    Military Pay: Army National Guard Personnel Mobilized to Active
    Duty Experienced Significant Pay Problems (13-NOV-03, GAO-04-89).

    In light of the recent mobilizations associated with the war on
    terrorism and homeland security, GAO was asked to determine if
    controls used to pay mobilized Army Guard personnel provided
    assurance that such pays were accurate and timely. GAO's audit
    used a case study approach to focus on controls over three key
    areas: processes, people (human capital), and systems.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-04-89
        ACCNO:   A08855
      TITLE:     Military Pay: Army National Guard Personnel Mobilized to
    Active Duty Experienced Significant Pay Problems
         DATE:   11/13/2003
      SUBJECT:   Erroneous payments
    	     Hazardous military-duty pay
    	     Internal controls
    	     Military compensation
    	     Military pay
    	     Military personnel
    	     Mobilization
    	     Strategic mobility forces
    	     Timeliness

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    GAO-04-89

    Report to the Chairman, Subcommittee
    on National Security, Emerging Threats,
    and International Relations, Committee
    on Government Reform, House of
    Representatives
    November 2003 MILITARY PAY
    Army National Guard
    Personnel Mobilized
    to Active Duty
    Experienced
    Significant Pay
    Problems
    Contents
    Tables
    Figures
    This is a work of the U.S. government and is not subject to copyright protection in the
    United States. It may be reproduced and distributed in its entirety without further
    permission from GAO. However, because this work may contain copyrighted images or
    other material, permission from the copyright holder may be necessary if you wish to
    reproduce this material separately.
    November 13, 2003 Leter
    The Honorable Christopher Shays
    Chairman, Subcommittee on National Security,
    Emerging Threats, and International Relations
    Committee on Government Reform
    House of Representatives
    Dear Mr. Chairman:
    In response to the September 11, 2001, terrorist attacks, the Army National
    Guard (Army Guard) mobilized and deployed soldiers in support of
    Operations Noble Eagle and Enduring Freedom. When mobilized for up to
    2 years at a time, these Army Guard soldiers performed search and destroy
    missions against Taliban and al Qaeda members throughout Asia and
    Africa; fought on the front lines in Afghanistan and Iraq; guarded al Qaeda
    prisoners held at Guantanamo Bay, Cuba; provided security at the
    Pentagon; and are now assisting in peace-keeping operations in Iraq.
    In 1993, we reported1 on millions of dollars of overpayments and other
    problems associated with payroll payments to Army military personnel
    during 1992 as soldiers returned from Operations Desert Shield and Desert
    Storm. A significant factor contributing to the improper payments
    discovered as part of that audit was the large number of Army Guard
    personnel mobilized to active duty and paid from the Army�s active duty
    payroll system. Because many of the current missions, particularly those
    associated with the global war on terrorism, are expected to persist, Army
    Guard personnel are likely to continue to experience additional
    mobilizations. Given the critical roles these mobilized Army Guard soldiers
    play in carrying out vital military missions both in the United States and
    overseas, effective internal controls are needed not only to provide timely
    and accurate pay to these soldiers, but also to prevent any such problems
    from adversely affecting the Army�s ability to retain these valuable
    personnel.
    In light of the recent mobilizations and growing importance of the Army
    Guard in fighting the war on terrorism and providing domestic security, you
    asked us to determine if controls used to pay mobilized Army Guard personnel using the Army�s reserve pay system provided reasonable
    assurance that such payments were accurate and timely.
    Because our preliminary assessment determined that current operations
    used to pay mobilized Army Guard soldiers relied extensively on errorprone
    manual transactions entry into multiple, nonintegrated systems, we
    did not statistically test current processes and controls. Instead, we used a
    case study approach to provide more detailed perspective on the nature of
    pay deficiencies in the three key areas of processes, people (human
    capital), and systems. Specifically, we gathered available data and analyzed
    the pay experiences of Army Guard special forces and military police units
    mobilized to active duty in support of Operations Noble Eagle and
    Enduring Freedom during the period from October 2001 through March
    2003. (See apps. I-VI for detailed summaries of our six case study units.)
    Finally, you asked us to identify any evidence that pay problems were
    continuing with Army Guard personnel in more recently mobilized units
    deployed to support missions in Iraq. We conducted a limited review of the
    initial mobilization and deployment pay records of one unit currently
    participating in that operation.
    We performed our work from November 2002 through September 2003 in
    accordance with generally accepted government auditing standards.
    Further details on our scope and methodology are included in appendix
    VII. We requested comments on a draft of this report from the Secretary of
    Defense or his designee. We received written comments from the Under
    Secretary of Defense (Comptroller), which are reprinted in appendix VIII.
    Results in Brief The existing processes and controls used to provide basic and special
    active duty pays to mobilized Army Guard personnel are so cumbersome
    and complex that 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.
    Weaknesses in the current processes and controls resulted in a substantial
    number of over- and underpayments and late active duty payments2 to
    mobilized Army Guard personnel at our case study units. For example, 450
    of the 481 soldiers from our six case study units had at least one pay
    problem associated with their mobilization. These pay problems severely
    constrain the Army�s and the Department of Defense�s (DOD) ability to
    provide a most basic service to these personnel, many of whom were
    risking their lives in combat. In addition, resulting inaccurate, late, and, or
    missing pays, and associated erroneous debts also had a profound financial
    impact on individual soldiers and their families. Soldiers and their families
    were required to spend considerable time, sometimes while the soldiers
    were deployed in remote, combat environments overseas, continually
    addressing concerns over their pay and allowances.
    One of the primary causes for these pay problems is rooted in the complex,
    cumbersome processes used to pay soldiers from their initial mobilization
    through active duty deployment to demobilization. While not designed as
    such, these pay operations have evolved over time to the point that few, if
    any, in the department fully understand their breadth, scope, and inherent
    weaknesses. Army Guard pay process requirements, particularly in light of
    the potentially hundreds of organizations and estimated thousands of
    personnel involved, were not well understood or consistently applied with respect to determining (1) the actions required to pay mobilized Army
    Guard soldiers timely and accurately, and (2) the components responsible,
    among Army Guard, active Army, and DFAS, for taking the required
    actions. Further, we found several instances in which existing regulations
    were out of date�some of which still reflected practices in place in 1991
    during Operation Desert Storm. As a result, we found numerous errors in
    key pay transactions at our case study locations.
    For example, procedures relating to amending active duty orders were
    problematic. For the Colorado Special Forces unit, we found that actions
    taken by the Army Guard military pay officials in an attempt to amend 34
    soldiers� orders resulted in reversing the active duty pays and allowances
    the soldiers received for 11 of the 12 months they were deployed on active
    duty in Afghanistan. Instead, the system recorded these pays and
    allowances as debts. These 34 soldiers received notice on their Leave and
    Earnings Statements that they owed the government an average of $48,000
    per soldier, for a largely erroneous total debt of $1.6 million. In another
    case, after exhausting all in-theatre processes to initiate pays without
    success, a sergeant with an Army Guard unit stationed in Uzbekistan had to
    make a time-consuming trip to Kuwait and back in order to personally
    deliver pay information from his unit to a finance office that could process
    Army Guard data. The trip proved to be not only a major inconvenience
    but was also life threatening, as the sergeant�s aircraft came under enemy
    fire during the course of his journey.
    With respect to human capital at our case study units, 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. A sufficient number of welltrained
    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. During our work at the
    case study locations we audited, we identified instances in which military
    pay technicians with the Army Guard and active Army finance office
    locations made data coding errors when entering pay transactions into the
    pay systems. We were told that these errors occurred because military pay
    personnel�particularly those at the active Army finance office locations�
    were unfamiliar with the system�s pay processing requirements for active
    duty pays to mobilized Army Guard personnel.
    A related human capital issue�customer support for active duty pay
    issues�was a recurring concern at our six case study locations. 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 be provided for questions or problems with their
    active duty pays. For example, 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 concerning
    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.
    Several systems issues were also a significant factor impeding accurate and
    timely payroll payments to mobilized Army Guard soldiers. The system
    relied on to pay mobilized Army Guard soldiers�the Defense Joint Military
    Pay System-Reserve Component (DJMS-RC)�was originally designed to
    process payroll payments to Army Reserve and Army Guard personnel on
    weekend drills, 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 system is now stretched to the
    limits of its functionality. DFAS has established �workarounds� to
    compensate for the DJMS-RC system constraints. Overall, we found the
    current stove-piped, nonintegrated systems were labor-intensive and
    require extensive error-prone manual data entry and reentry. As a result, it
    was often difficult to ensure that mobilized soldiers received only and all
    the pays and allowances to which they were entitled, as illustrated in
    appendixes I-VI by our six case studies. While DOD has plans to implement
    system improvements in this area, it is likely that the department will be
    required to operate within existing system constraints for at least several
    more years.
    Finally, our limited review of pays to one more recently activated Army
    Guard military police unit deployed to Iraq in April 2003 to provide military
    convoy security and carry out highway patrols 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, we identified
    54 soldiers who were either overpaid, underpaid, 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 input errors related to amended orders, delays and
    errors in coding pay and allowance transactions, and slow or nonexistent
    customer service response.
    We are making a series of recommendations to address the Army Guard
    active duty pay weaknesses we identified in the areas of process, human
    capital, and systems. While DOD should take a number of immediate
    actions to address these problems, we are also recommending that DOD
    ensure that its longer-term reengineering and system improvement efforts
    in this area include complete and lasting solutions to the weaknesses
    identified. In its comments on a draft of this report, DOD agreed with our
    recommendations and outlined its actions to address the deficiencies noted
    in our report.
    Background The Army Guard is the oldest component of any of the uniformed services.
    It traces its roots to the colonial militia, and claims a �birth�of 1636. Today,
    the Army Guard exists in 54 locations that include all 50 states, the District
    of Columbia, and three territories: Guam, the Virgin Islands, and Puerto
    Rico. There are about 2,300 Army Guard units within these locations and
    over 350,000 Army Guard members. During peacetime, Army Guard units
    report to the adjutant generals of their states or territories, or in the case of
    the District of Columbia, to the Commanding General. Each adjutant
    general reports to the governor of the state, or in the case of the District of
    Columbia, the mayor.
    At the state level, the governors have the ability, under the Constitution of
    the United States, to call up members of the Army Guard in times of
    domestic emergency or need. The Army Guard�s state mission is perhaps
    the most visible and well known. Army Guard units battle fires or help
    communities deal with floods, tornadoes, hurricanes, snowstorms, or other
    emergency situations. In times of civil unrest, the citizens of a state rely on
    the Army Guard to respond, if needed. During national emergencies,
    however, the President has the authority to mobilize the Army Guard,
    putting them in federal duty status. While federalized, the units answer to
    the Combatant Commander of the theatre in which they are operating and,
    ultimately, to the President. Even when not federalized, the Army Guard
    has a federal mission to maintain properly trained and equipped units,
    available for prompt mobilization for war, national emergency, or as
    otherwise needed. Nonfederalized Army Guard members� pay and allowances are paid with state funds while federalized Army Guard
    members� pay and allowances are paid with federal funds.
    Typically, Army Guard members enlist for 8 years and are entitled to a
    number of benefits while serving in the Army Guard, including those for
    health care, life insurance, and other state-specific benefits. After their
    enlistment periods, former Army Guard members are entitled to veterans�
    benefits, such as veterans� health care and burial benefits.
    Army Guard members are required to attend one drill weekend each month
    and one annual training period (usually 2 weeks in the summer) each year.
    Initially, all nonprior service personnel are required to attend initial entry
    training, also known as Basic Training. After Basic Training, soldiers go to
    their Advanced Individual Training, which teaches them the special skills
    they will need for their jobs in the Army Guard. This training can usually be
    scheduled to accommodate civilian job or school constraints. The Army
    Guard has armories and training facilities in more than 2,800 communities.
    The Army Guard is a partner with the active Army and the Army Reserves
    in fulfilling the country's military needs. The National Guard Bureau
    (NGB) assists the Army Guard in this partnership. NGB is a joint bureau of
    the Departments of the Army and the Air Force and is charged with
    overseeing the federal functions of the Army Guard and the Air Guard. In
    this capacity, NGB helps the Army Guard and the Air Guard procure
    funding and administer policies. NGB also acts as a liaison between the
    Departments of the Army and Air Force and the states.
    All Army forces are integrated under DOD�s �total force� concept. DOD�s
    total force concept is based on the premise that it is not practically feasible
    to maintain active duty forces sufficient to meet all possible war
    contingencies. Under this concept, DOD�s active and reserve components
    are to be blended into a cohesive total force to meet a given mission. On September 14, 2001, the President declared a national emergency as a
    result of the terrorist attacks on the World Trade Center and the Pentagon
    and the continuing and immediate threat of further attacks on the United
    States. Concurrent with this declaration, the President authorized the
    Secretary of Defense to call troops to active duty pursuant to 10 U.S.C.
    Section 12302. The Secretary of Defense delegated to the Secretary of the
    Army the authority to order Army Guard soldiers to active duty as part of
    the overall mobilization effort. Approximately 93,000 Army Guard soldiers
    were activated as of March 2003. At that time, Army Guard soldiers
    accounted for 34 percent of the total reserve components3 mobilized in
    response to the terrorist attacks on September 11, 2001.
    The active duty federal missions established in response to the September
    2001 national emergency were categorized into two operations: Operation
    Enduring Freedom and Operation Noble Eagle. In general, missions to
    fight terrorism outside the United States were categorized under Operation
    Enduring Freedom, while missions to provide domestic defense were
    categorized as Operation Noble Eagle. For example, Army Guard soldiers
    participated in direct combat in Afghanistan under Operation Enduring
    Freedom. U.S. homeland security missions, such as guarding the Pentagon,
    airports, nuclear power plants, domestic water supplies, bridges, tunnels,
    and other military assets were conducted under Operation Noble Eagle.
    The Army Guard also supported federal peacekeeping operations in
    Southwest Asia with Operation Desert Spring and in Kosovo with
    Operation Joint Guardian under various other military operations.
    While on active duty, all Army Guard soldiers earn various statutorily
    authorized pays and allowances. The types of pay and allowances Army
    Guard soldiers are eligible to receive vary depending upon rank and length
    of service, dependency status, skills and certifications acquired, duty
    location, and the difficulty of the assignment. While Army Guard soldiers
    mobilized to active duty may be entitled to receive additional pays and
    allowances, we focused on 14 basic types of pays and allowances
    applicable to the Army Guard units we selected for case studies. As shown
    in table 1, we categorized these 14 pay and allowance types into two
    groups: (1) pays, including basic pay, special duty assignment pay,
    parachute jumping and foreign language proficiency skill-based pays, and
    location-based hostile fire and hardship duty pays and (2) allowances,
    including allowances for housing, subsistence, family separation, and cost
    of living for the continental United States.4
    Table
    1: Basic Pays and Allowances Associated with Case Study Units
    Pays Description Dollar amount
    Basic pay Salary Varies depending on rank and
    years of service
    Hazardous duty pay -
    jump pay
    Pay for parachute jumping $150 per month
    Hazardous duty pay �
    jump pay - high altitude
    low opening pay
    Pay for parachute jumping at
    high altitude without use of a
    static line
    $225 per month
    Special duty assignment
    pay
    Pay to enlisted soldiers
    performing duties that are
    particularly difficult or
    requiring an unusual degree
    of responsibility
    Varies from $55 to $375 per
    month
    Foreign language
    proficiency pay
    Pay for specialized foreign
    language skills
    Varies depending on
    proficiency but may not
    exceed $300 per month
    Diving duty pay Pay for diving duty or the
    requirement to maintain
    proficiency as a diver
    Varies according to service
    branch and proficiency but
    may not exceed $240 per
    month for officers and $340
    per month for enlisted
    members
    Hardship duty location
    pay for designated areas
    Pay when assigned to duty in
    specified locations
    $50, $100, or $150 per month
    (depending on duty location)
    Hardship duty location
    pay for certain places
    (phase out began on
    January 1, 2002)
    Pay to enlisted soldiers when
    assigned to duty in specified
    locations
    Varies from $8 to $22.50 per
    month depending on rank
    Hostile fire/imminent
    danger pay
    Full pay for any portion of
    month assigned to a location
    subject to or in close proximity
    to hostile fire or assigned to
    duty in a designated imminent
    danger location
    $150 per month through
    September 30, 2002; $225
    per month effective October
    1, 2002 though September
    30, 2003
    Allowances
    Basic allowance for
    housing
    Meant to offset the cost of
    housing when member does
    not receive governmentprovided
    housing
    Varies depending on location,
    rank, and whether member
    has dependents
    Cost of living allowance in
    the continental United
    States
    Meant to provide
    compensation for variations in
    costs (other than housing) in
    the continental United States
    Varies depending on location,
    rank, years of service, and
    whether member has
    dependents
    Basic allowance for
    subsistence
    Meant to offset costs for a
    member�s meals
    Varies depending on whether
    member is officer or enlisted
    Family separation
    allowance I
    Meant to offset added housing
    expenses resulting from
    forced separation from
    dependents
    Equivalent to monthly basic
    allowance for housing for
    member of same rank without
    dependents
    Family separation
    �allowance II
    Meant to offset certain
    expenses resulting from
    forced separation from
    dependents
    $100 per month from January
    1, 1998, through September
    30, 2002; $250 per month
    effective October 1, 2002,
    through September 30, 2003
    Source: GAO analysis.
    In addition, Army Guard soldiers may be eligible for tax advantages
    associated with their mobilization to active duty. That is, mobilized Army
    Guard soldiers assigned to or working in a combat zone are entitled to exclude from taxable income certain military pay that would otherwise be
    taxable.5
    As shown in figure 1, there are three key phases associated with starting
    and stopping relevant pays and allowances for mobilized Army Guard
    soldiers: (1) initial mobilization (primarily through the Soldier Readiness
    Processing), (2) deployment, which includes carrying out assigned mission
    operations while on active duty, and (3) demobilization.
    Figure
    1: Three Key Phases for Active Duty Pays to Army Guard Soldiers
    Mobilization Deployed Demobilization
    � Pays soldiers
    � Issues Leave and Earnings Statements
    and wage garnishments
    Performs
    active duty
    mission
    Leaves
    active army
    duty station
    Return to
    Army Guard
    home station
    Receive Release
    from Active
    Duty Orders
    Arrives at
    active Army
    duty station
    Arrives at
    active Army
    demobilization
    station
    DFAS
    Source: GAO.
    Receive Mobilization
    Orders and review
    pay records as part
    of Soldier Readiness
    Processing (SRP) at
    Army Guard home
    station
    2nd pay record
    review done as part
    of SRP at active
    Army mobilization
    station
    Army Guard units and state-level command support components, as well as
    active Army finance components and DFAS, have key roles in this process.
    In addition, there are five key computer systems involved in authorizing, entering, and processing active duty pays to mobilized Army Guard soldiers
    through the three key phases of their mobilization:
    � Army�s standard order writing system, Automated Fund Control Order
    System (AFCOS);
    � Army Guard�s personnel system, Standard Installation Division
    Personnel Reporting System (SIDPERS);
    � Army Guard�s pay input system, JUMPS Standard Terminal Input System
    (JUSTIS);
    � active Army�s pay input system, Defense Military Pay Office System
    (DMO); and
    � DFAS� Army Guard and Reserve pay system, DJMS-RC.
    Initial Mobilization Phase During the initial mobilization, units receive an alert order and begin a
    mobilization preparation program, Soldier Readiness Processing (SRP).
    The financial portion of the SRP is conducted by one of the 54 United
    States Property and Fiscal Offices (USPFO) to verify the accuracy of pay
    records for each soldier and to make changes to pay records based on
    appropriate supporting documentation for the pays and allowances that the
    soldiers will be entitled to receive when initially mobilized. If
    documentation, such as birth certificates for dependents or parachute
    jumping certifications, is missing, soldiers have a few days to obtain the
    necessary documents. The unit commander is responsible for ensuring that
    all personnel data for each soldier under their command are current.
    When the unit receives a mobilization order, USPFO pay technicians are
    responsible for initiating basic pay and allowances by manually entering
    the start and stop dates into DJMS-RC6 for the active duty tour that appears
    on each soldier�s mobilization order. Army Guard pay technicians use
    JUSTIS to access and record data in DJMS-RC. By entering the soldier�s
    Social Security number and mobilization order number into JUSTIS, the
    pay technician can view the pay data in DJMS-RC, ensure that they are complete, and enter any missing data supported by documentation
    provided by the soldier. If done correctly, soldiers will start to receive
    basic pay, basic allowances for housing, basic allowances for subsistence,
    and jump pay automatically based on the start date entered into DJMS-RC.
    After soldiers complete their initial SRP and receive individual mobilization
    orders, they travel as a unit to a mobilization station. At the mobilization
    station, mobilized Army Guard personnel undergo a second SRP review. In
    this second SRP, mobilization station personnel are responsible for
    confirming or correcting the results of the first SRP, including making
    necessary reviews to ensure that each soldier�s records are current.
    Mobilization pay technicians are required to promptly initiate pays that
    were not initiated during the first SRP and enter appropriate pay changes
    into DJMS-RC. The mobilization station commander is required to certify
    that the unit is ready for mobilization, including ensuring that all authorized
    active duty pays are in place for the soldiers in the unit, at the end of this
    process.
    DJMS-RC will generate certain pays and allowances automatically for each
    2-week pay period until the stop date entered in DJMS-RC. If entered
    correctly, the stop date in DJMS-RC will be the end of active duty tour date
    documented on the soldier�s mobilization orders. This automated feature is
    intended to prevent erroneous payments to soldiers beyond their
    authorized active duty status. However, human intervention is required
    when a pay or allowance error is detected or an event occurs that requires
    a change in the soldier�s pay and personnel file. For example, a change in
    dependent status, such as marriage or divorce, a promotion, jump pay
    disqualification, or being demobilized before an active duty tour ends
    would change or eliminate some of the pays and allowances a soldier
    would be entitled to receive. All pays and allowances and subsequent
    changes are documented in the Master Military Pay Account (MMPA)�the
    central pay record repository in DJMS-RC for each soldier.
    Deployed Phase While deployed on active duty, there are several Army Guard (USPFO),
    active Army, and DFAS components involved in paying mobilized Army
    Guard personnel. The active Army servicing finance office, which may be
    within the United States or in a foreign country, is responsible for initiating
    pays earned while the soldier is deployed, such as hostile fire pay and
    hardship duty pay. Pay technicians start hostile fire pay for each soldier
    listed on a battle roster or flight manifest. Thereafter, hostile fire pay is
    automatically generated each pay period. Other location-based pays, such as hardship duty, require pay transactions each month. The servicing
    finance office for the deployed phase is under the jurisdiction of the active
    Army. Active Army servicing finance offices use DMO to enter pay
    transactions into DJMS-RC. Under certain conditions, either active Army
    pay servicing offices or USPFOs can process applicable pay-altering
    transactions, such as those related to a soldier�s early separation from
    active duty or a soldier�s death.
    Demobilization Phase Upon completion of an active duty tour, soldiers normally return to the
    same Army locations from which they were mobilized for demobilization
    out-processing before returning to their home units. Demobilization
    personnel, employed by the active Army or Army Guard, are required to
    provide each soldier with a Release from Active Duty (REFRAD) order and
    a Form DD 214, Certificate of Release or Discharge from Active Duty. The
    demobilization station pay technicians are to use these documents as a
    basis for deactivating the soldier�s active duty pay and allowances as of the
    date of release from active duty. At this time, the supporting USPFO is
    responsible for discontinuing monthly input of all nonautomated pays and
    allowances. If the demobilization station did not take action to return a
    soldier to a demobilized status, the state USPFO has this responsibility.
    Military Pay Systems
    Environment
    In 1995, the Army decided to process pays to mobilized Army Guard
    soldiers from the DJMS-RC system rather than the active Army payroll
    system used to pay mobilized Army Guard soldiers previously. According
    to the then Deputy Assistant Secretary of the Army (Financial Operations),
    this decision was made as an interim measure (pending the conversion to a
    single system to pay both active and reserve component soldiers) based on
    the belief that DJMS-RC provides the best service to the reserve component
    soldiers. DJMS-RC is a large, complex, and sensitive payroll computer
    application used to pay Army and Air National Guard and Army and Air
    Force Reserve personnel. DFAS has primary responsibility for developing
    guidance and managing operations of the system. DFAS Indianapolis is the
    central site for all Army military pay and is responsible for maintaining over
    1 million MMPAs for the Army. Each MMPA contains a soldier�s pay-related
    personnel, entitlement, and performance data. All pay-related transactions
    that are entered into DJMS-RC, through JUSTIS and DMO, update the
    MMPA. Personnel data contained in the MMPA are generated from
    SIDPERS�a personnel database maintained and used by the Army Guard
    at the 54 state-level personnel offices to capture data on personnel-related actions (e.g. discharge, promotion, demotion actions that impact soldiers�
    pay).
    DFAS Denver is responsible for designing, developing, and maintaining
    customer requirements for the Military and Civilian Pay Services business
    line, and its Technical Support Office designs and maintains the DJMS-RC
    core pay software. DFAS-Indianapolis serves as a �gatekeeper� in that it
    monitors the daily status of data uploaded to DJMS-RC to ensure that all
    transactions are received and processed in DJMS-RC. Users can sign on to
    DJMS-RC directly through online interactive software used for file transfer
    transactions, online queries of MMPAs, and downloads of data files and
    various DJMS-RC reports.
    JUSTIS is the pay input subsystem used by the 54 state-level Army Guard
    commands, including the USPFOs, to update DJMS-RC. Database
    management of JUSTIS is decentralized in that each of the 54 sites owns
    and maintains its own JUSTIS database. This subsystem processes
    transactions for submission to DJMS-RC to create payments for Army
    National Guard soldiers. JUSTIS receives certain pay-affecting personnel
    data from SIDPERS.
    JUSTIS receives a limited amount of mobilization order data directly from
    AFCOS. These systems share the same operating system platform and
    certain database tables. However, additional data needed to create pay
    transactions associated with active duty pay and allowances must be
    entered manually into JUSTIS from hard copies of mobilization orders.
    DMO is the pay input subsystem used by active Army finance offices and
    the DOD military pay offices, including those in overseas locations such as
    Europe, Korea, and Iraq, to update DJMS-RC. This pay input subsystem
    can be used by active Army finance offices to create transactions for
    military pay and allowances that are not reported at the time of
    mobilization for upload to DJMS-RC and for active Army finance offices to
    use to enter location-based pays, such as hostile fire and hardship duty
    pays and combat zone tax exclusion transactions.
    Case Studies Illustrate
    Significant Pay
    Problems
    We found significant pay problems at the six Army Guard units we audited.
    These problems related to processes, human capital, and systems. The six
    units we audited, including three special forces and three military police
    units, were as follows:
    Special forces units
    � Colorado B Company, 5th Battalion, 19th Special Forces
    � Virginia B Company, 3rd Battalion, 20th Special Forces
    � West Virginia C Company, 2nd Battalion, 19th Special Forces
    Military police units
    � Mississippi 114th Military Police Company
    � California 49th Military Police Headquarters and Headquarters
    Detachment
    � Maryland 200th Military Police Company
    In addition, we conducted a limited review of the pay experiences of a
    seventh unit mobilized more recently and deployed to Iraq in April 2003�
    the Colorado Army Guard�s 220th Military Police Company�to determine
    the extent to which the pay problems we found in our six case study units
    persisted. As shown in figure 2, these units were deployed to various
    locations in the United States and overseas in support of Operations Noble
    Eagle and Enduring Freedom.
    Figure
    2: Units and Deployment Location
    1
    2
    3
    4
    5
    6
    7
    1
    2
    3
    4
    5
    6
    7
    Mississippi, 114th Military Police Company - deployed to Guantanamo Bay, Cuba
    Deployments
    California, 49th Military Police Detachment - deployed to Fort Lewis, Washington
    Virginia, 20th Special Forces, 3rd Battalion, B Company - deployed to Afghanistan
    Maryland, 200th Military Police Company - deployed to Pentagon, Virginia
    Colorado, 19th Special Forces, 5th Battalion, B Company - deployed to Afghanistan
    West Virginia, 19th Special Forces, 2nd Battalion, C Company - deployed to Afghanistan
    Colorado, 220th Military Police Company - deployed to Iraq
    Source: GAO.
    s
    These units were deployed to help perform a variety of critical mission
    operations, including search and destroy missions in Afghanistan against
    Taliban and al Qaeda forces, guard duty for al Qaeda prisoners in Cuba,
    providing security at the Pentagon shortly after the September 11, 2001,
    terrorist attacks, and military convoy security and highway patrols in Iraq. For the six units we audited, we found significant pay problems involving
    over one million dollars in errors. These problems consisted of
    underpayments, overpayments, and late payments that occurred during all
    three phases of Army Guard mobilization to active duty. Overall, for the 18-
    month period from October 1, 2001, through March 31, 2003, we identified
    overpayments,7 underpayments, and late payments at the six case study
    units estimated at $691,000, $67,000, and $245,000, respectively. 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
    from our case study units had at least one pay problem associated with
    their mobilization to active duty. Table 2 shows the number of soldiers
    with at least one pay problem during each of the three phases of active duty
    mobilization.
    Table
    2: Pay Problems at Six Case Study Units
    Army Guard unit
    Soldiers with pay problems
    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
    Due to the lack of supporting documents at the state, unit, and battalion
    levels, we may not have identified all of the pay problems related to the
    active duty mobilizations of these units. We have provided documentation
    for the pay problems we identified to appropriate DOD officials for further
    research to determine whether additional amounts are owed to the
    government or the soldiers. The payment problems we identified at the six
    case study units did not include instances of fraudulent payments, which
    were a major finding resulting from the further investigation of improper
    payments found in our 1993 audit of Army military payroll.8 Nonetheless,
    we found the inaccurate, late, and missing pays and associated erroneous
    debts found during our current audit had a profound financial impact on
    individual soldiers and their families. Some of the pay problems we
    identified included the following.
    � DOD erroneously billed 34 soldiers in a Colorado National Guard
    Special Forces unit an average of $48,000 each. Though 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.
    � As a result of confusion over responsibility for entering 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.
    � Some soldiers did not receive payments for up to 6 months after
    mobilization and others still had not received certain payments by the
    conclusion of our audit work.
    � Ninety-one of 100 members of a Mississippi National Guard military
    police unit that was deployed to Guantanamo Bay, Cuba, did not receive
    the correct amount of Hardship Duty Pay.
    � 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.
    � 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.
    � Four Virginia Special Forces soldiers who were injured in Afghanistan
    and unable to resume their civilian jobs experienced problems in
    receiving entitled active duty pays and related health care.
    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. Appendixes I�VI provide details of the pay
    experiences of the soldiers at the case study units we audited.
    Significant Weaknesses
    in Processes over
    Mobilized Army Guard
    Pay
    Procedural requirements, particularly in light of the potentially hundreds of
    organizations and thousands of personnel involved, 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. 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. These complex, cumbersome processes, which were developed in
    piecemeal fashion over a number of years, provide numerous opportunities
    for control breakdowns. We found that a substantial number of payment
    errors 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, and
    Evolving Processes
    Overall, as shown in figures 3, 4 and 5, we found that an extensive,
    cumbersome, and labor-intensive process has evolved to pay mobilized
    Army Guard soldiers for their active duty service. Figure
    3: Initial Mobilization Phase Process
    Process for initiating
    active duty pay when
    first mobilized
    Process for stopping
    active duty pay when
    demobilized
    Process for pay changes
    while deployed
    1 2 3
    See
    part
    2
    to
    duty
    station
    Personnel clerks update pay
    impacting soldier data in
    SIDPERS for mobilized
    soldiers.
    Payroll clerks review
    supporting documentation,
    pass system edit checks,
    and input payroll start and
    stop date for automated
    active duty pay and
    allowances into JUSTIS.
    2nd SRP pay transactions
    entered into DMO after
    review and edit checks.
    Mobilization
    orders
    Mobilization
    orders
    Mobilization
    orders
    Home unit
    Soldiers under state control
    receive federal active duty
    mobilization orders, and their
    active duty pay support
    documentation is validated as
    part of the Soldier Readiness
    Processing (SRP).
    Mobilization station
    2nd SRP opportunity to
    update/correct active duty
    pay support based on
    mobilization orders.
    Monthly data
    reconciliation
    Start active duty
    pay transactions
    monthly listing
    of soldiers paid
    for active duty
    Monthly Unit
    Commander Pay
    Management
    Report
    Start pay transactions
    updated/corrected into
    DJMS-RC.
    Process pay transactions
    entered into DJMS-RC. Up
    to 8 to 10 active duty payroll
    payments to soldiers each
    month.
    1
    Unit
    Commander
    Monthly personnel
    on-board vs. paid
    reconciliation
    Army Guard - State Personnel
    Office
    Army Guard - State U.S.
    Property and Fiscal Office
    (USPFO)
    DFAS - IN
    Active Army - Mobilization
    Station DMPO or
    Army Finance Office
    Army Order
    Writing System
    AFCOS
    Pay and allowances, wage garnishment
    and LESs to soldiers Source: GAO.
    Figure
    4: Deployed Phase Process
    Figure
    5: Demobilization Phase Process
    Process for initiating
    active duty pay when
    first mobilized
    Process for stopping
    active duty pay when
    demobilized
    Process for pay changes
    while deployed
    1 2 3
    From
    part
    2
    from
    duty
    station
    Home unit
    Soldiers return to home
    station and state control.
    Demobilization station
    Receive Release from Active
    Duty Order (REFRAD) and
    Certificate of Release or
    Discharge from Active Duty
    (Form DD 214).
    Transactions pass review of
    documentation and system
    edit checks to stop active
    duty pay through JUSTIS.
    Stop pay transactions entered
    into DJMS-RC
    Soldier is removed from
    active duty status in
    SIDPERS.
    Transactions pass review of
    documentation and system
    edit checks to stop active
    duty pay through DMO.
    Monthly
    data
    reconciliation
    Process pay transactions
    entered into DJMS-RC.
    monthly listing
    of soldiers paid
    for active duty
    Stop pay
    transactions
    Debt
    assessed and
    wage
    garnishment
    to soldier for any
    overpayments
    4
    Monthly personnel
    on-board vs. paid
    reconciliation
    Unit
    Commander
    Monthly Unit
    Commander Pay
    Management
    Report
    Active Army - Demobilization
    Station DMPO or
    Army Finance Office
    Army Guard - State Personnel
    Office
    Army Guard - State U.S.
    Property and Fiscal Office
    (USPFO)
    DFAS - IN
    REFRAD,
    revoked, or
    amended order
    Army Order
    Writing System
    AFCOS
    Pay and allowances, wage garnishment
    and LESs to soldiers
    Source: GAO.
    While figures 3, 4 and 5 provide an overview of the process, particularly of
    the types of DOD organizations involved, they do not fully capture the
    numbers of different DOD components involved. Specifically, thousands of
    Army Guard (individual units and state-level organizations), active Army,
    and DFAS components may be involved in authorizing, processing, and
    paying mobilized Army Guard soldiers, including
    � an estimated 2,300 local Army Guard home units, unit commanders, and
    unit administrators that are involved in maintaining up-to-date soldier
    personnel and related pay records;
    � 54 state-level Army Guard commands, including both USPFOs and statelevel
    personnel offices involved in authorizing and starting active duty
    pay transactions;
    � active Army finance offices or DOD Military Pay Offices at over 15
    mobilization stations across the United States that are involved in
    processing Army Guard personnel to and from their active duty
    locations;
    � 28 active Army area servicing finance offices at over 50 locations
    worldwide that are involved in servicing Army Guard soldiers� locationbased
    active duty pays;
    � DFAS-Indianapolis�the central site for processing Army Guard
    soldiers� active duty pays;
    � DFAS-Denver�the central site for maintaining the pay system used to
    pay Army Guard soldiers;
    � DFAS-Cleveland�the central site for handling soldier military pay
    inquiries; and
    � The Army National Guard Financial Services Center�the Army Guard
    organization responsible for providing guidance, training, and oversight
    and coordination for active duty pays to Army Guard personnel.
    Several of these organizations with key roles in payroll payments to
    mobilized Army Guard soldiers, including DOD, DFAS, Army, and the Army
    Guard, have issued their own implementing regulations, policies, and
    procedures. In addition, we found unwritten practices in place at some of
    the case study locations we audited. Existing written policies and procedures are voluminous�the DOD Financial Management Regulations
    (FMR) guidance on pay and allowance entitlements alone covers 65
    chapters. As a result of their size and continually evolving nature as legal,
    procedural, and system requirements change, we found that policies and
    procedures were not well understood or consistently applied across the
    potentially hundreds of organizations and thousands of personnel involved
    in paying mobilized Army Guard personnel. These processes have been
    developed in piecemeal fashion over a number of years to accommodate
    changing legislative requirements, DOD policies, and the unique operating
    practices of different DOD organizations and systems involved in these
    processes.
    As discussed in the following sections, these extensive and evolving
    policies and procedures were confusing both across various organizations
    and personnel involved in their implementation and, more importantly, to
    the Army Guard soldiers who are the intended beneficiaries. In addition,
    these cumbersome policies and procedures contributed to the pay errors
    we identified.
    Procedural Requirements
    Not Clear
    We found instances in which unclear procedural requirements for
    processing active duty pays contributed to erroneous and late pays and
    allowances to mobilized Army Guard soldiers. For example, we found
    existing policies and procedural guidance were unclear with respect to the
    following issues.
    Amending active duty orders. A significant problem we found at the
    case study locations we audited concerned procedures that should be
    followed for amending active duty orders. We found instances at two of
    our case study locations in which military pay technicians at either a
    USPFO or an active Army finance office made errors in amending existing
    orders. These errors resulted in establishing virtually all prior pays made
    under the original orders as debts. A major contributor to the pay errors
    we found in this area was that existing procedures did not clearly state how
    USPFO and active Army finance personnel should modify existing order
    tour start and stop information in the pay system when necessary without
    also unintentionally adversely affecting previous pays and allowances.
    Also, these procedures did not warn USPFO and active Army personnel
    that using alternative methods will automatically result in an erroneous
    debt assessment and garnishment of up to two-thirds of the soldier�s pay.
    We identified over $1 million in largely erroneous debt transactions as a
    result of breakdowns in this area. At the Colorado Special Forces unit, we
    found that actions taken by the Colorado USPFO in an attempt to amend 34
    soldiers� orders resulted in reversing the active pay and allowances the
    soldiers received for 11 of the 12 months they were deployed on active duty
    in Afghanistan and instead establishing these payments as debts. These 34
    soldiers received notice on their Leave and Earnings Statements that they
    owed the government an average of approximately $48,000 per soldier, for
    a total largely erroneous debt of $1.6 million. Although we informed DOD
    of this problem in April 2003, as of the end of our audit fieldwork in
    September 2003, the problems at the Colorado Special Forces unit had not
    been resolved. DOD officials did advise us that, as a result of our work,
    they implemented a software change on September 18, 2003, intended to
    help avoid such problems in the future. Specifically, we were told new
    warning messages have been added to JUSTIS that will appear when a
    transaction is entered to cancel or amend a tour of duty. The new warnings
    will advise that the transaction will or could result in a collection action
    and will ask the pay technician to confirm that is their intent. While we did
    not verify the effectiveness of this change, it has the potential to reduce pay
    problems associated with errors made in amending orders.
    Required time frames for processing pay transactions. Written
    requirements did not exist with respect to the maximum amount of time
    that should elapse between the receipt by the responsible Army Guard or
    Army pay office of proper documentation and processing the related pay
    transaction through the pay system. While some of the locations we
    audited had established informal processing targets, for example, 3 days,
    we also found numerous instances in which available documentation
    indicated lengthy delays in processing pay transactions after pay offices
    received supporting documentation. These lengthy processing delays
    resulted in late payroll payments to deployed soldiers.
    Required monthly reconciliations of pay and personnel data. The
    case study units lacked specific written requirements for conducting and
    documenting monthly reconciliations of pay and personnel mismatch
    reports and unit commanders� finance reports. Available documentation
    showed that these controls were either not done or were not done
    consistently or timely. Because, as discussed later in this report, the
    processing of Army Guard pay relies on systems that are not integrated or
    effectively interfaced, these after-the-fact detective controls are critical to
    detecting and correcting erroneous or fraudulent pays. To be effective, the 54 state-level Army Guard commands must individually
    reconcile common data elements in all 54 state-operated personnel
    databases for Army Guard personnel with corresponding DJMS-RC pay
    records at least monthly. Because of the lack of clarity in existing
    procedural requirements in this area, we found that several of the locations
    we visited had established standard but undocumented reconciliation
    practices. However, at the six case study locations we audited, we found
    that although all the USPFOs told us they received monthly SIDPERS and
    DJMS-RC mismatch reports, they did not always fully reconcile and make
    all necessary system corrections each month. Lacking specific written
    policies and procedural requirements for such reconciliations, several of
    the case study locations we audited established a standard, but
    undocumented, practice of reconciling roughly a third of the common data
    elements every month, so that all elements were to be reconciled and all
    necessary corrective actions taken over a 3-month period. However,
    documentation was not always retained to determine the extent to which
    these reconciliations were done and if they were done consistently.
    Our findings are similar to those in reports from Army Guard operational
    reviews. For example, the results of the most recent reviews at three of the
    six case study locations we audited showed that state Army Guard
    personnel were not performing effective reconciliations of pay and
    personnel record discrepancies each month. One such report9 concluded,
    �Failure to reconcile the Personnel/Pay Mismatch listing monthly provides
    a perfect opportunity to establish fraudulent personnel or pay accounts.�
    Several of the instances we identified in which soldiers received pay and
    allowances for many months after their release from active duty likely
    would have been identified sooner had USPFO military pay personnel
    investigated the personnel/pay mismatch report discrepancies more
    frequently. For example, at one case study unit, 34 soldiers received pay
    for several months past their official discharge dates. Although records
    were not available to confirm that these overpayments were reported as
    discrepancies on monthly mismatch reports, the USPFO military pay
    supervisor told us that at the time the mismatch reports were not being
    used to identify and correct pay-affecting errors. As discussed later, at another case study unit, a mobilized soldier was
    released from active duty and discharged from the Army in June 2002,
    earlier than his planned release date due to alleged involvement in drugrelated
    activities. But, the soldier continuied to receive active duty pay. The
    soldier�s SIDPERS personnel record on July 2, 2002, to reflect the
    discharge. According to pay records, the soldier�s pay continued until the
    USPFO military pay supervisor identified the discrepancy on the
    September 25, 2002, personnel/pay mismatch report and initiated action
    that stopped the soldier�s pay effective September 30, 2002. However,
    because this discrepancy was not identified until late September, the
    soldier received $9,400 in extra pay following his discharge from the Army.
    In addition, while as discussed previously, we found a number of instances
    in which Army Guard soldiers� active duty pays continued after their
    demobilization, available documentation showed only one instance in the
    six case study units we visited in which a reconciliation of the unit
    commander�s finance report resulted in action to stop improper active duty
    pay and allowances. Specifically, available documentation shows that an
    administrative clerk�s review of this report while the unit was mobilized in
    Guantanamo Bay, Cuba, resulted in action to stop active duty pay and
    allowances to a soldier who was previously demobilized. However, it is
    also important to note that while these reconciliations are an important
    after-the-fact detective control, they are limited because they can only
    detect situations in which payroll and personnel records do not agree. A
    number of pay errors we identified resulted from the fact that neither
    personnel nor pay records were updated.
    Soldiers returning from deployments earlier than their units. For
    four of our case study units, we found instances in which Army Guard
    soldiers� active duty pays were not stopped at the end of their active duty
    tours when they were released from active duty earlier than their units. We
    found procedural guidance did not clearly specify how to carry out
    assigned responsibilities for soldiers who return from active duty earlier
    than their units. DFAS-Indianapolis 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 that a soldier
    did not return with his or her unit, or how the USPFO was to take action to
    validate the status of such soldiers. At one of our case study locations,
    officials at the 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.
    Data input and eligibility requirements for housing and family
    separation allowances. Our audit work at two of our case study
    locations indicated that procedural guidance was not clear with respect to
    transaction entry and eligibility requirements for the basic allowance for
    housing and the family separation allowance, respectively. For example,
    during our audit work at one of our case study locations, we determined
    that because of inconsistent interpretations of existing guidance for
    �dependents� in entering transactions to start paying soldiers� basic
    allowance for housing, a number of Maryland soldiers were not paid the
    correct amount. At another case study location, we found that existing
    guidance on eligibility determination was misinterpreted so that soldiers
    were erroneously refused the �single parent soldiers family separation
    allowance� to which they were entitled.
    Organizational
    Responsibilities Not Clear
    We also found that existing policies and procedures were unclear with
    respect to organizational responsibilities. Confusion centered principally
    around pay processing responsibility for Army Guard soldiers 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). However, we found a significant number
    of instances in which critical coordination requirements were not clearly
    defined.
    Individual Case Illustration: Confusion over Responsibility for Entering Pay
    Transactions Results in Family Obtaining a Grant to Pay Bills
    A sergeant incurred pay problems during his mobilization and deployment to Afghanistan
    in support of Operation Enduring Freedom that caused financial hardship for his family
    while he was deployed. In this case, the active Army and his state's USPFO were
    confused as to responsibility for processing pay input transactions associated with a
    promotion. Specifically, pay input transactions were required for his promotion from a
    sergeant first class (E-7) to master sergeant (E-8), his demotion back to an E-7, and a
    second promotion back to an E-8. The end result was the soldier was overpaid during
    the period of his demotion. DFAS garnished his wages and collected approximately
    $1,100 of the soldier's salary. These garnishments reduced the soldier's net pay to less
    than 50 percent of the amount he had been receiving. As a result, the soldier's wife had
    to obtain a grant of $500 from the Colorado National Guard's Family Support Group to
    pay bills.
    DFAS Indianapolis mobilization procedures authorize the Army Guard�s
    USPFOs and the active Army�s mobilization station and in-theater finance
    offices to enter transactions for deployed soldiers. However, we found
    existing guidance did not provide for clear responsibility and
    accountability between USPFOs and active Army mobilization stations and
    in-theater servicing finance offices with respect to responsibility for
    entering transactions while in-theater and terminating payments for
    soldiers who separate early or who are absent without leave or are
    confined. For example, at one of our case study locations, we found that
    this broad authority for entering changes to soldiers� pay records enabled
    almost simultaneous attempts by two different pay offices to enter pay
    transactions into DJMS-RC for the same soldier.
    As shown in the following illustration, at another case study location 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 correct these payments.
    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.
    While guidance that permits both Army Guard and active Army military pay
    personnel to enter transactions for mobilized Army Guard soldiers
    provides flexibility in serving the soldiers, we found indications that it also
    contributed to soldiers being passed between the active Army and Army
    Guard servicing locations. For example, at another of our case study
    locations, we were told that several mobilized soldiers sought help in
    resolving active duty pay problems from the active Army�s mobilization
    station finance office at Fort Knox and later the finance office at Fort
    Campbell. However, officials at those active Army locations directed the
    soldiers back to the USPFO because they were Army Guard soldiers.
    We also found procedures were not clear on how to ensure timely
    processing of active duty medical extensions for injured Army Guard
    soldiers. Army Regulation 135-381 provides that Army Guard soldiers who
    are incapacited as a result of injury, illness, or disease that occured while
    on active duty for more than 30 consecutive days are eligible for continued
    health benefits. That is, with medical extension status, soldiers are entitled
    to continue to receive active duty pays, allowances, and medical benefits
    while under a physician�s care.
    At the Virginia 20th Special Forces, B Company, 3rd Battalion, we found that
    four soldiers were eligible for continued active duty pay and associated
    medical benefits due to injuries incurred as a result of their involvement in
    Operation Enduring Freedom. Although these injuries precluded them
    from resuming their civilian jobs, they experienced significant pay
    problems as well as problems in receiving needed medical care, in part, as a
    result of the lack of clearly defined implementing procedures in this area.
    All four soldiers experienced pay disruptions because existing guidance
    was not clear on actions needed to ensure that these soldiers were retained
    on active duty medical extensions. One of the soldiers told us, �People did
    not know who was responsible for what. No one knew who to contact or
    what paperwork was needed�.� As a result, all four have experienced
    gaps in receiving active duty pay and associated medical benefits while
    they remained under a physician�s care for injuries received while on their
    original active duty tour. 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.
    Guidance Outdated We found several instances in which existing DOD and Army regulations
    and guidance in the pay and allowance area are outdated and conflict with
    more current legislative and DOD guidance. 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. For example, the National Defense Authorization Act for Fiscal Year 1998
    replaced the basic allowance for quarters and the variable housing
    allowance with the basic allowance for housing.10 However, volume 7A,
    chapter 27 of the DOD FMR, dated February 2002, still refers to the basic
    allowance for quarters and the variable housing allowance. The act also
    replaced foreign duty pay with hardship duty pay.11 Yet, chapter 8 of Army
    Regulation 37-104-4 (Military Pay and Allowances Policy and Procedures �
    Active Component) still refers to foreign duty pay.
    Further, current DFAS and Army mobilization procedural guidance directs
    active Army finance units to use transaction codes to start soldiers�
    hardship duty pays that are incorrect. Effective December 2001, DOD
    amended FMR, Volume 7A, chapter 17, to establish a new �designated area�
    hardship duty pay with rates of $50, $100, or $150 per month, depending on
    the area. However, DFAS guidance dated December 19, 2002, directed
    mobilization site finance offices to use transaction codes that resulted in
    soldiers receiving a prior type of hardship duty pay that was eliminated in
    the December 2001 revisions. At one of our case study locations, we found
    that because the active Army finance office followed the outdated DFAS
    guidance for starting hardship duty pays, 91 of 100 Mississippi military
    police unit soldiers deployed to Cuba to guard al Qaeda prisoners were
    paid incorrect amounts of hardship duty pay.
    In addition, Army Regulation 37-104-4, dated September 1994, which was
    still in effect at the end of our audit work, provides that mobilized Army
    Guard soldiers are to be paid through the active Army pay system�the
    Defense Joint Military Pay System-Active Component (DJMS-AC). This
    procedure, in effect during the mobilizations to support Operations Desert
    Shield and Desert Storm, was changed in 1995. Specifically, in 1995, it was
    agreed that Army Guard personnel would no longer be moved to the active
    duty pay system, DJMS-AC, when mobilized to active duty, but would
    remain on the DJMS-RC system. Maintaining such outdated references in
    current policies may have contributed to confusion by USPFO and active
    Army finance personnel regarding required actions, particularly in light of
    the extensive set of policies and procedures now in effect in this area.
    Human Capital Issues
    Affect Ability to Pay
    Mobilized Army Guard
    Soldiers Promptly and
    Accurately
    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 states that effective human capital
    practices are critical to establishing and maintaining a strong internal
    control environment. Specifically, 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 Pay Processing
    Personnel
    Our audit identified concerns with the numbers of knowledgeable
    personnel dedicated to 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 Army Guard soldiers� pay as they are
    mobilized to active duty 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 the human capital resources
    allocated to this area, primarily with respect to the Army Guard military
    pay processing at the state-level USPFOs. Specifically, we identified
    concerns with (1) the number of staff on board in the military pay sections
    of the USPFOs, (2) the relatively lower grade structure for nonsupervisory
    personnel in the USPFOs� military pay sections in comparison with the
    grades for similar positions in other sections of the USPFO which led to
    difficulty in recruiting and retaining military pay processing personnel, and
    (3) as discussed in the following section, 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. NGB provides annual authorization for the overall staffing levels for each
    state. Within these overall staffing authorizations, each state allocates
    positions to each of the sections within a USPFO, including the military pay
    section and other sections such as vendor and contract pay. We compared
    the actual number of personnel on board to the NGB-authorized staffing
    level for the military pay sections at the case study locations we audited.
    During our audit period, two of the six case study locations had fewer
    military pay technicians on board than they were authorized.
    Officials at several of the six case study units also stated that restrictions
    on rank/grade at which USPFOs are allowed to hire personnel for their
    military pay sections made it difficult to recruit and retain employees. For
    example, a USPFO official told us that retaining personnel in the military
    pay section of the USPFOs was particularly difficult because similar
    administrative positions in other sections of the USPFO were typically
    higher paying and provided better benefits than the positions in the military
    pay section. The highest pay grade of the nonsupervisory pay technicians
    at the six case study units was a GS-7, and the majority of personnel were
    in the GS-6 pay grade.
    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. Specifically, a
    November 2002 memorandum of understanding between the Army and
    DFAS states that the active Army has primary responsibility to provide
    trained military or civilian resources to execute active duty pay and
    allowance surge processing requirements. However, this memorandum
    does not address the resources needed for surge processing at 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 several of the six case study units showed that there
    were no independent reviews of proposed pay transactions before they
    were submitted to DJMS-RC for processing. Such independent supervisory
    reviews are required by DJMS-RC operating procedures. However, a
    USPFO official told us that because of the limited number of pay
    technicians available to process pay transactions�particularly when processing massive numbers of transactions to start active duty pays at the
    same time�this requirement was often not followed.
    The Chief of Payroll at one of our case study locations told us that because
    they were currently understaffed, staff members worked 12 to 14 hours a
    day and still had backlogs of pay start transactions to be entered into the
    pay system. We were also told that two of our other case study locations
    experienced backlogs and errors in entering pay start transactions when
    they were processing large numbers of Army Guard soldiers during initial
    mobilizations. Military pay personnel told us that they were able to avoid
    backlogs in processing pay start transactions during mobilization
    processing by conscripting personnel from other USPFO sections to help in
    assembling and organizing the extensive paperwork associated with
    activating appropriate basic pays, entitlements, and special incentive pays
    for their mobilized Army Guard soldiers.
    Training on Pay Entitlement
    and Processing
    Requirements Critical
    In addition to concerns about the numbers of personnel onboard at the
    USPFO military pay offices involved in processing pay transactions for our
    case study units, we identified instances in which the personnel at military
    pay offices at both the USPFOs and the active Army finance offices did not
    appear to know the different aspects of the extensive pay eligibility or
    payroll processing requirements used to provide accurate and timely pays
    to Army Guard soldiers. 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 about the
    extensive and complex pay eligibility and processing requirements. We
    also found that such training is particularly important for active Army pay
    personnel who may have extensive experience and knowledge of pay
    processing requirements for regular Army soldiers, but may not be well
    versed in the unique procedures and pay transaction entry requirements for
    Army Guard soldiers.
    During our work at the case study units, 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. We were told that these errors occurred
    because military pay personnel�particularly those at the active Army
    finance office locations�were unfamiliar with the system�s pay processing requirements for active duty pays to mobilized Army Guard personnel.
    Correcting these erroneous transactions required additional labor-intensive
    research and data entry by other more skilled pay technicians. As
    discussed previously, we also found that pay technicians did not
    understand how to properly code data on the soldiers� dependents status,
    which is used to determine housing allowances, into the pay system. As a
    result, we identified cases in which soldiers were underpaid housing
    allowances to which they were entitled.
    Personnel at active Army finance offices told us that while they are readily
    familiar with the pay processing requirements for active Army personnel
    (using DJMS-AC), they had little experience with, or training in, the policies
    and procedures to be followed in entering pay transactions into DJMS-RC.
    An Army finance office official told us that handling two sets of pay
    transaction processing procedures is often confusing because they are
    often required to process a large number of both active Army personnel
    and Army Guard and other reserve personnel using different processes and
    systems at the same time.
    While the Army Guard offers training for their military pay technicians, we
    found that there was no overall monitoring of Army Guard pay personnel
    training. 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 to activated Army Guard personnel.
    Beginning in fiscal year 2002, the Army Guard began offering training on
    mobilization pays and transaction processing to the USPFO military pay
    technicians. However, there is no requirement for USPFO pay technicians
    to attend these training courses. In addition, available documentation
    showed that two of the five scheduled courses for fiscal year 2003 were
    canceled�one because of low registration and one because of schedule
    conflicts.
    Only two of the six case study locations we audited tracked the extent to
    which pay technicians have taken training in this area. We were told that
    few of the military pay technicians at the state Army Guard USPFOs we
    audited had formal training on JUSTIS, DJMS-RC, or mobilization pay
    processing requirements and procedures. Throughout our case studies, we
    found numerous errors that involved some element of human capital. One
    payroll clerk told us that she had not received any formal training on how to operate JUSTIS when she was assigned to the job. Instead, she stated,
    she has learned how to operate the system through on-the-job training and
    many phone calls to system support personnel in Indianapolis. She
    estimated that she was not fully comfortable with all the required
    transaction processing procedures until she had been on the job for about 7
    years.
    In addition, unit commanders have significant responsibilities for
    establishing and maintaining the accuracy of solders� 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 the commanders of our case study units carried out these
    requirements. Further, neither Army Guard unit commanders nor active
    Army commanders were required to receive training on the importance of
    the pay to on-board personnel reconciliations, discussed previously, as an
    after-the-fact detective control to proactively identify Army Guard soldiers
    who should no longer receive active duty pays. We were told that this was
    primarily because unit commanders have many such 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 the 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 dates because
    soldiers did not submit the paperwork necessary to start these pays.
    Customer Service Concerns Through data collected directly from selected soldiers and work at our six
    case study locations, we identified a recurring soldier concern with the
    level and quality of customer service they received associated with their
    pays and allowances when mobilized to active duty. 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 be provided concerning questions or problems with their active
    duty pays. However, we identified several sources that soldiers may go to
    for customer service or information on any such issues. These include
    � their home unit,
    � the military pay section of the USPFO of their home state�s Army Guard,
    � the designated active Army area servicing finance office, and
    � a toll free number, 1-888-729-2769 (Pay Army).
    While soldiers had multiple sources from which they could obtain service,
    we found indications that many Army Guard soldiers were displeased with
    the customer service they received. 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 for enabling soldiers to identify if
    they were not receiving such pays and therefore require customer service.
    In addition, as discussed later in this report, we 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. Our audit identified customer
    service concerns at all three phases of the active duty tours and involving
    DFAS, active Army, and Army Guard servicing components.
    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 Army Guard personnel
    mobilized to active duty should be served 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 during the mobilization phase, 10 indicated
    satisfaction, while 15 reported dissatisfaction.12 In addition, of the 45
    soldiers responding to our question on customer support following
    demobilization, 5 indicated satisfaction while 29 indicated dissatisfaction.13
    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 �nonexistent,� �hostile,� or
    �poor.� For example, a company commander for one of our case study units
    told us that he was frustrated with the level of customer support his unit
    received during the initial mobilization process. Only two knowledgeable
    military pay officials were present to support active duty pay transaction
    processing for the 51 soldiers mobilized for his unit. He characterized the
    customer service his unit received at initial mobilization as time consuming
    and frustrating.
    Personnel we talked with at the Colorado special forces unit we audited
    were particularly critical of the customer service they received both while
    deployed in Afghanistan and when they were demobilized from active duty.
    Specifically, unit officials expressed frustration with being routed from one
    office to another in their attempts to resolve problems with their active duty pays and allowances. For example, the unit administrator told us he
    contacted the servicing area active Army finance office for the 101st
    Airborne in West Virginia because his unit was attached to the 101st when
    they were deployed. The finance office instructed him to contact the
    USPFO in West Virginia because, although he was from a Colorado unit, his
    unit was assigned to a West Virginia Army Guard unit. However, when he
    contacted the West Virginia USPFO for service, officials from that office
    instructed him to contact the USPFO in his home state of Colorado to
    provide service for his pay problems.
    Systems Problems
    Hamper Prompt and
    Accurate Army Guard
    Pay
    Several systems issues were significant factors impeding accurate and
    timely payroll payments to mobilized Army Guard soldiers, including
    � the lack of an integrated or effectively interfaced pay system with both
    the personnel and order-writing systems,
    � limitations in DJMS-RC processing capabilities, and
    � ineffective system edits of payments and debts.
    DOD has a significant system enhancement project under way to improve
    military pay. However, given that the effort has been under way for about 5
    years and DOD has encountered challenges fielding the system, it is likely
    that the department will continue to operate with existing system
    constraints for at least several more years.
    Our findings related to weaknesses in the systems environment were
    consistent with issues raised by DOD in its June 2002 report14 to the
    Congress on its efforts to implement an integrated military pay and
    personnel system. Specifically, DOD�s report acknowledged that major
    deficiencies in the delivery of military personnel and pay services to ensure
    soldiers receive timely and accurate personnel and pay support must be
    addressed by the envisioned system. Further, the report indicated these
    deficiencies were the direct result of the inability of a myriad of current
    systems with multiple, complex interfaces to fully support current business
    process requirements. Figure 6 provides an overview of the five systems currently involved in
    processing Army Guard pay and personnel information.
    Figure
    6: Overview of Army Guard Pay and Personnel Systems
    Army National Guard
    DFAS
    Army
    SIDPERS
    AFCOS
    JUSTIS
    DJMS-RC
    DMO
    Active duty payments
    to soldiers, LESs,
    and wage garnishments
    Source: GAO.
    Hard copy of
    Mobilization orders
    Reconciliation
    Hard copy of
    Mobilization orders
    Hard copy of
    Mobilization orders
    Lack of Integrated Systems The five key DOD systems 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 error-prone, manual entry of data from the
    same source documents into multiple systems. With an effectively
    integrated system, changes to personnel records automatically update
    related payroll records from a single source of data input. While not as
    efficient as an integrated system, an automatic personnel-to-payroll system
    interface can also reduce errors caused by independent, manual entry of
    data from the same source documents into both pay and personnel
    systems. Without an effective interface between the personnel and pay systems, we found instances in which pay-affecting information did not get
    entered into both the personnel and pay systems, thus causing various pay
    problems�particularly late payments.
    We found that an existing interface could be used to help alert military pay
    personnel to take action when mobilization transactions are entered into
    the personnel system. Specifically, Army Guard state personnel offices
    used an existing interface between SIDPERS and JUSTIS to transmit data
    on certain personnel transactions (i.e., transfers, promotions, demotions,
    and address changes) to the 54 USPFOs to update the soldier�s pay records.
    However, this personnel-to-pay interface (1) requires manual review and
    acceptance by USPFO pay personnel of the transactions created in
    SIDPERS and (2) does not create pay and allowance transactions to update
    a soldier�s pay records. For example, when Army Guard soldiers change
    from inactive drilling status to active duty status, state personnel offices
    create personnel-related transactions in SIDPERS, but associated payrelated
    transactions to update the soldier�s pay records are not
    automatically created in JUSTIS. USPFO pay personnel are not aware that
    a pay-related transaction is needed until they receive documentation from
    the soldier, the soldier�s unit commander, or the monthly personnel/pay
    mismatch report. Automated improvements, such as an administrative
    action transmitted through the personnel-to-payroll interface, could be
    used to proactively alert USPFOs of certain pay-impacting transactions that
    are created in SIDPERS as a means to help ensure timely and accurate pay.
    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.
    At the case study locations we audited, we found several instances in
    which Army Guard soldiers received amended or revoked orders that were
    entered into SIDPERS but were not entered into DJMS-RC. We also found
    instances in which personnel pay-affecting changes such as changes in
    family separation allowance, basic allowance for housing, and active duty
    pay increases from promotions, were not entered into the pay system
    promptly. 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.
    The lack of an integrated set of systems was also apparent in the
    relationship between JUSTIS and the order writing system�AFCOS.
    Currently, certain personnel and order information entered and stored in
    the AFCOS database is automatically filled in the JUSTIS input screens
    pertaining to active duty tours for state missions upon entry of the soldier�s
    Social Security Number and order number. This auto-fill functionality
    eliminates the need for some error-prone, manual reentry of data into
    JUSTIS. However, currently, manual entry of data from a hard copy of the
    soldier�s orders and other documentation is required to initiate the soldier�s
    pay and allowances�a procedure that defeats the purpose of an effective
    interface. For example, at one of the case study units we audited, USPFO
    pay personnel had to manually enter the soldier�s active duty tour start and
    stop dates into JUSTIS from a hard copy of the actual mobilization order.
    When we brought this to the attention of NGB officials, they stated that
    providing the auto-fill functionality to the mobilization input screens would
    require minimal programming changes. NGB officials stated that they
    planned to release a programming software change to all 54 USPFOs that
    would allow the start and stop dates to be automatically filled into the
    mobilization screens to reduce the need for reentry of some mobilization
    information. Because this software change was scheduled to occur after
    the conclusion of our fieldwork, we did not verify its effectiveness. In any
    case, while this proposed programming change may be beneficial, it does not eliminate the need for manual entry and review of certain other
    mobilization data needed to initiate a soldier�s basic pay and allowances.
    Pay System Has Limited
    Active Duty Pay Processing
    Capabilities
    DOD has acknowledged that DJMS-RC is an aging, COBOL/mainframebased
    system. Consequently, it is not surprising that we found DFAS
    established a number of �workarounds��procedures to compensate for
    existing DJMS-RC processing limitations with respect to processing active
    duty pays and allowances to mobilized Army guard soldiers. Such manual
    workarounds are inefficient and create additional labor-intensive, errorprone
    transaction processing. We observed a number of such system
    workaround procedures at the case study units we audited.
    For example, for the special forces units we audited, our analysis disclosed
    a workaround used to exclude soldiers� pay from federal taxes while in
    combat. Specifically, DJMS-RC was not designed to make active duty pays
    and exclude federal taxes applicable to those pays in a single pay
    transaction. To compensate for this system constraint, DFAS established a
    workaround that requires two payment transactions over a 2-month payroll
    cycle to properly exempt soldiers� pay for the combat zone tax exclusion.
    That is, for those soldiers entitled to this exclusion, DJMS-RC withholds
    federal taxes the first month, identifies the taxes to be refunded during endof-
    month pay processing, and then makes a separate payment during the
    first pay update the following month to refund the taxes that should not
    have been withheld. Soldiers� taxes could not be refunded the same month
    because the DJMS-RC refund process occurs only one time a month.
    In addition, 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 system is now stretched
    because it is being used to make payments and allowances that it was not
    structured or designed to make, such as hostile fire pay and the combat
    zone tax exclusion. Many of these active duty pay and allowances require
    manual, monthly verification and reentry into DJMS-RC because, while
    some pays, such as basic active duty pay and jump pay, can be generated automatically, DJMS-RC is not programmed to generate automatic payment
    of certain other types of pay and allowances.
    For example, each month USPFO pay personnel are responsible for
    entering into JUSTIS special duty assignment pay, foreign language
    proficiency pay, and high altitude low opening (HALO) pay, and Army area
    servicing finance offices are responsible for entering into DMO hardship
    duty pay, for deployed soldiers entitled to these types of pays and for which
    a performance certification is received from the respective unit
    commanders. However, because pay transactions must be manually
    entered every month soldiers are entitled to receive these pays, it is often
    difficult to ensure that mobilized soldiers receive their entitled
    nonautomated pays and allowances. For example, we found a number of
    instances in which soldiers were underpaid their entitled jump, foreign
    language proficiency, special duty assignment, or hardship duty pays
    because pay technicians inadvertently omitted the monthly manual input
    required to initiate these types of pays every month.
    At one of the case study units, we found USPFO pay personnel had a
    procedure in place to help prevent inadvertently omitting month-to-month
    entry of nonautomated pays for entitled soldiers. Specifically, pay
    personnel at the USPFO in Maryland used a warning screen within JUSTIS
    as a mechanism to alert them that soldiers were eligible to receive that
    particular pay component that month. Although this does not alleviate the
    problem of month-to-month manual entry, the warning screen could be
    used to help preclude some of the pay problems we found resulting from
    failures to enter transactions for nonautomated, month-to-month pay and
    allowance entitlements.
    Further, these month-to-month pays and allowances were not separately
    itemized on the soldiers� leave and earnings statements in a user-friendly
    format.
    In contrast, at four of our six case study units, we found that a significant
    number of soldiers were overpaid their entitled automated pays 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, which is necessary to terminate the
    automated active duty pays when soldiers leave active duty early. For
    example, the military finance office in Kuwait, which was 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.
    Individual Case Illustration: Problems in Deciphering a Leave and Earnings
    Statement
    An Army National Guard Special Forces sergeant believed that he was not receiving
    certain active duty pays and allowances during his mobilization to active duty in support
    of Operation Enduring Freedom. On March 23, 2002, the sergeant wrote a letter from
    Afghanistan to a fellow battalion soldier back in his home state, discussing his pay
    problems. The sergeant stated that he was not receiving his special duty assignment pay
    from November 2001 to March 2002. The sergeant�s letter also stated he was not
    receiving his hostile fire pay and combat zone tax exclusion. His letter concluded, �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?� The sergeant was
    killed in action in Afghanistan on April 15, 2002, before he knew if his pay problems were
    resolved. Our review determined that some of the sergeant�s pays were started up to 2
    months late, but others had actually been paid properly. The sergeant apparently was not
    aware of receiving these payments because of the way they were combined.
    Soldiers� pays may appear as lump sum payments under �other credits� on
    their leave and earnings statements. In many cases these other credit pay
    and allowances appeared on their leave and earning statements without
    adequate 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. In addition,
    several Army Guard soldiers told us that they had difficulty discerning from
    their leave and earnings statements whether lump sum catch-up payments
    fully compensated them for previously underpaid active duty pay and
    allowance entitlements. Without such basic customer service, the soldiers
    cannot readily verify that they received all the active duty pays and
    allowances to which they were entitled.
    As shown in the example leave and earnings statement extract included in
    figure 7, an Army Guard soldier who received a series of corrections to
    special duty assignment pay along with a 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
    7: Sample Army Guard Leave and Earnings Statement
    Source: Individual Leave and Earnings Statement.
    System Edits Do Not
    Prevent Large Payments or
    Debts
    While DJMS-RC has several effective edits to prevent certain
    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. DOD established these thresholds to monitor and detect
    abnormally large payments. As a result of the weaknesses we identified,
    we found several instances in our case studies in which soldiers received
    large lump sum payments, probably 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. DJMS-RC does have edits that prevent soldiers from (1) being
    paid for pay and allowances beyond the stop date for the active duty tour,
    (2) being paid for more than one tour with overlapping dates, or (3) being
    paid twice during a pay period.
    Each month, DFAS Indianapolis pay personnel receive an Electronic Fund
    Transfer Excess Dollar Listing after the electronic fund transfer payment
    has been processed in DJMS-RC and deposited to the soldier�s bank
    account. DJMS-RC does not contain edit checks to reject payments over
    the threshold amounts or to require review and approval of payments over
    these amounts prior to their final processing. For example, at one of the
    case study units we audited, DJMS-RC did not have edit checks to prevent
    one soldier from receiving an erroneous electronic payment totaling
    $20,110 without prior approval (see the individual case illustration below
    for details). In addition, our analysis showed 76 other payroll-related
    payments during the period October 1, 2001, through March 31, 2003, of
    over $7,000 (net) each that were paid by DJMS-RC. Because the Electronic
    Fund Transfer Excess Dollar Listing is printed after the payment is made,
    timely detection of errors is critical to help ensure that erroneous payments
    are recovered and that fraud does not occur.
    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 provide adequate explanations for pay-related debt assessments.
    Our case studies identified individuals who received debt notices in excess
    of $30,000 with no explanation. At five of the 6 units audited, we identified
    86 individuals who had total pay and allowance debts of approximately
    $300,000 as of March 31, 2003. 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.
    In addition, we found that current 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 of an �Unpaid Debt Balance� in the remarks
    section of his Leave and Earnings Statement. A soldier at one of our case
    study units told us that he was not notified in advance of his receipt of his
    Leave and Earnings Statement that he had a debt assessment and that twothirds
    of his pay would be garnished. As a result, he was not able to plan his
    financial affairs to avoid late payments on his car and other loans.
    This debt assessment notification procedure is even more egregious when
    debts, particularly large debts, are assessed in error and up to two-thirds of the soldier�s pay may be garnished to begin repaying the erroneous debt.
    For example, at our case study units, we found that the only notice several
    soldiers received when they were erroneously assessed payroll debts was
    an �Unpaid Debt Balance� buried in the remarks section of their Leave and
    Earnings Statements. One such assessment showing a $39,489.28 debt is
    shown in figure 8.
    Figure
    8: Sample Leave and Earnings Statement with Large Debt Balance
    Source: Individual Leave and Earnings Statement.
    Status of System Redesign
    Efforts
    DOD has a major system enhancement effort under way in this area
    described as the largest personnel and pay system in the world in both
    scope and number of people served�the Defense Integrated Military
    Human Resources System (DIMHRS). One of the major benefits expected
    with DIMHRS is �service members receiving accurate and timely pay and
    benefits.� Begun in 1998, DIMHRS is ultimately intended to replace more
    than 80 legacy systems (including DJMS-RC) and integrate all pay,
    personnel, training, and manpower functions across the department by
    2007.
    By the end of fiscal year 2003, DOD reporting shows that it will have
    invested over 5 years and about $360 million in conceptualizing and
    planning the system. In 2002, DOD estimated that integrated personnel and
    pay functions of DIMHRS would be fully deployed by fiscal year 2007. It
    also reported a development cost of about $427 million. However, our
    review of the fiscal year 2004 DOD Information Technology budget request
    shows that DOD is requesting $122 million and $95 million, respectively, for
    fiscal years 2004 and 2005. In addition, the department reported that the
    original DIMHRS project completion milestone date has slipped about 15
    months.
    Part of the requested funding for fiscal year 2004 was to acquire a payroll
    module, Forward Compatible Payroll. According to program officials, this
    module, in conjunction with a translation module and a Web services
    component, is to replace DJMS-RC and DJMS-AC systems by March 2006,
    with the first deployment to the Army Reserve and Army Guard in March
    2005.
    In assessing the risks associated with DIMHRS implementation as part of
    its fiscal year 2004 budget package, DOD highlighted 20 such risks. For
    example, DOD reported a 60 percent risk associated with �Service issues
    with business process reengineering and data migration.� The
    department�s ability to effectively mitigate such risks is of particular
    concern given its poor track record in successfully designing and
    implementing major systems in the past.15 Consequently, given the
    schedule slippages that have already occurred combined with the many
    risks associated with DIMHRS implementation, Army Guard soldiers will likely be required to rely on existing pay systems for at least several more
    years.
    Army Guard Active
    Duty Pay Problems
    Continue with Current
    Deployments 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, we identified 54 soldiers who our review of available records
    indicated 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. Colorado USPFO military pay-processing
    personnel told us they are reviewing pay records for all deployed soldiers
    from this unit to ensure that they are receiving all entitled active duty pays
    and allowances.
    Conclusions 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 clearly may have a profound effect on reenlistment
    and retention. It is not surprising that cumbersome and complex processes
    and ineffective human capital strategies, combined with the use of an
    outdated system that was not designed to handle the intricacies of active
    duty pay and allowances, would result in significant pay problems. 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, immediate actions 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 and the
    global war on terrorism. Immediate steps to at least mitigate the most
    serious of the problems we identified are needed to help ensure that the
    Army Guard can continue to successfully fulfill its vital role in our national
    defense.
    Recommendations for
    Executive Action
    We recommend that the Secretary of Defense direct the Secretary of the
    Army, in conjunction with the Under Secretary of Defense (Comptroller),
    to take the following actions to address the issues we found with respect to
    the existing processes, human capital, and automated systems relied on to
    pay activated Army Guard personnel.
    Process � 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.
    � Establish performance measures for obtaining supporting
    documentation and processing pay transactions (for example, no more
    than 5 days would seem reasonable).
    � Establish who is accountable for stopping active duty pays for soldiers
    who return home earlier than their units.
    � Clarify the policies and procedures for how to properly amend active
    duty orders, including medical extensions.
    � 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.
    � 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 � 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.
    � 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.
    � 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.
    � 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.
    � 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.
    � Establish an ongoing mechanism to monitor the quality and completion
    of training for both pay and finance personnel and unit commanders.
    � 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.
    � 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.
    � 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
    Interim Improvements to
    Current Automated Pay System
    Structure
    � 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.
    � 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.
    � 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.
    � Evaluate the feasibility of using the JUSTIS warning screen to help
    eliminate inadvertent omissions of required monthly manual pay inputs.
    � 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.
    � Evaluate the feasibility of establishing an edit check and requiring
    approval before processing any debt assessments above a specified
    dollar amount.
    � Evaluate the feasibility of establishing an edit check and requiring
    approval before processing any payments above a specified dollar
    amount.
    Longer-Term System
    Improvements
    � 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. � 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.
    Agency Comments and
    our Evaluation
    In its written comments, DOD concurred with our recommendations and
    identified actions to address the identified deficiencies. Speciifically, DOD�s
    response outlined some actions already taken, others that are underway,
    and further planned actions with respect to our recommendations. If
    effectively implemented, these actions should substantially resolve the
    deficiencies pointed out in our report. DOD�s comments are reprinted in
    appendix VIII.
    As agreed with your office, unless you publicly announce its contents
    earlier, we plan no further distribution of this report until 30 days from its
    date. At that time, we will send copies of the report to interested
    congressional committees. We will also send copies of this report to the
    Secretary of Defense, the Under Secretary of Defense (Comptroller), the
    Secretary of the Army, the Director of the Defense Finance and Accounting
    Service, the Director of the Army National Guard, and the Chief of the
    National Guard Bureau. We will make copies available to others upon
    request. In addition, the report will be available at no charge on the GAO
    Web site at http://www.gao.gov. If you or your staff have any questions
    regarding this report, please contact me at (202) 512-9505 or
    kutzg@gao.gov or Geoffrey Frank, Assistant Director, at (202) 512-9518 or
    frankg@gao.gov.
    Sincerely yours,
    Gregory D. Kutz
    Director, Financial Management and Assurance
    Colorado Army National Guard B Company,
    5th Battalion, 19th Special Forces Appendix I
    On December 5, 2001, the Colorado Army National Guard�s B Company, 5th
    Battalion, 19th Special Forces, was mobilized to active duty on orders for a
    2-year period�through December 4, 2003. The unit was mobilized at Fort
    Knox and subsequently deployed in Afghanistan, Uzbekistan, and
    surrounding areas to search for Taliban and al Qaeda terrorists as part of
    Operation Enduring Freedom. The unit returned to Fort Campbell for
    demobilization and was released from active duty on December 4, 2002�1
    year before the end of the unit�s original mobilization orders. A timeline of
    the unit�s actions associated to its mobilization under Operation Enduring
    Freedom is shown in figure 9.
    Figure
    9: Timeline Showing Key Actions Associated with Colorado National Guard
    Special Forces Unit�s Mobilization
    Active duty tour
    officially ends.
    12/4/02
    Dec 01 Jan 02 Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
    Soldiers in-process
    at Pueblo, CO home station.
    12/5/01
    Soldiers demobilize at
    Ft. Campbell, KY.
    7/02 through
    10/02
    Travel to
    Ft. Knox, KY.
    12/15/01
    Travel to
    Ft. Campbell, KY.
    12/20/01 Travel to
    Uzbekistan/Afghanistan.
    2/15/02
    Arrival in
    Uzbekistan/Afghanistan.
    2/22/02
    2/22/02 through
    10/02
    Deployed in
    Uzbekistan/Afghanistan.
    12/20/01 through
    2/15/02
    Preparing for
    overseas
    deployment.
    Source: GAO
    As summarized in table 3, the majority of soldiers from Colorado�s B
    Company experienced some sort of pay problem during one or more of the
    three phases of their active duty mobilization. Overall, all 62 soldiers with
    the company had at least one pay problem associated with their
    mobilization. These pay problems included not receiving entitled pays and
    allowances at all; not receiving some entitled pays and allowances within
    30 days; and for some, overpayments of pays and allowances. Specifically, we found (1) 56 soldiers did not receive certain pay and allowance
    entitlements at all, or within 30 days of their initial mobilization, (2) 61
    soldiers either did not receive, or did not receive within 30 days, the hostile
    fire pay or other �high-risk location� pays they were entitled to receive
    based on their deployment in Uzbekistan and Afghanistan, and (3) 53
    soldiers either improperly continued to receive hostile fire pay after leaving
    high-risk locations overseas or continued to receive paychecks, as if they
    were still on active duty status, for over 2 months beyond their release from
    active duty.
    Table
    3: Summary of Identified Pay Problems by Phase
    Phase Number of soldiers with pay problems
    Mobilization 56 of 62
    Deployed 61 of 62
    Demobilization 53 of 62
    Source: GAO analysis.
    In total, we identified estimated overpayments of $494,000, underpayments
    of $28,000, and late payments of $64,000, associated with the pay problems
    we found. Of the estimated $494,000 in overpayments, we identified about
    $88,000 that was subsequently collected from the soldiers of Colorado�s B
    Company. In addition, in trying to correct overpayments associated with
    Colorado B Company�s departure from high-risk locations and release from
    active duty, the Defense Finance and Accounting Service (DFAS) billed 34
    of the unit�s soldiers an average of $48,000 each, for a largely erroneous
    total debt of over $1.6 million.
    Many soldiers with the company characterized the service they received
    from the state United States Property and Fiscal Office (USPFO) and the
    active Army finance offices while deployed in Afghanistan and surrounding
    areas as �poor� or �openly hostile.� Some of the soldiers in the unit
    expressed significant dissatisfaction with the time and effort they, or their
    spouses were required to spend attempting to identify and correct their
    pay.
    These pay problems had a variety of adverse effects. The labor-intensive
    efforts by the special forces soldiers to address pay problems, in some
    cases, distracted them from important mission operations. In addition,
    several soldiers told us that the numerous pay problems they encountered would play a major role in their decision whether to reenlist. According to
    several soldiers from Colorado�s B Company, the combined effect of
    (1) recurring pay problems, (2) having two-thirds of their monthly training
    paychecks garnished to pay off often erroneous payroll-related debts, and
    (3) receiving poor payroll customer service during their active duty tours
    adversely affects morale and may have an adverse effect on a soldier�s
    willingness to continue his or her service with the Army Guard. For
    example, a unit official advised us that as of September 30, 2003, three
    soldiers had left B Company primarily due to frustration over pay
    problems. The unit official indicated that he expected additional soldiers
    would depart as a result of the current debt problems.
    Mobilization Pay
    Problems
    As summarized in table 4, we identified a number of pay problems
    associated with eight different types of active duty pays and allowances
    related to the unit�s mobilization to active duty. These problems resulted
    from failure to enter data, data entry errors, or late entry of data needed by
    Army Guard USPFO military pay personnel and by active Army military pay
    personnel at the unit�s mobilization station to start active duty pays. We
    also found that these pay problems were exacerbated by breakdowns in
    customer service.
    Table
    4: Identified Mobilization Pay Problems
    Type of pay or allowance
    Number of
    soldiers who did
    not receive pay or
    allowance within
    30 days of
    entitlement
    Number of
    soldiers who
    were underpaid
    Number of
    soldiers who
    were overpaid
    Basic pay 5 2 0
    Basic allowance for housing 5 3 0
    Basic allowance for
    subsistence 6 4 0
    Family separation allowance 7 7 1
    Jump pay 11 2 0
    HALO pay 10 2 8
    Foreign language proficiency
    pay 4 0 0
    Special duty assignment pay 44 41 2
    Source: GAO analysis.
    In total, 56 out of 62 soldiers did not receive certain pays and allowances at
    all, or in a timely manner, after being activated on December 5, 2001. As
    illustrated in table 4, 11 soldiers did not receive entitled Jump pay within 30
    days of entitlement,1 10 did not receive HALO pay within 30 days of
    entitlement,2 and 41 soldiers did not receive at least 1 month of their special
    duty assignment pay.3
    According to DFAS procedures, the unit�s Army Guard USPFO should have
    initiated these pays. In addition, these problems could have been
    minimized if they were identified and corrected by the Army mobilization
    station finance office at Fort Knox during the soldier readiness processing
    at that location. According to Army regulations, the active Army
    mobilization station is required to conduct a soldier readiness program to
    review every mobilizing soldier�s pay account for accuracy. In essence,
    under Department of Defense (DOD) guidance, the active Army
    mobilization stations are to act as a �safety net� to catch and correct any
    errors in soldiers� active duty pays and allowances before they are
    deployed on their active duty missions.
    The underpayments and late payments resulted in adverse financial
    repercussions for a number of the unit�s members and their families. We
    were told that many of the unit members� spouses tried to contact the
    soldiers while they were deployed to find out why they were not receiving
    the anticipated funds. We were told that neither the spouses nor the
    soldiers received clear guidance on whom to contact to address their pay
    concerns. For example, some soldiers sought help from the active Army�s
    finance offices at Fort Knox and Fort Campbell. However, upon contacting
    officials at those locations, soldiers were told that the active Army could
    not help them because they were Army Guard soldiers and should
    therefore contact their home state Army Guard USPFO. According to
    DFAS officials, the active Army finance offices have the capability to
    service Army Guard soldiers. Fort Knox and Fort Campbell finance
    personnel were either unaware of their capability or unwilling to take the
    actions needed to address the unit�s active duty pay concerns.
    Colorado�s B Company soldiers turned back to the USPFO for assistance.
    Although the USPFO did process a number of transactions to start entitled
    active duty pays and allowances for the unit�s soldiers, such pays were
    started more than 30 days after the date they were entitled to receive such
    pays. In one case, a soldier�s spouse had to obtain a $500 grant from the
    Colorado National Guard in order to pay bills while her husband was on
    active duty.
    Deployment Pay
    Problems
    Colorado�s B Company was deployed to Uzbekistan and Afghanistan in
    February 2002. As summarized in table 5, we identified pay problems
    associated with the hostile fire pay, combat zone tax exclusion, and
    hardship duty pay that unit soldiers were entitled to receive based on their
    deployment to Afghanistan and surrounding areas.
    Table
    5: Identified Deployment Pay Problems
    Type of pay or
    allowance
    Number of soldiers who
    did not receive pays or
    allowances within 30
    days of entitlement
    Number of
    soldiers who
    were underpaid
    Number of
    soldiers who
    were overpaid
    Hostile fire pay 51 2 2
    Combat zone tax
    exclusion 56 7 0
    Hardship duty pay 59 33 14
    Source: GAO analysis.
    Specifically, after arriving in Afghanistan, some soldiers in Colorado�s B
    Company received these pays sporadically, were not paid at all, were paid
    but for inexplicable dollar amounts, or were overpaid their entitled active
    duty pays and allowances while deployed. For example, 16 of the 62
    soldiers in B Company received the wrong type of hardship duty pay,
    formerly called Foreign Duty Pay, in addition to the correct hardship duty
    location pay while they were deployed in Afghanistan.
    We found that these pay problems could be attributed, in part, to the active
    Army servicing finance office�s lack of knowledge about how to process
    transactions through the Defense Joint Military Pay System-Reserve
    Component system (DJMS-RC) to start location-based pays and allowances
    for the unit�s soldiers. For example, we were told that because active Army
    in-theater finance personnel were unfamiliar with the required procedures to follow in starting hardship duty pays, they entered transactions that
    resulted in soldiers receiving two different location-based types of hardship
    duty pay for the same duty. Further, Army Guard soldiers told us the active
    Army finance office could not effectively answer questions concerning
    their pay entitlements or transaction processing documentation
    requirements. After not receiving any pay support from the active Army
    servicing finance location, the unit�s soldiers told us they contacted their
    Army Guard USPFO in Colorado for assistance. However, Colorado
    USPFO officials informed them that they did not have the capability to start
    location-based pays and allowances for Army Guard soldiers.
    A frequent complaint we received from Colorado�s B Company soldiers
    concerned the circular nature of any attempts to get assistance on pay
    issues while deployed overseas. B Company�s soldiers told us they spent
    significant amounts of time and effort trying to correct the pay problems
    while deployed on critical mission operations in Afghanistan and
    surrounding areas�time and focus away from the mission at hand. For
    example, as discussed in greater detail in our West Virginia case study
    summary, a soldier from that unit took several days away from his unit to
    get location-based pay started for both the West Virginia and Colorado
    special forces units. We were also told that some members of the unit used
    their satellite radios to attempt to resolve their pay problems while
    deployed in Afghanistan. In addition, several of the unit�s soldiers told us
    their ability to identify and correct pay problems while deployed was
    impaired by limited access to telephones, faxes, e-mail, and their current
    Leave and Earnings Statements.
    Pay Problems
    Associated with
    Demobilization and
    Release from Active
    Duty
    In the late summer to early fall of 2002, soldiers from Colorado�s B
    Company began returning from Afghanistan and surrounding areas to Fort
    Campbell to begin their demobilization from active duty. However, the
    active Army�s finance office at Fort Campbell failed to properly stop
    soldiers� pay as of their demobilization dates, which for most of the unit�s
    soldiers was December 4, 2002. As summarized in table 6, 39 of the unit�s
    62 soldiers continued to receive active duty pay and allowances, some
    until February 14, 2003�2 and a half months after the date of their release
    from active duty. Table
    6: Identified Demobilization Pay Problems
    Type of pay or allowance continued in error Number of soldiers overpaid
    Basic pay 39
    Hostile fire pay 41
    Combat zone tax exclusion 39
    Hardship duty pay 1
    Source: GAO analysis.
    We found that both the active Army servicing finance location for the unit
    while it was in Afghanistan and at Fort Campbell upon its return to the
    United States did not take action to stop active duty pays and allowances.
    According to DFAS procedures, the finance office at the servicing
    demobilization station is to conduct a finance out-processing, which would
    include identifying and stopping any active duty pays that soldiers were no
    longer entitled to receive. According to DFAS-Indianapolis Reserve
    Component mobilization procedures, the local servicing active Army
    finance office also has primary responsibility for entering transactions to
    stop hardship duty pay, hostile fire pay, and the combat zone tax exclusion
    when soldiers leave an authorized hostile fire/combat zone. However, in
    this case, that office did not take action to stop these types of pay and
    allowances for many of the unit�s soldiers. For example, military pay
    personnel at Fort Campbell failed to deactivate hostile fire pay for 41 out of
    62 B Company soldiers. With regard to customer service, some soldiers in
    the unit told us that upon their return from overseas deployments, they
    were informed that they should have corrected these problems while intheater,
    despite the fact that these problems were not detected until the
    demobilization phase.
    Colorado�s B Company demobilization was complicated by the fact that the
    unit did not demobilize through the same active Army location used to
    mobilize the unit. DFAS procedures provide that Army Guard soldiers are
    to demobilize and have their active duty pays stopped by the installation
    from which they originally mobilized. However, the unit received orders to
    demobilize at Fort Campbell rather than Fort Knox where they originally
    mobilized. According to Fort Campbell personnel, Colorado�s B Company
    out-processed through the required sections, including finance, during their
    demobilization. Nonetheless, the finance office at that active Army
    location failed to stop all active duty pays and allowances when the unit
    was demobilized from active duty. Fort Campbell finance office personnel
    we interviewed were not present during B Company�s demobilization and had no knowledge of why pay was not stopped during the demobilization
    process.
    Failure to stop location-based and other active duty pays and allowances
    for the unit�s soldiers resulted in overpayments. As a result of the Colorado
    USPFO�s errors made in attempting to amend the unit�s orders to reflect an
    earlier release date than the date reflected in the unit�s original mobilization
    orders, large debts were created for many soldiers in the unit. Specifically,
    largely erroneous soldier debts were created when personnel at the
    Colorado USPFO inadvertently revoked the soldiers� original mobilization
    orders when attempting to amend the orders to reflect the unit�s actual
    release date of December 4, 2002�1 year before the end of the unit�s
    original orders. As a result, 34 soldiers received notice on their Leave and
    Earnings Statements that rather than a debt for the 2 and a half months of
    active duty pay and allowances they received after their entitlement had
    ended, they owed debts for the 11 months of their active duty tour�an
    average of $48,000 per soldier, for a total debt of $1.6 million.
    Several of the soldiers in the company noticed the erroneous debt and
    called their unit commander. Some of the soldiers wanted to settle the debt
    by writing a check to DFAS. However, they were told not to because the
    exact amount of each soldier�s debt could not be readily determined and
    tracking such a payment against an as-yet undetermined amount of debt
    could confuse matters. Meanwhile, some soldiers now returned from
    active duty, resumed participation in monthly training, and began having
    two-thirds of their drill pay withheld and applied to offset their largely
    erroneous debt balances. We were told that it would take approximately 4
    to 5 years for the soldiers to pay off these debts using this approach.
    On April 17, 2003, and in a subsequent June 20, 2003, letter, we brought this
    matter to the attention of DFAS and the DOD Comptroller, respectively.
    Table 7 provides an overview of the actions leading to the creation of
    largely erroneous payroll-related debts for many of the unit�s soldiers and
    DOD�s actions to address these largely erroneous debts. Table
    7: Timetable of Colorado B Company�s Unresolved Pay-Related Debts
    Date Action
    December 5, 2001 B Company begins active duty tour in support of Operation
    Enduring Freedom.
    July to October 2002 Soldiers demobilize through Fort Campbell. Active duty pay
    and other location-based pays are not stopped by finance
    office.
    December 4, 2002 Active duty tour officially ends (1 year before the end of the
    unit�s original 2-year orders). Pay is stopped for 28 of 62
    soldiers; pay erroneously continues for 34 others.
    February 14, 2003 Thirty-four soldiers� pay was not stopped until more than 70
    days after tour officially ended. In attempting to amend orders
    to stop active duty pay and allowances and correct the length of
    the unit�s original 2-year orders, the state USPFO pay chief
    revokes the original orders. This action triggers a systemic
    reversal of pay already earned from March 2002 through
    February 15, 2003, and establishes debts for these soldiers
    from $34,000 to $68,000. The soldiers were first notified of
    these large debts by notations in the �Remarks� section of their
    Leave and Earnings Statements.
    April 17, 2003 GAO alerts DFAS Indianapolis of B Company�s continuing pay
    problem.
    June 20, 2003 GAO sends the Under Secretary of Defense (Comptroller) a
    letter requesting assistance on correcting pay issues and
    making soldiers whole, including any tax consequences of
    errors. DFAS-Indianapolis suspends 24 soldiers� pay-related
    debts from collection activity.
    July 19, 2003 DFAS-Indianapolis sends representative to B Company
    monthly unit training to discuss debt computations. Debt
    computations did not reflect underpayments due soldiers for
    location-based pays.
    July 31, 2003 DFAS Indianapolis agrees to again visit B Company after
    completion of audit of soldiers� entire active duty tour in order to
    make soldiers financially whole.
    Source: GAO analysis.
    Despite considerable time and effort of DFAS and others across the Army
    Guard and Army, as of the end of our fieldwork in September 2003,
    Colorado�s B Company debt problems had not been resolved. In fact, for
    one sergeant, his pay problems were further complicated by these efforts.
    For example, in attempting to reduce the soldier�s recorded $30,454 debt by
    $20,111, DFAS instead sent the soldier a payment of $20,111. As of
    September 2003, about 9 months after his demobilization, the sergeant�s
    reported unpaid debt balance was $26,806, but the actual amount of his
    debt remained unresolved.
    Virginia Army National Guard B Company, 3rd
    Battalion, 20th Special Forces Appendix I
    On January 2, 2002, the Virginia Army National Guard�s B Company, 3rd
    Battalion, 20th Special Forces, was called to active duty in support of
    Operation Enduring Freedom for a 1-year tour. The unit in-processed at
    Fort Pickett, Virginia, and departed for Fort Bragg, North Carolina. The
    unit mobilized at Fort Bragg and for the next several months performed
    various duties on base until May 2002. In early May 2002, Virginia�s B
    Company deployed to Afghanistan to perform search and destroy missions
    against al Qaeda and Taliban terrorists. Although several of B Company�s
    soldiers returned from Afghanistan during August and September 2002,
    most of the unit�s members returned to Fort Bragg for demobilization
    during October 2002 and were released from active duty on January 2, 2003.
    A timeline of the unit�s actions associated with its mobilization under
    Operation Enduring Freedom is shown in figure 10.
    Figure
    10: Timeline Showing Key Actions Associated with Virginia Army National
    Guard Special Forces Unit�s Mobilization
    Dec 01 Jan 02 Jan 03 Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
    Soldiers in-process
    at Fort Pickett, VA.
    12/15/01
    Soldiers leave Fort
    Bragg for
    In-Theater location.
    5/3/02
    Arrival in
    Afghanistan.
    5/10/02
    Demobilization
    through Ft. Bragg.
    9/02 through
    11/02
    1/02 through 4/02
    Training at Fort
    Bragg, NC.
    5/3/02 through
    5/10/02
    En route
    to Afghanistan.
    5/10/02 through
    10/02
    Deployed in and
    around Afghanistan.
    1/02/03
    Active duty tour
    officially ends.
    Source: GAO.
    As summarized in table 8, the majority of soldiers from Virginia�s B
    Company experienced some sort of pay problem during one or more of the
    three phases of their active duty mobilization. Overall, 64 of the 65 soldiers
    with the company experienced at least one pay problem associated with
    their mobilization. These pay problems included not receiving entitled
    pays and allowances at all; not receiving some entitled pays and allowances
    within 30 days; and for some, overpayments of pays and allowances.
    Specifically, we found (1) 31 soldiers did not receive certain pay and allowance entitlements at all, or within 30 days of their initial mobilization
    entitlement, or were overpaid, (2) 63 soldiers either did not receive, or did
    not receive within 30 days, the hardship duty pay or other high-risk location
    pays they were entitled to receive based on their deployment to
    Afghanistan, and (3) 60 soldiers improperly continued to receive hardship
    duty pay or hostile fire pay after leaving high-risk locations overseas.
    Table
    8: Summary of Identified Pay Problems by Phase
    Process stage Number of soldiers with pay problems
    Mobilization 31 of 65
    Deployed 63 of 65
    Demobilization 60 of 65
    Source: GAO analysis.
    In total, we identified estimated overpayments of $25,000, underpayments
    of $12,000, and late payments of $28,000 associated with the pay problems
    we found. Of the estimated $25,000 in overpayments, we identified about
    $2,000 that was subsequently collected from the soldiers.
    Our audit showed that the pay problems experienced by Virginia�s B
    Company were the result of a number of factors, including late submission
    of required pay support documents, incorrect pay inputs by Army
    personnel, and an active Army in-theater finance office�s lack of knowledge
    about the unit�s presence in Afghanistan.
    These pay problems had a number of adverse effects. Several B Company
    soldiers we interviewed expressed dissatisfaction with the time and effort
    they, or their spouses, were required to spend attempting to identify and
    correct problems with their pay. Another complaint concerned the circular
    nature of any attempts to get assistance. For example, we were told the
    USPFO referred soldiers to the active Army finance office and that office
    referred them back to the USPFO. Virginia USPFO officials informed us
    that the circular nature of giving assistance to soldiers was sometimes
    unavoidable. For example, they said that once soldiers left their home unit
    and the Fort Bragg and in-theater finance offices assumed pay
    responsibilities, the USPFO informed soldiers and their spouses to contact
    these active Army finance offices to discuss active duty payment problems.
    USPFO officials acknowledged that in instances in which the active Army finance office did not resolve soldiers� pay problems, USPFO staff would
    try to fix the problems.
    According to several soldiers, the combined effect of recurring pay
    problems and receiving poor payroll customer service during their active
    duty tours adversely affects morale and may have a negative effect on the
    soldiers� willingness to continue serving with the Army National Guard.
    Several soldiers told us that the numerous pay problems they encountered
    would play a major role in their decisions whether to reenlist.
    Mobilization Pay
    Problems
    As summarized in table 9, we identified a number of pay problems
    associated with the unit�s mobilization to active duty. These problems
    resulted from failures by unit soldiers to provide necessary documentation
    to initiate certain pays, and data entry errors or late entry of data needed to
    start active duty pays by Army Guard USPFO military pay personnel and/or
    by active Army military pay personnel at the unit�s mobilization station.
    Table
    9: Identified Mobilization Pay Problems
    Type of pay
    Number of soldiers
    who did not receive
    pay within 30 days of
    entitlement
    Number of
    soldiers who
    were underpaid
    Number of
    soldiers who
    were overpaid
    Jump pay 3 8 0
    Foreign language
    proficiency pay 0 10 0
    HALO pay 0 0 10
    Basic pay 13 0 0
    Source: GAO analysis.
    We identified 31 out of 65 soldiers from Virginia�s B Company who did not
    receive certain types of pay at all, were not paid in a timely manner, or were
    overpaid after being activated on January 2, 2002. The types of pay for
    which most problems occurred during mobilization were parachute jump
    pay, foreign language proficiency pay, HALO pay, and basic pay. As shown
    in table 9, we identified 8 soldiers who were underpaid for jump pay, 10
    soldiers who were underpaid for foreign language pay, and 10 soldiers who
    were overpaid for HALO pay.
    Prior to being mobilized, the soldiers in Virginia�s B Company attended a
    soldier readiness program at the USPFO at Fort Pickett, Virginia. Part of
    this program was intended to ensure that soldiers had proper
    administrative paperwork and financial documents necessary to start all
    entitled active duty pays at mobilization. Virginia USPFO personnel who
    conducted the finance portion of B Company�s soldier readiness program
    verified soldiers� supporting financial documentation and updated, if
    necessary, each soldier�s Master Military Pay Accounts (MMPA).
    This verification process disclosed that many soldiers had unresolved pay
    errors that had occurred as far back as 1996. According to U.S. Army
    Forces Command Regulation 500-3-3, these problems should have been
    corrected during required annual soldier readiness reviews conducted at
    the unit�s home station. As part of our analysis of the unit�s pay, we
    determined that some of these long-standing pay problems had been
    resolved. For example, over $22,500 was processed for 52 B Company
    soldiers� and included in soldiers� pay distributions from October 2001 to
    March 2003. USPFO officials told us that they have been working with a
    sergeant from Virginia�s B Company who performed a detailed analysis of
    soldiers� long-standing pay problems in addition to pay problems that
    occurred subsequent to January 2002 for the majority of their mobilization.1
    This sergeant performed these pay-related tasks in addition to his missionrelated
    duties as a professional engineer.
    After leaving the unit�s home station, B Company traveled to Fort Bragg, its
    active Army mobilization station. Fort Bragg personnel conducted a
    second soldier readiness program that was intended to identify and fix any
    pay issues not resolved at the home station. According to USPFO officials
    and active Army finance office officials at Fort Bragg, problems with jump
    pay and foreign language pay occurred at mobilization because the
    necessary documentation to support jump pay eligibility or language
    proficiency for a number of soldiers was not always provided to the USPFO
    or the mobilization station. For example, of the 8 soldiers in the unit who
    were underpaid for jump pay, 4 did not receive jump pay until mid-
    February 2002 and 1 did not begin to receive jump pay until mid-March. In
    another instance, we identified 10 soldiers who were eligible to receive
    foreign language proficiency pay in January 2002, but did not receive
    payments for 1 or more months after they became eligible. Further, nine soldiers in the unit were eligible for HALO pay in January
    2002. However, again, in part because of the lack of proper documentation
    from the unit�s soldiers, but also because of pay input errors at the active
    Army finance unit at Fort Bragg, pay problems occurred for seven of the
    nine soldiers during January 2002, the initial month of their mobilization.
    The seven soldiers eligible for HALO pay received both jump pay as well as
    HALO pay during January 2002, which resulted in overpayments to these
    soldiers. These overpayments occurred because Fort Bragg, unaware that
    the USPFO had previously processed HALO pay for these soldiers,
    processed HALO pay a second time, based on supporting documentation
    received from the unit. Also, we found that two soldiers, who were not
    eligible to receive HALO pay, received HALO pay for 3 months and another
    soldier received HALO pay starting in January but did not become eligible
    for this pay until mid-April 2002. Documentation was not available to
    explain these errors.
    Deployment Pay
    Problems
    In May 2002, Virginia�s B Company left Fort Bragg and traveled to
    Afghanistan to assist in missions against al Qaeda and Taliban forces.
    While in Afghanistan, the soldiers encountered additional pay problems
    related to hardship duty pay, special duty assignment pay, and, to a lesser
    extent, hostile fire pay and basic pay. Also, the soldiers experienced
    problems in receiving the full amounts of their entitled HALO pay. Table 10
    summarizes the pay problems we identified for the unit while it was
    deployed.
    Table
    10: Identified Deployment Pay Problems
    Type of pay or
    allowance
    Number of soldiers
    who did not receive
    pays or allowances
    within 30 days of
    entitlement
    Number of
    soldiers who
    were underpaid
    Number of
    soldiers who
    were overpaid
    Hardship duty pay 63 0 0
    Special duty
    assignment pay 0 10 24
    HALO pay 0 11 0
    Hostile Fire pay 0 2 0
    Basic pay 3 0 0
    Source: GAO analysis.
    Once the soldiers arrive in-theater, an active Army finance office assigned
    to the unit is responsible for initiating assignment and location-based pays
    for the unit�s soldiers in DJMS-RC. However, we found that the active Army
    in-theater finance offices did not always know which units they were
    responsible for servicing or their location. The in- theater finance office for
    Virginia�s B Company, located in Kuwait, did not start these pays as
    required. We were told that this occurred because finance personnel in
    Kuwait did not know that B Company had arrived in Afghanistan. Virginia�s
    B Company soldiers, who were not regularly receiving their leave and
    earnings statements while in Afghanistan, told us they became concerned
    that they were not receiving pays they were entitled to while deployed
    based on conversations with their spouses.
    After attempts to initiate location-based pays at the battalion finance unit in
    Afghanistan were unsuccessful because finance personnel at that location
    were not familiar with DJMS-RC�s transaction processing requirements for
    starting these types of pay, two soldiers were ordered to travel to Camp
    Snoopy, Qatar, where another Army finance office was located. Attempts
    to start assignment and location-based pays for the unit�s soldiers at Camp
    Snoopy were also unsuccessful. One of the soldiers told us that they flew
    to Kuwait because they were advised that the finance unit at that active
    Army finance office was more knowledgeable about how to enter the
    necessary transactions into DJMS-RC to pay the unit�s soldiers. The soldier
    told us he took an annotated battle roster listing the names of all Virginia�s
    B Company soldiers deployed in and around Afghanistan at that time and
    the dates they arrived in country with him as support for starting the unit�s
    in theater-based pays.2 Finally, at Kuwait the appropriate in-theater pays
    were activated and the two soldiers returned to Afghanistan. As shown in
    figure 11, the entire trip required interim stops at eight locations because of
    limited air transportation and took about a week. Figure
    11: Itinerary of Two B Company Soldiers� Efforts to Start Location-Based Pays for the Unit
    Armenia
    Georgia
    Azerbaijan Tajikistan
    Qatar
    U. A. E.
    Yemen
    Iraq
    Iran
    Oman
    Saudi Arabia
    Russia
    Afghanistan
    Pakistan
    Turkmenistan
    Uzbekistan
    Caspian
    Sea
    Arabian Sea
    Indian Ocean
    Gulf of Oman
    Persian
    Gulf
    Kazakhstan
    Camp
    Snoopy
    Shabaz
    AFB
    Dushanbe
    Kandahar AFB
    Seeb AFB
    Bagram AFB
    Kuwait Intl Airport/
    Camp Doha 5
    1 Sgt. and SFC fly from Bagram AFB,
    Afghanistan, to Dushanbe, Tajikistan.
    2 Sgt. and SFC fly from Dushanbe to Camp
    Snoopy, Qatar, and are informed of inability to
    make pay changes from Camp Snoopy.
    Sgt. and SFC spend the weekend in Qatar due
    to limited flight availablilty.
    3 Sgt. and SFC fly from Camp Snoopy to
    Jacobabad, Pakistan.
    4 Sgt. and SFC fly from Jacobabad, Pakistan
    to Kuwait International Airport.
    5 Sgt. and SFC travel 45 minutes to Camp
    Doha, Kuwait, and uses Camp Doha
    finance office to input name, SSN, rank,
    arrival date, and other pertinent information
    for each battalion member. Sgt. and SFC
    return to Kuwait International Airport.
    7 Sgt. and SFC fly from Seeb
    AFB to Kandahar AFB, Afghanistan.
    8 Sgt. and SFC fly from Kandahar AFB,
    returning to Bagram AFB, Afghanistan.
    6 Sgt. and SFC fly from Kuwait
    International Airport to Seeb AFB, Oman. Kuwait
    Source: GAO.
    1
    2
    3
    4
    6
    7
    8
    Despite this costly, time-consuming, and risky procedure to start locationbased
    pays for the unit, 63 of Virginia�s B Company soldiers, who became eligible for hardship duty pay in May 2002, not receive their location-based
    pay entitlements until July 2002.
    Problems with special duty assignment pay also occurred during the unit�s
    deployment. We found that both underpayments and overpayments of this
    type of pay were made as a result of confusion about who was responsible
    for making the manual monthly transactions necessary for entitled soldiers
    in the unit to receive these pays.. For example, 10 soldiers in B Company
    did not receive at least 1 month of entitled special duty assignment pay.
    Conversely, overpayments of this type of pay were made when B Company
    left Afghanistan and returned to Fort Bragg to demobilize in October 2002,
    and both the active Army finance office at Fort Bragg and the Virginia
    USPFO entered special duty assignment pay transactions for the unit�s
    eligible soldiers. Fort Bragg processed October and November 2002
    special duty assignment duty payments for 24 of the unit�s soldiers in
    December 2002. Virginia�s USPFO, unaware that Fort Bragg had made
    these payments in December 2002, also paid all 24 eligible soldiers special
    duty assignment pay for October and November 2002 several months later.
    USPFO officials explained that their military pay office processed the
    payments because B Company submitted the necessary documentation
    certifying that the unit�s soldiers were entitled to receive back pay for
    missed special assignment duty pays. The officials told us that special duty
    assignment pay was processed because, having received this certification
    from the unit, they assumed that payments had not yet been made.
    Virginia�s B Company soldiers also experienced problems with HALO pay
    during deployment. We identified 11 B Company soldiers eligible for HALO
    pay who did not receive 1 or more months of this pay as of March 31, 2003.
    We determined that these problems occurred because such pays require
    manual monthly input, and the pay technicians inadvertently did not make
    the required entries each month. In addition, 2 of the unit�s soldiers did not
    receive all hostile fire payments to which they were entitled. One soldier
    did not receive the first month of entitled hostile fire pay for May 2002, and
    the other soldier received hostile fire pay for May 2002 but not for the
    remaining months of his deployment.
    Pay Problems
    Associated with
    Demobilization and
    Release from Active
    Duty
    Although some soldiers in B Company left Afghanistan during August and
    September 2002, most of the unit returned to Fort Bragg in October 2002 to
    begin the demobilization process. As summarized in table 11, 57 soldiers
    continued to receive pays to which they were no longer entitled because
    they left Afghanistan, including either hostile fire pay, hardship duty pay, or
    both.
    Table
    11: Identified Demobilization Pay Problems
    Type of pay or allowance
    continued in error
    Number of soldiers who
    were overpaid
    Number of soldiers having
    an overpayment collected
    Hostile fire pay 55 0
    Hardship duty pay 57 23
    Source: GAO analysis.
    According to DOD mobilization procedures, the finance office at the
    servicing demobilization station is to conduct a finance out-processing.
    The finance office is responsible for inputting transactions to stop certain
    location-based pays, such as hardship duty pay and hostile fire pay. In
    addition, according to DOD�s Financial Management Regulation (FMR),
    Volume 7A, chapters 10 and 17, location-based pays must be terminated
    when the soldier leaves the hostile fire/combat zone.
    Overpayments to B Company soldiers occurred during demobilization
    because the in-theater finance office continued to make hostile fire and
    hardship duty pays after soldiers left Afghanistan in October 2002, and the
    Fort Bragg active Army finance office did not enter transactions into DJMSRC
    to stop these payments as required. We found that 55 of 64 soldiers
    eligible for hostile fire pay were overpaid for at least 1 month beyond their
    departure from Afghanistan. Also, we found that 57 of 64 soldiers eligible
    for hardship duty pay were overpaid at least part of 1 month. A Fort Bragg
    official explained that the Army finance office personnel at Fort Bragg
    were not aware that these payments were still being made after the soldiers
    had returned to the United States, but, subsequently determined that
    hostile fire and hardship duty overpayments were occurring and took
    action to terminate the payments.
    Also, four members of Virginia�s B Company, who were injured while
    deployed in Afghanistan, returned to Fort Bragg and requested medical
    extensions to their active duty tours so they could continue to receive active duty pay and medical benefits until they recovered. One of the
    soldiers told us, �People did not know who was responsible for what. No
    one knew who to contact or what paperwork was needed �.� To support
    themselves and their families, these four soldiers needed the active duty
    military pay they were entitled to receive while obtaining medical
    treatment and recovering from their injuries. However, after risking their
    lives for their country, all four have had gaps in receiving active duty pay
    while they remained under a physician�s care after their demobilization
    date and have experienced financial difficulties. In addition, when active
    duty pay was stopped, the soldiers� medical benefits were discontinued. As
    discussed earlier in this report, these pay-related problems for wounded
    soldiers caused significant hardship for them and their families.
    C Company, 2nd Battalion, 19th Special Forces
    Group, West Virginia Appendix I
    On December 5, 2001, West Virginia�s 19th Special Forces Group, 2nd
    Battalion, C Company, was called to active duty in support of Operation
    Enduring Freedom for a 1-year tour. The unit was mobilized at Fort Knox
    and subsequently deployed in Afghanistan, Uzbekistan, and surrounding
    areas to search for possible Taliban and al Qaeda terrorists. The unit
    returned to Fort Campbell for demobilization and was released from active
    duty on December 4, 2002. A timeline of the unit�s actions associated with
    its mobilization under Operation Enduring Freedom is summarized in
    figure 12.
    Figure
    12: Timeline Showing Key Actions Associated with West Virginia National
    Guard Special Forces Unit�s Mobilization
    Active duty tour
    officially ends.
    12/4/02
    Dec 01 Jan 02 Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
    Soldiers in-process
    at Fort Knox, KY.
    12/10/01
    Travel to
    Ft. Campbell, KY.
    12/14/01
    Travel to
    Afghanistan.
    12/25/01
    Arrival in
    Afghanistan.
    12/27/01
    Arrival at
    Ft. Campbell, KY.
    10/3/02
    12/14/01 through
    12/25/01
    Preparing for
    overseas deployment.
    12/27/01 through
    10/01/02
    Deployed in
    Afghanistan.
    10/3/02 through
    10/18/02
    Demobilization at
    Ft. Campbell, KY.
    Source: GAO
    As summarized in table 12, the majority of soldiers from C Company
    experienced some sort of pay problem during one or more of the three
    phases of their active duty mobilization. Overall, 86 of the 94 soldiers with
    the company experienced at least one pay problem associated with its
    mobilization. Specifically, we identified (1) 36 soldiers who were either
    overpaid, did not receive certain pay and allowance entitlements at all, or
    did not receive pay within 30 days of their initial mobilization entitlement,
    (2) 84 soldiers who were either overpaid, did not receive, or did not receive
    within 30 days, the hostile fire pay or other high-risk location pays they were entitled to receive based on their deployment in Uzbekistan and
    Afghanistan, and (3) 66 soldiers who did not receive, or did not receive
    within 30 days, their special duty assignment pay during their
    demobilization.
    Table
    12: Summary of Identified Pay Problems by Phase
    Process stage Number of soldiers with pay problems
    Mobilization 36 of 94
    Deployed 84 of 94
    Demobilization 66 of 94
    Source: GAO analysis.
    In total, we identified estimated overpayments of $31,000, underpayments
    of $9,000, and late payments of $61,000 associated with the identified pay
    problems. We did not identify any collections related to overpayments for
    this unit.
    Mobilization Pay
    Problems
    As summarized in table 13, several soldiers from C Company did not
    receive the correct pay or allowance when called to active duty. We found
    that some soldiers received payments over 5 months late and other soldiers
    had been overpaid. Seven soldiers did not receive their $225 per month
    HALO pay until over a month after mobilization, and 18 other soldiers
    received combat diver pay and HALO pay to which they were not entitled.
    Table
    13: Identified Mobilization Pay Problems
    Type of pay or
    allowance
    Number of soldiers who
    did not receive pay or
    allowance within 30
    days of entitlement
    Number of
    soldiers who
    were underpaid
    Number of
    soldiers who
    were overpaid
    HALO pay 7 0 10
    Combat diver pay 0 0 8
    Jump pay 0 7 0
    Special duty assignment
    pay 4 0 0
    Foreign language
    proficiency pay 3 3 0
    Family separation
    allowance 2 0 0
    All entitled pays and
    allowances 0 0 1
    Source: GAO analysis.
    Prior to being mobilized, the soldiers in C Company attended a soldier
    readiness program at their unit armory. This program was intended to
    ensure that all soldiers had proper administrative paperwork and financial
    documents and were physically fit for the ensuing mobilization. West
    Virginia USPFO personnel who conducted the finance portion of C
    Company�s soldier readiness program were required to verify soldiers�
    supporting financial documentation, and update, if necessary, soldiers� pay
    records in DJMS-RC. Soldiers not submitting the correct paperwork at the
    time of the Soldier Readiness Program caused some payments to be late.
    For example, according to the USPFO, one soldier did not submit the
    proper paperwork for his family separation allowance. The delay in
    submission caused his first payment to be over 3 months late.
    Another problem with the unit�s mobilization related to 17 soldiers who had
    significant problems with their HALO pay. According to USPFO personnel,
    the unit commander for C Company did not provide the USPFO a list of the
    unit members who were eligible to receive HALO pay. Therefore, the
    USPFO paid all the unit members who were parachute qualified the regular
    parachute pay. Once the USPFO received a list of the unit�s 17 HALOqualified
    soldiers, pay personnel attempted to recoup the regular jump pay
    and pay the HALO team the increased HALO pay amount. USPFO
    personnel told us they did not know how to initiate a payment for the
    difference between regular jump and HALO pay. Consequently, they
    entered transactions to recoup the entire amount of jump pay and then
    initiated a separate transaction to pay the correct amount of HALO pay.
    According to the DOD FMR, volume 7A, chapter 24, soldiers who are
    eligible to receive regular parachute pay and HALO pay are paid the higher
    of the two amounts, but not both. In this case, the 17 members of C
    Company�s HALO team should have received a $225 per month payment
    from the beginning of their mobilization. Pay records indicate that this
    correction initiated by the USPFO occurred about 2 months after the unit mobilized. When the USPFO personnel attempted to collect the soldiers�
    regular parachute pay, they inadvertently collected a large amount of the
    soldiers� basic active duty pay for the first month of their mobilization.
    Personnel at the USPFO stated that the error caused debts on soldiers�
    accounts but was corrected immediately after a pay supervisor at the
    USPFO detected the error in February. Even after the soldiers� pay was
    corrected, USPFO personnel did not stop the regular parachute pay for the
    HALO team members, but instead let it continue, then collected the $150
    per month parachute pay manually, and then paid the correct $225 per
    month HALO pay. This error-prone, labor- intensive manual collection and
    subsequent payment method used by the USPFO personnel to pay C
    Company�s HALO team the higher HALO rate of pay was not consistently
    applied each month and resulted in 7 soldiers being overpaid when their
    regular parachute pay was not collected.
    In addition to the 7 soldiers who were actually on the HALO team, 10 other
    soldiers were on the initial list given to the USPFO but were actually not on
    the HALO team. The unit commander for C Company provided a more
    accurate list to the USPFO some time after the first list, and only members
    on the more accurate list continued to receive HALO pay. However,
    USPFO pay personnel did not attempt to collect the HALO pay from unit
    members on the first list who had incorrectly received HALO pay. As a
    result of this complex collection and payment process, the unit�s soldiers
    were confused about whether they were receiving all their entitled active
    duty pays while mobilized.
    After leaving the unit�s home station, C Company traveled to Fort Knox, its
    active Army mobilization station. As required by Army guidance, Fort
    Knox personnel conducted a second soldier readiness program to identify
    and fix unresolved pay issues associated with the unit�s mobilization.
    Based on our findings that the pay problems continued after this review, it
    does not appear that the active Army finance office at Fort Knox carried
    out its responsibility to review and validate all of C Company soldiers�
    active duty pays and allowance support records. Problems with HALO and
    family separation pay were not resolved for several months after the
    mobilization. As a result, the soldiers� pay problems persisted into their
    deployment overseas.
    Deployment Pay
    Problems
    As summarized in table 14, we identified a number of pay problems
    associated with three different types of active duty pays related to the unit�s
    deployment.
    Table
    14: Identified Deployment Pay Problems
    Type of pay or allowance
    Number of soldiers
    who did not receive
    pay or allowance
    within 30 days of
    entitlement
    Number of
    soldiers who
    were underpaid
    Number of
    soldiers who
    were overpaid
    Hostile fire pay 45 18 40
    Hardship duty pay
    (designated areas) 75 5 12
    Hardship duty pay (certain
    places) 0 0 29
    Source: GAO analysis.
    After going through initial in-processing at Fort Knox, C Company soldiers
    traveled to Fort Campbell where they prepared to deploy overseas.
    Starting in December 2001, members of C Company traveled to Uzbekistan
    and Afghanistan to perform special forces missions. During their
    deployment overseas, C Company soldiers consistently experienced
    problems related to specific location-based payments such as hostile fire
    pay and hardship duty pay. In 78 cases, the payments were not started
    within 30 days from when the soldiers were entitled to the payments. In 22
    other cases, we determined that soldiers had not received all locationbased
    pays as of March 31, 2003. In 60 cases, the soldiers were overpaid or
    payments were not stopped when they left the combat zones. Due to the
    lack of supporting documents at the state, unit, and battalion-levels, dates
    for when each soldier entered and left combat zones were not always
    available. Consequently, there may have been other deployment-related
    pay problems for C Company that we were not able to identify.
    According to DFAS policy, when soldiers from C Company arrived in
    Uzbekistan the in-theater finance office in Uzbekistan was responsible for
    initiating location-based payments for the unit. Unit personnel stated that
    the staff in the finance office in Uzbekistan were not adequately trained in
    how to input pays into DJMS-RC. Initially, we were told the Uzbekistan
    finance office incorrectly believed it was the West Virginia USPFO�s
    responsibility to start location-based pays for the deployed soldiers from C
    Company. The active Army finance office in Uzbekistan instructed the unit
    to contact the West Virginia USPFO to start location-based pays. However,
    DFAS policy clearly states that it is the active Army in-theater finance
    office�s responsibility to start and maintain monthly location-based
    payments.
    After attempts by the unit administrator and the Uzbekistan finance office
    failed to initiate the payments, a sergeant in C Company was ordered to
    travel to Camp Doha, Kuwait, to have the unit�s location-based pays started.
    The soldier stated that he traveled to Camp Doha because he was told that
    the finance unit at that active Army finance location was more
    knowledgeable in how to enter transactions into DJMS-RC to initiate
    location-based pays for the unit�s soldiers. The soldier took with him all the
    necessary paperwork to have the pays started for all the companies under
    the battalion, including C Company. On the return flight from the
    sergeant�s mission in Kuwait, his plane encountered enemy fire and was
    forced to return to a safe airport until the next day. The failure by active
    Army personnel at the finance office in Uzbekistan to enter the
    transactions necessary to start location-based pays for the unit delayed
    payments to some soldiers for up to 9 months and put one soldier in harm�s
    way.
    Per DOD FMR, volume 7A, chapter 10, soldiers who perform duty in hostile
    fire zones are entitled to hostile fire pay as soon as they enter the zone.
    However, we found that 45 soldiers in C Company did not have their hostile
    fire pay started until over 30 days after they were entitled to receive it.
    Some of C Company�s soldiers received retroactive payments over 2
    months after they should have received their pay. In addition, as of March
    31, 2003, we determined that 18 soldiers from the unit were not yet paid for
    1 or more months that they were in the hostile fire zone. We also identified
    40 soldiers who received hostile fire pay after they had left the country and
    were no longer entitled to receive such pays. These overpayments
    occurred primarily because hostile fire pay is an automatic recurring
    payment based on the start and stop date for the soldier�s mobilization
    entered into DJMS-RC. However, in this case, the active Army finance
    office in Uzbekistan did not amend the stop dates for automated active
    duty pays in DJMS-RC to reflect that C Company left the designated area
    before the stop date entered into DJMS-RC. The active Army finance
    office�s failure to follow prescribed procedures resulted in overpayment of
    this pay to 40 soldiers.
    Per DOD FMR, volume 7A, chapter 17, soldiers who perform duties in
    designated areas for over 30 days are entitled to the hardship duty pay
    incentive. The FMR provides for two mutually exclusive types of hardship
    duty pay for identified locations�one according to specified �designated
    areas� and the other for specified �certain places.� Effective December 31,
    2001, the regulation no longer permitted soldiers newly assigned to
    locations specified as �certain places� to begin receiving hardship duty pay. However, the regulation specified Afghanistan and Uzbekistan as
    designated areas and provided for paying $100 a month to each soldier
    serving there.
    While deployed to Afghanistan and Uzbekistan, 29 soldiers in C Company
    were mistakenly provided both types of hardship duty pay. The local
    finance office in Uzbekistan correctly entered transactions to start C
    Company�s hardship duty pay for designated areas into the DJMS-RC pay
    system. Due to limitations in DJMS-RC, the local finance office was
    required to manually enter the designated area payments for each soldier
    every month the unit was in a designated area. However, DFAS
    documentation shows that finance personnel at Fort Bragg incorrectly
    initiated a recurring certain places hardship duty payment for soldiers in C
    Company.1 For some soldiers, payments continued until May 31, 2002 and
    for others the payments continued until the end of their tour of active duty
    on December 4, 2002. These erroneous certain places hardship duty pays
    resulted in overpayments.
    In addition, because DJMS-RC processing capability limitations required
    the designated areas payment to be manually entered every month the unit
    was in the designated area, the in-theater finance office in Uzbekistan
    failed to consistently enter the monthly designated area payments for all
    entitled soldiers. Throughout the time C Company was in Uzbekistan and
    Afghanistan, we identified a total of 5 soldiers who missed one or more
    monthly payments of entitled hardship duty designated area pay. Other
    soldiers received entitled payments over 9 months late. Still others were
    paid more than once for the same month or paid after leaving the
    designated area, resulting in overpayments to 12 soldiers. The mix of
    erroneous certain places hardship duty payments along with sporadic
    payments of the correct type of designated area hardship duty pay caused
    confusion for the soldiers of C Company and their families regarding what
    types of pay they were entitled to receive and whether they received all
    active duty entitlements. Demobilization and
    Release from Active
    Duty Pay Problems
    C Company returned to Fort Campbell during the fall of 2002 to begin the
    demobilization process. By October 2002, all of the unit had returned from
    overseas and was demobilized on December 4, 2002. As shown in table 15,
    66 of C Company�s 94 soldiers experienced pay problems associated with
    their demobilization from active duty.
    Table
    15: Identified Pay Demobilization Problems
    Type of Pay or Allowance
    Number of soldiers who did not
    receive pay or allowances within
    30 days of entitlement
    Number of
    soldiers who
    were underpaid
    Special duty assignment pay 63 3
    Source: GAO analysis.
    In October 2002, eligible soldiers in the unit were entitled to a special duty
    assignment pay increase from $110 per month to $220 per month. To
    initiate this higher pay rate, the West Virginia Army National Guard military
    personnel office was required to cut new special duty assignment pay
    orders for all eligible C Company soldiers. USPFO officials stated that they
    could not pay the increased amount until they received a copy of the new
    orders. The USPFO personnel did not continue to pay the $110 a month to
    the soldiers because they did not want to have to recoup the old amount
    and then pay the correct amount when orders were received. However, the
    orders for the soldiers were not received by the USPFO for several months,
    which created a delay in the payment of the soldiers� special duty
    assignment pay. Supporting documents showed that a delay in the
    production of the orders by the West Virginia Army National Guard military
    personnel office caused the late payments. For C Company, 63 soldiers
    received their last 3 months of special duty assignment pay over 30 days
    late. Another 3 soldiers did not receive their last 3 months of special duty
    assignment pay because the USPFO inadvertently overlooked the manual
    transaction entries required to process special duty assignment pay for
    those soldiers. Mississippi 114th Military Police Company Appendix IV
    On December 27, 2001, the Mississippi Army National Guard�s 114th
    Military Police Company was called to active duty in support of Operation
    Noble Eagle for a 1-year tour�through January 5, 2003. The unit
    mobilized in Clinton, Mississippi, and departed for Fort Campbell,
    Kentucky, on January 6, 2002. The unit in-processed at Fort Campbell and
    for the next 5 months performed military police duties at Fort Campbell
    until early June. On June 10, 2002, the 114th Military Police Company
    deployed to Guantanamo Bay, Cuba, to perform base security and guard
    duties for Taliban and al Qaeda prisoners. After guarding detainees in Cuba
    for approximately 6 months, the unit returned to Fort Campbell in late
    November 2002. At Fort Campbell the unit out-processed and returned to
    Clinton, Mississippi, and was released from active duty on January 5, 2003.
    A time line of actions associated with the unit�s active duty mobilization is
    shown in figure 13.
    Figure
    13: Timeline Showing Key Actions Associated with the Mississippi Army
    National Guard Military Police Unit�s Mobilization
    Jan 02 Dec Nov Jan 03 Feb Mar Apr May Jun Jul Aug Sept Oct
    To Guantanamo
    Bay, Cuba.
    6/10/02
    Return to
    Ft. Campbell, KY.
    11/23/02
    Release from
    active duty.
    1/05/03
    Soldiers mobilize at
    Clinton, MS home station.
    1/6/02
    1/6/02 through
    6/10/02
    Guard duty at
    Fort Campbell, KY. approx. 1/7/02
    Soldiers go to
    Ft. Campbell, KY
    Mobilization station.
    6/10/02 through
    11/23/02
    Deployed in
    Guantanamo Bay, Cuba.
    12/02
    Return to
    Clinton, MS
    home station.
    Source: GAO
    As summarized in table 16, at every stage of the unit�s 1-year tour of active
    duty, soldiers experienced various pay problems. Of the 119 soldiers of the
    Mississippi Army National Guard�s 114th Military Police Company, 105
    experienced at least one pay problem associated with mobilization in
    support of Operation Noble Eagle. Specifically, we found that (1) 21
    soldiers experienced underpayments, overpayments, or late payments, or a
    combination of these, during their initial mobilization, including some
    soldiers who did not receive payments for up to 7 months after their
    mobilization dates, and others who still have not received certain payments, (2) 93 soldiers experienced underpayments, overpayments, late
    payments, or some combination, during their tour of active duty at Fort
    Campbell and in Cuba, including in-theater incentives such as hardship
    duty pay, and (3) 90 soldiers experienced underpayments, overpayments,
    late payments, or a combination of these, during their demobilization at
    Fort Campbell, including problems related to the continuation of in-theater
    incentives and overpayment of active duty pay after demobilization.
    Table
    16: Summary of Identified Pay Problems by Phase
    Phase Number of soldiers with pay problems
    Mobilization 21 of 119
    Deployed 93 of 119
    Demobilization 90 of 119
    Source: GAO analysis.
    In total, we identified estimated overpayments of $50,000, underpayments
    of $6,000, and late payments of $15,000 associated with the pay problems
    we found. Of the estimated $50,000 in overpayments, we identified about
    $13,000 that was subsequently collected from the unit�s soldiers.
    Mobilization Pay
    Problems
    As summarized in table 17, we found that 21 soldiers from the 114th Military
    Police Company experienced underpayments, overpayments, late
    payments, or some combination related to pay and allowance entitlements
    when called to active duty. For example, several soldiers did not receive
    their entitled $100 per month family separation allowance until 7 months
    after mobilization, and several other soldiers did not receive the correct
    type of basic allowance for housing as specified in the DOD FMR, Volume
    7A, chapter 26. Table
    17: Identified Mobilization Pay Problems
    Type of pay or
    allowance
    Number of soldiers who
    did not receive pay or
    allowances within 30
    days of entitlement
    Number of
    soldiers who
    were underpaid
    Number of
    soldiers who
    were overpaid
    Basic pay 2 1 5
    Family separation
    allowance 11 1 0
    Basic allowance for
    housing 2 3 0
    Jump pay 0 0 1
    Source: GAO analysis.
    Prior to being mobilized, the soldiers in the 114th Military Police Company
    attended a soldier readiness program at their unit armory. The purpose of
    this review was to ensure that all soldiers had proper administrative
    paperwork and financial documents and were physically fit for the ensuing
    mobilization. Mississippi USPFO personnel, who conducted the finance
    portion of the 114th Military Police unit�s soldier readiness program, were
    required to verify soldiers� supporting financial documentation, and update,
    if necessary, soldiers� MMPAs. Not submitting the complete and current
    paperwork at the time of the soldier readiness program contributed to
    some of the late payments we identified. For example, some soldiers did
    not receive their family separation allowance because they did not provide
    documentation supporting custody arrangements. However, we also found
    that confusion at the USPFO over the eligibility of single parents
    contributed to these late pays. It was later in the unit�s active duty tour that
    finance officers initiated action for 11 of the 114th Military Police unit�s
    soldiers to receive retroactive payments, some for as much as 7-months of
    back pay. In another case, a former Special Forces soldier improperly
    received jump pay even though his assignment to this military police unit
    did not require that special skill.
    Five soldiers improperly received active duty pay and allowances even
    though they did not mobilize with the unit. Because these five soldiers
    were not deployable for a variety of reasons, they were transferred to
    another unit that was not subject to the current mobilization. However, the
    delay in entering the transfer and stopping pay caused each of these
    soldiers to receive active duty pay for 10 days. Several other soldiers
    received promotions at the time of their mobilization, but state military pay
    personnel at the USPFO did not enter transactions for the promotions until several months later, resulting in late promotion pay to the affected
    soldiers. Delays by the unit in submitting the promotion paperwork or by
    the state personnel office in entering the promotion paperwork into the
    personnel system caused these problems. However, supporting documents
    were not available to enable us to determine the specific cause of the
    delays.
    After leaving the unit�s home station, the 114th Military Police Company
    traveled to Fort Campbell, its active Army mobilization station. As required
    by Army guidance, Fort Campbell personnel conducted a second soldier
    readiness program intended, in part, to verify the accuracy of soldiers� pay
    records. However, instead of conducting a thorough review of each
    soldier�s pay record, Fort Campbell finance personnel performed only a
    perfunctory review by asking the soldiers if they were experiencing pay
    problems. At this point, because the soldiers had only recently mobilized
    and had not received their first paychecks, they were unaware of pay
    problems. Failure to follow requirements for finance verification at Fort
    Campbell of each soldier�s pay account caused pay problems to persist past
    the mobilization stage. In addition, we were unable to determine specific
    causes for certain pay problems associated with the unit�s mobilization
    because the unit remobilized in February 2003, and unit administrative
    personnel did not retain payroll source documents relating to the prior
    mobilization.
    Deployment Pay
    Problems
    As summarized in table 18, we identified a number of pay problems
    associated with four types of active duty pays and allowances associated
    with the unit�s deployment while on active duty.
    Table
    18: Identified Deployment Pay Problems
    Type of pay or
    allowance
    Number of soldiers who
    did not receive pay or
    allowances within 30
    days of entitlement
    Number of
    soldiers who
    were underpaid
    Number of
    soldiers who
    were overpaid
    Basic pay 10 0 0
    Family separation
    allowance 3 0 3
    Basic allowance for
    housing 1 0 0
    Hardship duty pay 0 11 88
    Source: GAO analysis.
    While at Fort Campbell, eight soldiers experienced problems resulting from
    delays in entering changes in the family separation allowance, basic
    allowance for housing, and active duty pay increases from promotions. For
    example, one soldier was promoted to the rank of Private First Class at the
    end of May, but the pay system did not reflect the promotion until October.
    Although the soldier eventually received retroactive promotion pay, the
    delay caused the soldier to be paid at her old rank for 5 months. According
    to DFAS guidance, when a change occurs in a soldier�s pay, the on-site
    Army finance office should input the change. In cases where personnel
    changes occurred that affected pay, either the soldiers failed to submit
    documents or personnel at Fort Campbell failed to input the changes. Due
    to the lack of documentation, we could not determine the origin of the
    delays.
    During the unit�s deployment to Guantanamo Bay, Cuba, the soldiers
    encountered additional pay problems related to hardship duty pay, a
    location-based payment for soldiers located at designated hardship duty
    locations. Some soldiers received extra hardship duty payments, while
    others were only paid sporadically. In total, only 9 of the 100 soldiers who
    deployed to Guantanamo Bay with the 114th Military Police Company
    received the correctly computed hardship duty pay.
    Per DOD FMR, Volume 7A, chapter 17, soldiers who perform duties in
    designated areas for over 30 days are entitled to the hardship duty pay
    incentive. The FMR provides for two mutually exclusive types of hardship
    duty pay for identified locations; one according to specified �designated
    areas� and the other for specified �certain places.� Effective December
    2001, the regulation no longer permitted soldiers newly assigned to locations specified as certain places to begin receiving hardship duty pay.
    However, the regulation specified Guantanamo Bay, Cuba, as a designated
    area and provided for paying $50 a month to each soldier serving there.
    Most of the 114th Military Police unit�s soldiers were mistakenly provided
    both types of hardship duty pay while deployed to Cuba. Upon arrival in
    Cuba, the local Guantanamo Bay finance office correctly entered
    transactions to start hardship duty pay for designated areas for the 114th
    Military Police unit�s soldiers into DJMS-RC. However, unknown to
    Guantanamo finance personnel, Fort Campbell finance personnel, upon the
    unit�s departure to Cuba, incorrectly initiated recurring certain places
    hardship duty payments for the soldiers of the 114th Military Police unit.
    These payments of both types of hardship duty pay resulted in
    overpayments to 88 enlisted soldiers of the 114th Military Police Company
    during the time the soldiers were stationed in Cuba.
    In addition, as a result of personnel turnover and heavy workload in the
    active Army�s Guantanamo Bay finance office and limitations in DJMS-RC,
    the Guantanamo Bay finance office did not make all the required monthly
    manual transaction entries required to pay hardship duty pays to the 114th
    Military Police Company�s soldiers. As a result, several soldiers in the unit
    did not receive one or more monthly hardship duty payments. Limitations
    in DJMS-RC required the local finance office to manually enter the
    designated area payments for each soldier on a monthly basis. For 11
    soldiers, the finance office inadvertently overlooked entering one or more
    monthly hardship duty payments. The combination of erroneous certain
    places payments, along with sporadic payments of hardship duty
    designated area pays caused confusion for the soldiers who were
    performing a stressful mission in Cuba regarding whether they were
    receiving all their active duty pay entitlements.
    Pay Problems
    Associated with
    Demobilization and
    Release from Active
    Duty
    The 114th Military Police Company returned to Fort Campbell on November
    23, 2002, to begin the demobilization process. During demobilization,
    soldiers continued to experience pay problems. As summarized in table 19,
    overpayment problems consisted of improper continuation of hardship
    duty pay following the unit�s return from Cuba and failure to stop active
    duty pay and allowances to soldiers who were discharged or returned from
    active duty early. Table
    19: Identified Demobilization Pay Problems
    Type of pay or allowance Number of soldiers who were overpaid
    Basic pay 5
    Family separation allowance 5
    Basic allowance for subsistence 5
    Basic allowance for housing 5
    Hardship duty pay 85
    Source: GAO analysis.
    According to the DOD FMR, Volume 7A, chapter 17, soldiers are entitled to
    receive hardship duty pay only while they are stationed in a hardship duty
    location. While the active Army�s Guantanamo Bay finance office stopped
    monthly designated area payments upon the unit�s departure from Cuba,
    the Fort Campbell finance office did not discontinue the incorrect certain
    places payments that its finance office had initiated months earlier.
    Consequently, 85 of 88 soldiers of the 114th Military Police unit�s soldiers
    continued receiving the incorrect certain places payments through their
    last day of active duty.
    In addition, five soldiers continued to receive active duty pay and
    allowances after being discharged or returned from active duty. Instead of
    demobilizing on schedule with their unit, these five soldiers demobilized
    individually earlier due to various reasons. According to DFAS guidance,
    Fort Campbell, the designated demobilization station for the 114th Military
    Police Company, was responsible for stopping active duty pay for the unit�s
    demobilizing soldiers. However, when these individual soldiers were
    released from active duty, Fort Campbell processed discharge orders but
    Fort Campbell�s finance office failed to stop their pay. Further, in at least
    one case in which documentation was available, state USPFO military pay
    personnel did not immediately detect the overpayments in monthly pay
    system mismatch reports.1 For these five soldiers, overpayments
    continued for up to 3 months. One of these soldiers was discharged early because of drug-related
    charges. However, his pay continued for 3 months past his discharge date.
    By the time the USPFO stopped the active duty pay, the former soldier had
    received overpayments of about $9,400. Although the state USPFO military
    pay personnel stopped the active duty pay in September 2002, no attempt
    to collect the overpayment was made until we identified the problem. In
    July 2003, state military pay personnel initiated collection for the
    overpayment.
    Another soldier was discharged on July 8, 2002, for family hardship
    reasons, but his active duty pay was not stopped until August 15, resulting
    in an overpayment. Another 114th Military Police soldier was returned from
    active duty on September 11, 2002, for family hardship reasons, but his
    active duty pay was not stopped until November 30, resulting in an
    overpayment of about $8,600. Another soldier, facing disciplinary
    proceedings related to a domestic violence incident, agreed to an early
    discharge on May 22, 2002. However, the soldier�s active duty pay was not
    stopped until the unit administrative officer, while deployed in Cuba,
    reviewed the unit commander�s finance report and discovered the soldier
    still on company pay records and reported the error. Following his
    discharge, this soldier continued to receive active duty pay until August 31,
    resulting in an overpayment. Maryland 200th Military Police Company Appendix V
    The 200th Military Police Company was called to active duty in support of
    Operation Noble Eagle on October 1, 2001, for a period not to exceed 365
    days. The unit, including 90 soldiers who received orders to mobilize with
    the 200th Military Police Company, reported to its home station, Salisbury,
    Maryland, on October 1, 2001, and then proceeded to Camp Fretterd
    located in Reisterstown, Maryland, for the soldier readiness program (SRP)
    in- processing. On October 13, 2001, they arrived at their designated
    mobilization station at Fort Stewart, Georgia, where they remained for the
    next 2 weeks undergoing additional in-processing.1 The unit performed
    general military police guard duties at Fort Stewart until December 15,
    2001, when 87 of the soldiers in the unit were deployed to guard the
    Pentagon. The company arrived at Ft. Eustis, Virginia, in late August 2002
    and was released from active duty on September 30, 2002. In addition, 3 of
    the 90 soldiers who received orders from the 200th Military Police Company
    were deployed in January 2002 to Guantanamo Bay, Cuba, to perform base
    security and guard duties with Maryland�s 115th Military Police Company.
    These soldiers demobilized at Fort Stewart, Georgia, where they were
    released from active duty on July 10, 2002. A time line of key actions
    associated with the unit�s mobilization under Operation Noble Eagle is
    shown in figure 14. Figure
    14: Timeline Showing Key Actions Associated with the Maryland National
    Guard Military Police Unit�s Mobilization
    Dec Nov Oct Jan 02 Feb Mar Apr May Jun Jul Aug Sept Oct
    Unit called to
    active duty
    10/1/01
    Unit travels to Fort Stewart, GA
    mobilization station
    10/13/01
    Deployed to Ft. Myer, VA
    to perform Pentagon guard duty
    12/15/01
    Demobilized at
    Fort Eustis, VA
    Late August 2002
    Active duty
    officially ends.
    9/30/02
    10/13/01 through
    12/14/01
    In processing and guard duty
    at Fort Stewart, GA.
    12/15/01 through
    late August 2002
    Performed Pentagon
    guard duty
    Source: GAO
    As summarized in table 20, the majority of soldiers from the company
    experienced some sort of pay problem during one or more phases of the
    three phases of their active duty mobilization. Overall, 83 of the company�s
    90 soldiers experienced at least one pay problem associated with their
    mobilization in support of Operation Noble Eagle. Pay problems included
    overpayments, underpayments, and late payments of entitlements, such as
    basic pay, basic allowance for housing, basic allowance for subsistence,
    family separation allowance and hardship duty pay associated with their
    initial mobilization, deployment to Fort Stewart, the Pentagon, and Cuba;
    and demobilization from active duty status.
    Table
    20: Summary of Identified Pay Problems by Phase
    Phase Number of soldiers with pay problems
    Mobilization 75 of 90
    Deployed 64 of 90
    Demobilization 3 of 90
    Source: GAO analysis.
    In total, we identified estimated overpayments of $74,000, underpayments
    of $11,000, and late payments of $10,000, associated with the pay problems we identified. Of the estimated $74,000 in identified overpayments, we
    identified about $32,000 that was subsequently collected from the unit�s
    soldiers. Specifically, we determined that
    � 75 soldiers were overpaid, underpaid, and/or paid late during the period
    of mobilization, including a soldier who did not receive correct
    payments for up to 7 months after the mobilization date;
    � 64 soldiers experienced pay problems during their tour of active duty
    related to the proper payment of basic pay, basic allowance for
    subsistence, basic allowance for housing, family separation allowance,
    and location-based pays such as hardship duty pay; and
    � 3 soldiers experienced pay problems during their demobilization from
    Fort Stewart related to continuation of active duty pay entitlements
    after they were released early from active duty.
    We identified a number of causes associated with these pay problems,
    including delays in submitting documents, incorrect data entry, and limited
    personnel to process the mass mobilizations. Maryland�s USPFO officials
    told us they had not experienced a large-scale mobilization to active duty in
    more than 10 years.
    Mobilization Pay
    Problems
    As summarized in table 21, we identified a number of pay problems
    associated with eight different types of active duty pays and allowances
    associated with the unit�s mobilization to active duty. Seventy-five of 90
    soldiers from the 200thth Military Police Company did not receive the
    correct or timely entitlements related to basic pay, basic allowance for
    housing, basic allowance for subsistence, or family separation allowance
    when called to active duty. Table
    21: Identified Mobilization Pay Problems
    Type of pay or
    allowance
    Number of soldiers
    who did not receive
    pay or allowances
    within 30 days of
    entitlement
    Number of
    soldiers who
    were underpaid
    Number of
    soldiers who
    were overpaid
    Basic pay 4 0 13
    Basic allowance for
    housing 4 24 16
    Basic allowance for
    subsistence 3 1 21
    Family separation
    allowance 11 42 2
    Source: GAO analysis.
    Thirteen soldiers received overpayments because they continued to receive
    pay after they were released early from active duty. These soldiers
    mobilized on October 1, 2001, and then received amended orders to be
    released from active duty around October 13, 2001. However, many
    continued to receive basic pay, basic allowance for subsistence, basic
    allowance for housing, and family separation allowance payments through
    the end of November 2001. The unit administrator stated that many of
    these soldiers received amended orders after their initial mobilization
    when it was determined that they were not deployable for a variety of
    reasons, such as health or family problems. The overpayments occurred
    because the Maryland Army Guard command was not informed by either
    unit personnel or the active component that individuals (1) did not deploy
    or (2) were released from active duty early. The Maryland Army Guard
    command initiated amendment orders to stop the active duty pays when it
    became aware of the problem; however, the orders were not generated in
    time for the USPFO to stop active duty pays in the system. Specifically, in
    order for pay to be stopped by October 13, 2001, the USPFO must have
    received and processed the amended orders by October 8, 2001. However,
    the Maryland Army Guard command did not generate many of the amended
    orders until November 14, 2001, at which time they would have been sent to
    the unit and then forwarded to the USPFO too late to meet the pay cutoff.
    An additional soldier was issued an amended order to release him from
    active duty on October 13, 2001. Upon our review of his pay account, we
    determined that he continued to receive active duty pay and allowances for
    an entire year. We spoke with the unit administrator about this soldier and determined that he mobilized with the unit and was deployed for the entire
    year that he was paid. The unit administrator and Maryland Army Guard
    command, along with the USPFO pay officials, were not sure why the
    amendment order was never processed. They believe that the amendment
    fell through the cracks due to the general confusion and the limited
    personnel processing the mass mobilizations after September 11, 2001.
    Based on our inquiries, the Maryland Army Guard command generated an
    amendment on August 21, 2003, to reinstate the original order to avoid
    future questions regarding the soldier�s tour of duty.
    Further, 42 soldiers from the unit were underpaid their entitled family
    separation allowance when they mobilized. Soldiers are entitled to receive
    a family separation allowance after they have been deployed away from
    home for more than 30 days. We found that these underpayments occurred
    as a result of Maryland USPFO military pay officials� errors in calculating
    the start and stop dates for this allowance.
    Several soldiers did not receive the correct type of basic allowance for
    housing after being mobilized as specified in the DOD FMR, Volume 7A,
    chapter 26. We were unable to determine specific causes and amounts of
    all the unit�s problems associated with the basic allowance for housing
    because the unit had remobilized in July 2003 and some of the historical
    records relating to housing entitlements applicable to the prior
    mobilization could not be located. Furthermore, the original unit
    administrator had retired, leaving limited records of the prior mobilization
    for the current unit administrator. Based on our inquiries, we determined
    that some soldiers were underpaid their housing allowance because the
    Maryland USPFO military pay officials entered the incorrect date for the
    tour and therefore shortened the unit�s soldiers� allowance by 1 day. Other
    soldiers did not receive the correct amount for this allowance as a result of
    different interpretations of how to enter �dependent� information provided
    on housing allowance application forms (Form 5960). According to
    personnel officials, married soldiers are required to write in their spouses�
    names as dependents on Form 5960 in order to receive the higher housing
    allowance amount. However, guidance did not clearly specify that simply
    checking the box indicating that they are married is not sufficient support
    to receive the higher housing allowance (with dependents) rate. As a
    result, several soldiers� dependent information was not loaded into the
    personnel system correctly, and they were paid a single rate housing
    allowance instead of the higher married rate allowance. Other soldiers did not receive the correct housing allowance because they
    did not turn in complete forms and documentation to initiate the correct
    allowance rate or were late in turning in documents. For example, one
    soldier, who appeared to have submitted his lease agreement 6 days after
    being called to active duty, did not receive the correct housing allowance
    amount for the first 2 months of active duty. During his entire deployment,
    the soldier attempted to get various unit and military pay officials to take
    action to initiate back pay for these housing allowance underpayments,
    including forwarding copies of the lease agreement as proof for payment
    on three different occasions. As of March 30, 2003, the soldier had not
    received the correct housing allowance for October and November 2001.
    Another soldier did not receive the correct amount of housing allowance
    after his mobilization and complained to the unit administrator. Seven
    months after his initial mobilization to active duty, finance officials at the
    active duty station in Fort Belvoir, Virginia, who were attempting to correct
    the soldier�s housing allowance instead inadvertently entered a transaction
    to collect the entire amount of the housing allowance previously paid to the
    soldier. Finance officials at Fort Belvoir subsequently entered a
    transaction to reverse the error and pay the soldier a �catch-up� housing
    allowance payment.
    Deployment Pay
    Problems
    As summarized in table 22, we identified a number of pay problems
    associated with five different types of active duty pays and allowances
    associated with the unit�s deployment.
    Table
    22: Identified Deployment Pay Problems
    Type of pay or
    allowance
    Number of soldiers who
    did not receive pay or
    allowance within 30 days
    of entitlement
    Number of
    soldiers who
    were underpaid
    Number of
    soldiers who
    were overpaid
    Basic pay 1 0 1
    Basic allowance for
    housing 0 0 1
    Basic allowance for
    subsistence 0 1 62
    Family separation
    allowance 0 1 1
    Hardship duty pay 3 3 0
    Source: GAO analysis.
    Sixty-two soldiers from the unit were overpaid their entitled subsistence
    allowance by active Army finance personnel while stationed at the
    Pentagon during the period of December 15, 2001, through December 31,
    2001. Prior to this period, the soldiers were stationed at Fort Stewart and
    were not provided lodging or mess and properly received the full
    subsistence allowance. When the unit was redeployed to the Pentagon,
    mess facilities became available. However, active Army finance personnel
    did not reduce the unit�s subsistence allowance rate to reflect the available
    mess facilities. According to DOD FMR, Volume 7A, chapter 25, enlisted
    soldiers are not entitled to the full subsistence allowance when mess
    facilities are provided.
    In January 2002, three soldiers who received mobilization orders from the
    200th MP Company left Fort Stewart and traveled with the 115th Military
    Police Company to Guantanamo Bay, Cuba, to assist with base security and
    guard duties. While in Cuba, the soldiers were either underpaid, or were
    late in receiving their entitled hardship duty pays. In accordance with DOD
    FMR Volume 7A, chapter 17, soldiers who perform duties in �designated
    areas� for over 30 days are entitled to hardship duty pay. The FMR
    specifies Guantanamo Bay, Cuba, as a designated area and provides
    payment of $50 a month to soldiers serving there. While deployed to Cuba,
    the three soldiers were mistakenly paid the old type of hardship duty pay.
    Since hardship duty pay is not an automated pay, the active Army finance
    office at Guantanamo Bay was required to manually enter the �designated
    areas� payment each month for each soldier. While they were in Cuba, the
    three soldiers did not receive all their entitled hardship duty pays.
    Furthermore, the hardship duty pays they did receive were more than 30
    days late.
    Demobilization and
    Release from Active
    Duty Pay Problems
    The 200th Military Police Company returned to Fort Eustis around the end
    of August 2002 to begin the demobilization process. We did not identify any
    pay issues associated with the unit�s soldiers who were released from
    active duty on September 30, 2002 (the original date for the unit�s
    demobilization, designated on the mobilization orders). However, as
    shown in table 23, we did identify three soldiers who continued to receive
    active duty pay after their early release from active duty. Table
    23: Identified Demobilization Pay Problems
    Type of pay or allowance Number of soldiers who were overpaid
    Basic pay 3
    Basic allowance for housing 3
    Basic allowance for subsistence 3
    Family separation allowance 3
    Hardship duty pay 2
    Source: GAO analysis.
    Specifically, the three soldiers from the unit returned from Cuba,
    demobilized at Fort Stewart, and were released from active duty on July 10,
    2002, while their original orders showed a September 30, 2002, release date.
    They continued to receive active duty pay and allowances through July 15,
    2002. Fort Stewart did not provide the amended orders with the earlier
    release date to the Maryland USPFO office in time to stop the pay. California 49th Military Police Headquarters
    and Headquarters Detachment Appendix VI
    On October 2, 2001, California�s 49th Military Police Headquarters and
    Headquarters Detachment (HHD) was mobilized to active duty for a period
    not to exceed 24 months. The 49 th MP HHD mobilized at its home station,
    Pittsburg, California, and then proceeded to its designated mobilization
    station, Fort Lewis, Washington, on October 12, 2001. The unit performed
    its active duty mission at Fort Lewis, where it provided base security as
    part of Operation Noble Eagle. The unit was demobilized from active duty
    at Fort Lewis on July 28, 2002. A time line of the unit�s actions with respect
    to its mobilization under Operation Noble Eagle is shown in figure 15.
    Figure
    15: Timeline Showing Key Actions Associated with the California Army
    National Guard Military Police Unit�s Mobilization
    Active duty tour
    officially ends
    10/8/02
    Dec Nov Oct Jan 02 Feb Mar Apr May Jun Jul Aug Sept Oct
    Soldiers depart Pittsburg, CA
    home station
    10/9/01
    Arrival at Fort Lewis, WA
    for in-process
    10/12/01
    Unit demobilizes at
    Fort Lewis, WA.
    7/28/02
    10/12/01 through
    7/28/02
    Deployed at
    Fort Lewis, WA.
    7/29/02 through
    10/8/02
    Soldiers continue
    to demobilize
    individually
    Source: GAO
    Almost all soldiers from the 49th Military Police Company experienced
    some sort of pay problem during one or more phases of the three phases of
    the active duty mobilization. Overall, 50 of the 51 soldiers with the unit had
    at least one pay problem associated with their mobilization to active duty in
    support of Operation Noble Eagle. These pay problems included not
    receiving pays and allowances at all (underpayments), receiving some pays
    and allowances over 30 days after entitlement (late payments), and the
    overpayment of allowances. Specifically, as summarized in table 24, we
    found that (1) 48 soldiers did not receive certain pay and allowances within
    30 days of their initial mobilization entitlement and (2) 41 soldiers did not
    receive, or did not receive within 30 days, the pay and allowances they
    were entitled to receive during their deployment.
    Table
    24: Summary of Identified Pay Problems by Phase
    Phase Number of Soldiers with pay problems
    Mobilization 48 of 51
    Deployed 41 of 51
    Demobilization 0 of 51
    Source: GAO analysis.
    In total, we identified estimated overpayments of $17,000, underpayments
    of $1,300, and late payments of $67,000 associated with the pay problems
    we found. In addition, of the $17,000 in overpayments, we found that less
    than $100 was subsequently collected from the soldiers.
    We determined a number of causes for these pay problems. First, we found
    a lack of sufficient numbers of knowledgeable staff. In addition, after-thefact
    detective controls were not in place, including a reconciliation of pay
    and personnel records and the reconciliation of pay records with the unit
    commander�s records of personnel actually onboard. Currently, as a matter
    of practice, pay and personnel representatives from the USPFO conduct a
    manual reconciliation between the pay and personnel system records
    approximately every 2 months. The purpose of the reconciliation is to
    ensure that for common data elements, the pay and personnel systems
    contain the same data. A USPFO official told us that while it is the
    USPFO�s goal to carry out such reconciliations each month, it currently
    does not have the resources required to do so.
    Mobilization Pay
    Problems
    As summarized in table 25, we identified a number of pay problems
    associated with the unit�s mobilization to active duty. Failures to enter
    transactions or late entry of transactions needed to start active duty pays
    by Army Guard USPFO military pay personnel and by active Army military
    pay personnel at the unit�s mobilization station were the initial cause of the
    pay problems. We also found that the underlying cause of the pay problems
    was a lack of sufficient numbers of knowledgeable personnel at the
    California USPFO and the Fort Lewis Finance Office. In addition,
    according to Army Guard and active Army officials, neither organization
    was prepared for the sheer volume of pay transactions associated with
    mobilizing soldiers to active duty.
    Table
    25: Identified Mobilization Pay Problems
    Type of pay or allowance
    Number of soldiers who did not receive pay or
    allowance within 30 days of entitlement
    Basic pay 17
    Basic allowance for housing 18
    Basic allowance for subsistence 18
    Family separation allowance 39
    Cost of living allowance 36
    Source: GAO analysis.
    In total, 48 out of 51 soldiers of the 49th Military Police Company did not
    receive certain pay and allowances and incentive pays at all, or did not
    receive them within 30 days after being mobilized on October 2, 2001. The
    types of pay entitlements either not paid at all or paid late associated with
    the unit�s initial mobilization included basic pay, basic allowance for
    subsistence, basic allowance for housing, family separation allowance, and
    the continental United States cost of living allowance.
    The late payments during the mobilization phase primarily resulted from
    California USPFO military pay personnel�s lack of understanding of their
    responsibility for initiating active duty pays. According to DFAS reserve
    component mobilization procedures; the California USPFO was
    responsible for initiating these pays. However, a USPFO military pay
    official mistakenly instructed the unit to take its pay data to the
    mobilization station to enter transactions to start active duty pays. The
    USPFO official stated that the USPFO did not start the active duty pay and
    allowances at that time because a copy machine was not available to make
    copies of relevant active duty pay support documentation (such as a lease
    agreement needed to support a housing allowance entitlement). As a
    result, the responsibility for initiating this allowance was improperly
    passed to the active Army finance office at the Fort Lewis mobilization
    station.
    The Fort Lewis finance office lacked sufficient numbers of knowledgeable
    military pay staff to expeditiously enter the large volume of transactions
    necessary to start active duty pay entitlements for the 49th Military Police
    Company�s soldiers. DFAS guidance requires finance personnel at the
    mobilization station to review each soldier�s pay account to identify any
    errors and input the necessary correcting transactions into DJMS-RC.
    Initially, the mobilization station finance office assigned an insufficient number of personnel to the task of starting active duty pays for the unit�s 51
    mobilizing soldiers. Moreover, one of the assigned pay technicians was not
    familiar with DJMS-RC and consequently entered data incorrectly for some
    of the unit�s soldiers. Also, the assigned pay technician initially failed to
    enter transactions to start pay and allowances for a significant number of
    the unit�s soldiers because the supporting documentation was misplaced.
    These documents were later found under a desk in the finance office.
    Recognizing this shortage of staff knowledgeable about DJMS-RC
    processing procedures, the Fort Lewis finance office asked the California
    USPFO to supply additional personnel and also temporarily reassigned
    soldiers from other units stationed at Fort Lewis to assist in the pay
    processing. Working together over a 2-month period after the unit was
    mobilized to active duty, these personnel were able to enter the omitted
    transactions needed to start active duty pays and correct the previous
    erroneous entries.
    In addition, the USPFO did not enter the required data to DJMS-RC to begin
    cost of living allowance pays for 36 of the unit�s soldiers. DFAS reserve
    component mobilization procedures state that the USPFO has the initial
    responsibility for initiating these pays. However, as discussed previously,
    the USPFO mistakenly sent the 49th Military Police Company to Fort Lewis
    with their pay documentation, and as a result, it was not until more than 2
    months after the unit�s mobilization date that the Fort Lewis finance office
    pay technicians began to enter these transactions into DJMS-RC.
    The company commander for the unit told us that he was frustrated with
    the level of customer support his unit received as it moved through the
    initial mobilization process. Only two knowledgeable military pay officials
    were present to support active duty pay transaction processing for the 51
    soldiers mobilized for his unit. He characterized the customer service his
    unit received at initial mobilization as very time-consuming and frustrating.
    Deployment Pay
    Problems
    As summarized in table 26, we identified a number of pay problems
    associated with six different types of active duty pays and allowances
    associated with the unit�s deployment while on active duty. These
    problems primarily resulted from a data entry error and inadequate
    document retention practices. Table
    26: Identified Deployment Pay Problems
    Type of pay or
    allowance
    Number of soldiers who
    did not receive pay or
    allowances within 30
    days of entitlement
    Number of
    soldiers who
    were underpaid
    Number of
    soldiers who
    were overpaid
    Basic pay 1 0 5
    Basic allowance for
    subsistence 1 0 5
    Basic allowance for
    housing 1 0 5
    Family separation
    allowance 0 0 6
    Foreign language
    proficiency pay 4 2 1
    Cost of living allowance 37 4 0
    Source: GAO analysis.
    For example, the USPFO paid one soldier her basic pay, basic allowance
    for subsistence, and basic allowance for housing nearly 4 months late. A
    USPFO official told us these late payments were caused when a USPFO pay
    technician entered an incorrect stop date for the soldier�s active duty tour
    into DJMS-RC. The pay technician, after being notified of the error by the
    soldier, corrected the data in DJMS-RC, which resulted in the soldier
    receiving her pay nearly 4 months late. Additionally, USPFO officials were
    unable to provide support explaining why five other soldiers continued to
    receive basic pay, the basic allowance for subsistence, and the basic
    allowance for housing after the date available records show their active
    duty tours had ended. Consequently, we identified the payments made to
    these five soldiers as overpayments.
    Overpayments of family separation allowances to soldiers in the unit
    resulted from a data entry error and inadequate USPFO document
    retention practices. A USPFO pay technician incorrectly coded a soldier�s
    account to receive a family separation allowance when the soldier had only
    been on active duty for 2 weeks. According to the DOD FMR, Volume 7A,
    chapter 27, soldiers are only eligible for this allowance after they have been
    separated more than 30 days from their families on a continuous active
    duty assignment. This overpayment problem had not been resolved as of
    March 31, 2003. Additionally, USPFO officials were unable to provide
    supporting documentation explaining why five soldiers continued to
    receive a family separation allowance after available documentation showed that these soldiers� active duty tours had officially ended. We
    identified these family separation allowance payments for the five soldiers
    as overpayments.
    Late, under- and overpayments of foreign language proficiency pays to the
    unit�s soldiers primarily resulted from delayed or inadequate data entry.
    For example, our audit showed that USPFO pay technicians failed to enter
    transactions into DJMS-RC in a timely manner for four soldiers resulting in
    late foreign language proficiency payments. In addition, USPFO pay
    technicians failed to enter any foreign language proficiency payment
    transactions for 1 month for one soldier and for 3 months for another
    soldier resulting in those soldiers being underpaid. This underpayment
    issue had not been resolved as of March 31, 2003. In another instance, a
    soldier received an overpayment of his entitled foreign language
    proficiency payment when a USPFO pay technician entered the wrong
    code. Approximately 3 months later, the USPFO pay technician identified
    the error and recovered the overpayment.
    Late payment, underpayment, and overpayment of cost of living allowances
    resulted from the inability of DJMS-RC to pay certain active duty pays and
    allowances automatically, inaccurate data entry, and inadequate
    documentation retention practices. For example, our audit discovered that
    USPFO pay technicians failed to manually enter cost of living allowance
    transactions into DJMS-RC in a timely manner for 37 soldiers, resulting in
    late payments to the soldiers. In addition, USPFO officials were unable to
    provide sufficient documentation to explain why 3 soldiers appeared not to
    have received cost of living allowance payments due them for a 2-month
    period. We considered these pay omissions to be underpayments. An
    Army pay technician at the Fort Lewis finance office entered the incorrect
    code, thereby paying a soldier the wrong type of allowance, which resulted
    in an underpayment.
    Pay Problems
    Associated with
    Demobilization and
    Release from Active
    Duty
    California�s 49th Military Police Company demobilized at Fort Lewis on
    July 28, 2002, and returned to its home station in Pittsburg, California. We
    did not identify any pay problems for this unit in the demobilization phase.
    Scope and Methodology Appendix VI
    To obtain an understanding and assess the processes, personnel (human
    capital), and systems used to provide assurance that mobilized Army Guard
    soldiers were paid accurately and timely, we reviewed applicable policies,
    procedures, and program guidance; observed pay processing operations;
    and interviewed cognizant agency officials. With respect to applicable
    policies and procedures, we obtained and reviewed 10 U.S.C. Section
    12302, DOD Directive Number 1235.10, �Activation, Mobilization &
    Demobilization of the Ready Reserve;� DOD FMR, Volume 7A, �Military Pay
    Policy and Procedures Active Duty and Reserve Pay�; and the Army Forces
    Command Regulations 500-3-3, Reserve Component Unit Commander
    Handbook, 500-3-4, Installation Commander Handbook, and 500-3-5,
    Demobilization Plan. We also reviewed various Under Secretary of
    Defense memorandums, a memorandum of agreement between Army and
    DFAS, DFAS, Army, Army Forces Command, and Army National Guard
    guidance applicable to pay for mobilized reserve component soldiers. We
    also used the internal controls standards provided in the Standards for
    Internal Control in Federal Government.1
    We applied the policies and procedures prescribed in these documents to
    the observed and documented procedures and practices followed by the
    various DOD components involved in providing active duty pays to Army
    Guard soldiers. We also interviewed officials from the National Guard
    Bureau, State USPFOs, Army and DOD military pay offices, as well as unit
    commanders to obtain an understanding of their experiences in applying
    these policies and procedures.
    In addition, as part of our audit, we performed a review of certain edit and
    validation checks in DJMS-RC. Specifically, we obtained documentation
    and performed walk-throughs associated with DJMS-RC edits performed
    on pay status/active duty change transactions, such as those to ensure that
    tour start and stop dates match MMPA dates and that the soldier cannot be
    paid basic pay and allowances beyond the stop date that was entered into
    DJMS-RC. We also obtained documentation on and walk-throughs of the
    personnel-to-pay system interface process, the order writing-to-pay system
    interface process, and on the process for entering mobilization information
    into the pay system. We held interviews with officials from the Army National Guard Readiness Center, the National Guard Bureau, and DFAS
    Indianapolis and Denver to augment our documentation and walkthroughs.
    Because our preliminary assessment determined that current operations
    used to pay mobilized Army Guard soldiers relied extensively on errorprone
    manual transactions entry into multiple, nonintegrated systems, we
    did not statistically test current processes and controls. Instead, we used a
    case study approach to provide a more detailed perspective of the nature of
    pay deficiencies in the three key areas of processes, people (human
    capital), and systems. Specifically, we gathered available data and analyzed
    the pay experiences of Army Guard special forces and military police units
    mobilized to active duty in support of Operations Noble Eagle and
    Enduring Freedom during the period from October 2001 through March
    2003. We audited six Army Guard units as case studies of the effectiveness
    of the controls over active duty pays in place for soldiers assigned to those
    units:
    � Colorado B Company, 5th Battalion, 19th Special Forces;
    � Virginia B Company, 3rd Battalion, 20th Special Forces;
    � West Virginia C Company, 2nd Battalion, 19th Special Forces;
    � Mississippi 114th Military Police Company;
    � California 49th Military Police Headquarters and Headquarters
    Detachment; and
    � Maryland 200th Military Police Company.
    In selecting these six units for our case studies, we sought to obtain the pay
    experiences of units assigned to either Operation Enduring Freedom or
    Operation Noble Eagle. We further limited our case study selection to
    those units both mobilized to active duty and demobilized from active duty
    during the period from October 1, 2001 through March 31, 2003. From the
    population of all Army Guard units mobilized and demobilized during this
    period, we selected three special forces units and three military police
    units. These case studies are presented to provide a more detailed view of
    the types and causes of pay problems and the pay experiences of these
    units as well as the financial impact of pay problems on individual soldiers
    and their families. We used mobilization data supplied by the Army Operations Center to
    assist us in selecting the six units we used as our case studies. We did not
    independently verify the reliability of the Army Operations Center
    database. We used the Army Operations Center data to select six states that
    had a large number of special forces or military police units that had been
    mobilized, deployed, and returned from at least one tour of active duty in
    support of Operations Noble Eagle and Enduring Freedom. We chose
    California, Colorado, Maryland, Mississippi, Virginia, and West Virginia.
    From these six states, we selected three special forces and three military
    police units that had a variety of deployment locations and missions. We
    also identified and performed a limited review of the pay experiences of a
    unit still deployed during the period of our review; Colorado�s 220th
    Military Police Company. The purpose of our limited review was to
    determine if there were any pay problems experienced by a more recently
    mobilized unit.
    We also obtained in-depth information from soldiers at four of the six case
    study units. Using a data collection instrument, we asked for soldier views
    on pay problems and customer service experiences before, during, and
    after mobilization. Unit commanders distributed the instrument to soldiers
    in their units. There were 325 soldiers in these units; in total, we received
    87 responses. The information we received from these data collection
    instruments is not representative of the views of the Army Guard members
    in these units nor of those of Army Guard members overall. The
    information provides further insight into some of the pay experiences of
    selected Army Guard soldiers who were mobilized under Operations Noble
    Eagle and Enduring Freedom.
    We used DJMS-RC pay transaction extracts to identify pay problems
    associated with our case study units. However, we did not perform an exact
    calculation of the net pay soldiers should have received in comparison with
    what DJMS-RC records show they received. Rather, we used available
    documentation and follow-up inquiries with cognizant USPFO personnel to
    identify if (1) soldiers� entitled active duty pays and allowances were
    received within 30 days of initial mobilization date, (2) soldiers were paid
    within 30 days of the date they became eligible for active duty pays and
    allowances associated with their deployment locations, and (3) soldiers
    stopped receiving active duty pays and allowances as of the date of their
    demobilization from active duty. As such, our audit results only reflect
    problems we identified. Soldiers in our case study units may have
    experienced additional pay problems that we did not identify. In addition, our work was not designed to identify, and we did not identify, any
    fraudulent pay and allowances to any Army Guard soldiers.
    As 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 counted
    soldiers� pay problems as a problem only in the phase in which they first
    occurred even if the problems persisted into other phases. For purposes of
    characterizing pay problems for this report, 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 of (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 estimate collections
    against identified overpayments through March 31, 2003. We did not
    attempt to estimate payments received against identified underpayments.
    We provided the support for the pay problems we identified to appropriate
    officials, at each of our case study locations so that they could fully develop
    and resolve any additional amounts owed to the government or to the Army
    Guard soldiers.
    We briefed DOD and Army officials, National Guard Bureau officials, DFAS
    officials, and USPFO officials in the selected states on the details of our
    audit, including our findings and their implications. On October 10, 2003,
    we requested comments on a draft of this report. We received comments
    on November 5, 2003, and have summarized those comments in the
    �Agency Comments and Our Evaluation� section of this report. DOD�s
    comments are reprinted in appendix VIII. We conducted our audit work
    from November 2002 through September 2003 in accordance with U.S.
    generally accepted government auditing standards.
    Comments from the Department of Defense Appendix VI
    GAO Contacts and Staff Acknowledgments Appendix IX
    GAO Contacts Geoffrey B. Frank, (202) 512-9518
    Sheila D. Miller, (303) 572-7378
    Acknowledgments Staff making key contributions to this report include: Paul S. Begnaud,
    Ronald A. Bergman, James D. Berry, Jr., Amy C. Chang, Mary E. Chervenic,
    Francine M. DelVecchio, C. Robert DeRoy, Dennis B. Fauber, Jennifer L.
    Hall, Charles R. Hodge, Jason M. Kelly, Julia C. Matta, Jonathan T. Meyer,
    John J. Ryan, Rebecca Shea, Crawford L. Thompson, Jordan M. Tiger,
    Patrick S. Tobo, Raymond M. Wessmiller, and Jenniffer F. Wilson.
    (192080)
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