GAO

United States Government Accountability Office

A

Testimony

Before the House Committee on Government Reform, 

Subcommittee on Government Efficiency and Financial 

Management, House of Representatives

For Release on Delivery 

Expected at 2 p.m. EST

Tuesday, July 20, 2004

MILITARY PAY

Army Reserve Soldiers 

Mobilized to Active Duty 

Experienced Significant 

Pay Problems 

Gregory D. Kutz

Director, Financial Management and Assurance

Geoffrey B. Frank

Assistant Director, Financial Management and Assurance

John J. Ryan

Assistant Director, Office of Special Investigations

GAO-04-990T
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 pays 

were accurate and timely. GAO’s 

audit used a case study approach to 

focus on controls over three key 

areas: processes, people (human 

capital), and automated systems. 

We provided a draft report 

detailing the results of our audit 

findings to DOD for review and 

comment on July 9, 2004. The draft 

report contains a series of 15 

recommended actions. After 

receiving and considering DOD’s 

comments, we plan to finalize and 

issue the report. To its credit, DOD 

has already taken a number of 

actions in response to our report 

on the Army National Guard. 

www.gao.gov/cgi-bin/getrpt?GAO-04-990T.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Gregory D. 

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

Highlights of GAO-04-990T, a testimony to 

the Chairman, Committee on Government 

Reform, Subcommittee on Government 

Efficiency and Financial Management, 

House of Representatives 

July 2004

MILITARY PAY

Army Reserve Soldiers Mobilized to 

Active Duty Experienced Significant Pay 

Problems 
Page 1 GAO-04-990T 

Mr. Chairman and Members of the Subcommittee:

Thank you for the opportunity to discuss controls over payroll payments to 

mobilized Army Reserve soldiers. In November 2003, we reported on 

significant pay problems experienced by mobilized Army National Guard 

soldiers. We also testified on this matter before the full committee in 

January 2004. Because of the severity of the problems identified for these 

mobilized Army National Guard soldiers, you, as well as other requestors,1

asked us to examine the accuracy and timeliness of payroll payments to 

mobilized Army Reserve soldiers. 

In response to the September 11 attacks, many Army Reserve soldiers were 

activated to federal duty. A reported 98,000 Army Reserve soldiers—almost 

half of the soldiers in the Army’s selected reserve—had been mobilized to 

active duty at some point since September 2001. These forces were 

deployed on various important missions across the United States and 

overseas in support of Operations Noble Eagle, Enduring Freedom, and 

Iraqi Freedom. Their missions consisted mostly of combat support 

missions, such as supply, medical, and transportation operations, as well as 

military police and intelligence functions. Given the critical and continuing 

roles Army Reserve soldiers play in carrying out vital military and security 

missions, effective controls are needed to provide timely and accurate pays 

and allowances to these soldiers. Pay-related problems are not only costly 

and time-consuming to resolve, but result in financial hardship for soldiers 

and their families.

Because current Department of Defense (DOD) operations used to pay 

mobilized Army Reserve soldiers relied extensively on error-prone, manual 

transactions entered into multiple, nonintegrated systems, we did not 

statistically test controls in this area. Instead, we audited eight Army 

Reserve units as case studies to provide a detailed perspective on the 

nature of payroll deficiencies with respect to Army Reserve soldiers. Each 

of these units had mobilized, deployed, and demobilized at some time 

during the 18-month period from August 2002 through January 2004. 

Appendix I provides details on the 14 pays and allowances we audited for 

these case study units, as well as an explanation of the three phases of an 

1

Other requestors for this audit were Chairman Tom Davis of the House Committee on 

Government Reform, Chairman Christopher Shays of the Subcommittee on National 

Security, Emerging Threats and International Relations of the House Committee on 

Government Reform, and Congressman Ed Schrock. 
Page 2 GAO-04-990T 

active duty mobilization (mobilization, deployment, and demobilization). 

Appendix II provides further details on our scope and methodology.

We found that Army Reserve soldiers experienced very similar problems to 

those we identified for Army National Guard soldiers. We provided a draft 

report detailing the results of our audit findings to DOD for review and 

comment on July 9, 2004. The draft report contains a series of 15 

recommended actions. After receiving and considering DOD’s comments, 

we plan to finalize and issue the report. To its credit, DOD has recognized 

the seriousness of these problems and has already taken a number of 

actions in response to our report on the Army National Guard, which I will 

address later in this testimony.

Today, I will summarize the results of our work with respect to (1) the pay 

experiences of Army Reserve soldiers at our case study units and (2) 

deficiencies in the three key control areas of processes, people, and 

automated systems.

Summary Overall, 332 of the 348 (95 percent) Army Reserve soldiers from our eight 

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

mobilization. Of these soldiers, 256 soldiers received an estimated 

$247,000 in overpayments, 294 soldiers received about $51,000 in 

underpayments, and 245 soldiers received about $77,000 in late payments 

of their active duty pays and allowances. In addition, none of the 303 

soldiers who deployed to designated combat zones received their combat 

zone tax exclusion benefits on time. Some of these problems lingered 

unresolved for considerable lengths of time—some for over one year. A 

brief summary of the results of our audits at each of our case study units is 

provided in appendix III.

The consequences of inaccurate, late, and missing payments, and 

associated erroneous debts had a profound financial impact on individual 

soldiers and their families. At one unit, several soldiers told us that they 

had to borrow money from friends and relatives in order to pay their bills 

when they initially deployed overseas. Soldiers and their families were 

required to spend considerable time, sometimes while the soldiers were 

deployed in remote, hostile environments overseas, in repeated attempts to 

address concerns over their pay and allowances, and related tax benefits. 

Weaknesses in processes, human capital, and automated systems were 

associated with pay problems we identified. With respect to processes, 
Page 3 GAO-04-990T 

until DOD improves the cumbersome and complex processes used to pay 

mobilized Army Reserve personnel, the Army, the Defense Finance and 

Accounting Service (DFAS), and, most importantly, the mobilized Army 

Reserve soldiers, cannot be reasonably assured of timely and accurate 

payroll payments. These processes, involving potentially hundreds of DOD, 

Army, and Army Reserve organizations and thousands of personnel, were 

not well understood or consistently applied with respect to maintaining 

accountability over soldiers and their associated pays, allowances, and tax 

benefits as the soldiers moved through the various phases of active duty 

mobilization.

In the human capital area, we found weaknesses including (1) insufficient 

resources allocated to key unit-level pay administration responsibilities, 

(2) inadequate training related to existing policies and procedures, and 

(3) poor customer service. The lack of sufficient numbers of well-trained, 

competent military pay professionals can undermine the effectiveness of 

even a world-class integrated pay and personnel system. A sufficient 

number of well-trained military pay staff is particularly crucial given the 

extensive, cumbersome, and labor-intensive process requirements that 

have evolved to support active duty pay to Army Reserve soldiers. 

Automated systems weaknesses also contributed to the pay problems we 

found. For example, nonintegrated systems and limitations in system 

processing capabilities further constrained DOD’s ability to provide a most 

basic service to these personnel, many of whom were serving under 

difficult conditions in the Middle East. The Defense Joint Military Pay 

System-Reserve Component (DJMS-RC)—originally designed to process 

payroll payments to personnel on weekend drills, on short periods of fewer 

than 30 days of annual active duty, or for training—is now being used to 

pay Army Reserve soldiers for up to 2 years. Army officials told us that the 

system is now stretched to the limits of its functionality. DFAS has 

established “workarounds” intended to compensate for the DJMS-RC 

system limitations, which further compound the human capital issues. 

Overall, we found the current stove-piped, nonintegrated systems were 

labor-intensive and required extensive error-prone manual data entry and 

reentry. 
Page 4 GAO-04-990T 

Case Studies Illustrate 

Significant Pay 

Problems

We found significant problems with the active duty pays, allowances, and 

related tax benefits received by the soldiers at the eight Army Reserve units 

we audited. The eight units we audited were:

• 824th Quartermaster Company – Ft. Bragg, N.C.

• 965th Dental Company – Seagoville, Tex.

• 948th Forward Surgical Team – Southfield, Mich.

• 443rd Military Police Company – Owings Mills, Md.

• FORSCOM Support Unit – Finksburg, Md.

• 629th Transportation Detachment - Ft. Eustis, Va.

• 3423rd Military Intelligence Detachment – New Haven, Conn.

• 431st Chemical Detachment – Johnstown, Pa.

These units were deployed to help perform a variety of critical domestic 

and overseas combat support operations, including supply, medical, and 

transportation operations, as well as military police and intelligence 

functions.

For the eight units we audited, we found numerous and varied pay 

problems. For those problems that we could quantify,2

 we identified about 

$375,000 in errors. These problems consisted of underpayments, 

overpayments, and late payments that occurred during all three phases of 

Army Reserve mobilization to active duty. For the 18-month period from 

August 2002 through January 2004, we identified overpayments, 

underpayments, and late payments at the eight case study units estimated 

2

Because of the lack of supporting documents, we were unable to determine the amounts 

involved for some of the active duty entitlements we audited and consequently, did not 

count these as errors. In addition, because our objective was to provide perspective on our 

case study units’ pay experiences and not to make exact calculations of active duty 

entitlements, we likely did not identify all of the pay problems related to the active duty 

mobilizations of our case study units. 
Page 5 GAO-04-990T 

at $247,000, $51,000, and $77,000, respectively.3 Overall, we found that 332 

of the 348 soldiers (95 percent) from our case study units had at least one 

pay problem associated with their mobilization to active duty. Table 1 

shows the number of soldiers at our case study units with at least one pay 

problem during each of the three phases of active duty mobilization.

Table 1: Pay Problems at Eight Case Study Units

Source: GAO analysis.

Some of the pay problems we identified included the following.

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

Company from North Carolina improperly received hardship duty pay, 

totaling about $30,000, for up to 5 months after departing from their 

overseas duty locations.

3

 For the pay problems we identified, we defined over- and underpayments as those pays or 

allowances for mobilized Army Reserve soldiers during the period from August 1, 2002 

through January 31, 2004, that were in excess (overpayment) or less than (underpayment) 

the entitled payment. We considered as late payments any active duty pays or allowances 

paid to the soldier over 30 days after the date on which the soldier was entitled to receive 

such pays or allowances. As such, these payments were those that, although late, addressed 

a previously unpaid entitlement. We did not include any erroneous debts associated with 

these payments as pay problems. In addition, we used available data to identify about 

$19,000 in collections against identified overpayments through February 2004. We did not 

attempt to estimate payments received against identified underpayments. We have provided 

documentation for the pay problems we identified to cognizant DOD officials for further 

research to determine whether additional amounts are owed to the government or the 

soldier.

Army Reserve unit

Soldiers with pay problems

Mobilization Deployment Demobilization

824th Quartermaster Company, N.C. 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 6 GAO-04-990T 

• Nine soldiers of the 824th Quartermaster Company improperly received 

family separation allowance payments totaling an estimated $6,250 

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

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

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

arrived at their designated duty locations overseas until about 3 months 

after their arrival.

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

their overseas housing allowance associated with their deployment in 

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

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

their active duty tour ended.

• A soldier with the 443rd MP Company who demobilized from an active 

duty deployment in August 2002, subsequently received erroneous 

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

erroneous payments were not detected and stopped by DOD. The 

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

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

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

and antibiotic inoculations he received in preparation for his overseas 

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

and hardship duty payments after his return from Kuwait. 

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

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

associated with his active duty mobilization.

• Two soldiers received tens of thousands of dollars in active duty pays 

and allowances over the course of a year or more even though they 

never mobilized with their units.

• Nearly, all of the soldiers in the seven case study units that deployed 

overseas experienced late payments related to their combat zone tax 

exclusion benefit.

In some cases, the problems we identified may have distracted these 

professional soldiers from mission requirements, as they spent 

considerable time and effort while deployed attempting to address these 
Page 7 GAO-04-990T 

issues. Further, these problems likely had an adverse effect on soldier 

morale.

Mobilized Army 

Reserve Pay Process, 

Human Capital, and 

Systems Deficiencies 

Deficiencies in three key areas—process, human capital, and automated 

systems—were at the heart of the pay problems we identified. Process 

deficiencies included weaknesses in (1) tracking and maintaining 

accountability over soldiers as they moved from location to location to 

carry out their mobilization orders, (2) carrying out soldier readiness 

programs (SRPs)—primarily at the mobilization stations, (3) distributing 

and reconciling key pay and personnel reports during mobilizations, and 

(4) determining eligibility for the family separation allowance associated 

with active duty mobilizations. Human capital weaknesses included 

insufficient resources, inadequate training, and poor customer service. 

Finally, the automated systems supporting pays to mobilized Army Reserve 

soldiers were ineffective because they were not integrated and had limited 

processing capabilities.

Process Deficiencies A substantial number of payment errors we found were caused, at least in 

part, by design weaknesses in the extensive, complex set of processes and 

procedures relied on to provide active duty pays, allowances, and related 

tax benefits to mobilized Army Reserve soldiers. Complex, cumbersome 

processes, developed in piecemeal fashion over a number of years, provide 

numerous opportunities for control breakdowns. We identified issues with 

the procedures in place for both determining eligibility and processing 

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

These process weaknesses involved not only the finance and military pay 

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

operational and personnel functions as well.

Flaws in Maintaining 

Accountability over Soldiers 

throughout Mobilization

Mobilization policies and procedures did not provide the Army with 

effective accountability and visibility over soldiers’ locations to provide 

reasonable assurance of accurate and timely payments to mobilized Army 

Reserve soldiers. Reserve soldiers pass through four main transitions 

during the course of a typical mobilization cycle, including transitions from 

(1) their home stations to their designated mobilization station, (2) the 

mobilization station to their assigned deployment location, (3) the 

deployment location to their demobilization station, and (4) the 

demobilization station back to their home station.
Page 8 GAO-04-990T 

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

tied to soldiers’ locations. For example, timely data regarding the dates 

soldiers arrive at and leave designated locations are essential for accurate 

and timely hardship duty pays, allowances, and related combat zone tax 

exclusion benefits. To effectively account for soldiers’ movements during 

these transitions, unit commanders, unit administrators, as well as 

individuals assigned to personnel and finance offices across the Army 

Reserves, Army mobilization stations, and in theater Army locations must 

work closely and communicate extensively to have the necessary data to 

pay Army Reserve soldiers accurately and on time throughout their active 

duty tours.

However, we identified several critical flaws in the soldier accountability 

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

identified flawed procedures for accountability over (1) soldiers that are 

supposed to go through processing for mobilization and demobilization, 

and (2) dates of soldiers’ arrival to and departure from designated hardship 

duty deployment locations.

Mobilization Station 

Accountability

We found that effective procedures were not in place to monitor and 

validate the propriety of active duty pays to mobilized Army Reserve 

soldiers. The accountability controls in place at Army mobilization stations 

responsible for unit mobilization and demobilization processing were not 

effective in detecting any missing Army Reserve soldiers assigned to units 

passing through those locations. As a result of these control design flaws, 

several soldiers received up to a year of active duty pay based on issued 

mobilization orders, even though the soldiers never reported for active 

duty. 
Page 9 GAO-04-990T 

Deployment Accountability Flaws in soldier accountability procedures associated with overseas 

deployment locations resulted in payment errors for almost all of the 

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

underpaid location-based incentives upon their initial arrival into 

designated hardship duty and hostile fire locations. Subsequently, they 

were often overpaid these same location-based entitlements because these 

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

designated overseas locations. Army local area servicing finance locations 

are to obtain documentation—flight manifests, for example--showing 

soldier arrival and departure date information to use as a basis for starting 

and stopping location-based pays, allowances, and associated tax benefits. 

However, despite diligent efforts by Army local area servicing finance 

officials to develop and maintain accurate documentation showing soldiers 

at the designated deployment locations, we found indications that this 

information was often not timely or accurate for the soldiers at our case 

study units. 

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

extraordinary, labor-intensive workaround to ensure that necessary 

Illustrative Cases: Flaws in Soldier Location Accountability Procedures Resulted 

in Erroneous Active Duty Payments

• A soldier assigned to the 965th Dental Company received a mobilization order, but 

based on a discussion with his commander about a medical condition, was told he 

would be transferred to a unit that was not mobilizing. However, the unit commander 

did not provide a list of the unit’s mobilizing soldiers to the UPC and did not provide any 

information on this soldier indicating that he would not be reporting to the unit’s 

mobilization station. Consequently, neither the UPC nor the mobilization station 

personnel had any means of detecting that a soldier had not mobilized with his unit 

and therefore was improperly receiving active duty pays. As a result, the soldier’s pay 

was started on February 11, 2003, and continued through February 2004, resulting in 

more than $36,000 in overpayments. This improper active duty pay was stopped only 

after we identified the error and notified Army officials. 

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

active duty pay for almost a year even though, according to the soldier, he was not 

mobilized to active duty during that time. Subsequent inquiry determined that, at least 

on paper, the soldier was transferred from Maryland’s 443rd Military Police Company to 

Pennsylvania’s 307th Military Police Company in February 2003, and was mobilized to 

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

for the soldier were initiated based on these March 3, 2003, orders. After the 307th

Military Police Company demobilized in February 2004, the soldier’s mobilization order 

was revoked. Nonetheless, available pay documentation indicated the soldier 

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

allowances for subsistence, housing, and family separation totaling an estimated 

$52,000 through May of 2004.
Page 10 GAO-04-990T 

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

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

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

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

Reserve soldiers’ actual locations and their related pay entitlements while 

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

deployed soldiers overseas. For example:

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

Company case study unit were underpaid their hardship duty pay when 

they first arrived at the designated location. Subsequently, almost all 

solders in the unit were overpaid their hardship duty pay--most for up to 

5 months--after they left the designated location, and some continued to 

receive these payments even after they were released from active duty. 

In total, we identified about $30,000 in improper hardship duty 

payments received by this unit’s soldiers.

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

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

hardship duty location.

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

Detachment received hardship duty pay for the months they arrived and 

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

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

overseas deployment locations. 

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 pays requiring manual input every month. 
Page 11 GAO-04-990T 

The debts created by overpayment of these location-based payments 

placed an additional administrative burden on both the soldiers and the 

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

Lack of Clear Pay Review 

Procedures at Mobilization 

Stations 

Some of the pay problems we found were associated with flawed 

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

SRP process carried out at Army mobilization stations. Procedures 

followed by Army mobilization station finance officials during the SRP 

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

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

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

While finance officials at some mobilization stations carried out one-on-one 

detailed pay reviews with each soldier, as well as a unit-wide finance 

briefing, finance officials at other mobilization stations carried out less 

thorough procedures. At two mobilization stations, finance officials 

provided only a unit-wide briefing and did not meet individually with the 

soldiers to conduct a detailed review of their military pay accounts. We 

found far fewer pay problems (excluding location-based pays) for the 

soldiers who went through the individual detailed pay reviews during the 

SRP than the soldiers who received less thorough or no individual reviews 

of their pay entitlements at their mobilization stations.

Inadequate Processes for 

Key Pay and Personnel 

Reconciliation Reports

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

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

duty payments. As discussed previously, we identified several cases in 

which such improper payments continued for over a year without 

detection. 

The Army Reserve pay review and validation procedures were initially 

designed for pays to Army Reserve soldiers performing weekend drills, 

annual training, and short-term active duty mobilizations of 30 days or 

fewer. Correspondingly, pay and personnel reconciliation processes in 

place during our audit were focused primarily on requirements for unit 

commanders to reconcile data for reserve soldiers while they are in an 

inactive (weekend drilling only) status. 

Specifically, current Army Reserve procedures require that unit 

commanders review a key report, the Unit Commanders Pay Management
Page 12 GAO-04-990T 

Report,4 for soldiers in their units performing weekend drill activities, for 

short-term active duty mobilization activities, and in planning for lengthy 

active duty mobilizations. However, these procedures do not clearly 

require unit commanders to review this key report for Army Reserve 

soldiers in subsequent phases of their active duty mobilization tours. The 

unit commander at one of our case study units, the 965th Dental Company, 

stated that he did not believe that a review and reconciliation was needed. 

Instead, he stated he relied on the unit’s soldiers to identify any pay 

problems. However, in light of the extensive manual entry, and 

nonintegrated systems currently relied on for mobilized Army Reserve 

soldiers’ pay, the timely and complete reconciliation of comparable pay and 

personnel data in these key reports can serve as an important detective 

control to identify any pay errors shortly after they have occurred. 

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

receive these reports. Distribution of these reports is particularly 

problematic for units deployed in remote locations overseas. Unit 

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

these key reports while deployed. Had those reports been available and 

reconciled, they could have been used to identify and correct improper 

active duty payments, such as the large, erroneous active duty 

overpayments discussed previously. 

Family Separation 

Allowance Eligibility 

Requirements Are Not Clear 

The existing procedures for applying eligibility requirements for activated 

Army Reserve soldiers’ family separation allowance payments were not 

clear. These flawed procedural requirements for paying family separation 

allowance led to varying interpretations and pay errors for Army Reserve 

soldiers at the implementing Army home stations and mobilization stations.

DOD policy clearly provides that soldiers are entitled to receive family 

separation allowance if their family does not reside near the duty station, 

which is generally defined as within 50 miles.5

 However, DOD guidance 

4

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

the unit. 

5

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

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

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

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

reasonable.
Page 13 GAO-04-990T 

and the form for implementing this policy were not clear because they did 

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

the soldier’s duty station. Specifically, they did not require soldiers to 

certify that (1) they live over 50 miles away from the unit’s home station 

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

soldier’s required commute to the duty station is not reasonable. As a 

result, we found inconsistencies as to when soldiers received family 

separation allowance. For example, soldiers from the 824th Quartermaster 

Company received family separation allowance payments while stationed 

at their Ft. Bragg home station even though they lived within 50 miles of the 

base and no documentation was available showing the unit commander 

authorized an exception. In contrast, 14 soldiers with Maryland’s 443rd

Military Police Company who lived over 50 miles away from their home 

station, including several soldiers from Puerto Rico, did not receive family 

separation allowance based on their arrival at their home station. 

Human Capital Issues Human capital weaknesses also contributed to the pay problems mobilized 

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

Standards for Internal Control in the Federal Government state that 

effective human capital practices are critical to establishing and 

maintaining a strong internal control environment, including actions to 

ensure that an organization has the appropriate number of employees to 

carry out assigned responsibilities. Even in an operational environment 

supported by a well-designed set of policies and procedures and a 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 numerous 

DOD components spread across the world that are now involved in 

carrying out the extensive coordination, manual intervention, and 

reconciliations required to pay mobilized Army Reserve soldiers.

Well-trained pay-support personnel throughout various DOD components 

are particularly critical given the extensive, cumbersome, and 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 
Page 14 GAO-04-990T 

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

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

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

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

observed the following human capital weaknesses in the current processes 

and organizational components now relied on to pay mobilized Army 

Reserve soldiers: (1) inadequate resources provided to support unit-level 

pay management, (2) inadequate pay management training across the 

spectrum of pay-support personnel, and (3) customer service breakdowns. 

Inadequate Resourcing for 

Critical Unit Administrator 

Positions 

Vacancies and turnover in key unit administrator positions, and the 

deployment of unit administrators to fill other military requirements, 

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

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

with our case study units. In addition to pay administration 

responsibilities, unit administrator duties include duties for personnel and 

supply operations. We were told that vacancies in unit administrator 

positions were difficult to fill and often remained vacant for many months 

because Army policy requires the individual filling the unit administrator 

position have a “dual” status, which means the individual must perform 

duties both in the capacity of an Army Reserve military occupation 

specialty as well as unit administrator.

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

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

that the 948th Surgical Team had difficulty filling the vacancy because of its 

dual status—i.e., the individual must have (1) a medical background to 

meet the unit’s mission requirements, and (2) knowledge and experience 

performing the personnel, payroll, and supply tasks of a unit administrator. 

In the absence of the unit administrator, the unit commander assigned a 

sergeant with limited knowledge of pay entitlements and DJMS-RC 

processing requirements to help carry out some of the unit administrator’s 

pay management duties. The sergeant told us that during a 2-week period 

during late April 2003, she spent about 100 hours attempting to resolve the 

unit’s pay problems, while concurrently carrying out her duties as a health 

specialist.

Inadequate Pay Management 

Training

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

critical unit administrator positions, we identified instances in which the 

lack of adequate training on pay management duties and responsibilities 

provided to unit administrator and finance office personnel contributed to 

soldiers’ pay problems. Further, we found that unit commanders did not 
Page 15 GAO-04-990T 

always support these important pay management duties. Our Standards 

for Internal Control in the Federal Government provide that management 

should establish and maintain a positive and supportive attitude toward 

internal controls and conscientious management.

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

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

covering unit administrator pay management responsibilities and that the 

training they did receive did not prepare them for mobilization issues 

associated with supporting and processing active duty pays. Moreover, few 

of these unit administrators had completed all of the required training on 

active duty pays and allowance eligibility and processing requirements. 

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

including working with the unit soldiers to obtain critical pay support 

documentation, maintaining copies of pay support records, providing paytransaction support documentation to the UPC, and reviewing pay reports 

for errors. Without adequate training, unit administrators may not be 

aware of these critical pay management responsibilities. 

Lack of training contributed to a number of pay errors that unit 

administrators could have prevented:

• At the 824th Quartermaster unit, while our audit of unit pay reports 

showed that the unit administrator reviewed the documents, we saw no 

indication that she used this information to identify and stop an 

overpayment of $18,000 to one soldier in her unit. As a result, the 

erroneous pay was allowed to continue for another 5 months.

• Several soldiers with the 965th Dental Company did not receive 

promotion pay increases and other entitlements for over 2 months 

because the unit administrator failed to process necessary pay-support 

documentation--available at the time of unit’s initial SRP--until after the 

unit was deployed on active duty. 

• At the 443rd Military Police Company, the unit’s finance sergeant6 who 

was assigned pay management responsibilities did not gather and 

submit current documentation needed to support active duty pays, such 

6

For this unit, the unit administrator did not deploy with the unit. Consequently, the unit’s 

pay management responsibilities were assigned to a finance sergeant deployed with the 

unit.
Page 16 GAO-04-990T 

as documents showing soldiers’ marital status and number of 

dependents. As a result, soldiers from this unit experienced 

overpayments, underpayments, and late payments associated with their 

housing and cost of living allowances.

Inadequate training of military pay technicians at Army finance offices at 

mobilization and demobilization stations, and at area servicing finance 

locations (for deployed soldiers), also adversely affected the accuracy and 

timeliness of pays to mobilized Army Reserve soldiers. Few of the military 

finance personnel responsible for processing pay information at the 

mobilization and demobilization stations and at the area servicing finance 

office for deployed units had formal training on DJMS-RC pay procedures. 

Instead, several of the military pay technicians and supervisors we talked 

to at the Army mobilization and demobilization stations told us they relied 

primarily on on-the-job training to become knowledgeable in the pay 

eligibility and pay transaction processing requirements for mobilized Army 

Reserve soldiers. For example, military pay personnel at the Defense 

Military Pay Office at Ft. Eustis informed us that instead of receiving 

formal training on active duty pay entitlements or DJMS-RC pay 

processing, they became knowledgeable in mobilization and 

demobilization pay processing procedures by processing hundreds of 

soldiers within 2 to 3 weeks of being assigned these responsibilities. They 

also said they contacted full-time civilians in the finance office, as well as 

UPC and DFAS officials, by telephone for assistance.

Also, few of the Army finance personnel at overseas area servicing finance 

locations received formal training on Army Reserve pay eligibility and 

DJMS-RC processing requirements before assuming their duties. These 

personnel had primary responsibility for supporting active duty payments 

to mobilized Army Reserve soldiers deployed overseas, including 

responsibility for processing location-based active duty payments to these 

soldiers. Camp Arifjan was the Army location assigned responsibility for 

processing pay to mobilized Army Reserve soldiers deployed in Kuwait and 

Iraq during 2003. Officials from the 336th Command, the Army command 

with oversight responsibility for Camp Arifjan, confirmed that while 

finance personnel at Camp Arifjan received training in the pay eligibility 

and pay processing procedures for active duty Army soldiers, they were not 

adequately trained in pay eligibility and processing procedures for Army 

Reserve soldiers. 

We were told of instances in which Army finance personnel were unable to 

help Reserve soldiers resolve their pay problems. For example, the 948th
Page 17 GAO-04-990T 

Surgical Team contacted an Army finance unit located in Kandahar, 

Afghanistan, to request its assistance in resolving the unit’s pay problems. 

However, the finance personnel at that location were unable to help resolve 

the 948th Surgical Team’s pay problems because they said they had not had 

training in this area and were not familiar with DJMS-RC processing 

requirements and procedures. All 20 soldiers with the 948th Surgical unit 

experienced pay problems associated with their location-based hardship 

duty payments, which required manual processing every month by the 

unit’s area servicing finance office. 

Further, we saw little evidence that the unit commanders of our case study 

units received any training on their role in supporting their unit 

administrators in these important pay management responsibilities. For 

example, at one of our case study units, the 965th Dental Company, the unit 

commander informed us that he did not support the review of pay 

management reports because soldiers had the capability to review their pay 

online and would use this capability to identify and report any pay 

problems. However, as discussed earlier, while we identified numerous 

instances in which soldiers received overpayments or had other pay 

problems, we saw little indication that these soldiers found and reported 

these problems prior to our audit. Moreover, we identified two instances in 

which soldiers did not report that they had received tens of thousands of 

dollars in improper active duty payments. 

Customer Service 

Breakdowns

Our audit work at eight case study units identified significant soldier 

concerns with both the level and quality of customer service they received 

related to their active duty pays, allowances, and tax benefits. The soldiers’ 

concerns centered around three distinct areas: (1) the accessibility of 

customer service, (2) the ability of customer service locations to help 

soldiers, and (3) the treatment of soldiers requesting assistance. Servicing 

soldiers and their families with pay inquiries and problems is particularly 

critical in light of the error-prone processes and limited automated system 

processing capabilities. Ultimately, pay accuracy is left largely to the 

individual soldier. 

Although there are several sources that soldiers can turn to for pay issue 

resolution, including an online system and a toll free phone pay assistance 

number, soldiers at our case study units experienced problems in accessing 

these sources. Mission requirements and the distance between 

deployment locations and field finance offices often impaired the soldiers’ 

ability to utilize the in-theater customer service centers. Also, soldiers did 
Page 18 GAO-04-990T 

not always have Internet and telephone access to utilize sources through 

these media. The lack of Internet access for deployed soldiers was 

particularly problematic because it limited soldiers’ access to pay, 

allowance, and tax benefit data reflected in their leave and earnings 

statements. Lacking leave and earnings statements, soldiers had no means 

to determine the propriety of their active duty payments. For example, 

soldiers with the 948th Surgical Team told us that their inability to access 

the leave and earnings statements adversely affected their overall morale. 

Even when mobilized reservists were able to contact customer service 

sources, their pay issues often continued because the office they were 

instructed to contact was unable to address their inquiry or correct their 

problem. In some cases, customer service sources failed to help soldiers 

because they lacked an understanding of what was needed to fix the 

problems. When representatives of the 948th Surgical Team contacted their 

parent company for help in correcting pay problems, personnel with the 

parent company informed them that they could not fix the unit’s pay 

problems because they (incorrectly) believed that the unit was paid 

through the Army’s active duty pay system. Soldiers at other units were 

redirected from one source to another. Soldiers were not aware of which 

sources could address which types of problems, and more significantly, the 

customer service sources themselves often did not know who should 

correct a specific problem.

An Army Reserve major’s experience illustrates the time and frustration 

that is sometimes involved with soldiers’ attempts to obtain customer 

service for correcting errors in active duty pays, allowances, and related 

tax benefits.
Page 19 GAO-04-990T 

Finally, soldiers expressed concern about the treatment they sometimes 

received while attempting to obtain customer service. Soldiers expressed 

concern that certain customer service representatives did not treat soldiers 

requesting assistance respectfully. For example, one soldier who 

attempted to make corrections to his Certificate of Discharge or Release 

from Active Duty (DD 214) informed us that mobilization station personnel 

told him that the citations and dates of service he was trying to add “didn’t 

matter.” Additionally, some soldiers told us that when they raised concerns 

about the quality of customer service they received with respect to their 

pay inquiries and concerns, they were sometimes ignored. For example, 

soldiers with Connecticut’s 3423rd Military Intelligence Detachment told us 

they contacted the local Inspector General because they believed that 

finance personnel at their deployment location had both actively tried to 

impair the payment of their active duty entitlements and had tried to 

intimidate and discourage the unit’s soldiers from seeking help elsewhere. 

However, they were not aware of any action taken as a result of their 

concerns. 

Systems Problems Weaknesses in automated systems contributed significantly to the 

underpayments, overpayments, and late payments we identified. These 

weaknesses consisted of (1) nonintegrated systems with limited system 

Individual Case Illustration: Extensive, Time-consuming Action Required to 

Resolve Pay Issue

• A soldier from Maryland was mobilized in March 2003 from the Army’s Individual 

Ready Reserve to active duty to serve as a liaison between the Army and Air Force to 

help coordinate ground and air combat operations in Iraq. After completing his 2-

month active duty tour and returning to an inactive reserve status in May 2003, he 

contacted Army officials to inform them that he was continuing to receive active duty 

pays and volunteered to immediately repay these erroneous overpayments. In July 

2003, he wrote a check for $6,150.75 after receiving documentation showing his debt 

computation. However, he continued to receive Leave and Earnings Statements 

indicating that he had an outstanding debt. He contacted his Army demobilization 

finance office to determine how to get the erroneous outstanding debt removed from 

his pay records. After being referred by officials at that location to various DFAS 

locations (including once being told, “There is nothing more I can do for you.”), he 

contacted us for assistance. After DFAS recomputed the soldier’s debt as a result of 

our inquiry, the soldier was informed that he owed an additional $1,140.54, because 

the original debt computation did not fully consider the erroneous combat zone tax 

exclusion benefits he received. Overall, he spent nearly a year after his 2-month active 

duty tour ended, and about 20 phone calls, faxes, and letters in contacting at least 

seven different DOD representatives at five different customer service centers to 

correct active duty pay and allowance overpayments and associated combat tax 

exclusion benefit problems. 
Page 20 GAO-04-990T 

interfaces and (2) limited processing capabilities within the pay system. 

The Army and DFAS rely on the same automated pay system to authorize 

and process active duty pays for Army Reserve soldiers as they use for 

Army National Guard soldiers. In addition, similar to the Army National 

Guard, the Army Reserve’s personnel and order-writing systems are not 

integrated with the pay system. Consequently, many of the systems 

problems experienced by mobilized Army Reserve soldiers are similar to 

those that we identified in our report on pay issues associated with 

mobilized Army National Guard soldiers.7

 

Because of the automated systems weaknesses, both Army Reserve and 

active Army personnel must put forth significant manual effort to 

accurately process pays and allowances for mobilized Army Reserve 

soldiers. Moreover, to compensate for the lack of automated controls over 

the pay process, both DFAS and the Army place substantial reliance on the 

review of pay reports to identify pay errors after the fact. Part of this 

reliance includes the expectation that soldiers review their own leave and 

earnings statements, even though these statements do not always provide 

clear explanations of all payments made. Finally, because of DJMS-RC’s 

limitations, the system cannot simply stop withholding taxes for soldiers in 

designated combat zone locations. Instead, for these soldiers, the system 

withholds taxes and then pays the soldiers the amount that was withheld at 

least a month after the soldiers were first entitled to receive this benefit. 

Automated Systems Are Not 

Integrated and Have Limited 

Interfaces

The key pay and personnel systems involved in authorizing, entering, 

processing, and paying mobilized Army Reserve soldiers are not integrated 

and have only limited interfaces. Figure 1 provides an overview of the key 

systems involved in authorizing, entering, processing, and making active 

duty payments to mobilized Army Reserve soldiers.

7

U.S. General Accounting Office, Military Pay: Army National Guard Personnel Mobilized 

to Active Duty Experienced Significant Pay Problems, GAO-04-89 (Washington, D.C.: Nov. 

13, 2003).
Page 21 GAO-04-990T 

Figure 1: Key Systems Involved in Authorizing, Entering, Processing, and Paying Mobilized Army Reserve Soldiers Are Not 

Effectively Integrated or Interfaced 

Note:

1 – Regional Level Application System (RLAS)

2 – Tactical Personnel System (TPS)

3 – Transition Processing (TRANSPROC) System

4 – Defense Military Pay Office (DMO)

5 – Total Army Personnel Database – Reserve (TAPDB-R)

6 – Defense Joint Military Pay System – Reserve Component (DJMS-RC)

DMO4

DJMS-RC6 TAPDB-R5 Reconciliation

Pay, allowances,

Leave and Earnings

Statements, etc. generated

for mobilized soldiers

Electronic

data

Source: GAO.

Hard copy of

personnel

manifests

RLAS1 TPS2

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

TRANSPROC3

orders personnel
Page 22 GAO-04-990T 

Lacking either an integrated or effectively interfaced set of personnel and 

pay systems, DOD must rely on error-prone, manual data entry from the 

same source documents into multiple systems. We found numerous 

instances in which pay-affecting personnel information was not entered 

promptly into the pay system, resulting in numerous pay errors. 

We found several instances in which soldiers that were promoted while on 

active duty did not receive their pay raises when they should have because 

the promotion information was not promptly recorded in DJMS-RC. For 

example, one Army Reserve soldier’s promotion was effective on July 1, 

2003. However, the soldier’s promotion was not processed in the pay 

system until October 2003, which delayed an increase in both his basic pay 

and basic allowance for housing. The soldier received his promotion pay, 

including back pay, in late October 2003, resulting in late payments totaling 

over $2,700.

Lacking an effective interface between pay and personnel systems, DOD 

and the Army must rely on after-the-fact detective controls, such as pay and 

personnel system data reconciliations to identify and correct pay errors 

occurring as a result of mismatches between personnel and pay system 

data. However, even these reconciliations will not identify soldiers that are 

being paid for active duty while in inactive status because the Army 

Reserve personnel system currently does not maintain data to indicate 

whether or not soldiers are on active duty.

Limited Automated 

Processing Capabilities 

DJMS-RC was not designed to pay Army Reserve soldiers for active duty 

tours longer than 30 days. According to DOD officials, requiring DJMS-RC 

to process various types of pays for active duty tours that exceed 30 days 

has stretched the system’s automated processing capabilities. Because of 

the system’s limitations, the Army and DFAS were required to make 

monthly error-prone manual inputs for certain active duty pays, such as 

hardship duty pay. We found many instances in which these manual inputs 

resulted in payment errors. Moreover, because of the way in which 

hardship duty pay was processed and reported on soldiers’ leave and 

earnings statements, mobilized Army Reserve soldiers could not always 

determine whether they received all of their entitled pays and allowances. 

In addition, because of current processing limitations, DJMS-RC cannot 

process a required tax exclusion promptly for soldiers in a combat zone. 

This processing limitation has resulted in late payments of this benefit for 

all entitled Army Reserve soldiers. 
Page 23 GAO-04-990T 

Hardship Duty Pay During our audit period, we found numerous errors in hardship duty pay as 

a result of a DJMS-RC processing limitation that required the use of a 

miscellaneous payment code for processing this type of pay. Because of 

the use of this miscellaneous code instead of a code specifically for 

hardship duty pay, this pay could not be automatically generated on a 

monthly basis once a soldier’s eligibility was established. Therefore, 

hardship duty pay had to be manually entered every month for eligible 

soldiers. 

We found that nearly all soldiers in our case studies who were eligible for 

hardship duty pay experienced problems with this pay, including late 

payments, underpayments, and overpayments. For example, the 965th

Dental Company’s soldiers from Seagoville, Texas, experienced both 

underpayments and overpayments. Specifically, all 85 soldiers deployed to 

Kuwait were underpaid a total of approximately $8,000 for hardship duty 

pay they were entitled to receive during their deployment overseas. 

Subsequently, 76 of the unit’s soldiers were overpaid a total of almost 

$47,000 because they continued to receive hardship duty payments for 

more than 6 months after they had left the theater. 

Both underpayments and overpayments, as well as late payments, of 

hardship duty pay occurred largely because of the reliance on manual 

processing of this pay every month. The errors often occurred because 

local area finance personnel did not receive accurate or timely 

documentation such as flight manifests or data from the Tactical Personnel 

System indicating when soldiers arrived or left the theater. As a result, 

finance personnel did not start these payments on time, and did not stop 

these payments as of the end of the soldiers’ active duty tour date recorded 

in DJMS-RC. 

Use of the miscellaneous code to process hardship duty pay also precluded 

the use of system edits as backup controls to prevent overpayments. 

Because a miscellaneous code is used for various types of payments, DFAS 

could not set up an edit to stop hardship duty pay after a soldier’s active 

duty tour ended in the event finance personnel mistakenly continued to 

manually process hardship duty pay. Similarly, DFAS could not establish 

an edit to prevent duplicate payments of hardship duty pay processed using 

the miscellaneous code. As a result, hardship duty pay could be entered 

more than once for a soldier in a given month without detection. From our 

case studies, we identified three soldiers who each received two hardship 

duty payments for one month, resulting in total overpayments of $250. 
Page 24 GAO-04-990T 

Use of the miscellaneous payment code also made it difficult for soldiers to 

understand, and determine the propriety of, some of the payments 

reflected on their leave and earnings statements. Hardship duty pay and 

other payments that are processed using the miscellaneous code are 

reported on leave and earnings statements as “other credits.” Furthermore, 

the leave and earnings statements did not provide any additional 

information about what the “other credits” were for unless pay clerks 

entered additional explanations in the “remarks” section of the statement, 

which they rarely did. As a result, lacking any explanations, soldiers often 

had no means to determine if these types of payments were appropriate 

and accurate.

Unit commanders told us that they relied on soldiers to identify any pay 

problems based on their review of their leave and earnings statements. 

However, because leave and earnings statements do not always provide 

adequate information or, as discussed previously, may not be available to 

soldiers while deployed, reliance on the soldiers to identify pay errors is 

not an effective control. 

Combat Zone Tax Exclusion In addition to soldiers’ pay problems that occurred primarily because of the 

extensive use of manual processes, soldiers also experienced systematic 

problems with automated payments related to their combat zone tax 

exclusion, which resulted in late payments of this benefit for all soldiers in 

the seven case study units that deployed overseas. Soldiers are entitled to 

the combat zone tax exclusion for any month in which the soldier performs 

active service in a designated combat zone area.8

 

Because DJMS-RC was designed as a pay system for Army Reserve soldiers 

in weekend drill status, it does not have the processing capability to halt 

the withholding of applicable income taxes. Therefore, as a workaround 

procedure to compensate for this limitation, an automated process was 

established whereby the system first withholds taxes applicable to 

payments made while soldiers are in a combat zone, and then later 

reimburses soldiers for these withheld amounts in the following month. As 

a result of this workaround process, with few exceptions, Army Reserve 

soldiers who served in a designated combat zone received their combat 

zone tax exclusion benefit at least one month late. 

8

26 U.S.C. Section 112.
Page 25 GAO-04-990T 

Soldiers experienced longer delays in receiving this benefit if they arrived 

in a combat zone after the midmonth cutoff for DJMS-RC processing, 

which is approximately on the seventh day of each month. In these cases, 

entitlement to the tax exclusion was not recognized until the following 

month, which then delayed the soldier’s receipt of his combat zone tax 

benefit until the next month—the third month the soldier was deployed in 

the combat zone. For example, members of the 824th Quartermaster 

Company that deployed to Afghanistan arrived in country on July 14, 2003, 

but did not receive their first combat zone tax exclusion reimbursements 

until early October, almost 3 months after they became eligible for the 

exclusion.

Actions to Improve 

Accuracy and 

Timeliness of 

Mobilized Army Guard 

and Reserve Pay

DOD and the Army have reported a number of relatively recent positive 

actions with respect to processes, human capital practices, and automated 

systems that, if implemented as reported, should improve the accuracy and 

timeliness of active duty pays, allowances, and related tax benefits 

provided to mobilized Army Reserve soldiers. Payroll payments to 

mobilized Army Reserve soldiers rely on many of the same processes and 

automated systems used for payments to mobilized Army National Guard 

soldiers. Consequently, actions to improve the accuracy and timeliness of 

Army Reserve soldier payments are closely tied to actions taken in 

response to several of the recommendations in our November 2003 Army 

National Guard pay report.9

Because many of DOD’s actions in this area were implemented in the fall of 

2003 or later, they were not in place soon enough to have had a positive 

impact on mobilized Army Reserve soldiers’ payments that we audited 

through January 2004. However, if implemented as reported to us, many of 

DOD’s actions in response to the recommendations in our November 2003 

report should help reduce the incidence of the types of pay problems we 

identified for Army National Guard soldiers as well as those identified in 

the Army Reserve case study units I have presented today. 

With respect to the process deficiencies and related recommendations, 

DOD reported implementing additional procedural guidance intended to 

help minimize the pay problems attributable to non-standard or unclear 

procedures. One of the purposes of this guidance is to eliminate any 

9

GAO-04-89
Page 26 GAO-04-990T 

questions regarding which DOD entity is responsible for resolving a 

soldier’s pay issues or questions. Further, as of January 2004, DOD 

reported establishing a new procedure under which DFAS assumed 

responsibility (from the Army finance offices located in various overseas 

locations) for all monthly manual entry of mobilized Army Reserve and 

Army National Guard soldiers’ location-based hardship duty pays. 

DOD also reported completing several actions related to our previous 

recommendations to improve the human capital practices related to 

payments to mobilized Army soldiers. For example, the Army reported that 

it had taken action to provide additional training for Army finance 

personnel at overseas finance locations and at mobilization and 

demobilization stations, as well as for those Army finance personnel 

scheduled for deployment. This training was directed at better ensuring 

that these personnel are adequately trained on existing and new pay 

eligibility and pay processing requirements for mobilized Army National 

Guard and Army Reserve soldiers. DOD also reported establishing a new 

policy in January 2004 directed at more clearly affixing responsibility for 

addressing soldiers’ pay problems or inquiries. Under this new policy, the 

Army National Guard established a pay ombudsman to serve as the single 

focal point for ensuring coordinated, prompt customer service on all Army 

National Guard soldiers’ pay problems. 

With respect to automated systems, the Army and DFAS have 

acknowledged serious deficiencies in the current automated systems used 

to pay mobilized Army Reserve soldiers, and report that they have 

implemented a number of significant improvements, particularly to reduce 

an estimated 67,000 manual monthly entries for hardship duty pay. For 

example, in response to our recommendations in the National Guard 

report, DOD reported taking actions to (1) automate manual monthly 

hardship duty pay in March 2004, (2) eliminate the use of “other credits” for 

processing hardship duty pay and instead process these pays using a 

unique transaction code to facilitate implementing a system edit to identify 

and stop erroneous payments, (3) compare active duty release dates in the 

Army’s system used to generate Release From Active Duty Orders with 

soldiers’ end of active duty tour dates shown in DJMS-RC to identify and 

stop any erroneous active duty payments, and (4) increase the reliability 

and timeliness of documentation used to support soldiers’ arrival at and 

departure from designated overseas locations. 

Further, DOD has a major system enhancement effort underway in this 

area–-the Defense Integrated Military Human Resources System 
Page 27 GAO-04-990T 

(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 laborintensive, error-prone workarounds necessitated by current DJMS-RC 

processing limitations. As of May 2004, FCP was expected to be 

operational for all Army Reserve soldiers by March 2005.

Concluding Comments The increased operating tempo for Army Reserve and Army National Guard 

active duty mobilizations has stressed the current processes, human 

capital, and automated systems relied on to pay these soldiers. The 

significant number of problems we identified associated with active duty 

pay, allowances, and related tax benefits provided to mobilized Army 

Reserve soldiers at eight case study locations raises serious concerns about 

whether current operations can be relied on to provide accurate and timely 

payments. These pay problems caused considerable frustration, adversely 

affected soldiers’ morale, and placed an additional unnecessary burden on 

both the soldiers and their families. Further, if not effectively addressed, 

these pay problems may ultimately have an adverse impact on Army 

Reserve reenlistment and retention. 

Strengthening existing processes, human capital practices, and automated 

systems is critical to preventing, or at minimum, promptly detecting and 

correcting the errors we identified. In this regard, DOD and the Army have 

reported a number of relatively recent positive actions intended to improve 

the accuracy and timeliness of active duty pays, allowances, and related tax 

benefits provided to mobilized Army Reserve soldiers. DOD’s completed 

and planned near-term actions, if implemented as reported, should reduce 

the number of pay problems. 

However, mobilized Army Reserve soldiers cannot be reasonably assured 

of accurate and timely active duty pays, allowances, and related tax 

benefits until DOD completes a reengineering of all the processes, human 

capital practices, and automated systems supporting this critical area. 

Fully and effectively addressing Army Reserve soldiers pay problems will 

require priority attention and sustained, concerted, coordinated efforts by 

DFAS, the Army, and the Army Reserve to build on actions taken and 

planned. 

Finally, I commend the Chairman and Vice Chairman for holding an 

oversight hearing on this important issue. Your Committee’s continuing 

interest and diligence in overseeing efforts to effectively and efficiently 
Page 28 GAO-04-990T 

support our Army Guard and Reserve forces will be essential in bringing 

about comprehensive and lasting improvements to many decades-old, 

entrenched problems. We are committed to continuing to work with you 

and DOD to identify and monitor actions needed to bring about 

comprehensive and lasting solutions to long-standing problems in its 

business and financial management operations. 

Mr. Chairman, this concludes my statement. I would be pleased to answer 

any questions you or other members of the Committee may have at this 

time. 

Contacts and 

Acknowledgments

For further information about this testimony, please contact Gregory D. 

Kutz at (202) 512-9095 or kutzg@gao.gov. Individuals making key 

contributions to this testimony include James D. Berry Jr., Amy C. Chang, 

Francine M. DelVecchio, Geoffrey B. Frank, Jennifer L. Hall, Ken Hill, Kristi 

L. Karls, Jason M. Kelly, Tram Le, Julia C. Matta, Jonathan T. Meyer, 

Michelle Philpott, John J. Ryan, Jenniffer F. Wilson, Leonard E. Zapata.
Page 29 GAO-04-990T 

Appendix I

Background ApendxiI

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

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

and allowances that Army Reserve soldiers are eligible to receive vary 

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

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

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

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

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

case studies. As shown in table 2, we categorized these 14 pay and 

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

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

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

for the continental United States.1

 

1

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. 
Appendix I

Background

Page 30 GAO-04-990T 

Table 2: Active Duty Pays and Allowances Associated with Case Study Units

Source: GAO.

Mobilization Phases As shown in figure 2, three key phases are associated with the pays and 

allowances applicable to mobilized Army Reserve soldiers: 

 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 pay 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 close 

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 

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
Appendix I

Background

Page 31 GAO-04-990T 

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

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

pays while continuing other nonlocation-based active duty pay and 

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

and allowances. 

Figure 2: Three Key Phases for Active Duty Pays to Army Reserve Soldiers 

Mobilization During mobilization, units receive alert orders and begin preparing for 

active duty by conducting Soldier Readiness Processing (SRP) at the unit’s 

home station. Among other things, the SRP is intended to ensure that each 

soldier’s financial records are in order. The unit administrator is supposed 

to gather all necessary documentation for each soldier and send it to the 

U.S. Army Reserve Pay Center (UPC). There, pay technicians enter 

transactions to initiate basic pays and allowances for the mobilized soldiers 

based on soldiers’ mobilization orders and documentation sent by the unit. 

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

Source: GAO.

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
Appendix I

Background

Page 32 GAO-04-990T 

After the initial SRP, soldiers go as a unit to an assigned active duty Army 

mobilization station, where they undergo a second SRP. As part of this 

second SRP, finance personnel at the mobilization station are responsible 

for confirming or correcting the results of the first SRP, including obtaining 

any necessary documentation and promptly initiating appropriate active 

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

SRP.2

 

Deployment While deployed on active duty, there are several active Army and DFAS 

components involved in paying mobilized Army Reserve personnel. The 

Army area servicing finance office, which may be within the United States 

or in a foreign country, is responsible for initiating pays earned while the 

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

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

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

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

manifests, showing when soldiers arrived at these designated locations. 

While the designated Army area servicing finance offices have primary 

responsibility for administering pay for deployed Army Reserve soldiers, 

finance personnel at the cognizant mobilization station or at the UPC can 

also enter certain pay-altering transactions that occur during deployments, 

such as those related to a soldier’s early separation from active duty. In 

addition, the UPC has responsibility for entering all monthly nonlocationbased, nonautomated pay and allowance transactions, such as foreign 

language proficiency pay.

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

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

for demobilization processing before returning to their home stations. 

There, each soldier should receive a copy of the Release from Active Duty 

(REFRAD) order and a Form DD 214, Certificate of Release or Discharge 

from Active Duty. Pay technicians at the demobilization station are 

required to use the date of release from active duty shown on these 

documents as a basis for stopping all Army Reserve soldiers’ active duty 

pay and allowances. The UPC is responsible for discontinuing monthly 

input of all nonlocation-based, nonautomated pays and allowances. If the 

2

 Transactions to initiate and terminate pays for all mobilized Army Reserve soldiers entitled 

to receive special medical and dental pay entitlements are entered and processed centrally 

at DFAS-IN. 
Appendix I

Background

Page 33 GAO-04-990T 

demobilization station did not take action to stop active duty pays for 

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

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

stopping active duty pays and allowances falls to the soldier’s unit or the 

UPC. 
Page 34 GAO-04-990T 

Appendix II

Scope and Methodology ApendxiI

Because current DOD operations used to pay mobilized Army Reserve 

soldiers relied extensively on error-prone, manual transactions entered into 

multiple, nonintegrated systems, we did not statistically test controls in this 

area. Instead, we audited eight Army Reserve units as case studies to 

provide a detailed perspective on the pay experiences of mobilized Army 

Reserve soldiers. Each of these units had mobilized, deployed, and 

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

through January 2004. Using data supplied by the Army Reserve 

Headquarters Operations Center, we selected case study units that had a 

variety of deployment locations and missions.

To identify the pay experiences associated with each case study unit, we 

obtained and analyzed DJMS-RC pay transaction extracts and other 

available documentation. We also conducted follow-up inquiries with 

cognizant personnel at the Army Reserve Command, Regional Readiness 

Command, and the Army Reserve Pay Center. Because our objective was 

to provide insight into the pay experiences of mobilized Army Reserve 

soldiers, we did not perform an exact calculation of the net pay soldiers 

should have received. Our audit results reflect only problems that we 

identified and we counted problems only once in the phase in which they 

first occurred, even though the problems we identified sometimes 

extended into subsequent phases. Soldiers in our case study units may 

have experienced additional pay problems that we did not identify.

For purposes of characterizing pay and allowance problems for this report, 

we defined overpayments and underpayments as those that were in excess 

of (overpayment) or less than (underpayment) the entitled payment. We 

considered as late payments any active duty pay or allowance paid to the 

soldier over 30 days after the date on which the soldier was entitled to 

receive such payments. In addition, while we did not attempt to calculate 

the exact impact of any soldier over, under, and late payments on their 

combat zone tax exclusion benefits, we did examine readily available data 

to determine the extent to which our case study unit soldiers’ experienced 

problems with their entitled combat zone tax exclusion benefits.

In addition, we conducted a number of other procedures, including 

• Observing procedures and practices followed by the various DOD 

components involved in providing active duty pays and allowances to 

Army Reserve soldiers;
Appendix II

Scope and Methodology

Page 35 GAO-04-990T 

• Interviewing recently demobilized soldiers about their pay experiences 

while mobilized; and

• Reviewing selected edit and validation checks in DJMS-RC, and certain 

data entry processes for DJMS-RC. 

We conducted our audit work from November 2003 through June 2004 in 

accordance with U.S. generally accepted government auditing standards. 

Further details on our scope and methodology will be provided in our soonto-be-issued report. 
Page 36 GAO-04-990T 

Appendix III

Summaries of Case Studies ApendxiI

We audited the pay experiences of soldiers in the following eight Army 

Reserve units as case studies of the effectiveness of the processes, human 

capital practices, and automated systems in place over active duty pays, 

allowances, and related tax benefits:

• 824th Quartermaster Company, Fort Bragg, N.C. 

• 965th Dental Company, Seagoville, Tex.

• 948th Forward Surgical Team, Southfield, Mich.

• 443rd Military Police Company, Owings Mills, Md.

• FORSCOM Support Unit, Finksburg, Md.

• 629th Transportation Company, Ft. Eustis, Va.

• 3423rd Military Intelligence Detachment, New Haven, Conn.

• 431st Chemical Detachment, Johnstown, Pa.

These case studies are presented to provide an overview of the types and 

causes of any pay problems experienced by these units. We selected 

regional readiness commands that had a large number of activated Reserve 

units that had mobilized, deployed, and returned from their tour of active 

duty in support of Operations Noble Eagle, Enduring Freedom, and Iraqi 

Freedom. From the list of units assigned to these Readiness Commands, 

we selected eight case studies that had a variety of deployment locations 

and missions, including both overseas and continental U.S. deployments.
Appendix III

Summaries of Case Studies

Page 37 GAO-04-990T 

824th Quartermaster 

Company 

Fort Bragg, NC

Number of mobilized unit soldiers’ pays audited: 68

Period of mobilization: February 2003 to September 2003

Principal deployment location: Kuwait and surrounding locations, 

Afghanistan, and Fort Bragg, NC

Deployment duties: Rigged parachutes for individual soldiers and large 

equipment drops.

Number of unit soldiers with at least one problem with active duty 

pay and allowance entitlements: 58 of 68

Unit Pay and Allowance Problems Identified (by Phase)

Source: GAO.

Overpayments identified (number of soldiers affected): $60,000 (57)

Late payments identified (number of soldiers affected): $3,000 (9)

Underpayments identified (number of soldiers affected): $10,000 

(49)

Combat zone tax exclusion benefit problems identified: All 49 

soldiers deployed overseas received their combat zone tax exclusion 

benefit at least 1 month late, totaling about $20,000. In addition, 

approximately $1,300 was over-withheld from 5 soldiers. 

Examples of specific problems identified:

• Nine soldiers were paid family separation allowance even though they 

remained at their home station and worked within their normal 

commuting distance of fewer than 50 miles. Another soldier did not 

Phase Number of soldiers with pay problems

Mobilization 11 of 68

Deployed 50 of 68

Demobilization 13 of 68
Appendix III

Summaries of Case Studies

Page 38 GAO-04-990T 

receive his entitled family separation allowance, totaling $1,400, until 

the end of his active duty tour. 

• Forty-nine soldiers were underpaid hardship duty pay 

• Forty-seven soldiers continued to receive hardship duty pay payments 

for up to 5 months following their return home, totaling $30,000.

• Forty-four soldiers that were deployed overseas were overpaid hostile 

fire pay.

• One soldier who demobilized early due to a medical condition continued 

to receive active duty pay and entitlements until the end of January 2004 

when we identified the error, resulting in an overpayment of about 

$18,000.
Appendix III

Summaries of Case Studies

Page 39 GAO-04-990T 

965th Dental Company 

Seagoville, Tex

Number of mobilized unit soldiers’ pays audited: 93

Period of mobilization: February 2003 through July 2003

Principal deployment location: Camp Arifjan, Kuwait

Deployment duties: Provided emergency dental services 

Number of unit soldiers with at least one problem with active duty 

pay and allowance entitlements: 89 of 93 

Pay and Allowance Problems Identified (by Phase)

Source: GAO.

Overpayments identified (number of soldiers affected): $100,000 

(86)

Late payments identified (number of soldiers affected): $16,000 (86)

Underpayments identified (number of soldiers affected): $27,000 

(65)

Combat zone tax exclusion benefit problems identified: 75 of the 85 

soldiers deployed overseas received their combat zone tax exclusion 

benefit 2 to 3 months late, totaling approximately $24,000. In addition, we 

identified $200 in over-withholdings and $300 in under-withholdings.

Examples of specific problems identified:

• Eighty-five soldiers were underpaid for hardship duty pay of $8,000

• Sixty-six soldiers received hardship duty pay totally $47,000 for at least 6 

months after leaving Kuwait.

Phase Number of soldiers with pay problems

Mobilization 25 of 93

Deployed 86 of 93

Demobilization 7 of 93
Appendix III

Summaries of Case Studies

Page 40 GAO-04-990T 

• One soldier received mobilization orders but did not report to the unit’s 

mobilization station. Nonetheless, he received $36,000 of active duty 

pay for over 12 months. These overpayments continued until we 

discovered them during our audit. 

• Another soldier received hostile fire pay, hardship duty pay, family 

separation allowance, and the combat zone tax exclusion benefits that 

he was no longer entitled to receive after he left his designated overseas 

deployment location early as a result of severe illness incurred during 

his active duty mobilization.

• One soldier received a duplicate basic allowance for housing allowance 

payment of $6,600.
Appendix III

Summaries of Case Studies

Page 41 GAO-04-990T 

948th Forward Surgical 

Team, Southfield, MI

Number of mobilized unit soldiers’ pays audited: 20

Period of mobilization: January 2003 to September 2003

Principal deployment location: Kandahar, Afghanistan

Deployment duties: Provide emergency medical care to soldiers and 

civilians in the field

Number of unit soldiers with at least one problem with active duty 

pay and allowance entitlements: 20 of 20

Pay and Allowance Problems Identified (by Phase)

Source: GAO.

Overpayments identified (number of soldiers affected): $20,700 (20)

Late payments identified (number of soldiers affected): $5,600 (20)

Underpayments identified (number of soldiers affected): $2,000 (5)

Combat zone tax exclusion benefit problems identified: All 20 unit 

soldiers deployed overseas received their combat zone tax exclusion 

benefits at least 1 month late, totaling $15,300. In addition, we identified 

$130 that was over-withheld.

Examples of specific problems identified:

• After arriving in Afghanistan, (1) 19 soldiers waited 47 days to receive 

their initial hostile fire pay, (2) 19 soldiers received their February 

hardship duty pay in April, and (3) 20 soldiers waited 67 days before 

receiving their initial combat zone tax exclusion benefit.

Phase Number of soldiers with pay problems

Mobilization 5 of 20

Deployed 20 of 20

Demobilization 18 of 20
Appendix III

Summaries of Case Studies

Page 42 GAO-04-990T 

• A sergeant spent 100 hours in late April 2003 attempting to resolve the 

unit’s pay problems. Several soldiers were forced to borrow money to 

meet financial obligations.

• Nineteen soldiers continued to receive hardship duty pay for a period 

ranging from 1 to 5 months after leaving Afghanistan.
Appendix III

Summaries of Case Studies

Page 43 GAO-04-990T 

443rd Military Police 

Company, 

Owings Mills, MD

Number of mobilized unit soldiers’ pays audited: 121

Period of mobilization: February 2003 to January 2004

Principal deployment location: Camp Cropper, Baghdad Airport, Iraq

Deployment duties: Guard Iraqi prisoners at Camp Cropper

Number of unit’s soldiers with at least one problem with active duty 

pay and allowance entitlements: 119 of 121 

Pay and Allowance Problems Identified (by Phase)

Source: GAO.

Overpayments identified (number of soldiers affected): $25,000 (48)

Late payments identified (number of soldiers affected): $20,000 (110)

Underpayments identified (number of soldiers affected): $15,000 

(114)

Combat zone tax exclusion benefit problems identified: One hundred 

twelve of the 114 unit soldiers deployed overseas received their combat 

zone tax exclusion benefits at least 1 month late, totaling an estimated 

$33,000. In addition, we identified $600 in under-withholding and $400 overwithholdings. 

Examples of specific problems identified:

• Bi-weekly trips to Kuwait were required for 5 months to address unit 

pay issues.

• One hundred thirteen soldiers did not receive their last month’s 

hardship duty pay. 

Phase Number of soldiers with pay problems

Mobilization 70 of 121

Deployed 114 of 121

Demobilization 17 of 121
Appendix III

Summaries of Case Studies

Page 44 GAO-04-990T 

• Six unit soldiers were paid beyond their date of separation from the 

Army, including 1 soldier who was overpaid about $10,500. 
Appendix III

Summaries of Case Studies

Page 45 GAO-04-990T 

FORSCOM Support 

Unit Finksburg, MD

Number of mobilized unit soldiers’ pays audited: 1

Period of mobilization: March 2003 to May 2003

Principal deployment location: Camp Doha, Qatar

Deployment duties: Provided briefings to the Air Force’s 379th

Expeditionary Force on the status and positions of Army and other 

coalition ground forces

Number of unit soldiers with at least one problem with active duty 

pay and allowance entitlements: 1 of 1 

Pay and Allowance Problems Identified (by Phase)

Source: GAO.

Overpayments identified (number of soldiers affected): $8,000 (1)

Late payments identified (number of soldiers affected): $300 (1)

Underpayments identified (number of soldiers affected): $0 (1)

Combat zone tax exclusion benefit problems identified: This soldier 

received his combat zone tax exclusion benefit after he demobilized, an 

estimated $2,500 late.

Examples of specific problems identified:

• Nearly a year of an estimated 20 phone calls, faxes, and letters to DFAS 

and Army customer service representatives at five locations were 

required to identify and resolve an overpayment of $8,000.

• Did not receive any hostile fire pay until after he demobilized.

Phase Number of soldiers with pay problems

Mobilization 0 of 1

Deployed 1 of 1

Demobilization 1 of 1
Appendix III

Summaries of Case Studies

Page 46 GAO-04-990T 

• Soldier continued to receive active duty pays and allowances for a 

month after demobilizing. 
Appendix III

Summaries of Case Studies

Page 47 GAO-04-990T 

629th Transportation 

Detachment 

Fort Eustis, VA

Number of mobilized unit soldiers’ pays audited: 24

Period of mobilization: March 2003 to January 2004

Principal deployment location: Kuwait

Deployment duties: Tracking logistics supplies in and out of Kuwait

Number of unit soldiers with at least one problem with active duty 

pay and allowance entitlements: 24 of 24

Pay and Allowance Problems Identified (by Phase)

Source: GAO.

Overpayments identified (number of soldiers affected): $3,000 (24)

Late payments identified (number of soldiers affected): $14,000 (23)

Underpayments identified (number of soldiers affected): $2,000 (24)

Combat zone tax exclusion benefit problems identified: While we did 

not attempt to quantify, nearly all soldiers deployed overseas received their 

combat zone tax exclusion benefit at least 1 month late.

Examples of specific problems identified:

• Twenty-three of 24 soldiers deployed to Kuwait received duplicate 

payments of $75 for hostile fire pay during their initial month of 

deployment.

• Twenty-three of 24 soldiers were underpaid hardship duty pay for 1 to 2 

months during their overseas deployment.

Phase Number of soldiers with pay problems

Mobilization 5 of 24

Deployed 24 of 24

Demobilization 1 of 24
Appendix III

Summaries of Case Studies

Page 48 GAO-04-990T 

3423rd Military 

Intelligence 

Detachment

New Haven, CT

Number of mobilized unit soldiers’ pays audited: 11

Period of mobilization: December 2002 to December 2003

Deployment location: Ft. Belvoir, Virginia

Deployment duties: Analyzed intelligence information for U.S. Army 

Intelligence and Security Command

Number of unit soldiers with one (or more) problems with pay and 

allowance entitlements associated with active duty mobilization: 11 

of 11 

Pay and Allowance Problems Identified (by Phase)

Source: GAO.

Overpayments identified (number of soldiers affected): $18,500 (10)

Late payments identified (number of soldiers affected): $5,000 (9)

Underpayments identified (number of soldiers affected): $4,000 (6)

Combat zone tax exclusion benefit problems identified: None, 

because the soldiers were not eligible for this benefit.

Examples of specific problems identified:

• Nine soldiers erroneously began receiving the overseas cost of living 

allowance, rather than the continental U.S. cost of living allowance, at 

the beginning of the mobilization. This created $3,500 in overpayments 

and $700 in late payments for the unit.

Phase Number of soldiers with pay problems

Mobilization 10 of 11

Deployed 9 of 11

Demobilization 9 of 11
Appendix III

Summaries of Case Studies

Page 49 GAO-04-990T 

• Nine soldiers continued to receive their active duty pays and 

entitlements for 13 to 28 days after demobilization, resulting in $14,000 

in overpayments.
Appendix III

Summaries of Case Studies

Page 50 GAO-04-990T 

431st Chemical 

Detachment

Johnstown, PA

Number of mobilized unit soldiers’ pays audited: 10

Period of mobilization: January 2003 to July 2003

Principal deployment location: Kuwait and surrounding locations

Deployment duties: Monitor battlefields for sign of nuclear, biological, or 

chemical agents 

Number of unit soldiers with at least one problem with active duty 

pay and allowance entitlements: 10 of 10

Pay and Allowance Problems Identified (by Phase)

Source: GAO.

Overpayments identified (number of soldiers affected): $12,000 (10)

Late payments identified (number of soldiers affected): $1,000 (8)

Underpayments identified (number of soldiers affected): $2,000 (10)

Combat zone tax exclusion benefit problems identified: While we 

were unable to quantify, nearly all soldiers deployed overseas received 

their combat zone tax exclusion benefit at least 1 month late.

Examples of specific problems identified:

• While deployed to Kuwait, (1) 8 of 10 soldiers did not receive their first 

month’s hostile fire pay and (2) all 10 soldiers did not receive hardship 

duty pay for the first month after arrival overseas.

• All 10 soldiers continued to receive hardship duty pay payments for up 

to 7 months following their return home, despite the unit administrator’s 

attempts to get the pay stopped through the unit’s chain of command. 

Phase Number of soldiers with pay problems

Mobilization 2 of 10

Deployed 10 of 10

Demobilization 0 of 10
Appendix III

Summaries of Case Studies

Page 51 GAO-04-990T 

The unit administrator also accessed the pay hotline at 888-PAY-ARMY, 

but was placed on hold for such a long time that she gave up. 

(192140)
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