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UNCLASSIFIED//FOUO
“Driving Change in Financial Management across the Army Enterprise”
Army Financial Management Optimization
AFMO Army Financial
Management Optimization
1
UNCLASSIFIED//FOUO
“We live in a changing and competitive world . . . Our force of the future has to be as great, if not even better, than our outstanding force of today. Our (national) security depends on it.”
Secretary Carter, November 2015
“Developing a lethal, professional and technically competent force requires an openness to new ideas and new ways of doing things in an increasingly complex world. We will change and adapt.”
CSA Milley, August 2015
The changing world around us…
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UNCLASSIFIED//FOUO
“Achieve efficiencies and effectiveness to redirect resources to direct support of combat, combat support, and combat service support elements of the DoD.”
“Improve financial processes, controls, and information via audit readiness.”
“Establish an enterprise framework for valuation and accountability of results, outcomes, cost, and risk.”
Strategic Objectives of Goal #5: Reform and Reshape the Defense Institution, DoD Agency Strategic Management Plan 2015 – 2018
31 July 2015
Meeting the challenge of the changing world around us …
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UNCLASSIFIED//FOUO
“By informing decisions with performance management the DoD leadership is empowered to focus on both efficiency and effectiveness to build value across the department.”
DoD Agency Strategic Plan 2015 – 2018, 31 July 2015
“I think the value of doing the audit is better information for decisions, but also better use of the resources and better outcomes. We are moving from a budget culture of "get the money executed" [to] a cost culture of "what is the outcome for the dollars that you execute." So the real outcome of [AFMO] is . . . better financial data for the decision-maker . . . and outcomes . . . we expected and asked Congress for the money for.”
HON Robert M. Speer, Assistant Secretary of the Army (Financial Management & Comptroller), April 2015
4
Meeting the challenge of the changing world around us …
UNCLASSIFIED//FOUO
Why Army FM Optimization? The FM Strategic Environment
General Fund Enterprise
Business System (GFEBS)
Integrated Personnel and Pay
System – Army (IPPS-A)
Global Combat Support System –
Army (GCSS-A)
Logistics Modernization Program (LMP)
Four Technologies
Advancing the Force
+
Internal and External Influencers
- Auditability by FY17 – Congressional Mandate - Shrinking budgets – Budget Control Act of 2011 - Shrinking Army forces = military & civilian reductions
- Demand for more Readiness inside smaller force with fewer resources
- 13+ years of War - Cost Management – tools for analytics to support decisions
Desired Outcome
Army Enterprise Resource Planning (ERP) Systems
=
5
. . . more efficient and effective use of resources to achieve Army outcomes.
UNCLASSIFIED//FOUO
What is it? A holistic approach to change management integrating financial management across the Army toward improving support to the warfighter
Who does it pertain to? Financial managers engaged
in resource and financial operations support Why do we need it? To effectively integrate efforts
toward meeting auditability goals and improve effective use of limited resources to Army priorities
Army FM Optimization Campaign Plan
6
Directed by the Secretary of the Army, Army Financial Management Optimization Supports the Army of 2025 and Beyond
UNCLASSIFIED//FOUO
Innovative FM enterprise solutions resourcing the Army of 2025 and Beyond*, enabling the essential qualities of ready Army forces that are:
–Agile –Expert –Innovative –Interoperable –Expeditionary –Scalable –Versatile –Balance
How Does AFMO Support Army of 2025 and Beyond?
* Source: The Army Vision
Agile, resource-informed decision support to commanders Increased full spectrum FM capability at reduced cost Dynamic costing of the full readiness life cycle Fully certified professional workforce experts in the ERP environment Enterprise solutions for Joint, Inter-organizational, Multi-national land operations
7
UNCLASSIFIED//FOUO
. . .integrated effective and efficient end-to-end financial management enterprise operation,
optimized to provide necessary resources to meet the Army’s missions
with proper stewardship and accountability of resources
and providing accurate and timely financial information and analysis for actionable decision making
that will receive a favorable Financial Statement clean audit opinion.
AFMO Campaign Plan Outlook
8
Like the Army’s journey to Army 2025 and Beyond, AFMO does not envision an end – AFMO will continue to frame change management as we adapt to a changing Army
inside a changing, complex world.
UNCLASSIFIED//FOUO
CO 1 Achieve and
Sustain Auditability
CO 2 Deliver FM Operations
Efficiently and Effectively
CO 4 Provide Financial Information and
Business Analytic Support
for Improved Decision Making
CO 3 Improve and
Sustain Operational
Readiness in FM Elements
• Public confidence in stewardship of DoD resources is high
• Business processes are standardized and auditable across the Army
• Automated Internal Controls systems are implemented throughout the FM environment
• FM Elements have access to enabling ERP systems
• FM Elements are high performing in any business or operating environment
• FM Elements are integrated with Home Station Mission
• Systems & processes are standardized & integrated by trained people in all FM operating environments
• FM Organizations are high performing
• Governance, decision and communication support are aligned
• Standardized Business Analytics are integrated leveraging breadth of financial cost data
• Business Intelligence (BI) capability delivers advanced analytics to commanders
• Improved decision making creates value capacity for commands and customers
AFMO Campaign Objectives
9
UNCLASSIFIED//FOUO
Strategic Environment
LOE 6: Army Cost Framework
LOE 4: FM Professional Workforce
LOE 5: Internal Controls Environment
LOE 1: Systems Domain
LOE 7: Strategic Management & Communications
LOE 2: Business Processes
LOE 3: Organizations
“Driving Change in Financial Management across the Army Enterprise”
AFMO Campaign Plan AFMO Objectives
(1) Achieve and Sustain Auditability (2) Deliver FM Operations Efficiently and Effectively (3) Improve and Sustain Readiness in FM Elements (4) Provide Financial Information and Business Analytic Support for Improved Decision Making
AFMO End State An integrated effective and efficient end-to-end financial management enterprise operation, optimized to provide necessary resources to meet the Army’s missions with proper stewardship and accountability of resources and providing accurate and timely financial information and analysis for actionable decision making that will receive a favorable Financial Statement clean audit opinion.
10
UNCLASSIFIED//FOUO
Legend: • Global Combat Support
System-Army (GCSS-A) • Logistics Modernization
Program (LMP) • Integrated Personnel & Pay
System-Army (IPPS-A)
• Fielding ~ 2020 • 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
• Increment 1 fully deployed • Consolidates Army General Fund
(GF) data for reporting, 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
• Beginning development • Includes secure capabilities • Will interface with GFEBS
LOE 1: Systems Domain
11
~ 75 legacy FM Domain systems
UNCLASSIFIED//FOUO
As-Is Process
Decomposed To-Be Process
Goal: Standardized business processes are critical to achieving audit readiness. Standardization is enhanced through use of ERP IT capabilities.
- Understand ERP opportunities - Reduce legacy systems - Exploit system capabilities
•Through Business Process Reengineering processes are standardized for efficiency and effectiveness. •Systems technological capabilities are leveraged and optimized.
LOE 2: Business Processes
12
UNCLASSIFIED//FOUO
Pilot Sites
Commanding General
Deputy to the Commander
for Field Operations
Systems Support
Operations (SSO)
Deputy to the Commander for Financial Management
Operations
Army Financial Services
(AFS)
Financial Audit &
Compliance (FAC)
USAFMCOM CSM
Special Staff
Exists In USAFMCOM
Near Term Focus Areas
Financial Audit & Compliance
Audit compliance Training Monitoring
Mid Term Focus Areas
FMSOCs
USAREUR
EUCOM
AFRICOM
USARAF
XVIII Corps
I Corps
III Corps
USARC
OCONUS FMSOC
CONUS FMSOC
FORSCOM
Financial Management Support Operations Center
Standardize processes Improved performance Reduce errors/re-work efforts
Systems Support Oversight Systems oversight/management Functional financial analysis support Cost Management support
The Army’s Financial Management Enterprise Operational Headquarters
13
LOE 3: Organizations US Army Financial Management Command (USAFMCOM)
Key USAFMCOM Outcomes: FM systems support Process
standardization Auditable financial
statements
UNCLASSIFIED//FOUO 14
Financial Management Support Operations Center (FMSOC) Outcomes: Standardized business
processes Reduced errors and re-
work Centralized support – more
expertise at reduced cost Systems integration (ERPs –
IPPS-A, GCSS-A, etc.) Training opportunities for
BC36 soldiers build FM readiness
USAFMCOM
CONUS FMSOC – Ft Bragg
TBD OCONUS FMSOC – Germany
HQDA DFAS
Operating Agencies (OA) and Fund Centers (FC)
What is the AFMO Pilot?
The AFMO Pilot explores improved standardization of transactional work, centralized to build expertise, reduce errors and improve audit readiness. Simultaneously, command RMs achieve enhanced capacity for analysis supporting optimizing resources toward command priorities.
Command Support Outcomes: Increased decision
support capacity Agility in influencing
current year execution; optimize toward readiness Increased cost
management Systems integration (ERPs
– IPPS-A, GCSS-A, etc.) Training opportunities for
BC36 soldiers build FM readiness
UNCLASSIFIED//FOUO
GOAL The Right People, At the Right Place,
With the Right Skills, Trained and Certified
Our people are the key to continued success …through enterprise Talent Management and validated workforce professional skills at all levels
Multi-disciplined training, OJT, customer focused, technical systems Training
Standardized DoD FM competencies to guide training and development
Certification
Leadership FM leadership competencies & talent
Organization Right mix of civilians and military, job series, grades and structure
15
LOE 4: FM Professional Workforce
UNCLASSIFIED//FOUO 16
LOE 5: Internal Controls Environment
Priorities Actions Goals
Existence and Completeness (E&C) of Assets & Liability
General Equipment (GE) Operating Materials and Supplies (OM&S) Real Property (RP) Inventory Other Balance Sheet Items
Standard processes Effective internal
controls Proper
documentation Accurate, timely,
reliable and supportable financial data
Establish effective control environment Assess
documentation & processes Implement
corrective actions Assess financial
statement data for accuracy
Enterprise Resource Planning (ERP) Systems
General Fund Enterprise Business System (GFEBS) Global Combat Support System–Army (GCSS-A) Logistics Modernization Program (LMP) Integrated Personnel and Pay System–Army (IPPS-A) Material Feeder Systems
Compliant Systems (FFMIA, FISCAM*)
Assess system controls Correct control
deficiencies
Army is auditable
*The Federal Financial Management Improvement Act, and Federal Information System Controls Audit Manual
Information is timely, accurate,
relevant
Statement of Budgetary Resources (SBR) Funds Receipt, Dist., and
Monitoring Payroll (Civ. & Mil.) Acquisition of Assets Reimbursable Inbound Grants, Cooperative
Agreements, Subsidies, Contributions, and Advances
FBWT / Disb. & Collect. Financial Reporting Contractual Services/
Acquisition of Assets: - Reimbursable Out
(MIPRs) - Purchase Cards - Supply Requisition - Contracts - Other
UNCLASSIFIED//FOUO 17
Capture and Valuate Data – Accurate, timely and relevant data – operational output/performance
data tied to financial data – Allocated Overhead
Cost Analysis – Variances – Depreciation – Trends and forecasting – Cost by element (labor, contract etc) – Understanding full costs of
organizations, operations, products and services
Cost Planning – Set Cost Targets and
Efficiency Goals – Compute Standard Rates
Cost Controlling – Adaptability based on analysis – Change targets – Change resources – Change quality
LOE 6: Army Cost Framework Resource Informed Decision Making
Managing business operations efficiently & effectively through accurate measurement & understanding "Full Cost" of an organization's business processes, products & services to provide Best Value.
UNCLASSIFIED//FOUO
LOE 7: Strategic Management and Communications
18
“Resources to Win in a Complex World”
“Driving Change in Financial Management across the Army Enterprise”
Achieve and Sustain
Auditability
Deliver FM Operations
Efficiently and Effectively
Provide Financial Info and Analytic Support for Improved
Decision Making
Improve and Sustain
Operational Readiness in FM Elements
UNCLASSIFIED//FOUO
• Better decision support to commanders • Standardizes processes and systems controls to improve audit readiness
• Leverages Army FM workforce and maximizes ERP systems to optimize
and streamline financial operations
• Improves oversight of Army enterprise-wide Financial Management operations
• Acknowledges key role of highly skilled workforce in shaping financial management change adapting to a changing Army
What are the Benefits of AFMO?
19
Ultimately, AFMO frames the path to achieving audit readiness, building value across the Army to direct more resources to core mission priorities.
UNCLASSIFIED//FOUO
What Can I Do?
• Assess business practices and processes – streamline and standardize
• Understand ERPs and controls, explore untapped capabilities for standardization
• Train and certify your team in the right skill sets and job series
• Share lessons learned from getting “Audit Ready”
• Increase cost analytics in the Commander’s decision-making process
• Demonstrate ability to optimize resources toward mission priorities
CO 1 Achieve and
Sustain Auditability
CO 2 Deliver FM Operations
Efficiently and Effectively
CO 4 Provide Financial Information and
Business Analytic Support
for Improved Decision Making
CO 3 Improve and
Sustain Operational
Readiness in FM Elements
20
To achieve audit compliance and improve support to commanders, we must change and adapt to the changing,
complex world around us.
UNCLASSIFIED//FOUO
Questions?
21
"Change is hard because people overestimate the value of what they have and underestimate the value of what they may gain by giving that up." - James Belasco and Ralph Stayer Flight of the Buffalo (1994)
"After living with their dysfunctional behavior for so many years (a sunk cost if ever there was one), people become invested in defending their dysfunctions rather than changing them." - Marshall Goldsmith Mojo
UNCLASSIFIED//FOUO
Questions?
22
For more information please contact: COL John Vogel (703) 692-8529 [email protected] COL Andrew McConachie (703) 693-2689 (301) 833-8314 [email protected] LTC Claire Lindley (703) 693-2698 [email protected]