Case Studies Illustrate Pay Problems

We identified significant pay problems at all eight of the Army Reserve case  study units we audited. Overall, 332 of the 348 soldiers (95 percent) in our eight case study units  that were mobilized, deployed, and demobilized at some time during the 18- month period from August 2002 through January 2004 had at least one pay  problem associated with their mobilization to active duty. Problems lingered unresolved for considerable lengths of  time. Soldiers were sometimes required to spend considerable time and were  frustrated in their efforts to determine the exact sums owed or to establish  a repayment plan. Significant Weaknesses Exist in Mobilized Army Reserve Pay Processes

The pay problems we found were caused, at least in part, by design  weaknesses in the extensive, complex set of processes and procedures  relied on to provide active duty pays, allowances, and related tax benefits  to mobilized Army Reserve soldiers. Such a human capital strategy supporting accurate and timely active duty  payments to mobilized Army Reserve soldiers must encompass potentially  hundreds of DOD components that are now involved in carrying out the  extensive coordination, manual intervention, and reconciliations required  to pay mobilized Army Reserve soldiers. The fact that mobilized Army Reserve soldiers received any of  their entitled active duty pays, allowances, and tax benefits accurately and  on-time is largely due to the dedication and tireless efforts of many of these  pay-support personnel to do the right thing for these mobilized Army  Reserve soldiers. Servicing  soldiers and their families with pay inquiries and problems is particularly  critical in light of the error-prone processes and limited automated system  processing capabilities. For  example, in response to our recommendations in the Army National Guard  report, DOD reported taking actions to (1) automate manual monthly  hardship duty pay in April 2004, (2) eliminate the use of the miscellaneous  code for processing hardship duty pay and instead process these payments  using a unique transaction code to facilitate implementing a system edit to  identify and stop erroneous payments, (3) compare active duty release  dates in the Army’s system used to generate Release From Active Duty  orders with soldiers’ end of active duty tour dates shown in DJMS-RC to  identify and stop any erroneous active duty pays, and (4) increase the  reliability and timeliness of documentation used to support soldiers’ arrival  at and departure from designated overseas locations. Instead, we  used a case study approach to provide a more detailed perspective of the  nature of any deficiencies in the three key areas of processes, people  (human capital), and automated systems relied on to pay mobilized Army  Reserve soldiers. Additionally, 3 soldiers  experienced overpayments and underpayments related to the combat zone  tax exclusion. In addition, all of the soldiers received their combat zone  tax exclusion benefit at least 1 month late.
Why GAO Did This Study

In light of GAO's November 2003 report highlighting significant pay problems experienced by Army National Guard soldiers mobilized to active duty in support of the global war on terrorism and homeland security, GAO was asked to determine if controls used to pay mobilized Army Reserve soldiers provided assurance that such payments are accurate and timely. GAO's audit used a case study approach to focus on controls over three key areas: processes, people (human capital), and automated systems.

What GAO Found

The processes and automated systems relied on to provide active duty pays, allowances, and tax benefits to mobilized Army Reserve soldiers are so error-prone, cumbersome, and complex that neither DOD nor, more importantly, Army Reserve soldiers themselves, could be reasonably assured of timely and accurate payments. Weaknesses in these areas resulted in pay problems, including overpayments, and to a lesser extent, late and underpayments, of soldiers' active duty pays and allowances at eight Army Reserve case study units. Specifically, 332 of 348 soldiers (95 percent) we audited at eight case study units that were mobilized, deployed, and demobilized at some time during the 18-month period from August 2002 through January 2004 had at least one pay problem. Many of the soldiers had multiple problems associated with their active duty pays and allowances. Some of these problems lingered unresolved for considerable lengths of time, some for over 1 year. Further, nearly all soldiers began receiving their tax exemption benefit at least 1 month late. These pay problems often had a profound adverse impact on individual soldiers and their families. For example, soldiers were required to spend considerable time, sometimes while deployed in remote, hostile environments overseas, seeking help on pay inquiries or in correcting errors in their active duty pays, allowances, and related tax benefits. The processes in place to pay mobilized Army Reserve soldiers, involving potentially hundreds of DOD, Army, and Army Reserve organizations and thousands of personnel, were deficient with respect to (1) tracking soldiers' pay status as they transition through their active duty tours, (2) carrying out soldier readiness reviews, (3) after-the-fact report reconciliation requirements, and (4) unclear procedures for applying certain pay entitlements. With respect to human capital, weaknesses identified at our case study units included (1) insufficient resources allocated to key unit-level pay administration responsibilities, (2) inadequate training related to existing policies and procedures, and (3) poor customer service. Several automated systems issues also contributed to the significant pay errors, including nonintegrated systems and limited processing capabilities.