<DOC>
[109th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:21297.wais]
STRENGTHENING TRAVEL REIMBURSEMENT PROCEDURES FOR ARMY NATIONAL GUARD
SOLDIERS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
FINANCE, AND ACCOUNTABILITY
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
MARCH 16, 2005
__________
Serial No. 109-23
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
______
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COMMITTEE ON GOVERNMENT REFORM
TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut HENRY A. WAXMAN, California
DAN BURTON, Indiana TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee DIANE E. WATSON, California
CANDICE S. MILLER, Michigan STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California LINDA T. SANCHEZ, California
GINNY BROWN-WAITE, Florida C.A. DUTCH RUPPERSBERGER, Maryland
JON C. PORTER, Nevada BRIAN HIGGINS, New York
KENNY MARCHANT, Texas ELEANOR HOLMES NORTON, District of
LYNN A. WESTMORELAND, Georgia Columbia
PATRICK T. McHENRY, North Carolina ------
CHARLES W. DENT, Pennsylvania BERNARD SANDERS, Vermont
VIRGINIA FOXX, North Carolina (Independent)
------ ------
Melissa Wojciak, Staff Director
David Marin, Deputy Staff Director
Rob Borden, Parliamentarian
Teresa Austin, Chief Clerk
Phil Barnett, Minority Chief of Staff/Chief Counsel
Subcommittee on Government Management, Finance, and Accountability
TODD RUSSELL PLATTS, Pennsylvania, Chairman
VIRGINIA FOXX, North Carolina EDOLPHUS TOWNS, New York
TOM DAVIS, Virginia MAJOR R. OWENS, New York
GIL GUTKNECHT, Minnesota PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana CAROLYN B. MALONEY, New York
JOHN J. DUNCAN, Jr., Tennessee
Ex Officio
HENRY A. WAXMAN, California
Mike Hettinger, Staff Director
Tabetha Mueller, Professional Staff Member
Nathaniel Berry, Clerk
Adam Bordes, Minority Professional Staff Member
C O N T E N T S
----------
Page
Hearing held on March 16, 2005................................... 1
Statement of:
Shine, Patrick T., Director of Military and Civilian Pay
Services, Defense Finance and Accounting Service; John
Argodale, Deputy Assistant Secretary for Financial
Operations, Office of the Assistant Secretary for Financial
Management and Comptroller; Roy Wallace, Director of Plans
and Resources, Department of the Army; and Gregory D. Kutz,
Director of Financial Management and Assurance, Government
Accountability Office...................................... 5
Argodale, John........................................... 12
Kutz, Gregory D.......................................... 25
Shine, Patrick T......................................... 5
Wallace, Roy............................................. 21
Letters, statements, etc., submitted for the record by:
Argodale, John, Deputy Assistant Secretary for Financial
Operations, Office of the Assistant Secretary for Financial
Management and Comptroller, prepared statement of.......... 14
Kutz, Gregory D., Director of Financial Management and
Assurance, Government Accountability Office, prepared
statement of............................................... 27
Platts, Hon. Todd Russell, a Representative in Congress from
the State of Pennsylvania, prepared statement of........... 3
Shine, Patrick T., Director of Military and Civilian Pay
Services, Defense Finance and Accounting Service, prepared
statement of............................................... 8
Towns, Hon. Edolphus, a Representative in Congress from the
State of New York, prepared statement of................... 81
Wallace, Roy, Director of Plans and Resources, Department of
the Army, prepared statement of............................ 22
STRENGTHENING TRAVEL REIMBURSEMENT PROCEDURES FOR ARMY NATIONAL GUARD
SOLDIERS
----------
WEDNESDAY, MARCH 16, 2005
House of Representatives,
Subcommittee on Government Management, Finance, and
Accountability,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 2:07 p.m., in
room 2247, Rayburn House Office Building, Hon. Todd R. Platts
(chairman of the subcommittee) presiding.
Present: Representatives Platts and Towns.
Staff present: Mike Hettinger, staff director; Dan Daly,
counsel; Tabetha Mueller, professional staff member; Jessica
Friedman, legislative assistant; Nathaniel Berry, clerk; Adam
Bordes, minority professional staff member; and Teresa Coufal,
minority assistant clerk.
Mr. Platts. Good afternoon. This hearing of the Government
Reform Subcommittee on Government Management, Finance, and
Accountability will come to order.
As is typical with a session day, we are all going in a
million and one directions. Congressman Towns is on his way and
will be joining us shortly. We believe we may have floor votes
in about 20 to 25 minutes. My hope is that we will get through
opening statements of myself and Mr. Towns and our panelists,
and I can race over for the last second of the first vote. We
have about a 20-minute recess and come back and to questions
and answers. We will see if that works out as we get started.
We will do our best to not hold our witnesses any longer in
limbo than we have to.
In response to the terrorist attacks of September 11, 2001,
the Army National Guard began to mobilize soldiers in support
of the global war on terror. As part of Operations Noble Eagle
and Enduring Freedom, these soldiers fought the Taliban and al
Qaeda throughout Asia and Africa. They continue to guard
prisoners at Guantanamo Bay, Cuba and perform support missions
here in the United States.
Similarly, National Guard soldiers served on the front
lines in Iraq and are now assisting in peacekeeping and
reconstruction operations in Iraq under Operation Iraqi
Freedom. This is the largest mobilization of Guard troops since
World War II. Over the past 2 years, the House Government
Reform Committee, the Government Accountability Office and the
Department of Defense have worked together to ensure that this
large-scale deployment goes as smoothly as possible.
In a series of hearings supplemented by ongoing quarterly
briefings, civilian and military personnel have worked closely
with committee staff and GAO auditors to bring improvements to
the systems and processes that serve our troops. Among the
issues that have been addressed are errors in soldiers' pay,
ineffective tracking of supplies, and problems with treatment
of injured Guard and Reserve soldiers.
This hearing will look at the process for reimbursing Guard
soldiers for their travel and per diem expenses. It is an
important part of the ongoing productive collaboration that has
resulted in a number of improvements. Specifically, the
subcommittee will discuss the findings of GAO's recent case
studies on travel reimbursement procedures for National Guard
troops. This report, which is being released today, found that
a number of deployed National Guard soldiers experienced
problems receiving appropriate travel and per diem
reimbursement.
In light of our heavy reliance on Guard and Reserve troops
in fighting the global war on terror, it is imperative that
travel reimbursement and other management issues be resolved
and that our uniformed personnel be informed of the extensive
work that is being done and continues to be done to address the
problems they have incurred.
I would like to thank our witnesses not only for being here
today, but for working with this committee and the minority and
majority staff over the past 2 years. First, we will hear from
Mr. Pat Shine, the Director of Military and Civilian Pay at the
Defense Finance and Accounting Service. Mr. Shine, I appreciate
your briefing my staff in the recent year on the challenges
before DFAS and your efforts to meet those challenges, and also
your specific help as we have brought some constituent cases to
your attention regarding Guard who have been mobilized and your
staff's quick response in helping to address those problems.
Mr. Shine. We were glad to help, sir.
Mr. Platts. We are also going to hear from Mr. John
Argodale, Deputy Assistant Secretary for Financial Operations,
and Mr. Roy Wallace, Director of Plans and Resources for the
Department of the Army. Mr. Greg Kutz, Director of Financial
Management and Insurance at the Government Accountability
Office will conclude the panel. Greg, you played a key role in
the past year with this committee. We thank you as well, in
addition to our other panelists.
We appreciate all of your testimonies, your written
testimonies you have already submitted, as well as your oral
testimonies that you will be giving here today. I was thinking
Mr. Towns would be here by the time I concluded my statement.
He is not. We will break if need be when he arrives for his
statement, or he may choose to submit that for the record.
Perfect timing, Ed. Do you want to make a statement?
[The prepared statement of Hon. Todd Russell Platts
follows:]
[GRAPHIC] [TIFF OMITTED] T1297.001
Mr. Towns. Yes.
Mr. Platts. We are joined by Mr. Towns, the ranking member
from New York, and the Chair would recognize Mr. Towns for the
purpose of making an opening statement.
Mr. Towns. Thank you very much, Mr. Chairman, for holding
this hearing.
It is timely for our committee to examine this issue, as
the number of soldiers experiencing financial burden due to
lack of travel reimbursement policies continues to rise. Let me
also thank our witnesses for their testimony in advance,
especially those of you who have ably served our Nation with
pride and distinction.
The issue of inadequate management at the Department of
Defense is not foreign to our committee. As we have continually
worked to improve the internal control structure and accounting
problems demonstrated by the agency over the years. Like our
previous work in examining the problems of associated with the
pay and benefit policies of our soldiers and reservists, we are
now beginning to identify the extensive deficiencies in the
travel reimbursement process for our Army Guardsmen.
This committee, at a critical time, as many of these men
and women are being called in increasing numbers to serve our
Nation's interest abroad. Since 2001, the Army Guard has been
asked to do more for us than at any other time in recent
memory. According to the GAO, there were more than 186,000 Army
Guard soldiers mobilized from September 2001 through September
2004, accounting for approximately 40 percent of the 111,800
reservists mobilized during this time period.
In my home State of New York alone, over 2,900 Army
Guardsmen are presently mobilized and serving in various
capacities. The problems detailed in the report before us today
are similar to previously defined deficiencies at DOD stemming
from continued weaknesses in managerial controls, inefficient
processes, and human capital constraints. Of the 10 Guard units
examined by GAO, a majority of the soldiers in each unit
experienced problems relating to reimbursements for meal
expenses.
Specific cases experienced delays for authorized
reimbursement in excess of a year. Other soldiers cited
inaccuracies or delays in the voucher authorization process,
requiring many soldiers to shoulder the financial burden of
deployment until such issues were resolved. Adding to their
plight, many soldiers were denied interest and late fees on
delinquent reimbursement as required under current law.
I believe, Mr. Chairman, these practices will prove to be a
long-term detriment to retention and recruiting efforts for the
Army Guard if they are not swiftly remedied. As I said before
our committee last July, this issue before us is not relevant
to our military mission or overseas objectives. It is, however,
relevant to whether the U.S. Government is keeping its word to
the men and women who honorably serve our Nation.
Once again, I believe it is disingenuous for us to tell the
American people that our armed services are well prepared when
we cannot even guarantee that our soldiers will receive their
pay and benefits in a timely manner. It is difficult enough for
the families of guardsmen serving away without having to endure
the undue economic hardship experienced by many individuals.
Hopefully, our efforts today will be productive in finding
solutions to such problems.
Again, Mr. Chairman, I thank you for holding this hearing.
I also would like to thank the witnesses for coming. Thank you
so much.
I yield back.
Mr. Platts. Thank you, Mr. Towns. Your statement, one of
the more important parts of it is the fact that while our
soldiers who were mobilized and engaged in helping to win the
war on terror, the fact that they were performing their
missions with great success and dedication, unimpacted by the
challenges they are facing on their reimbursements and things,
that was put aside while they did their jobs, is a testament to
our soldiers. I appreciate your reaffirming that, how grateful
we are to the work of these soldiers that have been mobilized.
We will move to our panelists. It is the practice of the
subcommittee if we could ask all of our witnesses to stand and
be sworn in. Anyone who would be advising you or giving counsel
as part of your testimony, if they would like to join in taking
the oath as well. If you would raise your right hands?
[Witnesses sworn.]
Mr. Platts. The clerk will affirm that the witnesses all
answered in the affirmative. We again appreciate your
testimony. It sounds like the vote board is just now starting,
which means we have about 20 minutes before the first vote. I
need to sprint over there. Ed is a little younger than me so he
does not need as much time as I do. [Laughter.]
I think what we will try to do is do our opening statements
and maybe I will get through all four of our opening
statements, or three of them. It would be a good break point if
we can get through all four, and then we will come back and do
questions and answers at the conclusion of the vote.
So Mr. Shine, if you would like to begin, we will get right
to your statement.
Mr. Shine. Yes, sir.
STATEMENTS OF PATRICK T. SHINE, DIRECTOR OF MILITARY AND
CIVILIAN PAY SERVICES, DEFENSE FINANCE AND ACCOUNTING SERVICE;
JOHN ARGODALE, DEPUTY ASSISTANT SECRETARY FOR FINANCIAL
OPERATIONS, OFFICE OF THE ASSISTANT SECRETARY FOR FINANCIAL
MANAGEMENT AND COMPTROLLER; ROY WALLACE, DIRECTOR OF PLANS AND
RESOURCES, DEPARTMENT OF THE ARMY; AND GREGORY D. KUTZ,
DIRECTOR OF FINANCIAL MANAGEMENT AND ASSURANCE, GOVERNMENT
ACCOUNTABILITY OFFICE
STATEMENT OF PATRICK T. SHINE
Mr. Shine. Chairman Platts, distinguished members of the
subcommittee, my name is Pat Shine. I am the Director of the
Military and Civilian Pay Service's business lines for the
Defense Finance and Accounting Service [DFAS].
I thank you for this opportunity to discuss our role in the
travel reimbursement payment process to mobilized soldiers.
DFAS shares the responsibility to provide timely and accurate
travel reimbursement payments and customer service with the
active and reserve components of the military departments. DFAS
has the primary responsibility of processing travel
reimbursements to the mobilized Army National Guard, U.S. Army
Reserve and active duty Army forces.
We accomplish this mission by using a combination of
military personnel, Department of Defense civilians and
contract employees. For the fiscal year that ended September
30, 2004, we employed 33 military, 286 civilians, and 283
contract employees. We processed over 2.2 million travel
reimbursement claims; 380,000 of these claims were specifically
related to the mobilized Guard and Reserve forces which is the
focus of my testimony today.
Normally, Guard and Reserve soldiers are sent directly to
an overseas combat theater of operation, or used at various
stateside locations as backfill behind active component
soldiers who are sent to the combat theater. Soldiers deployed
to the combat area where government lodging and meals are
provided are entitled to a flat rate of $3.50 per day. Soldiers
assigned to stateside locations on a temporary status are
entitled to full per diem to cover allowable travel expenses,
including lodging and meals if adequate government quarters and
meals are not available.
Individuals in the combat area file a voucher for
reimbursement of their travel expenses upon completion of their
active duty tour. Mobilized soldiers who remain stateside not
near their home are eligible to file accruals every 30 days in
order to pay bills that they have incurred. During the summer
of 2003, we witnessed a dramatic increase in the number of
mobilized Guard and Reserve soldiers and consequently an
increase in the number of travel claims.
This spike in travel claims temporarily overwhelmed our
DFAS staff. To address this issue, we partnered with the U.S.
Army and secured additional funding to hire contractor
personnel. In addition, we obtained the help of the U.S. Army
Reserve and Army National Guard finance units to assist us in
processing claims and reducing the backlog.
Within 30 days, the turnaround time decreased to the DFAS
standard of 8 business days. It has remained in that range
since. While our processing time has been at an acceptable
range for the past 18 months, there are two other issues that
the Government Accountability Office draft report, Army
National Guard Inefficient Air-Prone Process Results in Travel
Reimbursement Problems for Mobilized Soldiers, has highlighted.
The first area the GAO review noted that required immediate
attention was the payment of interest for interim vouchers. We
were not paying interest on accrual claims when the processing
time exceeded 30 days as required by the Travel and
Transportation Reform Act. In the course of GAO's review, they
brought this to our attention and we immediately changed our
procedures to comply with the act.
The other significant area relates to the number of claims
returned to service members because they were not properly
completed and documented in order for us to make payment. These
incomplete claims are returned for various reasons, including
missing travel orders, missing receipts, missing signatures or
incomplete or illegible itineraries. We have partnered with the
leadership of the Guard and Reserve in providing trend analysis
data on these types of problems occurring so the commands can
focus their corrective action.
We also have provided additional education on the travel
reimbursement process to travelers. Specific examples of
actions we have taken include, we have developed and
distributed handouts at mobilization and demobilizationsites
that explain how to prepare the travel reimbursement claim and
what supporting documentation is needed. This information is
also available on both the DFAS and Army Knowledge Online Web
sites. We partnered with the Army National Guard in developing
a detailed information packet entitled the Citizen Soldier's
Guide to Mobilization Finance that explains the various
authorized entitlements while in a temporary change of station
status.
We have also visited select mobilization and
demobilizationsites to provide hands-on instructions on how to
complete the travel reimbursement claims. As a result of these
actions, we have been partially successful in correcting
problems associated with return claims. The return or rejected
rate is now around 12 percent, down from the previous rate that
was 25 percent or higher. We continue to work with the
leadership of the Army, the Guard and the Reserve and specific
units to drive this rate down even further.
The Department's ultimate solution for travel pay
reimbursement is the Defense Travel System [DTS]. DTS is a Web-
based end-to-end process that will ease the administrative
burden on the traveler and simplify many of the complex
entitlement rules in the manual paper-intensive process
currently used today. DTS will be available to support
mobilized Guard and Reserve soldiers in the Army by the end of
fiscal year 2006.
Mr. Chairman, DFAS remains fully committed to our
continuing partnership with all service components in improving
the accuracy and timeliness of travel reimbursement services.
We will remain steadfast in taking aggressive action and we
will look forward to reporting our results to the GAO and to
the committee.
Mr. Chairman, this concludes my formal remarks and I will
be happy to answer any questions the committee may have. Thank
you.
[The prepared statement of Mr. Shine follows:]
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Mr. Platts. Thank you, Mr. Shine. Again, thanks for you and
your staff on the front lines of this issue and meeting those
challenges of the spike in mobilization and trying to quickly
respond to them. We will look forward to getting into some of
your actions in more detail in the question and answer.
Mr. Shine. Thank you.
Mr. Platts. Secretary Argodale.
STATEMENT OF JOHN ARGODALE
Mr. Argodale. Chairman Platts, Mr. Towns, distinguished
members of the subcommittee, thank you very much for the
opportunity to appear before you this afternoon to discuss
travel reimbursement of the Army's mobilized National Guard
soldiers.
My name is John J. Argodale. I am the Deputy Assistant
Secretary for Financial Operations. The motto of the Army
Finance Corps is service to soldiers. I, along with my civilian
and military counterparts, take great pride in providing
service to soldiers, particularly during these times of
unprecedented mobilization. Secretary Harvey's expectation is
perfection in all matters impacting soldier pay. We are working
to make the Secretary's expectations a reality.
Since the onset of the global war on terrorism, the Army
has executed large-scale mobilizations and demobilizations on a
scale not experienced since World War II. The Army mobilized
over 342,000 National Guard and Reserve soldiers, demobilized
186,737 soldiers, and as of March 3, 2005, 155,283 Army
National Guard and Reserve soldiers are mobilized for active
duty.
The magnitude of the mobilization and consequent travel
claims created a significant strain on the Army's ability to
ensure mobilized soldiers receive travel reimbursements in the
correct amount and on time. We simply needed to improve our
performance.
Service to soldiers is the Army Finance Corps' ultimate
objective. To provide the travel reimbursement service our
mobilized Guard and Reserve soldiers deserve, we applied
significant people and money. We mobilized more than 80
soldiers from the Army National Guard and Reserve finance units
to assist DFAS in processing travel claims. We paid DFAS $17
million between fiscal years 2002 and 2004 to hire additional
people needed to process travel claims.
These efforts enabled DFAS to significantly increase the
number of personnel processing contingency operations travel
claims. For example, in October 2001, there were only 35 people
processing contingency operation travel claims. In July 2003,
the number of people processing contingency operation travel
claims grew to 141, including 83 mobilized Reserve component
soldiers. Currently, there are approximately 320 people
processing contingency operation travel claims.
The increased personnel enabled DFAS to stabilize travel
claim processing. Over the past 18 months, DFAS reports that
travel claims are processed within 8 business days of receiving
a claim for reimbursement.
In addition to people and money, we have made several
process improvements designed to correct deficiencies in
processing travel claims and improve our service to soldiers.
To correct confusion on meals reimbursement, all mobilization
orders now state that soldiers will not be charged for meals
when billeted on government facilities. In situations where
soldiers are billeted off-post, reimbursement is authorized for
meals consumed during non-duty hours.
To improve service to soldiers, claims with missing
documentation, such as the mobilization order, are no longer
rejected back to the soldier for resolution. Instead, the
claims are held and the missing orders obtained from a central
location. This improved service resulted in the expedited
payment of nearly 17,000 claims and a reduction in rejected
travel claims returned to soldiers, from over 20 percent to a
range of 10 percent to 12 percent of total claims received.
The Army receives weekly metrics from DFAS on all
contingency travel operation claims. The metrics disclose the
total claims received, total processed, processing time, total
claims rejected, and reasons for rejection. We have learned
that most claims are rejected because of missing signatures and
incomplete itineraries. These metrics are a valuable tool for
use in educational materials and information designed to
improve the travel reimbursement process.
In summary, we are improving our service to soldiers.
Travel reimbursements are processed within 8 business days of
receipt of the claim by DFAS. We reduced rejected claims to a
range of 10 percent to 12 percent of total claims received.
Changes to the process for rejecting travel reimbursements
expedited the payment of about 17,000 claims. Metrics are
monitored weekly and used to inform soldiers of common mistakes
made in submitting travel claims.
Although we have made progress, we must continue to pursue
additional process improvements in order to meet Secretary
Harvey's goal of perfection in the delivery of soldier pay. To
solve larger problems such as integrating personnel and payroll
actions and automating travel claims and reimbursements, the
Army needs DOD-driven solutions such as the Defense Integrated
Military Human Resource System and the Defense Travel System to
come online soon.
Service to soldiers is my job and the job of my civilian
and military colleagues. I appreciate the subcommittee's
interest in this issue and look forward to continued
collaboration with the subcommittee staff and the GAO to
improve service to soldiers.
Thank you.
[The prepared statement of Mr. Argodale follows:]
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Mr. Platts. Thank you, Mr. Secretary. Given the heroic
service of our men and women in uniform, and in this instance
specifically folks in our Guard, the goal of perfection that
Secretary Harvey has set is an appropriate one and it will take
all of our collective efforts to achieve that. We certainly
look forward to continuing to work with you.
I think we will, Mr. Wallace at least get you in yet, and
we may get Mr. Kutz in. We will see.
STATEMENT OF ROY WALLACE
Mr. Wallace. Thank you, Mr. Chairman, Mr. Towns, members of
the subcommittee. I would like to thank you all for taking such
an acute interest in the welfare of our National Guard, Reserve
and active component soldiers and for allowing me the
opportunity to appear before you today.
I have submitted the written statement for the record and I
would like to make just a few brief comments, and then I will
open for questions.
My office is responsible for the policy formulation for
travel and pay within the Department of the Army. However, this
is a joint game and therefore we work diligently with the
office of the Secretary of Defense and our sister services to
ensure that the policies are universal and applied to all. In
fact, the mobilized soldier is paid and travel requirements are
exactly the same as the active soldier.
In addition, we authored the personnel policy guidance,
which is a voluminous instruction to the field which is
distributed to all Army units and organizations. It is a living
document that we have continued to adjust as things such as the
GAO report that we are working today have come to light. The G-
1 is fully committed to working with the Office of the
Secretary of Defense and DFAS to provide clear and concise
guidance to the field.
Thank you very much.
[The prepared statement of Mr. Wallace follows:]
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Mr. Platts. Thank you, Mr. Wallace.
Greg, we are going to try to get you in here, and then I
will be running out, and then we will stand in recess for
probably about 20 minutes, get my votes in, and then we will
get back over.
Mr. Kutz. OK.
STATEMENT OF GREGORY D. KUTZ
Mr. Kutz. Thank you for the opportunity to discuss travel
reimbursement problems for mobilized Army Guard soldiers. As
you had mentioned, I previously testified on pay problems for
Guard and Reserve soldiers, including those injured in the line
of duty. Several weeks ago, we had that hearing.
Our bottom line today, as you mentioned, is that soldiers
have also experienced significant problems receiving timely and
accurate travel reimbursements. My testimony has two parts. I
will talk first about travel reimbursement problems and then
briefly discuss DOD actions.
First, we identified inaccurate, delayed and denied travel
reimbursement for Army Guard soldiers. Our 10 case study units
experienced a broad range of travel reimbursement problems. For
example, for these 10 units, we identified over $1 million of
delayed or disputed amounts for meals, some of which remain
unpaid.
Some of the examples of the issues that we found include 36
soldiers from a Pennsylvania unit that filed identical
vouchers, but were paid amounts ranging from zero to $1,700
every month. One-hundred and seven soldiers from a Maryland MP
unit were housed off-post and denied per diem authorization for
meals. As a result, some of the meals were paid for out-of-
pocket by soldiers, while others rode bicycles or hiked over 3
miles to the mess hall. And 32 soldiers from a Georgia MP unit
incurred debts totaling over $200,000 when the per diem
payments that they had already received were retroactively
disallowed. Debt collections were started while these soldiers
were deployed to Iraq, causing financial hardship for the
soldiers and their families.
In the last several weeks, we became aware of the potential
for similar problems for injured Guard and Reserve soldiers.
For example, we identified problems with active duty medical
extension orders and confusion over injured reservists'
entitlements to meals. As a result, many out-patient soldiers
may have inappropriately paid for their own meals. Army
officials have represented that they are looking into this
matter.
The root causes of these reimbursement problems relate to
people, processes and automated system. For example, as the
operational tempo increased after September 11, many
installations did not have available on-post housing for Army
Guard soldiers. As a result, soldiers were housed off-post in
commercial hotels and apartments. This created novel situations
that were not specifically addressed in the travel regulations.
The current paper-intensive error-prone process was another
major factor. Problems in assembling all of the paper necessary
for a complete travel voucher package resulted in a reported
85,000 vouchers being rejected and returned to soldiers in
2004. This churning process added to delays and frustration for
soldiers.
Second, as was mentioned by the other witnesses, DOD has
taken many actions to improve the situation. I will not repeat
what those were in the interest of time here, but as was
mentioned, they are also implementing the Defense Travel System
to address longstanding problems, even those beyond Guard and
Reserve soldiers. However, our view is that given that DTS has
been underway for about 8 years and cannot currently be
utilized by mobilized soldiers, we believe it is likely that
the soldiers will have to live with the current system for the
foreseeable future.
In conclusion, the current reimbursement system was not
designed to handle the increased operational tempo from the
global war on terrorism. With a new system, in our view, likely
years away, it is important that Army, DFAS and the National
Guard continue their efforts to compensate for the problems
with the current system. We look forward to continuing to work
with this subcommittee and the other witnesses and their
organizations to see that soldiers have the world-class travel
reimbursement system that they deserve.
That ends my statement. I will be happy to answer
questions.
[The prepared statement of Mr. Kutz follows:]
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Mr. Platts. Thank you, Mr. Kutz.
We will stand in recess for about 20 minutes to the call of
the Chair.
[Recess.]
Mr. Platts. We will reconvene the hearing. I apologize for
the delay and appreciate your patience while we got the votes.
The good thing is, that is our last series of recorded votes on
the floor, so I should not have to run out again in the midst
of our ongoing hearing.
Again, I want to thank all four of you for your
testimonies, and I will get into some more specifics. The way I
understand the problems identified in the GAO report and the
statements of our witnesses here today is that we all
acknowledge some significant problems that have come up as we
have experienced this tremendous mobilization, some of which
were more troublesome than others. We have made some good
headway in the right direction. We still have work to be done
and we seem to have an idea of what that work is as we go
forward.
Where I would like to start is maybe with GAO, Mr. Kutz.
You have identified 23 specific recommendations and in your
testimony I believe 20 of those were agreed to and acted on by
the Department, or 21, and then two that were partially agreed
to and being acted on.
If you want to summarize from where we are today versus at
the time you did the study and your best information as you
understand from your perspective of what major issues are still
out there, or kind of in the works, and then we will get to the
Department's perspective on where we are and how we are
addressing those.
Mr. Kutz. Right. I mentioned in the beginning that the
issues were people, processes and automated systems. I would
say that the significant activity has been on dealing with
human capital issues and process improvements such as customer
service and just dealing with the specific problems we
identified in this report, putting other training and education
programs in place.
There has been quite a bit of activity and we have seen
solid evidence that is happening. So I would say with respect
to dealing with the current system and compensating for the
problems with it, there has been very good progress. Our bigger
concern is the Defense Travel System. When we did take a good
look at the Defense Travel System as it relates to this
problem, it was barely on the drawing board. I think that there
has been probably some progress since we looked at that, but
the key issue there is that system is a TDY system, which is
temporary duty versus temporary change of station for
reservists. It is a little bit different thing. Putting a
voucher package together here in an automated manner would be
much different than TDY. So the DIMHRS System is supposed to
automate the various orders involved in completing a voucher
package. We believe that is going to take some time to do.
Mr. Platts. The progress we have made is good, and if I can
maybe re-summarize your statement, as we concluded before the
recess, is critical because of your belief that we are going to
continue to rely on this labor-intensive system for a long time
to come, based on your assessment of where the Defense Travel
System is and the likelihood of that being online.
Mr. Kutz. That is correct. Again, we look at a lot of
systems at DOD and we have done a lot of work for your
subcommittee on that, and I think we have some reports coming
up for you. The real history of the systems at DOD is that
there is no system that has ever come online on schedule within
performance parameters and within cost parameters.
So until they start showing that they can field these
systems within cost, schedule and performance parameters, we
believe that they are going to have to continue to deal with
the current systems and make sure they have contingency plans
in place to work around the current processes.
So again, I think that is something the proof will be in
when we see tangible evidence that these things are being dealt
with from a system perspective.
Mr. Platts. Mr Shine, maybe we will start with you on the
recommendations were made and where you believe you are on
those recommendations, and your assessment of what further work
you have to do based on what came out of the recommendations
from GAO.
Mr Shine. Yes, sir. As Mr. Kutz indicated, when you look at
this from the people, processes and systems perspective, the
Army has part of this as it relates to their mission to publish
orders and to determine the statements of non-availability
which in many cases drives the entitlement that we work on.
What the GAO specifically addressed to the DFAS operation
was, one, the relation to the amount of time it was taking us
to process the vouchers. I think I indicated that we have
worked on that and we feel that we have had that under control
for a significant amount of time now.
Mr. Platts. And that is down to the 8 days.
Mr. Shine. Yes, sir.
Mr. Platts. Once you get it and process it, it is an 8-day
turnaround.
Mr. Shine. In what we call a ready-to-pay voucher. All we
mean by that is that all the necessary itineraries are
completed, all the normal justification documents are in fact
included and the voucher is a completed package and we are now
able to do that within 8 business days.
The other issue that the General Accountability Office
identified for us was the issue with interest. I just wanted to
clarify for that. We already knew that this was an issue that
was in the law, but anytime we did what we called a final
settlement voucher, we were already identifying and paying the
interest. Where we were not doing this, there was a situation
where individuals that are mobilized in the United States,
where they are actually getting what we call accrual payments
every 30 days, we did not understand. We did not interpret the
law, and when the GAO brought that to our attention, we
recognized that needed to be done.
So not only are we doing that now, but we are also
committed to going back as the GAO asked us to do and take a
look to see all the people who had gone since the mobilization
started back, going back to the September 11 timeframe. We are
committed to going back and looking at all those vouchers to
determine if there in fact were periods or instances when
mobilized soldiers should have received interest payments and
did not.
By and large, these are not large payments. I just want to
make sure that I am clear. The average interest payment that we
are paying today is about $8. So it is not a lot of money, but
it was something that we had a different interpretation of.
Once the GAO identified it, we did not wait for their draft
report. We went ahead and changed that on the spot. So from
that standpoint and working with the Army to bring on
sufficient assets to get the turnaround time under control, we
feel like we are doing fairly well.
The other issue that is in our lane has to do with customer
service. This is really getting at what happens when people
call in or tell us that they have a problem. There were
problems when the GAO did their initial report that related to
backlogs, the volume of calls that actually exceeded our
capability to answer. We have taken several positive steps to
address that. If you would like me to, I can go through them in
detail, but I would like to let you know that we feel our
customer service now is much, much improved from what it was at
the time the GAO did the report.
Mr. Platts. One specific question on that customer service
side is I guess initially, according to the GAO report, when
you set up an 800 number and were fielding I think it was
15,000 calls per month, I believe, if that is correct.
Mr. Shine. That is correct.
Mr. Platts. But it appears that you were not gleaning from
those calls, using metrics to identify what were the underlying
problems to go out and try to fix them out front so you would
reduce the number of calls in the first place. Is that
something you are doing now, that you are better reviewing the
substance of those calls? I acknowledge and it is a good step
that you are being responsive, but are you learning from that
response?
Mr. Shine. The answer is yes on a couple of fronts that I
would just like to mention. First of all, we recognize that a
large number of the calls we were getting were simply people
trying to find out if we had gotten their voucher or not. One
of the things that GAO pointed out to us was that we were not
logging in every voucher that we received. So once we start
logging in, it is an automated process that feeds an email
directly to the soldiers, what is called AKO, or Army Knowledge
Online email account. It tells the that their voucher has been
received, and they get a similar email when we have computed
the voucher because we are now following that log-in process.
So we have seen the number of calls, first of all, cut in half
from what the GAO originally saw.
We also have a system called an automated call distribution
system we have in place that has up front, while some people
find it to be somewhat irritating to go through what we call an
interactive voice response, where you press one for this, press
two for that, press three for this, remember that the customers
we are taking care of in many cases are located around the
world. Their duty hours are much different than ours. So while
in many cases people just want to get information about the
status of their travel voucher, having an interactive voice
response system like that we have found to be very, very
helpful.
As a result of that, we have been able to identify when
those calls come in like that either on the interactive voice
response system or if they actually talk to a human being, we
are now able to do what we call data mining. We are actually
able to go back and look at what trends we are seeing and that
allows us to be able to provide that to the weekly information
that we provide to the Army to also help as the Army is going
out, and with the Army Guard to work directly with the units on
problems that we are seeing out there. But it also tells us if
we are having a problem inside of DFAS so we can fix that as
well. I think we have taken positive action on both of those
venues.
Mr. Platts. You mentioned, I think you said that 8 days is
ready to pay vouchers. Is that the correct term?
Mr. Shine. That is the correct term.
Mr. Platts. Everything is in order, but one of the problems
that was identified are the hoops that a soldier is having to
go through and the voucher comes in and it maybe had three
problems with it, but only one was identified. It was sent
back, you are missing something, it comes back, oh, you forgot
to sign it, it goes back.
It is my understanding you have set up in essence I will
call it an ombudsman office so that instead of sending them
back and forth, you have someone who takes that and works the
problem on an individual case. Can you expand on that?
Mr. Shine. Sir, I can. That ombudsman program came into
effect as a result of both your subcommittee and the larger
House Government Reform Committee requesting that both the
Guard and the Reserve establish such an ombudsman program for
pay. Once it was already in place, it was the perfect vehicle
to take care of these travel-related issues as well. While you
may not be aware of it, sir, where we actually conduct all
these travel processes that I am referring to, what we call
contingency travel operations, is in Indianapolis.
The Army National Guard has a pay liaison office also
located in Indianapolis, which is the source of their ombudsman
program. So what we are able to do, sir, is as these issues
come up, we now take them directly to the Army National Guard
office. I would be happy to let Mr. Argodale talk about what
happens from that point on, but we found that to be a very,
very responsive process. As a result, we have seen much quicker
turnaround and in many cases we do not even have to return the
voucher to the soldier at all. The Army National Guard
Ombudsman Office is able to fix the problem and we can take
care of it within 24 hours.
Mr. Platts. On the automated systems, sometimes they are
frustrating. I have a bank that if I want to check something I
can do that automated system. The fact that with my hours, when
I get to call the bank is about midnight. There is usually no
one there answering the phone, but I can get my automated
system. That use of business practices, which is something I
know you are really looking at doing, and I think, Mr.
Secretary, maybe you talked about it in your testimony of using
some business practices to kind of modernize your processing,
is great to hear in trying to address what was a fairly abysmal
situation in the past that is still a challenge, but at least
heading in the right direction from what you have to work with.
I want to get into the computer issue, which is a long-term
issue, but in trying to address.
I do want to ask at least a couple of specifics on a couple
of the cases. One actually Mr. Kutz referenced in an example. I
think you said it was a Maryland Guard unit that was authorized
for reimbursement and paid, and then subsequently the
authorization as taken back.
Mr. Kutz. That was actually a Georgia unit.
Mr. Platts. Georgia. Did I understand you correctly in
saying that in that instance, the soldiers were deployed and
while they were deployed debt collection proceedings were
begun?
Mr. Kutz. That is correct.
Mr. Platts. Were they deployed overseas?
Mr. Kutz. Iraq, yes.
Mr. Platts. To Iraq.
Mr. Kutz. Yes.
Mr. Platts. That seems an example of a pretty poor
approach. How often has that happened and are we working to
ensure it never happens again, because of the improvements you
have made? That is something that if a soldier is paid and you
are deployed, I think it is a fair assumption for a soldier to
make on being paid appropriately. Their concern should be
fighting the war, not getting paid. That is back here.
I understand errors are going to happen in that pay, but
the fact that we then compounded the error by actually
beginning debt collection against soldiers who were deployed in
Iraq. Can we expand on that? I am not sure who is going to best
be able to respond, Mr. Shine, if that is you or the Secretary,
who would best be able to address that specific case?
Mr. Argodale. Sir, I am not familiar with the specific
entitlements that may have resulted in an overpayment and a
collection action, but I can tell you that we have been very
proactive with respect to training soldiers and educating them
on what the entitlements are and the proper methods for filing
a travel claim and the things that they can expect to be
reimbursed for.
One of the major issues that we corrected with respect to
the findings in the GAO audit is the issue of meals, and
whether meals are reimbursable or the soldier has to pay out-
of-pocket. All of the mobilization orders now have a statement
that clearly states that meals will be provided at no cost to
the soldier. In situations where soldiers are not housed in a
government facility on-post, and they are off-post somewhere,
meals that are consumed during non-duty hours are reimbursed.
We also tell soldiers that they need to have a statement of
non-availability in order to be entitled to certain types of
reimbursements. So we think that an up-front kind of an
education process is the best remedy to ensure that soldiers
understand what they are entitled to and what they are going to
be reimbursed.
Mr. Platts. I agree. I think the steps that you are taking,
such as making it clear on those papers that reimbursement,
those meals being provided, those are all very important steps.
Somehow, though, in at least this case reference, and I am not
sure how common this is, and that is why I asked the question.
I hope it is not. Something was filed and reviewed and
authorized, acted on and paid, and then there is either,
correctly or incorrectly, a rescission of that authorization
that resulted in an effort to recoup the money. Even if it was
an accurate rescission, the fact that we would begin debt
collection while soldiers were deployed is to me unacceptable.
Who would actually have begun that debt collection? I am
not sure what office. Would that be DFAS?
Mr. Shine. Sir, what happened in this particular case, and
it was somewhat unusual because the individuals, as Mr. Kutz
indicated, were from Georgia and at the time they were actually
activated to go to Fort McPherson, GA. What ended up happening
was there are certain restrictions in the joint travel
regulations that preclude an individual from drawing temporary
duty allowances when they are actually able to live at home. In
this particular case, each installation has to make a
determination installation-by-installation, by the installation
commander as to what the commuting distance is going to be
considered whether or not you are entitled.
What happened, sir, was we were paying these people full
per diem allowances. There was a decision made subsequently by
the installation commander at Fort McPherson that individuals
in certain counties were considered to be within the local
commuting distance and therefore not eligible, and therefore
these payments that had been made were then determined to be
improper payments and therefore they were collected.
I fully appreciate what you are saying about the fact that
when people are going into harm's way and these collections are
being made, but it was a normal administrative process that was
just, if you will, going through. Once the individuals were
identified, we then processed the collection actions. That is
actually how it happened, sir.
Mr. Platts. Are there any safeguards in place today, one,
to have that administrative decision that this is a commute, so
reimbursement, there is no eligibility here, up front, so that
we are not repeating that type of problem? Because it sounds
like it is still a local installation decision, but how are we
ensuring that decision is made up front by that installation
commander and not after the fact to avoid this. And also, what
is still the position today if there is an overpayment as far
as debt collection, if it is a soldier deployed? Because it
seems to me that an effort to identify and work with the
soldier, but it seems that we were kind of like, well, whether
you bore responsibility for the error or not, it is your
responsibility and we are coming after you, is how it sounds.
If I am wrong, I am glad to be corrected.
Mr. Wallace.
Mr. Wallace. Yes, sir. From a policy position, in direct
response to this particular case, we have gone back out in our
policy guidance to all installations and all units to reiterate
what the joint travel regulation says and what the law says,
and to provide them with vignettes that would allow them to
differentiate when this person should be reimbursed and should
not.
Mr. Platts. So you have taken a proactive education
approach, and that includes, too, installation commanders?
Mr. Wallace. It goes to every unit and every organization
in the U.S. Army.
Mr. Platts. I think what is good that it has come out of
the GAO report is that they have identified issues, examples
like this, that I appreciate that you are seeking to respond to
these cases and learn from them and try to guard against a
repeat of that type of problem. To me, when I read the report
and the testimony it is that on the one hand I am displeased
because of what we put our soldiers through, but I am also
encouraged by the efforts to correct the wrongs of the past to
make sure we do not repeat them in the future. That is where I
hope as a result of this hearing, we can help continue to push
in that right direction.
So I have more questions, but I want to yield to the
ranking member, Mr. Towns.
Mr. Towns. Thank you very much, Mr. Chairman.
Let me ask you, Mr. Shine, is DFAS' problem human capital
or is it technology barriers?
Mr. Shine. Sir, I would answer that we are probably a
little bit of both. We actually operate a semi-automated system
that we use today. The reason I call it semi-automated is
because it requires paper to come in and then we inter-date it
into a system that automates the computation of what the travel
reimbursements are. So we are in fact involved with that
process and that is in fact the payment system that is used
today to pay the individuals that we are describing, not only
for the mobilized Guard and Reserve, but also it is what is
paying the active duty for regular temporary duty travel as
well.
The issue that DFAS had in terms of human capital, sir, I
would say really was one that occurred in approximately May
2003, when we saw a huge surge that overwhelmed our capability
for on-staff personnel. We knew that this was directly related
to the global war on terror. We anticipated that this would not
be something that would continue ad infinitum. So rather than
going out and hiring full-time permanent Civil Service
employees, we worked with the Army.
The Army gave us money to hire contract personnel because
we viewed this as a short-term mission. The Army also was very,
very helpful in actually going out and getting Reserve and
Guard units whose primary mission is to do finance, who
actually came on board for their active duty mobilization, came
to DFAS and actually sat and computed vouchers to help out with
this process. The Guard and Reserve were only there for 1 year,
but the good news is that with the continued support of the
Army by giving us the dollars that we need to maintain the
human capital, we have now at DFAS the right number of people
on board, we think, to take care of the vouchers that are
coming in such as we can maintain the 8-day turnaround time.
Mr. Towns. So you really feel that as we move forward there
will be less chances of these kind of occurrences where people
will not get paid or will not be able to travel, will have to
wait for reimbursement? You really feel that based on what is
in place now that a lot of this will just disappear?
Mr. Shine. Sir, the other dimension of the human capital
issue has to do with the individuals that are actually
completing the vouchers and their chain of command who are
reviewing those vouchers. I would really prefer, if I could, to
defer that question to the Army under their domain, because
there is a human capital issue there on whether or not the
voucher we get is in a status that can be computed or not.
Mr. Towns. Right. Let me ask you then, Mr. Argodale, are
the policies clear? Should they be revised to be able to give
the kind of instructions that need to be put forth in order to
eliminate some of the things that are going on? It seems to me
that there is a lot of stuff here that is a little fuzzy.
Mr. Argodale. Sir, I would agree with you. As a traveler
myself and a person involved in the finance and accounting
business in the Army, I can tell you as both a traveler and a
finance person, that the rules are fuzzy and there is some
confusion. It is compounded by the fact that the preponderance
of the soldiers who are involved in the case studies are not
what you would call professional travelers. They travel very
infrequently and their understanding of filing the claims,
filling out the forms is very limited.
What we have done to correct that is undertaken a massive
education and training program to enlighten these folks with
respect to how to fill out the vouchers. We train their
commanders in what to look for in terms of how to properly
compile and complete and submit a travel claim. We explain to
them what the entitlements are and what they can expect to be
reimbursed for. We have corrected problems associated with
mobilization orders to clarify meals and lodgings will not be
charged to the soldier, they will be provided at no cost to the
soldier.
We review on a weekly basis metrics that DFAS provides that
identify the common types of mistakes that are seen in travel
claims that cannot be computed. We work with DFAS and with the
Guard and the Reserve components to improve the training
materials, to incorporate the mistakes we see in the actual
travel claims that are filed.
So Mr. Shine is correct. On the one aspect of it, the human
capital, pertains to the folks available to actually process
the claims, and then on the other side there is a human capital
dimension with respect to the traveler actually filing the
claim. During the period of the study, we were not doing a real
good job, frankly, in educating people on how to file a claim
and what they could expect to be reimbursed for.
Mr. Towns. Right. Mr. Wallace, what effects have the
reimbursement problems, have you identified that, I guess I am
more concerned about the morale and of course the family
circumstances. I can see all kinds of things happening here as
a result of this. I can see the morale being low. I can see
family situations in terms of that can treat problems in terms
of the family itself. Domestic problems I am talking about.
What have you seen in this area, or am I overreaching?
Mr. Wallace. Yes, sir. What I can tell you from the Army G-
1 who compiles all of the recruiting and retention stats, I can
tell you that all three components of the Army are meeting
their retention goals. What that tells me as a former colonel
in the U.S. Army myself and a commander once upon a time, is
that the people that are with us now are staying to the
appropriate levels that we need to man the all-volunteer force.
What we are seeing on the other hand, though, with
recruiting is that we are seeing a fall-off of our ability to
gain the numbers that we need. Part of that deals with the time
of the year that we are in now, and I am sure part of it deals
with the things that you mentioned. But as far as the people
that are in, and I know the National Guard has hit its marks
every month this year for retention. So that tells me that the
people are staying with us.
Mr. Towns. I see the red light is on, Mr. Chairman. I yield
back. We will have another round?
Mr. Platts. Yes, sure. Thank you, Mr. Towns.
Mr. Towns. OK. Thank you.
Mr. Platts. A followup on the Georgia Guard case, and again
from what we learned. I think that is one of the important
aspects of our past interactions and again this hearing today
is learning from the actions of the past and how to improve
them in the future.
The case where the per diems were paid and then as final
settlements were made, the installation has decided, I guess it
was a 50-mile distance for being eligible. Was there any
individual treatment of those cases? What I mean by that is
were some soldiers, and I do not know the specifics of these
cases, but they might have decided, well, 50 miles, I can drive
that. I commute 96 miles each day for session each way.
But if I am being reimbursed and I am eligible, I am going
to take a hotel at least Monday, Tuesday, Wednesday, Thursday
for the days during the week, depending on what the schedule
is, and they actually did have out-of-pocket expenses under the
belief that they were eligible. Was there any examination of
the individual soldiers? Or was it the policy as of when we
finally settled it was 50 miles or not, and no accounting for
those who maybe actually had out-of-pocket expenses for lodging
or meals in good faith, under the belief that they were
eligible?
Mr. Shine. Sir, I believe that there are portions of your
questions that I do not know, but there are some portions that
I think I can address.
Mr. Platts. OK.
Mr. Shine. First of all, the 50-mile rule, while that is
commonly used, in vogue commonly throughout the Department of
Defense, is actually not the proper regulatory reference. In
this case, that is not what was applied. It was actually a
county-by-county determination that was made by the
installation commander. But nonetheless, you have a situation
where on the county line, you could have an individual living
on one side of the road who was considered within the commuting
distance, a person across the street that was out.
What we did find, sir, was even in those cases where
individuals were determined after the installation commander
made the decision to be within that normal commuting distance,
there were times when based on their duties they were
considered to be called what is known as ``essential''
personnel, which meant that they had to remain at Fort
McPherson for a longer period of duty. In many cases, they had
to spend the night there. In those cases when they were
required for their duty to be present and not to be able to go
back to their normal home of residence, then those per diem
entitlements were allowed to be paid.
But in terms of your larger issue about how it was dealt
with individually for each member of that unit, I am sorry,
sir, I do not know, but I will be happy to research that and
give you a more complete answer.
Mr. Platts. I think it is something worth looking into to
learn from the past because, and it has been too many years
since I was in law school and practiced law, but the principle
of estoppel I think is maybe what I am thinking of here, where
you in good faith relied on what you were told and to now be
punished for complying with what you were told up front, and
retroactively be harmed, that if they in good faith relied on
it and had actual out-of-pocket expenses, so that we are not
talking about a windfall here, that there is a good case to be
made that they should be able to account for them.
How they would retroactively account for them if they were
not being required to up front is another issue, but I think it
is something worth looking at. It really goes to that issue of
the ombudsman where you individualize these cases because there
are going to be extenuating circumstances as in this case,
where you found those where they were essential, that is an
extenuating circumstance if they are required, but maybe they
were not required, but hey, I am going to be reimbursed.
Instead of driving home tonight, I am going to stay, thinking I
am not going to have out-of-pocket.
So I do appreciate your looking at that and giving us a
general response if you would.
Mr. Shine. Sir, I would be happy to do that and provide you
with a more detailed response. I would also like to let you
know that what you refer to as estoppel, in the Department of
Defense we actually have a waiver and remission process. So it
is possible for an individual to submit a waiver and the
circumstances that you describe, which is that I relied on what
I thought was to be solid information from a government
official, and if in fact individuals can produce receipts that
they actually incurred expenses relying on that information,
that has been the grounds in the past for us to consider and
approve a waiver process.
Mr. Platts. In that sense, then, an individual appeal
ability?
Mr. Shine. That is exactly what it is, sir.
Mr. Platts. OK. That is good to hear, because if there was
not actual out-of-pocket expenses thought to be reimbursable,
and we do not want a windfall, I understand that, that we do
not have that windfall. Even in that instance, though, the fact
that in the end we suspended the efforts to have collection
until the soldiers returned, that would kind of be a general
practice that we try to put in place. I will tell you, I will
be visiting troops probably in the next week-and-a-half or so
overseas, including Iraq, I believe, as the schedule is
planned, but the one thing I hear, whether I have been with
troops in Iraq, whether I have been in Afghanistan or Bosnia,
is the most common request I have heard from troops is just do
right by my family back home so I do not have to worry about
bills and my family, and I can just do my job out here on the
front.
I appreciate your looking at it further because if we have
guys on the front lines and they have a debt collection and
maybe it was a windfall, and now we are going to necessarily
collect it, but they have already spent it because they did not
know it was a windfall. That creates some financial hardships,
that we go out of our way to account for that. And it sounds
like there is an effort to do that and that you are learning
from these actions of the past. So I appreciate your doing
that.
So I do not forget from a procedural standpoint we do have
a written statement from our full committee Chair, Chairman
Davis, that we will submit without objection for the record in
today's hearing.
We have maybe another 15 minutes or so. We have those floor
votes done, but I have another markup going on in the Education
Committee that has votes coming up here as well.
Mr. Wallace, I want to touch on the place, when I looked at
the numbers and the spike that occurred in 2003, I guess, and
where Mr. Shine and your staff, you got overwhelmed with the
number of cases you were being asked to handle. There cannot be
an exactness, I guess, to what those numbers were going to be,
but there certainly should have been some lead-time of here is
how many troops we are planning on mobilizing, Guard troops.
How would that process work through the chain of command
and communication to DFAS to say, 3 months from now we are
going to have this huge number being called up, and so you had
better be ready with staff because you are going to get
inundated subsequent to that mobilization. How did that happen
then and how is it happening different today so that we are
better communicating? I think that would be something more of a
policy that you would be looking at.
Mr. Wallace. Sir, actually a tad out of the G-1's lane and
really a G-3 question, who is responsible for the mobilization
of the Army of all components, and tasking through the force
providers, those organizations that will meet the requirements
from General Abizaid and the combatant commanders.
Your question is good, though, should we have known that we
were going to demobilize or we were going to fill vouchers and
field that many vouchers at one time is a very good question.
From the Army's standpoint, we probably should have been able
to foresee that.
Mr. Platts. That is what jumped out to me is that it at
some point should not have been a surprise of how many troops
were mobilizing and then from then forward the number that were
going to be demobilized and the new mobilizations, and it is an
ongoing process. I mean, as we speak that process continues.
Mr. Wallace. One of the things that we have instituted as
we have gone along is a Saturday video-teleconference with the
people in-country, dealing with them. Mr. Argodale's
organization has a representative that attends that every week
where we talk about mobilization issues and we talk about
demobilization issues. We run through all of the numbers and
the different organizations by unit of who is being mobilized
and who is being demobilized, and the issues that we are seeing
while we are going through that. I would see that as a conduit
for sharing information that could help us prevent this in the
future.
Mr. Platts. Again, my hope is that we are learning from the
past. I would imagine, Mr. Shine, you and your staff got a
little overwhelmed as the numbers of vouchers started rolling
in, compounded by the system that was in place that as they
were sent back for corrections and came back a second time or a
third time. The analogy I would make, we see that right now
with immigration services where because they are not able to
timely process the applicants for visas and things, they are
giving temporary extensions which take more manpower, which
then just compounds the casework for the same amount of staff,
and it is just a snowball getting bigger and bigger.
Are you comfortable from a manpower standpoint of where you
are today and the infrastructure changes in the communications,
that you are positioned to, under the system you have, to deal
with the volume of mobilizations and demobilizations that you
are dealing with?
Mr. Shine. Sir, I would say as a general rule the answer is
yes. The Army, I think, as Mr. Wallace indicated with the Army
operations under the G-3, is trying to do the best they can to
get word out to not only the financial community, but all the
other support communities, medical, legal, that are affected by
mobilizations and demobilizations.
Where we actually have to get involved with a little bit
more intelligence is the fact that if an individual is going to
be mobilized and sent to either Afghanistan or Iraq, in all
likelihood, sir, they are not going to file a voucher until the
completion of their mobilization tour, so in the final account
process, that is one.
If in fact they get deployed to the United States, and that
is they actually come on an active-duty tour, but stay in the
United States, in many cases they are staying in a place where
they are going to be incurring expenses and they are going to
have to be reimbursed every 30 days so they can pay their
credit card. That same individual only counts one for
mobilization purposes, but now from my standpoint, I am looking
at paying them 12 times.
Mr. Platts. Twelve times, right.
Mr. Shine. And so that has to be factored into the overall
equation. But sir, I would just say that while it was a huge
spike and I think that we could probably take a hit for not
being more attentive to it, I think that with the work we have
done in partnership with the Army over the last 18 months, to
give us advance information not only for travel, but remember
that when we were here briefing you in July on the pay issues
for the U.S. Army Reserve, we now have put into place specific
provisions where we get advance notification on units that are
mobilizing and demobilizing, so we can check to make sure that
all their active duty pay entitlements are started when they
should start, and that they are terminated when they leave
active duty. So all we are doing is taking that same
information and using it to predict travel reimbursements as
well.
Mr. Platts. And that proactive approach is so important
here.
Mr. Shine. It is working very well.
Mr. Platts. Good to hear.
Mr. Towns, did you have other questions?
Mr. Towns. Yes, I do.
Mr. Platts. OK. Mr. Towns.
Mr. Towns. Mr. Kutz, in your testimony, you state that DFAS
has added over 200 additional staff to assist with the
increasing paperwork and voucher activity facing the agency.
One concern I have is that adding people who may not be well
trained might not be the solution to the problem. It might even
further exacerbate the problem. With that said, what have you
been able to identify, any training or development efficiencies
among the newly added staff?
Mr. Kutz. I think, and Mr. Shine could probably add to
this, that initially when they had to hire several hundred
people in a very short period of time, that was a major
challenge for them. I think as time has passed, they have been
able to train some of those folks and get them up to speed. It
is a very complicated system, actually, to understand all of
the entitlements and the various orders and the types of paper
that come in. Again, one of the symptoms of having a very
paper-intensive process is when you have a volume increase
which was like 3,000 vouchers a month up to 50,000 vouchers a
month, the system can come crashing in and you just have mounds
of paper to deal with and that requires significant numbers of
people. But I believe that initially they had training issues,
but they have worked hard to address those.
Mr. Towns. Is anybody anywhere working to simplify this? I
just have problems with the fact that somewhere along the line
that we cannot simplify it. There are all these, again, these
different gray areas. It seems to me that some way or another
we should just make it clear as to what is and what is not. I
mean, is anybody looking at this in a very serious way?
Mr. Argodale. Sir, I will----
Mr. Towns. I served in the military, too, incidentally. Go
ahead.
Mr. Argodale. Several years ago, the Department undertook
an effort to simplify travel. This was kind of the precursor to
implementing the Defense Travel System. A couple of things that
we did was eliminate the need for receipts for certain types of
claims. We eliminated the payment on a pro-rated basis based on
the time of departure and the time of return. In the immediate
case, we clearly now stayed on mobilization orders that
soldiers are entitled to, meals and lodging at no cost or they
are entitled to reimbursement for meals consumed when they are
not in government lodging. So those kinds of things have helped
to simplify the process.
I agree with you, sir, it is a very paper-intensive and a
very confusing process. It is particularly difficult for folks
that are navigating it for the first time. There are a lot of
errors that can happen. But the education programs, the
training that we provide, in fact, the Guard provides as part
of the training package a template of how to file the claim,
what can be expected to be reimbursed, and they even provide an
envelope that is addressed that the soldier can put the claim
in and mail the claim to Indianapolis to be computed and paid.
And then the ombudsman cell, which as Mr. Shine mentioned,
is co-located with the entitlement folks working for him at
DFAS, is there as kind of a backstop, a quality control kind of
a mechanism to work in conjunction with the DFAS entitlement
staff to ensure that the paperwork is properly assembled and
prepared, and to work with the soldiers to help them understand
when there is an incomplete claim that additional information
needs to be provided so that we do not create, as the GAO
called it, this business of churning and rejecting the same
claim back to the same soldier multiple times.
Mr. Towns. Let me ask another question. Based on the
problem here, I can see a lot of soldiers having problems with
their credit. What is being done about that, because I just got
my credit report the other day. I know in terms of how
important that is. So what is being done about that?
Mr. Shine. Sir, let me try to address that if I could. What
I would like to do is reference you back to this huge spike
that I was talking about, where we in the Department knew that
we were not going to be able to have, we had so many vouchers
on hand and we had not yet gotten our full staff on board. Most
of these individuals incur their expenses through the
government travel card which is currently being done through
Bank of America. We contacted Bank of America. We explained the
problem to them. We asked them directly, would they be willing
to forego and suspend collection action for up to 90 days and
they said absolutely yes. We estimated we could get out of the
predicament we were in within 90 days and as a matter of fact,
we were.
So the bank cooperated in that case. That obviously was
what I would call sort of an extreme case where we went to the
bank for the entire Department of Defense. Now, we have
individual situations, as the GAO has described, where while we
are confident we can process a voucher in 8 days, if in fact
the voucher comes in without complete documentation, we have to
send it back, or if for some reason the traveler upon
completing the travel delays in submitting the voucher, there
are possibilities that we could now be going beyond 30 days
when that individual's bank statement is going to be due.
There is a provision for individuals who have not yet been
reimbursed by the Department to notify the Bank of America and
to suspend the fact that payment is due and they are willing to
do that for a period of time. Then what we would like to have
happen in that case is either directly to DFAS or through the
ombudsman program that we just described, for that to be
elevated for the individual traveler so that we are aware that
this individual now has a problem that could impact on their
credit, so that once we get the voucher ready to pay, we can
move that to the front of the line so that we can prevent those
very kind of situations from occurring.
Mr. Towns. OK.
Mr. Chairman, I yield back. Thank you.
Mr. Platts. Thank you, Mr. Towns.
That type of coordination is exactly what we are after, an
acknowledgment of the challenges of what happens with DFAS and
the system that impacts the soldiers and their families, and we
are trying to address that in a proactive way.
I think I have 8 to 10 minutes before I have to run off
with these votes. I want to get into the defense travel system.
A couple of things concern me here are long term, that seems to
be the solution to get away from this labor-intensive process
and a more efficient technology-driven, and will allow for a
much more seamless process here. The picture, though, on that
side does not look real promising. My understanding from the
report is that as of the end of 2003 we spent $288 million
already, with the estimate of needing another $251 million to
try to complete it by 2006. But even if we do complete it, it
is not going to be able to truly account for all of the
processes that you are responsible for as it is currently
structured.
So I guess I would open it up to all four of you, if you
can comment on your understanding of where we are with the DTS
and once we complete it, where we will be as far as truly
solving these problems. I will add in the other thing that
jumps out to me is that if I understand the way the system is
intended to operate, because of the issue of DTS and the issue
of TDY payments versus actual mobilization, that you are going
to be relying on this new DIMHR System to transmit information
to DTS to then act on. And that we really do not know when that
is going to be up and running to have the information available
to transfer.
So it is a big issue and a lot of different aspects to it,
if each of you would want to comment on your perspective.
Mr. Shine. Would you like me to go first?
Mr. Platts. That would be great. Thank you.
Mr. Shine. DTS as you have indicated is in fact in
operation today. It is in operation at over, I believe, 4,000
sites and the current deployment plan is to have DTS fully
fielded to all of the Department sites by the end of fiscal
year 2006.
Mr. Platts. And that still holds today? That is the
schedule that we believe we are on?
Mr. Shine. Yes, sir.
Mr. Platts. OK.
Mr. Shine. But your question actually identified that while
that might be fielded to everybody in the Department of
Defense, the reality is today that the DTS is limited in
everything it is able to do. I actually agree with Mr. Kutz's
statement that we are going to be processing in this semi-
automated paper-based mode for definitely a period to come. It
is hard for me to give a specific date on it, but I agree with
his contention that is going to continue to exist.
There are releases that are planned over the next several
years from the DTS program management office that will
incrementally address these issues. So that right now, it is
primarily doing what we would call routine temporary duty, and
the type of mobilization temporary travel that we are talking
about is not in that category. There is a process moving toward
doing exactly that and the DTS PM's office is working with each
of the military departments and the specific issues, sir, you
referenced to DIMHRS, which is the migratory military pay
system, is because that is both pay and personnel. So it will
have the capability to produce military orders. It is working
right now with each of the military departments, the Navy, the
Air Force, the Army and the Marine Corps, because each of them
have their own unique order-issuing capabilities today, and
trying to standardize that process is why this is an iterative
process.
If you would like specifics on exactly which future
releases are going to contain which additional functionality,
sir, I would be happy to take that question and provide it for
the record. I just do not have it right now at the tip of my
fingers.
Mr. Platts. OK.
Mr. Argodale. Sir, in the Army we have DTS currently
deployed at 34 major posts, camps and stations. The
functionality in DTS does not support the requirements of the
Reserve components. Based on my understanding of the scheduled
deployment release, functionality will be provided sometime in
2006.
I currently use DTS myself and I am the typical business-
type of traveler. I can tell you from experience, sir, that it
is a cumbersome system to initially become accustomed to, but
once you have done a couple of trips inside of DTS, you sort of
get the hang of it and then it becomes a routine type of a
process.
It is very efficient. It tells you as a traveler what you
are entitled to before you leave, and it is very clear with
respect to each day giving you an itinerary and what you can
expect to be reimbursed in terms of meals, lodging, that type
of information. And then on the return trip when you actually
file the claim, it tells you how much you will be reimbursed.
It shows how much should be split paid to your credit card
account, so that you do not have to write a paper check to make
the credit card payment, and then how much will be reimbursed
back to you for things that you did not charge on your credit
card.
Then typically you are reimbursed within 24 to 48 hours
after the claim has been certified by the certifying officer
and submitted for final computation of payment. So it does do
very efficiently what it is designed to do currently, and as a
customer of DTS, the Army is looking forward to the
functionality being added for the Guard and Reserve some time
in 2006, so that we can bring the Reserve components on board.
Mr. Platts. One of the statements you made concerns me in
the sense of that initial understanding of the system and that
cumbersome, because your typical traveler maybe under DTS now,
I would imagine not in comparison to a Guard or Reservist, is
not going to be regularly using it, but be using it and may be
not using it for 6 months, or using it and be deployed for a
year. It is going to be different than a weekly or monthly
basis.
Is there a plan in the Guard and Reserve for an intense
education component for those who are going to be using to try
to overcome the cumbersomeness of the system?
Mr. Argodale. When we deploy DTS to a post, camp or
station, we have a very regimented deployment process that
includes business process changing. We look at the current way
business is done and then we look at how business processes
need to be changed around DTS. We also provide significant
training for the users, both the approving officials and the
travelers. We leave onsite a help desk person. I think
currently we have about 50 or so full-time help desk people
supporting the 32 sites that we have currently deployed. We are
looking at ratcheting that up as we continue to deploy.
But sir, I agree with you that this is going to be a
challenge for the infrequent traveler, not only in terms of
training, but the recurring refresher-type training that they
are going to need.
Mr. Platts. The analogy would be in my office, we have a
great case management system that my staff, you know, they can
get on there and pull up information. When I get on it and try
to find a specific case, it takes me a long time because I do
not use it every day like they do. That is my worry, is that we
fine-tune it and that education, and learning from the
challenges of those using it today and try to improve it for
when we actually go to the Guard and Reserve.
I want to get Mr. Wallace and Mr. Kutz in here on this
broad issue and how you want to comment on your perspective on
DTS and how it will interact with DIMHRS.
Mr. Wallace. Sir, I am kind of a customer of DTS from this
side, but from the policy side some of the things that we are
doing that will help set us up for DTS, for example, setting
standard data elements for statements of non-availability and
such, that are being proliferated throughout the Army will help
us in the transition as we move toward DTS, as we start
fielding it.
So from a policy standpoint, we are trying to standardize
across not only the Army, but the services, with the different
travel entitlements and such.
Mr. Platts. And those policy directives, are they shared in
a way that those who are working the DTS system kind of
incorporate those and ideally from a programming standpoint to
have them, like now you stamp that order, that policy change
where an order is changed as far as their entitled to
reimbursement for food, no out-of-pocket expense for the food.
That is something that goes on their order up front. Is that
something that we translate to computer programming that it
will know that? Is that something that we can hope to see?
Mr. Wallace. Sir, I do not have any knowledge of an
automation system that would be in the plans. We would have to
take that for the record and come back to you.
Mr. Platts. OK.
Mr. Kutz.
Mr. Kutz. I think it is important to give you a little bit
of historical perspective here. DTS has been underway for about
8 years. It was initially intended to provide TDY travel
services for the Department in 1999. So we are in 2005 right
now, and we are still rolling it out. So with respect to
automating and integrating the authorizations, which is the
unique part of this for the Guard and Reserve soldiers, when we
looked for information on that, it seemed to us that it was
just barely on the drawing board, if you will. We did not see
things like specific requirements, testing plans, pilot plans,
schedules etc., to roll that out.
So I am very skeptical that DTS will be capable of
providing the kinds of functionality necessary for mobilized
Guard and Reserve soldiers anytime soon.
Mr. Platts. That is my worry, that we are going to have
spent $500-plus million and get to 2006 and find that, well, it
was well-intended, but it is not really doing what we wanted to
alleviate, that heavy manpower and the labor-intensive, and we
are going to be starting over and be 11 years after when it was
first envisioned as a solution, and be $500 million down and
not have the long-term benefits that those dollars were
intended for.
So my hope on that is, as the coordination and dialog has
occurred on the pay issues and now on travel issues, we clearly
have made some important improvements and significant
improvements for the good of those men and women in uniform and
how we are reimbursing them. That has come about through
extensive, I think, interactions between GAO, the Department,
DFAS, all working hand in hand, is that we continue that very
proactive approach and take the good that has occurred and
build on it so that at the end of the day in 2005 and 2006 and
beyond, that, you know, the types of cases that were found in
the case studies are truly the exception and never again the
norm. I think we have the chance to do that if we remain
diligent in our efforts.
Mr. Towns, did you have any other questions or comments?
Mr. Towns. Just a general question. Is there anything that
we can do to assist this process as members of the U.S.
Congress? Is there anything we can do?
Mr. Argodale. Sir, I think what you are doing right now in
terms of holding this hearing, the hearings on the pay, the
quarterly updates to the staff, the collaboration with the
committee staff and the GAO, those things need to continue to
shed the proper light and perspective on the issues.
I think in addition to some of the issues that have been
brought up in the GAO reviews and audits with respect to pay
and travel, we also may want to take a look at where we are
with some of these automated solutions in terms of DTS and
DIMHRS to ensure that we are adding the proper functionality,
that we are going to get the benefits that we need from the
investments, and that the capabilities will be there to meet an
Army that is an expeditionary joint type of Army as opposed to
an Army in a garrison.
So I think we need to look at those types of things and
continue to quarterly updates, the hearings and keep the focus
and the interest on these types of issues. Because as Secretary
Harvey has said, he expects perfection when it comes to paying
soldiers. As I talk to soldiers and their commanders, they
really only want two things when it comes to pay. They want to
be paid the right amount and be paid on time. It is very
important that this body, the Congress, and that my colleagues
back at the Department, the GAO, we all keep that focus in
mind, paying soldiers the correct amount and paying them on
time.
Mr. Towns. Right.
Yes, sir?
Mr. Kutz. Yes, I agree 100 percent. I think that you should
not walk away after today and be done with this. I think that
this is something that in a collaborative way working together,
certainly we would be part of that, and the folks at the table,
and this subcommittee and the full committee, because we all
want the same thing. We want to see the soldiers taken care of.
We want this to no longer be a real source of frustration for
them and their families going forward. I think what you are
doing today is the right thing.
Mr. Towns. Any other comments?
Mr. Shine. Sir, I would just say that I think what the
subcommittee and the full committee have done has put a laser
focus on this issue. I think as a result we are now seeing
better pay for our service men and women, and that is really
what it is all about. We thank you for your participation.
Mr. Towns. Thank you.
I yield back, Mr. Chairman. Thank you very much.
Mr. Platts. Thank you, Mr. Towns.
There are two ongoing, as the Secretary referenced, keeping
kind of the focus here with GAO on DIMHRS, with the
subcommittee review ongoing as well as on the business systems
modernization project or program that we have asked, and GAO is
working on, to continue the focus here, and on a broader sense
with DIMHRS.
I apologize. I have votes in the Committee on Education I
am going to run off to. I do want to say two things, one to our
soldiers here, our men in uniform here past and present, Mr.
Towns your past service. I have not worn the uniform.
Mr. Towns. Thank you. [Laughter.]
Mr. Platts. I say openly and regularly, I have not ever
worn the uniform, and for those who are today and those who
have in the past, I know but for your service, I would not be
sitting here as a kid from York given the privilege to serve in
national office. It is because of those who have worn the
uniform in the past and those today that we are the Nation of
opportunity that we are, and it has allowed me this opportunity
to serve in a civilian capacity. I think that all of you have
set the example for all of us fellow citizens in how we need to
serve, whether that is as an elected official or just as
citizens in our communities. I certainly will do my best to
live up to the standard that each of you have set for us fellow
citizens.
Specific to this issue, I want to thank each of you and
your staffs because Mr. Shine your comment that a laser-focus,
I think that is from everybody, is that you really have taken
the challenges here and the issues that have come forward very
seriously and as issues are brought to your attention, you and
your staff have done your utmost to respond to them and to fix
whatever the problem is and learn from the past and go forward.
As you said, the bottom line is we all are seeking to work
together, that when courageous fellow citizens are willing to
go into harm's way for us, that we are doing right by them and
their families.
We have made great strides in the right direction. We do
have work to do and we will continue to look forward to
partnering with each of you and your organizations in making
sure we eventually get to that perfection that Secretary Harvey
is demanding, and rightfully so.
Again, thanks for your testimony and your time today and
your patience while we got our votes in over on the floor. We
will keep the record open for 2 weeks for any additional
information based on the questions or just from the comments,
and again look forward to continuing our work with you.
This hearing stands adjourned.
[Whereupon, at 4:10 p.m. the subcommittee was adjourned, to
reconvene at the call of the Chair.]
[The prepared statement of Hon. Edolphus Towns follows:]
[GRAPHIC] [TIFF OMITTED] T1297.051
[GRAPHIC] [TIFF OMITTED] T1297.052
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