department of defense agency financial report fiscal year 2012

Department of Defense Agency Financial Report for FY 2012
identify processes needing additional attention or correction. The added reviews, coupled
with ongoing review of deceased retiree and annuitant accounts, has allowed DFAS to
provide a more comprehensive and concise accounting of outlays in military retirement.
Root Causes. Eligibility for military retired pay ends on the retiree’s date of death. Prompt
reporting of a deceased retiree's death can help avoid delay and possible financial hardship
to surviving beneficiaries, family members or executors, who are required to return any
unearned payments of the decedent's military retired pay. The delay in notifying the payroll
activity of the death of a Military Retiree results in unavoidable overpayments to deceased
retirees. Our review of confirmed overpayments to deceased retirees in FY 2012 disclosed
that the Department recovered approximately 96 percent of the overpayments within
60 days, demonstrating the effectiveness of controls within the retired pay system once the
Department is notified of a retiree’s death.
Corrective Actions. The Department’s control processes to prevent, identify, and reduce
overpayments to deceased retirees and annuitants include:
• Validating existence of retiree and/or annuitant, if living outside the United States;
• Annual certification of existence for all annuitants
• Periodic random certifications for retirees over a certain age;
• Validating Military Retiree existence if payments are returned and/or if account was
suspended for several months due to bad check/correspondence address.
Early detection and data mining efforts, along with partnerships with other Federal and state
entities, also are used. The Department takes a proactive approach to ensure the accuracy
of Military retiree payments, routinely comparing retired and annuitant payroll master file
databases with the Social Security Administration’s death master file and periodically
comparing records with the Office of Personnel Management’s deceased files, Department of
Veterans Affairs’ database, and with
individual states with sizable retiree and
annuitant populations (e.g., Texas,
California, and Florida). Payments for
Military retirees identified as deceased
are suspended pending validation of
death or validation of continued
eligibility. The Department's expanded
definition of acceptable source
documents for notice of death has
allowed DFAS to initiate earlier
reclamation actions, thereby increasing
faster recovery of funds paid after date
of death.
DFAS Travel Pay. The FY 2012
projected improper payment rate of
5.0 percent, shown in Figure A-5,
includes random reviews of DTS trip
records for the Military Services and
A-58
Figure A-5. Improper Payment Rate –
DFAS Travel Pay
5.50%
5.00%
4.50%
4.00%
3.50%
3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
B10-41
1.91%
3.28%
5.00%
FY 2010 FY 2011 FY 2012 FY 2013
Target
FY 2012 Target 3.27%
3.26% 3.25% 3.24%
FY 2014
Target
FY 2015
Target
Addendum A