Continuing deficiencies in the Army’s military payroll processes and controls threaten the Army’s ability to achieve audit readiness by 2014, according to a report issued by the General Accountability Office (GAO).
The GAO report cited two major problems: 1) Process and systems weaknesses undermine the Army’s ability to identify the population of military payroll transactions and 2) System weaknesses do not allow the Army to match military pay accounts to personnel files.
Under existing procedures, the Army was unable to identify a complete population of active duty military payroll accounts for 2010, according to the GAO report. “The Army and the Defense Finance and Accounting Service in Indianapolis (DFAS-IN) did not have an effective, repeatable process for identifying the population of active duty payroll accounts,” the report stated.
GAO also cited the Defense Manpower Data Center’s (DMDC) lack of “an effective process for comparing military pay account files to military personnel files.” Because the systems are not integrated, it took two months of intense labor before DMDC was able to reconcile differences between Army pay records and personnel files.
GAO cautioned that this lack of effective processes to identify the population of Army pay records and allow for a comparison of military pay accounts to personnel records will make it difficult for the Army to meet the 2014 audit readiness goals for the Statement of Budgetary Resources.
GAO acknowledged that the military pay audit readiness efforts underway increase the chances that the Army can meet the audit readiness goals. However, because these efforts have not been documented, GAO could not evaluate their potential effectiveness.
To address the concerns cited in the report, GAO recommend that the Army: 1) document and implement a process to identify and validate the payroll transaction population by fiscal year; 2) identify and develop procedures for maintaining “key finance (i.e., pay-affecting) documents” that support military pay transaction; 3) require the central location and ready accessibility of “key personnel and other pay-related documents that support military transactions; and 4) require the review of “service member Official Military Personnel File records” to confirm that they are consistent and complete to support audit requirements.
In response to the GAO report, Army Secretary John McHugh said the Army generally concurred with the GAO report. McHugh agreed with the need to have consistent, standard documentation rules that support the audit of military pay data. He pointed out that the Army is currently developing comprehensive documentation of processes and controls for military pay. Regarding GAO’s evaluation of the Army’s and DMDC’s ability to compare payroll and personnel records, McHugh said the Army‘s “ongoing process for comparing payroll and personnel records” uses Army personnel systems, not the Defense Manpower Data Center, as GAO used.
