[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]




 
 FINANCIAL FRIENDLY FIRE: A REVIEW OF PERSISTENT MILITARY PAY PROBLEMS

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

                                HEARING

                               before the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 27, 2006

                               __________

                           Serial No. 109-145

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpoaccess.gov/congress/
                               index.html
                      http://www.house.gov/reform


                                 ______

                    U.S. GOVERNMENT PRINTING OFFICE
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_____________________________________________________________________________
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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
DAN BURTON, Indiana                  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
GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
JON C. PORTER, Nevada                C.A. DUTCH RUPPERSBERGER, Maryland
KENNY MARCHANT, Texas                BRIAN HIGGINS, New York
LYNN A. WESTMORELAND, Georgia        ELEANOR HOLMES NORTON, District of 
PATRICK T. McHENRY, North Carolina       Columbia
CHARLES W. DENT, Pennsylvania                    ------
VIRGINIA FOXX, North Carolina        BERNARD SANDERS, Vermont 
JEAN SCHMIDT, Ohio                       (Independent)
------ ------

                      David Marin, Staff Director
                Lawrence Halloran, Deputy Staff Director
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on April 27, 2006...................................     1
Statement of:
    Kutz, Gregory D., Managing Director, Forensic Audits and 
      Special Investments, U.S. Government Accountability Office; 
      Lieutenant Colonel John M. Lovejoy, U.S. Army Reserve, 
      364th Civil Affairs Brigade, Portland, OR; Specialist Frank 
      Mangum, former Alabama Army National Guard, 279th Signal 
      Battalion; and Specialist Brandy Taylor, former U.S. Army 
      Reserve, 296th Transportation Company, Brookhaven, MS......    19
    Kutz, Gregory D.                                                 19
    Lovejoy, John M.                                                 41
    Mangum, Frank                                                    48
    Taylor, Brandy                                                   62
    Patterson, J. David, Principal Deputy Under Secretary of 
      Defense, Office of the Comptroller, U.S. Department of 
      Defense; Nelson Ford, Principal Deputy Assistant Secretary 
      of the Army for Financial Management and Comptroller, U.S. 
      Department of Defense; Zack E. Gaddy, Director, Defense 
      Finance Accounting Service, U.S. Department of Defense; 
      Mark R. Lewis, Assistant Deputy Chief of Staff, G-1, 
      Department of the Army, U.S. Department of Defense; and 
      Colonel Mark A. McAlister, Finance Officer, 18th Airborne 
      Corps, Fort Bragg, NC, U.S. Army...........................    87
    Ford, Nelson                                                     92
    Gaddy, Zack E.                                                  102
    Lewis, Mark R.                                                  114
    McAlister, Mark A.                                              119
    Patterson, J. David                                              87
Letters, statements, etc., submitted for the record by:
    Cummings, Hon. Elijah E., a Representative in Congress from 
      the State of Maryland, prepared statement of...............     7
    Davis, Chairman Tom, a Representative in Congress from the 
      State of Virginia, prepared statement of...................     4
    Ford, Nelson, Principal Deputy Assistant Secretary of the 
      Army for Financial Management and Comptroller, U.S. 
      Department of Defense, prepared statement of...............    94
    Gaddy, Zack E., Director, Defense Finance Accounting Service, 
      U.S. Department of Defense, prepared statement of..........   104
    Hayes, Hon. Robin, a Representative in Congress from the 
      State of North Carolina, prepared statement of.............    12
    Kutz, Gregory D., Managing Director, Forensic Audits and 
      Special Investments, U.S. Government Accountability Office:
        Example of a credit report...............................    21
        Prepared statement of....................................    23
    Lewis, Mark R., Assistant Deputy Chief of Staff, G-1, 
      Department of the Army, U.S. Department of Defense, 
      prepared statement of......................................   116
    Lovejoy, John M.,U.S. Army Reserve, 364th Civil Affairs 
      Brigade, Portland, OR:
        Leave and earnings statement.............................    42
        Prepared statement of....................................    44
    Mangum, Specialist Frank, former Alabama Army National Guard, 
      279th Signal Battalion, prepared statement of..............    50
    McAlister, Colonel Mark A., Finance Officer, 18th Airborne 
      Corps, Fort Bragg, NC, U.S. Army , prepared statement of...   120
    Patterson, J. David, Principal Deputy Under Secretary of 
      Defense, Office of the Comptroller, U.S. Department of 
      Defense, prepared statement of.............................    89
    Platts, Hon. Todd Russell, a Representative in Congress from 
      the State of Pennsylvania, prepared statement of...........    78
    Taylor, Specialist Brandy, former U.S. Army Reserve, 296th 
      Transportation Company, Brookhaven, MS, prepared statement 
      of.........................................................    64
    Waxman, Hon. Henry A., a Representative in Congress from the 
      State of California, prepared statement of.................    16


 FINANCIAL FRIENDLY FIRE: A REVIEW OF PERSISTENT MILITARY PAY PROBLEMS

                              ----------                              


                        THURSDAY, APRIL 27, 2006

                          House of Representatives,
                            Committee on Government Reform,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:03 a.m., in 
room 2154, Rayburn House Office Building, Hon. Tom Davis 
(chairman of the committee) presiding.
    Present: Representatives Tom Davis, Shays, Platts, Foxx, 
Waxman, Cummings, Kucinich, Clay, Ruppersberger, Higgins, and 
Norton.
    Also present: Representative Hayes.
    Staff present: David Marin, staff director; Larry Halloran, 
deputy staff director; Keith Ausbrook, chief counsel; Rob 
White, communications director; Andrea LeBlanc, deputy director 
of communications; Grace Washbourne, professional staff member; 
Teresa Austin, chief clerk; Sarah D'Orsie, deputy clerk; Leneal 
Scott, computer systems manager; Phil Barnett, minority staff 
director/chief counsel; Kristin Amerling, minority general 
counsel; Karen Lightfoot, minority communications director/
senior policy advisor; Andrew Su, minority professional staff 
member; Earley Green, minority chief clerk; and Jean Gosa, 
minority assistant clerk.
    Chairman Tom Davis. Good morning. A quorum being present, 
the Committee on Government Reform will come to order.
    Today we are joined by my friend from North Carolina, 
Congressman Robin Hayes, who has worked with us on behalf of 
the soldiers at Fort Bragg and has contributed to the 
improvements in the situation there. I would ask unanimous 
consent that he be allowed to join us today, and hearing no 
objection, so ordered.
    Today we are going to continue the committee's oversight of 
Department of Defense payroll, personnel, and medical systems 
intended to serve deployed service members, particularly those 
wounded in battle. Four previous hearings, here and before our 
subcommittees, have examined specific aspects of a military 
finance process that is badly broken. This morning we will 
discuss the impact of overpayments and subsequent debt 
collection actions on the lives of soldiers and their families.
    Between public sessions, the committee receives frequent 
briefings from the Defense Finance and Accounting Service 
[DFAS], the Army, and the Government Accountability Office 
[GAO], on the status of short-term work-arounds, mid-term 
initiatives, and long-term plans to modernize and integrate 
vital functions that sustain the financial lives of those 
injured on behalf of our Nation's defense. What we have learned 
continues to raise serious questions about the pace and the 
adequacy of efforts to address longstanding systemic problems.
    After hearing from many who had encountered pay and debt 
problems, we asked GAO to determine how many returning 
soldiers, from both active and reserve components, had been 
overpaid, how much was owed, and what steps DOD took to 
collect. We also asked GAO to focus specifically on 
overpayments to the injured National Guard and Reserve soldiers 
who transition through the facilities at Fort Bragg, NC, one of 
23 Army Medical Retention Processing Units.
    Keep this fact in clear focus: Almost without exception, 
the debts we are talking about are caused by a sluggish, 
misfiring pay system, not the soldier. Hazardous duty bonuses 
and other deployment-specific payments are not always shut off 
when the service member comes home. And once the error is 
discovered, it is the soldier or the family who gets the bill, 
not the Army. In some cases, a lump-sum deduction wipes out an 
entire paycheck. Other debts are reported to credit bureaus and 
sent to collection agencies, marring credit histories and 
impairing a family's ability to complete the healing process 
and to get on with life. Literally adding insult to injury, the 
systems that are supposed to nurture and support returning 
warriors too often inflict additional wounds to their financial 
health.
    The GAO reports released today point to this conclusion: 
Convoluted, disjoined, and error-prone personnel and pay 
systems continue to impose needless hardships on military 
members and their families. Despite earnest efforts by DFAS and 
the Army to train personnel, craft new procedures, and address 
individual problems, it is still far too likely the system will 
get it wrong. The sad sagas we will hear today from wounded 
soldiers about pay errors and debt collections are not 
anomalous or isolated cases. They bring tragic proof that a 
Byzantine and stovepiped system grinds on, all but impervious 
to fundamental change.
    In previous testimonies, DOD promised interim steps to 
merge pay, personnel, and medical data on returning soldiers so 
managers would not financially ``shoot the wounded'' by 
starting collection actions while the patient was still 
healing. In fact, the Wounded in Action Pay Management Program 
has cobbled together a tracking system. Many erroneous payments 
are being caught, and debts are being deferred or canceled. But 
a more comprehensive interim fix, the Forward Compatible 
Payroll system, was over budget, behind schedule, and has been 
abandoned. That does not bode well for successful development 
of the planned long-term fix, which is a fully integrated 
finance and personnel platform, the Defense Integrated Military 
Human Resources System. For the foreseeable future, wounded 
soldiers trying to avoid drowning in debts not of their making 
have to hope DFAS and the Army can keep plugging holes in 
aging, leaky legacy systems.
    Last year Congress gave the military Service Secretaries 
additional authority to forgive some debts, but the provision 
is set to expire next year, creating potential inequities for 
those discharged before or after the eligibility period. So we 
asked GAO and our other witnesses to recommend ways to make 
this process more soldier-friendly. The most complex 
battlefield system fielded by this Nation, the human soldier, 
deserves to be supported by fully modern, sophisticated human 
resource systems that account for the entire life cycle of 
those precious assets. Soldiers already injured should never 
face the risk of having their credit standing crippled as well 
due to error-prone military pay systems.
    We want to thank all of you for your testimony today. All 
the witnesses today bring important information and 
perspectives to this important work, and we look forward to a 
constructive discussion.
    [The prepared statement of Chairman Tom Davis follows:]

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    Chairman Tom Davis. I would now yield to the gentleman from 
Maryland for any opening statement he would wish to make.
    Mr. Cummings. Thank you very much, Mr. Chairman, I do thank 
you very much for holding this vitally important hearing on the 
perennial pay problems experienced by military personnel.
    In no uncertain terms, no military personnel who risk their 
life and limbs in the service of this great Nation should have 
to experience pay problems and their attendant economic 
hardship because the Government failed to operate effectively 
and efficiently.
    Soldiers fighting in the global war on terrorism have 
inappropriately incurred debts for which they bear no direct 
responsibility. Central factors contributing to this troubling 
state of affairs include the Department of Defense's attempt to 
recover overpayments, computation mistakes, and unearned credit 
related to enlistment bonuses and leave payments.
    As a result, succeeding paychecks may lag or be subject to 
substantial deductions in pursuit of debt collection. Moreover, 
DOD's inability to appropriately reimburse soldiers for 
expenses ranging from travel to insurance premiums has driven 
some soldiers into the unforgiving arms of debt.
    The scope of this problem is jaw-dropping. The GAO reports 
that by September 2005, 1,300 injured or killed soldiers 
serving in the global war on terrorism acquired more than $1.5 
million in debt because of DOD failures. Make no mistake, such 
debt has real consequences. The GAO found that 16 of 19 
soldiers it studied experienced significant problems covering 
the cost of the basic necessities as a result of payment issues 
and debt collection activities.
    For instance, one soldier and his family could not afford 
to pay their utility bill and were compelled to have distant 
relatives assume the care of their daughter. I am also no less 
troubled by the reports out of Fort Bragg that overpayments and 
the military's attempt to recoup those funds left soldiers 
without the resources needed to pay their mortgage, insurance, 
and other critical expenses.
    It has been said that the true measure of a great Nation is 
how it treats those brave souls who willingly shed blood, 
sweat, and tears in defense of our fellow countrymen. In the 
past, our Nation has done well by this standard, and there is 
no reason why we cannot do the same today. After all, we are 
one of the greatest countries in the world. We best honor the 
sacrifice of the men and women who serve in our military by 
eliminating impediments that hinder our ability to dispense 
military pay in a timely and accurate manner.
    And with that, Mr. Chairman, I yield back.
    [The prepared statement of Hon. Elijah E. Cummings 
follows:]

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    Chairman Tom Davis. Thank you very much.
    Mr. Hayes.
    Mr. Hayes. Thank you very much, Mr. Chairman, and thank 
you, Congressman Cummings, for your kind remarks.
    I showed Colonel Lovejoy and, of course, Colonel McAlister 
this coin that is always in my pocket for the 82nd Airborne, 
and it just reminds me of the incredible service not only at 
Fort Bragg and our wonderful soldiers, but Specialist Taylor 
and others around the globe and around the country. Thank you 
so much for what you do.
    Our concern here, Chairman Davis, always is to bring to 
light what the issues are but, more importantly, solve the 
problems and make sure that these circumstances do not reoccur, 
but also that anything else that might be lurking out there in 
the unintended consequences category hopefully we can scoop 
that in our net as well.
    Again, thank you for inviting me here to be with you today, 
Chairman Davis, for this critical hearing and for the 
opportunity to participate in the oversight of this important 
issue. I am very proud to have Fort Bragg, home of the 18th 
Airborne Corps, 82nd Airborne Division, the epicenter of the 
universe, here today. The service members and their families 
are our top priority.
    I care about our soldiers at Fort Bragg and appreciate the 
sacrifices that they have made to ensure freedom for all of us. 
Whether our soldiers are stationed there permanently or are on 
temporary medical hold, it is vital that they are given the 
best care and services. That is why I have been happy to work 
with this committee on the investigation into the effects of 
the military pay process and to make sure that our Army Guard 
and Reserve who are injured or wounded in combat have the best 
treatment possible.
    When I learned of the allegations that Guard and Reservists 
at the Medical Retention Processing Unit at Bragg were being 
overpaid and that this was sometimes resulting in their 
referral to debt collection agencies, I was, needless to say, 
outraged. Unfortunately, I was to learn that this Army problem 
is not specific to the base in my district, but was also 
occurring at 21 other sites for medical in-processing. That is 
why the Government Accountability Office investigation and this 
hearing are so very important.
    Thank you to all of our witnesses. We appreciate you 
bringing your experiences, your wisdom, and things that can 
only come from the field, thank you for bringing that today. I 
want to welcome Colonel McAlister of the Fort Bragg Finance 
Battalion and share my appreciation for him for facing the 
challenges under extremely heavy uptempo--he is doing a great 
job--challenges they have faced due to lack of resources and 
personnel to give our wounded soldiers the attention they 
deserve. We want to help.
    Many strides have been made in terms of addressing the pay 
and personnel system integration at the Department of Defense. 
I am committed to doing whatever is necessary to ensure that 
our Nation's soldiers do not fall victim to this continuing 
bureaucratic nightmare. It is our duty to take care of those 
who serve our country in the Nation's armed forces, and I look 
forward to working with the Department of Defense to address 
these issues.
    Thank you for your presence and, more importantly, thank 
you to the men and women in uniform for your incredible 
service.
    Thank you, Mr. Chairman. I yield back.
    [The prepared statement of Hon. Robin Hayes follows:]

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    Chairman Tom Davis. Thank you very much.
    Mr. Waxman.
    Mr. Waxman. Mr. Chairman, thank you for holding this 
oversight hearing today. I am pleased that the committee 
continues to focus on exposing and addressing numerous 
deficiencies in our military pay system. These problems have 
become painfully apparent during the recent unprecedented call-
up of National Guard soldiers and Reservists.
    I would like to welcome the soldiers and their families who 
are with us today and praise your heroism in serving our 
country. I also want to commend you for your bravery in 
speaking out on behalf of your fellow soldiers on the 
indignities that you have suffered. I hope that the Pentagon 
takes the necessary actions following today's hearing to help 
you and your families.
    Today we will be hearing yet again about pay problems in 
the Army's financial and accounting systems. In 2003, the 
committee held its first hearing on pay irregularities that had 
arisen regarding compensation of soldiers contributing to the 
military efforts in Afghanistan, Iraq, and elsewhere. At that 
time, the Army said the problems were anomalies.
    Yet, here we are 3 years later, and the Army still has not 
fixed the problems. At the committee's request, the Government 
Accountability Office has been conducting an ongoing review of 
DOD pay administration systems. GAO tells us that internal 
control weaknesses, poor training and other human capital 
problems, and the lack of integrated financial systems continue 
to exist.
    Now we are learning that the newly discovered accounting 
errors have incorrectly assigned millions of dollars in debt to 
hundreds of Guard and Reserve soldiers. We will hear from GAO 
today that DOD delays in reimbursing soldiers, pay errors, and 
other DOD accounting and administrative problems have resulted 
in about $1.5 million in debts for soldiers who have served in 
Iraq and Afghanistan.
    These incorrectly assigned debts have a very real human 
cost. The hardships to soldiers caused by these errors can be 
both burdensome and stigmatizing. Whether it is struggling to 
pay household bills, car payments, mortgages, or being hounded 
by debt collectors for bad credit, our veterans continue to 
suffer after they return from the battlefield. And these debt 
problems may take months or years to resolve.
    Mr. Chairman, I hope this hearing will be the last the 
committee needs to hold on military pay problems. Our Nation 
will continue to rely upon Guardsmen and Reserve soldiers into 
the foreseeable future. Fixing the multiple pay problems 
affecting these individuals is integral to demonstrating them 
the respect and care that they so rightly deserve.
    Thank you again, and thanks to the soldiers and their 
families for being here today.
    [The prepared statement of Hon. Henry A. Waxman follows:]

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    Chairman Tom Davis. Mr. Waxman, thank you. You know, we 
have held hearings on pay problems, then health, now debt 
collection. There always seems to be a new wrinkle. They solve 
one, and other things seem to spring up. But I hope this is the 
last one we have to hold.
    I am going to move to our first panel. We are very honored 
and grateful to our first panel of witnesses for coming forward 
today to share their personal experiences and expertise with 
the committee. Mr. Gregory Kutz is back. He is the financial 
management and assurance from the U.S. Government 
Accountability Office.
    Lieutenant Colonel John M. Lovejoy, U.S. Army Reserve, 
364th Civil Affairs Brigade, Portland, OR. Thank you for being 
with us.
    We have Specialist Frank Mangum, former Alabama Army 
National Guardsman with the 279th Signal Battalion, accompanied 
by his wife, Paulette, and thank you very much for being with 
us.
    And Specialist Brandy Taylor, former U.S. Army Reservist 
with the 296th Transportation company, Brookhaven, MS.
    Along with Mr. Kutz, I want to recognize Gary Bianchi, 
Gayle Fischer, and Mary Ellen Chervenic of the GAO who have 
gone beyond the call of duty to assist this committee with its 
investigation, just quality work. We appreciate it. The 
committee thanks you very much for your outstanding work.
    I also want to welcome and thank Mrs. Paulette Mangum for 
coming here today. We consider your husband's service and 
sacrifices and your service and sacrifices, and we salute you.
    We also welcome Ms. Jamesa Taylor, who is here supporting 
her cousin, Specialist Brandy Taylor.
    I just want to thank all of you very much for being here 
and taking part in this important hearing.
    It is our policy on the committee that we swear witnesses 
before you testify, so if you will just rise with me and raise 
your right hands.
    [Witnesses sworn.]
    Chairman Tom Davis. We are going to start, Mr. Kutz, with 
you and move straight on down. We have a light in front of you. 
If you have a written statement, that entire statement is 
already in the record and questions will be based on that. And 
thank you once again for being with us. Greg, you are on.

  STATEMENTS OF GREGORY D. KUTZ, MANAGING DIRECTOR, FORENSIC 
AUDITS AND SPECIAL INVESTMENTS, U.S. GOVERNMENT ACCOUNTABILITY 
OFFICE; LIEUTENANT COLONEL JOHN M. LOVEJOY, U.S. ARMY RESERVE, 
  364TH CIVIL AFFAIRS BRIGADE, PORTLAND, OR; SPECIALIST FRANK 
   MANGUM, FORMER ALABAMA ARMY NATIONAL GUARD, 279TH SIGNAL 
   BATTALION; AND SPECIALIST BRANDY TAYLOR, FORMER U.S. ARMY 
     RESERVE, 296TH TRANSPORTATION COMPANY, BROOKHAVEN, MS

                  STATEMENT OF GREGORY D. KUTZ

    Mr. Kutz. Mr. Chairman and Congressman Hayes, thank you for 
the opportunity to discuss pay problems for Army soldiers. As 
you mentioned, Mr. Chairman, this is the fifth in our series of 
pay-related testimony before this committee. I want to commend 
you, Mr. Chairman, and Representatives Shays, Platts, 
Ruppersberger, and Hayes for your consistent and aggressive 
oversight of military pay.
    The bottom line of my testimony today is that sick and 
injured soldiers continue to experience frustration and 
financial problems with an outdated, error-prone military pay 
system.
    My testimony has two parts: first, actions taken by DOD; 
and, second, the results of our two reports that are being 
released today.
    First, I want to make clear to you that this committee's 
oversight has made a difference. Based on your requests, our 
past work has resulted in 84 recommendations for improvement to 
soldier pay and travel reimbursements. According to DOD, they 
have taken action on 70 of these recommendations. Improvements 
include specific actions to help wounded soldiers, enhances 
training of soldiers and finance personnel, and improved 
customer service.
    However, although these actions result in an improved 
system, the fundamental problems remain. In essence, DOD is 
using substantial human effort and work-arounds to compensate 
for the current outdated, error-prone military pay system.
    Second, our two reports being released today are further 
evidence that soldiers remain vulnerable to pay problems. Our 
first report shows battle-injured soldiers struggling to deal 
with debts primarily caused by pay problems.
    This work started in February 2005, after I read an e-mail 
from Staff Sergeant Ryan Kelly from the Army Reserve. Mr. Kelly 
was wounded by a roadside bomb in Iraq in 2003, resulting in 
the loss of his right leg below the knee. What struck me about 
this e-mail was that Sergeant Kelly was representing that his 
pay-related debts had been reported to a credit bureau.
    The posterboard, which is on the monitor, shows excerpts 
from Staff Sergeant's Kelly's credit report.
    [The information referred to follows:]
    [GRAPHIC] [TIFF OMITTED] T7853.012
    
    Mr. Kutz. As you can see, the summary section shows $2,249 
of past due debt. Below that, you can see that the source of 
the only negative credit on the entire report is the Defense 
Finance Accounting Service [DFAS]. Although it is hard to 
believe, wounded warriors such as Staff Sergeant Kelly were 
being reported as bad credit by the Department of Defense.
    Subsequently, DOD established the Wounded-in-Action data 
base and is attempting to better handle these soldiers' debts. 
Our report provides suggestions for legislation to expand debt 
relief authority and exempt soldiers from credit bureau 
reporting and private collection agency actions.
    Our Fort Bragg report provides another example of pay 
problems, this time for sick or injured soldiers receiving 
medical treatment. Although initial allegations were that 37 
Army National Guard and Reserve soldiers had pay problems, our 
investigation showed that 232 were overpaid. These overpayments 
ultimately can result in debt and garnishment of wages.
    Examples of the impact of problems from our two reports 
include: battle-injured soldiers' debts reported to credit 
bureaus; injured soldiers being pursued by private collection 
agencies; and soldiers and their families struggling to pay 
their bills.
    I am honored to be at the table today with the other 
witnesses, who will share their stories with the committee.
    In conclusion, DOD is trying very hard to compensate for 
the current outdated, error-prone military pay system. However, 
until this system is reengineered, soldiers will continue to 
experience frustration and financial problems. Mr. Chairman, I 
encourage you to continue your oversight for as long as it 
takes to ensure that our soldiers have the world-class military 
pay system that they deserve.
    Mr. Chairman, this ends my statement. I look forward to 
your questions.
    [Note.--The GAO report entitled, ``Military Pay, Hundreds 
of Battle-Injured GWOT Soldierts Have Struggled to Resolve 
Military Debts, GAO-06-494, April 2006'' may be found in 
committee files.]
    [The prepared statement of Mr. Kutz follows:]

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    Chairman Tom Davis. Thank you very much.
    Colonel Lovejoy, thanks for being with us.

                  STATEMENT OF JOHN M. LOVEJOY

    Lt. Colonel Lovejoy. My name is Lieutenant Colonel John 
Lovejoy, and I am an officer in the U.S. Army Reserve. Although 
I am appearing in uniform today, I am speaking only for myself. 
I do not represent any position of my unit, the Army, the Army 
Reserve, or the Department of Defense. I am a graduate of the 
U.S. Military Academy and have a Master of Science degree in 
engineering management from the University of Missouri-Rolla. 
My current duty station is the 364th Civil Affairs Brigade out 
of Portland, OR.
    I would like to thank the members of the committee and the 
Honorable Tom Davis for inviting me to testify today. I hope 
that my testimony will illustrate the type of pay problems a 
Reservist or National Guardsman can face when called to active 
duty. Generally, my experience with the Army pay system has 
been positive. However, the ``system'' did make mistakes with 
my pay during my last deployment. The more serious problems 
usually occur when a soldier does not get paid. However, I am 
here to talk about the impact of being overpaid.
    I was mobilized in December 2003 for Operation Iraqi 
Freedom. Nine months later, I was having chest pains, but not 
serious enough to be medically evacuated out of theater since I 
only had about a month left on my tour of duty. I left Iraq in 
October 2004 and was retained on medical hold at Fort Bragg, 
NC. I remained on medical hold for 7 months until July 3, 2005, 
when I was released from active duty to return to my Reserve 
unit.
    My first pay issue occurred when my hardship duty and 
hostile fire pays were not stopped after I left the Iraqi 
theater. I made three separate visits to the Fort Bragg Finance 
Office trying to stop these pays. I was overpaid a total of 
$553, with the last overpayment received on December 15, 2004. 
To prepare for this hearing, I reviewed all of my leave and 
earnings statements [LES], and found that the Army had over-
collected $150 in hardship duty pay and under-collected $225 in 
hostile fire pay. I counted 17 LESs that contained remarks 
only, adjustments to pay, or debt collections from the period 
November 2004 to February 2006.
    The collections made by the Army in my case were somewhat 
confusing, but I was confident that the Army would correct my 
pay. I have an example of a confusing collection action from my 
November 15, 2005, LES. Please refer to the monitor.
    [The information referred to follows:]

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    Lt. Colonel Lovejoy. Note in the remark block in the 
center, ``Original Debt $50.00,'' with the dates 01 December to 
15 December 2004. Above that in the deductions columns is a 
debt payment of $11--$11 from $50 should leave a balance of 
$39, but the LES indicates an unpaid balance total of 448.32. 
Nowhere on this LES is this discrepancy explained. It appears 
the $50 collection was for hardship duty pay, but I am not 
sure.
    My second pay issue occurred when my active duty pay was 
not stopped after I was released from active duty. I was 
overpaid for two pay periods totaling about $7,600. I owed this 
amount back to the Army. Luckily, I had earned subsequent pay 
for a 4-week military exercise, and that pay plus 33 days of 
accrued leave repaid my debt, or I would still be paying the 
debt back over several months from my weekend drill--now known 
as battle assembly pay.
    Civilian employers have the flexibility to resolve their 
mistakes by working closely with the affected employee. In 
fact, mistakes found over a year old are more likely to be 
written off by a company rather than attempting to collect from 
an employee, especially if the company was responsible for the 
mistake. The Army does not operate that way. The Army usually 
takes action without consulting with the affected soldier. As a 
result, the soldier usually bears the burden when the soldier's 
pay is suddenly corrected. The Army can do a better job of 
fixing pay errors to minimize the impact on the soldier.
    I have the following recommendations for the committee's 
consideration which, if implemented, will truly take care of 
soldiers.
    First, routinely provide a point of contact for any 
collection action in the remarks block of the soldier's LES. 
Many Reservists and National Guardsmen are separated from their 
home units and need a point of contact.
    Second, write a letter to the soldier explaining any errors 
and the action that will be taken to correct the error.
    Third, for collections greater than $300, provide the 
soldier with options for repayment.
    Fourth, provide the soldier with detailed information on 
how to apply for relief from the debt if that debt creates a 
hardship.
    Fifth, give brigade commanders the authority to relieve 
debt on any mistakes made by the Army.
    And, finally, complete all collection actions in a timely 
manner.
    I also concur with Mr. Kutz's recommendations that bad 
debts caused by the Army's errors should not be reported to 
collection agencies or credit bureaus. The two panel members to 
my left agree with all of these recommendations. These actions 
will minimize the impact on a soldier's pay due to overpayment 
or error.
    Again, thank you for the opportunity to share my experience 
with you. I would be happy to answer any questions that you 
might have.
    [The prepared statement of Lt. Colonel Lovejoy follows:]

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    Chairman Tom Davis. Thank you very much, Specialist Mangum. 
Thank you for being with us.

                   STATEMENT OF FRANK MANGUM

    Mr. Mangum. Thank you for inviting me here today to testify 
before this committee. I am here in the hope that my story may 
benefit other Guard and Reserve soldiers returning from the 
global war on terrorism. I wish to preface this statement by 
simply stating that in my case, if something could go wrong, it 
did. I feel that I am not the average case to come before you, 
but the exception to you. The average soldier does not have as 
many problems as seem to have plagued me. I sincerely hope this 
testimony will help improve the financial and medical care 
given to returning soldiers.
    My name is Frank Mangum, Jr., and I'm a 36-year-old former 
National Guard soldier from Decatur, AL. I was a member of the 
279th Signal Battalion attached to Bravo Company for deployment 
to Iraq in support of Operation Iraqi Freedom. I volunteered 
for this deployment in October 2003, and deployed to Iraq in 
February 2004. My unit was stationed at Camp Caldwell, which is 
near Kurkush. During my deployment, I served as a 35 Echo, or a 
Radio/COMSEC Repairer, for my unit.
    On April 2nd, I injured my right knee during physical 
training. Medical personnel onsite treated the injury, which 
they determined to be minor. Even though I was in a 
considerable amount of pain, I continued to perform my duties 
while following up with the doctor at Camp Caldwell about my 
knee.
    I was eventually sent to the hospital at Camp Anaconda in 
Baghdad for physical therapy. I was seen by a doctor there who 
recommended my medical evacuation from the theater, because he 
suspected more serious problems than originally thought. This 
evacuation from Iraq was on June 28th.
    I arrived at Fort Bragg on July 5th, and inprocessed into 
the Fort Bragg Medical Retention Unit [MRPU], on July 9th. 
After inprocessing into the MRPU, it took 6 weeks before I was 
seen by an orthopedist. The orthopedist ordered x-rays and a 
series of physical therapy sessions for me. Six weeks later, I 
was again seen, and he recommended me for a medical discharge 
because I could no longer perform my duties as a soldier, 
because I had a condition known as ``runner's knee.'' I was 
discharged from the military on June 19, 2005.
    After being medically discharged, all returning Guard and 
Reserve soldiers are given 6 months of continued health 
coverage, which I used to seek another opinion on my knee in 
July 2005. This time the doctor I saw ordered an MRI and a set 
of x-rays. After reading the results, the doctor asked me when 
I had broken my leg in the past. I had never had my leg 
diagnosed as being broken in the past. The doctor determined 
that I had most likely broken it in my accident in Iraq, 15 
months earlier. He also found a tear in the meniscus in my 
knee, plus severe damage to the cartilage in the kneecap. 
Surgery was performed to remove the cartilage and the torn 
portion of the meniscus. The break was not repairable.
    My pay issues started upon my arrival at Fort Bragg. As 
part of my inprocessing to the Fort Bragg MRPU, I visited the 
Fort Bragg Finance Battalion on July 15th to have my pay 
account reviewed for accuracy by a financial clerk. Yet I still 
continued to receive the hostile fire and hazardous duty pay 
through October 31st. My overpayments grew to $1,075 in spite 
of my complaints to the MRPU and the Finance Office.
    I had $299 deducted from my pay on November 15th, which a 
Fort Bragg finance official told me was for overpayment of 
hardship duty pay. This prevented me from coming home to visit 
my family in Alabama over the Thanksgiving holiday. I still had 
bills to pay, and I couldn't afford to do both. My paycheck was 
reduced by another $23 on December 15th. My LES did not 
describe what the deduction was for. And this is similar to the 
problem that is faced by Colonel Lovejoy.
    Since there were no further deductions from my paychecks, I 
assumed that my debt was paid. I was wrong. As shown on the 
poster board, I received a letter from DFAS, dated March 21, 
2006, regarding a $775 debt for overpayment of military pay. I 
contacted DFAS to dispute the amount, and I was told that I 
still had to pay this entire $775, file my dispute, and after 
DFAS investigated the matter, they would refund the difference 
if any difference was found. If I did not make full payment, I 
would be subject to interest charges, administrative fees and 
possibly face collections and credit issues. I question why 
this took 15 months to be sorted out.
    I had an award of severance pay in the amount of $11,266 
that I had been awarded at the time of my discharge on June 19, 
2005. I was told this would take 2 weeks to put in my bank 
account. It took 8 months.
    The final chapter to the financial side of my story ends 
with the aftermath of my injury. Before I was deployed to Iraq 
with my Guard unit, I was a sheet metal mechanic in the 
construction industry. I was required to climb ladders all day 
long. My wage was between $15 and $17 an hour. I can no longer 
do this job. I now make $8 as a manager for the local Burger 
King franchise.
    My service in Iraq cost me my health, my money and my job. 
Now I'm being asked for more. Do I regret serving in the Army? 
Not for 1 minute. I would go back in if they would let me, and 
straight back to Iraq to boot. This is the greatest Nation in 
the world, and I would gladly give my life to defend her. I ask 
nothing of this Nation in return except to care for me as I 
have cared for her.
    I thank you again for the opportunity to share my 
experiences. I would be happy to answer any questions you may 
have.
    [The prepared statement of Mr. Mangum follows:]

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    Chairman Tom Davis. Thank you very much.
    Specialist Taylor, thank you for being with us.

                   STATEMENT OF BRANDY TAYLOR

    Ms. Taylor. Mr. Chairman and members of the committee, my 
name is Brandy Taylor. I'm a former Army Reserve Specialist 
with the 296th Transportation Company. Thank you for this 
opportunity to take part in this hearing, to share my 
experience with the Army debt problem.
    I entered on duty with the Army Reserve in July 2001 as a 
Food Service Specialist. My unit deployed to Iraq in February 
2003, and I was assigned to drive a 5-ton supply truck. In 
March 2003, my unit was attacked on the way to Baghdad, and I 
was wounded by mortar fire, which left shrapnel in my right 
knee.
    I had a series of six surgeries, none of which were 
successful. After I returned to the United States, I was sent 
to a military hospital at Keesler Air Force Base in Biloxi, MS.
    Upon my arrival at Keesler, I made several attempts to 
contact my unit to let them know my status and location. The 
Air Force doctor arranged for me to receive physical rehab near 
my home in Leakesville, MS. My rehab continued until July 2003, 
and I was medically discharged November 2003.
    I became aware that I had a military debt when a collection 
agent contacted me 2 months after I separated. The collection 
agent told me that I owed the Government money because my unit 
had listed me AWOL. I was told that I had to repay $975 of my 
enlistment bonus, and $600 related to overpayment of my 
hardship duty, a total of $1,575. I told the collection agent 
that I was never AWOL, and he told me to contact my unit to 
resolve this problem.
    I contacted my unit Admin Officer, who said she would 
correct these problems. However, I received another call from 
the collection agent in late 2004. I told the collection agent 
that the Admin Officer was correcting my paperwork. However, 
when I contacted my Admin Officer to check on the status, she 
was not in, and she never returned my call. As it turned out, 
she was away at school.
    The collection agent hounded me for months until I faxed 
him orders and related documents. The collection agent then 
told me that I should hear from DFAS in a few months. However, 
DFAS never contacted me.
    In April 2004, the Government withheld my tax refund of 
$576 to cover the military debt. At this point I assumed that 
my debt issues had been corrected.
    I experienced significant frustration and financial 
difficulties during my 2\1/2\ year struggle with the military 
debt. I planned to use my tax return to pay off bills. When I 
couldn't pay my bills, then this caused other problems. I had 
to quit attending college to work more hours to pay bills.
    As shown on the poster board, although DFAS supposedly 
recalled my debt from the credit bureau, in November 2005, when 
I attempted to obtain a $500 loan, my application was denied 
because my credit report showed unpaid DFAS debt. When 
Christmas came, I had no money. Previously I always paid my 
bills on time. Now I had bills that I couldn't pay. In January 
2006, I again applied for a loan. It was also denied for the 
same reason, DFAS debt.
    Although DFAS recalled my debt of $1,575 from the credit 
bureau two times, as shown on the poster board, the military 
debt appeared on my credit report again, the end of March 2006, 
just 4 weeks ago. I understand that this was a result of error 
made by both DFAS and the credit bureau. The bottom line is 
that even though my debt should have been corrected, I still 
couldn't get a loan to pay off my bills.
    Mr. Chairman and members of the committee, I want to thank 
you again for this opportunity to share my experience. I want 
to note that the Army awarded me a Purple Heart for my combat 
injury, and the Mayor of Leakesville gave me a key to my 
hometown. And yet, there was this terrible man from the 
collection agency hounding me and making me feel like a 
criminal.
    The military was quick to pursue me for debts that were 
their mistake, and they were extremely slow in correcting their 
error, resulting in significant stress and additional cost and 
effort to me. I was a 24-year-old war hero, and shouldn't have 
had to deal with this. It was my faith, and is my faith in God 
that keeps me going. I would be happy to answer any question 
that you might have.
    [The prepared statement of Ms. Taylor follows:]

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    Chairman Tom Davis. Well, Thank you very much.
    I will start the questions. Let me just ask each of you--
your experiences under the DOD Army pay systems I think are 
appalling. Was there anyone in the Army, DOD, the staff at the 
medical finance centers or anyone at all who has apologized to 
you for making these mistakes? Ms. Taylor.
    Ms. Taylor. No, sir.
    Chairman Tom Davis. Mr. Mangum.
    Mr. Mangum. No, sir.
    Chairman Tom Davis. Colonel Lovejoy.
    Lt. Colonel Lovejoy. No, sir.
    Chairman Tom Davis. Who has been the most help to you? Is 
there anybody you could single out that has really helped you 
as you moved up the line? And then I am going to ask is there 
any people that really just sloughed this thing off?
    Ms. Taylor. GAO.
    Chairman Tom Davis. GAO was very helpful?
    Ms. Taylor. Yes.
    Mr. Mangum. GAO was very helpful to me, as well as Mr. 
Cawthorn in my Alabama Pay and Finance Office.
    Chairman Tom Davis. Thank you.
    Lt. Colonel Lovejoy. Mr. Chairman, in my case, the Fort 
Bragg Finance Office was the most help to me when I tried to 
stop the active duty pay. And I was really frantically trying 
to stop that because while I was still in the active duty pay 
system, I couldn't do anything in the reserve system. I 
couldn't be paid in the reserve system, and I also believe to 
include going on military missions, so I was really working 
hard to get that stopped, and the Finance Office did help me 
get that accomplished in short order.
    Chairman Tom Davis. We often hear about the one Army in 
which active duty and Reserve component soldiers in an 
integrated seamless organization. With respect to your pay, 
your travel, medical treatment, do you think that you all 
received comparable treatment to your active duty counterparts?
    Mr. Mangum. Mr. Chairman, I feel that we got no equal 
treatment at all.
    Chairman Tom Davis. Do you agree with that, Specialist 
Taylor?
    Ms. Taylor. Yes, I agree with him.
    Chairman Tom Davis. Colonel Lovejoy.
    Lt. Colonel Lovejoy. I don't know if I really detect any 
difference.
    Chairman Tom Davis. It is just that the difference being, 
when you move from system to system, it is not seamless and you 
get lost. It is not that you are discriminated against when you 
are on the field, right? But it is just the fact that the 
systems, they are not integrated, that once you move from one 
system to another, you seem to move into anotherworld, whereas 
somehow things fall through the cracks. We have held hearing 
after hearing here where people have stayed and not received 
medical attention for months because they are lost in the 
system between the States and the Federal system, where the pay 
systems moved over and didn't get adjusted. I guess that is 
where I am at, Colonel Lovejoy, if that gives you a sense of 
it.
    Lt. Colonel Lovejoy. Yes, sir. And I was going to say, it 
did affect me, now that I think about it--something I didn't 
bring up in my testimony--but I had another pay issue before I 
deployed. We were allowed to make up our drill assemblies, and 
I had made up those, but I submitted those when I was already 
on active duty, and was told I couldn't be paid because I was 
now in the active duty system, and I was told I had to wait 
until I got off of active duty before I could get paid in the 
reserve system. And then after I got off the active duty system 
and tried to get paid in the reserve system, they said, ``Well, 
it's too old, so we can't do it. That was too long ago.'' And 
then it took a while before I got to the right person, who then 
told me, ``Yes, we could have paid you while you were on the 
active duty system. All we had to do was get that to Fort 
McCoy.''
    So a lot of people didn't have the right answer for me, and 
even though I pursued it and asked several people, and I got 
the same answer, the same wrong answer, and then it wasn't till 
almost 2 years later or 18 months later I got the right answer, 
but then it was quite a bit later.
    Chairman Tom Davis. Specialist Taylor, I look at your 
poster regarding your credit report and your attempts to get 
loans to cover debt, to cover living expenses and pay off 
interest fees on credit cards. You were discharged from the 
Army in November 2003?
    Ms. Taylor. Yes, sir.
    Chairman Tom Davis. And this is 2006.
    Ms. Taylor. Yes, sir.
    Chairman Tom Davis. And it looks to me that DFAS is still 
having problems with notifying the credit agencies that your 
debt was removed?
    Ms. Taylor. Yes, sir. I went to the bank, and he pulled up 
my credit report, and it was still there.
    Chairman Tom Davis. Now, roughly a month ago, after telling 
you that they had recalled your debt from collection agencies 
on March 28th, the DFAS debt reappeared on the credit report, 
is that right?
    Ms. Taylor. Yes, sir.
    Chairman Tom Davis. Has anyone from DFAS contacted you 
recently to resolve this?
    Ms. Taylor. No, sir not even a letter.
    Chairman Tom Davis. Wow. Thank you very much.
    Mr. Kutz, let me just ask, as we discussed at prior 
meetings, DOD has been trying to re-engineer its military pay 
systems for a long, long time. This is the fifth hearing we 
have done. It seems that some of the representations made at 
our prior hearings that a new re-engineered system would be in 
place by 2005, and be in place by 2006, are not going to come 
to pass. How long has DOD been trying to develop new, more 
automated and integrated pay systems?
    Mr. Kutz. Actually, Comptroller General Bowsher had 
testified on this back in the mid and early 1990's, so this 
goes back, Mr. Chairman, at least 10 years, possibly, at least 
to the first Gulf war, and so they've been attempting--it was 
called something other than DIMHRS in the 1990's. I think 
they've changed the name. But the concept of integrating 
personnel pay systems has been around for well over a decade.
    Chairman Tom Davis. How much have they spent on this?
    Mr. Kutz. Hundreds of millions. I don't have the exact 
numbers. Hundreds of millions on DIMHRS and at least 50 million 
on what's called the Forward Compatible Pay System, which was 
terminated recently.
    Chairman Tom Davis. I don't want to be flip, but it looks 
like they are spending more effort getting $50 bucks back from 
Colonel Lovejoy, than they are in getting this thing resolved 
properly. Is there any end in sight?
    Mr. Kutz. Well, certainly, I think that the folks like 
Colonel McAlister on the next panel, who have to deal with 
this, need to plan as if DIMHRS will never come to pass. In 
other words, they have to continue the human efforts and work-
arounds to make sure that the soldiers are taken care of, 
because if they had planned for DIMHRS and Forward Compatible 
Pay, which were promised in 2002, 2004, 2005, 2006, they would 
have been in bigger trouble than they are today, so I think 
they indefinitely need to keep the human effort and work-
arounds in place to take care of soldiers as best they can.
    Chairman Tom Davis. Is it fair to say that hundreds of 
millions of dollars have been wasted?
    Mr. Kutz. I would say yes. And, again, this is a broader 
issue than just the military pay. We have testified before your 
committee and Chairman Platts' subcommittee before on business 
system modernization, which is on our high-risk list for the 
Department of Defense. And so they have had difficult fielding 
business systems through all of their business lines, and we're 
talking about billions and tens of billions there.
    Chairman Tom Davis. What do you think are the root causes 
of their failure to implement the new technology in the area of 
military pay?
    Mr. Kutz. Well, I think, Congress, has been more than 
generous giving DOD money to modernize its system, so it's not 
a lack of money. I think it's a lack of sustained leadership, 
accountability and basic project management and oversight. It 
isn't as if this is new technology. This is off-the-shelf----
    Chairman Tom Davis. The private sector is doing this stuff 
every day, aren't they?
    Mr. Kutz. It is off-the-shelf packages. I will say though, 
Mr. Chairman, that the military pay system is significantly 
more complicated than any other system I have seen, because you 
know as soldiers move in and out of theater, they have 
different--there's dozens of different special pays that they--
--
    Chairman Tom Davis. Just look at the LES. I mean it is 
pretty complicated.
    Mr. Kutz. It's complicated, yes.
    Chairman Tom Davis. What happened to the Forward Compatible 
pay system?
    Mr. Kutz. I don't know, but it's been terminated, and that 
was promised at one of your prior hearings in 2005 to be 
delivered, and again, I would expect it was ineffective 
management and oversight of the project.
    Chairman Tom Davis. My last question is, would the plan, 
Defense Integrated Military Human Resource System, the DIMHRS, 
solve all the problems that you have identified over the course 
of this work?
    Mr. Kutz. No. I think that no software alone is going to 
solve the problem. I think that unless DIMHRS is considered to 
be people processes and automated systems, but I think you 
still have to re-engineer the processes and make sure that the 
right human capital is in place at the right places.
    Chairman Tom Davis. When a returning soldier comes back and 
has a problem with pay, with their health care, with all this, 
is there an ombudsman that they can call? Has DOD set up where 
they can call somebody that will get on that problem and solve 
it?
    Mr. Kutz. Yes. As I mentioned in my opening statement, as a 
result, in many respects, of your past hearings, there's more 
800 numbers, there's better customer service, there's more 
customer service, there are more case people, case workers for 
injured soldiers. So I think in the last several years we've 
seen increased human efforts again to compensate for the broken 
system.
    Chairman Tom Davis. But still, as we can, it has fallen 
through the cracks in some cases.
    Mr. Kutz. People can fall through the cracks, yes.
    Chairman Tom Davis. And we have some examples. Thank you 
very much.
    Mr. Hayes.
    Mr. Hayes. Thank you, Mr. Chairman. Specialist Mangum and 
Taylor, you have a great career ahead of you in public 
speaking. Thanks for very eloquent and accurate presentations.
    As the chairman alluded to, we talk about an army of one, I 
want to assure--and I am sure I speak for the chairman, Mr. 
Platts and other members of this committee--that we want to 
treat you as though it is an army of one. Every single one of 
you is vitally important. It is appalling and embarrassing what 
has happened, but stuff happens, the point being, anything that 
we can do to make sure this never happens again is what we want 
to do.
    Brandy, who is your Congressman? Do you know? Don't mean to 
embarrass you.
    Ms. Taylor. No, sir. [Laughter.]
    Mr. Hayes. Unfortunately, I travel around a lot with the 
military, and typically they don't know you can always call 
your Congressman if, for whatever reason, you are not receiving 
the help that you need. It is either Bennie Thompson, Chip 
Pickering, Roger Wicker or Gene Taylor. And we will jump at the 
chance.
    And, Frank, do you know who yours is?
    Mr. Mangum. Yes, Mr. Hayes, I do. My Congressman is Bud 
Cramer.
    Mr. Hayes. I am sure Bud would--and again, it is not our 
point as Congressman to give a hard time to any of the 
agencies, but this is a complex problem. It seems to me--and I 
had a good conversation with Colonel McAlister before we began 
the hearing--when you are in your unit, you are the team. The 
army of one is a team and you got your sergeant major or 
whatever the leadership is, and you have ways to go. But once 
you are separated from that team, then the potential and 
chances of problems increases dramatically. So, again, let me 
encourage you through this process to help us think through, as 
you have seen your own circumstance, so that we have a system, 
a safety net in place, where you have always got some place to 
go.
    Again, looking forward, prevention of the problem, what has 
happened at Bragg and many of our other installations, because 
of op tempo, a tremendous number of deployments, they had the 
personnel who would normally have handled what your case called 
for, deployed. The other personnel who would be sort of the 
backup were in training. So, Mr. Chairman, again, an unexpected 
gap. That is not an excuse, but we know that happened now. 
Again, what is the backstop that we can provide?
    Mr. Kutz, having heard what you have heard--it has been 
very instructional--have you got any thoughts of what we might 
ought to definitely have on our action list leaving here today?
    Mr. Kutz. Again, I think that this committee's oversight 
and actions by the Department in the areas of human capital and 
customer service and process improvements have been positive. 
And so I would expect that since we started looking at this 3 
years ago, that there are fewer problems.
    However, fundamental problems have not been fixed, and so 
there is still a high probability of soldiers having pay 
problems. So the real solution is to re-engineer and have an 
integrated pay personnel system that links to the medical 
records system, and quite frankly, also the Defense travel 
system. So this is a fairly complicated systems issue that 
needs to be resolved, but I think there's no solution within 
the next several years from what I can tell.
    Mr. Hayes. Well, surely to goodness, we can do better than 
that. We are from the Government. We are here to help you. 
Let's find something we can do. Any thoughts, either Frank or 
Brandy, in those situations, if you are wounded, leave your 
unit, come to Womack at Bragg--let's say your family is 
stationed at Landstuhl--all of a sudden you are not getting 
combat pay, but you should be getting overseas duty pay. So be 
sure we put our finger on each one of those kinds of 
situations. Everybody tells me how wonderful computers are. 
Well, once computers start putting out bad information, that is 
a force multiplier I don't know how you bring back into 
control. Any thoughts at this point, either of you?
    Mr. Mangum. Yes, sir, I do have thoughts. Communication 
between the Reserve and Guard components and the regular Army 
seems to be breaking down. I know that in the case of my unit, 
we were given a lot of misinformation when we got to Bragg. We 
had housing problems. We had initial pay problems, just simply 
because our command and control group did not have the correct 
information. Where they got their information from were several 
sources, and often these sources conflicted each other.
    When we first arrived at Bragg we had housing issues, as 
I've previously stated, and we were without barracks our first 
night. We just kind of piled in with other units that had empty 
beds, just simply to sleep that evening. We didn't have a chow 
hall that evening. When we get into Iraq we ran into similar 
problems. We slept outside for 3 or 4 days simply because there 
were no tents made available to us.
    Then we had problems--there was a KBR dining facility on 
post, on the camp, and we were underneath a regular Army unit, 
we were eating in that dining facility because we assumed, hey, 
a soldier's got to eat, that's where we eat. There was a 
command sergeant major from that regular Army unit that came 
through, and tossed out all the Guard and Reserve soldiers. We 
were put into a formation after we got tossed out of the dining 
facility, and told there was no contract for the Guard and 
Reserve element to eat in that dining facility, so we had to 
leave. We were told to eat out of our mobile kitchens or eat 
MREs for the duration of our stay or until we got a contract to 
eat in his dining facility.
    After that problem--eventually resolved that, but it took 
about 4 or 5 months. We could sit, for that 4 or 5 months, from 
where I worked, and watch the food just being thrown away, and 
we were sitting, eating rations out in the field, and 
Specialist Taylor can attest to the quality of those rations 
because she is a cook.
    Thank you.
    Mr. Hayes. I see my time has expired, Mr. Chairman. Any of 
those thoughts that you would write down--I was in Iraq, first 
group in, I know what it is like then, so I know exactly what 
they put you in, but I've also been back since and seen a KBR 
facility, and that just makes it even more--please keep a close 
record, and let's make sure that this is, after-action, never 
to happen again.
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Mr. Shays, followed by Mr. Platts.
    Mr. Shays. Thank you, Mr. Chairman.
    As has been pointed out, we have had a number of hearings. 
Mr. Kutz, why is it that we end up with a hearing and feel like 
we have solved the problem or are close to solving the problem, 
and then we have another hearing and we learned we had--what 
accounts for that?
    Mr. Kutz. Well, I think, again, it has to do with there's 
been a lot of progress in the short-term fixes. The real 
fundamental problem is the long-term fixes. And I recall 
several years ago we had the business systems modernization 
hearings with your subcommittee, and we discussed even at those 
that the GAO high-risk area business systems modernization, 
that this isn't just a military pay problem, it's a logistics 
issue and other lines of business where they've been unable to 
deliver these longer term fundamental fixes. So I would commend 
them for the short-term actions, but the long term, as you 
said, never seems to get resolved.
    Mr. Shays. I think nothing outrages my constituents more 
than thinking we would send men and women into battle and that 
they would have to worry that back home bills aren't being paid 
and their spouses are dealing with not only the agony of their 
being in Iraq or Afghanistan or somewhere else, but then, you 
know, someone is calling to ask them to pay their bills. But 
what I have not been introduced to, and this is new to me, is 
that we have a problem with people AWOL when they have been 
injured in battle. I just want to apologize to all of you that 
you have had to go through this. What I wrestle with is once we 
know someone has gone through this, and it becomes public can I 
make an assumption that the three soldiers before us, you know, 
tomorrow the problem is solved, or are they going to still be 
having to deal with this issue? I mean that is an immediate 
issue and it is a micro issue not a macro, because all of you 
are here to tell your story, to solve it for everyone. But can 
I go home tomorrow and know that Specialist Taylor will have no 
more problems, Mr. Kutz?
    Mr. Kutz. Again, I think--I'll let them answer it on their 
own, but I think that it depends. It depends on what you're 
talking about. Some things can be fixed short term, but as 
we've talked about before, once a pay problem happens, 
oftentimes--I think Chairman Davis said that in his opening--
can take months or years to resolve, so the real solution is 
preventing the pay problems in the first place because once 
they happen, it can be a nightmare scenario.
    Mr. Shays. That suggests to me that we don't have ombudsmen 
and folks that we can turn to, who will every day be available 
when someone encounters that problem. And I thought we were 
seeing ombudsmen available.
    Newt Gingrich says this, you know, that sometimes just 
having a hearing, the problem gets solved because we focus 
attention and resources go. But the one thing I have always 
found to be true, almost always, is at least the people came 
and testified to their problem, and if their problem isn't 
going to be dealt with, then we are in a more serious problem 
than anyone can imagine.
    I would like each of you to tell me what you think you will 
still encounter after this hearing.
    Lt. Colonel Lovejoy. Mr. Shays, I'm thinking probably the 
worst. I'm thinking that the Army is going to collect back the 
$225 hostile fire pay, but I'll be retired by that time, 
because I will be retired within the next 2\1/2\ months. So I 
will get a debt letter, and I might be working on a house in 
Alabama, may not get my mail, and then this is turned over to a 
collection agency because I didn't pay for the $225. And then, 
of course, they over collected $150 from me, so then I'd have 
to work to try to get that back. And then the--we haven't 
talked about the tax consequences----
    Mr. Shays. We are not talking about $150,000, we are 
talking about $150?
    Lt. Colonel Lovejoy. Right, we're only talking about $150.
    Mr. Shays. We are not talking about $1,500, we are talking 
about $150?
    Lt. Colonel Lovejoy. Well, we're talking about what this 
could do as a negative remark on my credit report, which I do 
not want that blemish, and I would love to just be able to cut 
a check for $75----
    Mr. Shays. You know, I had a Mayor that people would go to 
and say, ``Mayor, could you fix this ticket?'' And it was 
illegal to fix tickets. But he would take the ticket--and 
everybody thought this guy was a genius--and then we found out 
all he did was paid himself. I mean it would almost be better 
for us to just come to one of us, and we can--next?
    Mr. Mangum. So I fully expect after I go back home to be in 
Specialist Taylor's shoes. I expect at one point to be hounded 
by collection agencies. I've been told that I can obtain a 
waiver and possibly I have obtained this waiver, but Specialist 
Taylor thought her problem was solved, and she was still 
getting negative reports.
    Mr. Shays. Anyone in the audience from the liaison of the 
National Guard, the Reserve, the Army? Anyone, just raise your 
hand. You do not have to identify yourself, just raise your 
hand. Would you guys meet me after, please? Thank you.
    Ms. Taylor, could I just ask Ms. Taylor to respond? Is that 
all right?
    Chairman Tom Davis. Sure.
    Mr. Shays. Ms. Taylor.
    Ms. Taylor. I expect that everything will be OK, but I have 
to go through the point where I had to go to my bank and 
constantly get him to run a credit report, and still say, no, I 
was denied. So for me to go to my bank and say, ``Now, can I 
get a loan because this is taken off of my credit report,'' 
still, back in his mind, well, what if something else comes up 
on her credit report?
    Mr. Shays. You served again where?
    Ms. Taylor. I served in Iraq.
    Mr. Shays. And you were there and you were injured, 
correct?
    Ms. Taylor. Yes, sir.
    Mr. Shays. How long were you there before you were injured?
    Ms. Taylor. I was there--I went in February 18, 2003, and I 
was injured March 23, 2003.
    Mr. Shays. Let me just say this to you. Are you her 
representative, Mr. Hayes?
    Mr. Hayes. I don't represent Mississippi, but I will be 
glad to annex it and take care of her.
    Mr. Shays. OK. [Laughter.]
    You looked like you were about to tell me that you were 
already helping her. I just want to say----
    Mr. Hayes. Would the gentleman yield just a moment?
    Mr. Shays. Absolutely.
    Mr. Hayes. What I will assure you is, because of the nature 
of the investigation that is here before this committee--as it 
well should be--but I can promise you that Chairman Hunter and 
the full Armed Services Committee will be totally aware, and 
all of their posts will be involved in whatever clean-up, fix-
up and repair needs to be done.
    Mr. Shays. Just in closing--thank you for your promise, Mr. 
Chairman. In closing, obviously, we have a systemic issue to 
deal with. We appreciate GAO's work on it. We know the military 
is trying to wrestle with it, but we are not seeing the kind of 
success that we want to see.
    I hope that each one of you is in personal contact with 
your individual Congressperson. If you were one of my 
constituents, I would assign a case worker that you could call 
every day until this problem was resolved, and I believe that 
if you are not getting satisfaction from your Congressperson, I 
want you to call my office. I am going to give you my card, and 
I am going to give you my personal phone number, if somehow it 
falls through the cracks.
    Thank you.
    Chairman Tom Davis. Thank you.
    Mr. Platts, followed by Mr. Clay.
    Mr. Platts. Thank you, Mr. Chairman. I have a statement I 
would like to have entered into the record.
    Chairman Tom Davis. Without objection.
    [The prepared statement of Hon. Todd Russell Platts 
follows:]

[GRAPHIC] [TIFF OMITTED] T7853.054

    Mr. Platts. Thank you, and I want to thank you and your 
staff for holding this hearing and staying very engaged on this 
issue, and especially thank our witnesses for being here today 
and sharing your specific involvement in this issue.
    Mr. Kutz, we know you have been very engaged with this full 
committee as well as my subcommittee, and appreciate your 
efforts on behalf of these soldiers and all of our men and 
women in uniform.
    And to our three military personnel, first, my heartfelt 
thanks for your service to our Nation. We are the most blessed 
Nation in the world with the most blessed freedoms in the world 
because of you who have one uniform, are wearing the uniform, 
and all of your fellow men and women in uniform, past and 
present. So my sincere thanks. And certainly my regrets for the 
way our Nation, through the bureaucracy, has treated you in 
trying to get your pay and compensation straight.
    I think that a point that was made was the dollar amounts 
is one thing, but the impact long term, especially on your 
credit reports, is what is problematic, as creditors are 
looking not at maybe necessarily the amount, but any blemish. 
And to no fault of your own you have had blemishes. And as 
Chairman Shays so well stated, you know, whatever problems 
remain certainly need to be addressed for you as well as for 
all, and with DFAS and other personnel engaged in this issue 
here in the room, I would certainly fully believe that we take 
one case at a time, and eventually we get them all, and here 
are three cases we need to make sure we get right, and then we 
move on to the fourth and fifth and down the line till we get 
them all right.
    In the second panel, those who will be testifying certainly 
are in a position to help make sure we get them right, and if 
not, all of us here today stand ready to assist you and your 
individuals cases.
    On specific--and I want to make sure I understood--
Specialist Taylor, your testimony is that even as late as this 
past month, your credit report was still showing errors?
    Ms. Taylor. Yes, sir.
    Mr. Platts. And has action been taken to correct that 
specific----
    Ms. Taylor. Yes, sir, it's been taken off. I went to my 
bank, and he also told me there was a credit bureau made this 
on my credit report. So he knows where it came from.
    Mr. Platts. So you believe that right now it has been 
corrected?
    Ms. Taylor. I hope so. It was taken off twice, so we don't 
know.
    Mr. Platts. Again, if not, and with the other witnesses 
being back with this committee, and us as Members and staff, if 
you continue to have problems, you will have a lot of advocates 
here, helping to correct.
    I want to touch base, Mr. Kutz, on your knowledge of the 
issues. You referenced kind of what I will call the heroic 
efforts, the work-arounds that are occurring. Am I accurate in 
saying that egregious errors were made over the last 10 years, 
and specific to Iraq, probably in 2003, 2004, and what we are 
still dealing with is a lot of problem solving relating to 
errors that happened in 2003 and 2004, and that because of the 
focus of Chairman Davis and this committee and GAO, that DFAS 
and all involved in these issues have tried to make sure we are 
not repeating those errors in 2005 and now in 2006? Is that a 
fair statement?
    Mr. Kutz. Not completely. I mean we still found problems in 
2005, and they're being still resolved. I think that given what 
has happened as a result of your hearings, is there are 
probably fewer problems to deal with, and there's more customer 
service people in place to deal with them quicker. But the 
fundamental problems remain, and the soldiers are still 
vulnerable. They are always one step away from disaster 
basically. If you don't have trained people or--I think you'll 
hear at the second panel, the trained people got deployed. Then 
you have a real problem, and a lot of people, in the case of 
Fort Bragg, over 200 people fell through the cracks and had 
significant problems as late as 2005.
    Mr. Platts. And where it is not happening and we are 
catching them is not because of yet permanent fixes, but 
because of heightened awareness, a heightened effort within a 
flawed system, that they are trying to make sure that they 
catch those flaws before there is a problem. Is that fair?
    Mr. Kutz. Yes, that's accurate. I mean I think they're 
trying to put as many safety nets, band-aids, whatever you want 
to call them in place to the fundamentally flawed system in 
place today.
    Mr. Platts. I think that is something that we do want to 
recognize the personnel, that in response to the errors that 
have come forward through Chairman Davis and his committee and 
subcommittee and GAO, that the message is being heard, and 
there is an effort to correct the error so that the terrible 
situation that the three of you have suffered through is not 
repeated, ideally, at all, and certainly it is the exception, 
not the norm, and that we acknowledge that ongoing effort is, 
but we still got to get to what, Mr. Kutz, you have well 
highlighted, the importance of a permanent solution, which we 
hope DIMHRS in the end will lead to be. That remains to be 
seen.
    Mr. Kutz. That's where the real failure is at this point, 
as you know. I mean, there's been hundreds of millions or more 
spent, possibly more, because they've been trying to do this 
for over a decade, to do the integrated pay personnel, and here 
we sit today, they're re-baselining and replanning, and I don't 
really know how much has actually been accomplished to solve 
the problem systematically and permanently.
    Mr. Platts. And that is clearly what we need, is the 
permanent systemic changes. The end of the Forward Compatible 
Pay System in January, $52 million roughly spent, it seems like 
there is some good and bad news in that announcement. Bad is 
that some of that $52 million was spent without a benefit, but 
good in that some of it was spent, is now going to be 
transferred to the DIMHRS effort, because the way I understand 
that is that FCP was intended to be a kind of interim fix while 
they get to DIMHRS. Deputy Secretary England, he and his staff, 
they are really trying to focus on this, and made a 
determination it is just not good management to keep spending 
money on this interim that has been delayed, as opposed to use 
what already is gained there, and really focus on a permanent 
solution. Is that your understanding?
    Mr. Kutz. Yes. Hopefully, they have learned something from 
the $52 million that they have spent, and I think one of the 
other good things is they may have recognized the failure and 
stopped additional money from being wasted on something that 
wasn't going to provide benefit to taxpayers and to the people 
sitting at the table here.
    Mr. Platts. What is somewhat outrageous, I think, is we are 
talking about going after soldiers who have gone into harm's 
way for us over $150, $200, and we talk millions that is spent 
without a result for the taxpayers to prevent the problems from 
occurring in the first place.
    In the Defense Reauthorization Act, we gave additional 
authority for the waiver of debt such as we are discussing 
here. Is there--are you aware of any cases that authority is 
not being used you believe it should be, or is it more just 
getting people through the process that their case is heard for 
the waiver to be considered?
    Mr. Kutz. I think that was a step in the right direction 
some of the authority granted, but there's additional things 
that we proposed in our report, such as expanding that beyond 
2007, providing the ability to refund solider--some soldiers 
now have already paid their debts, where others have been 
waived, and from a fairness perspective, we believe that 
refunds is something that Congress should consider allowing for 
soldiers.
    Also, the current policy and the way it is set up is that 
they can only go back 1 year to provide relief. So soldiers, if 
you're released from active duty and a year has passed, you are 
no longer eligible. You know, we have offered any possibility 
for the Congress to consider taking that back all the way to 
2001, the beginning of the global war on terrorism efforts, so 
that other soldiers can be fairly treated there also.
    Mr. Platts. I am sure I am over my time, Mr. Chairman. On 
that final point, if we can work with GAO and Chairman Hunter 
at Armed Services, as we look to Defense reauthorization later 
this year, to incorporate those recommendations, which are 
important about fairness, that those who pay the debt should 
have that same opportunity to have that forgiveness and that we 
look prospectively as well.
    Finally, just again, my sincere thanks to our courageous 
men and woman here today for your service. I know that my 
family and I are free and safe because of you and all who wear 
the uniform, and may God watch over you in your lives ahead.
    Again, Mr. Chairman, thanks for your efforts on these 
issues. Thank you.
    Chairman Tom Davis. Thank you very much, Mr. Platts.
    We now go to Mr. Clay, accompanied by his chief aide here.
    Mr. Clay. Thank you very much. Will is here with us today. 
I guess this is take your----
    Chairman Tom Davis. You need to understand, before we 
start, Mr. Clay succeeded his father, and then this is young 
Will who is in training here. He is not old enough to run yet, 
but he is getting some firsthand experience.
    Mr. Clay. Thank you very much, Mr. Chairman. Also, thank 
you for conducting this hearing, and thank you all for being 
here today.
    Specialist Mangum, you not only encountered pay problems, 
but you experienced a host of other problems while in service, 
from the lack of available bathroom facilities when you arrived 
in Iraq, problems with obtaining medical treatment, theft of 
personal items, and hassles in medical processing. We could 
hold an entire hearing just on your experiences. [Laughter.]
    Instead of helping you get back on your feet, the solution 
given to you by the Army was to suck it up. Could you please 
describe the attitude and treatment given to you when you dared 
to raise questions about your medical condition? And by the 
way, how is your family doing? I see your wife has joined you. 
How are they doing? Go ahead.
    Mr. Mangum. My family is doing fine. You know, of course, 
we've had some financial problems because of the re-
collections. I've already stated that it was a problem to get 
back home for the holidays and cover bills. So I chose to cover 
the bills to try to save my credit rating. And now I'm probably 
facing more credit issues because of this re-collection.
    In regards to how soldiers were treated, in Medical 
Retention at Fort Bragg, any soldier that raised a 
congressional inquiry was put on the back burner. They were 
actually moved to the back of the list, if you would, on 
medical treatment. We sort of started back at square one. As my 
position that I was given during my time at the medical 
holding, as Assistant NCO IC of Clinical Operations for Womack 
Army Hospital, even though it wasn't an NCO, I got a lot of 
information on how things were moving through the hospital. It 
was part of my job to help other medical hold soldiers get 
through the system, and I saw firsthand congressionals come 
through, and flat out, there were lies told.
    There are people that are in control of the medical hold 
program there that I have directly heard stated in the office 
that I worked in, state that they were there just to move the 
soldier home. If they could be treated at home, they had 6 
months worth of tri-care, they could get it handled there.
    Mr. Clay. Thank you for that response. It is apparent that 
we need to make it clear to those at Fort Bragg and elsewhere 
that our soldiers deserve the best medical treatment that we 
pay for as taxpayers, and that this is not a political game. It 
is about life and death for you all.
    Let me go on to Specialist Taylor. Your testimony showed 
the numerous attempts you made to notify your unit of your 
whereabouts and status. Yet, despite your repeated attempts 
over a 2\1/2\ year period, you were continually listed as AWOL, 
and as a result, suffered pay discrepancies and were hounded by 
credit collection agencies for the mistaken debt which appeared 
on your credit report.
    What do you believe should be an appropriate review period 
or grace period for DFAS to take before it reports debt to 
major credit bureaus for collection? I understand that since 
2005, DFAS has suspended all reporting of military debt to 
private debt collection. So what do you think would be an 
appropriate review period or grace period for DFAS to take?
    Ms. Taylor. First of all, I would like for them to first go 
and review the person, look at the person's stuff. Don't just 
say this person owes a debt. Go and check it out, investigate 
first beforehand, before saying a debt is old, and then holding 
a person, getting them put on a collection agency. Don't do 
that. Talk to the person. Get to know the person, find out 
what--because I told them that my unit did this. They didn't 
want to get in contact with my unit. They told me to get in 
contact with my unit. Well, they could have went and got in 
contact with my unit themselves and found out their paperwork 
was wrong. I was never AWOL.
    Mr. Clay. So, Specialist, DFAS should be more thorough in 
their investigation, more careful in their investigation, and 
actually do a thorough investigation of the circumstances, 
without this willy-nilly make determinations that have an 
impact on someone's credit report.
    It looks like my time is up, but I appreciate both of you 
all for being here today, as well as your service to this 
Nation. Thank you.
    Mr. Kutz. Congressman, could I just add a point? I mean, I 
think one of the issues we've seen that has been a problem that 
causes pay problems is the loss of track of soldiers, and 
that's what I think happened to Brandy. I mean they thought she 
was AWOL when she was actually being treated as an outpatient 
at an Air Force hospital. Which what happens then is she got 
paid. Subsequently, they go back and say she shouldn't have 
been paid because she was AWOL, and then that turns into debt.
    You also had a situation at Fort Bragg, where soldiers that 
never deployed, the system said that they actually were in 
Iraq, so those soldiers that were still at Bragg that never 
deployed, received hardship duty and hostile fire pay, although 
they never went. So you have lots of problems that we've seen 
over the last 3 years, tracking soldiers, which drives pay 
issues.
    Mr. Clay. And this is the advantage we have for this new 
technology that we have purchased, that the military has 
purchased.
    Mr. Kutz. They need new technology to better do that, I 
would say.
    Mr. Clay. Don't they have the technology now? I mean aren't 
they using a computer system now to track these soldiers?
    Mr. Kutz. They are, but they do not have effective 
integrated pay and personnel systems, and that is driving many 
of the problems.
    Mr. Clay. Thank you for your response.
    Chairman Tom Davis. Thank you.
    Mr. Ruppersberger.
    Mr. Ruppersberger. Probably the second panel is who I 
should be asking this question to, but, Mr. Kutz, I want to ask 
you. First thing, let me say this. If you look at the different 
wars that we have had in this country, probably World War II 
more than any, when the whole country came together, but the 
only sacrifices that you see now, I think, are the men and 
women going to Iraq and Afghanistan and their families, and 
whatever we have to do to resolve this issue.
    And the amount, I think the report you showed, about 1,300 
that really were in a bad situation. It seems to me that we 
need to create a system--and I don't want to repeat what has 
been said before--but that we need a recommendation of a 
system, and not why it happened. I mean, learn from that, and 
find out right now, to make sure this doesn't happen again and 
we take care of the backlog that is there. That might mean--and 
maybe we have this--but I don't know--were you aware, when you 
did your analysis, did they have a help desk? You know, we 
have, in certain situations like this, where you have a help 
desk, I mean, a very simple position that could make a big 
difference for a lot of these people, who could then follow 
through and deal with the collection agencies and all the 
things that occur when you get on a list of having bad debt.
    Mr. Kutz. There are Army, Guard and Reserve ombudsmen, and 
there are 800 numbers and there are various functions to put in 
place in many parts because of the prior hearings we have had 
here, I believe, and so that has been an improvement, but 
again, you still have the fundamental problems, and soldiers 
can still slip through the cracks, and I think today would be 
an example.
    Let me just also say on the 1,300, the 1,300 is battle-
injured soldiers that are separated, so the actual number of 
soldiers that had debt problems is going to be far more 
significant than that. That was just battle-injured, separated, 
so you still have soldiers that are in service, and so if you 
have non-battle-injured, sick and--you're going to have others.
    Mr. Ruppersberger. I am going to stop a bit because I want 
to stay focused, but I mean, the wounded veteran issue is an 
entirely different issue. Once the men and women leave the 
military hospitals and go throughout the country, are not 
getting the rehab or what they need to take them to the next 
level, and it's not any physical rehab, mental rehab, and also 
job issues that are out there, which is something that hasn't 
been dealt with and should.
    But I want to get back to, you know, your analysis. Because 
of hearings, we have help desks, but are they functioning? Just 
because we put in a position, what is the mission or the plan 
to make sure that every single individual who served our 
country in Iraq and Afghanistan has been injured, where are we 
as far as fixing that problem? And you need to put together a 
system, and there needs to be somebody who is overseeing that 
system to hold the people working there accountable. Does that 
exist? Does your research show that it is working now, or what 
kind of backlog that we have? I mean this should be a high-
priority issue that should be resolved from the highest level 
within a month.
    Mr. Kutz. I think the second panel can better answer that, 
but my analysis----
    Mr. Ruppersberger. I am not going to be here for the second 
panel. I have to go to another hearing.
    Mr. Kutz [continuing]. My analysis of it, I mean, with 
respect to short-term fixes of customer service and other 
process improvements, band-aids to the current system, there 
has been a lot of action and a lot of focus. It has been a very 
high priority focus based on our assessment of DOD's actions.
    With respect to the fundamental fixes that would prevent 
the problems from happening in the first case, they have not 
made much progress on that, and they've spent hundreds of 
millions of dollars trying to implement the integrated pay 
personnel system, and re-engineered system, and I think at this 
point they haven't gotten very far, so that's where the real 
issue is.
    Mr. Ruppersberger. Why do you think they haven't gotten far 
in that regard?
    Mr. Kutz. Again, we have a high-risk area, DOD business 
system modernization. You've got basic project management. It 
isn't as if the technology doesn't exist for this, it's a 
matter of actually effectively planning, implementing, testing 
and executing implementation of that.
    Mr. Ruppersberger. So then we need a system, say, call it a 
manual system to back it up until this works when you are 
dealing with men and women serving our country.
    Mr. Kutz. And they do have that in place, but again, the 
problem is so--the system is so fundamentally flawed that I 
don't think you can have 100 percent fail-safe system until you 
re-engineer and provide the new system.
    I think that there are fewer problems than when we started 
looking at this 3 years ago, but I just don't think human 
effort alone is going to fix this.
    Mr. Ruppersberger. All you have to do is use common sense, 
and you can identify everyone who has been injured, and you 
just follow them through. I mean, you have their names. You 
know who they are. You have somebody assigned to them like a 
caseworker, and take them through--they don't know. They have 
been called up to duty. They come from all different walks of 
life, and I am not sure what their education, and whether they 
really understand debt, some do, some might not. Would you 
recommend--I am just looking for a solution here, and a system 
that has been set up, not to talk about--if we use technology 
that can't work, then we have to back it up with manual in 
certain areas of priorities.
    All it is, this could be fixed tomorrow if the Secretary of 
Defense would make this a very high priority, to take care of 
injured men and women and to put the resources there. If it is 
from a manual point of view, to assign every person who is 
injured or comes up until this is fixed. Do you feel that----
    Mr. Kutz. I agree with you.
    Mr. Ruppersberger. Do you feel that can be done?
    Mr. Kutz. I agree they can do better, and I think that this 
needs to be a priority because there should be a zero tolerance 
for pay problems for sick, injured soldiers.
    Mr. Ruppersberger. My light is on and I have to stop. The 
chairman seems to be in a good mood today, so maybe he will let 
me ask one more question.
    Chairman Tom Davis. This is very important, so I appreciate 
it.
    Mr. Ruppersberger. What would you recommend--you are 
outside looking in--that this could be fixed? How would we do 
it? Start at the top. I mean we have some leverage, not a lot.
    Mr. Kutz. Well, as a result of your request, as I mentioned 
in my opening statement--you were not here for that--but we 
have issued 84 recommendations and they have taken action on 70 
of those, and so not all of the 70 are implemented, many of 
them are, and so if they implement all 84 of our 
recommendations, I think they'll be closer, but again, it 
appears that there are still people falling through the cracks, 
so to the extent that the customer service function has not 
served appropriately for the people at the table, then they 
need to take a re-look at what they've done.
    Mr. Ruppersberger. Mr. Chairman, from an accountability 
point of view, I would really request that we have another 
analysis and come back in the next month or so, and let us know 
where we are. And the second panel, I am sure, might address 
these issues. Unfortunately, I can't be here for that.
    Chairman Tom Davis. Well, our staff is going to continue to 
bird-dog this, and we are just hearing things today, just like 
the mess hall, things that shouldn't happen, additional 
problems that we will get to with our next panel. So thank you 
very much.
    Mr. Hayes.
    Mr. Hayes. Quick comment. I assured Mr. Clay--if you all 
wonder what the conversations were--we are across-the-hall 
neighbors. We check each other. Womack will get a call about 
your situation, Frank. Jennifer Shirley is my MLA. She will 
give you the numbers and we will make sure that all that gets 
followed up on. Didn't like the sound of that.
    Thank you, Mr. Chairman.
    Chairman Tom Davis. Let me just say to each of you, we 
really appreciate your being here. We didn't get you up here 
just to hear you talk. We think this will make a difference. 
And if you can stay and hear the second panel, we are going to 
ask them some questions, and I am sure they are as eager to 
solve these issues. They don't like coming up here before the 
committee having to explain how things go wrong with systems, 
but this is important. We appreciate your willingness to speak 
out, and we think a lot of the other soldiers will benefit, 
because you have come forward today. So thank you very much.
    I will dismiss this panel. And we will take a quick recess, 
but we are going to move to our second panel then, which is the 
Hon. J. David Patterson, who is the Principal Deputy Under 
Secretary of Defense in the Office of the Comptroller; Hon. 
Nelson Ford, who is the Principal Deputy Assistant Secretary of 
the Army for Financial Management and Comptroller; Zack Gaddy, 
who is the Director of Defense Finance Accounting Service, 
Defense; Mark Lewis, Assistant Deputy Chief of Staff, G-1, U.S. 
Department of the Army; and Colonel Mark McAlister, who is the 
Finance Officer of the 18th Airborne Corps at Fort Bragg, NC.
    So we will just take a 2-minute recess and come back.
    [Recess.]
    [Witnesses sworn.]
    Chairman Tom Davis. I think you know the rules on 
testifying. You have heard the first panel, and I would like to 
hear your response. I mean, this should not happen in 2001 in 
the U.S. military. And a lot of these decisions that led to 
where we are were before many of you were in your places, and 
so we are not trying to point fingers. We are trying to solve a 
problem here. But, Mr. Patterson, we will start with you and 
move straight on down, and welcome and thanks for being here. I 
am glad you were here to hear the first panel. I think that is 
helpful to all of us.

   STATEMENTS OF J. DAVID PATTERSON, PRINCIPAL DEPUTY UNDER 
     SECRETARY OF DEFENSE, OFFICE OF THE COMPTROLLER, U.S. 
DEPARTMENT OF DEFENSE; NELSON FORD, PRINCIPAL DEPUTY ASSISTANT 
SECRETARY OF THE ARMY FOR FINANCIAL MANAGEMENT AND COMPTROLLER, 
 U.S. DEPARTMENT OF DEFENSE; ZACK E. GADDY, DIRECTOR, DEFENSE 
FINANCE ACCOUNTING SERVICE, U.S. DEPARTMENT OF DEFENSE; MARK R. 
LEWIS, ASSISTANT DEPUTY CHIEF OF STAFF, G-1, DEPARTMENT OF THE 
     ARMY, U.S. DEPARTMENT OF DEFENSE; AND COLONEL MARK A. 
 McALISTER, FINANCE OFFICER, 18TH AIRBORNE CORPS, FORT BRAGG, 
                         NC, U.S. ARMY

                STATEMENT OF J. DAVID PATTERSON

    Mr. Patterson. OK. Thank you, Mr. Chairman, Mr. Hayes.
    I am very pleased to be here with my colleagues, Mr. Nelson 
Ford, Mr. Zack Gaddy, Mr. Mark Lewis, and Colonel Mark 
McAlister. And I think it is an important topic that we are 
discussing: the accuracy of the pay support to our wounded 
soldiers and, in fact, all of our military members.
    But before I begin with my prepared remarks, let me be on 
the record as offering the Department's sincerest apology for 
the pain, anxiety, and inconvenience that we have caused these 
fine soldiers that you heard this morning.
    The statements of my colleagues will outline what the 
Department of Defense is doing to address these pay problems 
experienced by a number of our military members and their 
families. Some of the problems we have discovered while others 
have been identified by the Government Accountability Office. 
So I will restrict my statements to some broader elements of 
the Defense Department policy and commitment.
    First, be assured that keeping military pay straight is one 
of the most important priorities of the Department of Defense. 
None of our missions or goals will ever get very far if we do 
not take good care of our military people and their family, and 
that care starts with their compensation. And certainly what 
group could be more deserving of keeping pay straight than the 
troops who have been wounded in action? So our Department 
leaders are committed to moving as quickly as possible whenever 
we find problems affecting our military people and their 
families.
    Second, the Department of Defense continues to make 
progress on solving the basic cause of these pay problems: the 
lack of an integrated personnel, pay, and medical system. 
Secretary Rumsfeld and other DOD leaders recognize that we need 
to overhaul our information and management systems to preclude 
problems, not simply put Band-aid fixes on the problems du 
jour. The Secretary has made clear that transforming how the 
Department of Defense does business is just as important as 
transforming our weapons or how our military fights. More to 
the point, all of these elements of Defense Transformation are 
interwoven. The Department has established a Personnel Pay 
Council made up of senior Defense Department executives whose 
responsibility it is to identify potential pay problems and put 
in place process remedies. I co-chair that Council.
    Furthermore, and perhaps more important, the Department 
recently established the Business Transformation Agency [BTA], 
which is responsible for the development and the implementation 
of Defense business systems. As one of its top priorities, the 
BTA is taking the lead on the implementation phase of the 
Defense Integrated Military Human Resource System [DIMHRS], 
which will help us provide excellence in pay service to our 
military members. Additionally, the Deputy Secretary of 
Defense, Secretary England, is personally involved in ensuring 
that DIMHRS is implemented on schedule and on cost. Our plan is 
to have this system fielded by December of calendar year 2008.
    Now, in previous hearings, the Department offered the 
Forward Compatible Payroll [FCP], system as an interim solution 
to our payroll tracking and distribution challenge. In a review 
of the DIMHRS implementation profile, we found that the Forward 
Compatible Payroll system was, as you mentioned, Mr. Chairman, 
over cost, behind schedule, and, truthfully, with little chance 
of reaching the desired level of performance. The expected 
fielding date of that system was such that it would be 
functional just about the time that DIMHRS was coming on board. 
Consequently, FCP was not an interim solution at all, but a 
duplicate system solution, and, therefore, the FCP program was 
canceled.
    With that as an overview, I will defer to my Army and DFAS 
colleagues for a detailed discussion of our diagnosis of the 
pay problems we have discovered and the solutions that we are 
implementing to address those problems. But, again, I would 
offer to you that having been a forward air controller in 
Vietnam, I wanted my pay correct. Having been a deputy 
commander or airlift forces during Desert Storm and Desert 
Shield, I wanted my pay correct. I have a son-in-law flying KC-
135s. I want his pay to be correct. And I have a son who is in 
the Air Force Special Forces who frequently deploys, and I want 
his pay to be correct.
    So I have a personal stake in the fact that the Department 
of Defense provides pay support that is accurate, timely, and 
sensitive to our military members' needs. And I thank you for 
the opportunity to discuss this important subject that 
directly, clearly, affects the welfare of our troops and their 
families. And I look forward to your questions and comments, 
sir.
    [The prepared statement of Mr. Patterson follows:]

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    Chairman Tom Davis. Thank you very much.
    Mr. Ford, thanks for being here.

                    STATEMENT OF NELSON FORD

    Mr. Ford. Thank you. Good morning. Chairman Davis, Mr. 
Hayes, my name is Nelson Ford, and I am the Principal Deputy 
Assistant Secretary of the Army for Financial Management and 
Comptroller, and I want to thank you for this opportunity to 
address debt-related problems for some of our injured soldiers 
who have separated from the Army.
    I want to stress at the outset that the Army expects that 
every soldier will be paid accurately and on time, and it is 
our fault when that does not occur. This is even more important 
for deployed soldiers and those wounded while selflessly 
serving their country. During this period of tremendous 
upheaval in their lives, soldiers should not have to worry 
about being paid correctly.
    I want to thank the committee for the emphasis you have 
placed on this issue. Mr. Chairman, for the past 2 years we 
have worked closely with the members of your staff resolving 
individual pay-related issues and implementing new policies and 
procedures to improve our ability to pay soldiers correctly and 
on time.
    We have made significant improvements in the way we train 
our payroll personnel, we have improved our payroll systems, 
and, most importantly, we have changed the process for granting 
debt relief to soldiers who have been overpaid through no fault 
of their own.
    Between DFAS and the Army, about 400 additional staff, 
military and civilian, have been augmenting existing staff to 
catch and correct pay problems before they turn into soldier 
debts. We are committed to maintaining these efforts until 
better systems are in place and proven to work. Let me provide 
some examples of what we are doing.
    First, in the area of improved business practices for 
wounded soldiers, we have implemented three new policies: one, 
we no longer refer outstanding debts to collection agencies; 
two, all pay-related debts are suspended until a thorough 
review of the soldier's pay account is completed; and, three, 
if appropriate, we initiate debt relief on the soldier's behalf 
through the waiver and remission process.
    Second, working with DFAS, we implemented the Wounded in 
Action Pay Management Program. This system captures medical 
information on soldiers from five different systems, both 
medical and personnel, and makes that information available to 
our finance and human resources personnel from a single data 
base that can be accessed through the Internet.
    Since mid-October 2005, we have successfully stopped all 
applicable theater entitlements for 100 percent of the soldiers 
evacuated through Landstuhl. This alone has significantly 
reduced the possibility of payroll overpayments for wounded and 
injured soldiers.
    Third, our efforts to make sure soldiers are paid correctly 
has reinforced the importance of making timely changes to 
soldier duty status in the payroll system. Our problems are a 
manifestation of the Department's struggles in developing and 
deploying an integrated personnel and pay system. As you have 
heard from Mr. Patterson, we are strongly committed to 
resolving these problems through the fielding of DIMHRS.
    We are also here to discuss the problems associated with 
the Medical Retention Processing Units [MRPUs], at Fort Bragg. 
We have investigated these problems carefully and confirmed 
that the issues are primarily local, not Army-wide. Colonel 
McAlister will address these issues in more detail. However, we 
continue to evaluate the support required for all the MRPUs.
    In summary, I want to reiterate that every soldier deserves 
to be paid correctly and on time. Although we have made 
significant improvements in soldier pay, the process remains 
imperfect. The Wounded in Action Pay Management Program 
provides visibility for a large group of at-risk soldiers, but 
it is not a perfect solution. We need DIMHRS in order to gain 
further improvements.
    In the meantime, we will continue to work with the 
committee, DFAS, and the GAO, to prevent and, if necessary, 
resolve the debts and other pay-related problems for all 
wounded soldiers.
    Thank you very much for the opportunity to testify this 
morning, and I look forward to your questions.
    [The prepared statement of Mr. Ford follows:]

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    Chairman Tom Davis. Thank you very much.
    Mr. Gaddy, thanks for being with us.

                   STATEMENT OF ZACK E. GADDY

    Mr. Gaddy. Thank you, Mr. Chairman.
    Chairman Davis and distinguished members of the committee, 
my name is Zack Gaddy, Director of the Defense Finance and 
Accounting Service, and I am here today to discuss pay-related 
problems for soldiers injured while serving in a combat zone.
    I would like to give you an overview of the progress the 
Army and DFAS have made to improve the accuracy of military pay 
to soldiers and actions we have taken to assist soldiers with 
relief from indebtedness. I am providing detailed information 
on this issue and a statement for the record.
    One of my top priorities is to make sure our men and women 
in uniform are paid the right amount on time. For the past 
year, DFAS has worked closely with the Army to mitigate 
conditions causing soldier indebtedness. I had the privilege to 
visit soldiers who have been medically evacuated to both the 
Landstuhl and Walter Reed Medical Army Centers to see firsthand 
how the solutions we are developing are working.
    Mr. Chairman, I was moved by their courage and spirit. 
Their efforts in fighting the global war on terrorism are 
exemplary, their contributions and personal sacrifices 
matchless. These young men and women are what make this the 
greatest Nation in the world, and they deserve timely, accurate 
pay. So let me explain how we in the Army have improved our 
accuracy.
    In May 2005, DFAS developed and deployed a Wounded in 
Action Pay Management Program that links casualty and medical 
information with finance records. Using Army data, we identify 
and monitor all battle-injured and non-battle-injured soldiers 
who have served in a combat zone from October 7, 2001, to the 
present.
    Over 60,000 pay accounts have been added to the program's 
data base. Since May 2005, we have reviewed over 35,000 of 
those accounts and should complete the remaining reviews by 
September 2006. As we find discrepancies, we take corrective 
action, including adjudication of any identified indebtedness.
    Since September 2005, all identified pay and allowance 
indebtedness for ill and injured active-duty soldiers has been 
suspended, pending review of their pay account for possible 
adjudication. To date, we have assisted just under 1,700 
soldiers with debt relief totaling approximately $1.5 million.
    Also, in October 2005, DFAS and the Army deployed a team to 
Landstuhl, the point of medical evacuation from the combat 
zone, to stop Hardship Duty Pay-Location. This was one of the 
combat entitlements being overpaid and causing much of the 
soldier indebtedness. To date, over 2,800 entitlements have 
been stopped correctly by our team at Landstuhl.
    Please put the chart up for how we handle this.
    This chart shows you the pay support soldiers now receive 
when medically evacuated from Southwest Asia through Landstuhl 
and onward to U.S. medical centers and hospitals. Face-to-face 
meetings with patients and their families are an integral part 
of the process. Every step of the way, Army finance specialists 
discuss current pay and entitlements, usually within 48 to 72 
hours, and assist soldiers and family members with travel claim 
processing. They also track pay accounts until soldiers return 
to duty or separate from service. If indebtedness is 
discovered, the finance specialist initiates the relief request 
on behalf of the soldier.
    We have also taken positive steps to alleviate the 
reporting of soldiers to credit bureaus over repayment issues. 
In June 2005, we suspended collection of debt for those 
wounded-in-action soldiers identified as no longer in the 
service. We also stopped reporting wounded-in-action soldier 
indebtedness to collection agencies and credit bureaus, and we 
stopped sending collection letters to the soldiers. These 
actions remain in effect until we can review and adjudicate 
each and every case of soldier indebtedness.
    The Department appreciates congressional assistance 
provided on these issues in the fiscal year 2006 National 
Defense Authorization Act. Thanks to your actions, Service 
Secretaries now have broader debt relief authority to take care 
of injured and ill active-duty and Reserve component soldiers. 
They now have a wider range of debt collection for relief 
consideration, more time for due process, and processing time 
is shortened by several weeks.
    Finally, I want to assure this committee that DFAS does not 
pursue debt collection for those who have given their lives in 
defense of our country. No known debts have been passed to the 
estates of those paying the ultimate price.
    Mr. Chairman, soldiers wounded in action should not have to 
worry about whether they are getting the right pay. They need 
to focus on their medical care, the healing process, and their 
families. The Army and DFAS need to provide the proper fiscal 
care. Since this issue came to light, the Army and DFAS have 
focused their efforts on providing soldiers the pay they are 
due when they are due to receive it. When we find pay 
discrepancies, we work aggressively with the Army to fix them. 
I assure you this is one of my top priorities, and DFAS will 
continue to work with the Army and the other services to do our 
very best each and every day to pay our brave men and women in 
uniform correctly.
    And, finally, I would like to offer my sincere thanks to 
those who have served, who are currently serving in Iraq and 
Afghanistan, and apologize for any problems we have caused 
them.
    Thank you.
    [The prepared statement of Mr. Gaddy follows:]

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    Chairman Tom Davis. Thank you very much.
    Mr. Lewis, thanks for being with us.

                   STATEMENT OF MARK R. LEWIS

    Mr. Lewis. Mr. Chairman, distinguished members of the 
committee, thank you for the opportunity to speak with you 
today to discuss wounded soldier pay issues. Our wounded 
soldiers deserve the very best compassion and care that the 
Army has to offer. That care includes the assurance and 
commitment to the soldier and their families that their pay is 
correct, sufficient, and timely.
    Within the Army, the U.S. Army Wounded Warrior Program, 
coined AW2 now, assists our most severely wounded soldiers in a 
myriad of areas. One of these areas is finance. AW2 receives 
debt management pay inquiries from several sources such as 
members, family members, unit members, and our own Army Family 
Management Pay Specialists, and through various data bases. 
Examples of wounded soldier issues include identifying theater 
entitlement overpayment and working with finance offices for 
debt relief or reducing incorrect payments.
    To date, the AW2 has reviewed 1,170 cases of their 
soldiers. They have audited them with 623 of those cases 
seeking an overpayment in the amount of $592,442. Over half of 
those cases submitted were approved for a complete write-off. 
Of the remaining cases, 61 are currently under reserve for 
write-off in the remaining then have exceeded the 3-year 
statute of limitation for submitting a waiver.
    In the past, wounded service members have received 
deployment entitlements above those authorized. Months later, 
they have a large lump sum deducted from their paycheck, thus 
leaving the soldier and their family with very little pay for a 
particular period. Several severely injured service members 
have incurred this kind of debt, and there is no excuse for 
that. The AW2 Finance Support Specialist is dedicated to 
working very closely with those soldiers and the finance 
officers to obtain and submit remittance or waiver packets for 
those soldiers. AW2, Army Medicine, and DFAS are in constant 
close coordination now to implement and develop proactive 
processes and procedures to ensure soldier's financial issues 
are identified and corrected before the issues become financial 
burdens to the soldier and their family.
    One of those key initiatives that we are working on is the 
Wounded Warrior Accountability System, which consolidates 
information regarding severely injured service members from a 
variety of personnel, finance, and medical systems. This 
system, this data base, is to be the platform for both the 
Wounded in Action and AW2 programs as we work with our 
soldiers, enabling greater visibility, collaboration, and 
resolution of the financial issues.
    Our efforts to fix these issues immediately when they occur 
are ongoing and continue to employ a mix of solutions to 
correct overpayments for the Active, Guard, and Reserve 
soldiers. The 2006 NDAA provided the Army needed assistance to 
grant debt relief for our wounded soldiers. However, we would 
like Congress to specify that payment of previously collected 
debts would be allowed as a remissible collection. We also 
would like to see the debt remission law added as permanent 
legislation and seek a 1-year retroactive one-time provision 
for debts of separated soldiers wounded in action implemented 
in the future.
    Recent enactments by Congress, such as the Traumatic Injury 
Protection under the Servicemember's Group Life insurance 
program, not charging soldiers for meals received at military 
treatment facilities, debt remission authority, and combat-
related Rehabilitation Injury Pay, have all helped tremendously 
in caring for our soldiers and safeguarding the financial 
futures of their families. I am confident that current systems 
in place coupled with recent legislation will reduce financial 
disruptions to our wounded soldiers' lives.
    Our soldiers' duty performance provides this Nation the 
very best Army in the world, and each soldier deserves accurate 
and timely pay, particularly for those who are wounded and sick 
and unable to provide for themselves and their families. The 
Army leadership has been deeply involved and concerned in 
providing the requisite services in support of all soldiers' 
and their families' well-being. The Army is committed to 
developing and fielding an integrated personnel and pay system 
which provides accurate and timely personnel services and pay 
to our soldiers.
    Mr. Chairman, thank you for this opportunity. I look 
forward to your questions.
    [The prepared statement of Mr. Lewis follows:]

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    Chairman Tom Davis. Thank you very much.
    Colonel McAlister, thanks for being with us.

                 STATEMENT OF MARK A. McALISTER

    Colonel McAlister. Good afternoon, Chairman Davis and 
distinguished members of the committee. I am Colonel Mark 
McAlister, Commander of the 18th Soldier Support Group 
(Airborne), responsible for Personnel, Finance, and Postal 
support to the 18th Airborne Corps at Fort Bragg. It is a 
privilege for me to speak to you today about current procedures 
and useful solutions for pay processing of Army Guard and 
Reserve soldiers.
    Since the start of the global war on terror, the 18th 
Airborne Corps and the 18th Soldier Support Group have been at 
the center of activity. Being both continuously deployed in a 
combat theater of operations and sharing the responsibility for 
the processing of tens of thousands of mobilizing and 
demobilizing Reserve soldiers through Fort Bragg, the 
operational tempo for my units and soldiers have been very 
challenging. I thank you for your interest in these soldiers, 
and I thank the Government Accountability Office report that 
has proven very helpful to us in identifying shortfalls and 
establishing better procedures to ensure soldiers are paid 
correctly.
    Again, it is an honor and privilege for me to appear before 
this committee, and I look forward to your questions.
    [The prepared statement of Colonel McAlister follows:]
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    Chairman Tom Davis. Thank you very much.
    Mrs. Foxx, do you want me to start with you?
    Mrs. Foxx. No. That is fine.
    Chairman Tom Davis. I have a lot of questions.
    First of all, thank you all for being here. For Secretary 
Patterson and Mr. Gaddy, DOD has been promising a new 
integrated pay and personnel system along with a complete 
overhaul of the entire process for paying mobilized and active-
duty soldiers. These go back to the mid-1990's, as we heard, 
before any of you were there, before I was here, when GAO and 
others reported significant soldier pay problems.
    During the last decade or more, Congress has provided DOD 
with hundreds of millions of dollars to address the problem. I 
do not think it is a money problem. Why have we not been able 
to deliver on these promises, which have had real consequences 
for hundreds of thousands of soldiers? And we talk about, you 
know, the wounded. If this were one or two people that we were 
bringing up here, you can always have that slipping through. 
But in the wounded soldiers category, we know a minimum of 
1,300 that we had this issue with.
    What is the problem? Can you explain to me why, with all 
this money--is it the contractor? Is it the fact that DOD has 
just not had the coordination and the expertise to do it? Can 
somebody help me?
    Mr. Patterson. It is an obvious question, and it requires a 
really good answer, and I wish I had one. But let me say that 
we are all culpable. No one gets off scot-free on this.
    I just came off of a project for a Defense Acquisition 
Performance Assessment where Secretary England asked us to look 
at every aspect of the acquisition process. And once we did, we 
found out that nobody gets a pass. We have all been culpable in 
one way or another--the industry that was willing to do 
whatever we asked, and Government, who asked whatever was 
thought possible. We have an ever-increasing number of 
requirements that drive the cost of contracts up, and DIMHRS 
does not escape.
    But I can tell you that the future is much brighter. We 
have Major General Pair, who is in charge of this program. He 
is an excellent program manager. We have milestones that are 
achievable. We have requirements that we hope will not creep. 
And we have senior management interests at the very highest 
levels that will ensure that the program DIMHRS is on track, on 
cost, and on schedule.
    Chairman Tom Davis. Now, this is the fifth hearing this 
committee has held on these issues, and every time it is a new 
wrinkle on an old problem. And they persist. You heard one of 
our witnesses today, that these issues still aren't resolved 3 
years after she has left active service. I hope at a minimum we 
can take care of that problem as we leave here today.
    Some call DIMHRS little more than vapoware, an ambitious 
concept but not yet a functional system. The history of major 
IT system development in the Pentagon is very mixed. It is not 
always a pretty story. What is different about the promises you 
are making this time that should give us any confidence that 
you can finally deliver on a solution? Do you have different 
people overseeing this? You mentioned one general. I don't know 
what their tenure is, but these things tend to take years into 
buildout. Is it a question of just getting good procurement 
officials? Is it a contractor issue to some extent? Is it 
communications between the contractor and the Government? I 
mean, can we get a little more precise? What has caused the 
problems today? You heard the GAO witness talk about hundreds 
of millions of dollars being wasted, and yet we are going after 
$50 that somebody owes and that is ruining their credit. I 
mean, all of us know we will look ridiculous when that happens.
    What has happened that this money has gone down the drain?
    Mr. Patterson. That now gives us more encouragement that we 
can go forward.
    Chairman Tom Davis. And why did they go bad? Why did we 
lose hundreds of millions of dollars in this? I mean, somebody 
made a mistake somewhere. This did not just come out of thin 
air.
    Mr. Patterson. Well, of course, I think that you are 
exactly right, and as I said before, we are culpable. We are 
victims of the conspiracy----
    Chairman Tom Davis. Mistakes were made, as----
    Mr. Patterson. Well, you know, that is a very--I do not 
want to be quite that glib, but the fact is that, you know, we 
live in a world of a conspiracy of hope. We hope that the 
contractors will do what they say, and the contractors hope 
they can as well. And I will tell you that what has changed--
and then I will leave the details of the answer to your 
question to Mr. Gaddy. But the fact is that we now have benefit 
of Secretary England being intimately involved. And we also 
have benefit of a committee that is made up of the senior 
executives of the Department of Defense who are interested in 
seeing success. And we have a program manager who is interested 
in meeting milestones and having this program implemented 
calendar year 2008 in December.
    To your specific question about communications, I think, 
too, what gives us a certain amount of hope that this will come 
to pass is the fact that we have deployed some pilot programs 
into the services, both the Air Force and the Army, who have 
taken a quick look at this. And the people who actually have to 
put the data into the system are delighted with it. They pick 
up on it right away.
    So there is reason for encouragement here, and I would ask 
you to invite us back to give you an update so that you can be 
encouraged as well.
    Chairman Tom Davis. Well, we continue to invite you back, 
but it is usually not for that kind of update. What happened 
along the way? Where did we go wrong?
    Mr. Patterson. Well, I think that Mr. Gaddy, who has been 
with this longer than I have--I came on board in November--is 
probably in a better position to talk about that.
    Chairman Tom Davis. Mr. Gaddy, this is the advantage of 
seniority. You get to answer this question. [Laughter.]
    Mr. Gaddy. Yes, sir, Mr. Chairman. I appreciate the 
advantage of seniority since next month will be 2 years for me, 
so I can go back about that far. Actually, I have been in the 
Defense Finance and Accounting Service since it was created in 
1991, so I have been around this for a long time in different 
capacities.
    I would like to comment a little bit on DIMHRS and then 
maybe a little bit more on Forward Compatible Pay, which I know 
has had some conversation today.
    First, in terms of DIMHRS, I would just submit to you it is 
the largest, most complex ERP, Enterprise Resource Planning, 
system ever envisioned by anyone. The pay complexity that we 
deal with--there are over 2,000 pay entitlements that military 
members--Guard, Reserve, active duty--can have, and that adds 
to complexity. And I know there is an undertaking right now 
within Personnel and Readiness to look at how to do some pay 
simplification kind of things.
    I think initially over the last 10 years or so that this 
program has been under way, money has been spent in a variety 
of ways. I don't know that I would categorize it as wasted. I 
believe that the money that was spent to date has brought us to 
a point where, when they went out last year looking at the 
system--because there was some question about where was it and 
could it actually be fielded. I think the assessment going out 
was we did not think so, but the assessment coming back in, 
quite candidly, was it is much better than they thought. It 
is----
    Chairman Tom Davis. But maybe not DIMHRS, but some of the 
previous systems that they had been working on were completely 
scrapped.
    Mr. Gaddy. Yes, sir.
    Chairman Tom Davis. And you would agree with me that money 
was wasted, wouldn't you?
    Mr. Gaddy. Yes, sir, I do.
    Chairman Tom Davis. OK.
    Mr. Gaddy. I believe DIMHRS itself will be fielded in spite 
of what some may say right now. And I understand why people may 
say that, because it has taken a long time, it is complex. My 
agency alone has devoted over 50 people to just supporting the 
pay requirements. We know those pay requirements exist. We are 
testing them today. There is a data base with those 
requirements. We are working on interfaces. We are doing the 
things that we believe will help push the program along.
    Chairman Tom Davis. Do you have the resources from us that 
you need to make this work?
    Mr. Gaddy. Yes, sir, we do. From my perspective, we have 
identified the requirements. One of the lessons learned coming 
out of Forward Compatible Payroll was have your pay 
requirements established early on. We believe we have those. 
When we were working FCP, one of the pitfalls that we did not 
anticipate, going back to 2003 when that started, was we were 
only replacing the pay portion of this problem, not the 
integration of pay, personnel, and medical. What we were trying 
to do is just replace the payroll system itself. That meant we 
had to go interface to every personnel system that exists. We 
added a level of complexity that we could not handle. With 
hindsight, that looks pretty clear to us, but going into it, it 
looked like we could do it.
    As the program slowed down and the progress was not what we 
anticipated, DIMHRS looked like it had more legs, it is going 
to make it. So then it looked like we were going to have a 
schedule convergence. So we had to make a decision: Do we 
continue pouring money and resources into FCP or do we 
basically put our money and resources on DIMHRS? And we believe 
DIMHRS is a much more pervasive system, solves many more 
problems, and will do a lot more for the soldier than FCP ever 
dreamed of doing.
    So when it came down to a resource contention, we decided 
DIMHRS was the right way to go, and that is why I made the 
decision back in February to terminate the FCP program.
    Chairman Tom Davis. OK. Thank you very much.
    Ms. Norton.
    Ms. Norton. Mr. Chairman, I just want to indicate a 
particular concern I had, and I think that you are to be 
congratulated for staying with this issue. I have never been 
able to understand it because we had more soldiers deployed in 
the Kuwait war. Perhaps I was not around when these issues 
might have been raised then. Maybe it is me that this is the 
first war I have heard of this kind of problem. It is not as if 
we had a draft and all of a sudden there was this huge influx 
of people and the payroll system just fell apart because we had 
to put so many people on it.
    The problem that concerns me most has been the overpayment 
problem. It does seem to me that the volunteers leave the Army 
and are then told you now owe money because you should have 
caught the error when you received more money. I keep thinking 
everybody should put themselves in the place of these soldiers. 
I do not know about them. Perhaps this is not the case with 
them. I know that any sizable amount of money I get is direct 
deposited, so I do not even know how much money there is.
    There is an analogy--not a complete and total one, but I 
cannot help but think of it--when there is overreaching in the 
criminal justice system. There are times when the charges have 
to be thrown out, where the courts say that the fault is so 
significantly with the Government that the only way the 
Government will learn not to engage in that violation again is 
not to be able to press this matter forward.
    Now, this, of course, is not in the justice system at all, 
and I understand that some adjustments have been made more 
recently. I would remain very--I just want to say for the 
record I would remain very, very concerned that soldiers who 
have stepped up--you do not hear any of them complain--to 
participate in a very unpopular war at home, do not complain 
now even when they hear that the tide at home has turned very 
decidedly against continued participation, to come home and 
find that the answer to the overpayment is you got to do your 
own accounting, soldier, the Government is not in the business 
of overpaying.
    If the fault is the Government's, it is very hard for me to 
be able to justify the notion that there is a single soldier 
who should have to pay back--and I particularly say this--for 
our Guard soldiers and our Reserve soldiers. And you are aware 
that they are--I suppose now almost half of those--they 
certainly were that at one point--in Iraq. Here are people for 
the most part who never expected to have to serve in combat in 
the first place, have gone without complaint, some at huge 
sacrifice at home--loss of businesses, only person working, 
marriages breaking up, debts unpaid, reduction in pay, Federal 
Government does not even do what private industry does for 
Reserve and National Guard, and that is to try to make up for 
the differential in pay. And on top of that, at the end, at 
some point in your service you are told the Government made a 
mistake and we want your check to be in the mail, I just want 
to say I think that cannot possibly be justified under any 
circumstances.
    And I thank you very much, Mr. Chairman.
    Chairman Tom Davis. Thank you very much.
    Ms. Foxx, do you have any questions?
    Ms. Foxx. Thank you, Mr. Chairman.
    I have a series of questions to ask here, but I guess I 
have really--I am just a very plainspoken, basic person, and 
the question that I would like to ask you is: Why when the 
Government needs to do something--well, let me back up. How 
many employees are affected by this new payroll system? How 
many people were affected by it, how many people came under it?
    Mr. Gaddy. The one that--DIMHRS is what you are talking 
about?
    Ms. Foxx. Right.
    Mr. Gaddy. It will be about 2.1 million.
    Ms. Foxx. 2.1 million, OK. Well, there may not be any 
analogy to it in the private sector, but my thought was there 
surely are payroll systems out in the private sector, they may 
not be quite as complicated, but similar to it. Why do we 
always have to reinvent something instead of taking something 
that works somewhere else and adapting it? Why is it that we 
can do so many great things in the military and we cannot do 
administrative things in a way like this? Why is that such a 
problem? Just a real basic issue.
    Mr. Gaddy. Yes, ma'am, I would like to address that. As I 
mentioned earlier, there are over 2,000 pay entitlements for 
military. There is nothing like that anywhere in the private 
sector. We are, in fact, with DIMHRS, using a COTS--commercial, 
off-the-shelf software product to handle the pay computation. 
The thing that makes it complex in addition to the pay 
entitlements is now you go to the personnel side of the 
business, and nowhere else do you see people being deployed in 
the many ways that we may call upon service members to serve.
    So, from that perspective, you have the complexity of the 
personnel business, the payroll side of things, and then add to 
that the third condition, which is unique to us, and that is 
the medical status of people. So when you look at the overall 
complexity of that, it is a scope issue. There are so many, and 
then there are also all the various pay entitlements that just 
make this a very terribly complicated area.
    It has taken many, many years to reach agreement within the 
Department on how to approach these things. I believe that has 
happened. It has taken many years to get the right focus behind 
things. I think that exists today. And as Mr. Patterson 
indicated, there is a refocus on the part of the Secretary, the 
Deputy Secretary, and all the military departments to bring 
DIMHRS to fruition.
    I as a payroll provider am very, very interested in it 
being successfully deployed because it will make my life so 
much easier in terms of being able to provide good service to 
men and women every day.
    Ms. Foxx. OK. When--and you may have said this earlier, and 
if you did, I apologize. When do you expect that this very 
antiquated statement that soldiers and their families get will 
be put in a way that they can understand it? When do you 
think----
    Mr. Gaddy. That is an excellent question, and, again, I 
will have to go back and look at that and take that for the 
record to give you a more definitive answer. Our payroll system 
that we currently use that produces that leave and earnings 
statement is quite old so I am not quite sure how much 
programming it might take to turn that into a more user-
friendly pay statement. We have been doing that on the civilian 
side, trying to make the leave and earnings statement more 
intelligible to civilians, and we will certainly look at that 
for military as well.
    Chairman Tom Davis. Mr. Hayes.
    Mr. Hayes. Thank you again, Mr. Chairman, and my neighbor, 
Ms. Foxx, thank you for great questions.
    Colonel McAlister and I and a number of others of you had a 
lengthy discussion before the hearing began. It was very, very 
helpful, and I believe it was you, Secretary Patterson, who 
apologized for the circumstances of having it, which is 
appreciated and appropriate. I come away today with a sense 
that everybody is committed to doing whatever it takes to get 
the problem solved.
    I want to take exception with Ms. Norton's 
characterization. It is not an unpopular war except for the 
terrorists in Iraq and Afghanistan. Around the world there are 
some people who have questions about it, and this is America, 
you can question that. It is not an unpopular war.
    Having said that--and, again, for Congresswoman Foxx, at 
Fort Bragg, we have an awful lot of great people, never claim 
that they are perfect, but, Colonel McAlister, you and I and 
your friends and associates in Fort Bragg will work this 
extremely hard from the soldier's perspective up, because, Mr. 
Chairman, as you well know, we have found out things among 
ourselves today that we did not know happened, that wasn't 
stovepiped, and it was just lack of information.
    So, Colonel, let's make sure that every one of our folks 
who has input provides it so that Secretary Patterson, Mr. 
Gaddy, and others can use that to craft the appropriate 
response. There is not going to be, you know, a perfect 
solution immediately, but this committee, for which I am very 
appreciative they let me come today, the Armed Services, and 
all of Congress pledge their support to you to solve a problem. 
We don't know where they all are yet. We have a good look, but, 
again, you want to make sure that we are doing the things that 
we need to do to equip and enable you to do what we know you 
want to do, and that is, take care of that wonderful man and 
woman who is wearing the uniform.
    Do any of you all have any questions that have not been 
asked by us to you that you would like for us to ask so that 
you could answer them? Or would you like to say anything to add 
to the process to assure the folks back home and the people in 
the room that we are absolutely committed to fix the problem.
    One more thing and I will be quiet. As we have transformed 
the Army--and that is wonderful. We have brigade combat teams. 
We have striker brigades. We have all kinds of neat things 
going on. But the basic premises, the problems, and the 
challenges of paying, feeding, and caring for the soldier have 
not gone away as we have transformed. So some of what has come 
out today is, as we have worked on future combat systems and 
all those kinds of important things, we got to make sure that 
the basics don't get short shrift.
    So any questions that we should have asked or any comments, 
on my time.
    Mr. Gaddy. I would like to make the following comment. It 
is not so much a question. As I visited Landstuhl and Walter 
Reed, what I came away with--I think others have alluded to it 
here today, and that is, a system like DIMHRS will certainly 
help us, but it will not replace the human dimension of what we 
need to do. At both locations the medical staff commented to me 
that one of the best things we have done since this issue came 
to light was to embed finance professionals with the medical 
professionals to help deal with the issues that the patients 
were facing. And I believe as we move forward, looking at how 
we will field DIMHRS and the way we support troops in the 
future, we need to look into how we provide that total person 
support to people ongoing.
    Mr. Hayes. Colonel McAlister?
    Colonel McAlister. Thank you, sir. One, I would like to 
say, sir, we really appreciate the support that we have gotten 
from the committee and that the GAO report really has been 
truly helpful in helping us identify those problems.
    We will continue to work with DFAS and the Army to ensure 
that the particular circumstances that caused some of the 
issues at Fort Bragg continue to be addressed. I think to date, 
we have already made very significant progress in addressing 
those issues. We have gotten the support from the Army to fix 
some of those issues.
    We will continue to have some challenges as the optempo and 
our constant deployments take experienced people away from the 
garrison support responsibility and they deploy to Iraq. The 
18th Airborne Corps and Fort Bragg has also been extremely 
helpful to us in allowing us to do some over-hires and contract 
support to help fill some of those gaps. But as long as the pay 
system is as complicated and requires the kind of expertise 
that it currently requires, we will consistently be met with 
challenges deploying people and maintaining that level of 
support that every soldier deserves when they return back home.
    Thank you, sir.
    Mr. Hayes. Thank you all again for appearing. Thank you for 
your comments. And please rest assured all of us are here to 
help provide what you need to get done what we know you want to 
do, and that is, take care of the folks in uniform.
    Mr. Chairman, I yield back and thank you once again.
    Chairman Tom Davis. Well, thank you very much. I just have 
a few questions I need to get answered here.
    Colonel McAlister, thanks again for being here. Your poster 
on deciphering just one line of code for a hostile fire pay 
transaction is just beyond comprehension. Pretend I am a new 
finance officer. Tell me what my responsibility is with this 
code. And how do I tell if it is in error?
    Colonel McAlister. OK, sir. The line of code that you 
received is a single line that really talks to--I think the one 
you received is a hazardous duty pay. It is broken out on the 
chart over there. The first portion of the code identifies the 
soldier as a portion of their last name.
    Chairman Tom Davis. Right.
    Colonel McAlister. It then breaks down into what the 
entitlement is, the location, the entitlement is derived from. 
All of these are in code, not plain English.
    Chairman Tom Davis. Right.
    Colonel McAlister. It breaks down the----
    Chairman Tom Davis. That is why it is tough for the average 
person.
    Colonel McAlister. Yes, sir. Today's soldiers and our 
civilians are used to the current computer environment. We work 
through drop-down menus, plain English screens. The experience 
that is required in order to read the documentation in the 
current pay system is difficult, and it does require quite a 
bit of experience, which makes it more complicated as we deploy 
soldiers and we bring in fillers to perform some of those 
garrison functions as soldiers go off to war.
    Chairman Tom Davis. Mr. Gaddy, is that really the Julian 
calendar system on the DJMS-RC system?
    Mr. Gaddy. Yes, sir.
    Chairman Tom Davis. Are many of the pay systems at DOD on 
this ancient calendar system?
    Mr. Gaddy. No, sir. The civilian payroll system is not; the 
military payroll system is.
    Chairman Tom Davis. So what type of errors do you foresee 
in data transferred to the DIMHRS because of this?
    Mr. Gaddy. Well, actually, as we go through the conversion 
to DIMHRS, there will be a data conversion effort. We are 
actually doing that today as a result of our efforts with the 
Forward Compatible Payroll system where we have been building a 
modern data base with pay information in it, for the Army 
primarily because we were going to field FCP to them first. 
That has been quite a learning experience for us to help bring 
information together in a modern data base. The current payroll 
system is not a data base system. It is what we call a flat 
file system. I don't know if you are familiar with that or not.
    Basically what that means is it was written--the code was 
written back in the 1960's. It has been added over the years. 
So when we do queries against it, we are going against a flat 
file system and the data structure that is quite complicated. 
We have introduced something called DMO or debt management--or 
defense military pay simplification to try to put a more modern 
screen on the front end of it to make it easier for users to 
actually go in and do queries. That is, again, more of a Band-
aid than an ultimate solution because, quite frankly, we need a 
new payroll system. But we are certainly depending on DIMHRS to 
be that payroll system to make things simpler for people.
    Chairman Tom Davis. Let me ask, how does an injured soldier 
like Specialist Taylor, who is in the personnel pay and medical 
systems, how do they get declared AWOL?
    Mr. Ford. We have looked at that, and we do not have any 
record in our personnel systems that she was ever declared 
AWOL. And so we are still looking into why the credit reporting 
process identified her that way. But we haven't found it----
    Chairman Tom Davis. Just somebody punched something in 
erroneously? Does that happen sometimes?
    Mr. Ford. It could be. It could be the fact that she had an 
out-of-service debt that a credit reporting entity decided she 
must have been AWOL. It is unclear. We are looking into it, and 
we will get back to the committee with a more complete report.
    Chairman Tom Davis. OK. Mr. Gaddy, your written testimony 
indicated that Fort Bragg was an anomaly and that the other 22 
Medical Processing Units do not have similar problems. As you 
know, this committee has been hearing from individual Reserve 
component soldiers affiliated with the Fort Bragg Medical Unit 
for about 2\1/2\ years. Why did it take our committee 
investigation for you to notice that there were issues at Fort 
Bragg? And why was it only then the Army decided to look to see 
that other MRPUs were having problems? That pre-dates you to 
some extent, so I am not making this personal. But I am just 
trying to get the flavor for it.
    Mr. Gaddy. Yes, sir, Mr. Chairman. I appreciate that. Quite 
frankly, I think, as we were looking at how to resolve many of 
the issues associated with taking care of soldiers and wounded, 
the MRPUs were not, you know, a high visible priority. I 
believe that when GAO did their review and identified the kind 
of problems they had, it forced us to relook at our procedures 
to ensure that we knew factually whether these kind of problems 
existed other places.
    We did find, in fact, 83 other individuals with similar pay 
issues at 11 of the remaining 22 MRPUs, and so we are working 
those cases individually. But it does point out, if you look at 
the kind of issues GAO found, we have other ways that members 
can end up in MRPUs besides coming out of a combat zone. So we 
needed to be a little broader in how we were evaluating whether 
those individuals' pays were correct.
    Chairman Tom Davis. What is the root cause of Army soldiers 
being overpaid?
    Mr. Gaddy. As GAO pointed out, about 73 percent of it is 
overpayment of pay and allowances. If you do not start or stop 
a member's entitlements correctly when they go into a war zone 
or when they come out of a war zone, a certain entitlement 
should stop. If they are not stopped, then, of course, they 
will continue being paid. If they leave the service, as 
Lieutenant Colonel Lovejoy indicated, and he was still paid for 
another month after he left, then the payroll system today is 
dependent on the accuracy and timeliness of personnel input.
    Chairman Tom Davis. What do you think the overpayments 
total in a given year in the Army? Any idea?
    Mr. Gaddy. Sir, I would not hazard a guess on that. I know 
what we have seen looking at the records of the ones we have 
looked at; 2 to 3 percent of the time we see pay issues with 
the 60,000 people in the payroll data base that we have now for 
wounded in action or non-battle injury. So I----
    Chairman Tom Davis. You see that in corporations, though. 
You see that in other branches of Government. You are just 
going to have issues with so many--I mean, the problem here, of 
course, is recouping those payments with wounded veterans, and 
obviously not just the embarrassment but the hardship it 
causes.
    Mr. Gaddy. Yes, sir.
    Chairman Tom Davis. And I think the appropriate sensitivity 
now, hopefully, has filtered on down the ranks at this point 
where we don't just process it and we start thinking about 
this. Do you think that is fair to say?
    Mr. Gaddy. Yes, sir.
    Chairman Tom Davis. Secretary Patterson, what OSD policy 
office is conducting oversight of the debt forgiveness process 
to assure fair results now for wounded soldiers?
    Mr. Patterson. Well, there are two, actually. There is my 
office, the Comptroller's office, and we have under us DFAS, 
but also Personnel and Readiness as well. And as I mentioned, 
we have the Personnel Pay Council that also has brought to it a 
number of problems or issues, and the Council deals with it in 
order to solve these issues. And, again, our purpose is not to 
put Band-aid fixes on things, but to find process remedies that 
are lasting, and we share that goal with you, Mr. Chairman.
    Chairman Tom Davis. OK. Thank you all very much. We 
appreciate your coming here. I think you understand. Nobody 
likes being hauled up before our committee and explaining 
mistakes that get made. Some of them had their germination 
before any of you were part of this. But, you know, we are all 
responsible for this. We all bear responsibility now for the 
outcomes, and so we will continue to monitor this and keep in 
close contact with you as we move ahead.
    I will keep the record open for 7 days, and the hearing is 
adjourned.
    [Whereupon, at 12:38 p.m., the committee was adjourned.]
    [Additional information submitted for the hearing record 
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