Improving the Defense Finance and Accounting Service's Interactions with Its Customers

The Defense Finance and Accounting Service (DFAS) provides a variety of finance and accounting services to military customers. Because DFAS received customer complaints, its leadership asked RAND to take a comprehensive look at all DFAS-customer interactions to identify problems and determine how those interactions might be improved.

The methodology was to collect information from interviews and data analysis and then make recommendations for improving customer interactions.

RAND interviewed personnel at DFAS headquarters, two regional centers, and two operating locations, selecting employees who have considerable experience in the organization.

Then we interviewed knowledgeable command- and installation-level customers to identify the issues they felt were most important in their interactions with DFAS.

Our research was complemented by analysis of DFAS data pertaining to costs, workload, and performance.

Customers cited two shortcomings in DFAS finance services: unacceptably high interest penalty payments and untimely and inaccurate payments to military personnel. On the accounting side, customers suggested the Chief Financial Officers Act of 1990 was a compliance exercise of little direct benefit to them.

We determined that DFAS has problems, both in accounting and finance, with new systems acquisition and implementation.

RAND made four recommendations to DFAS: (1) Develop the ability to respond to crises such as the FY00 change in military pay. (2) Continue its pricing reforms. (3) Acquire new software commercially. (4) Make greater use of the Web to make the accounting data customers receive more timely and to expedite efforts to fix errors.