Current Issues in DoD

Financial Operations

Presented to ASMC PDI

May 28, 2015

• Annual financial audits meant fewer inspections and internal compliance audits

• Annual financial reports, with positive opinions, were as “hi-vis” as the

President’s Budget Submission

• There were fewer systems enforcing

better data standards – meaning

less rework and fewer exceptions

• Our Financial management team

obtained the right training within a

structured professional certification

program

• Reports provided more accurate and timely status of funds – better financial

information for decision making

The Future May Be Closer Than You Think2

The Future: Wouldn’t it be nice if …

Envisioning the Future

• Challenges

– Resource constraints

– Recruiting and retaining the right skills

• Outlook on Opportunities

– Cost accounting / control

– More accurate reports providing closer link to budget items

• Change Management Strategies

– Incentives

– Culture change

Current Issues in Financial Operations

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“We do all those old tricks electronically now.”

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• Department of the Army

Laura Jankovich

Deputy Assistant Secretary of the Army (Financial Operations)

• Department of the Navy

Karen Fenstermacher

Deputy Assistant Secretary of the Navy (Financial Operations)

• Department of the Air Force

Tom Murphy

Deputy Assistant Secretary of the Air Force (Financial Operations)

• Defense Finance and Accounting Service

Dave McDermott

Deputy Director for Operations

The DoD Financial Operations Team

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Antideficiency Act

Investigations

• Root causes

• Qualified Investigating Officer Challenges

• Delays in ADA Flash reporting

• ADA caseload increasing

ERPs and

Legacy Systems

• ERP Challenges

• Legacy system sunset and challenges

• Establishing protocols for sensitive activities

Financial

Accounting

• UMT / IDOCs

• Travel Efficiencies (CBA / Lodging / Mandatory IBA use)

• Canceling Year Emphasis

• Contract closeouts

• Transportation Challenges

Financial

Reporting

• Abnormal Balances

• Army / DFAS JV working groups

o Identify and correct root causes of JVs

o Reduce unsupported JVs

o Eliminate legacy processes resulting in JVs

Army Current Issues

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Improved

Recruiting

• For DoD, accounting and financial audit experience are scarce skill sets

• Direct Hiring Authority has been explored, but not obtained

o May have a long lead time

• For now, flex the “as-is” HR infrastructure

o Use the system work “adaptively” to fill our requirements

Improved

Retention

• Emphasize responsibility and leadership potential in audit-related jobs

• Stress skill set development and closing skills gaps

• Leverage FM Certification Program to add to worker capabilities

FM Certification

Program

• Reassess relevance: Is it aiding FM career progression?

• Make cert requirements a “win” for both employees and FM professionalism

• Use as tool to close the gap in needed audit-related skill sets

Overhauling

IT Systems

• Navy doing control assessment on 83 business systems which affect financial

statements most

• Changing remediation strategy – to centralized direction

• Improving IT controls is “Priority One”:

o Can’t compile accurate statements without strong controls

o Strong, reliable IT controls = less substantive testing

Leveraging

Auditability

• Stronger controls/oversight over obligations = expanded buying power

• Better insight of business operations = greater potential for more

efficiencies/savings thru synergy

• Tighter IT controls = less rework of business data

Navy Current Issues

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Cleaning up the

ERP End to End

• Supporting auditability through technology

• Shifting the issues from back-end to front-end

• Increase in end to end information value after cleaning the front end

Sunsetting

Legacy Systems

• Biting the bullet on the last “10%” of functionality

• BPR BPR BPR

• Cost per transaction analysis

Operationalizing

the Audit

• SBA is yesterday’s news

• The reality of change management investment needed

• Accountability in a disciplined environment

A View from the

Private Side

• What's the bottom line?

• Ignoring distraction (the 10% bite v the 90% chase)

• Teams who care

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Air Force Current Issues

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DFAS Current Issues

• Customer Collaboration in an Evolving Environment

– Legacy system retirement

– Managing business in ERP environment

– Audit readiness/steadiness

• Proactive Customer Engagement

– Transparency – Customer view model

– Call centers

– Self Service offerings

• Hiring the Right Skills & Aligning Current Workforce

– Scout for talent

– Enterprise Leadership Program & Succession planning

Stay Connected

Visit the FIAR websitehttp://comptroller.defense.gov/FIAR.aspx

Read the FIAR Plan Status Report

http://comptroller.defense.gov/FIAR/plan.aspx

Subscribe to the DCFO’s

Defense Audit Readiness NewsJoin the distribution list by emailing

AuditReadiness@osd.mil

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