United States Fleet Forces Command…Comptroller Overview

1. United States Fleet Forces Command…Comptroller Overview RDML (S) John P. Polowczyk Comptroller USFFC May 14, 2013 UNCLASSIFIED

2. Agenda • Understanding United States Fleet Forces Command • How We Produce Readiness • Fiscal Update • Financial Improvement and Audit Readiness (FIAR) • United States Fleet Forces Command Contract Efforts

3. Mission • Train, certify and provide combat-ready Navy forces to Combatant Commanders that are capable of conducting prompt, sustained naval, joint, and combined operations in support of U.S. national interests. • Command and control subordinate Navy forces and shore activities during the planning and execution of assigned service functions in support of Chief of Naval Operations. • Provide operational planning and coordination support to Commander, U.S. Northern Command (CDR USNORTHCOM), Commander U.S. Element NORAD (CDR USELEMNORAD), and Commander, U.S. Strategic Command (CDR USSTRATCOM). • Command and control subordinate forces during the planning and execution of joint missions as the Joint Forces Maritime Component Commander North (JFMCC-N) to CDR USNORTHCOM. Per FFC MF&T (OPNAVINST 5440.77B), Signed 25APR12

4. Commander’s Intent Warfighting first, but hollowness is not an option. To successfully execute our mission, we must: • Support and defend our homeland • Send forward-deployed warfighters the most lethal Naval Forces possible • Standardize Readiness production • Drive costs down, and increase Readiness effectiveness • Harness the power of properly trained and aligned staffs • Synchronize actions and messages to produce effects • Hold Commanders and Leaders accountable for results

5. U.S. Fleet Forces Roll Call Postured to Meet Global Mission Requirements Surface ~40,000 People* 76 Ships Aviation ~50,000 People* 1200+ Aircraft 5 Aircraft Carriers Subsurface ~8,000 People* 32 Submarines Expeditionary ~30,000 People* 3 Riverine Squadrons 7 Construction Regiments 2 EOD Groups 11 MESF Squadrons 5 Logistics Regiments Network Warfare ~15,000 People* 28 Activities * Includes Military, Government Civilian, and Private Contractor Staff

6. Command Relationships CHIEF OF NAVAL OPERATIONS U.S. NORTHERN COMMAND U.S. STRATEGIC COMMAND U.S. PACIFIC FLEET U.S. NAVAL FORCES EUROPE COMMAND U.S. NAVAL FORCES CENTRAL COMMAND U.S. NAVAL FORCES SOUTHERN COMMAND U.S. NAVAL FORCES AFRICA COMMAND CNIC USFF NAVAL SPECIAL WARFARE COMMAND REGIONAL COMMANDERS MILITARY SEALIFT COMMAND FLEET CYBER COMMAND SHORE INSTALLATION COMMANDERS AIR FORCES ATLANTIC NAVY EXPEDITIONARY COMBAT COMMAND SUBMARINE FORCES ATLANTIC NAVY CYBER FORCES COMMAND MILITARY SEALIFT COMMAND SURFACE FORCES ATLANTIC NAVY METEOROLOGY & OCEANOGRAPHY COMMAND NAVAL WARFARE DEVELOPMENT COMMAND NAVY MUNITIONS COMMAND STRIKE GROUP COMMANDERS NAVAL STRIKE & AIR WARFARE CENTER STRIKE FORCE TRAINING ATLANTIC COMMAND

7. Alignment North to South Promote Acquisition Excellence and Integrity Take Care of Our People Lead the Nation in Sustainable Energy DON Objectives for FY12 and Beyond Maintain Warfighter Readiness in an Era of Reduced Budgets Dominate in Unmanned Systems Drive Innovative Enterprise Transformation CNO’s Sailing Directions Be Ready Warfighting First Operate Forward Joint and Fleet Operations Sailors, Civilians, and Their Families Warfighting and Readiness Global Force Management Fleet Forces Lines of Operation Safety (underpins all other Lines of Operation)

8. Alignment East to West “Two Fleets, One Voice” Fleet Forces Lines of Operation provide the lens through which mission is executed: Pacific Fleet Priorities broadly define the primary focus areas: • Warfighting and Readiness • Joint and Fleet Operations • Global Force Management • Sailors, Civilians, and Their Families • Safety (underpins all Lines of Operation) • Warfighting Readiness • Advance Regional Partnerships and Alliances • Purposeful, Forward Presence • Value our People and Their Families • Safety

9. Readiness Kill Chain Means Personnel Equipment Supplies Training Ordnance Installations Networks Community / Industry Ways Ends Assess FRTP RESOURCE / POLICY ASSESS / PROCURE PRE- INTRO MAINT BASIC INTEGRATED DEPLOY & SUSTAIN Surface Aviation Common Actions Synchronized Training Full Weapon System Ops Submarines Weapon System C4ISR/CYBER NECC OP/TAC HQs OPNAV N1, N2/6, N3/5, N4, N8, N9 The Joint Staff SYSCOMs / CNIC / MSC CPF / FFC Responsibility TYCOMs CSFTL/P Numbered Fleets Everyone is part of the Readiness Kill Chain Everyone needs to know their place and role in the Readiness Kill Chain Means and Ways must support the Ends – our Deployability / Sustainment model, the FRP As of 30NOV2012

10. FY 13 Fiscal Update Sequestration Overview • Navy Level • ~$49B requirement • Continuous Resolution (CR) “wedge” $5.5B • Sequestration took out $4.4B • Navy down ~$10B on $50B program • USFFC - BSO 60 • ~$11.9B requirement • ~$9.9B CR/SEQ control • ~$2B reduction of Fleet spending • ADM Gortney’s Fleet Priorities • Support FY 13 Global Force Management Allocation • Plan (GFMAP) • Prepare FY 14 GFMAP • CENTCOM • BMD ships

11. FY 13 Fiscal Update (continued) • Navy’s Revised Plan: Tier Alpha and Tier Bravo • Tier Alpha: Recoverable actions and/or things to do in 4th Quarter such as: • Cancel 4th Quarter A/C maintenance • Civilian hiring freeze • Reduced Tuition Assistance • Reduce NECC equipment buys • Cancel 4th quarter SDM • Reduce FSRM • Furloughs in 4th Quarter • Travel restrictions • Contract reductions • Tier Bravo: Drastic actions with direct impact to Fleet operations such as: • Cut Deployments • Cancel MIAMI and PORTER repairs • Cancel 3rd Quarter SDM maintenance • Reduce flying and steaming hours

12. Current Status • Where are we now? • HR 933 or Public Law 113-6 as an appropriation bill • OM&N ~ $43.9B with additional resources for CGs / LSDs in a transfer fund • Navy still ~$4B short to adjusted lower requirement…1 CSG presence • Limited transfer authority for Navy ~$250M out of DoD $7B; remainder to Army • and Air Force • Current status = we will make it through FY 13, but with shortfalls across the • fleet…but no significant reduction to operating forces • May bow wave some requirements into FY 14 • FY 14 Outlook • USFFC (BSO 60) • Required =~$11.1B • PB14 =~$10.5B • SEQ = ~$9.5B • Shortfall of ~$1.6B

13. Financial Improvement and Audit Readiness (FIAR) Background • National Defense Authorization Act (2010) - Mandated that DoD financial statements are validated and ready for audit by 30 September 2017 • The Office of Secretary of Defense has directed DoD produce an audit ready Statement of Budgetary Resources by 2014 • The Secretary of the Navy accelerated DoN’s audit readiness timeline to 2013 • DoD has developed a standard process for all services to assert financial segments through discovery, testing and implementing corrective actions to prepare for validation by an Independent Public Accountant (IPA) • Audit Readiness = 100% of financial transactions are captured, properly documented, and substantiated 13

14. USFF FIAR Efforts Financial Segments Future Efforts Current Efforts • BPS Phase IV • Sustainment of approved business processes • Change management around any previously approved standardized process • Periodic testing of controls and compliance with published standards • Business Process Standardization (BPS) • Booz Allen Hamilton (19 FTEs) • (N00189-10-b-ZD27) • Phases 2 • Align system agnostic to system- specific processes • Confirm controls and business rules align to corresponding steps • Document/confirm all financial controls are included within processes • Identify opportunities for reduced process variation around control steps • Phase 2.5 • Implementation Guidelines • Accounting Handbook • Segment-specific Standard Operating Procedure (SOP) documents • Establish a Resource site • KPMG (~4 FTEs) • Phase 3.0 • Implement accepted standard processes • Establish Support Teams • Compliance testing and metrics Assertion Testing Accenture (4 FTEs) (N00189-10-D-Z026-0003) Using the FIAR Methodology, provide direct support in the 6 phases in the DoD FIAR Methodology: Discovery Corrective Actions Evaluation Assertion Validation Audit from IPA Contractor Vendor Pay (CVP) Reimbursable Work Order –Grantor/Performer (RWO-G/P) Funds Balance with Treasury (FBwT) Financial Statement Compilation & Reporting (FSCR) Transportation of People (ToP) Transportation of Things (ToT) Acquire to Retire (A2R) Civilian Pay (CIVPAY) Existence and Completeness (E&C) Military Pay (MILPAY) Military Standard Requisitioning and Issue Procedures (MILSTRIP) 14 7

15. FY 13 Contract Focus Areas Unclassified

16. Current USFF Contracts

17. Current USFF Contracts (continued)

18. Coming Attractions • Re-compete for the maritime operation center training support effort - estimated - $4.5M per year • Fleet Integration, strategic planning and communication support – estimated - $340K per year • Ballistic Missile Defense (BMD) analytic support – estimated - $700K per year • USFFC Contract Management POC is Maureen Hayes: maureen.hayes@navy.mil; (757) 836-5239

19. Questions?