review of fiscal law december 4, 2002 draft. change management center 2 draft overview purpose &...
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Review of Fiscal Law
December 4, 2002
DRAFT
Change Management Center
2DRAFT
Overview
Purpose & Objective
Challenges
Management Directives
Partnership Approach
Project Activities & Timeframe
Cost
Next Steps
Change Management Center
2DRAFT
Purpose & Objective
Purpose To conduct a comprehensive review of current Fiscal Laws and associated
regulations and directives, and recommend legislative changes as appropriate for inclusion in the President’s Budget
Objective Implement an Overarching Network of Fiscal Laws that will provide an
Integrated and Flexible Support Foundation for DoD Financial Management Operations into the 21st Century
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President’s Management Agenda supports change:– The Financial Management Initiative improves how the Government manages its
money – reducing, for instance, the billions in erroneous payments the Government makes every year
– The E-Gov Initiative harnesses the power of the Internet to make the Government more productive
Congress receptive to DoD financial streamlining recommendations SECDEF: Improving Financial Management in “Top Ten”
Challenges Overlapping Congressional/Administrative financial rules Limited DoD “Freedom to Manage” Disconnect between fiscal policy and business processes GAO: DoD financial modernization requires complimentary policy/process
modernization No “wall-to-wall” review of Fiscal Law
Management Directives
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Partnership Approach Management – CMC & OSD
– Senior Advisory Services– Section 800” Model - Creation of an Advisory Panel to
identify, justify, and recommend legal and structural changes to complex DoD issues
– Financial Management Advisory Group– Appointed by Executive Sponsor
– Contractor Administrative Support– SAIC– Keane– Financial Management
Services, Inc. (FMSI)
DoD Executive
Sponsor
Fiscal Law
Advisory Panel
Fiscal Law
Contractor Support
Change
Management
Center
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Partnership Approach (Cont.) Divide Project into distinct “Modules”
– Appropriation Law
– Anti-Deficiency Act
– Disbursement and Collection
– Financial Management Accountability
Initially specialize in each module
Initial findings, “Quick Fixes,” Business Process Reengineering (BPR)
End product will ensure consistency in overall recommendations
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Project Activities & TimeframePhase I – Scope Identification (01/01/03 – 4/30/03 )
Identify issues for review – Subject Matter Expert Panel:
– Appropriation Law
– Anti-Deficiency
– Disbursing & Collection
– Financial Management Accountability
Interview Public and Private Stakeholders
– DoD managers
– Congressional staff, CBO, GAO, OMB, FASAB, & JFMIP
– Private sector experts
Analyze and prioritize critical reform opportunities in statute, regulation and process
– Provide Executive Sponsor Initial Findings – “Quick Hits” (60 & 120 days)
Define scope of analysis & Key Performance Indicators
NOTE:
The end date of Phase I will need to be moved to04/30/03 if submission of proposed legislation is required to be submitted with the President’s FY05 Budget and related interviews and financial management analysis may be required to be reduced.
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Project Activities & Timeframe
Phase II – Recommendation Development (7/1/03 – 12/31/03)
Establish Advisory Panel
Identify & Establish Congressional Champion
Establish Staff, SME, Technical Expert Working Groups
– Review and validate project scope
– Identify issues
– Propose recommendations for change & performance results
expected
• Process or policy
• Regulatory
• Legislative
• Effectiveness & Efficiency Improvements
Provide IPRs to Advisory Panel on Working Group progress
Finalize Working Group recommendations
NOTE:
The end date of Phase II will need to be moved to 09/30/03 if submission of proposed legislation is required to be submitted with the President’s FY05 Budget and related interviews and financial management analysis may be required to be reduced.
The begin date for Phase II would also be moved to 05/01/03.
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Project Activities & TimeframePhase III – Final Report & Action Model Implementation Plan (01/01/04 – 9/30/04)
Conduct Advisory Panel review
Prepare final report
– Background
– Analysis and justification
– Recommendations
– Outreach and Communications Plan
– Draft Legislative/Regulatory Language
– Implementation Plan
Submit recommendations for President’s Budget
NOTE:
The end date of Phase III will need to be moved to 02/28/03 if submission of proposed legislation is required to be submitted with the President’s FY05 Budget and related interviews and financial management analysis may be required to be reduced.
The begin date for Phase III would also be moved to 10/01/03.
The project team would remain in operation to respond to legislative questions and plan implementation strategies and related costs.
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CostSupport Services
Period of Performance 01/01/03 Through 03/31/04 (15 Months)
Contractor Support
Subject Matter Experts
Internet Web Services Costs
Travel
Total Contractor
DOD Internal Support Services
Next Steps
$2,055,335.97
$1,390,625.00
$340,650.00
$180,000.00
$3,966,610.97
$1,487,955. 44
$843,750.00
$195,750.00
$120,000.00
$2,647,455.44
Executive Sponsor Action Items Establish Executive Sponsor/CMC Partnership
Identify/Establish Advisory Panel
Consider FACA Issues
Identify & Allocate Funding
Confirm Scope
Provide DoD Technical Resources
Coordinate OSD – Legislative Affairs Requirements
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Back-Up Slides
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Expected ChangesLegislative Change Examples Anti-Deficiency Act
– Problem - Fund managers can not pay vendors for purchases to required to perform work for working capital fund customers.
– Possible Solution - Modify over-expenditure requirement to allow “Working Capital Funds” to either 1) over-expend “fund balance with treasury” or authorize borrowing authority from treasury equal to agency accounts receivable balance.
– Result – Vendors are: 1`) paid timely, 2) provided increased working capital liquidity, 3) reduced borrowing cost, and 4) either reduced product or service cost or profits to be reinvested or returned to stockholders to be reinvested or used.
Disbursing Officer Act, Executive Order 6166, Prompt Payment Act
– Problem – Vendors invoices can not be paid except by authorized government disbursing officers & interest penalties are assessed for late payment (Prompt Payment Act)
– Solution – Change Disbursing Officers Act, Executive Order 6166 & Prompt Payment Act to allow vendors to “Electronically PULL” payments from treasury general account equal to one months invoice for products or services and “post audit” paid invoice and adjust next month invoice for discrepancies,
– Result - Vendors are: 1) paid timely, 2) provided increased working capital liquidity, 3) either reduced product or service cost or profits to be reinvested or returned to stockholders to be reinvested or used, and 4) Government payment processing cost, invoice examination and disbursing costs are reduced.
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Federal Advisory Committee Act (FACA) Pro
– Transparent, High Visibility– Use of Private Sector Recommendations
Con– Cumbersome and Time Consuming– Limits use of Private Sector– Limits flexibility of participants
FACA Requirements include (Department of Defense Directive 5105.4) – Establish a written charter that explains the mission of the committee;– Give timely notice of committee meetings in the Federal Register;– Have fair and balanced membership on the committee;– Open committee meetings to the public, whenever possible;– Have the sponsoring agency prepare minutes of committee meetings;– Provide public access to the information used by the committee;– Grant to the federal government the authority to convene and adjourn meetings; and– Terminate within two years unless the committee charter is renewed or otherwise
FACA Trigger– Private Sector Individuals alone or in conjunction with government employees providing
consensus advice at the request of a government agency
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Organization