DFAS Director Terri McKay said more stringent actions, such as furloughing employees, may be necessary if sequestration takes place or the current continuing resolution expires without another agreement in place to further fund the Defense Department. (Defense Department)

The Defense Finance and Accounting Service on Jan. 27 will freeze hiring, stop nominating employees for performance awards, and slash travel, training and overtime to help it deal with budget cuts.

In a Jan. 17 email obtained by Federal Times, DFAS Director Terri McKay said more stringent actions — such as furloughing employees — may be necessary if sequestration takes place or the current continuing resolution expires without another agreement in place to further fund the Defense Department.

“These are challenging times for us all,” McKay said in the email. “I am proud of what you do every day, and I ask for your patience and your continued commitment to our customers.”

DFAS discussed its plans to reduce costs with the American Federation of Government Employees on Jan. 16 at a labor-management forum meeting. McKay said in her email that DFAS and AFGE agreed those plans were “reasonable and responsible at this time.”

Ed Abounader, president of AFGE’s DFAS council 171, said that these cutbacks are much more desirable than furloughing employees.

“Furloughs would be devastating to our people,” Abounader said. “Our employees are predominantly lower-graded technicians. An unpaid furlough — even for one day per pay period — would have a far more immediate impact than reduced overtime or no new hires.”

Abounader said that DFAS will probably make exceptions to the hiring freeze and the cuts in overtime for mission-critical operations, such as ensuring service members in combat zones get their pay. He said DFAS did not say exactly how much overtime, training and travel will be reduced. He also said the budget situation is too fluid to know how long those restrictions will stay in place.

The entire federal government is bracing itself for severe budget cutbacks if sequestration takes effect in March. The Army, Navy and Air Force have already frozen hiring and are warning employees that massive furloughs may be required — perhaps for as much as 22 days.

Sequestration would cut roughly 9 percent from Defense’s budget by the end of the fiscal year in September. But even if Congress and President Obama come to a deficit reduction agreement that avoids sequestration, it still will likely contain steep budget cuts.