.- 25 a UNITEDSTATESGENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 DEFENSE DIVISION B-125037 Dear Mr. Secretary: The accompanying report summarizes our findings, conclusions, and recommendations on the basis of our review ’ of the Army Reserve Drill Pay System. It shows that signifi- ?,.I cant economies can be achieved by centralizing the Army Re- serve drill pay function at one location under a fully mechanized pay system; by discontinuing the recording of retirement cred- its for, and issuing annual statements to, obligated enlisted re- servists; and by strengthening controls over attendance at drills by prescribing sign-in and sign-out procedures for use by Re- serve units where practicable. This report contains recommendations for your consider- ation that are subject to the provisions of section 236 of the Legislative Reorganization Act of 1970. We shall appreciate receiving copies of the statements you furnish to the specified committees in accordance with this act. Copies of this report are being sent today to the Direc- tor, Office of Management and Budget; the Secretary of the Army; the Chairmen, House and Senate Committees on Gov- - 4 s”e -’ ^ ernment Operations; the Chairmen, House and Senate Commit- ‘7 ‘s z. tees on Appropriations; and the Chairmen, House and Senate . , ’ ’ Committee s on Armed Services. P Sincerely yours, * ; ~oej Director, Defense Division The Honorable The Secretary of Defense 50TH ANNIVERSARY 1921-1971 I GENERAL ACCOUNTING OFFICE POTENTIAL FOR IMPROVEMENT IN THE I REPORT TO THE ARMY RESERVE DRILL PAY SYSTEM I SECRETARY OF DEFENSE Department of the Army B-125037 I I I DIGEST ------ I I WHY THE REVIEW WAS MDE I The General Accounting Office (GAO} +--.-----.: reviewed b-the,_-=" Army Reserve .. ____. _~_ Drill Pay System to determine (1) the feasibility of developing a fully mechanized system-at -1- -._..- a.- central - point and (2) the effectiveness with which the cur- rent ..- __pay system is operating. . i I FINDINGS AND CONCLUSIONS I I 1 Payrolls for Reserve training drills were being handled by nine finance I I and accounting offices at an annual cost of $658,000. Three of the I nine offices were using a manual pay system. . I I I All payrolls for training drills could be prepared at one place under a' I fully mechanized system at an annual cost of $533,000, which, GAO esti- I I mated, would save $125,000. (See p. 6.) Army regulations require that retirement points earned monthly by each reservist be recorded without regard to whether he might become a ca- reer reservist. In view of the fact that 206,638 of an estimated 260,03 reservists are obligated enlisted reservists and the fact that these re- servists have a reenlistment rate of only l-1/2 percent, GAO feels that retirement point credits should not be recorded for them. I Instead, records should be maintained to permit compilation of total re- I tirement points earned for those individuals who do'reenlist. The elim- I ination of this requirement would result in substantial savings, since I I Army commands currently are expending approximately $431,000 annually in I personnel and machine costs to process and account for retirement points. I I (See p. 8.) I I I Each Army command is responsible for prescribing regulations for taking I and recording attendance at drills for those units under its jurisdic- I tion. GAO found a wide variation in methods used for recording atten- I I dance at drills. The basic documents--attendance records and drills reports--for the Army Reserve Drill Pay System contain discrepancies in the number of drills performed by reservists. The absence of uniform attendance procedures and of a standard attendance form contributed to the discrepa%ies. As a result, erroneous payments were made to reservists and retirement cred- its either were recorded in error or were not recorded when earned. In I l I Tear Sheet I I 4’ I ;-s I the.month included in GAO's test--April 1970--the Army made erroneous I payments totaling about $116,900. (See pp. 10 to 14.) I I RECOMMENDATIONS OR SUGGESTIONS I I The Secretary of the Army should I --direct that the Army Reserve drill pay function be centralized in one I place under a fully mechanized pay system; --direct that recording retirement point credits for, and issuing an- nual statements to, obligated enlisted reservists be discontinued; --direct that records be maintained to permit compilation of total re- tirement points for those who reenlist; --prescribe uniform procedures for observing and recording attendance at drills; --prescribe a standard attendance form for use by all Reserve units; --prescribe sign-in and sign-out procedures for use by reserve units where practicable; x --prescribe procedures for verifying drill reports to attendance rec- e ords; and I --place increased emphasis on the criteria and procedures for authoriz- I ing and recording equivalent training. I I I 4 Contents Page DIGEST 1 CHAPTER 1 INTRODUCTION 3 2 CENTRALIZING RESERVEPAY 6 Agency comments 7 Conclusion and recommendation 7 3 - RECORDINGRETIREMENTPOINTS 8 Agency comments 8 Conclusion and recommendations 9 4 REPORTINGATTENDANCEAT DRILLS 10 Discrepancies in reporting drills per- formed 10 Lack of uniform attendance procedures and of a standard attendance form 11 Agency actions 13 Conclusion and recommendations 14 5 SCOPEOF REVIEW 15 GENERAL ACCOUNTING OFFICE POTENTIAL FOR IMPROVEMENT IN THE REPORT TO THE ARMY RESERVE DRILL PAY SYSTEM SECRETARY OF DEFENSE Department of the Army B-125037 DIGEST ------ WHY THE REVIEW WAS MADE The General Accounting Office (GAO) reviewed the Army Reserve Drill Pay System to determine (1) the feasibility of developing a fully mechanized system at a central point and (2) the effectiveness with which the cur- rent pay system is operating. FINDINGS AND CONCLUSIONS Payrolls for Reserve training drills were being handled by nine finance and accounting offices at,an annual cost of $658,000. Three of the nine offices were using a manual pay system. All payrolls for training drills could be prepared at one place under a fully mechanized system at an annual cost of $533,000, which, GAO csti- mated, would save $125,000. (See p. 6.) Army regulations require that retirement points earned monthly by each reservist be recorded without regard to whether he might become a ca- reer reservist. In view of the fac"t that 206,688 of an estimated 260,000 reservists are obligated enlisted reservists and the fact that these re- servists have a reenlistment rate of only l-l/Z percent, GAO feels that retirement point credits should not be recorded for them. Instead, records should be maintained to permit compilation of total re- * tirement points earned for those individuals who do reenlist. The elim- ination of this requirement would result in substantial savings, since Army commands currently are expending approximately $431,000 annually in personnel and machine costs to process and account for retirement points. (See p. 8.) 4 Each Army command is responsible for prescribing regulations for taking and recording attendance at drills for those units under its jurisdic- tion. GAO found a wide variation in methods used for recording atten- dance at drills. The basic documents--attendance records and drills reports--for the Army Reserve Drill Pay System contain discrepancies in the number of drills performed by reservists. The absence of uniform attendance procedures and of a standard attendance form contributed to the discrepancies. As a result, erroneous payments were made to reservists and retirement cred- its either were recorded in error or were not recorded when earned. In 1 the month included in GAO's test--April 1970--the Army made erroneous' payments totaling about $116,900. (See pp. 70 to 14.) RECOMMENDATIONSOR SUGGESTIONS The Secretary of the Army should --direct that the Army Reserve drill pay function be centralized in one place under a fully mechanized pay system; --direct that recording retirement point credits for, and issuing an- nual statements to, obligated enlisted reservists be discontinued; --direct that records be maintained to permit compilation of total re- tirement points for those who reenlist; --prescribe uniform procedures for observing and recording attendance at drills; --prescribe a standard attendance form for use by all Reserve units; --prescribe sign-in and sign-out procedures for use by reserve units where practicable; . --prescribe procedures for verifying drill reports to attendance rec- ords; and --place increased emphasis onethe criterialand procedures for authoriz-, ing and recording equivalent training. 2 CHAPTER 1 INTRODUCTION 3 The U.S. Army Reserve is a Federal force organized, maintained, and commanded by the Active Army. The mission of the Reserve is to meet Army mobilization requirements by providing (1) units that are staffed, trained, and equipped sufficiently to be deployed with a minimum of postmobiliza- tion training and (2) trained officers and enlisted person- nel to reinforce and replace losses of Active Army units. When training or on full-time duty with Active Army units, members of the Reserve are considered in a Federal pay sta- tus under the jurisdiction of the Secretary of the Army. The Reserve Forces Bill of Rights and Vitalization Act of 1967 made certain changes in the organizational and ad- ministrative structure of Reserve components to enable them to better- meet their mobilization role. The act created a Selected Reserve within each Reserve component to provide a basis for assigning priorities for personnel, training, and equipment to Reserve elements which have the highest re- quirement for meeting the needs of the Department of De- fense. The act provided that members of Selected Reserve units attend a minimum of 48 drills annually, plus a period of active-duty training of not less than 14 days each year. For fiscal year 1971 the Selected Reserve of the Army Re- serve was programmed to attain an average strength of not less than 260,000. The Army Reserve Drill Pay System is decentralized at nine finance and accounting offices in the continental United States and is operated partly on a manual and partly on a mechanized basis. For a scheduled drill the Reserve unit prepares a drill report --known as a Unit Record of Re- serve Training --which shows the status of each member for that drill. Depending upon whether a unit is under a man- ual or a mechanized payroll system, unit commanders use the drill reports to prepare military pay vouchers or enter cur- rent data on a preprinted military pay roster which shows each member assigned to the unit at the end of the payroll period. The pay roster is used to furnish pay data to fi- nance and accounting offices for mechanical preparation of military pay vouchers. Preprinted military pay rosters are 3 prepared by finance and accounting offices at the end of the payroll period and are sent to Reserve units operating under a mechanized payroll system. For both the manual and the mechanized systems, pay- rolls, together with substantiating documents and Army Re- serve pay voucher summary and certification sheets, are sent to finance and accounting offices on a quarterly basis for computation and payment. Reservists become eligible for retirement pay after completion of 20 years of qualifying service and attainment of 60 years of age. As of June 30, 1949, reservists must earn a minimum of 50 retirement points a year to have that year credited as qualifying service. Not more than 60 points a year will be credited for drill training in any one retirement year. Retirement points are earned for days on active duty; membership in an active status in a Reserve unit; participa- tion in drills; preparation and presentation of instruction; performance of medical, pastoral, and certain legal duties; attendance at professional or trade co.nventions and at Armed Forces seminars; completion of Armed Forces extension courses; and some other services and duties. Training in lieu of attendance at regularly scheduled drills is known as equivalent training. It may consist of instruction, training, or other appropriate duty. Equiva- lent training must be authorized in advance and must be in the best interests of the service--not for the convenience of the individual member. Public Law 88-110, dated September 3, 1963, established a uniform service obligation of 6 years for every unmarried male between the ages of 17 and 26 years. This obligation can be met by a combination of active military service, as- signment to a unit or control group in the Ready Reserve, or assignment to the Standby Reserve. The General Accounting Office reviewed the Army Re- serve Drill Pay System to determine --the feasibility of centralizing the system on a mech- anized basis, 4 --the controls over drill ,attendance and related pay- ments for drills, --which Army organizations administered various phases of the Reserve pay system and how these organiza- tions carried out their responsibilities, --the accuracy of payments for attendance at drills, --how reservists were given credit for retirement ben- efits for drills performed, and --what internal audits were made of the pay system. , CHAPTER2 CENTRALIZING RESERVEPRY The Army could save $125,000 annually by processing payments for Reserve drill training at one central location under a fully mechanized payroll system. This would be more efficient and would result in better service to indi- vidual reservists. Presently Reserve drill-training payrolls are paid by nine finance and accounting offices in the continental United States; one finance office each in the lst, 3d, and 5th Army areas, two in the 4th Army area, and four in the 6th Army area. Six of these offices use a mechanized pay- roll system, whereas three in the 6th Army area use a man- ual system. According to the Army, which developed the information at our request, the current annual*costs at- tributable to the Reserve payroll function at these nine offices is $658,000. Over 40 percent of all Army reservists in the United States receiving drill pay- -those in the 1st Army area-- are paid by one finance and accounting office at Indiantown Gap Military Reservation under a mechanized payroll system. ‘i Current automatic data processing costs and related person- nel costs for this operation are estimated to be $237,000 . annually. Indiantown Gap estimated that, with additional annual costs of $296,000--primarily for more personnel--it , could process all drill-training payrolls for reservists in the United States. Thus the total estimated cost of proc- essing all drill-training payrolls by Indiantown Gap is $533,000, or $125,000 less than the amount currently being paid to process Reserve pay at nine separate locations. ' Centralizing payment of Reserve drill-training pay at one location under a fully mechanized payroll system also would simplify operations at Reserve units now using a manual payroll system. Unit commanders no longer would have to prepare a military pay voucher for each member to be paid- -as is now done under the manual system--but,instead, would enter only current data on a preprinted pay roster which shows each member assigned to the unit at the end of the payroll period. 6 AGENCY COMMENTS Indiantown Gap officials expressed a willingness, as well as an eagerness, to process all Reserve payrolls if they were given the additional resources. This matter also was discussed with the Chief of Army Reserves who expressed general agreement with the concept of centralization but who stated that it would require consideration and approval by the Army. CONCLUSION AND RECOMMENDATION We believe that there are opportunities for signifi- cant savings and better service to reservists through readily implemented changes to the Reserve pay system. To achieve these savings, we recommend that the Sec- retary of the Army centralize the Reserve drill pay func- tion at.one location,under a fully mechanized pay system. CHAPTER3 RECORDINGRETIREMENTPOINTS Retirement points are recorded monthly on each en- listed reservist's record, and reservists are furnished with annual statements of retirement credits earned--at an annual cost of about $431,000--even though few reserv.ists having obligated service reenlist after serving their ini- tial enlistment period. In our opinion, this is an unneces- sary and costly procedure. Using information shown on personnel rosters furnished to them monthly by Reserve units, all five Army Headquar- ters in the United States record manually the number of retirement points earned by each reservist assigned to units under their command. Also they furnish reservists with annual statements of the retirement points credited for the preceding year. Two Armies--the 1st and 6th--were more than a year behind in recording retirement points and in furnishing annual statements to reservists. As of December 31, 1970, the Army Reserve had 226,306 enlisted members in a pay status. Army officials informed us that 206,688 of these members were first enlistment reservists having obligated service under the Reserve En- listment Program of 1963. Experience has shown that such reservists have a reenlistment rate of only l-l/Z percent. Reservists become eligible for retirement pay only after completion of 20 years of qualifying service and at- tainment of 60 years of age. Prior to reenlistment for a second tour of duty, there is no indication that a reserv- ist is likely to continue in the Reserve until he is eli- gible for retirement. Consequently, up to this time, re- cording the number of retirement points earned by an indi- vidual serves no useful purpose. AGENCYCOMMENTS Officials of the 6th Army have acknowledged that the present system of recording retirement points is unwieldy and complicated and does not lend itself to mechanization. They believed that retirement point credits should not be recorded for reservists having obligated service because of the small number of these reservists who would remain with the Reserve program once the initial period of service was completed. CONCLUSION AND RECOMMENDATIONS We believe that recording retirement point credits for first enlistment reservists and furnishing annual statements to them is unnecessary and that substantial annual savings could be realized by discontinuing this practice. We recommend that the Secretary of the Army direct that --recording retirement point credits for, and issuing annual statements to, obligated enlisted reservists be discontinued and --records be maintained to permit compilation of total points earned for those individual who reenlist. . 9 CHAPTER4 REPORTINGATTENDANCEAT DRILLS The basic documents for the Army Reserve Drill Pay System- -attendance records, drill reports, military pay rosters, and/or military pay vouchers--contain discrepan- cies in the number of drills performed by reservists. The absence bf a uniform attendance procedure and of a standard attendance form contribute to these discrepancies. As a result, erroneous payments were made to reservists--esti- mated at $116,900 in April 1970--and retirement credits either were recorded in error or were not recorded when earned. DISCREPANCIESIN REPORTINGDRILLS PERFORMED From Reserve units in the United States, we selected a statistical sample of 107 units for our review. These included units in each of the five Armies in the continen- tal United States. Of the 107 Reserve units, 23 did not provide us with attendance records, other than the drill reports (Unit Records of Reserve Training). Our comparison of April 1970 drill reports with atten- dance reports for 84 units and with pay rosters and/or military pay vouchers for all units showed that 152 dis- crepancies had been made in recording the drills performed for 34 units, which resulted in overpayments and underpay- ments totaling $3,475. About 72 percent of the $3,475 (68 percent of the dis- crepancies) were overpayments for drills. Two examples of such overpayments follow. In one reserve unit 38 reservists were paid for one drill more than was scheduled in the quarter. Army regulations do not authorize payment for such ad- ditional drills. Overpayments of about $335 were made to these reservists. In another reserve unit two reservists were re- ported on the drill report as constructively present for five drills scheduled in April 1970 because they 10 were scheduled to perform equivalent training in lieu of such drills. The pay rosters, however, indicated that the members had been absent from these drills, and consequently they were not paid. Information fur- nished to us by the units indicated that the two mem- bers had performed the equivalent training as sched- uled and therefore were entitled to payment. These two reservists were underpaid about $160. On the basis of our sample, we estimated that errors in payments made to reservists for 1 month, April 1970, totaled $116,900. Further, as a result of these errors, re- servists-were credited with either too many or too few drills for retirement purposes. This ultimately could af- fect the reservists' rates of retirement pay. LACK OF UNIFORM ATTENDANCE PROCEDURES . AND OF A STANDARD ATTENDANCE FORM Reserve-units used different methods to observe and record attendance.at drills because uniform attendance pro- cedures and a standard attendance form had not been pre- scribed by the Army. We believe that this lack of uniform procedure contributed to the discrep&rcies in the drill records. Uniform attendance procedures needed Neither the Department of the Army nor the Continental Army Command has issued uniform procedures for recording attendance at drills. We noted in our visits to headquar- ters of three Army commands that two of them had issued procedures f$r recording and reporting attendance and that one had not.’ The one Army command relied on its subordi- nate Reserve commands to perform this function. While at- tending meetings of selected Reserve units, we observed the following breakdown in controls over attendance data. --O&e Army command required all units to use the roll- 1 call procedure. We found that this procedure did not provide adequate documentation of attendance. --At one unit within this command, we found that one reservist had received pay and retirement points although his presence could not be verified. 11 --At another unit we noted that 15 members who were excused from formation but marked present had never been located. --We also counted the members present at the closing formation and found that the attendance registers reported 24 more men present than our count. We could find no documentation for 10 of these 24 who supposedly had been excused. --At one unit in another Army command, we found inade- quate administrative control over the roll-call ros- ters and related pay documents, which resulted in erroneously counting four men as present. --In another unit we noted that three reservists had been marked present but were performing equivalent training in lieu of the scheduled drill. The above variations in procedures demonstrate the need for uniformity in recording attendance at drills. Standard attendance record needed Currently a variety of attendance records-are used by Reserve units. Some units use sign-in and sign-out regis- ters, others use roll-call rosters, and still others use the worksheet copy of the drill report. For those units using sign-in and sign-out registers and roll-call rosters, a variety of locally reproduced forms were used. b To simplify the recording of attendance, one standard attendance record should be prescribed for use by all Re- serve units. Instructions should be issued explaining how the attendance record shollld be prepared. Such instruct- tions should include a requirement that reservists sign in and out at drills and that drill reports be independently verified to ‘attendance rosters and military pay rosters. The use of a standard attendance record not only would re- duce the number of errors in recording attendance but also a would aid in the audits of Reserve units. 12 Noncompliance with existing equivalent training regulations Army Regulations 140-l and 37-125 require that unit orders authorizing equivalent training in lieu of atten- dance at scheduled drills be issued prior to the perfor- mance of such training. At a unit in one Army command, we found that 21 members had been excused from regularly sched- uled drills to perform equivalent training without the re- _ quired orders authorizing the training. At a later date orders were issued and backdated to cover performance of the equivalent training. The backdating of such orders and the absence of substantiating documents raise a question as to whether the training actually was performed. AGENCYACTIONS The Army Audit Agency, in its review of Reserve activi- ties in 1969, recommended to the Commanding General, Conti- nental Army Command, that uniform procedures for recording attendance at training assemblies be established. Specifi- cally it recommended that sign-in and sign-out registers be used and that the commanding officer or a designated repre- sentative witness the signing of the registers at the begin- ning and end'of each training assembly. The Department of the Army informed the Army Audit Agency that it did not concur in this recommendation. It took the position that uniform Army-wide policies contained in Army Regulations 135-91 and 140-185 provide commanders with adequate guidance on this subject and that it would be ineffective and inappropriate to impose procedures which would apply to all Reserve units in an area that is a matter of command responsibility. The Department of the Army believes that improvement in this matter depends solely upon increased command empha- sis, particularly at the unit level. Commanders at all levels will be directed to place more emphasis on this mat- ter, and the subject will be included in a checklist to be prepared for the use of Army advisors to Reserve units. The results of our review, however, have indicated that attendance-recording procedures that do not require the member to sign in and out at a training assembly do not 13 provide a satisfactory record of those in attendance at the drill. We therefore concur in the Army Audit Agency recommendations. CONCLUSIONAND RECOMMENDATIONS Accurate attendance records and drill reports are es- sential to an effective drill pay system. Drill reports are the basis upon which pay is computed and retirement credit is given to reservists. They can be only as accu- rate, however, as the attendance reports on which they are based. Currently there are a sufficient number of discrepan-' ties between drill reports and attendance records in the number of drills performed to seriously affect the accuracy of payments under the Army Reserve Drill Pay System. We believe that these discrepancies can be reduced. To ensure that accurate attendance data are submitted, we recommend that the Secretary of the Army prescribe --uniform procedures for observing and recording atten- dance at drills, * --a standard attendance form for use by all Reserve units, --sign-in and sign-out procedures for use where prac- ticable, and --procedures for verifying Unit Records of Reserve Training to attendance records. Additionally we recommend that the Secretary of the Army place increased emphasis on the criteria and proce- dures for authorizing and recording equivalent training. 14 CHAPTER5 SCOPEOF REVIEW In evaluating the Army Reserve Drill Pay System, we reviewed the following Army activities. Army Finance Center, Fort Benjamin Harrison, Indiana --To determine whether reservists had been paid prop- erly for drills performed, we compared the atten- dance records for April 1970, where available, with the Unit Records bf Reserve Training and, in turn, these records with the individual pay rosters and/or military pay vouchers for 7,471 reservists assigned to 107 selected training units. --To ascertain whether pay information had been re- corded properly, we audited the military pay vouchers of 866 reservists. Headquarters, U.S. Continental Army Command Fort Monroe, Virginia --We reviewed this command to obtain information on the command structure of the U.S. Army Reserve and to ascertain the type and scope of inspections per- formed at Reserve units. U.S. Army Administration Center, St. Louis, Missouri --We made a review to obtain information on what per- sonnel data were available on the individual reserv- ists and on the kinds of reports issued with respect to the Ready Reserve. 15 Headquarters, 1st U.S. Army, Fort Geo’rge G. Meade, Maryland Headquarters, 5th U.S. Army, Fort Sheridan, Illinois Headquarters, 6th U.S. Army, Presidio of San Francisco, California --We obtained general information on how these commands operated within the Reserve organization. We deter- mined the extent to which these commands directed, supervised, and reviewed the recording and reporting of attendance at drills and the processing of perti- nent personnel data for pay and retirement purposes. Finance and Accounting Office, Indiantown Gap Military Reservation, Pennsylvania Finance and Accounting Office, Presidio of San Francisco, California --We reviewed these offices to obtain information on the operations of, and to evaluate the effectiveness Of, the finance and accounting offices relative to the Army Reserve Drill Pay System. Various Reserve units --We evaluated the procedures and controls for observ- ing Y recording, and reporting attendance at drills by reservists. We visited the number of Reserve units specified after each of the locations listed below. Camden, New Jersey (2) Horsham, Pennsylvania (1) Indianapolis, Indiana (4) Mountain View, California (1) Oakland, California (1) Philadelphia, Pennsylvania (1) San Francisco, California (1) Sausalito, California (1) . 16
Potential for Improvement in the Army Reserve Drill Pay System
Published by the Government Accountability Office on 1971-08-30.
Below is a raw (and likely hideous) rendition of the original report. (PDF)