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Expeditionary Combat Support System ECSS Logistics Financial Management

. . ECSS Logistics and Financials. In order to maintain integrity of data, ERP's directly execute purchase, sell, movement, work and modification events with financial transactions at the same time. Disassociation risks compliance and material weakness increased risk in data interoperabilit

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Expeditionary Combat Support System ECSS Logistics Financial Management

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    1. 1 Expeditionary Combat Support System (ECSS) Logistics Financial Management

    2. ECSS Logistics and Financials In order to maintain integrity of data, ERP’s directly execute purchase, sell, movement, work and modification events with financial transactions at the same time. Disassociation risks compliance and material weakness increased risk in data interoperability requirements ECSS attempts to isolate logistics and financial events in order execute its mission of Air Force sustainment effectively and efficiently ECSS establishes Improvements for material weaknesses and controls by enforcing policy and matching logistics events with financial transactions

    3. Business Imperatives 3

    4. Major Challenges No AF enterprise view into processes and systems Poorly linked Warfighter requirements and logistical capabilities Conflicting metrics across functions and organizations Fragmented unresponsive planning and re-planning processes Limited predictive or causal analysis capability Uncoordinated planning across functions and organizations Disconnected and conflicting processes and systems integration Limited enterprise visibility of resources and capacity Intermittent linkage with Suppliers (internal and external) Lack of financial transparency and accountability Inability to fully account for all assets and resources Limited management visibility into real time costs and resources utilization Inability to meet certifiable financial reporting requirements 4

    5. Warfighter Benefits 5

    6. Current Legacy System Interaction

    7. ECSS Financial Interaction

    8. ECSS Release 1 P2P Interaction 8

    9. ECSS Order to Cash 9

    10. ECSS Release 1

    11. ECSS Release 2

    12. DEAMS and ECSS A Transactional View 12

    13. DEAMS and ECSS Major Differences DEAMS: Acquisition focused for General Funds Finance: Sub ledger and General Ledger System of Record for Air Force General Funds System of Record for Transportation Working Capital Funds ECSS: Sustainment focused Finance: Sub ledger and General Ledger System of Record for Air Force Working Capital Funds Assets (Tracking, Life cycle Management) Inventory (Moving Average Cost, Pricing, Balances, Movement, etc) Work Orders (Repair, Labor, Materials, Scheduling, etc) Personnel (Certifications, Rates, Approvals) Planning 13

    14. ECSS Schedule 14

    15. The Bottom Line The first two releases of ECSS are change the way finance and logistics work together Release 1 Procuring Expense Items Systematically Web Based Shopping Single Orders (due in/out process) Automated Funds Certification Internal Recording of Obligations Release 2 Single Source of Planning Data Automated Purchasing Rules Executing Blanket Releases (Commercial Path) Capital Asset Management 15

    16. Backup ECSS and Air Force Material Weakness 16

    17. Highlights United States Standard General Ledger (USSGL) Opportunity Lack of central repository for logistics financial transactions inhibits financial visibility AF legacy systems use General Ledger accounts that do not comply with the Treasury Financial Manual No system reconciliation between the general ledger and the subsidiary ledgers at the line item level ECSS Central repository for logistics financial transactions provides total financial visibility General Ledger Accounts comply with Treasury Financial Manual Sub-ledger details reconcile to general ledger balances, for example, Accounts Receivable details must reconcile to general ledger balances

    18. Highlights Costing Opportunity Overstated assets resulting from multiple un-reconciled sources of inventory data and the lack of inventory reconciliation associated with inventory in-transit Inventory cost anomalies caused by the lack of integrated database tables and reconciliation between cost data elements maintained in the various system tables Full costs are not associated with the final product or service ECSS ECSS will use a master set of financial books for in-transit items, even though they are tracked at multiple levels for management (e.g. base, AFMC, etc.) ECSS will use Moving Average Cost (MAC) to value inventory held for repair or remanufacture ECSS will accumulate costs into a final product or service by defined outputs (e.g. tail number, part number, etc.)

    19. Highlights Funds Control Opportunity No validation of fund use based on policy requirements and business rules No systemic administrative control of appropriations Current processes permit financial transactions to exceed available funds No controls to prohibit obligations in advance of an appropriation ECSS ECSS will provide visibility of the type and amount of funds available for use and validate their use against business rules and policy requirements ECSS will validate the requested funds against the available funds to help prevent Anti-Deficiency Act violations ECSS will provide for the commitment of funds for request of goods and services and the automatic de-commitment and obligation when contracts/purchase orders are awarded

    20. Highlights Payables Opportunity No central repository for logistics invoices Disparate entitlement systems Contract modifications that change the pay station have caused duplicate payments ECSS ECSS will be the central repository for logistics invoices for the AF, regardless of the entitlement system Duplicate invoice validation on vendor Includes pre-validation invoices Matching to CLIN/SubCLIN Validates available balance Receipt if required

    21. Highlights Receivables Opportunity There is a lack of official log of disputes to track billing issues and does not provide lessons learned for all concerned Lack of tracking disputes results in customer issues not being addressed in a timely manner Unresolved disputes result in incorrect revenue bills ECSS ECSS contains a centralized log of disputes ECSS will track due dates and personnel assigned to resolve disputes ECSS will measure the performance to highlight areas for improvements to the claim preparation and billing process

    22. Highlights Receivables Opportunity Prices on items are not correctly matched between Foreign Military Sales (FMS) Reconciliation process is labor intensive, not timely Large discrepancies between the working capital billing and the actual bills presented to the customer ECSS Expenditure Authority (EA) will continue to be maintained outside of ECSS Accounts Receivable will update prices daily Detailed file with actual bill presented to the customer will be sent to ECSS daily Reconciliation will be automated, providing speedier correction

    23. 2007/2008 AFWCF FS Audit Opinion Last Audit of Air Force WCF Financial Statements the DoD Inspector General (IG) “unable to express an opinion” Limitations on scope of DoD IG Work on Financial Statement Audit Did not perform audit utilizing procedures required by U.S. Government Auditing Standards and Office of Management and Budget (OMB) Stated Financial Statements may be unreliable Integral reason is The Report on Internal Control and Compliance with Laws and Regulations Material Weakness defined as “A significant deficiency, or a combination of significant deficiencies, resulting in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected.”

    24. Lack of Financial Management Controls Weakness Financial management systems non-compliance with federal financial management system requirements Inability to collect and report financial information on Full-Accrual Accounting Basis ECSS Blueprint ECSS Blueprint complies with applicable FSIO Federal Financial Management System Requirements documents ECSS Blueprint collects and reports costs on Full-Accrual Basis Oracle R12 Federal Financial Applications deemed compliant on 22 Jan 09 by FSIO ECSS consolidates and replaces numerous legacy systems

    25. Lack of In-Transit Inventory Auditing Weakness Current AF supply systems do not provide sufficient audit trails to confirm and value in-transit inventory for consolidated balance sheet ECSS Blueprint ECSS consolidates and replaces numerous legacy systems used for tracking Inventory ECSS maintains an account number for inventory in-transit and feeds the balance sheet through the General Ledger Oracle R12 Federal Financial Applications deemed compliant on 22 Jan 09 by FSIO Previously briefed “BAR-Costing Improvements”

    26. Balances and Expense Recording of Operating Materials and Supplies Weakness Inability to record cost-of-goods sold and work-in-progress IAW SFFAS #3 Uncertain balances on financial statements for Operating Materials and Supplies Uncertain quantities used to derive balances ECSS Blueprint Most recent acquisition cost captured and used in valuation for financial statements ECSS consolidates and replaces numerous legacy systems used for maintaining quantities Oracle R12 Federal Financial Applications deemed compliant on 22 Jan 09 by FSIO Previously briefed “BAR-Costing Improvements”

    27. Proper Recording of General Property, Plant, & Equipment (PP&E) Weakness Inability to verify values of PP&E Balance Sheet does not include all Government Furnished Equipment (GFE) exceeding capitalization threshold located at contractor sites ECSS Blueprint ECSS has capability to drill down to source documents and transactions Capability to separately track transactions in long term, multiple transaction acquisitions Capability to identify location of PP&E provided as GFE by contractor site

    28. Inadequate use of Subsidiary Ledgers and Special Journals Weakness Not maintaining documentation or use transaction subsidiary ledgers to support recorded Trial Balances Lack of reconciliations for accuracy of Accounts Receivable from FMS, Progress Payments, and Accounts Payable ECSS Blueprint Single database for WCF transactions General Ledger and Subsidiary Ledgers integrated by design Trial Balances generated based on General Ledger Account Balances Improved reconciliation capabilities Ability to view source transactions Previously briefed “BAR-USSGL Improvements”

    29. Inaccurate Intra-governmental Transaction Accounting Weakness Can not identify all Intra-governmental transactions by customer Seller provides balances and AF adjusts buyer-side records ECSS Blueprint Single database for WCF transactions Capability to identify transactions by customer Enables the identification of Intra-governmental transactions Previously briefed “Receivable Big Win-Disputes” Previously briefed “BAR-Costing Improvements”

    30. Improper/Undocumented Material Adjustments-Other Accounting Entries Weakness Material adjustments used for financial reporting are unsupported by transaction details Inability to identify Inter-governmental trading partner transactions ECSS Blueprint Single database for WCF transactions Capability to identify transactions by Trading Partner Trading Partner Indicator Code Previously briefed “Receivable-Disputes Improvements”

    31. Validity of Accounts Receivable Weakness Unable to assure validity of accounts receivable reported on financial statements due to trading partner eliminations, FMS, undistributed collections, supporting documentation and completeness of Tri-Annual Review ECSS Blueprint Single database for WCF transactions Improves ability to conduct Tri-Annual Review Capability to drill down to source documents and transactions Captures Trading Partner Indicator codes Permits identification and elimination of Intra-governmental Accounts Receivable Previously briefed “Receivable -FMS Pricing Improvements”

    32. Accuracy of Accounts Payable Weakness Inaccurate Accounts Payable in financial statements due to trading partner eliminations, accruals, supporting documentation and completeness of Tri-Annual Review ECSS Blueprint Single database for WCF transactions Improves ability to conduct Tri-Annual Review Capability to drill down to source documents and transactions Captures Trading Partner Indicator Codes Permits identification and elimination of Intra-governmental Accounts Payable Previously briefed “Payable-Prevent Duplicate Payments Improvements”

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