Defense says steps taken to fix Guard, Reserve pay problems

Defense Department finance officials told Congress Tuesday that they had taken tangible steps to resolve ongoing pay problems in the National Guard and Army Reserve, but several reservists testified that the troubled system had damaged morale.

In January, senior Pentagon officials told the House Government Reform Committee that the large-scale mobilization of reservists had derailed the pay system. As a result, thousands were being overpaid, underpaid or paid late. During a hearing Tuesday before the House Government Reform Subcommittee on Government Efficiency and Financial Management, officials said the Pentagon had installed a number of short-term reforms, including a military pay "safety net" to catch mistakes.

"Within the last six months, we have collectively made great strides in improving processes and procedures within the finance community," Patrick Shine, the director of military and civilian pay services at the Defense Finance and Accounting Service, said in prepared testimony. "We are already seeing results from our action plan … hundreds of soldiers' accounts have been corrected as a direct result of this safety net."

Shine told the subcommittee that the Defense Department is looking to install a temporary pay system-called Forward Compatible Payroll-across the military by the spring of 2006. The FCP, officials said, will resolve many of the problems caused by the existing overburdened system. Ultimately, the Pentagon's solution is a single integrated personnel and payroll system known as the Defense Integrated Military Human Resources System. Last year, Northrop Grumman was awarded the contract to develop that system.

During the subcommittee hearing, however, several reservists said pay problems hurt morale in Afghanistan and Iraq, and some of the issues are still unresolved. Deployed reservists often did not receive their full pay after being activated but then received active duty pay long after they returned to their reserve status, according to the soldiers. Sgt. Melinda DeLain, a medic for the 948th Forward Surgical Team, said soldiers in her unit were constantly dealing with flawed paychecks while supporting combat operations in Kandahar, Afghanistan.

"Fellow soldiers began receiving e-mails from home regarding the inability to pay creditors," DeLain said. "As time passed without full pay, the morale of the unit fell, and the stress levels increased."

DeLain, a single mother, said her parents were forced to make house and car payments for her while her pay was being resolved. Delain said she asked personnel officers in Afghanistan how to resolve her unit's pay problems but was told the issues could only be addressed by finance units in Uzbekistan.

"Around the end of March, my mother, who was handling my bills, e-mailed me and asked about the status of my pay," Delain said. "My commander at this time e-mailed her a memorandum of record to send to my creditors requesting that they work with my mother on payment plans until our pay issues were fixed."

George Riggins, a recently retired Army major, was activated and sent to Qatar in March 2003. While deployed, he was underpaid and overtaxed, he said. When he returned to the United States, his pay returned to the correct level but did not stop after he was deactivated. He attempted to return the overpayment several times, he said, but military officials were unable to tell him exactly how much he owed.

Riggins said his family was able to handle the underpayments while he was deployed, but all military personnel are probably not in the same position.

"It is easy to see that issues such as these could be financially devastating to young soldiers whose sole income supporting their family is derived from their military paycheck," he said. "These soldiers are already deployed to the far reaches of the world, facing life-and-death decisions on a daily basis. They should not also be burdened with wondering if their spouse at home will be able to make a car payment or feed a child."

At the hearing, the Government Accountability Office released the results of a pay survey conducted for seven reserve units. More than 90 percent of personnel in the units experienced pay problems.