OSD FCT PROJECT

1. OSD FCT PROJECT/ FINANCIAL MANAGEMENT OVERVIEW Adele Ratcliff OSD FCT Deputy Program Manager 13 November 2002 Again, welcome to the kickoff for the FY02/03 FCT New Start projects. In this brief, I would like to address the project and financial management responsibilities of the new FCT PM.Again, welcome to the kickoff for the FY02/03 FCT New Start projects. In this brief, I would like to address the project and financial management responsibilities of the new FCT PM.

2. OVERVIEW Project Management Financial Management FCT Funding Guidelines Prior Year Funding Issues FCTS Financial Module Importance of Close Monitoring of FCT Project Funding Summary Service FCT Program/Financial Managers The are a few basic project management items that I will discuss prior to hitting on financial management. Several areas in financial management will be discussed today. Review of FCT funding since FY95 Address prior year funding (ULO) issues Importance of close monitoring of FCT funding execution at the project level Explain how OSD monitors execution of FCT funding via FCTS Financial Module Identify the Service Financial and Program Managers The are a few basic project management items that I will discuss prior to hitting on financial management. Several areas in financial management will be discussed today. Review of FCT funding since FY95 Address prior year funding (ULO) issues Importance of close monitoring of FCT funding execution at the project level Explain how OSD monitors execution of FCT funding via FCTS Financial Module Identify the Service Financial and Program Managers

3. PROJECT MANAGEMENT

4. FCT PROJECT MANAGEMENT REQUIREMENTS Project Test Plan Key Performance Parameters (KPPs) Pass/Fail Criteria Focus on Schedule/Cost Milestones Reporting Quarterly Reports Technical Test and Project Close Out Report Mid Year Review Will not release $ for testing until test plan approved. Something we have seen recently and Service Focal Points will be focusing on test plans before test execution. Test plans should be complete and address KPPs identified in proposal and pass/fail criteria. Reporting Quarterly � focus on schedule/cost milestones (If project not meeting obligation/expenditure benchmarks in any quarter, expect OSD monthly reviews) Technical Test and Project Close Out Mid Year Review � April-May 2003 � focus on project meeting schedule/cost milestones. Will not release $ for testing until test plan approved. Something we have seen recently and Service Focal Points will be focusing on test plans before test execution. Test plans should be complete and address KPPs identified in proposal and pass/fail criteria. Reporting Quarterly � focus on schedule/cost milestones (If project not meeting obligation/expenditure benchmarks in any quarter, expect OSD monthly reviews) Technical Test and Project Close Out Mid Year Review � April-May 2003 � focus on project meeting schedule/cost milestones.

6. Address actions and issues for last quarter Provide updates to follow on procurement statusAddress actions and issues for last quarter Provide updates to follow on procurement status

7. SAMPLE PROJECT CHART (BAD)

8. SAMPLE PROJECT CHART (GOOD)

9. PROJECT TITLE If not meeting quarterly obligation/expenditure benchmarks, can expect a inquiry phone call from OSD FCT Office or be requested to submit monthly execution reporting. If not meeting quarterly obligation/expenditure benchmarks, can expect a inquiry phone call from OSD FCT Office or be requested to submit monthly execution reporting.

10. FCT MID-YEAR REVIEW METRICS Schedule: Green- program slip less than 1 quarter Yellow- program slip greater than 1 quarter and less than 6 months that does not result in a missed milestone or 10% funding increase. Red- program slip greater than 6 months or that results in a missed milestone or causes a funding increase of 10% Funding: Green- Obligation/Expenditure Rates within 5% of OSD standard Yellow- Obligation/Expenditure Rates within 6-10% of OSD standard Red- Obligation/Expenditure Rates more than 10% below OSD standard Each yellow or red metric would have to be explained in the issues section. Each yellow or red metric would have to be explained in the issues section.

11. FINANCIAL MANAGEMENTNo matter how good a product is,No matter how valid or urgent the need,Without money � there is no project

12. FCT FUNDING PROFILEFY95-03 Every penny, from cradle to grave, needs to be executed and accounted for. FY2002 $3M decrement � able to absorb the reduction by the cancellation of a project. FY2003 $3.7M decrement � not able to absorb � also your performance (i.e., funds execution) this year will impact the outcome of our FY2004 appropriation next year. Every penny, from cradle to grave, needs to be executed and accounted for. FY2002 $3M decrement � able to absorb the reduction by the cancellation of a project. FY2003 $3.7M decrement � not able to absorb � also your performance (i.e., funds execution) this year will impact the outcome of our FY2004 appropriation next year.

13. FY02 -- STATUS OF FCT FUNDSas of July 2002 (1002 Report) Need to monitor undisbursed funds to ensure they have been billed accurately and expedtiously. Need to monitor undisbursed funds to ensure they have been billed accurately and expedtiously.

14. FY97 -- STATUS OF FCT FUNDSas of July 2002 (1002 Report)

15. IMPORTANCE OF CLOSE MONITORING OF FCT PROJECT FUNDING FCT funding not utilized (i.e., unobligated, undisbursed) at project level results in �lost opportunities� and reductions in FCT Program funding Unobligated/undisbursed funds need to be returned during the �obligational authority� period. Allows OSD to reprogram funds to additional �new start� projects to be funded during an �out of cycle� proposal process

16. FCTS FINANCIAL MODULE

17. Navy MIPR � Star Tracker Project

18. FCTS FINANCIAL MODULE

19. FCTS FINANCIAL MODULE DATA SOURCES Service Accounting Systems send an �End of the Month� funds execution file to the DFAS centers listed. DFAS sends a file to FCTS file server where the report is posted within 2 days of receipt of file Monthly reports are posted in FCTS on different days because Service Accounting Systems have differing end of month dates � Navy 8th of the month, Air Force 15th of the month.Service Accounting Systems send an �End of the Month� funds execution file to the DFAS centers listed. DFAS sends a file to FCTS file server where the report is posted within 2 days of receipt of file Monthly reports are posted in FCTS on different days because Service Accounting Systems have differing end of month dates � Navy 8th of the month, Air Force 15th of the month.

20. FCTS FINANCIAL MODULE

21. FCTS FINANCIAL MODULE Financial Manager at Service level has access to FCTS Information can be provided/included in the comments section Financial Manager at Service level has access to FCTS Information can be provided/included in the comments section

22. FY03 NEW START PROJECT CODES

23. FY03 NEW START PROJECT CODES

24. FCT FUNDING GUIDELINES FCT Funds 2 years obligations + 5 years expenditures 7 years total funding life cycle OSD Obligation Benchmarks 100% planned target 89% required target within 1st year OSD Expenditure Benchmarks 55% planned target 45% required target within 1st year

25. FY03 OBLIGATIONS

26. FY03 EXPENDITURES

27. SUMMARY

28. SERVICE FCT PROGRAM MANAGERS

29. SERVICE FCT FINANCIAL MANAGERS

30. BACKUP SLIDES

31. EXPLANATION OF FINANCIAL TERMS

32. FY98 -- STATUS OF FCT FUNDSas of July 2002 (1002 Report)

33. FY99 -- STATUS OF FCT FUNDSas of July 2002 (1002 Report)

34. FY00 -- STATUS OF FCT FUNDSas of July 2002 (1002 Report)

35. FY01 -- STATUS OF FCT FUNDSas of July 2002 (1002 Report)