Military Pay: Army National Guard Personnel Mobilized to Active  
Duty Experienced Significant Pay Problems (28-JAN-04,		 
GAO-04-413T).							 
                                                                 
In light of the recent mobilizations associated with the war on  
terrorism, GAO was asked to determine if controls used to pay	 
mobilized Army Guard personnel provided assurance that such pays 
were accurate and timely. This testimony focuses on the pay	 
experiences of Army Guard soldiers at selected case study units  
and deficiencies with respect to controls over processes, human  
capital, and automated systems. 				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-04-413T					        
    ACCNO:   A09173						        
  TITLE:     Military Pay: Army National Guard Personnel Mobilized to 
Active Duty Experienced Significant Pay Problems		 
     DATE:   01/28/2004 
  SUBJECT:   Active duty expense allowances			 
	     Army reservists					 
	     Erroneous payments 				 
	     Human resources training				 
	     Human resources utilization			 
	     Internal controls					 
	     Military pay					 
	     Mobilization					 
	     Payroll systems					 
	     Defense Joint Military Pay 			 
	     System-Reserve Component				 
                                                                 

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GAO-04-413T

United States General Accounting Office

GAO Testimony

Before the House Committee on Government Reform, House of Representatives

For Release on Delivery Expected at 10 a.m. EST Wednesday, January 28,
2004

MILITARY PAY

 Army National Guard Personnel Mobilized to Active Duty Experienced Significant
                                  Pay Problems

Statement of

Gregory D. Kutz
Director, Financial Management and Assurance

Geoffrey B. Frank
Assistant Director, Financial Management and Assurance

John J. Ryan
Assistant Director, Office of Special Investigations

                                       A

GAO-04-413T

Highlights of GAO-04-413T, a testimony to the Chairman, House Committee on
Government Reform

In light of the recent mobilizations associated with the war on terrorism,
GAO was asked to determine if controls used to pay mobilized Army Guard
personnel provided assurance that such pays were accurate and timely. This
testimony focuses on the pay experiences of Army Guard soldiers at
selected case study units and deficiencies with respect to controls over
processes, human capital, and automated systems.

GAO's related report (GAO-04-89) made 24 recommendations to DOD including
the following: cD- Establish a unified set of

policies and procedures as well as performance measures in the pay area.

cD- 	Evaluate staffing allocation, pay grades, and training at all 54 Army
Guard offices.

cD- 	Identify options for improving customer service.

cD- 	Review and resolve GAO identified pay issues at the six case study
units.

cD- 	Evaluate the feasibility of automating manual pays and redesigning
the leave and earnings statements.

cD- 	In developing the new pay system, consider a complete reengineering
effort to include process and human capital.

DOD concurred with GAO's recommendations and described actions recently
completed, underway, and planned to correct the noted deficiencies.

www.gao.gov/cgi-bin/getrpt?GAO-04-413T.

To view the full product, click on the link above. For more information,
contact Gregory D. Kutz at (202) 512-9095 or [email protected].

January 2004

MILITARY PAY

Army National Guard Personnel Mobilized to Active Duty Experienced Significant
Pay Problems

The existing processes and controls used to provide pay and allowances to
mobilized Army Guard personnel are so cumbersome and complex that neither
DOD nor, more importantly, the mobilized Army Guard soldiers could be
reasonably assured of timely and accurate payroll payments. Weaknesses in
these processes and controls resulted in over-and underpayments and late
active duty payments and, in some cases, large erroneously assessed debts,
to mobilized Army Guard personnel. The end result of these weaknesses is
to severely constrain DOD's ability to provide active duty pay to these
personnel, many of whom were risking their lives in combat in Iraq and
Afghanistan. In addition, these pay problems have had a profound impact on
individual soldiers and their families and may adversely impact on
decisions to stay in the Army Guard. For example, many soldiers and their
families were required to spend considerable time, sometimes while the
soldiers were deployed in remote, hostile environments overseas, seeking
corrections to active duty pays and allowances.

Pay Problems at Six Case Study Locations

            Army Guard                        
               unit         Soldiers with pay          Comments           
                            problems          
                                                         34 soldiers were 
         Colorado Special       62 of 62       erroneously assessed debts 
              Forces                              averaging $48,000 each. 
                                              Injured soldiers            
                                              experienced problems        
         Virginia Special       64 of 65      receiving entitled active   
                                              duty pay and                
              Forces                           related medical benefits.  
                                                Sergeant came under enemy 
                                                              fire during 
          West Virginia         86 of 94       4-day trip to deliver pay  
                                                      records to          
          Special Forces                            correct errors.       
       California Military                           Majority of soldiers 
              Police            50 of 51            experienced delays in 
                                               starting active duty pays. 
                                              Pays for 13 soldiers        
                                              continued for 6             
        Maryland Military       83 of 90      weeks after early release   
                                              from active                 
              Police                                     duty.            
                                              88 soldiers were mistakenly 
       Mississippi Military    105 of 119     paid for 2 types of         
              Police                          hardship duty pay.          

450 of 481 94 percent of soldiers had pay Total problems

Source: GAO analysis.

The pay process, involving potentially hundreds of DOD, Army, and Army
Guard organizations and thousands of personnel, was not well understood or
consistently applied with respect to determining (1) the actions required
to make timely, accurate pays to mobilized soldiers, and (2) the
organization responsible for taking the required actions. With respect to
human capital, we found weaknesses including (1) insufficient resources
allocated to pay processing, (2) inadequate training related to existing
policies and procedures, and (3) poor customer service. Several systems
issues were also significant factors impeding accurate and timely payroll
payments to mobilized Army Guard soldiers, including (1) nonintegrated
systems, (2) limitations in system processing capabilities, and (3)
ineffective system edits.

Mr. Chairman and Members of the Committee:

Thank you for the opportunity to discuss controls over payroll payments to
mobilized Army National Guard (Army Guard) soldiers. Our related report1
issued in November 2003 details weaknesses in the processes, human
capital, and automated systems that impaired prompt and accurate Army
Guard payroll payments.

In response to the September 11 attacks, many Army Guard soldiers were
activated to federal duty. A reported 93,000 Army Guard soldiers-
accounting for about a third of all mobilized reserve forces-were
activated as of March 2003. These forces were deployed on various
important missions across the United States and overseas in support of
Operations Noble Eagle and Enduring Freedom, including search and destroy
missions against the Taliban and al Qaeda; guarding al Qaeda prisoners
held at Guantanamo Bay; providing security at the Pentagon and military
bases; and carrying out military police functions in Iraq. Particularly
given the critical and continuing roles Army Guard soldiers play in
carrying out vital military and security missions, effective controls are
needed to provide timely and accurate pays and allowances to these
soldiers. Pay-related problems are not only costly and time-consuming to
resolve, but result in financial hardship for soldiers and their families.
In addition, there are indications that these pay problems are beginning
to have an adverse effect on the Army's ability to retain these valuable
Army Guard personnel.

Because current DOD operations used to pay mobilized Army Guard soldiers
relied extensively on error-prone, manual transactions entered into
multiple, nonintegrated systems, we did not statistically test controls in
this area. Instead, we audited six Army Guard units as case studies to
provide a detailed perspective on the nature of payroll deficiencies with
respect to Army Guard soldiers. As requested, we also conducted a limited
review of one unit currently deployed in Iraq to identify any evidence of
continuing pay problems. Further details on our scope and methodology and
the results of the case studies can be found in our related report.2

1 U.S. General Accounting Office, Military Pay: Army National Guard
Personnel Mobilized to Active Duty Experienced Significant Pay Problems,
GAO-04-89 (Washington, D.C.: Nov. 13, 2003).

2 GAO-04-89. See appendixes I-VII.

Today, I will summarize the results of our work with respect to (1) the
extent of pay problems we identified at our case study units, (2)
deficiencies in the three key control areas of processes, people, and
automated systems, and (3) recommended actions for addressing these
issues.

Summary	Internal control weaknesses in the processes, human capital, and
automated systems resulted in significant pay problems at all six Army
Guard units we audited. Overall, 450 of the 481 (94 percent) Army Guard
soldiers from our six case study units had at least one pay problem
associated with their mobilization. In addition, our limited review of the
pay experiences of the soldiers in the Colorado Army Guard's 220th
Military Police Company, who are currently deployed to Iraq, indicated
that some of the same types of pay problems that we found in our six case
study units continued to occur.

Until DOD improves the cumbersome and complex processes used to pay
mobilized Army Guard personnel, the Army, the Defense Finance and
Accounting Service (DFAS), and, most importantly, the mobilized Army Guard
soldiers, cannot be reasonably assured of timely and accurate payroll
payments. These processes, involving potentially hundreds of Department of
Defense (DOD), Army, and Army Guard organizations and thousands of
personnel, were not well understood or consistently applied with respect
to determining (1) the actions required to make timely, accurate pays to
mobilized soldiers, and (2) the organization responsible for taking the
required actions. In addition, we found several instances of outdated and
conflicting DOD and Army regulations and guidance in the pay and allowance
area.

With respect to human capital, we found weaknesses including (1)
insufficient resources allocated to pay processing, (2) inadequate
training related to existing policies and procedures, and (3) poor
customer service. The lack of sufficient numbers of well-trained,
competent military pay professionals can undermine the effectiveness of
even a world-class integrated pay and personnel system. A sufficient
number of well-trained military pay staff is particularly crucial given
the extensive, cumbersome, and labor-intensive process requirements that
have evolved to support active duty pay to Army Guard soldiers.

Automated systems issues-nonintegrated systems, limitations in system
processing capabilities, and ineffective system edits-further constrained

DOD's ability to provide a most basic service to these personnel, many of
whom were risking their lives in combat. The Defense Joint Military Pay
System-Reserve Component (DJMS-RC)-originally designed to process payroll
payments to personnel on weekend drills, on short periods of less than 30
days of annual active duty, or for training-is now used to pay Army Guard
soldiers for up to 2 years. Army officials told us that the system is now
stretched to the limits of its functionality. DFAS has established
"workarounds" intended to compensate for the DJMS-RC system constraints,
which further compound the human capital issues. Overall, we found the
current stove-piped, nonintegrated systems were labor-intensive and
require extensive error-prone manual data entry and reentry. Despite DOD
plans to implement system improvements in this area, the department will
be required to operate within existing system constraints for at least
several more years.

The consequences of inaccurate, late, and, missing pays, and associated
erroneous debts had a profound financial impact on individual soldiers and
their families. One soldier's spouse had to obtain a grant to pay bills
while her husband was in Afghanistan. Soldiers and their families were
required to spend considerable time, sometimes while the soldiers were
deployed in remote, hostile environments overseas, continually addressing
concerns over their pay and allowances. Further, pay-related problems can
have an adverse effect on the Army's ability to retain these valuable
personnel.

In our related report, we recommended a series of 24 actions to improve
the accuracy and timeliness of payroll payments to mobilized Army Guard
soldiers. In its response to our report, DOD concurred with our
recommended actions and stated that it is already taking action to correct
the noted deficiencies.

  Case Studies Illustrate Significant Pay Problems

We found significant pay problems at the six Army Guard units we audited
related to processes, human capital, and systems. The six units we
audited, including three special forces and three military police units,
were:

o  Colorado B Company, 5th Battalion, 19th Special Forces

o  Virginia B Company, 3rd Battalion, 20th Special Forces

o  West Virginia C Company, 2nd Battalion, 19th Special Forces

o  Mississippi 114th Military Police Company

o 	California 49th Military Police Headquarters and Headquarters
Detachment

o  Maryland 200th Military Police Company

These units were deployed to help perform a variety of critical domestic
and overseas mission operations, including search and destroy missions in
Afghanistan against Taliban and al Qaeda forces, guard duty for al Qaeda
prisoners in Cuba, and providing security at the Pentagon shortly after
the September 11, 2001, terrorist attacks.

For the six units we audited, we found significant pay problems involving
over $1 million in errors. These problems consisted of underpayments,
overpayments, and late payments that occurred during all three phases of
Army Guard mobilization to active duty. For the 18-month period from
October 1, 2001, through March 31, 2003, we identified overpayments,
underpayments, and late payments at the six case study units estimated at
$691,000, $67,000, and $245,000, respectively.3 In addition, for one unit,
these pay problems resulted in largely erroneous debts totaling $1.6
million. Overall, we found that 450 of the 481 soldiers (94 percent) from
our case study units had at least one pay problem associated with their
mobilization to active duty. Table 1 shows the number of soldiers at our
case study units with at least one pay problem during each of the three
phases of active duty mobilization.

3As a result of the lack of supporting documents, we likely did not
identify all of the pay problems related to the active duty mobilizations
of our case study units. However, for the pay problems we identified, we
defined over- and underpayments as those pays or allowances for mobilized
Army Guard soldiers during the period from October 1, 2001, through March
31, 2003, that were in excess (overpayment) or less than (underpayment)
the entitled payment. We considered as late payments any active duty pays
or allowances paid to the soldier over 30 days after the date on which the
soldier was entitled to receive such pays or allowances. As such, these
payments were those that, although late, addressed a previously unpaid
entitlement. We did not include any erroneous debts associated with these
payments as pay problems. In addition, we used available data to identify
about $135,000 in collections against identified overpayments through
March 31, 2003. We did not attempt to estimate payments received against
identified underpayments. We have provided documentation for the pay
problems we identified to cognizant DOD officials for further research to
determine whether additional amounts are owed to the government or the
soldier.

                 Table 1: Pay Problems at Six Case Study Units

Soldiers with pay problems Army Guard unit Mobilization Deployment
Demobilization

                Colorado Special Forces   56 of 62     61 of 62      53 of 62 
                Virginia Special Forces   31 of 65     63 of 65      60 of 65 
           West Virginia Special Forces   36 of 94     84 of 94      66 of 94 
             California Military Police   48 of 51     41 of 51       0 of 51 
               Maryland Military Police   75 of 90     64 of 90       3 of 90 
            Mississippi Military Police  21 of 119    93 of 119     90 of 119 

Source: GAO analysis.

Some of the pay problems we identified included the following.

o 	DOD erroneously billed 34 soldiers in a Colorado National Guard Special
Forces unit an average of $48,000 each in payroll-related debt- most of
which was erroneous. While we first notified DOD of these issues in April
and sent a follow-up letter in June 2003, the largely erroneous total debt
for these soldiers of about $1.6 million remained unresolved at the end of
our audit in September 2003.

o 	As a result of confusion over responsibility for entering
promotionrelated transactions associated with a Colorado soldier's
promotion, the soldier's spouse had to obtain a grant from the Colorado
National Guard to pay bills while her husband was in Afghanistan.

o 	Some soldiers did not receive payments for up to 6 months after
mobilization and others still had not received some of their active duty
pays by the conclusion of our audit.

o 	Ninety-one of 100 members of a Mississippi National Guard military
police unit deployed to Guantanamo Bay, Cuba, did not receive the correct
amount of Hardship Duty Pay.

o 	One soldier from the Mississippi unit was paid $9,400 in active duty
pay during the 3 months following an early discharge for drug-related
charges.

o 	Forty-eight of 51 soldiers in a California National Guard military
police unit received late payments because the unit armory did not have a
copy machine available to make copies of needed pay-related documents.

o 	Four Virginia Special forces soldiers injured in Afghanistan, unable to
resume their civilian jobs, experienced problems in receiving entitled
active duty pays and related health care.

o 	Pays for 13 soldiers continued for 6 weeks after early release from
active duty.

o  88 soldiers were mistakenly paid for 2 types of hardship duty pay.

In some cases, the problems we identified may have distracted these
professional soldiers from mission requirements, as they spent
considerable time and effort while deployed attempting to address these
issues. Further, these problems may adversely affect the Army's ability to
retain these valuable personnel.

Pay Problems Continue with Unit Currently Deployed to Iraq

Our limited review of the pay experiences of the soldiers in the Colorado
Army Guard's 220th Military Police Company, which was mobilized to active
duty in January 2003, sent to Kuwait in February 2003, and deployed to
Iraq on military convoy security and highway patrol duties in April 2003,
indicated that some of the same types of pay problems that we found in our
six case study units continued to occur. Of the 152 soldiers mobilized in
this unit, our review of available records identified 54 soldiers who were
either overpaid, underpaid, or received entitled active duty pays and
allowances over 30 days late, or for whom erroneous pay-related debts were
created. We found that these pay problems could be attributed to control
breakdowns similar to those we found at our case study units, including
pay system input errors associated with amended orders, delays and errors
in coding pay and allowance transactions, and slow customer service
response. For example, available documentation and interviews indicate
that while several soldiers submitted required supporting documentation to
start certain pays and allowances at the time of their initial
mobilization in January 2003, over 20 soldiers were still not receiving
these pays in August 2003. This unit remained deployed in Iraq as of
January 2004.

  Mobilized Army Guard Pay Process, Human Capital, and Systems Deficiencies

Deficiencies in three key areas-process, human capital, and systems- were
at the heart of the pay problems we identified. Processes were not well
understood or consistently applied and were outdated in several instances.
Insufficient resources, inadequate training, and poor customer service
impaired the human capital operations in this area. Further, the automated
systems supporting pays to mobilized Army Guard soldiers were ineffective
because they were (1) not integrated and (2) constrained by limited
processing capabilities and ineffective system edits.

Process Deficiencies	A substantial number of payment errors we found were
caused, at least in part, by unclear procedural requirements for
processing active duty pay and allowance entitlements to mobilized Army
Guard soldiers. Complex, cumbersome processes, developed in piecemeal
fashion over a number of years, provide numerous opportunities for control
breakdowns. The DOD Financial Management Regulation guidance on pay and
allowance entitlements alone covered 65 chapters. Procedural requirements,
particularly in light of the numerous organizations issuing guidance
applicable to this area, and potentially hundreds of organizations and
thousands of personnel involved in implementing this guidance, were not
well understood or consistently applied with respect to determining (1)
the actions required to make timely, accurate active duty pays to
mobilized Army Guard soldiers and (2) the component responsible, among
Army Guard, active Army, and DFAS, for taking the required actions. For
example, within the Army Guard, 54 state-level personnel and another 54
state-level pay offices-United States Property and Fiscal Offices (USPFOs)
are integrally involved in the process to pay mobilized Army Guard
soldiers. Further, we found instances in which existing guidance was out
of date-some of which still reflected practices in place in 1991 during
Operation Desert Storm.

Procedural Requirements Not Unclear procedural requirements for processing
active duty pays

Clear	contributed to erroneous and late pay and allowances to mobilized
Army Guard soldiers. We found existing policies and procedural guidance
were unclear with respect to amending active duty orders, stopping active
duty pays for early returning soldiers, and extending active duty pays to
injured soldiers.

At two of our case study locations, military pay technicians using vague
guidance made errors in amending existing orders. One of these errors

resulted in 34 soldiers being billed a largely erroneous total debt of
about $1.6 million.

Procedural guidance was not clear regarding how to carry out assigned
responsibilities for soldiers returning from active duty earlier than
their unit. DFAS-IN guidance provides only that "the supporting USPFO will
be responsible for validating the status of any soldier who does not
return to a demobilized status with a unit." The guidance did not state
how the USPFO should be informed of soldiers not returning with their
unit, or what means the USPFO should use to validate the status of any
such soldiers. One USPFO informed us that they became aware that a soldier
had returned early from a deployment when the soldier appeared at a
weekend drill while his unit was still deployed. In four of six case study
units, we found instances in which Army Guard soldiers' active duty pays
were not stopped at the end of their active duty tour when they were
released from active duty earlier than their units. One Mississippi Army
Guard soldier was paid $9,400 in active duty pay during the 3 months
following an early discharge for drug-related offenses.

We also found a lack of specific procedures to ensure timely processing of
active duty medical extensions for injured Army Guard soldiers. Even
though Army regulations provide that Army Guard soldiers with active duty
medical extension status are entitled to continue to receive active duty
pays, allowances, and medical benefits, we found that four soldiers from
the Virginia 20th Special Forces, B Company, 3rd Battalion in that status
experienced significant pay problems and related problems in obtaining
needed medical services to treat injuries or illnesses incurred while on
active duty in part as a result of a lack of clearly defined implementing
procedures in this area.

Individual Case Illustration: Unclear Regulations for Active Duty Medical
Extension

Four soldiers who were injured while mobilized in Afghanistan for
Operation Enduring Freedom told us that customer service was poor and no
one was really looking after their interest or even cared about them.
These problems resulted in numerous personal and financial difficulties
for these soldiers.

.	"Not having this resolved means that my family has had to make greater
sacrifices and it leaves them in an unstable environment. This has caused
great stress on my family that may lead to divorce."

.	"My orders ran out while awaiting surgery and the care center tried to
deny me care. My savings account was reduced to nearly 0 because I was
also not getting paid while I waited. I called the Inspector General at
Walter Reed and my congressman. My orders were finally cut. In the end, I
was discharged 2 weeks before my care should have been completed because
the second amendment to my orders never came and I couldn't afford to wait
for them before I went back to work. The whole mess was blamed on the
`state' and nothing was ever done to fix it."

.	One sergeant was required to stay at Womack, the medical facility at
Fort Bragg, North Carolina, while on medical extension. His home was in
New Jersey. He had not been home for about 20 months, since his call to
active duty. While he was recovering from his injuries, his wife was
experiencing a high-risk pregnancy and depended upon her husband's medical
coverage, which was available while he remained in active duty status.
Even though she lived in New Jersey, she scheduled her medical
appointments near Fort Bragg to be with her husband. The sergeant
submitted multiple requests to extend his active duty medical extension
status because the paperwork kept getting lost. Lapses in obtaining
approvals for continued active duty medical extension status caused the
sergeant's military medical benefits and his active duty pay to be stopped
several times. He told us that because of gaps in his medical extension
orders, he was denied medical coverage, resulting in three delays in
scheduling a surgery. He also told us he received medical bills associated
with his wife's hospitalization for the delivery of their premature baby
as a result of these gaps in coverage.

Organizational Responsibilities Not Clear

We also found that existing policies and procedures were vague with
respect to organizational responsibilities. Confusion centered principally
on the lack of clear guidance with respect to responsibility and
accountability for Army Guard personnel as they move from state control to
federal control and back again. To be effective, current processes rely on
close coordination and communication between state (Army Guard unit and
state-level command organizations) and federal (active Army finance
locations at mobilization/demobilization stations and at area servicing
finance offices) organizations. However, we found a significant number of
instances in which critical coordination requirements were not clearly
defined. For example, at one of our case study locations, we found that,
in

part because of confusion over responsibility for starting location-based
pays, a soldier was required to carry out a dangerous multiday mission to
fix these pays.

Individual Case Illustration: Difficulty in Starting In-Theatre Pays

A sergeant with the West Virginia National Guard Special Forces unit was
stationed in Uzbekistan with the rest of his unit, which was experiencing
numerous pay problems. The sergeant told us that the local finance office
in Uzbekistan did not have the systems up and ready, nor available
personnel who were familiar with DJMS-RC. According to the sergeant, the
active Army finance personnel were only taking care of the active Army
soldiers' pay issues. When pay technicians at the West Virginia USPFO
attempted to help take care of some of the West Virginia National Guard
soldiers' pay problems, they were told by personnel at DFAS-Indianapolis
not to get involved because the active Army finance offices had primary
responsibility for correcting the unit's pay issues.

Eventually, the sergeant was ordered to travel to the finance office at
Camp Doha, Kuwait, to get its assistance in fixing the pay problems. As
illustrated in the following map. This trip, during which a soldier had to
set aside his in-theatre duties to attempt to resolve Army Guard pay
issues, proved to be not only a major inconvenience to the sergeant, but
was also life-threatening. At Camp Doha (an established finance office), a
reserve pay finance unit was sent from the United States to deal with the
reserve component soldiers' pay issues. The sergeant left Uzbekistan for
the 4-day trip to Kuwait. He first flew from Uzbekistan to Oman in a C-130
ambulatory aircraft (carrying wounded soldiers). From Oman, he flew to
Masirah Island. From Masirah Island he flew to Kuwait International
Airport, and from the airport he had a 45-minute drive to Camp Doha. The
total travel time was 16 hours. The sergeant delivered a box of supporting
documents used to input data into the system. He worked with the finance
office personnel at Camp Doha to enter the pertinent data on each member
of his battalion into DJMS-RC. After 2 days working at Camp Doha, the
sergeant returned to the Kuwait International Airport, flew to Camp Snoopy
in Qatar, and from there to Oman. On his flight between Oman and
Uzbekistan, the sergeant's plane took enemy fire and was forced to return
to Oman. No injuries were reported. The next day, he left Oman and
returned safely to Uzbekistan.

Source: GAO.

Guidance Outdated	We found several instances in which existing DOD and
Army regulations and guidance in the pay and allowance area were outdated
and conflict with more current legislation and DOD regulations. Some
existing guidance reflected pay policies and procedures dating back to
Operations Desert Shield and Desert Storm in 1991. While we were able to
associate

pay problems with only one of these outdated requirements, there is a risk
that they may also have caused as yet unidentified pay problems. Further,
having out-of-date requirements in current regulations may contribute to
confusion and customer service issues.

Human Capital Issues 	With respect to human capital, we found weaknesses
including (1) insufficient resources allocated to pay processing, (2)
inadequate training related to existing policies and procedures, and (3)
poor customer service. The lack of sufficient numbers of well-trained,
competent military pay professionals can undermine the effectiveness of
even a world-class integrated pay and personnel system. A sufficient
number of well-trained military pay staff is particularly crucial given
the extensive, cumbersome, and labor-intensive process requirements that
have evolved to support active duty pay to Army Guard soldiers. GAO's
Standards for Internal Control in the Federal Government state that
management should take steps to ensure that its organization has the
appropriate number of employees, and that appropriate human capital
practices, including hiring, training, and retention, are in place and
effectively operating.

Insufficient Numbers of Military Our audit identified a lack of
knowledgeable personnel dedicated to

                            Pay Processing Personnel

entering and processing active duty pays and allowances to mobilized Army
Guard soldiers. As discussed previously, both active Army and Army Guard
military pay personnel play key roles in this area. Army Guard operating
procedures provide that the primary responsibility for administering
mobilized Army Guard soldiers' pay rests with the 54 USPFOs. These USPFOs
are responsible for processing pay for drilling reservists along with the
additional surge of processing required for initiating active duty pays
for mobilized soldiers.

Our audit work identified concerns with USPFO military pay sections
operating at less than authorized staffing levels and recruiting and
retention challenges due to the positions being at a lower pay grade
level. In addition, few of the military pay technicians on board at the
six locations we audited had received formal training on pay eligibility
and pay processing requirements for mobilized Army Guard personnel.

Although the Army and DFAS have established an agreement that in part
seeks to ensure that resources are available to provide appropriately
skilled pay personnel at mobilization stations to support surge
processing, no such contingency staffing plan exists for the USPFOs. As
discussed previously, pay problems at the case study units were caused in
part by

USPFO military pay sections attempting to process large numbers of pay
transactions without sufficient numbers of knowledgeable personnel.

Lacking sufficient numbers of personnel undermines the ability of the
USPFO pay functions to carry out established control procedures. For
example, our audits at the six case study units showed that, for the most
part, proposed pay transactions were not independently reviewed as
required by DJMS-RC operating procedures before they were submitted for
processing. USPFO officials told us that because of the limited number of
available pay technicians, this requirement was often not followed. For
example, one Chief of Payroll told us that because they were understaffed,
the current staff worked 12 to 14 hours a day and still had backlogs of
pay start transactions to be processed.

Training on Pay Entitlements and We identified instances in which the
personnel at military pay offices at

Processing Requirements Critical 	both the USPFOs and the active Army
finance offices did not appear to be knowledgeable about the various
aspects of the extensive pay eligibility or payroll processing
requirements. There are no DOD or Army requirements for military pay
personnel to receive training on pay entitlements and processing
requirements associated with mobilized Army Guard soldiers or for
monitoring the extent to which personnel have taken either of the recently
established training courses in the area. Such training is critical given
that military pay personnel must be knowledgeable with respect to the
existing extensive and complex pay eligibility and processing
requirements. We also found that such training is particularly important
for active Army pay personnel who may lack knowledge in the unique
procedures and pay transaction entry requirements to pay Army Guard
soldiers. As a result, we identified numerous instances in which military
pay technicians at both the USPFOs and active Army finance office
locations made data coding errors when entering transaction codes into the
pay systems. Correcting these erroneous transactions required additional
labor-intensive research and data entry by other more skilled pay
technicians.

While the Army Guard began offering training for their military pay
technicians in fiscal year 2002, we found that there was no overall
monitoring of training the Army Guard pay personnel had taken and no
requirement for USPFO pay technicians to attend these training courses. At
several of the case study locations we audited, we found that Army Guard
pay technicians relied primarily on on-the-job-training and phone calls to
the Army Guard Financial Services Center in Indianapolis or to

other military pay technicians at other locations to determine how to
process active duty pays.

In addition, unit commanders have significant responsibilities for
establishing and maintaining the accuracy of soldiers' pay records. U.S.
Army Forces Command Regulation 500-3-3, Reserve Component Unit Commander's
Handbook (July 15, 1999), requires unit commanders to (1) annually review
and update pay records for all soldiers under their command as part of an
annual soldier readiness review and (2) obtain and submit supporting
documentation needed to start entitled active duty pay and allowances
based on mobilization orders. However, we saw little evidence that
commanders for our case study units carried out these requirements. We
were told that this was primarily because unit commanders have many
administrative duties and without additional training on the importance of
these actions, they may not receive sufficient priority attention.

The lack of unit commander training on the importance of these
requirements may have contributed to pay problems we identified at our
case study units. For example, at our Virginia case study location, we
found that when the unit was first mobilized, USPFO pay personnel were
required to spend considerable time and effort to correct hundreds of
errors in the unit's pay records dating back to 1996. Such errors could
have been identified and corrected during the preceding years' readiness
reviews. Further, we observed many cases in which active duty pays were
not started until more than 30 days after the entitled start date because
soldiers did not submit the paperwork necessary to start these pays.

Customer Service Concerns 	We found indications that many Army Guard
soldiers were displeased with the customer service they received. None of
the DOD, Army, or Army Guard policies and procedures we examined addressed
the level or quality of customer service that mobilized Army Guard
soldiers should receive concerning questions or problems with their active
duty pays. We found that not all Army Guard soldiers and their families
were informed at the beginning of their mobilization of the pays and
allowances they should receive while on active duty. This information is
critical to enable soldiers to determine if they were not receiving such
pays and therefore require customer service. We also found that the
documentation provided to Army Guard soldiers-primarily in the form of
leave and earnings statements- concerning the pays and allowances they
received did not facilitate customer service.

Consistent with the confusion we found among Army Guard and active Army
finance components concerning responsibility for processing pay
transactions for mobilized Army Guard soldiers, we found indications that
the soldiers themselves were similarly confused. Many of the complaints we
identified concerned confusion over whether mobilized Army Guard personnel
should be serviced by the USPFO because they were Army Guard soldiers or
by the active Army because they were mobilized to federal service.

Individual Case Illustration: Poor Customer Service

One soldier told us that he submitted documentation on three separate
occasions to support the housing allowance he should have received as of
the beginning of his October 2001 mobilization. Each time he was told to
resubmit the documentation because his previously submitted documents were
lost. Subsequently, while he was deployed, he made additional repeated
inquiries as to when he would receive his housing allowance pay. He was
told that it would be taken care of when he returned from his deployment.
However, when he returned from his deployment, he was told that he should
have taken care of this issue while he was deployed and that it was now
too late to receive this allowance.

Data collected from Army Guard units mobilized to active duty indicated
that some members of the units had concerns with the pay support customer
service they received associated with their mobilization- particularly
with respect to pay issues associated with their demobilization.
Specifically, of the 43 soldiers responding to our question on
satisfaction with customer support at mobilization, 10 indicated
satisfaction, while 15 reported dissatisfaction.4 Similarly, of the 45
soldiers responding to our question on customer support following
demobilization, 5 indicated satisfaction while 29 indicated
dissatisfaction.5 Of the soldiers who provided written comments about
customer service, none provided any positive comments about the customer
service they received, and several had negative comments about the
customer service they received, including such comments as "non-existent,"
"hostile," or "poor." A company commander for one of our case study units
characterized the customer service his unit received at initial
mobilization as time-consuming and frustrating.

4 The remaining 18 respondents indicated they were either as satisfied as
not or had no basis to judge.

5 The 11 remaining respondents were either as satisfied as not or had no
basis to judge.

In addition, procedures used to notify soldiers of large payroll-related
debts did not facilitate customer service. Under current procedures, if a
soldier is determined to owe the government money while on active duty, he
is assessed a debt and informed of this assessment with a notation for an
"Unpaid Debt Balance" in the remarks section of his leave and earnings
statement. One such assessment showing a $39,489.28 debt is shown in
figure 1.

     Figure 1: Sample Leave and Earnings Statement with Large Debt Balance

                Source: Individual Leave and Earnings Statement.

Systems Problems 	Several systems issues were significant factors impeding
accurate and timely payroll payments to mobilized Army Guard soldiers,
including

o 	the lack of an integrated or effectively interfaced pay system with
both the personnel and order-writing systems;

o  limitations in DJMS-RC processing capabilities; and

o  ineffective system edits for large payments and debts.

Our systems findings were consistent with issues raised by DOD in its June
2002 report6 to the Congress on its efforts to implement an integrated
military pay and personnel system. Specifically, DOD's report acknowledged
that major deficiencies with the delivery of military personnel and pay
services were the direct result of the inability of a myriad of current
systems with multiple, complex interfaces to fully support current
business process requirements. DOD has a significant system enhancement
project underway, but it is likely that the department will operate with
many of its existing system constraints for a number of years.

Figure 2 provides an overview of the five systems currently involved in
processing Army Guard pay and personnel information.

6U.S. Department of Defense, Report to Congress: Defense Integrated
Military Human Resource System (Personnel and Pay), (Washington, D.C. June
2002).

Figure 2: Overview of Army Guard Pay and Personnel Systems

Lack of Integrated Systems	The five key DOD systems (see fig. 4) involved
in authorizing, entering, processing, and paying mobilized Army Guard
soldiers were not integrated. Lacking either an integrated or effectively
interfaced set of personnel and pay systems, DOD must rely on manual entry
of data from the same source documents into multiple systems. This
error-prone, labor-intensive manual data entry caused various pay
problems-particularly late payments.

In our case studies, we found instances in which mobilization order data
that were entered into SIDPERS were either not entered into DJMS-RC for
several months after the personnel action or were entered inconsistently.
Consequently, these soldiers either received active duty pays they were
not entitled to receive-some for several months-or did not timely receive
active duty pays to which they were entitled.

Individual Case Illustration: Overpayment due to Lack of Integrated Pay
and Personnel Systems

A soldier with the Mississippi Army National Guard was mobilized in
January 2002 with his unit and traveled to the mobilization station at
Fort Campbell. The unit stayed at Fort Campbell to perform post security
duties until June 2002. On June 14, 2002, the E-4 specialist received a
"general" discharge order from the personnel office at Fort Campbell for a
drug-related offense. However, he continued to receive active duty pay,
totaling approximately $9,400, until September 2002. Although the
discharge information was promptly entered into the soldier's personnel
records, it was not entered into the pay system for almost 4 months. This
problem was caused by weaknesses in the processes designed to work around
the lack of integrated pay and personnel systems. Further, the problem was
not detected because reconciliations of pay and personnel data were not
performed timely. Specifically, it was not until over 3 months after the
soldier's discharge, through its September 2002 end-of-month
reconciliation, that the Mississippi Army National Guard USPFO identified
the overpayment and took action on October 2, 2002, to stop the
individual's pay. However, collection efforts on the $9,400 overpayment
did not begin until July 2003, when we pointed out this situation to USPFO
officials.

A soldier with the Mississippi Army National Guard was mobilized in
January 2002 with his unit and traveled to the mobilization station at Ft.
Campbell. The unit stayed at Ft. Campbell to perform post security duties
until June 2002. On June 14, 2002, the E-4 specialist received a "general"
discharge order from the personnel office at Ft. Campbell for a
drug-related offense. However, he continued to receive active duty pay,
totaling approximately $9,400, until September 2002. Although the
discharge information was promptly entered into the soldier's personnel
records, it was not entered into the pay system for almost 4 months. This
problem was caused by weaknesses in the processes designed to work around
the lack of integrated pay and personnel systems. Further, the problem was
not detected because reconciliations of pay and personnel data were not
performed timely. Specifically, it was not until over 3 months after the
soldier's discharge, through its September 2002 end-of-month
reconciliation, that the Mississippi Army National Guard USPFO identified
the overpayment and took action on October 2, 2002, to stop the
individual's pay. However, collection efforts on the $9,400 overpayment
did not begin until July 2003, when we pointed out this situation to USPFO
officials.

Pay System Has Limited Active Duty Pay Processing Capabilities

DOD has acknowledged that DJMS-RC was not designed to process payroll
payments to mobilized Army Guard soldiers for extended periods of active
duty. Consequently, it is not surprising that we found a number of
"workarounds"-procedures intended to compensate for existing DJMS-RC
processing limitations with respect to Army Guard active duty pays. Such
manual workarounds are inefficient and create additional laborintensive,
error-prone transaction processing.

Because of limited DJMS-RC processing capabilities, the Army Guard USPFO
and in-theatre active Army area servicing finance office pay technicians
are required to manually enter transactions for nonautomated pay and
allowances every month. DJMS-RC was originally designed to process payroll
payments to Army Reserve and Army Guard personnel on weekend drills, or on
short periods of annual active duty (periods of less than 30 days in
duration) or for training. With Army Guard personnel now being paid from
DJMS-RC for extended periods of active duty (as long as 2 years at a
time), DFAS officials told us that the COBOL/mainframe-based system was
now being stretched to the limits of its functionality. In several of the
case study units we audited, we found a number of instances in which
soldiers were underpaid their entitled pays that must be entered each
month manually (such as foreign language proficiency, special duty
assignment, or hardship duty pays) because pay technicians did not enter
the monthly manual transaction input required to initiate those pays every
month.

In addition, we found a significant number of soldiers were overpaid when
they were demobilized from active duty before the stop date specified in
their original mobilization orders. This occurred because pay technicians
did not update the stop date in DJMS-RC necessary to terminate the
automated active duty pays when soldiers leave active duty early. For
example, the military finance office in Kuwait, responsible for paying
Virginia 20th Special Forces soldiers in the fall of 2002, did not stop
hostile fire and hardship duty pays as required when these soldiers left
Afghanistan in October 2002. We found that 55 of 64 soldiers eligible for
hostile fire pay were overpaid for at least 1 month beyond their departure
from Afghanistan.

Further, these month-to-month pays and allowances were not separately
itemized on the soldiers' leave and earnings statements in a user-friendly
format. Instead, many of these pays appeared as lump sum payments under
"other credits." In many cases these "other credit" pay and allowances
appeared with little explanation. As a result, we found

indications that Army Guard soldiers had difficulty using the leave and
earnings statements to determine if they received all entitled active duty
pays and allowances. Without such basic customer service, the soldiers
cannot readily determine whether they received all entitled active duty
pays and allowances.

As shown in the example leave and earnings statement extract included in
figure 3, an Army Guard soldier who received a series of corrections to
special duty assignment pay along with their current special duty
assignment payment of $110 is likely to have difficulty discerning whether
he or she received all and only entitled active duty pays and allowances.

            Figure 3: Sample Army Guard Leave and Earnings Statement

                Source: Individual Leave and Earnings Statement.

In yet another example, one sergeant, apparently having difficulty
deciphering his leave and earnings statement, wrote a letter to a fellow
service member asking, "Are they really fixing pay issues or are they
putting them off till we return? If they are waiting, then what happens to
those who (god forbid) don't make it back?" This sergeant was killed in
action in Afghanistan on April 15, 2002, before he knew if his pay
problems were resolved.

System Edits Do Not Prevent While DJMS-RC has several effective edits to
prevent certain

Large Payments or Debts	overpayments, it lacks effective edits to reject
large proposed net pays over $4,000 at midmonth and over $7,000 at end of
month before their final processing. We found several instances in our
case studies where soldiers received large lump sum payments, possibly
related to previous underpayments or other pay errors, with no
explanation. Further, the lack of preventive controls over large payments
poses an increased risk of fraudulent payments.

Similarly, DJMS-RC does not have system edits to prevent large debts from
being assessed without review and approval prior to being processed and
does not require the leave and earnings statement to include an
explanation of pay-related debt assessments. Such was the case for the
following Army Guard soldier

Individual Case Illustration: System Edits Do Not Prevent Large Payments
and Debts

A sergeant with the Colorado Army National Guard, Special Forces,
encountered numerous severe pay problems associated with his mobilization
to active duty, including his deployment to Afghanistan in support of
Operation Enduring Freedom. The sergeant's active duty pay and other pay
and allowances should have been stopped on December 4, 2002, when he was
released from active duty. However, because the sergeant's mobilization
orders called him to active duty for 730 days and not the 365 days that he
was actually mobilized, and the Army area servicing finance office at the
demobilization station, Fort Campbell, did not enter the release from
active duty date into DJMS-RC, the sergeant continued to improperly
receive payments, as if he were still on active duty, for 2 and a half
months after he was released from active duty totaling over $8,000. The
sergeant was one of 34 soldiers in the company whose pay continued after
their release from active duty. In an attempt to stop the erroneous
payments, in February 2003, pay personnel at the Colorado USPFO created a
transaction to cancel the tour instead of processing an adjustment to
amend the stop date consistent with the date on the Release from Active
Duty Order. When this occurred, DJMS-RC automatically processed a reversal
of 11 months of the sergeant's pay and allowances that he earned while
mobilized from March 1, 2002, through February 4, 2003, which created a
debt in the amount of $39,699 on the soldier's pay record; however, the
reversal should have only been from December 5, 2002, through February 4,
2003. In April 2003, at our request, DFAS-Indianapolis personnel
intervened in an attempt to correct the large debt and to determine the
actual amount the sergeant owed. In May 2003, DFAS-Indianapolis
erroneously processed a payment transaction instead of a debt correction
transaction in DJMS-RC. This created a payment of $20,111, which was
electronically deposited to the sergeant's bank account without
explanation, while a debt of $30,454 still appeared on his Leave and
Earnings Statement. About 9 months after his demobilization, the
sergeant's unpaid debt balance was reportedly $26,559, but the actual
amount of his debt had not yet been determined as of September 2003.

DOD has a system enhancement project underway for which one of the major
expected benefits is the improvement of military pay accuracy and
timeliness. However, the effort to replace over 80 legacy personnel, pay,
training, and manpower systems (including DJMS-RC) has been underway for
over 5 years and DOD has encountered challenges fielding the system. In
the nearer term, the department reported that it expected to field a
system to replace the current DFAS system used to process pays to
mobilized Army Guard soldiers by March 2005. However, given that the pay
system is only one of several non-integrated systems the department
currently relies on to authorize and pay mobilized Army Guard soldiers, it
is likely that the department will continue to operate with many of the
existing system constraints for at least several more years.

Actions to Improve Accuracy and Timeliness of Army Guard Pay

While it is likely that DOD will be required to rely on existing systems
for a number of years, a complete and lasting solution to the pay problems
we identified will only be achieved through a complete reengineering, not
only of the automated systems, but also of the supporting processes and
human capital practices in this area. However, our related report
(GAO-04-89) detailed immediate actions that can be taken in these areas to
improve the timeliness and accuracy of pay and allowance payments to
activated Army Guard soldiers. The need for such actions is increasingly
imperative in light of the current extended deployment of Army Guard
soldiers in their crucial role in Operation Iraqi Freedom and anticipated
additional mobilizations in support of this operation. To help ensure that
the Army Guard can continue to successfully fulfill its vital role in our
national defense, immediate steps are needed to at least mitigate the most
serious problems we identified.

Accordingly, we made the following short-term recommendations to the
Secretary of Defense to address the issues we identified with respect to
the existing processes, human capital, and automated systems relied on to
pay activated Army Guard personnel.

Process  o 	Establish a unified set of policies and procedures for all
Army Guard, Army, and DFAS personnel to follow for ensuring active duty
pays for Army Guard personnel mobilized to active duty.

o 	Establish performance measures for obtaining supporting documentation
and processing pay transactions (for example, no more than 5 days would
seem reasonable).

o 	Establish who is accountable for stopping active duty pays for soldiers
who return home earlier than their units.

o 	Clarify the policies and procedures for how to properly amend active
duty orders, including medical extensions.

o 	Require Army Guard commands and unit commanders to carry out complete
monthly pay and personnel records reconciliations and take necessary
actions to correct any pay and personnel record mismatches found each
month.

o 	Update policies and procedures to reflect current legal and DOD
administrative requirements with respect to active duty pays and
allowances and transaction processing requirements for mobilized Army
Guard soldiers.

Human Capital  o 	Consider expanding the scope of the existing memorandum
of understanding between DFAS and the Army concerning the provision of
resources to support surge processing at mobilization and demobilization
sites to include providing additional resources to support surge
processing for pay start and stop transaction requirements at Army Guard
home stations during initial soldier readiness programs.

o 	Determine whether issues concerning resource allocations for the
military pay operations identified at our case study units exist at all 54
USPFOs, and if so, take appropriate actions to address these issues.

o 	Determine whether issues concerning relatively low-graded military pay
technicians identified at our case study units exist at all 54 USPFOs, and
if so, take appropriate actions to address these issues.

o 	Modify existing training policies and procedures to require all USPFO
and active Army pay and finance personnel responsible for entering pay
transactions for mobilized Army Guard soldiers to receive appropriate
training upon assuming such duties.

o 	Require unit commanders to receive training on the importance of
adhering to requirements to conduct annual pay support documentation
reviews and carry out monthly reconciliations.

o 	Establish an ongoing mechanism to monitor the quality and completion of
training for both pay and finance personnel and unit commanders.

o 	Identify and evaluate options for improving customer service provided
to mobilized Army Guard soldiers by providing improved procedures for
informing soldiers of their pay and allowance entitlements throughout
their active duty mobilizations.

o 	Identify and evaluate options for improving customer service provided
to mobilized Army Guard soldiers to ensure a single, well-advertised

source for soldiers and their families to access for customer service for
any pay problems.

o 	Review the pay problems we identified at our six case study units to
identify and resolve any outstanding pay issues for the affected soldiers.

Systems  o 	Evaluate the feasibility of using the personnel-to-pay
interface as a means to proactively alert pay personnel of actions needed
to start entitled active duty pays and allowances.

o 	Evaluate the feasibility of automating some or all of the current
manual monthly pays, including special duty assignment pay, foreign
language proficiency pay, hardship duty pay, and HALO pay.

o 	Evaluate the feasibility of eliminating the use of the "other credits"
for processing hardship duty (designated areas), HALO pay, and special
duty assignment pay, and instead establish a separate component of pay for
each type of pay.

o 	Evaluate the feasibility of using the JUSTIS warning screen to help
eliminate inadvertent omissions of required monthly manual pay inputs.

o 	Evaluate the feasibility of redesigning Leave and Earnings Statements
to provide soldiers with a clear explanation of all pay and allowances
received so that they can readily determine if they received all and only
entitled pays.

o 	Evaluate the feasibility of establishing an edit check and requiring
approval before processing any debt assessments above a specified dollar
amount.

o 	Evaluate the feasibility of establishing an edit check and requiring
approval before processing any payments above a specified dollar amount.

With regard to a complete and lasting solution to the pay problems we
identified, our related report included the following long-term
recommendations

o 	As part of the effort currently under way to reform DOD's pay and
personnel systems-referred to as DIMHRS-incorporate a complete

understanding of the Army Guard pay problems as documented in this report
into the requirements development for this system.

o 	In developing DIMHRS, consider a complete reengineering of the
processes and controls and ensure that this reengineering effort deals not
only with the systems aspect of the problems we identified, but also with
the human capital and process aspects.

Concluding Comments	The extensive problems we identified at the case study
units vividly demonstrate that the controls currently relied on to pay
mobilized Army Guard personnel are not working and cannot provide
reasonable assurance that such pays are accurate or timely. The personal
toll that these pay problems have had on mobilized soldiers and their
families cannot be readily measured, but at least with two of our case
study units there are already indications that these pay problems have
begun to have an adverse effect on reenlistment and retention. It is not
surprising that cumbersome and complex processes and ineffective human
capital strategies, combined with the use of a system that was not
designed to handle the intricacies of active duty pay and allowances,
would result in significant pay problems. To its credit, DOD concurred
with the recommendations included in our companion report and outlined
some actions already taken, others that are underway, and further planned
actions with respect to our recommendations.

We did not assess the completeness and adequacy of DOD's actions directed
at improving controls over pays to mobilized Army Guard soldiers. However,
pays to mobilized Army Reserve soldiers rely on many of the same processes
and automated systems used to pay mobilized Army Guard soldiers. At your
request, we will be reviewing the pay experiences of mobilized Army
Reserve soldiers, and we will be assessing the effectiveness of any
relevant DOD actions taken as part of that review.

Finally, I commend the Chairman and Vice Chairman for holding an oversight
hearing on this important issue. Your Committee's continuing interest and
diligence in overseeing efforts to effectively and efficiently support our
Army Guard and Reserve forces will be essential in bringing about
comprehensive and lasting improvements to many decades-old, entrenched
problems. For example, in addition to our ongoing review of the pay
experiences of mobilized Army Reserve soldiers, we now have related
engagements ongoing that you requested concerning

o 	controls over pays and related medical benefits for mobilized Army
Guard soldiers who elect to have their active duty tours extended to
address injuries or illnesses incurred while on active duty,

o  controls over travel reimbursements to mobilized Army Guard soldiers,

o  utilization of Army Guard forces since September 11, 2001, and

o 	the impact of deployments on DOD's ability to carry out homeland
security missions.

We are committed to continuing to work with you and DOD to identify and
monitor actions needed to bring about comprehensive and lasting solutions
to long-standing problems in its business and financial management
operations.

Mr. Chairman, this concludes my statement. I would be pleased to answer
any questions you or other members of the Committee may have at this time.

Contacts and Acknowledgments

(192113)

For further information about this testimony, please contact Gregory D.
Kutz at (202) 512-9095 or [email protected]. Individuals making key
contributions to this testimony include Paul S. Begnaud, Amy C. Chang,
Mary Ellen Chervenic, Francine M. DelVecchio, Dennis B. Fauber, Geoffrey
B. Frank, Jennifer L. Hall, Charles R. Hodge, Julia C. Matta, Jonathan T.
Meyer, Sheila D. Miller, and John J. Ryan, Patrick S. Tobo.

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