Air Force Financial Management Update Ms. Marilyn Thomas Principal Deputy Assistant Secretary of the Air Force (Financial Management and Comptroller) 14 March 2019
Overview • FM Strategic Plan • Budget Update • Cost and Economics Update • Financial Operations Update • Workforce Management • Q & A 2
FM Strategic Plan Overview • FM Strategic Plan – Why? • FM Enterprise Goals • Human Capital Strategy Goals • How You Fit In
FM Strategic Plan – Why? “This update to the Financial Management (FM) Strategic Plan is a call to an actionable strategy that resonates with our FM workforce — officer, enlisted, civilian, and contractor. It refreshes our blueprint to help create air, space, and cyber capabilities for the United States Air Force, take care of Airmen, take care of the treasures entrusted to us, and create a lethal FM team ready to support combatant commanders.” “We took a fresh look at our FM Vision and Mission Statements since that’s where we start in guiding our work today to build a better future. We solicited inputs from across FM — senior and junior personnel — and developed this new direction.” – John P. Roth FM Vision: Financial Excellence — Powered by Honorable John P. Roth Airmen, Fueled by Innovation Assistant Secretary of the Air Force (Financial Management and Comptroller) FM Mission: Provide resources, financial services, and decision support to deliver air, space, and cyber capabilities for our nation
FM Enterprise Goals Goal 1: Develop and Take Care of the FM Team • Objective 1.1 : Implement Human Capital Strategy • Objective 1.2 : Save Airmen Time Goal 2: Deliver Financial Management Excellence • Objective 2.1 : Provide Excellent Financial Customer Service • Objective 2.2 : Provide High-Quality Programming, Cost Estimating, Budget Development, and Execution • Objective 2.3 : Provide Accurate and Auditable Accounting Support Goal 3: Provide Financial Management Leadership • Objective 3.1 : Build Airmen/FM Leaders • Objective 3.2 : Support Contingency/Joint Operations • Objective 3.3 : Grow Resource Management Capability 5
Human Capital Strategy Goals 1.1 Build Modern Recruiting Strategy/Capabilities 1.2 Assess Retention Factors – Build Retention Strategy & Tools 2.1 Grow Air Force Leaders 2.2 Evaluate & Shape FM Competency Requirements 2.3 Modernize Education and Training Processes and Content 3.1 Implement Human Capital Governance 3.2 Improve Career Development Infrastructures 6
How You Fit In Read and discuss with your people • Understand Air Force Priorities • Understand FM Priorities Lead - be an active participant in making things better • We need your innovative thoughts • If 10% of our people provide a way to improve what we do, we can move mountains Live the Air Force Strategic Imperatives • Agility – be open to change – be a change agent • Inclusiveness – be a good teammate and collaborate with others to produce excellence Provide feedback • These are dynamic plans – will be reviewed and updated 7
SAF/FMB Budget Update Maj Gen John Pletcher Deputy Assistant Secretary (Budget)
FY20 PB Focus Areas Fiscal Environment • FY17- 19 $50B topline growth from BCA caps…little appetite for large unfundeds • FY19 on- time appropriation…emergent requirements & diminishing sources…Reprogramming? Supplemental? More Lethal and Ready Force Fielding Faster and Smarter • People and Training • Prototyping and Experimentation • Cost-effective Maintenance and Logistics • Tailored Acquisition Strategies • Safe, Secure and Effective • Agile Software Development Nuclear Deterrent • Expanded Competition • Modernization • Cyber Dominance • Accelerating Defendable Space
FY20 Budget Request FY20 PB FY20 PB Comparable Submission FY19 Enacted $204.8B $204.8B $194.3B Non-Blue, Non-Blue, $39.2 $39.2 Non-Blue, $38.5 OCO, $12.8 MILCON, $2.7 OCO, $14.8 OCO, $42.3 MILCON, $2.3 Procurement, $25.9 Procurement, Air Force MILCON, $2.7 $26.0 Controlled Procurement, RDT&E, $35.4 Air Force $24.3 Budget RDT&E, $30.9 Controlled Authority RDT&E, Budget $165.6B $35.4 MILPERS, $34.2 Authority MILPERS, $31.9 $155.8B MILPERS, $34.2 Includes O&M, $54.6 Space Force O&M, $49.9 O&M, HQ $26.7 OCO includes Direct War and Enduring requirements OCO includes all categories Numbers may not add due to rounding Numbers may not add due to rounding
QUESTIONS?
SAF/FMC Cost & Economics Update Ms. Ranae Woods Technical Director, Cost and Economic Analysis Research Air Force Cost Analysis Agency
FMC - Cost & Economics Organizational Structure Deputy Assistant Secretary Cost & Economics (FMC) (Ms. Pamela Schwenke, SES) Associate Deputy Assistant Cost & Economics (FMC) (Mr. C. Grant McVicker, SES) Technical Director AFCAA (AFCAA) Ms. Ranae Woods, SL Cost Analysis & Economics & Policy Integration Business Mgt (SAF/FMCC) (SAF/FMCE) (Brig Gen Mike Greiner) (Dr. Anne Gorney) Space Programs Operations & Support Info Tech & Electronics Aircraft & Weapons Photo not (AFCAA/FMCS) (AFCAA/FMCY) (AFCAA/FMCI) (AFCAA/FMCA) Available (Mr. Bill Seeman) (Mr. Sean Escobar) (Ms. Eunice Ciskowski) (Mr. Dave Stem)
“What’s Happening?” Acquisition Decisions Special Studies AF Middle Tier Acquisition B-52 – Re-engine Programs (Section 804) Battlefield Airmen POM Cost Risk Guidance Memo Uniforms Assessment Undergraduate Agile SW Cost Estimating RED: difference Pilot Training ACAT IB SCPs/ICES between realistic cost 55 programs/$128B in Space Force $ estimate & budget investment funding Air Force We Cost in the AF SPPBE process Need Leadership informed risk Enables Cost Direct integration with Conscious Decision panels Making Early involvement with planning Data Collection / Cost Assessment Data Enterprise 10 180 # Estimates # Analysts per Estimate 9 8 Analysts 0.8 Analysts 160 Training Per Per 8 Estimate 140 DAU BUS-CE – certification standard update Estimate 7 MCEA/AFIT Masters 120 Analysts per Estimate # Estimates 6 100 Space, Launch, and ICBM Systems Division 5 80 stood up 4-person OL in support of AF Nuclear 4 60 Weapons Center, Hill AFB, UT 3 40 2 20 1 0 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
QUESTIONS?
SAF/FMF Financial Operations Update Mr. Thomas Murphy Deputy Assistant Secretary (Financial Operations)
FY18 Audit Recap Detail Results Number of NFRs Number of CAPs Number of CAPs Number of NFRs Developed Completed Closed 0 326 311 35 Auditors identified 11 General Fund and 12 Working Capital Fund Material Weaknesses under the following categories: Accounting Processes • Financial Reporting • Beginning Financial Balances • Financial Information Systems •
Audit Remediation Approach Achieving a clean audit opinion will require a three part strategy: Demonstrate progress Prioritize Develop, Prioritize, Implement and Complete Corrective Action Plans (CAPs) NFRs Avoid Notice of Findings and Recommendations (NFRs) reissuances due to failure Improve audit opinion Address Work and minimize the impact and severity of material weaknesses Material Meet FY2019 SECDEF goals of addressing Real Property, Inventory, and IT Access Weaknesses Controls Achieve and sustain auditability Strengthen Strengthen Implement a robust Internal Control Program to help sustain a clean audit and reduce Internal Internal future audit findings. Controls Controls Operate system of Internal Control across the Air Force Program Program
Audit Remediation Approach NFRs Prioritization Results The prioritization framework has enabled the Air Force to make risk-based decisions on prioritization of remediation activities that will drive sustainable audit processes in FY2019 and beyond. Total - 114 (35%) Total - 107 (33%) HIGH High Impact, Low Complexity High Impact, High Complexity High Impact: High (material) financial impact, High Impact: High (material) financial impact, potential reputational risk, and/or OUSD critical potential reputational risk, and/or OUSD critical capability capability Low Complexity: Centralized, control-related, High Complexity: Many dependencies, process CAP in progress, near-term CAP completion, and system updates required, and/or new Impact and/or sunsetting systems approach/CAPs to coordinate Total - 26 (8%) Total - 79 (24%) Low Impact, High Complexity Low Impact, Low Complexity Low Impact: Immaterial, low reputational risk, Low Impact: Immaterial, low reputational risk, and/or and/or not an OUSD critical capability not an OUSD critical capability High Complexity: Many dependencies, process Low Complexity: Centralized, control-related, CAP in and system updates required, and/or new progress, near-term CAP completion, and/or approach/CAPs to coordinate LOW sunsetting systems LOW Complexity HIGH
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