a

GAO

United States General Accounting Office

Report to the Chairman, Subcommittee 

on National Security, Emerging Threats, 

and International Relations, Committee 

on Government Reform, House of 

Representatives 

November 2003 MILITARY PAY

Army National Guard 

Personnel Mobilized 

to Active Duty 

Experienced 

Significant Pay 

Problems

GAO-04-89
The existing processes and controls used to provide pay and allowances to 

mobilized Army Guard personnel are so cumbersome and complex that 

neither DOD nor, more importantly, the mobilized Army Guard soldiers 

could be reasonably assured of timely and accurate payroll payments. 

Weaknesses in these processes and controls resulted in over- and 

underpayments and late active duty payments and, in some cases, largely 

erroneous debt assessments to mobilized Army Guard personnel. The end 

result of these pay problems is to severely constrain DOD’s ability to provide 

active duty pay to these personnel, many of whom were risking their lives in 

combat in Iraq and Afghanistan. In addition, these pay problems have had a 

profound financial impact on individual soldiers and their families. For 

example, many soldiers and their families were required to spend 

considerable time, sometimes while the soldiers were deployed in remote, 

combat environments overseas, seeking corrections to active duty pays and 

allowances. 

Pay Problems at Six Case Study Locations 

Army Guard Soldiers with pay problems 

unit Mobilization Deployment Demobilization Comments 

Colorado 

Special Forces 

56 of 62 61 of 62 53 of 62 34 soldiers were erroneously 

assessed debts averaging 

$48,000 each 

Virginia Special 

Forces 

31 of 65 63 of 65 60 of 65 Injured soldiers denied active 

duty pay and medical benefits 

when orders not processed 

West Virginia 

Special Forces 

36 of 94 84 of 94 66 of 94 Sergeant came under enemy 

fire during 4-day trip to deliver 

pay records to correct errors 

California 

Military Police 

48 of 51 41 of 51 0 of 51 Majority of soldiers 

experienced delays in starting 

active duty pays 

Maryland 

Military Police 

75 of 90 64 of 90 3 of 90 Pays for 13 soldiers 

continued for 6 weeks after 

early release from active duty 

Mississippi 

Military Police 

21 of 119 93 of 119 90 of 119 88 soldiers mistakenly paid 

for two types of hardship duty 

pay 

Source: GAO analysis. 

The pay process, involving potentially hundreds of DOD, Army, and Army 

Guard organizations and thousands of personnel, was not well understood or 

consistently applied with respect to determining (1) the actions required to 

make timely, accurate pays to mobilized soldiers, and (2) the organization 

responsible for taking the required actions. With respect to human capital, 

we found weaknesses including (1) insufficient resources allocated to pay 

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

procedures, and (3) poor customer service. Several systems issues were 

also a significant factor impeding accurate and timely payroll payments to 

mobilized Army Guard soldiers, including (1) non-integrated systems, 

(2) limitations in system processing capabilities, and (3) ineffective system 

edits. 

In light of the recent mobilizations 

associated with the war on 

terrorism and homeland security, 

GAO was asked to determine if 

controls used to pay mobilized 

Army Guard personnel provided 

assurance that such pays were 

accurate and timely. GAO’s audit 

used a case study approach to 

focus on controls over three key 

areas: processes, people (human 

capital), and systems. 

GAO makes a series of 

recommendations directed at 

immediate actions needed to 

address weaknesses in the 

processes, human capital, and 

systems currently relied on to 

provide active duty pay and 

allowances to mobilized Army 

Guard soldiers. In addition, GAO 

recommends action, as part of the 

Department of Defense’s (DOD) 

longer-term system improvement 

initiatives, to ensure that 

reengineering efforts include the 

process, human capital, and 

systems issues identified in this 

report. 

DOD concurred with GAO’s 

recommendations and described 

actions recently completed, 

underway, and planned to correct 

the noted deficiences. 

www.gao.gov/cgi-bin/getrpt?GAO-04-89.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Gregory D. 

Kutz at (202) 512-9505 or Kutzg@gao.gov. 

Highlights of GAO-04-89, a report to the 

Chairman, Subcommittee on National 

Security, Emerging Threats, and 

International Relations, Committee on 

Government Reform, House of 

Representatives 

November 2003

MILITARY PAY

Army National Guard Personnel Mobilized 

to Active Duty Experienced Significant 

Pay Problems 
Page i GAO-04-89 Army Guard Pay

Contents

Letter 1

Results in Brief 3

Background 6

Case Studies Illustrate Significant Pay Problems 15

Significant Weaknesses in Processes over Mobilized Army Guard 

Pay 20

Human Capital Issues Affect Ability to Pay Mobilized Army Guard 

Soldiers Promptly and Accurately 37

Systems Problems Hamper Prompt and Accurate Army Guard Pay 

44

Army Guard Active Duty Pay Problems Continue with Current 

Deployments to Iraq 57

Conclusions 57

Recommendations for Executive Action 58

Agency Comments and our Evaluation 61

Appendixes

Appendix I: Colorado Army National Guard B Company, 5th Battalion, 19th

Special Forces 62

Mobilization Pay Problems 64

Deployment Pay Problems 66

Pay Problems Associated with Demobilization and Release from 

Active Duty 67

Appendix II: Virginia Army National Guard B Company, 3rd Battalion, 20th

Special Forces 71

Mobilization Pay Problems 73

Deployment Pay Problems 75

Pay Problems Associated with Demobilization and Release from 

Active Duty 79

Appendix III: C Company, 2nd Battalion, 19th Special Forces Group, West 

Virginia 81

Mobilization Pay Problems 82

Deployment Pay Problems 84

Demobilization and Release from Active Duty Pay Problems 88

Appendix IV: Mississippi 114th Military Police Company 89

Mobilization Pay Problems 90

Deployment Pay Problems 92

Pay Problems Associated with Demobilization and Release from 

Active Duty 94
Contents

Page ii GAO-04-89 Army Guard Pay

Appendix V: Maryland 200th Military Police Company 97

Mobilization Pay Problems 99

Deployment Pay Problems 102

Demobilization and Release from Active Duty Pay Problems 103

Appendix VI: California 49th Military Police Headquarters and 

Headquarters Detachment 105

Mobilization Pay Problems 106

Deployment Pay Problems 108

Pay Problems Associated with Demobilization and Release from 

Active Duty 110

Appendix VII: Scope and Methodology 111

Appendix VIII: Comments from the Department of Defense 115

Appendix IX: GAO Contacts and Staff Acknowledgments 125

GAO Contacts 125

Acknowledgments 125

Tables Table 1: Basic Pays and Allowances Associated with Case Study 

Units 9

Table 2: Pay Problems at Six Case Study Units 18

Table 3: Summary of Identified Pay Problems by Phase 63

Table 4: Identified Mobilization Pay Problems 64

Table 5: Identified Deployment Pay Problems 66

Table 6: Identified Demobilization Pay Problems 68

Table 7: Timetable of Colorado B Company’s Unresolved 

Pay-Related Debts 70

Table 8: Summary of Identified Pay Problems by Phase 72

Table 9: Identified Mobilization Pay Problems 73

Table 10: Identified Deployment Pay Problems 75

Table 11: Identified Demobilization Pay Problems 79

Table 12: Summary of Identified Pay Problems by Phase 82

Table 13: Identified Mobilization Pay Problems 82

Table 14: Identified Deployment Pay Problems 85

Table 15: Identified Pay Demobilization Problems 88

Table 16: Summary of Identified Pay Problems by Phase 90

Table 17: Identified Mobilization Pay Problems 91

Table 18: Identified Deployment Pay Problems 93

Table 19: Identified Demobilization Pay Problems 95

Table 20: Summary of Identified Pay Problems by Phase 98

Table 21: Identified Mobilization Pay Problems 100

Table 22: Identified Deployment Pay Problems 102
Contents

Page iii GAO-04-89 Army Guard Pay

Table 23: Identified Demobilization Pay Problems 104

Table 24: Summary of Identified Pay Problems by Phase 106

Table 25: Identified Mobilization Pay Problems 107

Table 26: Identified Deployment Pay Problems 109

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

Soldiers 11

Figure 2: Units and Deployment Locations 17

Figure 3: Initial Mobilization Phase Process 21

Figure 4: Deployed Phase Process 22

Figure 5: Demobilization Phase Process 23

Figure 6: Overview of Army Guard Pay and Personnel Systems 45

Figure 7: Sample Army Guard Leave and Earnings Statement 51

Figure 8: Sample Leave and Earnings Statement with Large Debt 

Balance 55

Figure 9: Timeline Showing Key Actions Associated with Colorado 

National Guard Special Forces Unit’s Mobilization 62

Figure 10: Timeline Showing Key Actions Associated with Virginia 

Army National Guard Special Forces Unit’s 

Mobilization 71

Figure 11: Itinerary of Two B Company Soldiers’ Efforts to Start 

Location-Based Pays for the Unit 77

Figure 12: Timeline Showing Key Actions Associated with West 

Virginia National Guard Special Forces Unit’s 

Mobilization 81

Figure 13: Timeline Showing Key Actions Associated with the 

Mississippi Army National Guard Military Police Unit’s 

Mobilization 89

Figure 14: Timeline Showing Key Actions Associated with the 

Maryland National Guard Military Police Unit’s 

Mobilization 98

Figure 15: Timeline Showing Key Actions Associated with the 

California Army National Guard Military Police Unit’s 

Mobilization 105
Contents

Page iv GAO-04-89 Army Guard Pay

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Page 1 GAO-04-89 Army Guard Pay

United States General Accounting Office

Washington, D.C. 20548

A

November 13, 2003 Letr

The Honorable Christopher Shays 

Chairman, Subcommittee on National Security, 

Emerging Threats, and International Relations

Committee on Government Reform

House of Representatives

Dear Mr. Chairman:

In response to the September 11, 2001, terrorist attacks, the Army National 

Guard (Army Guard) mobilized and deployed soldiers in support of 

Operations Noble Eagle and Enduring Freedom. When mobilized for up to 

2 years at a time, these Army Guard soldiers performed search and destroy 

missions against Taliban and al Qaeda members throughout Asia and 

Africa; fought on the front lines in Afghanistan and Iraq; guarded al Qaeda 

prisoners held at Guantanamo Bay, Cuba; provided security at the 

Pentagon; and are now assisting in peace-keeping operations in Iraq. 

In 1993, we reported1 on millions of dollars of overpayments and other 

problems associated with payroll payments to Army military personnel 

during 1992 as soldiers returned from Operations Desert Shield and Desert 

Storm. A significant factor contributing to the improper payments 

discovered as part of that audit was the large number of Army Guard 

personnel mobilized to active duty and paid from the Army’s active duty 

payroll system. Because many of the current missions, particularly those 

associated with the global war on terrorism, are expected to persist, Army 

Guard personnel are likely to continue to experience additional 

mobilizations. Given the critical roles these mobilized Army Guard soldiers 

play in carrying out vital military missions both in the United States and 

overseas, effective internal controls are needed not only to provide timely 

and accurate pay to these soldiers, but also to prevent any such problems 

from adversely affecting the Army’s ability to retain these valuable 

personnel. 

In light of the recent mobilizations and growing importance of the Army 

Guard in fighting the war on terrorism and providing domestic security, you 

asked us to determine if controls used to pay mobilized Army Guard 

1

U.S. General Accounting Office, Financial Management: Defense’s System for Army 

Military Payroll Is Unreliable, GAO/AIMD-93-32 (Washington, D.C.: Sept. 30, 1993).
Page 2 GAO-04-89 Army Guard Pay

personnel using the Army’s reserve pay system provided reasonable 

assurance that such payments were accurate and timely. 

Because our preliminary assessment determined that current operations 

used to pay mobilized Army Guard soldiers relied extensively on errorprone manual transactions entry into multiple, nonintegrated systems, we 

did not statistically test current processes and controls. Instead, we used a 

case study approach to provide more detailed perspective on the nature of 

pay deficiencies in the three key areas of processes, people (human 

capital), and systems. Specifically, we gathered available data and analyzed 

the pay experiences of Army Guard special forces and military police units 

mobilized to active duty in support of Operations Noble Eagle and 

Enduring Freedom during the period from October 2001 through March 

2003. (See apps. I-VI for detailed summaries of our six case study units.) 

Finally, you asked us to identify any evidence that pay problems were 

continuing with Army Guard personnel in more recently mobilized units 

deployed to support missions in Iraq. We conducted a limited review of the 

initial mobilization and deployment pay records of one unit currently 

participating in that operation.

We performed our work from November 2002 through September 2003 in 

accordance with generally accepted government auditing standards. 

Further details on our scope and methodology are included in appendix 

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

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

Secretary of Defense (Comptroller), which are reprinted in appendix VIII.
Page 3 GAO-04-89 Army Guard Pay

Results in Brief The existing processes and controls used to provide basic and special 

active duty pays to mobilized Army Guard personnel are so cumbersome 

and complex that the Army; the Defense Finance and Accounting Service 

(DFAS); and, most importantly, the mobilized Army Guard soldiers cannot 

be reasonably assured of timely and accurate payroll payments. 

Weaknesses in the current processes and controls resulted in a substantial 

number of over- and underpayments and late active duty payments2

 to 

mobilized Army Guard personnel at our case study units. For example, 450 

of the 481 soldiers from our six case study units had at least one pay 

problem associated with their mobilization. These pay problems severely 

constrain the Army’s and the Department of Defense’s (DOD) ability to 

provide a most basic service to these personnel, many of whom were 

risking their lives in combat. In addition, resulting inaccurate, late, and, or 

missing pays, and associated erroneous debts also had a profound financial 

impact on individual soldiers and their families. Soldiers and their families 

were required to spend considerable time, sometimes while the soldiers 

were deployed in remote, combat environments overseas, continually 

addressing concerns over their pay and allowances. 

One of the primary causes for these pay problems is rooted in the complex, 

cumbersome processes used to pay soldiers from their initial mobilization 

through active duty deployment to demobilization. While not designed as 

such, these pay operations have evolved over time to the point that few, if 

any, in the department fully understand their breadth, scope, and inherent 

weaknesses. Army Guard pay process requirements, particularly in light of 

the potentially hundreds of organizations and estimated thousands of 

personnel involved, were not well understood or consistently applied with 

2

As a result of the lack of supporting documents, we likely did not identify all of the pay 

problems related to the active duty mobilizations of our case study units. However, for the 

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

allowances for mobilized Army Guard soldiers during the period from October 1, 2001, 

through March 31, 2003, that were in excess of (overpayment) or less than (underpayment) 

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

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

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

a previously unpaid entitlement. In addition, we used available data to identify about 

$135,000 in collections against identified overpayments through March 31, 2003. We did not 

attempt to estimate payments received against identified underpayments. In addition, we 

did not include any erroneous debts associated with these payments as pay problems. 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. 
Page 4 GAO-04-89 Army Guard Pay

respect to determining (1) the actions required to pay mobilized Army 

Guard soldiers timely and accurately, and (2) the components responsible, 

among Army Guard, active Army, and DFAS, for taking the required 

actions. Further, we found several instances in which existing regulations 

were out of date—some of which still reflected practices in place in 1991 

during Operation Desert Storm. As a result, we found numerous errors in 

key pay transactions at our case study locations. 

For example, procedures relating to amending active duty orders were 

problematic. For the Colorado Special Forces unit, we found that actions 

taken by the Army Guard military pay officials in an attempt to amend 34 

soldiers’ orders resulted in reversing the active duty pays and allowances 

the soldiers received for 11 of the 12 months they were deployed on active 

duty in Afghanistan. Instead, the system recorded these pays and 

allowances as debts. These 34 soldiers received notice on their Leave and 

Earnings Statements that they owed the government an average of $48,000 

per soldier, for a largely erroneous total debt of $1.6 million. In another 

case, after exhausting all in-theatre processes to initiate pays without 

success, a sergeant with an Army Guard unit stationed in Uzbekistan had to 

make a time-consuming trip to Kuwait and back in order to personally 

deliver pay information from his unit to a finance office that could process 

Army Guard data. The trip proved to be not only a major inconvenience 

but was also life threatening, as the sergeant’s aircraft came under enemy 

fire during the course of his journey.

With respect to human capital at our case study units, we found 

weaknesses, including (1) insufficient resources allocated to pay 

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

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

cumbersome, and labor-intensive process requirements that have evolved 

to support active duty pay to Army Guard soldiers. During our work at the 

case study locations we audited, we identified instances in which military 

pay technicians with the Army Guard and active Army finance office 

locations made data coding errors when entering pay transactions into the 

pay systems. We were told that these errors occurred because military pay 

personnel—particularly those at the active Army finance office locations—

were unfamiliar with the system’s pay processing requirements for active 

duty pays to mobilized Army Guard personnel. 

A related human capital issue—customer support for active duty pay 

issues—was a recurring concern at our six case study locations. None of 
Page 5 GAO-04-89 Army Guard Pay

the DOD, Army, or Army Guard policies and procedures we examined 

addressed the level or quality of customer service that mobilized Army 

Guard soldiers should be provided for questions or problems with their 

active duty pays. For example, one soldier told us that he submitted 

documentation on three separate occasions to support the housing 

allowance he should have received as of the beginning of his October 2001 

mobilization. Each time he was told to resubmit the documentation 

because his previously submitted documents were lost. Subsequently, 

while he was deployed, he made additional repeated inquiries concerning 

when he would receive his housing allowance pay. He was told that it 

would be taken care of when he returned from his deployment. However, 

when he returned from his deployment, he was told that he should have 

taken care of this issue while he was deployed and that it was now too late 

to receive this allowance. 

Several systems issues were also a significant factor impeding accurate and 

timely payroll payments to mobilized Army Guard soldiers. The system 

relied on to pay mobilized Army Guard soldiers—the Defense Joint Military 

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

process payroll payments to Army Reserve and Army Guard personnel on 

weekend drills, on short periods of annual active duty (periods of less than 

30 days in duration), or for training. With Army Guard personnel now being 

paid from DJMS-RC for extended periods of active duty (as long as 2 years 

at a time), DFAS officials told us that the system is now stretched to the 

limits of its functionality. DFAS has established “workarounds” to 

compensate for the DJMS-RC system constraints. Overall, we found the 

current stove-piped, nonintegrated systems were labor-intensive and 

require extensive error-prone manual data entry and reentry. As a result, it 

was often difficult to ensure that mobilized soldiers received only and all 

the pays and allowances to which they were entitled, as illustrated in 

appendixes I-VI by our six case studies. While DOD has plans to implement 

system improvements in this area, it is likely that the department will be 

required to operate within existing system constraints for at least several 

more years. 

Finally, our limited review of pays to one more recently activated Army 

Guard military police unit deployed to Iraq in April 2003 to provide military 

convoy security and carry out highway patrols indicated that some of the 

same types of pay problems that we found in our six case study units 

continued to occur. Of the 152 soldiers mobilized in this unit, we identified 

54 soldiers who were either overpaid, underpaid, received entitled active 

duty pays and allowances over 30 days late, or for whom erroneous pay-
Page 6 GAO-04-89 Army Guard Pay

related debts were created. We found that these pay problems could be 

attributed to control breakdowns similar to those we found at our case 

study units, including input errors related to amended orders, delays and 

errors in coding pay and allowance transactions, and slow or nonexistent 

customer service response. 

We are making a series of recommendations to address the Army Guard 

active duty pay weaknesses we identified in the areas of process, human 

capital, and systems. While DOD should take a number of immediate 

actions to address these problems, we are also recommending that DOD 

ensure that its longer-term reengineering and system improvement efforts 

in this area include complete and lasting solutions to the weaknesses 

identified. In its comments on a draft of this report, DOD agreed with our 

recommendations and outlined its actions to address the deficiencies noted 

in our report.

Background The Army Guard is the oldest component of any of the uniformed services. 

It traces its roots to the colonial militia, and claims a “birth”of 1636. Today, 

the Army Guard exists in 54 locations that include all 50 states, the District 

of Columbia, and three territories: Guam, the Virgin Islands, and Puerto 

Rico. There are about 2,300 Army Guard units within these locations and 

over 350,000 Army Guard members. During peacetime, Army Guard units 

report to the adjutant generals of their states or territories, or in the case of 

the District of Columbia, to the Commanding General. Each adjutant 

general reports to the governor of the state, or in the case of the District of 

Columbia, the mayor.

At the state level, the governors have the ability, under the Constitution of 

the United States, to call up members of the Army Guard in times of 

domestic emergency or need. The Army Guard’s state mission is perhaps 

the most visible and well known. Army Guard units battle fires or help 

communities deal with floods, tornadoes, hurricanes, snowstorms, or other 

emergency situations. In times of civil unrest, the citizens of a state rely on 

the Army Guard to respond, if needed. During national emergencies, 

however, the President has the authority to mobilize the Army Guard, 

putting them in federal duty status. While federalized, the units answer to 

the Combatant Commander of the theatre in which they are operating and, 

ultimately, to the President. Even when not federalized, the Army Guard 

has a federal mission to maintain properly trained and equipped units, 

available for prompt mobilization for war, national emergency, or as 

otherwise needed. Nonfederalized Army Guard members’ pay and 
Page 7 GAO-04-89 Army Guard Pay

allowances are paid with state funds while federalized Army Guard 

members’ pay and allowances are paid with federal funds. 

Typically, Army Guard members enlist for 8 years and are entitled to a 

number of benefits while serving in the Army Guard, including those for 

health care, life insurance, and other state-specific benefits. After their 

enlistment periods, former Army Guard members are entitled to veterans’ 

benefits, such as veterans’ health care and burial benefits. 

Army Guard members are required to attend one drill weekend each month 

and one annual training period (usually 2 weeks in the summer) each year. 

Initially, all nonprior service personnel are required to attend initial entry 

training, also known as Basic Training. After Basic Training, soldiers go to 

their Advanced Individual Training, which teaches them the special skills 

they will need for their jobs in the Army Guard. This training can usually be 

scheduled to accommodate civilian job or school constraints. The Army 

Guard has armories and training facilities in more than 2,800 communities. 

The Army Guard is a partner with the active Army and the Army Reserves 

in fulfilling the country's military needs. The National Guard Bureau 

(NGB) assists the Army Guard in this partnership. NGB is a joint bureau of 

the Departments of the Army and the Air Force and is charged with 

overseeing the federal functions of the Army Guard and the Air Guard. In 

this capacity, NGB helps the Army Guard and the Air Guard procure 

funding and administer policies. NGB also acts as a liaison between the 

Departments of the Army and Air Force and the states. 

All Army forces are integrated under DOD’s “total force” concept. DOD’s 

total force concept is based on the premise that it is not practically feasible 

to maintain active duty forces sufficient to meet all possible war 

contingencies. Under this concept, DOD’s active and reserve components 

are to be blended into a cohesive total force to meet a given mission. 
Page 8 GAO-04-89 Army Guard Pay

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

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

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

States. Concurrent with this declaration, the President authorized the 

Secretary of Defense to call troops to active duty pursuant to 10 U.S.C. 

Section 12302. The Secretary of Defense delegated to the Secretary of the 

Army the authority to order Army Guard soldiers to active duty as part of 

the overall mobilization effort. Approximately 93,000 Army Guard soldiers 

were activated as of March 2003. At that time, Army Guard soldiers 

accounted for 34 percent of the total reserve components3

 mobilized in 

response to the terrorist attacks on September 11, 2001. 

The active duty federal missions established in response to the September 

2001 national emergency were categorized into two operations: Operation 

Enduring Freedom and Operation Noble Eagle. In general, missions to 

fight terrorism outside the United States were categorized under Operation 

Enduring Freedom, while missions to provide domestic defense were 

categorized as Operation Noble Eagle. For example, Army Guard soldiers 

participated in direct combat in Afghanistan under Operation Enduring 

Freedom. U.S. homeland security missions, such as guarding the Pentagon, 

airports, nuclear power plants, domestic water supplies, bridges, tunnels, 

and other military assets were conducted under Operation Noble Eagle. 

The Army Guard also supported federal peacekeeping operations in 

Southwest Asia with Operation Desert Spring and in Kosovo with 

Operation Joint Guardian under various other military operations.

3

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

Air Force Reserves, Naval Reserves, Marine Corps Reserves, and Coast Guard Reserves.
Page 9 GAO-04-89 Army Guard Pay

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

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

Guard soldiers are eligible to receive vary depending upon rank and length 

of service, dependency status, skills and certifications acquired, duty 

location, and the difficulty of the assignment. While Army Guard soldiers 

mobilized to active duty may be entitled to receive additional pays and 

allowances, we focused on 14 basic types of pays and allowances 

applicable to the Army Guard units we selected for case studies. As shown 

in table 1, we categorized these 14 pay and allowance types into two 

groups: (1) pays, including basic pay, special duty assignment pay, 

parachute jumping and foreign language proficiency skill-based pays, and 

location-based hostile fire and hardship duty pays and (2) allowances, 

including allowances for housing, subsistence, family separation, and cost 

of living for the continental United States.4

Table 1: Basic Pays and Allowances Associated with Case Study Units

4

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 an allowance as “a 

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

like.” Department of Defense Financial Management Regulation, vol. 7A, Definitions, para. 

15 (February 2001). While generally items considered as “pay” are taxable for federal 

income tax purposes, except for the cost of living

allowance for the continental United States, most allowances, such as those for housing, 

subsistence, and family separation, are not. 

Pays Description Dollar amount

Basic pay Salary Varies depending on rank and 

years of service

Hazardous duty pay - 

jump pay 

Pay for parachute jumping $150 per month

Hazardous duty pay – 

jump pay - high altitude 

low opening pay

Pay for parachute jumping at 

high altitude without use of a 

static line

$225 per month

Special duty assignment 

pay

Pay to enlisted soldiers 

performing duties that are 

particularly difficult or 

requiring an unusual degree 

of responsibility

Varies from $55 to $375 per 

month
Page 10 GAO-04-89 Army Guard Pay

Source: GAO analysis.

In addition, Army Guard soldiers may be eligible for tax advantages 

associated with their mobilization to active duty. That is, mobilized Army 

Guard soldiers assigned to or working in a combat zone are entitled to 

Foreign language 

proficiency pay

Pay for specialized foreign 

language skills

Varies depending on 

proficiency but may not 

exceed $300 per month

Diving duty pay Pay for diving duty or the 

requirement to maintain 

proficiency as a diver

Varies according to service 

branch and proficiency but 

may not exceed $240 per 

month for officers and $340 

per month for enlisted 

members

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

Hostile fire/imminent 

danger pay

Full pay for any portion of 

month 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 though September 

30, 2003

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

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 

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 September 30, 2003

(Continued From Previous Page)

Pays Description Dollar amount
Page 11 GAO-04-89 Army Guard Pay

exclude from taxable income certain military pay that would otherwise be 

taxable.5

 

As shown in figure 1, there are three key phases associated with starting 

and stopping relevant pays and allowances for mobilized Army Guard 

soldiers: (1) initial mobilization (primarily through the Soldier Readiness 

Processing), (2) deployment, which includes carrying out assigned mission 

operations while on active duty, and (3) demobilization. 

Figure 1: Three Key Phases for Active Duty Pays to Army Guard Soldiers 

Army Guard units and state-level command support components, as well as 

active Army finance components and DFAS, have key roles in this process. 

In addition, there are five key computer systems involved in authorizing, 

5

There is no limit on the military pay exemption for enlisted Army Guard members, but there 

is an annual limit of about $70,000 for officers. 

Mobilization Deployed Demobilization

• Pays soldiers

• Issues Leave and Earnings Statements

 and wage garnishments

Performs

active duty

mission

Leaves 

active army

duty station

Return to

Army Guard

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 Guard home 

station

2nd pay record 

review done as part 

of SRP at active 

Army mobilization 

station
Page 12 GAO-04-89 Army Guard Pay

entering, and processing active duty pays to mobilized Army Guard soldiers 

through the three key phases of their mobilization:

• Army’s standard order writing system, Automated Fund Control Order 

System (AFCOS);

• Army Guard’s personnel system, Standard Installation Division 

Personnel Reporting System (SIDPERS);

• Army Guard’s pay input system, JUMPS Standard Terminal Input System 

(JUSTIS); 

• active Army’s pay input system, Defense Military Pay Office System 

(DMO); and

• DFAS’ Army Guard and Reserve pay system, DJMS-RC.

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

mobilization preparation program, Soldier Readiness Processing (SRP). 

The financial portion of the SRP is conducted by one of the 54 United 

States Property and Fiscal Offices (USPFO) to verify the accuracy of pay 

records for each soldier and to make changes to pay records based on 

appropriate supporting documentation for the pays and allowances that the 

soldiers will be entitled to receive when initially mobilized. If 

documentation, such as birth certificates for dependents or parachute 

jumping certifications, is missing, soldiers have a few days to obtain the 

necessary documents. The unit commander is responsible for ensuring that 

all personnel data for each soldier under their command are current.

When the unit receives a mobilization order, USPFO pay technicians are 

responsible for initiating basic pay and allowances by manually entering 

the start and stop dates into DJMS-RC6

 for the active duty tour that appears 

on each soldier’s mobilization order. Army Guard pay technicians use 

JUSTIS to access and record data in DJMS-RC. By entering the soldier’s 

Social Security number and mobilization order number into JUSTIS, the 

pay technician can view the pay data in DJMS-RC, ensure that they are 

6

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

military pay system to pay the Army active and reserve component soldiers (including Army 

Guard soldiers).
Page 13 GAO-04-89 Army Guard Pay

complete, and enter any missing data supported by documentation 

provided by the soldier. If done correctly, soldiers will start to receive 

basic pay, basic allowances for housing, basic allowances for subsistence, 

and jump pay automatically based on the start date entered into DJMS-RC. 

After soldiers complete their initial SRP and receive individual mobilization 

orders, they travel as a unit to a mobilization station. At the mobilization 

station, mobilized Army Guard personnel undergo a second SRP review. In 

this second SRP, mobilization station personnel are responsible for 

confirming or correcting the results of the first SRP, including making 

necessary reviews to ensure that each soldier’s records are current. 

Mobilization pay technicians are required to promptly initiate pays that 

were not initiated during the first SRP and enter appropriate pay changes 

into DJMS-RC. The mobilization station commander is required to certify 

that the unit is ready for mobilization, including ensuring that all authorized 

active duty pays are in place for the soldiers in the unit, at the end of this 

process. 

DJMS-RC will generate certain pays and allowances automatically for each 

2-week pay period until the stop date entered in DJMS-RC. If entered 

correctly, the stop date in DJMS-RC will be the end of active duty tour date 

documented on the soldier’s mobilization orders. This automated feature is 

intended to prevent erroneous payments to soldiers beyond their 

authorized active duty status. However, human intervention is required 

when a pay or allowance error is detected or an event occurs that requires 

a change in the soldier’s pay and personnel file. For example, a change in 

dependent status, such as marriage or divorce, a promotion, jump pay 

disqualification, or being demobilized before an active duty tour ends 

would change or eliminate some of the pays and allowances a soldier 

would be entitled to receive. All pays and allowances and subsequent 

changes are documented in the Master Military Pay Account (MMPA)—the 

central pay record repository in DJMS-RC for each soldier.

Deployed Phase While deployed on active duty, there are several Army Guard (USPFO), 

active Army, and DFAS components involved in paying mobilized Army 

Guard personnel. The active Army servicing finance office, which may be 

within the United States or in a foreign country, is responsible for initiating 

pays earned while the soldier is deployed, such as hostile fire pay and 

hardship duty pay. Pay technicians start hostile fire pay for each soldier 

listed on a battle roster or flight manifest. Thereafter, hostile fire pay is 

automatically generated each pay period. Other location-based pays, such 
Page 14 GAO-04-89 Army Guard Pay

as hardship duty, require pay transactions each month. The servicing 

finance office for the deployed phase is under the jurisdiction of the active 

Army. Active Army servicing finance offices use DMO to enter pay 

transactions into DJMS-RC. Under certain conditions, either active Army 

pay servicing offices or USPFOs can process applicable pay-altering 

transactions, such as those related to a soldier’s early separation from 

active duty or a soldier’s death. 

Demobilization Phase Upon completion of an active duty tour, soldiers normally return to the 

same Army locations from which they were mobilized for demobilization 

out-processing before returning to their home units. Demobilization 

personnel, employed by the active Army or Army Guard, are required to 

provide each soldier with a Release from Active Duty (REFRAD) order and 

a Form DD 214, Certificate of Release or Discharge from Active Duty. The 

demobilization station pay technicians are to use these documents as a 

basis for deactivating the soldier’s active duty pay and allowances as of the 

date of release from active duty. At this time, the supporting USPFO is 

responsible for discontinuing monthly input of all nonautomated pays and 

allowances. If the demobilization station did not take action to return a 

soldier to a demobilized status, the state USPFO has this responsibility. 

Military Pay Systems 

Environment

In 1995, the Army decided to process pays to mobilized Army Guard 

soldiers from the DJMS-RC system rather than the active Army payroll 

system used to pay mobilized Army Guard soldiers previously. According 

to the then Deputy Assistant Secretary of the Army (Financial Operations), 

this decision was made as an interim measure (pending the conversion to a 

single system to pay both active and reserve component soldiers) based on 

the belief that DJMS-RC provides the best service to the reserve component 

soldiers. DJMS-RC is a large, complex, and sensitive payroll computer 

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

Force Reserve personnel. DFAS has primary responsibility for developing 

guidance and managing operations of the system. DFAS Indianapolis is the 

central site for all Army military pay and is responsible for maintaining over 

1 million MMPAs for the Army. Each MMPA contains a soldier’s pay-related 

personnel, entitlement, and performance data. All pay-related transactions 

that are entered into DJMS-RC, through JUSTIS and DMO, update the 

MMPA. Personnel data contained in the MMPA are generated from 

SIDPERS—a personnel database maintained and used by the Army Guard 

at the 54 state-level personnel offices to capture data on personnel-related 
Page 15 GAO-04-89 Army Guard Pay

actions (e.g. discharge, promotion, demotion actions that impact soldiers’ 

pay). 

DFAS Denver is responsible for designing, developing, and maintaining 

customer requirements for the Military and Civilian Pay Services business 

line, and its Technical Support Office designs and maintains the DJMS-RC 

core pay software. DFAS-Indianapolis serves as a “gatekeeper” in that it 

monitors the daily status of data uploaded to DJMS-RC to ensure that all 

transactions are received and processed in DJMS-RC. Users can sign on to 

DJMS-RC directly through online interactive software used for file transfer 

transactions, online queries of MMPAs, and downloads of data files and 

various DJMS-RC reports. 

JUSTIS is the pay input subsystem used by the 54 state-level Army Guard 

commands, including the USPFOs, to update DJMS-RC. Database 

management of JUSTIS is decentralized in that each of the 54 sites owns 

and maintains its own JUSTIS database. This subsystem processes 

transactions for submission to DJMS-RC to create payments for Army 

National Guard soldiers. JUSTIS receives certain pay-affecting personnel 

data from SIDPERS.

JUSTIS receives a limited amount of mobilization order data directly from 

AFCOS. These systems share the same operating system platform and 

certain database tables. However, additional data needed to create pay 

transactions associated with active duty pay and allowances must be 

entered manually into JUSTIS from hard copies of mobilization orders. 

DMO is the pay input subsystem used by active Army finance offices and 

the DOD military pay offices, including those in overseas locations such as 

Europe, Korea, and Iraq, to update DJMS-RC. This pay input subsystem 

can be used by active Army finance offices to create transactions for 

military pay and allowances that are not reported at the time of 

mobilization for upload to DJMS-RC and for active Army finance offices to 

use to enter location-based pays, such as hostile fire and hardship duty 

pays and combat zone tax exclusion transactions. 

Case Studies Illustrate 

Significant Pay 

Problems 

We found significant pay problems at the six Army Guard units we audited. 

These problems related to processes, human capital, and systems. The six 

units we audited, including three special forces and three military police 

units, were as follows:

Special forces units
Page 16 GAO-04-89 Army Guard Pay

• Colorado B Company, 5th Battalion, 19th Special Forces

• Virginia B Company, 3rd Battalion, 20th Special Forces

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

Military police units

• Mississippi 114th Military Police Company

• California 49th Military Police Headquarters and Headquarters 

Detachment 

• Maryland 200th Military Police Company

In addition, we conducted a limited review of the pay experiences of a 

seventh unit mobilized more recently and deployed to Iraq in April 2003—

the Colorado Army Guard’s 220th Military Police Company—to determine 

the extent to which the pay problems we found in our six case study units 

persisted. As shown in figure 2, these units were deployed to various 

locations in the United States and overseas in support of Operations Noble 

Eagle and Enduring Freedom.
Page 17 GAO-04-89 Army Guard Pay

Figure 2: Units and Deployment Locations

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

operations, including search and destroy missions in Afghanistan against 

Taliban and al Qaeda forces, guard duty for al Qaeda prisoners in Cuba, 

providing security at the Pentagon shortly after the September 11, 2001, 

terrorist attacks, and military convoy security and highway patrols in Iraq. 

1

2

3

4

5

6

7

1

2

3

4

5

6

7

Mississippi, 114th Military Police Company - deployed to Guantanamo Bay, Cuba

Deployments

California, 49th Military Police Detachment - deployed to Fort Lewis, Washington

Virginia, 20th Special Forces, 3rd Battalion, B Company - deployed to Afghanistan

Maryland, 200th Military Police Company - deployed to Pentagon, Virginia

Colorado, 19th Special Forces, 5th Battalion, B Company - deployed to Afghanistan

West Virginia, 19th Special Forces, 2nd Battalion, C Company - deployed to Afghanistan

Colorado, 220th Military Police Company - deployed to Iraq

Source: GAO.
Page 18 GAO-04-89 Army Guard Pay

For the six units we audited, we found significant pay problems involving 

over one million dollars in errors. These problems consisted of 

underpayments, overpayments, and late payments that occurred during all 

three phases of Army Guard mobilization to active duty. Overall, for the 18-

month period from October 1, 2001, through March 31, 2003, we identified 

overpayments,7

 underpayments, and late payments at the six case study 

units estimated at $691,000, $67,000, and $245,000, respectively. In 

addition, for one unit, these pay problems resulted in largely erroneous 

debts totaling $1.6 million. Overall, we found that 450 of the 481 soldiers 

from our case study units had at least one pay problem associated with 

their mobilization to active duty. Table 2 shows the number of soldiers 

with at least one pay problem during each of the three phases of active duty 

mobilization.

Table 2: Pay Problems at Six Case Study Units

Source: GAO analysis.

7

We identified about $135,000 in collections against these overpayments. 

Army Guard unit

Soldiers with pay problems

Mobilization Deployment Demobilization

Colorado Special Forces 56 of 62 61 of 62 53 of 62

Virginia Special Forces 31 of 65 63 of 65 60 of 65

West Virginia Special Forces 36 of 94 84 of 94 66 of 94

California Military Police 48 of 51 41 of 51 0 of 51

Maryland Military Police 75 of 90 64 of 90 3 of 90

Mississippi Military Police 21 of 119 93 of 119 90 of 119
Page 19 GAO-04-89 Army Guard Pay

Due to the lack of supporting documents at the state, unit, and battalion 

levels, we may not have identified all of the pay problems related to the 

active duty mobilizations of these units. We have provided documentation 

for the pay problems we identified to appropriate DOD officials for further 

research to determine whether additional amounts are owed to the 

government or the soldiers. The payment problems we identified at the six 

case study units did not include instances of fraudulent payments, which 

were a major finding resulting from the further investigation of improper 

payments found in our 1993 audit of Army military payroll.8

 Nonetheless, 

we found the inaccurate, late, and missing pays and associated erroneous 

debts found during our current audit had a profound financial impact on 

individual soldiers and their families. Some of the pay problems we 

identified included the following.

• DOD erroneously billed 34 soldiers in a Colorado National Guard 

Special Forces unit an average of $48,000 each. Though we first notified 

DOD of these issues in April and sent a follow-up letter in June 2003, the 

largely erroneous total debt for these soldiers of about $1.6 million 

remained unresolved at the end of our audit in September 2003.

• As a result of confusion over responsibility for entering transactions 

associated with a Colorado soldier’s promotion, the soldier’s spouse had 

to obtain a grant from the Colorado National Guard to pay bills while 

her husband was in Afghanistan.

• Some soldiers did not receive payments for up to 6 months after 

mobilization and others still had not received certain payments by the 

conclusion of our audit work.

• Ninety-one of 100 members of a Mississippi National Guard military 

police unit that was deployed to Guantanamo Bay, Cuba, did not receive 

the correct amount of Hardship Duty Pay.

8

GAO/AIMD-93-32. As discussed in that report, at that time, Army Guard soldiers mobilized 

to active duty were paid using the Army active duty pay system. In addition, as discussed in 

our April 1994 testimony, (U.S. General Accounting Office, Financial Management: 

Financial Control and System Weaknesses Continue to Waste DOD Resources and 

Undermine Operations, GAO/T-AIMD/NSIAD-94-154, Washington, D.C.: Apr. 12, 1994), 

further investigation of the improper payroll payments identified in our 1993 report revealed 

instances of fraudulent payments to “ghost soldiers.” 
Page 20 GAO-04-89 Army Guard Pay

• One soldier from the Mississippi unit was paid $9,400 in active duty pay 

during the 3 months following an early discharge for drug-related 

charges.

• Forty-eight of 51 soldiers in a California National Guard military police 

unit received late payments because the unit armory did not have a copy 

machine available to make copies of needed pay-related documents.

• Four Virginia Special Forces soldiers who were injured in Afghanistan 

and unable to resume their civilian jobs experienced problems in 

receiving entitled active duty pays and related health care. 

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

professional soldiers from mission requirements, as they spent 

considerable time and effort while deployed attempting to address these 

issues. Further, these problems may adversely affect the Army’s ability to 

retain these valuable personnel. Appendixes I–VI provide details of the pay 

experiences of the soldiers at the case study units we audited. 

Significant Weaknesses 

in Processes over 

Mobilized Army Guard 

Pay 

Procedural requirements, particularly in light of the potentially hundreds of 

organizations and thousands of personnel involved, were not well 

understood or consistently applied with respect to determining (1) the 

actions required to make timely, accurate active duty pays to mobilized 

Army Guard soldiers and (2) the component responsible, among Army 

Guard, active Army, and DFAS, for taking the required actions. Further, we 

found instances in which existing guidance was out of date—some of 

which still reflected practices in place in 1991 during Operation Desert 

Storm. These complex, cumbersome processes, which were developed in 

piecemeal fashion over a number of years, provide numerous opportunities 

for control breakdowns. We found that a substantial number of payment 

errors were caused, at least in part, by unclear procedural requirements for 

processing active duty pay and allowance entitlements to mobilized Army 

Guard soldiers. 

Complex, Cumbersome, and 

Evolving Processes

Overall, as shown in figures 3, 4 and 5, we found that an extensive, 

cumbersome, and labor-intensive process has evolved to pay mobilized 

Army Guard soldiers for their active duty service. 
Page 21 GAO-04-89 Army Guard Pay

Figure 3: Initial Mobilization Phase Process

Process for initiating

 active duty pay when

first mobilized

Process for stopping

active duty pay when

demobilized

Process for pay changes

while deployed

1 2 3

See

part

2

to

duty

station

Personnel clerks update pay 

impacting soldier data in 

SIDPERS for mobilized 

soldiers.

Payroll clerks review 

supporting documentation, 

pass system edit checks, 

and input payroll start and 

stop date for automated 

active duty pay and 

allowances into JUSTIS. 

2nd SRP pay transactions 

entered into DMO after 

review and edit checks.

Mobilization

orders

Mobilization

orders

Mobilization

orders

Home unit

Soldiers under state control 

receive federal active duty 

mobilization orders, and their 

active duty pay support 

documentation is validated as 

part of the Soldier Readiness 

Processing (SRP).

Mobilization station

2nd SRP opportunity to 

update/correct active duty 

pay support based on 

mobilization orders.

Monthly data

reconciliation

Start active duty

pay transactions

monthly listing

of soldiers paid

for active duty

Monthly Unit

Commander Pay

Management

Report

Start pay transactions

updated/corrected into

DJMS-RC. Process pay transactions 

entered into DJMS-RC. Up 

to 8 to 10 active duty payroll 

payments to soldiers each 

month.

1

Unit

Commander

Monthly personnel

on-board vs. paid

reconciliation

Army Guard - State Personnel

Office

Army Guard - State U.S.

Property and Fiscal Office

(USPFO)

DFAS - IN

Active Army - Mobilization

Station DMPO or

Army Finance Office

Army Order

Writing System

AFCOS

Pay and allowances, wage garnishment

Source: GAO. and LESs to soldiers
Page 22 GAO-04-89 Army Guard Pay

Figure 4: Deployed Phase Process

Process for initiating

 active duty pay when

first mobilized

Process for stopping

active duty pay when

demobilized

Process for pay changes

while deployed

1 2 3

From

part

1

See

part

3

from

mobilization

station

to

demobilization

station

Payroll clerks review 

supporting documentation, 

pass system edit checks 

and input monthly manual 

pay impacting transactions 

into JUSTIS. 

Payroll clerks review 

supporting documentation, 

pass system edit checks, 

and input pay impacting 

transactions into DMO.

Payroll clerks review 

supporting documentation, 

pass system edit checks, 

and input monthly manual 

pay impacting transactions 

into DMO.

Soldier sends special orders and pay

impacting transaction

with supporting documentation

to one of three locations.

Monthly Unit Commander

Pay Management Report

Active army duty station

Soldiers eligible for 

additional types of pay 

based on duty location.

Unit

Commander

Monthly personnel

on-board vs. paid

reconciliation

2 3

Personnel transactions 

entered into SIDPERS.

Monthly data

reconciliation

Pay transactions entered to 

DJMS-RC. Up to 8 to 10 

active duty payroll payments 

to soldiers each month.

monthly listing

of soldiers paid

for active duty

Army Guard - State Personnel

Office

Army Guard - State U.S.

Property and Fiscal Office

(USPFO)

Active Army - DMPO or

Army Finance Office

Active Army - Area Servicing

Finance Office

DFAS - IN

Pay and allowances, wage garnishment

Source: GAO. and LESs to soldiers
Page 23 GAO-04-89 Army Guard Pay

Figure 5: Demobilization Phase Process

Process for initiating

 active duty pay when

first mobilized

Process for stopping

active duty pay when

demobilized

Process for pay changes

while deployed

1 2 3

From

part

2

from

duty

station

Home unit

Soldiers return to home 

station and state control.

 Demobilization station 

Receive Release from Active 

Duty Order (REFRAD) and

Certificate of Release or 

Discharge from Active Duty 

(Form DD 214).

Transactions pass review of 

documentation and system 

edit checks to stop active 

duty pay through JUSTIS.

Stop pay transactions entered

into DJMS-RC

Soldier is removed from 

active duty status in 

SIDPERS.

Transactions pass review of 

documentation and system 

edit checks to stop active 

duty pay through DMO.

Monthly

data reconciliation

Process pay transactions 

entered into DJMS-RC.

monthly listing

of soldiers paid

for active duty

Stop pay

transactions

Debt

assessed and

wage

garnishment

to soldier for any

overpayments

4

Monthly personnel

on-board vs. paid

reconciliation

Unit

Commander

Monthly Unit

Commander Pay

Management

Report

Active Army - Demobilization

Station DMPO or

Army Finance Office

Army Guard - State Personnel

Office

Army Guard - State U.S.

Property and Fiscal Office

(USPFO)

DFAS - IN

REFRAD,

revoked, or

amended order

Army Order

Writing System

AFCOS

Pay and allowances, wage garnishment

and LESs to soldiers

Source: GAO.
Page 24 GAO-04-89 Army Guard Pay

While figures 3, 4 and 5 provide an overview of the process, particularly of 

the types of DOD organizations involved, they do not fully capture the 

numbers of different DOD components involved. Specifically, thousands of 

Army Guard (individual units and state-level organizations), active Army, 

and DFAS components may be involved in authorizing, processing, and 

paying mobilized Army Guard soldiers, including 

• an estimated 2,300 local Army Guard home units, unit commanders, and 

unit administrators that are involved in maintaining up-to-date soldier 

personnel and related pay records;

• 54 state-level Army Guard commands, including both USPFOs and statelevel personnel offices involved in authorizing and starting active duty 

pay transactions;

• active Army finance offices or DOD Military Pay Offices at over 15 

mobilization stations across the United States that are involved in 

processing Army Guard personnel to and from their active duty 

locations;

• 28 active Army area servicing finance offices at over 50 locations 

worldwide that are involved in servicing Army Guard soldiers’ locationbased active duty pays;

• DFAS-Indianapolis—the central site for processing Army Guard 

soldiers’ active duty pays;

• DFAS-Denver—the central site for maintaining the pay system used to 

pay Army Guard soldiers; 

• DFAS-Cleveland—the central site for handling soldier military pay 

inquiries; and 

• The Army National Guard Financial Services Center—the Army Guard 

organization responsible for providing guidance, training, and oversight 

and coordination for active duty pays to Army Guard personnel.

Several of these organizations with key roles in payroll payments to 

mobilized Army Guard soldiers, including DOD, DFAS, Army, and the Army 

Guard, have issued their own implementing regulations, policies, and 

procedures. In addition, we found unwritten practices in place at some of 

the case study locations we audited. Existing written policies and 
Page 25 GAO-04-89 Army Guard Pay

procedures are voluminous—the DOD Financial Management Regulations 

(FMR) guidance on pay and allowance entitlements alone covers 65 

chapters. As a result of their size and continually evolving nature as legal, 

procedural, and system requirements change, we found that policies and 

procedures were not well understood or consistently applied across the 

potentially hundreds of organizations and thousands of personnel involved 

in paying mobilized Army Guard personnel. These processes have been 

developed in piecemeal fashion over a number of years to accommodate 

changing legislative requirements, DOD policies, and the unique operating 

practices of different DOD organizations and systems involved in these 

processes.

As discussed in the following sections, these extensive and evolving 

policies and procedures were confusing both across various organizations 

and personnel involved in their implementation and, more importantly, to 

the Army Guard soldiers who are the intended beneficiaries. In addition, 

these cumbersome policies and procedures contributed to the pay errors 

we identified. 

Procedural Requirements 

Not Clear

We found instances in which unclear procedural requirements for 

processing active duty pays contributed to erroneous and late pays and 

allowances to mobilized Army Guard soldiers. For example, we found 

existing policies and procedural guidance were unclear with respect to the 

following issues.

Amending active duty orders. A significant problem we found at the 

case study locations we audited concerned procedures that should be 

followed for amending active duty orders. We found instances at two of 

our case study locations in which military pay technicians at either a 

USPFO or an active Army finance office made errors in amending existing 

orders. These errors resulted in establishing virtually all prior pays made 

under the original orders as debts. A major contributor to the pay errors 

we found in this area was that existing procedures did not clearly state how 

USPFO and active Army finance personnel should modify existing order 

tour start and stop information in the pay system when necessary without 

also unintentionally adversely affecting previous pays and allowances. 

Also, these procedures did not warn USPFO and active Army personnel 

that using alternative methods will automatically result in an erroneous 

debt assessment and garnishment of up to two-thirds of the soldier’s pay.
Page 26 GAO-04-89 Army Guard Pay

We identified over $1 million in largely erroneous debt transactions as a 

result of breakdowns in this area. At the Colorado Special Forces unit, we 

found that actions taken by the Colorado USPFO in an attempt to amend 34 

soldiers’ orders resulted in reversing the active pay and allowances the 

soldiers received for 11 of the 12 months they were deployed on active duty 

in Afghanistan and instead establishing these payments as debts. These 34 

soldiers received notice on their Leave and Earnings Statements that they 

owed the government an average of approximately $48,000 per soldier, for 

a total largely erroneous debt of $1.6 million. Although we informed DOD 

of this problem in April 2003, as of the end of our audit fieldwork in 

September 2003, the problems at the Colorado Special Forces unit had not 

been resolved. DOD officials did advise us that, as a result of our work, 

they implemented a software change on September 18, 2003, intended to 

help avoid such problems in the future. Specifically, we were told new 

warning messages have been added to JUSTIS that will appear when a 

transaction is entered to cancel or amend a tour of duty. The new warnings 

will advise that the transaction will or could result in a collection action 

and will ask the pay technician to confirm that is their intent. While we did 

not verify the effectiveness of this change, it has the potential to reduce pay 

problems associated with errors made in amending orders.

Required time frames for processing pay transactions. Written 

requirements did not exist with respect to the maximum amount of time 

that should elapse between the receipt by the responsible Army Guard or 

Army pay office of proper documentation and processing the related pay 

transaction through the pay system. While some of the locations we 

audited had established informal processing targets, for example, 3 days, 

we also found numerous instances in which available documentation 

indicated lengthy delays in processing pay transactions after pay offices 

received supporting documentation. These lengthy processing delays 

resulted in late payroll payments to deployed soldiers.

Required monthly reconciliations of pay and personnel data. The 

case study units lacked specific written requirements for conducting and 

documenting monthly reconciliations of pay and personnel mismatch 

reports and unit commanders’ finance reports. Available documentation 

showed that these controls were either not done or were not done 

consistently or timely. Because, as discussed later in this report, the 

processing of Army Guard pay relies on systems that are not integrated or 

effectively interfaced, these after-the-fact detective controls are critical to 

detecting and correcting erroneous or fraudulent pays. 
Page 27 GAO-04-89 Army Guard Pay

To be effective, the 54 state-level Army Guard commands must individually 

reconcile common data elements in all 54 state-operated personnel 

databases for Army Guard personnel with corresponding DJMS-RC pay 

records at least monthly. Because of the lack of clarity in existing 

procedural requirements in this area, we found that several of the locations 

we visited had established standard but undocumented reconciliation 

practices. However, at the six case study locations we audited, we found 

that although all the USPFOs told us they received monthly SIDPERS and 

DJMS-RC mismatch reports, they did not always fully reconcile and make 

all necessary system corrections each month. Lacking specific written 

policies and procedural requirements for such reconciliations, several of 

the case study locations we audited established a standard, but 

undocumented, practice of reconciling roughly a third of the common data 

elements every month, so that all elements were to be reconciled and all 

necessary corrective actions taken over a 3-month period. However, 

documentation was not always retained to determine the extent to which 

these reconciliations were done and if they were done consistently. 

Our findings are similar to those in reports from Army Guard operational 

reviews. For example, the results of the most recent reviews at three of the 

six case study locations we audited showed that state Army Guard 

personnel were not performing effective reconciliations of pay and 

personnel record discrepancies each month. One such report9

 concluded, 

“Failure to reconcile the Personnel/Pay Mismatch listing monthly provides 

a perfect opportunity to establish fraudulent personnel or pay accounts.” 

Several of the instances we identified in which soldiers received pay and 

allowances for many months after their release from active duty likely 

would have been identified sooner had USPFO military pay personnel 

investigated the personnel/pay mismatch report discrepancies more 

frequently. For example, at one case study unit, 34 soldiers received pay 

for several months past their official discharge dates. Although records 

were not available to confirm that these overpayments were reported as 

discrepancies on monthly mismatch reports, the USPFO military pay 

supervisor told us that at the time the mismatch reports were not being 

used to identify and correct pay-affecting errors. 

9

May 9, 2002, memorandum on the results of an April 15-19, 2002, National Guard Bureau 

operational review of Colorado’s USPFO.
Page 28 GAO-04-89 Army Guard Pay

As discussed later, at another case study unit, a mobilized soldier was 

released from active duty and discharged from the Army in June 2002, 

earlier than his planned release date due to alleged involvement in drugrelated activities. But, the soldier continuied to receive active duty pay. The 

soldier’s SIDPERS personnel record on July 2, 2002, to reflect the 

discharge. According to pay records, the soldier’s pay continued until the 

USPFO military pay supervisor identified the discrepancy on the 

September 25, 2002, personnel/pay mismatch report and initiated action 

that stopped the soldier’s pay effective September 30, 2002. However, 

because this discrepancy was not identified until late September, the 

soldier received $9,400 in extra pay following his discharge from the Army. 

In addition, while as discussed previously, we found a number of instances 

in which Army Guard soldiers’ active duty pays continued after their 

demobilization, available documentation showed only one instance in the 

six case study units we visited in which a reconciliation of the unit 

commander’s finance report resulted in action to stop improper active duty 

pay and allowances. Specifically, available documentation shows that an 

administrative clerk’s review of this report while the unit was mobilized in 

Guantanamo Bay, Cuba, resulted in action to stop active duty pay and 

allowances to a soldier who was previously demobilized. However, it is 

also important to note that while these reconciliations are an important 

after-the-fact detective control, they are limited because they can only 

detect situations in which payroll and personnel records do not agree. A 

number of pay errors we identified resulted from the fact that neither 

personnel nor pay records were updated. 

Soldiers returning from deployments earlier than their units. For 

four of our case study units, we found instances in which Army Guard 

soldiers’ active duty pays were not stopped at the end of their active duty 

tours when they were released from active duty earlier than their units. We 

found procedural guidance did not clearly specify how to carry out 

assigned responsibilities for soldiers who return from active duty earlier 

than their units. DFAS-Indianapolis guidance provides only that “the 

supporting USPFO will be responsible for validating the status of any 

soldier who does not return to a demobilized status with a unit.” The 

guidance did not state how the USPFO should be informed that a soldier 

did not return with his or her unit, or how the USPFO was to take action to 

validate the status of such soldiers. At one of our case study locations, 

officials at the USPFO informed us that they became aware that a soldier 

had returned early from a deployment when the soldier appeared at a 

weekend drill while his unit was still deployed.
Page 29 GAO-04-89 Army Guard Pay

Data input and eligibility requirements for housing and family 

separation allowances. Our audit work at two of our case study 

locations indicated that procedural guidance was not clear with respect to 

transaction entry and eligibility requirements for the basic allowance for 

housing and the family separation allowance, respectively. For example, 

during our audit work at one of our case study locations, we determined 

that because of inconsistent interpretations of existing guidance for 

“dependents” in entering transactions to start paying soldiers’ basic 

allowance for housing, a number of Maryland soldiers were not paid the 

correct amount. At another case study location, we found that existing 

guidance on eligibility determination was misinterpreted so that soldiers 

were erroneously refused the “single parent soldiers family separation 

allowance” to which they were entitled. 

Organizational 

Responsibilities Not Clear

We also found that existing policies and procedures were unclear with 

respect to organizational responsibilities. Confusion centered principally 

around pay processing responsibility for Army Guard soldiers as they move 

from state control to federal control and back again. To be effective, 

current processes rely on close coordination and communication between 

state (Army Guard unit and state-level command organizations) and federal 

(active Army finance locations at mobilization/demobilization stations and 

at area servicing finance offices). However, we found a significant number 

of instances in which critical coordination requirements were not clearly 

defined.

Individual Case Illustration: Confusion over Responsibility for Entering Pay 

Transactions Results in Family Obtaining a Grant to Pay Bills 

A sergeant incurred pay problems during his mobilization and deployment to Afghanistan 

in support of Operation Enduring Freedom that caused financial hardship for his family 

while he was deployed. In this case, the active Army and his state's USPFO were 

confused as to responsibility for processing pay input transactions associated with a 

promotion. Specifically, pay input transactions were required for his promotion from a 

sergeant first class (E-7) to master sergeant (E-8), his demotion back to an E-7, and a 

second promotion back to an E-8. The end result was the soldier was overpaid during 

the period of his demotion. DFAS garnished his wages and collected approximately 

$1,100 of the soldier's salary. These garnishments reduced the soldier's net pay to less 

than 50 percent of the amount he had been receiving. As a result, the soldier's wife had 

to obtain a grant of $500 from the Colorado National Guard's Family Support Group to 

pay bills.
Page 30 GAO-04-89 Army Guard Pay

DFAS Indianapolis mobilization procedures authorize the Army Guard’s 

USPFOs and the active Army’s mobilization station and in-theater finance 

offices to enter transactions for deployed soldiers. However, we found 

existing guidance did not provide for clear responsibility and 

accountability between USPFOs and active Army mobilization stations and 

in-theater servicing finance offices with respect to responsibility for 

entering transactions while in-theater and terminating payments for 

soldiers who separate early or who are absent without leave or are 

confined. For example, at one of our case study locations, we found that 

this broad authority for entering changes to soldiers’ pay records enabled 

almost simultaneous attempts by two different pay offices to enter pay 

transactions into DJMS-RC for the same soldier. 

As shown in the following illustration, at another case study location we 

found that, in part because of confusion over responsibility for starting 

location-based pays, a soldier was required to carry out a dangerous 

multiday mission to correct these payments.
Page 31 GAO-04-89 Army Guard Pay

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Page 32 GAO-04-89 Army Guard Pay

Individual Case Illustration: Difficulty in Starting In-Theatre Pays

A sergeant with the West Virginia National Guard Special Forces unit was stationed in 

Uzbekistan with the rest of his unit, which was experiencing numerous pay problems. 

The sergeant told us that the local finance office in Uzbekistan did not have the systems 

up and ready, nor available personnel who were familiar with DJMS-RC. According to the 

sergeant, the active Army finance personnel were only taking care of the active Army 

soldiers’ pay issues. When pay technicians at the West Virginia USPFO attempted to 

help take care of some of the West Virginia National Guard soldiers’ pay problems, they 

were told by personnel at DFAS-Indianapolis not to get involved because the active Army 

finance offices had primary responsibility for correcting the unit’s pay issues. 

Eventually, the sergeant was ordered to travel to the finance office at Camp Doha, 

Kuwait, to get its assistance in fixing the pay problems. As illustrated in the following 

map. This trip, during which a soldier had to set aside his in-theatre duties to attempt to 

resolve Army Guard pay issues, proved to be not only a major inconvenience to the 

sergeant, but was also life-threatening. At Camp Doha (an established finance office), a 

reserve pay finance unit was sent from the United States to deal with the reserve 

component soldiers’ pay issues. The sergeant left Uzbekistan for the 4-day trip to Kuwait. 

He first flew from Uzbekistan to Oman in a C-130 ambulatory aircraft (carrying wounded 

soldiers). From Oman, he flew to Masirah Island. From Masirah Island he flew to Kuwait 

International Airport, and from the airport he had a 45-minute drive to Camp Doha. The 

total travel time was 16 hours. The sergeant delivered a box of supporting documents 

used to input data into the system. He worked with the finance office personnel at Camp 

Doha to enter the pertinent data on each member of his battalion into DJMS-RC. After 2 

days working at Camp Doha, the sergeant returned to the Kuwait International Airport, 

flew to Camp Snoopy in Qatar, and from there to Oman. On his flight between Oman and 

Uzbekistan, the sergeant’s plane took enemy fire and was forced to return to Oman. No 

injuries were reported. The next day, he left Oman and returned safely to Uzbekistan.
Page 33 GAO-04-89 Army Guard Pay
Page 34 GAO-04-89 Army Guard Pay

While guidance that permits both Army Guard and active Army military pay 

personnel to enter transactions for mobilized Army Guard soldiers 

provides flexibility in serving the soldiers, we found indications that it also 

contributed to soldiers being passed between the active Army and Army 

Guard servicing locations. For example, at another of our case study 

locations, we were told that several mobilized soldiers sought help in 

resolving active duty pay problems from the active Army’s mobilization 

station finance office at Fort Knox and later the finance office at Fort 

Campbell. However, officials at those active Army locations directed the 

soldiers back to the USPFO because they were Army Guard soldiers. 

We also found procedures were not clear on how to ensure timely 

processing of active duty medical extensions for injured Army Guard 

soldiers. Army Regulation 135-381 provides that Army Guard soldiers who 

are incapacited as a result of injury, illness, or disease that occured while 

on active duty for more than 30 consecutive days are eligible for continued 

health benefits. That is, with medical extension status, soldiers are entitled 

to continue to receive active duty pays, allowances, and medical benefits 

while under a physician’s care.

At the Virginia 20th Special Forces, B Company, 3rd Battalion, we found that 

four soldiers were eligible for continued active duty pay and associated 

medical benefits due to injuries incurred as a result of their involvement in 

Operation Enduring Freedom. Although these injuries precluded them 

from resuming their civilian jobs, they experienced significant pay 

problems as well as problems in receiving needed medical care, in part, as a 

result of the lack of clearly defined implementing procedures in this area. 

All four soldiers experienced pay disruptions because existing guidance 

was not clear on actions needed to ensure that these soldiers were retained 

on active duty medical extensions. One of the soldiers told us, “People did 

not know who was responsible for what. No one knew who to contact or 

what paperwork was needed....” As a result, all four have experienced 

gaps in receiving active duty pay and associated medical benefits while 

they remained under a physician’s care for injuries received while on their 

original active duty tour. 
Page 35 GAO-04-89 Army Guard Pay

Guidance Outdated We found several instances in which existing DOD and Army regulations 

and guidance in the pay and allowance area are outdated and conflict with 

more current legislative and DOD guidance. Some existing guidance 

reflected pay policies and procedures dating back to Operations Desert 

Shield and Desert Storm in 1991. While we were able to associate pay 

problems with only one of these outdated requirements, there is a risk that 

they may also have caused as yet unidentified pay problems. Further, 

having out-of-date requirements in current regulations may contribute to 

confusion and customer service issues. 

Individual Case Illustration: Unclear Regulations for Active Duty Medical 

Extension

Four soldiers who were injured while mobilized in Afghanistan for Operation Enduring 

Freedom told us that customer service was poor and no one was really looking after 

their interest or even cared about them. These problems resulted in numerous personal 

and financial difficulties for these soldiers. 

· “Not having this resolved means that my family has had to make greater sacrifices and 

it leaves them in an unstable environment. This has caused great stress on my family 

that may lead to divorce.”

· “My orders ran out while awaiting surgery and the care center tried to deny me care. 

My savings account was reduced to nearly 0 because I was also not getting paid while 

I waited. I called the Inspector General at Walter Reed and my congressman. My 

orders were finally cut. In the end, I was discharged 2 weeks before my care should 

have been completed because the second amendment to my orders never came and I 

couldn’t afford to wait for them before I went back to work. The whole mess was 

blamed on the ‘state’ and nothing was ever done to fix it.” 

· One sergeant was required to stay at Womack, the medical facility at Fort Bragg, 

North Carolina, while on medical extension. His home was in New Jersey. He had not 

been home for about 20 months, since his call to active duty. While he was recovering 

from his injuries, his wife was experiencing a high-risk pregnancy and depended upon 

her husband’s medical coverage, which was available while he remained in active duty 

status. Even though she lived in New Jersey, she scheduled her medical appointments 

near Fort Bragg to be with her husband. The sergeant submitted multiple requests to 

extend his active duty medical extension status because the paperwork kept getting 

lost. Lapses in obtaining approvals for continued active duty medical extension status 

caused the sergeant’s military medical benefits and his active duty pay to be stopped 

several times. He told us that because of gaps in his medical extension orders, he was 

denied medical coverage, resulting in three delays in scheduling a surgery. He also 

told us he received medical bills associated with his wife’s hospitalization for the 

delivery of their premature baby as a result of these gaps in coverage.
Page 36 GAO-04-89 Army Guard Pay

For example, the National Defense Authorization Act for Fiscal Year 1998 

replaced the basic allowance for quarters and the variable housing 

allowance with the basic allowance for housing.10 However, volume 7A, 

chapter 27 of the DOD FMR, dated February 2002, still refers to the basic 

allowance for quarters and the variable housing allowance. The act also 

replaced foreign duty pay with hardship duty pay.11 Yet, chapter 8 of Army 

Regulation 37-104-4 (Military Pay and Allowances Policy and Procedures – 

Active Component) still refers to foreign duty pay.

Further, current DFAS and Army mobilization procedural guidance directs 

active Army finance units to use transaction codes to start soldiers’ 

hardship duty pays that are incorrect. Effective December 2001, DOD 

amended FMR, Volume 7A, chapter 17, to establish a new “designated area” 

hardship duty pay with rates of $50, $100, or $150 per month, depending on 

the area. However, DFAS guidance dated December 19, 2002, directed 

mobilization site finance offices to use transaction codes that resulted in 

soldiers receiving a prior type of hardship duty pay that was eliminated in 

the December 2001 revisions. At one of our case study locations, we found 

that because the active Army finance office followed the outdated DFAS 

guidance for starting hardship duty pays, 91 of 100 Mississippi military 

police unit soldiers deployed to Cuba to guard al Qaeda prisoners were 

paid incorrect amounts of hardship duty pay. 

In addition, Army Regulation 37-104-4, dated September 1994, which was 

still in effect at the end of our audit work, provides that mobilized Army 

Guard soldiers are to be paid through the active Army pay system—the 

Defense Joint Military Pay System-Active Component (DJMS-AC). This 

procedure, in effect during the mobilizations to support Operations Desert 

Shield and Desert Storm, was changed in 1995. Specifically, in 1995, it was 

agreed that Army Guard personnel would no longer be moved to the active 

duty pay system, DJMS-AC, when mobilized to active duty, but would 

remain on the DJMS-RC system. Maintaining such outdated references in 

current policies may have contributed to confusion by USPFO and active 

Army finance personnel regarding required actions, particularly in light of 

the extensive set of policies and procedures now in effect in this area.

10Pub. L. No. 105-85, Div. A, Title VI, Subtitle A, Section 603, 111 Stat. 1629, 1775 (1997). 

11Id. at Section 619, 111 Stat. 1629, 1789.
Page 37 GAO-04-89 Army Guard Pay

Human Capital Issues 

Affect Ability to Pay 

Mobilized Army Guard 

Soldiers Promptly and 

Accurately 

With respect to human capital, we found weaknesses, including 

(1) insufficient resources allocated to pay processing, (2) inadequate 

training related to existing policies and procedures, and (3) poor customer 

service. The lack of sufficient numbers of well-trained, competent military 

pay professionals can undermine the effectiveness of even a world-class 

integrated pay and personnel system. A sufficient number of well-trained 

military pay staff is particularly crucial given the extensive, cumbersome, 

and labor-intensive process requirements that have evolved to support 

active duty pay to Army Guard soldiers. GAO’s Standards for Internal 

Control in the Federal Government states that effective human capital 

practices are critical to establishing and maintaining a strong internal 

control environment. Specifically, management should take steps to 

ensure that its organization has the appropriate number of employees, and 

that appropriate human capital practices, including hiring, training, and 

retention, are in place and effectively operating. 

Insufficient Numbers of 

Military Pay Processing 

Personnel 

Our audit identified concerns with the numbers of knowledgeable 

personnel dedicated to entering and processing active duty pays and 

allowances to mobilized Army Guard soldiers. As discussed previously, 

both active Army and Army Guard military pay personnel play key roles in 

this area. Army Guard operating procedures provide that the primary 

responsibility for administering Army Guard soldiers’ pay as they are 

mobilized to active duty rests with the 54 USPFOs. These USPFOs are 

responsible for processing pay for drilling reservists along with the 

additional surge of processing required for initiating active duty pays for 

mobilized soldiers.

Our audit work identified concerns with the human capital resources 

allocated to this area, primarily with respect to the Army Guard military 

pay processing at the state-level USPFOs. Specifically, we identified 

concerns with (1) the number of staff on board in the military pay sections 

of the USPFOs, (2) the relatively lower grade structure for nonsupervisory 

personnel in the USPFOs’ military pay sections in comparison with the 

grades for similar positions in other sections of the USPFO which led to 

difficulty in recruiting and retaining military pay processing personnel, and 

(3) as discussed in the following section, few of the military pay 

technicians on board at the six locations we audited had received formal 

training on pay eligibility and pay processing requirements for mobilized 

Army Guard personnel. 
Page 38 GAO-04-89 Army Guard Pay

NGB provides annual authorization for the overall staffing levels for each 

state. Within these overall staffing authorizations, each state allocates 

positions to each of the sections within a USPFO, including the military pay 

section and other sections such as vendor and contract pay. We compared 

the actual number of personnel on board to the NGB-authorized staffing 

level for the military pay sections at the case study locations we audited. 

During our audit period, two of the six case study locations had fewer 

military pay technicians on board than they were authorized. 

Officials at several of the six case study units also stated that restrictions 

on rank/grade at which USPFOs are allowed to hire personnel for their 

military pay sections made it difficult to recruit and retain employees. For 

example, a USPFO official told us that retaining personnel in the military 

pay section of the USPFOs was particularly difficult because similar 

administrative positions in other sections of the USPFO were typically 

higher paying and provided better benefits than the positions in the military 

pay section. The highest pay grade of the nonsupervisory pay technicians 

at the six case study units was a GS-7, and the majority of personnel were 

in the GS-6 pay grade. 

Although the Army and DFAS have established an agreement that in part 

seeks to ensure that resources are available to provide appropriately 

skilled pay personnel at mobilization stations to support surge processing, 

no such contingency staffing plan exists for the USPFOs. Specifically, a 

November 2002 memorandum of understanding between the Army and 

DFAS states that the active Army has primary responsibility to provide 

trained military or civilian resources to execute active duty pay and 

allowance surge processing requirements. However, this memorandum 

does not address the resources needed for surge processing at USPFOs. As 

discussed previously, pay problems at the case study units were caused in 

part by USPFO military pay sections attempting to process large numbers 

of pay transactions without sufficient numbers of knowledgeable 

personnel. 

Lacking sufficient numbers of personnel undermines the ability of the 

USPFO pay functions to carry out established control procedures. For 

example, our audits at several of the six case study units showed that there 

were no independent reviews of proposed pay transactions before they 

were submitted to DJMS-RC for processing. Such independent supervisory 

reviews are required by DJMS-RC operating procedures. However, a 

USPFO official told us that because of the limited number of pay 

technicians available to process pay transactions—particularly when 
Page 39 GAO-04-89 Army Guard Pay

processing massive numbers of transactions to start active duty pays at the 

same time—this requirement was often not followed.

The Chief of Payroll at one of our case study locations told us that because 

they were currently understaffed, staff members worked 12 to 14 hours a 

day and still had backlogs of pay start transactions to be entered into the 

pay system. We were also told that two of our other case study locations 

experienced backlogs and errors in entering pay start transactions when 

they were processing large numbers of Army Guard soldiers during initial 

mobilizations. Military pay personnel told us that they were able to avoid 

backlogs in processing pay start transactions during mobilization 

processing by conscripting personnel from other USPFO sections to help in 

assembling and organizing the extensive paperwork associated with 

activating appropriate basic pays, entitlements, and special incentive pays 

for their mobilized Army Guard soldiers.

Training on Pay Entitlement 

and Processing 

Requirements Critical 

In addition to concerns about the numbers of personnel onboard at the 

USPFO military pay offices involved in processing pay transactions for our 

case study units, we identified instances in which the personnel at military 

pay offices at both the USPFOs and the active Army finance offices did not 

appear to know the different aspects of the extensive pay eligibility or 

payroll processing requirements used to provide accurate and timely pays 

to Army Guard soldiers. There are no DOD or Army requirements for 

military pay personnel to receive training on pay entitlements and 

processing requirements associated with mobilized Army Guard soldiers or 

for monitoring the extent to which personnel have taken either of the 

recently established training courses in the area. Such training is critical 

given that military pay personnel must be knowledgeable about the 

extensive and complex pay eligibility and processing requirements. We 

also found that such training is particularly important for active Army pay 

personnel who may have extensive experience and knowledge of pay 

processing requirements for regular Army soldiers, but may not be well 

versed in the unique procedures and pay transaction entry requirements for 

Army Guard soldiers. 

During our work at the case study units, we identified numerous instances 

in which military pay technicians at both the USPFOs and active Army 

finance office locations made data coding errors when entering transaction 

codes into the pay systems. We were told that these errors occurred 

because military pay personnel—particularly those at the active Army 

finance office locations—were unfamiliar with the system’s pay processing 
Page 40 GAO-04-89 Army Guard Pay

requirements for active duty pays to mobilized Army Guard personnel. 

Correcting these erroneous transactions required additional labor-intensive 

research and data entry by other more skilled pay technicians. As 

discussed previously, we also found that pay technicians did not 

understand how to properly code data on the soldiers’ dependents status, 

which is used to determine housing allowances, into the pay system. As a 

result, we identified cases in which soldiers were underpaid housing 

allowances to which they were entitled. 

Personnel at active Army finance offices told us that while they are readily 

familiar with the pay processing requirements for active Army personnel 

(using DJMS-AC), they had little experience with, or training in, the policies 

and procedures to be followed in entering pay transactions into DJMS-RC. 

An Army finance office official told us that handling two sets of pay 

transaction processing procedures is often confusing because they are 

often required to process a large number of both active Army personnel 

and Army Guard and other reserve personnel using different processes and 

systems at the same time. 

While the Army Guard offers training for their military pay technicians, we 

found that there was no overall monitoring of Army Guard pay personnel 

training. At several of the case study locations we audited, we found that 

Army Guard pay technicians relied primarily on on-the-job-training and 

phone calls to the Army Guard Financial Services Center in Indianapolis or 

to other military pay technicians at other locations to determine how to 

process active duty pays to activated Army Guard personnel.

Beginning in fiscal year 2002, the Army Guard began offering training on 

mobilization pays and transaction processing to the USPFO military pay 

technicians. However, there is no requirement for USPFO pay technicians 

to attend these training courses. In addition, available documentation 

showed that two of the five scheduled courses for fiscal year 2003 were 

canceled—one because of low registration and one because of schedule 

conflicts. 

Only two of the six case study locations we audited tracked the extent to 

which pay technicians have taken training in this area. We were told that 

few of the military pay technicians at the state Army Guard USPFOs we 

audited had formal training on JUSTIS, DJMS-RC, or mobilization pay 

processing requirements and procedures. Throughout our case studies, we 

found numerous errors that involved some element of human capital. One 

payroll clerk told us that she had not received any formal training on how 
Page 41 GAO-04-89 Army Guard Pay

to operate JUSTIS when she was assigned to the job. Instead, she stated, 

she has learned how to operate the system through on-the-job training and 

many phone calls to system support personnel in Indianapolis. She 

estimated that she was not fully comfortable with all the required 

transaction processing procedures until she had been on the job for about 7 

years. 

In addition, unit commanders have significant responsibilities for 

establishing and maintaining the accuracy of solders’ pay records. U.S. 

Army Forces Command Regulation 500-3-3, Reserve Component Unit 

Commander’s Handbook (July 15, 1999) requires unit commanders to (1) 

annually review and update pay records for all soldiers under their 

command as part of an annual soldier readiness review and (2) obtain and 

submit supporting documentation needed to start entitled active duty pay 

and allowances based on mobilization orders. However, we saw little 

evidence the commanders of our case study units carried out these 

requirements. Further, neither Army Guard unit commanders nor active 

Army commanders were required to receive training on the importance of 

the pay to on-board personnel reconciliations, discussed previously, as an 

after-the-fact detective control to proactively identify Army Guard soldiers 

who should no longer receive active duty pays. We were told that this was 

primarily because unit commanders have many such administrative duties, 

and without additional training on the importance of these actions, they 

may not receive sufficient priority attention.

The lack of unit commander training on the importance of these 

requirements may have contributed to the pay problems we identified at 

our case study units. For example, at our Virginia case study location, we 

found that when the unit was first mobilized, USPFO pay personnel were 

required to spend considerable time and effort to correct hundreds of 

errors in the unit’s pay records dating back to 1996. Such errors could have 

been identified and corrected during the preceding years’ readiness 

reviews. Further, we observed many cases in which active duty pays were 

not started until more than 30 days after the entitled start dates because 

soldiers did not submit the paperwork necessary to start these pays. 

Customer Service Concerns Through data collected directly from selected soldiers and work at our six 

case study locations, we identified a recurring soldier concern with the 

level and quality of customer service they received associated with their 

pays and allowances when mobilized to active duty. None of the DOD, 

Army, or Army Guard policies and procedures we examined addressed the 
Page 42 GAO-04-89 Army Guard Pay

level or quality of customer service that mobilized Army Guard soldiers 

should be provided concerning questions or problems with their active 

duty pays. However, we identified several sources that soldiers may go to 

for customer service or information on any such issues. These include

• their home unit,

• the military pay section of the USPFO of their home state’s Army Guard,

• the designated active Army area servicing finance office, and

• a toll free number, 1-888-729-2769 (Pay Army).

While soldiers had multiple sources from which they could obtain service, 

we found indications that many Army Guard soldiers were displeased with 

the customer service they received. We found that not all Army Guard 

soldiers and their families were informed at the beginning of their 

mobilization of the pays and allowances they should receive while on 

active duty. This information is critical for enabling soldiers to identify if 

they were not receiving such pays and therefore require customer service. 

In addition, as discussed later in this report, we found that the 

documentation provided to Army Guard soldiers—primarily in the form of 

leave and earnings statements—concerning the pays and allowances they 

received did not facilitate customer service. Our audit identified customer 

service concerns at all three phases of the active duty tours and involving 

DFAS, active Army, and Army Guard servicing components. 

Consistent with the confusion we found among Army Guard and active 

Army finance components concerning responsibility for processing pay 

transactions for mobilized Army Guard soldiers, we found indications that 

the soldiers themselves were similarly confused. Many of the complaints 

we identified concerned confusion over whether Army Guard personnel 

mobilized to active duty should be served by the USPFO because they were 

Army Guard soldiers or by the active Army because they were mobilized to 

federal service.
Page 43 GAO-04-89 Army Guard Pay

Data collected from Army Guard units mobilized to active duty indicated 

that some members of the units had concerns with the pay support 

customer service they received associated with their mobilization—

particularly with respect to pay issues associated with their demobilization. 

Specifically, of the 43 soldiers responding to our question on satisfaction 

with customer support during the mobilization phase, 10 indicated 

satisfaction, while 15 reported dissatisfaction.12 In addition, of the 45 

soldiers responding to our question on customer support following 

demobilization, 5 indicated satisfaction while 29 indicated dissatisfaction.13 

Of the soldiers who provided written comments about customer service, 

none provided any positive comments about the customer service they 

received, and several had negative comments about the customer service 

they received, including such comments as “nonexistent,” “hostile,” or 

“poor.” For example, a company commander for one of our case study units 

told us that he was frustrated with the level of customer support his unit 

received during the initial mobilization process. Only two knowledgeable 

military pay officials were present to support active duty pay transaction 

processing for the 51 soldiers mobilized for his unit. He characterized the 

customer service his unit received at initial mobilization as time consuming 

and frustrating. 

Personnel we talked with at the Colorado special forces unit we audited 

were particularly critical of the customer service they received both while 

deployed in Afghanistan and when they were demobilized from active duty. 

Specifically, unit officials expressed frustration with being routed from one 

office to another in their attempts to resolve problems with their active 

12The remaining 18 respondents were either as satisfied as not or had no basis to judge.

13The 11 remaining respondents were either as satisfied as not or had no basis to judge.

Individual Case Illustration: Poor Customer Service

One soldier told us that he submitted documentation on three separate occasions to 

support the housing allowance he should have received as of the beginning of his 

October 2001 mobilization. Each time he was told to resubmit the documentation 

because his previously submitted documents were lost. Subsequently, while he was 

deployed, he made additional repeated inquiries as to when he would receive his 

housing allowance pay. He was told that it would be taken care of when he returned 

from his deployment. However, when he returned from his deployment, he was told that 

he should have taken care of this issue while he was deployed and that it was now too 

late to receive this allowance. 
Page 44 GAO-04-89 Army Guard Pay

duty pays and allowances. For example, the unit administrator told us he 

contacted the servicing area active Army finance office for the 101st

Airborne in West Virginia because his unit was attached to the 101st when 

they were deployed. The finance office instructed him to contact the 

USPFO in West Virginia because, although he was from a Colorado unit, his 

unit was assigned to a West Virginia Army Guard unit. However, when he 

contacted the West Virginia USPFO for service, officials from that office 

instructed him to contact the USPFO in his home state of Colorado to 

provide service for his pay problems.

Systems Problems 

Hamper Prompt and 

Accurate Army Guard 

Pay

Several systems issues were significant factors impeding accurate and 

timely payroll payments to mobilized Army Guard soldiers, including 

• the lack of an integrated or effectively interfaced pay system with both 

the personnel and order-writing systems,

• limitations in DJMS-RC processing capabilities, and

• ineffective system edits of payments and debts.

DOD has a significant system enhancement project under way to improve 

military pay. However, given that the effort has been under way for about 5 

years and DOD has encountered challenges fielding the system, it is likely 

that the department will continue to operate with existing system 

constraints for at least several more years. 

Our findings related to weaknesses in the systems environment were 

consistent with issues raised by DOD in its June 2002 report14 to the 

Congress on its efforts to implement an integrated military pay and 

personnel system. Specifically, DOD’s report acknowledged that major 

deficiencies in the delivery of military personnel and pay services to ensure 

soldiers receive timely and accurate personnel and pay support must be 

addressed by the envisioned system. Further, the report indicated these 

deficiencies were the direct result of the inability of a myriad of current 

systems with multiple, complex interfaces to fully support current business 

process requirements. 

14U.S. Department of Defense, Report to Congress: Defense Integrated Military Human 

Resource System (Personnel and Pay), (Washington, D.C. June 2002).
Page 45 GAO-04-89 Army Guard Pay

Figure 6 provides an overview of the five systems currently involved in 

processing Army Guard pay and personnel information. 

Figure 6: Overview of Army Guard Pay and Personnel Systems 

Lack of Integrated Systems The five key DOD systems involved in authorizing, entering, processing, 

and paying mobilized Army Guard soldiers were not integrated. Lacking 

either an integrated or effectively interfaced set of personnel and pay 

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

same source documents into multiple systems. With an effectively 

integrated system, changes to personnel records automatically update 

related payroll records from a single source of data input. While not as 

efficient as an integrated system, an automatic personnel-to-payroll system 

interface can also reduce errors caused by independent, manual entry of 

data from the same source documents into both pay and personnel 

systems. Without an effective interface between the personnel and pay 

Army National Guard

DFAS

Army

SIDPERS

AFCOS

JUSTIS

DJMS-RC

DMO

Active duty payments

to soldiers, LESs,

and wage garnishments

Source: GAO.

Hard copy of

Mobilization orders

Reconciliation

Hard copy of

Mobilization orders

Hard copy of

Mobilization orders
Page 46 GAO-04-89 Army Guard Pay

systems, we found instances in which pay-affecting information did not get 

entered into both the personnel and pay systems, thus causing various pay 

problems—particularly late payments. 

We found that an existing interface could be used to help alert military pay 

personnel to take action when mobilization transactions are entered into 

the personnel system. Specifically, Army Guard state personnel offices 

used an existing interface between SIDPERS and JUSTIS to transmit data 

on certain personnel transactions (i.e., transfers, promotions, demotions, 

and address changes) to the 54 USPFOs to update the soldier’s pay records. 

However, this personnel-to-pay interface (1) requires manual review and 

acceptance by USPFO pay personnel of the transactions created in 

SIDPERS and (2) does not create pay and allowance transactions to update 

a soldier’s pay records. For example, when Army Guard soldiers change 

from inactive drilling status to active duty status, state personnel offices 

create personnel-related transactions in SIDPERS, but associated payrelated transactions to update the soldier’s pay records are not 

automatically created in JUSTIS. USPFO pay personnel are not aware that 

a pay-related transaction is needed until they receive documentation from 

the soldier, the soldier’s unit commander, or the monthly personnel/pay 

mismatch report. Automated improvements, such as an administrative 

action transmitted through the personnel-to-payroll interface, could be 

used to proactively alert USPFOs of certain pay-impacting transactions that 

are created in SIDPERS as a means to help ensure timely and accurate pay. 

In our case studies, we found instances in which mobilization order data 

that were entered into SIDPERS were either not entered into DJMS-RC for 

several months after the personnel action or were entered inconsistently. 

At the case study locations we audited, we found several instances in 

which Army Guard soldiers received amended or revoked orders that were 

entered into SIDPERS but were not entered into DJMS-RC. We also found 

instances in which personnel pay-affecting changes such as changes in 

family separation allowance, basic allowance for housing, and active duty 

pay increases from promotions, were not entered into the pay system 

promptly. Consequently, these soldiers either received active duty pays 

they were not entitled to receive—some for several months—or did not 

timely receive active duty pays to which they were entitled. 
Page 47 GAO-04-89 Army Guard Pay

The lack of an integrated set of systems was also apparent in the 

relationship between JUSTIS and the order writing system—AFCOS. 

Currently, certain personnel and order information entered and stored in 

the AFCOS database is automatically filled in the JUSTIS input screens 

pertaining to active duty tours for state missions upon entry of the soldier’s 

Social Security Number and order number. This auto-fill functionality 

eliminates the need for some error-prone, manual reentry of data into 

JUSTIS. However, currently, manual entry of data from a hard copy of the 

soldier’s orders and other documentation is required to initiate the soldier’s 

pay and allowances—a procedure that defeats the purpose of an effective 

interface. For example, at one of the case study units we audited, USPFO 

pay personnel had to manually enter the soldier’s active duty tour start and 

stop dates into JUSTIS from a hard copy of the actual mobilization order.

When we brought this to the attention of NGB officials, they stated that 

providing the auto-fill functionality to the mobilization input screens would 

require minimal programming changes. NGB officials stated that they 

planned to release a programming software change to all 54 USPFOs that 

would allow the start and stop dates to be automatically filled into the 

mobilization screens to reduce the need for reentry of some mobilization 

information. Because this software change was scheduled to occur after 

the conclusion of our fieldwork, we did not verify its effectiveness. In any 

case, while this proposed programming change may be beneficial, it does 

Individual Case Illustration: Overpayment due to Lack of Integrated Pay and 

Personnel Systems

A soldier with the Mississippi Army National Guard was mobilized in January 2002 with 

his unit and traveled to the mobilization station at Fort Campbell. The unit stayed at Fort 

Campbell to perform post security duties until June 2002. On June 14, 2002, the E-4 

specialist received a "general" discharge order from the personnel office at Fort 

Campbell for a drug-related offense. However, he continued to receive active duty pay, 

totaling approximately $9,400, until September 2002. Although the discharge 

information was promptly entered into the soldier's personnel records, it was not entered 

into the pay system for almost 4 months. This problem was caused by weaknesses in 

the processes designed to work around the lack of integrated pay and personnel 

systems. Further, the problem was not detected because reconciliations of pay and 

personnel data were not performed timely. Specifically, it was not until over 3 months 

after the soldier's discharge, through its September 2002 end-of-month reconciliation, 

that the Mississippi Army National Guard USPFO identified the overpayment and took 

action on October 2, 2002, to stop the individual's pay. However, collection efforts on the 

$9,400 overpayment did not begin until July 2003, when we pointed out this situation to 

USPFO officials.
Page 48 GAO-04-89 Army Guard Pay

not eliminate the need for manual entry and review of certain other 

mobilization data needed to initiate a soldier’s basic pay and allowances. 

Pay System Has Limited 

Active Duty Pay Processing 

Capabilities

DOD has acknowledged that DJMS-RC is an aging, COBOL/mainframebased system. Consequently, it is not surprising that we found DFAS 

established a number of “workarounds”—procedures to compensate for 

existing DJMS-RC processing limitations with respect to processing active 

duty pays and allowances to mobilized Army guard soldiers. Such manual 

workarounds are inefficient and create additional labor-intensive, errorprone transaction processing. We observed a number of such system 

workaround procedures at the case study units we audited.

For example, for the special forces units we audited, our analysis disclosed 

a workaround used to exclude soldiers’ pay from federal taxes while in 

combat. Specifically, DJMS-RC was not designed to make active duty pays 

and exclude federal taxes applicable to those pays in a single pay 

transaction. To compensate for this system constraint, DFAS established a 

workaround that requires two payment transactions over a 2-month payroll 

cycle to properly exempt soldiers’ pay for the combat zone tax exclusion. 

That is, for those soldiers entitled to this exclusion, DJMS-RC withholds 

federal taxes the first month, identifies the taxes to be refunded during endof-month pay processing, and then makes a separate payment during the 

first pay update the following month to refund the taxes that should not 

have been withheld. Soldiers’ taxes could not be refunded the same month 

because the DJMS-RC refund process occurs only one time a month. 

In addition, because of limited DJMS-RC processing capabilities, the Army 

Guard USPFO and in-theatre active Army area servicing finance office pay 

technicians are required to manually enter transactions for nonautomated 

pay and allowances every month. DJMS-RC was originally designed to 

process payroll payments to Army Reserve and Army Guard personnel on 

weekend drills or on short periods of annual active duty (periods of less 

than 30 days in duration) or for training. With Army Guard personnel now 

being paid from DJMS-RC for extended periods of active duty (as long as 2 

years at a time), DFAS officials told us that the system is now stretched 

because it is being used to make payments and allowances that it was not 

structured or designed to make, such as hostile fire pay and the combat 

zone tax exclusion. Many of these active duty pay and allowances require 

manual, monthly verification and reentry into DJMS-RC because, while 

some pays, such as basic active duty pay and jump pay, can be generated 
Page 49 GAO-04-89 Army Guard Pay

automatically, DJMS-RC is not programmed to generate automatic payment 

of certain other types of pay and allowances. 

For example, each month USPFO pay personnel are responsible for 

entering into JUSTIS special duty assignment pay, foreign language 

proficiency pay, and high altitude low opening (HALO) pay, and Army area 

servicing finance offices are responsible for entering into DMO hardship 

duty pay, for deployed soldiers entitled to these types of pays and for which 

a performance certification is received from the respective unit 

commanders. However, because pay transactions must be manually 

entered every month soldiers are entitled to receive these pays, it is often 

difficult to ensure that mobilized soldiers receive their entitled 

nonautomated pays and allowances. For example, we found a number of 

instances in which soldiers were underpaid their entitled jump, foreign 

language proficiency, special duty assignment, or hardship duty pays 

because pay technicians inadvertently omitted the monthly manual input 

required to initiate these types of pays every month.

At one of the case study units, we found USPFO pay personnel had a 

procedure in place to help prevent inadvertently omitting month-to-month 

entry of nonautomated pays for entitled soldiers. Specifically, pay 

personnel at the USPFO in Maryland used a warning screen within JUSTIS 

as a mechanism to alert them that soldiers were eligible to receive that 

particular pay component that month. Although this does not alleviate the 

problem of month-to-month manual entry, the warning screen could be 

used to help preclude some of the pay problems we found resulting from 

failures to enter transactions for nonautomated, month-to-month pay and 

allowance entitlements. 

Further, these month-to-month pays and allowances were not separately 

itemized on the soldiers’ leave and earnings statements in a user-friendly 

format.

In contrast, at four of our six case study units, we found that a significant 

number of soldiers were overpaid their entitled automated pays when they 

were demobilized from active duty before the stop date specified in their 

original mobilization orders. This occurred because pay technicians did 

not update the stop date in DJMS-RC, which is necessary to terminate the 

automated active duty pays when soldiers leave active duty early. For 

example, the military finance office in Kuwait, which was responsible for 

paying Virginia 20th Special Forces soldiers in the fall of 2002, did not stop 

hostile fire and hardship duty pays as required when these soldiers left 
Page 50 GAO-04-89 Army Guard Pay

Afghanistan in October 2002. We found that 55 of 64 soldiers eligible for 

hostile fire pay were overpaid for at least 1 month beyond their departure 

from Afghanistan. 

Soldiers’ pays may appear as lump sum payments under “other credits” on 

their leave and earnings statements. In many cases these other credit pay 

and allowances appeared on their leave and earning statements without 

adequate explanation. As a result, we found indications that Army Guard 

soldiers had difficulty using the leave and earnings statements to determine 

if they received all entitled active duty pays and allowances. In addition, 

several Army Guard soldiers told us that they had difficulty discerning from 

their leave and earnings statements whether lump sum catch-up payments 

fully compensated them for previously underpaid active duty pay and 

allowance entitlements. Without such basic customer service, the soldiers 

cannot readily verify that they received all the active duty pays and 

allowances to which they were entitled. 

As shown in the example leave and earnings statement extract included in 

figure 7, an Army Guard soldier who received a series of corrections to 

special duty assignment pay along with a current special duty assignment 

payment of $110 is likely to have difficulty discerning whether he or she 

received all and only entitled active duty pays and allowances. 

Individual Case Illustration: Problems in Deciphering a Leave and Earnings 

Statement 

An Army National Guard Special Forces sergeant believed that he was not receiving 

certain active duty pays and allowances during his mobilization to active duty in support 

of Operation Enduring Freedom. On March 23, 2002, the sergeant wrote a letter from 

Afghanistan to a fellow battalion soldier back in his home state, discussing his pay 

problems. The sergeant stated that he was not receiving his special duty assignment pay 

from November 2001 to March 2002. The sergeant’s letter also stated he was not 

receiving his hostile fire pay and combat zone tax exclusion. His letter concluded, “Are 

they really fixing pay issues or are they putting them off till we return? If they are waiting, 

then what happens to those who (god forbid) don’t make it back?” The sergeant was 

killed in action in Afghanistan on April 15, 2002, before he knew if his pay problems were 

resolved. Our review determined that some of the sergeant’s pays were started up to 2 

months late, but others had actually been paid properly. The sergeant apparently was not 

aware of receiving these payments because of the way they were combined.
Page 51 GAO-04-89 Army Guard Pay

Figure 7: Sample Army Guard Leave and Earnings Statement

Source: Individual Leave and Earnings Statement.
Page 52 GAO-04-89 Army Guard Pay

System Edits Do Not 

Prevent Large Payments or 

Debts

While DJMS-RC has several effective edits to prevent certain 

overpayments, it lacks effective edits to reject large proposed net pays over 

$4,000 at midmonth and over $7,000 at end-of-month before their final 

processing. DOD established these thresholds to monitor and detect 

abnormally large payments. As a result of the weaknesses we identified, 

we found several instances in our case studies in which soldiers received 

large lump sum payments, probably related to previous underpayments or 

other pay errors, with no explanation. Further, the lack of preventive 

controls over large payments poses an increased risk of fraudulent 

payments. DJMS-RC does have edits that prevent soldiers from (1) being 

paid for pay and allowances beyond the stop date for the active duty tour, 

(2) being paid for more than one tour with overlapping dates, or (3) being 

paid twice during a pay period.

Each month, DFAS Indianapolis pay personnel receive an Electronic Fund 

Transfer Excess Dollar Listing after the electronic fund transfer payment 

has been processed in DJMS-RC and deposited to the soldier’s bank 

account. DJMS-RC does not contain edit checks to reject payments over 

the threshold amounts or to require review and approval of payments over 

these amounts prior to their final processing. For example, at one of the 

case study units we audited, DJMS-RC did not have edit checks to prevent 

one soldier from receiving an erroneous electronic payment totaling 

$20,110 without prior approval (see the individual case illustration below 

for details). In addition, our analysis showed 76 other payroll-related 

payments during the period October 1, 2001, through March 31, 2003, of 

over $7,000 (net) each that were paid by DJMS-RC. Because the Electronic 

Fund Transfer Excess Dollar Listing is printed after the payment is made, 

timely detection of errors is critical to help ensure that erroneous payments 

are recovered and that fraud does not occur. 

Similarly, DJMS-RC does not have system edits to prevent large debts from 

being assessed without review and approval prior to being processed and 

does not provide adequate explanations for pay-related debt assessments. 

Our case studies identified individuals who received debt notices in excess 

of $30,000 with no explanation. At five of the 6 units audited, we identified 

86 individuals who had total pay and allowance debts of approximately 

$300,000 as of March 31, 2003. 
Page 53 GAO-04-89 Army Guard Pay

In addition, we found that current procedures used to notify soldiers of 

large payroll-related debts did not facilitate customer service. Under 

current procedures, if a soldier is determined to owe the government 

money while on active duty, he is assessed a debt and informed of this 

assessment with a notation of an “Unpaid Debt Balance” in the remarks 

section of his Leave and Earnings Statement. A soldier at one of our case 

study units told us that he was not notified in advance of his receipt of his 

Leave and Earnings Statement that he had a debt assessment and that twothirds of his pay would be garnished. As a result, he was not able to plan his 

financial affairs to avoid late payments on his car and other loans.

This debt assessment notification procedure is even more egregious when 

debts, particularly large debts, are assessed in error and up to two-thirds of 

Individual Case Illustration: System Edits Do Not Prevent Large Payments and 

Debts 

A sergeant with the Colorado Army National Guard, Special Forces, encountered 

numerous severe pay problems associated with his mobilization to active duty, including 

his deployment to Afghanistan in support of Operation Enduring Freedom. The 

sergeant’s active duty pay and other pay and allowances should have been stopped on 

December 4, 2002, when he was released from active duty. However, because the 

sergeant’s mobilization orders called him to active duty for 730 days and not the 365 

days that he was actually mobilized, and the Army area servicing finance office at the 

demobilization station, Fort Campbell, did not enter the release from active duty date 

into DJMS-RC, the sergeant continued to improperly receive payments, as if he were still 

on active duty, for 2 and a half months after he was released from active duty totaling 

over $8,000. The sergeant was one of 34 soldiers in the company whose pay continued 

after their release from active duty. In an attempt to stop the erroneous payments, in 

February 2003, pay personnel at the Colorado USPFO created a transaction to cancel 

the tour instead of processing an adjustment to amend the stop date consistent with the 

date on the Release from Active Duty Order. When this occurred, DJMS-RC 

automatically processed a reversal of 11 months of the sergeant’s pay and allowances 

that he earned while mobilized from March 1, 2002, through February 4, 2003, which 

created a debt in the amount of $39,699 on the soldier’s pay record; however, the 

reversal should have only been from December 5, 2002, through February 4, 2003. In 

April 2003, at our request, DFAS-Indianapolis personnel intervened in an attempt to 

correct the large debt and to determine the actual amount the sergeant owed. In May 

2003, DFAS-Indianapolis erroneously processed a payment transaction instead of a debt 

correction transaction in DJMS-RC. This created a payment of $20,111, which was 

electronically deposited to the sergeant’s bank account without explanation, while a debt 

of $30,454 still appeared on his Leave and Earnings Statement. About 9 months after 

his demobilization, the sergeant’s unpaid debt balance was reportedly $26,559, but the 

actual amount of his debt had not yet been determined as of September 2003.
Page 54 GAO-04-89 Army Guard Pay

the soldier’s pay may be garnished to begin repaying the erroneous debt. 

For example, at our case study units, we found that the only notice several 

soldiers received when they were erroneously assessed payroll debts was 

an “Unpaid Debt Balance” buried in the remarks section of their Leave and 

Earnings Statements. One such assessment showing a $39,489.28 debt is 

shown in figure 8.
Page 55 GAO-04-89 Army Guard Pay

Figure 8: Sample Leave and Earnings Statement with Large Debt Balance 

Source: Individual Leave and Earnings Statement.
Page 56 GAO-04-89 Army Guard Pay

Status of System Redesign 

Efforts 

DOD has a major system enhancement effort under way in this area 

described as the largest personnel and pay system in the world in both 

scope and number of people served—the Defense Integrated Military 

Human Resources System (DIMHRS). One of the major benefits expected 

with DIMHRS is “service members receiving accurate and timely pay and 

benefits.” Begun in 1998, DIMHRS is ultimately intended to replace more 

than 80 legacy systems (including DJMS-RC) and integrate all pay, 

personnel, training, and manpower functions across the department by 

2007. 

By the end of fiscal year 2003, DOD reporting shows that it will have 

invested over 5 years and about $360 million in conceptualizing and 

planning the system. In 2002, DOD estimated that integrated personnel and 

pay functions of DIMHRS would be fully deployed by fiscal year 2007. It 

also reported a development cost of about $427 million. However, our 

review of the fiscal year 2004 DOD Information Technology budget request 

shows that DOD is requesting $122 million and $95 million, respectively, for 

fiscal years 2004 and 2005. In addition, the department reported that the 

original DIMHRS project completion milestone date has slipped about 15 

months. 

Part of the requested funding for fiscal year 2004 was to acquire a payroll 

module, Forward Compatible Payroll. According to program officials, this 

module, in conjunction with a translation module and a Web services 

component, is to replace DJMS-RC and DJMS-AC systems by March 2006, 

with the first deployment to the Army Reserve and Army Guard in March 

2005. 

In assessing the risks associated with DIMHRS implementation as part of 

its fiscal year 2004 budget package, DOD highlighted 20 such risks. For 

example, DOD reported a 60 percent risk associated with “Service issues 

with business process reengineering and data migration.” The 

department’s ability to effectively mitigate such risks is of particular 

concern given its poor track record in successfully designing and 

implementing major systems in the past.15 Consequently, given the 

schedule slippages that have already occurred combined with the many 

risks associated with DIMHRS implementation, Army Guard soldiers will 

15See, for example, U.S. General Accounting Office, DOD Business Systems Modernization: 

Continued Investment in Key Accounting Systems Needs to Be Justified, GAO-03-465

(Washington, D.C.: Mar. 28, 2003).
Page 57 GAO-04-89 Army Guard Pay

likely be required to rely on existing pay systems for at least several more 

years. 

Army Guard Active 

Duty Pay Problems 

Continue with Current 

Deployments to Iraq 

Our limited review of the pay experiences of the soldiers in the Colorado 

Army Guard’s 220th Military Police Company, which was mobilized to active 

duty in January 2003, sent to Kuwait in February 2003, and deployed to Iraq 

on military convoy security and highway patrol duties in April 2003, 

indicated that some of the same types of pay problems that we found in our 

six case study units continued to occur. Of the 152 soldiers mobilized in 

this unit, we identified 54 soldiers who our review of available records 

indicated were either overpaid, underpaid, or received entitled active duty 

pays and allowances over 30 days late, or for whom erroneous pay-related 

debts were created. We found that these pay problems could be attributed 

to control breakdowns similar to those we found at our case study units, 

including pay system input errors associated with amended orders, delays 

and errors in coding pay and allowance transactions, and slow customer 

service response. For example, available documentation and interviews 

indicate that while several soldiers submitted required supporting 

documentation to start certain pays and allowances at the time of their 

initial mobilization in January 2003, over 20 soldiers were still not receiving 

these pays in August 2003. Colorado USPFO military pay-processing 

personnel told us they are reviewing pay records for all deployed soldiers 

from this unit to ensure that they are receiving all entitled active duty pays 

and allowances. 

Conclusions The extensive problems we identified at the case study units vividly 

demonstrate that the controls currently relied on to pay mobilized Army 

Guard personnel are not working and cannot provide reasonable assurance 

that such pays are accurate or timely. The personal toll that these pay 

problems have had on mobilized soldiers and their families cannot be 

readily measured, but clearly may have a profound effect on reenlistment 

and retention. It is not surprising that cumbersome and complex processes 

and ineffective human capital strategies, combined with the use of an 

outdated system that was not designed to handle the intricacies of active 

duty pay and allowances, would result in significant pay problems. While it 

is likely that DOD will be required to rely on existing systems for a number 

of years, a complete and lasting solution to the pay problems we identified 

will only be achieved through a complete reengineering, not only of the 

automated systems, but also of the supporting processes and human 
Page 58 GAO-04-89 Army Guard Pay

capital practices in this area. However, immediate actions can be taken in 

these areas to improve the timeliness and accuracy of pay and allowance 

payments to activated Army Guard soldiers. The need for such actions is 

increasingly imperative in light of the current extended deployment of 

Army Guard soldiers in their crucial role in Operation Iraqi Freedom and 

anticipated additional mobilizations in support of this operation and the 

global war on terrorism. Immediate steps to at least mitigate the most 

serious of the problems we identified are needed to help ensure that the 

Army Guard can continue to successfully fulfill its vital role in our national 

defense. 

Recommendations for 

Executive Action

We recommend that the Secretary of Defense direct the Secretary of the 

Army, in conjunction with the Under Secretary of Defense (Comptroller), 

to take the following actions to address the issues we found with respect to 

the existing processes, human capital, and automated systems relied on to 

pay activated Army Guard personnel.

Process • Establish a unified set of policies and procedures for all Army Guard, 

Army, and DFAS personnel to follow for ensuring active duty pays for 

Army Guard personnel mobilized to active duty.

• Establish performance measures for obtaining supporting 

documentation and processing pay transactions (for example, no more 

than 5 days would seem reasonable).

• Establish who is accountable for stopping active duty pays for soldiers 

who return home earlier than their units.

• Clarify the policies and procedures for how to properly amend active 

duty orders, including medical extensions.

• Require Army Guard commands and unit commanders to carry out 

complete monthly pay and personnel records reconciliations and take 

necessary actions to correct any pay and personnel record mismatches 

found each month.

• Update policies and procedures to reflect current legal and DOD 

administrative requirements with respect to active duty pays and 
Page 59 GAO-04-89 Army Guard Pay

allowances and transaction processing requirements for mobilized 

Army Guard soldiers. 

Human Capital • Consider expanding the scope of the existing memorandum of 

understanding between DFAS and the Army concerning the provision of 

resources to support surge processing at mobilization and 

demobilization sites to include providing additional resources to 

support surge processing for pay start and stop transaction 

requirements at Army Guard home stations during initial soldier 

readiness programs.

• Determine whether issues concerning resource allocations for the 

military pay operations identified at our case study units exist at all 54 

USPFOs, and if so, take appropriate actions to address these issues.

• Determine whether issues concerning relatively low-graded military pay 

technicians identified at our case study units exist at all 54 USPFOs, and 

if so, take appropriate actions to address these issues.

• Modify existing training policies and procedures to require all USPFO 

and active Army pay and finance personnel responsible for entering pay 

transactions for mobilized Army Guard soldiers to receive appropriate 

training upon assuming such duties.

• Require unit commanders to receive training on the importance of 

adhering to requirements to conduct annual pay support documentation 

reviews and carry out monthly reconciliations.

• Establish an ongoing mechanism to monitor the quality and completion 

of training for both pay and finance personnel and unit commanders.

• Identify and evaluate options for improving customer service provided 

to mobilized Army Guard soldiers by providing improved procedures for 

informing soldiers of their pay and allowance entitlements throughout 

their active duty mobilizations.

• Identify and evaluate options for improving customer service provided 

to mobilized Army Guard soldiers to ensure a single, well-advertised 

source for soldiers and their families to access for customer service for 

any pay problems.
Page 60 GAO-04-89 Army Guard Pay

• Review the pay problems we identified at our six case study units to 

identify and resolve any outstanding pay issues for the affected soldiers. 

Systems

Interim Improvements to 

Current Automated Pay System 

Structure

• Evaluate the feasibility of using the personnel-to-pay interface as a 

means to proactively alert pay personnel of actions needed to start 

entitled active duty pays and allowances.

• Evaluate the feasibility of automating some or all of the current manual 

monthly pays, including special duty assignment pay, foreign language 

proficiency pay, hardship duty pay, and HALO pay. 

• Evaluate the feasibility of eliminating the use of the “other credits” for 

processing hardship duty (designated areas), HALO pay, and special 

duty assignment pay, and instead establish a separate component of pay 

for each type of pay.

• Evaluate the feasibility of using the JUSTIS warning screen to help 

eliminate inadvertent omissions of required monthly manual pay inputs.

• Evaluate the feasibility of redesigning Leave and Earnings Statements to 

provide soldiers with a clear explanation of all pay and allowances 

received so that they can readily determine if they received all and only 

entitled pays.

• Evaluate the feasibility of establishing an edit check and requiring 

approval before processing any debt assessments above a specified 

dollar amount.

• Evaluate the feasibility of establishing an edit check and requiring 

approval before processing any payments above a specified dollar 

amount.

Longer-Term System 

Improvements

• As part of the effort currently under way to reform DOD’s pay and 

personnel systems—referred to as DIMHRS—incorporate a complete 

understanding of the Army Guard pay problems as documented in this 

report into the requirements development for this system. 
Page 61 GAO-04-89 Army Guard Pay

• In developing DIMHRS, consider a complete reengineering of the 

processes and controls and ensure that this reengineering effort deals 

not only with the systems aspect of the problems we identified, but also 

with the human capital and process aspects. 

Agency Comments and 

our Evaluation

In its written comments, DOD concurred with our recommendations and 

identified actions to address the identified deficiencies. Speciifically, DOD’s 

response outlined some actions already taken, others that are underway, 

and further planned actions with respect to our recommendations. If 

effectively implemented, these actions should substantially resolve the 

deficiencies pointed out in our report. DOD’s comments are reprinted in 

appendix VIII.

As agreed with your office, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 30 days from its 

date. At that time, we will send copies of the report to interested 

congressional committees. We will also send copies of this report to the 

Secretary of Defense, the Under Secretary of Defense (Comptroller), the 

Secretary of the Army, the Director of the Defense Finance and Accounting 

Service, the Director of the Army National Guard, and the Chief of the 

National Guard Bureau. We will make copies available to others upon 

request. In addition, the report will be available at no charge on the GAO 

Web site at http://www.gao.gov. If you or your staff have any questions 

regarding this report, please contact me at (202) 512-9505 or 

kutzg@gao.gov or Geoffrey Frank, Assistant Director, at (202) 512-9518 or 

frankg@gao.gov. 

Sincerely yours,

Gregory D. Kutz

Director, Financial Management and Assurance
Page 62 GAO-04-89 Army Guard Pay

Appendix I

Colorado Army National Guard B Company, Apendxies

5th Battalion, 19th Special Forces ApendxiI

On December 5, 2001, the Colorado Army National Guard’s B Company, 5th

Battalion, 19th Special Forces, was mobilized to active duty on orders for a 

2-year period—through December 4, 2003. The unit was mobilized at Fort 

Knox and subsequently deployed in Afghanistan, Uzbekistan, and 

surrounding areas to search for Taliban and al Qaeda terrorists as part of 

Operation Enduring Freedom. The unit returned to Fort Campbell for 

demobilization and was released from active duty on December 4, 2002—1 

year before the end of the unit’s original mobilization orders. A timeline of 

the unit’s actions associated to its mobilization under Operation Enduring 

Freedom is shown in figure 9. 

Figure 9: Timeline Showing Key Actions Associated with Colorado National Guard 

Special Forces Unit’s Mobilization

As summarized in table 3, the majority of soldiers from Colorado’s B 

Company experienced some sort of pay problem during one or more of the 

three phases of their active duty mobilization. Overall, all 62 soldiers with 

the company had at least one pay problem associated with their 

mobilization. These pay problems included not receiving entitled pays and 

allowances at all; not receiving some entitled pays and allowances within 

30 days; and for some, overpayments of pays and allowances. Specifically, 

Active duty tour

officially ends.

12/4/02

Dec 01 Jan 02 Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

Soldiers in-process

at Pueblo, CO home station.

12/5/01

Soldiers demobilize at

Ft. Campbell, KY.

7/02 through

10/02

Travel to

Ft. Knox, KY.

12/15/01

Travel to

Ft. Campbell, KY.

12/20/01 Travel to

Uzbekistan/Afghanistan.

2/15/02

Arrival in

Uzbekistan/Afghanistan.

2/22/02

2/22/02 through

10/02

Deployed in

Uzbekistan/Afghanistan.

12/20/01 through

2/15/02

Preparing for

overseas

deployment.

Source: GAO
Appendix I

Colorado Army National Guard B Company, 

5th Battalion, 19th Special Forces

Page 63 GAO-04-89 Army Guard Pay

we found (1) 56 soldiers did not receive certain pay and allowance 

entitlements at all, or within 30 days of their initial mobilization, (2) 61 

soldiers either did not receive, or did not receive within 30 days, the hostile 

fire pay or other “high-risk location” pays they were entitled to receive 

based on their deployment in Uzbekistan and Afghanistan, and (3) 53 

soldiers either improperly continued to receive hostile fire pay after leaving 

high-risk locations overseas or continued to receive paychecks, as if they 

were still on active duty status, for over 2 months beyond their release from 

active duty. 

Table 3: Summary of Identified Pay Problems by Phase

Source: GAO analysis.

In total, we identified estimated overpayments of $494,000, underpayments 

of $28,000, and late payments of $64,000, associated with the pay problems 

we found. Of the estimated $494,000 in overpayments, we identified about 

$88,000 that was subsequently collected from the soldiers of Colorado’s B 

Company. In addition, in trying to correct overpayments associated with 

Colorado B Company’s departure from high-risk locations and release from 

active duty, the Defense Finance and Accounting Service (DFAS) billed 34 

of the unit’s soldiers an average of $48,000 each, for a largely erroneous 

total debt of over $1.6 million. 

Many soldiers with the company characterized the service they received 

from the state United States Property and Fiscal Office (USPFO) and the 

active Army finance offices while deployed in Afghanistan and surrounding 

areas as “poor” or “openly hostile.” Some of the soldiers in the unit 

expressed significant dissatisfaction with the time and effort they, or their 

spouses were required to spend attempting to identify and correct their 

pay. 

These pay problems had a variety of adverse effects. The labor-intensive 

efforts by the special forces soldiers to address pay problems, in some 

cases, distracted them from important mission operations. In addition, 

several soldiers told us that the numerous pay problems they encountered 

Phase Number of soldiers with pay problems

Mobilization 56 of 62 

Deployed 61 of 62 

Demobilization 53 of 62 
Appendix I

Colorado Army National Guard B Company, 

5th Battalion, 19th Special Forces

Page 64 GAO-04-89 Army Guard Pay

would play a major role in their decision whether to reenlist. According to 

several soldiers from Colorado’s B Company, the combined effect of 

(1) recurring pay problems, (2) having two-thirds of their monthly training 

paychecks garnished to pay off often erroneous payroll-related debts, and 

(3) receiving poor payroll customer service during their active duty tours 

adversely affects morale and may have an adverse effect on a soldier’s 

willingness to continue his or her service with the Army Guard. For 

example, a unit official advised us that as of September 30, 2003, three 

soldiers had left B Company primarily due to frustration over pay 

problems. The unit official indicated that he expected additional soldiers 

would depart as a result of the current debt problems.

Mobilization Pay 

Problems

As summarized in table 4, we identified a number of pay problems 

associated with eight different types of active duty pays and allowances 

related to the unit’s mobilization to active duty. These problems resulted 

from failure to enter data, data entry errors, or late entry of data needed by 

Army Guard USPFO military pay personnel and by active Army military pay 

personnel at the unit’s mobilization station to start active duty pays. We 

also found that these pay problems were exacerbated by breakdowns in 

customer service. 

Table 4: Identified Mobilization Pay Problems 

Source: GAO analysis.

Type of pay or allowance

Number of 

soldiers who did 

not receive pay or 

allowance within 

30 days of 

entitlement

Number of 

soldiers who 

were underpaid 

Number of 

soldiers who 

were overpaid 

Basic pay 5 2 0

Basic allowance for housing 5 3 0

Basic allowance for 

subsistence 6 4 0

Family separation allowance 7 7 1

Jump pay 11 2 0

HALO pay 10 2 8

Foreign language proficiency 

pay 4 0 0

Special duty assignment pay 44 41 2
Appendix I

Colorado Army National Guard B Company, 

5th Battalion, 19th Special Forces

Page 65 GAO-04-89 Army Guard Pay

In total, 56 out of 62 soldiers did not receive certain pays and allowances at 

all, or in a timely manner, after being activated on December 5, 2001. As 

illustrated in table 4, 11 soldiers did not receive entitled Jump pay within 30 

days of entitlement,1

 10 did not receive HALO pay within 30 days of 

entitlement,2 and 41 soldiers did not receive at least 1 month of their special 

duty assignment pay.3

According to DFAS procedures, the unit’s Army Guard USPFO should have 

initiated these pays. In addition, these problems could have been 

minimized if they were identified and corrected by the Army mobilization 

station finance office at Fort Knox during the soldier readiness processing 

at that location. According to Army regulations, the active Army 

mobilization station is required to conduct a soldier readiness program to 

review every mobilizing soldier’s pay account for accuracy. In essence, 

under Department of Defense (DOD) guidance, the active Army 

mobilization stations are to act as a “safety net” to catch and correct any 

errors in soldiers’ active duty pays and allowances before they are 

deployed on their active duty missions. 

The underpayments and late payments resulted in adverse financial 

repercussions for a number of the unit’s members and their families. We 

were told that many of the unit members’ spouses tried to contact the 

soldiers while they were deployed to find out why they were not receiving 

the anticipated funds. We were told that neither the spouses nor the 

soldiers received clear guidance on whom to contact to address their pay 

concerns. For example, some soldiers sought help from the active Army’s 

finance offices at Fort Knox and Fort Campbell. However, upon contacting 

officials at those locations, soldiers were told that the active Army could 

not help them because they were Army Guard soldiers and should 

therefore contact their home state Army Guard USPFO. According to 

DFAS officials, the active Army finance offices have the capability to 

service Army Guard soldiers. Fort Knox and Fort Campbell finance 

personnel were either unaware of their capability or unwilling to take the 

actions needed to address the unit’s active duty pay concerns.

1

U.S. Department of Defense, Financial Management Regulation (FMR), vol. 7A, ch. 24.

2

DOD FMR, vol. 7A, ch. 24.

3

DOD FMR, vol. 7A, ch. 8.
Appendix I

Colorado Army National Guard B Company, 

5th Battalion, 19th Special Forces

Page 66 GAO-04-89 Army Guard Pay

Colorado’s B Company soldiers turned back to the USPFO for assistance. 

Although the USPFO did process a number of transactions to start entitled 

active duty pays and allowances for the unit’s soldiers, such pays were 

started more than 30 days after the date they were entitled to receive such 

pays. In one case, a soldier’s spouse had to obtain a $500 grant from the 

Colorado National Guard in order to pay bills while her husband was on 

active duty. 

Deployment Pay 

Problems 

Colorado’s B Company was deployed to Uzbekistan and Afghanistan in 

February 2002. As summarized in table 5, we identified pay problems 

associated with the hostile fire pay, combat zone tax exclusion, and 

hardship duty pay that unit soldiers were entitled to receive based on their 

deployment to Afghanistan and surrounding areas. 

Table 5: Identified Deployment Pay Problems 

Source: GAO analysis.

Specifically, after arriving in Afghanistan, some soldiers in Colorado’s B 

Company received these pays sporadically, were not paid at all, were paid 

but for inexplicable dollar amounts, or were overpaid their entitled active 

duty pays and allowances while deployed. For example, 16 of the 62 

soldiers in B Company received the wrong type of hardship duty pay, 

formerly called Foreign Duty Pay, in addition to the correct hardship duty 

location pay while they were deployed in Afghanistan. 

We found that these pay problems could be attributed, in part, to the active 

Army servicing finance office’s lack of knowledge about how to process 

transactions through the Defense Joint Military Pay System-Reserve 

Component system (DJMS-RC) to start location-based pays and allowances 

for the unit’s soldiers. For example, we were told that because active Army 

in-theater finance personnel were unfamiliar with the required procedures 

Type of pay or 

allowance

Number of soldiers who 

did not receive pays or 

allowances within 30 

days of entitlement

Number of 

soldiers who 

were underpaid 

Number of 

soldiers who 

were overpaid 

Hostile fire pay 51 2 2

Combat zone tax 

exclusion 56 7 0

Hardship duty pay 59 33 14
Appendix I

Colorado Army National Guard B Company, 

5th Battalion, 19th Special Forces

Page 67 GAO-04-89 Army Guard Pay

to follow in starting hardship duty pays, they entered transactions that 

resulted in soldiers receiving two different location-based types of hardship 

duty pay for the same duty. Further, Army Guard soldiers told us the active 

Army finance office could not effectively answer questions concerning 

their pay entitlements or transaction processing documentation 

requirements. After not receiving any pay support from the active Army 

servicing finance location, the unit’s soldiers told us they contacted their 

Army Guard USPFO in Colorado for assistance. However, Colorado 

USPFO officials informed them that they did not have the capability to start 

location-based pays and allowances for Army Guard soldiers.

A frequent complaint we received from Colorado’s B Company soldiers 

concerned the circular nature of any attempts to get assistance on pay 

issues while deployed overseas. B Company’s soldiers told us they spent 

significant amounts of time and effort trying to correct the pay problems 

while deployed on critical mission operations in Afghanistan and 

surrounding areas—time and focus away from the mission at hand. For 

example, as discussed in greater detail in our West Virginia case study 

summary, a soldier from that unit took several days away from his unit to 

get location-based pay started for both the West Virginia and Colorado 

special forces units. We were also told that some members of the unit used 

their satellite radios to attempt to resolve their pay problems while 

deployed in Afghanistan. In addition, several of the unit’s soldiers told us 

their ability to identify and correct pay problems while deployed was 

impaired by limited access to telephones, faxes, e-mail, and their current 

Leave and Earnings Statements. 

Pay Problems 

Associated with 

Demobilization and 

Release from Active 

Duty

In the late summer to early fall of 2002, soldiers from Colorado’s B 

Company began returning from Afghanistan and surrounding areas to Fort 

Campbell to begin their demobilization from active duty. However, the 

active Army’s finance office at Fort Campbell failed to properly stop 

soldiers’ pay as of their demobilization dates, which for most of the unit’s 

soldiers was December 4, 2002. As summarized in table 6, 39 of the unit’s 

62 soldiers continued to receive active duty pay and allowances, some 

until February 14, 2003—2 and a half months after the date of their release 

from active duty. 
Appendix I

Colorado Army National Guard B Company, 

5th Battalion, 19th Special Forces

Page 68 GAO-04-89 Army Guard Pay

Table 6: Identified Demobilization Pay Problems 

Source: GAO analysis.

We found that both the active Army servicing finance location for the unit 

while it was in Afghanistan and at Fort Campbell upon its return to the 

United States did not take action to stop active duty pays and allowances. 

According to DFAS procedures, the finance office at the servicing 

demobilization station is to conduct a finance out-processing, which would 

include identifying and stopping any active duty pays that soldiers were no 

longer entitled to receive. According to DFAS-Indianapolis Reserve 

Component mobilization procedures, the local servicing active Army 

finance office also has primary responsibility for entering transactions to 

stop hardship duty pay, hostile fire pay, and the combat zone tax exclusion 

when soldiers leave an authorized hostile fire/combat zone. However, in 

this case, that office did not take action to stop these types of pay and 

allowances for many of the unit’s soldiers. For example, military pay 

personnel at Fort Campbell failed to deactivate hostile fire pay for 41 out of 

62 B Company soldiers. With regard to customer service, some soldiers in 

the unit told us that upon their return from overseas deployments, they 

were informed that they should have corrected these problems while intheater, despite the fact that these problems were not detected until the 

demobilization phase. 

Colorado’s B Company demobilization was complicated by the fact that the 

unit did not demobilize through the same active Army location used to 

mobilize the unit. DFAS procedures provide that Army Guard soldiers are 

to demobilize and have their active duty pays stopped by the installation 

from which they originally mobilized. However, the unit received orders to 

demobilize at Fort Campbell rather than Fort Knox where they originally 

mobilized. According to Fort Campbell personnel, Colorado’s B Company 

out-processed through the required sections, including finance, during their 

demobilization. Nonetheless, the finance office at that active Army 

location failed to stop all active duty pays and allowances when the unit 

was demobilized from active duty. Fort Campbell finance office personnel 

we interviewed were not present during B Company’s demobilization and 

Type of pay or allowance continued in error Number of soldiers overpaid

Basic pay 39

Hostile fire pay 41

Combat zone tax exclusion 39

Hardship duty pay 1
Appendix I

Colorado Army National Guard B Company, 

5th Battalion, 19th Special Forces

Page 69 GAO-04-89 Army Guard Pay

had no knowledge of why pay was not stopped during the demobilization 

process.

Failure to stop location-based and other active duty pays and allowances 

for the unit’s soldiers resulted in overpayments. As a result of the Colorado 

USPFO’s errors made in attempting to amend the unit’s orders to reflect an 

earlier release date than the date reflected in the unit’s original mobilization 

orders, large debts were created for many soldiers in the unit. Specifically, 

largely erroneous soldier debts were created when personnel at the 

Colorado USPFO inadvertently revoked the soldiers’ original mobilization 

orders when attempting to amend the orders to reflect the unit’s actual 

release date of December 4, 2002—1 year before the end of the unit’s 

original orders. As a result, 34 soldiers received notice on their Leave and 

Earnings Statements that rather than a debt for the 2 and a half months of 

active duty pay and allowances they received after their entitlement had 

ended, they owed debts for the 11 months of their active duty tour—an 

average of $48,000 per soldier, for a total debt of $1.6 million. 

Several of the soldiers in the company noticed the erroneous debt and 

called their unit commander. Some of the soldiers wanted to settle the debt 

by writing a check to DFAS. However, they were told not to because the 

exact amount of each soldier’s debt could not be readily determined and 

tracking such a payment against an as-yet undetermined amount of debt 

could confuse matters. Meanwhile, some soldiers now returned from 

active duty, resumed participation in monthly training, and began having 

two-thirds of their drill pay withheld and applied to offset their largely 

erroneous debt balances. We were told that it would take approximately 4 

to 5 years for the soldiers to pay off these debts using this approach. 

On April 17, 2003, and in a subsequent June 20, 2003, letter, we brought this 

matter to the attention of DFAS and the DOD Comptroller, respectively. 

Table 7 provides an overview of the actions leading to the creation of 

largely erroneous payroll-related debts for many of the unit’s soldiers and 

DOD’s actions to address these largely erroneous debts. 
Appendix I

Colorado Army National Guard B Company, 

5th Battalion, 19th Special Forces

Page 70 GAO-04-89 Army Guard Pay

Table 7: Timetable of Colorado B Company’s Unresolved Pay-Related Debts

Source: GAO analysis.

Despite considerable time and effort of DFAS and others across the Army 

Guard and Army, as of the end of our fieldwork in September 2003, 

Colorado’s B Company debt problems had not been resolved. In fact, for 

one sergeant, his pay problems were further complicated by these efforts. 

For example, in attempting to reduce the soldier’s recorded $30,454 debt by 

$20,111, DFAS instead sent the soldier a payment of $20,111. As of 

September 2003, about 9 months after his demobilization, the sergeant’s 

reported unpaid debt balance was $26,806, but the actual amount of his 

debt remained unresolved.

Date Action

December 5, 2001 B Company begins active duty tour in support of Operation 

Enduring Freedom.

July to October 2002 Soldiers demobilize through Fort Campbell. Active duty pay 

and other location-based pays are not stopped by finance 

office.

December 4, 2002 Active duty tour officially ends (1 year before the end of the 

unit’s original 2-year orders). Pay is stopped for 28 of 62 

soldiers; pay erroneously continues for 34 others.

February 14, 2003 Thirty-four soldiers’ pay was not stopped until more than 70 

days after tour officially ended. In attempting to amend orders 

to stop active duty pay and allowances and correct the length of 

the unit’s original 2-year orders, the state USPFO pay chief 

revokes the original orders. This action triggers a systemic 

reversal of pay already earned from March 2002 through 

February 15, 2003, and establishes debts for these soldiers 

from $34,000 to $68,000. The soldiers were first notified of 

these large debts by notations in the “Remarks” section of their 

Leave and Earnings Statements.

April 17, 2003 GAO alerts DFAS Indianapolis of B Company’s continuing pay 

problem.

June 20, 2003 GAO sends the Under Secretary of Defense (Comptroller) a 

letter requesting assistance on correcting pay issues and 

making soldiers whole, including any tax consequences of 

errors. DFAS-Indianapolis suspends 24 soldiers’ pay-related 

debts from collection activity.

July 19, 2003 DFAS-Indianapolis sends representative to B Company 

monthly unit training to discuss debt computations. Debt 

computations did not reflect underpayments due soldiers for 

location-based pays. 

July 31, 2003 DFAS Indianapolis agrees to again visit B Company after 

completion of audit of soldiers’ entire active duty tour in order to 

make soldiers financially whole.
Page 71 GAO-04-89 Army Guard Pay

Appendix II

Virginia Army National Guard B Company, 3rd

Battalion, 20th Special Forces ApendxiI

On January 2, 2002, the Virginia Army National Guard’s B Company, 3rd

Battalion, 20th Special Forces, was called to active duty in support of 

Operation Enduring Freedom for a 1-year tour. The unit in-processed at 

Fort Pickett, Virginia, and departed for Fort Bragg, North Carolina. The 

unit mobilized at Fort Bragg and for the next several months performed 

various duties on base until May 2002. In early May 2002, Virginia’s B 

Company deployed to Afghanistan to perform search and destroy missions 

against al Qaeda and Taliban terrorists. Although several of B Company’s 

soldiers returned from Afghanistan during August and September 2002, 

most of the unit’s members returned to Fort Bragg for demobilization 

during October 2002 and were released from active duty on January 2, 2003. 

A timeline of the unit’s actions associated with its mobilization under 

Operation Enduring Freedom is shown in figure 10. 

Figure 10: Timeline Showing Key Actions Associated with Virginia Army National 

Guard Special Forces Unit’s Mobilization

As summarized in table 8, the majority of soldiers from Virginia’s B 

Company experienced some sort of pay problem during one or more of the 

three phases of their active duty mobilization. Overall, 64 of the 65 soldiers 

with the company experienced at least one pay problem associated with 

their mobilization. These pay problems included not receiving entitled 

pays and allowances at all; not receiving some entitled pays and allowances 

within 30 days; and for some, overpayments of pays and allowances. 

Specifically, we found (1) 31 soldiers did not receive certain pay and 

Dec 01 Jan 02 Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan 03

Soldiers in-process

at Fort Pickett, VA.

12/15/01

Soldiers leave Fort

Bragg for

In-Theater location.

5/3/02

Arrival in

Afghanistan.

5/10/02

Demobilization

through Ft. Bragg.

9/02 through

11/02

1/02 through 4/02

Training at Fort

Bragg, NC.

5/3/02 through

5/10/02

En route

to Afghanistan.

5/10/02 through

10/02

Deployed in and

around Afghanistan.

1/02/03

Active duty tour

officially ends.

Source: GAO.
Appendix II

Virginia Army National Guard B Company, 3rd

Battalion, 20th Special Forces

Page 72 GAO-04-89 Army Guard Pay

allowance entitlements at all, or within 30 days of their initial mobilization 

entitlement, or were overpaid, (2) 63 soldiers either did not receive, or did 

not receive within 30 days, the hardship duty pay or other high-risk location 

pays they were entitled to receive based on their deployment to 

Afghanistan, and (3) 60 soldiers improperly continued to receive hardship 

duty pay or hostile fire pay after leaving high-risk locations overseas. 

Table 8: Summary of Identified Pay Problems by Phase 

Source: GAO analysis.

In total, we identified estimated overpayments of $25,000, underpayments 

of $12,000, and late payments of $28,000 associated with the pay problems 

we found. Of the estimated $25,000 in overpayments, we identified about 

$2,000 that was subsequently collected from the soldiers. 

Our audit showed that the pay problems experienced by Virginia’s B 

Company were the result of a number of factors, including late submission 

of required pay support documents, incorrect pay inputs by Army 

personnel, and an active Army in-theater finance office’s lack of knowledge 

about the unit’s presence in Afghanistan. 

These pay problems had a number of adverse effects. Several B Company 

soldiers we interviewed expressed dissatisfaction with the time and effort 

they, or their spouses, were required to spend attempting to identify and 

correct problems with their pay. Another complaint concerned the circular 

nature of any attempts to get assistance. For example, we were told the 

USPFO referred soldiers to the active Army finance office and that office 

referred them back to the USPFO. Virginia USPFO officials informed us 

that the circular nature of giving assistance to soldiers was sometimes 

unavoidable. For example, they said that once soldiers left their home unit 

and the Fort Bragg and in-theater finance offices assumed pay 

responsibilities, the USPFO informed soldiers and their spouses to contact 

these active Army finance offices to discuss active duty payment problems. 

USPFO officials acknowledged that in instances in which the active Army 

Process stage Number of soldiers with pay problems

Mobilization 31 of 65

Deployed 63 of 65 

Demobilization 60 of 65
Appendix II

Virginia Army National Guard B Company, 3rd

Battalion, 20th Special Forces

Page 73 GAO-04-89 Army Guard Pay

finance office did not resolve soldiers’ pay problems, USPFO staff would 

try to fix the problems. 

According to several soldiers, the combined effect of recurring pay 

problems and receiving poor payroll customer service during their active 

duty tours adversely affects morale and may have a negative effect on the 

soldiers’ willingness to continue serving with the Army National Guard. 

Several soldiers told us that the numerous pay problems they encountered 

would play a major role in their decisions whether to reenlist.

Mobilization Pay 

Problems 

As summarized in table 9, we identified a number of pay problems 

associated with the unit’s mobilization to active duty. These problems 

resulted from failures by unit soldiers to provide necessary documentation 

to initiate certain pays, and data entry errors or late entry of data needed to 

start active duty pays by Army Guard USPFO military pay personnel and/or 

by active Army military pay personnel at the unit’s mobilization station. 

Table 9: Identified Mobilization Pay Problems 

Source: GAO analysis.

We identified 31 out of 65 soldiers from Virginia’s B Company who did not 

receive certain types of pay at all, were not paid in a timely manner, or were 

overpaid after being activated on January 2, 2002. The types of pay for 

which most problems occurred during mobilization were parachute jump 

pay, foreign language proficiency pay, HALO pay, and basic pay. As shown 

in table 9, we identified 8 soldiers who were underpaid for jump pay, 10 

soldiers who were underpaid for foreign language pay, and 10 soldiers who 

were overpaid for HALO pay.

Type of pay 

Number of soldiers 

who did not receive 

pay within 30 days of 

entitlement

Number of 

soldiers who 

were underpaid 

Number of 

soldiers who 

were overpaid 

Jump pay 3 8 0

Foreign language 

proficiency pay 0 10 0

HALO pay 0 0 10

Basic pay 13 0 0
Appendix II

Virginia Army National Guard B Company, 3rd

Battalion, 20th Special Forces

Page 74 GAO-04-89 Army Guard Pay

Prior to being mobilized, the soldiers in Virginia’s B Company attended a 

soldier readiness program at the USPFO at Fort Pickett, Virginia. Part of 

this program was intended to ensure that soldiers had proper 

administrative paperwork and financial documents necessary to start all 

entitled active duty pays at mobilization. Virginia USPFO personnel who 

conducted the finance portion of B Company’s soldier readiness program 

verified soldiers’ supporting financial documentation and updated, if 

necessary, each soldier’s Master Military Pay Accounts (MMPA).

This verification process disclosed that many soldiers had unresolved pay 

errors that had occurred as far back as 1996. According to U.S. Army 

Forces Command Regulation 500-3-3, these problems should have been 

corrected during required annual soldier readiness reviews conducted at 

the unit’s home station. As part of our analysis of the unit’s pay, we 

determined that some of these long-standing pay problems had been 

resolved. For example, over $22,500 was processed for 52 B Company 

soldiers’ and included in soldiers’ pay distributions from October 2001 to 

March 2003. USPFO officials told us that they have been working with a 

sergeant from Virginia’s B Company who performed a detailed analysis of 

soldiers’ long-standing pay problems in addition to pay problems that 

occurred subsequent to January 2002 for the majority of their mobilization.1

 

This sergeant performed these pay-related tasks in addition to his missionrelated duties as a professional engineer. 

After leaving the unit’s home station, B Company traveled to Fort Bragg, its 

active Army mobilization station. Fort Bragg personnel conducted a 

second soldier readiness program that was intended to identify and fix any 

pay issues not resolved at the home station. According to USPFO officials 

and active Army finance office officials at Fort Bragg, problems with jump 

pay and foreign language pay occurred at mobilization because the 

necessary documentation to support jump pay eligibility or language 

proficiency for a number of soldiers was not always provided to the USPFO 

or the mobilization station. For example, of the 8 soldiers in the unit who 

were underpaid for jump pay, 4 did not receive jump pay until midFebruary 2002 and 1 did not begin to receive jump pay until mid-March. In 

another instance, we identified 10 soldiers who were eligible to receive 

foreign language proficiency pay in January 2002, but did not receive 

payments for 1 or more months after they became eligible. 

1

 Our audit findings were consistent with those of the sergeant.
Appendix II

Virginia Army National Guard B Company, 3rd

Battalion, 20th Special Forces

Page 75 GAO-04-89 Army Guard Pay

Further, nine soldiers in the unit were eligible for HALO pay in January 

2002. However, again, in part because of the lack of proper documentation 

from the unit’s soldiers, but also because of pay input errors at the active 

Army finance unit at Fort Bragg, pay problems occurred for seven of the 

nine soldiers during January 2002, the initial month of their mobilization. 

The seven soldiers eligible for HALO pay received both jump pay as well as 

HALO pay during January 2002, which resulted in overpayments to these 

soldiers. These overpayments occurred because Fort Bragg, unaware that 

the USPFO had previously processed HALO pay for these soldiers, 

processed HALO pay a second time, based on supporting documentation 

received from the unit. Also, we found that two soldiers, who were not 

eligible to receive HALO pay, received HALO pay for 3 months and another 

soldier received HALO pay starting in January but did not become eligible 

for this pay until mid-April 2002. Documentation was not available to 

explain these errors.

Deployment Pay 

Problems 

In May 2002, Virginia’s B Company left Fort Bragg and traveled to 

Afghanistan to assist in missions against al Qaeda and Taliban forces. 

While in Afghanistan, the soldiers encountered additional pay problems 

related to hardship duty pay, special duty assignment pay, and, to a lesser 

extent, hostile fire pay and basic pay. Also, the soldiers experienced 

problems in receiving the full amounts of their entitled HALO pay. Table 10 

summarizes the pay problems we identified for the unit while it was 

deployed. 

Table 10: Identified Deployment Pay Problems 

Source: GAO analysis.

Type of pay or 

allowance

Number of soldiers 

who did not receive 

pays or allowances 

within 30 days of 

entitlement

Number of 

soldiers who 

were underpaid

Number of 

soldiers who 

were overpaid 

Hardship duty pay 63 0 0

Special duty 

assignment pay 0 10 24

HALO pay 0 11 0

Hostile Fire pay 0 2 0

Basic pay 3 0 0
Appendix II

Virginia Army National Guard B Company, 3rd

Battalion, 20th Special Forces

Page 76 GAO-04-89 Army Guard Pay

Once the soldiers arrive in-theater, an active Army finance office assigned 

to the unit is responsible for initiating assignment and location-based pays 

for the unit’s soldiers in DJMS-RC. However, we found that the active Army 

in-theater finance offices did not always know which units they were 

responsible for servicing or their location. The in- theater finance office for 

Virginia’s B Company, located in Kuwait, did not start these pays as 

required. We were told that this occurred because finance personnel in 

Kuwait did not know that B Company had arrived in Afghanistan. Virginia’s 

B Company soldiers, who were not regularly receiving their leave and 

earnings statements while in Afghanistan, told us they became concerned 

that they were not receiving pays they were entitled to while deployed 

based on conversations with their spouses.

After attempts to initiate location-based pays at the battalion finance unit in 

Afghanistan were unsuccessful because finance personnel at that location 

were not familiar with DJMS-RC’s transaction processing requirements for 

starting these types of pay, two soldiers were ordered to travel to Camp 

Snoopy, Qatar, where another Army finance office was located. Attempts 

to start assignment and location-based pays for the unit’s soldiers at Camp 

Snoopy were also unsuccessful. One of the soldiers told us that they flew 

to Kuwait because they were advised that the finance unit at that active 

Army finance office was more knowledgeable about how to enter the 

necessary transactions into DJMS-RC to pay the unit’s soldiers. The soldier 

told us he took an annotated battle roster listing the names of all Virginia’s 

B Company soldiers deployed in and around Afghanistan at that time and 

the dates they arrived in country with him as support for starting the unit’s 

in theater-based pays.2

 Finally, at Kuwait the appropriate in-theater pays 

were activated and the two soldiers returned to Afghanistan. As shown in 

figure 11, the entire trip required interim stops at eight locations because of 

limited air transportation and took about a week. 

2

A sergeant who was tracking pay-related issues in addition to his mission-related duties as 

an engineer prepared the roster. He could not make the trip to initiate the location-based 

pays because he received another mission-related assignment that superseded his 

administrative tasks.
Appendix II

Virginia Army National Guard B Company, 3rd

Battalion, 20th Special Forces

Page 77 GAO-04-89 Army Guard Pay

Figure 11: Itinerary of Two B Company Soldiers’ Efforts to Start Location-Based Pays for the Unit

Despite this costly, time-consuming, and risky procedure to start locationbased pays for the unit, 63 of Virginia’s B Company soldiers, who became 

Armenia

Georgia

Azerbaijan Tajikistan

Qatar

U. A. E.

Yemen

Iraq Iran

Oman Saudi Arabia

Russia

Afghanistan

Pakistan

Turkmenistan

Uzbekistan

Caspian

Sea

Arabian Sea

Indian Ocean

Gulf of Oman

Persian

Gulf

Kazakhstan

Camp

Snoopy

Shabaz

AFB

Dushanbe

Kandahar AFB

Seeb AFB

Bagram AFB

Kuwait Intl Airport/

Camp Doha 5

1 Sgt. and SFC fly from Bagram AFB,

Afghanistan, to Dushanbe, Tajikistan. 

2 Sgt. and SFC fly from Dushanbe to Camp

Snoopy, Qatar, and are informed of inability to 

make pay changes from Camp Snoopy. 

Sgt. and SFC spend the weekend in Qatar due 

to limited flight availablilty.

3 Sgt. and SFC fly from Camp Snoopy to

Jacobabad, Pakistan.

4 Sgt. and SFC fly from Jacobabad, Pakistan

to Kuwait International Airport.

5 Sgt. and SFC travel 45 minutes to Camp

Doha, Kuwait, and uses Camp Doha

finance office to input name, SSN, rank,

arrival date, and other pertinent information

for each battalion member. Sgt. and SFC

return to Kuwait International Airport. 

7 Sgt. and SFC fly from Seeb

AFB to Kandahar AFB, Afghanistan.

8 Sgt. and SFC fly from Kandahar AFB,

returning to Bagram AFB, Afghanistan.

6 Sgt. and SFC fly from Kuwait

International Airport to Seeb AFB, Oman. Kuwait

Source: GAO.

1

2

3

4

6

7

8
Appendix II

Virginia Army National Guard B Company, 3rd

Battalion, 20th Special Forces

Page 78 GAO-04-89 Army Guard Pay

eligible for hardship duty pay in May 2002, not receive their location-based 

pay entitlements until July 2002.

Problems with special duty assignment pay also occurred during the unit’s 

deployment. We found that both underpayments and overpayments of this 

type of pay were made as a result of confusion about who was responsible 

for making the manual monthly transactions necessary for entitled soldiers 

in the unit to receive these pays.. For example, 10 soldiers in B Company 

did not receive at least 1 month of entitled special duty assignment pay. 

Conversely, overpayments of this type of pay were made when B Company 

left Afghanistan and returned to Fort Bragg to demobilize in October 2002, 

and both the active Army finance office at Fort Bragg and the Virginia 

USPFO entered special duty assignment pay transactions for the unit’s 

eligible soldiers. Fort Bragg processed October and November 2002 

special duty assignment duty payments for 24 of the unit’s soldiers in 

December 2002. Virginia’s USPFO, unaware that Fort Bragg had made 

these payments in December 2002, also paid all 24 eligible soldiers special 

duty assignment pay for October and November 2002 several months later. 

USPFO officials explained that their military pay office processed the 

payments because B Company submitted the necessary documentation 

certifying that the unit’s soldiers were entitled to receive back pay for 

missed special assignment duty pays. The officials told us that special duty 

assignment pay was processed because, having received this certification 

from the unit, they assumed that payments had not yet been made.

Virginia’s B Company soldiers also experienced problems with HALO pay 

during deployment. We identified 11 B Company soldiers eligible for HALO 

pay who did not receive 1 or more months of this pay as of March 31, 2003. 

We determined that these problems occurred because such pays require 

manual monthly input, and the pay technicians inadvertently did not make 

the required entries each month. In addition, 2 of the unit’s soldiers did not 

receive all hostile fire payments to which they were entitled. One soldier 

did not receive the first month of entitled hostile fire pay for May 2002, and 

the other soldier received hostile fire pay for May 2002 but not for the 

remaining months of his deployment.
Appendix II

Virginia Army National Guard B Company, 3rd

Battalion, 20th Special Forces

Page 79 GAO-04-89 Army Guard Pay

Pay Problems 

Associated with 

Demobilization and 

Release from Active 

Duty

Although some soldiers in B Company left Afghanistan during August and 

September 2002, most of the unit returned to Fort Bragg in October 2002 to 

begin the demobilization process. As summarized in table 11, 57 soldiers 

continued to receive pays to which they were no longer entitled because 

they left Afghanistan, including either hostile fire pay, hardship duty pay, or 

both. 

Table 11: Identified Demobilization Pay Problems 

Source: GAO analysis.

According to DOD mobilization procedures, the finance office at the 

servicing demobilization station is to conduct a finance out-processing. 

The finance office is responsible for inputting transactions to stop certain 

location-based pays, such as hardship duty pay and hostile fire pay. In 

addition, according to DOD’s Financial Management Regulation (FMR), 

Volume 7A, chapters 10 and 17, location-based pays must be terminated 

when the soldier leaves the hostile fire/combat zone.

Overpayments to B Company soldiers occurred during demobilization 

because the in-theater finance office continued to make hostile fire and 

hardship duty pays after soldiers left Afghanistan in October 2002, and the 

Fort Bragg active Army finance office did not enter transactions into DJMSRC to stop these payments as required. We found that 55 of 64 soldiers 

eligible for hostile fire pay were overpaid for at least 1 month beyond their 

departure from Afghanistan. Also, we found that 57 of 64 soldiers eligible 

for hardship duty pay were overpaid at least part of 1 month. A Fort Bragg 

official explained that the Army finance office personnel at Fort Bragg 

were not aware that these payments were still being made after the soldiers 

had returned to the United States, but, subsequently determined that 

hostile fire and hardship duty overpayments were occurring and took 

action to terminate the payments.

Also, four members of Virginia’s B Company, who were injured while 

deployed in Afghanistan, returned to Fort Bragg and requested medical 

extensions to their active duty tours so they could continue to receive 

Type of pay or allowance 

continued in error

Number of soldiers who 

were overpaid

Number of soldiers having 

an overpayment collected

Hostile fire pay 55 0

Hardship duty pay 57 23
Appendix II

Virginia Army National Guard B Company, 3rd

Battalion, 20th Special Forces

Page 80 GAO-04-89 Army Guard Pay

active duty pay and medical benefits until they recovered. One of the 

soldiers told us, “People did not know who was responsible for what. No 

one knew who to contact or what paperwork was needed ....” To support 

themselves and their families, these four soldiers needed the active duty 

military pay they were entitled to receive while obtaining medical 

treatment and recovering from their injuries. However, after risking their 

lives for their country, all four have had gaps in receiving active duty pay 

while they remained under a physician’s care after their demobilization 

date and have experienced financial difficulties. In addition, when active 

duty pay was stopped, the soldiers’ medical benefits were discontinued. As 

discussed earlier in this report, these pay-related problems for wounded 

soldiers caused significant hardship for them and their families.
Page 81 GAO-04-89 Army Guard Pay

Appendix III

C Company, 2nd Battalion, 19th Special Forces 

Group, West Virginia ApendxiI

On December 5, 2001, West Virginia’s 19th Special Forces Group, 2nd

Battalion, C Company, was called to active duty in support of Operation 

Enduring Freedom for a 1-year tour. The unit was mobilized at Fort Knox 

and subsequently deployed in Afghanistan, Uzbekistan, and surrounding 

areas to search for possible Taliban and al Qaeda terrorists. The unit 

returned to Fort Campbell for demobilization and was released from active 

duty on December 4, 2002. A timeline of the unit’s actions associated with 

its mobilization under Operation Enduring Freedom is summarized in 

figure 12. 

Figure 12: Timeline Showing Key Actions Associated with West Virginia National 

Guard Special Forces Unit’s Mobilization

As summarized in table 12, the majority of soldiers from C Company 

experienced some sort of pay problem during one or more of the three 

phases of their active duty mobilization. Overall, 86 of the 94 soldiers with 

the company experienced at least one pay problem associated with its 

mobilization. Specifically, we identified (1) 36 soldiers who were either 

overpaid, did not receive certain pay and allowance entitlements at all, or 

did not receive pay within 30 days of their initial mobilization entitlement, 

(2) 84 soldiers who were either overpaid, did not receive, or did not receive 

within 30 days, the hostile fire pay or other high-risk location pays they 

Active duty tour

officially ends.

12/4/02

Dec 01 Jan 02 Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

Soldiers in-process

at Fort Knox, KY.

12/10/01

Travel to

Ft. Campbell, KY.

12/14/01

Travel to

Afghanistan.

12/25/01

Arrival in

Afghanistan.

12/27/01

Arrival at

Ft. Campbell, KY.

10/3/02

12/14/01 through

12/25/01

Preparing for

overseas deployment.

12/27/01 through

10/01/02

Deployed in

Afghanistan.

10/3/02 through

10/18/02

Demobilization at

Ft. Campbell, KY.

Source: GAO
Appendix III

C Company, 2nd Battalion, 19th Special Forces 

Group, West Virginia

Page 82 GAO-04-89 Army Guard Pay

were entitled to receive based on their deployment in Uzbekistan and 

Afghanistan, and (3) 66 soldiers who did not receive, or did not receive 

within 30 days, their special duty assignment pay during their 

demobilization. 

Table 12: Summary of Identified Pay Problems by Phase

Source: GAO analysis.

In total, we identified estimated overpayments of $31,000, underpayments 

of $9,000, and late payments of $61,000 associated with the identified pay 

problems. We did not identify any collections related to overpayments for 

this unit. 

Mobilization Pay 

Problems

As summarized in table 13, several soldiers from C Company did not 

receive the correct pay or allowance when called to active duty. We found 

that some soldiers received payments over 5 months late and other soldiers 

had been overpaid. Seven soldiers did not receive their $225 per month 

HALO pay until over a month after mobilization, and 18 other soldiers 

received combat diver pay and HALO pay to which they were not entitled. 

Table 13: Identified Mobilization Pay Problems 

Process stage Number of soldiers with pay problems

Mobilization 36 of 94 

Deployed 84 of 94 

Demobilization 66 of 94 

Type of pay or 

allowance

Number of soldiers who 

did not receive pay or 

allowance within 30 

days of entitlement

Number of 

soldiers who 

were underpaid 

Number of 

soldiers who 

were overpaid 

HALO pay 7 0 10

Combat diver pay 0 0 8

Jump pay 0 7 0

Special duty assignment 

pay 4 0 0

Foreign language 

proficiency pay 3 3 0
Appendix III

C Company, 2nd Battalion, 19th Special Forces 

Group, West Virginia

Page 83 GAO-04-89 Army Guard Pay

Source: GAO analysis.

Prior to being mobilized, the soldiers in C Company attended a soldier 

readiness program at their unit armory. This program was intended to 

ensure that all soldiers had proper administrative paperwork and financial 

documents and were physically fit for the ensuing mobilization. West 

Virginia USPFO personnel who conducted the finance portion of C 

Company’s soldier readiness program were required to verify soldiers’ 

supporting financial documentation, and update, if necessary, soldiers’ pay 

records in DJMS-RC. Soldiers not submitting the correct paperwork at the 

time of the Soldier Readiness Program caused some payments to be late. 

For example, according to the USPFO, one soldier did not submit the 

proper paperwork for his family separation allowance. The delay in 

submission caused his first payment to be over 3 months late.

Another problem with the unit’s mobilization related to 17 soldiers who had 

significant problems with their HALO pay. According to USPFO personnel, 

the unit commander for C Company did not provide the USPFO a list of the 

unit members who were eligible to receive HALO pay. Therefore, the 

USPFO paid all the unit members who were parachute qualified the regular 

parachute pay. Once the USPFO received a list of the unit’s 17 HALOqualified soldiers, pay personnel attempted to recoup the regular jump pay 

and pay the HALO team the increased HALO pay amount. USPFO 

personnel told us they did not know how to initiate a payment for the 

difference between regular jump and HALO pay. Consequently, they 

entered transactions to recoup the entire amount of jump pay and then 

initiated a separate transaction to pay the correct amount of HALO pay.

According to the DOD FMR, volume 7A, chapter 24, soldiers who are 

eligible to receive regular parachute pay and HALO pay are paid the higher 

of the two amounts, but not both. In this case, the 17 members of C 

Company’s HALO team should have received a $225 per month payment 

from the beginning of their mobilization. Pay records indicate that this 

correction initiated by the USPFO occurred about 2 months after the unit 

Family separation 

allowance 2 0 0

All entitled pays and 

allowances 0 0 1

(Continued From Previous Page)

Type of pay or 

allowance

Number of soldiers who 

did not receive pay or 

allowance within 30 

days of entitlement

Number of 

soldiers who 

were underpaid 

Number of 

soldiers who 

were overpaid 
Appendix III

C Company, 2nd Battalion, 19th Special Forces 

Group, West Virginia

Page 84 GAO-04-89 Army Guard Pay

mobilized. When the USPFO personnel attempted to collect the soldiers’ 

regular parachute pay, they inadvertently collected a large amount of the 

soldiers’ basic active duty pay for the first month of their mobilization. 

Personnel at the USPFO stated that the error caused debts on soldiers’ 

accounts but was corrected immediately after a pay supervisor at the 

USPFO detected the error in February. Even after the soldiers’ pay was 

corrected, USPFO personnel did not stop the regular parachute pay for the 

HALO team members, but instead let it continue, then collected the $150 

per month parachute pay manually, and then paid the correct $225 per 

month HALO pay. This error-prone, labor- intensive manual collection and 

subsequent payment method used by the USPFO personnel to pay C 

Company’s HALO team the higher HALO rate of pay was not consistently 

applied each month and resulted in 7 soldiers being overpaid when their 

regular parachute pay was not collected.

In addition to the 7 soldiers who were actually on the HALO team, 10 other 

soldiers were on the initial list given to the USPFO but were actually not on 

the HALO team. The unit commander for C Company provided a more 

accurate list to the USPFO some time after the first list, and only members 

on the more accurate list continued to receive HALO pay. However, 

USPFO pay personnel did not attempt to collect the HALO pay from unit 

members on the first list who had incorrectly received HALO pay. As a 

result of this complex collection and payment process, the unit’s soldiers 

were confused about whether they were receiving all their entitled active 

duty pays while mobilized.

After leaving the unit’s home station, C Company traveled to Fort Knox, its 

active Army mobilization station. As required by Army guidance, Fort 

Knox personnel conducted a second soldier readiness program to identify 

and fix unresolved pay issues associated with the unit’s mobilization. 

Based on our findings that the pay problems continued after this review, it 

does not appear that the active Army finance office at Fort Knox carried 

out its responsibility to review and validate all of C Company soldiers’ 

active duty pays and allowance support records. Problems with HALO and 

family separation pay were not resolved for several months after the 

mobilization. As a result, the soldiers’ pay problems persisted into their 

deployment overseas. 

Deployment Pay 

Problems

As summarized in table 14, we identified a number of pay problems 

associated with three different types of active duty pays related to the unit’s 

deployment.
Appendix III

C Company, 2nd Battalion, 19th Special Forces 

Group, West Virginia

Page 85 GAO-04-89 Army Guard Pay

Table 14: Identified Deployment Pay Problems 

Source: GAO analysis.

After going through initial in-processing at Fort Knox, C Company soldiers 

traveled to Fort Campbell where they prepared to deploy overseas. 

Starting in December 2001, members of C Company traveled to Uzbekistan 

and Afghanistan to perform special forces missions. During their 

deployment overseas, C Company soldiers consistently experienced 

problems related to specific location-based payments such as hostile fire 

pay and hardship duty pay. In 78 cases, the payments were not started 

within 30 days from when the soldiers were entitled to the payments. In 22 

other cases, we determined that soldiers had not received all locationbased pays as of March 31, 2003. In 60 cases, the soldiers were overpaid or 

payments were not stopped when they left the combat zones. Due to the 

lack of supporting documents at the state, unit, and battalion-levels, dates 

for when each soldier entered and left combat zones were not always 

available. Consequently, there may have been other deployment-related 

pay problems for C Company that we were not able to identify.

According to DFAS policy, when soldiers from C Company arrived in 

Uzbekistan the in-theater finance office in Uzbekistan was responsible for 

initiating location-based payments for the unit. Unit personnel stated that 

the staff in the finance office in Uzbekistan were not adequately trained in 

how to input pays into DJMS-RC. Initially, we were told the Uzbekistan 

finance office incorrectly believed it was the West Virginia USPFO’s 

responsibility to start location-based pays for the deployed soldiers from C 

Company. The active Army finance office in Uzbekistan instructed the unit 

to contact the West Virginia USPFO to start location-based pays. However, 

DFAS policy clearly states that it is the active Army in-theater finance 

office’s responsibility to start and maintain monthly location-based 

payments.

Type of pay or allowance

Number of soldiers 

who did not receive 

pay or allowance 

within 30 days of 

entitlement

Number of 

soldiers who 

were underpaid 

Number of 

soldiers who 

were overpaid 

Hostile fire pay 45 18 40

Hardship duty pay 

(designated areas) 75 5 12

Hardship duty pay (certain 

places) 0 0 29
Appendix III

C Company, 2nd Battalion, 19th Special Forces 

Group, West Virginia

Page 86 GAO-04-89 Army Guard Pay

After attempts by the unit administrator and the Uzbekistan finance office 

failed to initiate the payments, a sergeant in C Company was ordered to 

travel to Camp Doha, Kuwait, to have the unit’s location-based pays started. 

The soldier stated that he traveled to Camp Doha because he was told that 

the finance unit at that active Army finance location was more 

knowledgeable in how to enter transactions into DJMS-RC to initiate 

location-based pays for the unit’s soldiers. The soldier took with him all the 

necessary paperwork to have the pays started for all the companies under 

the battalion, including C Company. On the return flight from the 

sergeant’s mission in Kuwait, his plane encountered enemy fire and was 

forced to return to a safe airport until the next day. The failure by active 

Army personnel at the finance office in Uzbekistan to enter the 

transactions necessary to start location-based pays for the unit delayed 

payments to some soldiers for up to 9 months and put one soldier in harm’s 

way. 

Per DOD FMR, volume 7A, chapter 10, soldiers who perform duty in hostile 

fire zones are entitled to hostile fire pay as soon as they enter the zone. 

However, we found that 45 soldiers in C Company did not have their hostile 

fire pay started until over 30 days after they were entitled to receive it. 

Some of C Company’s soldiers received retroactive payments over 2 

months after they should have received their pay. In addition, as of March 

31, 2003, we determined that 18 soldiers from the unit were not yet paid for 

1 or more months that they were in the hostile fire zone. We also identified 

40 soldiers who received hostile fire pay after they had left the country and 

were no longer entitled to receive such pays. These overpayments 

occurred primarily because hostile fire pay is an automatic recurring 

payment based on the start and stop date for the soldier’s mobilization 

entered into DJMS-RC. However, in this case, the active Army finance 

office in Uzbekistan did not amend the stop dates for automated active 

duty pays in DJMS-RC to reflect that C Company left the designated area 

before the stop date entered into DJMS-RC. The active Army finance 

office’s failure to follow prescribed procedures resulted in overpayment of 

this pay to 40 soldiers.

Per DOD FMR, volume 7A, chapter 17, soldiers who perform duties in 

designated areas for over 30 days are entitled to the hardship duty pay 

incentive. The FMR provides for two mutually exclusive types of hardship 

duty pay for identified locations—one according to specified “designated 

areas” and the other for specified “certain places.” Effective December 31, 

2001, the regulation no longer permitted soldiers newly assigned to 

locations specified as “certain places” to begin receiving hardship duty pay. 
Appendix III

C Company, 2nd Battalion, 19th Special Forces 

Group, West Virginia

Page 87 GAO-04-89 Army Guard Pay

However, the regulation specified Afghanistan and Uzbekistan as 

designated areas and provided for paying $100 a month to each soldier 

serving there. 

While deployed to Afghanistan and Uzbekistan, 29 soldiers in C Company 

were mistakenly provided both types of hardship duty pay. The local 

finance office in Uzbekistan correctly entered transactions to start C 

Company’s hardship duty pay for designated areas into the DJMS-RC pay 

system. Due to limitations in DJMS-RC, the local finance office was 

required to manually enter the designated area payments for each soldier 

every month the unit was in a designated area. However, DFAS 

documentation shows that finance personnel at Fort Bragg incorrectly 

initiated a recurring certain places hardship duty payment for soldiers in C 

Company.1

 For some soldiers, payments continued until May 31, 2002 and 

for others the payments continued until the end of their tour of active duty 

on December 4, 2002. These erroneous certain places hardship duty pays 

resulted in overpayments. 

In addition, because DJMS-RC processing capability limitations required 

the designated areas payment to be manually entered every month the unit 

was in the designated area, the in-theater finance office in Uzbekistan 

failed to consistently enter the monthly designated area payments for all 

entitled soldiers. Throughout the time C Company was in Uzbekistan and 

Afghanistan, we identified a total of 5 soldiers who missed one or more 

monthly payments of entitled hardship duty designated area pay. Other 

soldiers received entitled payments over 9 months late. Still others were 

paid more than once for the same month or paid after leaving the 

designated area, resulting in overpayments to 12 soldiers. The mix of 

erroneous certain places hardship duty payments along with sporadic 

payments of the correct type of designated area hardship duty pay caused 

confusion for the soldiers of C Company and their families regarding what 

types of pay they were entitled to receive and whether they received all 

active duty entitlements. 

1

In DJMS-RC, the hardship duty (certain places) payment is identified as a separate 

component of pay, while designated areas payments require using a miscellaneous 

component of pay.
Appendix III

C Company, 2nd Battalion, 19th Special Forces 

Group, West Virginia

Page 88 GAO-04-89 Army Guard Pay

Demobilization and 

Release from Active 

Duty Pay Problems

C Company returned to Fort Campbell during the fall of 2002 to begin the 

demobilization process. By October 2002, all of the unit had returned from 

overseas and was demobilized on December 4, 2002. As shown in table 15, 

66 of C Company’s 94 soldiers experienced pay problems associated with 

their demobilization from active duty. 

Table 15: Identified Pay Demobilization Problems 

Source: GAO analysis.

In October 2002, eligible soldiers in the unit were entitled to a special duty 

assignment pay increase from $110 per month to $220 per month. To 

initiate this higher pay rate, the West Virginia Army National Guard military 

personnel office was required to cut new special duty assignment pay 

orders for all eligible C Company soldiers. USPFO officials stated that they 

could not pay the increased amount until they received a copy of the new 

orders. The USPFO personnel did not continue to pay the $110 a month to 

the soldiers because they did not want to have to recoup the old amount 

and then pay the correct amount when orders were received. However, the 

orders for the soldiers were not received by the USPFO for several months, 

which created a delay in the payment of the soldiers’ special duty 

assignment pay. Supporting documents showed that a delay in the 

production of the orders by the West Virginia Army National Guard military 

personnel office caused the late payments. For C Company, 63 soldiers 

received their last 3 months of special duty assignment pay over 30 days 

late. Another 3 soldiers did not receive their last 3 months of special duty 

assignment pay because the USPFO inadvertently overlooked the manual 

transaction entries required to process special duty assignment pay for 

those soldiers. 

Type of Pay or Allowance

Number of soldiers who did not 

receive pay or allowances within 

30 days of entitlement

Number of 

soldiers who 

were underpaid 

Special duty assignment pay 63 3
Page 89 GAO-04-89 Army Guard Pay

Appendix IV

Mississippi 114th Military Police Company ApendxiIV

On December 27, 2001, the Mississippi Army National Guard’s 114th 

Military Police Company was called to active duty in support of Operation 

Noble Eagle for a 1-year tour—through January 5, 2003. The unit 

mobilized in Clinton, Mississippi, and departed for Fort Campbell, 

Kentucky, on January 6, 2002. The unit in-processed at Fort Campbell and 

for the next 5 months performed military police duties at Fort Campbell 

until early June. On June 10, 2002, the 114th Military Police Company 

deployed to Guantanamo Bay, Cuba, to perform base security and guard 

duties for Taliban and al Qaeda prisoners. After guarding detainees in Cuba 

for approximately 6 months, the unit returned to Fort Campbell in late 

November 2002. At Fort Campbell the unit out-processed and returned to 

Clinton, Mississippi, and was released from active duty on January 5, 2003. 

A time line of actions associated with the unit’s active duty mobilization is 

shown in figure 13.

Figure 13: Timeline Showing Key Actions Associated with the Mississippi Army 

National Guard Military Police Unit’s Mobilization

As summarized in table 16, at every stage of the unit’s 1-year tour of active 

duty, soldiers experienced various pay problems. Of the 119 soldiers of the 

Mississippi Army National Guard’s 114th Military Police Company, 105 

experienced at least one pay problem associated with mobilization in 

support of Operation Noble Eagle. Specifically, we found that (1) 21 

soldiers experienced underpayments, overpayments, or late payments, or a 

combination of these, during their initial mobilization, including some 

soldiers who did not receive payments for up to 7 months after their 

mobilization dates, and others who still have not received certain 

Jan 02 Feb Mar Apr May Jun Jul Aug Sept Oct Nov Jan 03 Dec

To Guantanamo

Bay, Cuba.

6/10/02 Return to

Ft. Campbell, KY.

11/23/02

Release from

active duty.

1/05/03

Soldiers mobilize at

Clinton, MS home station.

1/6/02

1/6/02 through

6/10/02

Guard duty at approx. 1/7/02 Fort Campbell, KY. Soldiers go to 

Ft. Campbell, KY

Mobilization station.

6/10/02 through

11/23/02

Deployed in

Guantanamo Bay, Cuba.

12/02

Return to

Clinton, MS

home station.

Source: GAO
Appendix IV

Mississippi 114th Military Police Company

Page 90 GAO-04-89 Army Guard Pay

payments, (2) 93 soldiers experienced underpayments, overpayments, late 

payments, or some combination, during their tour of active duty at Fort 

Campbell and in Cuba, including in-theater incentives such as hardship 

duty pay, and (3) 90 soldiers experienced underpayments, overpayments, 

late payments, or a combination of these, during their demobilization at 

Fort Campbell, including problems related to the continuation of in-theater 

incentives and overpayment of active duty pay after demobilization. 

Table 16: Summary of Identified Pay Problems by Phase 

Source: GAO analysis.

In total, we identified estimated overpayments of $50,000, underpayments 

of $6,000, and late payments of $15,000 associated with the pay problems 

we found. Of the estimated $50,000 in overpayments, we identified about 

$13,000 that was subsequently collected from the unit’s soldiers. 

Mobilization Pay 

Problems

As summarized in table 17, we found that 21 soldiers from the 114th Military 

Police Company experienced underpayments, overpayments, late 

payments, or some combination related to pay and allowance entitlements 

when called to active duty. For example, several soldiers did not receive 

their entitled $100 per month family separation allowance until 7 months 

after mobilization, and several other soldiers did not receive the correct 

type of basic allowance for housing as specified in the DOD FMR, Volume 

7A, chapter 26. 

Phase Number of soldiers with pay problems

Mobilization 21 of 119 

Deployed 93 of 119 

Demobilization 90 of 119 
Appendix IV

Mississippi 114th Military Police Company

Page 91 GAO-04-89 Army Guard Pay

Table 17: Identified Mobilization Pay Problems 

Source: GAO analysis.

Prior to being mobilized, the soldiers in the 114th Military Police Company 

attended a soldier readiness program at their unit armory. The purpose of 

this review was to ensure that all soldiers had proper administrative 

paperwork and financial documents and were physically fit for the ensuing 

mobilization. Mississippi USPFO personnel, who conducted the finance 

portion of the 114th Military Police unit’s soldier readiness program, were 

required to verify soldiers’ supporting financial documentation, and update, 

if necessary, soldiers’ MMPAs. Not submitting the complete and current 

paperwork at the time of the soldier readiness program contributed to 

some of the late payments we identified. For example, some soldiers did 

not receive their family separation allowance because they did not provide 

documentation supporting custody arrangements. However, we also found 

that confusion at the USPFO over the eligibility of single parents 

contributed to these late pays. It was later in the unit’s active duty tour that 

finance officers initiated action for 11 of the 114th Military Police unit’s 

soldiers to receive retroactive payments, some for as much as 7-months of 

back pay. In another case, a former Special Forces soldier improperly 

received jump pay even though his assignment to this military police unit 

did not require that special skill. 

Five soldiers improperly received active duty pay and allowances even 

though they did not mobilize with the unit. Because these five soldiers 

were not deployable for a variety of reasons, they were transferred to 

another unit that was not subject to the current mobilization. However, the 

delay in entering the transfer and stopping pay caused each of these 

soldiers to receive active duty pay for 10 days. Several other soldiers 

received promotions at the time of their mobilization, but state military pay 

personnel at the USPFO did not enter transactions for the promotions until 

Type of pay or 

allowance

Number of soldiers who 

did not receive pay or 

allowances within 30 

days of entitlement

Number of 

soldiers who 

were underpaid 

Number of 

soldiers who 

were overpaid 

Basic pay 2 1 5

Family separation 

allowance 11 1 0

Basic allowance for 

housing 2 3 0

Jump pay 0 0 1
Appendix IV

Mississippi 114th Military Police Company

Page 92 GAO-04-89 Army Guard Pay

several months later, resulting in late promotion pay to the affected 

soldiers. Delays by the unit in submitting the promotion paperwork or by 

the state personnel office in entering the promotion paperwork into the 

personnel system caused these problems. However, supporting documents 

were not available to enable us to determine the specific cause of the 

delays. 

After leaving the unit’s home station, the 114th Military Police Company 

traveled to Fort Campbell, its active Army mobilization station. As required 

by Army guidance, Fort Campbell personnel conducted a second soldier 

readiness program intended, in part, to verify the accuracy of soldiers’ pay 

records. However, instead of conducting a thorough review of each 

soldier’s pay record, Fort Campbell finance personnel performed only a 

perfunctory review by asking the soldiers if they were experiencing pay 

problems. At this point, because the soldiers had only recently mobilized 

and had not received their first paychecks, they were unaware of pay 

problems. Failure to follow requirements for finance verification at Fort 

Campbell of each soldier’s pay account caused pay problems to persist past 

the mobilization stage. In addition, we were unable to determine specific 

causes for certain pay problems associated with the unit’s mobilization 

because the unit remobilized in February 2003, and unit administrative 

personnel did not retain payroll source documents relating to the prior 

mobilization. 

Deployment Pay 

Problems 

As summarized in table 18, we identified a number of pay problems 

associated with four types of active duty pays and allowances associated 

with the unit’s deployment while on active duty.
Appendix IV

Mississippi 114th Military Police Company

Page 93 GAO-04-89 Army Guard Pay

Table 18: Identified Deployment Pay Problems 

Source: GAO analysis.

While at Fort Campbell, eight soldiers experienced problems resulting from 

delays in entering changes in the family separation allowance, basic 

allowance for housing, and active duty pay increases from promotions. For 

example, one soldier was promoted to the rank of Private First Class at the 

end of May, but the pay system did not reflect the promotion until October. 

Although the soldier eventually received retroactive promotion pay, the 

delay caused the soldier to be paid at her old rank for 5 months. According 

to DFAS guidance, when a change occurs in a soldier’s pay, the on-site 

Army finance office should input the change. In cases where personnel 

changes occurred that affected pay, either the soldiers failed to submit 

documents or personnel at Fort Campbell failed to input the changes. Due 

to the lack of documentation, we could not determine the origin of the 

delays. 

During the unit’s deployment to Guantanamo Bay, Cuba, the soldiers 

encountered additional pay problems related to hardship duty pay, a 

location-based payment for soldiers located at designated hardship duty 

locations. Some soldiers received extra hardship duty payments, while 

others were only paid sporadically. In total, only 9 of the 100 soldiers who 

deployed to Guantanamo Bay with the 114th Military Police Company 

received the correctly computed hardship duty pay. 

Per DOD FMR, Volume 7A, chapter 17, soldiers who perform duties in 

designated areas for over 30 days are entitled to the hardship duty pay 

incentive. The FMR provides for two mutually exclusive types of hardship 

duty pay for identified locations; one according to specified “designated 

areas” and the other for specified “certain places.” Effective December 

2001, the regulation no longer permitted soldiers newly assigned to 

Type of pay or 

allowance

Number of soldiers who 

did not receive pay or 

allowances within 30 

days of entitlement

Number of 

soldiers who 

were underpaid 

Number of 

soldiers who 

were overpaid 

Basic pay 10 0 0

Family separation 

allowance 3 0 3

Basic allowance for 

housing 1 0 0

Hardship duty pay 0 11 88
Appendix IV

Mississippi 114th Military Police Company

Page 94 GAO-04-89 Army Guard Pay

locations specified as certain places to begin receiving hardship duty pay. 

However, the regulation specified Guantanamo Bay, Cuba, as a designated 

area and provided for paying $50 a month to each soldier serving there. 

Most of the 114th Military Police unit’s soldiers were mistakenly provided 

both types of hardship duty pay while deployed to Cuba. Upon arrival in 

Cuba, the local Guantanamo Bay finance office correctly entered 

transactions to start hardship duty pay for designated areas for the 114th

Military Police unit’s soldiers into DJMS-RC. However, unknown to 

Guantanamo finance personnel, Fort Campbell finance personnel, upon the 

unit’s departure to Cuba, incorrectly initiated recurring certain places 

hardship duty payments for the soldiers of the 114th Military Police unit. 

These payments of both types of hardship duty pay resulted in 

overpayments to 88 enlisted soldiers of the 114th Military Police Company 

during the time the soldiers were stationed in Cuba. 

In addition, as a result of personnel turnover and heavy workload in the 

active Army’s Guantanamo Bay finance office and limitations in DJMS-RC, 

the Guantanamo Bay finance office did not make all the required monthly 

manual transaction entries required to pay hardship duty pays to the 114th

Military Police Company’s soldiers. As a result, several soldiers in the unit 

did not receive one or more monthly hardship duty payments. Limitations 

in DJMS-RC required the local finance office to manually enter the 

designated area payments for each soldier on a monthly basis. For 11 

soldiers, the finance office inadvertently overlooked entering one or more 

monthly hardship duty payments. The combination of erroneous certain 

places payments, along with sporadic payments of hardship duty 

designated area pays caused confusion for the soldiers who were 

performing a stressful mission in Cuba regarding whether they were 

receiving all their active duty pay entitlements. 

Pay Problems 

Associated with 

Demobilization and 

Release from Active 

Duty

The 114th Military Police Company returned to Fort Campbell on November 

23, 2002, to begin the demobilization process. During demobilization, 

soldiers continued to experience pay problems. As summarized in table 19, 

overpayment problems consisted of improper continuation of hardship 

duty pay following the unit’s return from Cuba and failure to stop active 

duty pay and allowances to soldiers who were discharged or returned from 

active duty early. 
Appendix IV

Mississippi 114th Military Police Company

Page 95 GAO-04-89 Army Guard Pay

Table 19: Identified Demobilization Pay Problems 

Source: GAO analysis.

According to the DOD FMR, Volume 7A, chapter 17, soldiers are entitled to 

receive hardship duty pay only while they are stationed in a hardship duty 

location. While the active Army’s Guantanamo Bay finance office stopped 

monthly designated area payments upon the unit’s departure from Cuba, 

the Fort Campbell finance office did not discontinue the incorrect certain 

places payments that its finance office had initiated months earlier. 

Consequently, 85 of 88 soldiers of the 114th Military Police unit’s soldiers 

continued receiving the incorrect certain places payments through their 

last day of active duty. 

In addition, five soldiers continued to receive active duty pay and 

allowances after being discharged or returned from active duty. Instead of 

demobilizing on schedule with their unit, these five soldiers demobilized 

individually earlier due to various reasons. According to DFAS guidance, 

Fort Campbell, the designated demobilization station for the 114th Military 

Police Company, was responsible for stopping active duty pay for the unit’s 

demobilizing soldiers. However, when these individual soldiers were 

released from active duty, Fort Campbell processed discharge orders but 

Fort Campbell’s finance office failed to stop their pay. Further, in at least 

one case in which documentation was available, state USPFO military pay 

personnel did not immediately detect the overpayments in monthly pay 

system mismatch reports.1

 For these five soldiers, overpayments 

continued for up to 3 months. 

Type of pay or allowance Number of soldiers who were overpaid 

Basic pay 5

Family separation allowance 5

Basic allowance for subsistence 5

Basic allowance for housing 5

Hardship duty pay 85

1

The National Guard Bureau’s Financial Services Center provides monthly computerized 

matches between common military pay-related-data in DJMS-RC and the SIDPERS 

personnel system. The purpose of this after-the-fact detective internal control is to ensure 

the propriety and accuracy of military pay and entitlements to authorized recipients. The 

monthly products that are provided to each state USPFO are commonly called mismatch 

reports.
Appendix IV

Mississippi 114th Military Police Company

Page 96 GAO-04-89 Army Guard Pay

One of these soldiers was discharged early because of drug-related 

charges. However, his pay continued for 3 months past his discharge date. 

By the time the USPFO stopped the active duty pay, the former soldier had 

received overpayments of about $9,400. Although the state USPFO military 

pay personnel stopped the active duty pay in September 2002, no attempt 

to collect the overpayment was made until we identified the problem. In 

July 2003, state military pay personnel initiated collection for the 

overpayment. 

Another soldier was discharged on July 8, 2002, for family hardship 

reasons, but his active duty pay was not stopped until August 15, resulting 

in an overpayment. Another 114th Military Police soldier was returned from 

active duty on September 11, 2002, for family hardship reasons, but his 

active duty pay was not stopped until November 30, resulting in an 

overpayment of about $8,600. Another soldier, facing disciplinary 

proceedings related to a domestic violence incident, agreed to an early 

discharge on May 22, 2002. However, the soldier’s active duty pay was not 

stopped until the unit administrative officer, while deployed in Cuba, 

reviewed the unit commander’s finance report and discovered the soldier 

still on company pay records and reported the error. Following his 

discharge, this soldier continued to receive active duty pay until August 31, 

resulting in an overpayment. 
Page 97 GAO-04-89 Army Guard Pay

Appendix V

Maryland 200th Military Police Company ApendxiV

The 200th Military Police Company was called to active duty in support of 

Operation Noble Eagle on October 1, 2001, for a period not to exceed 365 

days. The unit, including 90 soldiers who received orders to mobilize with 

the 200th Military Police Company, reported to its home station, Salisbury, 

Maryland, on October 1, 2001, and then proceeded to Camp Fretterd 

located in Reisterstown, Maryland, for the soldier readiness program (SRP) 

in- processing. On October 13, 2001, they arrived at their designated 

mobilization station at Fort Stewart, Georgia, where they remained for the 

next 2 weeks undergoing additional in-processing.1

 The unit performed 

general military police guard duties at Fort Stewart until December 15, 

2001, when 87 of the soldiers in the unit were deployed to guard the 

Pentagon. The company arrived at Ft. Eustis, Virginia, in late August 2002 

and was released from active duty on September 30, 2002. In addition, 3 of 

the 90 soldiers who received orders from the 200th Military Police Company 

were deployed in January 2002 to Guantanamo Bay, Cuba, to perform base 

security and guard duties with Maryland’s 115th Military Police Company. 

These soldiers demobilized at Fort Stewart, Georgia, where they were 

released from active duty on July 10, 2002. A time line of key actions 

associated with the unit’s mobilization under Operation Noble Eagle is 

shown in figure 14. 

1

In early November 2001, soldiers from the unit were moved off base to live in local hotels 

because Fort Stewart could not accommodate the large number of soldiers arriving to 

mobilize.
Appendix V

Maryland 200th Military Police Company

Page 98 GAO-04-89 Army Guard Pay

Figure 14: Timeline Showing Key Actions Associated with the Maryland National 

Guard Military Police Unit’s Mobilization

As summarized in table 20, the majority of soldiers from the company 

experienced some sort of pay problem during one or more phases of the 

three phases of their active duty mobilization. Overall, 83 of the company’s 

90 soldiers experienced at least one pay problem associated with their 

mobilization in support of Operation Noble Eagle. Pay problems included 

overpayments, underpayments, and late payments of entitlements, such as 

basic pay, basic allowance for housing, basic allowance for subsistence, 

family separation allowance and hardship duty pay associated with their 

initial mobilization, deployment to Fort Stewart, the Pentagon, and Cuba; 

and demobilization from active duty status. 

Table 20: Summary of Identified Pay Problems by Phase

Source: GAO analysis.

In total, we identified estimated overpayments of $74,000, underpayments 

of $11,000, and late payments of $10,000, associated with the pay problems 

Phase Number of soldiers with pay problems

Mobilization 75 of 90

Deployed 64 of 90

Demobilization 3 of 90

Oct Jan 02 Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

Unit called to

active duty

10/1/01

Unit travels to Fort Stewart, GA

mobilization station

10/13/01

Deployed to Ft. Myer, VA

to perform Pentagon guard duty

12/15/01

Demobilized at

Fort Eustis, VA

Late August 2002

Active duty

officially ends.

9/30/02

10/13/01 through

12/14/01

In processing and guard duty

at Fort Stewart, GA. 

12/15/01 through

late August 2002

Performed Pentagon 

guard duty

Source: GAO
Appendix V

Maryland 200th Military Police Company

Page 99 GAO-04-89 Army Guard Pay

we identified. Of the estimated $74,000 in identified overpayments, we 

identified about $32,000 that was subsequently collected from the unit’s 

soldiers. Specifically, we determined that 

• 75 soldiers were overpaid, underpaid, and/or paid late during the period 

of mobilization, including a soldier who did not receive correct 

payments for up to 7 months after the mobilization date; 

• 64 soldiers experienced pay problems during their tour of active duty 

related to the proper payment of basic pay, basic allowance for 

subsistence, basic allowance for housing, family separation allowance, 

and location-based pays such as hardship duty pay; and 

• 3 soldiers experienced pay problems during their demobilization from 

Fort Stewart related to continuation of active duty pay entitlements 

after they were released early from active duty. 

We identified a number of causes associated with these pay problems, 

including delays in submitting documents, incorrect data entry, and limited 

personnel to process the mass mobilizations. Maryland’s USPFO officials 

told us they had not experienced a large-scale mobilization to active duty in 

more than 10 years. 

Mobilization Pay 

Problems

As summarized in table 21, we identified a number of pay problems 

associated with eight different types of active duty pays and allowances 

associated with the unit’s mobilization to active duty. Seventy-five of 90 

soldiers from the 200thth Military Police Company did not receive the 

correct or timely entitlements related to basic pay, basic allowance for 

housing, basic allowance for subsistence, or family separation allowance 

when called to active duty. 
Appendix V

Maryland 200th Military Police Company

Page 100 GAO-04-89 Army Guard Pay

Table 21: Identified Mobilization Pay Problems 

Source: GAO analysis.

Thirteen soldiers received overpayments because they continued to receive 

pay after they were released early from active duty. These soldiers 

mobilized on October 1, 2001, and then received amended orders to be 

released from active duty around October 13, 2001. However, many 

continued to receive basic pay, basic allowance for subsistence, basic 

allowance for housing, and family separation allowance payments through 

the end of November 2001. The unit administrator stated that many of 

these soldiers received amended orders after their initial mobilization 

when it was determined that they were not deployable for a variety of 

reasons, such as health or family problems. The overpayments occurred 

because the Maryland Army Guard command was not informed by either 

unit personnel or the active component that individuals (1) did not deploy 

or (2) were released from active duty early. The Maryland Army Guard 

command initiated amendment orders to stop the active duty pays when it 

became aware of the problem; however, the orders were not generated in 

time for the USPFO to stop active duty pays in the system. Specifically, in 

order for pay to be stopped by October 13, 2001, the USPFO must have 

received and processed the amended orders by October 8, 2001. However, 

the Maryland Army Guard command did not generate many of the amended 

orders until November 14, 2001, at which time they would have been sent to 

the unit and then forwarded to the USPFO too late to meet the pay cutoff. 

An additional soldier was issued an amended order to release him from 

active duty on October 13, 2001. Upon our review of his pay account, we 

determined that he continued to receive active duty pay and allowances for 

an entire year. We spoke with the unit administrator about this soldier and 

Type of pay or 

allowance

Number of soldiers 

who did not receive 

pay or allowances 

within 30 days of 

entitlement

Number of 

soldiers who 

were underpaid 

Number of 

soldiers who 

were overpaid 

Basic pay 4 0 13

Basic allowance for 

housing 4 24 16

Basic allowance for 

subsistence 3 1 21

Family separation 

allowance 11 42 2
Appendix V

Maryland 200th Military Police Company

Page 101 GAO-04-89 Army Guard Pay

determined that he mobilized with the unit and was deployed for the entire 

year that he was paid. The unit administrator and Maryland Army Guard 

command, along with the USPFO pay officials, were not sure why the 

amendment order was never processed. They believe that the amendment 

fell through the cracks due to the general confusion and the limited 

personnel processing the mass mobilizations after September 11, 2001. 

Based on our inquiries, the Maryland Army Guard command generated an 

amendment on August 21, 2003, to reinstate the original order to avoid 

future questions regarding the soldier’s tour of duty. 

Further, 42 soldiers from the unit were underpaid their entitled family 

separation allowance when they mobilized. Soldiers are entitled to receive 

a family separation allowance after they have been deployed away from 

home for more than 30 days. We found that these underpayments occurred 

as a result of Maryland USPFO military pay officials’ errors in calculating 

the start and stop dates for this allowance.

Several soldiers did not receive the correct type of basic allowance for 

housing after being mobilized as specified in the DOD FMR, Volume 7A, 

chapter 26. We were unable to determine specific causes and amounts of 

all the unit’s problems associated with the basic allowance for housing 

because the unit had remobilized in July 2003 and some of the historical 

records relating to housing entitlements applicable to the prior 

mobilization could not be located. Furthermore, the original unit 

administrator had retired, leaving limited records of the prior mobilization 

for the current unit administrator. Based on our inquiries, we determined 

that some soldiers were underpaid their housing allowance because the 

Maryland USPFO military pay officials entered the incorrect date for the 

tour and therefore shortened the unit’s soldiers’ allowance by 1 day. Other 

soldiers did not receive the correct amount for this allowance as a result of 

different interpretations of how to enter “dependent” information provided 

on housing allowance application forms (Form 5960). According to 

personnel officials, married soldiers are required to write in their spouses’ 

names as dependents on Form 5960 in order to receive the higher housing 

allowance amount. However, guidance did not clearly specify that simply 

checking the box indicating that they are married is not sufficient support 

to receive the higher housing allowance (with dependents) rate. As a 

result, several soldiers’ dependent information was not loaded into the 

personnel system correctly, and they were paid a single rate housing 

allowance instead of the higher married rate allowance. 
Appendix V

Maryland 200th Military Police Company

Page 102 GAO-04-89 Army Guard Pay

Other soldiers did not receive the correct housing allowance because they 

did not turn in complete forms and documentation to initiate the correct 

allowance rate or were late in turning in documents. For example, one 

soldier, who appeared to have submitted his lease agreement 6 days after 

being called to active duty, did not receive the correct housing allowance 

amount for the first 2 months of active duty. During his entire deployment, 

the soldier attempted to get various unit and military pay officials to take 

action to initiate back pay for these housing allowance underpayments, 

including forwarding copies of the lease agreement as proof for payment 

on three different occasions. As of March 30, 2003, the soldier had not 

received the correct housing allowance for October and November 2001. 

Another soldier did not receive the correct amount of housing allowance 

after his mobilization and complained to the unit administrator. Seven 

months after his initial mobilization to active duty, finance officials at the 

active duty station in Fort Belvoir, Virginia, who were attempting to correct 

the soldier’s housing allowance instead inadvertently entered a transaction 

to collect the entire amount of the housing allowance previously paid to the 

soldier. Finance officials at Fort Belvoir subsequently entered a 

transaction to reverse the error and pay the soldier a “catch-up” housing 

allowance payment. 

Deployment Pay 

Problems

As summarized in table 22, we identified a number of pay problems 

associated with five different types of active duty pays and allowances 

associated with the unit’s deployment.

Table 22: Identified Deployment Pay Problems 

Source: GAO analysis.

Type of pay or 

allowance

Number of soldiers who 

did not receive pay or 

allowance within 30 days 

of entitlement

Number of 

soldiers who 

were underpaid 

Number of 

soldiers who 

were overpaid 

Basic pay 1 0 1

Basic allowance for 

housing 0 0 1

Basic allowance for 

subsistence 0 1 62

Family separation 

allowance 0 1 1

Hardship duty pay 3 3 0
Appendix V

Maryland 200th Military Police Company

Page 103 GAO-04-89 Army Guard Pay

Sixty-two soldiers from the unit were overpaid their entitled subsistence 

allowance by active Army finance personnel while stationed at the 

Pentagon during the period of December 15, 2001, through December 31, 

2001. Prior to this period, the soldiers were stationed at Fort Stewart and 

were not provided lodging or mess and properly received the full 

subsistence allowance. When the unit was redeployed to the Pentagon, 

mess facilities became available. However, active Army finance personnel 

did not reduce the unit’s subsistence allowance rate to reflect the available 

mess facilities. According to DOD FMR, Volume 7A, chapter 25, enlisted 

soldiers are not entitled to the full subsistence allowance when mess 

facilities are provided. 

In January 2002, three soldiers who received mobilization orders from the 

200th MP Company left Fort Stewart and traveled with the 115th Military 

Police Company to Guantanamo Bay, Cuba, to assist with base security and 

guard duties. While in Cuba, the soldiers were either underpaid, or were 

late in receiving their entitled hardship duty pays. In accordance with DOD 

FMR Volume 7A, chapter 17, soldiers who perform duties in “designated 

areas” for over 30 days are entitled to hardship duty pay. The FMR 

specifies Guantanamo Bay, Cuba, as a designated area and provides 

payment of $50 a month to soldiers serving there. While deployed to Cuba, 

the three soldiers were mistakenly paid the old type of hardship duty pay. 

Since hardship duty pay is not an automated pay, the active Army finance 

office at Guantanamo Bay was required to manually enter the “designated 

areas” payment each month for each soldier. While they were in Cuba, the 

three soldiers did not receive all their entitled hardship duty pays. 

Furthermore, the hardship duty pays they did receive were more than 30 

days late. 

Demobilization and 

Release from Active 

Duty Pay Problems

The 200th Military Police Company returned to Fort Eustis around the end 

of August 2002 to begin the demobilization process. We did not identify any 

pay issues associated with the unit’s soldiers who were released from 

active duty on September 30, 2002 (the original date for the unit’s 

demobilization, designated on the mobilization orders). However, as 

shown in table 23, we did identify three soldiers who continued to receive 

active duty pay after their early release from active duty. 
Appendix V

Maryland 200th Military Police Company

Page 104 GAO-04-89 Army Guard Pay

Table 23: Identified Demobilization Pay Problems 

Source: GAO analysis.

Specifically, the three soldiers from the unit returned from Cuba, 

demobilized at Fort Stewart, and were released from active duty on July 10, 

2002, while their original orders showed a September 30, 2002, release date. 

They continued to receive active duty pay and allowances through July 15, 

2002. Fort Stewart did not provide the amended orders with the earlier 

release date to the Maryland USPFO office in time to stop the pay. 

Type of pay or allowance Number of soldiers who were overpaid 

Basic pay 3

Basic allowance for housing 3

Basic allowance for subsistence 3

Family separation allowance 3

Hardship duty pay 2
Page 105 GAO-04-89 Army Guard Pay

Appendix VI

California 49th Military Police Headquarters 

and Headquarters Detachment ApendxiVI

On October 2, 2001, California’s 49th Military Police Headquarters and 

Headquarters Detachment (HHD) was mobilized to active duty for a period 

not to exceed 24 months. The 49 th MP HHD mobilized at its home station, 

Pittsburg, California, and then proceeded to its designated mobilization 

station, Fort Lewis, Washington, on October 12, 2001. The unit performed 

its active duty mission at Fort Lewis, where it provided base security as 

part of Operation Noble Eagle. The unit was demobilized from active duty 

at Fort Lewis on July 28, 2002. A time line of the unit’s actions with respect 

to its mobilization under Operation Noble Eagle is shown in figure 15.

Figure 15: Timeline Showing Key Actions Associated with the California Army 

National Guard Military Police Unit’s Mobilization

Almost all soldiers from the 49th Military Police Company experienced 

some sort of pay problem during one or more phases of the three phases of 

the active duty mobilization. Overall, 50 of the 51 soldiers with the unit had 

at least one pay problem associated with their mobilization to active duty in 

support of Operation Noble Eagle. These pay problems included not 

receiving pays and allowances at all (underpayments), receiving some pays 

and allowances over 30 days after entitlement (late payments), and the 

overpayment of allowances. Specifically, as summarized in table 24, we 

found that (1) 48 soldiers did not receive certain pay and allowances within 

30 days of their initial mobilization entitlement and (2) 41 soldiers did not 

receive, or did not receive within 30 days, the pay and allowances they 

were entitled to receive during their deployment.

Active duty tour

officially ends

10/8/02

Oct Jan 02 Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

Soldiers depart Pittsburg, CA

home station

10/9/01

Arrival at Fort Lewis, WA

for in-process

10/12/01

Unit demobilizes at

Fort Lewis, WA.

7/28/02

10/12/01 through

7/28/02

Deployed at

Fort Lewis, WA.

7/29/02 through

10/8/02

Soldiers continue

to demobilize

individually

Source: GAO
Appendix VI

California 49th Military Police Headquarters 

and Headquarters Detachment

Page 106 GAO-04-89 Army Guard Pay

Table 24: Summary of Identified Pay Problems by Phase 

Source: GAO analysis.

In total, we identified estimated overpayments of $17,000, underpayments 

of $1,300, and late payments of $67,000 associated with the pay problems 

we found. In addition, of the $17,000 in overpayments, we found that less 

than $100 was subsequently collected from the soldiers. 

We determined a number of causes for these pay problems. First, we found 

a lack of sufficient numbers of knowledgeable staff. In addition, after-thefact detective controls were not in place, including a reconciliation of pay 

and personnel records and the reconciliation of pay records with the unit 

commander’s records of personnel actually onboard. Currently, as a matter 

of practice, pay and personnel representatives from the USPFO conduct a 

manual reconciliation between the pay and personnel system records 

approximately every 2 months. The purpose of the reconciliation is to 

ensure that for common data elements, the pay and personnel systems 

contain the same data. A USPFO official told us that while it is the 

USPFO’s goal to carry out such reconciliations each month, it currently 

does not have the resources required to do so.

Mobilization Pay 

Problems

As summarized in table 25, we identified a number of pay problems 

associated with the unit’s mobilization to active duty. Failures to enter 

transactions or late entry of transactions needed to start active duty pays 

by Army Guard USPFO military pay personnel and by active Army military 

pay personnel at the unit’s mobilization station were the initial cause of the 

pay problems. We also found that the underlying cause of the pay problems 

was a lack of sufficient numbers of knowledgeable personnel at the 

California USPFO and the Fort Lewis Finance Office. In addition, 

according to Army Guard and active Army officials, neither organization 

was prepared for the sheer volume of pay transactions associated with 

mobilizing soldiers to active duty.

Phase Number of Soldiers with pay problems

Mobilization 48 of 51 

Deployed 41 of 51 

Demobilization 0 of 51 
Appendix VI

California 49th Military Police Headquarters 

and Headquarters Detachment

Page 107 GAO-04-89 Army Guard Pay

Table 25: Identified Mobilization Pay Problems 

Source: GAO analysis.

In total, 48 out of 51 soldiers of the 49th Military Police Company did not 

receive certain pay and allowances and incentive pays at all, or did not 

receive them within 30 days after being mobilized on October 2, 2001. The 

types of pay entitlements either not paid at all or paid late associated with 

the unit’s initial mobilization included basic pay, basic allowance for 

subsistence, basic allowance for housing, family separation allowance, and 

the continental United States cost of living allowance.

The late payments during the mobilization phase primarily resulted from 

California USPFO military pay personnel’s lack of understanding of their 

responsibility for initiating active duty pays. According to DFAS reserve 

component mobilization procedures; the California USPFO was 

responsible for initiating these pays. However, a USPFO military pay 

official mistakenly instructed the unit to take its pay data to the 

mobilization station to enter transactions to start active duty pays. The 

USPFO official stated that the USPFO did not start the active duty pay and 

allowances at that time because a copy machine was not available to make 

copies of relevant active duty pay support documentation (such as a lease 

agreement needed to support a housing allowance entitlement). As a 

result, the responsibility for initiating this allowance was improperly 

passed to the active Army finance office at the Fort Lewis mobilization 

station.

The Fort Lewis finance office lacked sufficient numbers of knowledgeable 

military pay staff to expeditiously enter the large volume of transactions 

necessary to start active duty pay entitlements for the 49th Military Police 

Company’s soldiers. DFAS guidance requires finance personnel at the 

mobilization station to review each soldier’s pay account to identify any 

errors and input the necessary correcting transactions into DJMS-RC. 

Initially, the mobilization station finance office assigned an insufficient 

Type of pay or allowance

Number of soldiers who did not receive pay or 

allowance within 30 days of entitlement

Basic pay 17

Basic allowance for housing 18

Basic allowance for subsistence 18

Family separation allowance 39

Cost of living allowance 36
Appendix VI

California 49th Military Police Headquarters 

and Headquarters Detachment

Page 108 GAO-04-89 Army Guard Pay

number of personnel to the task of starting active duty pays for the unit’s 51 

mobilizing soldiers. Moreover, one of the assigned pay technicians was not 

familiar with DJMS-RC and consequently entered data incorrectly for some 

of the unit’s soldiers. Also, the assigned pay technician initially failed to 

enter transactions to start pay and allowances for a significant number of 

the unit’s soldiers because the supporting documentation was misplaced. 

These documents were later found under a desk in the finance office. 

Recognizing this shortage of staff knowledgeable about DJMS-RC 

processing procedures, the Fort Lewis finance office asked the California 

USPFO to supply additional personnel and also temporarily reassigned 

soldiers from other units stationed at Fort Lewis to assist in the pay 

processing. Working together over a 2-month period after the unit was 

mobilized to active duty, these personnel were able to enter the omitted 

transactions needed to start active duty pays and correct the previous 

erroneous entries. 

In addition, the USPFO did not enter the required data to DJMS-RC to begin 

cost of living allowance pays for 36 of the unit’s soldiers. DFAS reserve 

component mobilization procedures state that the USPFO has the initial 

responsibility for initiating these pays. However, as discussed previously, 

the USPFO mistakenly sent the 49th Military Police Company to Fort Lewis 

with their pay documentation, and as a result, it was not until more than 2 

months after the unit’s mobilization date that the Fort Lewis finance office 

pay technicians began to enter these transactions into DJMS-RC. 

The company commander for the unit told us that he was frustrated with 

the level of customer support his unit received as it moved through the 

initial mobilization process. Only two knowledgeable military pay officials 

were present to support active duty pay transaction processing for the 51 

soldiers mobilized for his unit. He characterized the customer service his 

unit received at initial mobilization as very time-consuming and frustrating.

Deployment Pay 

Problems 

As summarized in table 26, we identified a number of pay problems 

associated with six different types of active duty pays and allowances 

associated with the unit’s deployment while on active duty. These 

problems primarily resulted from a data entry error and inadequate 

document retention practices. 
Appendix VI

California 49th Military Police Headquarters 

and Headquarters Detachment

Page 109 GAO-04-89 Army Guard Pay

Table 26: Identified Deployment Pay Problems 

Source: GAO analysis.

For example, the USPFO paid one soldier her basic pay, basic allowance 

for subsistence, and basic allowance for housing nearly 4 months late. A 

USPFO official told us these late payments were caused when a USPFO pay 

technician entered an incorrect stop date for the soldier’s active duty tour 

into DJMS-RC. The pay technician, after being notified of the error by the 

soldier, corrected the data in DJMS-RC, which resulted in the soldier 

receiving her pay nearly 4 months late. Additionally, USPFO officials were 

unable to provide support explaining why five other soldiers continued to 

receive basic pay, the basic allowance for subsistence, and the basic 

allowance for housing after the date available records show their active 

duty tours had ended. Consequently, we identified the payments made to 

these five soldiers as overpayments.

Overpayments of family separation allowances to soldiers in the unit 

resulted from a data entry error and inadequate USPFO document 

retention practices. A USPFO pay technician incorrectly coded a soldier’s 

account to receive a family separation allowance when the soldier had only 

been on active duty for 2 weeks. According to the DOD FMR, Volume 7A, 

chapter 27, soldiers are only eligible for this allowance after they have been 

separated more than 30 days from their families on a continuous active 

duty assignment. This overpayment problem had not been resolved as of 

March 31, 2003. Additionally, USPFO officials were unable to provide 

supporting documentation explaining why five soldiers continued to 

receive a family separation allowance after available documentation 

Type of pay or 

allowance

Number of soldiers who 

did not receive pay or 

allowances within 30 

days of entitlement

Number of 

soldiers who 

were underpaid

Number of 

soldiers who 

were overpaid

Basic pay 1 0 5

Basic allowance for 

subsistence 1 0 5

Basic allowance for 

housing 1 0 5

Family separation 

allowance 0 0 6

Foreign language 

proficiency pay 4 2 1

Cost of living allowance 37 4 0
Appendix VI

California 49th Military Police Headquarters 

and Headquarters Detachment

Page 110 GAO-04-89 Army Guard Pay

showed that these soldiers’ active duty tours had officially ended. We 

identified these family separation allowance payments for the five soldiers 

as overpayments.

Late, under- and overpayments of foreign language proficiency pays to the 

unit’s soldiers primarily resulted from delayed or inadequate data entry. 

For example, our audit showed that USPFO pay technicians failed to enter 

transactions into DJMS-RC in a timely manner for four soldiers resulting in 

late foreign language proficiency payments. In addition, USPFO pay 

technicians failed to enter any foreign language proficiency payment 

transactions for 1 month for one soldier and for 3 months for another 

soldier resulting in those soldiers being underpaid. This underpayment 

issue had not been resolved as of March 31, 2003. In another instance, a 

soldier received an overpayment of his entitled foreign language 

proficiency payment when a USPFO pay technician entered the wrong 

code. Approximately 3 months later, the USPFO pay technician identified 

the error and recovered the overpayment.

Late payment, underpayment, and overpayment of cost of living allowances 

resulted from the inability of DJMS-RC to pay certain active duty pays and 

allowances automatically, inaccurate data entry, and inadequate 

documentation retention practices. For example, our audit discovered that 

USPFO pay technicians failed to manually enter cost of living allowance 

transactions into DJMS-RC in a timely manner for 37 soldiers, resulting in 

late payments to the soldiers. In addition, USPFO officials were unable to 

provide sufficient documentation to explain why 3 soldiers appeared not to 

have received cost of living allowance payments due them for a 2-month 

period. We considered these pay omissions to be underpayments. An 

Army pay technician at the Fort Lewis finance office entered the incorrect 

code, thereby paying a soldier the wrong type of allowance, which resulted 

in an underpayment. 

Pay Problems 

Associated with 

Demobilization and 

Release from Active 

Duty

California’s 49th Military Police Company demobilized at Fort Lewis on 

July 28, 2002, and returned to its home station in Pittsburg, California. We 

did not identify any pay problems for this unit in the demobilization phase.
Page 111 GAO-04-89 Army Guard Pay

Appendix VII

Scope and Methodology ApendxiVI

To obtain an understanding and assess the processes, personnel (human 

capital), and systems used to provide assurance that mobilized Army Guard 

soldiers were paid accurately and timely, we reviewed applicable policies, 

procedures, and program guidance; observed pay processing operations; 

and interviewed cognizant agency officials. With respect to applicable 

policies and procedures, we obtained and reviewed 10 U.S.C. Section 

12302, DOD Directive Number 1235.10, “Activation, Mobilization & 

Demobilization of the Ready Reserve;” DOD FMR, Volume 7A, “Military Pay 

Policy and Procedures Active Duty and Reserve Pay”; and the Army Forces 

Command Regulations 500-3-3, Reserve Component Unit Commander 

Handbook, 500-3-4, Installation Commander Handbook, and 500-3-5, 

Demobilization Plan. We also reviewed various Under Secretary of 

Defense memorandums, a memorandum of agreement between Army and 

DFAS, DFAS, Army, Army Forces Command, and Army National Guard

guidance applicable to pay for mobilized reserve component soldiers. We 

also used the internal controls standards provided in the Standards for 

Internal Control in Federal Government.1

We applied the policies and procedures prescribed in these documents to 

the observed and documented procedures and practices followed by the 

various DOD components involved in providing active duty pays to Army 

Guard soldiers. We also interviewed officials from the National Guard 

Bureau, State USPFOs, Army and DOD military pay offices, as well as unit 

commanders to obtain an understanding of their experiences in applying 

these policies and procedures.

In addition, as part of our audit, we performed a review of certain edit and 

validation checks in DJMS-RC. Specifically, we obtained documentation 

and performed walk-throughs associated with DJMS-RC edits performed 

on pay status/active duty change transactions, such as those to ensure that 

tour start and stop dates match MMPA dates and that the soldier cannot be 

paid basic pay and allowances beyond the stop date that was entered into 

DJMS-RC. We also obtained documentation on and walk-throughs of the 

personnel-to-pay system interface process, the order writing-to-pay system 

interface process, and on the process for entering mobilization information 

into the pay system. We held interviews with officials from the Army 

1

U.S. General Accounting Office, Standards for Internal Control in Federal Government, 

GAO/AIMD-00-21.3.1 (Washington D.C.: November 1999). These standards provide the 

overall framework for establishing and maintaining effective internal control and for 

identifying and addressing areas of greatest risk of fraud, waste, abuse, and 

mismanagement.
Appendix VII

Scope and Methodology

Page 112 GAO-04-89 Army Guard Pay

National Guard Readiness Center, the National Guard Bureau, and DFAS 

Indianapolis and Denver to augment our documentation and walkthroughs.

Because our preliminary assessment determined that current operations 

used to pay mobilized Army Guard soldiers relied extensively on errorprone manual transactions entry into multiple, nonintegrated systems, we 

did not statistically test current processes and controls. Instead, we used a 

case study approach to provide a more detailed perspective of the nature of 

pay deficiencies in the three key areas of processes, people (human 

capital), and systems. Specifically, we gathered available data and analyzed 

the pay experiences of Army Guard special forces and military police units 

mobilized to active duty in support of Operations Noble Eagle and 

Enduring Freedom during the period from October 2001 through March 

2003. We audited six Army Guard units as case studies of the effectiveness 

of the controls over active duty pays in place for soldiers assigned to those 

units:

• Colorado B Company, 5th Battalion, 19th Special Forces;

• Virginia B Company, 3rd Battalion, 20th Special Forces;

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

• Mississippi 114th Military Police Company;

• California 49th Military Police Headquarters and Headquarters 

Detachment; and

• Maryland 200th Military Police Company.

In selecting these six units for our case studies, we sought to obtain the pay 

experiences of units assigned to either Operation Enduring Freedom or 

Operation Noble Eagle. We further limited our case study selection to 

those units both mobilized to active duty and demobilized from active duty 

during the period from October 1, 2001 through March 31, 2003. From the 

population of all Army Guard units mobilized and demobilized during this 

period, we selected three special forces units and three military police 

units. These case studies are presented to provide a more detailed view of 

the types and causes of pay problems and the pay experiences of these 

units as well as the financial impact of pay problems on individual soldiers 

and their families. 
Appendix VII

Scope and Methodology

Page 113 GAO-04-89 Army Guard Pay

We used mobilization data supplied by the Army Operations Center to 

assist us in selecting the six units we used as our case studies. We did not 

independently verify the reliability of the Army Operations Center 

database. We used the Army Operations Center data to select six states that 

had a large number of special forces or military police units that had been 

mobilized, deployed, and returned from at least one tour of active duty in 

support of Operations Noble Eagle and Enduring Freedom. We chose 

California, Colorado, Maryland, Mississippi, Virginia, and West Virginia. 

From these six states, we selected three special forces and three military 

police units that had a variety of deployment locations and missions. We 

also identified and performed a limited review of the pay experiences of a 

unit still deployed during the period of our review; Colorado’s 220th 

Military Police Company. The purpose of our limited review was to 

determine if there were any pay problems experienced by a more recently 

mobilized unit. 

We also obtained in-depth information from soldiers at four of the six case 

study units. Using a data collection instrument, we asked for soldier views 

on pay problems and customer service experiences before, during, and 

after mobilization. Unit commanders distributed the instrument to soldiers 

in their units. There were 325 soldiers in these units; in total, we received 

87 responses. The information we received from these data collection 

instruments is not representative of the views of the Army Guard members 

in these units nor of those of Army Guard members overall. The 

information provides further insight into some of the pay experiences of 

selected Army Guard soldiers who were mobilized under Operations Noble 

Eagle and Enduring Freedom. 

We used DJMS-RC pay transaction extracts to identify pay problems 

associated with our case study units. However, we did not perform an exact 

calculation of the net pay soldiers should have received in comparison with 

what DJMS-RC records show they received. Rather, we used available 

documentation and follow-up inquiries with cognizant USPFO personnel to 

identify if (1) soldiers’ entitled active duty pays and allowances were 

received within 30 days of initial mobilization date, (2) soldiers were paid 

within 30 days of the date they became eligible for active duty pays and 

allowances associated with their deployment locations, and (3) soldiers 

stopped receiving active duty pays and allowances as of the date of their 

demobilization from active duty. As such, our audit results only reflect 

problems we identified. Soldiers in our case study units may have 

experienced additional pay problems that we did not identify. In addition, 
Appendix VII

Scope and Methodology

Page 114 GAO-04-89 Army Guard Pay

our work was not designed to identify, and we did not identify, any 

fraudulent pay and allowances to any Army Guard soldiers.

As a result of the lack of supporting documents, we likely did not identify 

all of the pay problems related to the active duty mobilizations of our case 

study units. However, for the pay problems we identified, we counted 

soldiers’ pay problems as a problem only in the phase in which they first 

occurred even if the problems persisted into other phases. For purposes of 

characterizing pay problems for this report, we defined over- and 

underpayments as those pays or allowances for mobilized Army Guard 

soldiers during the period from October 1, 2001, through March 31, 2003, 

that were in excess of (overpayment) or less than (underpayment) the 

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

allowances paid to the soldier over 30 days after the date on which the 

soldier was entitled to receive such pays or allowances. As such, these 

payments were those that, although late, addressed a previously unpaid 

entitlement.

We did not include any erroneous debts associated with these payments as 

pay problems. In addition, we used available data to estimate collections 

against identified overpayments through March 31, 2003. We did not 

attempt to estimate payments received against identified underpayments. 

We provided the support for the pay problems we identified to appropriate 

officials, at each of our case study locations so that they could fully develop 

and resolve any additional amounts owed to the government or to the Army 

Guard soldiers. 

We briefed DOD and Army officials, National Guard Bureau officials, DFAS 

officials, and USPFO officials in the selected states on the details of our 

audit, including our findings and their implications. On October 10, 2003, 

we requested comments on a draft of this report. We received comments 

on November 5, 2003, and have summarized those comments in the 

“Agency Comments and Our Evaluation” section of this report. DOD’s 

comments are reprinted in appendix VIII. We conducted our audit work 

from November 2002 through September 2003 in accordance with U.S. 

generally accepted government auditing standards.
Page 115 GAO-04-89 Army Guard Pay

Appendix VIII

Comments from the Department of Defense ApendxiVI
Appendix VIII

Comments from the Department of Defense

Page 116 GAO-04-89 Army Guard Pay

1

Enclosure

GAO DRAFT REPORT DATED OCTOBER 10, 2003 

GAO-04-89 (GAO CODE 192080) 

“MILITARY PAY: ARMY NATIONAL GUARD PERSONNEL 

MOBILIZED TO ACTIVE DUTY EXPERIENCED 

SIGNIFICANT PAY PROBLEMS” 

DEPARTMENT OF DEFENSE COMMENTS 

TO THE GAO RECOMMENDATIONS 

RECOMMENDATION 1: The GAO recommended that the Secretary of Defense direct the 

Director of the Defense Finance and Accounting Service (DFAS), in conjunction with the Under 

Secretary of Defense (Comptroller), to establish a unified set of policies and procedures for all 

Army Guard, Army, and DFAS personnel to follow for servicing active duty pays for Army 

Guard personnel mobilized to active duty. (p. 74/GAO Draft Report) 

DoD RESPONSE: Concur. DFAS and the Army are jointly building on the existing guidance 

procedures as published in FORSCOM REG 500-3-3, (FORSCOM Mobilization and 

Deployment Planning System Form Deps, Volume 3, Reserve Component Commanders’ 

Handbook dated July 15,1999); the National Guard Standard Operating Procedure Contingency 

Operations; and DFAS AIG Message dated December 19, 2002, Subject: Reserve ComponentMobilization Procedures, to clearly define the roles and responsibilities between 

mobilization/demobilization stations, United States Property and Fiscal Offices (USPFOs), and 

deployed Army finance elements. A joint task force has been established to review existing 

procedural guidance, lessons learned to date, and available metrics. As a first step, expanded 

central guidance will be published within the next 30 days, which will further articulate the 

specific responsibilities of the servicing finance activities. This breakout of responsibilities will 

also be provided in a simple matrix form to visually reinforce this guidance. Within 

approximately 60 days, the Army and DFAS will begin compliance reviews of the 

mobilization/demobilization stations to ensure adherence to published guidance and to provide 

any further assistance these offices may require. Within the next 3 to 6 months, the task force 

will build upon the existing guidance to provide comprehensive procedures and related 

standards, down to the individual technician level, for all offices and units responsible for pay 

input support of mobilized soldiers. 

RECOMMENDATION 2: The GAO recommended that the Secretary of Defense direct the 

Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to 

establish performance measures for obtaining supporting documentation and processing pay 

transactions. (p. 75/Draft Report) 

DoD RESPONSE: Concur. Standards for the timeliness of processing pay transactions are 

currently in place for units, finance offices, and central site. However, these standards are 

focused on the full range of transactions and associated unit level data is generated based on the 

normal permanent/home station relationship with a Reserve Component Pay Support Office. 
Appendix VIII

Comments from the Department of Defense

Page 117 GAO-04-89 Army Guard Pay

2

Enclosure

Within the next 6 months, DFAS and the Army will jointly review how these existing 

mechanisms can be used to more succinctly capture data specifically related to mobilized 

soldiers and units. 

RECOMMENDATION 3: The GAO recommended that the Secretary of Defense direct the 

Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to 

establish who is accountable for stopping active duty pays for soldiers who return home separate 

from their units. (p. 75/Draft Report) 

DoD RESPONSE: Concur. Within the next 30 days, DFAS, in cooperation with the Army, will 

reinforce existing procedures on responsibilities for stopping active duty pays for soldiers who 

return home separate from their units. This will be part of the revised guidance identified in 

response to recommendation one. In addition, mechanisms have been established to perform 

automated comparisons of personnel demobilization records and the Defense Joint Military Pay 

System - Reserve Component (DJMS-RC) to identify any demobilizing soldiers whose tours in 

the pay system were not adjusted to coincide with the demobilization date. 

RECOMMENDATION 4: The GAO recommended that the Secretary of Defense direct the 

Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to 

clarify the policies and procedures for how to properly amend active duty orders, including 

medical extensions. (p. 75/Draft Report) 

DoD RESPONSE: Concur. For medical extensions, the Army published revised guidance on 

June 10, 2003, reinforcing procedures on this process. Included were the requirements for 

publishing orders prior to the end date of the current active duty tour. Concerning the specific 

case in Colorado cited by the GAO, DFAS and the Army have implemented changes to the input 

systems to warn the operator processing a tour cancellation when the correct input should be a 

tour curtailment. Action is complete. 

RECOMMENDATION 5: The GAO recommended that the Secretary of Defense direct the 

Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to 

require Army Guard commands and unit commanders to carry out complete monthly pay and 

personnel records reconciliations and take necessary actions to correct any pay and personnel 

record mismatches found each month. (p. 75/Draft Report) 

DoD RESPONSE: Concur. Within 60 days, the Army will reinforce to all reserve commands 

the importance of this requirement. As noted by the GAO, this requirement is already included 

in US Army Forces Command Regulation 500-3-3, Unit Commander’s Handbook. 

RECOMMENDATION 6: The GAO recommended that the Secretary of Defense direct the 

Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to 

update policies and procedures to reflect current legal and DoD administrative requirements with 
Appendix VIII

Comments from the Department of Defense

Page 118 GAO-04-89 Army Guard Pay

3

Enclosure

respect to active duty pays and allowances and transaction processing requirements for mobilized 

Army Guard soldiers. (p. 75/Draft Report) 

DoD RESPONSE: Concur. In Fiscal Year 2004, DFAS, the Army, and National Guard will 

respectively update the cited regulations under their cognizance to the most current and accurate 

requirements. 

RECOMMENDATION 7: The GAO recommended that the Secretary of Defense direct the 

Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to 

consider expanding the scope of the existing memorandum of understanding between DFAS and 

the Army concerning the provisions of resources to support surge processing at mobilization and 

demobilization sites to include providing additional resources to support surge processing for pay 

start and stop transactions requirements at Army Guard home stations during initial soldier 

readiness programs. (p. 75/Draft Report) 

DoD RESPONSE: Concur. The Army will work with the National Guard on resourcing the 

USPFOs for mobilization/demobilization surges. However, the memorandum of understanding 

between DFAS and the Army pertains only to the management and resourcing of Defense 

Military Pay Offices, to include their role in support of mobilization/ demobilization stations. As 

such, it is not the appropriate vehicle to address staffing of USPFO under the National Guard. 

RECOMMENDATION 8: The GAO recommended that the Secretary of Defense direct the 

Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to 

determine whether issues concerning resource allocations for the military pay operations 

identified at our case study units exist at all 54 USPFOs, and, if so, take appropriate actions to 

address these issues. (p. 76/Draft Report) 

DoD RESPONSE: Concur. To support surge requirements, the National Guard could use 

additional National Guard soldiers being brought on active duty in a Temporary Tour of Active 

Duty status to augment the USPFO staff based on mobilization workload requirements. The 

additional requirement and funding will need to be addressed by the supplemental provided to 

Army. Normal manning at the USPFO, Military Pay Section is based on Full Time Support 

authorized state strength levels. 

RECOMMENDATION 9: The GAO recommended that the Secretary of Defense direct the 

Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to 

determine whether concerns over relatively low graded military pay technicians identified at our 

case study units exist at all 54 USPFOs, and, if so, take appropriate actions to address these 

issues. (p. 76/Draft Report) 

DoD RESPONSE: Concur. Higher grades would provide a more stable and experienced 

workforce at the USPFO. However, grade structure is established based on guidance from the 

Office of Personnel Management (OPM). The National Guard recently completed a review of 
Appendix VIII

Comments from the Department of Defense

Page 119 GAO-04-89 Army Guard Pay

4

Enclosure

grade levels in the USPFOs’ Comptroller sections and the current grade levels for military pay 

technicians were validated as correct under OPM standards. Action is complete. 

RECOMMENDATION 10: The GAO recommended that the Secretary of Defense direct the 

Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to 

modify existing training policies and procedures to require all USPFO and active Army pay and 

or finance personnel responsible for entering pay transactions for mobilized Army Guard soldiers 

to receive appropriate training upon assuming such duties. (p. 76/Draft Report) 

DoD RESPONSE: Concur. The National Guard has instituted mobilization specific training for 

pay technicians. The National Guard Financial Services Center quality assurance program is 

currently used to monitor completion of JUMPS Standard Terminal Input System (JUSTIS) 

training for USPFO military pay technicians. The US Army Reserve Command (USARC) has 

expanded training programs on DJMS-RC to help support the immediate training needs of 

deploying units and mobilization/demobilization stations. Over 35 training events have occurred 

since February 2002 in support of deploying units and mobilization/demobilization sites. The 

Army finance school is working with USARC to develop an exportable training package on 

DJMS-RC, which should be available within the next 6 months. Additionally, DFAS and the 

Army are sending a joint training team to Kuwait and Iraq in November 2003 to specifically 

address reserve component support. For the midterm (6 months to 2 years), the training on 

reserve component pay input for soldiers in finance battalions and garrison support units will be 

evaluated to determine how best to expand the training within the Army total training 

infrastructure, particularly in light of the planned integration of reserve and active component 

pay processing into a single system. The Army finance school is already evaluating the 

expansion of the current instruction on mobilized reserve component pay in the training 

curriculum for the finance advanced individual training course. 

RECOMMENDATION 11: The GAO recommended that the Secretary of Defense direct the 

Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to 

require unit commanders to receive training on the importance of adhering to requirements to 

conduct annual pay support documentation reviews and carry out monthly reconciliations. 

(p. 76/Draft Report) 

DoD RESPONSE: Concur. The importance of conducting annual pay support documentation 

reviews and monthly reconciliations will be incorporated into precommand courses at the 

company level for the National Guard by the end of Fiscal Year 2004. 

RECOMMENDATION 12: The GAO recommended that the Secretary of Defense direct the 

Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to 

establish an ongoing mechanism to monitor the quality and completion of training for both pay 

and finance personnel and unit commanders. (p. 76/Draft Report) 

DoD RESPONSE: Concur. The National Guard currently reviews the training status of 

military pay technicians at the USPFOs as part of the ongoing quality assurance review program. 
Appendix VIII

Comments from the Department of Defense

Page 120 GAO-04-89 Army Guard Pay

5

Enclosure

The appropriate mechanism for monitoring the training of unit commanders and finance battalion 

personnel is dependent on the location of that training in the overall Army training infrastructure 

(i.e. unit training is assessed as part of the annual External Evaluation-ExEval) and, as such will 

be considered as part of the overall evaluation of the reserve pay training addressed in response 

to recommendation 10. 

RECOMMENDATION 13: The GAO recommended that the Secretary of Defense direct the 

Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to 

identify and evaluate options for improving customer service provided to mobilized Army Guard 

soldiers by providing improved procedures for informing soldiers of their pay and allowance 

entitlements throughout their active duty mobilization. (p. 76/Draft Report) 

DoD RESPONSE: Concur. Within the next 30 days, the Army will prepare a standard 

information flyer to be given to all mobilizing reservists. The flyer will address entitlements as 

well as sources of pay support. The flyer will be published via Army Knowledge Online and 

incorporated into the overall revision to procedural guidance addressed in response to 

recommendation one. 

RECOMMENDATION 14: The GAO recommended that the Secretary of Defense direct the 

Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to 

identify and evaluate options for improving customer service provided to mobilized Army Guard 

soldiers with respect to providing a single, well-advertised, source for soldiers and their families 

to access for customer service for any pay problems. (p. 77/Draft Report) 

DoD RESPONSE: Concur. The existing centralized information sources on individual soldiers 

pay will be expanded. Specifically, DFAS will continue to add functionality to myPay for input 

of discretionary actions. Additionally, DFAS is developing a separate view-only Personal 

Identification Number capability which soldiers will be able to give their dependents so they can 

see the Leave and Earning Statement without being able to change anything on the pay record. 

This enhancement is scheduled for August 2004. The DFAS also operates a central customer 

service center for pay inquiries for all Services. The toll free number for this center as well as 

the myPay internet address will be incorporated in the flyer discussed in response to 

recommendation 13 as well as continue being advertised in locations such as Army Knowledge 

Online. Until the implementation of DIMHRS, with full integration of pay and personnel, the 

processing of pay transactions will still require the movement of some entitlement 

information/authorization from units and personnel to finance via paper. As such, a network of 

finance support activities is required to geographically align with deployed combat and 

supporting personnel units. As always, pay remains essentially a command responsibility. For 

the individual soldier, the single source of pay support is his or her unit, which in-turn interfaces 

with the appropriate finance and personnel activities. For dependents of deployed soldiers, the 

single source for finance, or any administrative issues, is either the rear detachment of the 

soldiers’ deployed unit or, for the National Guard, the applicable State Family Assistance 

Coordinator.
Appendix VIII

Comments from the Department of Defense

Page 121 GAO-04-89 Army Guard Pay

6

Enclosure

RECOMMENDATION 15: The GAO recommended that the Secretary of Defense direct the 

Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to 

review the pay problems we identified at our six case study units to identify and resolve any 

outstanding pay issues for the affected soldiers. (p. 77/Draft Report) 

DoD RESPONSE: Concur. The National Guard Financial Services Center is working with 

each of the identified units and supporting USPFOs to ensure all pay issues are resolved. The 

Army and DFAS will continue to work the correction of any specific cases identified as still 

open for these units. As noted by the GAO, many of the cases identified have already been 

resolved or involved a delay in payment over 30 days from entitlement rather than an actual 

unresolved discrepancy. 

RECOMMENDATION 16: The GAO recommended that the Secretary of Defense direct the 

Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to 

evaluate the feasibility of using the personnel-to-pay interface as a means to proactively alert pay 

personnel of actions needed to start entitled active duty pays and allowances. (p. 77/Draft 

Report)

DoD RESPONSE: Concur. Within the next 6 months, we will evaluate the feasibility of using 

the personnel-to-pay interface as a means to proactively alert pay personnel of actions needed to 

start entitled active duty pays and allowances. 

RECOMMENDATION 17: The GAO recommended that the Secretary of Defense direct the 

Director of the Defense Finance and Accounting Service, in conjunction with the Under 

Secretary of Defense (Comptroller), to evaluate the feasibility of automating some or all of the 

current manual monthly pays, including special duty assignment pay, foreign language 

proficiency pay, hardship duty pay and high altitude, low opening jump pay. (p. 77/Draft 

Report)

DoD RESPONSE: Concur. Programming changes to DJMS-RC have been implemented to 

enhance the processes for special duty assignment pay and foreign language proficiency pay. 

However, monthly input is still required. Hardship duty pay is scheduled for implementation for 

April 2004. High altitude, low opening jump pay requires manual computation and input of a 

transaction for payment. The small volume of members entitled to this pay has not justified nor 

provided an adequate return on investment for this automation. DFAS has recognized the 

urgency of improving the military pay system capabilities supporting our Service members. A 

study was conducted of improvement alternatives in the fall of 2002, which concluded that a new 

commercial off the shelf based payroll capability (“Forward Compatible Payroll” (FCP)) was the 

best option to expeditiously improve our system payroll services. FCP is currently prototyping 

military entitlements and deductions and has already demonstrated that DJMS RC’s current 

monthly manual pays can be automated rapidly in the new commercial off the shelf based 

environment. 
Appendix VIII

Comments from the Department of Defense

Page 122 GAO-04-89 Army Guard Pay

7

Enclosure

RECOMMENDATION 18: The GAO recommended that the Secretary of Defense direct the 

Director of the Defense Finance and Accounting Service, in conjunction with the Under 

Secretary of Defense (Comptroller), to evaluate the feasibility of eliminating the use of the 

“other credits” for processing Hardship Duty (Designated Areas); high altitude, low opening 

jump pay; and special duty assignment pay, and instead establishing a separate component of pay 

for each type of pay. (p. 77/Draft Report) 

DoD RESPONSE: Concur. Hardship duty pay is scheduled for automation in April 2004. We 

will also recommend inclusion of automation of high altitude, low opening jump pay in FCP. We 

acknowledge that the information available to the member is inadequate in today’s system. This 

has already been addressed in the FCP requirements. Each pay is designed to provide fully 

automated computation capability for active, Reserve/Guard and detailed leave and earnings 

statement reporting to the Service member through myPay. FCP will use legacy military 

pers/pay data feeds to create a single military pay record for each Service member supporting all 

Service component affiliations and duty statuses. FCP will resolve pay systems capability 

related problems described in this report. Until such time FCP has been implemented, we will 

ensure that these certain pays paid under “other credits” are included in the flyer addressed in 

response to recommendation 13. In addition, DFAS will update the DFAS Reserve Component 

Mobilization Procedures to mandate a remark be entered on the service member’s leave and 

earnings statement for pays paid under “other credits” to inform the service member exactly what 

entitlement(s) they have paid. 

RECOMMENDATION 19: The GAO recommended that the Secretary of Defense direct the 

Secretary of the Army, in conjunction with the Under Secretary of Defense (Comptroller), to 

evaluate the feasibility of using the JUSTIS warning screen to help eliminate inadvertent 

omissions of required monthly manual pay inputs. (p. 78/Draft Report) 

DoD RESPONSE: Concur. The National Guard will develop a JUSTIS table identifying all 

applicable soldiers in order to notify the USPFO technician of accounts requiring monthly 

entitlement input. This will be more efficient and effective than a pop-up warning screen, which 

would appear only if the individual soldier’s social security number were input. 

RECOMMENDATION 20: The GAO recommended that the Secretary of Defense direct the 

Director of the Defense Finance and Accounting Service, in conjunction with the Under 

Secretary of Defense (Comptroller), to evaluate the feasibility of redesigning leave and earnings 

statement to provide soldiers with a clear explanation of all pay and allowances received so that 

they can readily determine if they received all and only entitled pays. (p. 78/Draft Report) 

DoD RESPONSE: Concur: We agree with the intent of this finding to provide a full explanation 

to service members for changes occurring on their leave and earnings statement. The DFAS is 

taking steps to improve the readability and meaningfulness of notices and information on the 

leave and earnings statement. Changes to the software used by the input systems (Defense 

MilPay Office and JUSTIS) utilized by the Army, Army National Guard, and DFAS, will require 

a remark be inserted on the leave and earnings statement whenever a manual payment or debt is 

made. Additionally, we will make every effort to better educate Service members on 
Appendix VIII

Comments from the Department of Defense

Page 123 GAO-04-89 Army Guard Pay

8

Enclosure

understanding their leave and earnings statement by reviewing and updating (as necessary) the 

information provided on our website(s); by providing independent leave and earnings statement 

remarks for present and future changes; continuing to provide the USPFOs ands Reserve 

Component Pay Support Offices with monthly newsletters; and effective immediately, provide 

the finance battalions/Defense Military Pay Offices with the National Guard newsletter. 

For the future, FCP is being designed with an easily understandable leave and earnings statement 

as one of the main requirements. Each pay is designed to provide fully automated computation 

capability for active, Reserve/Guard and detailed leave and earnings statement reporting through 

myPay. FCP will use legacy military pers/pay data feeds to create a single military pay record 

for each Service member supporting all Service component affiliations and duty statuses. FCP 

will also resolve pay systems capability related problems described in this report. 

RECOMMENDATION 21: The GAO recommended that the Secretary of Defense direct the 

Director of the Defense Finance and Accounting Service, in conjunction with the Under 

Secretary of Defense (Comptroller), to evaluate the feasibility of establishing an edit check and 

requiring approval before processing any debt assessments above a specified dollar amount. 

(p. 78/Draft Report) 

DoD RESPONSE: Concur. The DFAS has already updated its current input system (Defense 

MilPay Office) to provide a warning to field finance personnel concerning the debt impact of 

tour cancellation (vice modification) for Reserve/Guard members. DJMS-RC would require a 

small to medium system change to edit debts that exceeded an established threshold or required 

approval. Secondary manual processing would be required to start the collection process or 

delete the debts. 

RECOMMENDATION 22: The GAO recommended that the Secretary of Defense direct the 

Director of the Defense Finance and Accounting Service, in conjunction with the Under 

Secretary of Defense (Comptroller), as part of the current effort underway to reform DoD’s pay 

and personnel systems-referred to as DIMHRS - incorporate a complete understanding of the 

Army Guard pay problems as documented in this report into the requirements development for 

this system. (p. 78/Draft Report) 

DoD RESPONSE: Concur. The DFAS has provided detailed military pay requirements input 

to the DIMHRS Program that support fully automated computation of all military pay 

entitlements and deductions. The DIMHRS system military pay requirements submitted by 

DFAS would resolve system related pay problems as described in this report. DIMHRS is 

envisioned to create a single military personnel/pay record for each Service member supporting 

all Service component affiliations and duty statuses. 

RECOMMENDATION 23: The GAO recommended that the Secretary of Defense direct the 

Director of the Defense Finance and Accounting Service, in conjunction with the Under 

Secretary of Defense (Comptroller), to consider complete reengineering of the processes and 

controls and ensure that this reengineering effort deals not only with the systems aspect of the 
Appendix VIII

Comments from the Department of Defense

Page 124 GAO-04-89 Army Guard Pay

9

Enclosure

problems identified, but also with the human capital and process aspects when developing 

DIMHRS. (p. 78/Draft Report) 

DoD RESPONSE: Concur. The DFAS and Army have been actively involved in 

recommending an improved operational military pers/pay concept in the DIMHRS environment. 

Procedural changes are clearly required to capitalize on the opportunities afforded by a modern 

fully integrated personnel and pay system including improvements in process cycle time, 

customer service, and accountability. The DFAS is working with the Army DIMHRS Office to 

document existing workflow and roles and responsibilities. The DIMHRS Program is still in the 

very early stages of determining when and how integrated processes and workflows will be 

incorporated into the DIMHRS based operational concept. The DIMHRS “Joint Service 

Functional Concept of Operations,” dated July 15, 2003, page 14, indicates that the current plan 

is to “...initially mirror the existing ‘As-Is’ structure until the new capability has been fielded 

and risk factors/ requirements have been clearly identified. A determination of what additional 

skills and expertise are required for operators of a knowledge-based personnel community must 

be made after the capabilities of the commercial off the shelf product are fully known.” 
Page 125 GAO-04-89 Army Guard Pay

Appendix IX

GAO Contacts and Staff Acknowledgments ApendxiIX

GAO Contacts Geoffrey B. Frank, (202) 512-9518

Sheila D. Miller, (303) 572-7378

Acknowledgments Staff making key contributions to this report include: Paul S. Begnaud, 

Ronald A. Bergman, James D. Berry, Jr., Amy C. Chang, Mary E. Chervenic, 

Francine M. DelVecchio, C. Robert DeRoy, Dennis B. Fauber, Jennifer L. 

Hall, Charles R. Hodge, Jason M. Kelly, Julia C. Matta, Jonathan T. Meyer, 

John J. Ryan, Rebecca Shea, Crawford L. Thompson, Jordan M. Tiger, 

Patrick S. Tobo, Raymond M. Wessmiller, and Jenniffer F. Wilson. 

(192080)
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