Posted on: Monday, November 15, 2004

MILITARY UPDATE

By Tom Philpott

The Defense Finance and Accounting Service plans to start using a new, more reliable pay system for the military next year.

Called the forward compatible payroll, it promises far fewer errors, an easy-to-understand leave and earnings statement and instantaneous adjustments to pay records.

FCP "should have a huge impact on our efficiency in providing pay services," says Sue Schallenberg, director of the Military Pay Operations Transition Group.

Phasing in of FCP will begin with the Army Reserve and National Guard in March, followed by the active duty Army in July, the entire Air Force next November, and the Navy Department, with its more complex shipboard environment, in March 2006.

That will mark the end of a problem-plagued pay system developed during the Vietnam War. The military payroll operation, called the defense joint military pay system, actually is two systems, one for active-duty and another for reserve forces. The two are compatible only with enormous effort, DFAS officials say.

The reserve system was designed to pay members for weekend drills and two weeks of active duty a year. Relying on it to provide accurate and timely pay to a few hundred thousand mobilized reservists has been difficult, requiring frequent manual intervention that raises the risk of errors.

The Government Accountability Office blamed the reserve pay system in part for a plague of pay errors that have hit Army Reserve and National Guard members mobilized since the Sept. 11 attacks to guard the nation and fight wars in Afghanistan and Iraq. DFAS and the Army have since taken measures to reduce the errors.

Schallenberg in Denver and Sylvia Hanneken, program manager for military pay system transition in Cleveland, discussed the new pay system in a phone interview with Military Update.

The present system, DJMS, is written in a programming language developed in the late-1960s.ÊSo it is cumbersome, fragile and woefully inadequate in handling recent complex changes to military pay. It takes an average of 12 to 18 months to automate new congressionally approved pays.ÊSome pays, such as medical bonuses, can't be programmed.

FCP will end the need for 95 percent of "workarounds" for reserve mobilization and new pays, said Schallenberg.

The process of moving reservists and National Guard members to activated status, with all appropriate pay and entitlement changes, "will be as simple as making a single change on the record," she added.

DJMS software is so old and inflexible that when states change their tax rates, it has to be reprogrammed, which can take 12 to 18 months. That's why many service members receive corrected W-2s annually from DFAS.

FCP, by contrast, will use existing commercial tax packages that contractors are obligated to keep up to date with the latest state tax laws.

FCP will restore member confidence in their pay system, particularly among those aware of pay problems suffered by mobilized reservists, said Hanneken.

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