department of defense agency financial report fiscal year 2012

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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
Department of Defense Agency Financial Report for FY 2012 WinIATS TDY and PCS for both civilian and military vouchers computed and disbursed by DFAS. (Travel disbursements made outside of DTS are also included in Table 4 footnotes.) The DFAS Travel Pay improper payment rate increased from FY 2010 primarily due to (1) improvements in the DFAS post-pay review process, and (2) a WinIATS processing error for Military PCS vouchers that truncated social security numbers. The latter are considered “technical” improper payment errors, because travel reimbursements are not to be made without a complete social security number. The cause of the WinIATS errors is under review. Errors in the traveler’s request for reimbursement and Approving Official (AO) lack of proper review and approval of such requests resulted in nearly all of the errors detected during the random reviews of travel payments. DTS Root Causes. The primary reasons for DTS improper payments include: • Per Diem (40 percent): The Department paid lodging incorrectly, reimbursed the traveler lodging expenses not validated by receipts, and/or paid meals at an incorrect rate. • Reimbursable Expense (35 percent): The Department incorrectly paid airfare, non-travel related expenses, and/or rental car expenses. • Missing Documentation (25 percent): The Department reimbursed lodging, airfare or rental car expenses without a receipt. DTS Corrective Actions. On a quarterly basis, DFAS provides the Defense Travel Management Office and DoD Components with error trend reports. The DFAS post-payment review personnel give presentations at various DTS training sessions and brief senior service executives on these post-payment review statistics, trends, and input errors. In addition, any improper payments identified are forwarded to the appropriate Debt Management Monitor for establishment of debt and recovery of overpayments. WinIATS Root Causes. The primary reasons for WinIATS improper payments: • Improperly completed travel voucher (82 percent): Claim paid with incomplete information to include missing Approving Official (AO) signature or social security number (SSN) on DD Form 1351-2. • Per Diem (11 percent): Per Diem/Meals & Incidental Expenses and Lodging paid at the incorrect rate, not at all, or when unauthorized. • Reimbursable Expense (4 percent): Airfare, household goods storage, and lodging tax paid incorrectly or not at all. • Other miscellaneous (3 percent.) WinIATS Corrective Actions. The DFAS has established an extensive set of preventative and monitoring actions to prevent improper payments, including: • Post-payment reviewers meet monthly with travel pay operations personnel to discuss findings and preventative measures. A-59 Addendum A
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