Fiar status update 17 july 2014
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AF Life Cycle Management Center. FIAR Status Update 17 July 2014. Randal Bowen AFLCMC/FM-FZ DSN: 785-3013 [email protected] BLUF. Provide a High Level Overview of FIAR and LCMC Impacts/Status. 2. Overview. Background Guidance/Strategy AFMC Approach Current Status/Examples

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FIAR Status Update 17 July 2014

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Fiar status update 17 july 2014

AF Life Cycle Management Center

FIAR Status Update17 July 2014

Randal Bowen

AFLCMC/FM-FZ

DSN: 785-3013

[email protected]


Fiar status update 17 july 2014

BLUF

Provide a High Level Overview of FIAR and LCMC Impacts/Status

2


Overview

Overview

  • Background

  • Guidance/Strategy

  • AFMC Approach

  • Current Status/Examples

  • Challenge(s)

  • How You Can Help


What is fiar

What is FIAR?

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

FIAR IS NOT:

  • An initiative of the current administration

  • Just a legal requirement

  • The sole responsibility of the FM Community


Fiar status update 17 july 2014

The CFO/FIAR Evolution

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

Federal Financial Management Improvement Act (FFMIA) of 1996

Chief Financial Officer (CFO) Act of 1990

Financial Improvement and Audit Readiness Focus on Balance Sheet Line Items (2005-2009)

SECDEF Memo GF SBR by 2014, Increased Emphasis on MCA’s

Government Management Reform Act (GMRA) of 1994

Unqualified Opinion All Stmts

2014

2017

19901993 1994 19951996… 2000… 2005… 2009 2010 2011…

Air Force produced first financial statements for FY95

Government Performance and Results Act (GPRA) of 1993

VCSAF and Under SECAF letter on FIAR

FIAR Priorities Focused on Statement of Budgetary Resources and Existence and Completeness of Mission Critical Assets

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


Tone from the top

Tone from the Top

“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

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

Eric Fanning, USECAF


Why is financial improvement audit readiness important

Why is Financial Improvement & Audit Readiness Important?

  • 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

Good audit results improve an organization’s creditability


Fiar status update 17 july 2014

DoD Four Wave Strategy

Current Position

Wave 1: (Done!)

  • Focus on the flow of money from receipt by Treasury to distribution to the Services

    Wave 2: (FYE 2014)

  • Life-cycle of funds (commit, obligate, spend)

  • Audit trail for all funds

Wave 3: (CYE 2015)

  • Asset Accountability

    • Book-to-Floor/Floor-to-Book Inventory

    • Proof of Ownership of Assets

      Wave 4: (FYE 2017)

  • Full financial statement audit

  • Incl. AF Working Capital Funds


How did we adapt

How Did We Adapt?

  • Organized to focus on goals/objectives

  • HQ AFMC Strategic Plan

  • AFMC FIAR Governance Structure

  • AFMC Learning/ Training Model

  • Commander’s

    Report Card

  • Wins/ Accomplishments

Commander Involvement


Hq afmc strategic plan

HQ AFMC Strategic Plan

AFMC Priority:

Demonstrate Cost Effectiveness Across All Mission Areas

Goals:

  • Demonstrate Cost Effective Mission Execution

  • Achieve and Maintain Financial Accountability/ Auditability (3.2.1.)

    • Stmt. of Budgetary Resources

    • Mission Critical Asset Accountability

    • Full Financial Statements

    • IT Controls


Fiar status update 17 july 2014

AFMC FIAR Governance Structure

Chair: AFMC/CC

Members: AFMC/CV/CA, Center CC/CV/CA & HQ Directors/Deputies

AFMC Council

Ctr/HQ Staff Council Prep

Chair: AFMC/FM, Director

Members: HQ Directors/Deputies & Ctr FMs

FIAR Team

Chair: AFMC/FM, Senior Financial Advisor

Members: Center & 2-Ltr FIAR OPRs

Execution arm of the FIAR Team; oversees and coordinates audit readiness initiatives across the Command

FIAR Division (HQ AFMC/FMI)

Enduring Requirement


Fiar status update 17 july 2014

SBR Timeline

As of 22 Jul 14

12


Fiar status update 17 july 2014

Compliance Learning/Training Model

Before Instruction

Before and During Instruction

Check for Understanding

Phase

Instruction

End Instruction Sequence

Reach consensus of “Right” by auditing standard

Start An Instructional Sequence on Assessable Area

Think about and use what you learn to motivate employees on “Why” and “How” we change the norm

Random Sampling

Write Curriculum and Decide Objective of Training

Update Training Based on Results

Grade

Analyze Results for any Trends

MAJCOM Collaboration with AFAA

Sustainment Phase

Provide Feedback and Training

Add to IG Unit Effectiveness Inspection as a Focus Area

Add to Base/Center Quality Assurance Programs as a Quality Assurance Review

95% Assurance Achieved

Recycle

Train to a Standard


Fiar status update 17 july 2014

Commander’s Report Card SBR

As of 22 Jul 14

14


Fiar status update 17 july 2014

Civilian Pay Testing Results

Nov 13-Apr 14

AFRL

AFNWC

AFSC

AFTC

AFMC

AFLCMC

GOAL 95%

Lower scores due primarily to missing documentation & incomplete delegation of authority forms (DD 577s)


Civ pay checklist

Civ Pay Checklist

  • 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 hrsrequested 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.  Completed DD 577.

  • 4B.  Name, title, organization of appointing authority.

  • 4C.  Effective date of appointment.

  • 4D.  Name, title, organization, address and phone number of appointee.

  • 4E.  Block 13 appoints appointee to certify time and attendance.

  • 4F.  Must be signed and dated by both the appointing authority and appointee.

  • 4G.  Provided DD 577s match signatures on 428s, leave requests and time cards.

  • 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.  Time and attendance is annotated on time card.

  • 7B.  Employee signs for any changes to timecard

  • 7C. Supervisor signs time card (digitally or hand written).

  • 7D.  Verify timecard is retained in accordance with retention regulation.


Dd 577 example

DD 577 Example

Approval Date (CAC)

Approval Date

(Stated)

Effective

Date

Acknowledgement Date (CAC)


Fiar status update 17 july 2014

MCA Timeline

As of 23 Jun 14

= AFMC Owned


Fiar status update 17 july 2014

Commander’s Report Card MCA

Overall Readiness with IT Status

19


Gfe commander s report card

GFE Commander’s Report Card

Establish Baseline of GFE Contracts/Assets

Sustain Baseline of GFE Contracts/Assets

20


Status summary of gfe spreadsheets as of 11 jun 14

Status/ Summary of GFE Spreadsheets as of 11 Jun 14

*Number of lines of data reviewed* estimated, spreadsheets my have spaces between line items, or contractor formatted data sheets +/- 10 to totals


Gfe contract issues

GFE Contract Issues

  • 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?


Fiar status update 17 july 2014

Challenges to Meeting Our Goals

  • 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


Fiar status update 17 july 2014

How can you help?

  • 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!


Call to action

Call to Action

“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

Acquire and Support War-Winning Capabilities

UNITY OF PURPOSE

TRUST AND CONFIDENCE

SPEED WITH DISCIPLINE

  • Product

    • Deliver Cost Effective Acquisition Solutions

    • Deliver Affordable and Effective Product Support

  • Process

    • Launch High Confidence Sustainable Programs

    • Standardize and

    • Continuously Improve Center Processes

  • People

    • Develop and

    • Place Right

    • Person at Right Time

    • Assure a Safe, Secure, and

    • Quality Work

    • Environment

DELIVER TO COMMITMENTS


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