F110_Fiscal Stewardship_NOTES

.docx

School

Command & General Staff College *

*We aren’t endorsed by this school

Course

F100

Subject

Management

Date

Jan 9, 2024

Type

docx

Pages

Uploaded by SuperHeatWaterBuffalo28

US ARMY COMMAND AND GENERAL STAFF COLLEGE Advanced Distributed Learning (ADL) US Army Command and General Staff School Command and General Staff Officer’s Course (CGSOC) Common Core F100: Force Management Advance Sheet for Lesson F110 Fiscal Stewardship 1. SCOPE This lesson covers the concept of fiscal stewardship from the national level to the execution level. This lesson will include historical examples: cases and stories that demonstrate why stewardship is important in everything that the government does. The intent is tomaximize buying power for the Army by further discussingthe budgeting and execution (BE) portion of planning, programming, budgeting, and execution (PPBE). This is where commanders at the corps and below canaddress readiness and lethality by integrating the S-3, the S-4, the S-8, and the comptroller. You will learn you how those three staff elements synchronize on a daily basis to form a foundation of responsible fiscal stewardship that supports the training calendar. The lesson addresses important items that a major will see at the corps and below and links them to issues that affect readiness. This lesson directly links to lessons F106 and F108-F110 by providing context for how the Army uses its resources to move from the Army of today to the Army of the future. This lesson incorporates critical thinking concepts taught in C100 (Phase 1), strategy taught in C200 (Phase 1), and the doctrine and planning taught in C400 and C500 (Phase 3). 2. LEARNING OBJECTIVES This lesson supports CGSOC Common Core Course TLO-CC-2, “Incorporate thinking skills”; TLO-CC-8, “Demonstrate Department of Defense processes that provide Army capabilities to commanders”; and TLO-CC-10, “Incorporate effective communication skills,” as listed on the block advance sheet. ELO-CC-8.5 Action: Explain managing resources at unit level to support missions. Condition: Using reference material provided, computer-based instruction (CBI), and personal experiences. Standard: Explanation includes— 1. The roles of the commander, executive officer, contract officer representative, S-8s/G-8s, and similar key players; 2. Unit-level resource management, to include unit budgets, contracts, and unfinanced requirement; 3. Organizations that assist with resource and financial management and operational contract support (OCS); 4. The planning and management of contract services in contingency operations; and, 5. Legal issues and concerns in resource management and OCS. 6. Fiscal stewardship. Learning Domain: Cognitive Level of Learning: Comprehension Program Learning Outcomes Supported: 1f. Compose complete and well-supported arguments. 1g. Apply critical and creative thinking. 2d. Meet organizational-level challenges. F110Advance Sheet 1 AY 21-22

5a. Apply law, policy and Joint and Army doctrine. 5d. Develop options for commanders. 5e. Consider risk and resource limitations inherent in planning. Special Areas of Emphasis Supported: None. 3. HOMEWORK ASSIGNMENT a. First Requirement : Read the following before viewing the computer-based instruction (CBI): (Readings are in the Blackboard Master Library or in the lesson area of Blackboard unless otherwise noted.) F110RA Fiscal Stewardship at Corps and Below, pages 1 – 7 (7 pages). F110RB Fiscal Stewardship and Defense Transportation, Speech Before the U.S. Naval Academy, Presentation by the Honorable David M. Walker, Comptroller General of the United States, Annapolis, Maryland, March 8, 2007, pages 1 – 10 (10 pages). F110RC “Will the Army’s Renewed Stab to Institutionalize Smart Spending Stick?” Defense News. Jen Judson. 9 October 2018, pages 1 – 3 (3 pages). Available: https://www.defensenews.com/digital-show-dailies/ausa/2018/10/09/will-the-armys-renewed- stab-to-institutionalize-smart-spending-stick/ (accessed 9 December 2021). F110RD Establishment of the Command Accountability and Execution Review Program. US Department of the Army, Assistant Secretary of the Army (Financial Management and Comptroller) MILDEP, 24 April 2018, pages 1 – 3 (3 pages). F110RE “The Command Accountability and Execution Review Program,” Army Sustainment. Lt. Gen. Thomas A. Horlander, January-March 2019, pages 1–4 (4 pages). F110RF Col. Raphael S. Heflin, Kathryn L. DeBenedetto, and Michael Scarlett. “Build Readiness Through Auditing Success,” Army.mil, 16 January 2020, pages 1-5 (5 pages). F110RG F110 Study Guide and Graphics Organizer (1 page). Review: Previous F100 lesson references and materials. b. Second Requirement: View the computer-based instruction (CBI) c. Third Requirement: Take the F108/F109/F110 Blackboard quiz. 5. ASSESSMENT PLAN This lesson is not individually assessed. The F108, F109 and F110 lessons are assessed in one Blackboard quiz after the F110 lesson. The quiz is 6% of the overall grade. Leaders must avoid the impulse to live only for today, plundering, for our own ease and convenience, the precious resources of tomorrow. —President Eisenhower, Farewell Radio and Television Address In the lesson, Operational Contract Support , you studied:  Principles of planning and management using contracted support  US Army contracting organizations  Role of the contracting officer's representative (COR)  Implications involved when dealing with contractors What is fiscal stewardship? The key to fiscal stewardship is that we want to optimize buying power within the Army to make each and every dollar provided by Congress and the American taxpayers go as far as it can. F110Advance Sheet 2 AY 21-22

What is fiscal stewardship?  Maintaining professional financial standards, rules, and regulations to effectively resource capabilities and optimize buying power for current and future requirements.  Funding requirements only for the proper purpose, within the time limits and amounts established by statutory and regulatory guidance. Key Topics:  Fiscal stewardship as a mindset  How to use your comptroller  The Command Accountability and Execution Review (CAER) program  Managing cost drivers Take a minute to consider this scene from the movie Brewster’s Millions . In the movie Brewster is told that his recently deceased great-uncle, has left him his entire $300 million fortune, but only if he can complete a challenge with several conditions. Brewster can choose to receive $1 million upfront, or attempt to inherit the whole estate by spending $30 million in 30 days—but at the end of 30 days he can have no assets at the end of the 30 day period. Is the “spend all the money and get more” mindset in the Army today? Is that mindset good for the Army? We need to change that mindset and that is why you’re taking this class. Fiscal stewardship is everyone’s responsibility, and Army leadership is committed to achieving the goal of stewarding the taxpayer’s money while maximizing the Army’s buying power. Field grade officers need to know the impact and importance of fiscal stewardship. It is important to remember that resources are finite, and because of this we must distinguish between “wants” and “needs”. In this section we will look at how to be effective and efficient when obligating funds, particularly at the battalion and brigade level. Obligation vs. Deobligation Before we start you must understand what obligation and deobligation mean. Obligation refers to the legally binding setting aside of funds towards a requirement, such as goods or services. For example, an obligation is created when travel orders are approved for a Soldier heading to a school. This obligation reserves their plane ticket, lodging, rental car, and other anticipated expenses. Deobligations are downward adjustments of previously incurred obligations. Using the previous example, when the Soldier returns from the school, he or she files a voucher for the actual expenses occurred. If the actual expenses are less than the original estimate from the travel orders, then a deobligation needs to occur to ensure the excess funding is returned and is made available for the unit to spend towards another requirement. F110Advance Sheet 3 AY 21-22

DOD is entrusted by the American people as steward of the vital resources (personnel, funds, materiel, land, and facilities) provided to defend the nation. All available resources shall be used in the most efficient means possible. —JP 1-06, Financial Management Support in Joint Operations The Army operates under the mandate to use all available resources in the most effective and efficient means possible to support the combatant commander. Although not mutually exclusive, these two goals—effectiveness and efficiency, do not have the same meaning.  Effectiveness describes how well consumed resources achieve the desired outcome or endstate or simply stated, “doing the right thing.”  Efficiency speaks to the manner in which those resources are consumed in order to produce the maximum amount of output regardless of whether the output achieves the desired outcome—“doing things the right way.” Obligation A legal liability of the government for the payment of goods and services ordered or received, or a legal duty on the part of the United States that could mature into a legal liability by virtue of actions on the part of the other party beyond the control of the United States. Payment may be made immediately or in the future. An agency incurs an obligation, for example, when it places an order, signs a contract, awards a grant, purchases a service, or takes other actions that require the government to make payments to the public or from one government account to another. —GAO-05-734SP Budget Glossary F110Advance Sheet 4 AY 21-22

Deobligation An agency’s cancellation or downward adjustment of previously incurred obligations. Deobligated funds may be reobligated within the period of availability of the appropriation. For example, annual appropriated funds may be reobligated in the fiscal year in which the funds were appropriated, while multiyear or no-year appropriated funds may be reobligated in the same or subsequent fiscal years. —GAO-05-734SP Budget Glossary In the class Resource Management , you discussed the Operations and Maintenance, or O&M, category of funding and may recall that this is generally where battalions and brigades spend the majority of their budget. Appropriations can generally be spent or obligated in the first year and then enter an “expired status” for five more years, before finally being cancelled. During the “expired status” no additional obligations can occur, but funds can still be disbursed against existing obligations. Remember, deobligated funds may be reobligated only within the period of availability of the appropriation, or the first year, which means funds deobligated in the “expired status” years cannot be applied toward other unit priorities. At the end of this five years any money that has not been disbursed is returned to the treasury. The Army is averaging a 3 – 5% deobligation rate after five expired years in its Operations and Maintenance account. This represents a noticeable loss of purchasing power and impacts readiness. Here are some of the top sources of O&M dollars lost to units and the Army through deobligation. Year 1 Your unit contracts for maintenance support, and awards a contract for $1 million. This is the best estimate of costs of goods and services during the length of the contract. Years 2 – 5 Your maintenance contract continues in accordance with your contract, and the contractor bills you against the funds allocated in your Year 1 appropriation. Contract Ends At the end of the contract, everything is complete, but the contractor only billed $900,000, not the full $1 million. The remaining $100,000 is deobligated. If the obligation occurs within the five-year expired state, the funds can only be used towards adjustment of other requirements that occurred in the same year of the contract. If the deobligation occurs after the fifth expired year, the amount is cancelled and returned to the Treasury. F110Advance Sheet 5 AY 21-22

Maximizing Buying Power Because purchasing power has a direct impact on readiness, let’s take a closer look at how we can minimize deobligations during expired years. The key is to identify risk and cost drivers. Then rank them and focus on the ones with the greatest impact on your organization. Remember, currently the Army is averaging a 3 – 5% deobligation rate after 5 expired years in its Operations and Maintenance account. This may seem small, but if you look at the Department of the Army budget as a whole, it represents $4.5 billion in buying power. Tips to Help Maximize your Unit’s Purchasing Power  Integrate other staff sections in budget development.  Align expenditure with commanders’ priorities and desired outcomes.  Perform historical cost analysis and apply to future spend plans.  Prioritize expenditure.  Seek other funding sources.  Minimize deobligating funds in the expired, or cancelling, years. Cost Drivers What can you do at your level to help address this problem? First you need to understand where battalions and brigades spend most of their money. F110Advance Sheet 6 AY 21-22

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version