[Joint House and Senate Hearing, 112 Congress]
[From the U.S. Government Publishing Office]




 
             NEW AUDIT FINDS PROBLEMS IN ARMY MILITARY PAY

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

                             JOINT HEARING

                               before the

                SUBCOMMITTEE ON GOVERNMENT ORGANIZATION,
                  EFFICIENCY AND FINANCIAL MANAGEMENT

                                 of the

              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
                        HOUSE OF REPRESENTATIVES

                                and the

                   SUBCOMMITTEE ON FEDERAL FINANCIAL
                  MANAGEMENT, GOVERNMENT INFORMATION,
              FEDERAL SERVICES, AND INTERNATIONAL SECURITY

                                 of the

                   COMMITTEE ON HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                              U.S. SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 22, 2012

                               __________

                           Serial No. 112-154

                               __________

   Printed for the use of the Committees on Oversight and Government 
                                 Reform


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


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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

   Subcommittee on Government Organization, Efficiency and Financial 
                               Management

              TODD RUSSELL PLATTS, Pennsylvania, Chairman
CONNIE MACK, Florida, Vice Chairman  EDOLPHUS TOWNS, New York, Ranking 
JAMES LANKFORD, Oklahoma                 Minority Member
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
FRANK C. GUINTA, New Hampshire       ELEANOR HOLMES NORTON, District of 
BLAKE FARENTHOLD, Texas                  Columbia

    Senate Subcommittee on Federal Financial Management, Government 
       Information, Federal Services, and International Security

                  THOMAS R. CARPER, Delaware, Chairman
CARL LEVIN, Michigan                 SCOTT P. BROWN, Massachusetts
DANIEL K. AKAKA, Hawaii              TOM COBURN, Oklahoma
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
CLAIRE McCASKILL, Missouri           RON JOHNSON, Wisconsin
MARK BEGICH, Alaska                  ROB PORTMAN, Ohio

                    John Kilvington, Staff Director
                William Wright, Minority Staff Director
                   Deirdre G. Armstrong, Chief Clerk


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 22, 2012...................................     1

                               WITNESSES

Lieutenant Colonel Kirk Zecchini, U.S. Army Reserve
    Oral statement...............................................     5
    Written statement............................................     7
Mr. Asif Khan, Director, Financial Management and Assurance, U.S. 
  Government Accountability Office
    Oral statement...............................................    16
    Written statement............................................    18
Mr. James Watkins, Director, Accountability and Audit Readiness, 
  Deparment of the Army
    Oral statement...............................................    31
    Written statement............................................    33
Jeanne M. Brooks
    Oral statement...............................................    37
    Written statement............................................    39
Mr. Aaron Gillison, Acting Director, Defense Finance and 
  Accounting Service, Indianapolis, Department of Defense
    Oral statement...............................................    41
    Written statement............................................    43

                                APPENDIX

The Honorable Tom Carper, U.S. Senator from the State of 
  Delaware, Opening Statement....................................    60
The Honorable Scott Brown, U.S. Senator from the State of 
  Massachusetts..................................................    64
The Honorable Edolphus Towns, a Member of Congress from the State 
  of New York, Opening Statement.................................    66
Follow up questions and answers..................................    68


             NEW AUDIT FINDS PROBLEMS IN ARMY MILITARY PAY

                              ----------                              


                        Thursday, March 22, 2012

                  House of Representatives,
      Committee on Oversight and Government Reform,
   Subcommittee on Government Organization, Efficiency and 
Financial Management, joint with the Senate Subcommittee on 
     Federal Financial Management, Government Information, 
              Federal Services, and International Security,
                                                   Washington, D.C.
    The committees met, pursuant to notice, at 10:06 a.m. in 
room 2154, Rayburn House Office Building, the Honorable Todd 
Platts [chairman of the House Subcommittee on Government 
Organization, Efficiency and Financial Management] presiding.
    Present: Representatives Platts, Issa, Towns and Connolly.
    Also present: Senator Carper.
    Staff Present: Kurt Bardella, Majority Senior Policy 
Advisor; Molly Boyl, Majority Parliamentarian; Linda Good, 
Majority Chief Clerk; Mark D. Marin, Majority Director of 
Oversight; Tegan Millspaw, Majority Research Analyst; Mary 
Pritchau, Majority Professional Staff Member; Rebecca Watkins, 
Majority Press Secretary; Jaron Bourke, Minority Director of 
Administration; Beverly Britton Fraser, Minority Counsel; Devon 
Hill, Minority Staff Assistant; Jennifer Hoffman, Minority 
Press Secretary; and Carla Hultberg, Minority Chief Clerk.
    Mr. Platts. We are pleased to also have the Chairman of our 
full committee, Mr. Issa, and our Ranking Member, Mr. Towns, 
with us.
    In the interest of time, I am going to submit my formal 
statement.
    I would highlight that our real focus here is really to 
achieve two purposes, how do we do a better job of doing right 
by our men and women in uniform and their families to make sure 
they are paid and compensated in an efficient, effective and 
accurate manner without the need for corrections after the fact 
repeatedly, as we will hear from our first witness what is, in 
some ways, described as just the norm for military personnel to 
expect problems with their pay. How do we do right by our men 
and women in uniform and their families in that regard?
    How do we better protect all American taxpayers that the 
funds they send here are efficiently handled and appropriately 
handled so that we do not have the misuse of funds or the 
inaccurate disbursement of funds?
    We have two primary goals, do right by the military and 
their families, do right by American taxpayers and collectively 
through this hearing advance that joint effort in the coming 
months and years as we especially work towards the ability to 
audit the Department of Defense and all of its related entities 
by 2017.
    With that, I will yield to the Chairman of our Senate 
Subcommittee for the purpose of an opening statement.
    Senator Carper. Thank you, Mr. Chairman.
    I would ask unanimous consent that my full statement be 
made a part of the record, if I could.
    Mr. Platts. Without objection.
    Senator Carper. I will summarize very briefly.
    You are good to do this, to let an old House member come 
back and work with you, Mr. Towns, Chairman Issa and others on 
what I believe is not the sexiest issue but is a real important 
issue.
    Colonel, we welcome you. We are delighted to see you and 
are privileged to have served with you in the service of our 
country.
    I was in the Navy for five years, active duty, during the 
Vietnam War. We were in California, we were all over the U.S. 
In California, our squad was home-based at Moffett Field Naval 
Air Station and then off to Southeast Asia. We bounced all over 
the Pacific with a lot of missions in and out of Thailand, the 
Philippines and Japan and everywhere. It was hard to keep our 
pay straight in a war and given the nature of the business we 
were in.
    I understand it is not an easy thing to do. It is made all 
the more difficult when people are at war, people deployed and 
serving combat positions all over the world. It is hard.
    Having said that, we can do this better. Everything I do, I 
know I can do better. We can do a better job of this. We had a 
very good demonstration yesterday in our full committee, the 
Homeland Security Committee in the Senate where our witness was 
Janet Napolitano, the Secretary of the Department of Homeland 
Security.
    They have an obligation to become audit-ready by 2014. They 
are a new department, they are standing up and have sort of 
meshed together what a lot of folks call a dogs breakfast of a 
department because it has so many different new elements that 
have been kind of crammed together to form one.
    She announced this week that their financials will be 
auditable this year, two years ahead of schedule. If they can 
do that at the Department of Homeland Security, we have to be 
able to do better at the Department of Defense in meeting their 
goal of 2017.
    God bless Leon Panetta with whom I served in the House for 
a number of years. He has a tough job, everyone knows that. The 
Secretary of that Department, the Secretary of any Department 
is a tough job but that one in the time of war is about as hard 
as it gets. He is also trying to make sure that his Department 
complies with the law with respect to their financials becoming 
auditable by 2017. He wants to beat the date of 2017. My firm 
hope is that will be the case.
    Among the reasons why that is so important, for him or 
whoever is going to be managing the Department in the future, 
if we don't have good financials, if we don't have good 
accounting systems, if we don't have good technology, we are 
doomed. We look at these huge budget deficits of trillions of 
dollars coming down, but still way too much and we have to be 
able to get better results for less money. This is a part of 
it, like ground zero where it starts.
    I look forward to a constructive hearing from our 
witnesses. We appreciate the work that GAO has done on this and 
look forward to hearing from our friends from the Army, too.
    Again, the spirit here is if it isn't perfect, make it 
better. We have to do better, all of us, and that includes me.
    Thank you.
    Mr. Platts. Thank you, Senator Carper.
    I yield to the Chairman of the full committee, Mr. Issa.
    Mr. Issa. Thank you and I, too, will be brief and submit 
for the record.
    I came here for two reasons. First of all, when the House 
of the people and the other house get together, it means that 
we have what it takes to move positive legislation all in one 
room. It is always preferable to have us hear the same thing 
and come away from a hearing knowing that we have to act and 
how we have to act.
    The second reason is that Colonel, like you, I was an 
enlisted man, paper leave and earnings statements. In 1970, it 
was real paper as it was for Senator Carper. If one piece of 
paper got ripped out of there, it was gone forever.
    My enlisted time was fairly uneventful, although I had a 
lot of TDY and a lot of different supplemental dollars as an 
EOD, enlisted man. When I was commissioned, I saw the other 
side of it. I was responsible for up to 200 men and women who 
were constantly having to get compassionate pay, having to get 
$25 or $50 because when they PCSed in, the paperwork got lost. 
We would keep them sometimes for a couple of months, not 
getting their real pay because there was a problem, 
particularly if they were coming from overseas.
    That was approaching half a century ago. We have come a 
long way. We have come from paper to electronic but we haven't 
come far enough to have the kind of proactive effort to where 
you should never have to say how do we pay this person, what do 
we do? Do we send them to USO or do we in fact, find some other 
way. More importantly, do we no longer have people who receive 
pay and then somehow, we say that was a snafu and for the next 
six months, we are going to be deducting.
    I represent Camp Pendleton. As a result, I see that 
happening. I see naval assets and private assets have to find 
ways to take care of families because there has been an 
overpayment and it has to be repaid.
    Last, but not least, I had the pleasure of leaving the Army 
and the only time I have been personally audited was the year I 
left the Army. There is nothing worse than trying to explain 
all these various per diems and pays that are tax free if x, y 
and z to a man who has never served in the military but whose 
job it is to try to get a little money out of you.
    I believe when we get to where we do the job right, it will 
make a huge difference for our men and women in uniform, 
especially those who have families who are also earning and 
have to bring these together in a predictable way to make 
payments.
    I am glad to see that my good friend, Chairman Towns, is 
also here. That gives an awful lot of legacy of this committee 
to hear it and respond.
    Mr. Chairman, Mr. Chairman, Mr. Chairman, I thank you all 
for being here today and I yield back. Chairmen are cheap here, 
aren't they?
    [Laughter.]
    Mr. Platts. Thank you, Mr. Chairman. We appreciate your 
interest in the important topic and your own service in uniform 
as well.
    I will now yield to the Ranking Member and former Chairman 
of the full committee as well as this subcommittee, Mr. Towns 
from New York.
    Mr. Towns. Thank you very much.
    Let me say you are right. I called someone Mr. Chairman on 
the elevator and about seven members looked around, you are 
right, there are a lot of folks around, ex and former chairmen 
and all of that.
    Let me just say, Mr. Zecchini, that I am really happy to 
see you, a person who served in the military more than 50 some 
years ago, ROTC and all of that. To have had problems with my 
own pay while I was in there on several occasions, every time 
they would transfer me somewhere, I would always have problems 
with my check catching up with me. I was one who needed my 
check in advance. To have to worry about your pay and at the 
same time defending this country to me is just something that 
should not happen.
    I want to salute you for your many, many years of service. 
We feel that we owe it to our military personnel to make 
certain they get paid on time.
    I am happy to see that we have Senator Carper, my 
classmate, here with me and of course Chairman Platts and of 
course the Chairman of the full committee as well, Chairman 
Issa.
    I think this is the way we go about it, hearing from people 
who have had these experiences and at the same time, folks on 
this side of aisle who are committed to trying to make certain 
the situation changes.
    On that note, Mr. Chairman, I will submit my entire 
statement for the record and look forward to hearing from the 
witnesses.
    Mr. Platts. Thank you, Mr. Towns.
    We will keep the record open for seven days for opening 
statements and extraneous material.
    We are going to move to our witnesses. In the interest of 
time, if I could ask not just the Colonel, but all of our 
witnesses on the second panel also, to stand and I will swear 
you all in at the same time. Please rise and raise your right 
hands.
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    [Witnesses respond in the affirmative.]
    Mr. Platts. May the record reflect that all witnesses 
answered in the affirmative. Please be seated.
    Colonel Zecchini, we are delighted to have you here with 
us. The Colonel is currently serving with the United States 
Army Reserve but soon to mark almost 30 years of service in one 
capacity or another in uniform to our Nation. We certainly are 
grateful for those many years of service and appreciate both 
your written testimony and your willingness to be here in 
person today.
    We will set the timer for all of our witnesses at five 
minutes. Because of time constraints, you could try to stay 
within that time limit it will help us get to a chance to have 
a good exchange with the Q and A.
    Colonel, the floor is yours.

                       WITNESS STATEMENTS

   STATEMENT OF LIEUTENANT COLONEL KIRK ZECCHINI, U.S. ARMY 
                            RESERVE

    Colonel Zecchini. Chairman Platts, Chairman Carper, Ranking 
Members Towns and Brown, and members of the two subcommittees, 
thank you for the opportunity to appear this morning.
    During the span of my military career covering 28 years, 
mostly as a member of the Ohio National Guard, I have 
personally experienced a wide variety of military pay problems. 
Serving as a traditional Guardsman, a full-time, active duty 
soldier and as a federal technician has provided me with a 
broad range of opportunities and challenges.
    In my experience in the military, pay problems are 
considered a normal part of Army life. Very early in my career 
as a Second Lieutenant, I was mentored to keep a running travel 
log to track my pay, allowances, per diem and travel costs. 
This guidance proved to be valuable as I began to perform more 
frequent temporary duty and additional duties with the Ohio 
National Guard.
    Travel vouchers were sometimes lost or misrouted during 
processing. For the most part, situations like this were easily 
fixed at the unit level as long as I could reproduce original 
claim documents such as orders, pay vouchers, receipts, et 
cetera.
    Later, as a field grade officer, my pay problems became 
more complex during my first deployment to Afghanistan in 2003. 
My original mobilization order was not to exceed 180 days but I 
volunteered to extend for an additional six months. The 
extension order was published but my military pay stopped 
promptly at the end of my original order. It took approximately 
one and a half months to have this issue resolved while I 
continued to perform in Afghanistan without pay.
    Immediately following my combat tour in Afghanistan, I 
began a series of missions throughout Southeast Asia and the 
Pacific Rim performing humanitarian assistance and humanitarian 
civic assistance in various developing countries. Several of 
the countries in which I worked were designated for special 
allowances such as hostile fire pay and hardship duty location 
pay, which varied by amount per location. These pay types were 
not familiar to me.
    Upon my return to Ohio in August 2004, I inquired with my 
unit administrator pay clerk about being paid the additional 
allowances but this was also new terrain to the unit, so my 
inquiry was sent up the chain of command to the Ohio Army 
National Guard State Headquarters for review by military pay 
and ultimately to the Comptroller.
    After several months of emails and non-action, I created a 
spreadsheet which reflected duty locations, orders, dates, 
allowances, pay and per diem. All entries were color coded to 
reflect status of payment. Several more months went by until I 
finally had to write a memo to the Ohio Inspector General 
requesting assistance.
    I eventually got paid for all requested allowances late in 
2005 while deployed in Iraq, approximately one and a half years 
after the initial performance of duty.
    During my deployment to Iraq in 2005 to 2006, I was 
assigned to an active duty unit along with a team of 10 other 
Ohio National Guardsmen. Our parent unit from Ohio was located 
in Baghdad. My team was deployed north in Tikrit. Three or four 
months into our deployment, we were notified that some 
particular tax was being withheld and that we all needed to 
complete additional paperwork in order to have the money 
refunded and the withholding to cease. This process was neither 
simple nor convenient while working in an austere environment.
    Dealing with pay problems while in a combat zone is not 
something that anyone should have to worry about, yet this was 
my second episode in as many tours.
    Since resigning and receiving an honorable discharge from 
the Ohio Army National Guard in June 2011, my pay problems have 
continued. Just last week, I received a leave and earnings 
statement for performance of duty on January 5, 2012 only to 
learn that the checking account number was entered incorrectly, 
so my pay was not deposited into my bank account.
    I just heard yesterday, two and a half months later, from 
the Army Reserve Finance Office that they think they have 
resolved the situation. I have also recently received four 
separate notices from DFAS indicating a debt collection that 
there is no indication of the reason or how I should contest 
these erroneous claims. These debt collections seem to have 
been initiated by the Ohio Army National Guard even though I 
have not been a part of this organization since June of 2011.
    Thank you once again for this opportunity to testify this 
morning. Now that my eldest son is serving proudly in 
Afghanistan, I am especially interested to see that he and his 
fellow soldiers are properly taken care of while performing 
their duties and without distractions of pay problems.
    He loves being a soldier as much as I have always loved 
being a soldier and I want nothing more than to see him come 
home safely. It is all about taking care of soldiers.
    [Prepared statement of Colonel Zecchini follows:]

    [GRAPHIC] [TIFF OMITTED] T5110.001
    
    [GRAPHIC] [TIFF OMITTED] T5110.002
    
    Mr. Platts. Colonel, thanks for your testimony and 
especially your service and now your eldest son's service as 
well. Certainly Godspeed to him and all who are out there in 
harms way on our behalf.
    Your testimony here today throughout your almost 30 years 
of service is kind of the norm, nothing new. Can you share more 
often than not when there is an error of some degree, is it 
something that more likely you identified or questioned because 
of uncertainty and have had to initiate the efforts to correct 
those errors or would it be more the norm that the military, 
whether it be the Guard, the Reserve, active duty, units you 
have served with, that they have caught the errors and then 
come to you to try to correct them?
    Colonel Zecchini. I don't recall anybody in the military 
ever coming to me to identify a pay issue. I would have to say 
you have to read your LES, you have to understand what you are 
looking at.
    Mr. Platts. So when those problems are identified, it is 
because you have to basically, in addition to worrying about 
the enemy out there if you are in harms way, you or your family 
back home looking at each pay to try to make sure you are 
getting what you are supposed to, not less, not more but the 
onus falls to you and all of our soldiers, airmen, sailors 
individually?
    Colonel Zecchini. Correct.
    Mr. Platts. The example you give of when you were in Iraq, 
in essence, your whole team of I think you said 10 Ohio 
Guardsmen that who were attached, in that case it was a tax 
issue?
    Colonel Zecchini. It was some sort of withholding from 
Ohio.
    Mr. Platts. Did that come from back home?
    Colonel Zecchini. I believe somebody in Ohio identified 
that this should have been taken care of at the mobe site at 
the mobilization station and for whatever reason, it wasn't 
picked up, so we had to do the paperwork down range.
    Mr. Platts. Was it a federal tax issue?
    Colonel Zecchini. As I recall, it was some sort of State 
withholding.
    Mr. Platts. Did you each individually have to then move 
forward to correct it for your own taxes and payroll or was 
there assistance that applied to all of you, we will take care 
of it?
    Colonel Zecchini. Each person had to do their own paperwork 
and each person was responsible to fax it back to the unit 
which made it a challenge when we were spread all over northern 
Iraq. It was not such an easy task.
    Mr. Platts. I have had the privilege to visit our troops 11 
times in Iraq and 8 in Afghanistan and I try to get to those 
remote places. I have been to Tikrit and some of the FOBS and 
get out there and one just logistically doing it and someone 
who is more remote, I think of a base in the mountains of 
Afghanistan where a young Army Captain, Adam King, leading 
about 70 soldiers, you flew in by helicopter or got there by 
mule but not a very easily accessible point. If they are 
experiencing these types of problems, all the more challenging 
to correct them and then hardship for families back home if the 
pay is not correct.
    In your time, have you ever had an instance where because 
pay was not properly provided to you that it caused a financial 
hardship because of an incorrect balance in a checking account? 
Are you aware that any soldiers you have served with have had 
that problem?
    Colonel Zecchini. From my personal experience, the only 
real hardship that I encountered was when I was in Afghanistan 
and my pay just stopped for about a month and a half. I still 
had a mortgage and I still had bills to pay back home. 
Fortunately, I had a little bit of savings while I was 
deployed. That was a pretty tense period not knowing when the 
pay was going to be turned back on again.
    Mr. Platts. In that example where it was delayed, was there 
any compensation, meaning interest for the two months that were 
not properly paid, when it finally was?
    Colonel Zecchini. No, sir.
    Mr. Platts. Again, I appreciate your service and your 
efforts in being here today that we do right by your son and 
all who are and will be serving us. That is the goal ultimately 
of this hearing and our continued oversight work, that we do 
right by those who are so courageously serving all of us.
    With that, I yield to Senator Carper.
    Senator Carper. Thank you, Mr. Chairman.
    My dad was a Chief Petty Officer in the Navy for many 
years. During the time I served active and reserves, about 23 
years, some of the best officers I served with were folks who 
have been prior enlisted and earned commissions and became an 
officer, and for the most part, performed admirably. How long 
were you enlisted?
    Colonel Zecchini. Five years.
    Senator Carper. How did you get your commission?
    Colonel Zecchini. Through Officer Candidate School, OCS.
    Senator Carper. I am going to ask you a question, then make 
a comment and then I am going to ask a question. The question I 
am going to ask you so you can think about it is this. We have 
some folks gathered here today who are responsible for trying 
to fix this problem. The question I would ask you is help us 
help them fix the problem for other folks, so just be thinking 
about that and give us some practical advice as to how to do 
that.
    The question I want to ask before that is my guess is you 
weren't the only person you served with who has had some 
problems with pay. We did in my unit then and I presume you had 
similar problems in your units. Were the problems of a nature 
similar to those you experienced or were they different, were 
there any commonalities, or was it just across the board, a 
wide variety of problems?
    Colonel Zecchini. I can't say that I have ever experienced 
the same problem twice.
    Senator Carper. When you think of your colleagues with whom 
you served, did they have similar problems or were they 
different kinds of problems?
    Colonel Zecchini. I would have to say different. Again, my 
experiences were kind of different from the typical Guardsman 
where I had a lot of active duty time, a lot of TDYs and I did 
a lot more outside of the one weekend a month, two weeks in the 
summer. Yes, I would have to say mine are probably a little bit 
different and broader than most of my peers.
    Senator Carper. I think you said you had a period of a 
month or two where you didn't get paid at all. When I was 
overseas, I was not married and had no wife or children and the 
Navy pretty much took care of our immediate needs. They fed us 
and there was a place to sleep, there was medical care and that 
kind of thing, so guys like me were able to save every other 
paycheck. We didn't make much money but we didn't spend much 
either. I had no wife or children to support. I tried to help 
my sister a little bit to go to college but that was the only 
big obligation that I had.
    That is not the case with a lot of folks, especially today 
when we have a lot of Reservists deployed, actively deployed, 
we have a lot of Guardsmen and women actively deployed and a 
lot of them do have families. When they have problems with 
their pay, it is a whole lot more difficult, a lot more 
complex.
    Put yourself in the position of providing good advice sort 
of through us but with us to the folks charged with fixing 
these problems. I realize we will never get to perfection but 
that should be our goal. If you were to provide some good 
advice, friendly advice to the folks charged with fixing this, 
and our job is oversight and making sure that it is addressed, 
what would be the advice? It can be fairly general, doesn't 
have to be very specific.
    I will give you an example. We had a guy before us 
testifying on the Finance Committee a couple months ago on 
deficit reduction. I asked him what we need to do on deficit 
reduction. He is Alan Blinder, former Vice Chairman of the 
Federal Reserve, Professor of Economics at Princeton. I said 
what should we do about deficit reduction? His big deal on 
deficit reduction is health care costs. If we don't reign in 
health care costs, we are doomed. He said, I am not a health 
economist.
    I said what should we do about health care to reign in 
health costs. He said, I am not a health economist but here is 
what I would do. I would find out what works and I would do 
more of that. That is exactly what he said. I would find out 
what works and do more of that. I said, you mean find out what 
doesn't work and do less of that? He said, yes.
    Actually that is pretty good advice in everything we do not 
just in reigning in health care costs. What should we do here? 
What should the folks at the Department of Defense do to help 
address this problem?
    Colonel Zecchini. Obviously, I have seen a lot of changes 
in 28 years from paper statements to electronic statements now 
and those have all been good things. Most recently, the Defense 
travel system came online where you can enter your travel 
claims online and that was huge. That really took the paperwork 
piece and streamlined the process for travel vouchers. You get 
paid now in three or four days where it used to take a month 
sometimes to get your travel pay.
    Senator Carper. That is a great improvement.
    Colonel Zecchini. DTS was, in my mind, great but not 
everybody has access to DTS. I had access to it because I was a 
full-time federal technician where most traditional Guardsmen 
and Reservists don't have that system yet.
    Senator Carper. Should they?
    Colonel Zecchini. I think they should especially if you are 
doing a lot of traveling. If you come back from a TDY period, 
then you have to go into your unit to submit a claim, you may 
or may not be within reasonable commuting distance to your unit 
and you can't do it at home. So things like that, everybody 
should have access to all the same databases and DTS 
especially.
    I would also think they could make some progress in 
connecting G1 to G8 maybe where if you are on orders and in a 
specific pay zone for allowances, somehow that should trigger 
G8 to connect the dots. That doesn't seem to be taking place.
    Senator Carper. Thank you very much for being here today. I 
appreciate those 28 years that you have shared with our 
Country, given our Country. Our very best to you and to your 
son.
    Mr. Platts. Thank you, Senator Carper.
    I will now yield to the Ranking Member, Mr. Towns, from New 
York.
    Mr. Towns. Let me thank you too for your many, many years 
of service.
    I recall in terms of my years that when they had trouble 
with my pay, it was that I had orders to go one place and they 
changed my orders and sent me somewhere else. Then they had 
trouble finding me. That was the problem they had. Other than 
that, I must say that I got paid pretty much on time.
    How many times did you have the problem?
    Colonel Zecchini. How many times?
    Mr. Towns. The pay problem during your years of service?
    Colonel Zecchini. After I started talking to Mr. Tyler last 
week, I started thinking back in my career and I gave him some 
good examples of the ones I just testified to, but I can think 
of several other ones that weren't such a big deal and they 
were pretty easily fixed at the unit level.
    Mr. Towns. It was so many times you can't remember, is that 
what you're saying?
    Colonel Zecchini. Yes.
    Mr. Towns. Wow! How widespread is the problem among others?
    Colonel Zecchini. You hear people talking about pay issues, 
chow hall talk. Somebody always seems to have a pay issue they 
are dealing with.
    Mr. Towns. How long did it take, the longest period, for 
you to correct your pay?
    Colonel Zecchini. The example I mentioned about my one and 
a half months without pay in Afghanistan, that was the longest 
that I ever went without a paycheck. That is the longest I ever 
had to deal with a problem and getting resolution to the 
problem was the one where I didn't get my various allowances 
from my missions in Southeast Asia. That took about a year and 
a half.
    Mr. Towns. Could you walk us through one process in terms 
of how you went about getting paid? Walk us through a process 
you had to take in order to get paid? In other words, you 
didn't get your check and what you had to do in order to get 
it.
    Colonel Zecchini. The example I mentioned about the pay and 
allowances from Southeast Asia, I was working in Bangladesh, 
the Philippines and all through Southeast Asia. Each of these 
different countries has a different rate for hostile fire pay 
in the Philippines as hardship duty location pay in Bangladesh 
and I wasn't even aware that these allowances were there when I 
was performing the duty. It was just through talking to my 
active duty counterparts who were there with me, I was informed 
that we were entitled to these allowances.
    When I got back to Ohio, I went to my unit and inquired 
about getting these allowances. I actually had to look through 
the regulations. There is a chart they have in the reg that 
tells you if you are in this location during this time of year, 
you are entitled to this much money. It was a pretty complex 
set of numbers. My unit clerk, my unit administrator certainly 
didn't know how to process that, so that is when it got pushed 
up the chain of command and went to Military Pay. Military Pay 
didn't seem to know anything about it.
    Time went on and I put together a spreadsheet, actually did 
a lot of the legwork for them to make it easier to understand 
what I was supposed to get versus what I did get. It languished 
and eventually I wrote a letter to the Ohio Inspector General 
requesting assistance. That is when I finally got some action.
    Mr. Towns. Let me ask, as a Lieutenant Colonel, did folks 
come to you asking you to help them get their pay, to help them 
resolve their problems?
    Colonel Zecchini. When I was a Company Commander years ago, 
I routinely worked with pay issues with my soldiers.
    Mr. Towns. Did you get a lot of complaints?
    Colonel Zecchini. I was a Company Commander for five years, 
so it was a little bit longer than usual. Yes, I would have to 
say that over five years, I got a fair number of pay issues 
that we worked through. Most of that we were able to fix most 
of that at the unit level. I had a unit administrator, a pay 
clerk, who was able to fix most of the pay problems at our 
level.
    Mr. Towns. Do you have any suggestions for us or to the 
folks that will be testifying later as to what might be done to 
eliminate some of this? Do you have any suggestions? You have 
had 28 years of this. I didn't stick around that long.
    Colonel Zecchini. Again, the guidance I give to my son is 
the same guidance I received as a young soldier, keep track of 
all your records, keep track of all your pay documents, your 
orders. You never know when you might need this stuff again 
some day.
    Mr. Towns. Thank you very much for service.
    On that note, I yield.
    Mr. Platts. Thank you, Mr. Towns.
    Before I go to Mr. Connolly, just a quick follow up. You 
said on the example of your Southeast Asia time, you were not 
even aware of the allowances. Other than active duty soldiers 
that you were serving with who then said, are you aware, you 
were not given any formal notification of what you were 
entitled to relating to those deployments?
    Colonel Zecchini. That is correct.
    Mr. Platts. As you worked through it, you mentioned 
ultimately you had to go the Ohio Inspector General to assist. 
At what point in that year and a half long process, how long 
had you tried working through the channels before you went that 
route to get it taken care of?
    Colonel Zecchini. I went to my unit initially in August 
2004. I would say the very next month, in September, it got 
pushed up the chain to the Ohio State Headquarters. I worked 
the issue with them until probably August 2005 when I was 
getting ready to go to Iraq. I knew I was going to be deployed 
again, so at that point I really had to do something.
    Mr. Platts. So for about a year, you kind of worked through 
their regular channels without success?
    Colonel Zecchini. Right.
    Mr. Platts. This was something, once you were aware, seemed 
pretty straight forward. You were in this country, you 
qualified, yet a year later you still weren't being compensated 
appropriately.
    Colonel Zecchini. It was a significant dollar amount too.
    Mr. Platts. Roughly, a round number?
    Colonel Zecchini. As I recall, it was a couple thousand 
dollars allowances.
    Mr. Platts. Thank you.
    I yield to the gentleman from Virginia, Mr. Connolly.
    Mr. Connolly. Thank you, Mr. Chairman.
    I want to welcome our colleague from the Senate, Senator 
Carper, who has been a great ally on so many other issues 
including postal issues. We thank him for being here today.
    Welcome to you, Lieutenant Colonel Zecchini. Thank you for 
your service and thank you for being here.
    You have a family?
    Colonel Zecchini. Yes, I do.
    Mr. Connolly. Mortgage?
    Colonel Zecchini. Yes.
    Mr. Connolly. Maybe a car loan, student loans?
    Colonel Zecchini. Not currently.
    Mr. Connolly. Not currently, but maybe you did?
    Colonel Zecchini. I did.
    Mr. Connolly. Delay in pay could be kind of significant not 
just for you, it is more inconvenient is the point, and 
actually could be pretty disruptive to the family household and 
its budget?
    Colonel Zecchini. Yes.
    Mr. Connolly. Are you aware of cases, either your own or 
others, where that was the case?
    Colonel Zecchini. The example I mentioned of being in 
Afghanistan where I went about a month and a half without pay, 
that was a tense period, not knowing how long that was going to 
continue without pay. That was the only thing. I was working 
with my wife who was back home trying to pay the bills and 
stretch the savings we had for as long as we could.
    Mr. Connolly. While you were on a war front?
    Colonel Zecchini. Yes, sir.
    Mr. Connolly. Why do you think there are these problems? I 
have to tell you, I spent 20 years in the private sector and I 
never once had a paycheck problem. They never once made a 
mistake about my amounts, my withholding or what name to send 
it to, whether it be electronic transfer or a paycheck. Why do 
you think we have a problem in the Pentagon?
    Colonel Zecchini. In that example, I was on orders for 180 
days and I may have over complicated the situation by 
volunteering to extend that when the order was cut authorizing 
the extension, in my mind, everything else should have fallen 
into place but pay didn't catch up with the orders.
    Mr. Connolly. You mentioned that you went to, I think you 
said, the company clerk but the clerk was not really equipped 
to resolve the problem and you had to go to a higher level?
    Colonel Zecchini. Right.
    Mr. Connolly. Does the Army not have or do other services 
not have people designated as ombudsmen to try to help the men 
and women in uniform when they have this kind of problem?
    Colonel Zecchini. At the State Headquarters, that is my 
understanding.
    Mr. Connolly. The State Headquarters?
    Colonel Zecchini. The Ohio National Guard State 
Headquarters.
    Mr. Connolly. If you are in Afghanistan, going back to 
State Headquarters in Ohio is a bit of a challenge.
    Colonel Zecchini. The pay issues I had in Afghanistan, the 
active duty finance people did work with me on that one and got 
that one resolved in the end.
    Mr. Connolly. On-site?
    Colonel Zecchini. On-site.
    Mr. Connolly. But you still went a month and a half, you 
said?
    Colonel Zecchini. A month and a half.
    Mr. Connolly. Mr. Chairman, I am so struck by the fact that 
Lieutenant Colonel Zecchini puts on the uniform, is active duty 
in a war front in Afghanistan on behalf of his Country because 
his Country called, and we can't resolve his compensation. He 
and his family back home suffering the anxiety of the war front 
now have to add to that anxiety can we meet the mortgage or 
other family household obligations. It seems to me no way to 
treat our men and women in uniform and it also seems to me this 
is not rocket science. The private sector somehow manages to do 
this every day of the week.
    As I said, I worked for 20 years in the private sector, I 
never once heard a complaint about a mistake. Maybe there were 
some and I am sure there were, but it certainly was not 
commonplace. It is very troubling to hear that is not the case 
in the U.S. military.
    I look forward to the next panel's testimony but I think 
Lieutenant Colonel Zecchini and his fellow men and women in 
uniform deserve better from their country.
    Thank you, Mr. Chairman. I yield back.
    Mr. Platts. I thank the gentleman and would echo the 
concern. As you well highlighted, that impacts not just the men 
and women in uniform but the family and certainly with 
deployments, enough stress associated with overseas deployments 
for the whole military family, let alone adding a pack issue 
and financial stress that comes with that.
    Colonel, again, we thank you for your almost 30 years of 
service in uniform to our Nation as well as your willingness to 
be here as we work to try to make sure we do better by you and 
all who are serving us and will continue to serve as your son 
is in harms way as we speak. Please convey to your wife as well 
for her service on the home front while you have been serving 
us far from home, our thanks.
    We are going to take a very brief recess while we reset for 
the second panel. We stand in recess momentarily.
    [Recess.]
    Mr. Platts. We will reconvene. We appreciate the quickness 
of our witnesses getting settled. Again, I apologize for the 
time restraints we are working under. I would ask you to try 
stay within your five minutes and if you want to yield back any 
of that time so we can get to exchange Q and A with you, we 
welcome that.
    I want to add my thanks to each of you for your current 
service as well as I know a number of you who have served in 
uniform for many years as well. We are very fortunate to have 
your commitment to your Nation and your fellow citizens both 
now as well as in the past in uniform. Thanks for being here 
and being a part of this process.
    We are going to go right to your testimony. Asif Khan is 
Director, Financial Management and Assurance, U.S. Government 
Accountability Office.

                     STATEMENT OF ASIF KHAN

    Mr. Khan. Thank you, Chairman Platts, Chairman Carper, 
Ranking Member Towns and Congressman Connolly. It is a pleasure 
to be here today to discuss our work on the challenges in 
assuring the accuracy and the validity of Army's military 
payroll.
    Deficiencies in Army payroll processes and control were 
most recently reported by GAO in 2009 and by the DOD Inspector 
General in 2011. Such deficiencies increase the risk of 
inaccurate and invalid payments to Army military personnel and 
impede the Army's efforts to prepare an auditable statement of 
the budget, the SBR.
    The SBR is one of the principal financial statements 
required of major government agencies including the military 
components of DOD. According to the Defense Finance Accounting 
Service, DFAS the Army fiscal year 2010 active duty military 
payroll was $46.1 billion, a material amount in the Army's SBR.
    We found there continues to be significant deficiencies in 
the Army and DFAS processes and systems. Today, I will focus on 
three problem areas highlighted in our report: first, 
significant deficiencies in the processes used to maintain and 
retrieve payroll records for active duty military personnel; 
second, problems in the automated systems used to store, 
process and reporting these records; and third, lack of 
supporting documentation for payroll transactions.
    To test whether Army's payroll processes were effective in 
making data readily available for an audit, we requested a list 
of service members who had received active duty pay in fiscal 
year 2010. DFAS staff made three attempts to provide us with a 
complete and accurate file. The first attempt included more 
than 11,000 duplicate accounts; the second attempt found over 
28,000 more accounts than the first; and finally, with a third 
attempt, we were able to perform reconciliation procedures that 
satisfied us that the data were reasonably complete.
    The inability to readily provide this information, if not 
effectively addressed, will impede the Army's ability to meet 
the 2014 SBR audit readiness goal. Non-integrated systems and 
cumbersome processes also contribute to the Army's difficulty 
in maintaining and reporting timely, accurate and complete 
data.
    The Army's pay and personnel system for example are not 
integrated. Active duty payroll data is maintained in one 
system; the personnel data is compiled from several systems 
that are fed data from the recruit reception office in each 
battalion and from at least 45 other feeder systems and 
spreadsheets.
    Comparing and reconciling the pay and personnel data 
requires labor intensive research. It took the data center over 
two months to confirm that all service members who received 
active duty military pay in fiscal year 2010 had an active duty 
personnel file for one of the personnel systems.
    The third problem is supporting documentation which is the 
fundamental control over all financial accounting and 
reporting. It provides evidence that a recorded transaction is 
accurate and valid. To test this control, we selected a sample 
of 250 service members' records and requested the related leave 
and earnings statements, and also documents that support basic 
pay allowances and entitlements.
    After initial difficulties in locating the documents, we 
suggested the Army focus on the first 20 pay account sample 
items. After further delay, we narrowed our request for 
documents to the first five sample items. As of the end of 
September 2011, six months after our initial request, we were 
able to obtain a complete documentation for 2 of the 250 sample 
items, partial support for 3, and no support for the remaining 
245.
    Without support documentation, the Army cannot verify the 
validity of its payment and is at increased risk of payments to 
the wrong persons or in the wrong amounts. Further, without 
documentation, the Army will not be able to pass an audit of 
its SBR.
    DOD has recently taken important steps toward improving 
financial management at the Department and its components. The 
Army has begun efforts to prepare for the audit of its SBR by 
2014 and ultimately, all principal statements by 2017.
    Other military components such as the Air Force and the 
Navy share some of the same processes and system risks as the 
Army. They also will need to resolve significant problems 
before their SBRs are auditable.
    Chairman Platts, Senator Carper, Ranking Member Towns, 
Congressman Connolly, this concludes my prepared statement. I 
would be happy to answer any questions you may have at this 
time.
    Thank you.
    [Prepared statement of Mr. Khan follows:]

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    Mr. Platts. Thank you, Mr. Khan.
    Next is Mr. James Watkins, Director, Accountability and 
Audit Readiness, Department of the Army.

                   STATEMENT OF JAMES WATKINS

    Mr. Watkins. Thank you.
    Chairman Platts, Chairman Carper, Ranking Member Towns, 
members of the committee, especially my own representative in 
Congress, Representative Connolly, thank you for the 
opportunity to testify today regarding Army military pay, audit 
readiness and our commitment to achieving auditable financial 
statements.
    Secretary McHugh, Army Chief of Staff Odierno, Under 
Secretary Dr. Westphal, the Assistant Secretary for Financial 
Management and Comptroller, Dr. Matiella; and all of our senior 
leaders are committed to achieving auditable financial 
statements including the Army's military pay business 
processes.
    I also thank the Government Accountability Office for their 
military pay audit. We concur that the Army faces challenges in 
achieving audit readiness for military pay. The military pay 
audit provided additional insight with specific recommendations 
to address deficiencies. We concur with the GAO findings and 
have included their recommendations in the Army's Financial 
Improvement Plan.
    While we are confident that we do a good job paying our 
soldiers the right amount of money at the right times. We know 
we have a lot of work to do to prove it via an audit. Military 
pay at approximately $50 billion annually represents a 
significant component of the Army's Statement of Budgetary 
Resources. Because of the amount of resources dedicated to and 
the importance of military pay, the Army and the Defense 
Finance and Accounting Service must ensure controls are in 
place to continue paying soldiers the right entitlements, the 
right amounts at the right time and to accurately report these 
transactions on the financial statements. This requires 
teamwork between the Army, DFAS and the Office of the Under 
Secretary Defense Comptroller.
    Our progress to date includes working with DFAS to develop 
and document a repeatable process for identifying the total 
population of active duty military payroll accounts each fiscal 
year. In fact, the Army and DFAS, in October 2011, implemented 
a monthly reconciliation of all detailed military pay 
transactions to the summary financial reporting records. This 
process improvement represents a significant accomplishment in 
advancing the Army's audit readiness efforts.
    Other initiatives include documenting the military 
personnel and payroll business processes; identifying the key 
pay-related substantiating documents; and standardizing the 
procedures for maintaining these documents. As part of this 
effort, we are creating a matrix that identifies the relevant 
substantiating documents and the retention location of those 
documents for each payroll entitlement. The matrix will 
simplify the retrieval of documents, demonstrate proof of 
military pay and assist in our response in future audit 
requests.
    Finally, we are reviewing all policies governing the 
storage and retention of key documents to ensure policies, 
processes and supporting business systems enable timely access 
to substantiating documentation in a cost effective manner.
    The pace at which the Army has supported financial 
improvement the past three years is unprecedented in the more 
than 30 years I have served in the Army, including 27 years as 
an infantryman and finance officer, and 6 as a civilian in the 
financial management and audit readiness community.
    With critical help from Congress, GAO, OSD and DFAS, we 
have generated the necessary momentum across the Army to 
achieve the goal of financial improvement in audit readiness. 
We have dedicated appropriate funding to meet this goal; we 
have established a robust government structure; we have shifted 
the culture of the Army toward greater personal and collective 
accountability.
    The Army's senior leaders are actively engaged in ensuring 
we meet Secretary Panetta's directive of an auditable statement 
of budgetary resources in 2014 and all financial statements by 
2017. I met with congressional staff in the spring of 2010 to 
describe the Army's financial improvement plan and the 
milestones between that time and 2017 that would demonstrate 
progress.
    I am proud to report that we have met our interim goals 
since that time and we continue to prove we are on the right 
path. To meet Secretary Panetta's 2014 deadline, we have 
accelerated some milestones, all of which I am very confident 
we will achieve.
    While we have made great progress, a tremendous amount of 
challenges lie before us. As Mr. Khan pointed out last July 
2011 in front of the Senate Committee on Armed Services, I am 
personally committed to this historic effort to improve 
financial management in the Army, to enhance support to 
soldiers and to improve accountability to the American 
taxpayers.
    I look forward to working with you to ensure the Army's 
success and I welcome your questions.
    [Prepared statement of Mr. Watkins follows:]

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    Mr. Platts. Thank you, Mr. Watkins.
    Next, we have Ms. Jeanne Brooks, Director, Technology & 
Business Architecture Integration, Office of the Deputy Chief 
of Staff, G-1, Department of the Army. Thank you for being 
here, Ms. Brooks.

                 STATEMENT OF JEANNE M. BROOKS

    Ms. Brooks. Good morning.
    Chairman Platts, Chairman Carper, Ranking Member Towns, and 
Congressman Connolly, thank you for the opportunity to testify 
today regarding the audit readiness of the Army's military pay 
appropriation and the draft report issued by the Government 
Accountability Office.
    Military pay is a significant portion of the Army's budget 
authority and we are committed to providing an accurate and 
comprehensive accountability of the monies authorized and 
appropriated by Congress for the purpose of paying our most 
viable assets, our soldiers.
    The Army G-1 is working diligently with the Assistant 
Secretary of the Army for Financial Management, Dr. Matiella, 
and her point person on audit readiness, Mr. Jim Watkins, to 
ensure that our G-1 processes, systems and procedures that 
impact military pay fully support the effort to be audit ready 
for the Statement of Budgetary Resources by 2014 and for all 
financial statements by 2017.
    We are using the Financial Improvement and Audit Readiness 
principles to guide our efforts. We appreciate the balanced and 
constructive approach used by GAO in assessing our audit 
readiness for active duty military pay. The dual focus of GAO 
was to validate the accuracy of the population paid and to 
verify all documentation for entitlements received. GAO 
highlighted that these two areas currently being worked in 
support of the overall audit readiness require significant 
additional emphasis.
    In the short term, we are aggressively analyzing the 
expansion of our Personnel Integrated Records Management System 
or IPPS-A to address the GAO finding of the document storage 
shortcomings. This analysis has focused on the inclusion of pay 
supporting documentation as well as the personnel documentation 
already being captured.
    Our current process for capturing pay documentation is 
paper centric and it relies on the National Archives and 
Records Administration storage facility. This process is 
outmoded and cumbersome and does not support our move to the 
auditable environment.
    Additionally, the Defense Finance and Accounting Service 
and the Army's Human Resources Command have processes in place 
outlining the procedures that are required to validate the 
Army's pay accounts against official personnel records. These 
agreements have been in place for a number of years. Currently, 
we are validating the efficacy of these comparisons in today's 
environment.
    The Army's Integrated Personnel and Pay System Program 
IPPS-A is our major effort to address these shortcomings in the 
long term. The initial release of IPPS-A will give us an 
integrated database of all active Guard and Reserve soldiers. 
Subsequently releases will eventually get us to an Integrated 
Personnel and Pay System. This implementation of the commercial 
PeopleSoft Human Resources Management System will be configured 
to meet the Army's needs and will strengthen our internal 
controls and ensure that our entire population is paid 
accurately.
    No longer will there be separate personnel and pay 
databases. Digital signatures, strong audit capabilities, a 
built-in business engine rule, and a strict roles and 
permissions structure will further ensure accuracy and internal 
control rigor for military pay.
    Expanding IPERMS and validating that personnel and pay 
comparisons are routinely performed will prepare the Army for 
the fiscal year 2014 SBR audit as well as address the GAO audit 
findings in the short term. IPPS-A will be the Army's long term 
solution to eliminate the need for personnel and payroll 
comparisons. This coupled with the enhanced iPERMS capabilities 
will prepare the Army for the full audit in fiscal year 2017.
    This concludes my statement. I welcome your questions.
    [Prepared statement of Ms. Brooks follows:]

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    Mr. Platts. Thank you, Ms. Brooks.
    Next, we have Mr. Aaron Gillison, Acting Director, Defense 
Finance and Accounting Service, Indianapolis, Department of 
Defense. Mr. Gillison?

                 STATEMENT OF AARON P. GILLISON

    Mr. Gillison. Chairman Platts, Chairman Carper, Ranking 
Member Towns, and Representative Connolly, thank you for the 
opportunity to speak at this hearing.
    I would like to thank the Government Accountability Office 
for their work on the study. I am pleased to be here to discuss 
DFAS commitment and actions to achieve audit readiness.
    The GAO report confirms the Army and DFAS have more work to 
do to be ready for an Army military pay audit assertion. Today, 
I will discuss the services DFAS provides the Department, DFAS 
specific improvements in support of an Army military pay audit, 
and how DFAS is collaborating with customers to support audit 
readiness and prepare for assertions.
    As background, DFAS proudly pays America's military, 
government civilians and commercial vendors. We also pay 
travelers and perform accounting and financial reporting 
services including the summary level financial reports for the 
Department. DFAS is applying the Financial Improvement and 
Audit Readiness Plan to help our customers achieve 
auditability.
    In fiscal year 2010, the active Army payroll accounted for 
$46.1 billion in Army resources or 20 percent of Army net 
outlays. This included about $9.6 million Army military pay 
transactions. The GAO report confirmed the active duty military 
members paid in fiscal year 2010 had an active duty personnel 
file. We recognize all process partners must provide 
documentation within reasonable time lines.
    While we have made improvements, we are committed to 
executing additional DFAS owned actions identified in the 
Army's Financial Improvement Plan. To improve the audit 
process, the Army and DFAS will use data query capability 
against the Master Military Pay Account which is the backbone 
of the Joint Military Pay System.
    In addition, our team is developing a matrix that includes 
entitlements, supporting document location and the responsible 
organizations. We will use this matrix to clarify roles, 
responsibilities and acceptable standard retrieval time lines. 
These steps coupled with the Army's Electronic Document 
Repository for Personnel Actions will help get documents to 
auditors more quickly.
    There is a weekly reconciliation of Army military pay 
directly to the personnel system. In October 2011, DFAS also 
implemented monthly payroll reconciliations that traced active 
duty Army payroll from the military pay system to the 
accounting system. This extracts soldier level data for all pay 
and allowance categories and includes all records.
    Generated and archived each month, reconciliations can be 
extracted for a single payroll period or combined to create a 
population for broader time periods providing an easier way to 
sample the transactions. DFAS established a senior executive as 
Director of Audit Readiness to provide oversight and guidance 
for agency support to the Department's audit readiness.
    DFAS is collaborating with process partners on systems we 
have used using the GAO Federal Information Systems Control 
Audit Manual. We are also using the American Institute of 
Certified Public Accountants Standards to prepare for and 
conduct audits of DFAS common processes in civilian pay, in 
military pay, disbursing and contract pay to ensure systems and 
controls are operated as intended.
    In addition, we are using lessons learned to reduce or 
eliminate repeat audit findings. We have dedicated teams at 
DFAS sites to coordinate all audit readiness efforts. While a 
number of these team members are certified public accountants, 
our training strategy must instill an audit ready every day 
philosophy into every employee.
    All DFAS senior executives now have audit readiness goals 
and performance plans. We are making progress toward financial 
auditability. Collaboration with our process partners and 
continuous improvement with an all in philosophy of leaders and 
employees is key to achieving military payroll audit readiness.
    Chairman Platts, Chairman Carper, Ranking Member Towns, 
Representative Connolly, and distinguished members, thank you 
for your time today. I look forward to your questions.
    [Prepared statement of Mr. Gillison follows:]

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    Mr. Platts. Thank you, Mr. Gillison.
    I will go directly to questions. I will give myself five 
minutes as again we try to beat the clock with the Floor votes.
    I want to say up front that I certainly appreciate that 
each and every one of you is committed and determined to make 
sure we get this right. We all share that goal and our exchange 
here is trying to identify how do we better achieve that goal.
    Mr. Gillison, I am going to start with your written 
testimony and your reference here. Mr. Watkins, you alluded to 
it as it well. Mr. Gillison, in your written testimony, you 
make the statement ``While we did pay these members 
correctly.'' When I read the GAO's report, their testimony here 
today and in writing as well, how do you know that to be able 
to make that statement because of the lack of documentation 
that they uncovered related to their 2010 study or report? How 
do you have the certainty to be able to make the statement that 
you know you paid correctly?
    Mr. Gillison. Number one, I do have confidence in the 
backbone of the system, the Match Military Pay Account. I can 
trace the actual computer update that it was processed on, I 
can trace back to which office processed it. What we could not 
do at the time was actually present some of those documents.
    I was as frustrated as the GAO was when I looked at it and 
asked questions. The team came together and said, have we 
thought about this system? Have we thought about it might be 
located over here in this other system. Over the course of the 
last two weeks, we have identified the documents for all those 
five cases.
    Mr. Platts. But there were 250 total though and that goes 
to the point that for 5, pulling together 2 completely 
initially, three partially, 245 is my understanding, no 
documentation.
    Mr. Gillison. Mr. Chairman, what I would say to that is the 
human element that's involved in this process, all of us, that 
is why I say really all in, we have to do our job every day. 
That is the audit ready every day component. Quickly, I will 
say this. Those documents are there the day it is processed 
into the computer system and they are retained at the 
respective finance office for one year. That very next morning, 
you know it is there because you do a comparison, then we ship 
it off.
    Mr. Platts. I apologize for interrupting, but I think that 
is the issue here. One, for internal controls to work, you have 
to be able to go back and say not just that we believe when 
that payment was made the document was there to justify the 
payment, we can go back and do the audit and say, yes, it was 
and still is. Otherwise, today we really don't know that it 
was. We are taking the word of whoever processed it that they 
looked at documentation.
    That is a significant internal control breakdown. That is 
why I asked you about the statement because we really cannot 
say, when we look at the number, on average in 2010, 364,000 
cases that were not all directly payroll related but my 
understanding is the majority, we have some serious challenges 
here.
    I appreciate that is what we are working through and trying 
to address. I think we have to be cautious. We cannot say today 
that we know we paid all of our military accurately because we 
know we haven't based on facts brought to your attention and 
that is what we are really trying to get after here.
    You also talked about and there was reference in a couple 
testimonies, the changes in October 2011. If we made the same 
request today that GAO made for the 2010 records, how quickly 
could you provide me, if I picked out any soldier who was paid 
in February of this year, how quickly could you provide me the 
backup documentation to show this is why he was paid what he 
was paid?
    Mr. Gillison. It is a three part answer, sir. We do affirm 
every month, first off, that we are paying the correct soldiers 
the correct pay and identified those that we are not.
    Mr. Platts. How do you do that every month?
    Mr. Gillison. We use the Unit Commander's finance report 
and pay is also a Commander's responsibility. That Commander 
and First Sergeant in every unit, affirms to us, signs off on 
the document that comes back and says I have 100 soldiers, this 
is the pay by category. We hold that document on hand for six 
months.
    Mr. Platts. So it is the Commander's assertion at that 
point, not the root documentation or the source documentation, 
you don't have at that point?
    Mr. Gillison. We also are supposed to retain it, the key 
word is supposed to retain it, within the finance office for 
one year and then we ship it to the records holding.
    As far as being able to support a GAO audit or a public 
accounting firm audit at this point, with the capability we 
have built, we can pull out and say that the following 1,000 
soldiers or 600,000 or 590,000 soldiers have received this 
amount of pay by this category of entitlements and allowances 
traced to the accounting system.
    Where we are still deficient is, this is what we are 
building, we have this table we are working on right now that 
then says who is responsible for the source document, where is 
it located, how do I get there from here, and we are going to 
have to expand the horizons of all of our individuals so they 
understand what the person left and the person right is doing 
and give them the accesses to that computer system.
    Mr. Platts. I am going to run out of time. I already am out 
of time. Hopefully I can come back to that issue because 
ultimately that is where we have to get. I know the iPERMS 
system is intended to help us do that, that we are going to 
have, as the Colonel testified, with the travel system, 
technology is a good thing if we are able to properly and 
efficiently implement it so that all that documentation is 
there, electronically stored and able to be pulled up.
    When you mentioned in the last two weeks, I won't ask how 
many hours you would calculate you and how many others put in 
to try to document just five soldiers? We do need to do it for 
all 500,000-plus that we are talking about. We have to get away 
from the labor intensive. This should be when you are working 
towards a system when you want that information on one soldier, 
last month you pulled up the source documentation and saw 
everything that we ultimately get to that.
    It is not heroic efforts because a hearing or heroic 
efforts because an audit is going to be done. It is so it is 
just routine. I know that is what you and all of you are 
working toward. I don't want to minimize that the commitment is 
there, starting with the Secretary of Defense and his 
commitment that we are going to do this and do it right.
    I am way over my time. Senator Carper has asked because of 
what may happen on the Floor with votes, I am going to yield to 
Mr. Connolly from Virginia.
    Mr. Connolly. Thank you, Mr. Chairman, and I thank the 
Senator.
    Thank you all for your testimony and your service, 
especially my constituent, Mr. Watkins, whose outstanding 
testimony I think should be framed, Mr. Chairman.
    Mr. Platts. With the exception of that chairman remark, 
trying to push me out of my seat here.
    [Laughter.]
    Mr. Connolly. I guess one of the things I would say to the 
panel is it seems to me progress achieved, not withstanding, we 
need to move from sort of the administrative clutter to the 
human level. No soldier on the ground in Afghanistan, Iraq or 
anywhere else serving in uniform ought to, on top of everything 
else, we worried about whether the spouse and kids back home 
can pay the bills. That ought to be our goal bottom line. That 
part, don't worry about, focus on the mission. We got the rest 
of it.
    It is very difficult to hear testimony, as we did this 
morning from Lieutenant Colonel Zecchini that in the middle of 
Afghanistan in a war front, he is worried about trying to pay 
the bills back home and so is his spouse and his kids. That is 
a very human concern and a very legitimate one.
    We may never get to perfection, it is a big, complex system 
with lots of change orders, bigger than any private sector 
enterprise. I understand, but that ought to be our goal. It is 
a human goal. We need to be seized with the mission. This isn't 
about numbers; this is about men and women and their lives.
    I say that as someone who has managed a big enterprise. If 
that is our mentality, we will fix this problem. I commend it 
to you. I know you are committed but we need to redouble that 
commitment so that we never have that kind of testimony again 
and Lieutenant Colonel Zecchini and his colleagues never have 
to worry about that again.
    Mr. Watkins, in your outstanding testimony you indicated 
you were pretty confident that we were going to meet the 
deadlines we have set for ourselves to finally have a 
certifiable audit like most other federal agencies. The 
Pentagon is not like every other federal agency, so we 
understand the complications. On a scale of 1 to 10, how 
confident are you that we, in fact, will meet that deadline 
finally?
    Mr. Watkins. Representative Connolly, I am very confident. 
I would rate it about 8.
    Mr. Connolly. Ok Thank you.
    Mr. Khan, your testimony, if I understood you correctly, 
has the GAO found appreciable progress has been made on the 
fronts we are talking about, is that correct?
    Mr. Khan. Some progress has been made but there is a lot 
more work which needs to be done to be able to meet the 2014 
deadline.
    Mr. Connolly. That is on the audit?
    Mr. Khan. Correct.
    Mr. Connolly. What about the issue of accurate pay?
    Mr. Khan. That continues to be a problem.
    Mr. Connolly. Statistically, how much of a problem is it 
from GAO's point of view? The Chairman was talking about 250, 
but obviously the problem has to be bigger than that given the 
size of our armed forces.
    Mr. Khan. Let me just pick up where you left off. Our 
sample of 250 was a statistical sample. That means the results 
could be generalized or extrapolated.
    Mr. Connolly. If we extrapolate, what would we say?
    Mr. Khan. We could not say anything on the accuracy or 
validity of Army's military active duty pay for fiscal year 
2010.
    Mr. Connolly. If we don't have some metrics for these folks 
to measure against and to gauge progress, then it remains 
anecdotal. Based on that statistical sample, what percentage of 
active duty military do we feel suffer from mistakes in their 
payroll?
    Mr. Khan. Based on our work, that would be very difficult 
to say. Getting two payroll records out of 250 doesn't really 
say much.
    Mr. Connolly. Right.
    Mr. Chairman, I have to go vote. I thank the Senator for 
his consideration. I just do think the GAO could be helpful 
here in helping to try to get our arms around some of the 
metrics so that we know what we are measuring against and we 
know what goals we need to be setting for ourselves. Is it 20 
percent at any given time of active duty who are having payroll 
complications, the severity of which obviously is another 
spectrum. Is it 5 percent, is it 2 percent? What is it?
    If we don't know that or have some way of trying to measure 
that, it seems to me it remains an illusive goal to try to get 
to zero so that Lieutenant Colonel Zecchini and his colleagues 
never suffer from that kind of malady again. I commend it to 
the GAO to try to work with us a little bit on more substantial 
metrics that we can use as a tool. So can the Pentagon in terms 
of a management tool.
    I yield back and I thank the Chair.
    Mr. Platts. I thank the gentleman. Because we don't 
actually know the total breadth of the number of cases, that 
means we also don't know how much time, effort and money we are 
spending on trying to correct the problems when they do occur. 
If we get the system right up front, we can avoid it in the 
long term.
    With that, I yield to Senator Carper.
    Senator Carper. Thank you, Mr. Chairman.
    Take a few seconds each of you and react to what we heard 
from Colonel Zecchini today. Mr. Khan, just a brief reaction to 
what you heard from him.
    Mr. Khan. I am sorry, Senator Carper?
    Senator Carper. I am going to ask you to briefly react to 
what you heard in the testimony of Colonel Zecchini, just your 
off-the-cuff reaction.
    Mr. Khan. That was pretty consistent with our observations 
on the deficiencies in the systems and payroll processes in the 
Army, that there is a high risk of incorrect payments, whether 
the amounts are wrong or they could be paid to the wrong 
person.
    Senator Carper. Mr. Watkins?
    Mr. Watkins. Yes, sir. First of all, I would say that is 
unacceptable, that is going on in more than one isolated case 
is unacceptable to the Army, it is unacceptable to the people 
in the Finance Corps and to the people doing the payroll.
    I spent 27 years on active duty. For 15 years, I have been 
receiving retired pay and four 4 years, I was in ROTC, 
different payroll systems, all administered by DFAS. I never 
had a pay complaint. I don't know if I am the oddball or if the 
pay issues that were brought up today is the oddball, but I do 
know we keep statistics on the pay time and pay accuracy. DFAS 
can provide those.
    I was a Commander, a platoon leader, Company Commander, 
Battalion Commander, Brigade Commander, I was the Commandant of 
the Army's Finance School and the Chief of the Finance Corps 
and I dealt with paying hundreds of thousands of soldiers and 
we did not have rampant problems with pay.
    First of all, I can tell you as a Commander, if you have a 
soldier that has a pay problem, you have a problem because he 
is not focused on the mission and you have to get that problem 
fixed. When I was the Finance Officer at the 5th Corps in 
Germany, at the 2nd Division in Korea and in I Corps at Ft. 
Lewis, if on payday we had long lines that indicated we had a 
problem but we didn't have long lines. The number of pay 
complaints were small compared to the number of people we paid.
    Senator Carper. Ms. Brooks, same question. Be brief.
    Ms. Brooks. I agree the situation is unacceptable. That is 
one of the reasons we are passionate and working very, very 
hard to correct our personnel systems and processes so that we 
can fix this problem. We truly need an integrated, active 
component, reserve component personnel and payroll system and 
we are working very hard toward that goal.
    Senator Carper. Mr. Gillison?
    Mr. Gillison. Any pay problem is an issue for us. I will 
say that during the time frame 2003 to 2004, we did react to 
the audit then and put in a 65-point action plan to address 
those deficiencies and put more speed on paying soldiers 
properly in all components. Today, we are data and metric rich. 
We pay 97 percent on time and we aggressively go after that 
other 3 percent. We are aggressive about this and we are 
looking forward to making further changes. Continuous 
improvement is the name of this game and everyone all in to get 
this done right.
    Mr. Connolly. Would the Senator yield?
    Senator Carper. Sure.
    Mr. Connolly. Mr. Gillison, your response to Senator Carper 
would suggest that you do have metrics in terms of error rate. 
If I heard you correctly, it is 3 percent?
    Mr. Gillison. Sir, we do have metrics we measure at each 
month and we report the metrics to OSD level. It is part of the 
Military Pay Improvement Action Plan that started in April 
2006. Our timeliness was much lower in that period of time, 
about 88 percent, and we have moved it to close to 97 percent. 
We are all about collaboration with all process partners and 
the continuous improvement. We are identifying these targets as 
soon as we can and trying to automate as much as we can. We are 
committed.
    Mr. Connolly. Thank you and I thank the Senator.
    Senator Carper. Sure.
    Mr. Khan, you heard the testimonies of Mr. Watkins, Ms. 
Brooks and Mr. Gillison and how they responded to GAO's work 
and to our questions. What did you hear that were happy to hear 
and what did you hear you weren't so pleased with?
    Mr. Khan. I was pleased to hear the response both from DFAS 
and the Army and the expectation is if they follow through with 
the commitment, they should be able to see some results in the 
short term.
    At the same time, this is a real problem. The length of 
time it took to produce the documentation is not going to 
enable an auditor to stay there and be able to give a valid 
audit opinion in a timely fashion.
    The other is the issue of supporting documentation. 
Regardless of the robustness of the system, the auditor will 
need access to the supporting documentation, the underlying 
records of the information which is maintained in the system.
    Those are the two points which need to be recognized. One 
is the timeliness and the other one is the accuracy and 
validity of the information in the system.
    Senator Carper. Mr. Khan, I think in responding to the 
GAO's work, the Army official letter to GAO said, ``We 
appreciate your confirmation that no significant issues were 
identified in your review of the military pay accounts for the 
Army.'' That is part of what it said. Based on what we heard 
from you and some from the Colonel, it seems a bit of an odd 
comment based on your testimony. Do you believe, as the Army 
stated, that your audit showed no significant issues?
    Mr. Khan. Our report has been very clear in highlighting 
the deficiencies in the Army's processes and systems. The 
deficiencies in the systems and processes really increase the 
risk of inaccurate payments as I mentioned before. Along with 
the timeliness with which the information that is provided, 
those are very significant issues, both towards the accuracy 
and validity of the information in the system and also to be 
able to get ready for an audit whether it is 2014 or 2017. The 
issues we highlighted are very significant.
    Senator Carper. Thank you.
    Mr. Platts. I am going to ask one question and then yield 
to Senator Carper before wrapping this up. We may have some 
follow up in writing because of time constraint.
    Ms. Brooks, key here is the Integrated Personnel Pay System 
you are moving forward with that ultimately will combine both 
active, Reserve, Guard and ultimately also payroll and 
personnel records. You talk in your testimony about that is in 
process. What is the time frame we see for that implementation?
    Ms. Brooks. The IPPS-A Program will be fielded in five 
different releases. Acquisition-wise, there are two increments. 
The first release will be an integrated database. It will be 
populated from the existing legacy databases. That first 
capability will be available around March 2013. Then each year, 
we have increasing capability. In 2014 and 2015, we have added 
personnel transactions. Those transactions are critical to 
eventually get to payroll. In fiscal year 2016, we will move on 
to the payroll piece of the program and move off DJMS, the 
DFAS-based system.
    Mr. Platts. When we look at the 2014 mid step to getting to 
a full audit of budgetary resources, we really are going to be 
in the early stages of this system even being started?
    Ms. Brooks. Correct.
    Mr. Platts. That is not going to help us really get to that 
audit capability we are talking about in 2014 that Secretary 
Panetta has laid out?
    Ms. Brooks. That is correct. The integrated database will 
help us to some extent but it will not give us those 
transactions.
    Mr. Platts. One final question related to access to 
information. You reference also that you are studying the 
expansion of the Personnel Electronic Records Management 
System, iPERMS, to include all the supporting documentation. 
Where is that study and what do you anticipate coming from 
that?
    Ms. Brooks. We still have a long ways to go on that study. 
The regulation that governs that system is up for review right 
now and under revision. The system itself will have to be 
changed once we determine what the policies are. It takes quite 
a bit of time because there are a large number of stakeholders 
involved in changing the policies that exist right now to 
include the Reserve components.
    As we do that, we have to take a look at the level of 
intrusion we are considering with documentation going into this 
electronic system. When we talk about birth certificates and 
marriage licenses, that does not seem very intrusive but 
certain pay events are also driven or authorized by documents 
such as divorce decrees, custody suits, paternity suits. It is 
going to take us some time to work with all of our stakeholders 
and get to the right level of documentation that is not so 
intrusive but is still authorizing.
    Mr. Platts. Getting through all that is going to be key to 
getting to ultimately one which is having in the system, easily 
accessible proper documentation to support whatever actions we 
take. With the study of that issue and iPERMS as well as the 
long term Integrated Personnel pay system, it is going to be 
critically important to achieving what we are all after. The 
bottom line is paying our soldiers and doing right by them and 
their families.
    I will yield to Senator Carper.
    Senator Carper. One of the things Mr. Connolly knows I 
sometimes like to do when I chair hearings over in the Senate 
is we get to the end of the hearing, I ask the witnesses given 
what you have heard, what you have said and what we have asked 
and some thoughts you have had, make a brief closing statement.
    We always ask you to make an opening statement, we give 
five minutes and then we ask you to consider making just a 
brief closing statement for 30 to 60 seconds about what you 
would like to have us walk out of here thinking about as well.
    Mr. Khan, we heard a fair amount from Mr. Watkins, Ms. 
Brooks and Mr. Gillison here today through testimony. I am sure 
a lot of work has gone into them preparing for today. As we 
listen to what they are saying and watch what they are doing, 
what kind of actions will say, boy, they have it, they are on 
the right track? They have turned the corner, they are going to 
do this. What should we be looking for?
    Mr. Khan. It is encouraging with the response we got from 
the Army that they are taking the steps they should be taking 
to identify their process. That is the key to really 
understanding where the internal controls are. However, they 
really need to go beyond that, just working with DFAS, and also 
include the system owners and human resources, so it should not 
really be in isolation.
    I am encouraged that they are heading in the right 
direction but I guess it is first, one step at a time. The only 
thing is the time line is compressed and 2014 is going to be 
here before we know it.
    Senator Carper. So there is a sense of urgency. In the 
Senate, we don't always operate with a sense of urgency as my 
friend from Pennsylvania knows. As a recovering governor, it 
drives me crazy sometimes and I am sure I drive my colleagues 
crazy as well sometimes. As much as anything I want to really 
impart a sense of urgency to you. I think that is what 
Secretary Panetta was trying to do as he takes on his 
responsibilities here.
    Speaking of Secretary Panetta, in my opening statement, I 
mentioned he had been very vocal in his support for improved 
financial information and financial management at the 
Department he now leads. I very much applaud his commitment to 
that goal. We will work with him during my time as chairman of 
our subcommittee in the Senate while we continue to try to 
partner with the Department of Defense and also with GAO 
towards supporting the goal of better accountability. I just 
think knowing that war fighters need our best efforts on this, 
so do the taxpayers.
    Mr. Watkins, you sort of alluded to this already. Can you 
again tell us what changes are forthcoming and how the new Army 
payroll and other related systems will be improved to meet 
Secretary Panetta's commitment to not only meet the 2017 goal 
of auditability but to meet the Secretary's challenge to the 
Department of being auditable before 2017? For example, how 
have your goals changed to meet the new goal to audit the 
Statement of Budgetary Resources by 2014?
    Mr. Watkins. Sir, that is a multi-faceted question. I will 
try and address each part.
    First of all, the changes you will see in the Army's 
rolling out its Enterprise Resource Planning Systems, the first 
thing we need to do in order to be auditable by 2017 is we need 
enterprise systems, not stovepipe systems that are old. The 
problems the Lieutenant Colonel brought up today, a lot of 
those are because of the built-in inefficiencies and 
ineffectiveness of some of our old systems, so these enterprise 
systems are key. That is number one.
    Number two is change management. We have a huge issue 
before us of change management because we are changing systems, 
we are changing processes, we are changing procedures and we 
are changing standard operating systems. Change management 
requires a competent workforce because what we are asking the 
workforce to do is different than what we used to ask them to 
do. We need more analysts and more people that have credentials 
than data entry folks because the systems allow different 
inputs and different analysis. We need training, so we have 
stepped up the training. We are doing a lot of training across 
the Army for this audit readiness.
    In 237 years, the Army has never had a financial statement 
audit. We have never been asked until recently the passage of 
the recent laws. We have had a lot of compliance audits and 
program audits, but a financial statement audit is a different 
beast. As GAO points out one of the biggest things is having 
the documentation to prove we are doing it right. We can't 
prove it today and that is the weakness we have. That is what 
we are about doing.
    To the second piece of your question concerning 2014, 
because we don't have an integrated pay and personnel system 
for 2014, we have to look at our current system which we call 
our legacy system, the Defense Joint Military Pay System. Our 
intention was not to use DJMS to go to audit in 2017; our 
intention was to use IPPS-A.
    Now that we are not going to have IPPS-A, we have to get 
these problems with our legacy system fixed and those are the 
recent activities I mentioned in my statement, the successes we 
have had about tying up detailed transactions to the General, 
summary data and tying the disbursing data to the accounting 
system so it is transaction-driven. We can drill it all the way 
down and get the proof for it.
    Senator Carper. I said earlier I would ask you all each to 
just give a closing statement, if it is all right with you, Mr. 
Chairman. I will start with you Mr. Gillison. Use no more than 
a minute, please.
    Mr. Gillison. Yes, sir.
    First, I appreciate being here today and telling the story 
of the proud Americans, some who have served in uniform, some 
who have not, that are committed to continuous improvement in 
paying our soldiers, sailors, airmen and Marines properly.
    We live in two worlds. We live in the current world where 
we have to be ready by 2014 for the SBR military pay. We have 
to continue to improve on our current system and we have to be 
able to show proof that we have the documents. We will get 
there. We are committed.
    We had a mock audit out briefing this week from a public 
accounting firm looking at some of the very same things 
identified and they think we can get there. They believe we can 
get there.
    We are going to do an SSA-16 study with accounting looking 
at military pay by September 2012. That will position us so we 
can do corrective actions in 2013 and we are ready in 2014. I 
am more on the scale of a paratrooper on top of a hill knowing 
that we are going to achieve the mission. I have no doubt about 
that with the personnel we have and the commitment.
    Thank you.
    Senator Carper. From your lips to God's ears.
    Ms. Brooks.
    Ms. Brooks. Again, I would like to thank you for the 
opportunity to appear here this morning. We are very, very 
committed to making sure that things are correct on the 
personnel side and on the pay side and eventually, the 
integration of the personnel and payrolls.
    We need the additional support for our ERP programs, as Mr. 
Watkins has explained, and we appreciate the oversight that we 
are getting from GAO because they are going to collaborate with 
us and help us so that we achieve our eventual goal whether it 
is in the near term with things that are less automated and in 
the long term when we get our fully fielded personnel and pay 
system.
    Senator Carper. Thank you.
    Mr. Watkins?
    Mr. Watkins. First, I would like to thank you and the 
Committee and the staffers who worked in preparation of this 
hearing.
    Senator Carper. Even Peter Tyler?
    Mr. Watkins. Even Peter. I have been working with Peter for 
over two years now because of other hearings on your side.
    Senator Carper. My heart goes out to you. He is great.
    Mr. Watkins. He is and I have enjoyed working with him and 
enjoy looking forward to the continuing relationship.
    My message is there is an old expression when I first came 
in the Army that said the organization only does well those 
things that the boss checks. I think it is very important for 
the Congress to continue it's oversight and conduct these 
hearings because that has given impetus to this change that we 
are undergoing. I think it is important that Congress continues 
that because our leaders have the message. Our leaders are 
committed to it and we are checking and getting better. I think 
the future is brighter today than it was two years ago.
    Senator Carper. Thank you.
    Mr. Khan?
    Mr. Khan. Thank you very much.
    I have really been encouraged with the tone of this hearing 
and with how the Army and DEFAS responded to our findings. At 
the same time, it is very important that they follow through 
and commitment exists. We obviously will be providing our 
oversight. Our work is done with the spirit of providing 
constructive advice. At the same time, exactly as Mr. Watkins 
said those charged with government and oversight it is very 
important that they stay involved so that the pace of progress 
continues and if there is any help needed by the audit team, 
that is provided on a timely basis.
    Thank you.
    Senator Carper. We appreciate very much the work that you 
and your colleagues at GAO continue to do with us for the 
American people on so many fronts. I would also say that I am 
encouraged by the tone of the testimony here and the comments 
we received from everyone.
    Sometimes Mr. Chairman, I have seen, as I am sure you have, 
where GAO comes in and has done a very good job on an audit and 
the folks who come from the agency about whom the hearing is 
being held are in like a state of denial and not really 
acknowledging they have a problem. It's usually somebody elses 
and we're not hearing that today.
    As we leave here I just want us to keep in mind the men and 
women who are serving us all around the world in some places 
not in the middle of hostility are not in imminent danger but 
in some places, they are in real danger. In some cases, they 
are single and have no wife, no husband, no children, no 
dependents. But in some cases, they have all of the above. The 
last thing we want them to have to worry about is how are we 
going to pay our bills, how is my family getting by, they are 
depending on me and I am not able to help them. That is a 
problem we don't need. They don't need that and we don't need 
that as a country.
    As we look at these goals that we set ahead to 2014 and 
2017, let us keep in mind this is not so much about complying 
with the law, staying in line with the GAO audit; there are 
real people involved in this.
    Thank you.
    Mr. Platts. Chairman Carper, I certainly thank you and your 
staff for partnering with our House Subcommittee.
    Senator Carper. We love doing it.
    Mr. Platts. It is a good example. Maybe in the public eye, 
they think Republicans and Democrats, House and Senate, just 
can never agree on anything and work together. This is a good 
example where we can and do, not just within the committees but 
with the witnesses here today, GAO, the DFAS and the Army, 
Colonel Zecchini and his testimony, how it impacts a soldier 
and a family ultimately when we don't get it right. I know we 
are all on the same page of what we are after and we are 
committed to getting there.
    While I can't make a commitment for myself beyond the end 
of this year because my chairmanship and tenure here will end 
in the House for at least the remainder of this year, I know 
Senator Carper and others, House and Senate, will continue well 
beyond the end of this year working with each of you in that 
partnership.
    I like the motto about what the boss checks. I think it is 
a good approach and certainly we try in our Oversight 
Committee, and I know Chairman Carper does it as well on the 
Senate side, is doing oversight, it is not a gotcha, it is just 
trying to make sure we are keeping an eye on the ball. In this 
case, it is good financial management that ultimately means we 
do right by our courageous men and women in uniform.
    We appreciate all of your testimonies and we will keep the 
record open for seven days for any additional information you 
can submit. We do look forward to continuing to work with each 
of you along with our staffs in moving forward.
    This joint hearing stands adjourned.
    [Whereupon, at 11:44 a.m., the committees were adjourned.]

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