Internal Controls Can Be Improved to Help Ensure Proper and Correct Military Retirement Payments.
GENERAL ACCOUNTING OFFICE WASHINGTON DC ACCOUNTING AND FINANCIAL MANAGEMENT DIV
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Military services pay 1.4 million retirees and survivors about 14 billion each year. A GAO audit found that payments could be made to ineligible, fictitious, or dead persons. Important pay systems controls, designed to ensure proper or correct payments, were inadequate, not followed, or nonexistent. For example, the Navy and Marine Corps lacked adequate separation of duties and internal checks to ensure that payments were made only to those retirees and survivors authorized to receive such payments. After GAOs review, a Navy clerk was indicated for fraud involving payments made to fictitious retirement pay accounts. This report recommends a number of actions needed to improve the effectiveness of internal controls in the military retirement pay systems. Defense has substantially concurred with these recommendations. Also, Defense, which is required to review its internal controls under provisions of the Federal Managers Financial Integrity Act of 1982, reported that military pay accounting systems need improvement.
- Administration and Management