AF Life Cycle Management Center AFLCMC… Providing the Warfighter’s Edge FIAR Status Update 17 July 2014 Randal Bowen AFLCMC/FM-FZ DSN: 785-3013 [email protected] BLUF AFLCMC… Providing the Warfighter’s Edge Provide a High Level Overview of FIAR and LCMC Impacts/Status 2 Overview AFLCMC… Providing the Warfighter’s Edge • • • • • • Background Guidance/Strategy AFMC Approach Current Status/Examples Challenge(s) How You Can Help 3 What is FIAR? AFLCMC… Providing the Warfighter’s Edge FIAR IS NOT: An initiative of the current administration Just a legal requirement The sole responsibility of the FM Community FIAR IS: An enterprise-wide effort to: - Document and standardize business processes Implement/enhance internal controls Standardize data Provide reasonable assurance that financial statements are presented fairly An initiative that involves all Functional Communities and MAJCOMs 4 The CFO/FIAR Evolution AFLCMC… Providing the Warfighter’s Edge Federal Financial Management Improvement Act (FFMIA) of 1996 Chief Financial Officer (CFO) Act of 1990 Government Management Reform Act (GMRA) of 1994 1990 1993 Government Performance and Results Act (GPRA) of 1993 1994 1995 1996… Air Force produced first financial statements for FY95 Financial Improvement and Audit Readiness Focus on Balance Sheet Line Items (2005-2009) 2000… 2005… NDAA 2010 audit ready by Sep 2017 Incentives for components that have financial statements validated as ready for audit on or before September 30, 2017 2009 2010 FIAR Priorities Focused on Statement of Budgetary Resources and Existence and Completeness of Mission Critical Assets SECDEF Memo GF SBR by 2014, Increased Emphasis on MCA’s 2011… VCSAF and Under SECAF letter on FIAR Unqualified Opinion All Stmts 2014 2017 Unqual. Opinion GF SBR Previous audit readiness target dates 2009 - USD(C) Refocused Efforts on Information Most Used for Decision Making DoD Only Federal Agency Without a Positive Audit Opinion 5 5 Tone from the Top AFLCMC… Providing the Warfighter’s Edge “Transforming financial management and achieving audit readiness is the law. General Welsh and I are committed to meeting these requirements, which are critical to maintaining the trust and confidence of Congress and the American people, and which will ultimately strengthen our Air Force.” “In support of this essential effort, I directed SAF/FMP to provide monthly updates on IT system Corrective Action Plans. These IT remediation efforts are critical in establishing the trust and confidence of our stakeholders and ultimately in strengthening our Air Force.” Source: SECAF 12 May 14 Memos: FIAR Update & Improving IT Controls 6 Eric Fanning, USECAF Deborah Lee James, SECAF “As we continue to assess our readiness and design, implement, and test corrective actions, we believe a concerted effort and laser focus will be required in order for us to meet the 2014 deadline.“ "Strengthening our financial systems, and the associated controls around those systems, remains our most critical challenge. Despite this challenge, the Air Force believes we will benefit greatly from an audit of our [Schedule of Budgetary Activity] in 2015, and further delays would place our goal of being ready for a full financial statement audit in 2017 at risk.“ Source: May 14 OSD FIAR Plan Status Report to Congress Why is Financial Improvement & Audit Readiness Important? AFLCMC… Providing the Warfighter’s Edge • Comply with Laws – Requires financial statement audits – National Defense Authorization Act (NDAA) 2013 requires Statement of Budgetary Resources auditability by 30 Sep 2014 – NDAA 2010 requires full financial statement auditability by 30 Sep 2017 • Verify Correct Allocation of Funds – Verify that all resources are allocated to approved mission priorities in a legal manner • Make Better Use of Resources – Provide better information for timely, informed decision-making and identify funds for other purposes • Understanding the value proposition – extends beyond auditable financials – accountability, cost control, operational improvement • Increase Public Trust – Reassure the public and Congress that the Air Force is a good steward 7 Good audit results improve an organization’s creditability DoD Four Wave Strategy AFLCMC… Providing the Warfighter’s Edge Current Position Wave 1: (Done!) Focus on the flow of money from receipt by Treasury to distribution to the Services Wave 3: (CYE 2015) Asset Accountability Book-to-Floor/Floor-to-Book Inventory Proof of Ownership of Assets Wave 2: (FYE 2014) Life-cycle of funds (commit, obligate, spend) Audit trail for all funds 8 Wave 4: (FYE 2017) Full financial statement audit Incl. AF Working Capital Funds How Did We Adapt? AFLCMC… Providing the Warfighter’s Edge • • • • Organized to focus on goals/objectives HQ AFMC Strategic Plan AFMC FIAR Governance Structure AFMC Learning/ Vision, Leadership, Oversight, Accountability, Training Model Assertion Leadership, Implementation SAF/FMP • Commander’s Direction, Readiness HQ AFMC Guidance Development, Issue Resolution, Report Card Consolidation Center Plan Development, Issue • Wins/ Base Identification, Quality Control Accomplishments Plan, Test Execution, Provide Sample Data 9 Commander Involvement HQ AFMC Strategic Plan AFLCMC… Providing the Warfighter’s Edge AFMC Priority: Demonstrate Cost Effectiveness Across All Mission Areas Goals: • Demonstrate Cost Effective Mission Execution • Achieve and Maintain Financial Accountability/ Auditability (3.2.1.) • • • • 10 Stmt. of Budgetary Resources Mission Critical Asset Accountability Full Financial Statements IT Controls AFMC FIAR Governance Structure AFLCMC… Providing the Warfighter’s Edge AFMC Council Ctr/HQ Staff Council Prep Chair: AFMC/CC Members: AFMC/CV/CA, Center CC/CV/CA & HQ Directors/Deputies Chair: AFMC/FM, Director Members: HQ Directors/Deputies & Ctr FMs FIAR Team Chair: AFMC/FM, Senior Financial Advisor Members: Center & 2-Ltr FIAR OPRs FIAR Division (HQ AFMC/FMI) Execution arm of the FIAR Team; oversees and coordinates audit readiness initiatives across the Command 11 Enduring Requirement SBR Timeline AFLCMC… Providing the Warfighter’s Edge As of 22 Jul 14 Assessable Units: FY 2013 FY 2014 FY 2015 Statement of Budgetary Resources: 30 Sep 2014 O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S Funds Distribution to MAJCOM Funds Distribution to Base Civilian Pay - Joint GF & WCF Travel Pay - Joint GF & WCF Military Pay Supply Requisitions (MILSTRIP) Vendor Pay (IAPS) - Joint GF & WCF Contract Pay (MOCAS) - Joint GF & WCF Reimbursable Authority and Execution Supply Requisitions: Awaiting SAF policy changes and test criteria Schedule of Budgetary Activity (Current Yr Transactions) 1 Examination - 1 Opinion/Yr FIAR OPR Assertion Team/Lead Commands/MAJCOMs MAJCOM Air Staff/AFMC Assertion Team Assertion Team June 14: SAF assertions not yet accomplished FIAR Task Discovery: Policy/Test Criteria Discovery: Readiness Sampling/Testing Discovery: Assertion Testing Readiness Date AFMC Goal (95%) Assertion Date Move Projection Assertion Date Reported to Congress Readiness Date Change From Last Council Assertion Date Change From Last Council Examination Sample Period Audit/Sustainment FIAR Phase Change Since Last Council 12 Compliance Learning/Training Model AFLCMC… Providing the Warfighter’s Edge Before Instruction Phase Start An Instructional Sequence on Assessable Area Before and During Instruction Reach consensus of “Right” by auditing standard Write Curriculum and Decide Objective of Training Think about and use what you learn to motivate employees on “Why” and “How” we change the norm Check for Understanding Instruction End Instruction Sequence Random Sampling Update Training Based on Results Grade Analyze Results for any Trends MAJCOM Collaboration with AFAA Add to Base/Center Quality Assurance Programs as a Quality Assurance Review Sustainment Phase Add to IG Unit Effectiveness Inspection as a Focus Area 95% Assurance Achieved Train to a Standard Provide Feedback and Training Recycle 13 Commander’s Report Card SBR As of 22 Jul 14 AFLCMC… Providing the Warfighter’s Edge Overall Readiness IT Ind. Status Assessment SBR Assessable Units (Supporting AFMC Owned/ Operated* IT Systems) (Schedule) (Performance) Opinion N/A Funds Distr. To Base Disclaimer N/A Civilian Pay Disclaimer ● Travel Pay On Track N/A Military Pay On Track N/A Supply Requisitions (MILSTRIP) Off Track N/A Funds Distr. to MAJCOM (DMAPS-TAA, JOCAS II*) Vendor Pay (ACPS, ConWrite, SCS (FIABS), SPS*) Contract Pay (ACPS, ConWrite, SPS*) Reimb. Budget Auth. & Execution (SAMIS, JOCAS II*) Blue: ● Opinion Off Track On Track Off Track ● ● ● Green: ● On Track/Pass Data Readiness Status (Performance) AFMC AFLCMC AFNWC ● ● ● ● ● ● ● ● ● AFRL AFSC AFTC Comments N/A N/A N/A N/A N/A N/A ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ≥ 95% since Oct 12 Yellow: ● Outstanding IT Priority 2 Red: ● Off Track/Fail June 14: 93% ≥ 95% since Mar 13 ≥ 95% since Aug 13 Awaiting SAF policy/test criteria ≥ 95% since Jan 14 ≥ 95% since Dec 13 ≥ 95% since Nov 13 Gray: ● Not Graded 14 Civilian Pay Testing Results Nov 13-Apr 14 AFLCMC… Providing the Warfighter’s Edge AFMC 100.00% 93% AFLCMC 91% 100% 99% AFRL AFNWC 98% 91% AFSC 69% 89% AFTC 98% 92% 98% 96% GOAL 95% 90.00% 80.00% 70.00% 60.00% Nov Mar Apr Jun Lower scores due primarily to missing documentation & incomplete delegation of 15 authority forms (DD 577s) Civ Pay Checklist AFLCMC… Providing the Warfighter’s Edge • • • • • 1A. Verify supervisor approved any additional hours worked (comp time earned, overtime, etc.) 1B. Request for additional hours includes pay pd, justification, name, grade, date, time, & number hrs requested for each individual. 1C. Verify line of accounting data is present on AF Form 428 1D. Verify line of accounting data has been certified 1E. Verify AF Form 428 is retained in accordance with records retention regulations. • • • 2A. Verify accounting data is reviewed by resource manager and signed by a supervisor. 2B. AF IMT 3821 retained in accordance with retention regulations 2C. AF IMT 3821 contains effective date, name, office symbol of employee. • • 3A. Verify accounting classification in DCPS agrees with the AF IMT 3821. 3B. Employee's time and attendance is properly recorded in DCPS. • • • • • • • 4A. 4B. 4C. 4D. 4E. 4F. 4G. • • • 5A. Leave taken is properly approved by the employee's supervisor (signed time card). 5B. Date, time, type and number of hours requested are on the leave request. 5C. Verify that leave request was retained two weeks after pay period. • • 6A. Supervisor has approved time and attendance action (annual leave, travel comp or comp time). 6B. Supporting documentation is present for time and attendance other than regular hrs (credit hrs, travel comp, over time, etc.). • • • • 7A. 7B. 7C. 7D. Completed DD 577. Name, title, organization of appointing authority. Effective date of appointment. Name, title, organization, address and phone number of appointee. Block 13 appoints appointee to certify time and attendance. Must be signed and dated by both the appointing authority and appointee. Provided DD 577s match signatures on 428s, leave requests and time cards. Time and attendance is annotated on time card. Employee signs for any changes to timecard Supervisor signs time card (digitally or hand written). Verify timecard is retained in accordance with retention regulation. 16 DD 577 Example AFLCMC… Providing the Warfighter’s Edge Approval Date (Stated) Approval Date (CAC) Effective Date Acknowledgement Date (CAC) 17 MCA Timeline As of 23 Jun 14 AFLCMC… Providing the Warfighter’s Edge Assessable Units: Mission Critical Assets: AFMC Due 31 Dec 2015 Military Equiment, Cruise Missiles, Aerial Targets & Drones (3AU's) Uninstalled Missile Motors Spare Engines (Corrective Action Plan) Conventional Munitions General Equipment OM&S Contractor Managed/Possessed Government Furnished Equipment Inventory / OM&S Base Possessed Inventory / OM&S (Depot) OM&S (U2/UAV) Inventory (In-Transit) Real Property - Joint GF & WCF General Equipment (Information Technology) Inventory (MedDent) FY 2014 A S O N D J FY 2015 F M A M J J A S O N D F M A M J J A S O N D J F M A M J Corrective Action: Qualified Opinion FIAR OPR Assertion Team/Lead Commands/MAJCOMs MAJCOM Air Staff/AFMC Assertion Team Assertion Team = AFMC Owned J FY 2016 FIAR Task Discovery: Policy/Test Criteria Discovery: Readiness Sampling/Testing Discovery: Assertion Testing Readiness Date AFMC Goal (95%) Assertion Date Reported to Congress Readiness Date Change From Last Council Assertion Date Change From Last Council Examination Sample Period FIAR Phase Change since last Council 18 Audit/Sustainment J Commander’s Report Card MCA Overall Readiness with IT Status AFLCMC… Providing the Warfighter’s Edge MCA Assessable Units Data Readiness Status (Performance) Overall Readiness Status IT Ind. Assessment (Schedule) (Performance) Military Equipment (RAMPOD, IMDS), Cruise Missiles (IMDS), Aerial Targets & Drones (IMDS) [3 AUs] Opinion ● Uninstalled Missile Motors (IMDB) Opinion N/A Spare Engines (Corrective Action Plan) (CEMS) On Track N/A Conventional Munitions On Track N/A General Equipment On Track N/A Off Track TBD Off Track N/A (Supporting AFMC Owned/ Operated* IT Systems) (CDAS) OM&S Contractor Managed/ Possessed (TBD) Government Furnished Equipment -(Establish the baseline) Inventory/OM&S Base Possessed (ILS-S*) Inventory/OM&S (Depot) (SCS/FIABS, AF-DSS, CAV-AF) Inventory/OM&S (U2/UAV) (ALMSS) Inventory - (In-transit) On Track On Track On Track ● ● ● On Track ● Real Property On Track N/A General Equipment (IT) On Track N/A Inventory - Med/Dent (DMLSS*) On Track ● (SCS/FIABS, AF DSS, CAV AF) AFMC ● ● ● ● ● ● ● ● ● ● ● ● ● ● AFLCMC AFNWC AFRL AFSC AFTC Comments ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● Unqualifed Opinion FY12 N/A Unqualifed Opinion FY12 N/A Qualifed Opinion FY12 ● N/A ● N/A ● N/A N/A N/A N/A ● ● ● ● ● ● ● ● ● ● ● ● ● ● N/A N/A N/A ● ● ● ● ● ● ● ● ● Blue: ● Opinion Green: ● On Track/Pass N/A ● N/A N/A N/A ● N/A ● ● ● ● ● ● N/A ● ● ● ● Initial SAF testing of 5 AFMC accts in Feb 14; AFMC reviewed all accts twice in Apr/Jun 14 Awaiting AF Test Criteria AF Mat'l Weakness; SDDP in progress AF Mat'l Weakness; Data baselining in progress Awaiting AF test criteria; Scheduling IT Review MOU w/DLA signed; SCS/FIABS IT Review In Progress, Scheduling AF DSS and CAV AF In-Progress; Scheduling IT Review AFMC Mat'l Weakness; SCS/FIABS IT Review in Progress, Scheduling AF DSS and CAV AF Review ≥ 95% Since Oct 13 Awaiting AF/A6 guidance ≥ 95% Since Oct 13; Scheduling IT Review ECD Sep 14 Red: ● Off Track/Fail Gray: ● Not Graded 19 GFE Commander’s Report Card AFLCMC… Providing the Warfighter’s Edge GFE Task/Milestone AFMC AFLCMC AFNWC AFRL AFSC AFTC Establish Baseline of GFE Contracts/Assets Overall Commander’s Status ID contracts with GFE (initial look) Centers submit spreadsheets to A4, then A4 to HAF (suspense – Feb 14) Correct/Populate missing data Task contractors to populate IUID Registry IAW contract requirements/2012 memo Sustain Baseline of GFE Contracts/Assets ID contracts with GFP that do not include required clauses and attachments Update contracts to add required clauses and attachments Task contractors to populate IUID Registry with GFE data with “corrected” contracts Establish metric(s) for monitoring contractors inputs into IUID Registry 20 Status/ Summary of GFE Spreadsheets as of 11 Jun 14 AFLCMC… Providing the Warfighter’s Edge Lead Center Total spreadsheets Revision A4RM received Required Percent Requiring Revision Number of lines of data reviewed* A4RM 25 22 88% 77,298 PK 21 21 100% 9,347 PK 36 21 58.3% 1,413 PK 41 4 9.8% 8,901 PK 27 22 81.5% 38,546 150 90 60% 135,505 21 of lines of data reviewed* estimated, spreadsheets my have spaces between *Number line items, or contractor formatted data sheets +/- 10 to totals GFE Contract Issues AFLCMC… Providing the Warfighter’s Edge • ID of GFE contracts requires matching input from FPDS-NG, Center SOCCER responses, & IUID Registry – Review reveals miscoding / low confidence in automated data — requires manual verification of 750+ AFMC contracts – Developing path to correct errors & to clarify base support vs GFE • Numerous contracts will require clause updates – Numerous “GFE” contracts validated to date do not include all six required clauses • Some awarded prior to current regulation; some contracts don’t include GFE – CONWRITE revised to pre-select all GFP clauses for Cost, T&M contracts – and, when applicable, FFP • SPS & ACPS already contained this logic – Manual review of 1500+ Cost-Type contracts required • PK/AQC/AQX to set burn-down plan, metrics for contract updates – Top USAF Programs? Complexity? Period of performance? Dollar value? GFE value? Contract Type? 22 Challenges to Meeting Our Goals AFLCMC… Providing the Warfighter’s Edge • Time – 2014 is here for AF General Fund Statement of Budgetary Resources, 2017 is not that far away for the rest…Time is of the essence • Automated Systems Environment – Need to implement process and IT mitigating controls to offset legacy system weaknesses – Need to ensure Systems Controls (FISCAM) and Business Enterprise Architecture (BEA) compliance 23 How can you help? AFLCMC… Providing the Warfighter’s Edge • Your Involvement – Look at what you are doing • Ensure the documents are correct before you sign them • Will an person outside the organization understand the description of what you are buying • Is the LOA complete and correct. Modifications changing Line of Accounting muddies the audit trail and causes rework. – Perform Quality Reviews as required in your functional guidelines – Answer data calls quickly with all required documentation, Auditors only give us 3-5 days to reply WE WILL WIN! 24 Call to Action AFLCMC… Providing the Warfighter’s Edge “Being able to audit this Department’s finances is a high priority for me and for the Department’s senior leadership. It should also be a high priority for each of us.” Chuck Hagel “If we can but prevent the government from wasting the labours of the people, under the pretence of taking care of them, they must become happy.” Thomas Jefferson Acquire and Support War-Winning Capabilities AFLCMC… Providing the Warfighter’s Edge Product Deliver Cost Effective Acquisition Solutions Deliver Affordable and Effective Product Support Process People Launch High Confidence Sustainable Programs Develop and Place Right Person at Right Time Standardize and Continuously Improve Center Processes Assure a Safe, Secure, and Quality Work Environment DELIVER TO COMMITMENTS 26 AFLCMC… Providing the Warfighter’s Edge 27
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