The Army's number one priority is readiness. In today's budget uncertainty and fiscally constrained environment this means focusing resources on immediate readiness priorities. Yet, security concerns in a dynamic and increasingly complex world also compel the Army to expend significant resources to meet current world-wide missions. This often results in readiness being consumed as fast as we build it, while increasing pressure and causing higher risk in long-term readiness and modernization. Therefore, the financial management community must best distribute scarce resources toward strategic plans and Army priorities, and provide Commanders with improved financial information and processes to enable timely decisions regarding readiness and current mission requirements. As trusted professionals, Financial Managers remain critical to resourcing readiness today and setting the conditions for readiness in the future.
LOOKING BACK AT 2016
RESOURCING THE ARMY
Although the Army's end-strength reached its lowest manning levels since before World War II, we were significantly engaged in combat and support missions world-wide. While prioritizing resources on building readiness, the Army remained globally responsive and regionally engaged, with forces forward deployed and in support from home station. Financial managers implemented resourcing strategies to help commanders supporting Operation Inherent Resolve and the fight against the Islamic State in Iraq and Syria, Operation Freedom's Sentinel in Afghanistan, and to increase presence in Europe in Operation Atlantic Resolve. Funding priorities also enabled strengthened international partnerships through Pacific Pathways 2016 and bilateral/multilateral partnership building exercises. The Army achieved positive outcomes in operational mission support and regional engagements, while sustaining readiness levels at affordable levels.
Army Financial Management Optimization (AFMO)
In 2016 we published the AFMO Campaign Plan, which documents and maps our efforts to transform Financial Management capabilities through more efficient and effective processes, taking advantage of recent improvements in technology, and enabling our workforce through organizational alignment of skills, training, leader development and education. The AFMO Campaign Plan drives to four core objectives of achieving and sustaining audit readiness, providing efficient and effective financial management support, improving readiness across financial management elements, and enhancing analytical support for improved leader decision making.
We made significant progress towards these campaign objectives, to include the broadening of the United States Army Financial Management Command's (USAFMCOM) capabilities and responsibilities. This two-star command provides the Army greater enterprise capabilities to drive standard business processes, ensure compliance and enable auditability, while delivering support required under our modernized and integrated financial, human resource and logistical Enterprise Resource Planning (ERP) systems. Meanwhile, this command continued to support worldwide contingency training and operations, electronic commerce and sensitive/classified activities.
Financial Enterprise Resource Planning (ERP) systems further matured in 2016. The General Fund Enterprise Business System (GFEBS) provided greater accountability and cost information, along with enhanced capabilities, such as direct Department of Treasury disbursements. GFEBS' operations with the logistics Global Combat Support System -- Army (GCSS-A) and the Logistics Modernization Program (LMP) showed in 2016 the value and benefits we expected from the investment in the federated solution of Army ERPs. Meanwhile, the Integrated Personnel and Pay System -- Army (IPPS-A), is on track to deliver future Human Resource functionality to Soldier pay and entitlements.
We built upon our workforce's technical foundation through the DoD Financial Management Certification Program. We are well on our way to achieving the goal of 100% course-based certification and will move to sustain certification and training into the future.
Our progress in 2016 in organization, systems, business processes, internal controls, and enhanced workforce knowledge set conditions and momentum for continued transformation efforts as we move to achieving enhanced decision-making support to Commanders and congressionally mandated auditability.
AUDIT READINESS
With a smaller and fiscally constrained Army, the stewardship and accountability of funds has never been more important. It is critical we accurately and timely capture financial transactions that provide operational readiness. Delivery of military and civilian pay, supply and equipment purchases, and inventories are just examples of the financial transactions commanders' need to make informed decisions. As such audit readiness reflects and is operational readiness.
In 2016 the Army completed the first ever Army-wide audit of financial transactions reflecting business activity and flow of funds through the Army's budget. This audit of Budgetary Activities (SBA) reflected command focus and team effort across multiple functional domains, including Personnel, Logistics, Installation Management, and Acquisition. Although we received a disclaimer of opinion from the auditors, the audit provided the Army valuable feedback and resulted in the development of corrective actions we needed to accomplish to achieve the congressionally mandated objective to be audit ready on the full set of financial statements by September 2017.
OUTLOOK FOR 2017
Resourcing Army readiness remains the top priority. The challenge of limited resources to provide current readiness and meet operational demands against the needs of future readiness and modernization will continue. Being fundamentally intertwined, the requirements, acquisition, sustainment, and budgeting processes must work harmoniously to deliver warfighting readiness. As such, and with the mandate to assert audit readiness by the end of September 2017 we will fully engage with Army acquisition, logistics, and operational units and commands to improve processes regarding retention of key supporting documentation, reconciliations between interfacing systems, cash reconciliation (Fund Balance with Treasury), service partnerships, and information technology.
RESOURCING THE ARMY
Secretary Fanning recently stated, "The biggest threat to the Department of Defense, not just the Department of the Army, is the budget instability and political environment. We start every year with a [continuing resolution] and don't really know what number to plan to into the future. Not only are we not able to provide some stability to soldiers, we're not getting our dollars' worth out of our resources."
Our Army needs sustained and reliable resourcing. The FY17 President's Budget request (pending congressional appropriation decisions at this writing) seeks to balance capacity and capability in a downsizing Army to meet increasing demands of Combatant Commanders. It reflects the minimal amount needed to balance capacity and capability in today's world of escalating complexity in conflict and threats to our national security. Heavy reliance on Overseas Contingency Operations (OCO) funding will support Operations such as: Freedom's Sentinel (Afghanistan), Inherent Resolve (Iraq and Syria), Spartan Shield (Middle East), and the European Reassurance Initiative. Our base budget priorities focus on funding a rotationally focused and surge ready force.
We will need more agility in resourcing emerging operational demands in support of Combatant Commanders. Simultaneously, we will further explore the costs of building readiness within the emergent Sustainment Readiness Model, with a goal to fund training to achieve readiness goals across all Army components.
CONTINUED TRANSFORMATION - AFMO
Our AFMO Campaign Plan integrates across the financial management domain to assure interoperable solutions; including standard processes, organizational design, workforce grades and skills, training and leader development, cost management, and financial systems improvement. We need to complete those campaign tasks and activities needed to adapt to shrinking budgets and meet the increasing demands for accuracy and accountability in financial information. USAFMCOM will continue to assume enterprise financial operational execution; enhancing support to commanders across the Army. We will collaborate with the Defense Finance and Accounting Service (DFAS), as we explore enhancing operational effectiveness, improved analysis, and greater efficiency toward audit compliance goals.
WORKFORCE
The complex national security environment and our Army demand agility in the programming, budgeting and execution of resources. The strength in financial management is the expertise and knowledge of our workforce -- trusted professionals, civilian and military, across all components. Our Financial Management workforce development goals include:
• Improving leader talent management - identifying and growing leaders through special assignment opportunities and educational programs.
• Sustaining the DoD FM Certification Program and institutionalizing such continuing education and training for our workforce.
• Recognizing and celebrating the many successes of our individuals and workgroups through acknowledgement and award both internally and externally as a way to communicate how critical our people are to mission success.
As our workforce adapts to technology we will streamline workload and shift focus toward cost management and enhanced analysis of financial data. With budget and cost information more readily available, tangible and reliable, our Financial Management workforce will be the institutional foundation contributing critical resource support during national security challenges while also providing improved decision support to our Army leaders.
SUMMARY
I could not be more proud of our people who are mastering our new technologies, building on our streamlined business processes, and delivering financial management solutions to our Commanders. I am very optimistic about our evolving transformation. Financial Management will continue to provide full-spectrum financial improvement through improved technology, organization, business processes and competent, certified personnel. We owe, -- and will deliver -- to Congress and the American people the assurance that we are making best use of resources entrusted to the Army. With fiscal stewardship and audit compliance; we will demonstrate the Army's achievement of building a ready Army today and in setting the ground work to achieve readiness into the future.
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