Defense Budget and Financial Management

DoD moving forward with phased retirement

Thursday, June 30th, 2016

ShareThis

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

ShareThis

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

ShareThis

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.

Senate passes FY2017 Defense Authorization bill over White House veto threat

Thursday, June 16th, 2016

ShareThis

This week the Senate passed the FY2017 Defense Authorization bill by a large majority.

The bill authorizes force levels, programs, and policies (including military pay raises) for Department of Defense (DoD) budgets and the programs and policies for the Department of Energy (DoE) nuclear weapons program.  Appropriations bills provide actual funding.

Senate Armed Services Committee (SASC) chair Sen. John McCain (R-AZ) praised the bipartisan support for the bill saying “I’m very proud that the Senate passed the National Defense Authorization Act for Fiscal Year 2017 with an overwhelming bipartisan vote of 85-13.” Forty-eight Republicans, thirty-six Democrats, and one Independent voted for the bill.

The House passed its version of the defense authorization bill in May 277-147.

The Senate bill would authorize a total of $602 billion, including $543 billion for the FY2017 DoD base budget. The bill also would provide $59 billion for Overseas Contingency Operations (OCO) costs in FY2017, the same amount requested by the president for OCO. 

The House bill also authorizes $543 billion for DoD, but provides another $23.1 billion in OCO funding to be used for base budget requirements.  The House bill authorizes only $36 billion for OCO through April 2017.

The Senate failed (56-42) to garner the 60 votes needed to approve an amendment by Sen. McCain that would have added another $18 billion to the Senate bill. A proposal by Sen. Jack Reed (D-RI) to add $18 billion to nondefense budgets also failed.

The Senate bill would approve the president’s request for a 1.6 percent military pay raise, rather than the 2.1 percent military raise included in the House bill.  The Senate also did not follow the House increases to the authorized active duty and reserve strength levels.  Proposals to match the House bill's military pay raise and higher military end-strength levels failed on the Senate floor.

The Senate bill also differs fro the House bill in changes to TRICARE. The Senate would authorize three new TRICARE health plans—TRICARE Prime, TRICARE Choice, and TRICARE Supplemental, while the House bill provides two TRICARE options—TRICARE Prime and TRICARE Preferred.

The Senate bill would require the registration of women for the draft. The House Rules Committee did not allow House consideration of a narrowly approved (32-30) House Armed Services Committee proposal that supported draft registration for women.

The Senate did join the House in rejecting the administration's call for another Base Realignment and Closure (BRAC) round.

Sen. McCain emphasized the bill's support for DoD organization and acquisition reform, calling the bill “the most significant piece of defense reform legislation passed by the Senate in 30 years.”

The Senate bill would reset “the roles and missions of the senior officials in DoD, as well as their relationships with each other.”  Legislation would limit the National Security Council (NSC) staff to 150, clarify the role of the Chairman of the Joint Chiefs of Staff (CJCS), and clarify the primary duties of the Combatant Commanders (COCOMs). The Senate would establish a Combatant Commanders Council (COCOMs, Chairman and Vice Chairman of the JCS, and the Secretary of Defense) to assist in the execution of strategy 

The bill would lower the number of general and flag officers by 25 percent, reduce the number of authorized four-star billets from the current 41 to 27, cut the number of Senior Executive Service (SES) civilian employees by 25 percent, and reduce spending on contractors by 25 percent by January 2019 from a FY2016 baseline.

The Senate bill's acquisition reforms focus on accountability, new sources of innovation, and an improved acquisition workforce.

The bill would replace the Under Secretary of Defense for Acquisition, Technology, and Logistics (AT&L) with an Under Secretary of Defense for Research and Engineering (R&E) and an Under Secretary of Defense of Management and Support and create a new Assistant Secretary of Defense for Acquisition Policy and Oversight to set defense-wide acquisition and industrial base policy.

The bill would streamline the regulation of commercial items and off the-shelf commercial items and establish preferences for commercial services and fixed-price contracts. 

The Senate would authorize more flexible hiring and compensation practices, improve the Defense Acquisition Workforce Development Fund, and establish competitively-selected senior military acquisition advisors in the Defense Acquisition Corps.

The White House, like it did with the House bill, issued a Statement of Administration Policy (SAP) threatening a veto of the Senate bill as passed. The SAP expressed strong objections to the bill's organizational changes, rejection of another BRAC, prescription of contractual methods, and the restrictions regarding detainees at Guantanamo Bay.

House and Senate conferees will now have to adjudicate the differences in the two bills to try to achieve a bill the president will sign.

Carter announces military and civilian personnel initiatives for the Force of the Future

Friday, June 10th, 2016

ShareThis

Secretary of Defense Ash Carter announced new initiatives intended to improve the officer promotion system and enhance the civilian recruiting and retention program.

Speaking to an all-hands meeting at the Pentagon, Carter cited the security challenges and the demographic, economic, and social changes facing the U.S.  He said his job was “to make sure that amid all this change DoD continues to recruit, develop, and retain the most talented men and women America has to offer.”

Carter billed the new initiatives for the military promotion system as fixes to a rigid “one size fits all” system that works most of the time, but “most of the time isn’t good enough for the Force of the Future.”  Carter said the current “up-or-out” policy can be too rigid and “can limit the ability of our services to achieve the right force mix they need.”  Often the system inhibits officers from specializing or deviating from a career path even if such a move would benefit the service and the individual, he said.

Carter identified four changes to the Department Officer Personnel Management Act (DOPMA) to improve the effectiveness of the force by bringing the 100-year old system into the 21st century.

To incentivize the best performers, the secretaries of the Military Departments could adjust the so-called lineal numbers (based on seniority) of officers that are selected for promotion in order to recognize superior performance.  Currently, when officers are selected for promotion, they are promoted in order of seniority based on when the officer was commissioned.  Carter called this change a “key part of good talent management.”

Under another proposal, the Military Departments could approve an officer’s request to “opt out” of the promotions cycle to pursue opportunities to broaden their experience without hurting chance of promotion.  This change would enhance retention objectives and bring new skills and ideas into the management pool, according to Carter.

To enhance the recruitment of experts in critical fields (e.g., cyber and scientific fields), civilians with such skills would be able to join at a mid-career level, as is the case for civilian doctors.  This authority would “fill critical gaps in our force” and “make us more effective,” Carter said.

In order to be able to respond to future needs in critical career fields, the Military Departments would be allowed (if approved by the Secretary of Defense) “to waive select DOPMA constraints to very quickly build up expertise in a critical career field.”  This authority will enable the services the flexibility to tailor their response to future capability needs within the current system, Carter said.

Carter also identified specific changes to civilian personnel management DoD is pursuing to “make sure our future civilian force is just as great as it is today.”

To improve the department’s ability to hire the “best and brightest” in colleges and universities, the department is requesting authority to directly hire students and recent college graduates into the DoD civilian workforce.  This non-competitive authority would allow candidates to circumvent the current processes and be given a tentative job offer “on-the-spot.”  Carter called this a “game changer” in civilian recruiting.

DoD would also establish a public-private talent exchange program.  Under this program, DoD and innovative private sector companies would temporarily exchange employees for a minimum of three months and a maximum of four years.  Carter said that this program could benefit both DoD and the private sector and will “help DoD stay on the cutting edge, and be more efficient and effective.”

To enhance employee retention, DoD is requesting the authority to provide six weeks of paid parental leave for civilian employees.  Currently, military personnel receive paid parental leave.  Cater said this authority would bring DoD’s parental leave policy for military and civilians in line and would be very effective in retaining experienced civilian employees.

Both the military and civilian personnel management initiatives require congressional approval of new legislative authorities.  Carter said he would continue working with the House and Senate Armed Services committees to complete this work.

These new initiatives are the latest in a series of proposals to reform the rules and regulations on how DoD recruits, develops, and retains personnel for the future.  Previous initiatives, or “Links” as Carter calls them, involved “building and expanding on-ramps and off-ramps for talent flow between DoD and the technology sector” and promoting retention by “expanding maternity and paternity leave, extending childcare hours on bases, and giving families some geographic flexibility;” In addition, Carter said DoD had opened all combat jobs to women, and was working with Congress to make joint duty requirements more flexible.

Nonprofit Website Design Custom Web Design