ASMC National Capital Region PDI 9 March 2017

Transcription

1 Office of the Assistant Secretary of the Army (Financial Management & Comptroller) (OASA(FM&C)) ASMC National Capital Region PDI 9 March 2017 Accountability & Audit Readiness: Sustaining Army s Strength 1

2 Audit Lifecycle Continuum Audit Readiness Develop* Audit Assess Universe of Transactions Sustain! Demonstrate Complete Army Universe of Transactions Support System Adjustments Balance Cash Account with Treasury System Controls Accountabilty and Valuation of Assets and Liabilties Governance & Management Support for Transactions Standard Business Processes Internal Controls Audit Findings Posting Logic & Adjustmetns Service Providers Audit Opinion Control Optimization and Realization Annual Internal Control Over Financial Reporting (ICOFR) Activities (OMB A-123) Alignment of Service Providers Effective systems, People and Efficient Processes Expected Audit Opinion FY17 Disclaimer Adverse Modified Unmodified** *Critical Capabilities (deal-breakers) identified by the Office of the Under Secretary of Defense (Comptroller) (OUSD(C) to undergo an audit ** Successful audit (unmodified opinion) may take many years for agencies as large and complex as Army Current Army Activities 2

3 FY17 Audit Priorities Universe of Transactions (UoT) Reconciliation Posting Logic and Data Categorization Fund Balance with Treasury (FBwT) Information Technology General Controls (ITGC) Journal Vouchers (JVs) and Financial Reporting Budget Execution Process Improvement Existence and Completeness (E&C) Asset Valuation Environmental and Disposal Liabilities (EDL) Audit Management and Governance 3

4 Status and Progress Status Interim Universe of Transactions Fund Balance with Treasury Military Pay Progress FY 17 Statement of Budgetary Resources Single Line Audits General Equipment Operations, Materials, & Supplies MILCON Process FY17 Disclaimer Adverse Modified Unmodified** 4 4

5 The Way Ahead Complete an audit of the full Statement of Budgetary Resources in FY17 Continue to hold ourselves and our teams accountable for corrective actions Conduct valuation of property, plant and equipment Establish and implement strong internal controls for the physical inventories of assets Enhance governance, outreach and communications Establish central location for data to support reconciliation of financials with feeder systems Continue to enhance partnerships with stakeholders Complete validation and execution of FY15/FY16 corrective actions for Schedule of Budgetary Activity Continue standardizing business processes across the Army Expand technical skills for a proficient work force 5 5

6 Army Financial Management Optimization (AFMO) American Society of Military Comptrollers Washington DC PDI Driving Change in the Army Financial Management Enterprise As of 7Mar17 v3 6

7 AFMO Update Agenda The Innovation Environment The Campaign Plan Strategic Efforts Questions/Discussion 7

8 Innovation Environment Evolutionary, Not Revolutionary People, Processes and Technology Adapting to changing environments Readiness Talent Management People Processes & Technology DoD FM Certification Business Processes Institutional reforms Outcomes Auditability Efficient & Effective Operations Readiness Enhanced Decision Making 8

9 The AFMO Campaign Plan Driving Change in Army Financial Management! AFMO Campaign Plan Lines of Effort (LOE) LOE 1: Systems LOE 2: Business Processes LOE 3: Organizations LOE 4: FM Professional Workforce LOE 5: Internal Controls LOE 6: Cost Management LOE 7: Transformation & Governance Campaign Objectives (1) Achieve and Sustain Auditability (2) Deliver FM Operations Efficiently and Effectively (3) Improve and Sustain Readiness in FM Elements (4) Provide Financial Information and Business Analytic Support for Improved Decision Making Campaign End State An integrated effective and efficient end-to-end financial management enterprise operation, optimized to provide necessary resources to meet the Army s missions with proper stewardship and accountability of resources and providing accurate and timely financial information and analysis for actionable decision making that will receive a favorable Financial Statement clean audit opinion. Strategic Environment: AFMO is nested in strategic guidance 9

10 What are Strategic Efforts? Cross Functional Integration of priority FM Actions Strategic Efforts: Business Process Standardization Systems & Technology Workforce Study Training & Professional Development Manager s Internal Control Program (MICP) Integrated Cost Management Performance and Progress measured in SMS 10

11 AFMO Strategy Map (Major Objectives to Campaign Objectives) CO 1: Achieve and Sustain Auditability CO 2: Deliver FM Operations Efficiently and Effectively CO 3: Improve and Sustain Readiness in FM Elements CO 4: Provide Financial Information and Business Analytic Support for Improved Decision Making Adapt systems domain for auditability [SES Morgan] 1.3b.1 Enable Sustained Auditable Environment [LTC Houston] Integrate E2E processes enterprisewide [SES Morgan] 2.3e.1 Organize and align FM units [LTC Okeke] Enable readiness to use FM systems [SES Morgan] 3.3e.1 Train BP to ensure account and audit readiness using FM Systems [LTC Okeke] Ensure availability of timely, accurate information & reports [SES Morgan] Align cost to strategic goals [Mr. Doug Bailly] Ensure effective IT general and interface controls [SES Morgan] Train and Certify the Workforce [Mr. Roger Groll] 2.2a.1 Maximize Army s buying power for year of execution [Mr. Chaput] Define the High Performance Workforce [Mr. Roger Groll] 3.3b.1 Deliver enterprise level FM Support [LTC Houston] 3.3e.2 Develop tools for FM Elements to enhance readiness through home station training. [LTC Okeke] 4.2a.1 Integrate execution data into the PPBE process feedback loop [Mr. Chaput] Integrate CM policy, procedures, models & reporting tools [Mr. O Sullivan] Enable timely data & audit query [SES Morgan] 1.2b.1 Standardize business processes & revise policy [Mr. Asberry] Achieve and Sustain Internal Control environment [Mr. Johnson] Establish & document audit ready CM E2E processes [Mr. Brooke Allen] 2.2b.1 Improve efficiency & effectiveness through B.P.R. [Mr. Asberry] Update Talent Management and Policies [Mr. Roger Groll] Legend: 3.3e.2 4.2d.1 Improve accuracy and affordability of CIVPAY [Mr. Graziano] 4.3b.1 Provide and Facilitate BA support [LTC Houston] Establish & manage Army Cost Framework (ACF) for key programs [Mr. Hanzelka] Establish & sustain cost managed organizations ICSW OAs [Mr. Peter Kim] Maps to Maps to Maps to Camp Line of the 2 nd Major Obj 3 Effort 3e Obj for this LOE in CO3. S.7.1 Shape AFMO transformation - strategic narrative & engagement plan [Mr. Ivery Taylor] S.7.2 Continuously assess evaluate & monitor AFMO campaign [Mr. John Boyce] As of: 07MAR17 11

12 Questions and Discussion For more information please contact: Mr. John Boyce (703) AFMO Task Force (703) Come join me in the AFMO group! Follow this link to join: 12

13 U.S. Army Financial Management Command (USAFMCOM) Financial Audit & Compliance (FAC) Audit Readiness is Mission Readiness 9 March

14 Financial Audit & Compliance Financial Audit & Compliance Audit Response Center Business Process Standardization Field Network Quality Audit Response Center supports initiatives aimed at planning, preparing, and reporting for the upcoming Financial Statement Audit. Fund Balance with Treasury Sensitive Activities Reconciliations The Business Process Standardization leads an Army-wide initiative to standardize, and improve auditability and efficiency of Financial Management (FM) processes. 7 End-to-End business processes 520+ process flows Standard Operating Procedures Training The Field Network Quality leads the Army's efforts to ensure established programs are adhered to and properly sustained in order to foster an effective internal control environment. Responsible for inspecting: Joint Reconciliation Program (Tri- Annual Review) Corrective Action Plans BPS Adherences 14 14

15 Importance of the Audit Improves Decision Support Allows Commanders real-time and accurate view of money Improves forecasting and spending oversight Supports mission readiness Increases Credibility Proves to Congress and taxpayers that Army can account for every dollar spent Assures leadership that financial information is accurate, reliable and timely Complies with Law Chief Financial Officers Act, 1990 National Defense Authorization Act (NDAA) mandate in 2010 Tone At The Top DoD Secretary mandates full financial statement audit by 30 SEP 2017 It is unacceptable to me that the Department of Defense cannot produce a financial statement that passes all financial audit standards. Former DoD Secretary Leon Panetta 15 15

16 Audit Readiness Is Mission Readiness AUDIT READINESS RISKS Command Activity: Every year, Army forfeits spending capability, leaving unused dollars on the table. Audit Risk: Commanders are not adequately controlling (e.g. monitoring, moving and using) spending authority. MISSION READINESS Opportunity Cost: Millions of dollars should be timely deobligated for availability to fund Brigade Combat Teams in: o Contingency Operations o Training o Equipment/Supplies 16 16

17 The Army Road to Financial Auditability 2 FY16 - FY20 1 SBA and SBR Business Process Standardization. & FNQ Inspections FY15 - FY17 Where We Were 1 Audits to date have led to disclaimer of opinion. Several material findings or what we call deal breakers were identified. 2 Management Controls Where We Are Business Process Standardization (BPS) and Field Network Quality (FNQ) inspections are providing the framework to accelerate Army s auditability. We are decreasing process deviations, addressing audit deal breakers, and inspecting corrective actions. Systems & Data Key Supporting Documentation 3 Safeguarding financial information Demonstrating integrity and completeness of information Evidencing financial transactions FY18 Audit of all four financial statements 3 Where We Are Going Army is leaning forward to undergo the greatest challenge yet full financial statement audit. Audit is changing the way we do business and new operational work is required (e.g. reconciling system interfaces, supporting all transactions) 17 17

18 Who Has a Role in Audit? EVERYONE, especially leadership. Audit is a Commander s responsibility! Activities Documentation Transactions Recorded to Financial Statements Purchasing Fuel Paying Military Employees Paying Civilian Employees MILSTRIP Payment of Basic Allowance for Housing Ordering Supplies Travel and Transportation Collections and Disbursements Reimbursable Work Orders Buying Goods and Services Financial Process Begins 18 18

19 Key Takeaways As an Army leader.your Tone At The Top is critical to leading change. Auditability improves decision support, increases credibility with Congress and taxpayers, and complies with the law. A favorable audit opinion also: Makes good business sense Allows you to better use resources in a timely and efficient manner Reduces the chance of punitive Congressional measures (i.e. budget cuts) Audit Readiness is Mission Readiness 19 19