What We Did:
The objective of this audit was to determine whether the process for activating Army National Guard (ARNG) and Air National Guard (ANG) members in response to the coronavirus disease–2019 (COVID 19) pandemic ensured that entitlements were accurately identified and processed.
What We Found:
Although ARNG and ANG officials used appropriate authorities to activate Reserve Component members in support of COVID 19 missions, the activation process did not include steps to consistently validate and accurately process BAH, FSA, and BAS entitlements. We selected a sample of 66 ARNG and ANG members and reviewed associated orders and supporting documents. We found that officials did not consistently validate the primary residence used to determine the amount of BAH entitlement for all 64 eligible members in our sample. In addition, for the members in our sample, the ARNG or ANG did not:
• validate the dependency status used to determine the amount of BAH entitlements for 34 Reserve Component members;
• validate FSA eligibility for 12 Reserve Component members;
• process FSA payments in a timely manner for 2 Reserve Component members; or
• confirm the accuracy of BAH, FSA, and BAS transactions manually entered into the payment system for 9 Reserve Component members.
ARNG and ANG officials did not validate Reserve Component members’ information that determined the BAH rate and FSA eligibility because the NGB did not establish policies requiring officials to confirm the correct BAH rate and eligibility to receive FSA entitlements. In addition, the NGB did not develop communication and dissemination methods for ARNG and ANG officials to provide all states, territories, and the District with applicable entitlement processing policies. Finally, the ARNG and ANG did not implement sufficient controls to verify that BAH, FSA, and BAS entitlements were properly paid, and ANG officials did not comply with guidance for timely processing of FSA payments. Without clear activation processing guidance and controls, ARNG and ANG members supporting COVID 19 missions are not receiving accurate and timely payments for BAH, FSA, and BAS entitlements. Specifically, the ARNG and ANG did not accurately pay 21 of 66 Reserve Component members; 15 were underpaid a total of $4,817.92, and 6 were overpaid a total of $1,536.05 for the 3 month period we reviewed. Since ARNG and ANG officials used the same procedures and policies to confirm and pay Reserve Component members BAH and FSA entitlements for other active duty missions, the issues we identified could be systemic, affecting current and future Reserve Component members. Although we reviewed activation documentation for only 66 ARNG and ANG members, any of the 44,116 members in our audit universe, or members currently supporting other missions are at increased risk of not receiving accurate and timely payments for BAH, FSA, and BAS entitlements due to lack of guidance, controls, and oversight.
Paying ARNG and ANG members accurately and in a timely manner may protect members from unexpected financial hardships and prevent ARNG and ANG officials from performing additional steps to correct overpayments or underpayments. Furthermore, inadequate BAH primary residence validation procedures could place the ARNG and ANG at risk for potential fraud when establishing members’ BAH rates.
What We Recommend:
To clarify Reserve Component members’ FSA entitlements eligibility, we recommend that the Under Secretary of Defense (Comptroller)/Chief Financial Officer, in coordination with the Under Secretary of Defense for Personnel and Readiness, update the DoD FMR, volume 7A, chapter 27 to provide definitions and clarifications for the FSA entitlement as it relates to Reserve Component members.
We also recommend that the NGB Chief, in coordination with the Director of the ARNG and the Director of the ANG, develop and implement policies and procedures to:
• require the ARNG and ANG to complete a review of proof of residency documentation when the member’s primary residency is established or changed for the BAH entitlement;
• outline the process and frequency of recertification for BAH entitlement that ARNG and ANG officials use to verify and fully document members’ dependency status;
• require ARNG and ANG officials to review and document the status of a military member married to another military member and identify which member will claim any applicable dependents;
• specify the methods for confirming eligibility and paying FSA for ARNG and ANG members; and
• establish formal dissemination and communication procedures for policies related to entitlements provided to the ARNG and ANG.
Finally, we recommend that the NGB Chief, in coordination with the Director of the ARNG and the Director of the ANG, develop and implement additional internal control procedures for the review of transactions manually submitted by the ARNG and ANG to the payment system prior to payment to ensure the completeness and accuracy of transactions.