	Case Studies Illustrate Significant Pay Problems

We found significant problems with the active duty pays, allowances, and  related tax benefits received by the soldiers at the eight Army Reserve units  we audited. Overall, we found that 332  of the 348 soldiers (95 percent) from our case study units had at least one  pay problem associated with their mobilization to active duty. Mobilized Army Reserve Pay Process, Human Capital, and Systems Deficiencies

Deficiencies in three key areas—process, human capital, and automated  systems—were at the heart of the pay problems we identified. Human capital weaknesses included  insufficient resources, inadequate training, and poor customer service. Process Deficiencies

A substantial number of payment errors 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. These flawed procedures, which were relied on to account for Army  Reserve soldiers’ actual locations and their related pay entitlements while  deployed, resulted in pay problems in all seven of our case study units that  deployed soldiers overseas. Human Capital Issues

Human capital weaknesses also contributed to the pay problems mobilized  Army Reserve soldiers experienced in our eight case study units. 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. As a result, lacking any explanations, soldiers often  had no means to determine if these types of payments were appropriate  and accurate. For  example, in response to our recommendations in the National Guard  report, DOD reported taking actions to (1) automate manual monthly  hardship duty pay in March 2004, (2) eliminate the use of “other credits” for  processing hardship duty pay and instead process these pays 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 payments, and (4) increase the reliability  and timeliness of documentation used to support soldiers’ arrival at and  departure from designated overseas locations. Each of these units had mobilized, deployed, and  demobilized at some time during the 18-month period from August 2002  through January 2004.
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 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 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.