In total, we reviewed the propriety and accuracy of payroll payments made to about 80 percent of the 281,000 civilians employed by the Navy in 1993. As shown in table 1, we confirmed overpayments of $62,500 were made to Navy civilians. These overpayments were caused, at least in part, because (1) DFAS and Navy Personnel did not reconcile discrepancies between personnel and payroll records and (2) DFAS staff did not compare payments from the various payroll databases to detect unauthorized payments to a single civilian employee. Reconciliations Between Personnel and Payroll Inadequate

Comparisons between the payroll and personnel systems and reconciliations of discrepancies were not routinely done. Control Weaknesses Leave DCPS Vulnerable to Improper Payments

In addition to the need for stronger controls to prevent overpayments, DCPS was also vulnerable to improper payments as a result of weaknesses in controls relied on to regulate access to data, document transaction processing, and perform file maintenance. Inactive Payroll Accounts Remain on DCPS

The Navy’s civilian payroll was also at risk of fraud and abuse because many payroll accounts of former employees, who should no longer receive pay checks—called inactive payroll accounts—remained on the system. Recommendations

We recommend that the Assistant Secretary of the Navy for Manpower and Reserve Affairs, and the Director of the Defense Finance and Accounting Service direct appropriate officials to:
Complete follow-up on the 134 overpaid employees we identified and referred to DFAS and Navy Personnel officials to determine the full extent of overpayment, collect amounts due, and identify and correct systemic causes of the overpayments.
Why GAO Did This Study

GAO reviewed the Navy's civilian payroll operations, focusing on the: (1) propriety and accuracy of payments made to civilian personnel; and (2) vulnerability of the internal control system to prevent fraud and abuse.

What GAO Found

GAO found that: (1) 134 of 225,000 Navy civilians were overpaid a total of at least $62,500 in 1 year; (2) these overpayments were due to the Defense Finance and Accounting Service's (DFAS) failure to determine if individual civilian employees were paid from multiple databases for the same time period and infrequent reconciliations between civilian payroll and personnel systems; (3) the Navy's civilian payroll operations are susceptible to additional improper payments as a result of many personnel having unrestricted access to payroll data, DFAS inability to identify database changes, and DFAS maintenance of inactive payroll accounts on the active payroll database; and (4) the rapid consolidation of civilian payroll accounts into the Defense Civilian Payroll System could exacerbate control weaknesses if vulnerabilities are not adequately addressed.