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By Donna St. George
Washington Post Staff Writer

Thursday, April 27, 2006; Page A18


Nearly 900 soldiers wounded in Iraq and Afghanistan have been saddled with government debts as they have recovered from war, according to a report that describes collection notices going out to veterans with brain damage, paralysis, lost limbs and shrapnel wounds. ...


The underlying problem is an antiquated computer system for paying and tracking members of the military. Pay records are not integrated with personnel records, creating numerous errors. When soldiers leave the battlefield, for example, they lose a pay differential, but the system can take time to lower their pay.

The government then tries to recoup overpayments, docking pay for active-duty troops and sending debt notices to those who have left the military. Eventually, the government sends private agencies to collect debts and notifies credit bureaus.

The computer system is so broken that 400 soldiers killed in action were listed as owing money to the government, although no debt notices were sent, the report said.

A total of $1.5 million in debts has been linked to the 400 fallen soldiers and 900 wounded troops. Of the total, $124,000 has been repaid. The government has waived $959,000, and the remainder of $420,000 is still owed.

Michael Hurst, a former Army finance officer in Arlington who has studied the issue, said the military should have taken action years ago to prevent the debts from being created.

"It's a complete leadership failure," he said. "We can't expect the soldiers to notice mistakes in their pay that the paid professionals have failed to notice and correct."

A database of soldiers wounded in action has been created, but the GAO suggested that more needs to be done, including congressional action to forgive more soldiers' debts and provide refunds in certain cases.