay office processed the  payments because B Company submitted the necessary documentation  certifying that the unit’s soldiers were entitled to receive back pay for  missed special assignment duty pays.  The officials told us that special duty  assignment pay was processed because, having received this certification  from the unit, they assumed that payments had not yet been made.
Virginia’s B Company soldiers also experienced problems with HALO pay  during deployment.  We identified 11 B Company soldiers eligible for HALO  pay who did not receive 1 or more months of this pay as of March 31, 2003.   We determined that these problems occurred because such pays require  manual monthly input, and the pay technicians inadvertently did not make  the required entries each month.  In addition, 2 of the unit’s soldiers did not  receive all hostile fire payments to which they were entitled.  One soldier  did not receive the first month of entitled hostile fire pay for May 2002, and  the other soldier received hostile fire pay for May 2002 but not for the  remaining months of his deployment.

	Pay Problems Associated with Demobilization and Release from Active Duty

Although some soldiers in B Company left Afghanistan during August and  September 2002, most of the unit returned to Fort Bragg in October 2002 to  begin the demobilization process.  As summarized in table 11, 57 soldiers  continued to receive pays to which they were no longer entitled because  they left Afghanistan, including either hostile fire pay, hardship duty pay, or  both.
According to DOD mobilization procedures, the finance office at the  servicing demobilization station is to conduct a finance out-processing.   The finance office is responsible for inputting transactions to stop certain  location-based pays, such as hardship duty pay and hostile fire pay.  In  addition, according to DOD’s Financial Management Regulation (FMR),  Volume 7A, chapters 10 and 17, location-based pays must be terminated  when the soldier leaves the hostile fire/combat zone.
Overpayments to B Company soldiers occurred during demobilization  because the in-theater finance office continued to make hostile fire and  hardship duty pays after soldiers left Afghanistan in October 2002, and the  Fort Bragg active Army finance office did not enter transactions into DJMS- RC to stop these payments as required.  We found that 55 of 64 soldiers  eligible for hostile fire pay were overpaid for at least 1 month beyond their  departure from Afghanistan.  Also, we found that 57 of 64 soldiers eligible  for hardship duty pay were overpaid at least part of 1 month.  A Fort Bragg  official explained that the Army finance office personnel at Fort Bragg  were not aware that these payments were still being made after the soldiers  had returned to the United States, but, subsequently determined that  hostile fire and hardship duty overpayments were occurring and took  action to terminate the payments.
Also, four members of Virginia’s B Company, who were injured while  deployed in Afghanistan, returned to Fort Bragg and requested medical  extensions to their active duty tours so they could continue to receive  active duty pay and medical benefits until they recovered.  One of the  soldiers told us, “People did not know who was responsible for what.  No  one knew who to contact or what paperwork was needed ….”  To support  themselves and their families, these four soldiers needed the active duty  military pay they were entitled to receive while obtaining medical  treatment and recovering from their injuries.  However, after risking their  lives for their country, all four have had gaps in receiving active duty pay  while they remained under a physician’s care after their demobilization  date and have experienced financial difficulties.  In addition, when active  duty pay was stopped, the soldiers’ medical benefits were discontinued.  As  discussed earlier in this report, these pay-related problems for wounded  soldiers caused significant hardship for them and their families.

C Company, 2nd Battalion, 19th Special Forces Group, West Virginia

On December 5, 2001, West Virginia’s 19th Special Forces Group, 2nd  Battalion, C Company, was called to active duty in support of Operation  Enduring Freedom for a 1-year tour.   The unit was mobilized at Fort Knox  and subsequently deployed in Afghanistan, Uzbekistan, and surrounding  areas to search for possible Taliban and al Qaeda terrorists.  The unit  returned to Fort Campbell for demobilization and was released from active  duty on December 4, 2002.  A timeline of the unit’s actions associated with  its mobilization under Operation Enduring Freedom is summarized in  figure 12.
As summarized in table 12, the majority of soldiers from C Company  experienced some sort of pay problem during one or more of the three  phases of their active duty mobilization.   Overall, 86 of the 94 soldiers with  the company experienced at least one pay problem associated with its  mobilization.  Specifically, we identified (1) 36 soldiers who were either  overpaid, did not receive certain pay and allowance entitlements at all, or  did not receive pay within 30 days of their initial mobilization entitlement,  (2) 84 soldiers who were either overpaid, did not receive, or did not receive  within 30 days, the hostile fire pay or other high-risk location pays they  were entitled to receive based on their deployment in Uzbekistan and  Afghanistan, and (3) 66 soldiers who did not receive, or did not receive  within 30 days, their special duty assignment pay during their  demobilization.
In total, we identified estimated overpayments of $31,000, underpayments  of $9,000, and late payments of $61,000 associated with the identified pay  problems.  We did not identify any collections related to overpayments for  this unit.

	Mobilization Pay Problems

As summarized in table 13, several soldiers from C Company did not  receive the correct pay or allowance when called to active duty.  We found  that some soldiers received payments over 5 months late and other soldiers  had been overpaid.  Seven soldiers did not receive their $225 per month  HALO pay until over a month after mobilization, and 18 other soldiers  received combat diver pay and HALO pay to which they were not entitled.
Prior to being mobilized, the soldiers in C Company attended a soldier  readiness program at their unit armory.  This program was intended to  ensure that all soldiers had proper administrative paperwork and financial  documents and were physically fit for the ensuing mobilization.   West  Virginia USPFO personnel who conducted the finance portion of C  Company’s soldier readiness program were required to verify soldiers’  supporting financial documentation, and update, if necessary, soldiers’ pay  records in DJMS-RC.  Soldiers not submitting the correct paperwork at the  time of the Soldier Readiness Program caused some payments to be late.   For example, according to the USPFO, one soldier did not submit the  proper paperwork for his family separation allowance. The delay in  submission caused his first payment to be over 3 months late.
Another problem with the unit’s mobilization related to 17 soldiers who had  significant problems with their HALO pay.  According to USPFO personnel,  the unit commander for C Company did not provide the USPFO a list of the  unit members who were eligible to receive HALO pay.  Therefore, the  USPFO paid all the unit members who were parachute qualified the regular  parachute pay.  Once the USPFO received a list of the unit’s 17 HALO- qualified soldiers, pay personnel attempted to recoup the regular jump pay  and pay the HALO team the increased HALO pay amount.  USPFO  personnel told us they did not know how to initiate a payment for the  difference between regular jump and HALO pay.  Consequently, they  entered transactions to recoup the entire amount of jump pay and then  initiated a separate transaction to pay the correct amount of HALO pay.
According to the DOD FMR, volume 7A, chapter 24, soldiers who are  eligible to receive regular parachute pay and HALO pay are paid the higher  of the two amounts, but not both.  In this case, the 17 members of C  Company’s HALO team should have received a $225 per month payment  from the beginning of their mobilization.  Pay records indicate that this  correction initiated by the USPFO occurred about 2 months after the unit  mobilized.  When the USPFO personnel attempted to collect the soldiers’  regular parachute pay, they inadvertently collected a large amount of the  soldiers’ basic active duty pay for the first month of their mobilization.   Personnel at the USPFO stated that the error caused debts on soldiers’  accounts but was corrected immediately after a pay supervisor at the  USPFO detected the error in February.  Even after the soldiers’ pay was  corrected, USPFO personnel did not stop the regular parachute pay for the  HALO team members, but instead let it continue, then collected the $150  per month parachute pay manually, and then paid the correct $225 per  month HALO pay.  This error-prone, labor- intensive manual collection and  subsequent payment method used by the USPFO personnel to pay C  Company’s HALO team the higher HALO rate of pay was not consistently  applied each month and resulted in 7 soldiers being overpaid when their  regular parachute pay was not collected.
In addition to the 7 soldiers who were actually on the HALO team, 10 other  soldiers were on the initial list given to the USPFO but were actually not on  the HALO team.  The unit commander for C Company provided a more  accurate list to the USPFO some time after the first list, and only members  on the more accurate list continued to receive HALO pay.  However,  USPFO pay personnel did not attempt to collect the HALO pay from unit  members on the first list who had incorrectly received HALO pay.  As a  result of this complex collection and payment process, the unit’s soldiers  were confused about whether they were receiving all their entitled active  duty pays while mobilized.
After leaving the unit’s home station, C Company traveled to Fort Knox, its  active Army mobilization station.  As required by Army guidance, Fort  Knox personnel conducted a second soldier readiness program to identify  and fix unresolved pay issues associated with the unit’s mobilization.   Based on our findings that the pay problems continued after this review, it  does not appear that the active Army finance office at Fort Knox carried  out its responsibility to review and validate all of C Company soldiers’  active duty pays and allowance support records.  Problems with HALO and  family separation pay were not resolved for several months after the  mobilization.  As a result, the soldiers’ pay problems persisted into their  deployment overseas.

	Deployment Pay Problems

As summarized in table 14, we identified a number of pay problems  associated with three different types of active duty pays related to the unit’s  deployment.
After going through initial in-processing at Fort Knox, C Company soldiers  traveled to Fort Campbell where they prepared to deploy overseas.   Starting in December 2001, members of C Company traveled to Uzbekistan  and Afghanistan to perform special forces missions.  During their  deployment overseas, C Company soldiers consistently experienced  problems related to specific location-based payments such as hostile fire  pay and hardship duty pay.  In 78 cases, the payments were not started  within 30 days from when the soldiers were entitled to the payments.  In 22  other cases, we determined that soldiers had not received all location- based pays as of March 31, 2003.  In 60 cases, the soldiers were overpaid or  payments were not stopped when they left the combat zones.  Due to the  lack of supporting documents at the state, unit, and battalion-levels, dates  for when each soldier entered and left combat zones were not always  available.  Consequently, there may have been other deployment-related  pay problems for C Company that we were not able to identify.
According to DFAS policy, when soldiers from C Company arrived in  Uzbekistan the in-theater finance office in Uzbekistan was responsible for  initiating location-based payments for the unit.  Unit personnel stated that  the staff in the finance office in Uzbekistan were not adequately trained in  how to input pays into DJMS-RC.  Initially, we were told the Uzbekistan  finance office incorrectly believed it was the West Virginia USPFO’s  responsibility to start location-based pays for the deployed soldiers from C  Company.  The active Army finance office in Uzbekistan instructed the unit  to contact the West Virginia USPFO to start location-based pays.  However,  DFAS policy clearly states that it is the active Army in-theater finance  office’s responsibility to start and maintain monthly location-based  payments.
After attempts by the unit administrator and the Uzbekistan finance office  failed to initiate the payments, a sergeant in C Company was ordered to  travel to Camp Doha, Kuwait, to have the unit’s location-based pays started.   The soldier stated that he traveled to Camp Doha because he was told that  the finance unit at that active Army finance location was more  knowledgeable in how to enter transactions into DJMS-RC to initiate  location-based pays for the unit’s soldiers.  The soldier took with him all the  necessary paperwork to have the pays started for all the companies under  the battalion, including C Company.  On the return flight from the  sergeant’s mission in Kuwait, his plane encountered enemy fire and was  forced to return to a safe airport until the next day.  The failure by active  Army personnel at the finance office in Uzbekistan to enter the  transactions necessary to start location-based pays for the unit delayed  payments to some soldiers for up to 9 months and put one soldier in harm’s  way.
Per DOD FMR, volume 7A, chapter 10, soldiers who perform duty in hostile  fire zones are entitled to hostile fire pay as soon as they enter the zone.   However, we found that 45 soldiers in C Company did not have their hostile  fire pay started until over 30 days after they were entitled to receive it.   Some of C Company’s soldiers received retroactive payments over 2  months after they should have received their pay.  In addition, as of March  31, 2003, we determined that 18 soldiers from the unit were not yet paid for  1 or more months that they were in the hostile fire zone.  We also identified  40 soldiers who received hostile fire pay after they had left the country and  were no longer entitled to receive such pays.  These overpayments  occurred primarily because hostile fire pay is an automatic recurring  payment based on the start and stop date for the soldier’s mobilization  entered into DJMS-RC.  However, in this case, the active Army finance  office in Uzbekistan did not amend the stop dates for automated active  duty pays in DJMS-RC to reflect that C Company left the designated area  before the stop date entered into DJMS-RC.  The active Army finance  office’s failure to follow prescribed procedures resulted in overpayment of  this pay to 40 soldiers.
Per DOD FMR, volume 7A, chapter 17, soldiers who perform duties in  designated areas for over 30 days are entitled to the hardship duty pay  incentive.   The FMR provides for two mutually exclusive types of hardship  duty pay for identified locations—one according to specified “designated  areas” and the other for specified “certain places.”  Effective December 31,  2001, the regulation no longer permitted soldiers newly assigned to  locations specified as “certain places” to begin receiving hardship duty pay.
However, the regulation specified Afghanistan and Uzbekistan as  designated areas and provided for paying $100 a month to each soldier  serving there.
While deployed to Afghanistan and Uzbekistan, 29 soldiers in C Company  were mistakenly provided both types of hardship duty pay. The local  finance office in Uzbekistan correctly entered transactions to start C  Company’s hardship duty pay for designated areas into the DJMS-RC pay  system.  Due to limitations in DJMS-RC, the local finance office was  required to manually enter the designated area payments for each soldier  every month the unit was in a designated area.  However, DFAS  documentation shows that finance personnel at Fort Bragg incorrectly  initiated a recurring certain places hardship duty payment for soldiers in C  Company.  For some soldiers, payments continued until May 31, 2002 and  for others the payments continued until the end of their tour of active duty  on December 4, 2002.  These erroneous certain places hardship duty pays  resulted in overpayments.
In addition, because DJMS-RC processing capability limitations required  the designated areas payment to be manually entered every month the unit  was in the designated area, the in-theater finance office in Uzbekistan  failed to consistently enter the monthly designated area payments for all  entitled soldiers.  Throughout the time C Company was in Uzbekistan and  Afghanistan, we identified a total of 5 soldiers who missed one or more  monthly payments of entitled hardship duty designated area pay.  Other  soldiers received entitled payments over 9 months late.  Still others were  paid more than once for the same month or paid after leaving the  designated area, resulting in overpayments to 12 soldiers.  The mix of  erroneous certain places hardship duty payments along with sporadic  payments of the correct type of designated area hardship duty pay caused  confusion for the soldiers of C Company and their families regarding what  types of pay they were entitled to receive and whether they received all  active duty entitlements.

	Demobilization and Release from Active Duty Pay Problems

C Company returned to Fort Campbell during the fall of 2002 to begin the  demobilization process.  By October 2002, all of the unit had returned from  overseas and was demobilized on December 4, 2002.  As shown in table 15,  66 of C Company’s 94 soldiers experienced pay problems associated with  their demobilization from active duty.
In October 2002, eligible soldiers in the unit were entitled to a special duty  assignment pay increase from $110 per month to $220 per month.  To  initiate this higher pay rate, the West Virginia Army National Guard military  personnel office was required to cut new special duty assignment pay  orders for all eligible C Company soldiers.  USPFO officials stated that they  could not pay the increased amount until they received a copy of the new  orders.  The USPFO personnel did not continue to pay the $110 a month to  the soldiers because they did not want to have to recoup the old amount  and then pay the correct amount when orders were received.  However, the  orders for the soldiers were not received by the USPFO for several months,  which created a delay in the payment of the soldiers’ special duty  assignment pay.  Supporting documents showed that a delay in the  production of the orders by the West Virginia Army National Guard military  personnel office caused the late payments.  For C Company, 63 soldiers  received their last 3 months of special duty assignment pay over 30 days  late.  Another 3 soldiers did not receive their last 3 months of special duty  assignment pay because the USPFO inadvertently overlooked the manual  transaction entries required to process special duty assignment pay for  those soldiers.

Mississippi 114th Military Police Company

On December 27, 2001, the Mississippi Army National Guard’s 114th  Military Police Company was called to active duty in support of Operation  Noble Eagle for a 1-year tour—through January 5, 2003.   The unit  mobilized in Clinton, Mississippi, and departed for Fort Campbell,  Kentucky, on January 6, 2002.  The unit in-processed at Fort Campbell and  for the next 5 months performed military police duties at Fort Campbell  until early June.   On June 10, 2002, the 114th Military Police Company  deployed to Guantanamo Bay, Cuba, to perform base security and guard  duties for Taliban and al Qaeda prisoners.  After guarding detainees in Cuba  for approximately 6 months, the unit returned to Fort Campbell in late  November 2002.  At Fort Campbell the unit out-processed and returned to  Clinton, Mississippi, and was released from active duty on January 5, 2003.   A time line of actions associated with the unit’s active duty mobilization is  shown in figure 13.
As summarized in table 16, at every stage of the unit’s 1-year tour of active  duty, soldiers experienced various pay problems.  Of the 119 soldiers of the  Mississippi Army National Guard’s 114th Military Police Company, 105  experienced at least one pay problem associated with mobilization in  support of Operation Noble Eagle.  Specifically, we found that (1) 21  soldiers experienced underpayments, overpayments, or late payments, or a  combination of these, during their initial mobilization, including some  soldiers who did not receive payments for up to 7 months after their  mobilization dates, and others who still have not received certain  payments, (2) 93 soldiers experienced underpayments, overpayments, late  payments, or some combination, during their tour of active duty at Fort  Campbell and in Cuba, including in-theater incentives such as hardship  duty pay, and (3) 90 soldiers experienced underpayments, overpayments,  late payments, or a combination of these, during their demobilization at  Fort Campbell, including problems related to the continuation of in-theater  incentives and overpayment of active duty pay after demobilization.
In total, we identified estimated overpayments of $50,000, underpayments  of $6,000, and late payments of $15,000 associated with the pay problems  we found.  Of the estimated  $50,000 in overpayments, we identified about  $13,000 that was subsequently collected from the unit’s soldiers.

	Mobilization Pay Problems

As summarized in table 17, we found that 21 soldiers from the 114th Military  Police Company experienced underpayments, overpayments, late  payments, or some combination related to pay and allowance entitlements  when called to active duty.  For example, several soldiers did not receive  their entitled $100 per month family separation allowance until 7 months  after mobilization, and several other soldiers did not receive the correct  type of basic allowance for housing as specified in the DOD FMR, Volume  7A, chapter 26.
Prior to being mobilized, the soldiers in the 114th Military Police Company  attended a soldier readiness program at their unit armory. The purpose of  this review was to ensure that all soldiers had proper administrative  paperwork and financial documents and were physically fit for the ensuing  mobilization.   Mississippi USPFO personnel, who conducted the finance  portion of the 114th Military Police unit’s soldier readiness program, were  required to verify soldiers’ supporting financial documentation, and update,  if necessary, soldiers’ MMPAs.  Not submitting the complete and current  paperwork at the time of the soldier readiness program contributed to  some of the late payments we identified.  For example, some soldiers did  not receive their family separation allowance because they did not provide  documentation supporting custody arrangements.  However, we also found  that confusion at the USPFO over the eligibility of single parents  contributed to these late pays.  It was later in the unit’s active duty tour that  finance officers initiated action for 11 of the 114th Military Police unit’s  soldiers to receive retroactive payments, some for as much as 7-months of  back pay.  In another case, a former Special Forces soldier improperly  received jump pay even though his assignment to this military police unit  did not require that special skill.
Five soldiers improperly received active duty pay and allowances even  though they did not mobilize with the unit.  Because these five soldiers  were not deployable for a variety of reasons, they were transferred to  another unit that was not subject to the current mobilization.  However, the  delay in entering the transfer and stopping pay caused each of these  soldiers to receive active duty pay for 10 days.  Several other soldiers  received promotions at the time of their mobilization, but state military pay  personnel at the USPFO did not enter transactions for the promotions until  several months later, resulting in late promotion pay to the affected  soldiers.  Delays by the unit in submitting the promotion paperwork or by  the state personnel office in entering the promotion paperwork into the  personnel system caused these problems.  However, supporting documents  were not available to enable us to determine the specific cause of the  delays.
After leaving the unit’s home station, the 114th Military Police Company  traveled to Fort Campbell, its active Army mobilization station.  As required  by Army guidance, Fort Campbell personnel conducted a second soldier  readiness program intended, in part, to verify the accuracy of soldiers’ pay  records.  However, instead of conducting a thorough review of each  soldier’s pay record, Fort Campbell finance personnel performed only a  perfunctory review by asking the soldiers if they were experiencing pay  problems.  At this point, because the soldiers had only recently mobilized  and had not received their first paychecks, they were unaware of pay  problems.  Failure to follow requirements for finance verification at Fort  Campbell of each soldier’s pay account caused pay problems to persist past  the mobilization stage.   In addition, we were unable to determine specific  causes for certain pay problems associated with the unit’s mobilization  because the unit remobilized in February 2003, and unit administrative  personnel did not retain payroll source documents relating to the prior  mobilization.

	Deployment Pay Problems

As summarized in table 18, we identified a number of pay problems  associated with four types of active duty pays and allowances associated  with the unit’s deployment while on active duty.
While at Fort Campbell, eight soldiers experienced problems resulting from  delays in entering changes in the family separation allowance, basic  allowance for housing, and active duty pay increases from promotions.  For  example, one soldier was promoted to the rank of Private First Class at the  end of May, but the pay system did not reflect the promotion until October.   Although the soldier eventually received retroactive promotion pay, the  delay caused the soldier to be paid at her old rank for 5 months.  According  to DFAS guidance, when a change occurs in a soldier’s pay, the on-site  Army finance office should input the change.  In cases where personnel  changes occurred that affected pay, either the soldiers failed to submit  documents or personnel at Fort Campbell failed to input the changes.  Due  to the lack of documentation, we could not determine the origin of the  delays.
During the unit’s deployment to Guantanamo Bay, Cuba, the soldiers  encountered additional pay problems related to hardship duty pay, a  location-based payment for soldiers located at designated hardship duty  locations.  Some soldiers received extra hardship duty payments, while  others were only paid sporadically.  In total, only 9 of the 100 soldiers who  deployed to Guantanamo Bay with the 114th Military Police Company  received the correctly computed hardship duty pay.
Per DOD FMR, Volume 7A, chapter 17, soldiers who perform duties in  designated areas for over 30 days are entitled to the hardship duty pay  incentive.   The FMR provides for two mutually exclusive types of hardship  duty pay for identified locations; one according to specified “designated  areas” and the other for specified “certain places.” Effective December  2001, the regulation no longer permitted soldiers newly assigned to  locations specified as certain places to begin receiving hardship duty pay.    However, the regulation specified Guantanamo Bay, Cuba, as a designated  area and provided for paying $50 a month to each soldier serving there.
Most of the 114th Military Police unit’s soldiers were mistakenly provided  both types of hardship duty pay while deployed to Cuba.  Upon arrival in  Cuba, the local Guantanamo Bay finance office correctly entered  transactions to start hardship duty pay for designated areas for the 114th  Military Police unit’s soldiers into DJMS-RC.  However, unknown to  Guantanamo finance personnel, Fort Campbell finance personnel, upon the  unit’s departure to Cuba, incorrectly initiated recurring certain places  hardship duty payments for the soldiers of the 114th Military Police unit.   These payments of both types of hardship duty pay resulted in  overpayments to 88 enlisted soldiers of the 114th Military Police Company  during the time the soldiers were stationed in Cuba.
In addition, as a result of personnel turnover and heavy workload in the  active Army’s Guantanamo Bay finance office and limitations in DJMS-RC,  the Guantanamo Bay finance office did not make all the required monthly  manual transaction entries required to pay hardship duty pays to the 114th  Military Police Company’s soldiers.  As a result, several soldiers in the unit  did not receive one or more monthly hardship duty payments.  Limitations  in DJMS-RC required the local finance office to manually enter the  designated area payments for each soldier on a monthly basis.  For 11  soldiers, the finance office inadvertently overlooked entering one or more  monthly hardship duty payments.  The combination of erroneous certain  places payments, along with sporadic payments of hardship duty  designated area pays caused confusion for the soldiers who were  performing a stressful mission in Cuba regarding whether they were  receiving all their active duty pay entitlements.

	Pay Problems Associated with Demobilization and Release from Active Duty

The 114th Military Police Company returned to Fort Campbell on November  23, 2002, to begin the demobilization process.  During demobilization,  soldiers continued to experience pay problems.  As summarized in table 19,  overpayment problems consisted of improper continuation of hardship  duty pay following the unit’s return from Cuba and failure to stop active  duty pay and allowances to soldiers who were discharged or returned from  active duty early.
According to the DOD FMR, Volume 7A, chapter 17, soldiers are entitled to  receive hardship duty pay only while they are stationed in a hardship duty  location.  While the active Army’s Guantanamo Bay finance office stopped  monthly designated area payments upon the unit’s departure from Cuba,  the Fort Campbell finance office did not discontinue the incorrect certain  places payments that its finance office had initiated months earlier.    Consequently, 85 of 88 soldiers of the 114th Military Police unit’s soldiers  continued receiving the incorrect certain places payments through their  last day of active duty.
In addition, five soldiers continued to receive active duty pay and  allowances after being discharged or returned from active duty.  Instead of  demobilizing on schedule with their unit, these five soldiers demobilized  individually earlier due to various reasons.  According to DFAS guidance,  Fort Campbell, the designated demobilization station for the 114th Military  Police Company, was responsible for stopping active duty pay for the unit’s  demobilizing soldiers.  However, when these individual soldiers were  released from active duty, Fort Campbell processed discharge orders but  Fort Campbell’s finance office failed to stop their pay.  Further, in at least  one case in which documentation was available, state USPFO military pay  personnel did not immediately detect the overpayments in monthly pay  system mismatch reports.  For these five soldiers, overpayments  continued for up to 3 months.
One of these soldiers was discharged early because of drug-related  charges.  However, his pay continued for 3 months past his discharge date.   By the time the USPFO stopped the active duty pay, the former soldier had  received overpayments of about $9,400.  Although the state USPFO military  pay personnel stopped the active duty pay in September 2002, no attempt  to collect the overpayment was made until we identified the problem.  In  July 2003, state military pay personnel initiated collection for the  overpayment.
Another soldier was discharged on July 8, 2002, for family hardship  reasons, but his active duty pay was not stopped until August 15, resulting  in an overpayment.  Another 114th Military Police soldier was returned from  active duty on September 11, 2002, for family hardship reasons, but his  active duty pay was not stopped until November 30, resulting in an  overpayment of about $8,600.  Another soldier, facing disciplinary  proceedings related to a domestic violence incident, agreed to an early  discharge on May 22, 2002.  However, the soldier’s active duty pay was not  stopped until the unit administrative officer, while deployed in Cuba,  reviewed the unit commander’s finance report and discovered the soldier  still on company pay records and reported the error.   Following his  discharge, this soldier continued to receive active duty pay until August 31,  resulting in an overpayment.

Maryland 200th Military Police Company

The 200th Military Police Company was called to active duty in support of  Operation Noble Eagle on October 1, 2001, for a period not to exceed 365  days.   The unit, including 90 soldiers who received orders to mobilize with  the 200th Military Police Company, reported to its home station, Salisbury,  Maryland, on October 1, 2001, and then proceeded to Camp Fretterd  located in Reisterstown, Maryland, for the soldier readiness program (SRP)  in- processing.   On October 13, 2001, they arrived at their designated  mobilization station at Fort Stewart, Georgia, where they remained for the  next 2 weeks undergoing additional in-processing.  The unit performed  general military police guard duties at Fort Stewart until December 15,  2001, when 87 of the soldiers in the unit were deployed to guard the  Pentagon. The company arrived at Ft. Eustis, Virginia, in late August 2002  and was released from active duty on September 30, 2002.  In addition, 3 of  the 90 soldiers who received orders from the 200th Military Police Company  were deployed in January 2002 to Guantanamo Bay, Cuba, to perform base  security and guard duties with Maryland’s 115th Military Police Company.   These soldiers demobilized at Fort Stewart, Georgia, where they were  released from active duty on July 10, 2002.  A time line of key actions  associated with the unit’s mobilization under Operation Noble Eagle is  shown in figure 14.
As summarized in table 20, the majority of soldiers from the company  experienced some sort of pay problem during one or more phases of the  three phases of their active duty mobilization.   Overall, 83 of the company’s  90 soldiers experienced at least one pay problem associated with their  mobilization in support of Operation Noble Eagle.  Pay problems included  overpayments, underpayments, and late payments of entitlements, such as  basic pay, basic allowance for housing, basic allowance for subsistence,  family separation allowance and hardship duty pay associated with their  initial mobilization, deployment to Fort Stewart, the Pentagon, and Cuba;  and demobilization from active duty status.
In total, we identified estimated overpayments of $74,000, underpayments  of $11,000, and late payments of $10,000, associated with the pay problems  we identified.   Of the estimated $74,000 in identified overpayments, we  identified about $32,000 that was subsequently collected from the unit’s  soldiers.   Specifically, we determined that   75 soldiers were overpaid, underpaid, and/or paid late during the period  of mobilization, including a soldier who did not receive correct  payments for up to 7 months after the mobilization date;   64 soldiers experienced pay problems during their tour of active duty  related to the proper payment of basic pay, basic allowance for  subsistence, basic allowance for housing, family separation allowance,  and location-based pays such as hardship duty pay; and   3 soldiers experienced pay problems during their demobilization from  Fort Stewart related to continuation of active duty pay entitlements  after they were released early from active duty.
We identified a number of causes associated with these pay problems,  including delays in submitting documents, incorrect data entry, and limited  personnel to process the mass mobilizations.  Maryland’s USPFO officials  told us they had not experienced a large-scale mobilization to active duty in  more than 10 years.

	Mobilization Pay Problems

As summarized in table 21, we identified a number of pay problems  associated with eight different types of active duty pays and allowances  associated with the unit’s mobilization to active duty.  Seventy-five of 90  soldiers from the 200thth Military Police Company did not receive the  correct or timely entitlements related to basic pay, basic allowance for  housing, basic allowance for subsistence, or family separation allowance  when called to active duty.
Thirteen soldiers received overpayments because they continued to receive  pay after they were released early from active duty.  These soldiers  mobilized on October 1, 2001, and then received amended orders to be  released from active duty around October 13, 2001.  However, many  continued to receive basic pay, basic allowance for subsistence, basic  allowance for housing, and family separation allowance payments through  the end of November 2001.  The unit administrator stated that many of  these soldiers received amended orders after their initial mobilization  when it was determined that they were not deployable for a variety of  reasons, such as health or family problems.  The overpayments occurred  because the Maryland Army Guard command was not informed by either  unit personnel or the active component that individuals (1) did not deploy  or (2) were released from active duty early. The Maryland Army Guard  command initiated amendment orders to stop the active duty pays when it  became aware of the problem; however, the orders were not generated in  time for the USPFO to stop active duty pays in the system.  Specifically, in  order for pay to be stopped by October 13, 2001, the USPFO must have  received and processed the amended orders by October 8, 2001.  However,  the Maryland Army Guard command did not generate many of the amended  orders until November 14, 2001, at which time they would have been sent to  the unit and then forwarded to the USPFO too late to meet the pay cutoff.
An additional soldier was issued an amended order to release him from  active duty on October 13, 2001.  Upon our review of his pay account, we  determined that he continued to receive active duty pay and allowances for  an entire year.  We spoke with the unit administrator about this soldier and  determined that he mobilized with the unit and was deployed for the entire  year that he was paid.  The unit administrator and Maryland Army Guard  command, along with the USPFO pay officials, were not sure why the  amendment order was never processed.  They believe that the amendment  fell through the cracks due to the general confusion and the limited  personnel processing the mass mobilizations after September 11, 2001.    Based on our inquiries, the Maryland Army Guard command generated an  amendment on August 21, 2003, to reinstate the original order to avoid  future questions regarding the soldier’s tour of duty.
Further, 42 soldiers from the unit were underpaid their entitled family  separation allowance when they mobilized.  Soldiers are entitled to receive  a family separation allowance after they have been deployed away from  home for more than 30 days.  We found that these underpayments occurred  as a result of Maryland USPFO military pay officials’ errors in calculating  the start and stop dates for this allowance.
Several soldiers did not receive the correct type of basic allowance for  housing after being mobilized as specified in the DOD FMR, Volume 7A,  chapter 26.   We were unable to determine specific causes and amounts of  all the unit’s problems associated with the basic allowance for housing  because the unit had remobilized in July 2003 and some of the historical  records relating to housing entitlements applicable to the prior  mobilization could not be located.  Furthermore, the original unit  administrator had retired, leaving limited records of the prior mobilization  for the current unit administrator.  Based on our inquiries, we determined  that some soldiers were underpaid their housing allowance because the  Maryland USPFO military pay officials entered the incorrect date for the  tour and therefore shortened the unit’s soldiers’ allowance by 1 day.  Other  soldiers did not receive the correct amount for this allowance as a result of  different interpretations of how to enter “dependent” information provided  on housing allowance application forms (Form 5960).  According to  personnel officials, married soldiers are required to write in their spouses’  names as dependents on Form 5960 in order to receive the higher housing  allowance amount.  However, guidance did not clearly specify that simply  checking the box indicating that they are married is not sufficient support  to receive the higher housing allowance (with dependents) rate.  As a  result, several soldiers’ dependent information was not loaded into the  personnel system correctly, and they were paid a single rate housing  allowance instead of the higher married rate allowance.
Other soldiers did not receive the correct housing allowance because they  did not turn in complete forms and documentation to initiate the correct  allowance rate or were late in turning in documents.  For example, one  soldier, who appeared to have submitted his lease agreement 6 days after  being called to active duty, did not receive the correct housing allowance  amount for the first 2 months of active duty.  During his entire deployment,  the soldier attempted to get various unit and military pay officials to take  action to initiate back pay for these housing allowance underpayments,  including forwarding copies of the lease agreement as proof for payment  on three different occasions.  As of March 30, 2003, the soldier had not  received the correct housing allowance for October and November 2001.   Another soldier did not receive the correct amount of housing allowance  after his mobilization and complained to the unit administrator.   Seven  months after his initial mobilization to active duty, finance officials at the  active duty station in Fort Belvoir, Virginia, who were attempting to correct  the soldier’s housing allowance instead inadvertently entered a transaction  to collect the entire amount of the housing allowance previously paid to the  soldier.  Finance officials at Fort Belvoir subsequently entered a  transaction to reverse the error and pay the soldier a “catch-up” housing  allowance payment.

	Deployment Pay Problems

As summarized in table 22, we identified a number of pay problems  associated with five different types of active duty pays and allowances  associated with the unit’s deployment.
Sixty-two soldiers from the unit were overpaid their entitled subsistence  allowance by active Army finance personnel while stationed at the  Pentagon during the period of December 15, 2001, through December 31,  2001.  Prior to this period, the soldiers were stationed at Fort Stewart and  were not provided lodging or mess and properly received the full  subsistence allowance.  When the unit was redeployed to the Pentagon,  mess facilities became available.  However, active Army finance personnel  did not reduce the unit’s subsistence allowance rate to reflect the available  mess facilities.  According to DOD FMR, Volume 7A, chapter 25, enlisted  soldiers are not entitled to the full subsistence allowance when mess  facilities are provided.
In January 2002, three soldiers who received mobilization orders from the  200th MP Company left Fort Stewart and traveled with the 115th Military  Police Company to Guantanamo Bay, Cuba, to assist with base security and  guard duties.  While in Cuba, the soldiers were either underpaid, or were  late in receiving their entitled hardship duty pays.  In accordance with DOD  FMR Volume 7A, chapter 17, soldiers who perform duties in “designated  areas” for over 30 days are entitled to hardship duty pay.   The FMR  specifies Guantanamo Bay, Cuba, as a designated area and provides  payment of $50 a month to soldiers serving there.  While deployed to Cuba,  the three soldiers were mistakenly paid the old type of hardship duty pay.   Since hardship duty pay is not an automated pay, the active Army finance  office at Guantanamo Bay was required to manually enter the “designated  areas” payment each month for each soldier.  While they were in Cuba, the  three soldiers did not receive all their entitled hardship duty pays.   Furthermore, the hardship duty pays they did receive were more than 30  days late.

	Demobilization and Release from Active Duty Pay Problems

The 200th Military Police Company returned to Fort Eustis around the end  of August 2002 to begin the demobilization process.  We did not identify any  pay issues associated with the unit’s soldiers who were released from  active duty on September 30, 2002 (the original date for the unit’s  demobilization, designated on the mobilization orders).  However, as  shown in table 23, we did identify three soldiers who continued to receive  active duty pay after their early release from active duty.
Specifically, the three soldiers from the unit returned from Cuba,  demobilized at Fort Stewart, and were released from active duty on July 10,  2002, while their original orders showed a September 30, 2002, release date.   They continued to receive active duty pay and allowances through July 15,  2002.  Fort Stewart did not provide the amended orders with the earlier  release date to the Maryland USPFO office in time to stop the pay.

California 49th Military Police Headquarters and Headquarters Detachment

On October 2, 2001, California’s 49th Military Police Headquarters and  Headquarters Detachment (HHD) was mobilized to active duty for a period  not to exceed 24 months.  The 49 th MP HHD mobilized at its home station,  Pittsburg, California, and then proceeded to its designated mobilization  station, Fort Lewis, Washington, on October 12, 2001.    The unit performed  its active duty mission at Fort Lewis, where it provided base security as  part of Operation Noble Eagle.  The unit was demobilized from active duty  at Fort Lewis on July 28, 2002.  A time line of the unit’s actions with respect  to its mobilization under Operation Noble Eagle is shown in figure 15.
Almost all soldiers from the 49th Military Police Company experienced  some sort of pay problem during one or more phases of the three phases of  the active duty mobilization.  Overall, 50 of the 51 soldiers with the unit had  at least one pay problem associated with their mobilization to active duty in  support of Operation Noble Eagle.  These pay problems included not  receiving pays and allowances at all (underpayments), receiving some pays  and allowances over 30 days after entitlement (late payments), and the  overpayment of allowances.  Specifically, as summarized in table 24, we  found that (1) 48 soldiers did not receive certain pay and allowances within  30 days of their initial mobilization entitlement and (2) 41 soldiers did not  receive, or did not receive within 30 days, the pay and allowances they  were entitled to receive during their deployment.
In total, we identified estimated overpayments of $17,000, underpayments  of $1,300, and late payments of $67,000 associated with the pay problems  we found.  In addition, of the $17,000 in overpayments, we found that less  than $100 was subsequently collected from the soldiers.
We determined a number of causes for these pay problems.  First, we found  a lack of sufficient numbers of knowledgeable staff.  In addition, after-the- fact detective controls were not in place, including a reconciliation of pay  and personnel records and the reconciliation of pay records with the unit  commander’s records of personnel actually onboard.  Currently, as a matter  of practice, pay and personnel representatives from the USPFO conduct a  manual reconciliation between the pay and personnel system records  approximately every 2 months.  The purpose of the reconciliation is to  ensure that for common data elements, the pay and personnel systems  contain the same data.  A USPFO official told us that while it is the  USPFO’s goal to carry out such reconciliations each month, it currently  does not have the resources required to do so.

	Mobilization Pay Problems

As summarized in table 25, we identified a number of pay problems  associated with the unit’s mobilization to active duty.   Failures to enter  transactions or late entry of transactions needed to start active duty pays  by Army Guard USPFO military pay personnel and by active Army military  pay personnel at the unit’s mobilization station were the initial cause of the  pay problems.  We also found that the underlying cause of the pay problems  was a lack of sufficient numbers of knowledgeable personnel at the  California USPFO and the Fort Lewis Finance Office.  In addition,  according to Army Guard and active Army officials, neither organization  was prepared for the sheer volume of pay transactions associated with  mobilizing soldiers to active duty.
In total, 48 out of 51 soldiers of the 49th Military Police Company did not  receive certain pay and allowances and incentive pays at all, or did not  receive them within 30 days after being mobilized on October 2, 2001.  The  types of pay entitlements either not paid at all or paid late associated with  the unit’s initial mobilization included basic pay, basic allowance for  subsistence, basic allowance for housing, family separation allowance, and  the continental United States cost of living allowance.
The late payments during the mobilization phase primarily resulted from  California USPFO military pay personnel’s lack of understanding of their  responsibility for initiating active duty pays.  According to DFAS reserve  component mobilization procedures; the California USPFO was  responsible for initiating these pays.  However, a USPFO military pay  official mistakenly instructed the unit to take its pay data to the  mobilization station to enter transactions to start active duty pays.  The  USPFO official stated that the USPFO did not start the active duty pay and  allowances at that time because a copy machine was not available to make  copies of relevant active duty pay support documentation (such as a lease  agreement needed to support a housing allowance entitlement).  As a  result, the responsibility for initiating this allowance was improperly  passed to the active Army finance office at the Fort Lewis mobilization  station.
The Fort Lewis finance office lacked sufficient numbers of knowledgeable  military pay staff to expeditiously enter the large volume of transactions  necessary to start active duty pay entitlements for the 49th Military Police  Company’s soldiers.   DFAS guidance requires finance personnel at the  mobilization station to review each soldier’s pay account to identify any  errors and input the necessary correcting transactions into DJMS-RC.   Initially, the mobilization station finance office assigned an insufficient  number of personnel to the task of starting active duty pays for the unit’s 51  mobilizing soldiers.  Moreover, one of the assigned pay technicians was not  familiar with DJMS-RC and consequently entered data incorrectly for some  of the unit’s soldiers.  Also, the assigned pay technician initially failed to  enter transactions to start pay and allowances for a significant number of  the unit’s soldiers because the supporting documentation was misplaced.   These documents were later found under a desk in the finance office.
Recognizing this shortage of staff knowledgeable about DJMS-RC  processing procedures, the Fort Lewis finance office asked the California  USPFO to supply additional personnel and also temporarily reassigned  soldiers from other units stationed at Fort Lewis to assist in the pay  processing.  Working together over a 2-month period after the unit was  mobilized to active duty, these personnel were able to enter the omitted  transactions needed to start active duty pays and correct the previous  erroneous entries.
In addition, the USPFO did not enter the required data to DJMS-RC to begin  cost of living allowance pays for 36 of the unit’s soldiers.  DFAS reserve  component mobilization procedures state that the USPFO has the initial  responsibility for initiating these pays.  However, as discussed previously,  the USPFO mistakenly sent the 49th Military Police Company to Fort Lewis  with their pay documentation, and as a result, it was not until more than 2  months after the unit’s mobilization date that the Fort Lewis finance office  pay technicians began to enter these transactions into DJMS-RC.
The company commander for the unit told us that he was frustrated with  the level of customer support his unit received as it moved through the  initial mobilization process.  Only two knowledgeable military pay officials  were present to support active duty pay transaction processing for the 51  soldiers mobilized for his unit.  He characterized the customer service his  unit received at initial mobilization as very time-consuming and frustrating.

	Deployment Pay Problems

As summarized in table 26, we identified a number of pay problems  associated with six different types of active duty pays and allowances  associated with the unit’s deployment while on active duty.  These  problems primarily resulted from a data entry error and inadequate  document retention practices.
For example, the USPFO paid one soldier her basic pay, basic allowance  for subsistence, and basic allowance for housing nearly 4 months late.  A  USPFO official told us these late payments were caused when a USPFO pay  technician entered an incorrect stop date for the soldier’s active duty tour  into DJMS-RC.  The pay technician, after being notified of the error by the  soldier, corrected the data in DJMS-RC, which resulted in the soldier  receiving her pay nearly 4 months late.  Additionally, USPFO officials were  unable to provide support explaining why five other soldiers continued to  receive basic pay, the basic allowance for subsistence, and the basic  allowance for housing after the date available records show their active  duty tours had ended.  Consequently, we identified the payments made to  these five soldiers as overpayments.
Overpayments of family separation allowances to soldiers in the unit  resulted from a data entry error and inadequate USPFO document  retention practices.  A USPFO pay technician incorrectly coded a soldier’s  account to receive a family separation allowance when the soldier had only  been on active duty for 2 weeks.  According to the DOD FMR, Volume 7A,  chapter 27, soldiers are only eligible for this allowance after they have been  separated more than 30 days from their families on a continuous active  duty assignment.  This overpayment problem had not been resolved as of  March 31, 2003.  Additionally, USPFO officials were unable to provide  supporting documentation explaining why five soldiers continued to  receive a family separation allowance after available documentation  showed that these soldiers’ active duty tours had officially ended.  We  identified these family separation allowance payments for the five soldiers  as overpayments.
Late, under- and overpayments of foreign language proficiency pays to the  unit’s soldiers primarily resulted from delayed or inadequate data entry.   For example, our audit showed that USPFO pay technicians failed to enter  transactions into DJMS-RC in a timely manner for four soldiers resulting in  late foreign language proficiency payments.  In addition, USPFO pay  technicians failed to enter any foreign language proficiency payment  transactions for 1 month for one soldier and for 3 months for another  soldier resulting in those soldiers being underpaid.  This underpayment  issue had not been resolved as of March 31, 2003.  In another instance, a  soldier received an overpayment of his entitled foreign language  proficiency payment when a USPFO pay technician entered the wrong  code.  Approximately 3 months later, the USPFO pay technician identified  the error and recovered the overpayment.
Late payment, underpayment, and overpayment of cost of living allowances  resulted from the inability of DJMS-RC to pay certain active duty pays and  allowances automatically, inaccurate data entry, and inadequate  documentation retention practices.  For example, our audit discovered that  USPFO pay technicians failed to manually enter cost of living allowance  transactions into DJMS-RC in a timely manner for 37 soldiers, resulting in  late payments to the soldiers.  In addition, USPFO officials were unable to  provide sufficient documentation to explain why 3 soldiers appeared not to  have received cost of living allowance payments due them for a 2-month  period.  We considered these pay omissions to be underpayments.  An  Army pay technician at the Fort Lewis finance office entered the incorrect  code, thereby paying a soldier the wrong type of allowance, which resulted  in an underpayment.

	Pay Problems Associated with Demobilization and Release from Active Duty

California’s 49th Military Police Company demobilized at Fort Lewis on  July 28, 2002, and returned to its home station in Pittsburg, California.  We  did not identify any pay problems for this unit in the demobilization phase.

Scope and Methodology

To obtain an understanding and assess the processes, personnel (human  capital), and systems used to provide assurance that mobilized Army Guard  soldiers were paid accurately and timely, we reviewed applicable policies,  procedures, and program guidance; observed pay processing operations;  and interviewed cognizant agency officials.  With respect to applicable  policies and procedures, we obtained and reviewed 10 U.S.C. Section  12302, DOD Directive Number 1235.10, “Activation, Mobilization &  Demobilization of the Ready Reserve;” DOD FMR, Volume 7A, “Military Pay  Policy and Procedures Active Duty and Reserve Pay”; and the Army Forces  Command Regulations 500-3-3, Reserve Component Unit Commander  Handbook, 500-3-4, Installation Commander Handbook, and 500-3-5,  Demobilization Plan.  We also reviewed various Under Secretary of  Defense memorandums, a memorandum of agreement between Army and  DFAS, DFAS, Army, Army Forces Command, and Army National Guard  guidance applicable to pay for mobilized reserve component soldiers.  We  also used the internal controls standards provided in the Standards for  Internal Control in Federal Government.
We applied the policies and procedures prescribed in these documents to  the observed and documented procedures and practices followed by the  various DOD components involved in providing active duty pays to Army  Guard soldiers.  We also interviewed officials from the National Guard  Bureau, State USPFOs, Army and DOD military pay offices, as well as unit  commanders to obtain an understanding of their experiences in applying  these policies and procedures.
In addition, as part of our audit, we performed a review of certain edit and  validation checks in DJMS-RC.  Specifically, we obtained documentation  and performed walk-throughs associated with DJMS-RC edits performed  on pay status/active duty change transactions, such as those to ensure that  tour start and stop dates match MMPA dates and that the soldier cannot be  paid basic pay and allowances beyond the stop date that was entered into  DJMS-RC.   We also obtained documentation on and walk-throughs of the  personnel-to-pay system interface process, the order writing-to-pay system  interface process, and on the process for entering mobilization information  into the pay system. We held interviews with officials from the Army  National Guard Readiness Center, the National Guard Bureau, and DFAS  Indianapolis and Denver to augment our documentation and walkthroughs.
Because our preliminary assessment determined that current operations  used to pay mobilized Army Guard soldiers relied extensively on error- prone manual transactions entry into multiple, nonintegrated systems, we  did not statistically test current processes and controls.  Instead, we used a  case study approach to provide a more detailed perspective of the nature of  pay deficiencies in the three key areas of processes, people (human  capital), and systems.  Specifically, we gathered available data and analyzed  the pay experiences of Army Guard special forces and military police units  mobilized to active duty in support of Operations Noble Eagle and  Enduring Freedom during the period from October 2001 through March  2003.  We audited six Army Guard units as case studies of the effectiveness  of the controls over active duty pays in place for soldiers assigned to those  units:  Colorado B Company, 5th Battalion, 19th Special Forces;  Virginia B Company, 3rd Battalion, 20th Special Forces;  West Virginia C Company, 2nd Battalion, 19th Special Forces;  Mississippi 114th Military Police Company;  California 49th Military Police Headquarters and Headquarters   Maryland 200th Military Police Company.
In selecting these six units for our case studies, we sought to obtain the pay  experiences of units assigned to either Operation Enduring Freedom or  Operation Noble Eagle.  We further limited our case study selection to  those units both mobilized to active duty and demobilized from active duty  during the period from October 1, 2001 through March 31, 2003.  From the  population of all Army Guard units mobilized and demobilized during this  period, we selected three special forces units and three military police  units.  These case studies are presented to provide a more detailed view of  the types and causes of pay problems and the pay experiences of these  units as well as the financial impact of pay problems on individual soldiers  and their families.
We used mobilization data supplied by the Army Operations Center to  assist us in selecting the six units we used as our case studies.  We did not  independently verify the reliability of the Army Operations Center  database. We used the Army Operations Center data to select six states that  had a large number of special forces or military police units that had been  mobilized, deployed, and returned from at least one tour of active duty in  support of Operations Noble Eagle and Enduring Freedom.  We chose  California, Colorado, Maryland, Mississippi, Virginia, and West Virginia.   From these six states, we selected three special forces and three military  police units that had a variety of deployment locations and missions.  We  also identified and performed a limited review of the pay experiences of a  unit still deployed during the period of our review; Colorado’s 220th  Military Police Company.   The purpose of our limited review was to  determine if there were any pay problems experienced by a more recently  mobilized unit.
We also obtained in-depth information from soldiers at four of the six case  study units.  Using a data collection instrument, we asked for soldier views  on pay problems and customer service experiences before, during, and  after mobilization.  Unit commanders distributed the instrument to soldiers  in their units.  There were 325 soldiers in these units; in total, we received  87 responses.  The information we received from these data collection  instruments is not representative of the views of the Army Guard members  in these units nor of those of Army Guard members overall.  The  information provides further insight into some of the pay experiences of  selected Army Guard soldiers who were mobilized under Operations Noble  Eagle and Enduring Freedom.
We used DJMS-RC pay transaction extracts to identify pay problems  associated with our case study units. However, we did not perform an exact  calculation of the net pay soldiers should have received in comparison with  what DJMS-RC records show they received.  Rather, we used available  documentation and follow-up inquiries with cognizant USPFO personnel to  identify if (1) soldiers’ entitled active duty pays and allowances were  received within 30 days of initial mobilization date, (2) soldiers were paid  within 30 days of the date they became eligible for active duty pays and  allowances associated with their deployment locations, and (3) soldiers  stopped receiving active duty pays and allowances as of the date of their  demobilization from active duty.  As such, our audit results only reflect  problems we identified.  Soldiers in our case study units may have  experienced additional pay problems that we did not identify. In addition,  our work was not designed to identify, and we did not identify, any  fraudulent pay and allowances to any Army Guard soldiers.
As a result of the lack of supporting documents, we likely did not identify  all of the pay problems related to the active duty mobilizations of our case  study units.  However, for the pay problems we identified, we counted  soldiers’ pay problems as a problem only in the phase in which they first  occurred even if the problems persisted into other phases.  For purposes of  characterizing pay problems for this report, we defined over- and  underpayments as those pays or allowances for mobilized Army Guard  soldiers during the period from October 1, 2001, through March 31, 2003,  that were in excess of (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 estimate collections  against identified overpayments through March 31, 2003.  We did not  attempt to estimate payments received against identified underpayments.   We provided the support for the pay problems we identified to appropriate  officials, at each of our case study locations so that they could fully develop  and resolve any additional amounts owed to the government or to the Army  Guard soldiers.
We briefed DOD and Army officials, National Guard Bureau officials, DFAS  officials, and USPFO officials in the selected states on the details of our  audit, including our findings and their implications.  On October 10, 2003,  we requested comments on a draft of this report.  We received comments  on November 5, 2003, and have summarized those comments in the  “Agency Comments and Our Evaluation” section of this report.  DOD’s  comments are reprinted in appendix VIII. We conducted our audit work  from November 2002 through September 2003 in accordance with U.S.  generally accepted government auditing standards.

Comments from the Department of Defense

GAO DRAFT REPORT DATED OCTOBER 10, 2003  GAO-04-89 (GAO CODE 192080)  “MILITARY PAY:  ARMY NATIONAL GUARD PERSONNEL  MOBILIZED TO ACTIVE DUTY EXPERIENCED  SIGNIFICANT PAY PROBLEMS”
RECOMMENDATION 1:  The GAO recommended that the Secretary of Defense direct the  Director of the Defense Finance and Accounting Service (DFAS), in conjunction with the Under  Secretary of Defense (Comptroller), to establish a unified set of policies and procedures for all  Army Guard, Army, and DFAS personnel to follow for servicing active duty pays for Army  Guard personnel mobilized to active duty.  (p. 74/GAO Draft Report)
DoD RESPONSE:  Concur.  DFAS and the Army are jointly building on the existing guidance  procedures as published in FORSCOM REG 500-3-3, (FORSCOM Mobilization and  Deployment Planning System Form Deps, Volume 3, Reserve Component Commanders’  Handbook dated July 15,1999); the National Guard Standard Operating Procedure Contingency  Operations; and DFAS AIG Message dated December 19, 2002, Subject:  Reserve Component- Mobilization Procedures, to clearly define the roles and responsibilities between  mobilization/demobilization stations, United States Property and Fiscal Offices (USPFOs), and  deployed Army finance elements.  A joint task force has been established to review existing  procedural guidance, lessons learned to date, and available metrics.  As a first step, expanded  central guidance will be published within the next 30 days, which will further articulate the  specific responsibilities of the servicing finance activities.  This breakout of responsibilities will  also be provided in a simple matrix form to visually reinforce this guidance.  Within  approximately 60 days, the Army and DFAS will begin compliance reviews of the  mobilization/demobilization stations to ensure adherence to published guidance and to provide  any further assistance these offices may require.  Within the next 3 to 6 months, the task force  will build upon the existing guidance to provide comprehensive procedures and related  standards, down to the individual technician level, for all offices and units responsible for pay  input support of mobilized soldiers.
RECOMMENDATION 2:  The GAO recommended that the Secretary of Defense direct the  Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to  establish performance measures for obtaining supporting documentation and processing pay  transactions.  (p. 75/Draft Report)
DoD RESPONSE:  Concur.  Standards for the timeliness of processing pay transactions are  currently in place for units, finance offices, and central site.  However, these standards are  focused on the full range of transactions and associated unit level data is generated based on the  normal permanent/home station relationship with a Reserve Component Pay Support Office.
Within the next 6 months, DFAS and the Army will jointly review how these existing  mechanisms can be used to more succinctly capture data specifically related to mobilized  soldiers and units.
RECOMMENDATION 3:  The GAO recommended that the Secretary of Defense direct the  Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to  establish who is accountable for stopping active duty pays for soldiers who return home separate  from their units.  (p. 75/Draft Report)
DoD RESPONSE:  Concur.  Within the next 30 days, DFAS, in cooperation with the Army, will  reinforce existing procedures on responsibilities for stopping active duty pays for soldiers who  return home separate from their units.  This will be part of the revised guidance identified in  response to recommendation one.  In addition, mechanisms have been established to perform  automated comparisons of personnel demobilization records and the Defense Joint Military Pay  System - Reserve Component (DJMS-RC) to identify any demobilizing soldiers whose tours in  the pay system were not adjusted to coincide with the demobilization date.
RECOMMENDATION 4:  The GAO recommended that the Secretary of Defense direct the  Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to  clarify the policies and procedures for how to properly amend active duty orders, including  medical extensions.  (p. 75/Draft Report)
DoD RESPONSE:  Concur.  For medical extensions, the Army published revised guidance on  June 10, 2003, reinforcing procedures on this process.  Included were the requirements for  publishing orders prior to the end date of the current active duty tour.  Concerning the specific  case in Colorado cited by the GAO, DFAS and the Army have implemented changes to the input  systems to warn the operator processing a tour cancellation when the correct input should be a  tour curtailment.  Action is complete.
RECOMMENDATION 5:  The GAO recommended that the Secretary of Defense direct the  Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to  require Army Guard commands and unit commanders to carry out complete monthly pay and  personnel records reconciliations and take necessary actions to correct any pay and personnel  record mismatches found each month.  (p. 75/Draft Report)
DoD RESPONSE:  Concur.  Within 60 days, the Army will reinforce to all reserve commands  the importance of this requirement.  As noted by the GAO, this requirement is already included  in US Army Forces Command Regulation 500-3-3, Unit Commander’s Handbook.
RECOMMENDATION 6:  The GAO recommended that the Secretary of Defense direct the  Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to  update policies and procedures to reflect current legal and DoD administrative requirements with  Enclosure respect to active duty pays and allowances and transaction processing requirements for mobilized  Army Guard soldiers.  (p. 75/Draft Report)
DoD RESPONSE:  Concur.  In Fiscal Year 2004, DFAS, the Army, and National Guard will  respectively update the cited regulations under their cognizance to the most current and accurate  requirements.
RECOMMENDATION 7:  The GAO recommended that the Secretary of Defense direct the  Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to  consider expanding the scope of the existing memorandum of understanding between DFAS and  the Army concerning the provisions of resources to support surge processing at mobilization and  demobilization sites to include providing additional resources to support surge processing for pay  start and stop transactions requirements at Army Guard home stations during initial soldier  readiness programs.  (p. 75/Draft Report)
DoD RESPONSE:  Concur.  The Army will work with the National Guard on resourcing the  USPFOs for mobilization/demobilization surges.  However, the memorandum of understanding  between DFAS and the Army pertains only to the management and resourcing of Defense  Military Pay Offices, to include their role in support of mobilization/ demobilization stations.  As  such, it is not the appropriate vehicle to address staffing of USPFO under the National Guard.
RECOMMENDATION 8:  The GAO recommended that the Secretary of Defense direct the  Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to  determine whether issues concerning resource allocations for the military pay operations  identified at our case study units exist at all 54 USPFOs, and, if so, take appropriate actions to  address these issues.  (p. 76/Draft Report)
DoD RESPONSE:  Concur.  To support surge requirements, the National Guard could use  additional National Guard soldiers being brought on active duty in a Temporary Tour of Active  Duty status to augment the USPFO staff based on mobilization workload requirements.  The  additional requirement and funding will need to be addressed by the supplemental provided to  Army.  Normal manning at the USPFO, Military Pay Section is based on Full Time Support  authorized state strength levels.
RECOMMENDATION 9:  The GAO recommended that the Secretary of Defense direct the  Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to  determine whether concerns over relatively low graded military pay technicians identified at our  case study units exist at all 54 USPFOs, and, if so, take appropriate actions to address these  issues.  (p. 76/Draft Report)
Enclosure grade levels in the USPFOs’ Comptroller sections and the current grade levels for military pay  technicians were validated as correct under OPM standards.  Action is complete.
RECOMMENDATION 10:  The GAO recommended that the Secretary of Defense direct the  Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to  modify existing training policies and procedures to require all USPFO and active Army pay and  or finance personnel responsible for entering pay transactions for mobilized Army Guard soldiers  to receive appropriate training upon assuming such duties.  (p. 76/Draft Report)
DoD RESPONSE:  Concur.  The National Guard has instituted mobilization specific training for  pay technicians. The National Guard Financial Services Center quality assurance program is  currently used to monitor completion of JUMPS Standard Terminal Input System (JUSTIS)  training for USPFO military pay technicians.  The US Army Reserve Command (USARC) has  expanded training programs on DJMS-RC to help support the immediate training needs of  deploying units and mobilization/demobilization stations.  Over 35 training events have occurred  since February 2002 in support of deploying units and mobilization/demobilization sites.  The  Army finance school is working with USARC to develop an exportable training package on  DJMS-RC, which should be available within the next 6 months.  Additionally, DFAS and the  Army are sending a joint training team to Kuwait and Iraq in November 2003 to specifically  address reserve component support.  For the midterm (6 months to 2 years), the training on  reserve component pay input for soldiers in finance battalions and garrison support units will be  evaluated to determine how best to expand the training within the Army total training  infrastructure, particularly in light of the planned integration of reserve and active component  pay processing into a single system.  The Army finance school is already evaluating the  expansion of the current instruction on mobilized reserve component pay in the training  curriculum for the finance advanced individual training course.
RECOMMENDATION 11:  The GAO recommended that the Secretary of Defense direct the  Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to  require unit commanders to receive training on the importance of adhering to requirements to  conduct annual pay support documentation reviews and carry out monthly reconciliations.   (p. 76/Draft Report)
DoD RESPONSE:  Concur.  The importance of conducting annual pay support documentation  reviews and monthly reconciliations will be incorporated into precommand courses at the  company level for the National Guard by the end of Fiscal Year 2004.
RECOMMENDATION 12:  The GAO recommended that the Secretary of Defense direct the  Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to  establish an ongoing mechanism to monitor the quality and completion of training for both pay  and finance personnel and unit commanders.  (p. 76/Draft Report)
DoD RESPONSE:  Concur.  The National Guard currently reviews the training status of  military pay technicians at the USPFOs as part of the ongoing quality assurance review program.
Enclosure The appropriate mechanism for monitoring the training of unit commanders and finance battalion  personnel is dependent on the location of that training in the overall Army training infrastructure  (i.e. unit training is assessed as part of the annual External Evaluation-ExEval) and, as such will  be considered as part of the overall evaluation of the reserve pay training addressed in response  to recommendation 10.
RECOMMENDATION 13:  The GAO recommended that the Secretary of Defense direct the  Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to  identify and evaluate options for improving customer service provided to mobilized Army Guard  soldiers by providing improved procedures for informing soldiers of their pay and allowance  entitlements throughout their active duty mobilization.  (p. 76/Draft Report)
DoD RESPONSE:  Concur.  Within the next 30 days, the Army will prepare a standard  information flyer to be given to all mobilizing reservists.  The flyer will address entitlements as  well as sources of pay support.  The flyer will be published via Army Knowledge Online and  incorporated into the overall revision to procedural guidance addressed in response to  recommendation one.
RECOMMENDATION 14:  The GAO recommended that the Secretary of Defense direct the  Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to  identify and evaluate options for improving customer service provided to mobilized Army Guard  soldiers with respect to providing a single, well-advertised, source for soldiers and their families  to access for customer service for any pay problems.  (p. 77/Draft Report)
DoD RESPONSE:  Concur.  The existing centralized information sources on individual soldiers  pay will be expanded.  Specifically, DFAS will continue to add functionality to myPay for input  of discretionary actions.  Additionally, DFAS is developing a separate view-only Personal  Identification Number capability which soldiers will be able to give their dependents so they can  see the Leave and Earning Statement without being able to change anything on the pay record.
This enhancement is scheduled for August 2004.  The DFAS also operates a central customer  service center for pay inquiries for all Services.  The toll free number for this center as well as  the myPay internet address will be incorporated in the flyer discussed in response to  recommendation 13 as well as continue being advertised in locations such as Army Knowledge  Online.  Until the implementation of DIMHRS, with full integration of pay and personnel, the  processing of pay transactions will still require the movement of some entitlement  information/authorization from units and personnel to finance via paper.  As such, a network of  finance support activities is required to geographically align with deployed combat and  supporting personnel units.  As always, pay remains essentially a command responsibility.  For  the individual soldier, the single source of pay support is his or her unit, which in-turn interfaces  with the appropriate finance and personnel activities.  For dependents of deployed soldiers, the  single source for finance, or any administrative issues, is either the rear detachment of the  soldiers’ deployed unit or, for the National Guard, the applicable State Family Assistance  Coordinator.
RECOMMENDATION 15:  The GAO recommended that the Secretary of Defense direct the  Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to  review the pay problems we identified at our six case study units to identify and resolve any  outstanding pay issues for the affected soldiers.  (p. 77/Draft Report)
DoD RESPONSE:  Concur.  The National Guard Financial Services Center is working with  each of the identified units and supporting USPFOs to ensure all pay issues are resolved.  The  Army and DFAS will continue to work the correction of any specific cases identified as still  open for these units.  As noted by the GAO, many of the cases identified have already been  resolved or involved a delay in payment over 30 days from entitlement rather than an actual  unresolved discrepancy.
RECOMMENDATION 16:  The GAO recommended that the Secretary of Defense direct the  Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to  evaluate the feasibility of using the personnel-to-pay interface as a means to proactively alert pay  personnel of actions needed to start entitled active duty pays and allowances.  (p. 77/Draft  Report)
DoD RESPONSE:  Concur.  Within the next 6 months, we will evaluate the feasibility of using  the personnel-to-pay interface as a means to proactively alert pay personnel of actions needed to  start entitled active duty pays and allowances.
RECOMMENDATION 17:  The GAO recommended that the Secretary of Defense direct the  Director of the Defense Finance and Accounting Service, in conjunction with the Under  Secretary of Defense (Comptroller), to evaluate the feasibility of automating some or all of the  current manual monthly pays, including special duty assignment pay, foreign language  proficiency pay, hardship duty pay and high altitude, low opening jump pay.  (p. 77/Draft  Report)
DoD RESPONSE:  Concur.  Programming changes to DJMS-RC have been implemented to  enhance the processes for special duty assignment pay and foreign language proficiency pay.
However, monthly input is still required.  Hardship duty pay is scheduled for implementation for  April 2004.  High altitude, low opening jump pay requires manual computation and input of a  transaction for payment.  The small volume of members entitled to this pay has not justified nor  provided an adequate return on investment for this automation.  DFAS has recognized the  urgency of improving the military pay system capabilities supporting our Service members.  A  study was conducted of improvement alternatives in the fall of 2002, which concluded that a new  commercial off the shelf based payroll capability (“Forward Compatible Payroll” (FCP)) was the  best option to expeditiously improve our system payroll services.  FCP is currently prototyping  military entitlements and deductions and has already demonstrated that DJMS RC’s current  monthly manual pays can be automated rapidly in the new commercial off the shelf based  environment.
RECOMMENDATION 18:  The GAO recommended that the Secretary of Defense direct the  Director of the Defense Finance and Accounting Service, in conjunction with the Under  Secretary of Defense (Comptroller), to evaluate the feasibility of eliminating the use of the  “other credits” for processing Hardship Duty (Designated Areas); high altitude, low opening  jump pay; and special duty assignment pay, and instead establishing a separate component of pay  for each type of pay.  (p. 77/Draft Report)
DoD RESPONSE:  Concur.  Hardship duty pay is scheduled for automation in April 2004.  We  will also recommend inclusion of automation of high altitude, low opening jump pay in FCP. We  acknowledge that the information available to the member is inadequate in today’s system.  This  has already been addressed in the FCP requirements.  Each pay is designed to provide fully  automated computation capability for active, Reserve/Guard and detailed leave and earnings  statement reporting to the Service member through myPay.  FCP will use legacy military  pers/pay data feeds to create a single military pay record for each Service member supporting all  Service component affiliations and duty statuses.  FCP will resolve pay systems capability  related problems described in this report.  Until such time FCP has been implemented, we will  ensure that these certain pays paid under “other credits” are included in the flyer addressed in  response to recommendation 13.  In addition, DFAS will update the DFAS Reserve Component  Mobilization Procedures to mandate a remark be entered on the service member’s leave and  earnings statement for pays paid under “other credits” to inform the service member exactly what  entitlement(s) they have paid.
RECOMMENDATION 19:  The GAO recommended that the Secretary of Defense direct the  Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to  evaluate the feasibility of using the JUSTIS warning screen to help eliminate inadvertent  omissions of required monthly manual pay inputs.  (p. 78/Draft Report)
DoD RESPONSE:  Concur.  The National Guard will develop a JUSTIS table identifying all  applicable soldiers in order to notify the USPFO technician of accounts requiring monthly  entitlement input.  This will be more efficient and effective than a pop-up warning screen, which  would appear only if the individual soldier’s social security number were input.
RECOMMENDATION 20:  The GAO recommended that the Secretary of Defense direct the  Director of the Defense Finance and Accounting Service, in conjunction with the Under  Secretary of Defense (Comptroller), to evaluate the feasibility of redesigning leave and earnings  statement to provide soldiers with a clear explanation of all pay and allowances received so that  they can readily determine if they received all and only entitled pays.  (p. 78/Draft Report)
Enclosure understanding their leave and earnings statement by reviewing and updating (as necessary) the  information provided on our website(s);  by providing independent leave and earnings statement  remarks for present and future changes; continuing to provide the USPFOs ands Reserve  Component Pay Support Offices with monthly newsletters; and effective immediately, provide  the finance battalions/Defense Military Pay Offices with the National Guard newsletter.
For the future, FCP is being designed with an easily understandable leave and earnings statement  as one of the main requirements.  Each pay is designed to provide fully automated computation  capability for active, Reserve/Guard and detailed leave and earnings statement reporting through  myPay.  FCP will use legacy military pers/pay data feeds to create a single military pay record  for each Service member supporting all Service component affiliations and duty statuses.  FCP  will also resolve pay systems capability related problems described in this report.
RECOMMENDATION 21:  The GAO recommended that the Secretary of Defense direct the  Director of the Defense Finance and Accounting Service, in conjunction with the Under  Secretary of Defense (Comptroller), to evaluate the feasibility of establishing an edit check and  requiring approval before processing any debt assessments above a specified dollar amount.   (p. 78/Draft Report)
DoD RESPONSE:  Concur.  The DFAS has already updated its current input system (Defense  MilPay Office) to provide a warning to field finance personnel concerning the debt impact of  tour cancellation (vice modification) for Reserve/Guard members.  DJMS-RC would require a  small to medium system change to edit debts that exceeded an established threshold or required  approval.  Secondary manual processing would be required to start the collection process or  delete the debts.
RECOMMENDATION 22:  The GAO recommended that the Secretary of Defense direct the  Director of the Defense Finance and Accounting Service, in conjunction with the Under  Secretary of Defense (Comptroller), as part of the current effort underway to reform DoD’s pay  and personnel systems-referred to as DIMHRS - incorporate a complete understanding of the  Army Guard pay problems as documented in this report into the requirements development for  this system.  (p. 78/Draft Report)
DoD RESPONSE:  Concur.  The DFAS has provided detailed military pay requirements input  to the DIMHRS Program that support fully automated computation of all military pay  entitlements and deductions.  The DIMHRS system military pay requirements submitted by  DFAS would resolve system related pay problems as described in this report.  DIMHRS is  envisioned to create a single military personnel/pay record for each Service member supporting  all Service component affiliations and duty statuses.
Enclosure problems identified, but also with the human capital and process aspects when developing  DIMHRS.  (p. 78/Draft Report)
DoD RESPONSE:  Concur.  The DFAS and Army have been actively involved in  recommending an improved operational military pers/pay concept in the DIMHRS environment.
Procedural changes are clearly required to capitalize on the opportunities afforded by a modern  fully integrated personnel and pay system including improvements in process cycle time,  customer service, and accountability.  The DFAS is working with the Army DIMHRS Office to  document existing workflow and roles and responsibilities.  The DIMHRS Program is still in the  very early stages of determining when and how integrated processes and workflows will be  incorporated into the DIMHRS based operational concept.  The DIMHRS “Joint Service  Functional Concept of Operations,” dated July 15, 2003, page 14, indicates that the current plan  is to “…initially mirror the existing ‘As-Is’ structure until the new capability has been fielded  and risk factors/ requirements have been clearly identified.  A determination of what additional  skills and expertise are required for operators of a knowledge-based personnel community must  be made after the capabilities of the commercial off the shelf product are fully known.”

GAO Contacts and Staff Acknowledgments

	GAO Contacts

	Acknowledgments

Staff making key contributions to this report include:  Paul S. Begnaud,  Ronald A. Bergman, James D. Berry, Jr., Amy C. Chang, Mary E. Chervenic,  Francine M. DelVecchio, C. Robert DeRoy, Dennis B. Fauber, Jennifer L.  Hall, Charles R. Hodge, Jason M. Kelly, Julia C. Matta, Jonathan T. Meyer,  John J. Ryan, Rebecca Shea, Crawford L. Thompson, Jordan M. Tiger,  Patrick S. Tobo, Raymond M. Wessmiller, and Jenniffer F. Wilson.

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Summary:
Why GAO Did This Study

In light of the recent mobilizations associated with the war on terrorism and homeland security, GAO was asked to determine if controls used to pay mobilized Army Guard personnel 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 systems.

What GAO Found

The existing processes and controls used to provide pay and allowances to mobilized Army Guard personnel are so cumbersome and complex that neither DOD nor, more importantly, the mobilized Army Guard soldiers could be reasonably assured of timely and accurate payroll payments. Weaknesses in these processes and controls resulted in over- and underpayments and late active duty payments and, in some cases, largely erroneous debt assessments to mobilized Army Guard personnel. The end result of these pay problems is to severely constrain DOD's ability to provide active duty pay to these personnel, many of whom were risking their lives in combat in Iraq and Afghanistan. In addition, these pay problems have had a profound financial impact on individual soldiers and their families. For example, many soldiers and their families were required to spend considerable time, sometimes while the soldiers were deployed in remote, combat environments overseas, seeking corrections to active duty pays and allowances. The pay process, involving potentially hundreds of DOD, Army, and Army Guard organizations and thousands of personnel, was not well understood or consistently applied with respect to determining (1) the actions required to make timely, accurate pays to mobilized soldiers, and (2) the organization responsible for taking the required actions. With respect to human capital, we found weaknesses including (1) insufficient resources allocated to pay processing, (2) inadequate training related to existing policies and procedures, and (3) poor customer service. Several systems issues were also a significant factor impeding accurate and timely payroll payments to mobilized Army Guard soldiers, including (1) non-integrated systems, (2) limitations in system processing capabilities, and (3) ineffective system edits.