Military Pay: Army Reserve Soldiers Mobilized to Active Duty Experienced Significant Pay Problems
Published: 2004-08-20T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In light of GAO's November 2003 report highlighting significant pay problems experienced by Army National Guard soldiers mobilized to active duty in support of the global war on terrorism and homeland security, GAO was asked to determine if controls used to pay mobilized Army Reserve soldiers provided assurance that such payments are accurate and timely. GAO's audit used a case study approach to focus on controls over three key areas: processes, people (human capital), and automated systems.
section_title: What GAO Found
paragraphs: The processes and automated systems relied on to provide active duty pays, allowances, and tax benefits to mobilized Army Reserve soldiers are so error-prone, cumbersome, and complex that neither DOD nor, more importantly, Army Reserve soldiers themselves, could be reasonably assured of timely and accurate payments. Weaknesses in these areas resulted in pay problems, including overpayments, and to a lesser extent, late and underpayments, of soldiers' active duty pays and allowances at eight Army Reserve case study units. Specifically, 332 of 348 soldiers (95 percent) we audited at eight case study units that were mobilized, deployed, and demobilized at some time during the 18-month period from August 2002 through January 2004 had at least one pay problem. Many of the soldiers had multiple problems associated with their active duty pays and allowances. Some of these problems lingered unresolved for considerable lengths of time, some for over 1 year. Further, nearly all soldiers began receiving their tax exemption benefit at least 1 month late. These pay problems often had a profound adverse impact on individual soldiers and their families. For example, soldiers were required to spend considerable time, sometimes while deployed in remote, hostile environments overseas, seeking help on pay inquiries or in correcting errors in their active duty pays, allowances, and related tax benefits. The processes in place to pay mobilized Army Reserve soldiers, involving potentially hundreds of DOD, Army, and Army Reserve organizations and thousands of personnel, were deficient with respect to (1) tracking soldiers' pay status as they transition through their active duty tours, (2) carrying out soldier readiness reviews, (3) after-the-fact report reconciliation requirements, and (4) unclear procedures for applying certain pay entitlements. With respect to human capital, weaknesses identified at our case study units included (1) insufficient resources allocated to key unit-level pay administration responsibilities, (2) inadequate training related to existing policies and procedures, and (3) poor customer service. Several automated systems issues also contributed to the significant pay errors, including nonintegrated systems and limited processing capabilities.

section_title: Letter
paragraphs: In November 2003, we reported on significant pay problems experienced  by mobilized Army National Guard soldiers, including 450 of 481 soldiers at  six case study units who had at least one pay problem associated with their  mobilization. Because of the severity of the problems identified for  mobilized Army National Guard soldiers, you asked us to examine the  accuracy and timeliness of payroll payments to mobilized Army Reserve  soldiers. Specifically, the objectives of our audit were to (1) provide an in- depth perspective on the pay experiences of mobilized Army Reserve  soldiers and (2) assess the overall design of the processes, human capital,  and automated systems relied on to provide accurate and timely pays,  allowances, and tax benefits to mobilized Army Reserve soldiers.
Our preliminary assessment of the internal control environment and the  design of key controls associated with payments to mobilized Army  Reserve soldiers indicated that the accuracy and timeliness of these  payments are highly dependent on inherently flawed processes and  controls. Active duty payments to mobilized Army Reserve soldiers rely on  many of the same Department of Defense (DOD) and Army policies and  procedures and automated systems used to pay mobilized Army National  Guard soldiers. Further, DOD has reported to Congress on major  deficiencies in the delivery of military payroll and related personnel  services, including those used to support both Army National Guard and  Army Reserve soldiers.
Consequently, as was the case for our audit of payments to mobilized Army  National Guard soldiers, rather than statistically testing the effectiveness of  inherently flawed processes and controls, we relied primarily on a case  study approach to provide perspective on the pay experiences of mobilized  Army Reserve soldiers. We selected Army Reserve units mobilized at some  point during the period from August 2002 through January 2004 as case  studies to provide a more in-depth perspective on Army Reserve soldiers’  pay experiences and their underlying causes. Our case studies included  seven Army Reserve units deployed overseas to carry out assigned combat  support missions as part of Operations Enduring Freedom or Iraqi  Freedom and one unit activated to perform services as part of critical  homeland defense operations under Operation Noble Eagle.
We performed our work from November 2003 through June 2004 in  accordance with generally accepted government auditing standards. The  pay problems we identified were based on a comparison of soldiers’ pay  records with available supporting documentation. Our audit was intended  to provide perspective on soldiers’ pay experiences and may not have  identified all pay problems at our case study units. In addition, our audit  was not designed to result in an exact determination of the pay, allowances,  and tax benefits soldiers should have received. We provided the results of  our pay analysis to Army Reserve officials for an exact determination of  any amounts owed the government or soldiers related to the mobilizations  audited. A more detailed description of the scope and methodology is  included in appendix I.
We requested comments on a draft of this report from the Secretary of  Defense or his designee. We received written comments from the Under  Secretary of Defense (Comptroller), which are reprinted in appendix X.
subsections: section_title: Background
paragraphs: The Army Reserve is a partner with the active Army and the Army National  Guard in fulfilling the country's military and contingency needs. The Army  Reserve provides nearly half of the Army’s combat support capabilities.  The Army Reserve has approximately 2,000 units that drill at 1,500 Army  Reserve Centers located in communities spread throughout the United  States and territories. As of May 2004, the Army Reserve reported that it  had about 328,000 members in the Ready Reserve.
During peacetime, Army Reserve units report to the United States Army  Reserve Command (USARC), located in Atlanta, Georgia, and the Chief of  the Army Reserve, located in Washington, D.C. In addition, the Army  Reserve has established Regional Readiness Commands to provide  resource, logistics, and personnel management support for Army Reserve  units within their region. When not mobilized to active duty, Army Reserve  units are required to maintain readiness at a sufficiently high level to  facilitate prompt active duty mobilization. While in a reserve status, Army  Reserve soldiers are required to attend one drill weekend each month and  obtain a minimum amount of training (usually about 2 weeks) each year.  During national emergencies, the President has the authority to mobilize  the Army Reserve to active duty status. While mobilized, Army Reserve  units are accountable to the combatant commander of the theater in which  they are assigned to operate, and ultimately, to the President.
On September 14, 2001, the President declared a national emergency as a  result of the terrorist attacks on the World Trade Center and the Pentagon  and the continuing and immediate threat of further attacks on the United  States. Concurrent with this declaration, the President authorized the  Secretary of Defense to mobilize reserve troops to active duty pursuant to  10 U.S.C. Section 12302. The Secretary of Defense delegated to the  Secretary of the Army the authority to order Army Reserve soldiers to  active duty. Since September 2001, the Army has mobilized unprecedented  numbers of Army Reserve soldiers (as well as other reserve and national  guard forces) to active duty on lengthy tours. DOD reported that as of April  2004, about 96,000 Army Reserve soldiers have been mobilized to active  duty at some point since September 2001 to carry out critical missions.
In contrast to the Army National Guard forces that may be assigned  traditional combat roles, Army Reserve forces are generally assigned  combat support missions. The Army National Guard and Army Reserve  both include military police and intelligence units. However, while the  Army National Guard has special forces and other units that have combat  mission assignments, Army Reserve units are generally limited to combat  support mission assignments, such as supply, medical, and transportation  operations.
Army Reserve soldiers’ mobilizations during the period of our audit were  also affected by two other Army actions. First, the Army issued a “stop  loss” order affecting Army Reserve soldiers in November 2002. The stop  loss order was authorized by statute and allows the Army to retain soldiers  in the service beyond their date of separation or retirement for an open- ended period. Second, in November 2003, the Army extended the orders  for all mobilized Army Reserve soldiers expected to return from active duty  on December 1, 2003, for an additional year.
There have been three major contingency operations involving mobilized  Army Reserve soldiers since September 2001: Operation Noble Eagle,  Operation Enduring Freedom, and Operation Iraqi Freedom. In general,  missions to provide domestic defense were funded through Operation  Noble Eagle, missions to fight terrorism outside the United States were  initially funded under Operation Enduring Freedom. More recently,  missions related to the combat in Iraq and subsequent policing operations  in that region were funded under Operation Iraqi Freedom. For example,  Army Reserve soldiers participated in combat support missions in  Afghanistan that were carried out as part of Operation Enduring Freedom,  whereas Army Reserve soldiers participating in homeland security  missions, such as assisting in intelligence data analysis, were considered  part of Operation Noble Eagle.
According to Army Reserve data, approximately 45,700 Army Reserve  soldiers were activated as of April 2004. At that time, Army Reserve  soldiers accounted for about 27 percent of all mobilized DOD reserve  components. Many of these Army Reserve soldiers were mobilized as  small units, including about 2,800 units with 10 or fewer soldiers and about  1,000 one-soldier units. The Army assigns a separate unit identification  number to each of these small groups or detachments of Army Reserve  soldiers (these units are known as derivative units). According to Army  Reserve data as of April 2004, the Army Reserve had soldiers assigned to  almost 6,000 different unit numbers.
While on active duty, all Army Reserve soldiers earn various statutorily  authorized types of pays and allowances. The types and amounts of pays  and allowances that Army Reserve soldiers are eligible to receive vary  depending upon rank and length of service, dependency status, skills and  certifications acquired, duty location, and the difficulty of the assignment.  While Army Reserve soldiers mobilized to active duty may be entitled to  receive over 50 types of pays and allowances, we focused on 14 types of  pays and allowances applicable to the Army Reserve units we selected for  case studies. As shown in table 1, we categorized these 14 pay and  allowance types into two groups: (1) pays, including basic pay, medical and  dental and foreign language proficiency skill-based pays, and 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.
Several of these types of pays and allowances have multiple subcategories  of entitlement. For example, there are eight different types of basic  allowances for housing that soldiers may be entitled to receive based on  individual circumstances and documentation (including documents  establishing dependency status or court documents). In addition, Army  Reserve soldiers may be eligible for significant tax advantages associated  with their mobilization to active duty. Mobilized Army Reserve soldiers  assigned to or working in a designated combat zone are entitled to exclude  from taxable income certain types of military pays that would otherwise be  taxable.
In addition to the complexities of determining and documenting the  specific circumstances surrounding each individual soldier’s initial active  duty pay, allowance, and tax benefit entitlements, these types of pays and  benefits are further complicated because entitlements vary depending on  soldiers’ locations as they move through their active duty tours. That is,  maintaining effective accountability and paying mobilized Army Reserve  soldiers as they move from location to location during their active duty  tours require extensive close coordination among a variety of operational,  personnel, finance, and pay organizations throughout DOD. Key  components requiring closely coordinated efforts in this worldwide team  are the  mobilized soldier;  unit commanders and unit administrators for all mobilized Army   United States Army Reserve Pay Center located at Fort McCoy;  Army Reserve Pay Management Division at Fort McPherson;  12 Army Reserve Regional Readiness Commands;  U.S. Army Finance Command;  personnel and finance offices at Army mobilization stations;  Army area servicing finance offices assigned to support deployed units;   personnel and finance offices at Army demobilization stations;  Defense Finance and Accounting Service (DFAS) at Indianapolis,   DFAS at Denver, Colorado; and  DFAS at Cleveland, Ohio.
As shown in figure 1, three key phases are associated with the pays and  allowances applicable to mobilized Army Reserve soldiers:   (1) mobilization: starting applicable active duty pays and allowances,   (2) deployment: starting and stopping applicable location-based active duty  pays while continuing other nonlocation-based active duty pay and  allowance entitlements, and (3) demobilization: stopping active duty pays  and allowances.
subsections: section_title: Mobilization Phase
paragraphs: During the initial mobilization, units receive an alert order and begin a  mobilization preparation program, Soldier Readiness Processing (SRP).  Among other things, the SRP is intended to ensure that each soldier’s  financial records are in order. The initial SRP is to be conducted by the  unit’s administrator at the unit’s home station assisted by personnel from  the cognizant Army Reserve Regional Readiness Command or designee.  This initial SRP is to include a verification of the accuracy of records  supporting applicable active duty pays and allowances. The unit  commander, supported by the unit administrator, is responsible for  ensuring that all personnel data, such as birth certificates for dependents  or foreign language certifications, are current for all soldiers under their  command.
During this phase, the unit administrator is required to gather all  supporting documents and send the documentation to the Reserve Pay  Center at Fort McCoy. Pay technicians at the Reserve Pay Center are  responsible for entering transactions to start initiating basic pay and  allowances for mobilized Army Reserve soldiers based on the active duty  tour information that appears on a hard copy of each soldier’s mobilization  order. If transactions are entered correctly and on time, activated Army  Reserve soldiers will automatically start to receive basic pay and basic  allowances for housing and subsistence based on the entered active duty  mobilization start date.
After soldiers complete their initial SRP, they travel as a unit to an assigned  active duty Army mobilization station. At the mobilization station,  mobilized Army Reserve soldiers are required to undergo a second SRP. As  part of this second SRP, finance personnel at the mobilization station are  responsible for confirming or correcting the results of the first SRP,  including obtaining the documentation necessary to support any changes  needed to the automated pay records. Pay technicians at the various Army  mobilization stations are required to promptly initiate appropriate active  duty pay and allowance transactions that were not initiated during the first  SRP. Transactions to initiate and terminate pays for all mobilized Army  Reserve soldiers entitled to receive special medical and dental pay  entitlements are entered and processed centrally at DFAS-Indianapolis.
section_title: Deployment Phase
paragraphs: While Army Reserve soldiers are deployed on active duty, there are several  active Army and DFAS components involved in paying them. The Army  area servicing finance office, which may be within the United States or in a  foreign country, is responsible for initiating pays earned while the soldier is  located in certain specified locations, such as location-based pays for  hostile fire and hardship duty. Pay technicians at these area servicing  finance offices are responsible for starting these types of pays for each  soldier based on documentation, such as annotated battle rosters or flight  manifests, showing when soldiers arrived at these designated locations.  Thereafter, hostile fire pay is automatically generated each pay period until  an established end-of-tour date is reached or a pay technician manually  stops the pay. In contrast, other location-based pays, such as hardship duty  pay, require manual entry of pay transactions each month by the assigned  Army area servicing finance office.
While the designated Army area servicing finance offices have primary  responsibility for administering pay for deployed Army Reserve soldiers,  particularly starting and stopping location-based active duty pays (such as  hardship duty pay), finance personnel at the cognizant mobilization station  or at the Reserve Pay Center can also enter certain pay-altering  transactions that occur during deployments, such as those related to a  soldier’s early separation from active duty. In addition, the Reserve Pay  Center has responsibility for entering all monthly nonlocation-based,  nonautomated pay and allowance transactions, such as foreign language  proficiency pay.
section_title: Demobilization Phase
paragraphs: Upon completion of an active duty tour, Army Reserve soldiers normally  return to the same active Army locations from which they were mobilized  for demobilization processing before returning to their home stations. The  personnel section at the demobilization station is required to provide each  soldier and the military pay technicians at the demobilization station with a  copy of the Release from Active Duty order and a DD Form 214, Certificate  of Release or Discharge from Active Duty. The demobilization station  military pay technicians are required to use the date of release from active  duty shown on these documents as a basis for stopping all Army Reserve  soldiers’ active duty pay and allowances. The Reserve Pay Center is  responsible for discontinuing monthly input of all nonlocation-based,  nonautomated pays and allowances. If the active Army demobilization  station did not take action to stop active duty payments for demobilized  Army Reserve soldiers, or if a soldier did not return to the demobilization  station for active duty out-processing, the responsibility for stopping active  duty pays and allowances falls to the soldier’s unit or the Reserve Pay  Center.
section_title: Automated Systems Environment
paragraphs: Paying Army Reserve soldiers is complicated by the number of  nonintegrated, automated order-writing, tactical, personnel, and pay  systems involved in authorizing, entering, and processing active duty pays  and allowances to mobilized Army Reserve soldiers during the  mobilization, deployment, and demobilization phases of their active duty  tours. These automated systems are  the Defense Joint Military Pay System – Reserve Component (DJMS- RC)—a DFAS-operated system used to pay reserve soldiers;  the Defense Military Pay Office (DMO)—data input system used to enter  pay transactions for processing;   the Army Reserve’s Regional Level Application System (RLAS),  including its personnel order-writing functions;  the Total Army Personnel Database–Reserves (TAPDB-R);  the Army’s Tactical Personnel System; and   the Army’s Transition Processing (TRANSPROC) System.
Many of these systems were originally designed for other purposes, but  have been adapted to help support payments to mobilized Army Reserve  soldiers. For example, DJMS-RC, a large, complex automated payroll  system application now used to pay Army and Air National Guard and  Army and Air Force Reserve soldiers, was originally designed to be used to  pay Reserve and Guard soldiers for monthly drills, short periods (30 days  or fewer) of active duty or training. DFAS has acknowledged that its  current military pay systems (including DJMS-RC) are aging, unresponsive,  fragile, and a major impediment to efficient and high-quality customer  service.
DFAS has primary responsibility for developing guidance and managing  system operations for DJMS-RC. DFAS-Denver is responsible for designing,  developing, and maintaining customer requirements for all of DOD’s  military pay services. Its Technical Support Office is responsible for  designing and maintaining the DJMS-RC core pay software. DFAS- Indianapolis is the central site for oversight of all Army military pay. As  such, DFAS-Indianapolis is responsible for maintaining an estimated   1 million Army soldier pay records, including those for Army Reserve  soldiers. DFAS-Indianapolis serves as a “gatekeeper” for DJMS-RC in that it  monitors the daily status of data uploaded to the system to ensure that all  received transactions are processed.
After manual entry of the mobilization dates from hard copies of  mobilization orders into DJMS-RC, DJMS-RC is designed to automatically  generate most active duty pay and allowance payments based on the  mobilization date, twice a month, until the stop date is entered into the  system. Without additional manual intervention, DJMS-RC will  automatically stop generating these active duty payments to Army Reserve  soldiers as of the stop date recorded in DJMS-RC. This automated edit  control feature is intended to prevent erroneous payments to soldiers  beyond their authorized end of active duty date. Because pay and  personnel systems are not integrated, human intervention and additional  manual data entry are required when a pay or allowance error is detected  or an event occurs that requires a change in the soldier’s pay-related  personnel and pay records. For example, a change in dependent status,  such as marriage or divorce; a promotion; jump pay disqualification; or  being demobilized before the active duty tour end date shown on a soldier’s  original mobilization order would necessitate manual input to  appropriately change or eliminate some of the pays and allowances a  soldier would be entitled to receive.
All Army Reserve soldier pays and allowances are to be documented in the  Master Military Pay Account—the central repository for soldier pay  records in DJMS-RC. All pay-related transactions that are entered into  DJMS-RC, primarily through the DMO input application, update the Master  Military Pay Account. DMO is the DJMS-RC pay input subsystem used by  the Reserve Pay Center, active Army finance offices, and military pay  offices—including offices located at overseas locations throughout the  world—to enter transactions to initiate and stop active duty pays to  mobilized Army Reserve soldiers. DMO is used to manually enter  transactions to (1) initiate any Army Reserve soldier pay and allowances  that were not started at initial mobilization, as well as applicable location- based pays, such as hostile fire and hardship duty pays, (2) stop all  location-based pays when soldiers depart designated locations, and   (3) stop all active duty pays and allowances at demobilization.
In addition to DJMS-RC and DMO, the Army Reserve relies on four other  nonintegrated automated systems as a basis for authorizing active duty pay,  allowance, and related benefit entitlements to mobilized Army Reserve  soldiers:  RLAS is operated at the Army Reserve’s regional support locations and  contains multiple modules to support regional human resource,  resource management, and training operations for Army Reserve  soldiers. The personnel module within RLAS is used to process Army  Reserve personnel actions, including those that have an impact on pay,  such as promotions and discharges. Within the personnel module, there  is an order-writing sub-module used for writing and generating  mobilization orders for individual Army Reserve soldiers. Army Reserve  soldier data in the personnel module of RLAS is used by the RLAS order- writing sub-module to help create the individual orders for mobilized  soldiers.
TAPDB-R is the central repository for Army Reserve-wide personnel  data. Selected pay-related personnel data, such as solders’ initial  enrollment in the Army Reserve, contained in Army Reserve soldiers’  pay records in DJMS-RC, are received through an automated interface  with TAPDB-R.
The Tactical Personnel System is a stand-alone Army-wide personnel  system operated by Army personnel at overseas airports where Army  soldiers first enter or leave an overseas deployment location. Hard  copies of Tactical Personnel System-generated manifests showing  names and dates of soldiers’ arrivals and departures are one source of  authorization for starting or stopping Army Reserve soldiers’ location- based hostile fire pay, hardship duty pay, and combat zone tax exclusion  tax benefits. Arriving and departing soldiers can enter data, such as  name, rank, and Social Security number, into the Tactical Personnel  System from their common access cards using a barcode scanner  function.
TRANSPROC is an Army-wide system used to track and support Army  soldier processing at mobilization and demobilization stations.  TRANSPROC is used to generate a DD Form 214, Certificate of Release  or Discharge from Active Duty, for Army Reserve soldiers completing  their active duty mobilization tours.
section_title: Case Studies Illustrate Pay Problems
paragraphs: We identified significant pay problems at all eight of the Army Reserve case  study units we audited. Specifically, we identified 256 Army Reserve  soldiers who were overpaid their active duty pay and allowance  entitlements by about $247,000, 245 soldiers who received late pay and  allowance payments of about $77,000, and 294 soldiers who were  underpaid their pay and allowance entitlements by about $51,000. As  discussed in the following sections, we found that these pay problems were  associated with a series of processes, human capital issues, and automated  system deficiencies.
The Army Reserve units we audited for our case studies had various  functions, including a Quartermaster (supply), dental services,  transportation, military police, and military intelligence unit. These units  were assigned a variety of combat support missions associated with the  global war on terrorism while mobilized on active duty in and around Iraq,  Afghanistan, Qatar, and Kuwait and in support of intelligence operations  here in the United States. The units we audited, their locations, and  information about their mobilizations are shown in table 2.
Overall, 332 of the 348 soldiers (95 percent) in our eight case study units  that were mobilized, deployed, and demobilized at some time during the 18- month period from August 2002 through January 2004 had at least one pay  problem associated with their mobilization to active duty. Many of the  soldiers had multiple pay problems associated with their active duty  mobilizations. Problems lingered unresolved for considerable lengths of  time. For example, for some soldiers, problems lingered through the entire  period of their active duty mobilization and for several months after their  active duty tours ended. Table 3 summarizes the number of Army Reserve  soldiers at each of our case study locations that had at least one problem  associated with their pays and allowances during each of the three phases  of their active duty mobilization.
We counted soldiers’ pay problems as a problem only in the phase in which  the problem first occurred, even if the problems persisted into subsequent  phases. In addition, many soldiers had more than one problem associated  with their entitled pays and allowances. Further, our case study audits  reflect only the problems we identified. However, because our audits were  only intended to provide more detailed perspective on the types and causes  of any pay problems experienced by mobilized Army Reserve soldiers,  rather than an exact calculation of what soldiers should have received, we  likely did not identify all of the active duty pay and allowance problems  related to our case study units.
In addition to pay and allowance problems, while we did not attempt to  fully quantify the tax withholding and tax filing effects, we also identified  problems with timeliness and accuracy of combat zone tax exclusion  benefits for soldiers with the seven case study units we audited that were  deployed overseas in Kuwait, Afghanistan, Qatar, or Iraq. Specifically, while  soldiers in these units were eligible to receive their pays and allowances  tax free when they first arrived in-theater, almost all failed to receive this  benefit until at least a month after arrival. Over- and underpayment of  active duty pays and allowances for soldiers deployed in designated  combat zones adversely impacted the accuracy and timeliness of soldiers’  combat zone tax exclusion benefits.
Establishing the exact amount owed and collecting overpayments of active  duty pays and allowances erroneously provided to soldiers placed an  additional administrative burden on both the individual soldiers and DOD.  Soldiers were sometimes required to spend considerable time and were  frustrated in their efforts to determine the exact sums owed or to establish  a repayment plan. For example, it took one soldier over a year and about 20  phone calls, e-mails, and faxes to identify and resolve the active duty  overpayments and related tax benefits he received. In other instances, we  identified soldiers who received extensive improper active duty payments,  sometimes for over a year, but who may not have contacted anyone within  DOD to stop these erroneous overpayments. These soldiers received  significant overpayments, but did not acknowledge their receipt or set  aside sufficient funds to repay these erroneous overpayments. In these  instances, the soldiers may be subject to criminal prosecution. For  example, we identified a soldier who did not mobilize with his unit, yet  received over $36,000 in active duty pay and allowances for over a year.  When questioned, the soldier stated he was not aware that he had received  $36,000 in erroneous pay and could not immediately pay back all the  erroneous active duty overpayments he received. We referred this, and  other similar cases, to the Army’s Criminal Investigation Division for  further investigation into whether criminal prosecution of these soldiers  may be warranted for attempting to fraudulently convert government funds  to personal use.
Further, these overpayment debts placed an additional labor-intensive  burden on the Army and DFAS. Determining the exact amounts soldiers  owed as a result of overpayments, particularly when the combat zone tax  exclusion benefits were involved, required labor-intensive efforts to gather  necessary supporting documentation (in some instances from multiple  locations) and compare these data with pay and tax withholdings,  sometimes spanning more than 1 year, to manually compute amounts owed  as a result of erroneous overpayments. In addition, DFAS was required to  track and monitor collections from soldiers against these debts. Collection  of these debts may become more difficult the longer they remain  outstanding. For example, Army auditors reported in 2003 that, to the  extent that soldiers leave the Army with outstanding debts, collection rates  are only about 40 percent.
Examples of pay and allowance problems found through our audits of  soldiers’ pay experiences at the eight case study units included the  following:  Forty-seven soldiers deployed overseas with the 824th Quartermaster  Company from North Carolina improperly received several months of  hardship duty pay, totaling about $30,000, for several months after they  left Kuwait.
Nine soldiers of the 824th Quartermaster Company improperly received  family separation allowance payments totaling an estimated $6,250  while serving at Fort Bragg, their unit’s home station.
Forty-nine soldiers with the 824th Quartermaster Company did not  receive the hardship duty pay they were entitled to receive when they  arrived at their designated duty locations overseas until about 3 months  after their arrival. Subsequently, they continued to erroneously receive  hardship duty pay for 5 consecutive months after departure from their  overseas duty locations.
Ten soldiers with the 443rd Military Police Company had problems with  their overseas housing allowance associated with their deployment in  Iraq, including five soldiers who were underpaid about $2,700 and seven  who did not receive their last allowance until more than 2 months after  their active duty tour ended.
A soldier with the 443rd Military Police Company who demobilized from  an active duty deployment in August 2002, subsequently received  erroneous active duty payments of about $52,000 through May 2004.  These erroneous payments were not detected and stopped by DOD. The  soldier contacted us to ask for our assistance in resolving this matter.
A soldier from the 965th Dental Company who received an emergency  evacuation from Kuwait as a result of an adverse reaction to anthrax  and antibiotic inoculations he received in preparing for his overseas  deployment, continued to receive about $2,900 in improper hostile fire  and hardship duty payments after his return from Kuwait.
A soldier with the 3423rd Military Intelligence Detachment did not  receive an estimated $3,000 in family separation allowance payments  associated with his active duty mobilization.
Further, seven of our eight units were deployed overseas during their  mobilization. Almost all the soldiers in these seven units had problems with  the timeliness of their combat zone tax exclusion benefits. All the soldiers  at our seven case study units who were deployed overseas experienced  problems with the late receipt of their combat zone tax benefits because  DJMS-RC could not simply stop withholding federal taxes, but instead had  to first withhold the taxes and then in the following month’s pay  processing, reimburse the soldier the taxes previously withheld. As a  result, soldiers generally did not benefit from the tax exemption for at least  one month after their tax withholdings should have ceased. In addition to  this systemic issue, we identified other problems associated with these  benefits with respect to the soldiers at our case study units:  Twenty of the 20 soldiers with the 948th Forward Surgical Team waited  over 2 months after they arrived in Afghanistan to benefit from the  combat zone tax exclusion.
It took nearly a year to identify and resolve a $1,100 overpayment  associated with one soldier’s combat zone tax exclusion benefit.
Several soldiers with Maryland’s 443rd Military Police Company never  received the correct amount of reimbursement for taxes withheld,  which sometimes resulted in underwithholding taxes, and other times  resulted in overwithholding taxes.
These pay mistakes were the source of many complaints, took  considerable time and effort to address, and were likely to have had an  adverse effect on soldier morale. In addition, soldiers at one of our case  study units told us that a delay in receiving their active duty pays and  allowances created financial hardship for them and their families.  Specifically, several of the unit’s soldiers told us they could not pay their  bills when they were initially deployed overseas and were forced to borrow  money from friends and relatives in order to meet their financial  obligations.
We provided data on the pay problems we identified to Army Reserve  officials. For the most part, they concurred with our analysis and reported  that they have taken action to address any identified over- and  underpayments and withholdings we identified. Appendixes II through IX  provide a more detailed description of the pay experiences of the soldiers  at each of the Army Reserve case study units we audited.
section_title: Significant Weaknesses Exist in Mobilized Army Reserve Pay Processes
paragraphs: The pay problems we found were caused, at least in part, by design  weaknesses in the extensive, complex set of processes and procedures  relied on to provide active duty pays, allowances, and related tax benefits  to mobilized Army Reserve soldiers. We identified issues with the  procedures in place for both determining eligibility and processing related  transactions of active duty pay to mobilized Army Reserve soldiers. These  process weaknesses involve not only the finance and military pay  component of the Army, Army Reserve, and DFAS, but the Army’s  operational and personnel functions as well. Specifically, we found  deficiencies in processes for (1) tracking and maintaining accountability  over soldiers as they moved from location to location to carry out their  mobilization orders, (2) carrying out SRPs—primarily at the mobilization  stations, (3) distributing and reconciling key pay and personnel reports  during mobilizations, and (4) determining eligibility for the family  separation allowance associated with active duty mobilizations.
subsections: section_title: Flaws in Procedures for Tracking and Maintaining Accountability over Soldiers throughout Mobilization
paragraphs: Mobilization policies and procedures did not provide the Army with  effective accountability and visibility over soldiers’ locations to provide  reasonable assurance of accurate and timely payments for Army Reserve  soldiers’ active duty mobilizations. Accountability breakdowns can occur  as soldiers pass through four main transitions during the course of a typical  mobilization cycle, including transitions from (1) their home station to  their designated mobilization station, (2) the mobilization station to their  assigned deployment location, (3) the deployment location to their  demobilization station, and (4) the demobilization station back to their  home station.
Soldiers’ active duty pays, allowances, and related tax benefits are directly  tied to being able to account for soldiers’ locations during these transitions.  For example, timely data on the dates soldiers arrive at and leave  designated locations are essential for accurate and timely hardship duty  pays, allowances, and related combat zone tax exclusion benefits. To  effectively account for soldiers’ movements during these transitions, unit  commanders, unit administrators, as well as individuals assigned to  personnel and finance offices across the Army Reserves, Army  mobilization stations, and in-theater Army locations must work closely and  communicate extensively to have the necessary data to pay Army Reserve  soldiers accurately and on time throughout their active duty tours.
However, we identified several critical flaws in the soldier accountability  procedures in place during the period of our audit. Specifically, we  identified flawed procedures for accountability over soldiers’ actual  locations and associated pay entitlements in that (1) soldiers received  mobilization orders, but did not report for active duty and (2) dates of  soldiers’ arrival at, and departure from, designated hardship duty  deployment locations were not reported. Such breakdowns in  accountability procedures resulted in erroneously starting, or delays in  starting, active duty pays, allowances, and related tax benefits, and  erroneously continuing these pays, allowances and benefits when soldiers  were no longer entitled to receive them.
subsections: section_title: Mobilization Station Accountability
paragraphs: Effective procedures were not in place to monitor and validate the  propriety of active duty payments to mobilized reservists. We found that  preventive controls for initiating and stopping active duty payments for  Army Reserve soldiers were ineffective. In addition, the accountability  controls in place at Army stations responsible for unit mobilization and  demobilization processing were not effective in detecting any Army  Reserve soldiers assigned to units passing through those locations who  were not entitled to receive active duty pays and allowances. As a result of  these control design flaws, we found several soldiers who received up to a  year of active duty payments based on issued mobilization orders, even  though the soldiers never reported for active duty. Army officials have  acknowledged that active duty payments are increasingly vulnerable to  such overpayments as a result of the Army Reserve’s November 2003 action  to extend Army Reserve soldiers on active duty at that time for another  year.
When a unit is called to active duty, soldiers in the mobilized unit receive  individual mobilization orders. Processing procedures provide that these  orders be used as a basis for initiating active duty pays and allowances to  begin on the first day of active duty designated in the individual active duty  mobilization orders. The Reserve Pay Center, located at Fort McCoy, is  generally responsible for initiating active duty pays and allowances based  on the data shown on a hard copy of the individual orders. However, the  Reserve Pay Center did not receive the data necessary to identify, on a unit- by-unit basis, which soldiers reported to the active Army mobilization  stations so that this information could be compared with a list of soldiers  for that unit for whom the Reserve Pay Center started active duty pays and  allowances. In addition, Army mobilization station finance personnel did  not receive a list of soldiers in a unit who were receiving active duty pay to  compare with the names of unit soldiers who actually reported to the  mobilization station.
At one of our case study units, the 965th Dental Company, we found that this  process flaw resulted in tens of thousands of dollars in overpayments.
Individual Case Illustration: Flawed Soldier Location  Accountability Procedures Result in $36,000 Erroneous Active  Duty Payments A soldier assigned to the 965th Dental Company received a mobilization  order, but based on a discussion with his commander about a medical  condition, was told he would be transferred to a unit that was not  mobilizing. However, the unit commander did not provide a list of the  unit’s mobilizing soldiers to the Reserve Pay Center and did not provide  any information on this soldier indicating that he would not be reporting  to the unit’s mobilization station. Consequently, neither the Reserve Pay  Center nor the mobilization station personnel had any means of detecting  that a soldier had not mobilized with his unit and therefore was  improperly receiving active duty payments. As a result, the soldier’s pay  was started on February 11, 2003, and continued through February 29,  2004, resulting in more than $36,000 in overpayments. This improper  active duty pay was stopped only after we identified the error and  notified Army officials.
In another instance, the Army’s inability to determine that one soldier’s  actual location did not match his “paper” mobilization resulted in an  estimated $52,000 in erroneous payments.
Individual Case Illustration:  Soldier Accountability Flaws Lead  to Estimated $52,000 in Erroneous Active Duty Payments   A soldier contacted GAO in March 2004 to inquire as to why he had been  receiving active duty pay for almost a year even though, according to the  soldier, he was not mobilized to active duty during that time.  Subsequent  inquiry determined that, at least on paper, the soldier was transferred  from Maryland’s 443rd Military Police Company to Pennsylvania’s 307th  Military Police Company in February 2003, and was mobilized to active  duty with that unit on March 3, 2003.  Applicable active duty pays and  allowances for the soldier were initiated based on these March 3, 2003,  orders.  After the 307th Military Police Company demobilized in February  2004, the soldier’s mobilization order was revoked.  Nonetheless,  available pay documentation indicated the soldier continued receiving  erroneous active duty pay and allowances for basic pay, and allowances  for subsistence, housing, and family separation totaling an estimated  $52,000 through May of 2004.
In addition, Army Reserve officials told us about similar cases at other  units not included in our case studies in which soldiers did not report for  active duty, but nonetheless received erroneous active duty pay for lengthy  periods. They told us they identified soldiers who received large improper  active duty payments, some of whom had received erroneous active duty  payments for over a year before they were identified and stopped, as the  following examples illustrate:  A soldier from an Army Reserve chemical unit in South Carolina  received an individual mobilization order in February 2003, but did not  mobilize with the unit. Nonetheless, her active duty pays and allowances  (a total of over $45,000) continued until they were stopped in April 2004.
A soldier from a Louisiana Army Reserve unit received an individual  mobilization order in January 2003. However, the unit commander  determined the soldier should not be mobilized with the unit because he  had not yet completed required training. Nonetheless, the soldier  received active duty pays and allowances totaling over $25,000 until they  were stopped in March 2004.
A soldier attached to a Puerto Rico Quartermaster Reserve unit was  mobilized in February 2003, but did not report for active duty. The  soldier continued to receive improper active duty pays and allowances  totaling about $36,000 until the payments were stopped in April 2004.
A soldier assigned to an Illinois Reserve Military Police Company  received an individual mobilization order in December 2002. However,  she did not report to the mobilization station with her unit and her  mobilization order was revoked in January 2003. Nonetheless, the  soldier continued to receive active duty pay and allowances totaling  about $24,000 until the payments were stopped in April 2004.
Army Reserve officials told us that these improper payments were not  identified through any systemic preventive accountability control process  associated with an active duty mobilization or demobilization, but rather as  a result of after the fact detective controls in place at the unit or the Army  Reserve pay center. For example, one soldier reported for a weekend drill  and the unit pay administrator attempted to enter a transaction to pay him  for weekend drill duties. However, the unit pay administrator discovered  the soldier’s receipt of erroneous active duty payments when the weekend  drill pay transaction was rejected by DJMS-RC. Army Reserve officials told  us they have referred these improper payments to the Army’s Criminal  Investigations Division to determine if criminal prosecution of the soldiers  involved may be warranted.
section_title: Deployment Accountability
paragraphs: Flaws in soldier accountability procedures associated with overseas  deployment locations resulted in late, under-, and overpayments of active  duty pays, allowances, and tax benefits associated with almost all the  soldiers in our case study units. Soldiers were generally paid late or  underpaid location-based incentives upon their initial arrival into  designated hardship duty and hostile fire locations. Subsequently, they  were often overpaid these same location-based entitlements because these  payments continued, sometimes for long periods of time, after soldiers left  designated overseas locations. These failures occurred because Army  procedures in place during our audit were ineffective in accounting for  when soldiers entered into and departed from designated hardship duty  and hostile fire locations. In addition, as discussed in a subsequent section  of this report, automated systems deficiencies also contributed to, and in  some cases exacerbated, location-based active duty pay problems.
According to DFAS procedures, Army local area servicing finance locations  are to obtain documentation showing soldier and associated arrival and  departure date information to start and stop location-based pays,  allowances, and associated tax benefits. We were told that flight manifest  lists generated through the Army’s Tactical Personnel System were the  primary source documents used as a basis for entering manual transactions  to start and stop location-based pays during most of our audit period.
One of our case study units, the 443rd Military Police Company, relied on an  extraordinary, labor-intensive workaround to ensure that necessary  documentation supporting any changes in the location of the unit’s  soldiers, as well as other pay-support documentation, was received by the  unit’s area servicing finance office while the soldiers were deployed in Iraq.
Individual Case Illustration: Biweekly Flights to Transmit Unit  Pay Documents While deployed to guard Iraqi prisoners at Camp Cropper in Iraq, the unit  commander of the 443rd Military Police Company assigned a sergeant to  help address myriad pay complaints. The sergeant was deployed to Iraq  as a cook, but was assigned to assist in pay administration for the unit  because he was knowledgeable in DJMS-RC procedures and pay-support  documentation requirements and was acquainted with one of the soldiers  assigned to the unit’s servicing finance office in Camp Arifjan, Kuwait.  Every 2 weeks, for about 5 months, the sergeant gathered relevant pay- support documentation from the unit’s soldiers, took a 1 hour and 15  minute flight to the Kuwait airport, and then drove an hour to the Army  finance office at Camp Arifjan. The day following the sergeant’s biweekly  journey to Camp Arifjan, the sergeant worked with the Army finance  officials at Camp Arifjan to enter transactions into DMO, often for 8-12  hours, to get unit soldiers’ pay entitlements started or corrected,  particularly hardship duty pay requiring manual input every month.
However, despite diligent efforts by Army local area servicing finance  officials to develop and maintain accurate lists of soldiers at the designated  deployment locations, our analysis of payments to soldiers at our case  study units indicated that this information was often not timely or accurate.  Finance officials at the Army area servicing finance offices either did not  obtain manifests (documentation showing soldier arrival and departure  dates) at all, received the documentation late (often months after the unit’s  actual arrival or departure dates), or obtained manifests listing soldiers  that should not have been included for pay purposes. For example, an  Army Reserve soldier assigned to support Air Force operations did not  process through, or have any access to, an Army location that could  provide a manifest showing his arrival date in-country to local Army area  servicing finance office officials so that they could start his location-based  pays. In this case, the soldier did not receive his location-based pays until  he returned to his demobilization station and insisted that personnel at that  location take the actions necessary to start this payment. Also, we were  told that soldiers departing from designated locations on emergency or rest  and recreation leave, who are still entitled to continue to receive  designated location-based pays while on such leave, were sometimes  erroneously included on departure manifests used as source documents to  stop active duty location-based pays.
These flawed procedures, which were relied on to account for Army  Reserve soldiers’ actual locations and their related pay entitlements while  deployed, resulted in pay problems in all seven of our case study units that  deployed soldiers overseas, as the following examples illustrate:   All 49 soldiers that deployed overseas with our 824th Quartermaster  Company case study unit were underpaid their hardship duty pay when  they first arrived in the country. Subsequently, almost all soldiers in the  unit were overpaid their hardship duty pay---most for up to 5 months-- after they left the designated location, and some continued to receive  these payments even after they were released from active duty. In total,  we identified about $30,000 in improper hardship duty payments  received by this unit’s soldiers.
Seventy-six soldiers with the 965th Dental Company received improper  hardship duty payments totaling almost $47,000 after they had left their  hardship duty location.
Ten soldiers with the 431st Chemical Detachment received improper  hardship duty payments for 7 months after their return to their home  station.
None of the 24 soldiers deployed with the 629th Transportation  Detachment received hardship duty pay for the months they arrived and  departed the hardship duty areas. In addition, they did not receive  hostile fire pay for almost 3 months after their arrival at their assigned  overseas deployment locations.
The debts created by overpayment of these location-based payments  placed an additional administrative burden on both the soldiers and the  department to calculate, monitor, and collect the corrected amounts.
section_title: Lack of Clear Pay Review Procedures at Mobilization Stations
paragraphs: Some of the pay problems we found were associated with flawed  procedural requirements for the pay support review, which is part of the  SRP process carried out at Army mobilization stations. Procedures  followed by Army mobilization station finance officials during the SRP  were inconsistent with respect to what constitutes a “thorough review” of  soldiers’ pay support documentation to determine if it is current and  complete and has been entered into the DJMS-RC pay system.
Procedures followed for our 824th Quartermaster Company case study unit  at the Fort Bragg mobilization station provided that the pay support portion  of the SRP at that location consisted of finance representatives briefing the  entire unit on required pay support. Finance personnel did not meet  individually with each soldier to compare his or her pay support  documentation with on-line soldier pay data in DJMS-RC. As a result,  missing or outdated documentation required to support active duty pays  and allowances at the time of the 824th Quartermaster Company’s SRP  contributed to some of the late payments we identified. For example, one  soldier with this unit who was certified as ready for mobilization as a result  of the SRP, did not receive entitled family separation allowance payments  because documentation necessary to start this allowance was not  submitted as part of the SRP process. Six months later, after the soldier  demobilized at Fort Bragg, the paperwork necessary to receive this  allowance was obtained and submitted for payment. This soldier received  about 6 months of back family separation allowance in September 2003  totaling $1,400.
We also found indications that the pay support documentation review  carried out at the Army’s Fort Lee mobilization station was less than  thorough. Personnel at the Fort Lee mobilization station did not carry out a  detailed review of Master Military Pay Account records, which would have  shown that soldiers with the unit would stop receiving their entitled  housing allowances and family separation allowances because there were  incorrect end dates for these payments entered into DJMS-RC. As a result,  several soldiers from the 443rd Military Police Company had their basic  allowance for housing switched to a rate less than the soldiers were  entitled to receive and had their family separation allowance stopped for a  period during their deployment because the Fort Lee mobilization station  finance personnel did not take action necessary to extend the end-of- eligibility dates for these two entitlements.
In contrast, pay support documentation review procedures in place as part  of the SRP at the Army’s mobilization stations at Fort McCoy and Fort  Eustis provided that, in addition to a unitwide finance briefing, finance  officials at those sites were to conduct one-on-one pay support  documentation reviews with each soldier. Members of the 948th Forward  Surgical Team, who mobilized through Fort McCoy, and the 629th  Transportation Detachment, who processed through Fort Eustis, had their  pay records reviewed and compared to DJMS-RC on-line records by  finance officials during the finance portion of their SRP. We found very few  problems with either the 948th or 629th units’ active duty pay entitlements,  excluding in-theater entitlements, after these units passed through the one- on-one soldier pay documentation review as part of the SRP at Fort McCoy  and Fort Eustis.
section_title: Inadequate Processes in Place for Reconciling and Distributing Key Pay and Personnel Reconciliation Reports
paragraphs: Design flaws in the procedures in place to obtain and reconcile key pay and  personnel reports impaired the Army’s ability to detect improper active  duty payments. As discussed previously, we identified several cases and the  Army has also identified a number of instances in which such improper  payments continued for over a year without detection.
The reserve pay review and validation procedures for Army Reserve  soldiers were initially designed to service reservists as they perform  weekend drills, annual training, and short-term active duty mobilizations of  30 days or fewer. Correspondingly, pay and personnel reconciliation  processes in place during our audit were focused primarily on  requirements for unit commanders to reconcile data for reserve soldiers  while they are in an inactive (drilling reservist) status. However, as  illustrated by the pay problems discussed in this report, there is an equal or  even greater need to clearly establish required procedures for the review  and reconciliation of pay and related personnel data for Army Reserve  soldiers mobilized on extended active duty tours.
Specifically, with respect to the monthly review and reconciliation of two  key reports, the Pay/Personnel Mismatch Report and the Unit Commander’s Pay Management Report, current procedures contained in  USARC Pamphlet 37-1 provide that unit commanders are required to  review the Unit Commander’s Pay Management Report for soldiers in their  units on weekend drill activities and for active duty mobilization planning  activities. However, these procedures do not clearly require unit  commanders to review this key report for Army Reserve soldiers in  subsequent phases of their active duty mobilization tours. Appendix I of  USARC Pamphlet 37-1 provides that unit pay data in the Unit Commander’s  Pay Management Report should be reconciled with unit training and  attendance reports, but does not require reconciling pay data with related  data on mobilized soldiers. As a result, the unit commander at one of our  case study units, the 965th Dental Company, stated that he did not believe  that a review and reconciliation was needed. Instead, he stated he relied on  the unit’s soldiers to identify any pay problems. In light of the extensive  manual entry, and nonintegrated systems currently relied on for mobilized  Army Reserve soldiers’ pay, the timely and complete reconciliation of  comparable pay and personnel data in these key reports can serve as an  important detective control to identify any pay errors shortly after they  have occurred.
In addition, Army guidance does not specify how deployed units are to  receive these reports. Distribution of these reports is particularly  problematic for units deployed in remote locations overseas. As a matter of  practice, we found that for units in an inactive status, the unit’s Regional  Readiness Command usually provides these reports. However, we also  found no procedural guidance in place to distribute the same reports to  unit commanders and administrators while their units are on active duty.  Unit commanders for several of our case study units stated they did not  receive these key reports while their units were deployed. Had those  reports been available and reconciled, they could have been used to  identify and correct improper active duty payments, such as the large,  erroneous active duty overpayments discussed previously.
section_title: Procedures for Applying Family Separation Allowance Eligibility Requirements Were Not Clear
paragraphs: The existing procedures for applying eligibility requirements for activated  Army Reserve soldiers’ family separation allowance payments were not  clear. These flawed procedural requirements for paying the family  separation allowance led to varying interpretations and pay errors for Army  Reserve soldiers at the implementing Army home stations and mobilization  stations.
DOD Financial Management Regulation (FMR) Volume 7A policy clearly  provides that soldiers are entitled to receive a family separation allowance  if their family does not reside near the duty station, which is generally  defined as within 50 miles. However, DOD procedures and the form  needed to implement this FMR policy were not clear. Implementing  guidance and DD Form 1561 (a document that must be completed to  receive the family separation allowance) do not provide for a  determination that a soldier’s family does not live near the soldier’s duty  station. Specifically, DD Form 1561 does not specifically require soldiers to  certify that the soldier is entitled to receive family separation allowance  benefits because (1) they live over 50 miles away from the unit’s home  station and do not commute daily or (2) the soldier’s commander has  certified that the soldier’s required commute to the duty station is not  reasonable. We noted that in several of our case study units, soldiers began  receiving the family separation allowance while stationed in Army  installations less than 50 miles away from their residence and without any  documentation showing the unit commander’s determination that the  soldier’s commute, even though within 50 miles, was nonetheless,  unreasonable. For example, soldiers from the 824th Quartermaster  Company received family separation allowance payments while stationed  at their Fort Bragg home station, even though they lived within 50 miles of  the base and no documentation was available showing that the unit  commander authorized an exception. In contrast, 14 soldiers with  Maryland’s 443rd Military Police Company who lived over 50 miles away  from their home station, including several soldiers from Puerto Rico, did  not receive a family separation allowance as of the date of their arrival at  their home station.
section_title: Human Capital Issues Affect Pay Accuracy and Timeliness
paragraphs: Human capital weaknesses also contributed to the pay problems mobilized  Army Reserve soldiers experienced in our eight case study units. Our  Standards for Internal Control in the Federal Government states that  effective human capital practices are critical to establishing and  maintaining a strong internal control environment, including actions to  ensure that an organization has the appropriate number of employees to  carry out assigned responsibilities. Even in an operational environment  supported by a well-designed set of policies and procedures and a world- class integrated set of automated pay and personnel systems, an effective  human capital strategy— directed at ensuring that sufficient numbers of  people, with the appropriate knowledge and skills, are assigned to carry  out the existing extensive, complex operational requirements—is essential.  Such a human capital strategy supporting accurate and timely active duty  payments to mobilized Army Reserve soldiers must encompass potentially  hundreds of DOD components that are now involved in carrying out the  extensive coordination, manual intervention, and reconciliations required  to pay mobilized Army Reserve soldiers.
Well-trained pay-support personnel throughout various DOD components  are particularly critical given the extensive, cumbersome, and labor- intensive process requirements that have evolved to provide active duty  payments to mobilized Army Reserve soldiers. We encountered many  sincere and well-meaning Army, Army Reserve, and DFAS personnel  involved in authorizing and processing active duty payments to these  soldiers. The fact that mobilized Army Reserve soldiers received any of  their entitled active duty pays, allowances, and tax benefits accurately and  on-time is largely due to the dedication and tireless efforts of many of these  pay-support personnel to do the right thing for these mobilized Army  Reserve soldiers. However, in conjunction with our case studies, we  observed human capital weaknesses related to (1) inadequate resources  provided to support unit-level pay management, (2) inadequate pay  management training across the spectrum of pay-support personnel, and  (3) customer service breakdowns.
subsections: section_title: Inadequate Resourcing for Critical Unit Administrator Positions
paragraphs: Vacancies and turnovers in key unit administrator positions, and the  deployment of unit administrators to fill other military requirements,  impaired a unit’s ability to carry out critical pay administration tasks that  could have prevented or led to early detection of pay problems associated  with our case study units. In addition to pay administration responsibilities,  unit administrator duties include personnel and supply operations. We  were told that vacancies in unit administrator positions were difficult to fill  and often remained vacant for many months because Army policy requires  the individual filling the unit administrator position to have a dual status,  which means the individual must perform duties both in the capacity of an  Army Reserve military occupation specialty as well as unit administrator.
For example, at the 948th Forward Surgical Team, the unit administrator  position was vacant prior to and during the unit’s mobilization. We were  informed that the 948th Forward Surgical Team had difficulty filling the  vacancy because of its dual status. Specifically, the unit officials stated that  this position was difficult to fill because the individual must have a medical  background to meet the dual status requirement. That is, the person filling  the position must be able to meet the unit’s mission requirements as well as  have knowledge and experience performing the personnel, payroll, and  supply tasks of a unit administrator. In the absence of a unit administrator,  the unit commander assigned a sergeant with limited knowledge of pay  entitlements and DJMS-RC processing requirements to help carry out some  of the unit administrator’s pay management duties. The sergeant told us  that during a 2-week period during late April 2003, she spent about 100  hours attempting to resolve the unit’s pay problems, while concurrently  carrying out her duties as a health specialist.
Providing adequate resources to support the execution of critical pay  management responsibilities was particularly problematic for Army  Reserve soldiers that were cross-leveled (transferred) to other units and  mobilized to active duty with those units. For three of the four case study  units we audited where small groups of Army Reserve soldiers were  transferred and mobilized to active duty with another unit, we found that  these soldiers experienced pay problems that could be attributed, at least  in part, to inadequate resources to carry out critical unit-level pay  management responsibilities. For example, because he did not have any  unit-level support to assist in processing his active duty payments, a soldier  who was mobilized as a single-soldier unit did not receive any location- based active duty pays until he returned from Qatar.
section_title: Inadequate Pay Management Training
paragraphs: In addition to concerns about the level of resources provided to support  critical unit administrator positions, we identified instances in which the  lack of adequate unit administrator and finance office personnel training on  pay management duties and responsibilities contributed to the soldiers’ pay  problems we identified. In addition, we found that unit commanders did  not always support these important pay management duties. Our  Standards for Internal Control in the Federal Government provides that  management should establish and maintain a positive and supportive  attitude toward internal controls and conscientious management.
Several of the individuals serving as unit administrators in our case study  units informed us that they had received limited or no formal training  covering unit administrator responsibilities and that the training they did  receive did not prepare them for mobilization issues associated with  supporting and processing active duty pays and allowances. Unit  administrators have responsibility for a variety of pay-related actions,  including working with the unit soldiers to obtain critical pay support  documentation, maintaining copies of pay support records, providing pay- transaction support documentation to the Reserve Pay Center, and  reviewing pay reports for errors. Without adequate training, unit  administrators may not be aware of these critical pay management  responsibilities.
Few unit administrators at our case study units had completed all of the  required training on active duty pay and allowance eligibility and  processing requirements. While unit administrators are required to attend  two courses (each lasting 2 weeks), few of the unit administrators for our  case study units took the required training at or near the time they assumed  these important pay management and other key unit administrator duties.  For example, the unit administrator at one of our case study units, the 824th  Quartermaster Company, stated she had not attended any formal training  courses, but instead received on-the-job training. Our audit showed that  she did not always effectively carry out her pay management report review  responsibilities. For example, while our audit of unit pay reports showed  she reviewed the documents, we saw no indication she used this tool to  identify and stop an overpayment of $18,000 to one soldier in her unit. As a  result, the erroneous pay was allowed to continue for another 5 months.
At other units, we identified instances in which available documentation  indicated that unit administrators did not take timely action to submit pay- support transactions. For example, several soldiers with the 965th Dental  Company did not receive promotion pay increases and other entitlements  for over 2 months because the unit administrator failed to process  necessary pay-support documentation, available at the time of the unit’s  initial SRP, until the unit was already deployed on active duty. At the 443rd  Military Police Company, we found the unit’s finance sergeant assigned  pay management responsibilities did not gather and submit current  documentation needed to support active duty pays and allowances,  including current documents showing soldiers’ marital status and number  of dependents. As a result, soldiers from the 443rd Military Police Company  experienced over-, under-, and late payments associated with their housing  and cost of living allowances.
In addition to inadequate unit administrator training, inadequate training of  military pay technicians at Army finance offices at mobilization stations,  area servicing finance offices (for deployed soldiers), and demobilization  stations adversely affected the accuracy and timeliness of payments to  mobilized Army Reserve soldiers. Few of the military finance personnel  responsible for processing pays and allowances at the mobilization and  demobilization stations and at the area servicing finance offices for  deployed units had formal training on DJMS-RC pay procedures. Instead,  several of the military pay technicians and supervisors we talked to at the  Army mobilization and demobilization stations told us they relied primarily  on on-the-job training to become knowledgeable in the pay eligibility and  pay transaction processing requirements for mobilized Army Reserve  soldiers. For example, military pay personnel at the Defense Military Pay  Office at Fort Eustis informed us that they did not receive any formal  training on active duty pay entitlements or DJMS-RC pay processing before  assuming their assigned responsibilities for mobilization and  demobilization pay processing. Instead, they stated they became  knowledgeable in mobilization and demobilization pay processing  procedures by processing hundreds of soldiers within 2 to 3 weeks of being  assigned these responsibilities. They also said they contacted full-time  civilians in the finance office, as well as Reserve Pay Center and DFAS  officials, by telephone for assistance.
Also, few of the Army finance personnel at overseas area servicing finance  offices were adequately trained in active duty pay entitlements and  processing procedures for mobilized Army Reserve soldiers. Specifically,  these key personnel with responsibility for location-based active duty  payments to mobilized Army Reserve soldiers deployed in Kuwait and Iraq  and surrounding areas did not receive formal training on pay eligibility and  DJMS-RC processing requirements before assuming their duties. USARC  Pamphlet 37-1 provides that an Army in-theater servicing finance office has  primary responsibility for supporting active duty payments to mobilized  Army Reserve soldiers when a reserve unit is deployed overseas. Camp  Arifjan was the Army location assigned responsibility for processing active  duty payments to mobilized Army Reserve soldiers deployed in Kuwait and  Iraq during 2003. Officials from the 336th Command, the Army command  with oversight responsibility for Camp Arifjan, confirmed that while  finance personnel at Camp Arifjan received training in the pay eligibility  and pay processing procedures for active duty Army soldiers, they were not  adequately trained in pay eligibility issues of Army Reserve soldiers.
We were told of instances in which Army finance personnel were unable to  help reserve soldiers resolve their pay problems. For example, the 948th  Forward Surgical Team contacted an Army finance unit located in  Kandahar, Afghanistan, to request its assistance in resolving the unit’s pay  problems. However, the finance personnel at that location were unable to  help resolve the 948th Forward Surgical Team’s pay problems because they  said they had not had training in this area and were not familiar with DJMS- RC processing requirements and procedures. All 20 soldiers with the 948th  Forward Surgical Team experienced pay problems associated with their  location-based payments related to their deployment in Afghanistan,  including hardship duty pay. These payments require manual entry every  month by the unit’s area servicing finance office.
Further, we saw little evidence that the unit commanders of our case study  units received any training for their role in supporting their unit  administrators in these important pay management responsibilities. For  example, at one of our case study units, the 965th Dental Company, the unit  commander informed us that he did not support the review of pay  management reports because soldiers had the capability to review their pay  online and would use this capability to identify and report any pay  problems. However, as discussed previously, we identified a number of  instances in which soldiers did not identify or report that they received  thousands of dollars in improper active duty payments.
section_title: Customer Service Breakdowns
paragraphs: Our audit work at eight case study units identified significant soldier  concerns with both the level and quality of customer service they received  related to their active duty pays, allowances, and tax benefits. The soldiers’  concerns centered around three distinct areas: (1) the accessibility of  customer service, (2) the ability of customer service locations to help  soldiers, and (3) the treatment of soldiers requesting assistance. Servicing  soldiers and their families with pay inquiries and problems is particularly  critical in light of the error-prone processes and limited automated system  processing capabilities. Ultimately, pay accuracy is left largely to the  individual soldier.
Although there are several sources that soldiers can turn to for pay issue  resolution, soldiers at our case study units experienced problems in  accessing these sources. Sources that soldiers can contact include their  home unit, the military pay section of the cognizant RRC, the  mobilization/demobilization station, the designated active Army area  servicing finance office in-theater, the online myPay system, and the 1-888- PAY-ARMY (729-2769) toll-free number. However, mission requirements  and the distance between deployment locations and field finance offices  often impaired the soldiers’ ability to utilize the in-theater customer service  centers. Also, soldiers did not always have Internet and telephone access to  use the myPay system or to contact customer service sources such as 1- 888-PAY-ARMY, the home unit, or the cognizant RRC. The lack of Internet  access for deployed soldiers was particularly problematic because it  limited soldiers’ access to pay, allowance, and tax benefit data reflected in  their leave and earnings statements. Lacking leave and earnings  statements, soldiers had no means to determine the propriety of their  active duty payments. For example, soldiers with the 948th Forward  Surgical Team told us that their inability to access the leave and earnings  statements adversely affected their overall morale.
Even when mobilized reservists were able to contact customer service  sources, their pay issues often continued because the office they were  instructed to contact was unable to address their inquiry or correct their  problem. In some cases, customer service sources failed to help soldiers  because they lacked an understanding of what was needed to fix the  problems. When representatives of the 948th Forward Surgical Team  contacted their parent company for help in correcting pay problems,  personnel with the parent company informed them that they could not fix  the unit’s pay problems because they (incorrectly) believed that the unit  was paid through the Army’s active duty Army system. Soldiers at other  units were redirected from one source to another. Soldiers were not aware  of which sources could address which types of problems, and more  significantly, the customer service sources themselves often did not know  who should correct a specific problem.
An Army Reserve major’s experience illustrates the time and frustration  that was sometimes involved with soldiers’ attempts to obtain customer  service for correcting errors in active duty pays, allowances, and related  tax benefits.
Individual Case Illustration: Extensive, Time-consuming Action  Required to Resolve Pay Issue A soldier from Maryland was mobilized in March 2003 from the Army’s  Individual Ready Reserve to active duty to serve as a liaison between the  Army and Air Force to help coordinate ground and air combat operations  in Iraq. After completing his 2-month active duty tour and returning to an  inactive reserve status in May 2003, he contacted Army officials to inform  them that he was continuing to receive active duty payments and  volunteered to immediately repay these erroneous overpayments. In July  2003, he wrote a check for $6,150.75 after receiving documentation  showing his debt computation. However, he continued to receive Leave  and Earnings Statements indicating that he had an outstanding debt. He  contacted his Army demobilization finance office to determine how to get  the erroneous outstanding debt removed from his pay records. After  being referred by officials at that location to various DFAS locations  (including once being told, “There is nothing more I can do for you.”), he  contacted us for assistance. After DFAS recomputed the soldier’s debt as  a result of our inquiry, the soldier was informed that he owed an  additional $1,140.54, because the original debt computation did not fully  consider the erroneous combat zone tax exclusion benefits he received.  Overall, he spent nearly a year after his 2-month active duty tour ended,  and about 20 phone calls, faxes, and letters in contacting at least seven  different DOD representatives at five different customer service centers  to correct active duty pay and allowance overpayments and associated  combat zone tax exclusion benefit problems.
Finally, soldiers expressed concern about the treatment they sometimes  received while attempting to obtain customer service. Soldiers felt that  certain customer service representatives did not treat soldiers requesting  assistance with respect. For example, one soldier who attempted to make  corrections to his DD Form 214, Certificate of Discharge or Release from  Active Duty, informed us that mobilization station personnel told him that  the citations and dates of service he was trying to add “didn’t matter” and  that he could fix them later. Additionally, some soldiers told us that while  they raised concerns about the quality of customer service they received  with respect to their pay inquiries and concerns, they were sometimes  ignored. For example, soldiers with Connecticut’s 3423rd Military  Intelligence Detachment told us that while they contacted the local  Inspector General when they believed that finance personnel at their  deployment location had both actively tried to impair the payment of their  active duty entitlements and had tried to intimidate and discourage the  unit’s soldiers from seeking help elsewhere, they were not aware of any  action taken as a result of their concerns. As a result, soldiers with the unit  told us they believed they had no recourse but to accept the poor treatment  they believed they received.
section_title: Automated Systems Deficiencies Constrain Accurate and Timely Payments
paragraphs: Weaknesses in automated systems contributed significantly to the  underpayments, overpayments, and late payments we identified. These  weaknesses consisted of (1) nonintegrated systems with limited system  interfaces and (2) limited processing capabilities within the pay system.  The Army and DFAS rely on the same automated pay system to authorize  and process active duty payments for Army Reserve soldiers as they use for  Army National Guard soldiers. In addition, similar to the Army National  Guard, the Army Reserve’s personnel and order-writing systems are not  integrated with the pay system. Consequently, many of the systems  problems experienced by mobilized Army Reserve soldiers were similar to  those that we identified in our report on pay issues associated with  mobilized Army National Guard soldiers.
Because of the automated systems weaknesses, both Army Reserve and  active Army personnel must put forth significant manual effort to  accurately process pays and allowances for mobilized Army Reserve  soldiers. Moreover, to compensate for the lack of automated controls over  the pay process, both DFAS and the Army place substantial reliance on the  review of pay reports to identify pay errors after the fact. Part of this  reliance includes the expectation that soldiers review their own leave and  earnings statements, even though these statements do not always provide  clear explanations of all payments made. Finally, because of DJMS-RC’s  limitations, the system cannot simply stop withholding taxes for soldiers in  designated combat zone locations. Instead, for these soldiers, the system  withholds taxes and then reimburses the soldiers the amount that should  not have been withheld at least a month after the soldiers were first entitled  to receive this benefit.
subsections: section_title: Automated Systems Are Not Integrated and Have Limited Interfaces
paragraphs: The key pay and personnel systems involved in authorizing, entering,  processing, and paying mobilized Army Reserve soldiers are not integrated  and have only limited interfaces. Figure 2 provides an overview of the key  systems involved in authorizing, entering, processing, and making active  duty payments to mobilized Army Reserve soldiers.
Lacking either an integrated or effectively interfaced set of personnel and  pay systems, DOD must rely on error-prone, manual data entry from the  same source documents into multiple systems. In an effectively integrated  system, changes to personnel records automatically update related payroll  records from a single source of data input. While not as efficient as an  integrated system, an automatic personnel-to-payroll system interface can  also reduce errors caused by repetitive manual data entry into more than  one system.
Because of the lack of effective integration or interfaces among key  personnel and pay systems, pay-affecting data recorded in the personnel  system are not automatically updated in the pay system. Therefore, pay- affecting personnel changes recorded in the personnel system must be re- entered into the pay system from hard copies of documents, such as  soldiers’ mobilization orders. We found numerous instances in which pay- affecting personnel information was not entered promptly into the pay  system, resulting in numerous pay errors.
Individual Case Illustration: Overpayment due to Lack of  Integrated Personnel and Pay Systems A soldier assigned to an Illinois Military Police Company received a  mobilization order in December 2002 to report to Fort Dix, New Jersey.  Data from her individual mobilization order were entered into DJMS-RC  and she began receiving active duty pays and allowances based on the  active duty mobilization date shown in her mobilization order. However,  her mobilization order was revoked in early January 2003 after she was  found to be ineligible for mobilization. But, because of the lack of  integration or an effective interface between personnel and pay systems,  this order was not automatically processed in DJMS-RC to stop the  soldier’s active duty pay. Consequently, the soldier was overpaid from  December 2002 through May 2004. Overpayments to the soldier totaled  over $24,000.
We found several instances in which soldiers that were promoted while on  active duty did not receive their pay raises when they should have because  the promotion information was not promptly recorded in DJMS-RC. For  example, one Army Reserve soldier’s promotion was effective on July 1,  2003. However, the soldier’s promotion was not processed in the pay  system until October 2003, which delayed an increase in both his basic pay  and basic allowance for housing. The soldier finally received his promotion  pay, including back pay, in late October 2003, resulting in late payments  totaling over $2,700.
Lacking an effective interface between pay and personnel systems, DOD  and the Army must rely on after-the-fact detective controls, such as pay and  personnel system data reconciliations, to identify and correct pay errors  occurring as a result of mismatches between personnel (TAPDB-R) and pay  system (DJMS-RC) data. In this regard, the Army Reserve has an automated  reconciliation tool—the Participation Management and Reporting  Subsystem (PMARS)—to help identify data inconsistencies between pay  and personnel systems. Specifically, the Army Reserve uses PMARS to  identify mismatches of soldiers accounted for in one system and not in the  other, and to compare the systems’ information on individual soldiers, such  as their ranks and dates of service. However, this tool is not effective in  identifying soldiers that are being paid for active duty while in inactive  status because TAPDB-R currently does not capture and maintain this  information.
Although TAPDB-R maintains a “deployability” code, this code does not  necessarily indicate whether or not a soldier is on active duty. If TAPDB-R  included a code that specifically identified soldiers on active duty, then the  PMARS comparison of TAPDB-R data with DJMS-RC data could help  identify those soldiers improperly receiving active duty pay.
section_title: Limited Automated Processing Capabilities
paragraphs: DJMS-RC was not designed to pay Army Reserve soldiers for active duty  tours longer than 30 days. According to DOD officials, requiring DJMS-RC  to process various types of pays and allowances for active duty tours that  exceed 30 days has stretched the system’s automated processing  capabilities to the limit. Because of the system’s limitations, the Army and  DFAS were required to make repetitive manual inputs for certain active  duty pays, such as hardship duty pay. We found many instances in which  these manual inputs resulted in payment errors. Moreover, because of the  way in which hardship duty pay was processed, mobilized Army Reserve  soldiers could not always determine whether they received all of their  entitled pays and allowances. In addition, under current processing  limitations, DJMS-RC does not process a required tax exclusion promptly  for soldiers in a combat zone, which has resulted in late payments of this  benefit for all entitled Army Reserve soldiers.
section_title: Hardship Duty Pay
paragraphs: During our audit period, we found numerous errors in hardship duty pay as  a result of a DJMS-RC processing limitation that required the use of a  miscellaneous payment code for processing this type of pay. Because of the  use of this miscellaneous code instead of a code specifically for hardship  duty pay, this pay could not be automatically generated on a monthly basis  once a soldier’s eligibility was established. Therefore, hardship duty pay  had to be manually input every month for eligible soldiers. As previously  discussed, reliance on manual processing is more prone to payment errors  than automated processing.
We found that nearly all soldiers in our case studies who were eligible for  hardship duty pay experienced problems with this pay, including late  payments, underpayments, and overpayments. For example, the 965th  Dental Company’s soldiers at Seagoville, Texas, experienced both  underpayments and overpayments. Specifically, all 85 soldiers deployed to  Kuwait were underpaid a total of approximately $8,000 for hardship duty  pay they were entitled to receive during their deployment overseas.  Subsequently, 76 of the unit’s soldiers were overpaid a total of almost  $47,000 because they continued to receive hardship duty payments for  more than 6 months after they had left the designated hardship duty  location.
Both underpayments and overpayments, as well as late payments, of  hardship duty pay occurred largely because of the reliance on manual  processing of this pay every month. The errors often occurred because  local area servicing finance office personnel did not receive accurate or  timely documentation such as flight manifests or data from the Tactical  Personnel System indicating when soldiers arrived or left the designated  hardship duty location. As a result, finance personnel did not start these  payments on time, and did not stop these payments as of the end of the  soldiers’ active duty tour date recorded in DJMS-RC.
The DJMS-RC system processing limitation that led to using the systems’  miscellaneous code to process hardship duty pay, also contributed to  overpayments of this active duty pay. That is, finance personnel mistakenly  continued to manually enter transactions to process hardship duty pay to  soldiers beyond soldiers’ end of active tour dates because DFAS had no  way of implementing a system edit that could identify and stop erroneous  hardship duty pay while permitting other types of transactions processed  using this code to continue.
Similarly, no edit was in place to prevent duplicate payments of hardship  duty pay. As a result, hardship duty pay could be entered more than once  for a soldier in a given month without detection. From our case studies, we  identified three soldiers who each received two hardship duty payments for  one month. None of these duplicate payments was identified or collected  until we submitted inquiries about these soldiers’ payments to the Reserve  Pay Center. In addition, we were told that soldiers had difficulty  determining that they received duplicate hardship duty payments because  this type of payment was not clearly identified on their leave and earnings  statement.
Use of the miscellaneous payment code also made it difficult for soldiers to  understand, and determine the propriety of, some of the payments  reflected on their leave and earnings statements. Hardship duty pay and  other payments that are processed using the miscellaneous payment code  are reported on leave and earnings statements as “other credits.”  Furthermore, the leave and earnings statements did not provide any  additional information about what the “other credits” were for unless pay  clerks entered additional explanations in the “remarks” section of the  statement, which they rarely did. As a result, soldiers often had no means  to determine if these types of payments were accurate.
Unit commanders told us that they relied on soldiers to identify any pay  problems based on their review of their leave and earnings statements.  However, because leave and earnings statements do not always provide  adequate information or are not available to soldiers while they are  deployed, reliance on the soldiers to identify pay errors is not an effective  control.
subsections: section_title: Combat Zone Tax Exclusion
paragraphs: In addition to soldiers’ pay problems that occurred primarily because of the  extensive use of manual processes, soldiers also experienced systematic  problems with automated payments related to their combat zone tax  exclusion, which resulted in late payments of this benefit for all soldiers in  the seven case study units that deployed overseas. Soldiers are entitled to  the combat zone tax exclusion for any month in which the soldier performs active service in a designated combat zone area. For any applicable  month, this benefit applies to the entire month, rather than being prorated  based on the number of days the soldier was in the combat zone.
However, because DJMS-RC was designed as a pay system for inactive  Army Reserve soldiers, it does not have the processing capability to  suspend withholding of federal and state income taxes applicable to pay  that is ordinarily taxable. Instead, as a workaround procedure to  compensate for this limitation, the system first improperly withholds taxes  applicable to payments made while soldiers are in a combat zone, then  later reimburses soldiers for these withheld amounts in the following  month. For example, when an Army Reserve soldier is assigned to a  location where he is entitled to receive tax-free active duty pays, DJMS-RC  (improperly) withholds taxes from at least the soldier’s first one or two  active duty payments. Subsequently, during the first pay cycle of the  following month, DJMS-RC reimburses the soldier for the amount of taxes  improperly withheld during the previous month. As a result of this  workaround process, all Army Reserve soldiers who served in a combat  zone received their combat zone tax exclusion benefit at least one month  late.
DJMS-RC processing limitations cause further delays in soldiers’ receipt of  entitled combat zone tax benefits when soldiers arrived in a combat zone  after the midmonth cutoff, which is approximately on the 7th day of each  month. In these cases, entitlement to the tax exclusion is not recognized  until the following month, which then delays the soldier’s receipt of his  combat zone tax benefit until the next month—the third month the soldier  is deployed in the combat zone. For example, members of the 824th  Quartermaster Company that deployed to Afghanistan arrived in country  on July 14, 2003, but did not receive their first combat zone tax exclusion  reimbursements until early October, almost 3 months after they became  eligible for the exclusion.
section_title: Recent Actions Should Result in Improvements
paragraphs: DOD and the Army have reported a number of relatively recent positive  actions with respect to processes, human capital practices, and automated  systems that, if implemented as reported, should improve the accuracy and  timeliness of active duty pays, allowances, and related tax benefits  provided to mobilized Army Reserve soldiers. The accuracy and timeliness  of payments to mobilized Army Reserve soldiers rely on many of the same  processes and automated systems used for payments to mobilized Army  National Guard soldiers. Consequently, actions to improve the accuracy  and timeliness of Army Reserve soldier payments are closely tied to actions  taken in response to several of the recommendations in our November 2003  Army National Guard pay report.
Because many of DOD’s actions in this area were implemented in the fall of  2003 or later, they were not in place soon enough to have had a positive  impact on mobilized Army Reserve soldiers’ payments as of the January  2004 cutoff for the soldier pay data we audited. However, if implemented as  reported to us, many of DOD’s actions in response to our November 2003  report recommendations should help reduce the incidence of the types of  pay problems we identified for Army National Guard soldiers as well as  those identified in the Army Reserve case study units discussed in this  report.
With respect to the process deficiencies and related recommendations,  DOD reported implementing additional procedural guidance intended to  help minimize the pay problems attributable to nonstandard or unclear  procedures. For example, in June 2004, the Army issued a comprehensive  “Finance Mobilization and Demobilization Standing Operating Procedure.”  This guidance clarified pay management responsibilities and transaction  processing requirements to be followed for all Army Reserve and Army  National Guard soldiers mobilized to active duty. One of the purposes of  this guidance is to eliminate any questions regarding which DOD entity is  responsible for resolving a soldier’s pay issues or questions. Further, as of  January 2004, DOD reported establishing a new procedure under which  DFAS assumed responsibility (from the Army finance offices located in  various overseas locations) for all monthly manual entry of mobilized Army  Reserve and Army National Guard soldiers’ location-based hardship duty  pay.
DOD also reported completing several actions related to our previous  recommendations to improve the human capital practices related to  payments to mobilized Army soldiers. For example, the Army reported that  it had taken action to provide additional training for Army finance  personnel at overseas finance locations, mobilization and demobilization  stations, and for those Army finance personnel scheduled for deployment.  This training is directed at better ensuring that these personnel are  adequately trained on existing and new pay eligibility and pay processing  requirements for mobilized Army National Guard and Army Reserve  soldiers. DOD also reported establishing a new policy in January 2004  directed at more clearly affixing responsibility for addressing soldiers’ pay  problems or inquiries. Under this new policy, the Army National Guard  established a pay ombudsman to serve as the single focal point for ensuring  coordinated, prompt customer service on all Army National Guard soldiers’  pay problems. Thus far, DOD’s reported actions have not yet addressed,  and consequently we are reiterating, our previous human capital  recommendations with respect to (1) requiring unit commanders to receive  training on the importance of adhering to requirements to carry out  monthly pay management responsibilities, and (2) modifying existing  training policies and procedures to require active Army pay and finance  personnel who are responsible for entering pay transactions for mobilized  reserve component soldiers to receive appropriate training upon assuming  such duties.
With respect to automated systems, the Army and DFAS have  acknowledged serious deficiencies in the current automated systems used  to pay mobilized Army Reserve soldiers, and report that they have  implemented a number of significant improvements, particularly to reduce  an estimated 67,000 manual monthly entries for hardship duty pay. For  example, in response to our recommendations in the Army National Guard  report, DOD reported taking actions to (1) automate manual monthly  hardship duty pay in April 2004, (2) eliminate the use of the miscellaneous  code for processing hardship duty pay and instead process these payments  using a unique transaction code to facilitate implementing a system edit to  identify and stop erroneous payments, (3) compare active duty release  dates in the Army’s system used to generate Release From Active Duty  orders with soldiers’ end of active duty tour dates shown in DJMS-RC to  identify and stop any erroneous active duty pays, and (4) increase the  reliability and timeliness of documentation used to support soldiers’ arrival  at and departure from designated overseas locations.
However, DOD has not yet fully addressed, and consequently we are  reiterating two of our previous recommendations directed at interim  automated system improvements and one of our longer-term system  improvement recommendations. Specifically, we are reiterating previous  interim recommendations related to evaluating the feasibility of (1) using  the personnel-to-pay interface as a means to proactively alert pay  personnel of actions needed to start active duty pays and allowances and  (2) establishing an edit check and requiring approval before processing any  payments above a specified dollar amount.
DOD has a major system enhancement effort under way in this area—the  Defense Integrated Military Human Resources System (DIMHRS). As an  interim measure, DOD is now pursuing Forward Compatible Payroll (FCP).  FCP is intended to replace payroll systems now used to pay Army military  personnel and help eliminate several of the labor-intensive, error-prone  workarounds necessitated by current DJMS-RC processing limitations. As  of May 2004, FCP was expected to be operational for all Army Reserve  soldiers by March 2005.
We are also reiterating our previous longer term recommendation with  respect to taking action to ensure that DIMHRS and related efforts include  a complete reengineering of not only the related automated systems, but  the supporting processes and human capital practices used to pay  mobilized Army Reserve soldiers as well. Such fundamental reengineering  is necessary because, as discussed in the preceding sections, many of the  pay problems we found were associated with procedural and human  capital practice issues, as well as nonintegrated automated systems that  extend beyond existing pay system processing limitations.
section_title: Conclusions
paragraphs: The increased operating tempo for Army Reserve and Army National Guard  active duty mobilizations has stressed the current processes, human  capital, and automated systems relied on to pay these soldiers. The  significant number of problems we identified associated with active duty  pays, allowances, and related tax benefits provided to mobilized Army  Reserve soldiers at eight case study locations raises serious concerns about  whether current operations can be relied on to provide accurate and timely  payments. These pay problems caused considerable frustration, adversely  affected soldiers’ morale, and placed an additional, unnecessary burden on  both the soldiers and their families. Further, if not effectively addressed,  these pay problems may ultimately have an adverse impact on Army  Reserve reenlistment and retention.
Strengthening existing processes, human capital practices, and automated  systems is critical to preventing, or at minimum, promptly detecting and  correcting, the errors we identified. In this regard, DOD and the Army have  reported a number of relatively recent positive actions intended to improve  the accuracy and timeliness of active duty pays, allowances, and related tax  benefits provided to mobilized Army Reserve soldiers. DOD’s completed  and planned near-term actions, if implemented as reported, should reduce  the number of pay problems. However, mobilized Army Reserve soldiers  cannot be reasonably assured of accurate and timely active duty pays,  allowances, and related tax benefits until DOD completes a reengineering  of all the processes, human capital practices, and automated systems  supporting this critical area.
Fully and effectively addressing Army Reserve soldiers’ pay problems will  require priority attention and sustained, concerted, coordinated efforts by  DFAS, the Army, and the Army Reserve to build on actions taken and  planned. For these reasons, we are reaffirming two of our previous human  capital-related recommendations and three of our previous automated  systems-related recommendations from our November 2003 report on  payments to mobilized Army National Guard soldiers. However, we are also  offering 15 additional recommendations identified as a result of our audit  of mobilized Army Reserve soldiers’ pay experiences.
section_title: Recommendations for Executive Action
paragraphs: We recommend that the Secretary of the Army, in conjunction with the  Under Secretary of Defense (Comptroller), take the following 15 actions to  address the issues we found with respect to the existing processes,  personnel (human capital), and automated systems relied on to pay  activated Army Reserve soldiers.
Establish procedures for unit commanders and unit administrators, or  other designated officials (for soldiers transferred between units), to  reconcile the names of Army Reserve soldiers receiving active duty pay  with the names of Army Reserve soldiers reporting for duty at  mobilization stations.
Establish procedures for unit commanders and unit administrators, or  other designated officials, to provide the names and arrival dates for all  soldiers entering and exiting in-theater locations to a designated area  servicing finance office to facilitate accurate and timely payment of in- theater location-based active duty pays, allowances, and related tax  benefits.
Establish procedures to provide demobilization stations with a list of  soldiers returning from overseas that are scheduled to arrive at the  demobilization station for outprocessing.
Establish procedures to reconcile the names of Army Reserve soldiers  who recently demobilized with the names of Army Reserve soldiers still  receiving mobilization pay and take appropriate action to resolve any  identified pay issues.
Clarify policy concerning “thorough” review of soldiers’ pay records  upon initial mobilization to specify that finance personnel at Army  mobilization stations must conduct a one-on-one review of online pay  records for each mobilized soldier.
Establish procedures to ensure unit commanders and unit  administrators, or other designated officials, have online access to pay  management reports, such as the Unit Commander’s Pay Management  Report, particularly for mobilized units.
Clarify DJMS-RC procedures to specifically require unit commanders,  unit administrators, or other designated officials to review and reconcile  key pay and personnel data every month, including personnel records,  with the monthly Unit Commander’s Pay Management Report, for all  mobilized Army Reserve soldiers.
Clarify and simplify procedures and forms implementing the family  separation allowance entitlement policy, particularly with respect to the  30-day waiting period and commuting distance criteria.
Take appropriate action to address the issues of inadequate resources  provided to carry out key unit administrator pay management  responsibilities identified at our case study units, particularly with  respect to (1) vacancies in unit administrator positions resulting from  the requirement for dual status unit administrators and (2) lack of pay  management support for Army Reserve soldiers transferred between  units.
Determine whether issues of inadequate resources identified at our case  study units apply to other mobilized Army Reserve units and soldiers,  and if so, take appropriate action to address any deficiencies identified.
Evaluate the feasibility of establishing an ombudsman to serve as the  single focal point and have overall coordination responsibility and  visibility to ensure that all Army Reserve soldiers’ problems and  inquiries with respect to applicable active duty pays, allowances, and  related combat zone tax exclusion benefits are promptly and fully  resolved.
Interim Improvements to Current Automated Systems  Evaluate the feasibility of modifying the deployability code or adding  a duty status code in TAPDB-R that can be compared with the pay  status code field in DJMS-RC to assist in identifying pay errors  resulting from discrepancies between the soldiers’ duty status and  pay status.
Evaluate the feasibility of modifying DJMS-RC to suspend  withholding taxes from soldiers when they serve in designated tax- exempt combat zones.
Evaluate the feasibility of establishing a system edit to prevent DJMS- RC from generating payments for active duty service to soldiers after  their date of demobilization from active duty.
Address the deficiencies noted in this report as part of the functional  requirements for the FCP and DIMHRS system development efforts  currently under way.
section_title: Agency Comments and our Evaluation
paragraphs: In its written comments, DOD concurred with our recommendations and  stated its actions to address the identified deficiencies. Specifically, DOD’s  response outlined some actions already taken, others that are under way,  and further planned actions with respect to our recommendations. If  effectively implemented, these actions should substantially resolve the  deficiencies pointed out in our report. DOD’s comments are reprinted in  appendix X.
As agreed with your offices, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 30 days from its  date. At that time, we will send copies of the report to interested  congressional committees. We will also send copies of this report to the  Secretary of Defense; the Under Secretary of Defense (Comptroller); the  Secretary of the Army; the Director of the Defense Finance and Accounting  Service; and the U.S. Army Reserve Command. We will make copies  available to others upon request. In addition, the report will be available at  no charge on the GAO Web site at http://www.gao.gov. If you or your staffs  have any questions regarding this report, please contact me at (202) 512- 9095 or kutzg@gao.gov or Geoffrey Frank, Assistant Director, at (202) 512- 9518 or frankg@gao.gov.
section_title: Scope and Methodology
paragraphs: To obtain an understanding and assess the processes, personnel (human  capital), and systems used to provide assurance that mobilized Army  Reserve soldiers were paid accurately and on time, we reviewed applicable  laws, policies, procedures, and program guidance; observed pay processing  operations; and interviewed cognizant agency officials. The key laws,  policies, and procedures, we obtained and reviewed included  10 U.S.C. Section 12302;   DOD Directive Number 1235.10, “Activation, Mobilization &  Demobilization of the Ready Reserve;”
DOD FMR, Volume 7A, “Military Pay Policy and Procedures Active Duty  and Reserve Pay;”
USARC Regulation 37-1, “Financial Administration: USAR Financial  Management and USAR Support;”
USARC Pamphlet 37-1, “Defense Joint Military Pay System – Reserve  Component (DJMS-RC) Procedures Manual;”
Army Regulation 600-8-101, “Personnel Processing (In-, Out-, Soldier  Readiness, Mobilization, and Deployment Processing);”  the Army’s Consolidated Personnel Policy Guidance for Operations  Noble Eagle and Enduring Freedom, September 2002; and   500-3-3, Reserve Component Unit Commander’s Handbook;   500-3-4, Installation Commander’s Handbook; and  500-3-5, Demobilization Plan.
We also reviewed various Under Secretary of Defense memorandums, a  memorandum of agreement between Army and DFAS, and DFAS, Army,  Army Forces Command, and Army Reserve Command guidance applicable  to pay for mobilized reserve component soldiers. We also used the internal control standards provided in the Standards for Internal Control in the  Federal Government.
We applied the policies and procedures prescribed in these documents to  the observed and documented procedures and practices followed by the  various DOD components involved in providing active duty pay to Army  Reserve soldiers. We also interviewed officials from USARC, RRCs, Army  Reserve Regional Readiness Commands, Army Central Command, Army  and DOD military pay and personnel offices, Army Finance Command,  DFAS, and unit commanders and unit administrators to obtain an  understanding of their experiences in applying these policies and  procedures. From these interviews, we also obtained information on  examples of recent mobilized Army Reserve pay problems they  encountered in the course of their work.
In addition, as part of our audit, we performed a review of selected edit and  validation checks in DJMS-RC. Specifically, we obtained documentation  and performed walk-throughs associated with DJMS-RC edits performed  on pay status/active duty change transactions, such as those to ensure that  tour start and stop dates matched MMPA dates and that the soldier cannot  be paid basic pay and allowances beyond the stop date that was entered  into DJMS-RC. We also obtained documentation on and performed walk- throughs of the recently implemented personnel-to-pay system interface  process, the order writing-to-pay system interface process, and on the  process for entering mobilization information into the pay system. We did  not independently test DOD’s reported edit and validation checks in DJMS- RC, but we held interviews with officials from U.S. Army Reserve  Headquarters, Army Finance Command, and DFAS-Indianapolis to  supplement our documentation and walk-throughs.
Because our preliminary assessment determined that current operations  used to pay mobilized Army Reserve soldiers relied extensively on error- prone manual entry of transactions into multiple, nonintegrated systems,  we did not statistically test current processes and controls. Instead, we  used a case study approach to provide a more detailed perspective of the  nature of any deficiencies in the three key areas of processes, people  (human capital), and automated systems relied on to pay mobilized Army  Reserve soldiers. Specifically, we gathered available data and analyzed the  pay experiences of Army Reserve soldiers mobilized to and demobilized  from active duty in support of Operations Noble Eagle, Enduring Freedom,  and Iraqi Freedom during the period from August 2002 through January  2004. We audited the pay experiences of soldiers in the following eight  Army Reserve units as case studies of the effectiveness of the processes,  human capital practices, and automated systems in place over active duty  pays, allowances, and related tax benefits:  824th Quartermaster Company, Fort Bragg, N.C.   965th Dental Company, Seagoville, Tex.  948th Forward Surgical Team, Southfield, Mich.  443rd Military Police Company, Owings Mills, Md.
FORSCOM Support Unit, Finksburg, Md.  629th Transportation Detachment, Fort Eustis, Va.  3423rd Military Intelligence Detachment, New Haven, Conn.  431st Chemical Detachment, Johnstown, Pa.
From the population of Army Reserve units mobilized and demobilized  between August 2002 and January 2004, we selected units from various  specialties that represented the wide variety of missions performed by the  Army Reserve during wartime. These case studies are presented to provide  a more detailed view of the types and causes of any pay problems  experienced by these units as well as the financial impact of pay problems  on individual soldiers and their families.
We used mobilization data supplied by the Army Reserve Headquarters  Operations Center to assist us in selecting the eight units we used as our  case studies. We did not independently verify the reliability of the  Operations Center database. We used the data to select RRCs that had a  large number of activated Reserve units that had mobilized, deployed, and  returned from their tour of active duty in support of Operations Noble  Eagle, Enduring Freedom, and Iraqi Freedom. From the list of units  assigned to these Readiness Commands, we selected our eight case studies  that had a variety of deployment locations and missions, including both  overseas and continental U.S. deployments. In addition to our case studies,  during our visits to Army mobilization locations, we interviewed small  numbers of soldiers currently in the process of returning from active duty  to obtain their perspectives on their experiences with active duty pays,  allowances, and related tax benefits.
We also obtained testimonial data from soldiers at several of our case study  units. We asked numerous soldiers at these units to discuss pay-related  experiences during their deployment. The information we obtained during  these interviews is presented to provide further insight into the pay  experiences of Army Reserve soldiers who were mobilized under current  military operations, but is not intended to be representative of the views of  all soldiers in their units nor of those of Army Reserve soldiers overall.
We used DJMS-RC pay transaction extracts for the period from August 2002  through January 2004 to identify pay problems associated with our case  study units. However, we did not perform an exact calculation of the net  pay soldiers should have received in comparison with what DJMS-RC  records show they received. Rather, we used available documentation and  follow-up inquiries with cognizant personnel at the Army Reserve  Command, Regional Readiness Commands, and the Reserve Pay Center at  Fort McCoy, Wisconsin, to determine if (1) soldiers’ entitled active duty pay  and allowances were received within 30 days of their initial mobilization  date, (2) soldiers were paid within 30 days of the date they became eligible  for active duty pay, allowances, and entitlements associated with their  deployment locations, and (3) soldiers stopped receiving active duty pay  and allowances as of the date of their demobilization from active duty. For  the pay problems we identified, we counted them as problems only in the  phase (mobilization, deployment, and demobilization) in which they first  occurred even if the problems persisted into other phases. For purposes of  characterizing pay and allowance problems for this report, we defined  overpayments and underpayments as those that were in excess of  (overpayment) or less than (underpayment) the entitled payment. We  considered as late payments any active duty pay or allowance paid to the  soldier over 30 days after the date on which the soldier was entitled to  receive such payments. As such, these payments were those that, although  late, addressed a previously unpaid entitlement. We used available data  through February 2004, as well as dollar amounts reported by Reserve Pay  Center officials, to determine collections against identified overpayments  through February 2004. In addition, while we did not attempt to calculate  the exact impact of any soldier’s over-, under-, and late payments on their  combat zone tax exclusion benefits, we did examine readily available data  to determine the extent to which our case study unit soldiers’ received their  entitled combat zone tax exclusion benefits.
Our audit results only reflect problems we identified. Soldiers in our case  study units may have experienced additional pay problems that we did not  identify. Further, our work was not designed to identify, and we did not  identify, any fraudulent pay and allowances to any mobilized Army Reserve  soldiers. However, to the extent we identified any problems with our case  study unit soldiers’ active duty pays, allowances, tax benefits, and related  collections, we provided documentation showing the results of our analysis  to appropriate Army Reserve officials for a complete review of all soldier  pay records to determine whether, and take appropriate action if,  additional amounts are owed to the Army Reserve soldiers or to the  government.
We briefed officials of the DOD Comptroller, Army Finance Command,  Army Reserve Command, Army Reserve Regional Readiness Commands,  Army Forces Command, and DFAS-Indianapolis on the details of our audit,  including our findings and their implications. On July 9, 2004, we requested  comments on a draft of this report. We received comments on August 11,  2004, from the Under Secretary of Defense (Comptroller) and have  summarized those comments in the section of this report entitled “Agency  Comments and Our Evaluation.” DOD’s comments are reprinted in  appendix X. We conducted our audit from November 2003 through June  2004 in accordance with U.S. generally accepted government auditing  standards.
section_title: 824th Quartermaster Company, Fort Bragg, North Carolina
paragraphs: Beginning on February 2, 2003, the 824th Quartermaster Company was  called to active duty for up to a year in support of Operation Enduring  Freedom. A total of 68 soldiers from the 824th Quartermaster Company  mobilized at Fort Bragg, North Carolina, and went through in-processing at  Fort Bragg’s mobilization station in the first few weeks of February. Over  the next several months, members of the unit performed their mission of  rigging parachutes for individual soldiers and large equipment drops at Fort  Bragg, in Afghanistan, and in and around Kuwait. On April 6, 2003, 44  members of the 824th Quartermaster Company deployed to Kuwait to assist  in parachute preparations. After completing their mission, the soldiers  returned to Fort Bragg 2 months later on June 19. Another 5 soldiers from  the unit deployed to Afghanistan on July 14 and performed similar  parachute rigging duties, returning to Fort Bragg on September 1, 2003. The  other 19 soldiers in the unit remained at Fort Bragg for the entire duration  of their tour of duty where they assisted in parachute rigging at the base.  Beginning on July 15, 2003, soldiers in the 824th Quartermaster Company  began to demobilize and return to their civilian jobs, and by the end of  September 2003, all but one soldier had been released from active duty. The  soldier that remained on active duty was receiving medical treatment for  injuries related to his military service. A time line of actions associated  with the unit’s active duty mobilization is shown in figure 3.
As summarized in table 4, at every stage of the unit’s tour of active duty,  soldiers experienced a variety of pay problems. Fifty-eight of the 68  soldiers in the 824th Quartermaster Company experienced at least one pay  problem associated with their activation to, during, or deactivation from  active duty in support of Operation Enduring Freedom. Specifically, (1) we  found that 11 soldiers experienced underpayments, overpayments, or late  payments during their initial mobilization; (2) 50 soldiers experienced  underpayments, overpayments, or late payments during their tour of active  duty at Fort Bragg, in Afghanistan, and in and around Kuwait, including in- theater incentives such as hostile fire pay; and (3) 13 soldiers experienced  underpayments, overpayments, and/or late payments associated with their  demobilization, with most of the problems relating to the continuation of  active duty pay after demobilization.
The dollar amounts associated with overpayments, underpayments, and  late payments we identified were approximately $60,000, $10,000, and  $3,000, respectively. Of the overpayments we identified, about $2,000 was  subsequently collected from the unit’s soldiers. Almost $18,000 of the  overpayments we identified was associated with one soldier, who  continued to receive active duty pay for more than 5 months after his  discharge from the Army.
subsections: section_title: Mobilization Pay Problems
paragraphs: As summarized in table 5, we found that 11 soldiers from the 824th  Quartermaster Company experienced underpayments, overpayments, or  late payments related to basic pay and associated entitlements when called  to active duty. For example, we identified several soldiers who received  their $250 per month family separation allowance even though they  performed their military duty at Fort Bragg, their home station, and were  not separated from their families as provided by the DOD FMR Volume 7A.  The soldiers were not informed by pay technicians at the unit or their  mobilization station that they were not entitled to the family separation  allowance if their home of record was within a reasonable commuting  distance, generally 50 miles, even though the soldiers were staying at Fort  Bragg.
Prior to being mobilized, the soldiers in the 824th Quartermaster Company  attended a SRP at their unit’s home station. The purpose of this review was  to ensure that all soldiers had all required administrative paperwork,  financial documents, and were physically fit for the ensuing mobilization.  Members of the 81st Regional Readiness Command and unit members of the  824th Quartermaster Company, who conducted the finance portion of the  SRP, were required to verify the soldiers’ supporting financial  documentation, and, if necessary, submit transactions with the necessary  supporting documentation to the Reserve Pay Center at Fort McCoy to  update the soldiers’ Master Military Pay Accounts to reflect their mobilized  status. After performing the SRP at the unit’s home station, the 824th  Quartermaster Company reported to Fort Bragg, its active Army  mobilization station. Fort Bragg personnel conducted a second SRP that  was intended, in part, to verify each soldier’s pay account with supporting  finance documents. However, instead of conducting the required review of  each soldier’s pay record, Fort Bragg’s finance personnel performed only a  perfunctory review of the soldiers’ supporting documents. According to  finance personnel at Fort Bragg’s mobilization station, the physical layout  of the in-processing station did not allow them to sit with each soldier “one  on one” to compare their pay account as shown in DJMS-RC with the  soldier’s pay supporting documentation in real time.
The perfunctory review and oversights during the SRPs at the home station  and mobilization station allowed several soldiers to receive FSA when they  were not entitled to receive it. A review by personnel at the SRP should  have identified that the soldiers were not separated from their families as  required, and therefore they would not have signed off as approvers of the  entitlement forms. A lack of adequately trained staff with enough time to  review the unit’s pay forms may have caused this pay error.
Missing or noncurrent documentation required to support active duty pays  and allowances at the time of the SRP contributed to some of the late pays  and allowance payments we identified. For example, one soldier did not  receive family separation allowance payments because documentation  necessary to start this allowance was not submitted as part of the SRP  process, although the soldier was certified as ready for mobilization as a  result of the SRP. It was 6 months later, when the soldiers were  demobilizing at Fort Bragg, that the paperwork necessary to receive this  allowance was submitted to the Fort Bragg finance office. This soldier  received about 6 months of back pay in September 2003.
section_title: Pay Problems While Deployed
paragraphs: As summarized in table 6, we identified a number of problems associated  with the unit’s active duty pays and allowances.
During the soldiers’ deployment to Afghanistan and Kuwait, they  encountered pay problems related to payments for soldiers located in  designated hardship duty locations and hostile fire zones. Most soldiers did  not receive the full amount of hardship duty pay payments while deployed.  In addition, they continued to receive their hardship duty pay well after  they had returned to Fort Bragg and demobilized. All 49 soldiers deployed  overseas were incorrectly paid for either hardship duty or hostile fire pay.
Army area servicing finance officials, who had responsibility for initiating  these entitlements, did not initiate the unit’s hardship duty pay payments  until several months after the unit had arrived. The delay resulted in the  deployed soldiers being underpaid for most of their time in the hardship  duty location.
Local active Army finance officials also did not terminate payments of  hardship duty pay until 5 months after the soldiers had left the hardship  duty pay location, in most cases. This erroneous continuation of hardship  duty payments may have been the result of pay clerks continuing to  manually process these payments each month using a roster of soldiers in  the country that did not properly reflect the unit’s departure from the  overseas deployment location. In addition, the DJMS-RC system processing  procedures in place at the time required that hardship duty pay be  processed using a miscellaneous payment code that could be used for a  variety of payments. The use of this miscellaneous code for hardship duty  pay precluded the system from identifying the payments as active duty pay  and therefore allowed these payments to continue after the soldiers were  demobilized. The use of the miscellaneous payment code also led to soldier  confusion because the Leave and Earning Statement did not identify the  nature of the entitlement.
In addition, soldiers who deployed to Afghanistan told us that in some  cases, they had trouble finding in-theater finance officers willing to help  them with their pay problems. The soldiers stated that when they arrived in  Afghanistan, the finance office on duty at the time was preparing to return  to the United States because its tour in the country was ending. Several  weeks passed before the transition of finance offices was complete, and in  that time the Reserve soldiers did not have any local support that would  assist them with finance problems. This gap in a functioning supporting  finance office for the deployed soldiers could only have added to their  frustration and confusion over in-theater pays.
In addition to the problems soldiers experienced related to their pay and  entitlements, they also experienced systematic problems related to their  combat zone tax exclusion benefits. All 49 of the soldiers from the 824th  Quartermaster Company who deployed overseas were eligible for this tax  benefit and all of them experienced some type of problem with their  combat zone tax exclusion. Specifically, we found that all 49 soldiers  received their combat zone tax exclusion late, totaling about $20,000. Five  soldiers did not receive all of the combat zone tax exclusion benefits they  were due during their deployment. Moreover, the soldiers who deployed to  Afghanistan did not have the combat zone tax exclusion applied to their  pay until nearly 3 months after they arrived in the country, and never  received their combat zone tax exclusion benefit for September 2003. The  error for the month of September caused over $1,300 of extra taxes to be  collected from these soldiers while in a combat zone.
section_title: Pay Problems Associated with Demobilization and Release from Active Duty
paragraphs: Soldiers of the 824th Quartermaster Company began to demobilize in July  2003. As summarized in table 7, during their demobilization and after their  release from active duty, soldiers continued to experience pay problems.  These problems were primarily overpayments associated with soldiers  receiving pay after their active duty demobilization dates.
The largest pay problem related to the 824th Quartermaster Company’s  demobilization involved a soldier who was put into a medical hold  company. The soldier initially mobilized with the unit in February, and was  in-processed by personnel at Fort Bragg. During the in-processing, it was  determined that the soldier had a medical condition that did not allow him  to mobilize with the unit and perform his duty. He was then transferred to a  medical holding company under the command of the Fort Bragg Garrison  Support Unit. In this unit, the soldier underwent treatment for his condition  and concluded that treatment in August 2003. On August 13, 2003, the  soldier was discharged entirely from the Army and his pay should have  stopped on that date. According to DFAS guidance, several locations can  initiate transactions to stop a soldier’s pay. The primary location is the  demobilization station where the soldier receives his or her DD Form 214,  Certificate of Discharge or Release from Active Duty. As a secondary catch,  the Reserve Pay Center at Fort McCoy can also stop the soldier’s pay on his  or her release date.
Although the soldier did out-process through Fort Bragg and received his  DD Form 214, personnel at the demobilization station at Fort Bragg did not  amend the soldier’s pay record to cut off pay on August 13. The unit also  did not take any action to stop the soldier’s pay because the soldier should  have been off of its pay records and in the pay records of the medical hold  company. This had not been done and the result was that the medical hold  company could not view the soldier’s pay records but knew he was  discharged. Meanwhile, the unit could view the pay records but, under  current procedures, did not receive a copy of the DD Form 214 showing the  soldier had been discharged. Ultimately, the soldier’s pay and allowances  were stopped only as a result of actions we took. Specifically, in August  2003, the soldier contacted his old unit, the 824th Quartermaster Company,  and faxed them a copy of his DD Form 214. At this point the unit had all  necessary documentation to identify the overpayment to the soldier after  his discharge date of August 13, but did not review the pay records and  identify the problem. The soldier continued to get paid until the end of  January 2004 when we identified the error, which resulted in an  overpayment of almost $18,000. Finally, after we brought the error to the  unit’s attention, the unit requested that the Reserve Pay Center at Fort  McCoy stop the soldier’s pay and initiate collection.
section_title: 965th Dental Company Seagoville, Texas
paragraphs: On February 9, 2003, the 965th Dental Company was called to active duty in  support of Operation Enduring Freedom for an initial 1-year tour. The unit  mobilized at its home station, Seagoville, Texas, on February 11, 2003, and  reported for active duty at Fort Hood, Texas, on February 14, 2003. On  March 23, 2003, the 965th Dental Company deployed to Camp Arifjan,  Kuwait, to provide dental services to Army soldiers involved in military  operations in Iraq and surrounding areas. Upon completion of its mission,  the company redeployed from Kuwait to Fort Hood in two separate groups;  the first group returned on May 22, 2003, and the second on June 10, 2003.  Within a few days of returning to Fort Hood, soldiers were sent home and  following end-of-tour leave were discharged from active duty. By the end of  July 2003, all but three soldiers had been released from active duty. Two  soldiers remained on active duty because they were still receiving medical  treatment for injuries sustained during their deployment and one was still  deployed overseas at the time of our review. A time line of actions  associated with the unit’s active duty mobilization is shown in figure 4.
As summarized in table 8, soldiers of the 965th Dental Company  experienced various pay problems at every stage of the unit’s tour of active  duty. Overall, 89 of 93 mobilized soldiers experienced some type of pay  problem associated with their activation to, during, or deactivation from,  active duty in support of Operation Enduring Freedom. Specifically, 25  soldiers experienced underpayments, overpayments, or late payments  associated with their initial mobilization; 86 experienced underpayments,  overpayments, or late payments during their deployment to areas in and  around Kuwait, including in-theater incentives such as hostile fire pay and  hardship duty pay; and 7 soldiers experienced underpayments or  overpayments associated with their demobilization, including problems  related to the continuation of active duty pay after demobilization. One  soldier received $36,000 of active duty pay even though he never mobilized  with the unit. Another soldier incorrectly received hostile fire pay, hardship  duty pay, the family separation allowance, and the combat zone tax  exclusion benefit following his return home to recuperate from injuries  sustained overseas.
The dollar amounts associated with overpayments, underpayments, and  late payments we identified were approximately $100,000, $16,000, and  $27,000, respectively. Of the overpayments we identified, about $400 was  subsequently collected from the soldiers prior to the time we started our  audit.
subsections: section_title: Mobilization Pay Problems
paragraphs: As summarized in table 9, we found that 25 soldiers from the 965th Dental  Company experienced underpayments, overpayments, or late payments  related to basic pay and associated entitlements during mobilization  processing.
The unit administrator conducted a premobilization SRP review during  October 2002 at the unit’s home station. However, according to the unit  administrator, about 30 to 40 soldiers did not attend the SRP session  because the soldiers would have had to travel from distant locations, such  as Albuquerque, New Mexico, where they typically attended Army Reserve  inactive duty training, or for other reasons. Thus, when these soldiers  arrived at the unit’s home station prior to reporting to Fort Hood, the unit  administrator quickly performed the SRP process for them at that time.  However, instead of submitting necessary changes to soldiers’ pay  accounts to the Reserve Pay Center, the unit administrator waited until the  unit arrived at the Fort Hood mobilization station to submit them.  According to documentation obtained from the Reserve Pay Center, some  soldiers’ documentation was not submitted until March 22, 2003, a month  after the unit was mobilized. As a result, promotion pay increases and other  entitlements were paid over 2 months late. For 3 soldiers, correct  entitlements were not received until the soldiers returned from their  overseas tour.
Delays in submitting required forms and documentation were the primary  causes for late pay and entitlements. Also, three soldiers were overpaid pay  and benefits because their active duty pay was started too early. These  minor overpayments were collected from the soldiers’ pay during  demobilization out-processing. One soldier received double the amount of  basic allowance for housing, for an estimated overpayment of $6,600. In  addition, the process of paying soldiers their family separation allowance  was not consistently applied for the soldiers of the 965th Dental Company.  For example, a soldier from Gulfport, Mississippi, was paid family  separation allowance during his commute to the mobilization station;  however, a soldier from Claremore, Oklahoma, was not.
The lack of accountability for deploying soldiers resulted in one unit  soldier being paid active duty pay even though the soldier never mobilized  with the unit. This soldier received orders to mobilize with the unit, but  because the soldier had a disability that prevented his serving on active  duty, the unit commander excused the soldier from mobilization. However,  although unit personnel transferred the soldier to another unit that was not  mobilizing, no one canceled the soldier’s original mobilization order in the  Army Reserve personnel system, or notified the Reserve Pay Center to stop  the soldier’s active duty pay. In addition, unit personnel did not notify the  Fort Hood mobilization station that this soldier had received a mobilization  order so the mobilization station could confirm that the order had been  revoked and stop pay for this soldier. Further, the soldier receiving the  unauthorized pay did not report the overpayments to the unit to which he  had been transferred. Thus, the soldier received approximately $36,000 of  active duty pay for which he was not entitled. These overpayments  continued for more than 12 months and were not identified until we  discovered them during our visit to the unit in January 2004.
During our visit to the home station, we informed the unit commander  about the soldier’s overpayment and he stated that this soldier should not  be held responsible for repaying the overpayment because he believed the  soldier did nothing wrong or illegal. He also stated that he did not review  the Unit Commander’s Pay Management Report because the soldiers were  able to review their pay online. It is likely that the improper payments to  this soldier would have been identified if either the unit commander or unit  administrator had monitored the unit’s pay reports.
section_title: Pay Problems While Deployed
paragraphs: As summarized in table 10, we identified extensive problems associated  with active duty pays and allowances applicable to the unit’s overseas  deployment to Kuwait. In total, 86 soldiers experienced some type of pay  problem during the deployed phase, including one soldier who did not  deploy overseas, but received in-theatre incentives.
During the unit’s deployment to Kuwait, soldiers encountered pay  problems related to hardship duty pay, hostile fire pay, and the combat  zone tax exclusion, all of which are benefits eligible to soldiers when  serving in designated hardship duty locations and hostile fire zones. All 85  of the soldiers deployed overseas were incorrectly paid for either hardship  duty pay or hostile fire pay, most of which were overpayments.
In total, 85 soldiers did not receive the full amount of their hardship duty  pay entitlement while deployed to Kuwait. These soldiers were underpaid a  total of about $8,000. In addition, 76 soldiers continued to receive hardship  duty pay payments following their return from Kuwait. Sixty-six of these  soldiers continued receiving the payments for 6 or more months following  their return home. Overpayments made to all 76 soldiers amounted to  approximately $46,500. This amount does not include the overpayments  made to soldiers involving a type of hardship duty pay that is no longer paid  to soldiers serving in Kuwait.
In addition, we estimated that the combat zone tax exclusion benefit was  applied to 76 soldiers late or incorrectly. We estimated that approximately  75 soldiers received their combat zone tax relief benefits 2 to 3 months late,  which was after their deployment ended, totally $24,000. In addition, one  soldier did not receive all of the combat zone tax exclusion benefits she  was due during her deployment, resulting in an estimated $200  underpayment, while 2 other soldiers were overpaid for a combined  overpayment of about $300.
section_title: Pay Problems Associated with Demobilization and Release from Active Duty
paragraphs: Soldiers of the 965th Dental Company returned to Fort Hood in two  different groups; the first group returned on May 22, 2003, and the second  group returned on June 10, 2003. As summarized in table 11, 7 of 93 soldiers  had problems associated with properly stopping their active duty pays and  allowances during their demobilization.
Of the soldiers who experienced pay problems associated with this phase,  most had underpayments. One of the soldiers we reviewed had his active  duty pay stopped before his actual demobilization date and another  soldier’s special medical pay was stopped a month early. Each soldier was  underpaid an estimated $1,200. Another soldier’s active duty pay continued  past his demobilization date for an overpayment of approximately $1,400.
In addition, one soldier returned home early from deployment in May 2003  due to a medical emergency. However, his pay and entitlements were not  adjusted correctly. As a result, during his convalescence, much of which  was at his home, the soldier continued to receive hardship duty pay, hostile  fire pay, the family separation allowance, and the combat zone tax  exclusion through April 2004 when we brought the overpayments to the  unit’s attention.
section_title: 948th Forward Surgical Team, Southfield, Michigan
paragraphs: On January 20, 2003, the 948th Medical Detachment Forward Surgical (948th  Forward Surgical Team) was mobilized to active duty in support of  Operation Enduring Freedom for a 1-year tour. A total of 20 soldiers from  the 948th Forward Surgical Team, including four surgeons, mobilized at its  home station in Southfield, Michigan, and went through in-processing at  the mobilization station at Fort McCoy, Wisconsin. On February 28, 2003,  the unit deployed to Afghanistan through Baghram Air Base, Afghanistan.  Most of the 20 soldiers remained in Kandahar for about 5 months. While  there, the unit provided emergency medical attention to wounded soldiers  and civilians in and around Kandahar and prepared them for evacuation to  a combat support hospital. Two surgeons from the team returned in June  2003 and a third soldier returned in July 2003 as a result of a medical  condition and was released from active duty on September 27, 2003.  Sixteen of the remaining 17 soldiers returned to Fort McCoy on August 5,  2003, for demobilization and were released from active duty by August 29,  2003. The 948th Forward Surgical Team’s commander remained in  Afghanistan until August 8, 2003, when he returned to Fort McCoy for  demobilization and was released from active duty on September 4, 2003. A  time line of the unit’s movements associated with its mobilization under  Operation Enduring Freedom is shown in figure 5.
All 20 soldiers in the 948th Forward Surgical Team experienced one or more  pay problems associated with their 2003 mobilization to active duty. As  summarized in table 12, soldiers in the 948th Forward Surgical Team  experienced pay problems during all phases of their active duty  mobilization, with the majority of the problems encountered in the last two  phases. Specifically, we identified pay problems associated with (1) basic  active duty pay, special medical pays, or allowances for 5 soldiers during  the mobilization phase; (2) basic active duty pay, special medical pays,  allowances, combat zone tax exclusion, or an in-theater incentive pay  associated with the deployment phase for 20 soldiers; and (3) basic active  duty pay, special medical pays, or allowances associated with 18 soldiers’  demobilization from active duty.
In total, the pay problems we identified resulted in estimated overpayments  of about $20,700, underpayments of about $2,000, and late payments of  about $5,600. In addition, we identified about $15,300 and about $130 of  combat zone tax exclusions that were delayed or not refunded,  respectively. Available records showed that about $2,300 of the $20,700 in  identified overpayments were subsequently collected from the soldiers.
We were informed of several instances in which the unit’s pay problems  created financial hardships for the unit’s soldiers and their families.  Specifically, several of the unit’s soldiers could not pay their bills while they  were deployed and were forced to borrow money from friends and  relatives in order to meet their financial obligations.
subsections: section_title: Mobilization Pay Problems
paragraphs: As summarized in table 13, we found that five soldiers from the 948th  Forward Surgical Team experienced underpayments, overpayments, or late  payments related to their active duty pay and allowances associated with  their initial mobilization.
Five soldiers experienced a variety of pay problems associated with their  mobilization to active duty. For example, one physician was underpaid the  special medical pay he was entitled to receive while on active duty. In  January 2003, the physician began receiving special medical payments at a  rate lower than he was entitled to receive. In March 2003, DFAS identified  and corrected this error by paying the physician the correct special medical  pay. However, DFAS did not retroactively pay the physician the correct  medical pay covering the first 39 days he was on active duty.
Another soldier experienced a problem related to his basic pay. The soldier  had previously received a reduction in rank for not completing training  requirements. On February 12, 2003, the commanding officer signed an  order revoking the reduction in rank—after the unit was mobilized to  active duty, but before it was deployed to Afghanistan. The Reserve Pay  Center received the revocation order on March 7, 2003, but did not process  this personnel action until April 4, 2003, resulting in late payments totaling  an estimated $520.
section_title: Deployment Pay Problems
paragraphs: In late February 2003, the 948th Forward Surgical Team left Fort McCoy and  traveled to Afghanistan. While in Kandahar, the soldiers experienced  further pay problems related to hardship duty pay, hostile fire pay, and to a  lesser extent, active duty basic pay, basic allowance for housing, family  separation allowance, and special medical pays. They also experienced  problems with respect to their benefits associated with the combat zone  tax exclusion. Table 14 summarizes the pay, allowance, and tax benefit  problems that the 948th Forward Surgical Team encountered during its  deployment.
We found that 19 of the 20 soldiers did not receive their initial hostile fire  pay of $150 for February until an average of 47 days after arriving in  Afghanistan. We also found that one soldier never received her initial  hostile fire pay for February and March totaling $300. She also never  received a retroactive hostile fire payment of $75 for February 2003.
All 20 soldiers experienced problems with their hardship duty pay.  Nineteen of the 20 soldiers did not receive their hardship duty pay for  February 2003 until April 2003. For 13 of the 19 soldiers, their February  2003 hardship duty payment was not only late but contained an  overpayment because the payments covered a period when the soldiers  were still at Fort McCoy. Additionally, 19 soldiers continued to receive  hardship duty payments not only after they left the location for which they  were authorized to receive this pay, but for periods ranging from 1 to 5  months following demobilization.
All 20 soldiers waited 67 days before receiving their February combat zone  tax exclusion benefit payment, which averaged $377. We also found that  one soldier was not refunded the total amount of taxes withheld while in  combat zone tax exclusion status.
section_title: Pay Problems Associated with Demobilization and Release from Active Duty
paragraphs: Eighteen of 20 soldiers in the 948th Forward Surgical Team experienced pay  problems associated with their demobilization from active duty. Seventeen  of the unit’s soldiers returned to Fort McCoy in August 2003 to begin their  demobilization process. The other 3 left Afghanistan and returned to Fort  McCoy in June and July 2003. As summarized in table 15, soldiers were  overpaid their active duty basic pay, certain allowances, and special  medical pays after their release from active duty, while others never  received (and were therefore underpaid) all of the family separation  allowance or special medical pays they were entitled to receive.
We determined that 16 soldiers received 1 or more days worth of active  duty basic pay, special medical pays, or allowances after being released  from active duty. These pay problems occurred because the demobilization  station was late in entering transactions to stop pays and allowances as of  the date the soldiers were released from active duty.
section_title: 443rd Military Police Company, Owings Mills, Maryland
paragraphs: The 443rd Military Police Company, headquartered in Owings Mills,  Maryland, has been called to active duty twice since September 11, 2001.  However, only the second mobilization fell within the time period of our  case study analysis. The first mobilization (October 6, 2001, to September  2002) activated 112 soldiers to perform “secure and defend” functions at  Fort Sam Houston in support of Operation Noble Eagle. On February 24,  2003, 121 soldiers of the 443rd Military Police Company were mobilized with  the unit, including 76 who had returned from the deployment to Fort Sam  Houston 5 months prior to this mobilization and 25 soldiers who were  cross-leveled in from other units. These cross-leveled soldiers included 12  soldiers from Puerto Rico, 7 soldiers from Pennsylvania, 3 soldiers from  Maryland, and 1 soldier each from New Jersey, Virginia, and West Virginia.
In support of Operation Enduring Freedom, soldiers from the 443rd Military  Police Company reported to the home station in Owings Mills for a SRP  designed to help prepare them for mobilization. They later reported to Fort  Lee, Virginia on February 27, 2003, for additional mobilization and in- processing procedures. After approximately 2.5 months at Fort Lee, 112  soldiers arrived in Iraq on May 15. Of the 9 remaining soldiers, 1 soldier  arrived in Iraq earlier, on May 14, 1 soldier arrived on September 16, and 7  were on medical hold at Fort Lee for the entire mobilization. While in- theater, the 443rd Military Police Company operated a prison, Camp  Cropper, located near the Baghdad airport. On December 6, 2003, 112 of the  114 soldiers who deployed to Iraq left the Middle East and returned to Fort  Lee. One of the 2 other soldiers left early—on August 17—and the other left  later—on December 14. The soldiers of the 443rd Military Police Company  began demobilizing and returning to their civilian jobs on December 15. By  January 15, 2004, all but 6 of the 121 soldiers had demobilized; the 6  soldiers remained on active duty to receive medical treatment at Fort Lee.  A time line of actions associated with the unit’s active duty mobilization is  shown in figure 6.
As summarized in table 16, soldiers experienced a range of pay problems at  every stage of the 443rd Military Police Company’s tour of active duty.  Overall, 119 of 121 soldiers who mobilized experienced some type of pay  problem associated with their activation to, during, or deactivation from  federal service in support of Operation Enduring Freedom. Specifically, we  found that (1) 70 soldiers experienced underpayments, overpayments, or  late payments during their initial mobilization; (2) 114 soldiers experienced  underpayments, overpayments, or late payments during their tour of active  duty at Camp Cropper, Iraq; and (3) 17 soldiers experienced  underpayments, overpayments, or late payments during their  demobilization.
The dollar amounts associated with overpayments, underpayments, and  late payments we identified were approximately $25,000, $15,000 and  $20,000, respectively. In addition, soldiers received late payment of their  combat zone tax exclusion benefit totaling about $33,000. Of the  overpayments we identified, about $4,000 were subsequently collected  from the unit’s soldiers.
subsections: section_title: Mobilization Pay Problems
paragraphs: As summarized in table 17, we found that 67 soldiers from the 443rd Military  Police Company experienced overpayments, underpayments, or late  payments related to basic pay and the associated entitlements when called  to active duty.
Before arriving at the mobilization station, the 99th Regional Readiness  Command performed a SRP for the 443rd Military Police Company at their  home station. This review was designed to prepare soldiers for  mobilization by confirming that their financial documents and personnel  paperwork were in order, as well as verifying that the soldiers were  medically fit to mobilize. The finance portion of the SRP consisted of a  briefing that covered the different entitlements soldiers could expect to  receive and a review of how to read the soldiers’ Master Military Pay  Accounts. Soldiers who found errors in their individual accounts were  supposed to notify the Regional Readiness Command’s finance personnel  at the SRP, who would then process the corrections upon returning to their  headquarters and send the necessary documentation to Fort McCoy’s  Reserve Pay Center.
Upon reporting to Fort Lee, the 443rd Military Police Company’s active  Army mobilization station, the unit underwent a second SRP, as required by  Army regulations. However, despite going through two SRPs, the soldiers  still experienced various pay problems related to their mobilization.
For example, not all of the eligible soldiers in the 443rd Military Police  Company received the proper amount of family separation allowance.  Many of the unit’s soldiers began receiving family separation allowance  earlier than they should have, resulting in small overpayments that totaled  approximately $550 for the unit. In addition, 15 soldiers received late family  separation allowance payments during mobilization.
In addition, the soldiers of the 443rd Military Police Company also had  difficulties in starting their basic allowance for housing entitlements and  active duty basic pay. Ten soldiers experienced overpayments and 6  soldiers experienced underpayments of their basic allowance for housing.
The 12 soldiers cross-leveled into the 443rd Military Police Company from  Puerto Rico were not entitled to the basic allowance for housing type I  during their mobilization because they were classified as overseas soldiers.  Instead, these soldiers received basic allowance for housing type II, a cost  of living allowance and an overseas housing allowance. One soldier  received an overpayment of the cost of living allowance and 2 soldiers  received underpayments of their overseas housing allowance entitlements,  all of which occurred because these payments were based on incorrect  rates.
Four members of the unit experienced problems starting their active duty  basic pay. Two soldiers received a delay in their promotions, resulting in  nearly $500 in late payments. The two other soldiers had received  demotions that were not promptly entered into DJMS-RC. The first soldier’s  demotion had been effective at the start of the mobilization, but the soldier  continued to receive payments at the incorrect, higher rate until July 2003.  The resulting overpayments of active duty basic pay, totaling over $2,500,  were not identified by the Reserve Pay Center until we raised questions  about them.
The second soldier, however, incurred almost $6,400 in collections when  his demotion was processed 16 months after it became effective, and  despite the fact that his higher rank was restored shortly thereafter. His  demotion occurred because he had been unable to attend training to  maintain his rank before being mobilized for Operation Noble Eagle in  October 2001. During this mobilization, in February 2002, Army personnel  at the 99th Regional Readiness Command generated a grade reduction  order, but the transaction was not entered into DJMS-RC until June 2003, 4  months after the soldier’s mobilization for Operation Enduring Freedom  and after his deployment to Iraq. Although his previous grade was restored  in July 2003, the restoration was not retroactive, so the soldier still had to  pay back almost $6,400.
One problem that occurred during the mobilization process did not have an  immediate effect on the soldiers of the 443rd Military Police Company, but  rather later, during their deployment. In October 2003, 20 soldiers had their  basic allowance for housing switched from the regular entitlement to the  partial basic allowance for housing. In addition, another 16 soldiers had  their family separation allowance entitlements stopped. These changes  occurred because during the SRP process in February, finance personnel  failed to extend the dates of eligibility for the basic allowance for housing  and the family separation allowance to reflect the end date of the current  mobilization. Pay records showed that these 36 soldiers were entitled to  receive one of these entitlements through October 2003, exactly 2 years  after the date of the first mobilization. While the soldiers were paid for  active duty beyond the October end date of eligibility in the system, the  allowances were automatically turned off by the system. Most of these  problems were caught shortly after occurring and were corrected by the  end of the following month, resulting in about $5,750 of late payments.  However, 4 soldiers failed to have their entitlements turned back on,  resulting in total underpayments of $3,500.
Soldiers of the 443rd Military Police Company complained that finance  personnel at Fort Lee in March refused to help them and told soldiers that  they needed to contact their unit administrator to fix their problems. The  unit administrator, who did not mobilize with the unit, voluntarily went to  Fort Lee to help ensure that all of the Company’s soldiers’ pay issues were  addressed. However, finance personnel at Fort Lee asked him to leave after  he attempted to help resolve some of his unit’s pay problems. Despite  spending over 2 months at Fort Lee, many of the pay problems that began  during mobilization were not corrected by the time the soldiers deployed to  Iraq. In fact, 52 of the 121 soldiers left the mobilization station with  unresolved pay-related problems.
section_title: Pay Problems While Deployed
paragraphs: As summarized in table 18, we identified a number of pay problems  associated with active duty pays and allowances during the 443rd Military  Police Company’s deployment while on active duty.
While deployed in Iraq, all of the soldiers experienced problems related to  the location-based payments—specifically, problems with hardship duty  pay, hostile fire pay, and the combat zone tax exclusion. All of the 114  soldiers deployed to Iraq with the 443rd Military Police Company  experienced some sort of overpayment, underpayment, or late payment of  at least one of these three entitlements.
Soldiers in the 443rd Military Police Company were entitled to $100 per  month for hardship duty pay for serving in Iraq. However, officials at the  Army area servicing finance office paid the first partial month’s hardship  duty pay more than 2 months after it was due to 107 of the 114 soldiers  deployed to Iraq. Of the remaining 7 soldiers, 4 received hardship duty pay  on time and 3 never received the first partial month’s hardship duty pay  during our audit period. Additionally, none of the 113 soldiers remaining in  Iraq during December 2003 received any hardship duty pay payments for  the partial month they spent in-theater. Soldiers in the unit also  experienced assorted individual problems relating to the payment of the  hardship duty pay entitlement. For example, 1 soldier who remained on  medical hold at Fort Lee received hardship duty pay payments, totaling  over $350, despite never deploying. Two soldiers each received two  hardship duty pay payments in a given month, resulting in over $150 in  overpayments. Finally, one soldier continued to receive over $300 in  hardship duty pay payments after leaving Iraq in August 2003.
Of the 113 soldiers entitled to hostile fire pay during the deployment, 3  experienced some sort of problem with this pay. Two soldiers received  overpayments of hostile fire pay, including 1 soldier who continued to  receive hostile fire pay after he left the in-theater location and another  soldier who erroneously received $300 in hostile fire pay instead of the  correct $225 amount for 1 month. This second soldier also received part of  his May 2003 hostile fire pay 75 days after it was due. Finally, 1 other soldier  experienced a $450 underpayment of hostile fire pay because he stopped  receiving the entitlement before leaving Iraq.
Of the 114 soldiers deployed to Iraq, 112 received their first month’s combat  zone tax exclusion more than 30 days after they were entitled to it. This  resulted in late payments totaling over $33,000, more than the late  payments from all other sources combined. Additionally, 3 soldiers  experienced overpayments and underpayments related to the combat zone  tax exclusion. One of these soldiers erroneously received over $250 as a  combat zone tax exclusion repayment related to a bonus payment that was  taxable. Another soldier did not receive his combat zone tax exclusion  repayment for the last 2 months of his mobilization, creating an  overwithholding of over $400.
We were unable to determine the extent to which one additional soldier in  the unit experienced problems with his combat zone tax exclusion,  hardship duty pay, and hostile fire pay during the mobilization. His DD  Form 214, Certificate of Release and Discharge from Active Duty, stated  that the soldier served with his unit in theater from May 15, 2003, to  December 6, 2003. However, the soldier did not receive any of these  location-based entitlements during his tour of duty. Pay personnel at Fort  McCoy stated that his records indicate he was on convalescent leave (leave  for soldiers returning to duty after illness or injury) from May 21 to July 16,  and therefore may not have been entitled to these allowances. Pay  personnel at Fort McCoy were continuing to research this case and could  not tell us anything further. Without additional information, we could not  determine whether this soldier was paid correctly.
In addition, during this phase, some of the soldiers of the 443rd Military  Police Company also experienced various individual problems with active  duty basic pay, the basic allowance for housing, and the overseas housing  allowance. Because of delays in promotions, six soldiers experienced late  payments of active duty basic pay and four of these soldiers also  experienced late payments of basic allowance for housing. Other problems  included one soldier who received overpayments of the basic allowance for  housing throughout the mobilization, totaling over $850, because her  spouse was a service member who periodically went on and off duty. Two  other soldiers had their overseas housing allowance paid inconsistently  and at varying rates, creating net overpayments for both soldiers.
section_title: Pay Problems Associated with Demobilization and Release from Active Duty
paragraphs: The soldiers of the 443rd Military Police Company began to demobilize in  December 2003. As summarized in table 19, some soldiers continued to  experience pay problems throughout their demobilization and even after  release from active duty. These problems consisted primarily of differences  between the last dates for which soldiers were paid and the dates of release  from active duty as recorded on the DD Form 214, Certificate of Release or  Discharge from Active Duty.
Of the 115 soldiers who demobilized by the end of our audit period,  including 2 who had been on medical hold, 6 soldiers were paid beyond  their date of demobilization and 2 soldiers had their pay stopped shortly  before demobilizing. The 6 soldiers paid beyond their date of  demobilization were overpaid for an average of 19 days and nearly $2,500  each. This includes 1 soldier who was overpaid for at least 68 days and  $10,500. This soldier, who demobilized in February 2004, stated that he  contacted his demobilization station, home unit, and the pay section of the  Regional Readiness Command by early April, but nevertheless continued to  be paid through April 2004. The 2 soldiers whose pays were stopped before  demobilizing were underpaid a total of almost $400.
In addition to the problems associated with the date of release from active  duty, several soldiers experienced other problems related to their  demobilization. For example, the demobilization station processed  “hardship duty pay for certain places” for 1 soldier from May 2003 to  December 2003. This type of hardship duty pay has not been authorized for  newly deployed soldiers since December 2001 and the soldier had received  his correct “hardship duty pay for designated areas” while he was deployed  in Iraq. This erroneous transaction during the soldier’s out-processing  created an overpayment of approximately $150 that went undetected.  Additionally, 7 of the 12 soldiers cross-leveled into the 443rd Military Police  Company from Puerto Rico experienced late payments of their last month’s  overseas housing allowance entitlement, totaling almost $1,500.
section_title: FORSCOM Support Unit, Finksburg, Maryland
paragraphs: A major in the Army’s Individual Ready Reserve, who lives in Maryland,  volunteered for active duty. He received orders mobilizing him to active  duty on March 6, 2003, in support of Operation Iraqi Freedom. The major  was activated as a separate one-person unit. Because he was mobilized  from an inactive status, he did not have a home unit. He reported to Fort  McPherson, Georgia, on March 6, 2003, where he participated in an Army  SRP. On March 9, 2003, he reported to Nellis Air Force Base in Nevada for  training. Because he was to serve as an Army liaison to the Air Force while  deployed, on March 17, 2003, he reported to Seymour Johnson Air Force  base in North Carolina, where he underwent an Air Force mobilization in- processing review with the Air Force’s 4th Fighter Wing. He arrived in Qatar  on March 25, 2003. He was assigned to serve as an Army Forces Command  (FORSCOM) Ground Liaison Officer attached to the Air Force’s 379th  Expeditionary Force at the Air Force base at Doha, Qatar. As a Ground  Liaison Officer, he was responsible for a team of Army officers that briefed  Air Force pilots before every mission during the Iraqi offensive on the latest  information concerning the location of Army troops and enemy forces. He  was also responsible for providing briefings to the Air Force general in  charge of flight operations at Doha on the status and positions of coalition  ground forces. He served in this capacity until May 1, 2003, when he left  Qatar. On May 2, 2003, he underwent Air Force active duty outprocessing  with the Air Force’s 4th Fighter Wing at Seymour Johnson Air Force Base.  He arrived at Fort McPherson on May 4, 2003, for demobilization  processing. He was demobilized from active duty on May 15, 2003, and  returned to his home in an inactive status as a member of the Army’s  Individual Ready Reserve. In August 2003, the major resigned his  commission and received an honorable discharge from the Army Reserve.  Key events associated with the major’s active duty pays and allowances for  his 2003 mobilization are summarized in figure 7.
As summarized in table 20, this one-soldier unit experienced various pay  problems associated with his location-based active duty pays and  allowances that continued until well after his demobilization to Individual  Ready Reserve status. Specifically, we found that this single-soldier unit (1)  did not have any underpayments, overpayments, or late payments during  initial mobilization; (2) experienced overpayments and late payments  associated with deployment location-based pays, allowances, and related  tax benefits; and (3) continued to experience problems with active duty  pays, allowances, and related tax benefits for months after his  demobilization.
The dollar amounts associated with overpayments and late payments we  identified were about $8,000 and $300, respectively. Of the overpayments  we identified, all were subsequently collected from the soldier by May 31,  2004.
subsections: section_title: Mobilization Pay Problems
paragraphs: Finance personnel at the soldier’s mobilization station at Fort McPherson,  Georgia, started his active duty pay entitlements associated with his initial  mobilization. We did not identify any pay problems associated with the  soldier’s initial mobilization to active duty.
section_title: Pay Problems While Deployed
paragraphs: As summarized in table 21, we identified active duty pay and combat zone  tax benefit problems associated with the soldier’s assigned deployment  location while on active duty. When the soldier arrived at his assigned  active duty deployment location in Qatar on March 25, 2003, he was entitled  to receive hardship duty pay and was entitled to exempt his pay from  federal taxes while assigned to that location. However, while the soldier  went through an Air Force in-processing procedure when he arrived in  Qatar, there were no procedures in place to provide flight manifest  documentation to an Army area servicing finance office notifying it of his  arrival. Such documentation is necessary to start the soldier’s hostile fire  pay and related combat zone tax exclusion benefits. Because he was  assigned to support an Air Force operation, he did not process through, or  have any access to, an Army area servicing finance office to start his  location-based pays and related tax benefits. It was not until he left Qatar  and arrived at his demobilization station at Fort McPherson that finance  personnel at that location received supporting documentation from the  soldier and took the actions necessary to process transactions for him to  receive his pay and tax benefit entitlements. Consequently, he did not  receive any of his hostile fire pay until May 21, 2003, or his related combat  zone tax exclusion benefits until June 4, 2003—after he returned from his  overseas deployment.
Army finance officials did not initiate the soldier’s hostile fire pay and  combat zone tax exclusion benefit, which he was entitled to receive  beginning in March 2003, until officials at his demobilization station took  action to start this pay and tax benefit. The soldier was deployed to serve  as an Army liaison to an Air Force unit with an Air Force finance office; he  was unable to find anyone at or near his deployed location who could help  him get his entitled location-based pay and related tax benefits started. Air  Force finance personnel told the soldier to contact finance personnel back  in the United States at Fort McPherson to address his pay problems. The  soldier told us that while he was in Qatar he was able to contact DFAS by e- mail, but officials there told him there was little they could do to help him  get his location-based pays and tax benefits started. He said that telephone  calls to the United States were difficult because of time differences and his  limited access to phones to make an overseas call.
section_title: Pay Problems Associated with Demobilization and Release from Active Duty
paragraphs: The soldier left Qatar on May 1, 2003, to return to his demobilization station  at Fort McPherson. Fort McPherson issued orders to demobilize him from  active duty to the Army’s Individual Ready Reserve as of May 15, 2003. As  summarized in table 22, during his demobilization and after his release  from active duty, the soldier continued to experience pay problems. These  problems were overpayments associated with the soldier receiving active  duty pay after the date of his demobilization from active duty.
The soldier out-processed through Fort McPherson and received his DD  Form 214, Certificate of Release or Discharge from Active Duty, with a  release from active duty date of May 15, 2003. However, finance personnel  at the Fort McPherson demobilization station did not take action to stop his  active duty pays and allowances as of that date. As a result, he continued to  receive active duty pays and allowances that he was not entitled to receive  for a month after his demobilization—from May 16 through June 13, 2003.  In addition, he continued to receive his combat zone tax exclusion benefits  for the same period, May 16 through June 13, even though he had not only  left the combat zone, but had already demobilized from active duty and  returned home. The income tax withholdings for this period were refunded  directly to the soldier. His pay was not stopped at the end of his active duty  tour initially because finance personnel at Fort McPherson were waiting  for his hardship duty pays to “clear,” but they then forgot to stop all pays  related to active duty.
This failure to stop the soldier’s active duty pays and allowances on time  resulted in the soldier writing a $6,150.75 check to DFAS in an attempt to  resolve all overpayment issues associated with his mobilization. As  summarized in table 23, the soldier undertook a series of time-consuming  phone calls and faxes to Fort McPherson, DFAS-Indianapolis, DFAS- Denver, and DFAS-Cleveland over a 13-month period to finally get his pay  issues resolved. Ultimately, the soldier’s pay issues related to his March and  April 2003 active duty deployment were only identified and resolved  through the relentless efforts of the soldier and our inquiries into the  matter. With the soldier’s recent $1,140.54 check to DFAS, his pay issues  with his March and April 2003 mobilization were resolved—over a year  after his deployment ended.
The 629th Transportation Detachment was called to active duty in support  of Operation Enduring Freedom on March 15, 2003, for a period not to  exceed 365 days. Twenty-seven soldiers with the 629th Transportation  Detachment received orders to mobilize; but only 24 soldiers actually  deployed with the unit. The unit arrived at its home station, Fort Eustis,  Virginia, on March 15, 2003, where it began the SRP in-processing. On  March 18, 2003, the soldiers continued their mobilization processing at Fort  Eustis, Virginia, which was also their designated mobilization station. The  unit remained at Fort Eustis for approximately 2 months undergoing  additional in-processing and training. On May 22, 2003, the 629th  Transportation Detachment was deployed to Kuwait and was assigned  responsibility for tracking supplies in and out of Army field locations in and  around Kuwait. After completing its assigned mission, the unit left Kuwait  on December 5, 2003, to return to its demobilization station. By the end of  January 2004, all of the soldiers were released from active duty with the  exception of 1 soldier who was placed on medical hold. A time line of key  actions associated with the unit’s mobilization under Operation Enduring  Freedom is shown in figure 8.
As summarized in table 24, all 24 of the deployed soldiers experienced at  least one pay problem associated with their activation to, during, and  deactivation from, active duty service in support of Operation Enduring  Freedom. Specifically, we found that (1) 5 soldiers experienced  underpayments or late payments during their initial mobilization; (2) 24  soldiers experienced underpayments, overpayments, or late payments  during their tour of active duty in and around Kuwait, including in-theater  incentives such as hostile fire pay and hardship duty pay; and (3) 1 soldier  was underpaid entitled pays and allowances associated with his  demobilization.
In total, we identified estimated overpayments of about $3,000,  underpayments of about $2,000, and late payments of about $14,000,  associated with the pay problems we identified. Specifically, we  determined the following:   More than half of the $3,000 in overpayments we identified was  associated with the majority of the unit’s soldiers receiving an extra $75  payment of hostile fire pay during their tour of active duty in Kuwait.
More than 70 percent of the soldiers deployed to Kuwait did not receive  hardship duty pay in the months of May and December 2003,  contributing to the underpayments of $2,000.
An estimated $8,000 of the $14,000 in late payments we identified were  associated with two soldiers. Available pay records for one soldier show  he did not receive the correct amount of basic allowance for housing  during his active duty tour until 9 months after his mobilization date.  Another soldier did not receive the correct amount of basic pay and  basic allowance for housing until approximately 3 months after his  promotion had become effective.
section_title: Mobilization Pay Problems
paragraphs: As summarized in table 25, we identified several soldiers who experienced  underpayments or late payments related to basic pay and associated  entitlements associated with the mobilization phase. Most, if not all, of  these cases were likely the result of proper documentation not being  submitted promptly, resulting in some soldiers receiving delayed housing  allowances and promotions. For example, one soldier did not receive the  correct amount of basic pay and basic allowance for housing based on a  promotion that should have been effective in January 2003 but did not get  processed until 3 months later in mid-April. We found the personnel action  form was not signed until April 2003.
Upon receipt of individual mobilization orders, the unit’s soldiers reported  to their unit’s home station in Fort Eustis, Virginia, where they attended a  SRP. The purpose of this SRP was to ensure that all soldiers had all  required administrative paperwork, financial documents, and were  physically fit for the ensuing mobilization. Personnel from the 99th Regional  Readiness Command sent a team who conducted the finance portion of the  SRP to verify the soldiers’ supporting financial documentation. If  necessary, the 99th Regional Readiness Command team submitted  transactions with the necessary supporting documentation to the Reserve  Pay Center at Fort McCoy to update the soldiers’ Master Military Pay  Accounts to correctly reflect their mobilized pay status. However, we  identified several soldiers who did not have appropriate supporting  documentation maintained in their files to justify basic allowance for  housing payments. For example, we identified 12 soldiers who received  basic allowance for housing payments for which we were unable to obtain  supporting documentation (i.e., DA Form 5960). Total basic allowance for  housing payments for those 12 soldiers amounted to over $110,000.
Additionally, we identified inconsistencies with the determinations of  soldiers’ entitlements to the family separation allowance made at the  mobilization station. According to the DOD FMR Volume 7A, soldiers  should be separated from their families by more than 50 miles in order to  receive the family separation allowance. We found 10 soldiers from the  629th Transportation Detachment, including the soldier who was placed on  medical hold, who received the family separation allowance while at their  home station and mobilization station even though that location was less  than 50 miles from their home. The soldiers were never informed by pay  technicians at the unit or at their mobilization station that they were not  entitled to the family separation allowance if they were staying at Fort  Eustis but their home of record was within 50 miles, and we did not see any  documentation showing that the unit commander had approved an  exception to the mileage restriction on family separation allowance  eligibility.
section_title: Pay Problems While Deployed
paragraphs: As summarized in table 26, we identified a number of pay problems with  five different types of active duty pays and allowances associated with the  unit’s deployment while on active duty.
During the soldiers’ deployment to Kuwait, all 24 of the 629th  Transportation Detachment’s soldiers encountered pay problems related to  hardship duty pay and hostile fire pay. Most soldiers did not receive any  hardship duty pay during the month they arrived in-theater and the month  that they left the theater. In addition, all of the soldiers received their  combat zone tax exclusion benefit at least one month late.
Per DOD FMR Volume 7A, soldiers who perform duties in designated areas  for over 30 days are entitled to the hardship duty pay incentive. The  regulation specified the general area of Kuwait as a designated area and  provided $100 a month to all soldiers serving there. Per the same  regulation, soldiers serving in Kuwait are also entitled to hostile fire pay of  $225 per month. Both hardship duty pay and hostile fire pay should start at  the same time upon the soldier’s arrival in Kuwait. In the case of the 629th  Transportation Detachment, the soldiers had their military identification  cards swiped into the Tactical Personnel System upon landing in Kuwait to  document their date of arrival. However, most of the soldiers never  received any payment for hardship duty pay in the month that they arrived  in Kuwait, nor did most receive any hardship duty pay payment in the  month that they left Kuwait. Officials at the local Army area servicing  finance office did not initiate the unit’s hostile fire pay incentive until 1  month after the soldiers arrived in theater. Furthermore, the soldiers  incorrectly received a hostile fire pay payment of $300 during the month of  June (an overpayment of $75). One of the unit’s soldiers left Kuwait earlier  than the rest of the unit, but the soldier’s hardship duty pay continued for  another 6 months and his hostile fire pay continued for 1 extra month  before it was stopped.
section_title: Pay Problems Associated with Demobilization and Release from Active Duty
paragraphs: Soldiers of the 629th Transportation Detachment returned to their  demobilization station at Fort Eustis, Virginia, around December 5, 2003,  and began the SRP out-processing. As summarized in table 27, we identified  one soldier who experienced pay problems associated with the  demobilization phase of his active duty tour.
We identified one soldier who did not receive any family separation  allowance payments during the last 3 months of active duty. This soldier’s  home of record was more than 50 miles from the demobilization station in  Fort Eustis, Virginia, and he was not commuting daily. Consequently, he  should have received family separation allowance for these 3 months. Ten  other soldiers in the unit who returned to Fort Eustis and lived within the  50-mile range of the demobilization station and did not have a commander’s  exception on file received $250 per month in family separation allowance  payments until their release from active duty. By January 2004, all  mobilized soldiers, with the exception of the soldier who was on medical  hold, were released from active duty.
section_title: 3423rd Military Intelligence Detachment New Haven, Connecticut
paragraphs: The 3423rd Military Intelligence Detachment was called to active duty in  support of Operation Noble Eagle on December 3, 2002. A total of 11  soldiers from the unit were mobilized to support operations at the  Intelligence and Security Command at Fort Belvoir, Virginia. The 3423rd  Military Intelligence Detachment does not have a unit administrator during  peacetime and had no dedicated unit administrator during the mobilization.  The unit was called to active duty and reported to its mobilization station,  Fort Lee, Virginia, where the soldiers went through in-processing during  December 2002. After this processing, the unit went to the Army’s National  Ground Intelligence Center in Charlottesville, Virginia, for 1 week of  additional in-processing and was then transferred to Fort Belvoir. For the  next 11 months, the unit carried out its mission to gather and analyze  intelligence information in support of U.S. Army Intelligence and Security  Command operations at Fort Belvoir. In November 2003, the 3423rd Military  Intelligence Detachment began to demobilize at Fort Lee and by December  2, 2003, all but 1 soldier had been released from active duty. The unit  reported that the remaining soldier stayed on active duty at Fort Belvoir for  an additional year. A time line of key actions associated with the unit’s  mobilization to active duty is shown in figure 9.
As summarized in table 28, soldiers experienced a range of pay problems at  every stage of the 3423rd Military Intelligence Detachment’s tour of active  duty. The unit did not have a dedicated unit administrator to carry out pay  support responsibilities during its active duty mobilization. Overall, all 11  soldiers in the unit experienced some type of pay problem associated with  their activation to, during, or deactivation from active duty in support of  Operation Noble Eagle. Specifically, we found that (1) 10 soldiers  experienced underpayments, overpayments or late payments during their  initial mobilization; (2) 9 soldiers experienced underpayments,  overpayments, or late payments during their tour of active duty at Fort  Belvoir; and (3) 9 soldiers experienced underpayments, overpayments, or  late payments during their demobilization.
The dollar amounts associated with the overpayments, underpayments,  and late payments we identified were about $18,500, $4,000, and $5,000,  respectively. Of the overpayments we identified, about $2,000 were  subsequently collected from the unit’s soldiers as of January 31, 2004.
subsections: section_title: Mobilization Pay Problems
paragraphs: As summarized in table 29, we found that 10 of the 11 soldiers from the  3423rd Military Intelligence Detachment experienced pay problems related  to basic pay and the associated entitlements when called to active duty.
Before mobilization, the unit attended several SRPs put on by the 94th  Regional Readiness Command. Specifically, after September 11, 2001, the  unit received warnings that it might be called up and therefore began  attending SRPs to prepare for impending mobilization. The unit first  attended a program at the Reserve center in Waterbury, Connecticut, in  October 2001, along with several other units that were definitely  mobilizing. The soldiers attended a second SRP in November 2002. The  finance portion of the SRP consisted of a briefing that covered the different  entitlements soldiers could expect to receive and a review of the soldiers’  Master Military Pay Accounts. Upon reporting to the active Army  mobilization station at Fort Lee, the unit underwent a third SRP.
We found 10 of the 11 soldiers in the 3423rd Military Intelligence  Detachment were entitled to the continental U.S. cost of living allowance  during their mobilization at a rate based on their principal place of  residence at the time they were ordered to active duty. One of these 10  soldiers did not receive the entitlement during his mobilization, resulting in  a $500 underpayment. The 9 remaining soldiers erroneously began  receiving the overseas cost of living allowance rather than the continental  U.S. cost of living allowance at the beginning of the mobilization. In April  2003, all 9 soldiers began correctly receiving continental U.S. cost of living  allowance and the entitlement was paid retroactively in May to 8 of the soldiers for the period December 2002 through March 2003. The erroneous  payments of the overseas cost of living allowance were collected  immediately for 4 of the soldiers, while the erroneous payments for the  other 4 soldiers were only partially collected later in the mobilization. The  delay in collecting the overseas cost of living allowance for the 4 soldiers  resulted in overpayments of over $3,500 that were not collected in full by  the end of the mobilization. One soldier continued to receive the overseas  cost of living allowance and the continental U.S. cost of living allowance  concurrently through August 2003, totaling more than $2,500. DOD began  to recoup these amounts in October 2003. In addition to the overpayments  and underpayments associated with overseas cost of living allowance  payments, discrepancies between the overseas and continental U.S. cost of  living allowance rates for 8 of the 9 soldiers led to over $700 in late  payments.
We also found that 9 of the 10 soldiers in the 3423rd Military Intelligence  Detachment received family separation allowance overpayments during  mobilization. Because of pay clerks’ confusion regarding family separation  allowance entitlement rules, the 9 soldiers began receiving the family  separation allowance 1 to 3 days earlier than they should have, resulting in  small overpayments that totaled almost $200 for the unit.
Additionally, one soldier in the unit experienced a problem related to his  basic allowance for housing pay during mobilization. Shortly after  mobilization, the soldier’s basic allowance for housing entitlement  erroneously switched from the “with dependents” rate to the “without  dependents” rate for half of December 2002 and for January through March  2003. In April 2003, the soldier was repaid basic allowance for housing at  the “with dependents” rate for January through March 2003. These  switches resulted in $800 in payments more than 30 days after the soldier  was entitled and almost $200 in underpayments for the period in December  2002 when the soldier did not receive basic allowance for housing at the  “with dependents” rate. Furthermore, even though the soldier was  deployed from his home in Connecticut to his active duty location at Fort  Belvior in Virginia, he did not received his family separation allowance for  the entire mobilization, creating an estimated $3,000 underpayment.
section_title: Pay Problems While Deployed
paragraphs: As summarized in table 30, we identified a number of pay problems  associated with active duty pays and allowances during the 3423rd Military  Intelligence Detachment’s deployment while on active duty.
Two soldiers experienced individual problems with active duty basic pay,  basic allowance for housing, and foreign language proficiency pay.  Additionally, during their deployment to Fort Belvoir, the unit’s soldiers  experienced pay problems related to the basic allowance for subsistence  provided to enlisted soldiers. Ten of the 11 soldiers in the unit experienced  some sort of overpayment, underpayment, or late payment associated with  their deployment.
Two soldiers experienced problems relating to various pay entitlements  during their deployment. One soldier received about $1,800 in active duty  basic pay and basic allowance for housing payments more than 30 days  after he was entitled to receive them because of a delay in processing his  promotion. Another soldier did not receive his foreign language proficiency  pay for 1 month of his deployment, creating a $100 underpayment.
While we did not count any of the unit’s basic allowance for subsistence  payments as pay problems because of incomplete documentation, seven  enlisted soldiers in the unit experienced significant confusion over whether  they received their correct basic allowance for subsistence payments. The  unit’s enlisted soldiers initially received the regular basic allowance for  subsistence until April 2003. At that time, all basic allowance for  subsistence amounts paid to these soldiers were collected and a different  basic allowance for subsistence rate, called “rations in kind not available,”  was retroactively paid to these soldiers. In 2003, rations-in-kind-not- available payments were about $20 more per month than the regular basic  allowance for subsistence.
However, finance personnel at the Intelligence and Security Command (the  unit’s servicing finance office while deployed at Fort Belvoir) determined  that even though the unit was issued orders stating that housing and mess  would not be provided, the soldiers actually could eat at the Fort Belvoir  mess. This resulted in (1) a collection in May of all of the previous rations- in-kind-not available payments to the unit’s soldiers except for payments  for the initial mobilization time prior to arrival at Fort Belvoir, and (2) a  retroactive repayment of the regular basic allowance for subsistence.  Nevertheless, the enlisted soldiers continued to receive the rations-in-kind- not-available rate from mid-May through July 2003. In July 2003, Fort  McCoy again initiated transactions to collect the rations-in-kind-not- available payments and instead pay regular basic allowance for  subsistence. The regular basic allowance for subsistence then continued  for the rest of the unit’s mobilization, despite the fact that in June 2003, a  committee of finance personnel at Fort Belvoir determined that it was not  feasible for the soldiers to continue to use the mess facilities at Fort Belvoir  because of mission requirements and transportation costs.
section_title: Pay Problems Associated with Demobilization and Release from Active Duty
paragraphs: The soldiers of the 3423rd Military Intelligence Detachment began to  demobilize in November 2003. As summarized in table 31, some soldiers  continued to experience pay problems throughout their demobilization and  release from active duty.
Of the 10 soldiers who demobilized by the end of our audit period, 9  continued to receive their active duty pay and entitlements past the date of  separation from the Army. Two of the 9 overpaid soldiers continued to  receive their entitlements for 28 days past the date of demobilization, while  the remaining 7 soldiers were overpaid for 13 days. This resulted in $14,000  in overpayments of active duty basic pay, basic allowance for housing,  basic allowance for subsistence, and where applicable, the family  separation allowance and foreign language proficiency pay.
When demobilizing through Fort Lee, the demobilization finance officials  failed to change the pay status code in DJMS-RC to stop active duty pay for  nine of the unit’s soldiers. The timing of the unit’s release from active duty  made it more difficult to catch and correct these concerns, as the soldiers  demobilized during the Thanksgiving holiday and a particularly severe  snowstorm. The problem was eventually caught and corrected by the 94th  Regional Readiness Command when personnel examined the Unit  Commander’s Pay Management Report in January 2004. Finance personnel  at the 94th Regional Readiness Command reported that available pay  reports indicated most of the soldiers’ overpayments have now been  collected from the unit’s soldiers.
section_title: 431st Chemical Detachment Johnstown, Pennsylvania
paragraphs: The 431st Chemical Detachment was called to active duty in support of  Operation Enduring Freedom on January 16, 2003, for a period not to  exceed 365 days. Ten soldiers who received orders to mobilize with the  431st Chemical Detachment reported to their home station in Johnstown,  Pennsylvania, on January 16, 2003. They underwent an initial SRP at their  Johnstown home station. On January 19, 2003, they arrived at their  designated mobilization station at Fort Dix, New Jersey, where they  remained for the next month undergoing additional in-processing and  training. Approximately 1 month later, around February 22, 2003, 8 of the 10  soldiers from the 431st Chemical Detachment were deployed to Kuwait.  Two soldiers from the unit left for Kuwait 1 month later, on March 20, 2003.
The primary mission of the 431st Chemical Detachment while deployed in  and around Kuwait was to track and report nuclear, biological, or chemical  attacks so that soldiers in the area could take appropriate protective  actions. After completing their mission, all 10 soldiers in the detachment  left Kuwait on May 21, 2003. Upon returning to Fort Dix, the soldiers began  the demobilization process and stayed at Fort Dix until the end of June  2003. For the period of July 1 through July 15, 2003, all of the soldiers in the  431st Chemical Detachment were placed on transitional leave. By July 15,  2003, all of the soldiers had been released from active duty. A time line of  key actions associated with the unit’s mobilization under Operation  Enduring Freedom is shown in figure 10.
As summarized in table 32, all 10 of the unit’s soldiers experienced some  sort of pay problem, primarily associated with the overseas deployment  phase of their active duty mobilization. Pay problems included  overpayments, underpayments, and late payments of pay entitlements and  incentives, such as family separation allowance, hostile fire pay, and  hardship duty pay associated with their initial mobilization and deployment  to Kuwait.
In total, we identified estimated overpayments of about $12,000,  underpayments of about $2,000, and late payments of about $1,000  associated with the pay problems we identified. Of the estimated $12,000 in  identified overpayments, we identified about $450 that was subsequently  collected. Specifically, we determined that   2 soldiers did not receive correct payments for up to 6 months after their   all 10 soldiers in the unit experienced underpayments, overpayments, or  late payments associated with their tour of active duty deployment in  Kuwait, including problems with hostile fire pay and hardship duty pay.
subsections: section_title: Mobilization Pay Problems
paragraphs: As summarized in table 33, we identified six soldiers with pay problems  related to overpayments of family separation allowance during the unit’s  initial mobilization to active duty.
Upon receipt of individual mobilization orders, the soldiers reported to  their unit’s home station in Johnstown, Pennsylvania, where they attended  a SRP. The purpose of this SRP was to ensure that all soldiers had all  required administrative paperwork, financial documents, and were  physically fit for the ensuing mobilization. SRP finance officials were  required to verify the soldiers’ supporting financial documentation and  submit transactions with the necessary supporting documentation to the  Reserve Pay Center at Fort McCoy to update the soldiers’ Master Military  Pay Accounts to reflect their mobilized status.
However, we identified several soldiers who did not have appropriate  supporting documentation maintained in their files to justify their basic  allowance for housing payments. One soldier appeared to be underpaid for  the basic allowance for housing during the period that he was called to  report to his home station for active duty. During the first pay period of his  mobilization, he was paid at a lower basic allowance for housing rate.  Subsequent payments for the basic allowance for housing throughout his  tour of duty were at a higher rate. We were not able to substantiate the  higher amount through supporting documentation. The total basic  allowance for housing payments to this soldier that could not be verified  amounted to approximately $3,500.
Furthermore, we identified four other soldiers who received basic  allowance for housing payments for which we were unable to obtain  supporting documentation (i.e., DA Form 5960). Total basic allowance for  housing payments for those four soldiers amounted to approximately  $30,000.
In addition, we identified six soldiers in the 431st Chemical Detachment  who received overpayments of the family separation allowance because  they began receiving this entitlement upon reporting to their home station,  even though that location was less than 50 miles from their homes and  there was no evidence that they had an unreasonable commuting distance,  as required by DOD FMR Volume 7A. Based on these criteria, the family  separation allowance payments should not have started until the soldiers  reached their mobilization station at Fort Dix, New Jersey. The family  separation allowance overpayments to these soldiers totaled $150.
section_title: Pay Problems While Deployed
paragraphs: As summarized in table 34, we found that during the soldiers’ deployment  to Kuwait, they experienced problems related to hardship duty pay and  hostile fire pay. In addition, all of the soldiers received their combat zone  tax exclusion benefit at least 1 month late.
Most soldiers did not receive the full amount of their hardship duty pay  while deployed. Moreover, they continued to receive hardship duty pay  well after they had returned to Fort Dix and demobilized. In total, all 10  deployed soldiers were incorrectly paid for either hardship duty or hostile  fire pay.
Soldiers of the 431st Chemical Detachment who deployed overseas had  their identification cards scanned into the Tactical Personnel System upon  landing at Kuwait International Airport. However, the unit’s hostile fire  payments did not start until more than 2 months after the soldiers arrived  in theater. Moreover, it took approximately 3 months from the time that the  soldiers arrived to start receiving hardship duty payments. In fact, hardship  duty payments were not processed until May 21, 2003, the same day that  the soldiers left the designated hardship duty location.
These delays resulted in the deployed soldiers being underpaid for most of  their time while serving in the hardship duty location. Furthermore,  hardship duty pay continued for another 7 months after the soldiers had  left Kuwait. As a result, the soldiers continued to receive payments of  hardship duty pay after their demobilization and release from active duty.  Also, local Army area servicing finance officials did not terminate  payments of hostile fire pay for the 2 months following the soldiers’ return  to the United States. These two breakdowns in the process of paying the  correct in-theater incentives to soldiers in a timely manner resulted in  underpayments or late payments at the front end of the soldiers’  deployment and overpayments after the soldiers had returned.
In addition, the unit administrator, who also deployed with the unit, stated  that she had trouble finding anyone in the local Army area servicing finance  office in Kuwait to assist with getting the unit’s hostile fire pay started.  Since the 431st Chemical Detachment was working for the Marine Corps  and was far away from the Army area servicing finance office, the unit was  given the number at Fort Doha as its supporting finance office in Kuwait.  The unit administrator made repeated telephone attempts to contact the  finance office at Fort Doha but could only reach a recording that told her to  call back later. This gap in a functioning supporting finance office for the  deployed soldiers added to their frustration and confusion over in-theater  pays.
Upon the unit’s return to the U.S. in May 2003, most of the soldiers noticed  that they continued to receive an additional $100 per month for 7 additional  months. However, because their Leave and Earnings Statements were not  clear as to what the payments represented, the soldiers contacted the unit  administrator for assistance. The unit administrator determined that the  payments represented erroneous hardship duty pay and tried to go through  the unit’s chain of command to get the payments stopped, but received no  response. The unit administrator also accessed the pay hotline at 888-PAY- ARMY, but was placed on hold for such a long time that she gave up.
section_title: Pay Problems Associated with Demobilization and Release from Active Duty
paragraphs: All 10 soldiers of the 431st Chemical Detachment arrived at the  demobilization station at Fort Dix, New Jersey, on May 21, 2003, to begin  the SRP out-processing. The soldiers were stationed at Fort Dix for  approximately 1 month. At the end of June 2003, the soldiers returned to  their home station in Johnstown, Pennsylvania, where they spent a few  days before being placed on transitional leave for the first 2 weeks in July  2003. While on transitional leave, the soldiers continued to receive $250 per  month for the family separation allowance even though they were not  separated from their families.
section_title: Comments from the Department of Defense
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: Staff making key contributions to this report include James D. Berry, Amy  C. Chang, Francine M. DelVecchio, Jennifer L. Hall, Ken Hill, Kristi L. Karls,  Jason M. Kelly, Tram Le, Julia C. Matta, Jonathan T. Meyer, Michelle  Philpott, John J. Ryan, Jennifer F. Wilson, and Leonard E. Zapata.
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