DoD Financial Management (FM) Strategy FY2016-2020

Office of the Under Secretary of Defense Comptroller – Business Integration Office

March 10, 2016

Vision for DoD FM’s Target Environment

To achieve a DoD FM environment that is standard, simplified, affordable, auditable and secure

Strategic Imperatives• Simplify and Standardize the FM

Environment• Achieve Audit Readiness by end of

FY17• Enhance Operational Effectiveness

and Efficiency• Reduce FM Operating Costs

Strategic Outcomes• Stewardship and Public Trust • Audit Sustainability• Strengthened Mission Capabilities• Improved Data Quality for Decision Making• Informed and Productive Workforce• Affordable FM Environment

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What’s Different Now: Accelerate Audit Outcomes Via Focus on Financial Improvement

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1.Execute an integrated FM Plan of Action

2.2-Year Audit Ready focus. Focus Priority Initiatives on Essential Elements for Financial Improvement

3.Collaboration

4.FM Strategy Document

Financial Improvement/Audit

Transition to the FM Environment

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Target Environment

Potential 20-30% Reduction

Persistent FM Challenges

FM Strategic Goals

FM Goals are aligned with DoD Agency Strategic Plan

VisionTo achieve a DoD FM environment that is standard, simplified, affordable, auditable and secure

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FM Strategy Approach

Implementation of the FM Strategy with a 2-Year Audit Ready focus that is in line with the Target Environment

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Progress towards strengthening the foundation, strengthening the surroundings and building to the future starts now

“The What” of the FM Strategy Priorities

Stage Cr it ica l In it iat ivesTechnology

EnablersBus iness

Outcomes

SFIS/SLOA/USSGL

Journal Vouchers

Sensitive Activities

Guidance

Audit Ready IT

Environment

Universe of

Transactions

Intergovernmental

Transactions

Property

FBWT – Cash

Accountability

Management

Enablers/Lever s

Optimized and

Leveraged ERPs

Shared Services

Governance

Strengthen

the

Foundation

Standard

Transaction

Broker

Business

Analytics

Standard

Transaction

BrokerStrengthen

the

Surroundings

Build for the

Future

Risk Management

Policy

Budget and Investment

Outreach

Improve mission effectiveness for the warfighter and achieve audit readiness

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• Stewardship and Public

Trust through

Transparency

• Audit Sustainment

• Strengthened Mission

Capabilities

• Improved Financial

Data Quality for

Decision Making

• Informed and

Productive Workforce

• Affordable FM

Environment

DATA Act

Open Obligations

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“The Why” FM Initiative Business Impact

The Services and Defense Agencies are dependent on one another to fully realize the benefits of financial improvement and audit. The Department needs to be aggressive in its implementation of the FM Strategy

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“The Why” – FM Information as an Asset

FM WorkforceWorkforce with the analytical training and knowledge

Cost ManagementManagement of information used for budgeting, estimating, forecasting and monitoring costs. Allows for mission critical trade-offs

FBWT – Cash Accountability

Provides traceability and accountability of all transactions impacting Funds Balance with Treasury

P2P HandshakesDefines standard processes and data between acquisition and finance

IntragovernmentalDefines standard processes and data between buyer and seller for reimbursable activity

SFIS/SLOA/USSGLCommon FM Enterprise Standards

Implementing the FM Strategy will increase the value of one of our most valuable assets, DATA!

VALUE• Universe of Transactions• Quality decision making. Reliable,

timely and accurate information• Reduced reconciliation work• Interoperable business

environment• DATA Act

TI-97 Universe of Transactions

Procure-to-Pay Handshakes

Handshake 1“Certify Funds”

Handshake 2“Validate

Funds”

Handshake 3“Record

Obligation”

Handshake 4 “Procurement Instrument for Entitlement”

PRDSPRDSContract

Writing System

Purchase

Request System

PDS/SFISPDS/SFISAccounting

System

Contract Writing

System

PDS/SFISPDS/SFISAccounting

System

Contract Writing

System

PDS/SFISPDS/SFISEntitlement

System

Contract Writing

System

EDI 850/860

EDI 850/860

*Covers more than 99.9% of the disbursement process

Cash Accountability - Transition to Target

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Current Day

ERPs/Accounting Systems

Entitling Systems (MOCAS, OnePay, DCPS, etc.)

Daily

Disbursing Systems (ADS, DDS)

Monthly

Departmental Systems (HQARS, DCMS, DCAS)

Monthly Treasury

Entitling Systems (MOCAS, OnePay, DCPS, etc.)

DailyDisbursing Systems (ADS, DDS)

ERPs/Accounting Systems

TreasuryDaily(PIR)

Daily, Direct

Phase 2: ERP Transition

to Direct Treasury

Disbursing

ERPs/Accounting Systems

Entitling Systems (MOCAS, OnePay, DCPS, etc.)

Daily

Disbursing Systems (ADS, DDS)

TreasuryDaily(PIR)

Phase 1: Transition to

Daily Reporting

ERPs/Accounting Systems

Entitling Systems (MOCAS, OnePay, DCPS, etc.)

Daily, Direct Treasury

Target State*: All Direct Treasury

Disbursing

Where we started

OSD-C FM SV-8 created in 2013 sought rapid transformation from 327 FM Systems in 2013 to 46 FM Target Systems by End 2018 (85% Reduction)

We have had challenges getting there13

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FM Target Systems Environment

Notional

* Multiple Treasury systems

STANDARD PROCESSES AND STANDARD DATA

Critical InterfacesHuman ResourcePropertyLogisticsGSA/TreasuryAcquisitionFinancial

DLA EBS

We Can Achieve the Simplified Target

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FM Strategy Evidence Based - Example

The OUSD(C) as the 4th estate FMO has implemented the FM Strategy using DAI

Unmodified SSAE-16 Opinion

< 3% Manual Journal

Vouchers

Standard processes at 15 Defense

Agencies

92% invoices processed

electronically

Reduced over 10

homegrown legacy

systems

Decisions made using

cost management

Produce a Reconcilable

UoT

Recent Agency projected $3

million annual savings

Implemented the GEX for 25

interfaces

Business Outcomes• Standard Processes• Standard Data• Reduced cost• Auditable• Reduced Complexity• Better decision making

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“The How” to Ensure Sustainable Audit Outcomes

Strengthen the foundation now to achieve audit readiness by FY2016-2017

Strengthen the surroundings by FY2018-2020

Build to the future by FY2021+

Progress towards strengthening the foundation, strengthening the surroundings and building to the future STARTS NOW

FM Strategy Summary

• Simplify and Standardize the FM Environment

• Everyone is critical in achieving the DoD FM

Strategy

• Change the game by playing smarter

• We know we can be successful!

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Strategic Imperatives• Simplify and Standardize the FM Environment• Achieve Audit Readiness by FY18• Enhance Operational Effectiveness and Efficiency• Reduce FM Operating Costs

FM Strategy Pictorial Summary

FM Strategy Document Available for Feedback and Reference for OEPs

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