FIAR Status Update 17 Sep 13

Report
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
Implementation
SAF/FMP Leadership,
• 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
●
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●
Green: ● On Track/Pass
Data Readiness Status (Performance)
AFMC AFLCMC AFNWC
●
●
●
●
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●
●
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●
AFRL
AFSC
AFTC
Comments
N/A
N/A
N/A
N/A
N/A
N/A
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≥ 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
●
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AFLCMC AFNWC
AFRL
AFSC
AFTC
Comments
●
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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
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N/A
N/A
N/A
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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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