The Army has major problems when it comes to matching up the information in its pay system against the data in its personnel systems. The mismatch is a major threat to DoD’s path toward audit readiness, and audit concerns aside, Congress is concerned that soldiers aren’t getting paid what they’re owed.
The Government Accountability Office said that even while the Army has made some strides toward improving its pay practices, the service is a long way off from the kind of data integrity independent experts would need to see in order to green light the systems as audit-ready, GAO found.
For example, When GAO asked the Army to tell it the number of soldiers who received active duty pay for 2010, it took the Army and DoD three months and repeated attempts before the service could provide that figure.
Since the Pentagon’s Defense Manpower Data Center doesn’t have an effective process for comparing pay files with personnel files, it took two months and a lot of manual labor before DMDC could reconcile those two groups of data. “This is a real problem,” Asif Khan, GAO’s director for financial management and assurance, told a joint hearing of the House Oversight and Government Reform Committee and the Senate Committee on Homeland Security and Governmental Affairs.
“The length of time it took them to produce the information isn’t something that’s going to let an auditor stay there and give a valid audit opinion in a timely fashion. The second problem is the supporting documentation. Regardless of the robustness of the system itself, an auditor is going to need to see the underlying records that support the information in the system,” he said.
In all but a handful of cases, GAO found the Army and DoD were completely unable to come up with the documents that would show which pay and benefits an individual soldier should or shouldn’t get. The watchdog agency chose a sample of 250 soldiers’ personnel files. The Army was able to provide supporting documentation in only five of those cases. For three of those, it could only hand over partial documentation.
“While we’re confident that we pay our soldiers the right amount of money at the right time, we know we have a lot of work to do to prove it via an audit,” said James Watkins, the Army’s director of accountability and audit readiness. He said the service concurs with GAO’s findings.
Congress would like to see that proof as part of the legislative mandates it’s set for DoD to be fully audit-ready by 2017, and partially ready by 2014. In the meantime, it’s hearing stories that would seem to contradict the Army’s claim that payroll checks are accurate.
Lt. Col. Kirk Zechinni, a member of the Ohio National Guard, said pay problems are simply a way of life in the Army. At one point during a 2003 tour of duty in Afghanistan, he went for a month and a half without any pay at all. He had volunteered to extend his tour for an extra six months, but one hand of the Army didn’t tell the other.
“That was a tense period, not knowing how long I was going to have to go without getting paid,” he said. “I was working with my wife back home, trying to stretch the savings we had for as long as we could.”
Then, in 2004, he was told by fellow soldiers he had been serving with in southeast Asia that he was entitled to thousands of dollars in special pay. The Army never told him those entitlements were due to him. Figuring it out took some original research, Zechinni said.
“I had to look through the regulations myself. It was a pretty complex set of numbers. My unit clerk didn’t know how to process it, and our military pay unit didn’t either,” he said. “I finally had to send a letter to the Ohio Inspector General, and that’s when I finally got some action.”
That was a year and a half later, Zechinni said. He said his pay problems have continued to the present day. Last week, he got a pay stub for money he never actually received because his bank account number had been entered incorrectly into an Army pay system.
From GAO’s perspective, none of those problems are too surprising.
“This is pretty consistent with our observations,” Khan said of Zechinni’s testimony. “There’s a high risk of incorrect payments, whether the payments are wrong or whether they could be paid to the wrong person.”
Watkins said the any pay discrepancies are unacceptable and that the Army’s most senior leaders are committed to getting the service’s personnel and pay systems in a state that could withstand the scrutiny of auditors. But he stood by his assertion that Army pay problems are the exception, not the rule.
“I don’t know if I’m the oddball or if [Zechinni’s] pay issues are the oddball,” said Watkins, who served in various Army leadership positions in-and-out of uniform for more than 20 years. “I’ve dealt with paying hundreds of thousands of soldiers, and we did not have rampant problems with pay. If you have a soldier that has a problem with pay, you have a problem as a commander. If somebody has a problem with pay, he’s not focused on the mission. You have to get that problem fixed.”
Numbers maintained by DoD’s Defense Finance and Accounting Service, which processes military disbursements, indicated the Pentagon pays service members on time in 97 percent of its transactions. That’s up from a rate of 88 percent in 2006, when DoD officials first began an effort to better their pay practices and came up with a 65-point improvement plan.
Army officials maintained that right now, their rate of pay accuracy improvement is unprecedented. They’re pinning most of their future hopes on a technological solution that would integrate pay and personnel records from across the active, guard and reserve components into one IT effort, dubbed the Integrated Pay and Personnel System-Army (IPPS-A).
“This implementation of the commercial PeopleSoft Human Resources Management System, configured to meet the Army’s needs, will strengthen our internal controls and ensure that our entire population is paid accurately,” said Jeanne Brooks, the Army’s director for technology and business architecture integration. “No longer will there be separate personnel and pay databases. Digital signatures, strong audit capabilities, a built-in rules engine and a strict roles and permissions structure will further ensure accuracy and internal control for military pay.
But that’s, at best, a long term solution. Under current law, the Army and the rest of DoD have to be ready for an audit of their statements of budgetary resources by 2014. The new IPPS-A system won’t be ready in time.
Watkins agreed with GAO that the Army can’t pass an audit with the systems and processes it has in place right now.
“Because we don’t have an integrated pay and personnel system, we have to go fix our legacy system and make it work,” he said. “Our intention was not to use it for audit, our intention was to use IPPS-A. Now that we’re not going to have it in time, we’ve got to get these problems fixed.”
GAO said the Army needs to come up with some way to make sure the documents that determine a soldier’s pay are readily accessible if the Army or auditors need them, figure out a process for identifying the how many active duty soldiers it’s paying for at least a given fiscal year and regularly check those files to make sure they’re accurate.