Department of Defense Cash Accountability Strategy National PDI Workshop #51 June 2, 2016 Improved Cash Accountability

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1 Department of Defense Cash Accountability Strategy National PDI Workshop #51 June, 016 Improved Cash Accountability Alaleh Jenkins, Assistant Deputy Chief Financial Officer Michele Gaw, DFAS Director, Accounting Standards & Reporting

2 Agenda Overview Current State and Challenges Where We Are Now Problem Statement Cash Accountability Strategy Overview Strategic Initiatives Implementation Strategy Phased Approach Target State Key Take Aways Stay Connected

3 Overview What is Cash Accountability? Process for balancing, reconciling, and reporting disbursements and collections data to US throughout Department of Defense s (DoD s) end-to-end business processes Entitlement 1 Why is it important? Provides Stewardship and Public Trust through Transparency Reconciliation 4 Disbursement Standardizes and Improves Financial Data Quality Streamlines the Financial Management (FM) Environment Reporting 3 Supports Audit Sustainability 3

4 Where We Are Now Current State and Challenges 4

5 Requirements In January 011, issued a memo requiring all Federal Agencies to begin daily reporting of its disbursements and collections versus at the end of the month by Fiscal Year 014. In accordance with the Financial Manual (TFM) and the DoD Financial Management Regulation (FMR), Federal Agencies must post all transactions that affect FBWT to the United States Standard General Ledger (USSGL) account 1010 in their general ledgers and reconcile their USSGL account 1010 balances for each account to s records on a monthly basis. Problem Statement Problem Statement Current State and Challenges Depending on the Component and its Service Provider s location, DoD s Reporting process can vary based on process steps and multiple legacy Information Technology (IT) systems making it difficult to fully reconcile DoD s FBWT. DoD must be able to trace our cash and balance our check book at the appropriation-level with (the bank ). 5

6 Overview Cash Accountability Strategy Oversight Implement enterprise standards Change Management Promote organizational change Cash Traceability and Central Accounting Reporting System (CARS) Implementation Reporting FBWT Reconciliations Reconciliations Data Validation Standard Financial Information Structure (SFIS) Direct Centralized post-pay actions in systems Data Management Standard financial data/central data broker Intra-Governmental Transactions/G-Invoicing* Standard buy/sell processes Sub-Allotments Execution and internal controls Station Symbol Number (DSSN) Drawdown Reporting 119/10 Government wide Account Symbol Adjusted Trial Balance System (GTAS) Single reporting requirement Funds Distribution Electronic Funds Distribution (EFD) Collections Receivables management Legacy Drawdown Transitions and sunsetting Results traceability of all outlays/collections validation of accuracy of disbursements and collections reconciliation of accounts with Component accounts reconciliation of CARS to GL Reduction in reclassification entries Reduction in statement of differences, use of clearing accounts, or unsupported JVs Outcomes Auditability OUSD(C) has a multi-point strategy for improving DoD s Cash Accountability. 6

7 Strategic Initiatives Cash Accountability Strategy Strategic Initiative Description Benefits CARS Implementation FBWT Reconciliation Current State Transition to daily reporting from monthly reporting Perform daily reconciliations between accounts in CARS to Component accounts in the accounting systems Complies with Federal mandate Eliminates Statements of Differences Provides real-time cash balancing with Identifies potential reconciliation issues daily resulting in corrective actions prior to month end budgetary reporting Reduces use of clearing accounts and unsupported journal vouchers Future State Month-End Month-End 7

8 Strategic Initiatives Cash Accountability Strategy Strategic Initiative Description Benefits Direct Transition ERPs/accounting systems and entitling systems to Direct systems Send and Receive data directly from the authoritative source for financial data Disburse directly from at no cost (which complies with OMB requirements to utilize federal sharedservices providers (FSSP)) Aligns with ERP out-of-the-box functionality (requiring less customization and reducing costs) Current State Future State Originating ERP/ Entitlement System (e.g., DAI, CAPS-W, etc.) Non- Direct Offices/ (e.g., MOCAS, ADS, etc.) Originating ERP/ Entitlement System (e.g., DAI, CAPS-W, etc.) US Reporting (e.g., DCAS, HQARS, etc.) US 8

9 Strategic Initiatives Cash Accountability Strategy Strategic Initiative Description Benefits Data Management ( Handshakes ) Generate and pass standard financial data between systems using a central hub Reduces number of point-to-point interfaces Provides transparent, auditable and traceable data throughout DoD s endto-end business processes that flows to the financial statements Current State Future State 9

10 Strategic Initiatives Cash Accountability Strategy Strategic Initiative Description Benefits Data Validation Validate financial transactional data using the Standard Financial Information Structure (SFIS) prior to payment of a transaction Stops the pay and chase practice and eliminates need for rework at the end of the process Improves data quality and consistency between systems and across business processes, and minimizes journal vouchers needing to be posted Current State Future State Procurement Procurement Validation Receipt and Acceptance Receipt and Acceptance Validation Entitlement Entitlement Validation Validation Validation Reporting Reporting 10

11 Implementation DFAS GWA Compliance Plan and the Strategy for FBWT: Connecting the Dots 11

12 Implementation Strategy DoD Strategy for Fund Balance with (FBWT) Target State*: All Direct (except deployed or tactical) ERPs/Accounting Entitling (MOCAS, OnePay, DCPS, etc.) DDS, Direct Phase : ERP Transition to Direct ERPs/Accounting Entitling (MOCAS, OnePay, DCPS, etc.) (ADS, DDS), Direct (PIR) Phase 1: Transition to Reporting ERPs/Accounting Entitling (MOCAS, OnePay, DCPS, etc.) (ADS, DDS) (PIR) Current Day ERPs/Accounting Entitling (MOCAS, OnePay, DCPS, etc.) (ADS, DDS) Monthly Departmental (HQARS, DCMS, DCAS) Monthly *Covers more than 99.9% of the disbursement process 1 1

13 RECLASS TDO/TREASURY DIRECT NTDO NTDO IPAC IPAC Implementation Strategy DOD CARS Implementation Strategy April 016 FY 016 FY 017 FY 018 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 O N D J F M A M J J A S Navy DSSNs Implementation process FY 017 Implement DCAS BI tool additional functionality (A3 recon, reclass, detailed reports) Army DSSNs Implementation process Air Force DSSNs Implementation process COLLECTIONS & PAYMENTS Oct 014 Jan 015 Oct 015 SRF/PIR/GEX System Changes DCAS Reconciliation NTDO/TDO Implement DCAS BI tool additional functionality (A3 recon, reclass, detailed reports) 5 5 Navy DSSNs Army DSSNs DoD Transition to OTCnet /CIR 5 EBAS/JS - partial Payments (EFT & Checks) GFEBS - partial Payments (EFT & Checks) WHS partial Payments Jan 016 EBS - partial (EFT only) Implement DCAS BI tool new functionality (A recon) 5 Army and Air Force MOCAS DSSNs Navy Ships DSSN Drawdown and Conversion to DDS Air Force DSSNs Navy MOCAS DSSNs DRAS Jan, 019 Navy Interfund Implementation 6 WG Interfund - solution CIHO-approved accounts CIHO Implementation Reporting Strategy 4 Implement DCAS BI tool additional functionality (Interfund: A3 recon, reclass, detailed reports) OUTSTANDING DECISIONS 1. GEX Interface Solution System Readiness Dates. DCAS BI tool 3. SRF to PIR Format (including Sensitive data) 4. CIHO Line of Accounting 5. (ADS, DDS, CDS, DCAS) Implementation Dates 6. Interfund 6/1/016 Reporting Strategy Army & AF Interfund Implementation LEGEND Collaboration with Stakeholders DEPENDENCY Decision Point Planned Implementation SRF/PIR/GEX System Changes Actual Implementation Solution for implementing Collections System Implementation Solution for implementing Interfund Business Process Changes CDS Retirement (Estimated Completion Sept 018) Integrity - Service - Innovation 13 13

14 & PAYMENTS NTDO COLLECTIONS Implementation Strategy Phase 1: Transition to Reporting Phase 1: Transition to Reporting ERPs/Accounting Entitling (MOCAS, OnePay, DCPS, etc.) (ADS, DDS) DCAS Recon NTDO SRF/PIR/GEX System Changes DSSN Drawdown DFAS and Components (ships) DoD Transition to OTCnet/CIR (PIR) 6/1/016 Integrity - Service - Innovation 14 14

15 TDO TREASURY DIRECT & PAYMENTS Implementation Strategy Phase : Transition to Direct NTDO COLLECTIONS Phase : ERP Transition to Direct ERPs/Accounting Entitling (MOCAS, OnePay, DCPS, etc.) DCAS RECON TDO JS (partial) GFEBS (partial) WHS (partial) EBS DRAS (ADS, DDS) DCAS Recon NTDO SRF/PIR/GEX System Changes DSSN Drawdown DFAS and Components (ships) DoD Transition to OTCnet/CIR, Direct (PIR) 6/1/016 Integrity - Service - Innovation 15 15

16 FROM PHASES 1 & ALL SYSTEMS Implementation Strategy Target State Target State*: All Direct (except deployed or tactical) ERPs/Accounting Entitling (MOCAS, OnePay, DCPS, etc.) DDS, Direct Assumptions: ADS and CDS have been retired DDS continues to be used for the deployed environment MCTFS, MOCAS, One Pay, DCPS, etc converted from NTDO to TDO Interfund included (via Reclass) (does not flow through disbursing today) IPAC included assuming with connection to G-Invoicing (formerly IPP) HQARS and DCMS reporting functionality have been subsumed DCAS reconciliation capability fully developed and implemented Other critical dependencies have been resolved *Covers more than 99.9% of the disbursement process 16 16

17 Implementation Strategy FBWT Strategy Focused on Payments Need more attention to development of reconciliation tools Assumes ERPs will move to TDO Relies heavily on GEX Development, implementation, maintenance DFAS GWA Strategy Aligns to FBWT Strategy Focused on Operational Needs and Critical Dependencies Reconciliation Development DCAS Mission changes from Reporter to Expenditure Distribution & Reconciliation Ships (DROO part of RLS) Summary 17

18 The Department s Cash Accountability strategy is dependent on our ability to demonstrate the following: Standardizing business processes across the Department Complying with mandates Key Take Aways Key Take Aways Balancing our check-book with daily Passing all financial information through a central hub instead of creating multiple pointto-point interfaces Implementing and validating standard data language across all financial systems We all need to embrace and encourage new ways of doing business (change management). Cash Accountability is not just aligned to Financial Management it spans across all Functional communities. 18

19 Stay Connected Stay Connected Visit the FIAR website Read the FIAR Plan Status Report Subscribe to the DCFO s Defense Audit Readiness News Join the distribution list by ing AuditReadiness@osd.mil 19