Military Pay Army – National Guard

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Program level Payment Integrity results

Sponsoring agency: Department of War

PROGRAM METRICS

$4,839 M

in FY 2024 outlays, with a

98.9%

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:

    +/-0.41

  • Actions taken & planned to mitigate improper payments

    Mitigation strategy Description of the corrective action Completion date Status
    Training
    To continue to mitigate the risk of improper payments, virtual trainings are provided by the Army National Guard (ARNG) Financial Services to the 50 States, Territories and the District of Columbia. These monthly trainings are attended by over 200 attendees. These ARNG training sessions have proven to be successful in reducing improper and unknown payments.
    FY2024 Q4
    Completed
    Change Process
    The Army National Guard (ARNG) established two memorandums of agreement (MOAs) between the US Army Financial Management Command and the Defense Finance and Accounting Service to address service member payments processed by Army Military Pay Offices (AMPOs). Both MOAs stress the need for proper document retention to substantiate pay and the prevention of improper payments. MOAs also clearly outline what functions are the responsibility of state pay offices and AMPOs while a ARNG service member is on active duty or in a deployment status.
    FY2024 Q4
    Completed
    Training
    The United States Army National Guard (ARNG) Financial Services will continue to host virtual trainings to the 50 States, Territories and the District of Columbia. The ARNG, in conjunction with the United States Army Reserve, will start a Military pay certification program in Q2 of FY2025 to provide baseline Military pay training to new state pay technicians. These trainings will be offered quarterly to maintain pay proficiency across the 50 States, Territories and the District of Columbia (in addition to the virtual monthly trainings that are already provided).
    FY2025
    Planned

Overpayments

The United States Army National Guard (ARNG) overpayments are within the ARNG control to mitigate because the root cause of the overpayments is attributed to the state pay offices processing incorrect payment amounts. The ARNG is mitigating the risk of continued overpayments by providing virtual comprehensive training which is regularly attended by over 200 participants throughout the 50 States, U.S. Territories, and the District of Columbia. Daily reviews are conducted by ARNG Financial Services to prevent these overpayments and in many of these cases a retroactive pay action can be processed to correct the service members pay record and recoup the overpayments. The vast majority of the ARNG overpayments are attributed to Basic Pay and Basic Allowance for Housing entitlements where the service member payment was incorrect due to the wrong rank and/or dependent status information. The ARNG in conjunction with United States Army Reserve (USAR) will start a Military pay certification program in quarter two of FY 2025 to provide baseline Military pay training to new state pay technicians. In FY 2024, ARNG established two memorandums of agreement (MOAs) between the US Army Financial Management Command and the Defense Finance and Accounting Service to address service member payments processed by Army Military Pay Offices (AMPOs). Both MOAs stress the need for proper document retention to substantiate pay and the prevention of improper payments. MOAs also clearly outline what functions are the responsibility of state pay offices and AMPOs while a ARNG service member is on active duty or in a deployment status.
Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $4.24 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 $4.24 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 Dependency $1.95 M
Overpayments Within Agency Control Military Status $2.29 M

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

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $7.52 M
The amount of underpayments 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 underpayments 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 underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $7.52 M

Eligibility element/information needed Eligibility amount
Dependency $6.69 M
Military Status $0.83 M

Mitigation strategies taken Mitigation strategies planned
Change Process, Training Training

Technically improper payments

The United States Army National Guard (ARNG) payments annotated as technically improper payment errors were caused by housing allowance payments that were made without a current DA Form 5960 - Basic Allowance For Housing (BAH) Authorization And Dependency Declaration. DA Form 5960s were subsequently produced after the entitlement was fully substantiated; however, they were provided after the sampled payment was made, thus resulting in a technically improper payment. Additionally, in a few samples, while the correct key supporting documentation was provided, the signature on the forms were dated after the sampled payment date. In both examples, the entitlements that were attributed to the payment were corroborated; however, the process followed was not in adherence with Department of Defense polices and procedures. When this occurs, the Army takes the appropriate steps to correct the Soldier's pay record based on the Army regulations.
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 $14.67 M

Mitigation strategies taken Mitigation strategies planned
Change Process, Training Training

Additional information

$22.19 M

Unknown Payment Details

The Military Pay Army National Guard (ARNG) program scenarios are broad and complex based upon the requirements to authorize an entitlement or deduction. For example, an unknown sample covering Military pay and allowances, could be for multiple reasons. ARNG payments are identified as unknown due to appropriate/applicable key supporting documents (KSDs) not readily available to be reviewed. The KSDs were not in the designated repositories and subsequently could not be provided prior to the review period ending. The ARNG will continue to research the appropriate repositories to obtain the applicable KSDs to resolve these errors.

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 $29.09 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
States $29.09 M The United States Army National Guard (ARNG) payments annotated as technically improper payment errors were caused by housing allowance payments that were made without a current DA Form 5960 "Basic Allowance For Housing (BAH) Authorization And Dependency Declaration." DA Form 5960s were subsequently produced after the entitlement was fully substantiated; however, they were provided after the sampled payment was made, thus resulting in a technically improper payment. DA 5960s, which authorize housing allowance, were a large percentage of the documentation that could not be provided. Without a current DA Form 5960, the ARNG cannot determine if the payment was improper or proper. Likewise, there were ARNG drill attendance rosters that were missing signatures. Similar to the DA 5960s, without the signature on the drill form, the ARNG cannot conclude if the payment was proper or improper.

Mitigation strategies taken Mitigation strategies planned
Change Process,Training Training

Evaluation of corrective actions

The vast majority of the Military Pay - Army National Guard are due to technical improper payments. The United States Army National Guard (ARNG) reduced its processing error rate from 10.4% in fiscal year (FY) 2023 to 5.1% in FY 2024. This error rate is well below the 10% acceptable risk by the Department. To continue to mitigate improper payment error rates, monthly virtual training will continue to be provided by ARNG Financial Services to the 50 States, Territories and the District of Columbia. These corrective action events trainings have been instrumental in the overall reduction of the improper and unknown payment error rates from FY2023 to FY2024. These events provide in-depth Military pay training and provide pay technicians with the information needed to accurately and efficiently process Military pay. Extra emphasis will be placed on the processing of housing allowances and the subsequent requirement to properly retain applicable documents. Additionally, ARNG in conjunction with the United States Army Reserve, will start a military pay certification program in Q2 of FY2025 to provide in person baseline military pay training to new state pay technicians. This training will be offered quarterly to maintain pay proficiency across the 50 States, Territories, and the District of Columbia (in addition to the virtual monthly trainings that are already provided).

The United States Army National Guard (ARNG) reduced its processing error rate from 10.4% in fiscal year (FY) 2023 to 5.1% in FY 2024. This error rate is well below the 10% acceptable risk by the Department. To continue to mitigate improper payment error rates, monthly virtual training will continue to be provided by ARNG Financial Services to the 50 States, Territories and the District of Columbia. These corrective action events trainings have been instrumental in the overall reduction of the improper and unknown payment error rates from FY2023 to FY2024. These events provide in-depth Military pay training and provide pay technicians with the information needed to accurately and efficiently process Military pay. Extra emphasis will be placed on the processing of housing allowances and the subsequent requirement to properly retain applicable documents. Additionally, ARNG in conjunction with the United States Army Reserve, will start a military pay certification program in Q2 of FY2025 to provide in person baseline military pay training to new state pay technicians. This training will be offered quarterly to maintain pay proficiency across the 50 States, Territories, and the District of Columbia (in addition to the virtual monthly trainings that are already provided).

The United States Army National Guard (ARNG) reduced its processing error rate from 10.4% in fiscal year (FY) 2023 to 5.1% in FY 2024. This error rate is well below the 10% acceptable risk by the Department. To continue to mitigate improper payment error rates, monthly virtual training will continue to be provided by ARNG Financial Services to the 50 States, Territories and the District of Columbia. These corrective action events trainings have been instrumental in the overall reduction of the improper and unknown payment error rates from FY2023 to FY2024. These events provide in-depth Military pay training and provide pay technicians with the information needed to accurately and efficiently process Military pay. Extra emphasis will be placed on the processing of housing allowances and the subsequent requirement to properly retain applicable documents. Additionally, ARNG in conjunction with the United States Army Reserve, will start a Military pay certification program in Q2 of FY2025 to provide in person baseline Military pay training to new state pay technicians. This training will be offered quarterly to maintain pay proficiency across the 50 States, Territories, and the District of Columbia (in addition to the virtual monthly trainings that are already provided).

The United States Army National Guard (ARNG) reduced its processing error rate from 10.4% in fiscal year (FY) 2023 to 5.1% in FY 2024. This error rate is well below the 10% acceptable risk by the Department. To continue to mitigate improper payment error rates, monthly virtual training will continue to be provided by ARNG Financial Services to the 50 States, Territories and the District of Columbia. These corrective action events trainings have been instrumental in the overall reduction of the improper and unknown payment error rates from FY2023 to FY2024. These events provide in-depth Military pay training and provide pay technicians with the information needed to accurately and efficiently process Military pay. Extra emphasis will be placed on the processing of housing allowances and the subsequent requirement to properly retain applicable documents. Additionally, ARNG in conjunction with the United States Army Reserve, will start a military pay certification program in Q2 of FY25 to provide in person baseline military pay training to new state pay technicians. This training will be offered quarterly to maintain pay proficiency across the 50 States, Territories, and the District of Columbia (in addition to the virtual monthly trainings that are already provided).

Future payment integrity outlook

Military Pay Army – National Guard has established a baseline.

The Department is anticipating effective corrective actions continuing to be implemented and will be successful in reducing improper and unknown payments. The reduction target is less than the estimated projected future year improper and unknown payments. Additionally, the Military Pay - Army National Guard program is currently underneath the OMB statutory threshold.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $5,202.33 M
Current year +1 estimated future improper payments $25.1 M
Current year +1 estimated future unknown payments $27.63 M
Current year +1 estimated future improper payment and unknown payment rate 1.01 %
Current year +1 estimated future improper payment and unknown payment reduction target 1.0 %

The program's current year improper payment and unknown payment rate of 1.15 % 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 Department fully expects and is confident in the Army's leadership to be able to fully implement the corrective actions to continue its progression of effectively reducing the Military Pay - Army National Guard (ARNG) program's Improper Payment and Unknown Payment rate estimates and achieving a tolerable rate below the OMB statutory threshold in fiscal year 2024. Currently the ARNG is well underneath the OMB statutory threshold with a combined improper and unknown payment projection of $55.51 million will automatically move to Phase 1 if the ARNG achieves PIIA compliance.

Internal Controls: The Army National Guard (ARNG) has internal controls in place that support the reduction of improper payments in its program to the levels the Department has targeted. Moreover, the ARNG pay offices support the end-to-end delivery of payroll processing services, received a modified System and Organizational Control (SOC) 1 Type 2 report under Statement on Standards for Attestation Engagements (SSAE) No. 18 in fiscal year (FY) 2024.

Human Capital: The ARNG has the human capital it needs to reduce improper payments in the Military Pay program to the levels the Department has targeted. As the ARNG's Military Pay program evolves and Department of Defense operations change, additional skill sets, and personnel resources may be needed to sustain and advance the program. However, implementing the new strategy for achieving compliance will necessitate a considerable increase in payment sampling which will require additional human capital working hours to implement.

Information Systems and Other Infrastructure: The ARNG has the information systems and other infrastructure it needs to reduce improper payments in the Military 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 Military Pay through implementation of new integrated pay and personnel processing systems. The Army continues to make progress towards fully implementing the Integrated Pay and Personnel System – Army (IPPS-A) in the future. Under IPPS-A, improper payments will be reduced because entitlements will be directly inputted into the Military Pay payroll system by an authorized personnel source thereby eliminating all manual processing. Moreover, 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 Department's Military Pay - Army National Guard program did not require any Payment Integrity specific recent budget submission to bring the program towards achieving compliance with the Payment Integrity Information Act of 2019. Furthermore, the ARNG internal controls and improved processes are cost beneficial, effective and will lead to achieving PIIA compliance.

Additional programmatic information

Accountability for detecting, preventing, and recovering improper payments

The Defense Payment Integrity Senior Accountable Officials Steering Committee (the Committee) was created in fiscal year 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, Operations. It also includes Senior Executive Service representatives from the Military Services and defense agencies. The Committee provides oversight to the Department of Defense (DoD) Payment Integrity programs and drives action for PIIA compliance. More specifically, the Committee evaluates the status of improper payments testing; the root causes of improper payments and the appropriate actions to reduce them; payment recovery activities; and solutions to resolve DoD-wide audit findings and recommendations related to improper payments. Additionally, it supports audits related to improper payments, reviews audit recommendations, 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 Military Pay Army – National Guard program reduced its Improper Payments (IP) and Unknown Payments (UP) estimate to well below the statutory threshold of $100M and 10 percent ($55.5M & 1.15 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 Military Pay Army – National Guard 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 Military Pay Army – National Guard 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 Military Pay Army – National Guard 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 Military Pay Army – National Guard program to Phase 1 for FY 2026. Therefore, the Army will not report IP/UP estimates for the Military Pay Army – National Guard program for FY 2025 but will provide a corresponding improper payment risk assessment in FY 2026, aligned with Phase 1 requirements.