Honorable Robert M. Speer

3 Mar 2015

Assistant Secretary of the Army for Financial

Management & Comptroller

2015 Washington-ASMC National Capital Region PDI

Army Budget (BU)MG Thomas Horlander

2

America’s Army

132,000 SOLDIERS IN 150 LOCATIONS WORLDWIDE

The world is experiencing an increased velocity of instability America’s 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

As of: 24 Feb 15

PACOM NORTHCOM EUCOM CENTCOM

JTF – BRAVO 430

OIR – IRAQ 2,020

CONUS SPT BASE19,080

OFS – AFGHANISTAN9,030

OSS – KUWAIT10,500

USAREUR27,270

JTF – HOA900

OSS – QATAR1,650

ALASKA11,860

HAWAII21,980

JAPAN2,360

SOUTH KOREA19,790

JTF – GTMO1,540

SOUTHCOM

AFRICOM

MFO – SINAI690

OTHER WORLDWIDEOPERATIONS

10,760

OSS – JORDAN890

OUA – WEST AFRICA1,010

OJG – BALKANS710

OAR – BALTICS &POLAND

960

OEF – PHILIPPINES120

3

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 only 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

$144.9

$134.6

$129.7

$126.5

$116.8 $117.3

$120.5

$138.4

$127.4$126.2

$121.1

$110

$120

$130

$140

$150

2012 2013 2014 2015 2016

$ B

illi

on

s

FY 16 O&M Reduction FY16 Procurement Reduction BBA Relief: Includes OCO for BasePB Request BCA Levels FY12-14 ExecutionFY15 Enacted FY14: $3.1B OCO for Base Requirements FY15: $.85B OCO for Base Requirements; $.3B Readiness Addition

(Base Funding Program)

$3.2B O&M

$2.6B Proc

Sequestration Impact

$5.1B Reduction from FY14

FY15 Funding Divot

Army Topline

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 Double-V Hull

Readiness and modernization will feel the brunt of BCA4

Military Personnel

45%Operation &

Mainte-nance

36%

Procure-ment RDTE

18%

Other Base 1%

FY 2015/2016 Budget Comparison

Request ($B) FY13 Actuals

FY14 Actuals

FY15 Enacted

FY16 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

Totals 127.4 126.21 121.12 126.5Other Base: Chemical Agent and Munitions Destruction, Army Working Capital Fund, Arlington National Cemetery1: Includes $3.1B OCO for Base Transfer 2: Includes $.85B OCO for Base Transfer and $.27B in Readiness Increase

$126.5B

(Base Funding Program)

FY16 Base Request

Military Personnel

47%Operation &

Maintenance 34%

Procurement RDTE 17%

Military Construction <1% Other Base 1%

FY15 Base Enacted$121.1B

FY16 Budget Request Equals FY14 Expenditures 5

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)• Incremental Improvements

FY16 Budget Highlights

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

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

Opportunity• Stewardship of nation’s resources • Continuous improvement• Cost informed decision making / Accountability

Army GO/SESCost Management (CM) Steering Group

Purpose: To shape and inform the implementation of cost management policy, strategy, system design and practices in alignment with Army Leadership priorities. Provide guidance and understanding on Army enterprise level cost needs, performance metrics, capability gaps, and recommendations required for more agile, effective, and efficient decision making processes.

Expected Outcomes: Successfully implement Cost Management and meet the information needs across the Army, starting with:

• CMSG Charter review• CMSG input on key CM information needs and strategies required to successfully support the resource information decision making process and Army leadership priority goals and missions.• Cost Managed Organizations Across the Army

Slide 9

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…

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…

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”

Defining Cost Information“Why & What is Needed”

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 Desk transition

• SOP Contents: – 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

• Dec 2014-May 2015• Documenting the 43

Command Unique Cost Model Documents

• 19 CCM Documents published on the Cost & Performance Portal

• Living Documents• Reference Documents to

understand the Command’s current cost model in multiple ERPs

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 Army’s 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

“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

`

Fu

ll F

inan

cial

Sta

tem

ents

-

V

alu

atio

nS

BR

SBA Financial Reporting

RP and OM&S E&C Exam

FY 2016 SBA Audit

Begins

Q3 FY15

Q2 FY15

Q3FY16

Q2FY17

Q1FY16

Q4FY16

Q2FY16

Q4 FY15

Q1FY17

Q3FY17

Q1FY18

Q4FY17

FY 2016 SBA Audit

Report

FY 2017 SBA Audit

Report

Internal Use Software Exam

RP and OM&S E&C

Report

Other Balance Sheet &

Statement of Net

Cost Line Items

Assertion

Other Balance Sheet & Statement of Net

Cost Line Items Exam

OM&SGeneral Equipment

Exam

OM&SGeneral Equip

Assertion

SBA FBwT Recon

FY 2015 SBAAudit

Report

FY 2017 SBAAudit

Begins

Internal Use

SoftwareAssertion

FY 2018 GF Full

Financial Statement

Audit Begins

Real PropertyAssertion

Real PropertyExam

Environmental Liabilities

Exam (DERP Only)

Enviro LiabilitiesAssertion

(DERP Only)

Enviro Liabilities

Exam (Remaining)

Enviro Liabilitie

sAssertion(Remaining)

FBwT Exam

FY 2015 SBAAudit

Continues

Complete Underway 3

Army ADA Root Causes – Cases Closed in FY14

4

• 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

23 ADA Investigations Completed in FY14

Common Root Causes

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

Legend:• Logistics Modernization Program (LMP) • Global Combat Support System-Army (GCSS-A)• Integrated Personnel & Pay System-Army (IPPS-A)

Legend:• Logistics Modernization Program (LMP) • Global Combat Support System-Army (GCSS-A)• Integrated Personnel & Pay System-Army (IPPS-A)

LMP

IPPS-A

GFEBSGCSS-Army

• 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

GFEBS• Fully deployed• Consolidates Army General Fund (GF)

data for management and audit

• Deploying worldwide by 2017• Source of supply, maintenance

and property book transactions• Leverages GFEBS financial

template• Interfaces with GFEBS for GF

execution

GFEBS-Sensitive Activities

• Beginning development• Includes secure

capabilities• Will interface with GFEBS

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 Interfaceo HQIIS and Real Property Inventory Management (RPIM) compliance

updateso SFIS 10 and DDRS Enhancementso DCAS Interface and Auto-Recycle Program enhancements to reduce

unmatched transactionso Tie Point and IDOC reporting in BI o Architecture in BI to support future Real Property reporting

GFEBS-SAo Supporting Business Process Design (BPD) and Functional Design (FD)

documentso 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 BIo 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 3QFY16o Full Go-live 1QFY17 20

Army Financial Management Optimization (AFMO) Lines of Effort

Transformation Maturity

OPR: DASA CE LOE 6: Establish Army Cost Framework

OPR: DASA FO LOE 2: Standardize Business Practice and Processes

OPR: PROPONENCY/AFMS LOE 4: Fully Trained & Certified Workforce

OPR: DASA FO LOE 5: Financial Improvement Plan

LOE 3: Transformation/Pilot

OPR: USAFMCOM LOE 3a: USAFMCOM Transformation

OPR: USAFMCOM LOE 3b: FMSOC Transformation

OPR: AFMO TF LOE 7: Strategic Communications

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

OPR: DASA FIM LOE 1: Maximize Financial System Domain/ ERPs Capability

DASA

-FIM

/AF

MO

TF

DASA

-CE

ABO

DASA

-FO

PRO

PON

ENCY

USA

FMCO

M

FMSO

C

Com

man

ds

DFA

S

AFM

S

HQ

DA

OPR: CMD G8/OA LOE 3c: OA Transformation

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

24

2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Launched Cum 7,741 9677 10499 12,422 12422 12422 12422 12422 12422 12422 12422 12422

Certified Target Cum

0 0 300 900 2268 3636 5004 6372 7,741 9677 10499 12,422

Certified Actual Cum

11 64 201 375 375 375 375 375 375 375 375 375

1,000

5,000

9,000

13,000

7,741

12,422

7,741

12,422

11

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.

CY

AMC (

28)

FORS

COM

(84)

TRADOC (3

2)IM

COM (5

7)USA

REUR (

3)USA

RPAC (

17)

USACE

(19)

USARC

(0)

USAAA (0

)M

EDCOM

(1)

NGB (0)

Other

s (13

4)

0200400600800

1,0001,2001,4001,6001,800 1,642

1,397

699989

355 477

1,616

1,305

478

908

1,555

1,001

12,422

Major Command Status

Implementation Through 30 Mar 15

USAR 2,292 1,305 LaunchedARNG 1,848 1,555 Launched

Mitigation Actions- Educate/Train Leaders - Monthly Training (Fewer

Rejections)- Communicate via MilSuite- Provide Course Listings

(CL 1,2 and 3)- Develop and publish

updated FM Certification Information

Total Certifications a/o 25 Feb 15: 375 FMs

Questions/Discussion

26PROFESSIONAL DEVELOPMENTPROFESSIONAL DEVELOPMENT

ASMC National Capital Region: Professional Development InstituteASMC National Capital Region: Professional Development Institute

TRAININGTRAININGEDUCATIONEDUCATION26

Speed Mentoring

Polaris Room 16:30