The United States Army is responsible for land-based military operations. It is the largest and oldest established branch of the U.S. military. The modern Army has its roots in the Continental Army, which was formed on June 14, 1775, before the establishment of the United States, to meet the demands of the American Revolutionary War. The Army’s mission is to fight and win our nation’s wars by providing prompt, sustained land dominance across the full range of military operations and spectrum of conflict in support of combatant commands. The Army does this by organizing, equipping, and training forces; accomplishing missions assigned by the President, the Secretary of Defense, and combatant commanders; and transforming for the future. For fiscal year 2010, Congress appropriated more than $52 billion to the “Military Personnel, Army” appropriation, which is a 1-year appropriation available for the pay, benefits, incentives, allowances, housing, subsistence, travel, and training primarily for active duty service members. The Defense Finance and Accounting Service in Indianapolis, Indiana (DFAS-IN) is responsible for accounting, disbursement, and reporting for the Army’s military personnel costs using the Defense Joint Military Pay System-Active Component (DJMS-AC). According to DFAS-IN, of the $52 billion in fiscal year 2010 military personnel appropriations, the Army’s nearly 680,000 service members received $46.1 billion in pay and allowances. To provide payroll support to the vast number of active Army service members, DFAS-IN has over 40 Defense Military Pay Offices within the United States that provide finance services to military personnel in designated geographical areas. The Statement of Budgetary Resources is the only financial statement predominantly derived from an entity’s budgetary accounts in accordance with budgetary accounting rules, which are incorporated into generally accepted accounting principles (GAAP) for the federal government. The Statement of Budgetary Resources is designed to provide information on authorized budgeted spending authority as reported in the Budget of the United States Government (President’s Budget), including budgetary resources, availability of budgetary resources, and how budgetary resources have been used. The Under Secretary of Defense for Personnel and Readiness (USD (P&R)) advises the Secretary of Defense on a number of personnel areas such as recruitment, pay and benefits, and oversight of military readiness, and serves as DOD’s Chief Human Capital Officer. The Office of the Assistant Secretary of the Army for Manpower and Reserve Affairs (ASA (M&RA)) is responsible for setting the strategic direction and providing overall supervision for manpower, personnel, and Reserve component affairs of the Department of the Army, and serves as the Army’s lead for manpower policy and human resources, among other things. In order to fulfill these responsibilities, ASA (M&RA) relies on the Deputy Chief of Staff, G-1, for advice and assistance. In addition to being the principal military advisor to ASA (M&RA), G-1’s other responsibilities include developing policy that provides guidance for responsive and flexible human resources support of the Army and overseeing the officer accession and enlisted recruiting policy. The Human Resources Command supports the Deputy Chief of Staff, G-1, in the management of all military personnel by serving as the functional proponent for military personnel management and personnel systems. Army Human Resources Command, unit commanders, and training certification officials, among others, are responsible for providing DFAS-IN with accurate and timely information regarding changes in individual military member status necessary to maintain accurate and timely payroll accounts. Offsetting collections are collections from intragovernmental transfers, business-like transactions with the public, and collections from the public that are governmental in nature but required by law to be classified as offsetting. These collections are all authorized by law to be credited to appropriation or fund expenditure accounts. As illustrated in figure 1, military pay accounts are established as part of the enlistment process for new recruits and are based on personnel records. The recruiting office establishes the basics of the recruit’s personnel file in the Army Recruiting Information Support System (ARISS). This file contains the recruit’s full name, contact information, country of origin, social security number (SSN), and recruiting status. After applying, the recruit reports to a Military Entrance Processing Station (MEPS), which works with the recruiting office to qualify applicants for military service and serves as the quality control unit between the recruiter and the military service. The applicant concludes the MEPS visit by signing either an enlistment contract or a delayed entry contract. The contract notes the terms of enlistment, such as pay grade, which relate to basic pay information. This completes the entrance documents that the MEPS collects. MEPS personnel then administer the Oath of Enlistment. All of the documents created are electronically transmitted to the respective service recruiting system, that is, ARISS for the Army, and a paper copy, referred to as a “Packet,” is created that accompanies the recruit to the training installation where the Packet is delivered to the personnel office at the Reception Battalion. Recruits generally report to their assigned installation Reception Battalion for training within 2 weeks to 14 months after signing their enlistment contract. The service liaison counselor keeps the documentation Packet until the enlistee reports to the Reception Battalion, at which time the Packet is sent to the respective training installation. The Reception Battalion uses information contained in the Packet to create a personnel file in the Reception Battalion Automated Support System (RECBASS). The enlistee provides additional information on dependents, such as a marriage certificate, birth certificates for dependent children, and W-4 dependent information. Reception Battalion personnel staff assist the enlistee in filling out any additional forms if they were not included in the Packet, such as direct deposit, pay allotments for base housing, savings account deposits, child support, and emergency contact information. Personnel staff enter this information into the personnel system and send the information to the installation’s Defense Military Pay Office where the enlistee’s payroll account, referred to as a master military pay account, is created in DJMS-AC. Military pay starts once the payroll account is established in DJMS-AC. Army active duty military personnel receive pay and allowances based on their grade and time in service; location; and whether they are married, have dependents, or are performing special duties. The Army’s active duty service members may elect to be paid once a month at the end of the month or twice a month at mid-month and at the end of month. The service member’s pay information is consolidated into one monthly Leave and Earnings Statement. In addition to basic pay, military members may also be eligible for cash recruitment or retention incentives (i.e., bonuses). Any necessary pay change after the pay account is set up is initiated by the appropriate officials throughout the Army. These changes generally relate to promotions, special duty pay, incentive pay, Permanent Change of Station assignments, Temporary Change of Station assignments, and changes in dependents. The Defense Manpower Data Center (DMDC) is the central DOD source to identify, authenticate, authorize, and provide information on DOD- affiliated personnel. As such, it is the one, central access point for information and assistance on DOD entitlements, benefits, and medical readiness for uniformed service members, veterans, and their families. Major DMDC databases include information on pay; accessions and examinations (USMEPCOM); authorizations and requirements; military units and addresses, special purposes, for example, contingency operations; Joint Command duty assignments; retirement point repository; and mobilization/activations. DMDC has five major operating locations, including the DOD Center, in Monterey Bay, California; the Washington, D.C. area; and overseas locations in South Korea, Europe, and Southwest Asia. In addition, DMDC has 2,145 issuing stations (badge offices, etc.) at 1,400 worldwide locations. Computer support for the DOD Center in Monterey Bay is provided by the DOD Center in Monterey Bay and the Naval Postgraduate School in Monterey, California. Other computer support offices are located in Arlington, Virginia, and Auburn Hills, Michigan. Payments of basic pay and allowances to service members are made via electronic funds transfer (EFT) through DJMS-AC. At the local level, DMPOs are required to review any substantial changes (defined as +/- 150 percent) in payroll data daily. The intent of this review is to identify data input errors. In addition, a day before payroll is processed, DFAS-IN conducts a pre-payroll review. This is a manual process, where the DFAS-IN Military Pay Operations (Mil Pay Ops) staff obtain a sample of Leave and Earnings Statements from DJMS-AC and trace the information in the statements to the relevant table outside of DJMS-AC. The purpose of this review is to identify potential system problems with the pay information used to calculate the pay amount. After completing this review, DFAS-IN then sends the DJMS-AC totals to the certifying official for certification. The certification process checks the DJMS-AC totals against the disbursing file totals. The certifying official sends an authorization and voucher to the Disbursing Office requesting release of payment. The DFAS-IN Disbursing Office uses the Army’s disbursing system to send electronic payments to the Federal Reserve Banks, which in turn distribute payments to each service member’s bank account. DFAS-IN’s Accounting Division performs a number of steps to transfer payroll transactions from DJMS-AC to the Army’s general ledger accounting system.