UNITED STAT= GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 2054ei SEP I G 9971 CIVIL. I>IVIS!ON Dear Admiral Bender: We have completed an examination at Coast Guard Headquarters, Washington, D.C. of a statistical sample of Coast Guard military pay records closed during the period January 1 to June 30, 1970. The examination included a review of 266 F&y records of Coast Guardsmen on active duty during the period. We found that there were 72 errors amounting to about $1,035 contained in 65 of the 266 pay records included in our sample. A statistical projection of the results of our examination indicates that there may have been about 10,450 errors amounting to an esti- mated $151,8QG contained in the pay records/of the 38,567 members on active duty as of June 30, 1970. More specifically, our com- putations showed that there was a 95-percent probability that <iI Lne nUi2iX2~ or errors In Liie pzy iecoras rangea ircXIl ZDCjUL D,UOU to about 12,800 and was more likely to be about 10,4SO and (21 the probable dollar amount of these errors ranged from about $53,500 to about $250,500 and was more likely to be about $151,800. A summary of the types and frequency of the errors found is contained in Attachment I. During the course of our examination we reported our findings in detail to the Coast Guard Payments and Claims Division so that corrective action could be initiated promptly. That Division has taken corrective action on all errors reported, We also examined the pay records of those members among the 266 in our sample who received reenlistment and variable reenl.ist- ment bonuses prior to January 1, 1970. This review disclosed two members who were paid bonuses for greater amounts than they were entitled. These cases and the actions taken by the Payments and Claims Divisj.on are discussed in Attachment Ii. Our examination did not include an overall evaluation of Coast Guard's payroll operations since we considered only those records available at Headquarters. We plan to initiate a review .. . l * ‘ . . of pertinent source documents in the field in the near future. We are currently examining pay records available at Headquarters of those members separated from active duty during the six month period ended December 31, 1970, and we plan to report to you on the results of this examination. We appreciate the cooperation and courtesies extended to us by Headquarters officials during our examination. We would appreciate your advice as to any actions the Coast Guard plans to take to reduce the incidence of the types of errors discussed in this letter. Sincerely yours, :.i Richard W. Kelley Assistant&Director Admiral Chester R. Bender Commandant The Coast Guard Attachments -2- . -. . . ATTACHMENT I ‘ Page 1 --SWMARY OF ERRORS SAMPLE OF 266 MILITARY FAY RECORDS Type of Error Number Overpayment Underpayment Total Federal income tax incorrectly withheld (a) 45 $ 383.93 $ 94.95 $ 478.88 FICA tax computed incorrectly 3 2.05 2.05 Basic allowance for quarters s incorrectly recorded 1 45.00 45.00‘ YI Sea duty incorrectly recorded 5 3.60 8.80 12.40 Foreign duty incorrectly computed 2 .80 -80 Incorrect number of days entitled to leave rations 1 4.17 4,.17 8 ' Incorrect determination of entitlement of basic and standard maintenance clothing monetary allowances 4 56.06 10.80 66,86 Basic allowance for subsistence and commuted rations incorrectly computed 2 10.14 10.14 Overwithheld allotment 1.00 1.00 Proficiency pay awarded before member had met eligibility requirements (b) 308.00 308.00 Member paid family separation allowance while on leave and proceed time 1 34.00 34.00 Base pay incorrectly computed (c) 3 17.77 53.90 71.67 Taxable income incorrectly computed (d) 3 - I -- 72 $810.38 $224.59 -% 034.y 21 ATTACHMENT Z c . Page 2 (a) Withholding of Federal income tax errors included cases where (1) no amounts or incorrect amounts were withheld . from retroactive pay increases, (2) sea duty was not included as income for withholding tax computation pur- poses, and (3) no amounts were withheld on taxable income. (b) Proficiency pay was awarded before the member met the eligibility requirement of demonstrating superior per- for?mance in assignment for a minimum period of 6 months, (cl Errors in base pay were (1) failure &-reduce pay for being AWOL, (2) rate of pay not increased when promoted, and (3) wrong pay base used for computation of retroactive pay , adjustment. (d) Consists of an overstatement of $847.32#and understatements totaling $181.00. ‘. , .‘._- . . i.; ATTACHMENT II Page 1 9 INFORMATQXX ON Ci%ERPAYMENTS OF REENLISTMENT AND ViiRIABliE REENLISTMENT BONUSES Case 1 A member was paid a reex&fstm~~ir bonus by the Air Force in 1956. He subsequently enlisted in a Coast Guard and after completing his initial enlistment, reenlist-z& in @?&ober 1966 and was awarded a reenlistment bonus and a varii&fe rzzenlistment bonus. The amount of the reenli%tmen%t bonus paid the member was incorrect because the Coast Guard did n&t conEiider the prior reenlistment bonus . paid by the Air Force in the. B-am;luscxnnputation as required by 37 U.S.C. 308(a). Also, the member wszs mast enzttitled to-.the variable reenlistment bonus since he did not meet t&m? re@rements of 37 U.S.C. 308(g). At the time of our review, the m~&er-~.s overpaid $4,175.75 and had not been paid $666.67 representi* the- remaining installment of the variable reenlistment bonus. We reported this matter rtno th f%yments and Claims Division. A pay adjustment was authorize&l again&t the member's pay. In April 1971, the Coast Guard approved the membe:rr% request for remission of indebtedness. Case 2 An enlisted member entered Of-r Candidate School (OCS) in September 1966 and was award&B a r.=listment and variable reenlistment bonus. He was paid $305.40 Eox+ztti Brst installment of the variable bonus in October 1966. This member &ad been selected to attend OCS prior to the date of his reezdiistm~, Inasmuch as the purpose of the variable reenlistment bonus i& to wide the services with the continued use of enlisted men who posse ceztmin critical skills, we believe that the bonus payment was improper, A Comptroller General's a&xFsiion~ dated February 8, 1968, (47 Comp. Gen. 4141, states that the vmtiable reenlistment bonus is not authorized to enlisted members who are seEect& for college training under the Navy Enlisted Scientific EducatioJm E%ogrzm or other similar programs and who reenlist for the purpose of meeting: the obligated service requirements for such training. The decis&rxx St&es further that in view of an apparent misunderstanding by &a mi.l&rtary departments of the proper application of a previous Com@~rolIem General's decision regarding the subject, we would not questions bonus payments otherwise correct that were made incident to such reem$istmmts. However, the decision required that further payments, includtig yearly installments for such reenlist-. ments already entered into, XE~VZ to be promptly discontinued, ATTACHMENT II Page 2 . Since this variable reenlistment bonus was paid prior to 47 Comp. Gen. 414, dated February 9, 1968, we did not request that collection action be initiated. However, we alerted the Payments and Claims Division to the need to comply with the decision in the future. Also,the Division agreed to review the pay records of all members who attended OCS subsequent to the effective date of the decision in order-to determine whether any variable reenlistment bonuses were improperly' awarded,
U.S. Coast Guard, Military Pay and Allowances
Published by the Government Accountability Office on 1971-09-16.
Below is a raw (and likely hideous) rendition of the original report. (PDF)