Military Pay: The Defense Finance and Accounting Service-Indianapolis Could Improve Control Activities over Its Processing of Active Duty Army Military Personnel Federal Payroll Taxes

摘要

The Department of the Army paid about $4.7 billion in federal payroll taxes for approximately 638,900 active duty military servicemembers for calendar year 2007, from the active duty Army military personnel appropriation. The Secretary of the Army relies on the Defense Finance and Accounting Service- Indianapolis (DFAS-IN) for processing and accounting support in paying the taxes for active duty servicemembers.1 This support includes calculating and reporting federal payroll taxes for active duty Army servicemembers to the Internal Revenue Service (IRS) and paying those taxes to the Department of the Treasury. Federal payroll taxes are amounts withheld from employees, wages for federal income taxes, Social Security, and Medicare (Hospital Insurance2) taxes, as well as the employer's mandatory matching contributions for Social Security and Medicare taxes. GAO's five standards of internal control3 provide the overall framework for establishing and maintaining internal control in the federal government. These standards help management identify and address major performance and management challenges and areas at greatest risk of fraud, waste, abuse, and mismanagement.