Budget Topics

1. Budget Topics Rob LymangroverAFLCMC/FZA28 Mar 2019

2. Agenda • AF Macro Budget Perspective • Civilian Pay and Direct Cite Authority • Future LCMC DEAMS Transition • Centralized Asset Management • Unliquidated Obligation Management • Upward Adjustment Requests • Mentorship Thoughts • Summary

3. Macro DoD Budget Summary Info from FY19 Defense Budget Overview, 13 Feb 2018 https://comptroller.defense.gov/Portals/45/Documents/defbudget/fy2019/FY2019_Budget_Request_Overview_Book.pdf

4. Macro DoD Budget SummaryFY19 Fiscal Environment • Previous AF ~$2B ATR halted due to uncertainty wrt plan to fund administration’s priorities • No planned future FY19 ATR requests (at this time) • Significant AF FY19 UFRs • LCMC cash flowed high priority UFRs (BPC OCO, Afloat, etc.) and now being asked to internally source • Do not anticipate add’l funds from SAF or OSD…seek ways to internally solve issues / problems

5. Macro DoD Budget SummaryPersonnel Costs • We understand challenges associated w/ lack of manpower to execute acq programs • Strategic AF and DoD imperative balancing personnel w/ modernization & readiness • LCMC continuing to advocate for add’l funding/authorizations “Comprising roughly one-third of the DoD budget, military pay and benefits are, and will likely always be, the single largest expense category for the Department. Total compensation funding, including civilian personnel, consumes nearly half of the budget. People are the Department’s most valuable asset, but DoD must continually balance these requirements with other investments that are critical to achieving the Department’s strategic goals.”

6. LCMC Civilian Pay Complexity • FMS (Admin & Direct Case) • RDT&E Acq Workforce– 8 Programs Elements ~$1.3B & ~9700 authorizations • AMR Direct Cite– Weapon System PE RDT&E or O&M funded ~720 authorizations YTD • Foreign Military Sales-- ~$0.3B & ~2700 authorizations • Other includes +1K authorizations (F-35, LCMC/PZI, DLA RBA, etc.)

7. Life Cycle Management CenterDAF Civilian Workforce • O&M funded civilian pay in FY17 & prior years • Evaluate WCF/other options as required • Fund Requirement • “Super” Direct Cite • Other fee approaches • Transitioned civilian pay to RDT&E (8 LCMC PEs) • Begin AMR • Programs can “buy down acquisition program risk” by BTR’ing RDT&E funding from weapon system PE to one of 8 centralized civ pay PEs • Initiated AMR gov. structure to ensure Lead MAJCOM transparency and spt • Fully implement AMR (FY19 PB approved) • Weapon system PE direct cite construct • Maintains 8 centrally funded RDT&E civ pay PECs • Provides add’l flexibility to utilize program funds for civ pay to buy down program risk (no BTR) • Continue AMR gov. structure to ensure Lead MAJCOM transparency and spt • Positive Congressional engagement • Congress supported via FY19 PB RDT&E Civ Pay and AMR, Includes All Acq Centers– LCMC, SMC, and NWC * AMR = Agile Manpower Resourcing

8. Acquisition WorkforceProgram Elements • FY18 O&M to RDT&E transition • Acq workforce visibility and stability • Budget flexibility (8 PEs = ~$10M flex in X 8) • Consistent funding approach across all acquisition Centers (SMC, NWC, & LCMC) • Enabler for future AMR direct cite implementation • Challenges exist wrt managing eight separate PEs • Evaluating PE consolidation as part of FY21 POM iaw SECAF PE consolidation tasking

9. Direct Cite Authority Process Annual Aggregate MAJCOM Requests Out of Cycle Requests) LCMC/DP tasks Directorates Directorates Notify LCMC/DP/XP/FM of Rqmt Directorates Submit Rqmts to DP w/ Funds Availability Validation Center Validates Rqmts & Leadership Determines Rqmts to Submit to Each MAJCOM Center Validates Rqmts AFLCMC/CA Sends Request to Lead MAJCOM Directorate Leadership Completes eSSS and Obtains Lead MAJCOM Agreement Lead MAJCOM Approves Lead MAJCOM Approves AFMC Approves & Builds Non-FYDP Positions AFMC Approves & Builds Non-FYDP Positions Funds Suballotted to OBAN LCWB Funds Suballotted to OBAN LCWB LCMC/FZA Places WS PE LOA into DCPS LCMC/FZA Places WS PE LOA into DCPS LCMC/FZA Reports Execution to Programs LCMC/FZA Reports Execution to Programs Notes: Only major process steps shown. Modified process exists for SAPs (not shown on this chart).

10. AMR Direct CiteCiv Pay Execution in CCaRS • Understand the rqmt to show Direct Cite civ pay execution within program CCaRS budgets • IDS developing training materials which will be provided shortly– IDS personnel should be able to support/train now • Summary of CCaRS process for Direct Cite civ pay reporting • Programs create new “Direct Cite Civ Pay” budget in CCaRS • Programs create new “Direct Cite Civ Pay” CCaRS record • Programs add funding source in the Program Tool • Programs implement Civ Pay Auto-Recon feature w/ support of CCaRS SMEs • Programs link new funding source to BMR composite budgets • Civ Pay Auto-Recon feature requires program office FMs (with support of CCaRS SMEs) to manually backfill “documents” one time • After manual backfill is completed once, the subsequent “documents” with the same “document number” (related to civ pay EEICs) will automatically backfill • CcaRS Auto-Recon feature ignores civ pay accruals…that is a good thing • Detailed training is forthcoming

11. LCMC DEAMS Transition • LCMC originally scheduled to deploy DEAMS in FY16 • Decision made in 2015 to delay LCMC DEAMS deployment until acqrqmtsmet • AFLCMC programs within Business Enterprise Systems (Maxwell & WP), Battle Management (Offutt), and C3I&N (Lackland) using DEAMS since 2016 • Two major aspects of DEAMS transition– (1) new business system and (2) new Standard Financial Information Structure (SFIS)

12. DEAMS “Tone from the Top” • Auditability • “Our legacy systems are just not able to be audited to the level required of generally accepted accounting principles” • Technology Advancement • “DEAMS allows us to consolidate older systems and keep you on the cutting edge of business technology” • Enhanced capability • “DEAMS can do things that our legacy systems cannot do” • “Weapons get upgraded, why shouldn’t our financial systems” Dr. Heather WilsonSECAF David L. GoldfeinGeneral USAF John P. RothSES USAF

13. DEAMS Air Force’s Way Forward • DEAMS provides the architecture to overcome audit deficiencies • Auditable • Accurate • Single-Entry • Standardized • Sustainable • Timely • Reliable • DEAMS • Form creation; approval routing; accounting transactions (payables, receivables, travel, civ pay), including for and by others; payment processing; target loads; General Ledger updates; prior year adjustments; Posts Interfund transactions

14. DEAMS Deployment Schedule FY 19 FY 20 FY 21+ MAR OCT APR ~ 4.1K ~ 1.4K ~ .8K ~ .9K MAJCOM COMPLETION INCREMENTALS CONTINUOUS CAPABILITY DEVELOPMENT Tenants at: • AFSPC Incr • Buckley • Los Angeles • Patrick • Peterson • Schriever • Vandenberg • AFMC Incr • Arnold • Edwards • Eglin • Hanscom • Hill • Robins • Rome • Tinker • Wright-Patt • Labs/Ranges • AFOSR • Arnold • Edwards • Eglin • Kirtland • Rome • Other AFRLs • AFIPPS • All MILPERS users • Acquisition • Eglin • Hanscom • Maxwell-Gunter • Kirtland • Tinker • Wright-Patt • Sustainment • Hill • Robins • Tinker • Eglin • Hill • Kirtland • Patrick • Peterson • Robins • Schriever • Tinker • Wright-Patt R12 Upgrade – FY19 • AFGSC Incr Kirtland • DFAS-CO • DFAS-CO • DFAS-CO Currently Deployed to ~14,700 AF & DFAS users at 155 installations For Official Use Only

15. DEAMS Deployment Activities D–180 D–150 D–120 D–90 D–60 D–30 D+60 D–210 Change Communications Weekly Site Readiness Meetings Deployment Notification Cutover Activities GO LIVE! SAF/FMF notification to MAJCOM FM; identification of Base POCs underway Execute cutover activities between site, MAJCOM, AFAFO, DFAS, interface partners and other representatives End User Registration User Accounts Request end user data for user registration into DEAMS; data will be used throughout the pre-deployment process to Go Live End User Registration Process Continues Site Profile/FFQ Kick Off End user data bulk load into DEAMS Town Hall Meetings Provide base-level POCs with DEAMS requirements and request site profile information and Financial Factfinding Questionnaire Provides future DEAMS users with information to help prepare them for the changes ahead End User Training Post-Deployment Prepare the workforce with the knowledge and skills required to use DEAMS with Instructor-Led Classroom Training’ ECD 31 May On-site Go Live Support, On-the-Job Training, sustainment activities. & Post-Deployment Survey

16. CCaRS and DEAMS Overview • Planning • RqmtsMngt / Prioritzation • Unfunded Rqmts & Impact Statements • Obl & Exp Forecasting • FYDP Budget Planning • Management & Reporting • Snake Charts & Event Timelines • SAF/AQ MAR Reporting • Should Cost & Small Business • WML, AML, & IML • Financial execution • TLS & BQ automated funds loading • Requisitions • MIPR Checklist & New Start Validation Form • Conwrite Interface PM, PEO, SAF/AQX, & SAE program / portfolio management & decision support DEAMS and CCaRS dual interface required to transfer data • Financial execution • Manual funds loading • Requisitions • Reporting • Status of funds reports • Official accounting system

17. DEAMS Communication & Education • DEAMS Outreach Portal: http://go.usa.gov/xRPxd • Announcements (Help Desk, DEAMS) • Active User support (DEAMS Answer Bank, forms, tables, tools, etc.) • Communications Library (Fact Sheets, DEAMS News) • Education & Training Corner (Job Aids, ad hoc training, continuing education, etc.) • milBook/DEAMS Users Group:http://go.usa.gov/Z3uA • Base Town Halls • DEAMS MonthlyUsers Forum • DEAMS Discoveries (Lessons Learned, Live Wire recognition, etc.) • Strategic Communications Mailbox: F.DEAMS.StratComms@us.af.mil Two-way communication between the FMO and the user helps increase understanding of the system

18. Agenda • AF Macro Budget Perspective • Civilian Pay and Direct Cite Authority • Future LCMC DEAMS Transition • Centralized Asset Management • Unliquidated Obligation Management • Upward Adjustment Requests • Mentorship Thoughts • Summary

19. Centralized Asset Management Mission, Vision and Governance Governance Structure CAM Executive Committee (EC) Co-Chairs: AFMC/CD, SAF/FMB, AF/A4 Mbrs: AF/A2R, A8P, A3O, A4L, A4P, A5X, REC, SAF/AQD, AQXR, ACC/CD, AETC/CD, AFGSC/CD, AFRC/CD, AFSOC/CD, AFSPC/CD, AMC/CD, ANG/CD, PACAF/CD, USAFE/CD, AFMC/CA, Advisors: AFSC/CC, AFLCMC/CC, AFNWC/CC CAM Mission Centralize and integrate management of AF sustainment to optimize warfighting capability through effective and efficient allocation of resources across the enterprise. CAM Vision Enterprise Perspective... Warfighter Focus! CAM Executive Steering Group (ESG) Chair: AFMC/CA Mbrs: AFMC/A1, A2, A3, A4, A/5/8/9, FM, EN, PK; 2-Ltr Equiv’s (A2, A3, A4, A6, A8, A10, FM) from MAJCOMs, AFRC, ANG, AFFSA; 3-Ltr Equiv’s from Air Staff; Weapons System PEOs; OC/OO/WR Air Logistics Complex Commanders CAM Advisory Council (AC) Co-Chairs: AFMC/FMM & A4F Mbrs: 3-Ltr Equiv’s (A2, A3, A4, A6, A8, A10, FM) from MAJCOMs, AFRC, ANG, AFFSA; 4-Ltr Equiv’s from Air Staff; Program Office PMs/PSMs; AFSC/LG; AFNWC/LG; AFLCMC/LG; Service Core Function Representative **Note: One vote per MAJCOM at each tier

20. Unliquidated Obligation Management • Managing contract funding through contract closeout is a program office IPT responsibility– includes teaming / collaborating w/ DCMA and DCAA • Question to consider: Does your program office have a list of all open contracts w/ assigned PM, FM, PK, etc. POCs? • LCMC understands focus on executing active year funding and manpower constraints • ULO Management (to include Cancelling Year ULOs) Process: Is Accounting System Accurate? Is Supply / Service Complete / Delivered? Has Contractor Invoiced for Completed Work? Has DFAS PaidContractor? DCMA & DCAAContract Closeout Activities • Support DCAA w/ final indirect rates • Support DCMA in contract closeout activities • Verify DFAS paid invoice correctly & iaw contract payment instructions • Confirmation from contractor & gov. PM that supply / service is complete • Validated by DD250 receiving report • Engage w/ contractors concerning timely invoicing • Research WAWFs • Validate via AEU in BQ / CRIS • BQ / CRIS reconciled w/ actual invoices • Understand ULO in relation to CLIN / ACRN • Utilize tools such as CCaRS contract module or CLIN / ACRN matrix

21. Cancelling Year ULO Analysis • Majority of Cancelling Year ULO risk does not materialize as CxC bill • Majority of Cancelling Year ULO risk results in deobligation after funds cancel • AF view bothCxC invoices and excess funding (deobligations after expiration/cancellation) as lost buying power • Analyze CxC invoices and post expiration / cancellation deobligations to determine root cause & corrective actions

22. Upward Adjustment RequestsPurpose / Justification • Clearly state type of UOA being requested (e.g. CxC, incentive fee, etc.) • Address purpose, time, and amount • Identify PoP of the original effort • Cite law, regulation, AFI, or at a minimum AFMAN 65-605 v1 • If UOA relates to CxC invoice, then identify detail of the invoices (e.g. invoice number, amount, DMACT package number, etc.) • Utilize UOA purpose templates! • https://org2.eis.af.mil/sites/21114/AFLCMC.FZA/FZAGuidebooks/Forms/AllItems.aspx • Current for Cancelled • Award Fee Determination • Request for Equitable Adjustment • Cost Reimbursement Contract Overrun • Pension Harmonization Ruling

23. Upward Adjustment RequestsTemplate Example (Award Fee) Award Fee Determination: UOA request for execution of ($xxx,xxx.xx) of expired (FYxx) funding as a result of the (Period XX) award fee determination for the (effort) on (contract #/DO #). In accordance with AFI 65-601V1 Ch8, para 8.3.1 for procurement appropriations (or Ch13, para 13.3.3 for RDT&E appropriations), “Award fee requirements are planned and budgeted for as part of the total weapon system cost. Award fees are a bona fide need of the same fiscal year and appropriation that finances the related effort on which the award fee is based.” Award fee requirements must be budgeted for and funded with the same appropriation as the associated effort. For the award period (DD MMM YYYY through DD MMM YYYY), a (Xx.X%) award determination was made on a total award pool of ($xxx,xxx.xx) resulting in an award of ($xxx,xxx.xx). The work effort associated with the award was funded with (FYxxAppropXX) funds. As such, funds were reserved via contingent liability on funding document (F4FDAM0236BY01) in accordance with the AFI referenced above. Request authority to execute the reserved funds. Per AFI 65-601V1 Ch6, para 6.3.6.1, this type of UOA is considered an ordinary adjustment. Original fund cite: 57 23010 112 4720 16A876 4G123B 12345FSource fund cite: 57 23010 112 4720 16A876 4G123B 12345F

24. Upward Obligation Adjustment Resources • AFMAN 65-605 V1 Chapter 6 • FZA SharePoint (https://org2.eis.af.mil/sites/21114/AFLCMC.FZA/default.aspx) • FZA Guidebooks / Upward Obligation Adjustments (UOA) / Guidance (https://org2.eis.af.mil/sites/21114/AFLCMC.FZA/FZA%20Guidebooks/Upward%20Obligation%20Adjustments%20(UOAs)/Guidance) • FMSuite UOA Module DD Form 2875 • UOA Purpose Template • AFLCMC FM Process Guide – Upward Obligation Adjustment Requests • AFLCMC UOA Module Training • FMSuite https://fmsuite.af.mil/home • AFFSO help desk email: saf.fmpaffso.customerservice@us.af.mil • AFFSO phone: DSN 787-3117 Com 937-257-3117 • AFFSO hours of operation: 0800-1700 EST • POCs • Primary: Rebekah Buck, AFLCMC/FZAI, DSN 986-5447 • Alternate: Cherrelle Flores, AFLCMC/FZAO, DSN 986-5411

25. Mentorship Thoughts • “FM earn their seat at the table” vs. “FM is the most valued member at the table” • Don’t only think of yourself as a Financial Manager…think of yourself as being responsible for executing your programs’ & the AF’s mission • FMs postured to bring integrated advice/decision support to program leadership • Integrated analysis related to rqmts, acq strategy, risk analysis, contract structure, logistics strategy, contract negotiations, cost savings initiatives, comm strategy, etc. is critical to program success • Caveat: You are a Financial Manager…focus on your FM responsibilities  • Acquisition Financial Management is challenging! • Be resilient and stay positive • Try to minimize “us vs them” perspective • Focus on servant leadership and servant followership

26. Summary • Thank you for all you do to support the AF mission • LCMC continuing to improve AMR Direct Cite processes • DEAMS is coming…deployment schedule is uncertain…working interface to leverage benefits of DEAMS and CCaRS • Managing unliquidated obligations, minimizing CxC invoices, and minimizing deobligations after funds expiration/cancellation is critical to maximizing AF TOA • AFLCMC/FZA is a customer support organization…supporting LCMC PEOs, program offices, and 66 ABG…while teaming with external stakeholders

27. Backup Charts

28. DEAMS Program Overview • Other Organizations using DEAMS: • HQ USCENTCOM • AFCENT - AOR • HQ USSOCOM • HQ USSTRATCOM • HQ USTRANSCOM • DFAS Locations (5) DEAMS is the Air Force’s core accounting and finance system supporting: • Air Force General Fund and Transportation Working Capital Funds (TWCF) control, Execution & Reporting • Joint Commands, with Air Force as executive agent or supporting host base • DFAS services provided to Air Force customers • DEAMS serves as target core financial & reporting system for all other functional system development with financial or mixed financial transactional data • DEAMS is currently deployed to 87% of the expected 16,900 users • ~155 Active Duty, Reserve, Air National Guard, and DFAS sites • All MAJCOMS have users processing on DEAMS