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Fixing the Current Reserve Components Pay Process

"Paying Soldiers their dues” is a common saying in military and political circles. But when it comes to actually paying Soldiers their hard-earned entitlements, it is often extremely hard to do, especially if the Soldier in question is a deployed Reserve components (RC) Soldier.

The current pay process for the Army National Guard (ARNG) and U.S. Army Reserve (USAR) has evolved into a cumbersome and complex system, and few, if any, personnel in military pay departments fully understand its breadth, scope, and weaknesses. What is worse, neither Soldiers nor the military pay departments can expect guaranteed, timely, and accurate payments of entitled benefits. Meanwhile, Soldiers and their families are often left wondering if all entitled benefits are paid—and that is never a good situation, particularly during these hard economic times.

Pay Problems

These deficiencies in pay and allotments have been well documented in past U.S. Government Accountability Office (GAO) audits of the ARNG and USAR mobilization pay process. The pay problems have ranged from payments delayed over 30 days to numerous overpayments and underpayments to mobilized members of the ARNG and USAR.

In an ARNG study released in November 2003, GAO analyzed the pay problems of 481 ARNG Soldiers during an 18-month period from 1 October 2001 through 31 March 2003. The total dollar amount of their pay problems during the course of their deployments was estimated as overpayments of $691,000, underpayments of $67,000, and late payments of $245,000. Out of the 481 Soldiers, 450 had at least one pay problem during the course of their deployment; this accounted for 93.6 percent of the total number of Soldiers in the study.

These 481 Soldiers were part of 6 ARNG units that included 3 Special Forces units and 3 military police units. These units, each from a different state, had distinct missions and were deployed to various locations (including Guantanamo Bay, Cuba; Afghanistan; Iraq; and two locations in the continental United States) during their mobilization periods.

To make matters worse, pay problems associated with the ARNG and USAR pay process grew exponentially as the role of RC units increased after the terrorist attacks of 11 September 2001. In the Iraq conflict alone, ARNG and USAR units have been so heavily involved that over 18,000 of the 155,000 Soldiers in the region in January 2008 were RC soldiers.

Payroll System Deficiencies

The Department of Defense (DOD) and the Army have been aware of these million-dollar pay problems associated with the ARNG and USAR pay system ever since the large RC role in Operations Desert Shield and Desert Storm. A 1993 GAO audit found millions of dollars in overpayments and other problems associated with Army payrolls as RC personnel returned from those military operations. A key factor that contributed to the improper payments was the large number of Soldiers being paid from the Army’s active-duty payroll system.

Based on this study, the Army decided in 1995 to process pay to mobilized ARNG Soldiers from the Defense Joint Military Pay System-Reserve Component (DJMS–RC) system rather than the Active Army payroll system. Although this 1995 decision was intended to be temporary pending the adoption of an integrated system to pay both Active and RC personnel, DJMS–RC is still used in the Army’s military pay process for mobilized RC Soldiers. Use of DJMS–RC was based on the premise that it provides the best service to RC Soldiers. Nevertheless, significant pay problems continue to affect RC Soldiers today.

Lack of Program Integration

Most of the pay problems are associated with the lack of integrated systems in the RC Soldiers’ pay process. Since DJMS–RC does not recognize transactions in the ARNG and USAR personnel systems, personnel data inputs that affect pay to Soldiers are not reflected in the DJMS–RC pay system. Personnel transactions that affect pay may include promotions, demotions, and marital status. The lack of integration between personnel and pay systems results in erratic manual entry of transactions into multiple, nonintegrated systems and numerous over- and under-payments and late payments to mobilized RC Soldiers.

DOD attempted to develop a solution to the lack of integrated systems that cause pay deficiencies through the proposed Defense Integrated Military Human Resources System (DIMHRS). DIMHRS was intended to provide the armed services with an integrated, multicomponent personnel and pay system. DIMHRS was also supposed to address the problems that occur when RC Soldiers are called up to active duty and are lost in the system. Getting lost in the system and inaccurate entries obviously affect Soldiers’ pay, credit for service, and benefits. However, development of DIMHRS encountered major technical problems, and DOD cancelled the program in March 2010.

GAO has reported that several organizations with key roles in payments to mobilized ARNG Soldiers have issued their own implementing regulations, policies, and procedures. These burdensome policies and procedures identified in a GAO audit study have contributed to pay errors for ARNG Soldiers. Because of a lack of clear guidance, some U.S. Property and Fiscal Office locations have established informal, undocumented reconciliation practices. For example, since no written requirements exist for conducting and documenting monthly reconciliations of pay and personnel mismatch reports, reconciliations are performed ad hoc or by informal means by each office location.

Short-Term Solutions

Most of the quality assurance methods that the Army has in place are reactive measures, such as audits and pay and personnel mismatch reports completed after the fact. Since most of the pay problems are not identified beforehand, it is important to have a standardized, best-practice approach as a proactive method for curtailing pay problems. Therefore, the time it takes to process the pay and personnel mismatch reports needs to be standardized across all 54 state and territorial U.S. Property and Fiscal Offices. Timely report processing also needs to be implemented across USAR unit pay offices. To be effective, military pay technicians need the proper training before this approach is implemented.

In order to identify pay problems, DOD and the Army military pay facilities need to adapt a tool that classifies the types of pay problems. This tool should allow military pay facilities and auditing agencies to identify the type of pay problem they are facing. This tool also will allow the auditor and military pay facility to apply the appropriate financial guidelines, depending on the class of pay deficiency encountered. The chart at left shows a model that DOD can implement to identify the types of pay problems.

Long-Term Solution

The Army should consider implementing the Marine Corps Total Force System (MCTFS) as a long-term solution to the problem of military pay discrepancies. MCTFS is the only integrated military pay and personnel system in DOD. Using a single transaction, MCTFS updates both pay and personnel records. For example, when a Marine is promoted, the system processing the promotion transaction within MCTFS includes all the programming needed to ensure that both pay and personnel information are updated concurrently by the single input of the promotion transaction.

MCTFS is a vast improvement over the Army’s troublesome DJMS–RC payroll system. MCTFS pays service members accurately and on time and contains accurate data for both Active and Reserve Marines in regard to state and Federal taxes, residency information, entitlements and allowances, special incentive pay, and allotments. The integration of pay and personnel means fewer resources are needed to perform simple input report procedures, pay and personnel functions are integrated seamlessly, and separate systems have no synchronization problems.

DOD and the Army tried unsuccessfully to implement DIMHRS. With all the resources and effort put into an unproven system like DIMHRS, DOD could have expanded on the proven success of MCTFS. The RC Soldiers have paid their dues with commitment, dedication, and sacrifice. It is time for Uncle Sam to pay RC Soldiers their hard-earned entitlements with accuracy and timeliness.

Major Noland I. Flores, CAARNG, is the executive officer for the Headquarters Support Company, 640th Aviation Support Battalion, California Army National Guard. He holds a master of military arts and sciences degree from the Army Command and General Staff College and an M.B.A. degree from the American Intercontinental University and is a graduate of the Human Resources Basic Course, the Field Artillery Captains Career Course, the Senior Transportation Officer Qualification Course, the Reserve Component Theater Sustainment Course, and the Army Command and General Staff College.

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