New Audit Finds "Problems" in Army Military Pay

On 22 Mar 2012, GAO submitted its report before a Congressional Hearing concerning the progress in the Army's attempts to be able to meet the 2017 Congressionally mandated auditability goals.

Among the individuals testifying in the joint committee hearings were our own COLs Jim Watkins and Aaron Gillison (along with Ms Jeanne Brooks out of COL Roy Wallace's shop).

Here is a link summarizing the issue: http://www.federalnewsradio.com/?nid=396&sid=2797218

And here is a link to video and transcripts of the hearings:
http://oversight.house.gov/hearing/new-audit-finds-problems-in-army-military-pay/

Webmaster soapbox:

For those of us who spent significant parts of our careers in and around MilPay, this was a fascinating hearing: something old (same old problems as always), something new (new integrated systems struggling to get deployed), and something blue (the overwhelming sense of deja vu).

The key issues in the hearing came from two different perspectives, evident in the questions from the dias: (1) The morale effects of pay timeleness and accuracy and (2) The need to have a complete, auditable, traceable system of technologies, people, and process, such that auditors can attest to the efficacy of "the pay system" (in the large). 

The GAO testimony and report focussed almost entirely on the second perspective.  The auditors were concerned about the ability to trace pay transactions back to substantiating documents (can you say "FDRF" or "PFR"?).

The testimony of the Army/DOD respondents focussed more on the first perspective, i.e., timeleness and accuracy of pay delivery based upon an internal control process that ensured a substantiating document was present at transaction creation time.  You can review the statements by clicking on the below witness names:
   Jim Watkins
   Aaron Gillison
   Jeanne Brooks

The obvious quandry is how do we bring those two perspectives and their often competing subgoals into efficient alignment, with the Army insisting this will come about with the eventual (2017) full deployment of the new IPPS-A Pay/Personnel system (can you say "COPPER" or "DIMHRS"?) and an expansion of the AG's document capture/retention system(s).  The G1's HR IT Strategy Paper points the way.

End Soapbox.

The Rest of the Story (with apologies to Paul Harvey), courtesy of COL Roy Wallace:

To understand the whole story you need to go way back to the early 1980's when we did away with the famous green PFR
(personnel finance record).  Follow that with the establishment of DFAS in the early 1990's and you have the recipe for the outcome of the GAO audit of military pay auditability and their conclusion that the Army will not be ready in 2014 to certify the statement of budgetary resources and 2017 to pass the actual audit.  The whole thing stems from the inability of DFAS and the army to produce the substantiating documentation the auditors said they needed. 

Let me give you an example...  Let's look at base pay for COL Smith.  The auditor asked for the promotion order that made COL Smith a Colonel.  That was pretty easy.  Since base pay has two components, rank and time-in-service, they asked for the substantiating document to prove that COL Smith has 33 years of service.  That meant that they needed the order bringing 2LT Smith on active duty in 1979.  That 1979 order is not maintained by DFAS or Human Resources Command and we had to go to the National Archives and Records Administration (NARA) to produce that document which took longer than the auditors were willing to wait. 

Therefore the conclusion was that the COL was improperly paid.  When you extend that to pay elements such as BAH (where the substantiating document is a marriage license or a dependent birth certificate) and Jump Pay (where you need a hazardous duty order and a jump manifest, which is a local training document only maintained for 2 years) you have further issues producing the documentation.  When we had the PFR many of those types of documents were right there in the file.  When we went to DFAS the business process only required DFAS to store substantiating documentation for 7 years.  That does not allow for speedy recovery of documents for auditors.  Most of us that have been account holders know the anal-retentive internal control nature of our finance processes well enough to have a great deal of confidence that we are in fact paying the vast majority of soldiers correctly and on time.  The GAO auditors did not have the same confidence.

Since the GAO audit, the Finance and AG community have joined forces to identify the required source documents for every type of pay and we are reviewing our business processes to make sure we are complying with the Army and Defense regulations.  Where we are not we are reevaluating the procedures so that in 2014 we can in good conscience certify military pay.

In addition we have programmed and begun implementation of the Integrated Personnel and Pay System - Army (IPPS-A) that will replace the DFAS pay systems and 60+ personnel systems.  IPPS-A is a commercial off-the-shelf product that is GAAP compliant.  This system will be implemented in a logical incremental schedule by mid-2016.  IPPS-A will establish the
permission-driven coder/verifier relationship that will bolster the required internal controls on military pay processes.  It will establish the electronic data and transactional audit trail that we need.  When coupled with IPERMS (which is an archive of individual soldier digitized key documents) we should be in very good shape for the audit in 2017.

An now you know . . .

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The Rest of the Story