Budget Documentation and Expiring Years

Report
Headquarters U.S. Air Force
Integrity - Service - Excellence
Obligations and Expenditures
Expiring Year Funds
Budget Documentation
ASMC Luncheon
October 2014
Ms Maria White
AFLCMC/EBYA
1
Topics for Discussion

Obligations & Expenditures

Expiring Year Funds

Budget Documentation
Integrity - Service - Excellence
2
Obligations & Expenditures:
RDT&E Goals
RDT&E goals for both Obs & Exp, but primarily judged on Expenditures
 Assumes both obs/exp are linear monthly consistent amount
 Does not generally consider hardware buys in EMD
RDT&E
Obl
7.5%
15.0%
22.5%
30.0%
37.5%
45.0%
52.5%
60.0%
67.5%
75.0%
82.5%
90.0%
Exp
4.6%
9.2%
13.8%
18.3%
22.9%
27.5%
32.1%
36.7%
41.3%
45.8%
50.4%
55.0%
Month
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Obl
90.8%
91.7%
92.5%
93.3%
94.2%
95.0%
95.8%
96.7%
97.5%
98.3%
99.2%
100.0%
RDT&E
Exp
57.9%
60.8%
63.8%
66.7%
69.6%
72.5%
75.4%
78.3%
81.3%
84.2%
87.1%
90.0%
Third year of Availability
Month
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Second year of Availability
RDT&E
First Year of Availability

Month
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Integrity - Service - Excellence
Obl
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
Exp
90.8%
91.7%
92.5%
93.3%
94.2%
95.0%
95.8%
96.7%
97.5%
98.3%
99.2%
100.0%
3
Obligations & Expenditures:
Procurement Goals
Procurement goals Obs only since production expenditures non-linear
Procurement
Obl
6.7%
13.3%
20.0%
26.7%
33.3%
40.0%
46.7%
53.3%
60.0%
66.7%
73.3%
80.0%
Exp
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Month
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Obl
80.8%
81.7%
82.5%
83.3%
84.2%
85.0%
85.8%
86.7%
87.5%
88.3%
89.2%
90.0%
Exp
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Third year of Availability
Month
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Procurement
Procurement
Second year of Availability
First Year of Availability

Month
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Integrity - Service - Excellence
Obl
90.8%
91.7%
92.5%
93.3%
94.2%
95.0%
95.8%
96.7%
97.5%
98.3%
99.2%
100.0%
Exp
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
4
Obligations & Expenditures:
Impact of Not Meeting Goals

Programs not meeting goals deemed “forward financed”

Results in Congressional Marks or OSD reductions during POM


Congress looks during PB cycle at all active years – 3 possible results
 Rescind (withdraw) prior year funds deemed excess/early to need
 “Mark” reducing current PB request
 Successful defense of funds required with no marks/rescissions
OSD “snaps chalk line” for execution status end of 1st year availability
 Look for “forward financed” programs to “re-phase” in POM/PBR
 Likely outcome: difference between where program is, and where it
ought to be taken as “source” to pay higher HQ bills in POM/PBR
Integrity - Service - Excellence
5
Obligations & Expenditures:
Example OSD Reduction

Under-Execution OSD Resource Management Decision (RMD) redux:

Program X appropriated FY 14 RDT&E:
$10.0M
End of 1st year expenditure goal (55%):
5.5M
 Actual end of 1st year expenditures:
- 1.0M
 Perceived forward financing:
4.5M
 Program X POM submission
 Current
After RMD re-phase


FY16:
 FY17:
 FY18:
 Total:
$10.0M
$10.0M
$10.0M
$30.0M
FY16: $ 5.5M
FY17: $ 12.0M
FY18: $ 12.5M
$ 30.0M

Frees up $4.5M in FY16 (first year of POM/PBR) for OSD to apply
funds to under-funded/higher priorities
 Gets program back in phase
Integrity - Service - Excellence
6
Obligations & Expenditures:
What NOT to Say

Know your goals…Congressional Staffers, OSD Comptroller and
AQXR all know them and judge you against them from Day 1

The following excuses/reasons for under-execution are
considered “whining” in DC:
 “CRA prevented me from obligating as much as I planned”
 “The AF didn’t release all the CRA to me I requested”
 “The AF hasn’t released funds to me yet, even though
Congress passed the appropriation 60 (90, etc) days ago.”
 “My program has too many contracting actions to complete
and not enough contracting staff.”
FM, PK and PM need to have
realistic contract award schedules and
strong communication to keep obs/exp on plan
Integrity - Service - Excellence
7
Expiring Year Funds

AF loses several hundred M$ annually due to inability to obligate
expiring funds

Excess program funds not allowed by Congress to be reprogrammed
 Funds excess to programs which have max’d BTR flex out
 Poor planning/execution of program spend plans
 Inability to award contracts before end of FY

Nov/Dec data call from AQXR designed to ID expiring funds early
to reprogram to higher AF (or OSD) priorities via ATR or BTR

Contingent Liability needs to be labeled as such
 Programs must ID inch-stone schedules to obligation
 Failure to provide inch-stones = lack of plan = funds pulled
If RFP hasn’t yet been issued by time of data call, funds likely
deemed excess by AQXR and pulled for reprogramming
FM, PK and PM need to have realistic contract award schedules
and strong communication to get expiring year funds awarded

Integrity - Service - Excellence
8
Budget Document Hierarchy:
J-Books

Justification Books (J-Books)

Compilation of budget exhibits for specific appropriation submitted to
Congress as part of the President’s Budget (PB)
 Congress expects Air Force to only spend appropriated funds in
execution on the tasks described in the J-books
 Air Force unclassified J-books for FY13 PB = 7,151 pages
 Air Force J-Books affecting EB programs:






Aircraft Procurement (APAF, 3010): 2 volumes
Missile Procurement (MPAF, 3020): 1 volume
Other Procurement (OPAF, 3080): 1 volume
Research, Development, Test & Evaluation (RDT&E, 3600): 4 volumes
Operations & Maintenance (O&M, 3400): 7 volumes
Approved J-Books submitted as part of annual President’s Budget
requests can be found at: http://www.saffm.hq.af.mil/budget/
Integrity - Service - Excellence
9
The Budget Doc “Message”

Defends the AF POM (to OSD) or the PB (to Congress)

Never mention what Air Force or OSD “did” to the program

Reflects the PEO and AF message and plan

Consistent with Congressional interactions

Provides funding breakout consistent with execution plans

Specific enough to clearly identify funds required

General enough to allow for the fact “life happens” in the 9-12
months between writing docs and getting funds to execute
 Too specific: Conduct study to determine if 2-seat variant of
aircraft is feasible to implement into the fleet
 Too general: Conduct studies
 Better: Conduct studies and analysis, including but not limited
to 2-seat feasibility, GPS update requirements, etc.
General
and
I nSpecificity
tegrity - Se
r v i Specific
c e - E x c e Generalities
llence
10
The POM vs. the Budget Docs
(aka J Books)

The POM is important because…
 …it gets MAJCOM and CFLI priorities to Air Staff
 …it gets those same priorities through Air Staff to OSD
 …it gets AF the chance to ASK for the $$ from Congress

Budget Docs are EQUALLY if not MORE important because…
 …they’re what Congress uses to actually GIVE AF the $$
 …they tell the story that goes along with the numbers
 …incomplete/wrong story, results in cuts or restrictive language
 …they’re the only place detailed breakouts are really scrutinized
by people who remember from year to year what AF tells them
Integrity - Service - Excellence
11
Budget Docs (J-books)
vs. Christmas

Budget docs are like Christmas shopping because…
 …no one likes to do it
 …everyone puts it off until the last minute, rushing through it
to just “get it done”

Budget docs are NOT like Christmas shopping because…
 …all sales (submissions) are FINAL
 ….if you don’t get the docs right you’re stuck with the having
to execute to what you wrote, OR turning funds back because
your plan changed and you have no authority to execute it
Integrity - Service - Excellence
12
Bottom Line

Obligations/Expenditures very important to maintain future funding

Accurate forecasting of expiring year funds inch-stones key to not
having them withdrawn
 If you don’t have a plan, offer funds up early for others to use

Budget docs are Bible of how program can spend funds – treat them
with the appropriate attention and respect
Integrity - Service - Excellence
13
Questions?
Integrity - Service - Excellence

similar documents