Members Respond to Report Detailing Ongoing U.S. Army Payroll Problems; Urge Corrective Action

December 12, 2012

Lack of Effective Oversight System Detailed by GAO

WASHINGTON – Today, Sens. Tom Carper (D-Del.), Tom Coburn (R-Okla.), Scott Brown (R-Mass.) and Claire McCaskill (D-Mo.), and Reps. Darrell Issa (R-Calif.), Edolphus Towns (D-N.Y.), and Todd Platts (R-Pa.) responded to today's Government Accountability Office (GAO) report that detailed major problems with the U.S. Army's $47 billion annual military payroll accounts. The report, DOD Financial Management:  Actions Needed to Address Deficiencies in Controls over Army Active Duty Military Payroll (GAO-13-28), found evidence of more than 300,000 military pay problems since 2008, including under payments to soldiers. This report is a follow up on an earlier GAO audit which was examined during the joint hearing, New Audit Finds Problems in Army Military Pay, chaired by Sen. Carper and Rep. Platts, in March of 2012.

Specifically, GAO found that the Army is unable to track and collect data on pay errors for active duty soldiers that occur due to over payments, under payments, data entry errors and fraud. Numerous examples of pay problems, as well as fraud cases investigated by the Army Criminal Investigative Division, could have been prevented, but were not promptly detected and corrected, according to the GAO. While the Army claims a low level of pay problems for the troops, the report stated that the current payroll system "does not have the capability to identify and report the extent and causes" of improper payments.  Without the ability to detect and correct payroll problems and errors, GAO warns that the Army risks creating a financial burden on soldiers who did not receive their full pay, and that, unless pay errors are identified in a timely manner, these oversights "can have a negative effect on soldier welfare and, ultimately, could erode soldiers focus on their Army mission." 

GAO also found undetected payroll errors that resulted in overpayments and debts owed to the government by soldiers no longer in the Army, as well as cases of  fraud in which individuals were able to take advantage of the Army pay system's weak oversight. The Army hopes to have a new payroll system in place by the end of 2016. The GAO includes recommendations for adopting a more accurate payroll system to prevent the kinds of pay problems it identified.

Rep. Darrell Issa, Chairman of the House Oversight and Government Reform Committee: "We have an obligation to ensure that taxpayers' money is well spent, but we also have a duty to men and women of our armed forces to ensure they receive prompt, accurate pay.  GAO's audit of the Army's payroll system finds that we are failing on both fronts.  Not only can the current system not detect fraud, but it needlessly delays proper payments to our troops."

Sen. Tom Carper, Chairman of the Senate Subcommittee on Federal Financial Management: "Federal agencies, including the Department of Defense, should always strive to be good stewards of taxpayer funds, particularly as we struggle to address our massive federal debt and deficit. After all, we can't effectively identify areas to reduce spending if we don't know how much – and where – we're spending that money in the first place. In this latest report, the Government Accountability Office found additional serious problems with the U.S. Army's ability to pay its troops accurately and on time. The GAO's findings are disturbing and point to a bigger, broader trend of faulty financial management. The fact that thousands of pay mistakes are made each year due to an antiquated and fundamentally broken Army payroll system is unacceptable. We have an imperative to make financial management at the Department of Defense better so that, every day, decisions can be made based on quality information. This way we can support the men and women in uniform and ensure they receive accurate and timely pay. Since he took office, Secretary of Defense Leon Panetta has pressed the Department to drastically improve its financial management practices. I welcome that commitment from the Secretary and urge the Army to adopt GAO's recommendations to address these problems outlined in this report. Moreover, I am hopeful that the Department is able to get its financial house in order quickly, not only to ensure that taxpayer dollars are spent correctly, but to ensure that we don't shortchange our war fighters. We ask so much of service members and their families. It seems like the very least we can do is ensure that they are paid accurately and in a timely manner for their service." 

Sen. Tom Coburn: "It is unacceptable the Army continues to struggle with payroll issues. After putting their lives on the line, our soldiers should not have to have worry about whether they will receive the pay they have earned.   As this reports notes, payroll problems quickly become morale problems and needless distractions for our troops during deployment.  There is no excuse for this financial mismanagement."

Sen. Scott Brown: "As Congress is facing difficult questions over sequestration, it makes it all the more difficult to argue against irresponsible blanket cuts to defense spending when the Department continues to have significant challenges with basic financial management as the GAO report points out.  Our brave men and women in uniform have sacrificed enough and they deserve to receive their hard-earned pay free of errors or other accounting problems.  I urge the Department of Defense to address the issues identified in the report quickly and completely."

Sen. Claire McCaskill: "If a soldier is getting underpaid because of a payroll error, that's something that needs to be corrected—immediately," said McCaskill, who serves on the Senate Armed Services Committee. "The failure of the Army system to prevent overpayments is also unacceptable, and can create burdens on soldiers and their families to return funds they may have thought they were rightly paid. Our soldiers make incredible sacrifices for our freedoms, and it is unacceptable that the Army's payroll system is unable to catch basic pay problems."

Rep. Todd Platts: "Last March, the Subcommittee on Government Organization, Efficiency, and Financial Management held a hearing on the GAO's first audit of the U.S. Army's payroll system.  That audit identified more than 364,000 errors in Army military pay in FY 2010 alone. The GAO also found that the Army's records management was so disorganized that GAO could not fully complete its audit.  Unfortunately, a new report released today by the GAO shows these types of financial mismanagement problems have yet to be resolved. Congress and the President have an responsibility to ensure that taxpayer funds are spent accurately and efficiently.  We also have a solemn obligation to do right by our service men and women to ensure they receive prompt and accurate pay."

Rep. Edolphus "Ed" Towns: "I am disappointed that despite promises of betterment, the Department of Defense has not improved its stewardship of the more than $52 billion that constitutes payroll for Army active duty soldiers.  GAO has reported that key areas of internal controls are still deficient and it leads to continual errors in pay for soldiers.  It is regretful that Army service men and women who put their lives on the line daily for this country, are on the battlefield worrying about whether their family back home will receive a paycheck with the correct amount."

During the joint hearing, "New Audit Finds Problems in Army Military Pay," held earlier this year, witness testimony showed that the Army was unable to produce basic pay records.  For example, basic documents showing duty station and pay grade could not be produced for even a small sample of 200 Army soldiers. Without these records, not only is a full financial audit not possible, but individual soldiers must often find their own records in order to correct pay problems. One example GAO noted during the hearing was an Army officer who had to prove overseas deployment in order to collect adequate compensation for his service.