Defense Budget and Financial Management

U,S, operations against ISIL cost $8.7 billion in FY2016 through July

Friday, August 26th, 2016

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The Department of Defense (DoD) reported that since August 8, 2014, the cost of U.S. military operations in Iraq and Syria (Operation Inherent Resolve-OIR) against the Islamic State of Iraq and the Levant (ISIL) totaled $8.7 billion as of July 31, 2016. 

Flying operations accounted for 43 percent ($3.7 billion) of total costs, while mission support costs were 34 percent ($3.0 billion) and munitions were 23 percent (2.0 billion) of total costs.

The average daily cost is $12.1 million, up $.9 million reported at the end of 2015.  DoD reports that $5.2 million of the daily average is for flying OPTEMPO, $2.7 million for munitions, $2.1 million for logistical support, $1.9 million for operational support, and $0.2 million for other costs.

The Air Force continues to bear the lion’s share of total costs at 65 percent ($5.7 billion).  The Army share is 16 percent ($1.4 billion) and the Navy share is 11 percent (almost $1 billion). Special Operations Command (SOCCOM) costs at $700 million are 8 percent of the total.

Air Force costs are averaging $7.8 million per day, while the Army daily costs are averaging $1.9 million and Navy costs are $1.3 million a day. Special Operations Command (SOCOM) costs are averaging $1 million daily.

Nations partnering with the U.S in conducting airstrikes against ISIL include Australia, Bahrain, Belgium, Canada, Denmark, France, Jordan, the Netherlands, Saudi Arabia, Turkey, the United Arab Emirates and the United Kingdom 

Through June 30, DoD reports that coalition forces conducted 10,615 close air support, escort, and interdiction air sorties in 2016. In 2014 (August through December) coalition forces conducted 6,591 such sorties and in 2015 (January through December) they carried out 21,113 sorties.

GSA sets higher per diem rates for federal employees in FY2017

Friday, August 19th, 2016

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The General Services Administration (GSA) announced this month that federal employees will receive slightly higher daily Per Diem reimbursement rates for official travel in FY2017.

Per Diem rates are the maximum amounts a federal employee can receive as reimbursement for allowable expenses while on official duty travel. GSA sets per diem rates for locations in CONUS. 

Per Diem rates in Standard areas in the Continental nited States (CONUS) for lodging will be $91 in FY2017, up from $89 in FY2017.  The Standard area rate covers most of the continental CONUS 2,600 counties. 

Per Diem rates for lodging at some 350 Non-Standard areas (NSAs) will vary depending on local conditions.  

Daily rates for meals and incidental expenses (M&IE) in Standard areas will be unchanged at $51 in FY2017.  The MI&E rates for Standard areas are based on the change in the Consumer Price Index for “Food Away from Home.”

The M&IE rate for NSAs (divided into six tiers) will continue to range from $54 to $74.  Travelers receive 75 percent of the appropriate MIE rate on the first and the last days of travel.  M&IE rates for NSAs are based on surveys of local restaurants.

Federal Travel Regulations still allow federal travelers to be reimbursed for actual expenses if per diem rates do not meet necessary expenses.

According to the GSA Per Diem Bulletin FTR 17-01 there are no new NSAs in FY2017.  However, GSA announced that three NSA locations will become Standard areas:  Lexington Park/Leonardtown/Lusby, MD; New Bern, NC; and Minot, ND.

The new Per Diem rates go into effect on Oct. 1, 2016.

DoD moving forward with phased retirement

Thursday, June 30th, 2016

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The Department of Defense (DoD) is now set to begin accepting eligible civilian employees into the phased retirement program. Under the program, eligible federal employees approaching retirement are able continue working part time, while beginning retirement. 

Implementation of the Phased Retirement Program has taken longer than expected to implement in the federal government. The program was approved by Congress in July of 2012 and the Office of Management and Budget (OMB) issued implementation rules in 2014. To date less than 100 employees, government wide, are participating.

For DoD, Acting DoD Under Secretary for Personnel and Readiness Peter Levine issued a memorandum on June 21st that describes the policy, responsibilities, and procedures under which eligible employees can apply for and be accepted into the program.

Levine said the DoD program “is designed to assist DoD Components with the transfer of knowledge and continuity of operations on a short-term basis.” The program is voluntary and participation requires the approval of both the employee and an authorized Component official. Components can limit the number of employees as necessary. Levine said.

To be eligible for the program employees must have been in full employment status for the previous three years and be eligible for immediate retirement under either the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS). Employees subject to mandatory retirement, such as law-enforcement officers, firefighters, air traffic controllers, or nuclear materials couriers are not eligible for DoD’s phased retirement program.

The eligible employee receives income from a combination of part-time salary (50%) and partial annuity payments (50%). The phased retiree also accrues future retirement benefits proportional to the time they work. Phased retirees are expected to spend 20 percent of their time mentoring other employees.

The DoD directive-type memorandum requires DoD Components to have “written criteria in place that will be used to approve or deny applications for phased retirement before approving or denying such applications.” Employees that are eligible for phased retirement will complete Standard Form 3116 “Phased Employment/Phased Retirement Status Elections.”

Applications must be improved in writing and the phased retirement time period must be established in accordance with DD Form 3018 “Phased Retirement Request and Agreement.”

The Assistant Secretary of Defense for Manpower and Reserve Affairs (ASD(M&RA)) has overall policy responsibility for the DoD program and Component heads have approval authority.

DoD Comptroller tells Congress DOD is on track to meet audit goals

Friday, June 24th, 2016

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The Department of Defense (DoD) is making sound progress toward meeting full audit accountability and DoD's leaders expect to meet the goal of full financial statement audit readiness by FY2018, according to DoD's Comptroller Mike McCord.

Testifying before the House Armed Services Committee, McCord told the committee achieving auditability is a key element of Secretary Ash Carter's goal of reforming how DoD does business. He said Secretary Carter and the senior leaders of the Military Departments were committed to “achieving and sustaining auditable financial statements.”

McCord stressed that the successes experienced to date demonstrate that DoD is on track to meet its audit goals. “Our focus on the audit has yielded substantial and measurable results over the past couple of years,” he said. He pointed out that the Military Departments audited their budgets for FY2015 and there have been “successful recurring audits” by other DoD components, e.g., the Defense Finance and Accounting Service (DFAS) and Defense Commissary Agency, and Defense Contract Audit Agency (DCAA).

While McCord noted that the Military Department audits did not receive a clean audit statement, “we learned a great deal from our initial effort.” He said “we are making progress, and are fully committed to getting it done.” DoD has a good audit readiness plan and will stick to it, McCord said.

Appearing with McCord were: Robert M. Speer, Assistant Secretary of the Army (Financial Management and Comptroller), Susan J. Rabern, Assistant Secretary of the Navy (Financial Management and Comptroller), and Rocardo A. Aguilera, Assistant Secretary of the Air Force (Financial Management and Comptroller).

In a joint statement the witnesses told the committee that audit readiness is a top priority for the Military Departments. The Army has been using results from its audits to prepare “corrective action plans to focus efforts and resources on remediating deficiencies.” Navy plans “emphasize sustainable, standardized, efficient business processes, improved controls over business processes, and consolidation of information technology (IT) systems.” The Air Force is working closely with auditors “to prioritize findings and recommendations from the audit and implement cost-effective corrective actions.”

The witnesses emphasized that it takes time for an audit infrastructure to be set in place and to “mature.” For example, it took Homeland Security 10 years to get an unmodified opinion on its financial statements for budget resources totaling $89 billion. DoD has about $1 trillion in budgetary resources.

Nevertheless, they stressed that DOD and the Military Departments remain committed to the goals and benefits from achieving clean financial audits.

House passes FY2017 DoD Appropriations bill, White House threatens veto

Tuesday, June 21st, 2016

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Last week, the House passed the FY2017 Department of Defense (DoD) Appropriations bill (H.R. 5293),278-149. Forty three Democrats joined 235 Republicans voting for passage.

House Appropriations Committee chair Rep. Hal Rogers (R-KY) said the bill provides for the defense needs of the country by “funding those military needs that must be addressed now, planning and preparing for the future, and respecting the taxpayer by making commonsense budgeting decisions.”

The House bill would provide $517 billion for the DoD base budget (excluding military construction). The House followed the House-passed FY2017 Defense Authorization bill's plan for funding Overseas Contingency Operations (OCO) by providing only $42.9 billion through April 2017. The president requested $58.6 billion to fund OCO for the entire year. In addition, the House would use $15.7 billion in OCO funding for base budget requirements, increasing total base budget funding to $533 billion.

The House action on OCO funding has drawn a veto threat from the White House. In a Statement of Administration Policy (SAP), the Office of Management and Budget (OMB) called the redirection of OCO funding to the base budget “dangerous and wasteful.” The SAP also complained that this funding approach gambles with warfighting funds and “risks the safety of our men and women fighting to keep America safe, [and] “undercuts stable planning and efficient use of taxpayer dollars.”

The House bill includes an additional $340 million to fund a 2.1 percent military pay raise (the president requested a 1,6 percent raise) that is authorized in the House-passed FY2017 Defense Authorization bill. House bill also would fund the higher active duty (+27,000) and guard and reserve (+25,000) strength levels that would be authorized by the House.

Procurement funding in the bill would buy 15 ships (including three Littoral Combat Ships), 74 F-35 aircraft, 16 F/A-18E/F planes, 72 UH-60 helicopters, 15 KC-46 tanker aircraft, and 123 Stryker upgrades.

With only a few weeks remaining before Congress adjourns for an extended recess for the party conventions, both House and Senate have passed only three FY2017 appropriations bills each. The House has passed the DoD, Legislative, and Military Construction/VA bills and the Senate has passed the Energy & Water, Transportation/HUD, and Military Construction/VA bills. The Military Construction/VA bill, having passed both chambers is now in conference to reconcile the differenced.

Six bills await floor action in the House (Agriculture, Commerce/Justice/Science, Energy & Water, Financial Services, Interior & Environment, and Transportation/HUD) while eight are ready for the floor in the Senate (Agriculture, Commerce/Justice/Science, DoD, Financial Services, Homeland Security, Interior & Environment, Labor/HHS/Education, Legislative).

The House full appropriations committee has not taken action on three bills (Homeland Security, Labor/HHS/Education, and State/Foreign Operations. In the Senate only the State/Foreign Operations bill has not been completed by the Senate Appropriations Committee.

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