March 8, 2018 —
We determined whether the Army’s civilian pay (CIVPAY) budget process was effective. Specifically, we evaluated whether the Army adequately supported and justified the civilian full-time equivalents (FTEs) and pay requirements contained in the Army’s FY 2017 Budget Estimate Submission (BES). Budget estimates relating to personnel requirements are determined in terms of FTE employment. FTEs are the total number of regular straight-time hours worked, or to be worked, divided by the total number of hours that agencies can pay employees in a fiscal year, which are called compensable hours.
This is the second in a series of audits in response to the explanatory statement accompanying Public Law 114-113, “Consolidated Appropriations Act, 2016,” December 18, 2015. The statement directs the DoD Office of Inspector General to report on the Military Services’ civilian compensation program and civilian FTE levels. Specifically, the Senate Appropriation Committee, Subcommittee on Defense and House Appropriations Committee, Subcommittee on Defense expressed concern that the Military Services’ consistently overestimate the number of civilians that will be employed during a fiscal year, while underestimating the civilian personnel funding requirements.
The Army receives the majority of its CIVPAY funding through the Operation and Maintenance (O&M) appropriation. The O&M appropriation includes funds for CIVPAY and non-pay expenses, such as travel, fuel, minor construction, training and education, base operations support, and maintenance of weapons systems and aircraft.
From FYs 2014 through 2017, the Army reduced its civilian FTEs and non-pay O&M expenses to comply with Presidential orders; the FYs 2013, 2014, and 2016 National Defense Authorization Acts; and Office of Management and Budget (OMB), DoD, and Army policy memorandums. However, from FYs 2015 through 2017, the Army’s budgeted civilian FTEs decreased, while the CIVPAY costs increased, which caused the cost per FTE to increase substantially.
This report is a result of Project No. D2016-D000AG-0220.000.