Defense Finance And Accounting Service - Defense Finance And Accounting Service

The Defense Finance and Accounting Service (DFAS) is an agency of the United States Department of Defense under the direction of the Under Secretary of Defense (Comptroller). DFAS provides finance and accounting services for the civil and military members of the Department. Headquartered in Indianapolis, IN, it was activated on Jan. 18, 1991. DFAS is the world's largest finance and accounting operation.

DFAS pays all DoD military and civilian personnel, retirees and annuitants, as well as major DoD contractors and vendors. DFAS also supports customers outside the DoD in support of electronic government initiatives. These customers include the Executive Office of the President, the Environmental Protection Agency, the Department of Energy, the Department of Veterans Affairs, the Department of Health and Human Services and the Broadcasting Board of Governors.

DFAS is a working capital fund agency financed by reimbursement of operating costs from its governmental customers (mostly the military service departments) rather than through direct appropriations. This service-provider relationship with its customers has resulted in a continuous innovation and improvement in the quality of services DFAS provides. DFAS has steadily reduced its operating costs and has returned these savings to customers in the form of decreased costs.

In FY 2014, DFAS:

• Processed 150.2 million pay transactions (6.3 million people)
• Made 5.8 million travel payments
• Paid 11.5 million commercial invoices
• Maintained 228.6 million General Ledger accounts
• Managed military retirement and health benefits funds ($772 billion)
• Made $572 billion in disbursements
• Managed $424 billion in foreign military sales (reimbursed by foreign governments)
• Accounted for 1,270 active DoD appropriations

History

In 1991, Secretary of Defense Dick Cheney created the Defense Finance and Accounting Service to reduce the cost of Defense Department finance and accounting operations and to strengthen financial management through consolidation of finance and accounting activities across the department. Since its inception, DFAS has consolidated more than 300 installation-level finance and accounting offices into 10 sites, and reduced the work force from about 27,000 to about 13,000 personnel.

In 2003, DFAS was selected by the Office of Personnel Management to be one of four governmental entities to provide payroll services for the U.S. government. In 2004, Nielsen Norman Group named the Defense Finance and Accounting Service's portal (ePortal) among the 10 best government intranets in the world. Experts at the Nielsen reviewed hundreds of intranets before naming the top ten which shared traits like good usability and organization, performance metrics and incremental improvements.

The 2005 round of Base Realignment and Closure cuts had DFAS being completely restructured. Many sites were integrated into major centers. The organization has continued to shift its focus to be a joint service provider.

One of the most visible responsibilities of DFAS is handling military pay.

Accounting Irregularities

A Department of Defense Inspector General's report noted that DFAS makes unjustified changes to accounting data in order to reconcile discrepancies, arbitrarily correcting numbers to match. The report also noted that DFAS could not produce accurate financial statements for the Army's General Fund because more than 16,000 financial data files were missing from its computer system. Jack Armstrong, a former Defense Inspector General, has reported that DFAS engages in "plugging", accounting jargon for making up numbers, and that DFAS staff refer to preparation of year-end statements as the "Grand Plug".

Locations

• Current locations:
  • Major Sites
    • Indianapolis, Indiana (Headquarters) â€" DFAS is headquartered in the MG Emmett J. Bean Finance Center, a 1,600,000-square-foot (150,000 m²) building that was part of Fort Benjamin Harrison. A solar panel system was installed on the roof of the building in 2010, allowing the building to generate 1.8-MW.
    • Cleveland, Ohio
    • Columbus, Ohio
    • Limestone, Maine
    • Rome, New York
      • Europe
      • Japan
  • Smaller scaled back sites
    • Alexandria, Virginia
    • Texarkana, Texas
    • Bratenahl, Ohio
• Closed sites:
  • Patuxent River, Maryland
  • Charleston, South Carolina
  • Dayton, Ohio
  • Denver, Colorado - Lowry Air Force Base
  • Kansas City, Missouri - Richards-Gebaur Air Force Base
  • Lawton, Oklahoma
  • Lexington, Kentucky
  • Norfolk, Virginia
  • Omaha, Nebraska
  • Oakland, California
  • Orlando, Florida - Naval Training Center Orlando
  • Pacific
  • Pensacola, Florida
  • Rock Island, Illinois
  • St. Louis, Missouri
  • San Antonio, Texas
  • San Bernardino, California - Norton Air Force Base
  • San Diego, California
  • Seaside, California