Civilian Pay – Army

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Program level Payment Integrity results

Sponsoring agency: Department of War

PROGRAM METRICS

$13,980 M

in FY 2024 outlays, with a

99.7%

payment accuracy rate

PROGRAM METRICS

Did not report

in FY 2025

  • Improper payment estimates over time
    View as:

    Chart toggle amounts:
    Proper payments
    Overpayment
    Underpayment
    Technically improper
    Unknown

Payment Integrity results

  • FY 2024 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    10/2022 - 09/2023


    Confidence interval:

    90% to <95%


    Margin of error:

    +/-0.11

  • Actions taken & planned to mitigate improper payments

    Mitigation strategy Description of the corrective action Completion date Status
    Training
    The majority of the technically improper and unknown payments were due to Standard Form (SF) 1190s with missing authorizing signatures. SF-1190s substantiate overseas entitlements like the Living Quarters Allowance and the Foreign Post Allowance. The U.S. Army Civilian Human Resource Agency (CHRA) provided a directive for all civilian pay personnel offices to ensure that block 25 of SF-1190s requesting reconciliation of expenses and block 26 on all SF-1190 forms are signed by their Command partners. This is a requirement aligned with the Department of Defense Financial Management Regulation Volume 8, Chapter 3, subparagraph 4.1.1. This mandate will prevent overseas entitlements from paying out to an employee without a properly signed SF1190; thus, substantially reducing (if not eliminating), technically improper and unknown payments in the coming years. Any SF 1190s that are currently being processed will be quickly coordinated with Army Commands to ensure the forms are correct. CHRA will continue to review and correct existing SF 1190s, and coordinate with Command partners to resolve discrepancies as they are identified.
    The corrective action was not fully completed this reporting period
    Not Completed
    Training
    The U.S. Army Civilian Human Resource Agency directed civilian pay personnel offices to ensure that all Standard Form (SF) 1190s are signed by their Command partners. The reason this is still causing technically improper payments is that the employee’s current three to five year tour includes prior year SF1190s that are not being properly signed.
    FY2025
    Planned

Overpayments

The overpayments annotated as ‘Monetary Loss within Agency Control’ (MLA) are within the Army’s control because the root cause of the overpayments is the Army Human Resource Command (HRC) processing the incorrect information on standard HRC personnel actions on the Standard Form (SF); specifically, the Standard Form (SF) 50, “Notification of Personnel Action” and/or the SF1190, “Foreign Allowances Application, Grant and Report” required to authorize the payment(s). In many of these cases a retroactive personnel action can be processed to correct the employees pay record and recoup the over payments. The Army can avoid this type of overpayment by ensuring the information on the SF50 and/or SF1190 contain the accurate pay information and personal information prior to sending the information to the payroll system for payment. The root cause is human error through the lack of attention to detail when reviewing the personnel actions. The Army prevents the majority of these similar errors by double checking the personnel actions and ensuring the appropriate signatures are on the required forms prior to sending to the payroll system.
Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $0.5 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $0.5 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $0.0 M

Overpayment type Eligibility element/information needed Eligibility amount
Overpayments Within Agency Control Address/Location $0.5 M

Overpayment type Mitigation strategies taken Mitigation strategies planned
Overpayments within the agency’s control Training Training

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $0.0 M

Technically improper payments

The technically improper payment errors for Army were caused by payments received from improperly signed Standard Forms (SF) 1190, “Foreign Allowances Application, Grant and Report” that are required to authorize the payment(s) for submission into the payroll system for processing. The employees were all entitled to receive the payments; however, because the SF1190 was not signed by all required parties, the payment was improper. From the Department of Defense (DoD) Financial Management Regulation (FMR) Volume 8 , Chapter 3 in subparagraph 4.1.1, “Foreign differentials and allowances are paid upon receipt through the interface of a properly completed and signed SF 1190, Foreign Allowances Application, Grant, and Report.” In 2021, at the direction of senior leadership in Human Resource, SF1190s did not require all signatures because the information was being sent from the Army Human Resource Command (HRC) system to the payroll system. This guidance was not accurate and could not be authorized because it was not in alignment with DoD FMR Volume 8 “Civilian Pay Policy.”
The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $37.23 M

Mitigation strategies taken Mitigation strategies planned
Training Training

Additional information

$37.23 M

Unknown Payment Details

The Army’s unknown payments are very similar in nature to the technically improper payment errors for Army and were caused by payments received from an improperly signed Standard Form (SF) 1190, “Foreign Allowances Application, Grant and Report” that were sent to the payroll system for payment but also were missing additional key supporting documentation (KSD) required to authorize and substantiate these payment types. The employees were all entitled to receive the payments, however technically, because the SF1190 was not signed by all required parties, the payment is improper. From the DoD Financial Management Regulation (DoD FMR) Volume Civilian Pay Policy. Foreign Area. Allowances and differentials payable to employees officially stationed in foreign areas are established by the Secretary of State and published in the Department of State Standardized Regulations (DSSR).

The amount of payments that could either be proper or improper but the agency is unable to determine whether they were proper or improper as a result of insufficient or lack of documentation is $9.22 M


Cause of insufficient or lack of documentation & why the documentation is needed for determination of payment type
Payment cause Amount Description of the documentation that was not provided and explanation of why the program is unable to conclude whether the payment is proper or improper without that documentation
Other $9.22 M The Army’s civilian unknown payments are very similar in nature to the technically improper payment errors for Army and were caused by payments received from an improperly signed Standard Form (SF) 1190, “Foreign Allowances Application, Grant and Report” that were sent to the payroll system for payment but also were missing additional key supporting documentation (KSD) required to authorize and substantiate these payment types. The employees were all entitled to receive the payments, however technically, because the SF1190 was not signed by all required parties, the payment is improper. From the DoD Financial Management Regulation (DoD FMR) Volume Civilian Pay Policy. Foreign Area. Allowances and differentials payable to employees officially stationed in foreign areas are established by the Secretary of State and published in the Department of State Standardized Regulations (DSSR). See Title 5 U.S. Code Sections 5921-5928. The DoD Instruction (DoDI) 1400.25-V1250 sets forth additional rules regarding foreign allowances and differentials for DoD civilian employees. Foreign differentials and allowances are paid upon receipt through the interface of a properly completed and signed SF 1190, Foreign Allowances Application, Grant, and Report. In 2021, at the direction of senior leadership in the Army Human Resource Command (HRC), SF1190s did not require all signatures because the information was being sent from the HR system to the payroll system. This guidance was not accurate and could not be authorized because it was not in alignment with the DoD FMR Volume Civilian Pay Policy. The missing KSD for these errors were specifically missing the Travel Orders authorizing the location and subsequently the Living Quarter Allowance amounts. Travel Orders contain the location of the Duty Station.

Mitigation strategies taken Mitigation strategies planned
Training Training

Evaluation of corrective actions

The U.S. Army Civilian Human Resource Agency directed civilian pay personnel offices to ensure that all Standard Form (SF) 1190s are signed by their Command partners. The reason this is still causing technically improper payments is that the employee’s current three-to-five-year tour includes prior year SF1190s that not being properly signed. Any SF 1190s that are currently being processed will be quickly coordinated with Army Commands to ensure the forms are correct. CHRA will continue to review and correct existing SF 1190s, and coordinate with Command partners to resolve discrepancies as they are identified. Another strong indicator of the effectiveness of the planned corrective actions is they align with prior efforts to reduce improper and unknown payments. Specifically, the Army’s portion of the previous Department wide Civilian Pay program prior to the FY 2024 restructure was $108.57 million in FY 2023. In FY 2024 the restructured Army Civilian Pay program successfully reduced improper and unknown payments by $61.62 million down to $46.95 million. It is through this significant reduction in improper payments and subsequent ending amounts which are below the OMB statutory threshold that the Department is confident in the Army’s Civilian Pay corrective actions planned based off prior success.

A strong indicator of the adequateness of the planned corrective actions is they align with prior efforts to reduce improper and unknown payments. Specifically, the Army’s portion of the previous Department wide Civilian Pay program prior to the FY 2024 restructure was $108.57 million in FY 2023. In FY 2024 the restructured Army Civilian Pay program successfully reduced improper and unknown payments by $61.62 million down to $46.95 million. It is through this significant reduction in improper payments and subsequent ending amounts which are below the OMB statutory threshold that the Department is confident in the Army’s Civilian Pay corrective actions planned based off prior success.

The U.S. Army Civilian Human Resource Agency directed civilian pay personnel offices to ensure that all Standard Form (SF) 1190s are signed by their Command partners. The reason this is still causing technically improper payments is that the employee’s current three-to-five-year tour includes prior year SF1190s that not being properly signed. Any SF 1190s that are currently being processed will be quickly coordinated with Army Commands to ensure the forms are correct. CHRA will continue to review and correct existing SF 1190s, and coordinate with Command partners to resolve discrepancies as they are identified.

The actions planned are only required for programs reporting an improper plus unknown payment estimate exceeding the statutory threshold. In the current reporting year, the Civilian Pay – Army program reported a total of $46.95 million in improper plus unknown payments, which is below the statutory threshold. Hence, no specific corrective actions are planned to be taken for this program. Furthermore, the Department anticipates the Civilian Pay - Army program to automatically move to Phase 1 in FY 2025 after achieving PIIA compliance. The U.S. Army Civilian Human Resource Agency directed civilian pay personnel offices to ensure that all Standard Form (SF) 1190s are signed by their Command partners. The reason this is still causing technically improper payments is that the employee’s current three-to-five-year tour includes prior year SF1190s that not being properly signed.

Future payment integrity outlook

Civilian Pay – Army has established a baseline.

The Department’s Payment Integrity program - Army Civilian Pay’s reduction target is less than the estimated future Improper Payment and Unknown Payment rate. Currently the Army Civilian Pay estimated rate is $46.95 million which is substantially lower than the OMB statutory threshold and is expected to remain underneath the allowable $100 million in projected improper and unknown payment projections. The Department is confident in the Army’s ability to continue their progress in ensuring that the appropriate forms are fully signed and readily available going forward.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $14,678.86 M
Current year +1 estimated future improper payments $37.7 M
Current year +1 estimated future unknown payments $8.3 M
Current year +1 estimated future improper payment and unknown payment rate 0.31 %
Current year +1 estimated future improper payment and unknown payment reduction target 0.3 %

The program's current year improper payment and unknown payment rate of 0.34 % has been achieved with a balance of payment integrity risk and controls and represents the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is the tolerable rate.

The reduction target is significantly below the OMB statutory threshold which will initiate the movement of the Civilian Pay - Army program from Phase 2 in FY 2024 to Phase 1 in FY 2025. Additionally, Civilian Pay - Army program movement to Phase 1 in FY 2025 is supported by its potential PIIA Compliance rating during the FY 2024 PIIA Compliance audit from the DoD OIG, its established baseline, and the Improper and Unknown payment projection being significantly below the OMB statutory threshold.

Internal Controls:
The Army has internal controls in place that support the reduction of improper payments in its Civilian Pay program to the levels the Department has targeted. Moreover, Federal Civilian Pay Service, which support the end-to-end delivery of payroll processing services, received an unmodified System and Organizational Control (SOC) 1 Type 2 report under Statement on Standards for Attestation Engagements (SSAE) No. 18 in FY 2024.

Human Capital:
The Army has the human capital it needs to reduce improper payments in the Civilian Pay program to the levels the Department has targeted. However, as the Army’s Civilian Pay program evolves and DoD operations change, additional skill sets and personnel resources may be needed to sustain and advance the program.

Information Systems and Other Infrastructure:
The Army has the information systems and other infrastructure it needs to reduce improper payments in the Civilian Pay program to the levels the Department has targeted. However, as technology advances, the Army and the Department continue to improve the accuracy and efficiency of Civilian Pay. Lastly, the Automated Disbursing System, the Centralized Disbursing System, and the Deployable Disbursing System (which are the primary disbursing systems for the Department) received an unmodified SOC 1 Type 2 report under SSAE No. 18 in FY 2024.

The Army's Civilian Pay Payment Integrity program has not had any specific or known additional resources requested in their most recent budget submission. Furthermore, the ongoing corrective actions are cost beneficial and relatively straightforward to implement to ensure the proper signatures are on the appropriate and relevant forms.

Additional programmatic information

Accountability for detecting, preventing, and recovering improper payments

The Department of Defense Payment Integrity Senior Accountable Officials Steering Committee (the Committee) was created in FY 2018, and it institutionalized a forum of accountability to oversee and guide the Department’s actions required by Appendix C of the OMB Circular Number A-123 to achieve full compliance with the Payment Integrity Information Act of 2019 (PIIA). The Committee is chaired by the Office of the Under Secretary of Defense (Comptroller)/Deputy Chief Financial Officer and co-chaired by the Defense Finance and Accounting Service, Deputy Director of Operations. It also includes Senior Executive Service representatives from the Military Services and Defense Agencies. The Committee provides oversight to the DoD Payment Integrity program and drives action for compliance with the PIIA. More specifically, the Committee evaluates the status of improper payments testing, the root causes of improper payments and appropriate actions to reduce them, payment recovery activities, and solutions to resolve DoD-wide audit findings and recommendations related to improper payments. Additionally, the Committee supports audits related to improper payments, reviews audit recommendations, performance of risk assessments and oversees the identification of root cause(s) and the development and implementation of corrective actions to address areas of noncompliance.

Additional information

During PIIA Review Year 2024, the Civilian Pay – Army program reduced its Improper Payments (IP) and Unknown Payments (UP) estimate to well below the statutory threshold of $100M and 10 percent ($46.9M & 0.34 percent). Office of Management and Budget (OMB) Circular A-123, Appendix C, Requirements for Payment Integrity Improvement, Fiscal Year (FY) 2021, page 19, paragraph 3, states “If a program is in Phase 2, has established a baseline, and reports an IP and UP estimate that is below the statutory threshold, it will automatically move back into Phase 1 the following FY unless the OIG issued a non-compliance finding for the program in the previous year and the finding demonstrated that the program IP and UP estimate was inaccurate and inappropriate given the program characteristics.” The Civilian Pay – Army program demonstrated strong performance in FY 2024, reporting improper and unknown payment estimates and rates well below the statutory threshold. Although the program met the criteria for Phase 1 transition based on the IP/UP estimates, the Department acknowledges the broader context outlined in Report No. DODIG-2025-105, Audit of the Department of Defense’s FY 2024 Compliance with Payment Integrity Information Act Requirements, which highlighted systemic challenges in establishing a reliable Universe of Transactions (UoT) across the Department's programs, impacting PIIA compliance for multiple consecutive years.

While the Civilian Pay – Army program achieved low IP/UP estimates, continued participation in Phase 2 would entail a significant investment of resources and personnel time diverting efforts from critical current pay missions and audit requirements, with no realistic prospect of achieving full PIIA compliance due to the ongoing UoT limitations identified by the OIG. Furthermore, the DoD OIG did not publish, as required by OMB Circular A-123 Appendix C, a demonstration in their compliance report showcasing a revised, statistically valid IP and UP estimate that adheres to the guidance and proves the Civilian Pay – Army program’s actual IP/UP estimates would exceed the statutory threshold.

Given the previously reported low susceptibility to significant improper and unknown payments and recognizing the broader UoT challenges affecting DoW PIIA compliance, the Office of the Under Secretary of War – Comptroller coordinated with OMB and the DoD OIG before strategically transitioning the Civilian Pay – Army program to Phase 1 for FY 2026. Therefore, the Army will not report IP/UP estimates for Civilian Pay – Army for FY 2025 but will provide a corresponding improper payment risk assessment in FY 2026, aligned with Phase 1 requirements.