Transcript Slide 1

Army Financial Management
HON Mary Sally Matiella
Assistant Secretary of the Army, Financial
Management & Comptroller
23 February 2012
7/16/2015
Agenda
• The Defense Budget
• Cost Culture/Management
• Challenges to Improving Financial
Management
• Pathway to Auditability
• Funding Lifecycle
• DoD Certification Program Framework
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The Defense Budget
• Discretionary spending is ~35% of total federal budget – Defense budget is ~50% of discretionary spending
• Increasing emphasis on reducing spending/deficit – Congress and the Administration
• Historically, funding levels have decreased as military demand decreases
DoD Military Manpower
$800 B
$700 B
Korean War
Armistice (1953)
$600 B
DoD Total Manpower
Height of
Vietnam
War (1968)
DoD $ (FY12 Constant $)
Height of
Cold War
(1985)
Vietnam War
Ends (1973)
FY01-11 Base (FY12 Constant $)
8.0 M
9/11
(2001)
Gulf War
Ends (1991)
OCO
?
7.0 M
6.0 M
$500 B
5.0 M
BCA
$400 B
4.0 M
$300 B
3.0 M
$200 B
2.0 M
BCA
impact
?
1.0 M
$100 B
$B
.0 M
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BCA – Budget Control Act of 2011
FOR OFFICIAL USE ONLY
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Cost Culture/Management
Cost Planning
– Operational managers
set cost targets and
efficiency goals
– Plan cost based on
outputs produced
Cost
Planning
Resource Informed
Decisions
– Take action based on
analysis and external
demands
– Change targets
– Change resources
– Change quantity / quality
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Cost
Accounting
Cost
Management
Process
Cost
Controlling
Full Cost Measurement
– Accurate, timely and relevant data
– Connecting operational output/performance
data to financial data
– Allocate Overhead, Unfunded Costs,
Indirect Support
Cost Analysis
– Variances
– Trends and forecasting
Cost
Analysis
– Product, service or activity
cost by expense (labor,
material, contracts, etc…)
– Understanding full costs of
organizations, operations,
products and services
– Comparison Analysis &
Benchmarking
** Cost Management Requires:
- Engaged Leaders
- Strong Staff (Cost Warriors)
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Challenges to Improving
Financial Management
Leadership
Internal
Control
ERP
Risks
Architecture
Workforce
1. Committed and sustained
leadership
2. Effective plan to correct internal
control weaknesses
3. Competent financial management
workforce
4. Accountability and effective
oversight
5. Well-defined enterprise
architecture
6. Successful implementation of the
enterprise resource planning
systems.
Accountability
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According to GAO Testimony before the Panel on DOD Financial
Management House Armed Services Committee, 28 July 2011
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Pathway to Auditability
Practices &
Policies
System
• General Ledger Accounts
• Transaction-level accounting
• Automated Internal Controls
• Automated Interfaces
• Financial Reporting
• Transaction-level processing
• Follow the 5 stages of
accounting (funding,
commitment, obligations,
receipt/accrual, and disbursing)
• Standard business practices
• Inter-governmental
processing
• Provide supporting
documentation (old & new)
Leadership
• Instill a “Will Do” Culture
• Ensures compliance with
system, practices, and policy
• Track & Resolve problems
• Train the workforce
• Change Management
• “Who”; “What”; “When”
AUDIT OPINION
Statement of Budgetary Resources by 2014
Full Financial Statements by 2017
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Funding Cycle
The purpose of financial reports is to inform managers how much of their funding falls
into each phase of the lifecycle. The example below uses terminology geared toward
contracts and supply orders, but the same lifecycle applies to other major uses of our
funds, such as civilian and military labor.
1. Funding
Available
2. Under
Contract/Order
3. Goods/Services
Received
4. Invoice
Approved
5. Payment made
(Outlays)
6. Contract/Order
Adjusted/Closed
1. Funding Available – Receive and distribute funding to operational organizations
2. Under Contract/Order – Use funding on goods and activities to meet mission goals
3. Goods/Services Received – Document orders are received
4. Invoice Approved – Pay only for goods and services received
5. Payment Made – Ensure payments are processed and recorded
6. Contract/Order Adjusted/Closed – Adjust orders for subsequent changes
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DoD Certification Program Framework
• Course Hours to Meet FM
Competencies
• Content and Course Hours for FM
101 Course & Other Required
Courses
• Course Hours for Leadership
Competencies
• Time and Experience in DoD
• Developmental Assignments
Level 1
40 CEU/CPE hrs
Level 2
60 CEU/CPE hrs
Level 3
80 CEU/CPE hrs
• CEU/CPE
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Summary
LEARN
–
–
–
–
Workforce
FM Systems
Audit Readiness
Resource Informed Decisions
Efficient
ADAPT
–
–
–
–
GFEBS
Workforce
Cost Culture
Financial Environment
WIN
Effective
FOCUS
–
–
–
–
Cost Culture
GFEBS
Audit Readiness
Workforce
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Questions?
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