B-125037 Illllllll Ill11 Illlllll IllI\I\\\ LM095591 llllllllllllI 1 Dear Mk. Secretary: The General Accounting Office, for many years, -has made qudits of Air Force3 dkbursing of:icers' accounts at the Air Force Account- . ---..- ing and'~~~;l~6e-C~~ter;- In 1967--in addition to the existing prac- tice of issuing no 'Jices of exception and certificates of settlement related to the disbursing officers' accountablLity--we began to issue letter reports to each base commander, with a copy to the Comptroller of the Air Force, advising of the resalts of the audit. The reports identify and de scribe erroneous payments, show error rates by types of documents, a?d give the error rate of the median Air Force station so that a commander may judge how his staticn stands relative to others as to the accuracy of payments. This is a summary report of recent findings, the types of pay- ments where signi-'3ZZZZ~~rs""cwr;""'the probable-'causes of er?or, and the efforts made at base level to preclude their recurrence. Excluded from ",his summary are the accounts of disburskg stations involved solely in orocurement functions--such as Defense Contract Administration Services Regions or Air ?orce PLa3.t Reoresentative Offices--civilian payrolls, payments under cost-reimbursable con- tracts, and paymenk fcr bills of lading or transportation requests. QUALITY OF DISBTJRSENENTS We schedule the accounts for audit to correspond with C,ne q-month period covered by military pay records. Since the pay rec- ords are not made available to us for at least 3 months after they are closed, some payments are 1 year old when our audit begins. Our latest audits covered about two-thirds of all Air Force stations for the disbursing period of April though December 1968 and the remaining stations for a period January through September 1969. 50TH ANNlVERSARY 1921- 1971 4 summary of estLmated errors (overpayments and underpayments) follows, . and* details are r'_n an enclosure. Estimated errors Disbursing period Number f~~ount April through December 1968 42,000 $2 ,500 ) 000 January through September 1969 22.000 1,?50.000 All stations (9-month period) 64,000 $2,66e,w - Most of the errors involve only a few types of payments as shown 3y th.e fo!_7cwk.g classifications. Estimated errors for a 9-month ver2 me of oavment -Number Amvm'; Settlemer'; fo- unused leave 10,400 $1,805,000 Basic allowance for subsistence 9,100 92,000 Per diem allowances 21,300 202,000 Travel paymentsbased on distances 7,100 120,000 Temporary lodging allowance (note a) 700 z 5, nm All others LIi.&a 4.26, ooo Total 64,. 000 $2.440.000 aEstinaat,e is for only about 40 percent of the Air Force stations. F-5’ <__I : ,l t [. “,. -, _ : II * : ‘i Ou-r audits in recent years have shown an improvement in the accuracy of Air Force payments. ,1 compariso n covering the types of documents on which mcst errors occur shows a declining error rate over a 2$--year period, as follows: Error rate Type of document A9 In-service military pay records (note a) 6.4 3.3 2.2 Out-of-service military pay records (note 5) 15.0 10.4 8.3 Travel vouchers 2.5 2.3 1.7 stMilitary pay records closed at the end of regularly established cycles for members continuing in the service. klitary pay records closed when-m;mbers are separated from the service. B-125037 The above represents Air Force-wide error rates wh:'.ch vary sig- nificantly by station. Error rates by station tend to be c0nstar'Z-y changing (up or down). For example, in comparing the alldits 0,' the January through September 1969 accounts wit?. prior audits: we r?o~&. that for: --in-service military pay records, 2 stations had Increased error rates, 18 had lower error rates, and 3 stayed abou:; the same; --out-of-service military pay records, 11 stations had increased error rates, 11 had lower error rates, and 1 stayed abou-': the same; and --travel vouchers, 11 stations had increased error rates, 36 had lower error rates, and '7 stayed about the same. At the close of our audit of accounts through December 1968 we estimated that the Air Force was making errors totaling about $3.8 million a year as opposed to about $5.3 million a year when we com- pleted the audit through fiscal year 7965, even though Air Force obligations for military pay, allowances, and permanent change of station travel increased from about $4.45 billion for fiscal year 1965 to about $5.9 billion for fiscal year 1969 (amounts for tern- ' porary duty travel are included in var:',ous appropriations and are not readily available). The estimated errors and error ra?es, described above, were established from sample audits made centrally at the Air Force Accounting and Finance Center. Such audits do not identify all of the errors or problems that might exist in the disbursing system and, for this reason, our future plans provide expanded coverage at base- level and other input sources, particularly when the Joint Uniform Military Pay System is implemented. . NEED TO IMPFUXE ACCURACY OF CERTAIN TYPES OF PAYMENTS Although there has been a bettering trend, the Air Force needs to improve the accuracy of certain types of payments which are dls- cussed below. Payments for unused leave ‘,\ i ‘, 1 1 The most significant errors, moneywise, are in payments for un- used leave. About 90 percent of these were due to failures to post, or incorrect postings, to leave accounts. This causes erroneous ceeve balances which result in incorrect payments a': the time mem-oers zoz"- plete a term of service or when they leave the servFce. 3 . El-125037 Over half of the erroneous leave charges are related to change of station travel of members authorized leave while traveling to newly assigned stations. Basic allowance for subsistence Many errors, although usually s11~1l in amount, are made in pay- ments of basic allowance for subsistence. These errors make up about 29 percent of all military pay record errors. About half of the errors are due to failure to make or incorrectly making adjustments for months having other than 3C days. The adjustments are necessary because the computer treats the daily rate for enlisted members as a 3%day monthly rate. Duplicate payments in tnis category make up the next most frequent type of error. Per diem allowances Errors in payments of per diem allowances account for the largest caiegory of errors on travel vouchers. %st result from Lmproperly applying deductions for meals and quarters furnished by the Government, use of wrong rates, mathematical mistakes, and payments for perfods of nonentitlement. * Over half of the errors made during April through December 1.968 were due to improper deductions for quarters. Several base co,mmanders advised us that late receipt of Change 187 to the Joint Travel Regulations, or nonreceipt of advance notice of the change, cause?. zxounttig 22d fSnance officers to compute deductions for quarters under superseded re,guIations. The problem was further aggravated because the %ntent o:?' Change Y-87 was not clearly stated, thus causing misinterpretation and resultant erroneous payments. Travel payments based on distances Error in payments based on distances is the second Largest group of travel payment errors. Error rates have declined, however, 51 the past few years. We believe the improvement is attributable to publications of new editions of the Official Table of Distances by the uniformed *services. Temoorary lodging allowancea ! : .,'\ i .‘ *ItjilL We audited 5,389 vouchers in the January through September 1969 accounts for payments of temporary lodging allowance and found 58~ erroneous payments, a rate of 10.8 errors per 100 vouchers. El25037 Most of the errors were due to inaccurate computations or pay- ments for days when members were not entitled to the allowance. We believe that many of the base accounting and finance office personnel have not completely understood the comp7ex regulations for this s'lowance. CAUSES OF ERRONEOUSPAYMENTS AND CORRECTIVE ACTIONS TO P-RKLUDE RECURRENCE When an audit shows a relatively high error rate for one or more types of documents, we invite the base commander to advise us of the causes of the erroneous payments and the measures taken to preclude recurrence. Their replies state that most erroneous payments are due to: 1. Understaffing or lack of quail,,-.'find and experienced personnel 2. Human and clerical errors 3. Inadequate procedures and controls 4. Misinterpretation of regulations or inadequate krowledge of entitlements 5. Late receipt of changes to Joint Travel Regulations To preclude recurrence of errors, many commanders (1) initiated better training programs, (2) strengthened local orocedures and controls, (3) im- proved the manning posture, and (4) established stronger internal audit programs. The cause of error most frequently reported by commanders is under- staffing or lack of qualified and experienced personnel. In our report to the Congress titled, "Follow-Up Review of Causes of Erroneous Payments of Military Pay and Allowances" (B-125.037, April 2, 1968), we showed that the main cause of error was the use of inexperienced and untrained clerks and supervisors to staff disbursing and personnel offices. It is apparent that this continues to be a troublesome problem. We conclude that the quality of the disbursing functions at most Air Force stations is generally .aatisfactory in terms of legality, propriety, and correctness. We believe, however, additional attention should be given to the skills and continuity of assignment of persons performing these tasks. AIR M)RCE RESPONSIBILITIES , 1I Y, d-dx& '21 ii, The Comptroller General, in a letter to heads of Federal departments and agencies dated August 1, 1969 (B-161457), reemphasized their resporsi- bilities for proper accounting and internal control, including in';erm!_ B-125037 audit, for functions of their accountable officers. Department and agency procedures and controls, the Comptroller General pointed out, should include adequate administrative procedures for systenaflcally examining disbursement and collection transactions to verYy their legality, propriety, and correctness at the point in time when any needed preventive or corrective action can be most effectively taken. ************t*** We would appreciate your comments on what additional attenticn is being given to the skills and continuity of assignment of persons performing disbursing functions and the actions taken s-r&under con- sideration, particularly by the Comptroller of the Air Force, to more fully discharge the responsibilities reemphasized in the letter cite?. above. Director, Defense DivisFon l%.xlosure l The Honorable The Secretary of the Air Force , ENCLOSURE 107 AIR FORCE DISBURSING STATIONS FOR THE 9-MONTH PERIOD, APRIL THROUGH DECEMBER- I-- Total estimated Number Sample Number Error Error Number Amount me of document of.s&aA:oz Universe audited of errors Em.ou.tlt c?te- of -_-I____ errors of errors ~__*-- In-service military pay records 36 409,026 7,868 259 10,201 3.3 11,508 419,103 Out-of-service military pay records 36 66,370 39617 377 47,714 IO.4 5,710 787,756 Travel vouchers 107 1,376,611 21,926 497 4,803 2.3 22,924 261,787 Commercial vouchers 107 830,704 17,584 589 2,846 Military pay vouchers 106 -- 16.143 1:; 2.,g 0.09 0.07 1.223 27,231 Totals 2,847,356 67,138 1,289 $ 65,570 /!+2,000d $l,500,000d 62 AIR FORCE DISBURSING STATIONS FOR THEj-MONTH E'OD, JANlIARY TKRo~~-@~>~$~(~<~e b), In-service military pay yecords 25 324,208 5,291 117 $ 8,317 2.2 Out-of-service military pay records 59,727 2,117 176 Travel vouchers 2 r374,?62 11,331 I.88 Temporary lodging allow- ance vouchers (note c) 46 .L '7,@4 .5 ?14222 .-m5L!! Totals 1,266,721 24,148 1,061 Grand totals 4LiibD ,._- --_I 91,286
Audits of Air Force Disbursing Officers' Accounts at the Air Force Accounting and Finance Center
Published by the Government Accountability Office on 1971-04-12.
Below is a raw (and likely hideous) rendition of the original report. (PDF)