page 1 - 10/31/2001 department of defense change management center financial management business...
TRANSCRIPT
Page 1 - 10/31/2001
Department of Defense
Change Management Center
Financial Management Business Reform Initiative
Thomas Bloom
Briefing
November 05, 2001
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Financial Management Business Reform InitiativeAgenda
1. Purpose
Review Project Goals & Objectives and Obtain Sponsorship and Funding for
E-Learning & Change Management Activities
2. Fiscal Laws Project & Objectives
3. The Problem
4. The Solutions
5. The People
6. The Results To Be Achieved
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• Identify legislative changes that will support improvements in the efficiency and effectiveness of DoD financial management systems.
• Draft legislation that will facilitate the implementation of technological and process changes in the operation of DoD financial management systems
Financial Management Business Reform Initiative
Advisory Committee Activity
• Implement a Prototype E-Learning & Change Management system that will capture and distribute the financial management knowledgebase to current and future DoD/DFAS staff.
• Capture and distribute the Financial Management Business Reform Initiative Advisory Committee knowledgebase to improve the dissemination of information and improve the effectiveness of the change management process.
E-Learning & Change Management Activity
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EO 6166
FAIR
CFO Act
PCBC
CMIA
GMRA
GPRA
EFT
EDI A-76JFMIP Regs
KlingerCohen
Financial Statement
Audits
FASAB Standards
B&A Act 1921
BPA Act 1950
The Federal Government’s financial management process has been built on a patchwork of “Fiscal Laws” that have been enacted since the formation of the nation. Like snowflakes, these Fiscal Laws have fallen and have built upon one another to form an ineffective foundation upon which modern technology cannot be built and related advantages cannot be achieved.
Pete Aldridge, USD (AT&L) Wednesday, August 15, 2001 – “…the real problem is, and that is if you look at the tooth-to-tail ratio in the department, we have far more tail than we do tooth. The overhead structure is out of balance with the procurement structure and the force structure. And that the challenge within the departments is to go after those overhead activities that they would find to be marginal and to reallocate those resources back to procurement and the things they need for readiness.”
The following is an excerpt from the Quadrennial Defense Review Report. Although directed at the Force, the goal equally applies to the transformation of the Defense Finance and Accounting Service:
To achieve these operational goals, the Defense Department must transform military training. Three basic tenets describe the changes the Department will implement to transform training in parallel with the transformation of its missions and forces:
• Use distributed learning technologies to reengineer individual training and job performance.
Financial Management Business Reform Initiative
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Revitalizing the DoD Establishment
The need to transform America's military capability encompasses more than strategy and force structure. Transformation applies not just to what DoD does, but how DoD does it. During the same period that the security environment shifted from a Cold War structure to one of many and varied threats, the capabilities and productivity of modern businesses changed fundamentally. The Department of Defense has not kept pace with the changing business environment.
A transformed U.S. force must be matched by a support structure that is equally agile, flexible, and innovative. It must be a structure in which each of DoD's dedicated civilian and military members can apply their talents to defend America - where they have the resources, information, tools, training, and freedom to perform. Transforming DoD's outdated support structure is a key step in achieving a more capable fighting force.
• DoD maintains between 20 and 25 percent more facility infrastructure than needed to support its forces - at an annual excess cost of $3 to $4 billion.
• DoD's financial systems are decades old and not well interconnected, and accounting and auditing processes would struggle to meet the standards of generally accepted accounting principles.
• DoD's business processes and regulations seem to be engineered to prevent any mistake. By doing so, these regulations often discourage taking any risk.
An infrastructure that needs to be streamlined to match the new reality, financial systems that limit the ability to see and manage the enterprise, and processes that discourage action and reasonable risk at the working level are hallmarks of a mature enterprise that must be transformed. While America's business have streamlined and adopted new business models to react to fast-moving changes in markets and technologies, the Defense Department has lagged behind without an overarching strategy to improve its business practices.
To redress this situation and lead the Defense Department's revitalization process, the DoD has established the Senior Executive Council (SEC) led by the Deputy Secretary of Defense and consisting of the Service Secretaries, and the Under Secretary of Defense for Acquisition, Technology and Logistics. The SEC will steer the Defense Department through what will be a challenging period of change. The Defense Department has also created a Defense Business Practices Implementation Board to tap outside expertise as the Department moves to improve its business practices. To focus these efforts, the Defense Department will institute programs to improve its performance in the following areas:
• Encourage talent to enter and stay in the military and civilian service; and
• Modernize DoD business processes and infrastructure.
Financial Management Business Reform Initiative
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Financial Management Business Reform Initiative
• Rebuild the Fiscal Law foundation – Enact New Legislation that supports a modern financial management structure:
• Based upon modern technology and following a rapid prototype methodology in knowledge center - change management philosophy and process approach.
• Designed by people who have the expertise, experience, and understand the federal financial management process and the politics.
• Managed by communicating goals and objectives, establishing key factors for measuring success, and empowering people to do what needs to be done.
• Establish a Vision of the DoD financial management environment that represents:
• A “Virtual” efficient and effective DoD workplace – reduced overhead burden.
• E-Government – Electronic Commerce - Internet based.
• Enterprise-wide - commercial operated and managed
• Entrepreneurial based and utilizing commercial banking and financial institution services & practices.
• DoD secured, regulated, audited, and analyzed.
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Financial Management Business Reform Initiative
Proposed Members
Steering Committee:
• Michael Wynne
• Mary Margaret Evans
• Thomas Bloom
• Jerry Williams/Mark Forman
• Karen Alderman
Advisory Committee:
• John Cherbini
• Frank Derville
• Irvin Faunce
• Gerald Murphy
• Anthony McCann
• Clyde McShan
• James Reid
• William Shelton
• Frank Sullivan
• Ronald Young
• DoD Staff 3-5
----------------------------------- Federal Position ------------------------------
Deputy Under Secretary of Defense for Acquisition & Technology
Director Defense Reform Office
Director Defense Finance and Accounting Service
Office of Management & Budget
Joint Financial Management Improvement Program (JFMIP)
GAO, Deputy Director, Accounting & Financial Management
House of Representatives, Chief Financial Officer
Treasury, Deputy Commissioner, Financial Management Service
Treasury, Fiscal Assistant Secretary
DHHS, Assistant Secretary Management & Budget
Commerce, Deputy Chief Financial Officer
Energy, Deputy Controller
Veterans Affairs, Associate Deputy Assistant Secretary, Financial Policy
Veterans Affairs, Deputy Chief Financial Officer
Federal Accounting Standards Advisory Board, Executive Director
Enterprise-wide Perspective – Retired & Active Duty – Financial Oriented
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Financial Management Business Reform Initiative
• Identification of Fiscal Laws Impeding F/M Technological Changes
• Identification of F/M Technological and Process Changes
• Consult with Central Financial Agencies and Congressional Staff
• Draft Legislation to Support F/M Technological and Process Changes
• Install Prototype E-Learning & Change Management System
• Track Advisory Committee Activities In CMS Knowledgebase
• User Test Prototype E-Learning System with 1000 DFAS Users
• Develop F/M Curriculum and Author Two E-Learning Courses
• Implement & Evaluate E-Learning System
Advisory Committee Activity
E-Learning & Change Management Activity