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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
3
“We do all those old tricks electronically now.”
4
• 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
6
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
7
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
9
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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