Interim pay system doesn't comply, GAO says

The Defense Finance and Accounting Service didn't follow legal and administrative policy, according to Congressional auditors.

Military Personnel: DFAS Has Not Met All Information Technology Requirements for Its New Pay System

The Defense Finance and Accounting Service's interim pay system has not met all of the requirements for implementation, according to a new General Accounting Office report.

In early January, DFAS determined that an interim military pay system needed to be established before all services are cut over to the Defense Integrated Military Human Resources System. The temporary system, the Forward Compatible Military Pay system, is designed to bridge the Defense Joint Military Pay System to DIMHRS.

"In moving forward with the development of the Forward Compatible Military pay system, DFAS has not complied with specific legal and administrative requirements applicable to [the Defense Department's] information technology policy," the GAO report read. "DFAS has not submitted the forward pay proposal to the responsible domain to determine its compliance with DOD's Business Enterprise Architecture (BEA), which guides DOD's investments in financial systems."

Specifically, GAO officials say that DFAS did not comply with certain aspects of:

* The Bob Stump National Defense Authorization Act of 2003, which says any investments in excess of $1 million to improve a defense financial system must be consistent with the department's BEA.

* A DOD Comptroller's memorandum from March that requires a demonstration of cost analysis, return on investment, break-even point and BEA compliance.

* The Clinger-Cohen Act of 1996 that requires agencies to maximize value and assess and manage the risks of IT investments.

"By failing to complete all required studies and analyses, DOD lacks assurance that it is meeting its goal of making quality information technology investments," the report states.

DOD officials say an interim personnel and pay system is needed because the current system is aging and the one being developed as part of DIMHRS will be implemented later than the target date of December 2006. DFAS has described the military pay system as unresponsive and fragile and a major impediment to efficient customer service.

DFAS officials agreed with the GAO recommendations to submit the interim pay system proposal to the domain owner to ensure BEA compliance, Bob Stump National Defense Authorization Act compliance and Clinger-Cohen Act compliance. DFAS must complete these three requirements and only then will a final decision be made as to whether or not investment in the interim pay system will continue.

In a letter to Derek Stewart, director of defense capabilities and management, a defense official said the entire program will be reviewed through the Business Management Modernization Program process.

"DFAS is in the process of completing the documentation and review requirements to establish whether the [forward compatible pay] initiative is a viable [IT] investment," wrote Lawrence Lanzillotta, DOD's deputy undersecretary for management reform.

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