aflcmc… providing the warfighter’s edge fiar status update 17 july 2014 randal bowen...
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AFLCMC… Providing the Warfighter’s Edge
FIAR Status Update17 July 2014
Randal BowenAFLCMC/FM-FZDSN: [email protected]
AF Life Cycle Management Center
AFLCMC… Providing the Warfighter’s Edge
Provide a High Level Overview of FIAR and LCMC Impacts/Status
BLUF
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AFLCMC… Providing the Warfighter’s Edge
Overview
• Background• Guidance/Strategy• AFMC Approach• Current Status/Examples• Challenge(s)• How You Can Help
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AFLCMC… Providing the Warfighter’s Edge
What is FIAR?
FIAR IS: An enterprise-wide effort to:
- Document and standardize business processes- Implement/enhance internal controls- Standardize data- Provide reasonable assurance that financial statements are presented
fairly An initiative that involves all Functional Communities and
MAJCOMs
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FIAR IS NOT: An initiative of the current administration Just a legal requirement The sole responsibility of the FM Community
AFLCMC… Providing the Warfighter’s Edge
1990 1993 1994 1995 1996… 2000… 2005… 2009 2010 2011…
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The CFO/FIAR Evolution
Federal Financial Management Improvement Act (FFMIA) of 1996
Government Management Reform Act (GMRA) of 1994
Chief Financial Officer (CFO) Act of 1990
Government Performance and Results Act (GPRA) of 1993
Air Force produced first financial statements for FY95
Financial Improvement and Audit Readiness Focus on Balance Sheet Line Items (2005-2009)
FIAR Priorities Focused on Statement of Budgetary Resources and Existence and Completeness of Mission Critical Assets
NDAA 2010 audit ready by Sep 2017Incentives for components that have financial statements validated as ready for audit on or before September 30, 2017
SECDEF Memo GF SBR by 2014, Increased Emphasis on MCA’s
VCSAF and Under SECAF letter on FIAR
Unqualified Opinion All Stmts
2017
Previous audit readiness target dates
2014
Unqual. Opinion GF SBR
2009 - USD(C) Refocused Efforts on Information Most Used for Decision MakingDoD Only Federal Agency Without a Positive Audit Opinion
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Tone from the Top
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“As we continue to assess our readiness and design, implement, and test corrective actions, we believe a concerted effort and laser focus will be required in order for us to meet the 2014 deadline.“
"Strengthening our financial systems, and the associated controls around those systems, remains our most critical challenge. Despite this challenge, the Air Force believes we will benefit greatly from an audit of our [Schedule of Budgetary Activity] in 2015, and further delays would place our goal of being ready for a full financial statement audit in 2017 at risk.“Source: May 14 OSD FIAR Plan Status Report to Congress
Deborah Lee James, SECAF
Eric Fanning, USECAF
“Transforming financial management and achieving audit readiness is the law. General Welsh and I are committed to meeting these requirements, which are critical to maintaining the trust and confidence of Congress and the American people, and which will ultimately strengthen our Air Force.”
“In support of this essential effort, I directed SAF/FMP to provide monthly updates on IT system Corrective Action Plans. These IT remediation efforts are critical in establishing the trust and confidence of our stakeholders and ultimately in strengthening our Air Force.”Source: SECAF 12 May 14 Memos: FIAR Update & Improving IT Controls
AFLCMC… Providing the Warfighter’s Edge
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Why is Financial Improvement & Audit Readiness Important?
• Comply with Laws – Requires financial statement audits– National Defense Authorization Act (NDAA) 2013 requires Statement of
Budgetary Resources auditability by 30 Sep 2014– NDAA 2010 requires full financial statement auditability by 30 Sep 2017
• Verify Correct Allocation of Funds– Verify that all resources are allocated to approved mission priorities in a legal
manner• Make Better Use of Resources
– Provide better information for timely, informed decision-making and identify funds for other purposes
• Understanding the value proposition– extends beyond auditable financials – accountability, cost control, operational
improvement • Increase Public Trust
– Reassure the public and Congress that the Air Force is a good steward
Good audit results improve an organization’s creditability
AFLCMC… Providing the Warfighter’s Edge
DoD Four Wave Strategy
Wave 3: (CYE 2015) Asset Accountability
Book-to-Floor/Floor-to-Book Inventory Proof of Ownership of Assets
Wave 4: (FYE 2017) Full financial statement audit Incl. AF Working Capital Funds
Wave 1: (Done!) Focus on the flow of money from receipt by
Treasury to distribution to the Services
Wave 2: (FYE 2014) Life-cycle of funds (commit, obligate, spend) Audit trail for all funds
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Current Position
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• Organized to focus on goals/objectives• HQ AFMC Strategic Plan• AFMC FIAR Governance Structure• AFMC Learning/
Training Model• Commander’s
Report Card• Wins/
Accomplishments
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How Did We Adapt?
SAF/FMP
HQ AFMC
Center
Base
Vision, Leadership, Oversight, Accountability, Assertion
Leadership, Implementation Direction, Readiness
Guidance Development, Issue Resolution, Consolidation
Plan Development, Issue Identification, Quality Control
Plan, Test Execution, Provide Sample Data
Commander Involvement
AFLCMC… Providing the Warfighter’s Edge
HQ AFMC Strategic Plan
AFMC Priority:
Demonstrate Cost Effectiveness Across All Mission Areas
Goals:• Demonstrate Cost Effective
Mission Execution• Achieve and Maintain
Financial Accountability/ Auditability (3.2.1.)
• Stmt. of Budgetary Resources• Mission Critical Asset Accountability• Full Financial Statements• IT Controls
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AFLCMC… Providing the Warfighter’s Edge
Chair: AFMC/FM, Senior Financial AdvisorMembers: Center & 2-Ltr FIAR OPRs
Chair: AFMC/CCMembers: AFMC/CV/CA, Center CC/CV/CA & HQ Directors/Deputies
Chair: AFMC/FM, DirectorMembers: HQ Directors/Deputies & Ctr FMs
AFMC Council
Ctr/HQ Staff Council Prep
FIAR Team
FIAR Division (HQ AFMC/FMI)
Execution arm of the FIAR Team; oversees and coordinates audit readiness initiatives across the Command
AFMC FIAR Governance Structure
Enduring Requirement 11
AFLCMC… Providing the Warfighter’s Edge
SBR Timeline As of 22 Jul 14
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Assessable Units:Statement of Budgetary Resources: 30 Sep 2014 O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S
Funds Distribution to MAJCOMFunds Distribution to BaseCivilian Pay - Joint GF & WCFTravel Pay - Joint GF & WCFMilitary PaySupply Requisitions (MILSTRIP)Vendor Pay (IAPS) - Joint GF & WCFContract Pay (MOCAS) - Joint GF & WCF Reimbursable Authority and Execution
FIAR Task
FIAR Phase Change Since Last CouncilAudit/SustainmentExamination Sample PeriodAssertion Date Change From Last Council
Discovery: Assertion Testing
FY 2013
Discovery: Readiness Sampling/TestingDiscovery: Policy/Test Criteria
FY 2015FY 2014
FIAR OPRAssertion Team/Lead Commands/MAJCOMs
MAJCOMAir Staff/AFMC
Assertion Team
Assertion Team Readiness Date Change From Last CouncilAssertion Date Reported to CongressAssertion Date Move ProjectionReadiness Date AFMC Goal (95%)
Schedule of Budgetary Activity
(Current Yr Transactions) 1 Examination - 1
Opinion/Yr
Supply Requisitions: Awaiting SAF policy changes and test criteria
June 14: SAF assertions not yet accomplished
AFLCMC… Providing the Warfighter’s Edge
Train to a Standard
Compliance Learning/Training Model
PhaseBefore
InstructionBefore and During
InstructionInstruction
Check for Understanding
Think about and use what you
learn to motivate employees on
“Why” and “How” we change the
norm
Reach consensus of “Right” by auditing
standard
Write Curriculum and Decide Objective of
Training
Random Sampling
Analyze Results for any Trends
Grade
Provide Feedback and
Training
Update Training Based on Results
Start An Instructional
Sequence on
Assessable Area
Add to Base/Center Quality Assurance
Programs as a Quality Assurance Review
Add to IG Unit Effectiveness
Inspection as a Focus Area
Recycle
Sustainment Phase
End Instruction Sequence
95% Assurance Achieved
MAJCOM Collaboration with
AFAA
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AFLCMC… Providing the Warfighter’s Edge
Commander’s Report Card SBR As of 22 Jul 14
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AFMC AFLCMC AFNWC AFRL AFSC AFTC Comments
Funds Distr. to MAJCOM Opinion N/A ● N/A N/A N/A N/A N/A N/A
Funds Distr. To Base Disclaimer N/A ● ● ● ● ● ● ≥ 95% since Oct 12
Civilian Pay (DMAPS-TAA, JOCAS II*)
Disclaimer ● ● ● ● ● ● ● June 14: 93%
Travel Pay On Track N/A ● ● ● ● ● ● ≥ 95% since Mar 13
Military Pay On Track N/A ● ● ● ● ● ● ≥ 95% since Aug 13
Supply Requisitions (MILSTRIP)
Off Track N/A ● ● ● ● ● ●Awaiting SAF
policy/test criteria
Vendor Pay (ACPS, ConWrite, SCS (FIABS), SPS*)
Off Track ● ● ● ● ● ● ● ≥ 95% since Jan 14
Contract Pay (ACPS, ConWrite, SPS*)
On Track ● ● ● ● ● ● ● ≥ 95% since Dec 13
Reimb. Budget Auth. & Execution (SAMIS, JOCAS II*)
Off Track ● ● ● ● ● ● ● ≥ 95% since Nov 13
SBR Assessable Units (Supporting AFMC Owned/
Operated* IT Systems)
Data Readiness Status (Performance)Overall Readiness
Status (Schedule)
IT Ind. Assessment
(Performance)
Blue: ● Opinion Green: ● On Track/Pass Yellow: ● Outstanding IT Priority 2 Red: ● Off Track/Fail Gray: ● Not Graded
AFLCMC… Providing the Warfighter’s Edge
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Edwards
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60.00%
70.00%
80.00%
90.00%
100.00%
Nov Mar Apr Jun
GOAL 95%
AFLCMC AFRL AFSC AFTC
Civilian Pay Testing Results Nov 13-Apr 14
AFNWCAFMC
Lower scores due primarily to missing documentation & incomplete delegation of authority forms (DD 577s)
AFLCMC… Providing the Warfighter’s Edge
Civ Pay Checklist
• 1A. Verify supervisor approved any additional hours worked (comp time earned, overtime, etc.)• 1B. Request for additional hours includes pay pd, justification, name, grade, date, time, & number hrs requested for each
individual.• 1C. Verify line of accounting data is present on AF Form 428• 1D. Verify line of accounting data has been certified• 1E. Verify AF Form 428 is retained in accordance with records retention regulations.
• 2A. Verify accounting data is reviewed by resource manager and signed by a supervisor.• 2B. AF IMT 3821 retained in accordance with retention regulations• 2C. AF IMT 3821 contains effective date, name, office symbol of employee.
• 3A. Verify accounting classification in DCPS agrees with the AF IMT 3821.• 3B. Employee's time and attendance is properly recorded in DCPS.
• 4A. Completed DD 577.• 4B. Name, title, organization of appointing authority.• 4C. Effective date of appointment.• 4D. Name, title, organization, address and phone number of appointee.• 4E. Block 13 appoints appointee to certify time and attendance.• 4F. Must be signed and dated by both the appointing authority and appointee.• 4G. Provided DD 577s match signatures on 428s, leave requests and time cards.
• 5A. Leave taken is properly approved by the employee's supervisor (signed time card).• 5B. Date, time, type and number of hours requested are on the leave request.• 5C. Verify that leave request was retained two weeks after pay period.
• 6A. Supervisor has approved time and attendance action (annual leave, travel comp or comp time).• 6B. Supporting documentation is present for time and attendance other than regular hrs (credit hrs, travel comp, over time, etc.).
• 7A. Time and attendance is annotated on time card.• 7B. Employee signs for any changes to timecard• 7C. Supervisor signs time card (digitally or hand written).• 7D. Verify timecard is retained in accordance with retention regulation.
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AFLCMC… Providing the Warfighter’s Edge
DD 577 Example
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EffectiveDate
Approval Date (CAC)
Acknowledgement Date (CAC)
Approval Date(Stated)
AFLCMC… Providing the Warfighter’s Edge
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MCA Timeline As of 23 Jun 14
= AFMC Owned
Assessable Units:Mission Critical Assets: AFMC Due 31 Dec 2015 A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J JMilitary Equiment, Cruise Missiles, Aerial Targets & Drones (3AU's)Uninstalled Missile MotorsSpare Engines (Corrective Action Plan)Conventional MunitionsGeneral EquipmentOM&S Contractor Managed/PossessedGovernment Furnished EquipmentInventory / OM&S Base PossessedInventory / OM&S (Depot)OM&S (U2/UAV)Inventory (In-Transit)Real Property - Joint GF & WCFGeneral Equipment (Information Technology)Inventory (MedDent)
FIAR OPR FIAR Task
Discovery: Policy/Test CriteriaDiscovery: Readiness Sampling/TestingDiscovery: Assertion TestingReadiness Date AFMC Goal (95%)Assertion Date Reported to CongressReadiness Date Change From Last CouncilAssertion Date Change From Last CouncilExamination Sample Period
FIAR Phase Change since last Council
Audit/Sustainment
Corrective Action: Qualified Opinion
FY 2016
Assertion Team/Lead Commands/MAJCOMs
Assertion TeamAssertion Team
MAJCOMAir Staff/AFMC
FY 2015FY 2014
AFLCMC… Providing the Warfighter’s Edge
Commander’s Report Card MCAOverall Readiness with IT Status
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AFMC AFLCMC AFNWC AFRL AFSC AFTC Comments
Military Equipment (RAMPOD, IMDS), Cruise Missiles (IMDS), Aerial Targets & Drones (IMDS) [3 AUs]
Opinion ● ● ● N/A ● ● ● Unqualifed Opinion FY12
Uninstalled Missile Motors (IMDB) Opinion N/A ● N/A ● N/A ● N/A Unqualifed Opinion FY12
Spare Engines (Corrective Action Plan) (CEMS)
On Track N/A ● N/A N/A N/A ● N/A Qualifed Opinion FY12
Conventional Munitions On Track N/A ● ● ● ● ● ●Initial SAF testing of 5 AFMC accts in
Feb 14; AFMC reviewed all accts twice in Apr/Jun 14
General Equipment (CDAS) On Track N/A ● ● ● ● ● ● Awaiting AF Test Criteria
OM&S Contractor Managed/ Possessed (TBD)
Off Track TBD ● ● ● N/A ● ● AF Mat'l Weakness; SDDP in progress
Government Furnished Equipment -(Establish the baseline)
Off Track N/A ● ● ● ● ● ● AF Mat'l Weakness; Data baselining in progress
Inventory/OM&S Base Possessed (ILS-S*)
On Track ● ● ● ● N/A ● ● Awaiting AF test criteria; Scheduling IT Review
Inventory/OM&S (Depot) (SCS/FIABS, AF-DSS, CAV-AF)
On Track ● ● ● ● N/A ● ●MOU w/DLA signed; SCS/FIABS IT
Review In Progress, Scheduling AF DSS and CAV AF
Inventory/OM&S (U2/UAV) (ALMSS)
On Track ● ● N/A N/A N/A ● N/A In-Progress; Scheduling IT Review
Inventory - (In-transit) (SCS/FIABS, AF DSS, CAV AF)
On Track ● ● ● ● ● ● ●AFMC Mat'l Weakness; SCS/FIABS IT
Review in Progress, Scheduling AF DSS and CAV AF Review
Real Property On Track N/A ● ● ● N/A ● ● ≥ 95% Since Oct 13
General Equipment (IT) On Track N/A ● ● ● ● ● ● Awaiting AF/A6 guidance
Inventory - Med/Dent (DMLSS*) On Track ● ● ● ● N/A ● ● ≥ 95% Since Oct 13; Scheduling IT Review ECD Sep 14
Data Readiness Status (Performance)
Blue: ● Opinion Green: ● On Track/Pass Red: ● Off Track/Fail Gray: ● Not Graded
Overall Readiness
Status (Schedule)
IT Ind. Assessment
(Performance)
MCA Assessable Units (Supporting AFMC Owned/
Operated* IT Systems)
AFLCMC… Providing the Warfighter’s Edge
GFE Commander’s Report Card
Overall Commander’s Status
ID contracts with GFE (initial look)
Centers submit spreadsheets to A4, then A4 to HAF (suspense – Feb 14)
Correct/Populate missing data
Task contractors to populate IUID Registry IAW contract requirements/2012 memo
Establish Baseline of GFE Contracts/Assets
ID contracts with GFP that do not include required clauses and attachments
Update contracts to add required clauses and attachments
Task contractors to populate IUID Registry with GFE data with “corrected” contracts
Establish metric(s) for monitoring contractors inputs into IUID Registry
Sustain Baseline of GFE Contracts/Assets
GFE Task/Milestone AFMC AFLCMC AFNWC AFRL AFSC AFTC
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AFLCMC… Providing the Warfighter’s Edge
Status/ Summary of GFE Spreadsheets as of 11 Jun 14
Lead Center
Total spreadsheets
A4RM receivedRevision Required
PercentRequiringRevision
Number of lines of data reviewed*
A4RM AFLCMC 25 22 88% 77,298
PK AFNWC 21 21 100% 9,347
PK AFRL 36 21 58.3% 1,413
PK AFSC 41 4 9.8% 8,901
PK AFTC 27 22 81.5% 38,546
150 90 60% 135,505
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*Number of lines of data reviewed* estimated, spreadsheets my have spaces between line items, or contractor formatted data sheets +/- 10 to totals
AFLCMC… Providing the Warfighter’s Edge
GFE Contract Issues
• ID of GFE contracts requires matching input from FPDS-NG, Center SOCCER responses, & IUID Registry– Review reveals miscoding / low confidence in automated data —
requires manual verification of 750+ AFMC contracts – Developing path to correct errors & to clarify base support vs GFE
• Numerous contracts will require clause updates– Numerous “GFE” contracts validated to date do not include all six
required clauses• Some awarded prior to current regulation; some contracts don’t include
GFE– CONWRITE revised to pre-select all GFP clauses for Cost, T&M
contracts – and, when applicable, FFP• SPS & ACPS already contained this logic
– Manual review of 1500+ Cost-Type contracts required
• PK/AQC/AQX to set burn-down plan, metrics for contract updates – Top USAF Programs? Complexity? Period of performance? Dollar
value? GFE value? Contract Type? 22
AFLCMC… Providing the Warfighter’s Edge
Challenges to Meeting Our Goals
• Time– 2014 is here for AF General Fund Statement of
Budgetary Resources, 2017 is not that far away for the rest…Time is of the essence
• Automated Systems Environment– Need to implement process and IT mitigating controls
to offset legacy system weaknesses– Need to ensure Systems Controls (FISCAM) and
Business Enterprise Architecture (BEA) compliance
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AFLCMC… Providing the Warfighter’s Edge
How can you help?
• Your Involvement– Look at what you are doing
• Ensure the documents are correct before you sign them• Will an person outside the organization understand the
description of what you are buying• Is the LOA complete and correct. Modifications changing
Line of Accounting muddies the audit trail and causes rework.
– Perform Quality Reviews as required in your functional guidelines
– Answer data calls quickly with all required documentation, Auditors only give us 3-5 days to reply
WE WILL WIN!24
AFLCMC… Providing the Warfighter’s Edge
Call to Action
“Being able to audit this Department’s finances is a high priority for me and for the Department’s senior leadership. It should also be a high priority for each
of us.”Chuck Hagel
“If we can but prevent the government from wasting the labours of the people, under the pretence of taking care
of them, they must become happy.”Thomas Jefferson
AFLCMC… Providing the Warfighter’s Edge
Product Deliver Cost Effective Acquisition
Solutions
Deliver Affordable and Effective Product Support
Process Launch High
Confidence Sustainable Programs
Standardize andContinuously Improve Center Processes
People Develop and
Place Right Person at Right Time
Assure a Safe, Secure, andQuality WorkEnvironment
26DELIVER TO COMMITMENTS
Acquire and Support War-Winning Capabilities
AFLCMC… Providing the Warfighter’s Edge
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