March 24, 2014
Tim Kauffman
[email protected]

AFGE Thanks Indiana Lawmakers for Probing Army’s Planned DFAS Withdrawal

Bipartisan group raises important questions about financial and accounting pullout 

WASHINGTON – American Federation of Government Employees National President J. David Cox Sr. today thanked a bipartisan group of Indiana lawmakers for raising tough questions about the Army’s plan to pull out of the Defense Finance and Accounting Service and build its own financial and accounting office.

Six Indiana lawmakers sent a letter today to Department of Defense Comptroller Robert Hale questioning the scheme, which would partly reverse a 1991 consolidation that reduced costs while improving accounting and financial functions throughout the department.

The letter was signed by Reps. André Carson, Susan Brooks, Larry Bucshon and Jackie Walorski and Sens. Joe Donnelly and Dan Coats.

“We thank Congressman Carson and his five colleagues for seeking answers to important questions about this bizarre scheme,” Cox said. “DFAS won’t formally brief its own employees and the Army still has not provided AFGE with a briefing, despite a written commitment to do so.”

AFGE represents the civilian workforce at DFAS, which is responsible for paying all DoD military and civilian personnel, retirees and annuitants, as well as major DoD contractors and vendors.  DFAS is based in Indianapolis, Ind., and also has offices in Cleveland; Columbus, Ohio; Limestone, Maine; Rome, N.Y.; Texarkana, Texas; as well as in Europe and Japan.

In 1991, the Secretary of Defense created DFAS in order to standardize, consolidate, and improve accounting and financial functions throughout DoD. DFAS reduces the cost of the department’s finance and accounting operations while strengthening its financial management.

Throughout 2013, the Army has been engaged in intensive planning to pull out of DFAS in order to reconstitute its own financial management office, which would be staffed largely by military personnel in various Army installations across the world. Currently, DFAS’ civilian employee workforce performs work for the Army in Indianapolis, Rome, and Limestone. DFAS’s own internal estimate is that implementation of the Army’s plan would cost at least 1,800 jobs in Indianapolis. 

In a Feb. 25 letter to Sen. Kirsten Gillibrand of New York, Army Secretary John McHugh wrote that he has merely directed that a review [“Army Financial Management Optimization (AFMO) initiative”] be conducted and that the Army will wait for results from a pilot project before considering restructuring recommendations in January 2016. The Army has planned to shift some work from Indianapolis and Rome to Fort Bragg, N.C., as early as next month. It is said that some work was shifted to Fort Stewart last October.

The letter from the six Hoosier lawmakers to the DoD comptroller asks how the Army could save money from creating its own duplicative finance and accounting office, what the impact would be on the civilian workforce in Indianapolis, and what rationale is there for using more expensive military personnel in lieu of civilian personnel for the performance of these functions.  

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