[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]





    ARE FINANCIAL MANAGEMENT PROBLEMS AT THE DEPARTMENT OF DEFENSE 
                       IMPACTING ARMY RESERVE PAY

=======================================================================

                                HEARING

                               before the

                 SUBCOMMITTEE ON GOVERNMENT EFFICIENCY
                        AND FINANCIAL MANAGEMENT

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 20, 2004

                               __________

                           Serial No. 108-235

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform


                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
96-995                      WASHINGTON : 2005
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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana                  HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut       TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana              CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California                 DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky                  DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia               JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania    WM. LACY CLAY, Missouri
CHRIS CANNON, Utah                   DIANE E. WATSON, California
ADAM H. PUTNAM, Florida              STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia          CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee       LINDA T. SANCHEZ, California
NATHAN DEAL, Georgia                 C.A. ``DUTCH'' RUPPERSBERGER, 
CANDICE S. MILLER, Michigan              Maryland
TIM MURPHY, Pennsylvania             ELEANOR HOLMES NORTON, District of 
MICHAEL R. TURNER, Ohio                  Columbia
JOHN R. CARTER, Texas                JIM COOPER, Tennessee
MARSHA BLACKBURN, Tennessee          BETTY McCOLLUM, Minnesota
PATRICK J. TIBERI, Ohio                          ------
KATHERINE HARRIS, Florida            BERNARD SANDERS, Vermont 
                                         (Independent)

                    Melissa Wojciak, Staff Director
                   David Marin, Deputy Staff Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel

     Subcommittee on Government Efficiency and Financial Management

              TODD RUSSELL PLATTS, Pennsylvania, Chairman
MARSHA BLACKBURN, Tennessee          EDOLPHUS TOWNS, New York
STEVEN C. LaTOURETTE, Ohio           PAUL E. KANJORSKI, Pennsylvania
CANDICE S. MILLER, Michigan          MAJOR R. OWENS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
KATHERINE HARRIS, Florida

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
                     Mike Hettinger, Staff Director
                 Larry Brady, Professional Staff Member
          Mark Stephenson, Minority Professional Staff Member


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 20, 2004....................................     1
Statement of:
    Gregory, Ernest J., Acting Assistant Secretary for the Army 
      for Financial Management and Comptroller, Department of the 
      Army; Lieutenant General James R. Helmly, Chief, Army 
      Reserves, Department of the Army; and Patrick T. Shine, 
      Director, Military and Civilian Pay Services, Defense 
      Finance and Accounting Service, Department of Defense......    92
    Kutz, Gregory D., Director of Financial Management and 
      Assurance, Government Accountability Office; Lieutenant 
      Colonel Donald J. Campbell, USAR, (ret.), former Unit 
      Commander, 3423rd Military Intelligence Unit, Connecticut; 
      Major George W. Riggins, USA, (ret.), Forscom Support Unit, 
      Maryland; and Sergeant Melinda Sue DeLain, USAR, 948th 
      Forward Surgical Team, Michigan............................    10
Letters, statements, etc., submitted for the record by:
    Davis, Hon. Tom, a Representative in Congress from the State 
      of Virginia, prepared statement of.........................    86
    DeLain, Sergeant Melinda Sue, USAR, 948th Forward Surgical 
      Team, Michigan, prepared statement of......................    78
    Gregory, Ernest J., Acting Assistant Secretary for the Army 
      for Financial Management and Comptroller, Department of the 
      Army, prepared statement of................................    94
    Helmly, Lieutenant General James R., Chief, Army Reserves, 
      Department of the Army, prepared statement of..............   101
    Kutz, Gregory D., Director of Financial Management and 
      Assurance, Government Accountability Office, prepared 
      statement of...............................................    13
    Platts, Hon. Todd Russell, a Representative in Congress from 
      the State of Pennsylvania, prepared statement of...........     3
    Riggins, Major George W., USA, (ret.), Forscom Support Unit, 
      Maryland, prepared statement of............................    72
    Shine, Patrick T., Director, Military and Civilian Pay 
      Services, Defense Finance and Accounting Service, 
      Department of Defense, prepared statement of...............   114
    Towns, Hon. Edolphus, a Representative in Congress from the 
      State of New York, prepared statement of...................     6

 
    ARE FINANCIAL MANAGEMENT PROBLEMS AT THE DEPARTMENT OF DEFENSE 
                       IMPACTING ARMY RESERVE PAY

                              ----------                              


                         TUESDAY, JULY 20, 2004

                  House of Representatives,
Subcommittee on Government Efficiency and Financial 
                                        Management,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 3 p.m., in 
room 2247, Rayburn House Office Building, Hon. Todd Russell 
Platts (chairman of the subcommittee) presiding.
    Present: Representatives Platts, Blackburn, and Towns.
    Also present: Mr. Tom Davis of Virginia and Mr. Schrock.
    Staff present: Mike Hettinger, staff director; Larry Brady 
and Tabetha Mueller, professional staff members; Amy Laudeman, 
legislative assistant; Adam Bordes, minority professional staff 
member; and Jean Gosa, minority assistant clerk.
    Mr. Platts. We are going to go ahead and get started. We 
have a number of Members who are still en route over from the 
floor. This hearing of the Subcommittee on Government 
Efficiency and Financial Management will come to order. We 
appreciate everyone's patience while we wrapped up floor votes. 
Our hope is that the next series of votes won't be, hopefully, 
for about 2 hours, and we can get a good part of the hearing 
underway and completed before the next series of votes.
    We appreciate everyone's participation today on the 
continuing oversight effort of this subcommittee regarding the 
financial management of the Department of Defense. And I cannot 
imagine a more important issue in financial management than how 
we pay our courageous men and women in uniform. I think that as 
we ask our fellow citizens to go into harm's way to protect the 
safety and security of our Nation and the principles for which 
it stands, as well as our very own personal safety as fellow 
Americans, that the least we can do is adequately and 
appropriately compensate those courageous individuals.
    Unfortunately, as we learned late last year through a GAO 
study regarding our Guard units that have been deployed and a 
more recent study regarding our reservists, we know that we 
have many challenges to meet when it comes to adequately paying 
our soldiers.
    I would tell you that I was quite dismayed when I learned 
of the examples last year and further disappointed when I 
learned of the regularity of inappropriate, wrongful levels of 
pay and compensation, and the impact on our soldiers and their 
families as well as the impact on their missions and their 
retention rates. We certainly need to do better, and as we will 
hear from our second panel I believe we are on the right track 
and the Defense Department is taking these challenges very 
seriously.
    I am going to submit most of my opening statement for the 
record and, from a time-sensitive standpoint, move forward.
    We will be hearing from our military and Defense Department 
leaders on our second panel. We are delighted that we will have 
Lieutenant General James Helmly, Chief of the Army Reserve; Mr. 
Ernest Gregory, Acting Assistant Secretary of the Army for 
Financial Management; and Mr. Patrick Shine, Director of 
Military and Civilian Pay Services for the Defense Financing 
Accounting Services.
    Before we hear from that panel, though, we are again 
delighted to have Greg Kutz from the newly named Government 
Accountability Office. Greg is the author of both the 2003 
report regarding the Guard units as well as the most recent 
case studies regarding reservists. We appreciate your work and 
are delighted to have you with us.
    And, perhaps most importantly, we are delighted to have 
with us three courageous Americans who have served our Nation 
in harm's way and have made a great effort to be here with us 
today to share their personal experiences. We are delighted to 
have Lieutenant Colonel Don Campbell come down from 
Massachusetts; Major George Riggins from Maryland; and Sergeant 
Melinda DeLain. We appreciate all three of you for your 
service. As one who is honored and proud to serve our Nation in 
public office, I know that what I do, and, as I conveyed to 
you, what I do in a civilian position pales in comparison to 
what each of you have done in wearing our Nation's uniform and 
going into harm's way for all of us. So I personally thank you 
for your service. I also know, Major Riggins, your wife is 
currently deployed. Your son first was absent his dad as you 
served overseas, and now his mom. That is a tremendous 
sacrifice by him. And Sergeant DeLain, your service as well. I 
was looking for--your 8-year-old daughter Katelyn. She's out 
seeing the sights of D.C., right? Well, we appreciate your 
service and your family's service. And, again, thank you for 
being here.
    Before I yield to our ranking member, Mr. Towns, the 
gentleman from New York, I would like to take the chairman's 
privilege of wishing an early happy birthday. Mr. Towns will be 
29 for the umpteenth time tomorrow, right? Happy Birthday. I 
now turn to the gentleman from New York, Mr. Towns, for the 
purposes of an opening statement.
    [The prepared statement of Hon. Todd Russell Platts 
follows:]

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    Mr. Towns. Thank you, Mr. Chairman. First of all, thanking 
you for recognizing my birthday, I do appreciate that. And I 
thank you for holding this hearing on what is quickly becoming 
a crisis for our Armed Services and reservists. And that is 
maintaining an adequate financial system in order to honor our 
commitment to our Nation's troops.
    Let me also thank our witnesses before us today, especially 
those of you who have ably served our Nation with pride and 
distinction. As you know, Mr. Chairman, the issue of adequate 
financial management at the Department of Defense is not 
foreign to our committee as we have collaborated on improving 
the internal control structure and chronic accounting problems 
demonstrated by the agency over the year. Today, however, we 
are dealing with the pressing issue of maintaining a reliable 
and efficient payroll system for our reservists, many of whom 
are now in immediate danger while serving our Nation's 
interests abroad.
    Since 2001 our reservists have been asked to do more for us 
than at any other time in recent memory. To date, there are 
more than 150,000 Reserve troops on Active Duty, with 130,000 
of those troops coming from the Army National Guard, and Army 
Reserves. Recent statistics tell us that 40 percent of our 
troops currently based in Afghanistan and Iraq are reservists, 
and DOD contends that their contribution to our overseas 
operation may escalate to 50 percent in future deployments.
    In my home State of New York alone, nearly 6,000 Army 
reservists have been mobilized among 171 separate units. 
According to the analysis provided to us today by GAO, 
approximately 95 percent of the Reserve soldiers reviewed 
experience some type of payroll-related problem. Of these, 
nearly 300 soldiers received a total of $50,000 in 
underpayments, in addition to DOD being delinquent in paying 
245 soldiers $77,000 for Active-Duty pay and allowances. 
Furthermore, over 300 reservists who were deployed to 
designated combat zones did not receive their entitled tax 
preferential treatment in a timely manner.
    Simply stated, Mr. Chairman, this is unacceptable.
    I am not here to debate the merits of our efforts overseas 
or our Nation's foreign policy. There will be time enough for 
us to do that in other venues. I will, however, state that it 
is disingenuous for us to tell the American people that our 
armed services are well prepared when we cannot even guarantee 
our soldiers that they will receive their pay and benefits in a 
timely fashion. The spouses, the children, and families of 
those deployed overseas, are often dependent on such resources 
until their loved ones return.
    Hopefully, our efforts today will be productive in finding 
solutions to such problems. Mr. Chairman, we have heard too 
many times coming from too many family members the saying: We 
cannot continue to live, because we do not have resources.
    Let me thank you, Mr. Chairman, and let me thank the 
witnesses for joining us today. And, on that note, I yield 
back.
    Mr. Platts. Thank you, Mr. Towns.
    [The prepared statement of Hon. Edolphus Towns follows:]

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    Mr. Platts. We will move to our first panel. As is the 
practice of the committee, we will ask each of our witnesses to 
stand and be sworn prior to beginning your testimony.
    We will then recognize each of you for a general timeframe 
of 5 minutes, if you can try to summarize as best possible--but 
we are not going to be a stickler if you need to go over some. 
And then we will get into questions. So if you would raise your 
right hands.
    [Witnesses sworn.]
    Mr. Platts. Thank you. The clerk will reflect that all 
witnesses affirmed the oath.
    We will begin to my left, Mr. Kutz, with your testimony and 
then we will work our way across the panel.

STATEMENTS OF GREGORY D. KUTZ, DIRECTOR OF FINANCIAL MANAGEMENT 
  AND ASSURANCE, GOVERNMENT ACCOUNTABILITY OFFICE; LIEUTENANT 
     COLONEL DONALD J. CAMPBELL, USAR, (RET.), FORMER UNIT 
  COMMANDER, 3423RD MILITARY INTELLIGENCE UNIT, CONNECTICUT; 
  MAJOR GEORGE W. RIGGINS, USA, (RET.), FORSCOM SUPPORT UNIT, 
MARYLAND; AND SERGEANT MELINDA SUE DeLAIN, USAR, 948TH FORWARD 
                    SURGICAL TEAM, MICHIGAN

    Mr. Kutz. Mr. Chairman and Representative Towns, thank you 
for the opportunity to discuss Army Reserve pay problems. Army 
Reserve soldiers serve a critical role in fighting the global 
war on terrorism. The bottom line of my testimony today is that 
Army Reserve soldiers must fight another enemy, our Nation's 
broken military pay system.
    My testimony has two parts. first, examples of the problems 
that we identified; and, second, the causes of those problems.
    First, as shown on the poster board, 95 percent, or 332 of 
the soldiers that we investigated, had pay problems. Although 
these soldiers are counted once, many had numerous errors. 
These errors included overpayments, underpayments, and late 
payments. Problems that we identified often lingered through 
the entire Active-Duty tour and sometimes for a year or more 
after demobilization. Examples of the pay problems include 
erroneous withholding and late repayment of Federal taxes for 
all 303 soldiers deployed to Kuwait, Afghanistan, Iraq and 
Qatar; a 3-month delay receiving thousands of dollars of 
hardship duty pay for 49 soldiers from the North Carolina 
Quartermaster unit; a sergeant from the Maryland Military 
Police, armed with pay support documentation, traveling every 2 
weeks from Baghdad to Kuwait to deal with pay problems; and a 
soldier from the Connecticut Intelligence Unit who was not paid 
$3,000 for the entitled family separation allowance.
    Our audit and investigations also identified a significant 
problem with improper payments. For example, $47,000 was 
improperly paid to 76 soldiers from the Texas Dental Unit for 
hardship duty pay after the soldiers had already left the 
hardship duty location. Soldiers that receive overpayments must 
contact DOD to repay the money. Unfortunately, as Major Riggins 
will tell you, trying to repay DOD can be a significant 
challenge.
    Further, several soldiers received and oftentimes spent 
tens of thousands of dollars of overpayments without reporting 
them. One soldier acknowledged being overpaid, but stated she 
thought that the payments were a gift from God. We referred all 
the potential fraud cases to the Army Criminal Investigation 
Division for further followup.
    These cases are just a few of the potentially thousands of 
errors that we identified for only 332 soldiers. Since 
September 11, 2001, about 100,000 Army Reserve and 176,000 Army 
National Guard soldiers have been mobilized and paid from this 
system. Given these substantial numbers and current and future 
mobilizations, the need to fix this problem is clear.
    I am sure you are asking yourselves how, with today's 
technology, we could be having so many problems paying our 
soldiers.
    Which leads to my second point: the causes of these 
problems. We found that the pay problems were caused by a 
combination of breakdowns in people, processes, and systems. 
For example, the complex processes make it difficult to 
maintain accountability over soldiers as they moved from 
location to location. One soldier contacted us in March 2004 to 
try to find out why he was still being paid Active-Duty pay. We 
found that this soldier, at least on paper, had been 
transferred from a Maryland MP unit to a Pennsylvania MP unit 
that was mobilized in February 2003; however, this soldier was 
actually at home, not mobilized, and was improperly paid 
$52,000 through May 2004.
    Human capital issues also contributed to the problems we 
identified, including insufficient resources, inadequate 
training, and customer service problems. Customer service is 
particularly important, given the error-prone system that 
exists today. Nonintegrated systems with limited processing 
capabilities also contribute to the problems that we 
identified. Because of the system weaknesses, significant 
manual effort is needed to process Army Reserve pay.
    Let me give you an example of what I mean by the lack of 
integration. On May 1, 2003, a soldier with the Texas Dental 
Unit received a promotion from private first class to 
specialist. The lack of integration means that the promotion is 
processed in the personnel system, but soldier pay records are 
not automatically updated. Instead, a paper copy of the 
promotion must be forwarded to pay personnel who manually 
update the pay system. This soldier did not receive her pay 
raise for over 5 months because of delays in processing the 
records.
    Limited processing capabilities also caused errors in the 
combat zone tax exclusion for all 303 soldiers that were 
deployed overseas. This is an important benefit to soldiers who 
put themselves in harm's way for their country. However, the 
current systems do not have the capability to stop withholding 
the taxes from eligible soldiers. Instead, the system first 
withholds the payments from the soldiers that are in the combat 
zone and then later repays them. This work-around leads to 
delays and errors and causes significant confusion for the 
soldiers and their families.
    In closing, I want to first acknowledge that DOD and the 
Army have taken positive actions in response to our prior 
recommendations. We have had a very constructive dialog with 
the members of the second panel and their representatives who 
are working proactively to resolve issues. We believe that the 
actions taken to date should improve customer service and 
reduce the vulnerability of the system to error. However, short 
of a complete reengineering of the people, processes, and 
automated systems, we believe that Army Reserve and National 
Guard soldiers will continue to experience pay problems.
    DOD has been attempting to reengineer its military pay 
system for a decade or more. The current system was not 
designed to support the reality of today's Army Reserve and 
National Guard missions. Our citizen soldiers and their 
families deserve nothing less than a world-class military pay 
system. I look forward to continuing to work with DOD and the 
Congress to see that this happens.
    Mr. Chairman, that ends my statement.
    Mr. Platts. Thank you, Mr. Kutz. And, again, thank you for 
your in-depth studies both with the Guard and Reserve units. 
Your work is certainly helping to bring to light the challenges 
and problems that need to be addressed, and to bring forward 
very positive recommendations that, as you referenced, DOD is 
embracing and moving forward with.
    [The prepared statement of Mr. Kutz follows:]

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    Mr. Platts. So next, Lieutenant Colonel Campbell.
    Colonel Campbell. Mr. Chairman, members of the 
subcommittee, thank you for giving me the opportunity to 
present to you some of the pay problems experienced by our unit 
during activation from December 2002 to December 2003.
    First, every unit member voluntarily signed a waiver to 
allow the National Intelligence Center to activate our unit in 
a minimum amount of time, due to a need for personnel at the 
Army Intelligence and Security Command, INSCOM, at Fort 
Belvoir. The unit left literally within days of being notified, 
reported to Fort Meade for in-processing, and then on to INJET 
for a week's training before leaving for Fort Belvoir. The 94th 
RSC processed our original orders and did the Soldier Readiness 
Program and in fact did an excellent job of getting everyone 
paid and into the system and paid the very first pay period we 
were eligible. Pay entitlements such as COLA, basic housing 
allowance, and separation pay were a constant source of concern 
after that, because there was always someone in the unit not 
being paid, overpaid, or underpaid.
    The problem here is that the system requires money paid 
wrongly to be collected back, and then the correct amount is 
disbursed to the individual, often taking weeks or months to 
complete one incorrect payment. The fact is that the system got 
the basic pay correct most of the time, and that relieved some 
of the stress of getting funds back home.
    The DFAS accounting and finance system has some serious 
issues with getting personnel pay. DFAS had new systems, new 
personnel, and a host of other factors impacting personnel 
getting paid. These reasons were given to us at different times 
as we worked to solve the individual per-diem pay issues at 
INSCOM. This situation was made worse by deployments. As they 
increased, DFAS fell behind at paying travel vouchers.
    The mandatory use of government-issued Visa cards for all 
payments for housing made a bad situation worse. And due to 
unit personnel having to meet the 11th of each month by 
regulation, it was almost impossible for DFAS to get the funds 
back to us in time to make their credit cards, often resulting 
in people's credit cards being suspended. We asked that every 
unit member have their credit card limit increased, and that 
was done after we made a written request to do so.
    Mr. Chairman, what I just described is the financial world 
we lived in when dealing with credit card and pay issues. I had 
a situation, a situation with over 40 other reservists assigned 
to INSCOM was made worse by the actions and behaviors of some 
individuals assigned to INSCOM. I take no pleasure in telling 
the committee that our unit and many other reservists were 
victimized throughout our deployment, and then for months 
afterwards, trying to correct the wrongs done to us.
    The problems started with our first travel voucher sent to 
DFAS. Some were paid as submitted for the full per diem and 
some were not. When the problems were brought to DFAS, Mr. 
Sands at DFAS ruled that the 1-800-Go-Army S&A statements and 
auditability were good, and they corrected the pay for 
everyone. We figured that was the end of the problem. We were 
wrong. The situation continued because of an interpretation 
made of the PPG by Captain Cleveland, the finance officer at 
INSCOM, who notified DFAS that in fact we should not be paid 
per diem because the PPG stated the maximum use of facilities 
was required, and those on Operation Noble Eagle were required 
to use the dining facilities, so per diem should be stopped.
    The situation got to the point that General Fay, the Deputy 
Commander for INSCOM, formed what he called a per-diem 
committee to review what could be met at the PPG and what could 
not. After months of their review, it was determined that, in 
fact, we were in fact entitled to the per diem, and the per-
diem committee ended its work and we moved on, thinking again 
that the process was finally over and we were going to be paid 
and everything would be fine.
    We moved on to demobilization in November. And while we 
were at Fort Meade demobilizing, personnel started receiving e-
mails that in fact a collection effort had been initiated by 
DFAS to collect money for the period that the per diem 
committee was operating. The request was made via Captain 
Cleveland and Mr. Scarfo, GG-15 at INSCOM, saying that General 
Fay intended that people use the dining facilities during the 
per-diem committee's work. I talked to General Fay a number of 
times during this, and that was never his intention. And when I 
called Mr. Scarfo from Fort Lee, he claimed that Captain 
Cleveland of the financial initiated it, and Captain Cleveland 
told me that Mr. Scarfo initiated it.
    So we contacted General Fay, who knew nothing about the 
collection effort, and in fact said he would look into it. 
Subsequently, I received an e-mail where he notified INSCOM and 
Mr. Scarfo to cancel the collection, he never intended for that 
to happen. But since he had moved on, was promoted, and was no 
longer at INSCOM, his request was ignored. The problem was 
settled a number of months later when Colonel Harthcock, the 
then-deputy commander, got involved and he personally informed 
DFAS to stop all collection efforts after he reviewed the 
situation and decided that in fact we were entitled.
    I must say at this point that all the operations officers 
at INSCOM worked diligently to help us and they challenged the 
actions against us. But they have to operate within the system. 
And when senior administrators and people in positions of 
responsibility such as the finance officer contact DFAS and 
request that collection actions happen, they happen.
    In conclusion, I would just like to say that the ability of 
finance officers and other civilian supervisors in senior 
positions to dictate the DFAS collection efforts against 
individual reservists is an area that needs to be reviewed by 
this committee.
    Thank you for your time and patience and listening to my 
testimony today.
    Mr. Platts. Thank you, Colonel Campbell. We appreciate your 
testimony and, again, your service to our Nation in uniform.
    Major George Riggins.
    Major Riggins. Mr. Chairman, members of the subcommittee, 
thank you for inviting me to testify at this hearing today.
    I enlisted in the U.S. Army in 1984, and gained a broad 
perspective of the military having served on Active Duty for 13 
years as an enlisted soldier, a Warrant Officer candidate, a 
West Point cadet, and a commissioned officer. I subsequently 
served for 6 years as a member of the Individual Ready Reserve 
and as an individual mobilization augmentee. On August 29, 
2003, at the rank of major, I received an honorable discharge 
from the U.S. Army Reserve. Currently I reside, as noted by the 
Chairman, with my 8-year-old son in Maryland while my wife is 
deployed in Iraq.
    I was motivated to testify here today by a desire to 
provide one officer's perspective on how to improve the 
military pay system.
    In January 2003, as America was gearing up for the brewing 
conflict in Iraq, I volunteered to be moved from the Individual 
Ready Reserve into any needed capacity. Activated on March 6, 
2003, I mobilized at Fort McPherson, GA, and was subsequently 
assigned as a ground liaison officer to the 379th Air 
Expeditionary Wing in Doha, Qatar. I arrived in theater on 
March 25th, and returned to the United States May 1st.
    My pay issues began during my time in theater. I realized 
that I was not receiving my hostile-fire pay, and that 
excessive taxes were being withheld due to the pay system not 
recognizing my combat zone and tax exclusion. Upon bringing 
this matter to the attention of the Air Force pay office at my 
location, I was told that since I was in the Army they could 
not help me. I then attempted to contact the Defense Finance 
and Accounting Service [DFAS], via e-mail and was informed I 
needed to contact the pay office at Fort McPherson. Due to the 
time difference, my duty schedule, and communications 
restrictions during combat operations, I was unable to contact 
anyone at Fort McPherson. Since I was receiving the bulk of my 
pay, and my civilian employer was also generously making up the 
difference between my military pay and my civilian salary, my 
family was not in jeopardy of falling delinquent of any of 
their bills. Because of this, I chose to focus on my mission at 
hand and resolve the pay issues when I returned to the States.
    When I returned to Fort McPherson in May, I detailed the 
difficulty I had to the pay office, and was informed that the 
problem would be corrected and I would receive the moneys owed 
to me.
    I completed my demobilization on May 15th and returned 
home. The following month, I recognized that I was still being 
paid and immediately contacted DFAS. They directed me back to 
the demobilization station at Fort McPherson. The official at 
Fort McPherson informed me that in an effort to ensure that my 
underpayment had been corrected, they had left me in the pay 
system. Unfortunately, once the problem had cleared, they 
failed to remove me from that pay system. They informed me that 
this mistake resulted in my receiving $6,150.75 in overpayment, 
and provided me with the address to return the money. I 
subsequently submitted a check on July 25th, returning the full 
amount that I had been informed to return.
    Subsequent to this, I continued to receive leave and 
earning statements indicating that I still owed an additional 
$1,140.54. This led to a series of phone calls spanning 10 
months, where I was passed off from one organization to 
another. The Fort McPherson office told me to contact DFAS in 
Cleveland. DFAS Cleveland initially told me to contact the debt 
collections office. They informed me that I wasn't in their 
system and that I did not need to worry about this issue. Upon 
receiving additional statements of obligation, I began to 
become concerned for my personal credit rating, and phoned DFAS 
Cleveland again. This time I was told that only DFAS in 
Indianapolis could help me, but that I wasn't allowed to have 
their phone number and I needed to call back to my 
demobilization office at Fort McPherson.
    Repeated calls to both the individual handling my file and 
to her supervisor went unresolved. In March 2004, I came across 
a small article in the Army Times requesting that reservists 
with pay difficulties contact the Government Accountability 
Office [GAO], as they were performing a study. At that point, 
it had been 1 year since I had mobilized, and it had been 7 
full months since I had been discharged from the Army entirely. 
I provided the GAO with all the information pertaining to my 
case in hopes that their investigation would accelerate the 
resolution of my own personal case.
    In April I again contacted the Fort McPherson pay office, 
and this time I informed them that the GAO had expressed 
interest in my situation. I was passed to a soldier who 
informed me that at this point he couldn't review my records 
because they had been purged from the system. So on Thursday, 
April 15th, I provided him with a faxed copy of all my leave 
and earning statements from the past year, and he was able to 
reconstruct my pay history. The sergeant quickly identified the 
problem and communicated it back to me the following Tuesday. 
This entire situation stemmed from the fact that the original 
calculation for what I owed did not take into account income 
taxes. I was required to reimburse the government an additional 
$1,140 for money that was withheld from the money that I had 
initially received in overpayment. In essence, I was being 
asked to pay back money that I had never received. The sergeant 
informed me that once the check was received, a recalculation 
would be performed and I would be reimbursed for anything due 
back to me. I sent the full amount to DFAS, and the check 
cleared on May 13, 2004. As of today, 2 months later, I have 
not yet received any indication reflecting the final 
recalculation.
    The entire event originating primarily from human error 
spanned over a year and consumed countless hours by myself, the 
various individuals at Fort McPherson, DFAS, GAO, and now 
Congress. It is a case that illuminates inadequacies that 
require addressing in order to adequately provide pay and 
benefits to the thousands of soldiers, sailors, and airmen 
deployed in the service of our Nation.
    I respectfully submit the following recommendations for 
your consideration: First, local finance offices, regardless of 
branch of service, need to be able to address a deployed 
service member's needs. In this day and age, we are moving more 
toward joint operations than ever before in our military's 
history. A service member should not have to contact a pay 
office on the other side of the Earth in order to resolve a 
problem when a pay office from another branch of the service is 
located 100 yards away. The key to resolving this is through 
automation and standardization. Web-based secure interfaces 
into a joint pay system would allow authorized pay officials to 
make necessary changes from any location. By standardizing the 
system across all service branches, training requirements are 
minimized.
    Second, create a second-tier organization able to handle 
unique and complicated pay problems. In the current system, 
regardless of what organization that I spoke with, I was sent 
back to the same spot where the problem had originated. While 
human error is excusable, as leaders we need to develop methods 
and procedures for organizations to overcome these errors. The 
creation of an organization within DFAS that our individual 
service members can turn to in order to escalate persistent 
problems will provide the means necessary to rectify problems 
caused by human error. This is especially important to 
individual augmentees who do not have a divisional relationship 
with any one pay office.
    Finally, expand the training of the existing work force to 
minimize the occurrence of those human errors. We are currently 
facing a time where the active components are relying heavily 
on augmentation from the Reserve and National Guard in order to 
meet the ever-increasing demands for forces deployed. It is 
imperative that the individuals charged with the handling of 
these pay and benefits be well versed in what is required to 
effectively care for the units and individual augmentees. An 
effective training plan addressing these needs would resolve 
many of these issues.
    While this experience has been personally frustrating, I 
count myself as extremely lucky. My family and I were never at 
risk of meeting any of our obligations due to these problems. 
However, it is easy to see that issues such as these could be 
financially devastating to the young soldiers whose sole income 
supporting the family is derived from their military paycheck. 
These soldiers are already deployed in the far reaches of the 
world, facing life-and-death decisions on a daily basis. They 
should not also be burdened with wondering if their spouse at 
home will be able to make a car payment or feed their child.
    Mr. Chairman, subject to your questions, this concludes my 
testimony.
    [The prepared statement of Major Riggins follows:]

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    Mr. Platts. Thank you, Major Riggins. I appreciate your 
insights. And I would hope that there are various individuals 
in this room who have heard your testimony that now, a year 
after being demobilized, there are still unresolved issues. I 
would hope that we will see a quick resolution and you can once 
and for all know what you are still owed. You have been very 
timely in your repayments, and we as a government need to be 
very timely in reconciling your account and getting you the 
right amount of money. We will be following up with you in the 
coming weeks to make sure that has happened.
    Major Riggins. Thank you, Mr. Chairman.
    Mr. Platts. Next, Sergeant Melinda DeLain.
    Sergeant DeLain. Mr. Chairman and members of the 
subcommittee, thank you for inviting me to testify at this 
hearing today. It is a distinct honor to be here to discuss 
Army Reserve pay issues.
    My name is Melinda Sue DeLain, and I am a sergeant in the 
U.S. Army Reserve with the 948th Forward Surgical Team located 
in Southfield, MI. I am a licensed practical nurse, combat 
medic, and emergency medical technician for the Army. My unit 
was deployed in support of Operation Enduring Freedom from 
January 20, 2003 through August 29, 2003. During this 
deployment, my unit had numerous pay issues. Some examples are: 
one, inaccurate base pay; two, no basic allowance for housing; 
three, no family separation allowance; four, no hazardous-duty 
pay; Five, no special medical or professional pay; Six, no tax-
exempt pay; Seven, no bonuses for those that were eligible.
    Basic allowance for housing and family separation allowance 
should have begun on January 20 with the mobilization of our 
unit from Southfield, MI to Fort McCoy, WI. This was not the 
case for all the soldiers who were eligible. And at least five 
soldiers had trouble receiving basic Active-Duty pay, 
professional pay, and/or allowances.
    During our actual deployment to Kandahar Army Air Field in 
Afghanistan, all 20 personnel of the 948th FST experienced pay 
problems associated with basic Active-Duty pay, professional 
pay, allowances, combat tax exclusion, and/or in-theater 
incentive pay associated with deployment.
    During the demobilization phase, at least 18 of the 20 
soldiers assigned to the 948th FST had pay problems associated 
with basic Active-Duty pay, professional pay, or allowances. 
Once home and released from activity duty, three soldiers were 
still receiving Active-Duty pay, at least 16 soldiers were 
still receiving hazardous-duty pay.
    The 948th's biggest issues began February 28, 2003, when 
our boots hit ground in Bazum, Afghanistan. Our unit in-
processed with an S-1 noncommissioned officer assigned to our 
higher command. Our unit was directed that our financial 
paperwork would follow us to Kandahar, Afghanistan, our final 
destination. I spent at least 4 hours trying to track down our 
paperwork to only learn it had disappeared. We had to then turn 
around and re-inprocess in Kandahar.
    With the arrival of our first leave and earnings statement, 
our unit learned how much we were not receiving what we were 
entitled to. As I was the acting S-1 NCO for my unit, a job 
that fell to me due to the fact that I had prior Active-Duty 
experience, I went to the personnel section for the 82nd 
Airborne, our ground support. Once there, I learned that they 
did not handle any reserve pay or issues dealing with pay, and 
that all questions had to be addressed in Uzbekistan. 
Everything had to be scanned and e-mailed there, and from there 
reservists would deal with the issues. This seemed to be a long 
process, and by this time it was the middle of March, and most 
soldiers were without pay other than base pay. It was also at 
this time that we learned that our pay would be divided into 
four separate checks. This just was not conducive to paying 
bills at home or Stateside.
    As time progressed into April, still without all the 
incentives for being in a combat zone, fellow soldiers began 
receiving e-mails from home regarding the inability to pay 
creditors. During this time, I was continuously at the 82nd 
Airborne PAC Office trying to get help in regards to pay. They 
copied our entire LES from January through April to allow me to 
figure out what each soldier was missing. I even called home 
two or three times to our home unit, the 323rd Combat Support 
Hospital hub in Southfield, MI, looking for direction and help, 
to only be told it had to be done in Afghanistan. As time 
passed without full pay, the morale of the unit fell and the 
stress levels increased. Stress already ran high in the 948th 
FST due to the nature of our combat mission, so this added 
stress was not conducive to the environment. Many of our 
soldiers started seeking treatment with mental health.
    Always taking care of the soldiers in my unit first, and in 
privacy, I could then worry about my own pay. Stressed about 
the lack of pay, since I am a single parent, I worried about 
the pay issues affecting my daughter, who was living with my 
parents. I had a new house to pay for that I had signed on 
January 18, 2003. I also had a relatively expensive vehicle at 
home to pay for. You need to know that I am a registered nurse 
in Michigan, and thus my expenses were relative to my job at 
home, not to being an E-4 in the military. Around the end of 
March, my mother, who was handling my bills, e-mailed me and 
asked me about the status of pay. My commander at this time e-
mailed her a memorandum for record to send to my creditors 
requesting that they work with my mother on payment issues--
payment plans, until our payment issues were fixed. Unknown to 
me, my mother and father were paying my bills so that I would 
not lose my house or car or become indebted to creditors. As 
this was not the first time pay issues had been a problem with 
the military, my parents were prepared. To this day, I do not 
know what I owe my parents, but I am sure I still owe them 
money.
    It was not till the middle of April 2003 that we started to 
receive our correct pay, still in four separate checks.
    Trying to keep track of all the soldiers' back pay that was 
due was done on an Excel spreadsheet. I spent numerous hours 
with each soldier to make sure that they were receiving the 
right amount due them. To be honest, I am not sure that each 
and every soldier actually received the correct pay.
    The problems continued once we got home. It took months to 
get our final payment, which was our travel voucher. I know 
that I did not receive my payment until the end of November, 
and some soldiers still did not have it at February's drill. At 
this point, I turned all pay issues over to the 323rd Combat 
Support Hospital in Southfield, MI. I do know that debts the 
Army says we owe them are still being taken out of our drill 
pay. Just last Friday, I received a call from a captain that 
has since transferred to the Inactive Ready Reserve. They had a 
debt collector calling her saying she owed over $500 due to 
them for overpayment.
    After the 948th deployment, there are only four soldiers 
left in our unit who actually deployed with us. Two transferred 
to the Inactive Ready Reserve, three left the unit, one moved, 
two discharged, one went to the National Guard, and the rest 
went back to original units as they were involuntarily 
transferred for this deployment.
    Mr. Chairman and members of the subcommittee, I thank you 
for the opportunity to provide testimony, and would be happy to 
respond to any questions.
    Mr. Platts. Thank you, Sergeant DeLain, for your testimony, 
and again for your service and your family's sacrifice on 
behalf of our Nation as well.
    [The prepared statement of Sergeant DeLain follows:]

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    Mr. Platts. Before we move to questions, I would like to 
recognize we have been joined by our Vice Chair, the gentlelady 
from Tennessee, Mrs. Blackburn. Marsha, thanks for being with 
us.
    I would like to start first, Mr. Kutz, with you. The 
studies you have done certainly paint a pretty bleak picture in 
regard to the reservists, 95 percent having at least one or 
more problems regarding their pay. We are going to get into 
some of the specifics of the types of problems. But did your 
study identify, if we took the 5 percent who didn't have any 
problems, what made them different that they got paid as they 
should have been? Is there something that jumps out? Any 
circumstances that jump out and say this is what we need to be 
shooting for with all 100 percent?
    Mr. Kutz. There were some differences in the units. Some 
had many more problems than others. The two largest units from 
Maryland and Texas had the most problems. There were some 
correlations with units that had a unit administrator, that was 
well trained, who was handling some of the pay problems, that 
may have helped reduce issues. Certainly all of them had some 
sort of problems from the units--there were no units that had 
no problems. So the 5 percent were spread across all eight of 
our case study units. But I don't think there was any in 
particular that I would say was that different for the 5 
percent.
    Mr. Platts. They were just a lucky few that got treated as 
they should have been?
    Mr. Kutz. Yeah. Probably lucky. Because they had the same 
types of special pays and various pay options that the other 
ones had.
    Mr. Platts. Your comment and your statements about 
technology. In today's world, technology is one area that I 
look at and stand amazed; we have companies that can track 
where every product in their inventory is around the world and 
how many are en route and where they are, yet we can't do right 
by our men and women in uniform. We certainly know we need to 
do a lot better.
    For our military personnel, I would be interested in what, 
if any, briefing you were given. As part of your mobilization, 
I know you go through a whole regimen of activities on the 
financial side, about having your financial papers in order and 
things. But specifically regarding your pay, what kind of 
information were you given up front to give you the ability to 
know what to expect?
    We can start, Colonel, with you and go across.
    Colonel Campbell. Yes, sir. The information we received was 
very general in nature. It was never specific as to how much 
anybody would receive for anything. You knew what your base pay 
was. I mean, that is published all the time. But beyond that, 
any special pay would be based on where you lived, what your 
rank was, various other things.
    So to answer your question, no, most people did not have 
any idea what they were going to receive once on Active-Duty, 
beyond basic pay.
    Mr. Platts. Major.
    Major Riggins. In my own personal case, the information 
that we received, or that I received was sketchy. But to be 
fair, that was based on the requirement for me to mobilize and 
move on from the station that I was at within about a day and a 
half. So the sum total of the experience was walking into the 
pay office, signing up, and saying this is what I need to do in 
order to--or, these are the pays that I need to receive, and 
then walking out of the office and just assuming it was going 
to be cared for.
    Mr. Platts. Sergeant.
    Sergeant DeLain. Actually, sir, that was probably the best 
part of our SRP in Minnesota, before we even went to Fort 
McCoy, WI to deploy. We sat down with each member of finance, 
we had all our personnel paperwork with us, they broke down our 
packets. They had pamphlets, a big table full of pamphlets of 
information. And they went through with each individual soldier 
and broke down exactly what you would be getting. This is where 
you are going to be deployed to, so you are entitled to this, 
this, this, and this. They circled everything, labeled it all 
down. It was--the only thing they did not tell us was that we 
would remain under the Reserve pay system, and it would be 
broken into four individual checks. That's the only part we did 
not know about.
    Mr. Kutz. Mr. Chairman, I would say, looking at the Guard 
and Reserves, we did find from a unit perspective, the ones 
that had the more detailed soldier readiness reviews did have 
fewer problems at the beginning. So I think what she had said 
there is probably accurate. And that would help the problem at 
the beginning.
    Mr. Platts. We do have votes going on now. The good news is 
these are going to be the last recorded votes of the day. The 
bad news is it means we are going to have to break here 
shortly, unless Mrs. Blackburn could preside. I apologize again 
and I appreciate your patience with us.
    I know we have displayed a sample of a leave and earnings 
statement. Even with the briefings and the more detail, what 
would be, from each of your perspectives, the likelihood of any 
soldier who has even been given a good briefing to really be 
able to look at this and in a quick, easy fashion say, yes, I 
was paid what I was supposed to? Because typically in a 
person's paycheck you get a pay stub, you know; if you are an 
hourly employee, how many hours you worked; what your rate is; 
boom, boom, what is subtracted. Obviously, this a lot more 
complex with the dozens of different categories and things.
    How certain would any of you be in saying, ``I know for 
certain I was paid accurately this month versus last month?''
    Colonel Campbell. Sir, my unit, probably 2 people would be 
able to do that out of the 11. It is something that was just 
too confusing for most people to spend time on. If their basic 
pay was there and the majority of their pay was there, the rest 
was just----
    Mr. Platts. Just kind of take what you are given and assume 
it is right?
    Colonel Campbell. Yeah. Correct.
    Major Riggins. While the leave and earning statement is 
somewhat confusing, I think a bigger piece of it was just 
knowing exactly what it was that you were supposed to be 
entitled to for the--and not having been associated with a 
unit, not having been completely up to speed, to be honest, 
with all of the changes that occurred in the 4 or 5 years that 
I had departed Active-Duty, it was quite an eye opener to see 
that it was a new leave and earning statement. And we--the 
folks that were in the same category that were with me, we 
spent quite a bit of time debating what we were entitled to and 
what we weren't entitled to, and all decided that, well, if one 
person was getting it, then we should probably all be getting 
it, and went back and adjudicated the issue that way with the 
finance office.
    Mr. Platts. A challenging approach, though.
    Major Riggins. Challenging at best, yes.
    Mr. Platts. Sergeant DeLain.
    Sergeant DeLain. I actually find LES to be pretty simple to 
read; but it was after years of Active-Duty is the reason. 
Usually it is usually only the unit administrator or the UA 
that can break it down. There are some special codes on there 
that you need to know when they start breaking it individually 
into groups.
    When we first got to Afghanistan, I went to the 82nd PAC 
Office to find out exactly what codes were being used on the 
LES so that we could break down, because my unit is a 
combination of doctors and nurse anesthetists and officers and 
enlisted, and so there was a big difference in the pay. But 
without having somebody that is knowledgeable in all the codes 
and each individual area of that, it would be difficult.
    Mr. Platts. It is, I guess, two steps. One is making sure 
that any pays or allowances that apply to you are accurately 
reflected, what you are supposed to be getting, and then are 
they actually there and being accounted for.
    Actually I am going to yield to our ranking member, Mr. 
Towns, and I will check how much time we have left on this 
vote. Actually, I think what we are going to do, because we 
have just 2 minutes left in the vote and we have just two 
votes, is we are going to recess, go over, get the two votes in 
and come back, and then we will be able to continue 
uninterrupted. So, I appreciate your patience. We stand in 
recess.
    [Recess.]
    Mrs. Blackburn. We will call the committee back to order. I 
do know that Chairman Davis is going to be coming our direction 
and he will have some questions.
    Let's see. Mr. Kutz, I think I would like to come to you 
first with a question if I might, please, sir. We hear from DOD 
that they have taken actions on several of the recommendations 
that you all have presented and that they have gone beyond what 
GAO recommended. And what I would like to know is if you can 
elaborate on that and spell out for us some of the actions that 
DOD has taken to address the pay problems.
    Mr. Kutz. Yes, with respect to the Army National Guard 
study we did last fall, they went back and for the units that 
we looked at, they looked at the particular problems we had 
there. They also implemented many of the recommendations we 
had, particularly the short-term ones, such as human capital 
and process issues. We had five issues that remained from that 
report and we reiterated those recommendations relating to 
human capital and to some short-term programming, things they 
could do on the IT side.
    With respect to the Army Reserve units, the eight units as 
part of this study, my understanding is that for the 
underpayments for all of the soldiers, that those have been 
paid. And again, we haven't validated that representation. And 
then for the overpayments, they established debts where 
relevant and are initiating collection process. Again, I would 
say that the representation had gone beyond what we have had. I 
believe that is probably true. They're proactive. They brief us 
quarterly or even more often on the status of what they are 
doing, and so I believe they are doing the best they can to, 
you know, make the best of a bad situation.
    It is a system that is not designed to take care of today's 
Army Reserve and National Guard soldiers that are mobilized for 
1- or 2-year periods. It was a system that was designed for 
weekend training and other short-term situations. So it's not 
designed to handle this nor the volume we have today.
    Short of a complete reengineering of that, which I said in 
my opening statement, we don't believe that they can complete 
this. Soldiers will still have pay problems in the Army Reserve 
and Guard, but we believe they have reduced the vulnerability 
and have improved customer service, so they should be better 
than they were when we started this.
    Mrs. Blackburn. Have you gone in and done any kind of 
statistical analysis by unit as to where the bulk of the pay 
problems exist and made any specific suggestions or has there 
been any specific cap applied to those?
    Mr. Kutz. With respect to the particular problems we found 
for the Reserves, there were two in particular that we have 
talked to them about it that they are going to try to deal with 
these, the combat zone tax exclusion, which some of the other 
individuals here at the table talked about. Everyone who was 
deployed was impacted by the systems problems that the 
Department has with that. So if they can make short-term 
systematic fixes to that, that would be a positive for tens of 
thousands of soldiers.
    So that's one thing that impacted everybody. We had 303 of 
our soldiers that were deployed overseas. This impacted all of 
them, not only from the standpoint that they didn't get paid at 
the front end, but many of them kept getting the benefit once 
they left country and they were no longer entitled to it. So it 
happened on both ends of this.
    The other special pay that was particularly error-prone was 
the hardship duty pay and they are taking some actions with 
respect to automating that. In the past, it's been what we call 
a manual workaround, where every month in theater someone has 
to input information into the system for a soldier to get paid. 
What they have done is automate that so that it automatically 
gets paid. It doesn't fix all the problems, but it does make it 
better.
    So I would say the combat zone tax exclusion and the 
hardship duty pay are the most frequent errors we have found as 
part of this study.
    Mrs. Blackburn. Thank you, sir. I will yield to our 
committee chairman for his statement and questions.
    Mr. Tom Davis. Thank you very much, Mrs. Blackburn. Our 
committee has been working closely with GAO and the Department 
to ensure that short and long-term steps result in correct and 
timely pay for Army Guard and Reserve. In 2003, of course, the 
GAO issued a disturbing report on pay problems experienced by 
the National Guard personnel mobilized under Title X, and then 
at that point we engaged GAO to look at the Army Reserve.
    I want to acknowledge the hard work that GAO has done on 
this investigation. And as we have heard, there continues to be 
a large number of soldiers affected by improper payment and 
payroll errors. And this committee wants to help see the 
reservists and the units participating in this study have their 
problems fixed as soon as possible.
    GAO visited the 629th Transportation Detachment stationed 
at Fort Eustis, VA and found that all 24 deployed soldiers 
experienced at least one pay problem. This is an intolerable 
situation and it is the equivalent of financial friendly fire. 
The challenges of integrating pay systems and processes is not 
singular to the Department of Defense or the Department of the 
Army, nor is it a problem that has cropped up overnight.
    Certainly the integration of payroll systems in such 
massive departments is long and difficult, but I think there's 
a lot that can be done to mitigate the problems were it certain 
that all the Department's witnesses today are as committed to 
fixing the system as they have been to fixing the National 
Guard payroll problems that we addressed in the full committee 
in January.
    At this time the combined efforts of the Army, the Reserve 
components, DFAS are moving, the pay administration for 
mobilized soldiers is moving in the right direction. And many 
of your initiatives are based not on the infusion of major 
additional resources, but rather the quality of the training, 
the guidance and system support infrastructure for existing 
human resources.
    Improvements have been made in training, procedural 
guidance, systems controls in support of the mobilized 
soldiers' pay. In many cases, the success of these improvements 
won't be visible with the original mobilizations and 
deployments in support of Operation Iraqi Freedom. They should 
result in improved pay support for those soldiers currently 
deployed under OIF 2 and to an even greater extent soldiers who 
are just beginning to be mobilized under OIF 3. DFAS will 
deploy the forward compatible payroll system in the Army 
Reserves and National Guard.
    DOD has been forthright in working with this committee and 
with GAO to support the soldiers and families. Fully and 
effectively addressing Army Reserve soldiers' pay problems will 
require priority attention and sustained and concerted 
coordinated efforts by DFAS, the Army, the Reserves to build on 
actions taken and planned. The Army, the Army National Guard, 
Army Reserve and DFAS have remained proactive in resolving the 
soldier pay challenges on the micro and the macrolevels and 
have remained engaged with this committee, and I want to thank 
them for their continued efforts in supporting the soldiers and 
family.
    [The prepared statement of Hon. Tom Davis follows:]

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    Mr. Tom Davis. And I have a couple of questions here, Mr. 
Kutz. You have described the multiple processes that need 
improvement. Where is the most emphasis needed and can we 
expect any real improvement without reengineering the process 
for paying mobilized reservists?
    Mr. Kutz. As I mentioned a moment ago, I think with respect 
to short-term things that can happen the tracking of soldiers 
is the one that caused the most problems. To the extent they 
can make short-term actions to track soldiers from mobilization 
to deployment to demobilization, that triggers a lot of the 
various pays. There was also one other thing that affected the 
303 deployed soldiers. That was the combat zone tax exclusion, 
and there is a programming change that they need to make to 
either the current system or, as you mentioned, the forward 
compatible pay that hopefully will allow the system not to 
withhold taxes. What the system does, it will not let you not 
withhold the taxes. It has to withhold taxes and pay them back 
later. Those are some of the things they could do in the short-
term that could help a lot of the soldiers.
    Mr. Tom Davis. Let me ask everybody this. Is it fair to 
expect a soldier who is being deployed, called from their jobs 
and families and being deployed in a far away country, to have 
the full responsibility for ensuring that he or she is 
receiving proper compensation or does DOD bear that 
responsibility or is it shared? Whose responsibility is to make 
sure the payment is right?
    Let me start with you.
    Mr. Kutz. I would say with the system as broken as it is 
now, at the end of the day there is a lot of responsibility on 
the soldier, which is not what we want. We want DOD to be 
responsible and have the soldiers focus on their mission. I 
would say a disproportionate share of the responsibility now 
falls upon the shoulders of the soldiers, and that's what we're 
trying to change and that's what DOD is trying to change. So 
hopefully as they make some of the improvements that you 
outlined, less and less of the responsibility will be on the 
soldier and they can stay focused on their mission.
    Colonel Campbell. The more you take the pressure off from 
worrying about pay, the better they can do their job.
    Mr. Tom Davis. Major Riggins.
    Major Riggins. The responsibility ultimately resides with 
the organization to be able to take care of those soldiers, 
sailors and airmen's pay in a responsible manner. It is still 
incumbent on the individual to check and make sure that a human 
error was not made and if one is made that they identify that 
back. But then it's also incumbent on the system to be able to 
resolve any problems that come up in a rapid fashion.
    Sergeant DeLain. I believe, sir, that somebody has to be 
responsible for it, but I think there should be somebody with 
every unit, that is their ultimate responsibility. We have 
people out there doing every job you can imagine. Why not 
somebody with every unit that is all they handle is personnel 
issues. We went with nobody to Afghanistan. We didn't have 
anybody in Afghanistan to help us at all.
    Mr. Tom Davis. And Mr. Kutz, to take people away from their 
families, away from their jobs and put them out there and then 
many of them--that is a pay reduction right there, because not 
every job pays their people. And then to send them over there 
and have them paid improperly, it has been a lot of hardship on 
people; families to support back home. And I wonder how we got 
in this situation. We have been mobilizing for months. This is 
not the first time in history that this has happened, that we 
were going to have problems as you transfer from reserve to an 
active status. We should have seen this coming.
    Mr. Kutz. I would agree. I think they have been trying to 
modernize their pay systems. We reported in 1993 and we 
recommended in a study we did that they should develop the 
integrated personnel pay system and they have been attempting 
to do so for a decade. And I think they are trying to do that, 
but it is proven to be somewhat resistant to reform at this 
point. And to the extent that they can put in an integrated 
personnel pay system, that is the long-term solution.
    Mr. Tom Davis. Sergeant, let me ask you, just elaborate for 
me on the effects the pay problems have on morale and on 
retention.
    Sergeant DeLain. Well, sir, as I said, there is only 4 of 
us out of 20 left in my unit. We are nondeployable at this 
point. And from the unit myself, there are very few forward 
surgical teams out there. They are really used quite a bit in a 
war zone or combat zone. So I think retention is probably at 
its lowest. I don't know the numbers, so I can't actually say. 
But I know for the personnel in our area, nobody is staying. 
Everybody is trying to get out, and unfortunately at this point 
nobody can get out.
    Mr. Tom Davis. It's hard enough being called away and not 
knowing how long you are going to be there, but not getting 
paid--do you agree with that, Major?
    Major Riggins. In my case the pay difficulty, as I stated 
in my testimony, was not a personal hardship on me, other than 
the time and frustration it took to get it resolved. However, I 
can easily see that soldiers who rely on this to--for their 
family, to feed their children, make their house payments, that 
these issues can be devastating.
    Mr. Tom Davis. Colonel.
    Colonel Campbell. In my case, it is a little different. It 
creates morale problems and you have to deal with those. My 
unit is a pretty specialized unit and everybody has retained 
and people have reenlisted, so we have not lost anybody.
    Mr. Tom Davis. Thank you all very much and hopefully we can 
move to get these issues straightened out.
    Mrs. Blackburn. I just have a couple more questions before 
we finish up. Major Riggins, you are part of the Individual 
Ready Reserve.
    Major Riggins. I was.
    Mrs. Blackburn. And how did this situation impact your pay 
status being part of the Individual Ready Reserves?
    Major Riggins. I am not sure I understand the question.
    Mrs. Blackburn. Did you find it more difficult as you were 
activated to resolve your pay issues? Do you think it was more 
difficult for you to get this resolved than it was for someone 
who is a part of the Army Reserve or someone who is on active 
duty?
    Major Riggins. Absolutely. Being an individual ready 
reservist and being called in to essentially fill a hole in an 
organization that exists, I didn't have habitual relationship 
with any one pay office. I didn't have the means or the 
resources or the connections to be able to turn to folks that I 
had been working with over the years to have these things 
resolved. So it was more difficult than I would think a normal 
unit that had been living and working together and had a pay 
office that they were habitually associated with to help in 
caring for them. I think it is particularly important at this 
time that the Individual Ready Reserve issues be resolved as 
we're looking at deploying quite a few ready reservists here in 
the future.
    Mrs. Blackburn. I asked the question, because I had--Fort 
Campbell is in my district and I had a great conversation with 
the gentleman that handles pay and all such for one of the 
units there and the institutional knowledge seemed to be what 
helped resolve so many of the situations that they felt like 
they faced. And for someone who is in the Individual Ready 
Reserve, I think not having that attachment would probably make 
that a bit more difficult. So were the resources that you 
needed, were they readily available or did you have to do all 
of this legwork yourself?
    Major Riggins. Actually, probably four of the happiest 
years of my life were spent at Fort Campbell serving with the 
101st Airborne. And I understand what you are saying that while 
there in an active duty component with a rapid deployment unit, 
you have the resources and people to talk to, the pay offices, 
the infrastructure is there to support those soldiers. As an 
individual ready reservist, I was on my own to find out who I 
needed to send forms to, who it was that was going to care for 
my pay issues, because it was not readily apparent.
    I was assigned to FORSCOM in Georgia but attached to the 
Air Force. The Air Force could not handle my pay issues. The 
Army wasn't sure they could handle my pay issues. So it became 
an issue of tracking down the right individuals.
    Mrs. Blackburn. As we look at moving forward and more 
deployments and activations with the Individual Ready Reserves, 
do you feel like DOD is on track to be able to handle the pay 
problems that would come from the Individual Ready Reserves?
    Major Riggins. I think that remains to be seen at this 
point. I personally don't have enough knowledge about what the 
internal changes are being made to ramp up for the recent 
public announcements that large numbers of individual ready 
reservists are going to be deployed. So I don't have enough 
personal knowledge to be able to honestly give you an honest 
answer.
    Mrs. Blackburn. Mr. Kutz, one more thing, your case study 
had 348 soldiers that were involved in that and you had 
hundreds of errors, underpayments, overpayments, late payments, 
a little bit of everything in that case study. Had DOD detected 
any of those errors or did they go undetected until you all 
found where the problems were?
    Mr. Kutz. For the most part, they were undetected.
    Mrs. Blackburn. Can you give me a percentage?
    Mr. Kutz. 90 percent were undetected.
    Mrs. Blackburn. I want to thank each of you, Mr. Kutz, 
Lieutenant Colonel Campbell, Major Riggins and Sergeant DeLain. 
I want to thank you for your testimony. You have raised some 
great issues that are important to the work that the committee 
does, but most importantly I think you have done a great 
service for other reservists and for the Army. And your 
testimony really is a critical part of what we are doing as we 
look to work with the GAO, the committee, the Department of 
Defense to be certain that what we do is of service to the men 
and women who are in uniform and we appreciate your service 
very much.
    At this time, I would like to call the second panel. I 
would like to request that each witness and anyone who might be 
advising you during your testimony please stand and raise your 
right hand and take the oath together.
    [Witnesses sworn.]
    Mrs. Blackburn. We are honored to have Lieutenant General 
James Helmly, Chief of the Army Reserve; Mr. Ernest Gregory, 
Acting Assistant Secretary of the Army for Financial 
Management; and Mr. Patrick Shine, Director of the Military and 
Civilian Pay Services for the Defense Finance and Accounting 
Service. And Mr. Gregory, we will start with you with your 
testimony. We observe the 5-minute rule, and of course you have 
the lights in front of you.

STATEMENTS OF ERNEST J. GREGORY, ACTING ASSISTANT SECRETARY FOR 
 THE ARMY FOR FINANCIAL MANAGEMENT AND COMPTROLLER, DEPARTMENT 
 OF THE ARMY; LIEUTENANT GENERAL JAMES R. HELMLY, CHIEF, ARMY 
    RESERVES, DEPARTMENT OF THE ARMY; AND PATRICK T. SHINE, 
 DIRECTOR, MILITARY AND CIVILIAN PAY SERVICES, DEFENSE FINANCE 
         AND ACCOUNTING SERVICE, DEPARTMENT OF DEFENSE

    Mr. Gregory. Yes, ma'am. In the interest of time, ma'am, 
you have our oral testimony there submitted for the record. So 
in the interest of time, I would like to summarize just shortly 
in less than that 5 minutes and provide you with your need.
    Bottom line, ma'am, is the witnesses and the findings that 
were presented by our first panel by the Government 
Accountability Office and by the Army witnesses who had pay 
problems. That is a totally unacceptable situation that those 
soldiers were put in and that they have been put in. And I 
would tell you that we have been working with the committee and 
the committee staff over the last, at least 7 or 8 months, 
working on a plan and developing a plan.
    We had 54 items of corrective actions that have been put 
into place. Those are broken down by immediate, near-term, mid-
term and long-term. We have coordinated with the staff to make 
sure we gave you the status as to exactly where we were. That 
was in the testimony that the GAO provided.
    I would tell you that the timeframe of the work that has 
been done by GAO, which has been valuable to everyone, 
especially us and the timeframe of the audit that was done 
relative to the U.S. Army Reserve was about along the same time 
line of the issues that they looked at. And I would tell you 
that our original plan that was 54 action items for us that 
centered just on the National Guard has been expanded to 
include those things that were found by the GAO which were 
unique to the U.S. Army Reserve, because many of the problems 
that were found under the National Guard were similar to the 
ones that were also found for the USAR. There were some Army 
Reserve issues that were separate and distinct and we have 
added those to our corrective action plan.
    It is our intention fully to work and continue to work with 
the staff in the Government Accountability Office to make sure 
that we continue to provide them updates, and we are diligent 
in working this issue. We are fully partnered, we in the Army 
and the Defense Finance and Accounting Service, who are our 
partners.
    I would like to say briefly, ma'am, that it is important 
that as partners everyone understand that the committee 
understand that we are all part of this process. And I would 
tell you that from a pay system's standpoint that to easily 
look and to blame a system is foolish, because the system needs 
input to work and the system needs to understand what's 
happening and where people are going, and for that we, the 
Army, are responsible. And so as partners, we are partnership 
in what we process and how we serve soldiers. We are also 
partners on what we are going to do to correct this problem and 
what we have been doing and we are going to continue to do it. 
Thank you, ma'am.
    [The prepared statement of Mr. Gregory follows:]

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    Mrs. Blackburn. Thank you, Mr. Gregory.
    General Helmly.
    General Helmly. Thank you, Congresswoman Blackburn. Just a 
few points I would like to make. And I ask that the statement I 
have prepared, similar to Assistant Secretary Gregory, be 
entered into the record and accepted.
    First, if I may refer back to the last panel, there was a 
question as to responsibility. I wish to make clear that the 
responsibility inside the U.S. Army Reserve is mine and mine 
alone. I share ownership of the various processes and functions 
within the Army and with the Department of Defense, that I 
accept complete and total responsibility for the welfare, 
readiness and training of the U.S. Army Reserve soldiers and I 
seek not to shirk that. That is the single reason why we have 
embarked upon, outside the confines, the focused confines we 
have before us, of aid to our soldiers. We have embarked upon 
probably the widest scope and most in-depth change that we can 
bring to this institution.
    I must tell you that one of our biggest challenges, though, 
is a bureaucratic intransigence. All the textbooks that regard 
major organizational change, the good news is they are all 
right. The bad news is we are learning they are all right 
because of the inertia that we have in this labyrinth of 
conflicting, confused, muddled policies and procedures, and I 
will be straightforward and honest. It is a wonder anybody gets 
paid accurately. That is not the function of the system, as Mr. 
Gregory's system, as much as it is the confused, overlapping 
labyrinth of policies and procedures that we use within the 
Department to go about personnel management and pay management.
    There was also a question as regards, ``length of 
mobilization history.'' Not even going back to Desert Shield, 
Desert Storm, which was the first, large scale mobilization of 
reserve component forces that we had since the Korean War, the 
facts are that we have been in a continuous state of calls to 
active duty since about January 1996 under another authority, 
Presidential Ed Select Reserve call-up, averaging 12 to 15,000 
Army Reserve soldiers annually. Because of the relatively small 
numbers and intensity, if you will, these problems escaped 
notice. I will tell you the same kinds of problems were 
resident there. They were more manageable because of the volume 
of soldiers being called to active duty was smaller and it was 
for 6 months and there weren't the unexpected extensions and 
that kind of thing. But largely, we experienced the same kind 
of problems.
    Some of this is information. When I assumed this position, 
I found a large amount of ignorance across our force and 
families as regards entitlements, authorizations, etc. We have 
embarked upon an extensive command information program inside 
the Army Reserve to communicate in a timely and accurate way 
with our soldiers and our families and to not allow the setting 
of what I would call false expectations as regards to 
frequency, duration, length of calls to active duty, or the 
kinds of benefits and entitlements that one receives when one 
is mobilized.
    I believe it impractical to authorize for every unit a 
separate individual to deal with the pay systems, but certainly 
nothing is probably more important to the soldier and the 
family than their daily life support, compensation if you will. 
We are capable of correcting this problem. It will require 
courage and consistency on our part. That is the single reason 
why I ask that the Army Reserve be the first component of any 
of the armed services to move to the Forward Compatible Pay 
System, followed by our being the first component of any of the 
armed services to move to Defense Integrated Management of 
Human Resources system.
    It is my professional judgment that given the nature of our 
all volunteer force, the fact that it is all volunteer, that 
one of the single biggest challenges that we face in this era 
of an extended duration of a very stressful war is to retain 
our soldiers, sailors, Marines, Coast Guard men. They are 
talented, they are smart, they are courageous and very loyal 
Americans, but it is my judgment that when it comes to pay and 
personnel support, we are short on delivery in the Department 
in terms of our policies, authorizations and certainly, as we 
have seen here, the actual delivery of services.
    And so I believe, though, that we are getting good support 
from Mr. Gregory's office, enthusiastic support. DFAS has in 
turn been most cooperative. We do have all of the challenges of 
any large organization, shortage of resources, inclusive of 
time. I do believe we know most of the problems. We are hard at 
work getting after them, and we will correct them.
    That's my opening statement. Thank you.
    [The prepared statement of General Helmly follows:]

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    Mrs. Blackburn. Thank you, sir.
    Mr. Shine.
    Mr. Shine. Congresswoman Blackburn, I would like to submit 
my formal comments for the record and make a general comment in 
the interest of time.
    We have heard several of the witnesses on the first panel 
talk about improper pay, and clearly that is an unacceptable 
standard and we in DFAS partner with the Army and in sharing 
the responsibility for improving those actions.
    I would like to harken back to a comment or question that 
Chairman Davis asked about did we not anticipate this, and the 
reality is that the benefits and the lessons learned from the 
Gulf war did tell us that we needed to improve our payroll 
systems. We recognized that two separate systems was not going 
to serve the readiness conditions of the Department of Defense 
in the future and therefore launched on to the integrated pay 
and personnel system, known as the Defense Integrated Military 
Human Resources [DIMHRS]. When we recognized in the late 1990's 
that wasn't going to be delivered as quickly as we had hoped it 
would because of all the complexities involved, we worked with 
the Department of Defense to identify an interim system known 
as the Forward Compatible Payroll System that could be designed 
using the same software that we were going to use for the 
Objective Integrated Payroll System in order to give us a 
replacement.
    You have heard Mr. Kutz talk about the fact that there are 
two issues that are really on top of the list that we would 
like to be able to fix for our deployed soldiers. The reality 
is one of them has already been fixed. That is automation of 
the hardship duty pay, which was done in April of this year and 
has saved countless, thousands of individual soldiers from 
having to suffer some of the same problems that you heard from 
the first witness panel.
    The other situation, is the fact that the system today does 
not pay combat zone tax exclusion or does not properly withhold 
it in the month in which it's entitled, is one that we've taken 
a look at that. And because of the age of the system, a 
deteriorated state, which is why it is in need of replacement, 
it would take us longer to fix that, than it would to actually 
deploy the interim system, which is scheduled to come up in the 
spring of 2005, at which time all Army Guard and Army Reserve 
soldiers, about 600,000 people, would be placed on this new 
system, which we think is the right way to go. And we think it 
is the best investment for DOD resources to do that and bring 
that up in the spring of 2005. And we are on record and 
currently on schedule to make that happen.
    But in the short term, recognizing the spring of 2005 is 
several months away and there are still people being deployed 
in harm's way, we have partnered with the Army to put together 
what we call a safety net. If that safety net had been in place 
when the individuals on the first panels had actually deployed, 
we believe the lion's share of those problems would never have 
existed or, if they had, they would have been caught sooner.
    A question that was placed to Mr. Kutz was how many of 
these problems did the Department of Defense find and how many 
were found by the GAO. We feel that situation would have been 
reversed where the response was that 90 percent of them were 
not found by the Department of Defense. We feel with the safety 
net we have put into place today, in fact 90 percent would have 
been prevented or found in time to fix the problems in a 
reasonable timeframe. But the other reality is that while 
that's the case, dealing with those problems and taking care of 
them in a satisfactory manner is still the standard we try to 
achieve. And I would like to publicly say that I think the 
statement that Major Riggins gave and the situation that 
occurred to him where he was passed from one office to another 
without a satisfactory conclusion was totally unacceptable, and 
I want to personally apologize to him for that terrible 
inconvenience.
    Those are the summation of my remarks, ma'am.
    [The prepared statement of Mr. Shine follows:]

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    Mrs. Blackburn. Thank you, sir. Mr. Shine, I think I will 
begin with you.
    Your integrated system, you are looking at having ready in 
spring of 2005?
    Mr. Shine. The interim system is not an integrated system. 
It is a replacement for the current payroll system which we 
call the Defense Joint Military Pay System. It has two 
components, an active component called AC and a reserve 
component piece called RC. And as General Helmly has already 
said, the RC portion is really designed to pay monthly drill 
pay. It was never designed to pay reservists who are deployed 
for long periods of active duty. That's the real failure with 
the system and that needs to be fixed.
    The Forward Compatible Payroll System will fix the fact 
that we will no longer have two separate and distinct payroll 
systems. We will be able to take care of any soldier regardless 
of their component on one payroll system. That is the good 
news. The bad news unfortunately is it will not be integrated 
with the personnel system, so many of the problems you've heard 
described here today that occurred because we didn't have good 
personnel accountability or we didn't have timely input from 
the personnel system, will not be fixed by the interim system 
that will be fielded in 2005, but will be fixed when the 
objective system known as DIMHRS is fielded.
    Mrs. Blackburn. So your interim system will be ready in 
2005 and your DIMHRS system, what is your time line on that?
    Mr. Shine. The DIMHRS system is not being developed by DFAS 
but actually being developed by the Office of the Under 
Secretary of Defense for Personnel and Readiness, and they have 
a timeframe that they are going to be fielding--and it varies 
by each service. And so the Army date--I will defer to Mr. 
Gregory.
    Mr. Gregory. We have been advised that we should expect to 
have the Army Reserve and Army National Guard, because that is 
our first choice to put the reserve component, no later than 
March calendar year 2006.
    Mrs. Blackburn. So we are developing an interim system that 
will go in the spring of 2005 and then the permanent system 
should be ready in March 2006?
    Mr. Gregory. Yes, ma'am. And to clarify that, as Mr. Shine 
said, the problem that the forward compatible pay system will 
solve and why it is so important, even though it is not 
integrated, it is going to solve the problem that Sergeant 
DeLain had when she mentioned that, well, I got my pay but it 
comes in four different checks. When forward compatible pay 
comes in, nobody will be getting four separate checks to figure 
out what's my total pay. There will be one.
    Mrs. Blackburn. Yes, sir. We appreciate that. And one of 
the things we would like to have, if you all do not mind, is 
the cost estimate of what you think it is going to end up 
costing to implement, develop and implement this system for its 
first year of implementation and then the human capital and 
personnel needs that are required by developing and 
implementing this system.
    Mr. Shine. Ma'am, just for clarification, which system?
    Mrs. Blackburn. I want both of them, the forward compatible 
pay and then the DIMHRS system.
    Mr. Shine. We will be happy to provide that to you.
    Mrs. Blackburn. Thank you. I appreciate that very much. Mr. 
Gregory, what actions have you taken to correct the specific 
pay problems that were identified in the GAO case study?
    Mr. Gregory. We have provided for your reference a copy of 
the work statements and the issues that we have been working 
with the committee on for this past 8 months. And those, ma'am, 
are directed at again, as I said, immediate corrective actions. 
And by immediate, means within 60 days; near term, mid term and 
long term. And long term, of course, the last one is the 
Defense Integrated Military Human Resources System, and as we 
said, it has been promised us by March 2006. But, ma'am, some 
of the things we have concentrated on--and because we haven't 
looked at doing a lot of systems work and investment to redress 
the issues in this GAO report for the U.S. Army Reserve. We 
concentrated on training, on process, on information. And 
ma'am, on page 6 of the report, you can get a feel for exactly 
the kind of things it includes in there. And one of the things 
that is included, as Mr. Shine referred to, the fix of hardship 
duty pay location, that hardship duty pay location affects 
quite a few. And 89 percent of the problems of----
    Mrs. Blackburn. Mr. Gregory, I appreciate that and we will 
have this as a part of the record. I am asking about the 
specific pay problems of those 348 soldiers in that case study.
    Mr. Gregory. Every one of the pay problems that was found 
for the Guard and/or the Reserve--I mean both different 
reports--but we handled the same way. We worked directly with 
GAO. And as GAO found the problems, we worked for the Army 
Reserve. We worked directly with the Army Reserve Command down 
at Fort McPherson, GA and we have worked with the unit that has 
been established at Fort McCoy, WI, as a centralized unit.
    Mrs. Blackburn. I don't understand from your answer, sir, 
that you all have addressed the individual specific problems 
for those enlisted men and women?
    Mr. Gregory. Yes, ma'am.
    Mrs. Blackburn. Each 1 of the 348?
    Mr. Gregory. Yes, ma'am.
    Mrs. Blackburn. We want to be certain of that. We 
appreciate the efforts that you're making in the aggregate, but 
I'll say that we continue to have a certain amount of 
frustration that we hear we're moving forward on systems and 
we're moving forward on addressing the pay problems for units 
as a whole, but it seems as if systems don't get developed as 
quickly as they should and time lines are not established and 
adhered to, so that continues to be a problem.
    You know, Major Riggins said in his testimony that his 
problems had not been addressed or fixed. Is someone going to 
address that?
    Mr. Gregory. Yes, ma'am.
    Mrs. Blackburn. General Helmly, I like that Airborne patch 
on your shoulder.
    General Helmly. No partiality to the 101st at Fort 
Campbell.
    Mrs. Blackburn. You can be partial all you want. You 
absolutely can. We think that the men and women at Fort 
Campbell have done excellent work as well as our reservists and 
our guardsmen in Tennessee who have been very active in this 
effort in the past couple of years, and we are very grateful to 
them. And when we have individuals that have problems with pay 
and families that have problems with pay, it does cause us to 
be concerned. And I appreciate the fact that you take total 
responsibility for the training and the goodwill of those fine 
men and women, and we share with you the frustration of muddled 
processes and procedures. I think that is frustrating for 
everyone involved, and so we do appreciate that you're placing 
some energy and effort into being certain that the deployments 
have predictability, that they have a system which is easily 
navigated for those families. You are responsible for what is 
actually overall a relatively small portion of the mobilization 
and pay process when you look at the total deployment. And how 
would you describe your command role in resolving the pay 
situation that we are facing today?
    General Helmly. Congresswoman, first, I think it's 
necessary to reflect that, as has already been noted, in large 
measure many of the pay performance problems emanate from 
personnel matters; that is, a failure to post records. In other 
cases, the authority, sometimes in law, have not been 
modernized. Largely all our personnel procedures as related to 
reserve component, systems, authorities, etc., were built for a 
different era and our assumption was that we would mobilize 
virtually the entire force and bring it to active duty, 
processes and systems.
    I believe you are aware of the fact that in Desert Shield 
and Desert Storm we placed all mobilized and reserve component 
members on DJMS active component. That was a part of that view, 
so be it, it resulted in improved pay, but a disastrous process 
wherein large numbers of servicemembers as we demobilized 
continued to receive active duty pay and we endured some horror 
stories of overpayments and recoupment and the hardships 
enacted on families and the members. My responsibility begins 
with, if you will, prior to mobilization, disciplining the 
records keeping, the personnel systems and processes and the 
updating of data bases and records. We are placing a great deal 
of command emphasis on that because even with Forward 
Compatible Pay system and ultimately DIMHRS we'll only be as 
good as the input that is in a timely, accurate way. We are 
disciplining our employees and members throughout the field 
with regard to a responsiveness.
    You'll pardon me, one of the reasons I am drinking coffee 
instead of water, I am recovering from jet lag from just 
returning from Iraq, Afghanistan, Uzbekistan and Kuwait. As I 
talked to our soldiers, one of their biggest complaints was as 
they send an e-mail back, which is a more common means today, 
than telephone call or snail mail as they call it, a complaint 
or a question, and they say, ``sir, I don't get a response.'' I 
must tell you that I--let's say in kind words, energize the 
chain of command when I find that on specific soldiers in units 
and then use that as a source of command emphasis through the 
chain of command at large. It is my judgment, as I said, we 
must improve that care and concern. So it starts prior to 
mobilization.
    Second, we have a policy which has had the effect of, once 
we have mobilized reserve component members, telling the parent 
chain of command everything is now the responsibility of a 
different chain of command. I must tell you there has been some 
friction because while I don't intend to try to exert direct 
control, I believe that I retain ultimate responsibility 
because that soldier is going to return to the Army Reserve. 
And if we want to retain them, we can't cut this off in a black 
and white kind of way, plus their family is still on this end. 
And I retain direct responsibility for ensuring their families 
get the proper entitlements and are cared for. So we are 
working all of those pieces hard.
    Mrs. Blackburn. So what I'm understanding you to say is 
that basically this system was not updated over the past 
decade?
    General Helmly. Yes, ma'am. That's correct.
    Mrs. Blackburn. So what you have is an archaic, labor-
intensive system that did not avail itself of developing 
technologies in an appropriate timeframe?
    General Helmly. That is correct, and it is built on an 
outdated system of policies.
    Last point I wish to make is in some way, in many ways, the 
cumbersome nature of this system has been confounded by the 
very overly rigid, centralized mobilization process we have 
used that has caused the late notice, innumerable changes at 
the last moment, etc., and all of those confound the people who 
are trying to input pay and personnel data.
    Mrs. Blackburn. Let me ask you one more thing, Mr. Hemly. 
Do you need specific targeted help in addition to what you 
currently have to run your program until the promised 
technology comes on-line in either spring 2005 and then spring 
2006?
    General Helmly. I don't wish to say no. That would imply 
that we----
    Mrs. Blackburn. Realistically.
    General Helmly. I don't know of an area where we would 
require Congress' help. I think we're getting it here seriously 
today. This helps shed visibility. The newly renamed Government 
Accountability Office reports, while many shy at those, have 
been very helpful in focusing us. I think the area where we 
need support is to maintain the resourcing stream and to 
maintain the congressional emphasis on the Department's reform 
efforts toward pay and personnel systems and processes.
    Mrs. Blackburn. I can guarantee you are going to continue 
to have Congress' efforts, because we have constituents who are 
very concerned, as are we, for them about these matters.
    Mr. Shine, back to you and Mr. Gregory, and this is a 
simple yes or no, the deadline or the goal, the time line for 
your forward pay system in 2005 and then the DIMHRS system in 
2006, how realistic are those deadlines and what are you doing 
to be certain that those get met?
    Mr. Shine first.
    Mr. Shine. Specifically, as it relates to the forward 
compatible payroll system, we have gone through all the proper 
milestone improvement schedules. We have a specific project 
development plan that includes not only the development of the 
system, but also the testing and training and fielding of that 
system. Up till this past month we have been monitoring that on 
a monthly basis in trying to apply resources in those areas 
where we didn't feel we were right on schedule. Starting this 
month, we have gone to weekly updates with that same intention 
in mind. If we continue to stay on schedule, and we currently 
are right now on schedule, sometime at the end of August, we 
should start the initial testing of the integrated pieces of 
the system. Because of the way we are trying to field this 
system as quickly as we are, we are actually fielding this one 
quicker than most systems of this magnitude. We are actually 
retaining the existing personnel systems, input systems and 
everything that the payroll system today talks to. So we call 
it an integration broker, a ring around, if you will, this 
commercial off-the-shelf software payroll system and making it 
link to all those other systems. That seems to be the most 
difficult part. Today as we speak at this point in time, we are 
on schedule for a March delivery to bring all the Guard, Army 
Guard and Reserve onto the Forward Compatible Payroll System in 
mid-month of March 2005.
    Mrs. Blackburn. Is this system being built on the same 
platform that your system is going to be built on or are we 
going to reinvent the wheel?
    Mr. Shine. It is using the exact same software, which is 
basically a PeopleSoft product.
    Mrs. Blackburn. Mr. Gregory.
    Mr. Gregory. First, on forward compatible pay to your 
earlier question to General Helmly, the Vice Chief of Staff of 
the Army went to the Defense Finance and Accounting Service and 
said we need this forward compatible pay as soon as we can get 
it. Is there something we, the Army, as your customer can give 
to you in terms of resources to help you serve our soldiers 
better? The answer from DFAS was we are on a very quick time 
line, as Mr. Shine stated, and that we want to make sure that 
it's properly tested, and putting money on it will not make it 
happen sooner, which means that we are working with DFAS on the 
time line they have established and we expect as their customer 
to have that in August--excuse me, in March. What we have asked 
DFAS to do is to enter into the operational phase and to 
identify a battalion for OIF 3 that we could help them and be 
part of their operational testing, which means an early test to 
see let's see how forward compatible pay does in comparison to 
the old legacy system. And we are working with DFAS in 
partnership to help them through their operational test phase.
    And with regard to DIMHRS, I can only tell you as a service 
who intends to be the first one in DOD on to DIMHRS--and I can 
tell you--and I am not the developer, I am a customer--I can 
tell you two things: No. 1, the Army has been involved with the 
DIMHRS effort since day 1. The Army again has a fully 
qualified, very expert finance officer, Army finance officer 
working with the Army DIMHRS's office to make sure that issue 
of integration of pay and personnel comes to fruition. That 
person is on board and working and we have done that over the 
years of development, and there have been many. As we have been 
told that we would have it to use in the U.S. Army Reserve--as 
General Helmly said, we have been told and updated as of this 
morning that March 2006 is the date we are going to have it.
    Mrs. Blackburn. Is this being developed in-house?
    Mr. Gregory. It is using, as Mr. Shine said, PeopleSoft--
the processes and integration takes the people in-house to 
determine that, but the software itself, no, ma'am. The 
software itself is a commercial off-the-shelf product and it is 
PeopleSoft.
    General Helmly. May I add one point to make sure it is 
correctly understood? This is a joint system. All of the 
services ultimately go into this, which adds to its 
capabilities, because as noted in the first panel, we have 
soldiers, sailors, airmen and Marines who have to go with each 
other increasingly in joint formations and then where we have 
service members who transfer from one service to another, we 
are able to subsequently not lose their pay records, promotions 
and all of those things in the process as happens most 
frequently today.
    So this is a Department of Defense initiative with the full 
and complete input, and in our case we can speak 
authoritatively.
    Mrs. Blackburn. We appreciate that. One of the frustrations 
that we have here is the fact that we have heard more than once 
that DOD has over 2,300 different accounting systems, that 
there is truly a lack of interface, that you do not have an 
enterprise technology, enterprise structure and a platform that 
all of these different financial accounting programs and 
personnel management programs run from. Now the problem with 
that to those of us that maybe aren't computer geniuses, and we 
are not a computer whiz and we are here trying to manage 
through these situations with our constituents, and the problem 
with that is we are always going back to square one. And you 
know, then we get into the excuses, well, we told you last year 
we were going to do this, but we haven't made any progress 
because of--this system doesn't talk to another system. And if 
we are going to build this and if we are still some months out, 
for goodness sakes, it seems to make sense that we would plan 
ahead just a little bit so that things are not as labor 
intensive, so that we do have systems that are through the 
different branches of the military that can talk to one 
another. And that just seems to make some good common sense 
there, and we certainly would hope that it will help with 
addressing that pay process.
    But I turn it--Mr. Schrock, do you have any questions.
    Mr. Schrock. No.
    Mrs. Blackburn. I know our chairman is trying to come back 
here. Mr. Shine, I want to hear from you before we finish this 
up. If I have some of our wonderful Tennessee volunteers who 
are in the Guard and they are going to be activated, how many 
different pieces of paper at this point in time right now, how 
many different pieces of paper, how many different forms are 
they going to have to fill out in order to get their pay? Is it 
four, is it five, how many will it be?
    Mr. Shine. I'm not exactly sure how many pieces of paper it 
will take, but I can get you an answer for the record. We 
actually share the mobilization process with the Army and so 
there are some Army forms, there are some DFAS forms, and I 
will get you an answer for the record.
    Mrs. Blackburn. Thank you, sir. And that will be helpful to 
us.
    Mr. Shine, let me ask you this also. You all were using a 
commercial off-the-shelf system, the PeopleSoft. OK, how much 
modification are you having to do to that to have it for your 
forward compatible pay system?
    Mr. Shine. Ma'am, I am not a technical expert, but let me 
do the best I can and at least try to get to the spirit of your 
question.
    PeopleSoft has a version that they call North American, 
which is the primary payroll engine that they sell to hundreds 
of private companies to do their payroll operations here in the 
United States. And what it really means is it is configured for 
the normal Federal tax withholdings, State tax withholdings, 
Social Security, and the things that normally occur to most 
private businesses here in the United States.
    Unfortunately, when we actually sat down--and I am 
actually, I apologize, I am really talking about the DIMHRS 
effort, when it first took a look at this piece of software. 
There was a determination made that the specific algorithm and 
logic of that particular piece of software would not work for 
the unique requirements of the U.S. military. There are so many 
unique legislative entitlements that individual soldiers, 
sailors, airmen and Marines are entitled to that the software 
that was being used, called PeopleSoft North American, would 
not work for the Department of Defense.
    However, PeopleSoft also sells their product to foreign 
organizations, and so they have another version they call 
PeopleSoft Global, and it is really designed to work in foreign 
countries where, as opposed to already having an existing 
structure, you basically build the logic and algorithms that 
supports the tax structure and the various withholding 
requirements of those foreign countries.
    We found that we were able to use the PeopleSoft Global 
software and actually build the unique legislative entitlements 
that accrued to the Department of Defense service members very 
well. And so, as a result of that, when the DIMHRS program 
management office decided to engage the PeopleSoft Global 
software, we in DFAS, when we got approval to develop the 
interim system, adopted the exact same software platform. We 
are using the exact same license that the Department of Defense 
already purchased. We did not have to purchase a new license, 
and the only thing we are having to do additional to that, 
ma'am, is not to affect the computation of the software itself 
as it computes pay.
    But I mentioned earlier this sort of ring that we had to 
put around it that we call an integration broker that allows 
the PeopleSoft software to talk to the existing personnel 
systems and accounting systems that are in existence today. 
With DIMHRS that will not be necessary because it won't have to 
talk to and interface with a different personnel system. The HR 
system and the payroll system will be integrated, and that is 
what the PeopleSoft product delivers.
    Mrs. Blackburn. Now, are you doing that in-house, or are 
you outsourcing that? Do you have a contractor doing that?
    Mr. Shine. It is actually a combination of both. Most of 
the requirements determination is coming from government, most 
of the software development is coming from contractors who are 
experienced in working with this particular product.
    Mrs. Blackburn. OK. Our concern is, when we hear a 
commercial off-the-shelf product, it has to have an enormous 
amount of modification. It seems like there are problems with 
that and getting it up and ready to run.
    Mr. Schrock, I know that you were on the original GAO 
study. Would you like to, since you had requested that study, 
ask a few questions?
    Mr. Schrock. I apologize for my lateness. I was chairing a 
committee, and it seemed to go forever. So I apologize, because 
this is an issue that is very important to me. As all of you 
know, I am a Navy guy. I know that is probably not too popular 
to say with this group. But we experienced problems like this 
when I was active duty, but it seems like it is even more 
egregious now. So let me go down and try to play catch up here 
a little bit.
    Mr. Shine, what has been done to identify the gaps by GAO 
and the number of soldiers ordered to active duty and the 
number who show up at mobilization stations and the overpayment 
problems that are a result of these accountability breakdowns? 
We heard that in other hearings in the past and wondered if 
there had been some resolution to this or some correction to 
this.
    Mr. Shine. Well, Congressman Schrock, I will tell you that 
personnel accountability is really an Army issue. Clearly, it 
is a direct driver and has a huge impact on whether we are 
going to be able to pay the people correctly. So if I could 
answer the second part of that question first, and then I will 
defer to the Army to answer the first part.
    Mr. Schrock. Great.
    Mr. Shine. What we have done, sir, is we have established 
since the first report to when we first reported back to your 
committee back in January of this year, we have established a 
safety net that we are working with the Guard and Reserve where 
we get identified to us the specific unit identification codes 
of the units that are mobilizing so that we can review to make 
sure that every soldier in that unit in fact got all their 
activity duty entitlements started correctly. And then the 
reverse situation when they are demobilizing to ensure that 
everybody who is in fact demobilized in fact was removed and 
had their active duty entitlements removed.
    We do run into issues, as you would expect, with situations 
for soldiers injured that are for some reason injured while 
they are on active duty, and they have to be retained in a 
hospital status, because obviously they are going to retain 
their active duty entitlements.
    But we feel with this safety net, sir, that we have 
actually been able to significantly reduce--I will not tell you 
it is with 100 percent, but I think we significantly reduced 
the causes of overpayments that were referenced in the original 
GAO report on the Army National Guard.
    Mr. Schrock. I may be asking things that have already been 
asked, so I ask your forgiveness on that. Why couldn't this 
have been foreseen, these problems we have?
    Mr. Shine. Well, sir, I----
    Mr. Schrock. I always look at the military as being so 
precise, so definite, so everything that is so perfect. And 
then when you see things like this happen, you wonder why did 
this happen? How could this have been allowed to happen?
    Mr. Shine. And, sir, what I can tell you is we realized 
back in the 1990's that we had an issue with the system that we 
have, that the system that we have is not the proper system to 
take care of these types of payments. And the Department 
launched onto an objective to produce an integrated payment 
personnel system that we call DIMHRS, the Defense Integrative 
Military Human Resource System.
    Nobody knew at that time that we were going to have these 
major deployments. Once we started seeing an increase in 
deployments at the time when we were going in the late 1990's 
into Kosovo and Croatia and those countries, we realized that 
the system we had was starting to get very, very fragile. And 
it was based on that, sir, that caused us to say that while 
DIMHRS is our objective solution, we need to get something 
soon, because the system we have now just will not work. Which 
was the genesis for the interim system we call Forward 
Compatible Pay. And while I and I think everybody that we pay 
would love to have had the Forward Compatible Pay System here 
already, the reality is we, sir, is we have put it on as fast a 
track as it can be in order to get it deployed as soon as 
possible.
    Mr. Schrock. Mr. Shine, correct me if I am wrong. Didn't 
some of these problems exist in Gulf I?
    Mr. Shine. Well, sir, actually the problem----
    Mr. Schrock. I'm sorry. Excuse me. And if they did, and 
they did and I think some of them did, why--that is 9, what, 9 
years later. I was wondering why it took so long.
    Mr. Shine. And actually, sir, you are right. There were 
problems. As a matter of fact, there was a 1993 GAO report that 
General Helmly was discussing just a little while ago. In those 
days, sir, we still had the two separate payroll systems, but 
in the Gulf war we actually moved the Reserve and Guard 
soldiers to the active system. We created a huge problem at the 
conclusion of the war, because, unfortunately, because of the 
lack of integration between pay and personnel we retained 
people on that active system, they continued to get paid 
literally millions of dollars. Congress got involved, and 
Congress had to actually pass legislation that waived many of 
those debts at that time. And it was a determination made at 
that time within the Department of Defense that the better way 
to do this until we had everybody on one system was to keep 
mobilized Guard and Reserve soldiers on the Reserve Component 
Pay System, sir, which has led to many of the customer service 
issues that you have heard enunciated both in the January 
hearing and this hearing today.
    Mr. Schrock. Secretary Rumsfeld recently appointed an 
independent commission to look at the overhauling of the 
military pay system. Will DIMHRS wait for the results of the 
study? And what if the findings don't jell with DIMHRS, what is 
going to happen?
    Mr. Gregory. Sir, if I may.
    Mr. Schrock. Yes, sir.
    Mr. Gregory. Congressman Schrock, I would say that I hope 
to God DIMHRS doesn't wait.
    Mr. Schrock. Doesn't what?
    Mr. Gregory. That it doesn't wait.
    Mr. Schrock. Oh, wait. Wait. I thought you said it doesn't 
work.
    Mr. Gregory. Oh, no, sir.
    Mr. Schrock. And I was going to say, we have a real problem 
if that is the case. We have a bigger problem than I thought.
    Mr. Gregory. No, sir. You asked if DIMHRS would wait for 
the outcome. And I would tell you that the best laboratory we 
have had for what we need in DIMHRS has been what we have been 
going through over the last couple of years. And what we are 
doing with regard to our plan for corrective action that we 
discussed at the last committee hearing and that we have 
brought up again today is to make sure that all the lessons 
learned we are getting from the first panel of our soldiers who 
were here with pay problems today, that we are looking at 
exactly how is DIMHRS going to address this. Do we have the 
right processes in place?
    Now, a question was asked before, sir, about when is DIMHRS 
going to be delivered to the Army, because we are first to get 
DIMHRS, and that has now have been targeted and been advised to 
me today, this morning, that it is going to be March 2006.
    Mr. Schrock. 2006?
    Mr. Gregory. Yes, sir. So I would say that there is time 
for the Secretary of Defense's special study to be taken under 
consideration and given the time line that we are on and when 
we expect delivery. And, but I don't want you to think that 
March 2006 is the only timeline and you won't see any improved 
systems until then. Mr. Shine discussed and clearly explained 
how.
    Because of that long time line, the Defense Finance and 
Accounting Service came up with an interim solution, albeit 
interim, and nonintegrative with personnel, but it is the 
Forward Compatible Pay System. And that we should have in the 
Army and first in the Reserves in--Pat, correct me. Tell me 
exactly the date for Forward Compatible Pay?
    Mr. Shine. For who?
    Mr. Gregory. FCP. What is the date?
    Mr. Shine. March 2005.
    Mr. Gregory. March 2005. A year earlier.
    Mr. Schrock. And if they told you this morning March 2006, 
I guess I have been in government long enough to know it is 
probably going to slip a little.
    Mr. Gregory. Well, sir, I would tell you that Secretary 
Rumsfeld asked: We have to move this forward. Tell me how long. 
And that has been the--and tell me when it will be available. 
That was the date provided, and the date provided to us as the 
customer.
    Mr. Schrock. Let me ask you, General, in your opinion, what 
is going to be the effect of pay system failures on your 
retention efforts once stop loss has been lifted for returning 
units? Are they just going to get so fed up they are going to 
say I am out of here?
    Lieutenant General Helmly. Thank you, Congressman. That in 
my judgment is the central point to make the point earlier. 
Given the stresses and strains on the force and the pressures 
of war, this is the first extended duration conflict of this 
intensity we have fought with an all volunteer force, and our 
soldiers are long on courage and competence, short on patience. 
To date, we have seen no specific----
    Mr. Schrock. Typical Americans, in other words?
    General Helmly. Yes, sir, and I must say that I am one of 
those who is short on patience as well.
    I have seen no specific noticeable decline in retention. 
However, that candidly is a part of the problem. Because as I 
have approached for varying authorities and changes in 
retention policies, entitlements, and procedures, the inertia 
of the bureaucracy says, you don't have a problem, you don't 
need that. We have to change the way we think, and that is to 
be preventive minded.
    I believe that the effect on retention will certainly be 
negative. I am unable to quantify that. But it will not be 
solely because of pay. It will be the combination of pay and 
personnel systems and policies that our soldiers see as harmful 
and deleterious to their personal and family welfare.
    Mr. Schrock. Mr. Chairman, just let me ask one more 
question, if I can. And let me preface it by saying the only 
day I don't like the Army is when they play Navy. The rest of 
the time I think they are great. And I have been to Afghanistan 
and Iraq a few times, and they are absolutely amazing people.
    General Helmly. Congressman, the feeling is mutual, I will 
assure you.
    Mr. Schrock. I accept that.
    Mr. Shine, how do you characterize the soldiers, or anybody 
for that matter, who would accept active duty pay month after 
month without reporting for active duty, and what actions have 
been taken to pursue those folks and collect those payments? 
They had to know at some point they were going to get----
    Mr. Shine. And, sir, I would just say that each one of 
those is on an individual case-by-case basis. There are 
actually some overpayments where--and we had a mockup here of 
the leave and earning statement here earlier, that in some 
cases, before we made some of the improvements we made to the 
leave and earning statement, it was somewhat difficult 
especially when there were things happening to a soldier's pay, 
when there were multiple transactions occurring, it actually 
could have caused confusion, in which case I think we would 
take a look at that and make a judgment on our own that it was 
probably something that was difficult to determine.
    In cases where we think it probably was a situation where a 
prudent person would have known that they were receiving 
overpayments, we normally refer those to an investigative body, 
either the Defense Criminal Investigative Service or the 
Criminal Investigative Division of the Army, for their 
determination of any criminal wrongdoing or fraud.
    Mr. Schrock. And the opposite of that as well. Some 
soldiers were not paid month after month after month after 
month, which I think caused them great harm financially at 
home. And I am hoping--that may have been discussed earlier, 
but I am praying to goodness that got solved as well.
    Mr. Shine. That is an unacceptable standard. And that is 
what the safety net that I discussed earlier, sir, was put in 
place, with the intention of trying to prevent those types of 
situations from occurring.
    General Helmly. May I add one point?
    Mr. Schrock. Yes, sir.
    General Helmly. While we are here focused on pay, the facts 
are that we in the Army Reserve Command find that our most 
accurate data--and this may be shared--regarding who is 
mobilized for what length of time, and the number of soldiers 
mobilized actually comes from the DFAS data base. We do that 
for two reasons. First, if soldiers are not getting paid, they 
are going to complain. And, second, we have such a confused 
labyrinth of orders, etc., in the mobilization process that we 
are simply almost incapable of getting accuracy regarding 
personnel accountability. And so we get our most accurate data 
regarding Army Reserve personnel accountability and numbers, 
etc., from DFAS.
    Mr. Schrock. Thank you, Mr. Chairman.
    Mr. Platts [presiding]. Thank you, Mr. Schrock, and I 
appreciate your standing in as the ranking member and I had to 
manage a bill on the floor dealing with financial 
accountability with the Department of Homeland Security. So I 
appreciate your working with Mrs. Blackburn and running the 
hearing in our absence.
    Mr. Schrock. Well, Mrs. Blackburn really did it, and I came 
in and she yielded.
    Mr. Platts. I will be sure to let Marsha know you gave her 
appropriate credit.
    I want to thank each of you belatedly for your 
participation here today and your testimonies, and also your 
patience in getting started and us having to run in and out of 
the hearing. And, also, both General Helmly, your service in 
uniform and your two colleagues on the civilian side, all of 
you, your service to our Nation is much appreciated. And we 
know you are doing your best to do right by all the men and 
women in uniform. That is certainly what we are all about.
    I will try to gather my thoughts and not duplicate too much 
what has already been addressed by other members and the staff 
we are working with. Let me start with one of the issues that I 
think it was Major Riggins and his recommendations that would 
help cut through, and this deals kind of with any entity where 
you are dealing with clients. And I will say for the soldier 
being a client, in the sense of if they are not being paid 
right and they are coming to the Department, to whichever 
branch, for assistance and the customer service, he described 
what I would characterize as an ombudsman's office, where there 
is kind of a one-stop shop. Where does that stand? I know we 
are trying to, like the Cleveland center, to consolidate. But 
where does the trouble shooting office stand right now as far 
as troops who have difficulties?
    Mr. Gregory. Sir, if I may.
    Mr. Platts. Yes.
    Mr. Gregory. We will take both sides of our reserve 
component. In the National Guard Bureau, as a result of 
Congressman Shay's recommendation, at the hearing, at the 
committee hearing, full committee hearing, he recommended the 
ombudsman be established, and that has been established in the 
National Guard Bureau and the ombudsman office. And there has 
been a bunch of 800 numbers established, and that has been 
propagated into information and in pamphlets, and every soldier 
gets to see that and carries a trifold, a little item that he 
gets and tells them, if you have a pay problem here is where 
you go.
    Now, at the same time, I would tell you that the U.S. Army 
Reserve has had a central place to go. It wasn't called an 
ombudsman's shop, but it is a central place to go, and that is 
the element that exists at Fort McCoy, WI. And, in effect, I 
would tell you that the U.S. Army Reserve led that, because 
they have had that established even before we had our hearing 
and before these findings come out. But as a result of doing it 
in the Guard, we have worked with the Army Reserve, and the 
Army Reserve is going to establish at Fort McCoy, WI with the 
facility they have an ombudsman, and to make sure that 
ombudsman has all the communication lines they need so that a 
soldier or family member, a spouse that has problems can go 
forward and say, hey, I am so and so, and I have this problem. 
Help me.
    Mr. Platts. Is the existing office with the Guard and the 
Reserve and this kind of more formalizing I guess this 
ombudsman's office with the Reserve, is it something that is 24 
hours a day, you know; in other words, anticipating the troops 
deploy at different times around the world, their ability that 
when it is their morning, it is night here, or vice versa, you 
know. Is there going to be not just numbers or e-mail but 
actually----
    Mr. Gregory. Mr. Chairman, I am going to be honest with 
you. I can't tell you what the hours of operation or 
availability are. I will find that out and certainly submit it 
in writing for the record.
    Mr. Platts. My reason for asking is we are making this as 
easy as possible, especially for those deployed troops that, 
you know, on their schedule, their timeframe, that we are 
available to trouble shoot. Because I think financial stress is 
a key challenge for any family. And especially when you have 
family members serving in harm's way, adding financial stress, 
is really a deadly mix.
    Mr. Gregory. Yes, Mr. Chairman. I would like to also say, 
because of referring to Major Riggins' comment where, no matter 
who he called and no matter where he went to in customer 
service, he was sent back to the first place. And, sir, I would 
refer to you in here and to our corrective action plan, you 
will see that one of the actions that we have taken is to train 
and advise and to bring and to make responsible as part of our 
mobilization, demobilization standard operating procedure, is 
that no matter where you go as a soldier, whatever finance 
office you go to, wherever it may be, that finance office 
becomes responsible to solve your problem.
    Mr. Platts. So no passing of the buck?
    Mr. Gregory. That is correct, sir.
    Mr. Platts. That is great to hear, and it has to be 
frustrating. You know, you are trying to get resolution and you 
are sent back, kind of like that perpetual customer service 
desk where you are just in the loop, you never actually get any 
assistance. And, again, especially for our troops deployed, 
they don't get passed along, but that somebody really does take 
responsibility.
    I do commend the Department in response to the GAO report 
last November and the hearing in January with the Guard and a 
lot of which we realize carries over to the Reserves, that the 
Department is being very proactive in moving forward with those 
recommendations and even other actions that weren't part of the 
recommendations, to address these very serious problems, that 
we do right by each and every man and woman in uniform.
    You referenced what the Guard is doing with an ombudsman. 
One of the things that I was interested in that came out of the 
GAO report is the guard booklet, which is a one-stop shop in 
print for the troops on where to go. I do notice that this is 
for the Guard specifically, in the way it is marketed. Is there 
an equivalent for the Reserve?
    Mr. Gregory. Sir, the items that were found that were as a 
result of GAO's report on the U.S. Army Reserve versus--or in 
addition to the National Guard, we have taken all of those 
other type of findings, different things. There are things that 
we have opened. And certainly the best ideas we intend to bring 
to the U.S. Army Reserve, and to do that, to make sure that is 
done. There is already an information pamphlet that is out from 
the U.S. Army Reserve, but we intend to make sure that same 
information is available to the U.S. reservists.
    Mr. Platts. It is not yet in this format? Because this 
seems like a very good, user friendly format: Here it is. If 
you have any questions, here is who to call, here is what to 
do.
    Mr. Gregory. Mr. Chairman, the outcome of this review that 
was expanded to the Reserve with the corrective actions will 
include that.
    Mr. Platts. I am glad to hear that. But, General, if could 
just--why it took a followup inquiry on the Reserve versus----
    Mr. Gregory. Sir, the difference was that in the Guard, the 
Guard was 54 separate entities and is 54 separate entities as 
opposed to the U.S. Army Reserve, which took the initiative to 
establish a single point of contact at Fort McCoy, WI.
    So our question was, was it necessary? Was it required? 
Once we found--and notwithstanding it is a great idea, but once 
we understood that, hey, we have a similar problem with the 
Army Reserve notwithstanding the initiative that the Reserves 
took, then we are going to act on it.
    Mr. Platts. Great.
    General.
    General Helmly. Congressman, two aspects. The handbook 
deals with soldier and family information as to entitlements, 
processes, systems, redress, procedures, etc. In addition, we 
have just published--and I hold in my hand--the first of June, 
standing operating procedures which guide and try to discipline 
those in the provision chain, all the way from unit 
administrators to the people working input stations and 
mobilization stations. This was coordinated with both DFAS and 
Mr. Gregory's office, because those--they govern the systems 
and processes. We have established out of St. Louis a citizen 
Web site. It is new. It provides accurate Web-based information 
response. We have put I won't say hundreds of millions, but 
millions of dollars into modernizing the pay support center at 
Fort McCoy as well as St. Louis on the personnel side, trying 
to provide the modernized technology for recording for 
immediate response interface between voice and e-mail and data 
bases. All of those are new.
    I must tell you part of this is culture change. Those 
processes and bureaucracies have in the past not been sensitive 
to soldier and family requirements, and so a large part of our 
effort is on putting starch in that, if you will, with command 
emphasis. And, where necessary, I must tell you--you spoke to 
the issue of over--or Congressman Schrock did, I apologize, to 
overpayments. Similar to that higher in the chain of command 
you go, we initiate the disciplinary actions to try to send a 
message that the old days of sloppiness, inaccuracy, and 
insensitivity are over. They are just gone.
    Mr. Platts. And I am glad to hear that, and I think that is 
a very important message to be sent, that these are serious 
issues and deserve everyone's full attention. Again, I 
appreciate the proactive approach that is now going and 
Chairman Davis and Chairman Shays and others, who have been 
part of this effort in helping to push that effort, because 
it's somewhat frustrating when you look at the GAO report of 
1993 that showed after the Desert Storm what happened; and as 
we went through the 1990's and knew we were relying more and 
more on Guard and Reserve, and are seeing that with the 
existing numbers of deployed, over 150,000 Guard and Reserve 
who are active now. All the more that this has to be a priority 
because it is the way our force structure is set up, and it is 
going to continue to be the way of doing business.
    So I have some other questions, but I want to yield to my 
ranking member, the gentleman from New York, Mr. Towns.
    Mr. Towns. Thank you very much, Mr. Chairman.
    Let me also apologize. I was a part of the bill that they 
have on the floor, and I am not sure whether these questions 
that I am going to raise have been asked already. But the point 
is I was not here. So I would be happy that you repeat at least 
for my understanding and for the record as well just in case.
    Mr. Gregory, for the past 10 years DOD has been on GAO's 
watchlist. Why, after 10 years, has DOD been unable to 
successfully modernize its military pay system so that our 
soldiers are not subject to the errors and details to the first 
panel's testimony in terms of all kind of mistakes have been 
made? Why haven't we been able to move along and show some 
improvement over the past 10 years?
    Mr. Gregory. Congressman Towns, I would say that there has 
been change over the last 10 years, but it has been marginal 
and incremental. We have been brought to an understanding 
because of the engagements we are currently involved in and the 
level of engagements, and how that really has impacted our 
reserve component that, as General Helmly said, we need a sea 
change, and we haven't done a sea change. We are doing a sea 
change now. We are in the middle right now of looking at--and I 
would tell you that it is certainly needed. We have the need 
and we have identified the need to do integrated processes with 
personnel. Personnel actions drive pay. And it is because of 
those that we are looking for and have been in development of 
an integrated personnel and payroll system for many years, I 
would say at least seven. But because it is a joint system, not 
just serving the Army, not just serving Army reservists, but 
the whole department, Army, Navy, Marine Corps--and I would 
tell you, too, that the Coast Guard intends that once we have 
it developed that they intend to adopt it. Sir, I would tell 
you that getting all of the individual requirements of the 
individual services, getting all of those nuances that exist 
together into an integrated process that will result in proper 
pay actions, timely and accurate pay actions has taken an awful 
long time. But, sir, it wasn't because we were denying the 
problem. We just haven't gotten there.
    Mr. Towns. Do you have a timetable as to when you might get 
there?
    Mr. Gregory. Sir, I was asked previously. But right now at 
the Defense Integrated Military Human Resource System, which is 
the integrated personnel and payroll system, is to be available 
for our use and have people on the system in the Army--because 
the Army will be first and the Reserve component in the Army 
will be first. It is now targeted and scheduled for March 2006.
    Mr. Towns. That is good to know. That is good news. 
Lieutenant General Helmly, let me ask you. I guess from a 
morale standpoint, I am concerned that the problems being 
experienced by our reservists will discourage them from 
continuing to serve in the future. Can you provide us with any 
statistics on the number of reservists who are not re-signing 
once their term expires because they are just sort of fed up 
with the fact that there is a lot of confusion around the pay 
and it has created hardships for their family? Do you have any 
statistics on this?
    General Helmly. Congressman, first of all, let me state 
this, and I state not for advertisement. The most frustrated 
soldier in the Army Reserve regarding the antiquity of the 
personnel, personnel bureaucracy and the policies is myself. On 
any given date I have the dubious honor of being asked to leave 
some of the finer offices in the Pentagon for just raising the 
devil about some of the changes we have put forth with regard 
principally to policies.
    I must say with regard to pay, on those, with the 
leadership of Mr. Gregory, we have seen marked cooperation and 
support for reform of pay systems. What we have not seen is an 
equal amount of energy with regard to modernization of 
personnel policies.
    Specifically to the issue, I am unable at this time to 
provide you any specific quantifiable decrease in retention. 
That is all the more amazing, considering the kinds of problems 
that we are facing here today. Our overall, both first term and 
career retention rates today are at about 98.4 percent of goal. 
Our recruiting is also amazingly, if you will, off the street, 
on target. I must tell you, though, that I believe there is a 
potential tsunami of a problem. That is because the intensity 
of the war continues.
    Second, we are now in the era where this large number of 
soldiers we mobilized for what we are calling OIF I, 
approximately 72,000 soldiers has now been redeployed and is 
entering the window of demobilization and the period of time in 
which stop loss is effective. I have done my best to try to 
normalize our statistics to exclude a what I call artificial 
retention imposed by stop. We are plowing brand new ground. We 
have never before engaged in this level or volume of 
mobilization over this extended period with the frequency and 
intensity and, add to that, the casualty rates that we are 
enjoying. By enjoying, I mean having happen to us. Certainly 
none of us are enjoying them in a positive sense.
    So that is part of the frustrating problem, is, in my 
judgment, we are facing a potential, not crisis but problem. 
But as I approach asking for certain authorities and changes in 
regulation and policy as regards retention capabilities and 
authorities, I am often told: Well, you don't have a problem, 
General. We don't understand why you are asking for that if you 
don't have a problem.
    That is a mindset that has to change. We have to get ahead 
of this in order to ensure that the integrity of our all 
volunteer force is maintained. And so I accept very well your 
concern. I have no statistics to sit here and say I need this, 
I need that, based on a statistical challenge because I don't 
see that. But I believe that it is there; it is simply masked 
from view today, and we will know more within the first quarter 
of the next fiscal year as this first cohort for OIF I has the 
opportunity to then either ETS, take a 20-year inactive duty 
retirement, or some just exit the force.
    Mr. Towns. Thank you. Mr. Chairman, let me just ask one 
very quick question, maybe two, for Mr. Shine.
    You know, in the first group of witnesses a statement was 
made that if you had been overpaid, trying to pay it back 
becomes almost an impossible task. I mean, that was said twice. 
Now, but why, if I am overpaid, that me trying to pay it back 
creates impossible tasks? I mean, could you explain that to me? 
Because I heard it twice, and I turned to staff and I said, did 
they say that you can't pay it back even when you try? And of 
course the answer from the staff was yes as well. So I guess I 
heard that.
    Mr. Shine. Sir, the answer to your question is a very easy 
one: There is no excuse for it. It never should have happened. 
And I have already apologized to Major Riggins for it, because 
there is no excuse for the type of customer service treatment 
that he received. Once an overpayment has been identified, 
simply contacting the proper government official to effect the 
repayment is all that should be necessary. What happened was 
unconscionable and never should have happened.
    Mr. Towns. Thank you very much, Mr. Chairman. I yield back.
    Mr. Platts. Thank you, Mr. Towns.
    Mr. Shine, I appreciate that approach. And as I said with 
the first panel, I am planning on following up with those that 
were part of that panel, Major Riggins being one in specific, I 
guess, said does 14 months after demobilizing still have an 
ongoing case, which is just somewhat disconcerting. And I 
appreciate your agreeing and trying to make sure it is--you 
know, one case at a time. But if we track down each one of 
those cases, eventually we will get them all, and that we do 
right by him and all of his fellow men and women in uniform.
    And that relates to one question, that in Sergeant DeLain's 
testimony she talked about--and I guess they demobilized--I'm 
looking for a date here--sometime last spring, if I remember 
correctly. I am looking for the right timeframe. August of last 
year. That, as recently as she had been last Friday contacted 
by a captain who had a debt collector calling that they owed 
$500. How is, if there is still an unpaid balance--and I 
distinguish between somebody who was deployed, was doing what 
they were supposed to be doing and just got paid wrongly versus 
someone who wasn't deployed to active duty and knew they were 
getting active duty pay. But that person who was deployed, how 
do we treat? I mean, this reads like there is an outside debt 
collection firm saying, hey, you owe us money. How do we handle 
those cases in general?
    Mr. Shine. Mr. Chairman, it wasn't specifically addressed 
in today's hearing, but it was one of the items that was 
discussed at the January hearing. And that is, that when an 
individual isn't determined to be in an overpaid status and has 
a debt, we have an obligation by law to make sure they are 
afforded proper due process. And this was one of the things 
that we recognized was a deficiency in some of the overpayments 
that had been processed. And, again, it is one of those--when I 
talked about some of the safety net issues that we have 
recently established, it was not in place unfortunately at the 
time that Sergeant DeLain's unit demobilized. It is in place 
now. We do have a procedure where we get a management report 
each month that identifies individuals that are in debt, and we 
then make an attempt to make sure that either through DFAS or 
through the unit administrator that the individual is notified 
of the debt so they have the right to due process. In some 
cases, these people have now already left service, in which 
case we have a specific organization inside of DFAS that deals 
with what we call out of service debt. At that time, they are 
again afforded a due process. It is an official process where 
they are notified in writing, they have the option then of 
either repaying the debt, providing substantiating documents to 
show that the debt has already been repaid. Or, another 
procedure, which is to apply for a waiver or remission of the 
indebtedness. And there is a specific adjudication process that 
follows if in fact that happens.
    As a matter of fact, you may recall there were some 
individuals from the hearing in January who are still pursuing 
that adjudication process. Once an individual decides to pursue 
that, we suspend the debt until complete adjudication is 
decided. So while I can't comment specifically on the 
individual captain with Sergeant DeLain, I will be happy to get 
with her after the hearing so we can make sure we followup on 
it. The normal procedure is that only in a circumstance where 
we have tried to collect the debt, the individual had either 
chosen not to choose the waiver option or just said I'm not 
going to pay it, there are cases depending on the size of the 
debt. If it is not economically cost justified to pursue it, we 
will end up doing a write-off. But if it is, we will sometimes 
turn it over, and it will get reported against the private 
credit companies as a bad debt.
    Mr. Platts. And it comes--my understanding from what you 
just said it is after they have been given every opportunity to 
have their case heard, and if they believe they are not in 
debt, to make that case. So that adjudication process runs its 
course before there is an actual debt collection effort?
    Mr. Shine. That is exactly the way it should work. And of 
course, like I said, I will followup to see if in fact we had a 
problem with the individual that Sergeant DeLain referenced.
    Mr. Platts. That would be great. Thank you. Related to that 
first panel, we talked a little bit about Major Riggins and the 
efforts of better educating, whether it be Reserve or Guard, or 
in this case Reserve. He was part of the Individual Ready 
Reserve. And we saw recently over 5,000 troops in that category 
being called upon. So they are not--if I understand it 
correctly, if they are not really part of a specific unit, how 
would they be educated? He talked about the fact that his case 
was unique. But it sounds like we are going to have several 
thousand unique cases where they are not necessarily a part of 
a unit deployment so they may not get as detailed or lengthy of 
an upbriefing. How are you going to try to ensure that these 
pay issues are addressed even for those Individual Ready 
Reserve members?
    General Helmly. Congressman, I will take that, if I may. 
First, the current chain of command, the human resources 
command in St. Louis has shown an impressive degree of 
sensitivity toward these soldiers and their families and a 
recognition that they are not a part of the Selected Reserve in 
a unit.
    Second, they will go to a mobilization station. Those 
stations are in the process of being identified where they will 
go through a soldier readiness processing, including a complete 
physical and a determination of their capability for active 
duty service, because they are by definition in a more 
personally unready state not being a part of the managed force 
today. That mobilization station has the input capabilities, 
the counseling, and they will go through virtually, if 
anything, a stronger post mobilization readiness check 
briefings, the information sessions, etc., than our Selected 
Reserve soldiers.
    And, third, I just today spoke to our USARP, Army Reserve 
Command sergeant major and our OCARP Command sergeant major 
about promotion force, these soldiers, etc. And I OK'ed their 
approval, since there had been some resistance, and will begin 
directing tomorrow that these soldiers will be treated as an 
integral part. The vast majority of these soldiers were 
justified against Army Reserve specific shortages in units for 
OIF 3. And we will make a matter of exerted command emphasis to 
ensure at every turn awards, decorations, family readiness, 
information, pay, etc., and that they are treated no 
differently than soldiers who were already a part of the units. 
We will place maximum emphasis on that. I have told both 
command sergeants major my intent is to do a good enough job 
that these soldiers, once demobilized, wish to remain a part of 
the Selected Reserve rather than revert to the Individual Ready 
Reserve.
    Mr. Platts. That is a commendable approach, and I 
appreciate that determination on your part to see that happens, 
and that understanding of recognition that they are in a unique 
circumstance because of their status versus the Selected 
Reserve.
    General Helmly. Unique circumstance, but they are no less 
the soldier. And we are going to treat them in every way. 
Certainly we are treating them that way from the operational 
perspective and the decision to mobilize them that way and send 
them forward. We carry a complete responsibility to ensure we 
carry with that in spirit and intent and action all of those 
things that we care for our Active Duty, Reserve, or National 
Guard soldiers.
    Mr. Platts. That captures the message of the full committee 
and the subcommittee. These men and women are being sent into 
harm's way to defend our Nation and our citizens, and side by 
side you are going to have active duty personnel, you are going 
to have the reservists who have been mobilized. What we are 
asking of them is going to be the same, yet historically we 
have treated them differently. Again, I commend the efforts to 
change that mindset, that they are not treated differently, 
that they are treated the same.
    A couple quick final questions and then we will wrap up, 
because you have been very patient in your time here with us 
today and I appreciate that. One is related to that treatment. 
In looking through the booklet for the Guard, and this is 
specific to the Guard versus Reservists, but I assume it is 
something similar.
    The book talks about paying of bills and the ability to 
have automated payment. In the Guard book it talks about the 
fact that the Reserve component of DJMS does not have the 
capability to issue allotments to pay bills automatically. And 
so I guess actually it's telling me, that is, for Guard and 
Reserve there is not that ability. Is that something you are 
looking at when you are talking about trying to treat them the 
same? Or is it because they are mobilized for such short 
periods it is harder to have such an automatic payment?
    Mr. Gregory. No, sir. As Mr. Shine said before, you know, 
when the active component and reserve component versions of 
DJMS were built, the reserve component was built for a weekend 
drill person, and it was never expected--and I would also 
include that what also was not in the reserve component system 
or wasn't originally in the reserve component system was the 
accumulation of leave. Forward compatible pay resolves that 
problem. There--because----
    Mr. Platts. That is 2006?
    Mr. Gregory. No, sir. March----
    Mr. Platts. 2005.
    Mr. Gregory. Correct.
    Mr. Platts. And that will address that?
    Mr. Gregory. Sir, it eliminates two systems and makes them 
one. Making them one means it doesn't make any difference 
whether you are reservist or on active.
    Mr. Platts. And so that type thing, of automatic bill 
payment, they are all going to have the same opportunity?
    Mr. Gregory. Yes, sir.
    Mr. Platts. Great.
    Mr. Gregory. To include leave.
    Mr. Platts. That is a good example of the positive action 
that you are taking, and where we will look forward to the next 
spring being as we are treating them all the same. What is the 
timeframe--I know that FCP is kind of that interim stage and 
the Defense Integrated Military Human Resource System the long 
term goal. Is that something--that is the March 2006?
    Mr. Gregory. Correct, sir.
    Mr. Platts. OK. All right. Get my dates straight, and I 
think I came in on the middle of that question. That is 
something that I do want to emphasize. We are definitely moving 
in the right direction. General, your statements very clearly--
and actually all three of you acknowledging the wrongful 
practices of the past and a dedicated concerted effort to 
correct those wrongful practices so that they don't repeat 
themselves in the future. Each of you, as you work with your 
various units within the military and the Department but also 
as GAO, with the full committee and this subcommittee, 
appreciate that partnering that we are all on the same page, 
trying to move forward in a positive way.
    The final question I want to touch on, one of the issues 
that came forward, I think it was Colonel Campbell talked about 
the mandatory use of credit cards. Because of the way the 
systems are in place, it was almost a given they are going to 
be paying late unless they paid with their own money. So the 
late payment fees and, you know, kind of that impact on their 
own credit and administrative actions being taken against the 
soldiers. Given that DOD, and I think it is probably several 
hundred thousand credit cards out there. That is a pretty 
powerful bargaining position with the credit card companies. 
What effort is there to get a 45-day instead of a 30-day 
payment period, a waiver of late fees as long as there is 
consistently made late payments because of the way the process? 
What efforts of that nature have occurred or are under way?
    Mr. Gregory. Sir, I will tell you that in the beginning, 
because we saw this coming, especially with the numbers we knew 
we had to mobilize--and to the credit of the Bank of America, 
who is our contractor, they did not apply late fees for a 
period of I think 6 months, nor did they consider payments 
delinquent. Now, I think that period of time that the 
contractor--that we negotiated with the Bank of America was for 
about a period of 6 months. And then after that they said, hey, 
we have to go back to our business case and our business plan. 
So I would have to give credit to the Bank of America, that 
they did more than what a business could--should be asked to 
do. And I will tell you, they were very good about that, and 
they deserve credit for that.
    And relative to the situation today that caused Colonel 
Campbell the problem he did, I will turn that to Pat.
    Mr. Shine. And basically just sort of echoing what Mr. 
Gregory said, we actually did get caught a little bit behind 
there. And with the Bank of America's help, that gave us, if 
you will, a cushion. During that cushion time, there were two 
very significant events that happened. One was we recognized 
that the number of huge travel reimbursements that were going 
to be required because of the war on terror far exceeded our 
capability to handle. And with the Army's assistance, we 
brought on a corps of about 250 contractors.
    The second event, which actually came mostly out of General 
Helmly's organization was we activated--in addition to 
reservists that actually deploy, we activated five separate 
finance units out of the U.S. Army Reserve and Guard that 
actually came--who were actually trained to do this kind of 
work, and came and augmented that work for us. So by the time 
the cushion--if I can use that term--that the Bank of America 
gave us had expired, we had that turnaround time down to what 
we considered to be--our normal turnaround time is to process 
all vouchers ready to pay within 8 business days. And I was 
talking to Colonel Campbell at one of the breaks there, we hit 
that 90 percent of the time. And obviously on the 10 percent we 
don't, our customers tell us--and rightfully so--you all didn't 
hit the mark. But I think at 90 percent, with the volume we are 
dealing with, we are literally talking hundreds of thousands of 
vouchers now per month. I think it has been a real partnership 
between the Army and DFAS to try to get people paid so that 
when their credit card bill is due they have the money in their 
hand with which to make the payments.
    Mr. Platts. Great news. I appreciate that effort. And I am 
glad you had that 6-month cushion. As we are going forward in a 
positive way, you won't need it in the future because of the 
system being better and better.
    Mr. Towns, did you have any other questions?
    Mr. Towns. No. I would just like to thank the witnesses, 
Mr. Chairman, and to say that, you know, as we look at this I 
am thinking about the many soldiers whose credit has been 
really messed up as a result of this, and that creates a 
problem for them, you know, in terms of life, going on to 
purchase whatever it is, because once that is on your record it 
takes a certain amount of time to get it off even though it was 
not really their fault for it to be on there. So I think this 
is a very serious issue, and I appreciate the fact that you are 
addressing it in a very serious fashion, that you are now 
prepared to give it a date certain that you think that you will 
be able to correct the most of this. I think that is very 
encouraging.
    So I want to thank all three of you for your testimony.
    On that note, I yield back, Mr. Chairman.
    Mr. Platts. Thank you, Mr. Towns.
    I want to thank each of you again for participating today 
and for your efforts day in and day out on behalf of our 
Nation, and especially our men and women in uniform. As I said 
to the first panel and General Helmly, you know, what I do 
pales in comparison to you and all who are wearing the uniform. 
You set the example for all of us Americans and what it means 
to give back to one's country. So I thank you for your service. 
I am not sure, Mr. Gregory, Mr. Shine, if you either have prior 
military service. You both do? My thanks to each of you as 
well. It is something that I feel in my heart, I hope if the 
good that came from the terrible date of September 11th was a 
better appreciation of those who wear the uniform and a better 
expression of that appreciation day in and day out. So I 
personally thank you. And I would tell you that your efforts 
are truly critically important, not just in the sense of doing 
right by the men and women in uniform, from a general 
standpoint that is the right thing to do, but from a mission 
performance. Having had the privilege of visiting troops in 
Iraq, Afghanistan, Bosnia, it has been an honor to go out in 
the field to convey my thanks personally. A common--two common 
messages I hear or see. One is just a pride of service. We are 
so blessed as a nation by those serving who are in harm's way 
and proud to wear the uniform and to be serving their Nation.
    The second, is, if you ask soldiers what they worry about, 
it is to take care of family at home. I think it came through 
loud and clear that the better we do by the troops and their 
families, the more they can focus on their mission and do their 
job and do it so well as they always do, and not have the 
stress of any distraction, especially financial stress.
    Your work is so important to each of those individuals and 
to our Nation's security overall. I appreciate your efforts. I 
am very glad we are here where we are today versus where we 
were January at the full committee hearing and how the lessons 
from the Guard study and now the Reserve study are being built 
upon and we are learning what is working and what is not and 
moving forward in a positive way. That is a great message for 
those men and women in uniform.
    So, again, my thanks. We will continue to work with you, 
and I want to thank the staff on both sides of the committee 
who are working with members of your staff and GAO, and that 
partnership continues. At the end of the day we just simply do 
right by those serving our Nation in uniform. We will keep the 
record open for 2 weeks for any additional submissions. This 
hearing stands adjourned. Thank you.
    [Whereupon, at 6:10 p.m., the subcommittee was adjourned.]

                                 
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