Multilevel list with 3 header level issue in Word 2013

One of our users is trying to set up a multilevel list with 3 different header levels in Microsoft Word 2013.

An example of the desired result would be having a table of contents such as:

1.0 Introduction and Background
     1.1 Asset Management Plan
     1.2 Background
          1.2.1 Wastewayer Collection System
          1.2.2 Wastewater Stabilization Lagoon Facility
     1.3 Utility Organization
2.0 Level of Service
     2.1 Utility Mission Statement
     2.2 Level of Service
          2.2.1 On Call Service
3.0 Asset Inventory
     3.1 Wastewater Collection System Inventory
          3.1.1 Pump Station Asset Evaluation Results

For how it is set up right now, they don’t number correctly, such as instead of going 1.2.1 and 1.2.2 it becomes 1.1.1 and 2.1.1. (Please see attached PDF for screenshots and details)

I had the user take screen shots (attached as a PDF) of her header settings and show an example of the results.  I'm guessing there is a small detail we missed somewhere.

I'm sorry if any of my terminology is off, I'm not too familiar with these features in Word.

Any help would be greatly appreciated.

Thank you.
Define-new-Multilevel-list.pdf
FvengAsked:
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EirmanChief Operations ManagerCommented:
I came across a useful discussion on this topic with some great links
http://blogs.msdn.com/b/timid/archive/2013/08/29/stupid-microsoft-word-trick-multilevel-numbered-headings.aspx

Everything in this article applies to Word 2013 (Verified)
http://shaunakelly.com/word/numbering/numbering20072010.html
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EirmanChief Operations ManagerCommented:
This is a useful guide to fixing multilevel lists
http://wordknowhow.wordpress.com/2013/05/20/how-to-fix-multilevel-list-in-word/

The main reason for numbered headings going out of order is ....
missing links between heading levels applied in your document and corresponding default heading styles of Word.
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