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STRENGTHENING TRAVEL REIMBURSEMENT

PROCEDURES FOR ARMY NATIONAL GUARD

SOLDIERS

HEARING

BEFORE THE

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,

FINANCE, AND ACCOUNTABILITY

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

MARCH 16, 2005

Serial No. 109–23

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

CHRISTOPHER SHAYS, Connecticut

DAN BURTON, Indiana

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

GIL GUTKNECHT, Minnesota

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

JOHN J. DUNCAN, JR., Tennessee

CANDICE S. MILLER, Michigan

MICHAEL R. TURNER, Ohio

DARRELL E. ISSA, California

GINNY BROWN-WAITE, Florida

JON C. PORTER, Nevada

KENNY MARCHANT, Texas

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

CHARLES W. DENT, Pennsylvania

VIRGINIA FOXX, North Carolina

——— ———

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. DUTCH RUPPERSBERGER, Maryland

BRIAN HIGGINS, New York

ELEANOR HOLMES NORTON, District of

Columbia

———

BERNARD SANDERS, Vermont

(Independent)

MELISSA WOJCIAK, Staff Director

DAVID MARIN, Deputy Staff Director

ROB BORDEN, Parliamentarian

TERESA AUSTIN, Chief Clerk

PHIL BARNETT, Minority Chief of Staff/Chief Counsel

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, FINANCE, AND ACCOUNTABILITY

TODD RUSSELL PLATTS, Pennsylvania, Chairman

VIRGINIA FOXX, North Carolina

TOM DAVIS, Virginia

GIL GUTKNECHT, Minnesota

MARK E. SOUDER, Indiana

JOHN J. DUNCAN, JR., Tennessee

EDOLPHUS TOWNS, New York

MAJOR R. OWENS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

EX OFFICIO

HENRY A. WAXMAN, CALIFORNIA

MIKE HETTINGER, Staff Director

TABETHA MUELLER, Professional Staff Member

NATHANIEL BERRY, Clerk

ADAM BORDES, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on March 16, 2005 ............................................................................ 1

Statement of:

Shine, Patrick T., Director of Military and Civilian Pay Services, Defense

Finance and Accounting Service; John Argodale, Deputy Assistant Secretary for Financial Operations, Office of the Assistant Secretary for

Financial Management and Comptroller; Roy Wallace, Director of Plans

and Resources, Department of the Army; and Gregory D. Kutz, Director

of Financial Management and Assurance, Government Accountability

Office .............................................................................................................. 5

Argodale, John ........................................................................................... 12

Kutz, Gregory D. ....................................................................................... 25

Shine, Patrick T. ....................................................................................... 5

Wallace, Roy .............................................................................................. 21

Letters, statements, etc., submitted for the record by:

Argodale, John, Deputy Assistant Secretary for Financial Operations,

Office of the Assistant Secretary for Financial Management and Comptroller, prepared statement of ...................................................................... 14

Kutz, Gregory D., Director of Financial Management and Assurance,

Government Accountability Office, prepared statement of ....................... 27

Platts, Hon. Todd Russell, a Representative in Congress from the State

of Pennsylvania, prepared statement of ...................................................... 3

Shine, Patrick T., Director of Military and Civilian Pay Services, Defense

Finance and Accounting Service, prepared statement of .......................... 8

Towns, Hon. Edolphus, a Representative in Congress from the State

of New York, prepared statement of ........................................................... 81

Wallace, Roy, Director of Plans and Resources, Department of the Army,

prepared statement of ................................................................................... 22

(1)

STRENGTHENING TRAVEL REIMBURSEMENT

PROCEDURES FOR ARMY NATIONAL GUARD

SOLDIERS

WEDNESDAY, MARCH 16, 2005

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,

FINANCE, AND ACCOUNTABILITY,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 2:07 p.m., in room

2247, Rayburn House Office Building, Hon. Todd R. Platts (chairman of the subcommittee) presiding.

Present: Representatives Platts and Towns.

Staff present: Mike Hettinger, staff director; Dan Daly, counsel;

Tabetha Mueller, professional staff member; Jessica Friedman, legislative assistant; Nathaniel Berry, clerk; Adam Bordes, minority

professional staff member; and Teresa Coufal, minority assistant

clerk.

Mr. PLATTS. Good afternoon. This hearing of the Government Reform Subcommittee on Government Management, Finance, and Accountability will come to order.

As is typical with a session day, we are all going in a million and

one directions. Congressman Towns is on his way and will be joining us shortly. We believe we may have floor votes in about 20 to

25 minutes. My hope is that we will get through opening statements of myself and Mr. Towns and our panelists, and I can race

over for the last second of the first vote. We have about a 20-

minute recess and come back and to questions and answers. We

will see if that works out as we get started. We will do our best

to not hold our witnesses any longer in limbo than we have to.

In response to the terrorist attacks of September 11, 2001, the

Army National Guard began to mobilize soldiers in support of the

global war on terror. As part of Operations Noble Eagle and Enduring Freedom, these soldiers fought the Taliban and al Qaeda

throughout Asia and Africa. They continue to guard prisoners at

Guantanamo Bay, Cuba and perform support missions here in the

United States.

Similarly, National Guard soldiers served on the front lines in

Iraq and are now assisting in peacekeeping and reconstruction operations in Iraq under Operation Iraqi Freedom. This is the largest

mobilization of Guard troops since World War II. Over the past 2

years, the House Government Reform Committee, the Government

Accountability Office and the Department of Defense have worked

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together to ensure that this large-scale deployment goes as smoothly as possible.

In a series of hearings supplemented by ongoing quarterly briefings, civilian and military personnel have worked closely with committee staff and GAO auditors to bring improvements to the systems and processes that serve our troops. Among the issues that

have been addressed are errors in soldiers’ pay, ineffective tracking

of supplies, and problems with treatment of injured Guard and Reserve soldiers.

This hearing will look at the process for reimbursing Guard soldiers for their travel and per diem expenses. It is an important

part of the ongoing productive collaboration that has resulted in a

number of improvements. Specifically, the subcommittee will discuss the findings of GAO’s recent case studies on travel reimbursement procedures for National Guard troops. This report, which is

being released today, found that a number of deployed National

Guard soldiers experienced problems receiving appropriate travel

and per diem reimbursement.

In light of our heavy reliance on Guard and Reserve troops in

fighting the global war on terror, it is imperative that travel reimbursement and other management issues be resolved and that our

uniformed personnel be informed of the extensive work that is

being done and continues to be done to address the problems they

have incurred.

I would like to thank our witnesses not only for being here today,

but for working with this committee and the minority and majority

staff over the past 2 years. First, we will hear from Mr. Pat Shine,

the Director of Military and Civilian Pay at the Defense Finance

and Accounting Service. Mr. Shine, I appreciate your briefing my

staff in the recent year on the challenges before DFAS and your efforts to meet those challenges, and also your specific help as we

have brought some constituent cases to your attention regarding

Guard who have been mobilized and your staff’s quick response in

helping to address those problems.

Mr. SHINE. We were glad to help, sir.

Mr. PLATTS. We are also going to hear from Mr. John Argodale,

Deputy Assistant Secretary for Financial Operations, and Mr. Roy

Wallace, Director of Plans and Resources for the Department of the

Army. Mr. Greg Kutz, Director of Financial Management and Insurance at the Government Accountability Office will conclude the

panel. Greg, you played a key role in the past year with this committee. We thank you as well, in addition to our other panelists.

We appreciate all of your testimonies, your written testimonies

you have already submitted, as well as your oral testimonies that

you will be giving here today. I was thinking Mr. Towns would be

here by the time I concluded my statement. He is not. We will

break if need be when he arrives for his statement, or he may

choose to submit that for the record.

Perfect timing, Ed. Do you want to make a statement?

[The prepared statement of Hon. Todd Russell Platts follows:]

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Mr. TOWNS. Yes.

Mr. PLATTS. We are joined by Mr. Towns, the ranking member

from New York, and the Chair would recognize Mr. Towns for the

purpose of making an opening statement.

Mr. TOWNS. Thank you very much, Mr. Chairman, for holding

this hearing.

It is timely for our committee to examine this issue, as the number of soldiers experiencing financial burden due to lack of travel

reimbursement policies continues to rise. Let me also thank our

witnesses for their testimony in advance, especially those of you

who have ably served our Nation with pride and distinction.

The issue of inadequate management at the Department of Defense is not foreign to our committee. As we have continually

worked to improve the internal control structure and accounting

problems demonstrated by the agency over the years. Like our previous work in examining the problems of associated with the pay

and benefit policies of our soldiers and reservists, we are now beginning to identify the extensive deficiencies in the travel reimbursement process for our Army Guardsmen.

This committee, at a critical time, as many of these men and

women are being called in increasing numbers to serve our Nation’s interest abroad. Since 2001, the Army Guard has been asked

to do more for us than at any other time in recent memory. According to the GAO, there were more than 186,000 Army Guard soldiers mobilized from September 2001 through September 2004, accounting for approximately 40 percent of the 111,800 reservists mobilized during this time period.

In my home State of New York alone, over 2,900 Army Guardsmen are presently mobilized and serving in various capacities. The

problems detailed in the report before us today are similar to previously defined deficiencies at DOD stemming from continued

weaknesses in managerial controls, inefficient processes, and

human capital constraints. Of the 10 Guard units examined by

GAO, a majority of the soldiers in each unit experienced problems

relating to reimbursements for meal expenses.

Specific cases experienced delays for authorized reimbursement

in excess of a year. Other soldiers cited inaccuracies or delays in

the voucher authorization process, requiring many soldiers to

shoulder the financial burden of deployment until such issues were

resolved. Adding to their plight, many soldiers were denied interest

and late fees on delinquent reimbursement as required under current law.

I believe, Mr. Chairman, these practices will prove to be a longterm detriment to retention and recruiting efforts for the Army

Guard if they are not swiftly remedied. As I said before our committee last July, this issue before us is not relevant to our military

mission or overseas objectives. It is, however, relevant to whether

the U.S. Government is keeping its word to the men and women

who honorably serve our Nation.

Once again, I believe it is disingenuous for us to tell the American people that our armed services are well prepared when we

cannot even guarantee that our soldiers will receive their pay and

benefits in a timely manner. It is difficult enough for the families

of guardsmen serving away without having to endure the undue

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economic hardship experienced by many individuals. Hopefully, our

efforts today will be productive in finding solutions to such problems.

Again, Mr. Chairman, I thank you for holding this hearing. I also

would like to thank the witnesses for coming. Thank you so much.

I yield back.

Mr. PLATTS. Thank you, Mr. Towns. Your statement, one of the

more important parts of it is the fact that while our soldiers who

were mobilized and engaged in helping to win the war on terror,

the fact that they were performing their missions with great success and dedication, unimpacted by the challenges they are facing

on their reimbursements and things, that was put aside while they

did their jobs, is a testament to our soldiers. I appreciate your reaffirming that, how grateful we are to the work of these soldiers

that have been mobilized.

We will move to our panelists. It is the practice of the subcommittee if we could ask all of our witnesses to stand and be

sworn in. Anyone who would be advising you or giving counsel as

part of your testimony, if they would like to join in taking the oath

as well. If you would raise your right hands?

[Witnesses sworn.]

Mr. PLATTS. The clerk will affirm that the witnesses all answered

in the affirmative. We again appreciate your testimony. It sounds

like the vote board is just now starting, which means we have

about 20 minutes before the first vote. I need to sprint over there.

Ed is a little younger than me so he does not need as much time

as I do. [Laughter.]

I think what we will try to do is do our opening statements and

maybe I will get through all four of our opening statements, or

three of them. It would be a good break point if we can get through

all four, and then we will come back and do questions and answers

at the conclusion of the vote.

So Mr. Shine, if you would like to begin, we will get right to your

statement.

Mr. SHINE. Yes, sir.

STATEMENTS OF PATRICK T. SHINE, DIRECTOR OF MILITARY

AND CIVILIAN PAY SERVICES, DEFENSE FINANCE AND ACCOUNTING SERVICE; JOHN ARGODALE, DEPUTY ASSISTANT

SECRETARY FOR FINANCIAL OPERATIONS, OFFICE OF THE

ASSISTANT SECRETARY FOR FINANCIAL MANAGEMENT AND

COMPTROLLER; ROY WALLACE, DIRECTOR OF PLANS AND

RESOURCES, DEPARTMENT OF THE ARMY; AND GREGORY D.

KUTZ, DIRECTOR OF FINANCIAL MANAGEMENT AND ASSURANCE, GOVERNMENT ACCOUNTABILITY OFFICE

STATEMENT OF PATRICK T. SHINE

Mr. SHINE. Chairman Platts, distinguished members of the subcommittee, my name is Pat Shine. I am the Director of the Military

and Civilian Pay Service’s business lines for the Defense Finance

and Accounting Service [DFAS].

I thank you for this opportunity to discuss our role in the travel

reimbursement payment process to mobilized soldiers. DFAS

shares the responsibility to provide timely and accurate travel reVerDate 11-MAY-2000 10:40 Jun 01, 2005 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 D:\DOCS\21297.TXT HGOVREF1 PsN: HGOVREF1
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imbursement payments and customer service with the active and

reserve components of the military departments. DFAS has the primary responsibility of processing travel reimbursements to the mobilized Army National Guard, U.S. Army Reserve and active duty

Army forces.

We accomplish this mission by using a combination of military

personnel, Department of Defense civilians and contract employees.

For the fiscal year that ended September 30, 2004, we employed 33

military, 286 civilians, and 283 contract employees. We processed

over 2.2 million travel reimbursement claims; 380,000 of these

claims were specifically related to the mobilized Guard and Reserve

forces which is the focus of my testimony today.

Normally, Guard and Reserve soldiers are sent directly to an

overseas combat theater of operation, or used at various stateside

locations as backfill behind active component soldiers who are sent

to the combat theater. Soldiers deployed to the combat area where

government lodging and meals are provided are entitled to a flat

rate of $3.50 per day. Soldiers assigned to stateside locations on a

temporary status are entitled to full per diem to cover allowable

travel expenses, including lodging and meals if adequate government quarters and meals are not available.

Individuals in the combat area file a voucher for reimbursement

of their travel expenses upon completion of their active duty tour.

Mobilized soldiers who remain stateside not near their home are eligible to file accruals every 30 days in order to pay bills that they

have incurred. During the summer of 2003, we witnessed a dramatic increase in the number of mobilized Guard and Reserve soldiers and consequently an increase in the number of travel claims.

This spike in travel claims temporarily overwhelmed our DFAS

staff. To address this issue, we partnered with the U.S. Army and

secured additional funding to hire contractor personnel. In addition, we obtained the help of the U.S. Army Reserve and Army National Guard finance units to assist us in processing claims and reducing the backlog.

Within 30 days, the turnaround time decreased to the DFAS

standard of 8 business days. It has remained in that range since.

While our processing time has been at an acceptable range for the

past 18 months, there are two other issues that the Government

Accountability Office draft report, Army National Guard Inefficient

Air-Prone Process Results in Travel Reimbursement Problems for

Mobilized Soldiers, has highlighted.

The first area the GAO review noted that required immediate attention was the payment of interest for interim vouchers. We were

not paying interest on accrual claims when the processing time exceeded 30 days as required by the Travel and Transportation Reform Act. In the course of GAO’s review, they brought this to our

attention and we immediately changed our procedures to comply

with the act.

The other significant area relates to the number of claims returned to service members because they were not properly completed and documented in order for us to make payment. These incomplete claims are returned for various reasons, including missing

travel orders, missing receipts, missing signatures or incomplete or

illegible itineraries. We have partnered with the leadership of the

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Guard and Reserve in providing trend analysis data on these types

of problems occurring so the commands can focus their corrective

action.

We also have provided additional education on the travel reimbursement process to travelers. Specific examples of actions we

have taken include, we have developed and distributed handouts at

mobilization and demobilizationsites that explain how to prepare

the travel reimbursement claim and what supporting documentation is needed. This information is also available on both the DFAS

and Army Knowledge Online Web sites. We partnered with the

Army National Guard in developing a detailed information packet

entitled the Citizen Soldier’s Guide to Mobilization Finance that

explains the various authorized entitlements while in a temporary

change of station status.

We have also visited select mobilization and demobilizationsites

to provide hands-on instructions on how to complete the travel reimbursement claims. As a result of these actions, we have been

partially successful in correcting problems associated with return

claims. The return or rejected rate is now around 12 percent, down

from the previous rate that was 25 percent or higher. We continue

to work with the leadership of the Army, the Guard and the Reserve and specific units to drive this rate down even further.

The Department’s ultimate solution for travel pay reimbursement is the Defense Travel System [DTS]. DTS is a Web-based

end-to-end process that will ease the administrative burden on the

traveler and simplify many of the complex entitlement rules in the

manual paper-intensive process currently used today. DTS will be

available to support mobilized Guard and Reserve soldiers in the

Army by the end of fiscal year 2006.

Mr. Chairman, DFAS remains fully committed to our continuing

partnership with all service components in improving the accuracy

and timeliness of travel reimbursement services. We will remain

steadfast in taking aggressive action and we will look forward to

reporting our results to the GAO and to the committee.

Mr. Chairman, this concludes my formal remarks and I will be

happy to answer any questions the committee may have. Thank

you.

[The prepared statement of Mr. Shine follows:]

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Mr. PLATTS. Thank you, Mr. Shine. Again, thanks for you and

your staff on the front lines of this issue and meeting those challenges of the spike in mobilization and trying to quickly respond

to them. We will look forward to getting into some of your actions

in more detail in the question and answer.

Mr. SHINE. Thank you.

Mr. PLATTS. Secretary Argodale.

STATEMENT OF JOHN ARGODALE

Mr. ARGODALE. Chairman Platts, Mr. Towns, distinguished members of the subcommittee, thank you very much for the opportunity

to appear before you this afternoon to discuss travel reimbursement of the Army’s mobilized National Guard soldiers.

My name is John J. Argodale. I am the Deputy Assistant Secretary for Financial Operations. The motto of the Army Finance

Corps is service to soldiers. I, along with my civilian and military

counterparts, take great pride in providing service to soldiers, particularly during these times of unprecedented mobilization. Secretary Harvey’s expectation is perfection in all matters impacting

soldier pay. We are working to make the Secretary’s expectations

a reality.

Since the onset of the global war on terrorism, the Army has executed large-scale mobilizations and demobilizations on a scale not

experienced since World War II. The Army mobilized over 342,000

National Guard and Reserve soldiers, demobilized 186,737 soldiers,

and as of March 3, 2005, 155,283 Army National Guard and Reserve soldiers are mobilized for active duty.

The magnitude of the mobilization and consequent travel claims

created a significant strain on the Army’s ability to ensure mobilized soldiers receive travel reimbursements in the correct amount

and on time. We simply needed to improve our performance.

Service to soldiers is the Army Finance Corps’ ultimate objective.

To provide the travel reimbursement service our mobilized Guard

and Reserve soldiers deserve, we applied significant people and

money. We mobilized more than 80 soldiers from the Army National Guard and Reserve finance units to assist DFAS in processing travel claims. We paid DFAS $17 million between fiscal years

2002 and 2004 to hire additional people needed to process travel

claims.

These efforts enabled DFAS to significantly increase the number

of personnel processing contingency operations travel claims. For

example, in October 2001, there were only 35 people processing

contingency operation travel claims. In July 2003, the number of

people processing contingency operation travel claims grew to 141,

including 83 mobilized Reserve component soldiers. Currently,

there are approximately 320 people processing contingency operation travel claims.

The increased personnel enabled DFAS to stabilize travel claim

processing. Over the past 18 months, DFAS reports that travel

claims are processed within 8 business days of receiving a claim for

reimbursement.

In addition to people and money, we have made several process

improvements designed to correct deficiencies in processing travel

claims and improve our service to soldiers. To correct confusion on

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meals reimbursement, all mobilization orders now state that soldiers will not be charged for meals when billeted on government facilities. In situations where soldiers are billeted off-post, reimbursement is authorized for meals consumed during non-duty hours.

To improve service to soldiers, claims with missing documentation, such as the mobilization order, are no longer rejected back to

the soldier for resolution. Instead, the claims are held and the

missing orders obtained from a central location. This improved

service resulted in the expedited payment of nearly 17,000 claims

and a reduction in rejected travel claims returned to soldiers, from

over 20 percent to a range of 10 percent to 12 percent of total

claims received.

The Army receives weekly metrics from DFAS on all contingency

travel operation claims. The metrics disclose the total claims received, total processed, processing time, total claims rejected, and

reasons for rejection. We have learned that most claims are rejected because of missing signatures and incomplete itineraries.

These metrics are a valuable tool for use in educational materials

and information designed to improve the travel reimbursement

process.

In summary, we are improving our service to soldiers. Travel reimbursements are processed within 8 business days of receipt of

the claim by DFAS. We reduced rejected claims to a range of 10

percent to 12 percent of total claims received. Changes to the process for rejecting travel reimbursements expedited the payment of

about 17,000 claims. Metrics are monitored weekly and used to inform soldiers of common mistakes made in submitting travel

claims.

Although we have made progress, we must continue to pursue

additional process improvements in order to meet Secretary Harvey’s goal of perfection in the delivery of soldier pay. To solve larger problems such as integrating personnel and payroll actions and

automating travel claims and reimbursements, the Army needs

DOD-driven solutions such as the Defense Integrated Military

Human Resource System and the Defense Travel System to come

online soon.

Service to soldiers is my job and the job of my civilian and military colleagues. I appreciate the subcommittee’s interest in this

issue and look forward to continued collaboration with the subcommittee staff and the GAO to improve service to soldiers.

Thank you.

[The prepared statement of Mr. Argodale follows:]

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Mr. PLATTS. Thank you, Mr. Secretary. Given the heroic service

of our men and women in uniform, and in this instance specifically

folks in our Guard, the goal of perfection that Secretary Harvey

has set is an appropriate one and it will take all of our collective

efforts to achieve that. We certainly look forward to continuing to

work with you.

I think we will, Mr. Wallace at least get you in yet, and we may

get Mr. Kutz in. We will see.

STATEMENT OF ROY WALLACE

Mr. WALLACE. Thank you, Mr. Chairman, Mr. Towns, members

of the subcommittee. I would like to thank you all for taking such

an acute interest in the welfare of our National Guard, Reserve

and active component soldiers and for allowing me the opportunity

to appear before you today.

I have submitted the written statement for the record and I

would like to make just a few brief comments, and then I will open

for questions.

My office is responsible for the policy formulation for travel and

pay within the Department of the Army. However, this is a joint

game and therefore we work diligently with the office of the Secretary of Defense and our sister services to ensure that the policies

are universal and applied to all. In fact, the mobilized soldier is

paid and travel requirements are exactly the same as the active

soldier.

In addition, we authored the personnel policy guidance, which is

a voluminous instruction to the field which is distributed to all

Army units and organizations. It is a living document that we have

continued to adjust as things such as the GAO report that we are

working today have come to light. The G–1 is fully committed to

working with the Office of the Secretary of Defense and DFAS to

provide clear and concise guidance to the field.

Thank you very much.

[The prepared statement of Mr. Wallace follows:]

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Mr. PLATTS. Thank you, Mr. Wallace.

Greg, we are going to try to get you in here, and then I will be

running out, and then we will stand in recess for probably about

20 minutes, get my votes in, and then we will get back over.

Mr. KUTZ. OK.

STATEMENT OF GREGORY D. KUTZ

Mr. KUTZ. Thank you for the opportunity to discuss travel reimbursement problems for mobilized Army Guard soldiers. As you

had mentioned, I previously testified on pay problems for Guard

and Reserve soldiers, including those injured in the line of duty.

Several weeks ago, we had that hearing.

Our bottom line today, as you mentioned, is that soldiers have

also experienced significant problems receiving timely and accurate

travel reimbursements. My testimony has two parts. I will talk

first about travel reimbursement problems and then briefly discuss

DOD actions.

First, we identified inaccurate, delayed and denied travel reimbursement for Army Guard soldiers. Our 10 case study units experienced a broad range of travel reimbursement problems. For example, for these 10 units, we identified over $1 million of delayed

or disputed amounts for meals, some of which remain unpaid.

Some of the examples of the issues that we found include 36 soldiers from a Pennsylvania unit that filed identical vouchers, but

were paid amounts ranging from zero to $1,700 every month. Onehundred and seven soldiers from a Maryland MP unit were housed

off-post and denied per diem authorization for meals. As a result,

some of the meals were paid for out-of-pocket by soldiers, while

others rode bicycles or hiked over 3 miles to the mess hall. And 32

soldiers from a Georgia MP unit incurred debts totaling over

$200,000 when the per diem payments that they had already received were retroactively disallowed. Debt collections were started

while these soldiers were deployed to Iraq, causing financial hardship for the soldiers and their families.

In the last several weeks, we became aware of the potential for

similar problems for injured Guard and Reserve soldiers. For example, we identified problems with active duty medical extension orders and confusion over injured reservists’ entitlements to meals.

As a result, many out-patient soldiers may have inappropriately

paid for their own meals. Army officials have represented that they

are looking into this matter.

The root causes of these reimbursement problems relate to people, processes and automated system. For example, as the operational tempo increased after September 11, many installations did

not have available on-post housing for Army Guard soldiers. As a

result, soldiers were housed off-post in commercial hotels and

apartments. This created novel situations that were not specifically

addressed in the travel regulations.

The current paper-intensive error-prone process was another

major factor. Problems in assembling all of the paper necessary for

a complete travel voucher package resulted in a reported 85,000

vouchers being rejected and returned to soldiers in 2004. This

churning process added to delays and frustration for soldiers.

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Second, as was mentioned by the other witnesses, DOD has

taken many actions to improve the situation. I will not repeat what

those were in the interest of time here, but as was mentioned, they

are also implementing the Defense Travel System to address longstanding problems, even those beyond Guard and Reserve soldiers.

However, our view is that given that DTS has been underway for

about 8 years and cannot currently be utilized by mobilized soldiers, we believe it is likely that the soldiers will have to live with

the current system for the foreseeable future.

In conclusion, the current reimbursement system was not designed to handle the increased operational tempo from the global

war on terrorism. With a new system, in our view, likely years

away, it is important that Army, DFAS and the National Guard

continue their efforts to compensate for the problems with the current system. We look forward to continuing to work with this subcommittee and the other witnesses and their organizations to see

that soldiers have the world-class travel reimbursement system

that they deserve.

That ends my statement. I will be happy to answer questions.

[The prepared statement of Mr. Kutz follows:]

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Mr. PLATTS. Thank you, Mr. Kutz.

We will stand in recess for about 20 minutes to the call of the

Chair.

[Recess.]

Mr. PLATTS. We will reconvene the hearing. I apologize for the

delay and appreciate your patience while we got the votes. The

good thing is, that is our last series of recorded votes on the floor,

so I should not have to run out again in the midst of our ongoing

hearing.

Again, I want to thank all four of you for your testimonies, and

I will get into some more specifics. The way I understand the problems identified in the GAO report and the statements of our witnesses here today is that we all acknowledge some significant problems that have come up as we have experienced this tremendous

mobilization, some of which were more troublesome than others.

We have made some good headway in the right direction. We still

have work to be done and we seem to have an idea of what that

work is as we go forward.

Where I would like to start is maybe with GAO, Mr. Kutz. You

have identified 23 specific recommendations and in your testimony

I believe 20 of those were agreed to and acted on by the Department, or 21, and then two that were partially agreed to and being

acted on.

If you want to summarize from where we are today versus at the

time you did the study and your best information as you understand from your perspective of what major issues are still out

there, or kind of in the works, and then we will get to the Department’s perspective on where we are and how we are addressing

those.

Mr. KUTZ. Right. I mentioned in the beginning that the issues

were people, processes and automated systems. I would say that

the significant activity has been on dealing with human capital

issues and process improvements such as customer service and just

dealing with the specific problems we identified in this report, putting other training and education programs in place.

There has been quite a bit of activity and we have seen solid evidence that is happening. So I would say with respect to dealing

with the current system and compensating for the problems with

it, there has been very good progress. Our bigger concern is the Defense Travel System. When we did take a good look at the Defense

Travel System as it relates to this problem, it was barely on the

drawing board. I think that there has been probably some progress

since we looked at that, but the key issue there is that system is

a TDY system, which is temporary duty versus temporary change

of station for reservists. It is a little bit different thing. Putting a

voucher package together here in an automated manner would be

much different than TDY. So the DIMHRS System is supposed to

automate the various orders involved in completing a voucher package. We believe that is going to take some time to do.

Mr. PLATTS. The progress we have made is good, and if I can

maybe re-summarize your statement, as we concluded before the

recess, is critical because of your belief that we are going to continue to rely on this labor-intensive system for a long time to come,

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based on your assessment of where the Defense Travel System is

and the likelihood of that being online.

Mr. KUTZ. That is correct. Again, we look at a lot of systems at

DOD and we have done a lot of work for your subcommittee on

that, and I think we have some reports coming up for you. The real

history of the systems at DOD is that there is no system that has

ever come online on schedule within performance parameters and

within cost parameters.

So until they start showing that they can field these systems

within cost, schedule and performance parameters, we believe that

they are going to have to continue to deal with the current systems

and make sure they have contingency plans in place to work

around the current processes.

So again, I think that is something the proof will be in when we

see tangible evidence that these things are being dealt with from

a system perspective.

Mr. PLATTS. Mr Shine, maybe we will start with you on the recommendations were made and where you believe you are on those

recommendations, and your assessment of what further work you

have to do based on what came out of the recommendations from

GAO.

Mr SHINE. Yes, sir. As Mr. Kutz indicated, when you look at this

from the people, processes and systems perspective, the Army has

part of this as it relates to their mission to publish orders and to

determine the statements of non-availability which in many cases

drives the entitlement that we work on.

What the GAO specifically addressed to the DFAS operation was,

one, the relation to the amount of time it was taking us to process

the vouchers. I think I indicated that we have worked on that and

we feel that we have had that under control for a significant

amount of time now.

Mr. PLATTS. And that is down to the 8 days.

Mr. SHINE. Yes, sir.

Mr. PLATTS. Once you get it and process it, it is an 8-day turnaround.

Mr. SHINE. In what we call a ready-to-pay voucher. All we mean

by that is that all the necessary itineraries are completed, all the

normal justification documents are in fact included and the voucher

is a completed package and we are now able to do that within 8

business days.

The other issue that the General Accountability Office identified

for us was the issue with interest. I just wanted to clarify for that.

We already knew that this was an issue that was in the law, but

anytime we did what we called a final settlement voucher, we were

already identifying and paying the interest. Where we were not

doing this, there was a situation where individuals that are mobilized in the United States, where they are actually getting what we

call accrual payments every 30 days, we did not understand. We

did not interpret the law, and when the GAO brought that to our

attention, we recognized that needed to be done.

So not only are we doing that now, but we are also committed

to going back as the GAO asked us to do and take a look to see

all the people who had gone since the mobilization started back,

going back to the September 11 timeframe. We are committed to

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going back and looking at all those vouchers to determine if there

in fact were periods or instances when mobilized soldiers should

have received interest payments and did not.

By and large, these are not large payments. I just want to make

sure that I am clear. The average interest payment that we are

paying today is about $8. So it is not a lot of money, but it was

something that we had a different interpretation of. Once the GAO

identified it, we did not wait for their draft report. We went ahead

and changed that on the spot. So from that standpoint and working

with the Army to bring on sufficient assets to get the turnaround

time under control, we feel like we are doing fairly well.

The other issue that is in our lane has to do with customer service. This is really getting at what happens when people call in or

tell us that they have a problem. There were problems when the

GAO did their initial report that related to backlogs, the volume

of calls that actually exceeded our capability to answer. We have

taken several positive steps to address that. If you would like me

to, I can go through them in detail, but I would like to let you know

that we feel our customer service now is much, much improved

from what it was at the time the GAO did the report.

Mr. PLATTS. One specific question on that customer service side

is I guess initially, according to the GAO report, when you set up

an 800 number and were fielding I think it was 15,000 calls per

month, I believe, if that is correct.

Mr. SHINE. That is correct.

Mr. PLATTS. But it appears that you were not gleaning from

those calls, using metrics to identify what were the underlying

problems to go out and try to fix them out front so you would reduce the number of calls in the first place. Is that something you

are doing now, that you are better reviewing the substance of those

calls? I acknowledge and it is a good step that you are being responsive, but are you learning from that response?

Mr. SHINE. The answer is yes on a couple of fronts that I would

just like to mention. First of all, we recognize that a large number

of the calls we were getting were simply people trying to find out

if we had gotten their voucher or not. One of the things that GAO

pointed out to us was that we were not logging in every voucher

that we received. So once we start logging in, it is an automated

process that feeds an email directly to the soldiers, what is called

AKO, or Army Knowledge Online email account. It tells the that

their voucher has been received, and they get a similar email when

we have computed the voucher because we are now following that

log-in process. So we have seen the number of calls, first of all, cut

in half from what the GAO originally saw.

We also have a system called an automated call distribution system we have in place that has up front, while some people find it

to be somewhat irritating to go through what we call an interactive

voice response, where you press one for this, press two for that,

press three for this, remember that the customers we are taking

care of in many cases are located around the world. Their duty

hours are much different than ours. So while in many cases people

just want to get information about the status of their travel voucher, having an interactive voice response system like that we have

found to be very, very helpful.

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As a result of that, we have been able to identify when those

calls come in like that either on the interactive voice response system or if they actually talk to a human being, we are now able to

do what we call data mining. We are actually able to go back and

look at what trends we are seeing and that allows us to be able

to provide that to the weekly information that we provide to the

Army to also help as the Army is going out, and with the Army

Guard to work directly with the units on problems that we are seeing out there. But it also tells us if we are having a problem inside

of DFAS so we can fix that as well. I think we have taken positive

action on both of those venues.

Mr. PLATTS. You mentioned, I think you said that 8 days is ready

to pay vouchers. Is that the correct term?

Mr. SHINE. That is the correct term.

Mr. PLATTS. Everything is in order, but one of the problems that

was identified are the hoops that a soldier is having to go through

and the voucher comes in and it maybe had three problems with

it, but only one was identified. It was sent back, you are missing

something, it comes back, oh, you forgot to sign it, it goes back.

It is my understanding you have set up in essence I will call it

an ombudsman office so that instead of sending them back and

forth, you have someone who takes that and works the problem on

an individual case. Can you expand on that?

Mr. SHINE. Sir, I can. That ombudsman program came into effect

as a result of both your subcommittee and the larger House Government Reform Committee requesting that both the Guard and

the Reserve establish such an ombudsman program for pay. Once

it was already in place, it was the perfect vehicle to take care of

these travel-related issues as well. While you may not be aware of

it, sir, where we actually conduct all these travel processes that I

am referring to, what we call contingency travel operations, is in

Indianapolis.

The Army National Guard has a pay liaison office also located in

Indianapolis, which is the source of their ombudsman program. So

what we are able to do, sir, is as these issues come up, we now take

them directly to the Army National Guard office. I would be happy

to let Mr. Argodale talk about what happens from that point on,

but we found that to be a very, very responsive process. As a result, we have seen much quicker turnaround and in many cases we

do not even have to return the voucher to the soldier at all. The

Army National Guard Ombudsman Office is able to fix the problem

and we can take care of it within 24 hours.

Mr. PLATTS. On the automated systems, sometimes they are frustrating. I have a bank that if I want to check something I can do

that automated system. The fact that with my hours, when I get

to call the bank is about midnight. There is usually no one there

answering the phone, but I can get my automated system. That use

of business practices, which is something I know you are really

looking at doing, and I think, Mr. Secretary, maybe you talked

about it in your testimony of using some business practices to kind

of modernize your processing, is great to hear in trying to address

what was a fairly abysmal situation in the past that is still a challenge, but at least heading in the right direction from what you

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have to work with. I want to get into the computer issue, which

is a long-term issue, but in trying to address.

I do want to ask at least a couple of specifics on a couple of the

cases. One actually Mr. Kutz referenced in an example. I think you

said it was a Maryland Guard unit that was authorized for reimbursement and paid, and then subsequently the authorization as

taken back.

Mr. KUTZ. That was actually a Georgia unit.

Mr. PLATTS. Georgia. Did I understand you correctly in saying

that in that instance, the soldiers were deployed and while they

were deployed debt collection proceedings were begun?

Mr. KUTZ. That is correct.

Mr. PLATTS. Were they deployed overseas?

Mr. KUTZ. Iraq, yes.

Mr. PLATTS. To Iraq.

Mr. KUTZ. Yes.

Mr. PLATTS. That seems an example of a pretty poor approach.

How often has that happened and are we working to ensure it

never happens again, because of the improvements you have made?

That is something that if a soldier is paid and you are deployed,

I think it is a fair assumption for a soldier to make on being paid

appropriately. Their concern should be fighting the war, not getting

paid. That is back here.

I understand errors are going to happen in that pay, but the fact

that we then compounded the error by actually beginning debt collection against soldiers who were deployed in Iraq. Can we expand

on that? I am not sure who is going to best be able to respond, Mr.

Shine, if that is you or the Secretary, who would best be able to

address that specific case?

Mr. ARGODALE. Sir, I am not familiar with the specific entitlements that may have resulted in an overpayment and a collection

action, but I can tell you that we have been very proactive with respect to training soldiers and educating them on what the entitlements are and the proper methods for filing a travel claim and the

things that they can expect to be reimbursed for.

One of the major issues that we corrected with respect to the

findings in the GAO audit is the issue of meals, and whether meals

are reimbursable or the soldier has to pay out-of-pocket. All of the

mobilization orders now have a statement that clearly states that

meals will be provided at no cost to the soldier. In situations where

soldiers are not housed in a government facility on-post, and they

are off-post somewhere, meals that are consumed during non-duty

hours are reimbursed.

We also tell soldiers that they need to have a statement of nonavailability in order to be entitled to certain types of reimbursements. So we think that an up-front kind of an education process

is the best remedy to ensure that soldiers understand what they

are entitled to and what they are going to be reimbursed.

Mr. PLATTS. I agree. I think the steps that you are taking, such

as making it clear on those papers that reimbursement, those

meals being provided, those are all very important steps. Somehow,

though, in at least this case reference, and I am not sure how common this is, and that is why I asked the question. I hope it is not.

Something was filed and reviewed and authorized, acted on and

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paid, and then there is either, correctly or incorrectly, a rescission

of that authorization that resulted in an effort to recoup the money.

Even if it was an accurate rescission, the fact that we would begin

debt collection while soldiers were deployed is to me unacceptable.

Who would actually have begun that debt collection? I am not

sure what office. Would that be DFAS?

Mr. SHINE. Sir, what happened in this particular case, and it was

somewhat unusual because the individuals, as Mr. Kutz indicated,

were from Georgia and at the time they were actually activated to

go to Fort McPherson, GA. What ended up happening was there

are certain restrictions in the joint travel regulations that preclude

an individual from drawing temporary duty allowances when they

are actually able to live at home. In this particular case, each installation has to make a determination installation-by-installation,

by the installation commander as to what the commuting distance

is going to be considered whether or not you are entitled.

What happened, sir, was we were paying these people full per

diem allowances. There was a decision made subsequently by the

installation commander at Fort McPherson that individuals in certain counties were considered to be within the local commuting distance and therefore not eligible, and therefore these payments that

had been made were then determined to be improper payments and

therefore they were collected.

I fully appreciate what you are saying about the fact that when

people are going into harm’s way and these collections are being

made, but it was a normal administrative process that was just, if

you will, going through. Once the individuals were identified, we

then processed the collection actions. That is actually how it happened, sir.

Mr. PLATTS. Are there any safeguards in place today, one, to

have that administrative decision that this is a commute, so reimbursement, there is no eligibility here, up front, so that we are not

repeating that type of problem? Because it sounds like it is still a

local installation decision, but how are we ensuring that decision

is made up front by that installation commander and not after the

fact to avoid this. And also, what is still the position today if there

is an overpayment as far as debt collection, if it is a soldier deployed? Because it seems to me that an effort to identify and work

with the soldier, but it seems that we were kind of like, well,

whether you bore responsibility for the error or not, it is your responsibility and we are coming after you, is how it sounds. If I am

wrong, I am glad to be corrected.

Mr. Wallace.

Mr. WALLACE. Yes, sir. From a policy position, in direct response

to this particular case, we have gone back out in our policy guidance to all installations and all units to reiterate what the joint

travel regulation says and what the law says, and to provide them

with vignettes that would allow them to differentiate when this

person should be reimbursed and should not.

Mr. PLATTS. So you have taken a proactive education approach,

and that includes, too, installation commanders?

Mr. WALLACE. It goes to every unit and every organization in the

U.S. Army.

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Mr. PLATTS. I think what is good that it has come out of the GAO

report is that they have identified issues, examples like this, that

I appreciate that you are seeking to respond to these cases and

learn from them and try to guard against a repeat of that type of

problem. To me, when I read the report and the testimony it is that

on the one hand I am displeased because of what we put our soldiers through, but I am also encouraged by the efforts to correct

the wrongs of the past to make sure we do not repeat them in the

future. That is where I hope as a result of this hearing, we can

help continue to push in that right direction.

So I have more questions, but I want to yield to the ranking

member, Mr. Towns.

Mr. TOWNS. Thank you very much, Mr. Chairman.

Let me ask you, Mr. Shine, is DFAS’ problem human capital or

is it technology barriers?

Mr. SHINE. Sir, I would answer that we are probably a little bit

of both. We actually operate a semi-automated system that we use

today. The reason I call it semi-automated is because it requires

paper to come in and then we inter-date it into a system that

automates the computation of what the travel reimbursements are.

So we are in fact involved with that process and that is in fact the

payment system that is used today to pay the individuals that we

are describing, not only for the mobilized Guard and Reserve, but

also it is what is paying the active duty for regular temporary duty

travel as well.

The issue that DFAS had in terms of human capital, sir, I would

say really was one that occurred in approximately May 2003, when

we saw a huge surge that overwhelmed our capability for on-staff

personnel. We knew that this was directly related to the global war

on terror. We anticipated that this would not be something that

would continue ad infinitum. So rather than going out and hiring

full-time permanent Civil Service employees, we worked with the

Army.

The Army gave us money to hire contract personnel because we

viewed this as a short-term mission. The Army also was very, very

helpful in actually going out and getting Reserve and Guard units

whose primary mission is to do finance, who actually came on

board for their active duty mobilization, came to DFAS and actually sat and computed vouchers to help out with this process. The

Guard and Reserve were only there for 1 year, but the good news

is that with the continued support of the Army by giving us the

dollars that we need to maintain the human capital, we have now

at DFAS the right number of people on board, we think, to take

care of the vouchers that are coming in such as we can maintain

the 8-day turnaround time.

Mr. TOWNS. So you really feel that as we move forward there will

be less chances of these kind of occurrences where people will not

get paid or will not be able to travel, will have to wait for reimbursement? You really feel that based on what is in place now that

a lot of this will just disappear?

Mr. SHINE. Sir, the other dimension of the human capital issue

has to do with the individuals that are actually completing the

vouchers and their chain of command who are reviewing those

vouchers. I would really prefer, if I could, to defer that question to

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the Army under their domain, because there is a human capital

issue there on whether or not the voucher we get is in a status that

can be computed or not.

Mr. TOWNS. Right. Let me ask you then, Mr. Argodale, are the

policies clear? Should they be revised to be able to give the kind

of instructions that need to be put forth in order to eliminate some

of the things that are going on? It seems to me that there is a lot

of stuff here that is a little fuzzy.

Mr. ARGODALE. Sir, I would agree with you. As a traveler myself

and a person involved in the finance and accounting business in

the Army, I can tell you as both a traveler and a finance person,

that the rules are fuzzy and there is some confusion. It is compounded by the fact that the preponderance of the soldiers who are

involved in the case studies are not what you would call professional travelers. They travel very infrequently and their understanding of filing the claims, filling out the forms is very limited.

What we have done to correct that is undertaken a massive education and training program to enlighten these folks with respect

to how to fill out the vouchers. We train their commanders in what

to look for in terms of how to properly compile and complete and

submit a travel claim. We explain to them what the entitlements

are and what they can expect to be reimbursed for. We have corrected problems associated with mobilization orders to clarify

meals and lodgings will not be charged to the soldier, they will be

provided at no cost to the soldier.

We review on a weekly basis metrics that DFAS provides that

identify the common types of mistakes that are seen in travel

claims that cannot be computed. We work with DFAS and with the

Guard and the Reserve components to improve the training materials, to incorporate the mistakes we see in the actual travel claims

that are filed.

So Mr. Shine is correct. On the one aspect of it, the human capital, pertains to the folks available to actually process the claims,

and then on the other side there is a human capital dimension with

respect to the traveler actually filing the claim. During the period

of the study, we were not doing a real good job, frankly, in educating people on how to file a claim and what they could expect to be

reimbursed for.

Mr. TOWNS. Right. Mr. Wallace, what effects have the reimbursement problems, have you identified that, I guess I am more concerned about the morale and of course the family circumstances. I

can see all kinds of things happening here as a result of this. I can

see the morale being low. I can see family situations in terms of

that can treat problems in terms of the family itself. Domestic

problems I am talking about. What have you seen in this area, or

am I overreaching?

Mr. WALLACE. Yes, sir. What I can tell you from the Army G–

1 who compiles all of the recruiting and retention stats, I can tell

you that all three components of the Army are meeting their retention goals. What that tells me as a former colonel in the U.S. Army

myself and a commander once upon a time, is that the people that

are with us now are staying to the appropriate levels that we need

to man the all-volunteer force.

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What we are seeing on the other hand, though, with recruiting

is that we are seeing a fall-off of our ability to gain the numbers

that we need. Part of that deals with the time of the year that we

are in now, and I am sure part of it deals with the things that you

mentioned. But as far as the people that are in, and I know the

National Guard has hit its marks every month this year for retention. So that tells me that the people are staying with us.

Mr. TOWNS. I see the red light is on, Mr. Chairman. I yield back.

We will have another round?

Mr. PLATTS. Yes, sure. Thank you, Mr. Towns.

Mr. TOWNS. OK. Thank you.

Mr. PLATTS. A followup on the Georgia Guard case, and again

from what we learned. I think that is one of the important aspects

of our past interactions and again this hearing today is learning

from the actions of the past and how to improve them in the future.

The case where the per diems were paid and then as final settlements were made, the installation has decided, I guess it was a 50-

mile distance for being eligible. Was there any individual treatment

of those cases? What I mean by that is were some soldiers, and I

do not know the specifics of these cases, but they might have decided, well, 50 miles, I can drive that. I commute 96 miles each day

for session each way.

But if I am being reimbursed and I am eligible, I am going to

take a hotel at least Monday, Tuesday, Wednesday, Thursday for

the days during the week, depending on what the schedule is, and

they actually did have out-of-pocket expenses under the belief that

they were eligible. Was there any examination of the individual soldiers? Or was it the policy as of when we finally settled it was 50

miles or not, and no accounting for those who maybe actually had

out-of-pocket expenses for lodging or meals in good faith, under the

belief that they were eligible?

Mr. SHINE. Sir, I believe that there are portions of your questions

that I do not know, but there are some portions that I think I can

address.

Mr. PLATTS. OK.

Mr. SHINE. First of all, the 50-mile rule, while that is commonly

used, in vogue commonly throughout the Department of Defense, is

actually not the proper regulatory reference. In this case, that is

not what was applied. It was actually a county-by-county determination that was made by the installation commander. But nonetheless, you have a situation where on the county line, you could

have an individual living on one side of the road who was considered within the commuting distance, a person across the street that

was out.

What we did find, sir, was even in those cases where individuals

were determined after the installation commander made the decision to be within that normal commuting distance, there were

times when based on their duties they were considered to be called

what is known as ‘‘essential’’ personnel, which meant that they had

to remain at Fort McPherson for a longer period of duty. In many

cases, they had to spend the night there. In those cases when they

were required for their duty to be present and not to be able to go

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back to their normal home of residence, then those per diem entitlements were allowed to be paid.

But in terms of your larger issue about how it was dealt with individually for each member of that unit, I am sorry, sir, I do not

know, but I will be happy to research that and give you a more

complete answer.

Mr. PLATTS. I think it is something worth looking into to learn

from the past because, and it has been too many years since I was

in law school and practiced law, but the principle of estoppel I

think is maybe what I am thinking of here, where you in good faith

relied on what you were told and to now be punished for complying

with what you were told up front, and retroactively be harmed,

that if they in good faith relied on it and had actual out-of-pocket

expenses, so that we are not talking about a windfall here, that

there is a good case to be made that they should be able to account

for them.

How they would retroactively account for them if they were not

being required to up front is another issue, but I think it is something worth looking at. It really goes to that issue of the ombudsman where you individualize these cases because there are going

to be extenuating circumstances as in this case, where you found

those where they were essential, that is an extenuating circumstance if they are required, but maybe they were not required,

but hey, I am going to be reimbursed. Instead of driving home tonight, I am going to stay, thinking I am not going to have out-ofpocket.

So I do appreciate your looking at that and giving us a general

response if you would.

Mr. SHINE. Sir, I would be happy to do that and provide you with

a more detailed response. I would also like to let you know that

what you refer to as estoppel, in the Department of Defense we actually have a waiver and remission process. So it is possible for an

individual to submit a waiver and the circumstances that you describe, which is that I relied on what I thought was to be solid information from a government official, and if in fact individuals can

produce receipts that they actually incurred expenses relying on

that information, that has been the grounds in the past for us to

consider and approve a waiver process.

Mr. PLATTS. In that sense, then, an individual appeal ability?

Mr. SHINE. That is exactly what it is, sir.

Mr. PLATTS. OK. That is good to hear, because if there was not

actual out-of-pocket expenses thought to be reimbursable, and we

do not want a windfall, I understand that, that we do not have that

windfall. Even in that instance, though, the fact that in the end we

suspended the efforts to have collection until the soldiers returned,

that would kind of be a general practice that we try to put in place.

I will tell you, I will be visiting troops probably in the next weekand-a-half or so overseas, including Iraq, I believe, as the schedule

is planned, but the one thing I hear, whether I have been with

troops in Iraq, whether I have been in Afghanistan or Bosnia, is

the most common request I have heard from troops is just do right

by my family back home so I do not have to worry about bills and

my family, and I can just do my job out here on the front.

72

I appreciate your looking at it further because if we have guys

on the front lines and they have a debt collection and maybe it was

a windfall, and now we are going to necessarily collect it, but they

have already spent it because they did not know it was a windfall.

That creates some financial hardships, that we go out of our way

to account for that. And it sounds like there is an effort to do that

and that you are learning from these actions of the past. So I appreciate your doing that.

So I do not forget from a procedural standpoint we do have a

written statement from our full committee Chair, Chairman Davis,

that we will submit without objection for the record in today’s hearing.

We have maybe another 15 minutes or so. We have those floor

votes done, but I have another markup going on in the Education

Committee that has votes coming up here as well.

Mr. Wallace, I want to touch on the place, when I looked at the

numbers and the spike that occurred in 2003, I guess, and where

Mr. Shine and your staff, you got overwhelmed with the number

of cases you were being asked to handle. There cannot be an

exactness, I guess, to what those numbers were going to be, but

there certainly should have been some lead-time of here is how

many troops we are planning on mobilizing, Guard troops.

How would that process work through the chain of command and

communication to DFAS to say, 3 months from now we are going

to have this huge number being called up, and so you had better

be ready with staff because you are going to get inundated subsequent to that mobilization. How did that happen then and how is

it happening different today so that we are better communicating?

I think that would be something more of a policy that you would

be looking at.

Mr. WALLACE. Sir, actually a tad out of the G–1’s lane and really

a G–3 question, who is responsible for the mobilization of the Army

of all components, and tasking through the force providers, those

organizations that will meet the requirements from General

Abizaid and the combatant commanders.

Your question is good, though, should we have known that we

were going to demobilize or we were going to fill vouchers and field

that many vouchers at one time is a very good question. From the

Army’s standpoint, we probably should have been able to foresee

that.

Mr. PLATTS. That is what jumped out to me is that it at some

point should not have been a surprise of how many troops were mobilizing and then from then forward the number that were going

to be demobilized and the new mobilizations, and it is an ongoing

process. I mean, as we speak that process continues.

Mr. WALLACE. One of the things that we have instituted as we

have gone along is a Saturday video-teleconference with the people

in-country, dealing with them. Mr. Argodale’s organization has a

representative that attends that every week where we talk about

mobilization issues and we talk about demobilization issues. We

run through all of the numbers and the different organizations by

unit of who is being mobilized and who is being demobilized, and

the issues that we are seeing while we are going through that. I

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would see that as a conduit for sharing information that could help

us prevent this in the future.

Mr. PLATTS. Again, my hope is that we are learning from the

past. I would imagine, Mr. Shine, you and your staff got a little

overwhelmed as the numbers of vouchers started rolling in, compounded by the system that was in place that as they were sent

back for corrections and came back a second time or a third time.

The analogy I would make, we see that right now with immigration

services where because they are not able to timely process the applicants for visas and things, they are giving temporary extensions

which take more manpower, which then just compounds the casework for the same amount of staff, and it is just a snowball getting

bigger and bigger.

Are you comfortable from a manpower standpoint of where you

are today and the infrastructure changes in the communications,

that you are positioned to, under the system you have, to deal with

the volume of mobilizations and demobilizations that you are dealing with?

Mr. SHINE. Sir, I would say as a general rule the answer is yes.

The Army, I think, as Mr. Wallace indicated with the Army operations under the G–3, is trying to do the best they can to get word

out to not only the financial community, but all the other support

communities, medical, legal, that are affected by mobilizations and

demobilizations.

Where we actually have to get involved with a little bit more intelligence is the fact that if an individual is going to be mobilized

and sent to either Afghanistan or Iraq, in all likelihood, sir, they

are not going to file a voucher until the completion of their mobilization tour, so in the final account process, that is one.

If in fact they get deployed to the United States, and that is they

actually come on an active-duty tour, but stay in the United States,

in many cases they are staying in a place where they are going to

be incurring expenses and they are going to have to be reimbursed

every 30 days so they can pay their credit card. That same individual only counts one for mobilization purposes, but now from my

standpoint, I am looking at paying them 12 times.

Mr. PLATTS. Twelve times, right.

Mr. SHINE. And so that has to be factored into the overall equation. But sir, I would just say that while it was a huge spike and

I think that we could probably take a hit for not being more attentive to it, I think that with the work we have done in partnership

with the Army over the last 18 months, to give us advance information not only for travel, but remember that when we were here

briefing you in July on the pay issues for the U.S. Army Reserve,

we now have put into place specific provisions where we get advance notification on units that are mobilizing and demobilizing, so

we can check to make sure that all their active duty pay entitlements are started when they should start, and that they are terminated when they leave active duty. So all we are doing is taking

that same information and using it to predict travel reimbursements as well.

Mr. PLATTS. And that proactive approach is so important here.

Mr. SHINE. It is working very well.

Mr. PLATTS. Good to hear.

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Mr. Towns, did you have other questions?

Mr. TOWNS. Yes, I do.

Mr. PLATTS. OK. Mr. Towns.

Mr. TOWNS. Mr. Kutz, in your testimony, you state that DFAS

has added over 200 additional staff to assist with the increasing

paperwork and voucher activity facing the agency. One concern I

have is that adding people who may not be well trained might not

be the solution to the problem. It might even further exacerbate

the problem. With that said, what have you been able to identify,

any training or development efficiencies among the newly added

staff?

Mr. KUTZ. I think, and Mr. Shine could probably add to this, that

initially when they had to hire several hundred people in a very

short period of time, that was a major challenge for them. I think

as time has passed, they have been able to train some of those

folks and get them up to speed. It is a very complicated system,

actually, to understand all of the entitlements and the various orders and the types of paper that come in. Again, one of the symptoms of having a very paper-intensive process is when you have a

volume increase which was like 3,000 vouchers a month up to

50,000 vouchers a month, the system can come crashing in and you

just have mounds of paper to deal with and that requires significant numbers of people. But I believe that initially they had training issues, but they have worked hard to address those.

Mr. TOWNS. Is anybody anywhere working to simplify this? I just

have problems with the fact that somewhere along the line that we

cannot simplify it. There are all these, again, these different gray

areas. It seems to me that some way or another we should just

make it clear as to what is and what is not. I mean, is anybody

looking at this in a very serious way?

Mr. ARGODALE. Sir, I will——

Mr. TOWNS. I served in the military, too, incidentally. Go ahead.

Mr. ARGODALE. Several years ago, the Department undertook an

effort to simplify travel. This was kind of the precursor to implementing the Defense Travel System. A couple of things that we did

was eliminate the need for receipts for certain types of claims. We

eliminated the payment on a pro-rated basis based on the time of

departure and the time of return. In the immediate case, we clearly

now stayed on mobilization orders that soldiers are entitled to,

meals and lodging at no cost or they are entitled to reimbursement

for meals consumed when they are not in government lodging. So

those kinds of things have helped to simplify the process.

I agree with you, sir, it is a very paper-intensive and a very confusing process. It is particularly difficult for folks that are navigating it for the first time. There are a lot of errors that can happen.

But the education programs, the training that we provide, in fact,

the Guard provides as part of the training package a template of

how to file the claim, what can be expected to be reimbursed, and

they even provide an envelope that is addressed that the soldier

can put the claim in and mail the claim to Indianapolis to be computed and paid.

And then the ombudsman cell, which as Mr. Shine mentioned, is

co-located with the entitlement folks working for him at DFAS, is

there as kind of a backstop, a quality control kind of a mechanism

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to work in conjunction with the DFAS entitlement staff to ensure

that the paperwork is properly assembled and prepared, and to

work with the soldiers to help them understand when there is an

incomplete claim that additional information needs to be provided

so that we do not create, as the GAO called it, this business of

churning and rejecting the same claim back to the same soldier

multiple times.

Mr. TOWNS. Let me ask another question. Based on the problem

here, I can see a lot of soldiers having problems with their credit.

What is being done about that, because I just got my credit report

the other day. I know in terms of how important that is. So what

is being done about that?

Mr. SHINE. Sir, let me try to address that if I could. What I

would like to do is reference you back to this huge spike that I was

talking about, where we in the Department knew that we were not

going to be able to have, we had so many vouchers on hand and

we had not yet gotten our full staff on board. Most of these individuals incur their expenses through the government travel card

which is currently being done through Bank of America. We contacted Bank of America. We explained the problem to them. We

asked them directly, would they be willing to forego and suspend

collection action for up to 90 days and they said absolutely yes. We

estimated we could get out of the predicament we were in within

90 days and as a matter of fact, we were.

So the bank cooperated in that case. That obviously was what I

would call sort of an extreme case where we went to the bank for

the entire Department of Defense. Now, we have individual situations, as the GAO has described, where while we are confident we

can process a voucher in 8 days, if in fact the voucher comes in

without complete documentation, we have to send it back, or if for

some reason the traveler upon completing the travel delays in submitting the voucher, there are possibilities that we could now be

going beyond 30 days when that individual’s bank statement is

going to be due.

There is a provision for individuals who have not yet been reimbursed by the Department to notify the Bank of America and to

suspend the fact that payment is due and they are willing to do

that for a period of time. Then what we would like to have happen

in that case is either directly to DFAS or through the ombudsman

program that we just described, for that to be elevated for the individual traveler so that we are aware that this individual now has

a problem that could impact on their credit, so that once we get the

voucher ready to pay, we can move that to the front of the line so

that we can prevent those very kind of situations from occurring.

Mr. TOWNS. OK.

Mr. Chairman, I yield back. Thank you.

Mr. PLATTS. Thank you, Mr. Towns.

That type of coordination is exactly what we are after, an acknowledgment of the challenges of what happens with DFAS and

the system that impacts the soldiers and their families, and we are

trying to address that in a proactive way.

I think I have 8 to 10 minutes before I have to run off with these

votes. I want to get into the defense travel system. A couple of

things concern me here are long term, that seems to be the solution

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to get away from this labor-intensive process and a more efficient

technology-driven, and will allow for a much more seamless process

here. The picture, though, on that side does not look real promising. My understanding from the report is that as of the end of 2003

we spent $288 million already, with the estimate of needing another $251 million to try to complete it by 2006. But even if we do

complete it, it is not going to be able to truly account for all of the

processes that you are responsible for as it is currently structured.

So I guess I would open it up to all four of you, if you can comment on your understanding of where we are with the DTS and

once we complete it, where we will be as far as truly solving these

problems. I will add in the other thing that jumps out to me is that

if I understand the way the system is intended to operate, because

of the issue of DTS and the issue of TDY payments versus actual

mobilization, that you are going to be relying on this new DIMHR

System to transmit information to DTS to then act on. And that

we really do not know when that is going to be up and running to

have the information available to transfer.

So it is a big issue and a lot of different aspects to it, if each of

you would want to comment on your perspective.

Mr. SHINE. Would you like me to go first?

Mr. PLATTS. That would be great. Thank you.

Mr. SHINE. DTS as you have indicated is in fact in operation

today. It is in operation at over, I believe, 4,000 sites and the current deployment plan is to have DTS fully fielded to all of the Department sites by the end of fiscal year 2006.

Mr. PLATTS. And that still holds today? That is the schedule that

we believe we are on?

Mr. SHINE. Yes, sir.

Mr. PLATTS. OK.

Mr. SHINE. But your question actually identified that while that

might be fielded to everybody in the Department of Defense, the reality is today that the DTS is limited in everything it is able to do.

I actually agree with Mr. Kutz’s statement that we are going to be

processing in this semi-automated paper-based mode for definitely

a period to come. It is hard for me to give a specific date on it, but

I agree with his contention that is going to continue to exist.

There are releases that are planned over the next several years

from the DTS program management office that will incrementally

address these issues. So that right now, it is primarily doing what

we would call routine temporary duty, and the type of mobilization

temporary travel that we are talking about is not in that category.

There is a process moving toward doing exactly that and the DTS

PM’s office is working with each of the military departments and

the specific issues, sir, you referenced to DIMHRS, which is the migratory military pay system, is because that is both pay and personnel. So it will have the capability to produce military orders. It

is working right now with each of the military departments, the

Navy, the Air Force, the Army and the Marine Corps, because each

of them have their own unique order-issuing capabilities today, and

trying to standardize that process is why this is an iterative process.

If you would like specifics on exactly which future releases are

going to contain which additional functionality, sir, I would be

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happy to take that question and provide it for the record. I just do

not have it right now at the tip of my fingers.

Mr. PLATTS. OK.

Mr. ARGODALE. Sir, in the Army we have DTS currently deployed

at 34 major posts, camps and stations. The functionality in DTS

does not support the requirements of the Reserve components.

Based on my understanding of the scheduled deployment release,

functionality will be provided sometime in 2006.

I currently use DTS myself and I am the typical business-type

of traveler. I can tell you from experience, sir, that it is a cumbersome system to initially become accustomed to, but once you

have done a couple of trips inside of DTS, you sort of get the hang

of it and then it becomes a routine type of a process.

It is very efficient. It tells you as a traveler what you are entitled

to before you leave, and it is very clear with respect to each day

giving you an itinerary and what you can expect to be reimbursed

in terms of meals, lodging, that type of information. And then on

the return trip when you actually file the claim, it tells you how

much you will be reimbursed. It shows how much should be split

paid to your credit card account, so that you do not have to write

a paper check to make the credit card payment, and then how

much will be reimbursed back to you for things that you did not

charge on your credit card.

Then typically you are reimbursed within 24 to 48 hours after

the claim has been certified by the certifying officer and submitted

for final computation of payment. So it does do very efficiently

what it is designed to do currently, and as a customer of DTS, the

Army is looking forward to the functionality being added for the

Guard and Reserve some time in 2006, so that we can bring the

Reserve components on board.

Mr. PLATTS. One of the statements you made concerns me in the

sense of that initial understanding of the system and that cumbersome, because your typical traveler maybe under DTS now, I

would imagine not in comparison to a Guard or Reservist, is not

going to be regularly using it, but be using it and may be not using

it for 6 months, or using it and be deployed for a year. It is going

to be different than a weekly or monthly basis.

Is there a plan in the Guard and Reserve for an intense education component for those who are going to be using to try to overcome the cumbersomeness of the system?

Mr. ARGODALE. When we deploy DTS to a post, camp or station,

we have a very regimented deployment process that includes business process changing. We look at the current way business is done

and then we look at how business processes need to be changed

around DTS. We also provide significant training for the users,

both the approving officials and the travelers. We leave onsite a

help desk person. I think currently we have about 50 or so full-time

help desk people supporting the 32 sites that we have currently deployed. We are looking at ratcheting that up as we continue to deploy.

But sir, I agree with you that this is going to be a challenge for

the infrequent traveler, not only in terms of training, but the recurring refresher-type training that they are going to need.

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Mr. PLATTS. The analogy would be in my office, we have a great

case management system that my staff, you know, they can get on

there and pull up information. When I get on it and try to find a

specific case, it takes me a long time because I do not use it every

day like they do. That is my worry, is that we fine-tune it and that

education, and learning from the challenges of those using it today

and try to improve it for when we actually go to the Guard and Reserve.

I want to get Mr. Wallace and Mr. Kutz in here on this broad

issue and how you want to comment on your perspective on DTS

and how it will interact with DIMHRS.

Mr. WALLACE. Sir, I am kind of a customer of DTS from this

side, but from the policy side some of the things that we are doing

that will help set us up for DTS, for example, setting standard data

elements for statements of non-availability and such, that are

being proliferated throughout the Army will help us in the transition as we move toward DTS, as we start fielding it.

So from a policy standpoint, we are trying to standardize across

not only the Army, but the services, with the different travel entitlements and such.

Mr. PLATTS. And those policy directives, are they shared in a way

that those who are working the DTS system kind of incorporate

those and ideally from a programming standpoint to have them,

like now you stamp that order, that policy change where an order

is changed as far as their entitled to reimbursement for food, no

out-of-pocket expense for the food. That is something that goes on

their order up front. Is that something that we translate to computer programming that it will know that? Is that something that

we can hope to see?

Mr. WALLACE. Sir, I do not have any knowledge of an automation

system that would be in the plans. We would have to take that for

the record and come back to you.

Mr. PLATTS. OK.

Mr. Kutz.

Mr. KUTZ. I think it is important to give you a little bit of historical perspective here. DTS has been underway for about 8 years. It

was initially intended to provide TDY travel services for the Department in 1999. So we are in 2005 right now, and we are still

rolling it out. So with respect to automating and integrating the

authorizations, which is the unique part of this for the Guard and

Reserve soldiers, when we looked for information on that, it seemed

to us that it was just barely on the drawing board, if you will. We

did not see things like specific requirements, testing plans, pilot

plans, schedules etc., to roll that out.

So I am very skeptical that DTS will be capable of providing the

kinds of functionality necessary for mobilized Guard and Reserve

soldiers anytime soon.

Mr. PLATTS. That is my worry, that we are going to have spent

$500-plus million and get to 2006 and find that, well, it was wellintended, but it is not really doing what we wanted to alleviate,

that heavy manpower and the labor-intensive, and we are going to

be starting over and be 11 years after when it was first envisioned

as a solution, and be $500 million down and not have the long-term

benefits that those dollars were intended for.

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So my hope on that is, as the coordination and dialog has occurred on the pay issues and now on travel issues, we clearly have

made some important improvements and significant improvements

for the good of those men and women in uniform and how we are

reimbursing them. That has come about through extensive, I think,

interactions between GAO, the Department, DFAS, all working

hand in hand, is that we continue that very proactive approach and

take the good that has occurred and build on it so that at the end

of the day in 2005 and 2006 and beyond, that, you know, the types

of cases that were found in the case studies are truly the exception

and never again the norm. I think we have the chance to do that

if we remain diligent in our efforts.

Mr. Towns, did you have any other questions or comments?

Mr. TOWNS. Just a general question. Is there anything that we

can do to assist this process as members of the U.S. Congress? Is

there anything we can do?

Mr. ARGODALE. Sir, I think what you are doing right now in

terms of holding this hearing, the hearings on the pay, the quarterly updates to the staff, the collaboration with the committee

staff and the GAO, those things need to continue to shed the proper light and perspective on the issues.

I think in addition to some of the issues that have been brought

up in the GAO reviews and audits with respect to pay and travel,

we also may want to take a look at where we are with some of

these automated solutions in terms of DTS and DIMHRS to ensure

that we are adding the proper functionality, that we are going to

get the benefits that we need from the investments, and that the

capabilities will be there to meet an Army that is an expeditionary

joint type of Army as opposed to an Army in a garrison.

So I think we need to look at those types of things and continue

to quarterly updates, the hearings and keep the focus and the interest on these types of issues. Because as Secretary Harvey has

said, he expects perfection when it comes to paying soldiers. As I

talk to soldiers and their commanders, they really only want two

things when it comes to pay. They want to be paid the right

amount and be paid on time. It is very important that this body,

the Congress, and that my colleagues back at the Department, the

GAO, we all keep that focus in mind, paying soldiers the correct

amount and paying them on time.

Mr. TOWNS. Right.

Yes, sir?

Mr. KUTZ. Yes, I agree 100 percent. I think that you should not

walk away after today and be done with this. I think that this is

something that in a collaborative way working together, certainly

we would be part of that, and the folks at the table, and this subcommittee and the full committee, because we all want the same

thing. We want to see the soldiers taken care of. We want this to

no longer be a real source of frustration for them and their families

going forward. I think what you are doing today is the right thing.

Mr. TOWNS. Any other comments?

Mr. SHINE. Sir, I would just say that I think what the subcommittee and the full committee have done has put a laser focus

on this issue. I think as a result we are now seeing better pay for

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our service men and women, and that is really what it is all about.

We thank you for your participation.

Mr. TOWNS. Thank you.

I yield back, Mr. Chairman. Thank you very much.

Mr. PLATTS. Thank you, Mr. Towns.

There are two ongoing, as the Secretary referenced, keeping kind

of the focus here with GAO on DIMHRS, with the subcommittee review ongoing as well as on the business systems modernization

project or program that we have asked, and GAO is working on,

to continue the focus here, and on a broader sense with DIMHRS.

I apologize. I have votes in the Committee on Education I am

going to run off to. I do want to say two things, one to our soldiers

here, our men in uniform here past and present, Mr. Towns your

past service. I have not worn the uniform.

Mr. TOWNS. Thank you. [Laughter.]

Mr. PLATTS. I say openly and regularly, I have not ever worn the

uniform, and for those who are today and those who have in the

past, I know but for your service, I would not be sitting here as

a kid from York given the privilege to serve in national office. It

is because of those who have worn the uniform in the past and

those today that we are the Nation of opportunity that we are, and

it has allowed me this opportunity to serve in a civilian capacity.

I think that all of you have set the example for all of us fellow citizens in how we need to serve, whether that is as an elected official

or just as citizens in our communities. I certainly will do my best

to live up to the standard that each of you have set for us fellow

citizens.

Specific to this issue, I want to thank each of you and your staffs

because Mr. Shine your comment that a laser-focus, I think that

is from everybody, is that you really have taken the challenges

here and the issues that have come forward very seriously and as

issues are brought to your attention, you and your staff have done

your utmost to respond to them and to fix whatever the problem

is and learn from the past and go forward. As you said, the bottom

line is we all are seeking to work together, that when courageous

fellow citizens are willing to go into harm’s way for us, that we are

doing right by them and their families.

We have made great strides in the right direction. We do have

work to do and we will continue to look forward to partnering with

each of you and your organizations in making sure we eventually

get to that perfection that Secretary Harvey is demanding, and

rightfully so.

Again, thanks for your testimony and your time today and your

patience while we got our votes in over on the floor. We will keep

the record open for 2 weeks for any additional information based

on the questions or just from the comments, and again look forward to continuing our work with you.

This hearing stands adjourned.

[Whereupon, at 4:10 p.m. the subcommittee was adjourned, to reconvene at the call of the Chair.]

[The prepared statement of Hon. Edolphus Towns follows:]

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