a

GAO

United States Government Accountability Office

Report to Congressional Requesters

August 2004 MILITARY PAY

Army Reserve Soldiers 

Mobilized to Active 

Duty Experienced 

Significant Pay 

Problems

GAO-04-911
The processes and automated systems relied on to provide active duty pays, 

allowances, and tax benefits to mobilized Army Reserve soldiers are so 

error-prone, cumbersome, and complex that neither DOD nor, more 

importantly, Army Reserve soldiers themselves, could be reasonably assured 

of timely and accurate payments. Weaknesses in these areas resulted in pay 

problems, including overpayments, and to a lesser extent, late and 

underpayments, of soldiers’ active duty pays and allowances at eight Army 

Reserve case study units. Specifically, 332 of 348 soldiers (95 percent) we 

audited at eight case study units that were mobilized, deployed, and 

demobilized at some time during the 18-month period from August 2002 

through January 2004 had at least one pay problem. 

Pay Experiences at Eight Army Reserve Case Study Units 

Many of the soldiers had multiple problems associated with their active duty 

pays and allowances. Some of these problems lingered unresolved for 

considerable lengths of time, some for over 1 year. Further, nearly all 

soldiers began receiving their tax exemption benefit at least 1 month late. 

These pay problems often had a profound adverse impact on individual 

soldiers and their families. For example, soldiers were required to spend 

considerable time, sometimes while deployed in remote, hostile 

environments overseas, seeking help on pay inquiries or in correcting errors 

in their active duty pays, allowances, and related tax benefits. 

The processes in place to pay mobilized Army Reserve soldiers, involving 

potentially hundreds of DOD, Army, and Army Reserve organizations and 

thousands of personnel, were deficient with respect to (1) tracking soldiers’ 

pay status as they transition through their active duty tours, (2) carrying out 

soldier readiness reviews, (3) after-the-fact report reconciliation 

requirements, and (4) unclear procedures for applying certain pay 

entitlements. With respect to human capital, weaknesses identified at our 

case study units included (1) insufficient resources allocated to key unitlevel pay administration responsibilities, (2) inadequate training related to 

existing policies and procedures, and (3) poor customer service. Several 

automated systems issues also contributed to the significant pay errors, 

including nonintegrated systems and limited processing capabilities. 

In light of GAO’s November 2003 

report highlighting significant pay 

problems experienced by Army 

National Guard soldiers mobilized 

to active duty in support of the 

global war on terrorism and 

homeland security, GAO was asked 

to determine if controls used to pay 

mobilized Army Reserve soldiers 

provided assurance that such 

payments are accurate and timely. 

GAO’s audit used a case study 

approach to focus on controls over 

three key areas: processes, people 

(human capital), and automated 

systems. 

GAO is reiterating 5 previous 

recommendations that remain 

open, including action to ensure 

that longer-term system 

improvement actions include a 

complete reengineering of not only 

related automated systems, but 

also supporting processes and 

human capital practices. GAO’s 

report includes 15 new 

recommendations. Fourteen 

recommendations are directed at 

immediate actions needed to 

address weaknesses in the 

processes, human capital, and 

automated systems currently relied 

on to provide active duty pays, 

allowances, and related tax 

benefits to mobilized Army Reserve 

soldiers. GAO’s other longer-term 

recommendation is directed at 

action needed to ensure that 

planned automated systems 

address the issues identified in this 

report. DOD agreed with GAO’s 

recommendations. 

www.gao.gov/cgi-bin/getrpt?GAO-04-911.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Gregory D. 

Kutz at (202) 512-9095 or Kutzg@gao.gov. 

Highlights of GAO-04-911, a report to 

congressional requesters 

August 2004

MILITARY PAY

Army Reserve Soldiers Mobilized to 

Active Duty Experienced Significant Pay 

Problems 
Page i GAO-04-911 Army Reserve Pay

Contents

Letter 1

Results in Brief 2

Background 6

Case Studies Illustrate Pay Problems 17

Significant Weaknesses Exist in Mobilized Army Reserve Pay 

Processes 23

Human Capital Issues Affect Pay Accuracy and Timeliness 34

Automated Systems Deficiencies Constrain Accurate and Timely 

Payments 41

Recent Actions Should Result in Improvements 48

Conclusions 51

Recommendations for Executive Action 52

Agency Comments and our Evaluation 54

Appendixes

Appendix I: Scope and Methodology 57

Appendix II: 824th Quartermaster Company, Fort Bragg, North Carolina 62

Mobilization Pay Problems 63

Pay Problems While Deployed 65

Pay Problems Associated with Demobilization and Release from 

Active Duty 67

Appendix III: 965th Dental Company Seagoville, Texas 69

Mobilization Pay Problems 70

Pay Problems While Deployed 72

Pay Problems Associated with Demobilization and Release from 

Active Duty 74

Appendix IV: 948th Forward Surgical Team, Southfield, Michigan 76

Mobilization Pay Problems 78

Deployment Pay Problems 79

Pay Problems Associated with Demobilization and Release from 

Active Duty 80

Appendix V: 443rd Military Police Company, Owings Mills, Maryland 82

Mobilization Pay Problems 84

Pay Problems While Deployed 87

Pay Problems Associated with Demobilization and Release from 

Active Duty 89

Appendix VI: FORSCOM Support Unit, Finksburg, Maryland 92

Mobilization Pay Problems 94
Contents

Page ii GAO-04-911 Army Reserve Pay

Pay Problems While Deployed 94

Pay Problems Associated with Demobilization and Release from 

Active Duty 95

Appendix VII: 629th Transportation Detachment, Fort Eustis, Virginia 98

Mobilization Pay Problems 100

Pay Problems While Deployed 101

Pay Problems Associated with Demobilization and Release from 

Active Duty 103

Appendix VIII: 3423rd Military Intelligence Detachment New Haven, 

Connecticut 104

Mobilization Pay Problems 105

Pay Problems While Deployed 108

Pay Problems Associated with Demobilization and Release from 

Active Duty 109

Appendix IX: 431st Chemical Detachment Johnstown, Pennsylvania 111

Mobilization Pay Problems 113

Pay Problems While Deployed 114

Pay Problems Associated with Demobilization and Release from 

Active Duty 116

Appendix X: Comments from the Department of Defense 117

Appendix XI: GAO Contact and Staff Acknowledgments 124

GAO Contact 124

Acknowledgments 124

Tables Table 1: Active Duty Pays and Allowances Associated with Case 

Study Units 9

Table 2: Army Reserve Units Audited 18

Table 3: Pay Problems at Eight Case Study Units 19

Table 4: Pay Problems by Phase 63

Table 5: Mobilization Pay Problems 64

Table 6: Deployment Pay Problems 65

Table 7: Demobilization Pay Problems 67

Table 8: Pay Problems by Phase 70

Table 9: Mobilization Pay Problems 71

Table 10: Deployment Pay Problems 73

Table 11: Demobilization Pay Problems 74

Table 12: Pay Problems by Phase 77

Table 13: Mobilization Pay Problems 78

Table 14: Deployment Pay Problems 79
Contents

Page iii GAO-04-911 Army Reserve Pay

Table 15: Demobilization Pay Problems 81

Table 16: Pay Problems by Phase 83

Table 17: Mobilization Pay Problems 84

Table 18: Deployment Pay Problems 87

Table 19: Demobilization Pay Problems 90

Table 20: Pay Problems by Phase 94

Table 21: Deployment Pay Problem 95

Table 22: Demobilization Pay Problems 96

Table 23: Timetable of Soldier’s Attempts to Correct Problems 

Related to Active Duty Entitlements 97

Table 24: Pay Problems by Phase 99

Table 25: Mobilization Pay Problems 100

Table 26: Deployed Pay Problems 102

Table 27: Demobilization Pay Problems 103

Table 28: Pay Problems by Phase 105

Table 29: Mobilization Pay Problems 106

Table 30: Deployment Pay Problems 108

Table 31: Demobilization Pay Problems 110

Table 32: Pay Problem by Phase 112

Table 33: Mobilization Pay Problems 113

Table 34: Deployment Pay Problems 114

Figures Figure 1: Three Key Phases for Active Duty Payments to Army 

Reserve Soldiers 12

Figure 2: Key Systems Involved in Authorizing, Entering, 

Processing, and Paying Mobilized Army Reserve Soldiers 

Are Not Effectively Integrated or Interfaced 43

Figure 3: 824th Quartermaster Company’s Mobilization Time 

Line 62

Figure 4: 965th Dental Company’s Mobilization Time Line 69

Figure 5: 948th Forward Surgical Team’s Mobilization Time Line 77

Figure 6: 443rd Military Police Company’s Mobilization Time 

Line 83

Figure 7: FORSCOM Support Unit Soldier Time Line 93

Figure 8: 629th Transportation Company’s Time Line 98

Figure 9: 3423rd Military Intelligence Company’s Mobilization Time 

Line 104

Figure 10: 431st Chemical Detachment’s Mobilization Time Line 112
Contents

Page iv GAO-04-911 Army Reserve Pay

Abbreviations

DOD Department of Defense

DFAS Defense Finance and Accounting Service

DJMS-RC Defense Joint Military Pay System – Reserve Component

DMO Defense Military Pay Office system

FMR Financial Management Regulation

FORSCOM Army Forces Command

PMARS Participation Management and Reporting Subsystem

RLAS Regional Level Application System

SRP Soldier Readiness Processing

TAPDB-R Total Army Personnel Database – Reserves

TRANSPROCTransition Processing System

USARC United States Army Reserve Command

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Page 1 GAO-04-911 Army Reserve Pay

United States Government Accountability Office

Washington, D.C. 20548

A

August 20, 2004 Letr

Congressional Requesters

In November 2003, we reported1 on significant pay problems experienced 

by mobilized Army National Guard soldiers, including 450 of 481 soldiers at 

six case study units who had at least one pay problem associated with their 

mobilization. Because of the severity of the problems identified for 

mobilized Army National Guard soldiers, you asked us to examine the 

accuracy and timeliness of payroll payments to mobilized Army Reserve 

soldiers. Specifically, the objectives of our audit were to (1) provide an indepth perspective on the pay experiences of mobilized Army Reserve 

soldiers and (2) assess the overall design of the processes, human capital, 

and automated systems relied on to provide accurate and timely pays, 

allowances, and tax benefits to mobilized Army Reserve soldiers.

Our preliminary assessment of the internal control environment and the 

design of key controls associated with payments to mobilized Army 

Reserve soldiers indicated that the accuracy and timeliness of these 

payments are highly dependent on inherently flawed processes and 

controls. Active duty payments to mobilized Army Reserve soldiers rely on 

many of the same Department of Defense (DOD) and Army policies and 

procedures and automated systems used to pay mobilized Army National 

Guard soldiers. Further, DOD has reported2

 to Congress on major 

deficiencies in the delivery of military payroll and related personnel 

services, including those used to support both Army National Guard and 

Army Reserve soldiers.

Consequently, as was the case for our audit of payments to mobilized Army 

National Guard soldiers, rather than statistically testing the effectiveness of 

inherently flawed processes and controls, we relied primarily on a case 

study approach to provide perspective on the pay experiences of mobilized 

Army Reserve soldiers. We selected Army Reserve units mobilized at some 

point during the period from August 2002 through January 2004 as case 

studies to provide a more in-depth perspective on Army Reserve soldiers’ 

pay experiences and their underlying causes. Our case studies included 

1

GAO, Military Pay: Army National Guard Personnel Mobilized to Active Duty 

Experienced Significant Pay Problems, GAO-04-89 (Washington, D.C.: Nov. 13, 2003).

2

U.S. Department of Defense, Report to Congress: Defense Integrated Military Human 

Resource System (Personnel and Pay), (Washington, D.C.: June 2002).
Page 2 GAO-04-911 Army Reserve Pay

seven Army Reserve units deployed overseas to carry out assigned combat 

support missions as part of Operations Enduring Freedom or Iraqi 

Freedom and one unit activated to perform services as part of critical 

homeland defense operations under Operation Noble Eagle.

We performed our work from November 2003 through June 2004 in 

accordance with generally accepted government auditing standards. The 

pay problems we identified were based on a comparison of soldiers’ pay 

records with available supporting documentation. Our audit was intended 

to provide perspective on soldiers’ pay experiences and may not have 

identified all pay problems at our case study units. In addition, our audit 

was not designed to result in an exact determination of the pay, allowances, 

and tax benefits soldiers should have received. We provided the results of 

our pay analysis to Army Reserve officials for an exact determination of 

any amounts owed the government or soldiers related to the mobilizations 

audited. A more detailed description of the scope and methodology is 

included in appendix I. 

We requested comments on a draft of this report from the Secretary of 

Defense or his designee. We received written comments from the Under 

Secretary of Defense (Comptroller), which are reprinted in appendix X.

Results in Brief The processes and automated systems relied on to provide active duty 

payments to mobilized Army Reserve soldiers are so error-prone, 

cumbersome, and complex that neither DOD nor, more importantly, the 

Army Reserve soldiers themselves, could be reasonably assured of timely 

and accurate payments. These weak processes and automated systems 

resulted in a significant number of overpayments, and to a lesser extent, 

late and underpayments, of soldiers’ active duty pays and allowances at the 

eight case study units we audited. Specifically, 332 of 348 soldiers (95 

percent) at eight Army Reserve units experienced at least one problem with 

the active duty pays and allowances they were entitled to receive. Many of 

the soldiers experienced multiple pay problems associated with their active 

duty mobilizations. Some of the pay problems soldiers experienced often 

lingered unresolved for considerable lengths of time, some for over a year. 

Nearly all soldiers in the seven case study units deployed overseas had 

problems with their location-based pays, particularly their hardship duty 

pay. In addition, while soldiers in the seven units that were deployed 

overseas were entitled to receive their pays and allowances tax free, and 

therefore, free of tax withholding from pay when they first arrived intheater, few, if any, received this benefit until at least a month after arrival.
Page 3 GAO-04-911 Army Reserve Pay

Of the $375,000 in active duty pay and allowance problems we identified for 

the Army Reserve soldiers in our case study units, the majority were 

overpayments. Included in the total of 256 Army Reserve soldiers that 

received an estimated $247,000 in overpayments, were several instances of 

soldiers who received significant overpayments, but did not acknowledge 

the receipt or set aside sufficient funds to repay these erroneous 

overpayments. In these instances, the soldiers may be subject to criminal 

prosecution. For example, we referred for criminal investigation one 

soldier who did not mobilize with his unit, yet erroneously received over 

$36,000 in active duty pays and did not report this overpayment. We also 

identified 245 Army Reserve soldiers at our case study units who received a 

total of about $77,000 in late payments of their active duty pays and 

allowances, and 294 soldiers who were underpaid a total of about $51,000 

in active duty pays and allowances. 

Taken together, a considerable amount of effort by individual Army 

Reserve soldiers and their families was often required to gather and 

complete the required documentation to support pay entitlements, resolve 

pay errors, and identify and repay debts associated with numerous pay 

errors. A number of soldiers and their families told us they spent 

considerable time and effort on these pay issues, sometimes while soldiers 

were deployed in remote, hostile environments overseas. In particular, 

resolving soldier debts resulting from erroneous overpayments was 

burdensome to both the soldier and DOD. Soldiers were sometimes 

required to spend considerable time and were frustrated in their efforts to 

determine the exact sums owed or establish a repayment plan. Further, 

these overpayment debts placed an additional labor-intensive burden on 

the Army and the Defense Finance and Accounting Service (DFAS) to 

manually compute the exact amounts owed and establish and monitor the 

recoupment of these sums from the soldiers. These pay issues may 

adversely impact Army Reserve soldiers’ morale, and, ultimately, may 

adversely affect the Army’s ability to retain these important soldiers.

One of the primary causes of the pay problems we found was the 

inadequate procedures relied on to maintain accountability over soldiers 

and their associated pays, allowances, and tax benefits as they moved 

through their active duty mobilization, including processing through 

various levels of Army, Army Reserve, DFAS, and DOD organizations. We 

also found pay problems associated with breakdowns in soldier 

accountability responsibilities assigned to unit commanders and unit 

administrators. For example, we found that flawed procedures for ensuring 

that documentation showing that soldiers were no longer at an overseas 
Page 4 GAO-04-911 Army Reserve Pay

deployment location or on active duty (such as revoked orders or return 

from active duty orders), led to many of the overpayments we identified. 

Because pay personnel did not receive timely documentation on soldiers’ 

departure from an overseas deployment, 47 soldiers with the 824th

Quartermaster Company from North Carolina improperly received several 

months of hardship duty pay, totaling about $30,000, after they left Kuwait. 

With respect to human capital, the dedicated and determined efforts of 

many involved in the current operations relied on to pay mobilized Army 

Reserve soldiers were handicapped by various human capital challenges, 

including (1) inadequate resources to support critical unit pay 

administration functions, (2) deficiencies in the training provided to key 

personnel on pay entitlements and pay transaction processing 

requirements, and (3) poor customer service. A sufficient number of welltrained military pay staff is particularly crucial given the extensive, 

cumbersome, and labor-intensive process requirements that have evolved 

to support active duty pay to Army Reserve soldiers.

Our audits of the pay experiences of soldiers assigned to our case study 

units identified instances in which unit-level pay management support 

deficiencies contributed to pay errors. These unit-level pay management 

deficiencies were particularly problematic for units with vacant unit 

administrator positions, or where the unit administrator was deployed with 

the unit in another capacity. For example, lacking an individual assigned to 

carry out unit administrator duties, 9 of the 11 soldiers with the 3423rd

Military Intelligence Detachment case study unit from Connecticut 

erroneously received the overseas cost of living allowance instead of the 

continental United States cost of living allowance for their deployment to 

Fort Belvoir. We also found that inadequate training of both key unit 

administrators and Army finance pay technicians led to pay errors. 

Personnel in both of these key positions told us that they relied primarily 

on on-the-job training when they assumed their responsibilities. A related 

human capital issue—customer support for active duty pay issues—was a 

recurring concern at our case study units. For example, it took over a year, 

and about 20 phone calls, e-mails, and faxes, after one Army Reserve 

officer contacted the Army to settle the debt resulting from the erroneous 

active duty pay, allowances, and combat zone tax exclusion benefits he 

received. 

Several automated systems issues were also major causal factors 

associated with the pay problems we identified. The labor-intensive manual 

entry and reentry of pay transactions into multiple nonintegrated systems, 
Page 5 GAO-04-911 Army Reserve Pay

and further data entry required to correct pay errors and related debts, 

were major contributing factors. We also found that limited automated 

system processing capabilities, necessitating extensive costly manual 

workarounds, and inadequate automated system edits were major factors 

in this area. For example, the payroll system cannot simply stop 

withholding federal taxes for soldiers deployed in designated combat 

zones, but instead must first withhold the taxes and then in the following 

month’s pay processing, reimburse the soldier for the taxes previously 

withheld. 

DOD has taken a number of actions, and has other actions under way, in 

response to recommendations in our November 2003 Army National Guard 

pay report. Our November 2003 report included both short- and longer-term 

recommendations. Because active duty payments to mobilized Army 

Reserve soldiers rely on many of the same procedures and automated 

systems used to pay mobilized Army National Guard soldiers, many of 

these recommendations and DOD’s responsive actions also apply to Army 

Reserve active duty pays. Many of DOD’s actions directed at improving the 

accuracy and timeliness of payments to both mobilized Army National 

Guard and Army Reserve soldiers were implemented in the fall of 2003 or 

later. For example, in June 2004, the Army issued a Finance Mobilization 

and Demobilization Standing Operating Procedure covering pay 

management responsibilities and transaction processing requirements to 

be followed for all Army Reserve and Army National Guard soldiers 

mobilized to active duty. Because the Army Reserve soldier pay 

experiences we audited ended in January 2004, DOD’s actions in response 

to our previous recommendations were not in place in sufficient time to 

impact the soldiers’ pay experiences we audited. However, if effectively 

and fully implemented, many of DOD’s actions directed at our short-term 

recommendations should help reduce the incidence of the types of pay 

problems we identified in our case studies.

Nonetheless, because five of the applicable recommendations in our Army 

National Guard pay report have not yet been fully addressed, we are 

reiterating these open recommendations. We are making 15 additional 

recommendations to address Army Reserve-unique issues. It is imperative 

that DOD act swiftly to fully implement these near-term recommendations 

to realize significant reductions in the extent of Mobilized Army Reserve 

soldiers’ pay problems. However, even full, effective actions in response to 

all near-term recommendations will not resolve the underlying causes of 

the pay problems we identified. These underlying causes can only be 

addressed as part of a longer term comprehensive reengineering of existing 
Page 6 GAO-04-911 Army Reserve Pay

processes, human capital practices, and automated systems. Until these 

more substantive actions can be put in place, Army Reserve soldiers are 

likely to continue to experience significant problems in receiving accurate 

and timely active duty payments. In its comments on a draft of this report, 

DOD agreed with our recommendations and outlined its actions to address 

the deficiencies noted in our report.

Background The Army Reserve is a partner with the active Army and the Army National 

Guard in fulfilling the country's military and contingency needs. The Army 

Reserve provides nearly half of the Army’s combat support capabilities.3

The Army Reserve has approximately 2,000 units that drill at 1,500 Army 

Reserve Centers located in communities spread throughout the United 

States and territories. As of May 2004, the Army Reserve reported that it 

had about 328,000 members in the Ready Reserve.4

During peacetime, Army Reserve units report to the United States Army 

Reserve Command (USARC), located in Atlanta, Georgia, and the Chief of 

the Army Reserve, located in Washington, D.C. In addition, the Army 

Reserve has established Regional Readiness Commands to provide 

resource, logistics, and personnel management support for Army Reserve 

units within their region. When not mobilized to active duty, Army Reserve 

units are required to maintain readiness at a sufficiently high level to 

facilitate prompt active duty mobilization. While in a reserve status, Army 

Reserve soldiers are required to attend one drill weekend each month and 

obtain a minimum amount of training (usually about 2 weeks) each year. 

During national emergencies, the President has the authority to mobilize 

the Army Reserve to active duty status. While mobilized, Army Reserve 

units are accountable to the combatant commander of the theater in which 

they are assigned to operate, and ultimately, to the President. 

3

The Army Reserve provides combat support through its Military Police, Chemical, and 

Military Intelligence units; and combat service support through units, such as its Medical, 

Quartermaster (supply), and Transportation units.

4

The Ready Reserve includes about 211,000 members of the Selected Reserve (Army 

Reserve soldiers participating in regularly scheduled training and consequently most readily 

available for mobilization) and about another 117,000 members of the Individual Ready 

Reserve (many of whom recently left active duty but still have a Reserve commitment or 

were previously in the Selected Reserve, but are not currently participating in any regularly 

scheduled drills or training). In addition, the Army Reserve reported that it had over 700,000 

retirees in its Retired Reserve. 
Page 7 GAO-04-911 Army Reserve Pay

On September 14, 2001, the President declared a national emergency as a 

result of the terrorist attacks on the World Trade Center and the Pentagon 

and the continuing and immediate threat of further attacks on the United 

States. Concurrent with this declaration, the President authorized the 

Secretary of Defense to mobilize reserve troops to active duty pursuant to 

10 U.S.C. Section 12302. The Secretary of Defense delegated to the 

Secretary of the Army the authority to order Army Reserve soldiers to 

active duty. Since September 2001, the Army has mobilized unprecedented 

numbers of Army Reserve soldiers (as well as other reserve and national 

guard forces) to active duty on lengthy tours. DOD reported that as of April 

2004, about 96,000 Army Reserve soldiers have been mobilized to active 

duty at some point since September 2001 to carry out critical missions. 

In contrast to the Army National Guard forces that may be assigned 

traditional combat roles, Army Reserve forces are generally assigned 

combat support missions. The Army National Guard and Army Reserve 

both include military police and intelligence units. However, while the 

Army National Guard has special forces and other units that have combat 

mission assignments, Army Reserve units are generally limited to combat 

support mission assignments, such as supply, medical, and transportation 

operations. 

Army Reserve soldiers’ mobilizations during the period of our audit were 

also affected by two other Army actions. First, the Army issued a “stop 

loss” order affecting Army Reserve soldiers in November 2002. The stop 

loss order was authorized by statute5

 and allows the Army to retain soldiers 

in the service beyond their date of separation or retirement for an openended period.6

 Second, in November 2003, the Army extended the orders 

for all mobilized Army Reserve soldiers expected to return from active duty 

on December 1, 2003, for an additional year.7

There have been three major contingency operations involving mobilized 

Army Reserve soldiers since September 2001: Operation Noble Eagle, 

5

10 U.S.C. Sec. 12305.

6

Those affected by the order generally cannot voluntarily retire, leave active duty, or 

separate from the service as long as reserves are called to active duty or until otherwise 

relieved by proper authority.

7

Through this action, Army Reserve soldiers on active duty orders covering a period of 365 

days from the date of their original mobilization orders were extended on active duty for a 

period of 730 days. 
Page 8 GAO-04-911 Army Reserve Pay

Operation Enduring Freedom, and Operation Iraqi Freedom. In general, 

missions to provide domestic defense were funded through Operation 

Noble Eagle, missions to fight terrorism outside the United States were 

initially funded under Operation Enduring Freedom. More recently, 

missions related to the combat in Iraq and subsequent policing operations 

in that region were funded under Operation Iraqi Freedom. For example, 

Army Reserve soldiers participated in combat support missions in 

Afghanistan that were carried out as part of Operation Enduring Freedom, 

whereas Army Reserve soldiers participating in homeland security 

missions, such as assisting in intelligence data analysis, were considered 

part of Operation Noble Eagle.

According to Army Reserve data, approximately 45,700 Army Reserve 

soldiers were activated as of April 2004. At that time, Army Reserve 

soldiers accounted for about 27 percent of all mobilized DOD reserve 

components.8

 Many of these Army Reserve soldiers were mobilized as 

small units, including about 2,800 units with 10 or fewer soldiers and about 

1,000 one-soldier units. The Army assigns a separate unit identification 

number to each of these small groups or detachments of Army Reserve 

soldiers (these units are known as derivative units). According to Army 

Reserve data as of April 2004, the Army Reserve had soldiers assigned to 

almost 6,000 different unit numbers. 

While on active duty, all Army Reserve soldiers earn various statutorily 

authorized types of pays and allowances. The types and amounts of pays 

and allowances that Army Reserve soldiers are eligible to receive vary 

depending upon rank and length of service, dependency status, skills and 

certifications acquired, duty location, and the difficulty of the assignment. 

While Army Reserve soldiers mobilized to active duty may be entitled to 

receive over 50 types of pays and allowances, we focused on 14 types of 

pays and allowances applicable to the Army Reserve units we selected for 

case studies. As shown in table 1, we categorized these 14 pay and 

allowance types into two groups: (1) pays, including basic pay, medical and 

dental and foreign language proficiency skill-based pays, and locationbased hostile fire and hardship duty pays, and (2) allowances, including

8

Reserve components include the Army National Guard, Army Reserve, Air National Guard, Air Force 

Reserve, Naval Reserve, Marine Corps Reserve, and Coast Guard Reserve.
Page 9 GAO-04-911 Army Reserve Pay

allowances for housing, subsistence, family separation, and cost of living 

for the continental United States.9

Table 1: Active Duty Pays and Allowances Associated with Case Study Units

9

The law makes a distinction between the terms “pays” and “allowances,” which together 

make up a service member’s overall compensation package. Generally, the term pay 

includes basic pay, special pay, retainer pay, incentive pay, retired pay, and equivalent pay, 

but does not include allowances. 37 U.S.C. Section 101(21). DOD defines allowance as “a 

monetary amount paid to an individual in lieu of furnished quarters, subsistence, or the 

like.” DOD Financial Management Regulation, vol. 7A, Definitions, para. 15 (February 

2001). While generally items considered as “pay” are taxable for federal income tax 

purposes, except for the cost of living allowance for the continental United States, most 

allowances, such as those for housing, subsistence, and family separation, are not. 

 Pays Description Dollar amount

Basic pay Salary Varies depending on rank and years of 

service

Hazardous duty pay (jump pay) Pay for parachute jumping $150 per month

Aviation career incentive pay Pay for officers performing operational flying 

duty

Varies from $125 to $840 per month 

based on years of aviation service

Foreign language proficiency pay Pay for specialized foreign language skills Varies depending on proficiency but may 

not exceed $300 per month

Hardship duty location pay for designated 

areas

Pay when assigned to duty in specified 

locations

$50, $100, or $150 per month 

(depending on duty location)

Hardship duty location pay for certain places 

(phase out began on January 1, 2002)

Pay to enlisted soldiers when assigned to 

duty in specified locations 

Varies from $8 to $22.50 per month 

depending on rank

Medical and dental pays Various special entitlements and incentives 

for medical and dental professionals

Varies from $100 per month to $3,000 

per month depending on medical 

specialty, professional qualifications, and 

creditable service

Hostile fire/imminent danger pay Full pay for any portion of month when 

assigned to a location subject to or in 

proximity to hostile fire or assigned to duty in 

a designated imminent danger location

$150 per month through September 30, 

2002, $225 per month, effective 

October 1, 2002, through December 31, 

2004.

Allowances

Basic allowance for housing Meant to offset the cost of housing when 

member does not receive governmentprovided housing

Varies depending on location, rank, and 

whether member has dependents

Basic allowance for subsistence Meant to offset costs for a member’s meals Varies depending on whether member is 

officer or enlisted 
Page 10 GAO-04-911 Army Reserve Pay

Source: GAO analysis.

Several of these types of pays and allowances have multiple subcategories 

of entitlement. For example, there are eight different types of basic 

allowances for housing that soldiers may be entitled to receive based on 

individual circumstances and documentation (including documents 

establishing dependency status or court documents). In addition, Army 

Reserve soldiers may be eligible for significant tax advantages associated 

with their mobilization to active duty. Mobilized Army Reserve soldiers 

assigned to or working in a designated combat zone are entitled to exclude 

from taxable income certain types of military pays that would otherwise be 

taxable.10

In addition to the complexities of determining and documenting the 

specific circumstances surrounding each individual soldier’s initial active 

duty pay, allowance, and tax benefit entitlements, these types of pays and 

benefits are further complicated because entitlements vary depending on 

soldiers’ locations as they move through their active duty tours. That is, 

maintaining effective accountability and paying mobilized Army Reserve 

soldiers as they move from location to location during their active duty 

tours require extensive close coordination among a variety of operational, 

personnel, finance, and pay organizations throughout DOD. Key 

components requiring closely coordinated efforts in this worldwide team 

are the

• mobilized soldier;

Family separation allowance I Meant to offset added housing expenses 

resulting from forced separation from 

dependents

Equivalent to monthly basic allowance for 

housing for member of same rank without 

dependents

Family separation allowance II Meant to offset certain expenses resulting 

from forced separation from dependents

$100 per month from January 1, 1998, 

through September 30, 2002; $250 per 

month effective October 1, 2002, through 

December 31, 2004

Cost of living allowance in the continental 

United States 

Meant to provide compensation for variations 

in costs (other than housing) in the 

continental United States 

Varies depending on location, rank, years 

of service, and whether member has 

dependents 

Overseas housing allowance Meant to provide compensation for variations 

in housing costs overseas

Varies depending on location, rank, and 

whether the member has dependents

(Continued From Previous Page)

 Pays Description Dollar amount

10There is no limit on the military pay exemption for enlisted Army Reserve members, but 

there is an annual limit of about $76,000 for officers. 
Page 11 GAO-04-911 Army Reserve Pay

• unit commanders and unit administrators for all mobilized Army 

Reserve units;

• United States Army Reserve Pay Center located at Fort McCoy;

• Army Reserve Pay Management Division at Fort McPherson;

• 12 Army Reserve Regional Readiness Commands;

• U.S. Army Finance Command;

• personnel and finance offices at Army mobilization stations;

• Army area servicing finance offices assigned to support deployed units; 

• personnel and finance offices at Army demobilization stations;

• Defense Finance and Accounting Service (DFAS) at Indianapolis, 

Indiana;

• DFAS at Denver, Colorado; and

• DFAS at Cleveland, Ohio. 

As shown in figure 1, three key phases are associated with the pays and 

allowances applicable to mobilized Army Reserve soldiers: 

(1) mobilization: starting applicable active duty pays and allowances, 

(2) deployment: starting and stopping applicable location-based active duty 

pays while continuing other nonlocation-based active duty pay and 

allowance entitlements, and (3) demobilization: stopping active duty pays 

and allowances. 
Page 12 GAO-04-911 Army Reserve Pay

Figure 1: Three Key Phases for Active Duty Payments to Army Reserve Soldiers 

Mobilization Phase During the initial mobilization, units receive an alert order and begin a 

mobilization preparation program, Soldier Readiness Processing (SRP). 

Among other things, the SRP is intended to ensure that each soldier’s 

financial records are in order. The initial SRP is to be conducted by the 

unit’s administrator at the unit’s home station assisted by personnel from 

the cognizant Army Reserve Regional Readiness Command or designee. 

This initial SRP is to include a verification of the accuracy of records 

supporting applicable active duty pays and allowances. The unit 

commander, supported by the unit administrator, is responsible for 

ensuring that all personnel data, such as birth certificates for dependents 

or foreign language certifications, are current for all soldiers under their 

command.

During this phase, the unit administrator is required to gather all 

supporting documents and send the documentation to the Reserve Pay 

Mobilization Deployment Demobilization

• Pays soldiers

• Issues Leave and Earnings Statements

 and wage garnishments

Performs

active duty

mission

Leaves 

active Army

duty station

Return to

Army Reserve

home station

Receive Release

from Active

Duty orders

Arrives at 

active Army

duty station

Arrives at 

active Army

demobilization 

station

DFAS

Receive mobilization

orders and review 

pay records as part 

of Soldier Readiness 

Processing (SRP) at 

Army Reserve home 

station

2nd pay record 

review done as part 

of SRP at active 

Army mobilization 

station

Source: GAO.
Page 13 GAO-04-911 Army Reserve Pay

Center at Fort McCoy. Pay technicians at the Reserve Pay Center are 

responsible for entering transactions to start initiating basic pay and 

allowances for mobilized Army Reserve soldiers based on the active duty 

tour information that appears on a hard copy of each soldier’s mobilization 

order. If transactions are entered correctly and on time, activated Army 

Reserve soldiers will automatically start to receive basic pay and basic 

allowances for housing and subsistence based on the entered active duty 

mobilization start date. 

After soldiers complete their initial SRP, they travel as a unit to an assigned 

active duty Army mobilization station. At the mobilization station, 

mobilized Army Reserve soldiers are required to undergo a second SRP. As 

part of this second SRP, finance personnel at the mobilization station are 

responsible for confirming or correcting the results of the first SRP, 

including obtaining the documentation necessary to support any changes 

needed to the automated pay records. Pay technicians at the various Army 

mobilization stations are required to promptly initiate appropriate active 

duty pay and allowance transactions that were not initiated during the first 

SRP. Transactions to initiate and terminate pays for all mobilized Army 

Reserve soldiers entitled to receive special medical and dental pay 

entitlements are entered and processed centrally at DFAS-Indianapolis. 

Deployment Phase While Army Reserve soldiers are deployed on active duty, there are several 

active Army and DFAS components involved in paying them. The Army 

area servicing finance office, which may be within the United States or in a 

foreign country, is responsible for initiating pays earned while the soldier is 

located in certain specified locations, such as location-based pays for 

hostile fire and hardship duty. Pay technicians at these area servicing 

finance offices are responsible for starting these types of pays for each 

soldier based on documentation, such as annotated battle rosters or flight 

manifests, showing when soldiers arrived at these designated locations. 

Thereafter, hostile fire pay is automatically generated each pay period until 

an established end-of-tour date is reached or a pay technician manually 

stops the pay. In contrast, other location-based pays, such as hardship duty 

pay, require manual entry of pay transactions each month by the assigned 

Army area servicing finance office. 

While the designated Army area servicing finance offices have primary 

responsibility for administering pay for deployed Army Reserve soldiers, 

particularly starting and stopping location-based active duty pays (such as 

hardship duty pay), finance personnel at the cognizant mobilization station 
Page 14 GAO-04-911 Army Reserve Pay

or at the Reserve Pay Center can also enter certain pay-altering 

transactions that occur during deployments, such as those related to a 

soldier’s early separation from active duty. In addition, the Reserve Pay 

Center has responsibility for entering all monthly nonlocation-based, 

nonautomated pay and allowance transactions, such as foreign language 

proficiency pay. 

Demobilization Phase Upon completion of an active duty tour, Army Reserve soldiers normally 

return to the same active Army locations from which they were mobilized 

for demobilization processing before returning to their home stations. The 

personnel section at the demobilization station is required to provide each 

soldier and the military pay technicians at the demobilization station with a 

copy of the Release from Active Duty order and a DD Form 214, Certificate 

of Release or Discharge from Active Duty. The demobilization station 

military pay technicians are required to use the date of release from active 

duty shown on these documents as a basis for stopping all Army Reserve 

soldiers’ active duty pay and allowances. The Reserve Pay Center is 

responsible for discontinuing monthly input of all nonlocation-based, 

nonautomated pays and allowances. If the active Army demobilization 

station did not take action to stop active duty payments for demobilized 

Army Reserve soldiers, or if a soldier did not return to the demobilization 

station for active duty out-processing, the responsibility for stopping active 

duty pays and allowances falls to the soldier’s unit or the Reserve Pay 

Center.

Automated Systems 

Environment

Paying Army Reserve soldiers is complicated by the number of 

nonintegrated, automated order-writing, tactical, personnel, and pay 

systems involved in authorizing, entering, and processing active duty pays 

and allowances to mobilized Army Reserve soldiers during the 

mobilization, deployment, and demobilization phases of their active duty 

tours. These automated systems are

• the Defense Joint Military Pay System – Reserve Component (DJMSRC)—a DFAS-operated system used to pay reserve soldiers;

• the Defense Military Pay Office (DMO)—data input system used to enter 

pay transactions for processing; 

• the Army Reserve’s Regional Level Application System (RLAS), 

including its personnel order-writing functions;
Page 15 GAO-04-911 Army Reserve Pay

• the Total Army Personnel Database–Reserves (TAPDB-R);

• the Army’s Tactical Personnel System; and 

• the Army’s Transition Processing (TRANSPROC) System.

Many of these systems were originally designed for other purposes, but 

have been adapted to help support payments to mobilized Army Reserve 

soldiers. For example, DJMS-RC,11 a large, complex automated payroll 

system application now used to pay Army and Air National Guard and 

Army and Air Force Reserve soldiers, was originally designed to be used to 

pay Reserve and Guard soldiers for monthly drills, short periods (30 days 

or fewer) of active duty or training. DFAS has acknowledged that its 

current military pay systems (including DJMS-RC) are aging, unresponsive, 

fragile, and a major impediment to efficient and high-quality customer 

service. 

DFAS has primary responsibility for developing guidance and managing 

system operations for DJMS-RC. DFAS-Denver is responsible for designing, 

developing, and maintaining customer requirements for all of DOD’s 

military pay services. Its Technical Support Office is responsible for 

designing and maintaining the DJMS-RC core pay software. DFASIndianapolis is the central site for oversight of all Army military pay. As 

such, DFAS-Indianapolis is responsible for maintaining an estimated 

1 million Army soldier pay records, including those for Army Reserve 

soldiers. DFAS-Indianapolis serves as a “gatekeeper” for DJMS-RC in that it 

monitors the daily status of data uploaded to the system to ensure that all 

received transactions are processed. 

After manual entry of the mobilization dates from hard copies of 

mobilization orders into DJMS-RC, DJMS-RC is designed to automatically 

generate most active duty pay and allowance payments based on the 

mobilization date, twice a month, until the stop date is entered into the 

system. Without additional manual intervention, DJMS-RC will 

automatically stop generating these active duty payments to Army Reserve 

soldiers as of the stop date recorded in DJMS-RC. This automated edit 

control feature is intended to prevent erroneous payments to soldiers 

beyond their authorized end of active duty date. Because pay and 

11In November 1988, the Under Secretary of the Army approved the use of the Air Force 

military pay system to pay Army active and reserve soldiers.
Page 16 GAO-04-911 Army Reserve Pay

personnel systems are not integrated, human intervention and additional 

manual data entry are required when a pay or allowance error is detected 

or an event occurs that requires a change in the soldier’s pay-related 

personnel and pay records. For example, a change in dependent status, 

such as marriage or divorce; a promotion; jump pay disqualification; or 

being demobilized before the active duty tour end date shown on a soldier’s 

original mobilization order would necessitate manual input to 

appropriately change or eliminate some of the pays and allowances a 

soldier would be entitled to receive. 

All Army Reserve soldier pays and allowances are to be documented in the 

Master Military Pay Account—the central repository for soldier pay 

records in DJMS-RC. All pay-related transactions that are entered into 

DJMS-RC, primarily through the DMO input application, update the Master 

Military Pay Account. DMO is the DJMS-RC pay input subsystem used by 

the Reserve Pay Center, active Army finance offices, and military pay 

offices—including offices located at overseas locations throughout the 

world—to enter transactions to initiate and stop active duty pays to 

mobilized Army Reserve soldiers. DMO is used to manually enter 

transactions to (1) initiate any Army Reserve soldier pay and allowances 

that were not started at initial mobilization, as well as applicable locationbased pays, such as hostile fire and hardship duty pays, (2) stop all 

location-based pays when soldiers depart designated locations, and 

(3) stop all active duty pays and allowances at demobilization.

In addition to DJMS-RC and DMO, the Army Reserve relies on four other 

nonintegrated automated systems as a basis for authorizing active duty pay, 

allowance, and related benefit entitlements to mobilized Army Reserve 

soldiers:

• RLAS is operated at the Army Reserve’s regional support locations and 

contains multiple modules to support regional human resource, 

resource management, and training operations for Army Reserve 

soldiers. The personnel module within RLAS is used to process Army 

Reserve personnel actions, including those that have an impact on pay, 

such as promotions and discharges. Within the personnel module, there 

is an order-writing sub-module used for writing and generating 

mobilization orders for individual Army Reserve soldiers. Army Reserve 

soldier data in the personnel module of RLAS is used by the RLAS orderwriting sub-module to help create the individual orders for mobilized 

soldiers. 
Page 17 GAO-04-911 Army Reserve Pay

• TAPDB-R is the central repository for Army Reserve-wide personnel 

data. Selected pay-related personnel data, such as solders’ initial 

enrollment in the Army Reserve, contained in Army Reserve soldiers’ 

pay records in DJMS-RC, are received through an automated interface 

with TAPDB-R. 

• The Tactical Personnel System is a stand-alone Army-wide personnel 

system operated by Army personnel at overseas airports where Army 

soldiers first enter or leave an overseas deployment location. Hard 

copies of Tactical Personnel System-generated manifests showing 

names and dates of soldiers’ arrivals and departures are one source of 

authorization for starting or stopping Army Reserve soldiers’ locationbased hostile fire pay, hardship duty pay, and combat zone tax exclusion 

tax benefits. Arriving and departing soldiers can enter data, such as 

name, rank, and Social Security number, into the Tactical Personnel 

System from their common access cards using a barcode scanner 

function. 

• TRANSPROC is an Army-wide system used to track and support Army 

soldier processing at mobilization and demobilization stations. 

TRANSPROC is used to generate a DD Form 214, Certificate of Release 

or Discharge from Active Duty, for Army Reserve soldiers completing 

their active duty mobilization tours. 

Case Studies Illustrate 

Pay Problems

We identified significant pay problems at all eight of the Army Reserve case 

study units we audited. Specifically, we identified 256 Army Reserve 

soldiers who were overpaid their active duty pay and allowance 

entitlements by about $247,000, 245 soldiers who received late pay and 

allowance payments of about $77,000, and 294 soldiers who were 

underpaid their pay and allowance entitlements by about $51,000. As 

discussed in the following sections, we found that these pay problems were 

associated with a series of processes, human capital issues, and automated 

system deficiencies. 

The Army Reserve units we audited for our case studies had various 

functions, including a Quartermaster (supply), dental services, 

transportation, military police, and military intelligence unit. These units 

were assigned a variety of combat support missions associated with the 

global war on terrorism while mobilized on active duty in and around Iraq, 

Afghanistan, Qatar, and Kuwait and in support of intelligence operations 
Page 18 GAO-04-911 Army Reserve Pay

here in the United States. The units we audited, their locations, and 

information about their mobilizations are shown in table 2.

Table 2: Army Reserve Units Audited 

Source: GAO analysis.

Overall, 332 of the 348 soldiers (95 percent) in our eight case study units 

that were mobilized, deployed, and demobilized at some time during the 18-

month period from August 2002 through January 2004 had at least one pay 

problem associated with their mobilization to active duty. Many of the 

soldiers had multiple pay problems associated with their active duty 

mobilizations. Problems lingered unresolved for considerable lengths of 

time. For example, for some soldiers, problems lingered through the entire 

Army Reserve unit and 

location

Mobilization 

station

Deployment 

location Mission

Mobilization 

dates

Number of 

soldiers 

mobilized

824th Quartermaster Company – 

Fort Bragg, N.C.

Fort Bragg, N.C. Kuwait, 

Afghanistan, and 

Fort Bragg

Prepared parachutes, 

weapons, and aid packages

2/03 - 9/03 68

965th Dental Company – 

Seagoville, Tex.

Fort Hood, Tex. Kuwait Provided emergency and 

sustaining dental care 

supporting combat 

operations 

2/03 - 6/03 93

948th Forward Surgical Team – 

Southfield, Mich.

Fort McCoy, Wis. Afghanistan Provided emergency and 

sustaining medical care 

supporting combat 

operations in Afghanistan

1/03 - 8/03 20

443rd Military Police – Owings 

Mills, Md.

Fort Lee, Va. Iraq Guarded Iraqi prisoners at 

former Camp Cropper Prison 

at Baghdad airport 

2/03 - 1/04 121

FORSCOM Support – Finksburg, 

Md.

Fort McPherson, 

Ga.

Qatar Served as ground liaison 

officer between Army and Air 

Force combat flight 

operations based in Qatar

3/03 - 5/03 1

629th Transportation DetachmentFort Eustis, Va.Fort Eustis, Va. Kuwait Tracked supplies in and out 

of Kuwait

3/03 -1/04 24

3423rd Military Intelligence 

Detachment – New Haven, Conn.

Fort Lee, Va. Fort Belvoir, Va. Supported National Ground 

Intelligence Center 

operations

12/02 - 12/03 11

431st Chemical Detachment – 

Johnstown, Pa.

Fort Dix, N.J. Kuwait Provided nuclear, biological, 

and chemical warning and 

reporting support to military 

operations 

1/03 - 7/03 10

 Total soldiers 348
Page 19 GAO-04-911 Army Reserve Pay

period of their active duty mobilization and for several months after their 

active duty tours ended. Table 3 summarizes the number of Army Reserve 

soldiers at each of our case study locations that had at least one problem 

associated with their pays and allowances during each of the three phases 

of their active duty mobilization. 

Table 3: Pay Problems at Eight Case Study Units

Source: GAO analysis.

We counted soldiers’ pay problems as a problem only in the phase in which 

the problem first occurred, even if the problems persisted into subsequent 

phases. In addition, many soldiers had more than one problem associated 

with their entitled pays and allowances. Further, our case study audits 

reflect only the problems we identified. However, because our audits were 

only intended to provide more detailed perspective on the types and causes 

of any pay problems experienced by mobilized Army Reserve soldiers, 

rather than an exact calculation of what soldiers should have received, we 

likely did not identify all of the active duty pay and allowance problems 

related to our case study units. 

In addition to pay and allowance problems, while we did not attempt to 

fully quantify the tax withholding and tax filing effects, we also identified 

problems with timeliness and accuracy of combat zone tax exclusion 

Army Reserve unit

Soldiers with pay problems

Mobilization Deployment Demobilization

824th Quartermaster 

Company, Va.

11 of 68 50 of 68 13 of 68

965th Dental Company, Tex. 25 of 93 86 of 93 7 of 93

948th Forward Surgical Team, 

Mich.

5 of 20 20 of 20 18 of 20

443rd Military Police 

Company, Md.

67 of 121 114 of 121 17 of 121 

FORSCOM Support Unit, 

Md.

0 of 1 1 of 1 1 of 1

629th Transportation 

Detachment, Va.

5 of 24 24 of 24 1 of 24

3423rd Military Intelligence 

Detachment, Conn.

10 of 11 10 of 11 9 of 11

431st Chemical Detachment, 

Pa.

6 of 10 10 of 10 0 of 10
Page 20 GAO-04-911 Army Reserve Pay

benefits for soldiers with the seven case study units we audited that were 

deployed overseas in Kuwait, Afghanistan, Qatar, or Iraq. Specifically, while 

soldiers in these units were eligible to receive their pays and allowances 

tax free when they first arrived in-theater, almost all failed to receive this 

benefit until at least a month after arrival. Over- and underpayment of 

active duty pays and allowances for soldiers deployed in designated 

combat zones adversely impacted the accuracy and timeliness of soldiers’ 

combat zone tax exclusion benefits. 

Establishing the exact amount owed and collecting overpayments of active 

duty pays and allowances erroneously provided to soldiers placed an 

additional administrative burden on both the individual soldiers and DOD. 

Soldiers were sometimes required to spend considerable time and were 

frustrated in their efforts to determine the exact sums owed or to establish 

a repayment plan. For example, it took one soldier over a year and about 20 

phone calls, e-mails, and faxes to identify and resolve the active duty 

overpayments and related tax benefits he received. In other instances, we 

identified soldiers who received extensive improper active duty payments, 

sometimes for over a year, but who may not have contacted anyone within 

DOD to stop these erroneous overpayments. These soldiers received 

significant overpayments, but did not acknowledge their receipt or set 

aside sufficient funds to repay these erroneous overpayments. In these 

instances, the soldiers may be subject to criminal prosecution. For 

example, we identified a soldier who did not mobilize with his unit, yet 

received over $36,000 in active duty pay and allowances for over a year. 

When questioned, the soldier stated he was not aware that he had received 

$36,000 in erroneous pay and could not immediately pay back all the 

erroneous active duty overpayments he received. We referred this, and 

other similar cases, to the Army’s Criminal Investigation Division for 

further investigation into whether criminal prosecution of these soldiers 

may be warranted for attempting to fraudulently convert government funds 

to personal use. 

Further, these overpayment debts placed an additional labor-intensive 

burden on the Army and DFAS. Determining the exact amounts soldiers 

owed as a result of overpayments, particularly when the combat zone tax 

exclusion benefits were involved, required labor-intensive efforts to gather 

necessary supporting documentation (in some instances from multiple 

locations) and compare these data with pay and tax withholdings, 

sometimes spanning more than 1 year, to manually compute amounts owed 

as a result of erroneous overpayments. In addition, DFAS was required to 

track and monitor collections from soldiers against these debts. Collection 
Page 21 GAO-04-911 Army Reserve Pay

of these debts may become more difficult the longer they remain 

outstanding. For example, Army auditors reported in 2003 that, to the 

extent that soldiers leave the Army with outstanding debts, collection rates 

are only about 40 percent.12

Examples of pay and allowance problems found through our audits of 

soldiers’ pay experiences at the eight case study units included the 

following:

• Forty-seven soldiers deployed overseas with the 824th Quartermaster 

Company from North Carolina improperly received several months of 

hardship duty pay, totaling about $30,000, for several months after they 

left Kuwait.

• Nine soldiers of the 824th Quartermaster Company improperly received 

family separation allowance payments totaling an estimated $6,250 

while serving at Fort Bragg, their unit’s home station.

• Forty-nine soldiers with the 824th Quartermaster Company did not 

receive the hardship duty pay they were entitled to receive when they 

arrived at their designated duty locations overseas until about 3 months 

after their arrival. Subsequently, they continued to erroneously receive 

hardship duty pay for 5 consecutive months after departure from their 

overseas duty locations.

• Ten soldiers with the 443rd Military Police Company had problems with 

their overseas housing allowance associated with their deployment in 

Iraq, including five soldiers who were underpaid about $2,700 and seven 

who did not receive their last allowance until more than 2 months after 

their active duty tour ended.

• A soldier with the 443rd Military Police Company who demobilized from 

an active duty deployment in August 2002, subsequently received 

erroneous active duty payments of about $52,000 through May 2004. 

These erroneous payments were not detected and stopped by DOD. The 

soldier contacted us to ask for our assistance in resolving this matter.

12U.S. Army Audit Agency, Identification of Soldiers in Deserter or Absentee Status, A-2003-

0009-FFG (Washington, D.C.: Nov. 13, 2002).
Page 22 GAO-04-911 Army Reserve Pay

• A soldier from the 965th Dental Company who received an emergency 

evacuation from Kuwait as a result of an adverse reaction to anthrax 

and antibiotic inoculations he received in preparing for his overseas 

deployment, continued to receive about $2,900 in improper hostile fire 

and hardship duty payments after his return from Kuwait. 

• A soldier with the 3423rd Military Intelligence Detachment did not 

receive an estimated $3,000 in family separation allowance payments 

associated with his active duty mobilization.

Further, seven of our eight units were deployed overseas during their 

mobilization. Almost all the soldiers in these seven units had problems with 

the timeliness of their combat zone tax exclusion benefits. All the soldiers 

at our seven case study units who were deployed overseas experienced 

problems with the late receipt of their combat zone tax benefits because 

DJMS-RC could not simply stop withholding federal taxes, but instead had 

to first withhold the taxes and then in the following month’s pay 

processing, reimburse the soldier the taxes previously withheld. As a 

result, soldiers generally did not benefit from the tax exemption for at least 

one month after their tax withholdings should have ceased. In addition to 

this systemic issue, we identified other problems associated with these 

benefits with respect to the soldiers at our case study units:

• Twenty of the 20 soldiers with the 948th Forward Surgical Team waited 

over 2 months after they arrived in Afghanistan to benefit from the 

combat zone tax exclusion. 

• It took nearly a year to identify and resolve a $1,100 overpayment 

associated with one soldier’s combat zone tax exclusion benefit.

• Several soldiers with Maryland’s 443rd Military Police Company never 

received the correct amount of reimbursement for taxes withheld, 

which sometimes resulted in underwithholding taxes, and other times 

resulted in overwithholding taxes.13

These pay mistakes were the source of many complaints, took 

considerable time and effort to address, and were likely to have had an 

13Over- and underwithholding of taxes associated with the combat zone tax exclusion can be 

corrected when Army Reserve soldiers file their tax returns if their W-2 form reflects the 

correct amount of taxable income. 
Page 23 GAO-04-911 Army Reserve Pay

adverse effect on soldier morale. In addition, soldiers at one of our case 

study units told us that a delay in receiving their active duty pays and 

allowances created financial hardship for them and their families. 

Specifically, several of the unit’s soldiers told us they could not pay their 

bills when they were initially deployed overseas and were forced to borrow 

money from friends and relatives in order to meet their financial 

obligations. 

We provided data on the pay problems we identified to Army Reserve 

officials. For the most part, they concurred with our analysis and reported 

that they have taken action to address any identified over- and 

underpayments and withholdings we identified. Appendixes II through IX 

provide a more detailed description of the pay experiences of the soldiers 

at each of the Army Reserve case study units we audited.

Significant Weaknesses 

Exist in Mobilized 

Army Reserve Pay 

Processes

The pay problems we found were caused, at least in part, by design 

weaknesses in the extensive, complex set of processes and procedures 

relied on to provide active duty pays, allowances, and related tax benefits 

to mobilized Army Reserve soldiers. We identified issues with the 

procedures in place for both determining eligibility and processing related 

transactions of active duty pay to mobilized Army Reserve soldiers. These 

process weaknesses involve not only the finance and military pay 

component of the Army, Army Reserve, and DFAS, but the Army’s 

operational and personnel functions as well. Specifically, we found 

deficiencies in processes for (1) tracking and maintaining accountability 

over soldiers as they moved from location to location to carry out their 

mobilization orders, (2) carrying out SRPs—primarily at the mobilization 

stations, (3) distributing and reconciling key pay and personnel reports 

during mobilizations, and (4) determining eligibility for the family 

separation allowance associated with active duty mobilizations. 

Flaws in Procedures for 

Tracking and Maintaining 

Accountability over Soldiers 

throughout Mobilization

Mobilization policies and procedures did not provide the Army with 

effective accountability and visibility over soldiers’ locations to provide 

reasonable assurance of accurate and timely payments for Army Reserve 

soldiers’ active duty mobilizations. Accountability breakdowns can occur 

as soldiers pass through four main transitions during the course of a typical 

mobilization cycle, including transitions from (1) their home station to 

their designated mobilization station, (2) the mobilization station to their 

assigned deployment location, (3) the deployment location to their 
Page 24 GAO-04-911 Army Reserve Pay

demobilization station, and (4) the demobilization station back to their 

home station.

Soldiers’ active duty pays, allowances, and related tax benefits are directly 

tied to being able to account for soldiers’ locations during these transitions. 

For example, timely data on the dates soldiers arrive at and leave 

designated locations are essential for accurate and timely hardship duty 

pays, allowances, and related combat zone tax exclusion benefits. To 

effectively account for soldiers’ movements during these transitions, unit 

commanders, unit administrators, as well as individuals assigned to 

personnel and finance offices across the Army Reserves, Army 

mobilization stations, and in-theater Army locations must work closely and 

communicate extensively to have the necessary data to pay Army Reserve 

soldiers accurately and on time throughout their active duty tours.

However, we identified several critical flaws in the soldier accountability 

procedures in place during the period of our audit. Specifically, we 

identified flawed procedures for accountability over soldiers’ actual 

locations and associated pay entitlements in that (1) soldiers received 

mobilization orders, but did not report for active duty and (2) dates of 

soldiers’ arrival at, and departure from, designated hardship duty 

deployment locations were not reported. Such breakdowns in 

accountability procedures resulted in erroneously starting, or delays in 

starting, active duty pays, allowances, and related tax benefits, and 

erroneously continuing these pays, allowances and benefits when soldiers 

were no longer entitled to receive them. 

Mobilization Station 

Accountability

Effective procedures were not in place to monitor and validate the 

propriety of active duty payments to mobilized reservists. We found that 

preventive controls for initiating and stopping active duty payments for 

Army Reserve soldiers were ineffective. In addition, the accountability 

controls in place at Army stations responsible for unit mobilization and 

demobilization processing were not effective in detecting any Army 

Reserve soldiers assigned to units passing through those locations who 

were not entitled to receive active duty pays and allowances. As a result of 

these control design flaws, we found several soldiers who received up to a 

year of active duty payments based on issued mobilization orders, even 

though the soldiers never reported for active duty. Army officials have 

acknowledged that active duty payments are increasingly vulnerable to 

such overpayments as a result of the Army Reserve’s November 2003 action 

to extend Army Reserve soldiers on active duty at that time for another 

year. 
Page 25 GAO-04-911 Army Reserve Pay

When a unit is called to active duty, soldiers in the mobilized unit receive 

individual mobilization orders. Processing procedures provide that these 

orders be used as a basis for initiating active duty pays and allowances to 

begin on the first day of active duty designated in the individual active duty 

mobilization orders. The Reserve Pay Center, located at Fort McCoy, is 

generally responsible for initiating active duty pays and allowances based 

on the data shown on a hard copy of the individual orders. However, the 

Reserve Pay Center did not receive the data necessary to identify, on a unitby-unit basis, which soldiers reported to the active Army mobilization 

stations so that this information could be compared with a list of soldiers 

for that unit for whom the Reserve Pay Center started active duty pays and 

allowances. In addition, Army mobilization station finance personnel did 

not receive a list of soldiers in a unit who were receiving active duty pay to 

compare with the names of unit soldiers who actually reported to the 

mobilization station.

At one of our case study units, the 965th Dental Company, we found that this 

process flaw resulted in tens of thousands of dollars in overpayments.

Individual Case Illustration: Flawed Soldier Location 

Accountability Procedures Result in $36,000 Erroneous Active 

Duty Payments

A soldier assigned to the 965th Dental Company received a mobilization 

order, but based on a discussion with his commander about a medical 

condition, was told he would be transferred to a unit that was not 

mobilizing. However, the unit commander did not provide a list of the 

unit’s mobilizing soldiers to the Reserve Pay Center and did not provide 

any information on this soldier indicating that he would not be reporting 

to the unit’s mobilization station. Consequently, neither the Reserve Pay 

Center nor the mobilization station personnel had any means of detecting 

that a soldier had not mobilized with his unit and therefore was 

improperly receiving active duty payments. As a result, the soldier’s pay 

was started on February 11, 2003, and continued through February 29, 

2004, resulting in more than $36,000 in overpayments. This improper 

active duty pay was stopped only after we identified the error and 

notified Army officials. 
Page 26 GAO-04-911 Army Reserve Pay

In another instance, the Army’s inability to determine that one soldier’s 

actual location did not match his “paper” mobilization resulted in an 

estimated $52,000 in erroneous payments.

In addition, Army Reserve officials told us about similar cases at other 

units not included in our case studies in which soldiers did not report for 

active duty, but nonetheless received erroneous active duty pay for lengthy 

periods. They told us they identified soldiers who received large improper 

active duty payments, some of whom had received erroneous active duty 

payments for over a year before they were identified and stopped, as the 

following examples illustrate:

• A soldier from an Army Reserve chemical unit in South Carolina 

received an individual mobilization order in February 2003, but did not 

mobilize with the unit. Nonetheless, her active duty pays and allowances 

(a total of over $45,000) continued until they were stopped in April 2004.

• A soldier from a Louisiana Army Reserve unit received an individual 

mobilization order in January 2003. However, the unit commander 

determined the soldier should not be mobilized with the unit because he 

had not yet completed required training. Nonetheless, the soldier 

received active duty pays and allowances totaling over $25,000 until they 

were stopped in March 2004. 

Individual Case Illustration: Soldier Accountability Flaws Lead 

to Estimated $52,000 in Erroneous Active Duty Payments 

A soldier contacted GAO in March 2004 to inquire as to why he had been 

receiving active duty pay for almost a year even though, according to the 

soldier, he was not mobilized to active duty during that time. Subsequent 

inquiry determined that, at least on paper, the soldier was transferred 

from Maryland’s 443rd Military Police Company to Pennsylvania’s 307th

Military Police Company in February 2003, and was mobilized to active 

duty with that unit on March 3, 2003. Applicable active duty pays and 

allowances for the soldier were initiated based on these March 3, 2003, 

orders. After the 307th Military Police Company demobilized in February 

2004, the soldier’s mobilization order was revoked. Nonetheless, 

available pay documentation indicated the soldier continued receiving 

erroneous active duty pay and allowances for basic pay, and allowances 

for subsistence, housing, and family separation totaling an estimated 

$52,000 through May of 2004. 
Page 27 GAO-04-911 Army Reserve Pay

• A soldier attached to a Puerto Rico Quartermaster Reserve unit was 

mobilized in February 2003, but did not report for active duty. The 

soldier continued to receive improper active duty pays and allowances 

totaling about $36,000 until the payments were stopped in April 2004. 

• A soldier assigned to an Illinois Reserve Military Police Company 

received an individual mobilization order in December 2002. However, 

she did not report to the mobilization station with her unit and her 

mobilization order was revoked in January 2003. Nonetheless, the 

soldier continued to receive active duty pay and allowances totaling 

about $24,000 until the payments were stopped in April 2004. 

Army Reserve officials told us that these improper payments were not 

identified through any systemic preventive accountability control process 

associated with an active duty mobilization or demobilization, but rather as 

a result of after the fact detective controls in place at the unit or the Army 

Reserve pay center. For example, one soldier reported for a weekend drill 

and the unit pay administrator attempted to enter a transaction to pay him 

for weekend drill duties. However, the unit pay administrator discovered 

the soldier’s receipt of erroneous active duty payments when the weekend 

drill pay transaction was rejected by DJMS-RC. Army Reserve officials told 

us they have referred these improper payments to the Army’s Criminal 

Investigations Division to determine if criminal prosecution of the soldiers 

involved may be warranted.

Deployment Accountability Flaws in soldier accountability procedures associated with overseas 

deployment locations resulted in late, under-, and overpayments of active 

duty pays, allowances, and tax benefits associated with almost all the 

soldiers in our case study units. Soldiers were generally paid late or 

underpaid location-based incentives upon their initial arrival into 

designated hardship duty and hostile fire locations. Subsequently, they 

were often overpaid these same location-based entitlements because these 

payments continued, sometimes for long periods of time, after soldiers left 

designated overseas locations. These failures occurred because Army 

procedures in place during our audit were ineffective in accounting for 

when soldiers entered into and departed from designated hardship duty 

and hostile fire locations. In addition, as discussed in a subsequent section 

of this report, automated systems deficiencies also contributed to, and in 

some cases exacerbated, location-based active duty pay problems. 
Page 28 GAO-04-911 Army Reserve Pay

According to DFAS procedures, Army local area servicing finance locations 

are to obtain documentation showing soldier and associated arrival and 

departure date information to start and stop location-based pays, 

allowances, and associated tax benefits. We were told that flight manifest 

lists generated through the Army’s Tactical Personnel System were the 

primary source documents used as a basis for entering manual transactions 

to start and stop location-based pays during most of our audit period.

One of our case study units, the 443rd Military Police Company, relied on an 

extraordinary, labor-intensive workaround to ensure that necessary 

documentation supporting any changes in the location of the unit’s 

soldiers, as well as other pay-support documentation, was received by the 

unit’s area servicing finance office while the soldiers were deployed in Iraq.

However, despite diligent efforts by Army local area servicing finance 

officials to develop and maintain accurate lists of soldiers at the designated 

deployment locations, our analysis of payments to soldiers at our case 

study units indicated that this information was often not timely or accurate. 

Finance officials at the Army area servicing finance offices either did not 

obtain manifests (documentation showing soldier arrival and departure 

dates) at all, received the documentation late (often months after the unit’s 

actual arrival or departure dates), or obtained manifests listing soldiers 

Individual Case Illustration: Biweekly Flights to Transmit Unit 

Pay Documents

While deployed to guard Iraqi prisoners at Camp Cropper in Iraq, the unit 

commander of the 443rd Military Police Company assigned a sergeant to 

help address myriad pay complaints. The sergeant was deployed to Iraq 

as a cook, but was assigned to assist in pay administration for the unit 

because he was knowledgeable in DJMS-RC procedures and pay-support 

documentation requirements and was acquainted with one of the soldiers 

assigned to the unit’s servicing finance office in Camp Arifjan, Kuwait. 

Every 2 weeks, for about 5 months, the sergeant gathered relevant paysupport documentation from the unit’s soldiers, took a 1 hour and 15 

minute flight to the Kuwait airport, and then drove an hour to the Army 

finance office at Camp Arifjan. The day following the sergeant’s biweekly 

journey to Camp Arifjan, the sergeant worked with the Army finance 

officials at Camp Arifjan to enter transactions into DMO, often for 8-12 

hours, to get unit soldiers’ pay entitlements started or corrected, 

particularly hardship duty pay requiring manual input every month. 
Page 29 GAO-04-911 Army Reserve Pay

that should not have been included for pay purposes. For example, an 

Army Reserve soldier assigned to support Air Force operations did not 

process through, or have any access to, an Army location that could 

provide a manifest showing his arrival date in-country to local Army area 

servicing finance office officials so that they could start his location-based 

pays. In this case, the soldier did not receive his location-based pays until 

he returned to his demobilization station and insisted that personnel at that 

location take the actions necessary to start this payment. Also, we were 

told that soldiers departing from designated locations on emergency or rest 

and recreation leave, who are still entitled to continue to receive 

designated location-based pays while on such leave, were sometimes 

erroneously included on departure manifests used as source documents to 

stop active duty location-based pays.

These flawed procedures, which were relied on to account for Army 

Reserve soldiers’ actual locations and their related pay entitlements while 

deployed, resulted in pay problems in all seven of our case study units that 

deployed soldiers overseas, as the following examples illustrate: 

• All 49 soldiers that deployed overseas with our 824th Quartermaster 

Company case study unit were underpaid their hardship duty pay when 

they first arrived in the country. Subsequently, almost all soldiers in the 

unit were overpaid their hardship duty pay---most for up to 5 months--

after they left the designated location, and some continued to receive 

these payments even after they were released from active duty. In total, 

we identified about $30,000 in improper hardship duty payments 

received by this unit’s soldiers.

• Seventy-six soldiers with the 965th Dental Company received improper 

hardship duty payments totaling almost $47,000 after they had left their 

hardship duty location.

• Ten soldiers with the 431st Chemical Detachment received improper 

hardship duty payments for 7 months after their return to their home 

station.

• None of the 24 soldiers deployed with the 629th Transportation 

Detachment received hardship duty pay for the months they arrived and 

departed the hardship duty areas. In addition, they did not receive 

hostile fire pay for almost 3 months after their arrival at their assigned 

overseas deployment locations. 
Page 30 GAO-04-911 Army Reserve Pay

The debts created by overpayment of these location-based payments 

placed an additional administrative burden on both the soldiers and the 

department to calculate, monitor, and collect the corrected amounts. 

Lack of Clear Pay Review 

Procedures at Mobilization 

Stations 

Some of the pay problems we found were associated with flawed 

procedural requirements for the pay support review, which is part of the 

SRP process carried out at Army mobilization stations. Procedures 

followed by Army mobilization station finance officials during the SRP 

were inconsistent with respect to what constitutes a “thorough review” of 

soldiers’ pay support documentation to determine if it is current and 

complete and has been entered into the DJMS-RC pay system.

Procedures followed for our 824th Quartermaster Company case study unit 

at the Fort Bragg mobilization station provided that the pay support portion 

of the SRP at that location consisted of finance representatives briefing the 

entire unit on required pay support. Finance personnel did not meet 

individually with each soldier to compare his or her pay support 

documentation with on-line soldier pay data in DJMS-RC. As a result, 

missing or outdated documentation required to support active duty pays 

and allowances at the time of the 824th Quartermaster Company’s SRP 

contributed to some of the late payments we identified. For example, one 

soldier with this unit who was certified as ready for mobilization as a result 

of the SRP, did not receive entitled family separation allowance payments 

because documentation necessary to start this allowance was not 

submitted as part of the SRP process. Six months later, after the soldier 

demobilized at Fort Bragg, the paperwork necessary to receive this 

allowance was obtained and submitted for payment. This soldier received 

about 6 months of back family separation allowance in September 2003 

totaling $1,400. 

We also found indications that the pay support documentation review 

carried out at the Army’s Fort Lee mobilization station was less than 

thorough. Personnel at the Fort Lee mobilization station did not carry out a 

detailed review of Master Military Pay Account records, which would have 

shown that soldiers with the unit would stop receiving their entitled 

housing allowances and family separation allowances because there were 

incorrect end dates for these payments entered into DJMS-RC. As a result, 

several soldiers from the 443rd Military Police Company had their basic 

allowance for housing switched to a rate less than the soldiers were 

entitled to receive and had their family separation allowance stopped for a 

period during their deployment because the Fort Lee mobilization station 
Page 31 GAO-04-911 Army Reserve Pay

finance personnel did not take action necessary to extend the end-ofeligibility dates for these two entitlements.

In contrast, pay support documentation review procedures in place as part 

of the SRP at the Army’s mobilization stations at Fort McCoy and Fort 

Eustis provided that, in addition to a unitwide finance briefing, finance 

officials at those sites were to conduct one-on-one pay support 

documentation reviews with each soldier. Members of the 948th Forward 

Surgical Team, who mobilized through Fort McCoy, and the 629th

Transportation Detachment, who processed through Fort Eustis, had their 

pay records reviewed and compared to DJMS-RC on-line records by 

finance officials during the finance portion of their SRP. We found very few 

problems with either the 948th or 629th units’ active duty pay entitlements, 

excluding in-theater entitlements, after these units passed through the oneon-one soldier pay documentation review as part of the SRP at Fort McCoy 

and Fort Eustis. 

Inadequate Processes in 

Place for Reconciling and 

Distributing Key Pay and 

Personnel Reconciliation 

Reports

Design flaws in the procedures in place to obtain and reconcile key pay and 

personnel reports impaired the Army’s ability to detect improper active 

duty payments. As discussed previously, we identified several cases and the 

Army has also identified a number of instances in which such improper 

payments continued for over a year without detection. 

The reserve pay review and validation procedures for Army Reserve 

soldiers were initially designed to service reservists as they perform 

weekend drills, annual training, and short-term active duty mobilizations of 

30 days or fewer. Correspondingly, pay and personnel reconciliation 

processes in place during our audit were focused primarily on 

requirements for unit commanders to reconcile data for reserve soldiers 

while they are in an inactive (drilling reservist) status. However, as 

illustrated by the pay problems discussed in this report, there is an equal or 

even greater need to clearly establish required procedures for the review 

and reconciliation of pay and related personnel data for Army Reserve 

soldiers mobilized on extended active duty tours. 

Specifically, with respect to the monthly review and reconciliation of two 

key reports, the Pay/Personnel Mismatch Report and the Unit
Page 32 GAO-04-911 Army Reserve Pay

Commander’s Pay Management Report,14 current procedures contained in 

USARC Pamphlet 37-1 provide that unit commanders are required to 

review the Unit Commander’s Pay Management Report for soldiers in their 

units on weekend drill activities and for active duty mobilization planning 

activities. However, these procedures do not clearly require unit 

commanders to review this key report for Army Reserve soldiers in 

subsequent phases of their active duty mobilization tours. Appendix I of 

USARC Pamphlet 37-1 provides that unit pay data in the Unit Commander’s 

Pay Management Report should be reconciled with unit training and 

attendance reports, but does not require reconciling pay data with related 

data on mobilized soldiers. As a result, the unit commander at one of our 

case study units, the 965th Dental Company, stated that he did not believe 

that a review and reconciliation was needed. Instead, he stated he relied on 

the unit’s soldiers to identify any pay problems. In light of the extensive 

manual entry, and nonintegrated systems currently relied on for mobilized 

Army Reserve soldiers’ pay, the timely and complete reconciliation of 

comparable pay and personnel data in these key reports can serve as an 

important detective control to identify any pay errors shortly after they 

have occurred. 

In addition, Army guidance does not specify how deployed units are to 

receive these reports. Distribution of these reports is particularly 

problematic for units deployed in remote locations overseas. As a matter of 

practice, we found that for units in an inactive status, the unit’s Regional 

Readiness Command usually provides these reports. However, we also 

found no procedural guidance in place to distribute the same reports to 

unit commanders and administrators while their units are on active duty. 

Unit commanders for several of our case study units stated they did not 

receive these key reports while their units were deployed. Had those 

reports been available and reconciled, they could have been used to 

identify and correct improper active duty payments, such as the large, 

erroneous active duty overpayments discussed previously. 

14These reports provide summaries of pay- and personnel-related information on soldiers in 

the unit. 
Page 33 GAO-04-911 Army Reserve Pay

Procedures for Applying 

Family Separation 

Allowance Eligibility 

Requirements Were Not 

Clear 

The existing procedures for applying eligibility requirements for activated 

Army Reserve soldiers’ family separation allowance payments were not 

clear. These flawed procedural requirements for paying the family 

separation allowance led to varying interpretations and pay errors for Army 

Reserve soldiers at the implementing Army home stations and mobilization 

stations.

DOD Financial Management Regulation (FMR) Volume 7A policy clearly 

provides that soldiers are entitled to receive a family separation allowance 

if their family does not reside near the duty station, which is generally 

defined as within 50 miles.15 However, DOD procedures and the form 

needed to implement this FMR policy were not clear. Implementing 

guidance and DD Form 1561 (a document that must be completed to 

receive the family separation allowance) do not provide for a 

determination that a soldier’s family does not live near the soldier’s duty 

station. Specifically, DD Form 1561 does not specifically require soldiers to 

certify that the soldier is entitled to receive family separation allowance 

benefits because (1) they live over 50 miles away from the unit’s home 

station and do not commute daily or (2) the soldier’s commander has 

certified that the soldier’s required commute to the duty station is not 

reasonable. We noted that in several of our case study units, soldiers began 

receiving the family separation allowance while stationed in Army 

installations less than 50 miles away from their residence and without any 

documentation showing the unit commander’s determination that the 

soldier’s commute, even though within 50 miles, was nonetheless, 

unreasonable. For example, soldiers from the 824th Quartermaster 

Company received family separation allowance payments while stationed 

at their Fort Bragg home station, even though they lived within 50 miles of 

the base and no documentation was available showing that the unit 

commander authorized an exception. In contrast, 14 soldiers with 

Maryland’s 443rd Military Police Company who lived over 50 miles away 

from their home station, including several soldiers from Puerto Rico, did 

not receive a family separation allowance as of the date of their arrival at 

their home station. 

15DOD’s FMR defines “within a reasonable commuting distance” as within 50 miles one way, 

unless the soldier is commuting daily. The FMR also permits the commander to authorize a 

soldier to receive FSA payments, even though the soldier’s dependents live within 50 miles 

of the soldier’s duty station, based on a determination that the required commute is not 

reasonable.
Page 34 GAO-04-911 Army Reserve Pay

Human Capital Issues 

Affect Pay Accuracy 

and Timeliness

Human capital weaknesses also contributed to the pay problems mobilized 

Army Reserve soldiers experienced in our eight case study units. Our 

Standards for Internal Control in the Federal Government states that 

effective human capital practices are critical to establishing and 

maintaining a strong internal control environment, including actions to 

ensure that an organization has the appropriate number of employees to 

carry out assigned responsibilities. Even in an operational environment 

supported by a well-designed set of policies and procedures and a worldclass integrated set of automated pay and personnel systems, an effective 

human capital strategy— directed at ensuring that sufficient numbers of 

people, with the appropriate knowledge and skills, are assigned to carry 

out the existing extensive, complex operational requirements—is essential. 

Such a human capital strategy supporting accurate and timely active duty 

payments to mobilized Army Reserve soldiers must encompass potentially 

hundreds of DOD components that are now involved in carrying out the 

extensive coordination, manual intervention, and reconciliations required 

to pay mobilized Army Reserve soldiers.

Well-trained pay-support personnel throughout various DOD components 

are particularly critical given the extensive, cumbersome, and laborintensive process requirements that have evolved to provide active duty 

payments to mobilized Army Reserve soldiers. We encountered many 

sincere and well-meaning Army, Army Reserve, and DFAS personnel 

involved in authorizing and processing active duty payments to these 

soldiers. The fact that mobilized Army Reserve soldiers received any of 

their entitled active duty pays, allowances, and tax benefits accurately and 

on-time is largely due to the dedication and tireless efforts of many of these 

pay-support personnel to do the right thing for these mobilized Army 

Reserve soldiers. However, in conjunction with our case studies, we 

observed human capital weaknesses related to (1) inadequate resources 

provided to support unit-level pay management, (2) inadequate pay 

management training across the spectrum of pay-support personnel, and 

(3) customer service breakdowns. 

Inadequate Resourcing for 

Critical Unit Administrator 

Positions 

Vacancies and turnovers in key unit administrator positions, and the 

deployment of unit administrators to fill other military requirements, 

impaired a unit’s ability to carry out critical pay administration tasks that 

could have prevented or led to early detection of pay problems associated 

with our case study units. In addition to pay administration responsibilities, 

unit administrator duties include personnel and supply operations. We 
Page 35 GAO-04-911 Army Reserve Pay

were told that vacancies in unit administrator positions were difficult to fill 

and often remained vacant for many months because Army policy requires 

the individual filling the unit administrator position to have a dual status, 

which means the individual must perform duties both in the capacity of an 

Army Reserve military occupation specialty as well as unit administrator.

For example, at the 948th Forward Surgical Team, the unit administrator 

position was vacant prior to and during the unit’s mobilization. We were 

informed that the 948th Forward Surgical Team had difficulty filling the 

vacancy because of its dual status. Specifically, the unit officials stated that 

this position was difficult to fill because the individual must have a medical 

background to meet the dual status requirement. That is, the person filling 

the position must be able to meet the unit’s mission requirements as well as 

have knowledge and experience performing the personnel, payroll, and 

supply tasks of a unit administrator. In the absence of a unit administrator, 

the unit commander assigned a sergeant with limited knowledge of pay 

entitlements and DJMS-RC processing requirements to help carry out some 

of the unit administrator’s pay management duties. The sergeant told us 

that during a 2-week period during late April 2003, she spent about 100 

hours attempting to resolve the unit’s pay problems, while concurrently 

carrying out her duties as a health specialist.

Providing adequate resources to support the execution of critical pay 

management responsibilities was particularly problematic for Army 

Reserve soldiers that were cross-leveled (transferred) to other units and 

mobilized to active duty with those units. For three of the four case study 

units we audited where small groups of Army Reserve soldiers were 

transferred and mobilized to active duty with another unit, we found that 

these soldiers experienced pay problems that could be attributed, at least 

in part, to inadequate resources to carry out critical unit-level pay 

management responsibilities. For example, because he did not have any 

unit-level support to assist in processing his active duty payments, a soldier 

who was mobilized as a single-soldier unit did not receive any locationbased active duty pays until he returned from Qatar. 

Inadequate Pay 

Management Training

In addition to concerns about the level of resources provided to support 

critical unit administrator positions, we identified instances in which the 

lack of adequate unit administrator and finance office personnel training on 

pay management duties and responsibilities contributed to the soldiers’ pay 

problems we identified. In addition, we found that unit commanders did 

not always support these important pay management duties. Our 
Page 36 GAO-04-911 Army Reserve Pay

Standards for Internal Control in the Federal Government provides that 

management should establish and maintain a positive and supportive 

attitude toward internal controls and conscientious management.

Several of the individuals serving as unit administrators in our case study 

units informed us that they had received limited or no formal training 

covering unit administrator responsibilities and that the training they did 

receive did not prepare them for mobilization issues associated with 

supporting and processing active duty pays and allowances. Unit 

administrators have responsibility for a variety of pay-related actions, 

including working with the unit soldiers to obtain critical pay support 

documentation, maintaining copies of pay support records, providing paytransaction support documentation to the Reserve Pay Center, and 

reviewing pay reports for errors. Without adequate training, unit 

administrators may not be aware of these critical pay management 

responsibilities. 

Few unit administrators at our case study units had completed all of the 

required training on active duty pay and allowance eligibility and 

processing requirements. While unit administrators are required to attend 

two courses (each lasting 2 weeks),16 few of the unit administrators for our 

case study units took the required training at or near the time they assumed 

these important pay management and other key unit administrator duties. 

For example, the unit administrator at one of our case study units, the 824th

Quartermaster Company, stated she had not attended any formal training 

courses, but instead received on-the-job training. Our audit showed that 

she did not always effectively carry out her pay management report review 

responsibilities. For example, while our audit of unit pay reports showed 

she reviewed the documents, we saw no indication she used this tool to 

identify and stop an overpayment of $18,000 to one soldier in her unit. As a 

result, the erroneous pay was allowed to continue for another 5 months.

At other units, we identified instances in which available documentation 

indicated that unit administrators did not take timely action to submit paysupport transactions. For example, several soldiers with the 965th Dental 

Company did not receive promotion pay increases and other entitlements 

16The Army Reserve Readiness Training Center located in Fort McCoy, Wisconsin, offers 

both courses. The courses, in part, cover processing personnel and payroll transactions, 

maintaining personnel and payroll data, identifying soldiers’ training requirements, 

mobilization procedures, and logistics. 
Page 37 GAO-04-911 Army Reserve Pay

for over 2 months because the unit administrator failed to process 

necessary pay-support documentation, available at the time of the unit’s 

initial SRP, until the unit was already deployed on active duty. At the 443rd

Military Police Company, we found the unit’s finance sergeant17 assigned 

pay management responsibilities did not gather and submit current 

documentation needed to support active duty pays and allowances, 

including current documents showing soldiers’ marital status and number 

of dependents. As a result, soldiers from the 443rd Military Police Company 

experienced over-, under-, and late payments associated with their housing 

and cost of living allowances.

In addition to inadequate unit administrator training, inadequate training of 

military pay technicians at Army finance offices at mobilization stations, 

area servicing finance offices (for deployed soldiers), and demobilization 

stations adversely affected the accuracy and timeliness of payments to 

mobilized Army Reserve soldiers. Few of the military finance personnel 

responsible for processing pays and allowances at the mobilization and 

demobilization stations and at the area servicing finance offices for 

deployed units had formal training on DJMS-RC pay procedures. Instead, 

several of the military pay technicians and supervisors we talked to at the 

Army mobilization and demobilization stations told us they relied primarily 

on on-the-job training to become knowledgeable in the pay eligibility and 

pay transaction processing requirements for mobilized Army Reserve 

soldiers. For example, military pay personnel at the Defense Military Pay 

Office at Fort Eustis informed us that they did not receive any formal 

training on active duty pay entitlements or DJMS-RC pay processing before 

assuming their assigned responsibilities for mobilization and 

demobilization pay processing. Instead, they stated they became 

knowledgeable in mobilization and demobilization pay processing 

procedures by processing hundreds of soldiers within 2 to 3 weeks of being 

assigned these responsibilities. They also said they contacted full-time 

civilians in the finance office, as well as Reserve Pay Center and DFAS 

officials, by telephone for assistance.

Also, few of the Army finance personnel at overseas area servicing finance 

offices were adequately trained in active duty pay entitlements and 

processing procedures for mobilized Army Reserve soldiers. Specifically, 

17For this unit, the unit administrator did not deploy with the unit. Consequently, the unit’s 

pay management responsibilities were assigned to a finance sergeant deployed with the 

unit.
Page 38 GAO-04-911 Army Reserve Pay

these key personnel with responsibility for location-based active duty 

payments to mobilized Army Reserve soldiers deployed in Kuwait and Iraq 

and surrounding areas did not receive formal training on pay eligibility and 

DJMS-RC processing requirements before assuming their duties. USARC 

Pamphlet 37-1 provides that an Army in-theater servicing finance office has 

primary responsibility for supporting active duty payments to mobilized 

Army Reserve soldiers when a reserve unit is deployed overseas. Camp 

Arifjan was the Army location assigned responsibility for processing active 

duty payments to mobilized Army Reserve soldiers deployed in Kuwait and 

Iraq during 2003. Officials from the 336th Command, the Army command 

with oversight responsibility for Camp Arifjan, confirmed that while 

finance personnel at Camp Arifjan received training in the pay eligibility 

and pay processing procedures for active duty Army soldiers, they were not 

adequately trained in pay eligibility issues of Army Reserve soldiers. 

We were told of instances in which Army finance personnel were unable to 

help reserve soldiers resolve their pay problems. For example, the 948th

Forward Surgical Team contacted an Army finance unit located in 

Kandahar, Afghanistan, to request its assistance in resolving the unit’s pay 

problems. However, the finance personnel at that location were unable to 

help resolve the 948th Forward Surgical Team’s pay problems because they 

said they had not had training in this area and were not familiar with DJMSRC processing requirements and procedures. All 20 soldiers with the 948th

Forward Surgical Team experienced pay problems associated with their 

location-based payments related to their deployment in Afghanistan, 

including hardship duty pay. These payments require manual entry every 

month by the unit’s area servicing finance office. 

Further, we saw little evidence that the unit commanders of our case study 

units received any training for their role in supporting their unit 

administrators in these important pay management responsibilities. For 

example, at one of our case study units, the 965th Dental Company, the unit 

commander informed us that he did not support the review of pay 

management reports because soldiers had the capability to review their pay 

online and would use this capability to identify and report any pay 

problems. However, as discussed previously, we identified a number of 

instances in which soldiers did not identify or report that they received 

thousands of dollars in improper active duty payments. 
Page 39 GAO-04-911 Army Reserve Pay

Customer Service 

Breakdowns

Our audit work at eight case study units identified significant soldier 

concerns with both the level and quality of customer service they received 

related to their active duty pays, allowances, and tax benefits. The soldiers’ 

concerns centered around three distinct areas: (1) the accessibility of 

customer service, (2) the ability of customer service locations to help 

soldiers, and (3) the treatment of soldiers requesting assistance. Servicing 

soldiers and their families with pay inquiries and problems is particularly 

critical in light of the error-prone processes and limited automated system 

processing capabilities. Ultimately, pay accuracy is left largely to the 

individual soldier. 

Although there are several sources that soldiers can turn to for pay issue 

resolution, soldiers at our case study units experienced problems in 

accessing these sources. Sources that soldiers can contact include their 

home unit, the military pay section of the cognizant RRC, the 

mobilization/demobilization station, the designated active Army area 

servicing finance office in-theater, the online myPay system, and the 1-888-

PAY-ARMY (729-2769) toll-free number. However, mission requirements 

and the distance between deployment locations and field finance offices 

often impaired the soldiers’ ability to utilize the in-theater customer service 

centers. Also, soldiers did not always have Internet and telephone access to 

use the myPay system or to contact customer service sources such as 1-

888-PAY-ARMY, the home unit, or the cognizant RRC. The lack of Internet 

access for deployed soldiers was particularly problematic because it 

limited soldiers’ access to pay, allowance, and tax benefit data reflected in 

their leave and earnings statements. Lacking leave and earnings 

statements, soldiers had no means to determine the propriety of their 

active duty payments. For example, soldiers with the 948th Forward 

Surgical Team told us that their inability to access the leave and earnings 

statements adversely affected their overall morale. 

Even when mobilized reservists were able to contact customer service 

sources, their pay issues often continued because the office they were 

instructed to contact was unable to address their inquiry or correct their 

problem. In some cases, customer service sources failed to help soldiers 

because they lacked an understanding of what was needed to fix the 

problems. When representatives of the 948th Forward Surgical Team 

contacted their parent company for help in correcting pay problems, 

personnel with the parent company informed them that they could not fix 

the unit’s pay problems because they (incorrectly) believed that the unit 

was paid through the Army’s active duty Army system. Soldiers at other 

units were redirected from one source to another. Soldiers were not aware 
Page 40 GAO-04-911 Army Reserve Pay

of which sources could address which types of problems, and more 

significantly, the customer service sources themselves often did not know 

who should correct a specific problem.

An Army Reserve major’s experience illustrates the time and frustration 

that was sometimes involved with soldiers’ attempts to obtain customer 

service for correcting errors in active duty pays, allowances, and related 

tax benefits.

Finally, soldiers expressed concern about the treatment they sometimes 

received while attempting to obtain customer service. Soldiers felt that 

certain customer service representatives did not treat soldiers requesting 

assistance with respect. For example, one soldier who attempted to make 

corrections to his DD Form 214, Certificate of Discharge or Release from 

Individual Case Illustration: Extensive, Time-consuming Action 

Required to Resolve Pay Issue

A soldier from Maryland was mobilized in March 2003 from the Army’s 

Individual Ready Reserve to active duty to serve as a liaison between the 

Army and Air Force to help coordinate ground and air combat operations 

in Iraq. After completing his 2-month active duty tour and returning to an 

inactive reserve status in May 2003, he contacted Army officials to inform 

them that he was continuing to receive active duty payments and 

volunteered to immediately repay these erroneous overpayments. In July 

2003, he wrote a check for $6,150.75 after receiving documentation 

showing his debt computation. However, he continued to receive Leave 

and Earnings Statements indicating that he had an outstanding debt. He 

contacted his Army demobilization finance office to determine how to get 

the erroneous outstanding debt removed from his pay records. After 

being referred by officials at that location to various DFAS locations 

(including once being told, “There is nothing more I can do for you.”), he 

contacted us for assistance. After DFAS recomputed the soldier’s debt as 

a result of our inquiry, the soldier was informed that he owed an 

additional $1,140.54, because the original debt computation did not fully 

consider the erroneous combat zone tax exclusion benefits he received. 

Overall, he spent nearly a year after his 2-month active duty tour ended, 

and about 20 phone calls, faxes, and letters in contacting at least seven 

different DOD representatives at five different customer service centers 

to correct active duty pay and allowance overpayments and associated 

combat zone tax exclusion benefit problems. 
Page 41 GAO-04-911 Army Reserve Pay

Active Duty, informed us that mobilization station personnel told him that 

the citations and dates of service he was trying to add “didn’t matter” and 

that he could fix them later. Additionally, some soldiers told us that while 

they raised concerns about the quality of customer service they received 

with respect to their pay inquiries and concerns, they were sometimes 

ignored. For example, soldiers with Connecticut’s 3423rd Military 

Intelligence Detachment told us that while they contacted the local 

Inspector General when they believed that finance personnel at their 

deployment location had both actively tried to impair the payment of their 

active duty entitlements and had tried to intimidate and discourage the 

unit’s soldiers from seeking help elsewhere, they were not aware of any 

action taken as a result of their concerns. As a result, soldiers with the unit 

told us they believed they had no recourse but to accept the poor treatment 

they believed they received.

Automated Systems 

Deficiencies Constrain 

Accurate and Timely 

Payments 

Weaknesses in automated systems contributed significantly to the 

underpayments, overpayments, and late payments we identified. These 

weaknesses consisted of (1) nonintegrated systems with limited system 

interfaces and (2) limited processing capabilities within the pay system. 

The Army and DFAS rely on the same automated pay system to authorize 

and process active duty payments for Army Reserve soldiers as they use for 

Army National Guard soldiers. In addition, similar to the Army National 

Guard, the Army Reserve’s personnel and order-writing systems are not 

integrated with the pay system. Consequently, many of the systems 

problems experienced by mobilized Army Reserve soldiers were similar to 

those that we identified in our report on pay issues associated with 

mobilized Army National Guard soldiers.18

Because of the automated systems weaknesses, both Army Reserve and 

active Army personnel must put forth significant manual effort to 

accurately process pays and allowances for mobilized Army Reserve 

soldiers. Moreover, to compensate for the lack of automated controls over 

the pay process, both DFAS and the Army place substantial reliance on the 

review of pay reports to identify pay errors after the fact. Part of this 

reliance includes the expectation that soldiers review their own leave and 

earnings statements, even though these statements do not always provide 

clear explanations of all payments made. Finally, because of DJMS-RC’s 

18GAO-04-89.
Page 42 GAO-04-911 Army Reserve Pay

limitations, the system cannot simply stop withholding taxes for soldiers in 

designated combat zone locations. Instead, for these soldiers, the system 

withholds taxes and then reimburses the soldiers the amount that should 

not have been withheld at least a month after the soldiers were first entitled 

to receive this benefit. 

Automated Systems Are Not 

Integrated and Have Limited 

Interfaces

The key pay and personnel systems involved in authorizing, entering, 

processing, and paying mobilized Army Reserve soldiers are not integrated 

and have only limited interfaces. Figure 2 provides an overview of the key 

systems involved in authorizing, entering, processing, and making active 

duty payments to mobilized Army Reserve soldiers.
Page 43 GAO-04-911 Army Reserve Pay

Figure 2: Key Systems Involved in Authorizing, Entering, Processing, and Paying Mobilized Army Reserve Soldiers Are Not 

Effectively Integrated or Interfaced 

a

Regional Level Application System (RLAS)

b

Tactical Personnel System (TPS)

c

Transition Processing (TRANSPROC) System

d

Defense Military Pay Office (DMO)

e

Total Army Personnel Database – Reserve (TAPDB-R)

f

Defense Joint Military Pay System – Reserve Component (DJMS-RC)

Lacking either an integrated or effectively interfaced set of personnel and 

pay systems, DOD must rely on error-prone, manual data entry from the 

DMOd

DJMS-RCf TAPDB-Re Reconciliation

Pay, allowances,

Leave and Earnings

Statements, etc., generated

for mobilized soldiers

Electronic

data

Source: GAO.

Hard copy of

personnel

manifests

RLASa TPSb

Hard copy of

administrative

change documents

(e.g. mobilization orders,

promotion orders)

Hard copy of

DD 214s

Hard copy of

flight manifests

and battle

rosters

0100101

1001001

0101010

1001001

0100101

Manual data entry from

hard copy

Manual data entry from

hard copy

TRANSPROCc

orders personnel
Page 44 GAO-04-911 Army Reserve Pay

same source documents into multiple systems. In an effectively integrated 

system, changes to personnel records automatically update related payroll 

records from a single source of data input. While not as efficient as an 

integrated system, an automatic personnel-to-payroll system interface can 

also reduce errors caused by repetitive manual data entry into more than 

one system. 

Because of the lack of effective integration or interfaces19 among key 

personnel and pay systems, pay-affecting data recorded in the personnel 

system are not automatically updated in the pay system. Therefore, payaffecting personnel changes recorded in the personnel system must be reentered into the pay system from hard copies of documents, such as 

soldiers’ mobilization orders. We found numerous instances in which payaffecting personnel information was not entered promptly into the pay 

system, resulting in numerous pay errors.

19In 1993, we reported the lack of an interface between military personnel and pay systems 

as a material weakness. In response, a limited interface was implemented in July 1997, 

which allows certain data in the personnel system, TAPDB-R, to establish and update 

certain data in the pay system, DJMS-RC, daily. However, this interface was established for 

only five data fields--soldiers’ names, Social Security numbers, soldiers’ entry into the Army, 

soldiers’ reassignments, and soldiers’ separations from military service. As a result, this 

limited interface did not incorporate the data elements needed by the payroll system to 

process payments for soldiers on active duty. 

Individual Case Illustration: Overpayment due to Lack of 

Integrated Personnel and Pay Systems

A soldier assigned to an Illinois Military Police Company received a 

mobilization order in December 2002 to report to Fort Dix, New Jersey. 

Data from her individual mobilization order were entered into DJMS-RC 

and she began receiving active duty pays and allowances based on the 

active duty mobilization date shown in her mobilization order. However, 

her mobilization order was revoked in early January 2003 after she was 

found to be ineligible for mobilization. But, because of the lack of 

integration or an effective interface between personnel and pay systems, 

this order was not automatically processed in DJMS-RC to stop the 

soldier’s active duty pay. Consequently, the soldier was overpaid from 

December 2002 through May 2004. Overpayments to the soldier totaled 

over $24,000. 
Page 45 GAO-04-911 Army Reserve Pay

We found several instances in which soldiers that were promoted while on 

active duty did not receive their pay raises when they should have because 

the promotion information was not promptly recorded in DJMS-RC. For 

example, one Army Reserve soldier’s promotion was effective on July 1, 

2003. However, the soldier’s promotion was not processed in the pay 

system until October 2003, which delayed an increase in both his basic pay 

and basic allowance for housing. The soldier finally received his promotion 

pay, including back pay, in late October 2003, resulting in late payments 

totaling over $2,700.

Lacking an effective interface between pay and personnel systems, DOD 

and the Army must rely on after-the-fact detective controls, such as pay and 

personnel system data reconciliations, to identify and correct pay errors 

occurring as a result of mismatches between personnel (TAPDB-R) and pay 

system (DJMS-RC) data. In this regard, the Army Reserve has an automated 

reconciliation tool—the Participation Management and Reporting 

Subsystem (PMARS)—to help identify data inconsistencies between pay 

and personnel systems. Specifically, the Army Reserve uses PMARS to 

identify mismatches of soldiers accounted for in one system and not in the 

other, and to compare the systems’ information on individual soldiers, such 

as their ranks and dates of service. However, this tool is not effective in 

identifying soldiers that are being paid for active duty while in inactive 

status because TAPDB-R currently does not capture and maintain this 

information.

Although TAPDB-R maintains a “deployability” code, this code does not 

necessarily indicate whether or not a soldier is on active duty. If TAPDB-R 

included a code that specifically identified soldiers on active duty, then the 

PMARS comparison of TAPDB-R data with DJMS-RC data could help 

identify those soldiers improperly receiving active duty pay.

Limited Automated 

Processing Capabilities 

DJMS-RC was not designed to pay Army Reserve soldiers for active duty 

tours longer than 30 days. According to DOD officials, requiring DJMS-RC 

to process various types of pays and allowances for active duty tours that 

exceed 30 days has stretched the system’s automated processing 

capabilities to the limit. Because of the system’s limitations, the Army and 

DFAS were required to make repetitive manual inputs for certain active 

duty pays, such as hardship duty pay. We found many instances in which 

these manual inputs resulted in payment errors. Moreover, because of the 

way in which hardship duty pay was processed, mobilized Army Reserve 

soldiers could not always determine whether they received all of their 
Page 46 GAO-04-911 Army Reserve Pay

entitled pays and allowances. In addition, under current processing 

limitations, DJMS-RC does not process a required tax exclusion promptly 

for soldiers in a combat zone, which has resulted in late payments of this 

benefit for all entitled Army Reserve soldiers. 

Hardship Duty Pay During our audit period, we found numerous errors in hardship duty pay as 

a result of a DJMS-RC processing limitation that required the use of a 

miscellaneous payment code for processing this type of pay. Because of the 

use of this miscellaneous code instead of a code specifically for hardship 

duty pay, this pay could not be automatically generated on a monthly basis 

once a soldier’s eligibility was established. Therefore, hardship duty pay 

had to be manually input every month for eligible soldiers. As previously 

discussed, reliance on manual processing is more prone to payment errors 

than automated processing. 

We found that nearly all soldiers in our case studies who were eligible for 

hardship duty pay experienced problems with this pay, including late 

payments, underpayments, and overpayments. For example, the 965th

Dental Company’s soldiers at Seagoville, Texas, experienced both 

underpayments and overpayments. Specifically, all 85 soldiers deployed to 

Kuwait were underpaid a total of approximately $8,000 for hardship duty 

pay they were entitled to receive during their deployment overseas. 

Subsequently, 76 of the unit’s soldiers were overpaid a total of almost 

$47,000 because they continued to receive hardship duty payments for 

more than 6 months after they had left the designated hardship duty 

location. 

Both underpayments and overpayments, as well as late payments, of 

hardship duty pay occurred largely because of the reliance on manual 

processing of this pay every month. The errors often occurred because 

local area servicing finance office personnel did not receive accurate or 

timely documentation such as flight manifests or data from the Tactical 

Personnel System indicating when soldiers arrived or left the designated 

hardship duty location. As a result, finance personnel did not start these 

payments on time, and did not stop these payments as of the end of the 

soldiers’ active duty tour date recorded in DJMS-RC. 

The DJMS-RC system processing limitation that led to using the systems’ 

miscellaneous code to process hardship duty pay, also contributed to 

overpayments of this active duty pay. That is, finance personnel mistakenly 

continued to manually enter transactions to process hardship duty pay to 
Page 47 GAO-04-911 Army Reserve Pay

soldiers beyond soldiers’ end of active tour dates because DFAS had no 

way of implementing a system edit that could identify and stop erroneous 

hardship duty pay while permitting other types of transactions processed 

using this code to continue. 

Similarly, no edit was in place to prevent duplicate payments of hardship 

duty pay. As a result, hardship duty pay could be entered more than once 

for a soldier in a given month without detection. From our case studies, we 

identified three soldiers who each received two hardship duty payments for 

one month. None of these duplicate payments was identified or collected 

until we submitted inquiries about these soldiers’ payments to the Reserve 

Pay Center. In addition, we were told that soldiers had difficulty 

determining that they received duplicate hardship duty payments because 

this type of payment was not clearly identified on their leave and earnings 

statement. 

Use of the miscellaneous payment code also made it difficult for soldiers to 

understand, and determine the propriety of, some of the payments 

reflected on their leave and earnings statements. Hardship duty pay and 

other payments that are processed using the miscellaneous payment code 

are reported on leave and earnings statements as “other credits.” 

Furthermore, the leave and earnings statements did not provide any 

additional information about what the “other credits” were for unless pay 

clerks entered additional explanations in the “remarks” section of the 

statement, which they rarely did. As a result, soldiers often had no means 

to determine if these types of payments were accurate.

Unit commanders told us that they relied on soldiers to identify any pay 

problems based on their review of their leave and earnings statements. 

However, because leave and earnings statements do not always provide 

adequate information or are not available to soldiers while they are 

deployed, reliance on the soldiers to identify pay errors is not an effective 

control. 

Combat Zone Tax Exclusion In addition to soldiers’ pay problems that occurred primarily because of the 

extensive use of manual processes, soldiers also experienced systematic 

problems with automated payments related to their combat zone tax 

exclusion, which resulted in late payments of this benefit for all soldiers in 

the seven case study units that deployed overseas. Soldiers are entitled to 

the combat zone tax exclusion for any month in which the soldier performs
Page 48 GAO-04-911 Army Reserve Pay

active service in a designated combat zone area.20 For any applicable 

month, this benefit applies to the entire month, rather than being prorated 

based on the number of days the soldier was in the combat zone.

However, because DJMS-RC was designed as a pay system for inactive 

Army Reserve soldiers, it does not have the processing capability to 

suspend withholding of federal and state income taxes applicable to pay 

that is ordinarily taxable. Instead, as a workaround procedure to 

compensate for this limitation, the system first improperly withholds taxes 

applicable to payments made while soldiers are in a combat zone, then 

later reimburses soldiers for these withheld amounts in the following 

month. For example, when an Army Reserve soldier is assigned to a 

location where he is entitled to receive tax-free active duty pays, DJMS-RC 

(improperly) withholds taxes from at least the soldier’s first one or two 

active duty payments. Subsequently, during the first pay cycle of the 

following month, DJMS-RC reimburses the soldier for the amount of taxes 

improperly withheld during the previous month. As a result of this 

workaround process, all Army Reserve soldiers who served in a combat 

zone received their combat zone tax exclusion benefit at least one month 

late.

DJMS-RC processing limitations cause further delays in soldiers’ receipt of 

entitled combat zone tax benefits when soldiers arrived in a combat zone 

after the midmonth cutoff, which is approximately on the 7th day of each 

month. In these cases, entitlement to the tax exclusion is not recognized 

until the following month, which then delays the soldier’s receipt of his 

combat zone tax benefit until the next month—the third month the soldier 

is deployed in the combat zone. For example, members of the 824th

Quartermaster Company that deployed to Afghanistan arrived in country 

on July 14, 2003, but did not receive their first combat zone tax exclusion 

reimbursements until early October, almost 3 months after they became 

eligible for the exclusion.

Recent Actions Should 

Result in 

Improvements

DOD and the Army have reported a number of relatively recent positive 

actions with respect to processes, human capital practices, and automated 

systems that, if implemented as reported, should improve the accuracy and 

timeliness of active duty pays, allowances, and related tax benefits 

2026 U.S.C. Section 112.
Page 49 GAO-04-911 Army Reserve Pay

provided to mobilized Army Reserve soldiers. The accuracy and timeliness 

of payments to mobilized Army Reserve soldiers rely on many of the same 

processes and automated systems used for payments to mobilized Army 

National Guard soldiers. Consequently, actions to improve the accuracy 

and timeliness of Army Reserve soldier payments are closely tied to actions 

taken in response to several of the recommendations in our November 2003 

Army National Guard pay report.21

Because many of DOD’s actions in this area were implemented in the fall of 

2003 or later, they were not in place soon enough to have had a positive 

impact on mobilized Army Reserve soldiers’ payments as of the January 

2004 cutoff for the soldier pay data we audited. However, if implemented as 

reported to us, many of DOD’s actions in response to our November 2003 

report recommendations should help reduce the incidence of the types of 

pay problems we identified for Army National Guard soldiers as well as 

those identified in the Army Reserve case study units discussed in this 

report. 

With respect to the process deficiencies and related recommendations, 

DOD reported implementing additional procedural guidance intended to 

help minimize the pay problems attributable to nonstandard or unclear 

procedures. For example, in June 2004, the Army issued a comprehensive 

“Finance Mobilization and Demobilization Standing Operating Procedure.” 

This guidance clarified pay management responsibilities and transaction 

processing requirements to be followed for all Army Reserve and Army 

National Guard soldiers mobilized to active duty. One of the purposes of 

this guidance is to eliminate any questions regarding which DOD entity is 

responsible for resolving a soldier’s pay issues or questions. Further, as of 

January 2004, DOD reported establishing a new procedure under which 

DFAS assumed responsibility (from the Army finance offices located in 

various overseas locations) for all monthly manual entry of mobilized Army 

Reserve and Army National Guard soldiers’ location-based hardship duty 

pay. 

DOD also reported completing several actions related to our previous 

recommendations to improve the human capital practices related to 

payments to mobilized Army soldiers. For example, the Army reported that 

it had taken action to provide additional training for Army finance 

personnel at overseas finance locations, mobilization and demobilization 

21GAO-04-89.
Page 50 GAO-04-911 Army Reserve Pay

stations, and for those Army finance personnel scheduled for deployment. 

This training is directed at better ensuring that these personnel are 

adequately trained on existing and new pay eligibility and pay processing 

requirements for mobilized Army National Guard and Army Reserve 

soldiers. DOD also reported establishing a new policy in January 2004 

directed at more clearly affixing responsibility for addressing soldiers’ pay 

problems or inquiries. Under this new policy, the Army National Guard 

established a pay ombudsman to serve as the single focal point for ensuring 

coordinated, prompt customer service on all Army National Guard soldiers’ 

pay problems. Thus far, DOD’s reported actions have not yet addressed, 

and consequently we are reiterating, our previous human capital 

recommendations with respect to (1) requiring unit commanders to receive 

training on the importance of adhering to requirements to carry out 

monthly pay management responsibilities, and (2) modifying existing 

training policies and procedures to require active Army pay and finance 

personnel who are responsible for entering pay transactions for mobilized 

reserve component soldiers to receive appropriate training upon assuming 

such duties. 

With respect to automated systems, the Army and DFAS have 

acknowledged serious deficiencies in the current automated systems used 

to pay mobilized Army Reserve soldiers, and report that they have 

implemented a number of significant improvements, particularly to reduce 

an estimated 67,000 manual monthly entries for hardship duty pay. For 

example, in response to our recommendations in the Army National Guard 

report, DOD reported taking actions to (1) automate manual monthly 

hardship duty pay in April 2004, (2) eliminate the use of the miscellaneous 

code for processing hardship duty pay and instead process these payments 

using a unique transaction code to facilitate implementing a system edit to 

identify and stop erroneous payments, (3) compare active duty release 

dates in the Army’s system used to generate Release From Active Duty 

orders with soldiers’ end of active duty tour dates shown in DJMS-RC to 

identify and stop any erroneous active duty pays, and (4) increase the 

reliability and timeliness of documentation used to support soldiers’ arrival 

at and departure from designated overseas locations. 

However, DOD has not yet fully addressed, and consequently we are 

reiterating two of our previous recommendations directed at interim 

automated system improvements and one of our longer-term system 

improvement recommendations. Specifically, we are reiterating previous 

interim recommendations related to evaluating the feasibility of (1) using 

the personnel-to-pay interface as a means to proactively alert pay 
Page 51 GAO-04-911 Army Reserve Pay

personnel of actions needed to start active duty pays and allowances and 

(2) establishing an edit check and requiring approval before processing any 

payments above a specified dollar amount. 

DOD has a major system enhancement effort under way in this area—the 

Defense Integrated Military Human Resources System (DIMHRS). As an 

interim measure, DOD is now pursuing Forward Compatible Payroll (FCP). 

FCP is intended to replace payroll systems now used to pay Army military 

personnel and help eliminate several of the labor-intensive, error-prone 

workarounds necessitated by current DJMS-RC processing limitations. As 

of May 2004, FCP was expected to be operational for all Army Reserve 

soldiers by March 2005.

We are also reiterating our previous longer term recommendation with 

respect to taking action to ensure that DIMHRS and related efforts include 

a complete reengineering of not only the related automated systems, but 

the supporting processes and human capital practices used to pay 

mobilized Army Reserve soldiers as well. Such fundamental reengineering 

is necessary because, as discussed in the preceding sections, many of the 

pay problems we found were associated with procedural and human 

capital practice issues, as well as nonintegrated automated systems that 

extend beyond existing pay system processing limitations. 

Conclusions The increased operating tempo for Army Reserve and Army National Guard 

active duty mobilizations has stressed the current processes, human 

capital, and automated systems relied on to pay these soldiers. The 

significant number of problems we identified associated with active duty 

pays, allowances, and related tax benefits provided to mobilized Army 

Reserve soldiers at eight case study locations raises serious concerns about 

whether current operations can be relied on to provide accurate and timely 

payments. These pay problems caused considerable frustration, adversely 

affected soldiers’ morale, and placed an additional, unnecessary burden on 

both the soldiers and their families. Further, if not effectively addressed, 

these pay problems may ultimately have an adverse impact on Army 

Reserve reenlistment and retention. 

Strengthening existing processes, human capital practices, and automated 

systems is critical to preventing, or at minimum, promptly detecting and 

correcting, the errors we identified. In this regard, DOD and the Army have 

reported a number of relatively recent positive actions intended to improve 

the accuracy and timeliness of active duty pays, allowances, and related tax 
Page 52 GAO-04-911 Army Reserve Pay

benefits provided to mobilized Army Reserve soldiers. DOD’s completed 

and planned near-term actions, if implemented as reported, should reduce 

the number of pay problems. However, mobilized Army Reserve soldiers 

cannot be reasonably assured of accurate and timely active duty pays, 

allowances, and related tax benefits until DOD completes a reengineering 

of all the processes, human capital practices, and automated systems 

supporting this critical area.

Fully and effectively addressing Army Reserve soldiers’ pay problems will 

require priority attention and sustained, concerted, coordinated efforts by 

DFAS, the Army, and the Army Reserve to build on actions taken and 

planned. For these reasons, we are reaffirming two of our previous human 

capital-related recommendations and three of our previous automated 

systems-related recommendations from our November 2003 report on 

payments to mobilized Army National Guard soldiers. However, we are also 

offering 15 additional recommendations identified as a result of our audit 

of mobilized Army Reserve soldiers’ pay experiences. 

Recommendations for 

Executive Action

We recommend that the Secretary of the Army, in conjunction with the 

Under Secretary of Defense (Comptroller), take the following 15 actions to 

address the issues we found with respect to the existing processes, 

personnel (human capital), and automated systems relied on to pay 

activated Army Reserve soldiers.

Process:

• Establish procedures for unit commanders and unit administrators, or 

other designated officials (for soldiers transferred between units), to 

reconcile the names of Army Reserve soldiers receiving active duty pay 

with the names of Army Reserve soldiers reporting for duty at 

mobilization stations.

• Establish procedures for unit commanders and unit administrators, or 

other designated officials, to provide the names and arrival dates for all 

soldiers entering and exiting in-theater locations to a designated area 

servicing finance office to facilitate accurate and timely payment of intheater location-based active duty pays, allowances, and related tax 

benefits.
Page 53 GAO-04-911 Army Reserve Pay

• Establish procedures to provide demobilization stations with a list of 

soldiers returning from overseas that are scheduled to arrive at the 

demobilization station for outprocessing.

• Establish procedures to reconcile the names of Army Reserve soldiers 

who recently demobilized with the names of Army Reserve soldiers still 

receiving mobilization pay and take appropriate action to resolve any 

identified pay issues.

• Clarify policy concerning “thorough” review of soldiers’ pay records 

upon initial mobilization to specify that finance personnel at Army 

mobilization stations must conduct a one-on-one review of online pay 

records for each mobilized soldier.

• Establish procedures to ensure unit commanders and unit 

administrators, or other designated officials, have online access to pay 

management reports, such as the Unit Commander’s Pay Management 

Report, particularly for mobilized units. 

• Clarify DJMS-RC procedures to specifically require unit commanders, 

unit administrators, or other designated officials to review and reconcile 

key pay and personnel data every month, including personnel records, 

with the monthly Unit Commander’s Pay Management Report, for all 

mobilized Army Reserve soldiers. 

• Clarify and simplify procedures and forms implementing the family 

separation allowance entitlement policy, particularly with respect to the 

30-day waiting period and commuting distance criteria.

Human Capital:

• Take appropriate action to address the issues of inadequate resources 

provided to carry out key unit administrator pay management 

responsibilities identified at our case study units, particularly with 

respect to (1) vacancies in unit administrator positions resulting from 

the requirement for dual status unit administrators and (2) lack of pay 

management support for Army Reserve soldiers transferred between 

units.

• Determine whether issues of inadequate resources identified at our case 

study units apply to other mobilized Army Reserve units and soldiers, 

and if so, take appropriate action to address any deficiencies identified. 
Page 54 GAO-04-911 Army Reserve Pay

• Evaluate the feasibility of establishing an ombudsman to serve as the 

single focal point and have overall coordination responsibility and 

visibility to ensure that all Army Reserve soldiers’ problems and 

inquiries with respect to applicable active duty pays, allowances, and 

related combat zone tax exclusion benefits are promptly and fully 

resolved.

Systems:

Interim Improvements to Current Automated Systems

• Evaluate the feasibility of modifying the deployability code or adding 

a duty status code in TAPDB-R that can be compared with the pay 

status code field in DJMS-RC to assist in identifying pay errors 

resulting from discrepancies between the soldiers’ duty status and 

pay status.

• Evaluate the feasibility of modifying DJMS-RC to suspend 

withholding taxes from soldiers when they serve in designated taxexempt combat zones.

• Evaluate the feasibility of establishing a system edit to prevent DJMSRC from generating payments for active duty service to soldiers after 

their date of demobilization from active duty.

Longer-Term Systems Action:

• Address the deficiencies noted in this report as part of the functional 

requirements for the FCP and DIMHRS system development efforts 

currently under way. 

Agency Comments and 

our Evaluation

In its written comments, DOD concurred with our recommendations and 

stated its actions to address the identified deficiencies. Specifically, DOD’s 

response outlined some actions already taken, others that are under way, 

and further planned actions with respect to our recommendations. If 

effectively implemented, these actions should substantially resolve the 

deficiencies pointed out in our report. DOD’s comments are reprinted in 

appendix X.
Page 55 GAO-04-911 Army Reserve Pay

As agreed with your offices, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 30 days from its 

date. At that time, we will send copies of the report to interested 

congressional committees. We will also send copies of this report to the 

Secretary of Defense; the Under Secretary of Defense (Comptroller); the 

Secretary of the Army; the Director of the Defense Finance and Accounting 

Service; and the U.S. Army Reserve Command. We will make copies 

available to others upon request. In addition, the report will be available at 

no charge on the GAO Web site at http://www.gao.gov. If you or your staffs 

have any questions regarding this report, please contact me at (202) 512-

9095 or kutzg@gao.gov or Geoffrey Frank, Assistant Director, at (202) 512-

9518 or frankg@gao.gov. 

Gregory D. Kutz

Director, Financial Management and Assurance
Page 56 GAO-04-911 Army Reserve Pay

List of Congressional Requesters

The Honorable Tom Davis

Chairman

Committee on Government Reform

House of Representatives

The Honorable Christopher Shays

Chairman

Subcommittee on National Security, 

Emerging Threats, and International Relations

Committee on Government Reform

House of Representatives

The Honorable Todd Platts

Chairman

Subcommittee on Government Efficiency

and Financial Management

Committee on Government Reform

House of Representatives

The Honorable Ed Schrock

House of Representatives
Page 57 GAO-04-911 Army Reserve Pay

Appendix I

Scope and Methodology ApApenednxidexiIs

To obtain an understanding and assess the processes, personnel (human 

capital), and systems used to provide assurance that mobilized Army 

Reserve soldiers were paid accurately and on time, we reviewed applicable 

laws, policies, procedures, and program guidance; observed pay processing 

operations; and interviewed cognizant agency officials. The key laws, 

policies, and procedures, we obtained and reviewed included

• 10 U.S.C. Section 12302; 

• DOD Directive Number 1235.10, “Activation, Mobilization & 

Demobilization of the Ready Reserve;” 

• DOD FMR, Volume 7A, “Military Pay Policy and Procedures Active Duty 

and Reserve Pay;” 

• USARC Regulation 37-1, “Financial Administration: USAR Financial 

Management and USAR Support;” 

• USARC Pamphlet 37-1, “Defense Joint Military Pay System – Reserve 

Component (DJMS-RC) Procedures Manual;” 

• Army Regulation 600-8-101, “Personnel Processing (In-, Out-, Soldier 

Readiness, Mobilization, and Deployment Processing);”

• the Army’s Consolidated Personnel Policy Guidance for Operations 

Noble Eagle and Enduring Freedom, September 2002; and 

• Army Forces Command Regulations 

• 500-3-3, Reserve Component Unit Commander’s Handbook; 

• 500-3-4, Installation Commander’s Handbook; and

• 500-3-5, Demobilization Plan.

We also reviewed various Under Secretary of Defense memorandums, a 

memorandum of agreement between Army and DFAS, and DFAS, Army, 

Army Forces Command, and Army Reserve Command guidance applicable 

to pay for mobilized reserve component soldiers. We also used the internal
Appendix I

Scope and Methodology

Page 58 GAO-04-911 Army Reserve Pay

control standards provided in the Standards for Internal Control in the 

Federal Government.

1

We applied the policies and procedures prescribed in these documents to 

the observed and documented procedures and practices followed by the 

various DOD components involved in providing active duty pay to Army 

Reserve soldiers. We also interviewed officials from USARC, RRCs, Army 

Reserve Regional Readiness Commands, Army Central Command, Army 

and DOD military pay and personnel offices, Army Finance Command, 

DFAS, and unit commanders and unit administrators to obtain an 

understanding of their experiences in applying these policies and 

procedures. From these interviews, we also obtained information on 

examples of recent mobilized Army Reserve pay problems they 

encountered in the course of their work. 

In addition, as part of our audit, we performed a review of selected edit and 

validation checks in DJMS-RC. Specifically, we obtained documentation 

and performed walk-throughs associated with DJMS-RC edits performed 

on pay status/active duty change transactions, such as those to ensure that 

tour start and stop dates matched MMPA dates and that the soldier cannot 

be paid basic pay and allowances beyond the stop date that was entered 

into DJMS-RC. We also obtained documentation on and performed walkthroughs of the recently implemented personnel-to-pay system interface 

process, the order writing-to-pay system interface process, and on the 

process for entering mobilization information into the pay system. We did 

not independently test DOD’s reported edit and validation checks in DJMSRC, but we held interviews with officials from U.S. Army Reserve 

Headquarters, Army Finance Command, and DFAS-Indianapolis to 

supplement our documentation and walk-throughs. 

Because our preliminary assessment determined that current operations 

used to pay mobilized Army Reserve soldiers relied extensively on errorprone manual entry of transactions into multiple, nonintegrated systems, 

we did not statistically test current processes and controls. Instead, we 

used a case study approach to provide a more detailed perspective of the 

nature of any deficiencies in the three key areas of processes, people 

1

GAO, Standards for Internal Control in The Federal Government, GAO/AIMD-00-21.3.1

(Washington D.C.: November 1999). These standards provide the overall framework for 

establishing and maintaining effective internal control and for identifying and addressing 

areas of greatest risk of fraud, waste, abuse, and mismanagement. 
Appendix I

Scope and Methodology

Page 59 GAO-04-911 Army Reserve Pay

(human capital), and automated systems relied on to pay mobilized Army 

Reserve soldiers. Specifically, we gathered available data and analyzed the 

pay experiences of Army Reserve soldiers mobilized to and demobilized 

from active duty in support of Operations Noble Eagle, Enduring Freedom, 

and Iraqi Freedom during the period from August 2002 through January 

2004. We audited the pay experiences of soldiers in the following eight 

Army Reserve units as case studies of the effectiveness of the processes, 

human capital practices, and automated systems in place over active duty 

pays, allowances, and related tax benefits:

• 824th Quartermaster Company, Fort Bragg, N.C. 

• 965th Dental Company, Seagoville, Tex.

• 948th Forward Surgical Team, Southfield, Mich.

• 443rd Military Police Company, Owings Mills, Md.

• FORSCOM Support Unit, Finksburg, Md.

• 629th Transportation Detachment, Fort Eustis, Va.

• 3423rd Military Intelligence Detachment, New Haven, Conn.

• 431st Chemical Detachment, Johnstown, Pa.

From the population of Army Reserve units mobilized and demobilized 

between August 2002 and January 2004, we selected units from various 

specialties that represented the wide variety of missions performed by the 

Army Reserve during wartime. These case studies are presented to provide 

a more detailed view of the types and causes of any pay problems 

experienced by these units as well as the financial impact of pay problems 

on individual soldiers and their families. 

We used mobilization data supplied by the Army Reserve Headquarters 

Operations Center to assist us in selecting the eight units we used as our 

case studies. We did not independently verify the reliability of the 

Operations Center database. We used the data to select RRCs that had a 

large number of activated Reserve units that had mobilized, deployed, and 

returned from their tour of active duty in support of Operations Noble 

Eagle, Enduring Freedom, and Iraqi Freedom. From the list of units 

assigned to these Readiness Commands, we selected our eight case studies 
Appendix I

Scope and Methodology

Page 60 GAO-04-911 Army Reserve Pay

that had a variety of deployment locations and missions, including both 

overseas and continental U.S. deployments. In addition to our case studies, 

during our visits to Army mobilization locations, we interviewed small 

numbers of soldiers currently in the process of returning from active duty 

to obtain their perspectives on their experiences with active duty pays, 

allowances, and related tax benefits. 

We also obtained testimonial data from soldiers at several of our case study 

units. We asked numerous soldiers at these units to discuss pay-related 

experiences during their deployment. The information we obtained during 

these interviews is presented to provide further insight into the pay 

experiences of Army Reserve soldiers who were mobilized under current 

military operations, but is not intended to be representative of the views of 

all soldiers in their units nor of those of Army Reserve soldiers overall. 

We used DJMS-RC pay transaction extracts for the period from August 2002 

through January 2004 to identify pay problems associated with our case 

study units. However, we did not perform an exact calculation of the net 

pay soldiers should have received in comparison with what DJMS-RC 

records show they received. Rather, we used available documentation and 

follow-up inquiries with cognizant personnel at the Army Reserve 

Command, Regional Readiness Commands, and the Reserve Pay Center at 

Fort McCoy, Wisconsin, to determine if (1) soldiers’ entitled active duty pay 

and allowances were received within 30 days of their initial mobilization 

date, (2) soldiers were paid within 30 days of the date they became eligible 

for active duty pay, allowances, and entitlements associated with their 

deployment locations, and (3) soldiers stopped receiving active duty pay 

and allowances as of the date of their demobilization from active duty. For 

the pay problems we identified, we counted them as problems only in the 

phase (mobilization, deployment, and demobilization) in which they first 

occurred even if the problems persisted into other phases. For purposes of 

characterizing pay and allowance problems for this report, we defined 

overpayments and underpayments as those that were in excess of 

(overpayment) or less than (underpayment) the entitled payment. We 

considered as late payments any active duty pay or allowance paid to the 

soldier over 30 days after the date on which the soldier was entitled to 

receive such payments. As such, these payments were those that, although 

late, addressed a previously unpaid entitlement. We used available data 

through February 2004, as well as dollar amounts reported by Reserve Pay 

Center officials, to determine collections against identified overpayments 

through February 2004. In addition, while we did not attempt to calculate 

the exact impact of any soldier’s over-, under-, and late payments on their 
Appendix I

Scope and Methodology

Page 61 GAO-04-911 Army Reserve Pay

combat zone tax exclusion benefits, we did examine readily available data 

to determine the extent to which our case study unit soldiers’ received their 

entitled combat zone tax exclusion benefits.

Our audit results only reflect problems we identified. Soldiers in our case 

study units may have experienced additional pay problems that we did not 

identify. Further, our work was not designed to identify, and we did not 

identify, any fraudulent pay and allowances to any mobilized Army Reserve 

soldiers. However, to the extent we identified any problems with our case 

study unit soldiers’ active duty pays, allowances, tax benefits, and related 

collections, we provided documentation showing the results of our analysis 

to appropriate Army Reserve officials for a complete review of all soldier 

pay records to determine whether, and take appropriate action if, 

additional amounts are owed to the Army Reserve soldiers or to the 

government. 

We briefed officials of the DOD Comptroller, Army Finance Command, 

Army Reserve Command, Army Reserve Regional Readiness Commands, 

Army Forces Command, and DFAS-Indianapolis on the details of our audit, 

including our findings and their implications. On July 9, 2004, we requested 

comments on a draft of this report. We received comments on August 11, 

2004, from the Under Secretary of Defense (Comptroller) and have 

summarized those comments in the section of this report entitled “Agency 

Comments and Our Evaluation.” DOD’s comments are reprinted in 

appendix X. We conducted our audit from November 2003 through June 

2004 in accordance with U.S. generally accepted government auditing 

standards. 
Page 62 GAO-04-911 Army Reserve Pay

Appendix II

824th Quartermaster Company, Fort Bragg, 

North Carolina ApendxiI

Beginning on February 2, 2003, the 824th Quartermaster Company was 

called to active duty for up to a year in support of Operation Enduring 

Freedom. A total of 68 soldiers from the 824th Quartermaster Company 

mobilized at Fort Bragg, North Carolina, and went through in-processing at 

Fort Bragg’s mobilization station in the first few weeks of February. Over 

the next several months, members of the unit performed their mission of 

rigging parachutes for individual soldiers and large equipment drops at Fort 

Bragg, in Afghanistan, and in and around Kuwait. On April 6, 2003, 44 

members of the 824th Quartermaster Company deployed to Kuwait to assist 

in parachute preparations. After completing their mission, the soldiers 

returned to Fort Bragg 2 months later on June 19. Another 5 soldiers from 

the unit deployed to Afghanistan on July 14 and performed similar 

parachute rigging duties, returning to Fort Bragg on September 1, 2003. The 

other 19 soldiers in the unit remained at Fort Bragg for the entire duration 

of their tour of duty where they assisted in parachute rigging at the base. 

Beginning on July 15, 2003, soldiers in the 824th Quartermaster Company 

began to demobilize and return to their civilian jobs, and by the end of 

September 2003, all but one soldier had been released from active duty. The 

soldier that remained on active duty was receiving medical treatment for 

injuries related to his military service. A time line of actions associated 

with the unit’s active duty mobilization is shown in figure 3. 

Figure 3: 824th Quartermaster Company’s Mobilization Time Line

As summarized in table 4, at every stage of the unit’s tour of active duty, 

soldiers experienced a variety of pay problems. Fifty-eight of the 68 

soldiers in the 824th Quartermaster Company experienced at least one pay 

problem associated with their activation to, during, or deactivation from 

Jan. 03 Feb. Mar. Apr. May June July Aug. Sept. Oct.

Soldiers process

through SRP at

Ft. Bragg, N.C. 

2/02/03

Soldiers demobilize

at Ft. Bragg, N.C. 

9/28/03

Soldiers

deploy

to Kuwait

4/03 to 6/03

Soldiers deploy

to Afghanistan

7/03 to 9/03

April to

Aug 2003

Soldiers not

deployed overseas

perform duties

at Ft. Bragg, N.C. 

Source: GAO.
Appendix II

824th Quartermaster Company, Fort Bragg, 

North Carolina

Page 63 GAO-04-911 Army Reserve Pay

active duty in support of Operation Enduring Freedom. Specifically, (1) we 

found that 11 soldiers experienced underpayments, overpayments, or late 

payments during their initial mobilization; (2) 50 soldiers experienced 

underpayments, overpayments, or late payments during their tour of active 

duty at Fort Bragg, in Afghanistan, and in and around Kuwait, including intheater incentives such as hostile fire pay; and (3) 13 soldiers experienced 

underpayments, overpayments, and/or late payments associated with their 

demobilization, with most of the problems relating to the continuation of 

active duty pay after demobilization. 

Table 4: Pay Problems by Phase

Source: GAO analysis.

Note: Soldiers may have experienced pay problems in more than one phase.

The dollar amounts associated with overpayments, underpayments, and 

late payments we identified were approximately $60,000, $10,000, and 

$3,000, respectively. Of the overpayments we identified, about $2,000 was 

subsequently collected from the unit’s soldiers. Almost $18,000 of the 

overpayments we identified was associated with one soldier, who 

continued to receive active duty pay for more than 5 months after his 

discharge from the Army. 

Mobilization Pay 

Problems

As summarized in table 5, we found that 11 soldiers from the 824th

Quartermaster Company experienced underpayments, overpayments, or 

late payments related to basic pay and associated entitlements when called 

to active duty. For example, we identified several soldiers who received 

their $250 per month family separation allowance even though they 

performed their military duty at Fort Bragg, their home station, and were 

not separated from their families as provided by the DOD FMR Volume 7A. 

The soldiers were not informed by pay technicians at the unit or their 

mobilization station that they were not entitled to the family separation 

allowance if their home of record was within a reasonable commuting 

distance, generally 50 miles, even though the soldiers were staying at Fort 

Bragg. 

Phase Number of soldiers with pay problems

Mobilization 11 of 68 

Deployment 50 of 68 

Demobilization 13 of 68 
Appendix II

824th Quartermaster Company, Fort Bragg, 

North Carolina

Page 64 GAO-04-911 Army Reserve Pay

Table 5: Mobilization Pay Problems

Source: GAO analysis.

Note: Soldiers may have experienced problems with more than one type of pay or allowance.

Prior to being mobilized, the soldiers in the 824th Quartermaster Company 

attended a SRP at their unit’s home station. The purpose of this review was 

to ensure that all soldiers had all required administrative paperwork, 

financial documents, and were physically fit for the ensuing mobilization. 

Members of the 81st Regional Readiness Command and unit members of the 

824th Quartermaster Company, who conducted the finance portion of the 

SRP, were required to verify the soldiers’ supporting financial 

documentation, and, if necessary, submit transactions with the necessary 

supporting documentation to the Reserve Pay Center at Fort McCoy to 

update the soldiers’ Master Military Pay Accounts to reflect their mobilized 

status. After performing the SRP at the unit’s home station, the 824th

Quartermaster Company reported to Fort Bragg, its active Army 

mobilization station. Fort Bragg personnel conducted a second SRP that 

was intended, in part, to verify each soldier’s pay account with supporting 

finance documents. However, instead of conducting the required review of 

each soldier’s pay record, Fort Bragg’s finance personnel performed only a 

perfunctory review of the soldiers’ supporting documents. According to 

finance personnel at Fort Bragg’s mobilization station, the physical layout 

of the in-processing station did not allow them to sit with each soldier “one 

on one” to compare their pay account as shown in DJMS-RC with the 

soldier’s pay supporting documentation in real time. 

The perfunctory review and oversights during the SRPs at the home station 

and mobilization station allowed several soldiers to receive FSA when they 

were not entitled to receive it. A review by personnel at the SRP should 

have identified that the soldiers were not separated from their families as 

required, and therefore they would not have signed off as approvers of the 

Type of pay or 

allowance

Number of soldiers 

who did not receive 

pay or allowance 

within 30 days of 

entitlement

Number of soldiers 

who were 

underpaid 

Number of soldiers 

who were overpaid 

Family separation 

allowance 1 0 9

Basic allowance 

for housing 0 0 1

Jump pay 0 1 0
Appendix II

824th Quartermaster Company, Fort Bragg, 

North Carolina

Page 65 GAO-04-911 Army Reserve Pay

entitlement forms. A lack of adequately trained staff with enough time to 

review the unit’s pay forms may have caused this pay error.

Missing or noncurrent documentation required to support active duty pays 

and allowances at the time of the SRP contributed to some of the late pays 

and allowance payments we identified. For example, one soldier did not 

receive family separation allowance payments because documentation 

necessary to start this allowance was not submitted as part of the SRP 

process, although the soldier was certified as ready for mobilization as a 

result of the SRP. It was 6 months later, when the soldiers were 

demobilizing at Fort Bragg, that the paperwork necessary to receive this 

allowance was submitted to the Fort Bragg finance office. This soldier 

received about 6 months of back pay in September 2003. 

Pay Problems While 

Deployed

As summarized in table 6, we identified a number of problems associated 

with the unit’s active duty pays and allowances.

Table 6: Deployment Pay Problems

Source: GAO analysis.

Note: Soldiers may have experienced problems with more than one type of pay or allowance.

During the soldiers’ deployment to Afghanistan and Kuwait, they 

encountered pay problems related to payments for soldiers located in 

designated hardship duty locations and hostile fire zones. Most soldiers did 

not receive the full amount of hardship duty pay payments while deployed. 

In addition, they continued to receive their hardship duty pay well after 

Type of pay or 

allowance

Number of soldiers 

who did not receive 

pay or allowance 

within 30 days of 

entitlement

Number of soldiers 

who were 

underpaid 

Number of soldiers 

who were overpaid 

Basic pay 2 0 0

Family separation 

allowance 1 1 0

Basic allowance for 

housing 1 1 0

Hostile fire pay 5 5 44

Hardship duty pay 0 49 47
Appendix II

824th Quartermaster Company, Fort Bragg, 

North Carolina

Page 66 GAO-04-911 Army Reserve Pay

they had returned to Fort Bragg and demobilized. All 49 soldiers deployed 

overseas were incorrectly paid for either hardship duty or hostile fire pay. 

Army area servicing finance officials, who had responsibility for initiating 

these entitlements, did not initiate the unit’s hardship duty pay payments 

until several months after the unit had arrived. The delay resulted in the 

deployed soldiers being underpaid for most of their time in the hardship 

duty location. 

Local active Army finance officials also did not terminate payments of 

hardship duty pay until 5 months after the soldiers had left the hardship 

duty pay location, in most cases. This erroneous continuation of hardship 

duty payments may have been the result of pay clerks continuing to 

manually process these payments each month using a roster of soldiers in 

the country that did not properly reflect the unit’s departure from the 

overseas deployment location. In addition, the DJMS-RC system processing 

procedures in place at the time required that hardship duty pay be 

processed using a miscellaneous payment code that could be used for a 

variety of payments. The use of this miscellaneous code for hardship duty 

pay precluded the system from identifying the payments as active duty pay 

and therefore allowed these payments to continue after the soldiers were 

demobilized. The use of the miscellaneous payment code also led to soldier 

confusion because the Leave and Earning Statement did not identify the 

nature of the entitlement. 

In addition, soldiers who deployed to Afghanistan told us that in some 

cases, they had trouble finding in-theater finance officers willing to help 

them with their pay problems. The soldiers stated that when they arrived in 

Afghanistan, the finance office on duty at the time was preparing to return 

to the United States because its tour in the country was ending. Several 

weeks passed before the transition of finance offices was complete, and in 

that time the Reserve soldiers did not have any local support that would 

assist them with finance problems. This gap in a functioning supporting 

finance office for the deployed soldiers could only have added to their 

frustration and confusion over in-theater pays. 

In addition to the problems soldiers experienced related to their pay and 

entitlements, they also experienced systematic problems related to their 

combat zone tax exclusion benefits. All 49 of the soldiers from the 824th

Quartermaster Company who deployed overseas were eligible for this tax 

benefit and all of them experienced some type of problem with their 

combat zone tax exclusion. Specifically, we found that all 49 soldiers 
Appendix II

824th Quartermaster Company, Fort Bragg, 

North Carolina

Page 67 GAO-04-911 Army Reserve Pay

received their combat zone tax exclusion late, totaling about $20,000. Five 

soldiers did not receive all of the combat zone tax exclusion benefits they 

were due during their deployment. Moreover, the soldiers who deployed to 

Afghanistan did not have the combat zone tax exclusion applied to their 

pay until nearly 3 months after they arrived in the country, and never 

received their combat zone tax exclusion benefit for September 2003. The 

error for the month of September caused over $1,300 of extra taxes to be 

collected from these soldiers while in a combat zone.

Pay Problems 

Associated with 

Demobilization and 

Release from Active 

Duty

Soldiers of the 824th Quartermaster Company began to demobilize in July 

2003. As summarized in table 7, during their demobilization and after their 

release from active duty, soldiers continued to experience pay problems. 

These problems were primarily overpayments associated with soldiers 

receiving pay after their active duty demobilization dates.

Table 7: Demobilization Pay Problems

Source: GAO analysis.

The largest pay problem related to the 824th Quartermaster Company’s 

demobilization involved a soldier who was put into a medical hold 

company. The soldier initially mobilized with the unit in February, and was 

in-processed by personnel at Fort Bragg. During the in-processing, it was 

determined that the soldier had a medical condition that did not allow him 

to mobilize with the unit and perform his duty. He was then transferred to a 

medical holding company under the command of the Fort Bragg Garrison 

Support Unit. In this unit, the soldier underwent treatment for his condition 

and concluded that treatment in August 2003. On August 13, 2003, the 

soldier was discharged entirely from the Army and his pay should have 

stopped on that date. According to DFAS guidance, several locations can 

initiate transactions to stop a soldier’s pay. The primary location is the 

demobilization station where the soldier receives his or her DD Form 214, 

Type of pay or allowance

Number of soldiers who were 

overpaid 

Basic pay 6

Basic allowance for subsistence 6

Basic allowance for housing 6

Family separation allowance 9

Jump pay 6
Appendix II

824th Quartermaster Company, Fort Bragg, 

North Carolina

Page 68 GAO-04-911 Army Reserve Pay

Certificate of Discharge or Release from Active Duty. As a secondary catch, 

the Reserve Pay Center at Fort McCoy can also stop the soldier’s pay on his 

or her release date.

Although the soldier did out-process through Fort Bragg and received his 

DD Form 214, personnel at the demobilization station at Fort Bragg did not 

amend the soldier’s pay record to cut off pay on August 13. The unit also 

did not take any action to stop the soldier’s pay because the soldier should 

have been off of its pay records and in the pay records of the medical hold 

company. This had not been done and the result was that the medical hold 

company could not view the soldier’s pay records but knew he was 

discharged. Meanwhile, the unit could view the pay records but, under 

current procedures, did not receive a copy of the DD Form 214 showing the 

soldier had been discharged. Ultimately, the soldier’s pay and allowances 

were stopped only as a result of actions we took. Specifically, in August 

2003, the soldier contacted his old unit, the 824th Quartermaster Company, 

and faxed them a copy of his DD Form 214. At this point the unit had all 

necessary documentation to identify the overpayment to the soldier after 

his discharge date of August 13, but did not review the pay records and 

identify the problem. The soldier continued to get paid until the end of 

January 2004 when we identified the error, which resulted in an 

overpayment of almost $18,000. Finally, after we brought the error to the 

unit’s attention, the unit requested that the Reserve Pay Center at Fort 

McCoy stop the soldier’s pay and initiate collection. 
Page 69 GAO-04-911 Army Reserve Pay

Appendix III

965th Dental Company Seagoville, Texas ApendxiI

On February 9, 2003, the 965th Dental Company1 was called to active duty in 

support of Operation Enduring Freedom for an initial 1-year tour.2 The unit 

mobilized at its home station, Seagoville, Texas, on February 11, 2003, and 

reported for active duty at Fort Hood, Texas, on February 14, 2003. On 

March 23, 2003, the 965th Dental Company deployed to Camp Arifjan, 

Kuwait, to provide dental services to Army soldiers involved in military 

operations in Iraq and surrounding areas. Upon completion of its mission, 

the company redeployed from Kuwait to Fort Hood in two separate groups; 

the first group returned on May 22, 2003, and the second on June 10, 2003. 

Within a few days of returning to Fort Hood, soldiers were sent home and 

following end-of-tour leave were discharged from active duty. By the end of 

July 2003, all but three soldiers had been released from active duty. Two 

soldiers remained on active duty because they were still receiving medical 

treatment for injuries sustained during their deployment and one was still 

deployed overseas at the time of our review.3

 A time line of actions 

associated with the unit’s active duty mobilization is shown in figure 4. 

Figure 4: 965th Dental Company’s Mobilization Time Line 

1

The 965th Medical Company Dental Area Support is referred to as the 965th Dental Company 

in this report.

2

The 965th Dental Company is a subordinate unit of the 807th Medical Command, which is the 

Army’s III Corps medical brigade.

3

The two soldiers were still on medical hold at the time of our review.

Jan. 03 Feb. Mar. Apr. May June July Aug.

Soldiers

in-process

through

Ft. Hood,

Tex. 

2/14/03

Unit deploys

to Kuwait 

3/23/03

First group of

soldiers returns

from Kuwait 

5/22/03

First group

that returned from

Kuwait demobilizes

at Ft. Hood, Tex.

6/03/03

Second group

of soldiers

returns from Kuwait

6/10/03

2/14/03 to

3/22/03

Soldiers prepare

for deployment overseas

7/01/03 to

7/29/03

Second group that returned

from Kuwait demobilizes

at Ft. Hood, Tex.

Source: GAO.
Appendix III

965th Dental Company Seagoville, Texas

Page 70 GAO-04-911 Army Reserve Pay

As summarized in table 8, soldiers of the 965th Dental Company 

experienced various pay problems at every stage of the unit’s tour of active 

duty. Overall, 89 of 93 mobilized soldiers experienced some type of pay 

problem associated with their activation to, during, or deactivation from, 

active duty in support of Operation Enduring Freedom. Specifically, 25 

soldiers experienced underpayments, overpayments, or late payments 

associated with their initial mobilization; 86 experienced underpayments, 

overpayments, or late payments during their deployment to areas in and 

around Kuwait, including in-theater incentives such as hostile fire pay and 

hardship duty pay; and 7 soldiers experienced underpayments or 

overpayments associated with their demobilization, including problems 

related to the continuation of active duty pay after demobilization. One 

soldier received $36,000 of active duty pay even though he never mobilized 

with the unit. Another soldier incorrectly received hostile fire pay, hardship 

duty pay, the family separation allowance, and the combat zone tax 

exclusion benefit following his return home to recuperate from injuries 

sustained overseas.

Table 8: Pay Problems by Phase

Source: GAO analysis.

Note: Soldier may have experienced pay problems in more than one phase.

The dollar amounts associated with overpayments, underpayments, and 

late payments we identified were approximately $100,000, $16,000, and 

$27,000, respectively. Of the overpayments we identified, about $400 was 

subsequently collected from the soldiers prior to the time we started our 

audit. 

Mobilization Pay 

Problems

As summarized in table 9, we found that 25 soldiers from the 965th Dental 

Company experienced underpayments, overpayments, or late payments 

related to basic pay and associated entitlements during mobilization 

processing. 

Phase Number of soldiers with pay problems

Mobilization 25 of 93

Deployment 86 of 93

Demobilization 7 of 93
Appendix III

965th Dental Company Seagoville, Texas

Page 71 GAO-04-911 Army Reserve Pay

Table 9: Mobilization Pay Problems

Source: GAO analysis.

Note: Soldiers may have experienced problems with more than one type of pay or allowance.

The unit administrator conducted a premobilization SRP review during 

October 2002 at the unit’s home station. However, according to the unit 

administrator, about 30 to 40 soldiers did not attend the SRP session 

because the soldiers would have had to travel from distant locations, such 

as Albuquerque, New Mexico, where they typically attended Army Reserve 

inactive duty training, or for other reasons. Thus, when these soldiers 

arrived at the unit’s home station prior to reporting to Fort Hood, the unit 

administrator quickly performed the SRP process for them at that time. 

However, instead of submitting necessary changes to soldiers’ pay 

accounts to the Reserve Pay Center, the unit administrator waited until the 

unit arrived at the Fort Hood mobilization station to submit them. 

According to documentation obtained from the Reserve Pay Center, some 

soldiers’ documentation was not submitted until March 22, 2003, a month 

after the unit was mobilized. As a result, promotion pay increases and other 

entitlements were paid over 2 months late. For 3 soldiers, correct 

entitlements were not received until the soldiers returned from their 

overseas tour. 

Delays in submitting required forms and documentation were the primary 

causes for late pay and entitlements. Also, three soldiers were overpaid pay 

and benefits because their active duty pay was started too early. These 

minor overpayments were collected from the soldiers’ pay during 

demobilization out-processing. One soldier received double the amount of 

basic allowance for housing, for an estimated overpayment of $6,600. In 

Type of pay or 

allowance

Number of soldiers 

who did not receive 

pay or allowance 

within 30 days of 

entitlement

Number of soldiers 

who were 

underpaid 

Number of soldiers 

who were overpaid 

Basic pay 8 0 3

Family separation 

allowance 8 2 0

Basic allowance for 

housing 6 2 6

Basic allowance for 

subsistence 2 0 3

Special dental pay 1 1 0
Appendix III

965th Dental Company Seagoville, Texas

Page 72 GAO-04-911 Army Reserve Pay

addition, the process of paying soldiers their family separation allowance 

was not consistently applied for the soldiers of the 965th Dental Company. 

For example, a soldier from Gulfport, Mississippi, was paid family 

separation allowance during his commute to the mobilization station; 

however, a soldier from Claremore, Oklahoma, was not. 

The lack of accountability for deploying soldiers resulted in one unit 

soldier being paid active duty pay even though the soldier never mobilized 

with the unit. This soldier received orders to mobilize with the unit, but 

because the soldier had a disability that prevented his serving on active 

duty, the unit commander excused the soldier from mobilization. However, 

although unit personnel transferred the soldier to another unit that was not 

mobilizing, no one canceled the soldier’s original mobilization order in the 

Army Reserve personnel system, or notified the Reserve Pay Center to stop 

the soldier’s active duty pay. In addition, unit personnel did not notify the 

Fort Hood mobilization station that this soldier had received a mobilization 

order so the mobilization station could confirm that the order had been 

revoked and stop pay for this soldier. Further, the soldier receiving the 

unauthorized pay did not report the overpayments to the unit to which he 

had been transferred. Thus, the soldier received approximately $36,000 of 

active duty pay for which he was not entitled. These overpayments 

continued for more than 12 months and were not identified until we 

discovered them during our visit to the unit in January 2004. 

During our visit to the home station, we informed the unit commander 

about the soldier’s overpayment and he stated that this soldier should not 

be held responsible for repaying the overpayment because he believed the 

soldier did nothing wrong or illegal. He also stated that he did not review 

the Unit Commander’s Pay Management Report because the soldiers were 

able to review their pay online. It is likely that the improper payments to 

this soldier would have been identified if either the unit commander or unit 

administrator had monitored the unit’s pay reports.4

Pay Problems While 

Deployed

As summarized in table 10, we identified extensive problems associated 

with active duty pays and allowances applicable to the unit’s overseas 

deployment to Kuwait. In total, 86 soldiers experienced some type of pay 

4

This soldier was still receiving pay during the time of our review. We notified the unit 

administrator and after our site visit the pay was stopped and the soldier incurred a debt 

balance for the total amount overpaid.
Appendix III

965th Dental Company Seagoville, Texas

Page 73 GAO-04-911 Army Reserve Pay

problem during the deployed phase, including one soldier who did not 

deploy overseas, but received in-theatre incentives. 

Table 10: Deployment Pay Problems

Source: GAO analysis.

Note: Soldiers may have experienced problems with more than one type of pay or allowance.

During the unit’s deployment to Kuwait, soldiers encountered pay 

problems related to hardship duty pay, hostile fire pay, and the combat 

zone tax exclusion, all of which are benefits eligible to soldiers when 

serving in designated hardship duty locations and hostile fire zones. All 85 

of the soldiers deployed overseas were incorrectly paid for either hardship 

duty pay or hostile fire pay, most of which were overpayments. 

In total, 85 soldiers did not receive the full amount of their hardship duty 

pay entitlement while deployed to Kuwait. These soldiers were underpaid a 

total of about $8,000. In addition, 76 soldiers continued to receive hardship 

duty pay payments following their return from Kuwait. Sixty-six of these 

soldiers continued receiving the payments for 6 or more months following 

their return home. Overpayments made to all 76 soldiers amounted to 

approximately $46,500. This amount does not include the overpayments 

made to soldiers involving a type of hardship duty pay that is no longer paid 

to soldiers serving in Kuwait. 

Type of pay or 

allowance

Number of soldiers 

who did not receive 

pay or allowance 

within 30 days of 

entitlement

Number of soldiers 

who were 

underpaid 

Number of soldiers 

who were overpaid 

Basic pay 0 1 0

Family separation 

allowance 

0 2 0

Basic allowance for 

housing

0 1 0

Basic allowance for 

subsistence

0 0 0

Hostile fire pay 61 9 21

Hardship duty pay 0 85 85

Special dental pay 1 1 1
Appendix III

965th Dental Company Seagoville, Texas

Page 74 GAO-04-911 Army Reserve Pay

In addition, we estimated that the combat zone tax exclusion benefit was 

applied to 76 soldiers late or incorrectly. We estimated that approximately 

75 soldiers received their combat zone tax relief benefits 2 to 3 months late, 

which was after their deployment ended, totally $24,000. In addition, one 

soldier did not receive all of the combat zone tax exclusion benefits she 

was due during her deployment, resulting in an estimated $200 

underpayment, while 2 other soldiers were overpaid for a combined 

overpayment of about $300. 

Pay Problems 

Associated with 

Demobilization and 

Release from Active 

Duty

Soldiers of the 965th Dental Company returned to Fort Hood in two 

different groups; the first group returned on May 22, 2003, and the second 

group returned on June 10, 2003. As summarized in table 11, 7 of 93 soldiers 

had problems associated with properly stopping their active duty pays and 

allowances during their demobilization. 

Table 11: Demobilization Pay Problems

Source: GAO analysis.

Note: Soldiers may have experienced problems with more than one type of pay or allowance.

Of the soldiers who experienced pay problems associated with this phase, 

most had underpayments. One of the soldiers we reviewed had his active 

duty pay stopped before his actual demobilization date and another 

soldier’s special medical pay was stopped a month early. Each soldier was 

underpaid an estimated $1,200. Another soldier’s active duty pay continued 

past his demobilization date for an overpayment of approximately $1,400.

In addition, one soldier returned home early from deployment in May 2003 

due to a medical emergency. However, his pay and entitlements were not 

adjusted correctly. As a result, during his convalescence, much of which 

was at his home, the soldier continued to receive hardship duty pay, hostile 

fire pay, the family separation allowance, and the combat zone tax 

Type of pay or allowance

Number of soldiers 

who were underpaid 

Number of soldiers 

who were overpaid 

Basic pay 1 1

Basic allowance for subsistence 1 0

Basic allowance for housing 1 0

Family separation allowance 1 1

Special dental pay 3 0
Appendix III

965th Dental Company Seagoville, Texas

Page 75 GAO-04-911 Army Reserve Pay

exclusion through April 2004 when we brought the overpayments to the 

unit’s attention.
Page 76 GAO-04-911 Army Reserve Pay

Appendix IV

948th Forward Surgical Team, Southfield, 

Michigan ApendxiIV

On January 20, 2003, the 948th Medical Detachment Forward Surgical (948th

Forward Surgical Team) was mobilized to active duty in support of 

Operation Enduring Freedom for a 1-year tour.1

 A total of 20 soldiers from 

the 948th Forward Surgical Team, including four surgeons, mobilized at its 

home station in Southfield, Michigan, and went through in-processing at 

the mobilization station at Fort McCoy, Wisconsin. On February 28, 2003, 

the unit deployed to Afghanistan through Baghram Air Base, Afghanistan. 

Most of the 20 soldiers remained in Kandahar for about 5 months. While 

there, the unit provided emergency medical attention to wounded soldiers 

and civilians in and around Kandahar and prepared them for evacuation to 

a combat support hospital. Two surgeons from the team returned in June 

2003 and a third soldier returned in July 2003 as a result of a medical 

condition and was released from active duty on September 27, 2003. 

Sixteen of the remaining 17 soldiers returned to Fort McCoy on August 5, 

2003, for demobilization and were released from active duty by August 29, 

2003. The 948th Forward Surgical Team’s commander remained in 

Afghanistan until August 8, 2003, when he returned to Fort McCoy for 

demobilization and was released from active duty on September 4, 2003. A 

time line of the unit’s movements associated with its mobilization under 

Operation Enduring Freedom is shown in figure 5.

1

The order mobilizing the 948th Forward Surgical Team states that physicians and nurse 

anesthetists were to deploy for only 90 days in a theater unless they voluntarily extended 

their tour with the approval of the command authority.
Appendix IV

948th Forward Surgical Team, Southfield, 

Michigan

Page 77 GAO-04-911 Army Reserve Pay

Figure 5: 948th Forward Surgical Team’s Mobilization Time Line

All 20 soldiers in the 948th Forward Surgical Team experienced one or more 

pay problems associated with their 2003 mobilization to active duty. As 

summarized in table 12, soldiers in the 948th Forward Surgical Team 

experienced pay problems during all phases of their active duty 

mobilization, with the majority of the problems encountered in the last two 

phases. Specifically, we identified pay problems associated with (1) basic 

active duty pay, special medical pays, or allowances for 5 soldiers during 

the mobilization phase; (2) basic active duty pay, special medical pays, 

allowances, combat zone tax exclusion, or an in-theater incentive pay 

associated with the deployment phase for 20 soldiers; and (3) basic active 

duty pay, special medical pays, or allowances associated with 18 soldiers’ 

demobilization from active duty.

Table 12: Pay Problems by Phase

Source: GAO analysis.

Note: Soldiers may have experienced pay problems in more than one phase.

Phase Number of soldiers with pay problems

Mobilization 5 of 20

Deployment 20 of 20

Demobilization 18 of 20

Jan. 03 Feb. Mar. Apr. May June July Aug. Sept.

Unit activated and

soldiers depart home

station, Southfield, Mich.

1/20/03

Soldiers arrive at

Ft. McCoy, Wisc. for

in-processing

1/22/03

Unit receives

orders to deploy to

Afghanistan

2/7/03

Two soldiers

demobilize at

Ft. McCoy, Wisc.

6/6/03 to

6/24/03

2/28/03 to

8/8/03

Soldiers deployed

in Afghanistan

Soldiers demobilize at

Ft. McCoy, Wisc.

7/19/03 to

9/27/03

2/7/03 to

2/27/03

Unit awaits

deployment

to Afghanistan 

Source: GAO.
Appendix IV

948th Forward Surgical Team, Southfield, 

Michigan

Page 78 GAO-04-911 Army Reserve Pay

In total, the pay problems we identified resulted in estimated overpayments 

of about $20,700, underpayments of about $2,000, and late payments of 

about $5,600. In addition, we identified about $15,300 and about $130 of 

combat zone tax exclusions that were delayed or not refunded, 

respectively. Available records showed that about $2,300 of the $20,700 in 

identified overpayments were subsequently collected from the soldiers.

We were informed of several instances in which the unit’s pay problems 

created financial hardships for the unit’s soldiers and their families. 

Specifically, several of the unit’s soldiers could not pay their bills while they 

were deployed and were forced to borrow money from friends and 

relatives in order to meet their financial obligations. 

Mobilization Pay 

Problems

As summarized in table 13, we found that five soldiers from the 948th

Forward Surgical Team experienced underpayments, overpayments, or late 

payments related to their active duty pay and allowances associated with 

their initial mobilization. 

Table 13: Mobilization Pay Problems

Source: GAO analysis of payroll data.

Note: Soldiers may have experienced problems with more than one type of pay or allowance.

Five soldiers experienced a variety of pay problems associated with their 

mobilization to active duty. For example, one physician was underpaid the 

special medical pay he was entitled to receive while on active duty. In 

January 2003, the physician began receiving special medical payments at a 

rate lower than he was entitled to receive. In March 2003, DFAS identified 

Type of pay or 

allowance

Number of soldiers 

who did not receive 

pay or allowance 

within 30 days of 

entitlement

Number of soldiers 

who were 

underpaid

Number of soldiers 

who were overpaid

Basic pay 1 0 0

Basic allowance for 

housing 1 0 0

Family separation 

allowance 0 1 0

Special medical pay 0 2 1
Appendix IV

948th Forward Surgical Team, Southfield, 

Michigan

Page 79 GAO-04-911 Army Reserve Pay

and corrected this error by paying the physician the correct special medical 

pay. However, DFAS did not retroactively pay the physician the correct 

medical pay covering the first 39 days he was on active duty.

Another soldier experienced a problem related to his basic pay. The soldier 

had previously received a reduction in rank for not completing training 

requirements. On February 12, 2003, the commanding officer signed an 

order revoking the reduction in rank—after the unit was mobilized to 

active duty, but before it was deployed to Afghanistan. The Reserve Pay 

Center received the revocation order on March 7, 2003, but did not process 

this personnel action until April 4, 2003, resulting in late payments totaling 

an estimated $520.

Deployment Pay 

Problems

In late February 2003, the 948th Forward Surgical Team left Fort McCoy and 

traveled to Afghanistan. While in Kandahar, the soldiers experienced 

further pay problems related to hardship duty pay, hostile fire pay, and to a 

lesser extent, active duty basic pay, basic allowance for housing, family 

separation allowance, and special medical pays. They also experienced 

problems with respect to their benefits associated with the combat zone 

tax exclusion. Table 14 summarizes the pay, allowance, and tax benefit 

problems that the 948th Forward Surgical Team encountered during its 

deployment.

Table 14: Deployment Pay Problems

Source: GAO analysis.

Note: Soldiers may have experienced problems with more than one type of pay or allowance.

Type of pay, 

allowance, or tax 

benefit

Number of soldiers 

who did not receive 

pay or allowance 

within 30 days of 

entitlement

Number of soldiers 

who were 

underpaid

Number of soldiers 

who were overpaid

Basic pay 2 0 0

Basic allowance for 

housing 2 0 0

Hostile fire pay 19 1 3

Hardship duty pay 19 2 20

Family separation 

allowance 0 1 0

Special medical pay 0 0 1
Appendix IV

948th Forward Surgical Team, Southfield, 

Michigan

Page 80 GAO-04-911 Army Reserve Pay

We found that 19 of the 20 soldiers did not receive their initial hostile fire 

pay of $150 for February until an average of 47 days after arriving in 

Afghanistan. We also found that one soldier never received her initial 

hostile fire pay for February and March totaling $300. She also never 

received a retroactive hostile fire payment of $75 for February 2003.2

All 20 soldiers experienced problems with their hardship duty pay. 

Nineteen of the 20 soldiers did not receive their hardship duty pay for 

February 2003 until April 2003. For 13 of the 19 soldiers, their February 

2003 hardship duty payment was not only late but contained an 

overpayment because the payments covered a period when the soldiers 

were still at Fort McCoy. Additionally, 19 soldiers continued to receive 

hardship duty payments not only after they left the location for which they 

were authorized to receive this pay, but for periods ranging from 1 to 5 

months following demobilization. 

All 20 soldiers waited 67 days before receiving their February combat zone 

tax exclusion benefit payment, which averaged $377. We also found that 

one soldier was not refunded the total amount of taxes withheld while in 

combat zone tax exclusion status. 

Pay Problems 

Associated with 

Demobilization and 

Release from Active 

Duty

Eighteen of 20 soldiers in the 948th Forward Surgical Team experienced pay 

problems associated with their demobilization from active duty. Seventeen 

of the unit’s soldiers returned to Fort McCoy in August 2003 to begin their 

demobilization process. The other 3 left Afghanistan and returned to Fort 

McCoy in June and July 2003. As summarized in table 15, soldiers were 

overpaid their active duty basic pay, certain allowances, and special 

medical pays after their release from active duty, while others never 

received (and were therefore underpaid) all of the family separation 

allowance or special medical pays they were entitled to receive.

2

Initially, the soldiers were to receive $150 as their hostile fire pay, but in April 2003, 

Congress increased the amount of hostile fire pay to $225 and made the $75 increase 

retroactive to October 2002. In May 2003, DFAS implemented the hostile fire pay increase 

and initiated action to disburse the $75 retroactive payments. 
Appendix IV

948th Forward Surgical Team, Southfield, 

Michigan

Page 81 GAO-04-911 Army Reserve Pay

Table 15: Demobilization Pay Problems

Source: GAO analysis. 

Note: Soldiers may have experienced problems with more than one type of pay or allowance.

We determined that 16 soldiers received 1 or more days worth of active 

duty basic pay, special medical pays, or allowances after being released 

from active duty. These pay problems occurred because the demobilization 

station was late in entering transactions to stop pays and allowances as of 

the date the soldiers were released from active duty. 

Type of pay or 

allowance

Number of soldiers 

who did not receive 

pay or allowance 

within 30 days of 

entitlement

Number of soldiers 

who were 

underpaid

Number of soldiers 

who were overpaid

Basic pay 0 0 12

Basic allowance for 

housing 0 0 13

Basic allowance for 

subsistence 0 0 13

Family separation 

allowance 0 2 6

Special medical pay 0 1 3
Page 82 GAO-04-911 Army Reserve Pay

Appendix V

443rd Military Police Company, Owings Mills, 

Maryland ApendxiV

The 443rd Military Police Company, headquartered in Owings Mills, 

Maryland, has been called to active duty twice since September 11, 2001. 

However, only the second mobilization fell within the time period of our 

case study analysis. The first mobilization (October 6, 2001, to September 

2002) activated 112 soldiers to perform “secure and defend” functions at 

Fort Sam Houston in support of Operation Noble Eagle.1

 On February 24, 

2003, 121 soldiers of the 443rd Military Police Company were mobilized with 

the unit, including 76 who had returned from the deployment to Fort Sam 

Houston 5 months prior to this mobilization and 25 soldiers who were 

cross-leveled in from other units. These cross-leveled soldiers included 12 

soldiers from Puerto Rico, 7 soldiers from Pennsylvania, 3 soldiers from 

Maryland, and 1 soldier each from New Jersey, Virginia, and West Virginia. 

In support of Operation Enduring Freedom, soldiers from the 443rd Military 

Police Company reported to the home station in Owings Mills for a SRP 

designed to help prepare them for mobilization. They later reported to Fort 

Lee, Virginia on February 27, 2003, for additional mobilization and inprocessing procedures. After approximately 2.5 months at Fort Lee, 112 

soldiers arrived in Iraq on May 15. Of the 9 remaining soldiers, 1 soldier 

arrived in Iraq earlier, on May 14, 1 soldier arrived on September 16, and 7 

were on medical hold at Fort Lee for the entire mobilization. While intheater, the 443rd Military Police Company operated a prison, Camp 

Cropper, located near the Baghdad airport. On December 6, 2003, 112 of the 

114 soldiers who deployed to Iraq left the Middle East and returned to Fort 

Lee. One of the 2 other soldiers left early—on August 17—and the other left 

later—on December 14. The soldiers of the 443rd Military Police Company 

began demobilizing and returning to their civilian jobs on December 15. By 

January 15, 2004, all but 6 of the 121 soldiers had demobilized; the 6 

soldiers remained on active duty to receive medical treatment at Fort Lee. 

A time line of actions associated with the unit’s active duty mobilization is 

shown in figure 6.

1

This mobilization falls outside of the audit period for this report and is therefore only 

considered for its impact on the second mobilization.
Appendix V

443rd Military Police Company, Owings Mills, 

Maryland

Page 83 GAO-04-911 Army Reserve Pay

Figure 6: 443rd Military Police Company’s Mobilization Time Line

As summarized in table 16, soldiers experienced a range of pay problems at 

every stage of the 443rd Military Police Company’s tour of active duty. 

Overall, 119 of 121 soldiers who mobilized experienced some type of pay 

problem associated with their activation to, during, or deactivation from 

federal service in support of Operation Enduring Freedom. Specifically, we 

found that (1) 70 soldiers experienced underpayments, overpayments, or 

late payments during their initial mobilization; (2) 114 soldiers experienced 

underpayments, overpayments, or late payments during their tour of active 

duty at Camp Cropper, Iraq; and (3) 17 soldiers experienced 

underpayments, overpayments, or late payments during their 

demobilization.

Table 16: Pay Problems by Phase

Source: GAO analysis.

Note: Soldiers may have experienced pay problems in more than one phase.

The dollar amounts associated with overpayments, underpayments, and 

late payments we identified were approximately $25,000, $15,000 and 

Phase Number of soldiers with pay problems

Mobilization 70 of 121

Deployment 114 of 121

Demobilization 17 of 121

Feb. 03 Apr. May June July Aug. Sept. Oct. Mar. Nov. Dec. Jan. 04

Unit reports for active duty

at home station,

Owings Mills, Md. 

2/24/03

Unit reports for active duty

at mobilization station,

Ft. Lee, Va. 

2/27/03 Soldiers deploy to Iraq

to run a prison at Camp

Cropper, outside Baghdad 

5/15/03

Soldiers return

to U.S. from Iraq

12/06/03

2/27/03 to

5/15/03

Soldiers in-process

and participate in training

12/15/03 to

1/15/04

Soldiers demobilize at

Ft. Lee, Va.

Source: GAO.
Appendix V

443rd Military Police Company, Owings Mills, 

Maryland

Page 84 GAO-04-911 Army Reserve Pay

$20,000, respectively. In addition, soldiers received late payment of their 

combat zone tax exclusion benefit totaling about $33,000. Of the 

overpayments we identified, about $4,000 were subsequently collected 

from the unit’s soldiers. 

Mobilization Pay 

Problems

As summarized in table 17, we found that 67 soldiers from the 443rd Military 

Police Company experienced overpayments, underpayments, or late 

payments related to basic pay and the associated entitlements when called 

to active duty. 

Table 17: Mobilization Pay Problems

Source: GAO analysis.

Note: Soldiers may have experienced problems with more than one type of pay or allowance.

Before arriving at the mobilization station, the 99th Regional Readiness 

Command performed a SRP for the 443rd Military Police Company at their 

home station. This review was designed to prepare soldiers for 

mobilization by confirming that their financial documents and personnel 

paperwork were in order, as well as verifying that the soldiers were 

medically fit to mobilize. The finance portion of the SRP consisted of a 

briefing that covered the different entitlements soldiers could expect to 

receive and a review of how to read the soldiers’ Master Military Pay 

Accounts. Soldiers who found errors in their individual accounts were 

supposed to notify the Regional Readiness Command’s finance personnel 

at the SRP, who would then process the corrections upon returning to their 

Type of pay or 

allowance

Number of soldiers 

who did not receive 

pay or allowance 

within 30 days of 

entitlement

Number of soldiers 

who were underpaid

Number of soldiers 

who were overpaid

Basic pay 2 0 2

Basic allowance for 

housing 20 10 6

Cost of living 

allowance 0 0 1

Family separation 

allowance 24 4 32

Overseas housing 

allowance 1 2 0
Appendix V

443rd Military Police Company, Owings Mills, 

Maryland

Page 85 GAO-04-911 Army Reserve Pay

headquarters and send the necessary documentation to Fort McCoy’s 

Reserve Pay Center. 

Upon reporting to Fort Lee, the 443rd Military Police Company’s active 

Army mobilization station, the unit underwent a second SRP, as required by 

Army regulations. However, despite going through two SRPs, the soldiers 

still experienced various pay problems related to their mobilization. 

For example, not all of the eligible soldiers in the 443rd Military Police 

Company received the proper amount of family separation allowance. 

Many of the unit’s soldiers began receiving family separation allowance 

earlier than they should have, resulting in small overpayments that totaled 

approximately $550 for the unit. In addition, 15 soldiers received late family 

separation allowance payments during mobilization.

In addition, the soldiers of the 443rd Military Police Company also had 

difficulties in starting their basic allowance for housing entitlements and 

active duty basic pay. Ten soldiers experienced overpayments and 6 

soldiers experienced underpayments of their basic allowance for housing. 

The 12 soldiers cross-leveled into the 443rd Military Police Company from 

Puerto Rico were not entitled to the basic allowance for housing type I 

during their mobilization because they were classified as overseas soldiers. 

Instead, these soldiers received basic allowance for housing type II, a cost 

of living allowance and an overseas housing allowance. One soldier 

received an overpayment of the cost of living allowance and 2 soldiers 

received underpayments of their overseas housing allowance entitlements, 

all of which occurred because these payments were based on incorrect 

rates.

Four members of the unit experienced problems starting their active duty 

basic pay. Two soldiers received a delay in their promotions, resulting in 

nearly $500 in late payments. The two other soldiers had received 

demotions that were not promptly entered into DJMS-RC. The first soldier’s 

demotion had been effective at the start of the mobilization, but the soldier 

continued to receive payments at the incorrect, higher rate until July 2003. 

The resulting overpayments of active duty basic pay, totaling over $2,500, 

were not identified by the Reserve Pay Center until we raised questions 

about them. 

The second soldier, however, incurred almost $6,400 in collections when 

his demotion was processed 16 months after it became effective, and 
Appendix V

443rd Military Police Company, Owings Mills, 

Maryland

Page 86 GAO-04-911 Army Reserve Pay

despite the fact that his higher rank was restored shortly thereafter. His 

demotion occurred because he had been unable to attend training to 

maintain his rank before being mobilized for Operation Noble Eagle in 

October 2001. During this mobilization, in February 2002, Army personnel 

at the 99th Regional Readiness Command generated a grade reduction 

order, but the transaction was not entered into DJMS-RC until June 2003, 4 

months after the soldier’s mobilization for Operation Enduring Freedom 

and after his deployment to Iraq. Although his previous grade was restored 

in July 2003, the restoration was not retroactive, so the soldier still had to 

pay back almost $6,400.

One problem that occurred during the mobilization process did not have an 

immediate effect on the soldiers of the 443rd Military Police Company, but 

rather later, during their deployment. In October 2003, 20 soldiers had their 

basic allowance for housing switched from the regular entitlement to the 

partial basic allowance for housing. In addition, another 16 soldiers had 

their family separation allowance entitlements stopped. These changes 

occurred because during the SRP process in February, finance personnel 

failed to extend the dates of eligibility for the basic allowance for housing 

and the family separation allowance to reflect the end date of the current 

mobilization. Pay records showed that these 36 soldiers were entitled to 

receive one of these entitlements through October 2003, exactly 2 years 

after the date of the first mobilization. While the soldiers were paid for 

active duty beyond the October end date of eligibility in the system, the 

allowances were automatically turned off by the system. Most of these 

problems were caught shortly after occurring and were corrected by the 

end of the following month, resulting in about $5,750 of late payments. 

However, 4 soldiers failed to have their entitlements turned back on, 

resulting in total underpayments of $3,500.

Soldiers of the 443rd Military Police Company complained that finance 

personnel at Fort Lee in March refused to help them and told soldiers that 

they needed to contact their unit administrator to fix their problems. The 

unit administrator, who did not mobilize with the unit, voluntarily went to 

Fort Lee to help ensure that all of the Company’s soldiers’ pay issues were 

addressed. However, finance personnel at Fort Lee asked him to leave after 

he attempted to help resolve some of his unit’s pay problems. Despite 

spending over 2 months at Fort Lee, many of the pay problems that began 

during mobilization were not corrected by the time the soldiers deployed to 

Iraq. In fact, 52 of the 121 soldiers left the mobilization station with 

unresolved pay-related problems. 
Appendix V

443rd Military Police Company, Owings Mills, 

Maryland

Page 87 GAO-04-911 Army Reserve Pay

Pay Problems While 

Deployed

As summarized in table 18, we identified a number of pay problems 

associated with active duty pays and allowances during the 443rd Military 

Police Company’s deployment while on active duty.

Table 18: Deployment Pay Problems

Source: GAO analysis.

Note: Soldiers may have experienced problems with more than one type of pay or allowance.

While deployed in Iraq, all of the soldiers experienced problems related to 

the location-based payments—specifically, problems with hardship duty 

pay, hostile fire pay, and the combat zone tax exclusion. All of the 114 

soldiers deployed to Iraq with the 443rd Military Police Company 

experienced some sort of overpayment, underpayment, or late payment of 

at least one of these three entitlements.

Soldiers in the 443rd Military Police Company were entitled to $100 per 

month for hardship duty pay for serving in Iraq. However, officials at the 

Army area servicing finance office paid the first partial month’s hardship 

duty pay more than 2 months after it was due to 107 of the 114 soldiers 

deployed to Iraq. Of the remaining 7 soldiers, 4 received hardship duty pay 

on time and 3 never received the first partial month’s hardship duty pay 

during our audit period. Additionally, none of the 113 soldiers remaining in 

Iraq during December 2003 received any hardship duty pay payments for 

Type of pay or 

allowance

Number of soldiers 

who did not receive pay 

or allowance within 30 

days of entitlement

Number of 

soldiers who 

were underpaid

Number of 

soldiers who 

were overpaid

Basic pay 6 0 0

Basic allowance for 

housing 5 4 1

Basic allowance for 

subsistence 0 1 0

Family separation 

allowance 1 0 1

Hardship duty pay 107 112 5

Hostile fire pay 1 1 2

Overseas housing 

allowance 1 2 1

Cost of living 

allowance 1 1 0
Appendix V

443rd Military Police Company, Owings Mills, 

Maryland

Page 88 GAO-04-911 Army Reserve Pay

the partial month they spent in-theater. Soldiers in the unit also 

experienced assorted individual problems relating to the payment of the 

hardship duty pay entitlement. For example, 1 soldier who remained on 

medical hold at Fort Lee received hardship duty pay payments, totaling 

over $350, despite never deploying. Two soldiers each received two 

hardship duty pay payments in a given month, resulting in over $150 in 

overpayments. Finally, one soldier continued to receive over $300 in 

hardship duty pay payments after leaving Iraq in August 2003.

Of the 113 soldiers entitled to hostile fire pay during the deployment, 3 

experienced some sort of problem with this pay. Two soldiers received 

overpayments of hostile fire pay, including 1 soldier who continued to 

receive hostile fire pay after he left the in-theater location and another 

soldier who erroneously received $300 in hostile fire pay instead of the 

correct $225 amount for 1 month. This second soldier also received part of 

his May 2003 hostile fire pay 75 days after it was due. Finally, 1 other soldier 

experienced a $450 underpayment of hostile fire pay because he stopped 

receiving the entitlement before leaving Iraq. 

Of the 114 soldiers deployed to Iraq, 112 received their first month’s combat 

zone tax exclusion more than 30 days after they were entitled to it. This 

resulted in late payments totaling over $33,000, more than the late 

payments from all other sources combined. Additionally, 3 soldiers 

experienced overpayments and underpayments related to the combat zone 

tax exclusion. One of these soldiers erroneously received over $250 as a 

combat zone tax exclusion repayment related to a bonus payment that was 

taxable. Another soldier did not receive his combat zone tax exclusion 

repayment for the last 2 months of his mobilization, creating an 

overwithholding of over $400. 

We were unable to determine the extent to which one additional soldier in 

the unit experienced problems with his combat zone tax exclusion, 

hardship duty pay, and hostile fire pay during the mobilization. His DD 

Form 214, Certificate of Release and Discharge from Active Duty, stated 

that the soldier served with his unit in theater from May 15, 2003, to 

December 6, 2003. However, the soldier did not receive any of these 

location-based entitlements during his tour of duty. Pay personnel at Fort 

McCoy stated that his records indicate he was on convalescent leave (leave 

for soldiers returning to duty after illness or injury) from May 21 to July 16, 

and therefore may not have been entitled to these allowances. Pay 

personnel at Fort McCoy were continuing to research this case and could 
Appendix V

443rd Military Police Company, Owings Mills, 

Maryland

Page 89 GAO-04-911 Army Reserve Pay

not tell us anything further. Without additional information, we could not 

determine whether this soldier was paid correctly.

In addition, during this phase, some of the soldiers of the 443rd Military 

Police Company also experienced various individual problems with active 

duty basic pay, the basic allowance for housing, and the overseas housing 

allowance. Because of delays in promotions, six soldiers experienced late 

payments of active duty basic pay and four of these soldiers also 

experienced late payments of basic allowance for housing. Other problems 

included one soldier who received overpayments of the basic allowance for 

housing throughout the mobilization, totaling over $850, because her 

spouse was a service member who periodically went on and off duty. Two 

other soldiers had their overseas housing allowance paid inconsistently 

and at varying rates, creating net overpayments for both soldiers. 

Pay Problems 

Associated with 

Demobilization and 

Release from Active 

Duty

The soldiers of the 443rd Military Police Company began to demobilize in 

December 2003. As summarized in table 19, some soldiers continued to 

experience pay problems throughout their demobilization and even after 

release from active duty. These problems consisted primarily of differences 

between the last dates for which soldiers were paid and the dates of release 

from active duty as recorded on the DD Form 214, Certificate of Release or 

Discharge from Active Duty. 
Appendix V

443rd Military Police Company, Owings Mills, 

Maryland

Page 90 GAO-04-911 Army Reserve Pay

Table 19: Demobilization Pay Problems

Source: GAO analysis.

Note: Soldiers may have experienced problems with more than one type of pay or allowance.

Of the 115 soldiers who demobilized by the end of our audit period, 

including 2 who had been on medical hold, 6 soldiers were paid beyond 

their date of demobilization and 2 soldiers had their pay stopped shortly 

before demobilizing. The 6 soldiers paid beyond their date of 

demobilization were overpaid for an average of 19 days and nearly $2,500 

each. This includes 1 soldier who was overpaid for at least 68 days and 

$10,500. This soldier, who demobilized in February 2004, stated that he 

contacted his demobilization station, home unit, and the pay section of the 

Regional Readiness Command by early April, but nevertheless continued to 

be paid through April 2004. The 2 soldiers whose pays were stopped before 

demobilizing were underpaid a total of almost $400.

In addition to the problems associated with the date of release from active 

duty, several soldiers experienced other problems related to their 

demobilization. For example, the demobilization station processed 

“hardship duty pay for certain places” for 1 soldier from May 2003 to 

December 2003. This type of hardship duty pay has not been authorized for 

newly deployed soldiers since December 2001 and the soldier had received 

his correct “hardship duty pay for designated areas” while he was deployed 

in Iraq. This erroneous transaction during the soldier’s out-processing 

created an overpayment of approximately $150 that went undetected. 

Additionally, 7 of the 12 soldiers cross-leveled into the 443rd Military Police 

Type of pay or 

allowance

Number of soldiers 

who did not receive 

pay or allowance 

within 30 days of 

entitlement

Number of soldiers 

who were underpaid

Number of soldiers 

who were overpaid

Basic pay 0 2 5

Basic allowance for 

housing 0 3 6

Basic allowance for 

subsistence 0 2 4

Hardship duty

pay 0 0 1

Family separation 

allowance 0 0 1

Overseas housing 

allowance 7 2 0
Appendix V

443rd Military Police Company, Owings Mills, 

Maryland

Page 91 GAO-04-911 Army Reserve Pay

Company from Puerto Rico experienced late payments of their last month’s 

overseas housing allowance entitlement, totaling almost $1,500.
Page 92 GAO-04-911 Army Reserve Pay

Appendix VI

FORSCOM Support Unit, Finksburg, MarylandApendxiVI

A major in the Army’s Individual Ready Reserve,1 who lives in Maryland, 

volunteered for active duty. He received orders mobilizing him to active 

duty on March 6, 2003, in support of Operation Iraqi Freedom. The major 

was activated as a separate one-person unit. Because he was mobilized 

from an inactive status, he did not have a home unit. He reported to Fort 

McPherson, Georgia, on March 6, 2003, where he participated in an Army 

SRP. On March 9, 2003, he reported to Nellis Air Force Base in Nevada for 

training. Because he was to serve as an Army liaison to the Air Force while 

deployed, on March 17, 2003, he reported to Seymour Johnson Air Force 

base in North Carolina, where he underwent an Air Force mobilization inprocessing review with the Air Force’s 4th Fighter Wing. He arrived in Qatar 

on March 25, 2003. He was assigned to serve as an Army Forces Command 

(FORSCOM) Ground Liaison Officer attached to the Air Force’s 379th

Expeditionary Force at the Air Force base at Doha, Qatar. As a Ground 

Liaison Officer, he was responsible for a team of Army officers that briefed 

Air Force pilots before every mission during the Iraqi offensive on the latest 

information concerning the location of Army troops and enemy forces. He 

was also responsible for providing briefings to the Air Force general in 

charge of flight operations at Doha on the status and positions of coalition 

ground forces. He served in this capacity until May 1, 2003, when he left 

Qatar. On May 2, 2003, he underwent Air Force active duty outprocessing 

with the Air Force’s 4th Fighter Wing at Seymour Johnson Air Force Base. 

He arrived at Fort McPherson on May 4, 2003, for demobilization 

processing. He was demobilized from active duty on May 15, 2003, and 

returned to his home in an inactive status as a member of the Army’s 

Individual Ready Reserve. In August 2003, the major resigned his 

commission and received an honorable discharge from the Army Reserve. 

Key events associated with the major’s active duty pays and allowances for 

his 2003 mobilization are summarized in figure 7.

1

The Army’s Individual Ready Reserve members do not participate in any regularly 

scheduled training and are not paid for their membership in the Ready Reserve. Each year, 

the Army transfers thousands of soldiers who have completed active duty or Selected 

Reserve commitments to the Individual Ready Reserve. Individual Ready Reserve soldiers 

can be mobilized to active duty to help meet requirements. 
Appendix VI

FORSCOM Support Unit, Finksburg, 

Maryland

Page 93 GAO-04-911 Army Reserve Pay

Figure 7: FORSCOM Support Unit Soldier Time Line

As summarized in table 20, this one-soldier unit experienced various pay 

problems associated with his location-based active duty pays and 

allowances that continued until well after his demobilization to Individual 

Ready Reserve status. Specifically, we found that this single-soldier unit (1) 

did not have any underpayments, overpayments, or late payments during 

initial mobilization; (2) experienced overpayments and late payments 

associated with deployment location-based pays, allowances, and related 

tax benefits; and (3) continued to experience problems with active duty 

pays, allowances, and related tax benefits for months after his 

demobilization. 

Mar. 03 Apr. May June July

Soldier reports for active duty

at Ft. McPherson, Colo. 

3/06/03

3/09/03

Soldier reports

for training at Nellis

Air Force Base, Nev.

Soldier completes

Air Force in-processing

with 4th Fighter Wing

at Seymour Johnson

Air Force Base, N.C. 

3/17/03

3/25/03

Soldier deployed

to Qatar

5/04/03

Soldier arrives at Ft. McPherson, Colo.

for Demobilization processing

Soldier completes Air Force duty

out-processing with 4th Fighter Wing

at Seymour Johnson Air Force Base, N.C.

5/02/03 Soldier demobilized

from active duty

5/15/03

Source: GAO.
Appendix VI

FORSCOM Support Unit, Finksburg, 

Maryland

Page 94 GAO-04-911 Army Reserve Pay

Table 20: Pay Problems by Phase 

Source: GAO analysis.

Note: Pay problems associated with deployment continued through demobilization.

The dollar amounts associated with overpayments and late payments we 

identified were about $8,000 and $300, respectively. Of the overpayments 

we identified, all were subsequently collected from the soldier by May 31, 

2004. 

Mobilization Pay 

Problems

Finance personnel at the soldier’s mobilization station at Fort McPherson, 

Georgia, started his active duty pay entitlements associated with his initial 

mobilization. We did not identify any pay problems associated with the 

soldier’s initial mobilization to active duty. 

Pay Problems While 

Deployed

As summarized in table 21, we identified active duty pay and combat zone 

tax benefit problems associated with the soldier’s assigned deployment 

location while on active duty. When the soldier arrived at his assigned 

active duty deployment location in Qatar on March 25, 2003, he was entitled 

to receive hardship duty pay and was entitled to exempt his pay from 

federal taxes while assigned to that location. However, while the soldier 

went through an Air Force in-processing procedure when he arrived in 

Qatar, there were no procedures in place to provide flight manifest 

documentation to an Army area servicing finance office notifying it of his 

arrival. Such documentation is necessary to start the soldier’s hostile fire 

pay and related combat zone tax exclusion benefits. Because he was 

assigned to support an Air Force operation, he did not process through, or 

have any access to, an Army area servicing finance office to start his 

location-based pays and related tax benefits. It was not until he left Qatar 

and arrived at his demobilization station at Fort McPherson that finance 

personnel at that location received supporting documentation from the 

soldier and took the actions necessary to process transactions for him to 

receive his pay and tax benefit entitlements. Consequently, he did not 

receive any of his hostile fire pay until May 21, 2003, or his related combat 

Phase Number of soldiers with pay problems

Mobilization 0 of 1

Deployment 1 of 1 

Demobilization 1 of 1 
Appendix VI

FORSCOM Support Unit, Finksburg, 

Maryland

Page 95 GAO-04-911 Army Reserve Pay

zone tax exclusion benefits until June 4, 2003—after he returned from his 

overseas deployment. 

Table 21: Deployment Pay Problem

Source: GAO analysis.

Army finance officials did not initiate the soldier’s hostile fire pay and 

combat zone tax exclusion benefit, which he was entitled to receive 

beginning in March 2003, until officials at his demobilization station took 

action to start this pay and tax benefit. The soldier was deployed to serve 

as an Army liaison to an Air Force unit with an Air Force finance office; he 

was unable to find anyone at or near his deployed location who could help 

him get his entitled location-based pay and related tax benefits started. Air 

Force finance personnel told the soldier to contact finance personnel back 

in the United States at Fort McPherson to address his pay problems. The 

soldier told us that while he was in Qatar he was able to contact DFAS by email, but officials there told him there was little they could do to help him 

get his location-based pays and tax benefits started. He said that telephone 

calls to the United States were difficult because of time differences and his 

limited access to phones to make an overseas call.

Pay Problems 

Associated with 

Demobilization and 

Release from Active 

Duty

The soldier left Qatar on May 1, 2003, to return to his demobilization station 

at Fort McPherson. Fort McPherson issued orders to demobilize him from 

active duty to the Army’s Individual Ready Reserve as of May 15, 2003. As 

summarized in table 22, during his demobilization and after his release 

from active duty, the soldier continued to experience pay problems. These 

problems were overpayments associated with the soldier receiving active 

duty pay after the date of his demobilization from active duty.

Type of pay or allowance Type of problem

Hostile fire pay Late payment
Appendix VI

FORSCOM Support Unit, Finksburg, 

Maryland

Page 96 GAO-04-911 Army Reserve Pay

Table 22: Demobilization Pay Problems 

Source: GAO analysis.

Note: Soldier may have experienced problems with more than one type of pay or allowance.

The soldier out-processed through Fort McPherson and received his DD 

Form 214, Certificate of Release or Discharge from Active Duty, with a 

release from active duty date of May 15, 2003. However, finance personnel 

at the Fort McPherson demobilization station did not take action to stop his 

active duty pays and allowances as of that date. As a result, he continued to 

receive active duty pays and allowances that he was not entitled to receive 

for a month after his demobilization—from May 16 through June 13, 2003. 

In addition, he continued to receive his combat zone tax exclusion benefits 

for the same period, May 16 through June 13, even though he had not only 

left the combat zone, but had already demobilized from active duty and 

returned home. The income tax withholdings for this period were refunded 

directly to the soldier. His pay was not stopped at the end of his active duty 

tour initially because finance personnel at Fort McPherson were waiting 

for his hardship duty pays to “clear,” but they then forgot to stop all pays 

related to active duty. 

This failure to stop the soldier’s active duty pays and allowances on time 

resulted in the soldier writing a $6,150.75 check to DFAS in an attempt to 

resolve all overpayment issues associated with his mobilization. As 

summarized in table 23, the soldier undertook a series of time-consuming 

phone calls and faxes to Fort McPherson, DFAS-Indianapolis, DFASDenver, and DFAS-Cleveland over a 13-month period to finally get his pay 

issues resolved. Ultimately, the soldier’s pay issues related to his March and 

April 2003 active duty deployment were only identified and resolved 

through the relentless efforts of the soldier and our inquiries into the 

matter. With the soldier’s recent $1,140.54 check to DFAS, his pay issues 

with his March and April 2003 mobilization were resolved—over a year 

after his deployment ended. 

Type of pay or allowance Type of problem 

Basic pay Overpayment

Basic allowance for subsistence Overpayment

Basic allowance for housing Overpayment

Family separation allowance Overpayment

Aviation career incentive pay Overpayment
Appendix VI

FORSCOM Support Unit, Finksburg, 

Maryland

Page 97 GAO-04-911 Army Reserve Pay

Table 23: Timetable of Soldier’s Attempts to Correct Problems Related to Active Duty Entitlements

Source: GAO analysis.

Date Action

June 6, 2003 Based on a Leave and Earnings Statement indicating he was continuing to receive active 

duty pays and allowances after he was demobilized, the soldier sent an e-mail through his 

myPay online account asking how to get these erroneous active duty payments stopped. 

About 2 weeks later, the soldier was told he needed to contact the pay office at his 

demobilization location (Fort McPherson) to get his active duty payments stopped. 

June 30, 2003 The soldier spoke with a Fort McPherson official who stopped his active duty payments and 

faxed him documentation showing he owed $6,150.75 as a result of his active duty 

overpayments.

July 25, 2003 The soldier mailed a check for $6,150.75 to the DFAS-Indianapolis address he was 

provided.

August 15, 2003 The soldier called Fort McPherson officials to inquire why his Leave and Earnings 

Statement continued to show a debt that he’d already repaid.

September 4, 2003 After three more phone calls to officials at Fort McPherson, on September 4, 2003, the 

soldier was told that DFAS had received his check and would adjust his account to remove 

the erroneous debt.

November 3, 2003 Two months later, on November 3, 2003, after again receiving a Leave and Earnings 

Statement showing an erroneous debt balance, the soldier again called Fort McPherson. 

He was told, “there is nothing more I can do for you” and advised to call 1-888-PAY-ARMY 

for service.

November 3, 2003 When he called 888-PAY-ARMY, the soldier was referred to debt collections (at 800-962-

0648).

November 3, 2003 The soldier called 800-962-0648 and was assured that “he did not need to worry, because 

he did not appear in their debt system.” 

December 23, 2003 After receiving another Leave and Earnings Statement showing an erroneous debt 

balance, the soldier called 888-PAY-ARMY. He was told that only DFAS-Indianapolis could 

help him resolve his problem, but the service representative would not give him a phone 

number to call at that location. Instead, he was told to call Fort McPherson. The soldier 

protested that an official at Fort McPherson told him that they could not help him and that 

he would have to contact the number he was now calling. Nonetheless, he was told he had 

to call Fort McPherson. 

December 23, 2003 The soldier called Fort McPherson. He was told to fax a copy of his canceled check 

showing that he repaid his active duty overpayment and they would again try to rectify this 

erroneous debt.

January 5, 2004 After receiving a copy of his canceled check sent to DFAS in July 2003, the soldier faxed a 

copy to Fort McPherson.

January 8, 2004 The soldier e-mailed us to ask for our assistance in resolving this erroneous debt.

April 20, 2004 After the soldier informed Fort McPherson officials that he contacted us about this matter, 

he was informed that a complete review of his pay records and a recalculation of the 

payments he received showed he owed an additional $1,140.54 associated with an 

erroneous combat zone tax exclusion benefit. 

May 3, 2004 The soldier wrote a check for $1,140.54 and sent it to DFAS.
Page 98 GAO-04-911 Army Reserve Pay

Appendix VII

629th Transportation Detachment, Fort Eustis, 

Virginia ApendxiVI

The 629th Transportation Detachment was called to active duty in support 

of Operation Enduring Freedom on March 15, 2003, for a period not to 

exceed 365 days. Twenty-seven soldiers with the 629th Transportation 

Detachment received orders to mobilize; but only 24 soldiers actually 

deployed with the unit.1

 The unit arrived at its home station, Fort Eustis, 

Virginia, on March 15, 2003, where it began the SRP in-processing. On 

March 18, 2003, the soldiers continued their mobilization processing at Fort 

Eustis, Virginia, which was also their designated mobilization station. The 

unit remained at Fort Eustis for approximately 2 months undergoing 

additional in-processing and training. On May 22, 2003, the 629th

Transportation Detachment was deployed to Kuwait and was assigned 

responsibility for tracking supplies in and out of Army field locations in and 

around Kuwait. After completing its assigned mission, the unit left Kuwait 

on December 5, 2003, to return to its demobilization station. By the end of 

January 2004, all of the soldiers were released from active duty with the 

exception of 1 soldier who was placed on medical hold. A time line of key 

actions associated with the unit’s mobilization under Operation Enduring 

Freedom is shown in figure 8.

Figure 8: 629th Transportation Company’s Time Line

1

Three soldiers did not deploy with the unit. One soldier had documentation supporting a 

medical condition that made him medically unfit for mobilization. Another soldier had his 

orders revoked the day after mobilization. The third soldier was mobilized but stayed 

behind in a medical hold status. 

Mar. 03 Apr. May June July Aug. Sept. Oct. Nov. Dec. Jan. 04 Feb.

Soldiers report for

active duty at home

station, Ft. Eustis, Va. 

3/15/03

Soldiers report to

mobilization station,

Ft. Eustis, Va.

3/18/03 Soldiers deployed

to Kuwait to track

supplies 

5/23/03

Soldiers return to

U.S. from Kuwait 

12/05/03

3/18/03 to

5/22/03

Soldiers in-process

and participate in training

12/03 to 1/04

Soldiers demobilize

at Ft. Eustis, Va.

Source: GAO.
Appendix VII

629th Transportation Detachment, Fort 

Eustis, Virginia

Page 99 GAO-04-911 Army Reserve Pay

As summarized in table 24, all 24 of the deployed soldiers experienced at 

least one pay problem associated with their activation to, during, and 

deactivation from, active duty service in support of Operation Enduring 

Freedom. Specifically, we found that (1) 5 soldiers experienced 

underpayments or late payments during their initial mobilization; (2) 24 

soldiers experienced underpayments, overpayments, or late payments 

during their tour of active duty in and around Kuwait, including in-theater 

incentives such as hostile fire pay and hardship duty pay; and (3) 1 soldier 

was underpaid entitled pays and allowances associated with his 

demobilization. 

Table 24: Pay Problems by Phase 

Source: GAO analysis.

Note: Soldier may have experienced pay problems in more than one phase.

In total, we identified estimated overpayments of about $3,000, 

underpayments of about $2,000, and late payments of about $14,000, 

associated with the pay problems we identified. Specifically, we 

determined the following: 

• More than half of the $3,000 in overpayments we identified was 

associated with the majority of the unit’s soldiers receiving an extra $75 

payment of hostile fire pay during their tour of active duty in Kuwait. 

• More than 70 percent of the soldiers deployed to Kuwait did not receive 

hardship duty pay in the months of May and December 2003, 

contributing to the underpayments of $2,000. 

• An estimated $8,000 of the $14,000 in late payments we identified were 

associated with two soldiers. Available pay records for one soldier show 

he did not receive the correct amount of basic allowance for housing 

during his active duty tour until 9 months after his mobilization date. 

Another soldier did not receive the correct amount of basic pay and 

basic allowance for housing until approximately 3 months after his 

promotion had become effective.

Phase Number of soldiers with pay problems

Mobilization 5 of 24

Deployment 24 of 24 

Demobilization 1 of 24 
Appendix VII

629th Transportation Detachment, Fort 

Eustis, Virginia

Page 100 GAO-04-911 Army Reserve Pay

Mobilization Pay 

Problems

As summarized in table 25, we identified several soldiers who experienced 

underpayments or late payments related to basic pay and associated 

entitlements associated with the mobilization phase. Most, if not all, of 

these cases were likely the result of proper documentation not being 

submitted promptly, resulting in some soldiers receiving delayed housing 

allowances and promotions. For example, one soldier did not receive the 

correct amount of basic pay and basic allowance for housing based on a 

promotion that should have been effective in January 2003 but did not get 

processed until 3 months later in mid-April. We found the personnel action 

form was not signed until April 2003. 

Table 25: Mobilization Pay Problems

Source: GAO analysis.

Note: Soldier may have experienced problems with more than one type of pay or 

allowance.

Upon receipt of individual mobilization orders, the unit’s soldiers reported 

to their unit’s home station in Fort Eustis, Virginia, where they attended a 

SRP. The purpose of this SRP was to ensure that all soldiers had all 

required administrative paperwork, financial documents, and were 

physically fit for the ensuing mobilization. Personnel from the 99th Regional 

Readiness Command sent a team who conducted the finance portion of the 

SRP to verify the soldiers’ supporting financial documentation. If 

necessary, the 99th Regional Readiness Command team submitted 

transactions with the necessary supporting documentation to the Reserve 

Pay Center at Fort McCoy to update the soldiers’ Master Military Pay 

Accounts to correctly reflect their mobilized pay status. However, we 

identified several soldiers who did not have appropriate supporting 

Type of pay or 

allowance

Number of soldiers 

who did not receive 

pay or allowance 

within 30 days of 

entitlement

Number of soldiers 

who were 

underpaid 

Number of soldiers 

who were overpaid 

Basic pay 0 1 0

Basic allowance 

for housing 1 1 0

Basic allowance 

for subsistence 0 0 0

Family separation 

allowance 2 2 0
Appendix VII

629th Transportation Detachment, Fort 

Eustis, Virginia

Page 101 GAO-04-911 Army Reserve Pay

documentation maintained in their files to justify basic allowance for 

housing payments. For example, we identified 12 soldiers who received 

basic allowance for housing payments for which we were unable to obtain 

supporting documentation (i.e., DA Form 5960). Total basic allowance for 

housing payments for those 12 soldiers amounted to over $110,000.

Additionally, we identified inconsistencies with the determinations of 

soldiers’ entitlements to the family separation allowance made at the 

mobilization station. According to the DOD FMR Volume 7A, soldiers 

should be separated from their families by more than 50 miles in order to 

receive the family separation allowance. We found 10 soldiers from the 

629th Transportation Detachment, including the soldier who was placed on 

medical hold, who received the family separation allowance while at their 

home station and mobilization station even though that location was less 

than 50 miles from their home. The soldiers were never informed by pay 

technicians at the unit or at their mobilization station that they were not 

entitled to the family separation allowance if they were staying at Fort 

Eustis but their home of record was within 50 miles, and we did not see any 

documentation showing that the unit commander had approved an 

exception to the mileage restriction on family separation allowance 

eligibility. 

Pay Problems While 

Deployed

As summarized in table 26, we identified a number of pay problems with 

five different types of active duty pays and allowances associated with the 

unit’s deployment while on active duty.
Appendix VII

629th Transportation Detachment, Fort 

Eustis, Virginia

Page 102 GAO-04-911 Army Reserve Pay

Table 26: Deployed Pay Problems

Source: GAO analysis.

Note: Soldiers may have experienced more than one type of problem with more than one type of pay or 

allowance.

During the soldiers’ deployment to Kuwait, all 24 of the 629th

Transportation Detachment’s soldiers encountered pay problems related to 

hardship duty pay and hostile fire pay. Most soldiers did not receive any 

hardship duty pay during the month they arrived in-theater and the month 

that they left the theater. In addition, all of the soldiers received their 

combat zone tax exclusion benefit at least one month late.

Per DOD FMR Volume 7A, soldiers who perform duties in designated areas 

for over 30 days are entitled to the hardship duty pay incentive. The 

regulation specified the general area of Kuwait as a designated area and 

provided $100 a month to all soldiers serving there. Per the same 

regulation, soldiers serving in Kuwait are also entitled to hostile fire pay of 

$225 per month. Both hardship duty pay and hostile fire pay should start at 

the same time upon the soldier’s arrival in Kuwait. In the case of the 629th

Transportation Detachment, the soldiers had their military identification 

cards swiped into the Tactical Personnel System upon landing in Kuwait to 

document their date of arrival. However, most of the soldiers never 

received any payment for hardship duty pay in the month that they arrived 

in Kuwait, nor did most receive any hardship duty pay payment in the 

month that they left Kuwait. Officials at the local Army area servicing 

finance office did not initiate the unit’s hostile fire pay incentive until 1 

month after the soldiers arrived in theater. Furthermore, the soldiers 

incorrectly received a hostile fire pay payment of $300 during the month of 

June (an overpayment of $75). One of the unit’s soldiers left Kuwait earlier 

Type of pay or 

allowance

Number of soldiers 

who did not receive 

pay or allowance 

within 30 days of 

entitlement

Number of soldiers 

who were 

underpaid 

Number of soldiers 

who were overpaid 

Basic pay 8 0 0

Basic allowance for 

housing 3 1 0

Family separation 

allowance 1 1 0

Hostile fire pay 22 1 23

Hardship duty pay 0 24 2
Appendix VII

629th Transportation Detachment, Fort 

Eustis, Virginia

Page 103 GAO-04-911 Army Reserve Pay

than the rest of the unit, but the soldier’s hardship duty pay continued for 

another 6 months and his hostile fire pay continued for 1 extra month 

before it was stopped.

Pay Problems 

Associated with 

Demobilization and 

Release from Active 

Duty

Soldiers of the 629th Transportation Detachment returned to their 

demobilization station at Fort Eustis, Virginia, around December 5, 2003, 

and began the SRP out-processing. As summarized in table 27, we identified 

one soldier who experienced pay problems associated with the 

demobilization phase of his active duty tour. 

Table 27: Demobilization Pay Problems 

Source: GAO analysis.

We identified one soldier who did not receive any family separation 

allowance payments during the last 3 months of active duty. This soldier’s 

home of record was more than 50 miles from the demobilization station in 

Fort Eustis, Virginia, and he was not commuting daily. Consequently, he 

should have received family separation allowance for these 3 months. Ten 

other soldiers in the unit who returned to Fort Eustis and lived within the 

50-mile range of the demobilization station and did not have a commander’s 

exception on file received $250 per month in family separation allowance 

payments until their release from active duty. By January 2004, all 

mobilized soldiers, with the exception of the soldier who was on medical 

hold, were released from active duty. 

Type of pay or 

allowance

Number of soldiers 

who did not receive 

pay or allowance 

within 30 days of 

entitlement

Number of soldiers 

who were 

underpaid 

Number of soldiers 

who were overpaid 

Family separation 

allowance 0 1 0
Page 104 GAO-04-911 Army Reserve Pay

Appendix VIII

3423rd Military Intelligence Detachment New 

Haven, Connecticut ApendxiVI

The 3423rd Military Intelligence Detachment was called to active duty in 

support of Operation Noble Eagle on December 3, 2002. A total of 11 

soldiers from the unit were mobilized to support operations at the 

Intelligence and Security Command at Fort Belvoir, Virginia.1

 The 3423rd

Military Intelligence Detachment does not have a unit administrator during 

peacetime and had no dedicated unit administrator during the mobilization. 

The unit was called to active duty and reported to its mobilization station, 

Fort Lee, Virginia, where the soldiers went through in-processing during 

December 2002. After this processing, the unit went to the Army’s National 

Ground Intelligence Center in Charlottesville, Virginia, for 1 week of 

additional in-processing and was then transferred to Fort Belvoir. For the 

next 11 months, the unit carried out its mission to gather and analyze 

intelligence information in support of U.S. Army Intelligence and Security 

Command operations at Fort Belvoir. In November 2003, the 3423rd Military 

Intelligence Detachment began to demobilize at Fort Lee and by December 

2, 2003, all but 1 soldier had been released from active duty. The unit 

reported that the remaining soldier stayed on active duty at Fort Belvoir for 

an additional year. A time line of key actions associated with the unit’s 

mobilization to active duty is shown in figure 9.

Figure 9: 3423rd Military Intelligence Company’s Mobilization Time Line

As summarized in table 28, soldiers experienced a range of pay problems at 

every stage of the 3423rd Military Intelligence Detachment’s tour of active 

duty. The unit did not have a dedicated unit administrator to carry out pay 

support responsibilities during its active duty mobilization. Overall, all 11 

1

A 12th soldier was mobilized from June 2002 to June 2003, but was not part of this mission.

Dec. 02 Jan. Nov. Dec. 03 Feb. Apr. May June July Aug. Sept. Oct. Mar.

Soldiers in-process

at Ft. Lee, Va. 

12/06/02

Soldiers deploy to

Ft. Belvoir, Va.

12/13/02

Unit at Ft. Belvoir, Va., supporting

the Army Intelligence and

Security Command

Soldiers begin to

demobilize at Ft. Lee, Va.

11/24/03

All but one soldier

complete demobilization

12/02/03

Source: GAO.
Appendix VIII

3423rd Military Intelligence Detachment New 

Haven, Connecticut

Page 105 GAO-04-911 Army Reserve Pay

soldiers in the unit experienced some type of pay problem associated with 

their activation to, during, or deactivation from active duty in support of 

Operation Noble Eagle. Specifically, we found that (1) 10 soldiers 

experienced underpayments, overpayments or late payments during their 

initial mobilization; (2) 9 soldiers experienced underpayments, 

overpayments, or late payments during their tour of active duty at Fort 

Belvoir; and (3) 9 soldiers experienced underpayments, overpayments, or 

late payments during their demobilization.

Table 28: Pay Problems by Phase

Source: GAO analysis. 

Note: Soldiers may have experienced pay problems in more than one phase.

The dollar amounts associated with the overpayments, underpayments, 

and late payments we identified were about $18,500, $4,000, and $5,000, 

respectively. Of the overpayments we identified, about $2,000 were 

subsequently collected from the unit’s soldiers as of January 31, 2004. 

Mobilization Pay 

Problems

As summarized in table 29, we found that 10 of the 11 soldiers from the 

3423rd Military Intelligence Detachment experienced pay problems related 

to basic pay and the associated entitlements when called to active duty.

Phase Number of soldiers with pay problems

Mobilization 10 of 11

Deployment 9 of 11

Demobilization 9 of 11
Appendix VIII

3423rd Military Intelligence Detachment New 

Haven, Connecticut

Page 106 GAO-04-911 Army Reserve Pay

Table 29: Mobilization Pay Problems

Source: GAO analysis. 

Note: Soldiers may have experienced pay problems with more than one type of pay or allowance or 

more than one type of problem per pay or allowance.

Before mobilization, the unit attended several SRPs put on by the 94th

Regional Readiness Command. Specifically, after September 11, 2001, the 

unit received warnings that it might be called up and therefore began 

attending SRPs to prepare for impending mobilization. The unit first 

attended a program at the Reserve center in Waterbury, Connecticut, in 

October 2001, along with several other units that were definitely 

mobilizing. The soldiers attended a second SRP in November 2002. The 

finance portion of the SRP consisted of a briefing that covered the different 

entitlements soldiers could expect to receive and a review of the soldiers’ 

Master Military Pay Accounts. Upon reporting to the active Army 

mobilization station at Fort Lee, the unit underwent a third SRP. 

We found 10 of the 11 soldiers in the 3423rd Military Intelligence 

Detachment were entitled to the continental U.S. cost of living allowance 

during their mobilization at a rate based on their principal place of 

residence at the time they were ordered to active duty.2

 One of these 10 

soldiers did not receive the entitlement during his mobilization, resulting in 

a $500 underpayment. The 9 remaining soldiers erroneously began 

receiving the overseas cost of living allowance rather than the continental 

U.S. cost of living allowance at the beginning of the mobilization. In April 

2003, all 9 soldiers began correctly receiving continental U.S. cost of living 

allowance and the entitlement was paid retroactively in May to 8 of the

Type of pay or 

allowance

Number of soldiers 

who received late 

payments

Number of soldiers 

who were underpaid

Number of soldiers 

who were overpaid

Basic allowance 

for housing 1 1 0 

Cost of living 

allowance 8 5 4

Family separation 

allowance 0 1 9 

2

The 11th soldier was not entitled to the continental U.S. cost of living allowance because his 

principal place of residence did not qualify for a cost of living adjustment.
Appendix VIII

3423rd Military Intelligence Detachment New 

Haven, Connecticut

Page 107 GAO-04-911 Army Reserve Pay

soldiers for the period December 2002 through March 2003.3 The erroneous 

payments of the overseas cost of living allowance were collected 

immediately for 4 of the soldiers, while the erroneous payments for the 

other 4 soldiers were only partially collected later in the mobilization. The 

delay in collecting the overseas cost of living allowance for the 4 soldiers 

resulted in overpayments of over $3,500 that were not collected in full by 

the end of the mobilization. One soldier continued to receive the overseas 

cost of living allowance and the continental U.S. cost of living allowance 

concurrently through August 2003, totaling more than $2,500. DOD began 

to recoup these amounts in October 2003. In addition to the overpayments 

and underpayments associated with overseas cost of living allowance 

payments, discrepancies between the overseas and continental U.S. cost of 

living allowance rates for 8 of the 9 soldiers led to over $700 in late 

payments. 

We also found that 9 of the 10 soldiers in the 3423rd Military Intelligence 

Detachment received family separation allowance overpayments during 

mobilization. Because of pay clerks’ confusion regarding family separation 

allowance entitlement rules, the 9 soldiers began receiving the family 

separation allowance 1 to 3 days earlier than they should have, resulting in 

small overpayments that totaled almost $200 for the unit. 

Additionally, one soldier in the unit experienced a problem related to his 

basic allowance for housing pay during mobilization. Shortly after 

mobilization, the soldier’s basic allowance for housing entitlement 

erroneously switched from the “with dependents” rate to the “without 

dependents” rate for half of December 2002 and for January through March 

2003. In April 2003, the soldier was repaid basic allowance for housing at 

the “with dependents” rate for January through March 2003.4

 These 

switches resulted in $800 in payments more than 30 days after the soldier 

was entitled and almost $200 in underpayments for the period in December 

2002 when the soldier did not receive basic allowance for housing at the 

“with dependents” rate. Furthermore, even though the soldier was 

deployed from his home in Connecticut to his active duty location at Fort 

Belvior in Virginia, he did not received his family separation allowance for 

the entire mobilization, creating an estimated $3,000 underpayment.

3

The 9th soldier did not have his overseas cost of living adjustment recollected and the 

continental U.S. cost of living adjustment paid instead, creating a $2 underpayment.

4

The basic allowance for housing previously paid under the “without dependents” rate was 

recollected concurrently with the April 2003 payment.
Appendix VIII

3423rd Military Intelligence Detachment New 

Haven, Connecticut

Page 108 GAO-04-911 Army Reserve Pay

Pay Problems While 

Deployed

As summarized in table 30, we identified a number of pay problems 

associated with active duty pays and allowances during the 3423rd Military 

Intelligence Detachment’s deployment while on active duty.

Table 30: Deployment Pay Problems

Source: GAO analysis. 

Note: Soldiers may have experienced pay problems with more than one type of pay or allowance or 

more than one type of problem per pay or allowance.

Two soldiers experienced individual problems with active duty basic pay, 

basic allowance for housing, and foreign language proficiency pay. 

Additionally, during their deployment to Fort Belvoir, the unit’s soldiers 

experienced pay problems related to the basic allowance for subsistence 

provided to enlisted soldiers. Ten of the 11 soldiers in the unit experienced 

some sort of overpayment, underpayment, or late payment associated with 

their deployment.

Two soldiers experienced problems relating to various pay entitlements 

during their deployment. One soldier received about $1,800 in active duty 

basic pay and basic allowance for housing payments more than 30 days 

after he was entitled to receive them because of a delay in processing his 

promotion. Another soldier did not receive his foreign language proficiency 

pay for 1 month of his deployment, creating a $100 underpayment. 

While we did not count any of the unit’s basic allowance for subsistence 

payments as pay problems because of incomplete documentation, seven 

enlisted soldiers in the unit experienced significant confusion over whether 

they received their correct basic allowance for subsistence payments. The 

unit’s enlisted soldiers initially received the regular basic allowance for 

subsistence until April 2003. At that time, all basic allowance for 

subsistence amounts paid to these soldiers were collected and a different 

Type of pay or 

allowance

Number of soldiers 

who received late 

payments

Number of soldiers 

who were underpaid

Number of soldiers 

who were overpaid

Active duty basic 

pay 1 0 0 

Basic allowance 

for housing 1 0 0

Foreign language 

proficiency pay 0 1 0
Appendix VIII

3423rd Military Intelligence Detachment New 

Haven, Connecticut

Page 109 GAO-04-911 Army Reserve Pay

basic allowance for subsistence rate, called “rations in kind not available,”5

was retroactively paid to these soldiers. In 2003, rations-in-kind-notavailable payments were about $20 more per month than the regular basic 

allowance for subsistence. 

However, finance personnel at the Intelligence and Security Command (the 

unit’s servicing finance office while deployed at Fort Belvoir) determined 

that even though the unit was issued orders stating that housing and mess 

would not be provided, the soldiers actually could eat at the Fort Belvoir 

mess. This resulted in (1) a collection in May of all of the previous rationsin-kind-not available payments to the unit’s soldiers except for payments 

for the initial mobilization time prior to arrival at Fort Belvoir, and (2) a 

retroactive repayment of the regular basic allowance for subsistence. 

Nevertheless, the enlisted soldiers continued to receive the rations-in-kindnot-available rate from mid-May through July 2003. In July 2003, Fort 

McCoy again initiated transactions to collect the rations-in-kind-notavailable payments and instead pay regular basic allowance for 

subsistence. The regular basic allowance for subsistence then continued 

for the rest of the unit’s mobilization, despite the fact that in June 2003, a 

committee of finance personnel at Fort Belvoir determined that it was not 

feasible for the soldiers to continue to use the mess facilities at Fort Belvoir 

because of mission requirements and transportation costs. 

Pay Problems 

Associated with 

Demobilization and 

Release from Active 

Duty

The soldiers of the 3423rd Military Intelligence Detachment began to 

demobilize in November 2003. As summarized in table 31, some soldiers 

continued to experience pay problems throughout their demobilization and 

release from active duty. 

5

According to DOD FMR Volume 7A, in general, “rations in kind not available” applies to 

enlisted soldiers on duty at a permanent station where a government mess is not available or 

is impracticable for the soldiers to use. 
Appendix VIII

3423rd Military Intelligence Detachment New 

Haven, Connecticut

Page 110 GAO-04-911 Army Reserve Pay

Table 31: Demobilization Pay Problems

Source: GAO analysis. 

Note: Soldiers may have experienced pay problems with more than one type of pay or allowance or 

more than one type of problem per pay or allowance.

Of the 10 soldiers who demobilized by the end of our audit period, 9 

continued to receive their active duty pay and entitlements past the date of 

separation from the Army. Two of the 9 overpaid soldiers continued to 

receive their entitlements for 28 days past the date of demobilization, while 

the remaining 7 soldiers were overpaid for 13 days. This resulted in $14,000 

in overpayments of active duty basic pay, basic allowance for housing, 

basic allowance for subsistence, and where applicable, the family 

separation allowance and foreign language proficiency pay.

When demobilizing through Fort Lee, the demobilization finance officials 

failed to change the pay status code in DJMS-RC to stop active duty pay for 

nine of the unit’s soldiers. The timing of the unit’s release from active duty 

made it more difficult to catch and correct these concerns, as the soldiers 

demobilized during the Thanksgiving holiday and a particularly severe 

snowstorm. The problem was eventually caught and corrected by the 94th

Regional Readiness Command when personnel examined the Unit 

Commander’s Pay Management Report in January 2004. Finance personnel 

at the 94th Regional Readiness Command reported that available pay 

reports indicated most of the soldiers’ overpayments have now been 

collected from the unit’s soldiers.

Type of pay or 

allowance

Number of soldiers 

who received late 

payments

Number of soldiers 

who were underpaid

Number of soldiers 

who were overpaid

Active duty basic 

pay 0 0 9

Basic allowance 

for housing 0 0 9 

Basic allowance 

for subsistence 0 0 9

Family separation 

allowance 0 0 8

Foreign language 

proficiency pay 0 0 1
Page 111 GAO-04-911 Army Reserve Pay

Appendix IX

431st Chemical Detachment Johnstown, 

Pennsylvania ApendxiIX

The 431st Chemical Detachment was called to active duty in support of 

Operation Enduring Freedom on January 16, 2003, for a period not to 

exceed 365 days. Ten soldiers who received orders to mobilize with the 

431st Chemical Detachment reported to their home station in Johnstown, 

Pennsylvania, on January 16, 2003. They underwent an initial SRP at their 

Johnstown home station. On January 19, 2003, they arrived at their 

designated mobilization station at Fort Dix, New Jersey, where they 

remained for the next month undergoing additional in-processing and 

training. Approximately 1 month later, around February 22, 2003, 8 of the 10 

soldiers from the 431st Chemical Detachment were deployed to Kuwait. 

Two soldiers from the unit left for Kuwait 1 month later, on March 20, 2003. 

The primary mission of the 431st Chemical Detachment while deployed in 

and around Kuwait was to track and report nuclear, biological, or chemical 

attacks so that soldiers in the area could take appropriate protective 

actions. After completing their mission, all 10 soldiers in the detachment 

left Kuwait on May 21, 2003. Upon returning to Fort Dix, the soldiers began 

the demobilization process and stayed at Fort Dix until the end of June 

2003. For the period of July 1 through July 15, 2003, all of the soldiers in the 

431st Chemical Detachment were placed on transitional leave. By July 15, 

2003, all of the soldiers had been released from active duty. A time line of 

key actions associated with the unit’s mobilization under Operation 

Enduring Freedom is shown in figure 10.
Appendix IX

431st Chemical Detachment Johnstown, 

Pennsylvania

Page 112 GAO-04-911 Army Reserve Pay

Figure 10: 431st Chemical Detachment’s Mobilization Time Line

As summarized in table 32, all 10 of the unit’s soldiers experienced some 

sort of pay problem, primarily associated with the overseas deployment 

phase of their active duty mobilization. Pay problems included 

overpayments, underpayments, and late payments of pay entitlements and 

incentives, such as family separation allowance, hostile fire pay, and 

hardship duty pay associated with their initial mobilization and deployment 

to Kuwait. 

Table 32: Pay Problem by Phase 

Source: GAO analysis.

Note: Soldier may have experienced pay problems in more than one phase.

In total, we identified estimated overpayments of about $12,000, 

underpayments of about $2,000, and late payments of about $1,000 

associated with the pay problems we identified. Of the estimated $12,000 in 

Phase Number of soldiers with pay problems

Mobilization 2 of 10

Deployment 10 of 10 

Demobilization 0 of 10 

Jan. 03 Feb. Mar. Apr. May June July Aug.

Soldiers report for active

duty at home station,

Johnstown, Pa. 

1/16/03

Soldiers report to

mobilization station,

Ft. Dix, N.J. 

1/19/03

Soldiers deployed

to Kuwait for nuclear,

biological and

chemical warning

and reporting duty 

2/22/03

Soldiers return

from Kuwait 

5/21/03

Soldiers demobilize at

Ft. Dix, N.J. 

7/15/03

1/19/03 to

2/21/03

Soldiers in-process

and participate in training

Source: GAO.
Appendix IX

431st Chemical Detachment Johnstown, 

Pennsylvania

Page 113 GAO-04-911 Army Reserve Pay

identified overpayments, we identified about $450 that was subsequently 

collected. Specifically, we determined that 

• 2 soldiers did not receive correct payments for up to 6 months after their 

mobilization date; and

• all 10 soldiers in the unit experienced underpayments, overpayments, or 

late payments associated with their tour of active duty deployment in 

Kuwait, including problems with hostile fire pay and hardship duty pay.

Mobilization Pay 

Problems

As summarized in table 33, we identified six soldiers with pay problems 

related to overpayments of family separation allowance during the unit’s 

initial mobilization to active duty. 

Table 33: Mobilization Pay Problems

Source: GAO analysis.

Upon receipt of individual mobilization orders, the soldiers reported to 

their unit’s home station in Johnstown, Pennsylvania, where they attended 

a SRP. The purpose of this SRP was to ensure that all soldiers had all 

required administrative paperwork, financial documents, and were 

physically fit for the ensuing mobilization. SRP finance officials were 

required to verify the soldiers’ supporting financial documentation and 

submit transactions with the necessary supporting documentation to the 

Reserve Pay Center at Fort McCoy to update the soldiers’ Master Military 

Pay Accounts to reflect their mobilized status. 

However, we identified several soldiers who did not have appropriate 

supporting documentation maintained in their files to justify their basic 

allowance for housing payments. One soldier appeared to be underpaid for 

the basic allowance for housing during the period that he was called to 

report to his home station for active duty. During the first pay period of his 

mobilization, he was paid at a lower basic allowance for housing rate. 

Subsequent payments for the basic allowance for housing throughout his 

Type of pay or 

allowance

Number of soldiers 

who received late 

payments

Number of soldiers 

who were 

underpaid 

Number of soldiers 

who were overpaid 

Family separation 

allowance 0 0 6
Appendix IX

431st Chemical Detachment Johnstown, 

Pennsylvania

Page 114 GAO-04-911 Army Reserve Pay

tour of duty were at a higher rate. We were not able to substantiate the 

higher amount through supporting documentation. The total basic 

allowance for housing payments to this soldier that could not be verified 

amounted to approximately $3,500.

Furthermore, we identified four other soldiers who received basic 

allowance for housing payments for which we were unable to obtain 

supporting documentation (i.e., DA Form 5960). Total basic allowance for 

housing payments for those four soldiers amounted to approximately 

$30,000.

In addition, we identified six soldiers in the 431st Chemical Detachment 

who received overpayments of the family separation allowance because 

they began receiving this entitlement upon reporting to their home station, 

even though that location was less than 50 miles from their homes and 

there was no evidence that they had an unreasonable commuting distance, 

as required by DOD FMR Volume 7A. Based on these criteria, the family 

separation allowance payments should not have started until the soldiers 

reached their mobilization station at Fort Dix, New Jersey. The family 

separation allowance overpayments to these soldiers totaled $150.

Pay Problems While 

Deployed

As summarized in table 34, we found that during the soldiers’ deployment 

to Kuwait, they experienced problems related to hardship duty pay and 

hostile fire pay. In addition, all of the soldiers received their combat zone 

tax exclusion benefit at least 1 month late.

Table 34: Deployment Pay Problems

Source: GAO analysis.

Note: Soldiers may have experienced problems with more than one type of pay or allowance.

Most soldiers did not receive the full amount of their hardship duty pay 

while deployed. Moreover, they continued to receive hardship duty pay 

well after they had returned to Fort Dix and demobilized. In total, all 10 

Type of pay or 

allowance

Number of soldiers 

who received late 

payments

Number of soldiers 

who were 

underpaid 

Number of soldiers 

who were overpaid 

Hostile fire pay 8 0 10

Hardship duty pay 1 10 10
Appendix IX

431st Chemical Detachment Johnstown, 

Pennsylvania

Page 115 GAO-04-911 Army Reserve Pay

deployed soldiers were incorrectly paid for either hardship duty or hostile 

fire pay. 

Soldiers of the 431st Chemical Detachment who deployed overseas had 

their identification cards scanned into the Tactical Personnel System upon 

landing at Kuwait International Airport. However, the unit’s hostile fire 

payments did not start until more than 2 months after the soldiers arrived 

in theater. Moreover, it took approximately 3 months from the time that the 

soldiers arrived to start receiving hardship duty payments. In fact, hardship 

duty payments were not processed until May 21, 2003, the same day that 

the soldiers left the designated hardship duty location. 

These delays resulted in the deployed soldiers being underpaid for most of 

their time while serving in the hardship duty location. Furthermore, 

hardship duty pay continued for another 7 months after the soldiers had 

left Kuwait. As a result, the soldiers continued to receive payments of 

hardship duty pay after their demobilization and release from active duty. 

Also, local Army area servicing finance officials did not terminate 

payments of hostile fire pay for the 2 months following the soldiers’ return 

to the United States. These two breakdowns in the process of paying the 

correct in-theater incentives to soldiers in a timely manner resulted in 

underpayments or late payments at the front end of the soldiers’ 

deployment and overpayments after the soldiers had returned. 

In addition, the unit administrator, who also deployed with the unit, stated 

that she had trouble finding anyone in the local Army area servicing finance 

office in Kuwait to assist with getting the unit’s hostile fire pay started. 

Since the 431st Chemical Detachment was working for the Marine Corps 

and was far away from the Army area servicing finance office, the unit was 

given the number at Fort Doha as its supporting finance office in Kuwait. 

The unit administrator made repeated telephone attempts to contact the 

finance office at Fort Doha but could only reach a recording that told her to 

call back later. This gap in a functioning supporting finance office for the 

deployed soldiers added to their frustration and confusion over in-theater 

pays. 

Upon the unit’s return to the U.S. in May 2003, most of the soldiers noticed 

that they continued to receive an additional $100 per month for 7 additional 

months. However, because their Leave and Earnings Statements were not 

clear as to what the payments represented, the soldiers contacted the unit 

administrator for assistance. The unit administrator determined that the 

payments represented erroneous hardship duty pay and tried to go through 
Appendix IX

431st Chemical Detachment Johnstown, 

Pennsylvania

Page 116 GAO-04-911 Army Reserve Pay

the unit’s chain of command to get the payments stopped, but received no 

response. The unit administrator also accessed the pay hotline at 888-PAYARMY, but was placed on hold for such a long time that she gave up. 

Pay Problems 

Associated with 

Demobilization and 

Release from Active 

Duty

All 10 soldiers of the 431st Chemical Detachment arrived at the 

demobilization station at Fort Dix, New Jersey, on May 21, 2003, to begin 

the SRP out-processing. The soldiers were stationed at Fort Dix for 

approximately 1 month. At the end of June 2003, the soldiers returned to 

their home station in Johnstown, Pennsylvania, where they spent a few 

days before being placed on transitional leave for the first 2 weeks in July 

2003. While on transitional leave, the soldiers continued to receive $250 per 

month for the family separation allowance even though they were not 

separated from their families. 
Page 117 GAO-04-911 Army Reserve Pay

Appendix X

Comments from the Department of Defense ApendxiX
Appendix X

Comments from the Department of Defense

Page 118 GAO-04-911 Army Reserve Pay
Appendix X

Comments from the Department of Defense

Page 119 GAO-04-911 Army Reserve Pay
Appendix X

Comments from the Department of Defense

Page 120 GAO-04-911 Army Reserve Pay
Appendix X

Comments from the Department of Defense

Page 121 GAO-04-911 Army Reserve Pay
Appendix X

Comments from the Department of Defense

Page 122 GAO-04-911 Army Reserve Pay
Appendix X

Comments from the Department of Defense

Page 123 GAO-04-911 Army Reserve Pay
Page 124 GAO-04-911 Army Reserve Pay

Appendix XI

GAO Contact and Staff Acknowledgments ApendxiXI

GAO Contact Geoffrey B. Frank, (202) 512-9518

Acknowledgments Staff making key contributions to this report include James D. Berry, Amy 

C. Chang, Francine M. DelVecchio, Jennifer L. Hall, Ken Hill, Kristi L. Karls, 

Jason M. Kelly, Tram Le, Julia C. Matta, Jonathan T. Meyer, Michelle 

Philpott, John J. Ryan, Jennifer F. Wilson, and Leonard E. Zapata.

(192109)
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