i n t e g r i t y - s e r v i c e - e x c e l l e n c e headquarters u.s. air force 1 jamie morin...
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I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Headquarters U.S. Air Force
1
Jamie MorinSAF/FM
ASMC “Mini PDI”
Financial Management in an Uncertain Environment
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I n t e g r i t y - S e r v i c e - E x c e l l e n c e
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2011
2014
2017
2020
2030
0%
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20%
30%
40%
50%
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80%
90%
National Fiscal Environment
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National deficit and debt are risks to national security -Budget Control Act of 2011 mandated DoD to do its part in debt reduction
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2212%
14%
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24%
26%Outlays
Revenues
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-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
2%
4%Federal Budget Surplus/DeficitsRevenues and Outlays
Federal Debt
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0%10%20%30%40%50%60%70%80%90%
100%
Mandatory
Nonde-fense
Defense
Net Interest Federal Outlays
% o
f Fe
dera
l Out
lays
% o
f Fe
dera
l Bud
get
% o
f GD
P%
of G
DP
62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 11 12 13 14 15 16 17 180
100
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AF DoD
FY10 – 18:DoD: -24%/-$178BAF: -22.6%/-$26B
Vietnam
Reagan Buildup
Iraq/AfghanFY13 Dollars in Billions
Vietnam (FY68-74)
DoD: -30%; AF: -38%
Buildup/Cold War (FY 86-98)
DoD: -33%; AF: -47%
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Total Budget Trends(Including supplemental and OCO funding through 2014)
Notional Sequestration Line
I n t e g r i t y - S e r v i c e - E x c e l l e n c e 1710
Air Force 2023…Cost Drivers
What we need to do today to be viable to execute Defense Strategy
■ Rising Personnel Costs■ Total Force E/S decreased 14% - FY90 to FY13■ MILPERS budget grew by 49% - FY90 to FY13
■ Cost to Operate the Fleet■ Largest growth in AF Blue base budget from 1990 to 2013 was in O&M at 92% ■ WSS growing at ~7% per yr above inflation
■ Aging Aircraft Inventory■ TAI: FY90: 9,032; FY00: 6,192; FY13: 5,500 ■ Average a/c age rising
■ Fighters 23 yrs, Bombers 36 yrs, Tankers 48 yrs■ FY14 buy of 50 aircraft = ~110 year Recap Rate
■ Recapitalization Opportunity■ Procurement dropped 49% (constant) - FY90 to FY13■ Implementation of should-cost showed ~2%-3% savings realized in FY12
compared to budget levels.
■ Fiscal Environment■ Topline issue: historical draw downs last 10+ yrs■ Budget uncertainty – CR, BCA of 2011 and sequestration
I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Groundwork for the AF’s FY15 POM (aka 5-year resource plan) ~65 cost assessments,
increased O&S focus
Earlier delivery to shape MAJCOM resource plans
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Shaping Budgets with Analysis
The FY15 POM continues on the path toward acquisition excellence by reducing cost risk in our acquisition portfolios.
I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Investment Cost AssessmentsTrends/Goals
PB 11 PB 12 PB 13 PB 140
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40
60
80
100
120
$77B
$90B
$4.7B
42%
$1.3B
64%
$99B$8.1B
61%$60B
$11.9B Cost Risk
33% of RDTE/Proc
$ B
illio
ns
■ High confidence, realistic estimates
■ Protect AF TOA
■ On-cost & on-schedule programs
■ Better prep’d for top-line pressure
■ Improve Gov’t negotiation position
6Making A Difference…% Assessed Up and Cost Risk Down
* “Cost risk” is the difference between valid cost estimate and the available funding
I n t e g r i t y - S e r v i c e - E x c e l l e n c e
Who We Are: FM Professionals
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Financial Stewards
Advisors
Educators
Innovation In Action – Professionals in the Face of Adversity
■ Every Dollar Counts Campaign■ Airmen Powered by
Innovation:■ Over 11,000 submissions ■ Over 500 for SAF/FM
■ Successes■ Automated Personal
Military Compensation Statement
■ Provide Lodging Tax Free Forms at Bases
■ Biggest Single Item:■ Increase awareness to
promote a fiscal responsible culture
Financial Improvement Actions
811Create a Culture Change for Financial Improvement
FIAR: Audit Readiness by 30 Sep 14 Well designed, aggressive path Asserted Funds Distro to Base Asserted on Civilian Pay (GF
$12.2B, WCF $5B) SBIRS Acq Program (not audit
ready – corrective actions to be addressed in MOCAS Contracts AU)
Spare Engines – Qualified (local system not reconciled to accountable record system) ($9.9B)
Missile Motors – Unqualified ($1.6B)
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Audit Readiness Status Accomplishments
Description Due USD(C) Priority Current Status
Budget Authority – Fund Receipt/Distribution 30-Sep-10 SBR Opinion - Sustainment
Fund Balance with Treasury Reconciliation 31-Dec-10 SBR Opinion - Sustainment
Military Equipment, Cruise Missiles, Drones, Aerial Targets
31-Dec-10 Existence & Completeness Under DoDIG Examination (6/30/12)
Fiscal Year 2012 Goals
Uninstalled Missile Motors 30-Mar-12 Existence & Completeness Preparing assertion documentation
Spare Engines 29-Feb-12 Existence & Completeness Asserted
Funds Distribution to Base 31-Mar-12 SBR Preparing assertion documentation (CAPs)
MDAP (SBIRS) 30-Sep-12 SBR In Discovery Stage
Fiscal Year 2013 Goals
Reimbursable Budget Authority (RBA) 31-Dec-12 SBR In Discovery Stage (CAP)
Hire to Retire (Civilian Pay) 31-Dec-12 SBR In Discovery Stage
Hire to Retire (Military Pay) 31-Mar-13 SBR In Discovery Stage
Real Property 30-Jun-13 Existence & Completeness In Discovery Stage
MILSTRIPS 31-Jul-13 SBR Not Started
Vendor Pay 31-Aug-13 SBR Not Started
Fiscal Year 2014 Goals
Reimbursable Work Order (RWO) 31-Dec-13 SBR In Discovery Stage (CAP)
Contracts (MOCAS) 31-Dec-13 SBR In Discovery Stage
Net Outlays 31-Dec-13 SBR In Discovery Stage
Financial Statement & Compilation 31-Dec-13 SBR In Discovery Stage
Spare Parts - AF Managed/AF Possessed 30-Jun-14 Existence & Completeness Not Started
Munitions 30-Jun-14 Existence & Completeness In Discovery Stage
Future Goals
Spare Parts - Ctr Managed/Ctr Possessed 30-Sep-15 Existence & Completeness Not Started
Spare Parts - Ctr Managed/AF Possessed 30-Sep-15 Existence & Completeness Not Started
Inventory (WCF) 31-Dec-15 Existence & Completeness In Discovery Stage
General Equipment 30-Sep-15 Existence & Completeness Not Started
Government Furnished Equipment 31-Mar-16 Existence & Completeness In Discovery Stage
Scarce resources drive need for more disciplined fiscal controls
Summary
■ Sequestration is a FYDP challenge, not just an FY13 challenge
■ Uncertainty for FY14 and beyond…
■ What should the Air Force look like in 2023?■ What capabilities can we afford?
■ What are the long term impacts on our people?
7Your role is critical in this uncertain fiscal environment