DoD Financial Management Strategy Why Accelerate the FM Target Environment? Drew Morgan Director, Business Integration Office of the Secretary of Defense - Comptroller March 2015 v4 DoD Financial Management is Aligned with Higher-Level Strategic Goals OUSD(C) Strategic Management Plan FY 2011-2017 Champion Acquire Ensure a strong and capable financial management workforce resources necessary to meet national defense objectives the legal, effective, and efficient use of DoD resources Changes Affecting Everyone Emerging FM Certification Program Downward Pressure on DoD Top Line Demands for Financial Auditability Desired Outcomes The Right Skill Sets and Career Framework Getting More out of the Program to Support Mission Confidence in Public Stewardship and Improved Efficiency Strategic Management Goals Strategy to Budget to Execution – Knowing DoD Strategic Cascade is the Start of Knowing How You Fit in 2 “Burning Platform” Compelling Need for Rapid Business Integration Optimum “Enterprise” Balance Inherently Government Federal Shared Services Commercial Outsourcing Drastic Budget Cuts/Mission Growth Operational Effectiveness Visibility, Transparency Audit Deadlines Federal-wide Department Installation/ Command ODO/Component Challenges • Laws, Regulations, Policies • Culture • Scarce Expertise KEY Foundational Pieces Now In Place: • OSD-C/DCMO Governance • DITPR • DoD IT Shared Services Strategy • Standards [BEA, SFIS, SLOA, PDS] • Audit Deadlines 3 Convergence of Government Standardization Efforts DoD Procure-to-Pay Treasury GWA and IGT Acquisition Standards Global Data Standard Federal Transparency Areas FM Data Standards 4 FIAR Financial Improvement and Audit Readiness How Do We Sustain Audit? 5 FM Functional Strategy Goals and Outcomes Improve Auditability Eliminate Material Weaknesses Audit Readiness Lack of Internal Controls Initiatives Execute FIAR strategy Accurate Posting to G/L Non-Standard Processes Implement Standards Improve Interoperability Goals Improve, Standardize, and Reengineer FM processes Challenges Support Decision Making Establish Data Standards Duplicative Processes Maximize FM Capabilities Achieve Positive ROI Lower Cost of FM Operations Improve Interoperability Too Many Interfaces Eliminate Legacy Systems Too Many Systems 6 Reduce Total Cost of FM Operations and Enable Sustained Audit by Reducing FM Systems and Simplifying the Environment IT Budget Reconciliations, Rework, Redundant and Manual Processes, Unsupportable Balances Auditability, Complexity and Issues, Point to Point, Data Calls, Information Uncertainty Internal Controls, Material Weaknesses, Non-Standards 7 Integrated Financial Improvement Grand Strategy FM Standards & Compliance Standard Processes & Systems Leverage Technology Direct Treasury Disbursing Business Results Business Outcomes * Interoperability among business systems OSD FIAR Plan Guidance SSAE16 Daily Cash Reporting Intra/Inter-Govt. Trans-Invoice Payment Platform (IGT / IPP) Maximize and Leverage ERPs Stronger Internal Controls impacting financial reporting and auditability Delinquent Debt Management FISCAM Treasury System Roll-Out Standard Transaction Broker & Business Analytics End-to-end funds traceability and linkage between budget and expenditures Standard PPBE USSGL Compliance with Govt- wide Accounting (GWA) Initiatives Funds Distribution SFIS/SLOA • Better financial information for business decisions • Auditable financial statements • Transparency of financial data Sub-Allotment Execution Cost Management * Aligns with the DoD Strategic Management Plan (SMP) Shared Services Enterprise Planning, Program Budget & Exec. (PPBE) 8 Target FM Business Systems Environment Enterprise-wide Standard Data, Processes and Systems Business Warehouse/Analytics (BEIS- DCD/DCW, EBI, BI tool) Component Capabilities Functional Areas FM Budget Inventory Acquisition Payroll/Personnel Travel Logistics NGRMS, DTS, IPPS’, DCPS, EFD Standard Transaction Broker (STB) (GEX) Core Acct/ ERPs: (DAI , EBAS, Navy ERP, GFEBS, DEAMS,EBS, GCSS-A, LMP, MSCFMS, GCSS-MC, SABRS,FAMIS) Reporting/Cash (BEIS(DDRS,DCAS) 1099-TRP, CORAS,SORS) Disbursing (ADS,DDS, ERPs(Direct Treas. Disbursing)) Treasury (GTAS, CARS, USA Spending) Portal Vendors We Can Achieve This by Executing the FM Functional Strategy 9 Reducing the Number of Systems and Interfaces Through Standards & ERPs Offers the Most Potential for Simplifying the Environment and Not sustainable at current budget levels # Systems, Interfaces, Manual Processes 327 Systems 2,000+ Point-to-Point Interfaces Numerous Manual Reconciliations Unsupportable Balances 327 FM Systems, Budget = $719M* Simplified Environment and Improved efficiencies TARGET - ~120 systems - ~ $220 million - Reduce Interfaces via Standard Transaction Broker - Minimize Reconciliations - Supported Balances Potential Savings to: Repurpose to the Mission To Date: 285 Systems 42 retired = ~$7M budget savings FY14 FY15 FY16 FY17 Auditability sustainable at current & future budget levels FY18 Auditability FY19 FY20 FY21 FY22 10 Simplified Cash Accountability A Entitlement B DCAS 3 levels of automated recon X 1 enterprise process = FBWT auditability Real-time Validation D Treasury (CARS) FBwT / GLAC Route/Validate Reconciliation C To Be “Tie Points” DCAS (B) G/L DDRS DCAS (B) What’s Next: • DCAS functionality tested • Automated feed from Treasury CARS • Re-engineer Reconciliations • TJS, WHS, Army GFEBS, DLA = G/L (C) Treasury (D) G/L (DDRS) = = (C) Treasury (D) 11 Direct Treasury Disbursing NTDO Variation Examples External Entitlement • CAPS, STARS1 Pay, DCPS External Entitlement & FRB • DJMS, MOCAS, GFEBS, DAI Disbursing System • ADS, DDS (to FRB for EFT) • GFEBS, CMA, DHS • DoD CAnT Treasury PIR • DoD CAnT • FRB (EFT pay) TDO Variation Examples ERP Self Entitled Treasury PIR Treasury PAM • DoD Cash Notional Target What’s Next: • GFEBS TDO for SelfEntitled o Include TFOs • TJS and WHS Pilot TDO for TFOs in Apr-15 • DLA TDO Oct-15 • Additional Implementations 12 Intergovernmental Transactions (IGT) in Treasury’s Invoice Processing Platform (IPP) 13 Governmentwide Treasury Account Symbol Adjusted Trial Balance System (GTAS) Agency’s Financial Statements DFAS/DoD DDRS Central Accounting System Edits FMS 2108 / Combined Statement Treasury Annual Reporting GTAS GFRS FMS OMB SF 133 Program and Financing Schedule President’s Budget DoD Compliancy with GTAS Reporting Requirements and Attributes 14 Electronic Funds Distribution (EFD) OSD Level – EFD Phase 1 - Post EFD Phase 3 (Budget structure down to President’s Budget BLI) (EFD contains all appropriated funds; General and Non-General) FUNDS DISTRIBUTION • Handles the initial OUSD(C) FAD distribution to the original allotment holder; delivers funding via interface • EFD includes DoD Appropriated Funds (General (less BRAC) and Non-General) down to BLI (Includes TI-57, TI-21, TI-17, and TI-97 funds) • Includes SFIS elements BS, POA, BA, BSA, BLI at this level (Below Pres Bud BLI) • EFD now handles the sub-allotment of TI-97 funds within the original allotment holder’s organization and the sub-allocation of funds to other Defense Organizations • EFD carries forward SFIS/SLOA elements identified above and includes the B13 Budget Allotment Line Item (BALI), B12 Suballocation Code (Limit), CA1 (Org Code), O3 (FSN) • Will add USSGL to Funds Distribution ACCOUNTING SYSTEMS EFD Component Field Level – EFD Phase 2 AFM: TI-57 Funds below BLI GFEBS: TI-21 General Funds below BLI *PBAS: TI-21 Non-General Funds PBIS: TI-17 funds below BLI TI-97 funds below BLI Component Accounting Systems • Receives TI-97 FAD interface file from EFD at each level of distribution and begins executing funds when they are distributed to the final allotment holder • TI-21, TI-57, and TI-17 field level FADs will be arriving from GFEBS, AFM, and PBIS respectively; (TI-21 Non-General Funds will be distributed via PBAS-FD until Army determines future plan) DEAMS GAFS-R GFEBS SOMARDS STAN -FINS SABRS NAVY -ERP STAR S-FL EBS EBIZ WAAS EBAS DAI CEFMS Manual Automatic 15 Standard Line of Accounting (SLOA) Contract Pay Contracting Systems AF ConWrite Army PADDS DLA SPS (May-15) DLA eProc (Feb-14) MOCAS Support Systems DFAS Support Systems DFAS MOCAS (Aug-17) DLA EFD Accounting Systems Treas Reporting (PIR, CARS) DFAS SCRT (Aug-17) AF DFAS EUD DLA EDA DEAMS DFAS DFAS BAM DFAS DCAS EAS GAFS-R Army LMP (Jan-15) Army GFEBS (May-15) Army CEFMS DLA DDRS (N/A) DLA WAWF DLA EBS DLA DAI JS EBAS Legend Navy SLOA Ready Dates Not Provided DFAS SFIS Configured Treas PAM/SPS SLOA Long-term Plan STARS DFAS SABRS Disbursing Systems SLOA Ready by GWA Not SLOA Applicable DFAS MOCAS (Aug-17) ERP NOT GEX Connected Most Accounting Systems are already GEX connected 16 Global Exchange (GEX) Partner System Partner System Partner System Partner System Partner System Partner System Partner System 17 How Does SLOA Support the FM Strategic Initiatives? FM Strategic Initiative Financial Improvement and Audit Readiness (FIAR) Outcomes How SLOA Enables Each Outcome SBR Assertion FY 2014 Financial Statement Assertion FY 2017 • Software tracks and records audit trail at each exchange of data, business rule modification, format transformation, etc. • Enables matching transactions between multiple accounting/feeder systems in 1-to-1 format which can be easily reconciled • Enables cleaner end-to-end transactional flow and processing Standard Line of Accounting (SLOA) Improved E2E FM Information Exchange SFIS/USSGL Compliance and Validation • Proper Posting of Transactions in DoD Financial Systems • SFIS Compliance Plans as part of Component OEPs • Enables clean interoperability across the enterprise E2Es • Workbooks define and reformat subset of SFIS data (SLOA) into standard definitions • Data compliance with Treasury and OMB standards Enterprise Funds Distribution/Next • Links transactions to the Budget/Funds Distribution data Integrated capability to formulate, distribute, track and • Transformed, standard data for allocation and distribution of funds Generation Resource Management execute the DoD budget identically across the enterprise System (EFD/NGRMS) Direct Treasury Disbursing Standard FBWT Daily Recon Process • Enables automatic matching of disbursement to accounting system (near real-time recon) • Enables routing ERP data directly to Treasury • Provides necessary data to prepare a Direct Treasury Pay Ready File Government-wide Accounting (GWA) Daily Treasury Reporting - GWA compliance by Oct. 14 Standard FBWT Daily Recon Process • Enables translation of TAS/BETC standard data elements to ADS • Consolidates DSSNs into standard repository for daily reporting Intragovernmental Transactions (IGT) • • • • Delinquent Debt Management Delinquent debt collections to treasury after 90 days, using re-engineered processes Maximize ERP Capabilities • E2E Process Improvement • Eliminate redundant capabilities in the E2Es Standard Transaction Broker Reduce/Minimize Point-to-Point Interfaces • Enables standardized MIPRs necessary data to perform eliminations • Intakes data formats into single central repository from multiple buyer systems and transforms it into a standard format, and vice versa • Standard buyer and seller data provides data matching and reconciliation • Enables matching and analysis of invoice data to obligation data in realtime and analyzes discrepancies between the two • Provides flags against delinquency business rules and provides error report when rules are violated (document LOAs overpaid, etc.) • Take advantage of imbedded controls within ERPs • Eliminates inefficiencies and reliance on feeder systems • Reduces need to point-to-point interfaces & downstream errors • Already connected to the GEX • Minimizes need to reconfigure legacy systems • Enables translation, validation, and routing between key E2E systems Business Intelligence Tools Near real-time, standards-based information and analytics from authoritative sources • Software provides detailed reports at each exchange of data, business rule modification, format transformation, etc. Cost Management Consistent cost data and management across the Department • Enables use of cost management codes and OCC for cost reporting • Provides the cost management information on every purchasing transaction which will facilitate Full Cost Accounting Standardize IGT Process DoD-Wide Eliminate manual processes and multiple forms Single Repository for IGT Orders for audit readiness Reduce IGT Eliminations material weakness 18 Sample Component Oracle System JITC USSGL/SFIS/SLOA Verification Results Compliant 100.0% 90.0% 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 1.43% 0.65% 16.47% Not Compliant 42.11% * 100.00% Chart of Accounts Posting Logic SFIS Business Rules Validation DDRS Trial Balance SLOA Interfaces 90.91% SFIS 10.0 Interfaces Areas for USSGL/SFIS/SLOA Compliance: 1) 2) 3) 4) 5) 6) 2 February 2015 System Posting Chart of Accounts to the DoD Chart of Accounts Posting Logic SFIS Attribute Base Configuration DDRS SFIS Trial Balance SLOA Interfaces/Data Exchanges SFIS 10.0 Interfaces/Data Exchanges 19 Joint Interoperability Test Command (JITC) USSGL/SFIS/SLOA Verification Phased Schedule by System Business Rules Review Emerging Results Briefing Signed Report CAP Due Date FAMIS-CS 28-Aug 9-Dec 23-Jan 23-Mar EBAS-D 14-Nov 26-Jan 20-Feb 6-Apr EBAS-JS 24-Oct 9-Feb 20-Feb 20-Apr DCAS 20-Feb 6-Mar 30-Mar 30-May DDRS 27-Feb TBD TBD TBD TBD TBD TBD TBD DEAMS Jul-15 TBD TBD TBD DAI Jul-15 TBD TBD TBD LMP TBD TBD TBD TBD Navy ERP Mar-16 TBD TBD TBD GFEBS-SA Jun-16 TBD TBD TBD DCD/DCW TBD TBD TBD TBD GCCS-MC TBD TBD TBD TBD DHA-ECS TBD TBD TBD TBD DDS TBD TBD TBD TBD WAWF TBD TBD TBD TBD System EBS 2 February 2015 20 Enterprise Cost Management Framework 21 Enterprise Cost Management Framework Aligned to SLOA Cost Elements • SLOA Component defined data elements roll up into the Enterprise Framework • Ties Component managerial accounting to enterprise managerial accounting • Allows Components to determine lower level line item breakout of funding documents (e.g. Payroll, Contracts, etc. • EBAS-D has all of these SFIS Cost Elements Cost Center Activity Project Cost Center Functional Area Work Order Number Cost Element Illustrative Mapping 22 Further Leveraging Integrated ERP Capabilities Offers the Most Potential for Reducing the Number of Systems and Interfaces Standard Business Intelligence and Analytics FM Functional Strategy Core Financial System Functions/Capabilities Budgetary Resource Management Translation to Capabilities Available Today in the Core FM ERPs Execution-Level Planning Programming Budget Planning and Formulation Exhibit Generation Funds Distribution & Control Prior-Year Actuals Feed Payment Management Matching & Payment Warehousing Disbursing Receivables Management Billings & Collections IPACS Core FM FM Initiatives are now underway leveraging all of these ERP capabilities Funds Balance with Treasury Management Budget Execution/ Funds Mgmt/ Funds Control (General & Working Capital Funds) Commitments, Obligations, Expenditures, Reimbursables General Ledger Management US Standard General Ledger (Budgetary and Proprietary) Cost Management Financial Reporting Cost Accounting (GFEBS,DAI Navy ERP) Cost Accumulation and Allocation Timekeeping (Navy ERP uses T&A) Treasury and OMB Reporting (Standard Feeds) ERPs Offer Additional Capabilities for Other Functional Areas Acquisition Inventory Payroll/ Personnel Travel Logistics ERP capabilities maximized today Initiatives underway to further leverage Further leveraging needed – Enterprise PPBE ConOps and Cost Management Framework / Proof of Concept underway Standard Interfacing / Business Integration 23 FIAR Financial Improvement and Audit Readiness How Do We Sustain Audit? Why accelerate DoD’s FM Target Environment? 24 Urgency to Implement FM Initiatives Key Takeaways: • Mandate for 2017 Audit • Limited and declining resources require streamlined and simplified processes as well as simpler footprint (systems and infrastructure) • Long-term sustainability • Investments and divestments must be meaningful and coordinated • Standards (data, process and controls) are imperative to unify enterprise systems and processes • Strategic perspective overcomes stovepipes 25 Questions/Discussion 26 Back-up 27 Simplified Cash Accountability PIR/SPS CL E11) ST/GSA GFEBS A7) Re-class CO IN CL CO Data Repository D10) FBWT Reconciliation D10= C9 & B8 D10= D9 & B8 New Recon: B8 & D9 For: MAP-X (Cash Recon) IN For: CAR Balances ST/GSA MAP-6 (Cash Reporting) CL A6 ) Recon of transaction Recon of A3)Sent / Posted (Detail Level) A4&A5 Disbursing/ SF1080 / SF1081 MAP-6 Reporting) •(Cash DCAS Source Record ID • TAS • BETC • Amount • SDN • Limit • Posting Results Cd • Transaction Post Date By: A4) Expenditure Accounting Data DCAS MAP-6 (Reclass) MAP-X (Trial Balance) DDRS IN A5) Accept/Reject Data C9) Month-end Trial Balance Accounting Systems *Civilian Payroll *Military Payroll *Unliquidated Balances *Suspense Accounts *Accounts Receivable MAP-X (Trial Balance) IN – Army & ODO CL – Navy CO – Air Force CL Treasury MAP-X (Mtly Acct Stmt) CO CO A3) Recon of Disbursing /CAR Balances (Department ; 1329/1400 Level) Recon of A3) Disbursing/ CAR For: Balances ADS IN Target: GEX. DCAS, or Direct MAP-X (Cash Recon) By: (IN/CO/CL Networks) (Transaction Reporting System / Collection Information Repository) By: A1) Expenditure / Collection Data (Daily) Entitlement / Disbursing Systems MAP-X (Daily Acct Stmt) TRS/CIR MAP-5 (Collection) (Government-wide Treasury Account Symbol Adjusted Trial Balance System) (Central Accounting Reporting System) D9) Account Statement (Monthly) SF215 MAP-5 (Pay/Coll) GTAS CARS Payment Information Repository/Standard Payment System MAP-5 (Payment) A2) Account Statement (Daily) NTDO/TDO/SelfDisbursed/Non-DoD MAP-5 (Pay/Coll) ST/GSA ---On SBRs--- CL ---On SBRs--- CO ---On SBRs--- IN ---On SBRs--- DCD/DCW 1) Cash Accountability Repository 2) Business Intelligence Layer for Reconciliations Denotes new interface/process Denotes possible data conversion to/from SLOA via SLOA Centralized Service (SCS) 28 Why do we need a standard transaction broker? TODAY Point-to-Point “Spaghetti” – Expensive!!! Extremely difficult to Manage or Standardize TARGET Hub and Spoke – Cheaper, Easy to Standardize and Manage, More Scalable * GEX is the De Facto Standard for Integration among 4th Estate Business Systems, and is being evolved to serve as the Target Standard Transaction Broker. 29
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