Formed 1991 Founded 1991 Annual budget 1.5 billion USD | Website www.dfas.mil Number of employees 12,000 | |
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Agency executives ~Teresa (Terri) McKay, Director
~Audrey Davis, Principal Deputy Director
~ Dave McDermott, Deputy Director, Operations
~ Jonathan Witter, Deputy Director, Strategy and Support Headquarters Indianapolis, Indiana, United States Profiles | ||
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.
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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:
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".