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)


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.


      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   *   :

        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.

         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.        .


       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.


              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

                 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

        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

        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.

       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.


       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

      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

        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!_

    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.

           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?.

                                                            Director,     Defense    DivisFon


l   The Honorable
    The Secretary       of the Air   Force

                                                                                                                 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     $l,500,000d
E'OD,   JANlIARY TKRo~~-@~>~$~(~<~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