DFAS Support and Outlook: Today and for the Future

1. DFAS Support and Outlook:Today and for the Future Terri McKay September 13 2007 Integrity - Service - Innovation

2. ASMC Session Agenda • DFAS BRAC Transformation. • Transformation (Video). • Support to the Warfighter & GWOT Reporting • Customer Support~ • Wounded Warrior program. • Out of Country payments. • Applying expertise in a customer environment. • Lessons learned from our audit. • Driving toward standardized DoD capabilities~ • ERP FM COE. • Shared services support initiatives. Integrity - Service - Innovation

3. Why Transform? • DFAS working (with the rest of the Department) to achieve results in these DOD identified high-priority areas: • Win the Global War on Terror. • Focus on People – Military and Civilian. • Increase Efficiency and Effectiveness Across the Board. • Transform Enterprise Management. • DFAS results to date since 2001: • Productivity increases of 46% • Labor cost reductions of $285 million. Integrity - Service - Innovation

4. Status of DFAS Site Closures Site Closure Highlight – Eleven sites have closed on-time and within budget. FY 2006 Lexington Oakland San Bernardino Seaside San Antonio FY 2007 Lawton Dayton Norfolk Pacific St. Louis Orlando • Sites not Included in BRAC: • Bratenahl • Europe • Japan • Texarkana FY 2008 Charleston Omaha San Diego Pensacola NAS Rock Island Kansas City FY 2009 Paxtuxent River Denver (Most Functions) Arlington (Realigned) FY 2010 Denver (Retire-in-Place) FY 2011 Saufley Field (Retire-in-Place) * Closed sites are in Red Integrity - Service - Innovation

5. Transformation Video Integrity - Service - Innovation

6. DFAS Support to the Warfighter MISSION Direct, approve and perform finance and accounting activities for DoD VISION Transforming with the Warfighter to remain the trusted financial partner for DoD STRATEGIC GOALS STRATEGIC OBJECTIVES Customer Perspective Support DoD in winning the Global War on Terror • Support Customers in the Global War on Terror • Establish business requirements for DoD transformation initiatives related to finance and accounting activities • Execute and/or support deployment of DoD transformation initiatives Lead transformation of finance and accounting functions throughout DoD Financial Perspective Perform the DFAS mission at best value for DoD • Use DFAS resources efficiently and effectively to achieve expected results • Achieve expected financial results from transformation initiatives Internal Perspective • Optimize processes to meet or exceed industry and government standards • Increase productivity, reduce errors, and deliver products and services on time • Identify and mitigate risks to improve processes and internal controls Attain operational excellence in finance and accounting services Learning & Growth Perspective Attract, develop, and retain a highly capable workforce with relevant skills and competencies • Raise the level of relevant skills and competencies to meet anticipated needs • Attract and retain employees with needed skills and competencies Integrity - Service - Innovation

7. JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP Identified Comprehensive Set of Audit and Review Activities Implemented Monthly Summary Reporting Process Implemented process to monitor GWOT CoW Audits Developed Joint Transition POAM Standup Conus Retrograde Support Office Establish Joint Training/Transition Teams as required Complete Retrograde Commercial Vendor Services for Kuwait & Qatar Finalize Plan for Additional Retrogrades to CONUS Produced GWOT CoW Status of Funds Report for Internal Customers Created Definitive CoW Report for all Prior Years Publish GWOT CoW Funds Application Standard Operating Procedure Identified Requirements for Documenting “Current” GWOT CoW Process GWOT CoW Status of Funds Report Ready for External Customers Implemented Quick Hit Process Brown Out Legacy Monthly GWOT CoW Report Develop Initial GWOT CoW Funds Application Standard Operating Procedure Provide GWOT CoW To Be Process Training Complete Current Business Process Assessment – Components Implemented Compliance/Accuracy Review Plan Integrate Current Assessment Design To Be Process State Systems Engineering Complete Software Development Complete Systems Testing & Acceptance Complete Fully Operational Systems for Improved Information Delivery Complete Retrograde of Back-Office Functions GWOT CoW - High Level Timeline FY 2007 FY 2008 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Audit & Review In-Theater Support BusinessProcesses Planned Milestone Information Delivery Completed Milestone Integrity - Service - Innovation

8. Wounded Warrior Pay Management Program • Mission Statement: To improve the accuracy and the timeliness of pay to Wounded Warriors and their families and ensure the critical human dimension of pay support (face-to-face contact and educating the customer) occurs at all critical patient flow locations. • Our Customer • The brave Wounded Warrior, who, without fanfare or desire for personal gain, selflessly places his or her life in grave danger in order to promote freedom and democracy--adhering to American values, executing his or her mission with the business end of a bayonet. • Our Challenge • Know the customer – educating and interacting with Warrior and family • Ensure visibility and accountability across spectrum of support • Enhance customer services by improving policies, procedures, and systems improvements Without the customer, we would be without a mission! Integrity - Service - Innovation

9. WRAMC • Face-to-face contact • Monitor/stop entitlements • Assist soldier/family in filing travel claim • Assist in filing remission or waiver • Annotate WIA database • System Feeds • Medical Operational Data System (RC) • Global War on Terrorism • Defense Casualty Processing System • LRMC • Face-to-face contact • Stop Combat Zone entitlements • Annotate WIA database VA Hospital WRAMC • System Feed • Joint Patient Tracking Application Step 3 Landstuhl Regional Med Center Family Travel Permanent Duty Station Step 2 • Home Station • (example: Ft. Hood) • Face-to-face contact • Monitor/stop entitlements • Assist soldier/family in filing travel claim • Assist in filing remission or waiver • Annotate WIA database Step 4 MEDEVAC Step 1 Wounded Warrior Tracking • System Feed • Patient Accountability and Real-time Tracking System TRANSCOM CIC Flight Manifest Integrity - Service - Innovation

10. Prior to the Wounded Warrior Program • Lack of visibility and accountability of a medically evacuated (MEDEVAC) Warrior resulted in: • Wounded Warriors with pay problems highlighted by media in late 2004 • Reduced command oversight of wounded Soldiers’ duty status • Combat-related entitlements not stopped timely Integrity - Service - Innovation

11. Improvements/Accomplishments since 2005 • Improved visibility and accountability with centrally managed database. • Reviewed 67,032 accounts for accuracy of combat-related entitlements. • Placed Wounded Warrior pay teams world-wide to provide face-to-face, world-class fiscal support & stopped appropriate combat entitlements since October 2005. • Established Project Management for Wounded Warrior Pay Management Program. • Conduct full scope review of all processes, procedures and legislation for Wounded Warriors • Expanded pay and entitlements education to Wounded Warriors and family members. Integrity - Service - Innovation

12. Wounded Warrior Member Debt Management Wounded Service member is Evacuated to Landstuhl Medical System populates Service member’s data into WW Database • Reduced instances of new debt for MEDEVAC Warriors since 2005. • Remitted $12.6 million of debt for over 13,453 Wounded Warriors: • On July 31, 2007, the Army Human Resources Command approved a mass remission for 5,834 Soldiers totaling $6.8 million. Input will be complete by August 31, 2007. • The mass remission ensures the Wounded Warriors do not endure any financial hardship while on their way to recovery. • Established Project Management for Wounded Warrior Pay Management Program: • Conduct full scope review of all processes, procedures and legislation for Wounded Warriors. • Expanded pay and entitlements education to Wounded Warriors and family members. Service member’s pay account is flagged to notify Finance Office of WW status • Responsibility of account management picked up at follow-on Hospital and Finance Office DFAS/ Army Finance suspends Soldier’s debt Finance Office makes face-to-face contact with Soldier to ensure accuracy of pay Integrity - Service - Innovation

13. Out-of-Country Payments • Out-of-country payments process includes: • Proactive steps to ensure internal controls over GWOT provide reasonable assurance that payments are properly supported and recorded. • Proactive steps include: • Modified document verification process to ensure 100% compliance. • Implemented improved checklist. • Improved procedures for follow-up with DOs (daily calls, emails, accelerate timeframes for turnaround). • Incorporated measures in balanced scorecard to track compliance Integrity - Service - Innovation

14. Applying expertise in a customer environment • Implementing document imagining capabilities for Commands in Kuwait and Iraq and DFAS Rome. • Moving payments when possible from Theater to CONUS. • Establishing a DFAS support cell in Theater: • 4 member teams on long-term TDY. • Training and assistance in real-time. • On-site awareness of challenges and opportunities for improvements. • Updating OUSD(C) Policy governing documentation requirements for payments and accounting for funds and property in a contingency environment. • Providing training on enhanced internal controls for Army finance units in Theater, at Ft. McCoy (units to deploy this fall) and at Rome. Integrity - Service - Innovation

15. Lessons Learned on Audits • Now proactively working audits by: • Not only addressing the auditor issues. • Looking for other management improvements that can be made to enhance the operating environment of the area and staff being audited. • Out-of country payments~ • Take proactive steps to ensure internal controls over GWOT provide reasonable assurance that payments are properly supported and recorded. • Steps include: • Modified document verification process to ensure 100% compliance. • Implemented improved checklist and improved procedures for follow-up with DOs (daily calls, emails, accelerate timeframes for turnaround). • Incorporated measures in balanced scorecard to track compliance Integrity - Service - Innovation

16. Finance & Accounting (F&A) Core Requirements:A Driver for Standardizing DoD Capabilities Framework for Federal Financial Management Systems OMB OFFM-NO-0106 January 2006 “Core Financial System Requirements” Core Financial System Requirements OMB OFFM-NO-0106 January 2006 “Core Financial System Requirements” Integrity - Service - Innovation

17. Architecture &Requirements AP, AR, SGL, Reporting, Disbursing, Cash Accountability, Intragovernmental StandardInterfaces ADS, DDRS, DCAS, BEIS, DTS, IATS, CAPS, WAWF, PowerTrack, Etc. Standard Corporate Support Scenarios for: core F&A requirements, FFMIA testing, compliance Testing StandardTesting Standard training doctrine, Standard procedures for core F&A tasks Training & Implementation ImpactAssessments Build “DFAS After…..” proposals,Forecast human capital needs Liaison &Project Mgmt. Coordinate planning and support with customer Assess level of standardization in current in LMP and BSM Current ERPAssessment Customer specific requirements UniqueRequirements Specialized Support SAPTechnical Support Supply independent advice to corporate and customer teams UniqueInterfaces Customer interfaces with legacy systems Direct Customer Support OracleTechnical Support Supply independent advice tocorporate and custom teams Conversion & Cleansing Cleansing of customer data ProgressAssessments Routinely assess systems progress toward standard F&A capabilities UniqueTesting Scnerios for customer specific requirements Training & Implementation Specialized training and procedures for customer requirements ERP Implementation: Functions & Products Integrity - Service - Innovation

18. Center of Excellence: Services & Support Concept Integrity - Service - Innovation

19. FM COE Mission and Goals Mission Develop and integrate DoD standard Finance and Accounting business practices Goals 1. Accelerate System Delivery 2. Reduce Risks Associated with System Delivery 3. Standardize Finance and Accounting Practices in DoD 4. Optimize Costs of Providing Finance & Accounting Services 5. Improve Financial Management Integrity - Service - Innovation

20. Summary • Continued DFAS focus to provide: • More accurate, consistent, and reliable data to support decision making. • More efficient business operations, with cost savings redeployed to support the warfighter. • Continued DFAS Strategy and Customer Focus to: • Resolve material weaknesses. • Improve financial practices, including appropriate metrics to better support the warfighter. • Strengthen internal controls. • Modernize business systems and integrate all processes. : Integrity - Service - Innovation

21. Questions Integrity - Service - Innovation