Assistant Secretary of the Army for Financial Management
Assistant Secretary of the Army for Financial Management & Comptroller 2015 Washington-ASMC National Capital Region PDI Honorable Robert M. Speer 3 Mar 2015 Army Budget (BU) MG Thomas Horlander 2 Americas Army PACOM JAPAN 2,360 SOUTH KOREA 19,790 ALASKA 11,860 HAWAII 21,980 OEF PHILIPPINES 120 NORTHCOM EUCOM CONUS SPT BASE 19,080 USAREUR 27,270 CENTCOM OFS AFGHANISTAN 9,030 OAR BALTICS & POLAND 960 SOUTHCOM OJG BALKANS 710 AFRICOM JTF BRAVO 430 JTF HOA 900
OUA WEST AFRICA 1,010 132,000 SOLDIERS IN 150 LOCATIONS WORLDWIDE OSS KUWAIT 10,500 OSS QATAR 1,650 JTF GTMO 1,540 OTHER WORLDWIDE OPERATIONS 10,760 OIR IRAQ 2,020 OSS JORDAN 890 MFO SINAI 690 As of: 24 Feb 15 The world is experiencing an increased velocity of instability Americas Army remains indispensable to National Defense Nine of ten active Army division headquarters are actively engaged around the world The Army is the backbone of the Joint Force, providing command and control to Joint Forces, setting and sustaining theaters, and securing and controlling people and terrain 3 Army Topline (Base Funding Program) $150 $144.9 $ B illions $140 $138.4 $134.6 Sequestration Impact $129.7 $130 $127.4 FY15 Funding Divot $126.5
$126.2 $3.2B O&M $121.1 $5.1B Reduction from FY14 $120 $110 2012 2013 $2.6B Proc $120.5 $116.8 $117.3 2014 2015 2016 FY 16 O&M Reduction FY16 Procurement Reduction BBA Relief: Includes OCO for Base PB Request BCA Levels FY12-14 Execution FY15 Enacted FY14: $3.1B OCO for Base Requirements FY15: $.85B OCO for Base Requirements; $.3B Readiness Addition At FY16 PB Levels The FY 2016 request begins to restore balance between End-strength, Readiness, and Modernization Sustains a planned drawdown of the Active Component to 475K Transitions from Tiered Readiness resourcing to more balanced Total Readiness across the Force Balanced, rotationally focused, and surge ready force to
meet combatant command demands Modernizes helicopter fleets; Armored Multi-Purpose Vehicle, Paladin Integrated Management, and Stryker Under Sequestered Budget Levels Continues Tiered Readiness resourcing Provides a Contingency Force where only 9 of ~30 Active Component BCTs are ready at a given time; supports onl priority Global Force Management Missions Accelerates the drawdown of the Active Component Cuts Modernization Accounts by ~12% Supports only critical life, health, and safety repairs to facilities Readiness and modernization will feel the brunt of BCA 4 FY 2015/2016 Budget Comparison (Base Funding Program) FY13 FY14 FY15 FY16 Actuals Actuals Enacted Request Military Personnel 56.1
56.4 56.2 56.3 Operation and Maintenance 43.1 44.71 41.82 44.7 Procurement/RDTE 23.1 21.2 20.6 23.1 Military Construction 3.4 2.6 .9 1.1 Other Base (FHA/BRAC/CAMD/AWCF/ANC) 1.7 1.3 1.6 1.4 127.4 126.21 121.12 126.5 Request ($B) Totals
Other Base: Chemical Agent and Munitions Destruction, Army Working Capital Fund, Arlington National Cemetery 1: Includes $3.1B OCO for Base Transfer 2: Includes $.85B OCO for Base Transfer and $.27B in Readiness Increase FY15 Base Enacted $121.1B OtherConst/Family Base (CAMD/ Military AWCF/ANC);;1.16% 0.91% Housing/BRAC Procurement/RDTE ; 17.05% Operation and Maintenance ; 34.37% Military Personnel ; 46.52% FY16 Base Other Request Base $126.5B (CAMD/ AWCF/ ANC) ; 0.64% Procurem Operation ent/RDTE Military Personnel ; 45.08% and ; 18.49% Maintena nce/ERA ; 35.79% FY16 Budget Request Equals FY14 Expenditures 5 FY16 Budget Highlights Total Army Forces: End-strength of 1,015 (AC 475K/ ARNG 342K/USAR 198K) Total Readiness across the force 19 Combat Training Center (CTC) rotations 16 Decisive Action (14 AC/2 RC) 2 Functional Brigades 1 Mission Rehearsal Exercise (MRE) Regional Engagements Pacific Pathways BCT rotation to South Korea Aviation and BCT rotations to USAREUR
Installations Funds Base Operations (95% AC/ 92% ARNG/90% USAR) Funds Sustainment , Restoration & Modernization (79% AC/80% ARNG/76% USAR) MILCON 32 Projects (13 AC/14 ARNG/5 USAR) RDA Significant Events Protects S&T funding to support Force 2025 Continues Aviation Restructuring Initiative (ARI) 6 Cost & Economics (C&E) Mr. Stephen Barth 7 Cost Management Providing Army Financial Transparency Challenges DOD Audit Readiness Visibility into Cost and Spending Meaningful Business Analytics for Decision Making Financial System Interface Errors and Rework Cost Tracking to Output / Outcome Opportunity Stewardship of nations resources Continuous improvement Cost informed decision making / Accountability Progress Cost Culture and Cost Management (CM) Initiatives Army General Fund Enterprise Business System (GFEBS) Addressing Financial Material Weaknesses - LSS Army Financial Management Optimization (AFMO) Army Financial Benefits Reporting and Tracking (AFBRT) Army CM Steering Group Army GO/SES Army GO/SES Cost Management (CM) Steering Group Cost Management (CM) Steering Group Purpose: Purpose:
To shape and inform the implementation of cost management policy, strategy, To shape and inform the implementation of cost management strategy, system design and practices in alignment with Army Leadershippolicy, priorities. Provide system design and practices in alignment with Army Leadership priorities. Provide guidance and understanding on Army enterprise level cost needs, performance guidance and understanding on Army enterprise level cost needs, performance metrics, capability gaps, and recommendations required for more agile, effective, metrics, capability gaps, and recommendations required for more agile, effective, and efficient decision making processes. and efficient decision making processes. Expected Outcomes: Expected Outcomes: Successfully implement Cost Management and meet the information needs across Successfully implement
the Army, starting with: Cost Management and meet the information needs across the Army, starting with: CMSG Charter review CMSG Charter review CMSG input on key CM information needs and strategies required to successfully support the CMSG information input on keydecision CM information needs and requiredpriority to successfully the resource making process andstrategies Army leadership goals andsupport missions. resource information decision making process and Army leadership priority goals and missions. Cost Managed Organizations Across the Army Cost Managed Organizations Across the Army Slide 9 Defining Cost Information Why & What is Needed Cost Information Needs: Cost of Readiness Cost of Training Readiness Cost of BCT Cost of Post Production SW Support Cost of IT Services and Support Cost of Installation Services Cost of Recruiting a Soldier Total Ownership Cost of Equipment Cost of Etc Varies by: - Proximity Where you sit - Periodicity Duration - Purpose Decision Different Meaning by: - Function Budget vs Functional - Stakeholder Internal vs External - Role Customer vs Provider Cost Terms / Definitions: Fixed and Variable Cost Funded and Unfunded Must Fund and Discretionary Direct and Indirect Cost Reimbursable and Direct Fund Overhead, G&A, Fee Sunk Cost Investment and Sustainment
Recurring and Non-Recurring Etc Cost Management Documentation 4Feb15: Draft document distributed for staffing Implementation Plan Contents: Goals &Objectives Assessment Areas (Measures of Effectiveness) Implementation Plan & Tasks Overview of Cost Management Process, Tools, and Resources Aligns Cost Management and Army Financial Management Optimization Objectives / Key Tasks 1Mar15: Draft document Standard Cost Model Contents: Overview and usage of all Cost Master Data objects (e.g. Cost Centers, Orders, WBS Elements) ERP Cost Planning Capturing Actuals (Payroll, Labor, Non-Pay/Labor, Depreciation) Performing Cost Allocations/ Cost Assignments Inbound cost interfaces Cost Reporting May15: Draft document with updates for the Help Documenting the 43 Command Unique Cost Model Desk transition Documents SOP Contents: Dec 2014-May 2015 19 CCM Documents published on the Cost & Performance Portal Living Documents Reference Documents to understand the Commands current cost model in multiple ERPs
Roles & Responsibilities Links to required supporting documentation (e.g. Faces-to-Spaces, policies for Cost Master Data) Command unique cost model requirements Procedures to review & update Cost Master Data 11 Financial Operations (FO) Ms. Laura Jankovich 12 Audit Readiness Accomplishments to Date November 2013: Unqualified opinion on more than 50% of real property assets, the largest successful audit of fixed assets in the DoD. April 2014: Completion of General Fund Statement of Budgetary Resources (SBR) Examination at 22 installations, including DFAS. November 2014: Unqualified opinion by DoDIG on an examination of the existence and completeness (E&C) of General Equipment (GE) assets. December 2014, Began audit of the Schedule of Budgetary Activity (SBA), by an IPA, the largest external validation of the Armys financial activity to date. 100 percent of fiscal year 2015 Army-specific appropriations are now under independent audit. Rigorous controls and substantive test program for SBR and Asset categories reviewed regularly by the Vice Chief of Staff and senior tactical commanders. Trained more than 23,000 Army personnel on audit standards and procedures 2 General Fund Audit Readiness Timeline Way Ahead SBR Q2
Report Q4 FY17 FY FY 2016 2016 SBA SBA Audit Audit Begins Begins FY FY 2016 2016 SBA SBA Audit Audit Report Report RP RP and and OM&S OM&S E&C E&C Report Report Real Real Property Property Assertion Assertion Other Other Balance Balance Sheet Sheet & & Statemen Statemen tt of of Net Net Cost Cost Line Line Items Items
Only) Only) Q3 FY17 FBwT FBwT Exam Exam Internal Internal Use Use Software Software Assertion Assertion RP RP and and OM&S OM&S E&C E&C Exam Exam Q1 FY17 Real Real Property Property Exam Exam OM&S OM&S General General Equipment Equipment Exam Exam FY FY 2018 2018 GF GF Full Full Financial Financial Statement Statement Audit Audit
Begins Begins Other Other Balance Balance Sheet Sheet & & Statement Statement of of Net Net Cost Cost Line Line Items Items Exam Exam Enviro Enviro Liabilitie Liabilitie s s Assertion Assertion (Remaining) (Remaining) Enviro Enviro Liabilities Liabilities Exam Exam (Remaining) (Remaining) Assertion means Army is ready to be audited SBR: Statement of Budgetary Resources SBA: Schedule of Budgetary Activity E&C: Existence & Completeness FBwT: Fund Balance with Treasury OM&S: Operating Materials & Supplies DERP: Defense Environmental Restoration Program Complete Underway 3 Army ADA Root Causes Cases Closed in FY14 23 ADA Investigations Completed in FY14 Common Root Causes
Using O&M for significant system modifications Prohibited purchases Use of Army funding to support non-DoD missions Project splitting Exceeding Military Construction thresholds Improper work classification Unlimited indemnification clauses in contracts Augmentation of appropriated funds Relocatable buildings 4 Army Business Initiative for Travel Efficiencies Savings Opportunities increased use of restricted fare air tickets minimizing centrally billed government travel accounts reducing manned air ticket offices reducing the number of credit cards being declined at ticketing increasing use of the government travel card dining pilot lodging pilot tax exemption 5 Financial Information Management (FIM) COL John Vogel 17 Enterprise Resource Planning (ERP) Systems GFEBS Fully deployed Consolidates Army General Fund (GF) data for management and audit GFEBS GCSS-Army Deploying worldwide by 2017 Source of supply, maintenance and property book transactions Leverages GFEBS financial template Interfaces with GFEBS for GF execution GFEBSSensitive Activities
Beginning development Includes secure capabilities Will interface with GFEBS LMP IPPS-A Fielding ~ 2019 Will provide military pay capability Will be source of pay transactions Will interface with GFEBS to trigger GF posting Fully deployed to depots & PEOs Enables some GF Procure-to-Pay and Asset Accounting processes Interfaces with GFEBS to trigger GF posting Legend: Legend: Logistics Logistics Modernization Modernization Program Program (LMP) (LMP) Global Global Combat Combat Support Support System-Army System-Army (GCSS-A) (GCSS-A) Integrated Integrated Personnel Personnel & & Pay Pay System-Army System-Army (IPPS-A) (IPPS-A) 18 Where We Are With GFEBS Where we are with GFEBS GFEBS (Main) o Military Personnel/Expenditure Reporting for Active, Army National Guard & Army Reserve o SPS Pre-Contract Award Interface o HQIIS and Real Property Inventory Management (RPIM) compliance updates o SFIS 10 and DDRS Enhancements o DCAS Interface and Auto-Recycle Program enhancements to reduce unmatched transactions o Tie Point and IDOC reporting in BI o Architecture in BI to support future Real Property reporting GFEBS-SA o Supporting Business Process Design (BPD) and Functional Design (FD)
documents o Assessing unique business processes that affect the sensitive activity workforce o Conducting functional process familiarization workshops at commands to advance understanding and prepare for later training 19 Where We Are Going With GFEBS Where we are going with GFEBS GFEBS (Main): o Prioritizing enhancements for Increment II o Financial statement preparation and automated reconciliation in BI o Extension of Business Intelligence technical infrastructure to enable: Cross-system Army-wide & Defense-wide financial data Consolidation Data refreshes multiple times in a single day to support users in all time zones Faster query response times Complex analysis and research of distantly related data sets Example: Tank miles driven compared to equipment maintenance costs Example: Asset information compared to general ledger postings GFEBS-SA: o Go-live limited to INSCOM and related DFAS organizations 3QFY16 o Full Go-live 1QFY17 20 OPR: OPR: DASA DASA FIM FIM LOE LOE 1: 1: Maximize Maximize Financial Financial System System Domain/ Domain/ ERPs ERPs Capability Capability OPR: OPR: DASA DASA FO FO LOE LOE 2: 2: Standardize Standardize Business Business Practice Practice and and Processes Processes
Improvement Plan Plan OPR: OPR: DASA DASA CE CE LOE LOE 6: 6: Establish Establish Army Army Cost Cost Framework Framework OPR: OPR: AFMO AFMO TF TF LOE LOE 7: 7: Strategic Strategic Communications Communications Transformation Transformation Maturity Maturity AFMS HQDA DFAS Commands FMSOC USAFMCOM PROPONENCY DASA-FO DASA-CE ABO DASA-FIM/ AFMO TF Army Financial Management Optimization (AFMO) Lines of Effort ENDSTATE (AFMO Goals &
Objectives) -Enhance Auditability -Leverage Financial System Domain/ ERPs -Optimize Workforce -Sustain readiness in FM units -Minimize redundant capabilities -Right-Size the Workforce -Develop Training and Certification -Reduce cost of FM operations -Better Analysis for Decision Making 21 Comptroller Proponency (PO) Ms. Ivonne Reid-Borland 22 Enterprise Talent Management (ETM) Civilian Education System (Constructive credit may be granted ilo course completion based on assignment history/past academics. TRADOC assesses and G3/5/7 has final approval authority) DOD FM Certification / CDFM Recognize and promote Senior Enterprise Talent Management (SETM) and ETM and take a personal interest in selection of SETM and ETM candidates and nominate only the best candidates Participate on selection and placement boards for Talent Management candidates Provide and protect resources for Civilian Talent Management Provide developmental opportunities for SETM and ETM candidates
Assess and provide feedback on Talent Management Programs Be willing to serve as mentors to SETM and ETM participants Recognize, profile and incentivize those candidates selected by the HQDA Civilian Talent Management Board 23 DoD FM Certification Program Update Major Command Status 1,642 1,616 1,397 1,555 1,305 989 699 12,422 1,001 908 355 477 USAR 2,292 1,305 Launched ARNG 1,848 1,555 Launched ) 4) s( 13 Ot he r NG B( 0)
US AR EU R( 3) US AR PA C( 17 ) US AC E( 19 ) US AR C( 0) US AA A (0 ) M ED CO M (1 ) IM CO M (5 7 ) (3 2 TR AD OC FO RS CO M (8 4 )
AM C( 28 Mitigation 14,000 Actions - Educate/Train Leaders 12,000 (Fewer - Monthly Training Rejections) 10,000 - Communicate via MilSuite - Provide Course7,741 Listings 8,000 (CL 1,2 and 3) - Develop and publish 6,000 updated FM Certification Information 4,000 Implementation Through 30 Mar 15 478 ) 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 12,422 12,422 Total Certifications a/o 25 Feb 15: 375 FMs 7,741 CY 2,000 11 0
2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 As of 01 July 2014, all persons must be certified within 2 years from launch. Requires that the 30 Jun 14 Cum Total 7,741 persons launched be certified by 30 Jun 16. 24 Questions/Discussion ASMC National Capital Region: Professional Development Institute Speed Mentoring Polaris Room 16:30 EDUCATION TRAINING PROFESSIONAL DEVELOPMENT26
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