-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-384R		

TITLE:     Military Pay: Inadequate Controls for Stopping Overpayments 
of Hostile Fire and Hardship Duty Pay to Over 200 Sick or Injured 
Army National Guard and Army Reserve Soldiers Assigned to Fort Bragg

DATE:   04/27/2006 
				                                                                         
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GAO-06-384R

     

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April 27, 2006

The Honorable Tom Davis

Chairman

Committee on Government Reform

House of Representatives

Subject: Military Pay: Inadequate Controls for Stopping Overpayments of
Hostile Fire and Hardship Duty Pay to Over 200 Sick or Injured Army
National Guard and Army Reserve Soldiers Assigned to Fort Bragg

Over the past several years, we have reported1 on significant pay problems
experienced by mobilized Army National Guard and Army Reserve (Army Guard
and Reserve) soldiers in the wake of the September 11, 2001, terrorist
attack. These reports included examples of hundreds of soldiers receiving
inaccurate and untimely payroll payments due to a paper-intensive,
error-prone pay process and the lack of integrated pay and personnel
systems. In response to our reports, the Department of Defense (DOD) has
taken some action to  improve controls designed to pay Army Guard and
Reserve soldiers accurately and on time, especially those who had become
sick or injured in the line of duty.

This report responds to your request that we investigate the allegation
that 37 Army Guard and Reserve soldiers assigned to the Medical Retention
Processing Unit (MRPU) at Fort Bragg, North Carolina, were overpaid for
hostile fire and hardship duty pay while in an outpatient status.2 Our
objectives were to determine (1) whether the allegations were true, and if
so, whether the pay issues were more widespread at Fort Bragg and (2) the
key causes of the overpayments and the resulting impact on soldiers and
their families.

1 GAO, Military Pay: Gaps in Pay and Benefits Create Financial Hardships
for Injured Army National Guard and Reserve Soldiers, GAO-05-125 and
GAO-05-322T (Washington, D.C.: Feb. 17, 2005); Army National Guard:
Inefficient, Error-Prone Process Results in Travel Reimbursement Problems
For Mobilized Soldiers, GAO-05-79 (Washington, D.C.: Jan. 31, 2005) and
GAO-05-400T (Washington, D.C.: Mar. 16, 2005); Military Pay: Army Reserve
Soldiers Mobilized to Active Duty Experienced Significant Pay Problems,
GAO-04-911 (Washington, D.C: Aug. 20, 2004) and GAO-04-990T (Washington,
D.C.: July 20, 2004); and Military Pay: Army National Guard Personnel
Mobilized to Active Duty Experienced Significant Pay Problems, GAO-04-413T
(Washington, D.C.: Jan. 28, 2004) and GAO-04-89 (Washington, D.C.: Nov.
13, 2003).

2 For the purposes of this report, "outpatient" means a soldier who is
being medically evaluated for specialized treatment. This may include
surgery, which would require hospitalization at a later date.

Scope and Methodology

To investigate the allegation that Army Guard and Reserve soldiers
assigned to the MRPU while in an outpatient status received overpayments
of hostile fire and hardship duty pay, we interviewed Fort Bragg MRPU and
Finance Battalion staff and observed MRPU and finance in-processing
procedures. We also used Defense Finance and Accounting Service (DFAS)
data extracts from monthly pay records and Fort Bragg MRPU records
containing the dates soldiers arrived at the Fort Bragg MRPU to determine
whether soldiers being treated at Fort Bragg during the period April 1,
2003, through June 30, 2005, improperly received hostile fire and/or
hardship duty payments while at Fort Bragg. We performed procedures to
assure ourselves that the data we used were sufficient for our purposes.
The scope of our investigation did not include verification of the
accuracy of soldiers' entire pay accounts. In addition, our scope did not
include inpatient soldiers assigned directly to the Womack Army Medical
Treatment Facility (hospital) at Fort Bragg.

Because of data reliability concerns we identified in our prior work,3 we
did not rely on DFAS records to calculate precise overpayments of hostile
fire and hardship duty pay. Instead, we estimated overpayments based on
the time period starting with the date the soldier arrived at Fort Bragg
until the date the soldier's improper pays were stopped.4 We provided Fort
Bragg Finance Battalion officials an opportunity to confirm our estimates,
identify the amount of debt established for the overpaid soldiers, and
determine whether the debts had been collected. We did not review Fort
Bragg's debt collection processes and procedures for compliance with DOD
regulations and requirements. In light of the Army's lack of progress in
integrating pay and personnel systems, we reviewed controls used by the
MRPU and Fort Bragg Finance Battalion staff to stop hostile fire and
hardship duty pay. We conducted this investigation from August 2005,
through March 2006, in accordance with quality standards for
investigations as set forth by the President's Council on Integrity and
Efficiency.

Summary of Investigation

Our investigation confirmed that 28 of the 37 Army Guard and Reserve
soldiers assigned to the MRPU in an outpatient status at Fort Bragg with
alleged pay problems were in fact overpaid for hostile fire and hardship
duty pay. We also identified at least 204 additional cases of sick or
injured soldiers assigned to the MRPU who were overpaid for the same
entitlements. An estimated $218,000 in hostile fire and/or hardship duty
overpayments were made to a total of about 232 Army Guard and

3 GAO, Global War on Terrorism: DOD Needs to Improve the Reliability of
Cost Data and Provide Additional Guidance to Control Cost, GAO-05-882
(Washington, D.C: Sept. 21, 2005); GAO-04-89; and GAO-04-911.

4 We did not estimate overpayment amounts for hostile fire and hardship
duty pay prior to the soldier's arrival to Fort Bragg.

Reserve soldiers in an outpatient status at Fort Bragg during the period
April 2003 through June 2005.5

As we have previously reported,6 internal control weaknesses in Army
processes, human capital, and the lack of integrated systems caused the
overpayments of hostile fire and hardship duty pay. Our investigation
disclosed that the Fort Bragg Finance Battalion and MRPU controls often
failed to detect the overpayments in a timely manner. A Fort Bragg Finance
official acknowledged that the Finance Battalion "dropped the ball" by
failing to promptly detect and stop the overpayments to sick or injured
Army Guard and Reserve soldiers upon their arrival to the Fort Bragg MRPU.
Further, in October 2005, DFAS completed an annual performance inspection
of the Fort Bragg Finance Battalion that confirmed our conclusion about
the problems soldiers were having with hostile fire and hardship duty pay.

Our case studies showed that as a result of these overpayments, some
soldiers and their families had to expend significant time and effort
dealing with pay and resulting debt problems while recovering from their
injuries. Several soldiers experienced large, unexpected deductions-as
much as $1,172 from a single paycheck-for repaying the debt resulting from
the Army's failure to stop the overpayments. On the other hand, the Fort
Bragg Finance Battalion did not consistently take action to recover
overpayments from other MRPU soldiers during the time of our
investigation.

Background

The MRPU at Fort Bragg is one of 23 MRPUs located throughout the United
States. Soldiers are assigned to these units while receiving outpatient
treatment for their illnesses or injuries under the Medical Retention
Program. The objective of the Medical Retention Program is to heal injured
soldiers and return them to their units or to discharge them from the Army
Guard or Reserve if they are unable to perform their military duties. The
Medical Retention Program is an option for mobilized National Guard and
Reserve soldiers who become sick or injured. Soldiers who are injured or
become ill during predeployment training or other predeployment activities
can also apply for treatment through the Medical Retention Program.

Before being injured, soldiers serving in certain locations were entitled
to several types of special duty pay, including hostile fire pay and
hardship duty pay. Soldiers are entitled to hostile fire pay when a
commander certifies that they are subject to hostile fire or explosions of
hostile mines; on duty in an area in close proximity to hostile fire
incidents; or are killed, injured, or wounded by hostile fire, explosions,
or

5 As a result of the lack of supporting documents and data reliability
concerns, we likely did not identify precise overpayment amounts. We have
provided information for the overpayments we identified to cognizant Fort
Bragg officials for further research to determine the proper amounts that
are owed to the government or the soldier.

6 See footnote 1.

other hostile actions.7 Hostile fire pay is $225 a month while the above
circumstances prevail. Any soldier injured under the above circumstances
is entitled to hostile fire pay for up to 3 months' of hospitalization
after the month in which the injury occurred, unless the soldier is
discharged sooner and does not return to a designated hostile fire or
hardship duty location.

Soldiers serving in designated areas are also entitled to hardship duty
pay. This entitlement stops, however, as soon as the soldier leaves the
designated area, whether or not the soldier is hospitalized for injuries
that occurred there. The maximum amount of hardship duty pay for any
designated area is $150 a month as long as the soldier serves in that
area. If a soldier leaves the duty location before the end of the month,
the hardship duty pay is prorated.

Soldiers assigned to the Fort Bragg MRPU in an outpatient status were not
entitled to either hostile fire pay or hardship duty pay because Fort
Bragg, North Carolina, is not a designated location for these pay
entitlements. Additionally, soldiers who were assigned to the MRPU during
their predeployment phase were never entitled to hostile fire pay or
hardship duty pay. Finally, MRPU outpatient soldiers whose medical
evaluations indicated a need for future hospitalization were not entitled
to receive hostile fire pay or hardship duty pay for subsequent hospital
stays.

It should be noted that our previous reports demonstrate that finance
offices in theater were often unable to start or stop hostile fire pay or
hardship duty pay as required because of problems with human capital,
processes, and lack of integrated pay and personnel systems. Accordingly,
installations processing soldiers from in theater have a responsibility to
confirm that the soldiers' pay is accurate and to adequately inform
soldiers about their responsibilities regarding their military pay. For
example, soldiers are responsible for reviewing their leave and earnings
statements and for prompt and accurate reporting of changes in their
personal circumstances that affect their entitlement pay to their
commander and servicing finance office.

Allegation Regarding Overpayments

of Hostile Fire and Hardship

Duty Pay Was Confirmed

The allegation that some Army Guard and Reserve outpatients assigned to
the Fort Bragg MRPU were receiving hostile fire and hardship duty pay they
were not entitled to receive was true, and these were not isolated
instances of overpayments. We found that 28 of the 37 soldiers with
alleged pay problems were overpaid an estimated $32,000 for hostile fire
and/or hardship duty pay. We selected 10 of these 28 soldiers for our case
studies during this investigation. Nine told us that they had

7 Additionally, soldiers in certain designated locations face what has
been determined to be imminent danger and are therefore entitled to
imminent danger pay. Notably, soldiers are entitled to either hostile fire
pay or imminent danger pay but not both. We mention the imminent danger
pay for background information only because the paperwork that we reviewed
for the soldiers in the MRPU at Fort Bragg only mentions hostile fire pay.

contacted the Fort Bragg Finance Battalion in an attempt to stop the
overpayments in order to avoid escalating debt accumulation.

Our investigation also disclosed that the Fort Bragg Finance Battalion
failed to timely detect and stop hostile fire and hardship duty pay for at
least 204 additional outpatient soldiers. Fort Bragg Finance Battalion's
delays resulted in overpayments of about $218,000 for 232  sick or injured
Army Guard and Reserve soldiers in the MRPU. To the extent that some of
these payments should have been stopped before the soldiers arrived at
Fort Bragg, the total overpayments may have been higher. MRPU records
showed that these 232 soldiers arrived at the Fort Bragg MRPU over a
3-year period: 23 soldiers from April 2003 through December 2003, 187
soldiers in calendar year 2004, and 22 soldiers from January 2005 through
June 2005.

The Fort Bragg MRPU classified the 232 outpatient soldiers whom we
identified as receiving overpayments of hostile fire and hardship duty pay
while in an outpatient status as follows: 8

           o  161 soldiers were medically evacuated out of theater generally
           before their active duty assignment period was completed and were
           assigned to the MRPU,
           o  31 soldiers were found to need medical evaluation during the
           demobilization process at Fort Bragg and were assigned to the
           MRPU,
           o  19 soldiers were found to need medical evaluation during
           predeployment training or other activities and were assigned to
           the MRPU, and
           o  21 soldiers were not classified into a specific category.

For 9 of the 10 MRPU soldiers in our case studies, it took pay technicians
at the Fort Bragg Finance Battalion from 14 to 203 days to stop the
overpayments once the MRPU soldier visited the Finance Battalion. We could
not determine the amount of time it took the pay technician to stop
overpayments for one of our case studies because there was no
documentation supporting the date he visited the Finance Battalion. Due to
such delays, overpayment amounts ranged from $553 to $2,300. Two of the 10
soldiers never deployed and therefore should have never received any
hostile fire and hardship duty pay. The following case study illustrates
one of these.

8 These categories are provided in this report for context only. We did
not verify the classifications for accuracy.

Individual Case Illustration: Soldier Who Never Deployed Received Improper 
Payments of Hostile Fire and Hardship Duty Pay                             
                                                                              
An Army National Guard soldier from Maryland who was initially mobilized   
with her unit for Operation Iraqi Freedom never made it overseas because   
she was diagnosed with anxiety and depression during her predeployment     
training. She arrived at the Fort Bragg MRPU on October 5, 2004, and       
visited the Fort Bragg Finance Battalion on October 13, 2004. She          
explained to us that, during her time at Fort Bragg, she told Finance that 
she was receiving improper hostile fire pay and hardship duty pay since    
she never deployed and was therefore ineligible to receive these           
entitlements. According to the soldier, the finance office told her that   
the improper payments would be collected from her later paychecks. Her     
hostile fire and hardship duty pay continued until March 10, 2005, 5       
months after her initial visit to the Fort Bragg Finance Battalion. By     
this time, her improper hostile fire and hardship duty payments had grown  
to about $1,823, of which $986 was collected from her paychecks as of      
November 2005.                                                             

According to MRPU records, 17 other soldiers whom we identified as having
received hostile fire and hardship duty payments while at the MRPU also
never deployed because of injuries being treated during the predeployment
period for their unit.

Figure 1 below shows delays for each of the 10 case study soldiers.

Figure 1: Length of Time Fort Bragg Finance Battalion Took to Stop 10
Soldiers' Hostile Fire and

Hardship Duty Pay and the Resulting Overpayments (as of June 30, 2005)

a Days elapsed = Number of days between date soldier visited Finance and
date ineligible pay was stopped.

b Estimated overpayments = Hostile fire and hardship duty payments made to
soldier after arrival at Fort Bragg MRPU.

Internal Control Weaknesses Hamper

Accuracy of Army Guard

and Reserve Soldiers' Pay

Fort Bragg did not have well-defined processes for ensuring that MRPU
soldiers' pay was accurate. While MRPU soldiers were provided a checklist
for in-processing at Fort Bragg that was intended to channel them to the
Finance Battalion9 to validate pay, neither that checklist nor the
Battalion's desk procedures offered adequate specificity regarding what
was expected of the finance staff. Furthermore, according to an MRPU
administrative staff member, some MRPU soldiers may not have gone to the
Finance Battalion because they did not return completed checklists
initialed by a pay technician to the MRPU as required to document their
visit to the Finance Battalion.

9 The Fort Bragg Finance Battalion was one of nine locations the sick and
injured soldiers had to personally visit in order to complete
in-processing to the MRPU. The soldiers' injuries ranged from those
inflicted by improvised explosive devices (IED) to post-traumatic stress
disorder. Soldiers with limited mobility were assigned a "buddy" to assist
them in getting around post to complete their in-processing.

We interviewed the Finance Battalion officials and observed their
processes. There was a requirement for pay technicians to review pay
accounts of the MRPU soldiers for accuracy, including the identification
of overpayments of hostile fire and hardship duty pay, and stop these
unearned payments expeditiously. Pay technicians were also required to
initial the in-processing checklist to signify that the MRPU soldier's pay
account was reviewed. Stopping hostile fire and hardship duty pay entailed
entering the correct pay termination date and transaction codes for each
of these pay entitlements into the Defense MilPay Office system, which
would routinely be used by DFAS to correct soldiers' pay accounts in the
Defense Joint Military Pay System-Reserve Component (DJMS-RC). However, as
shown in figure 1 above, pay problems continued for soldiers who had their
in-processing checklist initialed by a pay technician.

For example, although the finance technician signed off on one MRPU
soldier's checklist on July 26, 2004, this soldier's hostile fire and
hardship duty pay continued until December 23, 2004, about 5 months after
he made his initial visit to finance, and his hostile fire and hardship
duty overpayments grew to $2,000. A Fort Bragg Finance official
acknowledged that the Finance Battalion did not promptly detect and stop
the overpayments to injured Army Guard and Reserve soldiers upon their
arrival to the Fort Bragg MRPU.

Our investigation also disclosed that there was no routine follow-up to
assure that all MRPU soldiers reported to the Fort Bragg Finance Battalion
as directed. For example, when we asked an MRPU clerk to provide copies of
completed in-processing checklists for the 37 soldiers alleged to have
been overpaid, the clerk only provided 20 completed checklists. The MRPU
clerk told us that soldiers did not always return the completed checklists
to the MRPU administrative staff. Without a personal visit by the MRPU
soldier to the Finance Battalion, pay technicians were provided no other
routine means to initiate a review of the pay accounts of soldiers
arriving at the Fort Bragg MRPU.

Although the Army issued revised procedures that included the handling of
sick and injured soldiers' pay accounts by finance personnel on June 1,
2004, the Fort Bragg Finance Battalion and MRPU continued to operate under
their own procedures, which emphasized the individual soldier's
responsibility regarding pay accuracy and personal visits to the Finance
Battalion. In contrast, the Army's revised procedures emphasize finance
staff responsibility to proactively work with the MRPU to obtain
information on all incoming soldiers that is to be used to ensure that all
MRPU soldiers' pay accounts are timely and appropriately updated as well
as accurate. This is important to note because between June 2004 and June
2005, 146 of the 232 soldiers, the majority of soldiers included in our
investigation, arrived at Fort Bragg for medical evaluation and treatment.
Had the Fort Bragg Finance Battalion followed Army guidance when the
Army's revised procedures were instituted in June 2004, the Finance
Battalion may have identified overpayments of unearned entitlements more
quickly for these sick or injured soldiers.

Army's Failure to Stop Hostile Fire

and Hardship Duty Pay Expeditiously

Resulted in Significant Time and Effort

Spent Addressing Debts

The Army's failure to stop hostile fire and hardship duty pay
expeditiously for Army Guard and Reserve soldiers resulted in significant
time and effort spent addressing debts10 for some soldiers and their
families. For example, some soldiers whose overpayments were detected and
established as a debt experienced large, unexpected deductions--as much as
$1,172 from a single paycheck--to repay the debt resulting from the Army's
failure to stop the overpayments.

Our investigation did not include work to determine whether the Fort Bragg
Finance Battalion complied with DOD policies and procedures for collecting
overpayments from soldiers or whether these policies were reasonable under
the circumstances. However, we noted that the longer it took the Fort
Bragg Finance Battalion to stop the overpayments, the greater the amount
of debt that accumulated for the soldier and the greater the financial
impact since more money was eventually withheld from the soldier's pay.
Our past work clearly showed the ramifications of protracted payment
errors. Establishing the exact amount owed and collecting overpayments of
active duty pays and allowances erroneously provided to soldiers imposes a
large administrative burden on DOD and a financial burden on the soldier.

Even when overpayments of hostile fire and hardship duty pay were stopped
by the Fort Bragg Finance Battalion, it sometimes did not establish debts
and collect the overpayments from the soldier's pay in a timely manner.
For example, 2 of the 10 soldiers in our case studies described in figure
1 did not have any pay deductions for overpayments of hostile fire and
hardship duty pay as of June 30, 2005, 6 months after these overpayments
were stopped.

We referred the names of the 232 soldiers, including the 10 soldiers in
our case studies, for which we estimated hostile fire and/or hardship duty
overpayments to the Fort Bragg Finance Battalion for follow-up to
determine whether correct amounts were established as debts and
appropriate debt collection measures were taken. The Fort Bragg Finance
Battalion had not completed its review at the time our investigation was
completed.

10 Collection of overpayments is not pursued until a debt is established.
To repay debts, the amount of the debt generally is deducted from a
soldier's pay in increments until the total debt is repaid, unless a
waiver is granted.

The following case studies show the experiences of three MRPU soldiers
with hostile fire and hardship duty overpayments.

Case Illustration 1: Errors Made in One Soldier's Pay Created Financial    
Hardship for The Soldier's Family                                          
                                                                              
An Army Guard National soldier from North Carolina described his           
experience as follows: "In September 2003, my National Guard Unit received 
orders to report for duty in support of Operation Iraqi Freedom. Our       
federal orders were issued 10/1/03. We began training at Ft. Bragg in      
preparation for our deployment. The majority of soldiers were deployed in  
mid-February. I was deployed in March. After arriving in Iraq, I was       
injured when my vehicle hit a crater caused by an IED. I was airlifted to  
the hospital in Baghdad for treatment. I was returned to my unit for       
continued duty. My leg began to swell and it was determined that I should  
be returned home for treatment. I was medically evacuated out of Iraq in   
late May.                                                                  
                                                                              
"When I reached Germany, I scanned my ID through finance. When I reached   
Walter Reed Army Hospital, I scanned my ID card through finance. When I    
reached Ft. Bragg, I scanned my ID card through finance on several         
occasions. I continued to receive hazardous duty and hostile fire pay      
through 12/04.                                                             
                                                                              
"When I was released from active duty in May 2005, I was processed out     
through Ft. Bragg finance. A clerical error was made and my start date for 
active duty was entered as 10/04. This created a debt of 1 years pay owed  
by me to the government. In the process of correcting this error, it was   
determined that I was paid hostile fire and hazardous duty in error. I am  
not convinced that my pay is correct now.                                  
                                                                              
"I attended drill twice in May and once in June. I did not receive drill   
pay. Monies were held to pay this debt. A debt remission package was       
finally submitted as the repayment of these funds would cause undo         
hardship to my family. While this error was being `corrected', we used all 
of our accumulated savings to cover our normal bills. Since I did my part  
by swiping my card through finance on numerous occasions, I do not feel    
obligated to repay these funds."                                           

Case Illustration 2: Pay Deductions Result in Family's Delay of Bill       
Payments                                                                   
                                                                              
An Army National Guard soldier from North Carolina suffered a stroke on    
June 26, 2004, while serving in Iraq in support of Operation Iraqi         
Freedom. He was flown to Germany and treated at the Landstuhl Regional     
Medical Center before returning to the United States. He arrived at Fort   
Bragg in early July 2004. Our investigation revealed that the soldier      
visited the Fort Bragg Finance Battalion on July 30, 2004, as part of his  
in-processing into the unit, and had his checklist signed by the finance   
technician. The soldier returned his completed checklist to the MRPU.      
                                                                              
Despite adhering to the MRPU's in-processing procedures, this soldier's    
hostile fire and hardship duty pay continued until November 5, 2004,       
approximately 4 months after he made his initial visit to the Fort Bragg   
Finance Battalion. By this time, his hostile fire and hardship duty pay    
overpayments had grown to $1,300. The Fort Bragg Finance Battalion         
eventually collected about $972 of this total from the soldier in a single 
paycheck, which was about 50 percent of his disposable pay. The            
collections had a negative financial impact on the soldier and his wife.   
The soldier's wife told us that she had to call and defer some of their    
bills, including the monthly payment on their second mortgage. According   
to information provided by the Finance Battalion to us on January 7, 2006, 
the soldier still owes about $100.                                         

Case Illustration 3: Soldier Frustrated by Efforts to Get His Pay          
Corrected                                                                  
                                                                              
An Army Reservist from California serving in Iraq in February 2004 in      
support of Operation Iraqi Freedom experienced cardiovascular problems     
while on duty in Baghdad. In October 2004 he was sent to Kuwait and then   
later stateside for demobilization and assignment to the Fort Bragg MRPU   
in November 2004.                                                          
                                                                              
Shortly after his arrival at Fort Bragg, he noticed that his Leave and     
Earnings Statement showed that he was still receiving hostile fire pay and 
hardship duty pay. He brought this error to the attention of a finance     
technician who said that his account would be corrected, and the combat    
entitlements would stop. He had accumulated overpayments for hostile fire  
pay and hardship duty pay totaling $553. According to the Fort Bragg       
Finance Battalion, as of January 9, 2006, $328 of the $553 in overpayments 
for hostile fire pay and hardship duty pay had not been deducted from the  
soldier's pay.                                                             
                                                                              
In addition to overpayments of hostile fire and hardship duty pay, this    
soldier told us that he also experienced overpayments of basic pay and     
benefits after he was released from the MRPU in July 2005 to return to his 
home unit in California. He then noticed on his July 2005 leave and        
earnings statement that he was continuing to receive basic pay as if he    
was still on active duty status while assigned to the MRPU. These basic    
pay overpayments continued for an additional pay period after the soldier  
made repeated calls to Fort Bragg to correct his pay account. By September 
9, the Army corrected the problem by deducting about $7,600 from other     
earned pay. He had participated in a 4-week training exercise in Korea in  
August 2005 and had 33 days of accrued leave which the Army used to offset 
previous overpayments of basic pay and benefits. Had he not participated   
in the training exercise, it would have taken many monthly pays for        
weekend drills for him to be able to repay the $7,600.                     

We spoke with Army and DFAS officials in December 2005 and January 2006
about our observations at the Fort Bragg Finance Battalion and Fort Bragg
MRPU. They told us that they were not surprised that we found pay account
review deficiencies at Fort Bragg and that it was troubling that the
proactive approach to pay management advocated by the Army in 2004 had not
been instituted at Fort Bragg until we were completing our investigation.
To help improve the skills of the finance staff at Fort Bragg, DFAS
provided on-site training in late September 2005 as part of their efforts
to improve pay account management for soldiers wounded in action. We were
also told that the pay account management capabilities of finance offices
at other installations varied and that they were taking steps to improve
performance where needed.

Corrective Action Briefing

On December 22, 2005, we discussed the results of our investigation with
the Fort Bragg Finance Battalion command. The command pointed out that
problems with ensuring timely termination of hostile fire pay and hardship
duty pay are due in part to the medical evacuation process, and the
existence of stove-piped pay and personnel systems that increase the
likelihood of inaccurate pay accounts. They said that at least some of
these pay problems should have been rectified before the soldier was
assigned to Fort Bragg.

The Battalion Commander stated that our identification of the 232 pay
accounts11 provided his staff with a good snapshot of pay issues that MRPU
soldiers were experiencing. The commander noted that since his battalion
is responsible for ensuring the accuracy of the pay accounts for all
soldiers who arrive at Fort Bragg, our investigation also provides his
staff with an opportunity to improve their services to Army Guard and
Reserve soldiers.

The Fort Bragg Finance Battalion officials informed us that they are
implementing the following corrective actions to provide reasonable
assurance that overpayments for hostile fire pay and hardship duty pay do
not affect future soldiers assigned to the MRPU at Fort Bragg:

           Coordinating with MRPU personnel staff to obtain regular updated
           lists of new arrivals to the MRPU to review those pay accounts in
           order to confirm that hostile fire pay and hardship duty pay
           entitlements are stopped in a timely manner.
           Coordinating with the MRPU personnel staff to identify MRPU
           soldiers who are unable to visit Finance due to their medical
           conditions and ensuring that Finance schedules personal visits
           with these sick or injured soldiers to individually review these
           soldiers' pay accounts.
           Regularly distributing Leave and Earnings Statement reports to the
           MRPU Commander in order to assist in the identification of MRPU
           soldiers who typically would not be receiving hostile fire pay and
           hardship duty pay.
           Regularly distributing Unit Commander's Financial Reports to the
           MRPU Commander to assist him in reviewing the accuracy of his
           soldiers' pay.
           Periodically briefing Fort Bragg units concerning combat pay
           entitlements.
           Adhering to a December 2005 revision of Fort Bragg's Finance
           Standard Operating Procedures that clarify how to review the pay
           accounts of MRPU soldiers to detect and stop hostile fire pay and
           hardship duty overpayments.

11 We referred 259 MRPU soldiers' pay accounts to the Finance Battalion in
September 2005 for review. On December 22, 2005, Finance Battalion
officials informed us that additional factors such as deployment from MRPU
may have subsequently entitled some of the soldiers to hostile fire and/or
hardship duty pay. We adjusted our estimated number of cases from 259 to
232 taking into account at least 27 instances where the MRPU data summary
file noted that the MRPU soldier deployed subsequent to arrival at the
Fort Bragg MRPU and as such, may have been entitled to some amount of
hostile fire and/or hardship duty pay. The remaining 232 cases are those
where we did not see any indication in the MRPU summary file that the MRPU
soldier deployed.

In subsequent correspondence to us on January 6, 2006, the MRPU Commander
informed us that the in-processing checklist will no longer be used as a
tool to alert the Finance Battalion to stop any hostile fire and hardship
duty pay to MRPU soldiers in a timely manner. Instead, beginning January
9, 2006, MRPU officials were to coordinate with the Fort Bragg Finance
Battalion weekly to assure that newly arriving soldiers' pay accounts are
correct based on the agreed-upon corrective actions listed above.

Conclusions

Fort Bragg did not carry out its responsibilities to ensure that the Army
Guard and Army Reserve soldiers assigned to the Fort Bragg MRPU received
accurate pay. Given the number of ongoing pay problems experienced by
these soldiers--problems that our investigation revealed extended far
beyond the initial allegation-and the systemwide pay problems we have
reported on in the past, it is conceivable that many other soldiers
assigned to the other 22 MRPU locations may be experiencing the same pay
problems. While soldiers have some responsibility to assist in correcting
pay errors, including setting aside amounts not earned, the primary
responsibility rests with DOD for timely pay adjustments to avoid the
types of problems and hardships surfaced by this investigation.

Recommendations for Executive Action

In conjunction with the Army's proactive efforts to improve Army Guard and
Reserve pay account management, we recommend that the Secretary of the
Army, in conjunction with the Under Secretary of Defense (Comptroller) and
the Under Secretary of Defense (Personnel and Readiness), follow up with
finance offices supporting the other 22 MRPUs that were not part of our
investigation to determine the extent to which hostile fire and hardship
duty overpayments to outpatient Army Guard and Reserve soldiers had
occurred and ensure that appropriate corrective action is taken. This
review should include the pay accounts for outpatient soldiers who had
been or are currently assigned to MRPU units, including those soldiers
with nonbattle injuries and other illness.

Agency Comments and Our Evaluation

DOD officials, in oral comments, partially concurred with our
recommendation to review the pay accounts for outpatient MRPU soldiers.
For example, DOD agreed to review the pay accounts for soldiers who are
currently assigned to MRPU units, including those soldiers with nonbattle
injuries and other illness, and take corrective action when required. In
addition, DOD said it plans to review the pay accounts of all soldiers who
received medical treatment in theater for serious injuries or illnesses
since October 2001, which it expects will include a significant percentage
of soldiers who were assigned to MRPUs after receiving initial treatment
in theater. However, because the scope of our investigation did not
include verification of the number of soldiers medically treated in
theater, the comprehensiveness of DOD's planned corrective actions is
uncertain.

DOD's planned reviews of sick and wounded soldiers' pay accounts are a
step in the right direction. Our investigation at Fort Bragg though
included a number of former MRPU soldiers who did not receive medical
treatment in theater for serious injuries or illnesses or who never
deployed and yet received overpayments of hostile fire and hardship duty
pay. This is a potential population of soldiers who need to be covered as
well when DOD reviews pay at other MRPUs.

We are sending copies of this report to appropriate congressional
committees and the Secretary of Defense. 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) 512-7455 ( [email protected] ). Contact points for our
Offices of Congressional Relations and Public Affairs may be found on the
last page of this report. GAO staff who made major contributions to this
report are listed in the enclosure.

Sincerely yours,

Gregory D. Kutz

Managing Director

Forensic Audits and Special Investigations

Enclosure

Enclosure I

                     GAO Contact and Staff Acknowledgments

GAO Contact Gregory D. Kutz (202) 512-7455

Acknowledgments In addition to the individual named above, Kord Basnight,
Gary Bianchi, Mary Ellen Chervenic, Dennis Fauber, Daniel Kaneshiro, Jason
Kelly, Barbara C. Lewis, Renee McElveen, Wayne Turowski, and John Ryan
made key contributions to this report.

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