1. 1 Booz Allen Hamilton Proprietary Meeting Today’s Professional Military Comptroller Challenge: Making Smart Cuts Dave Price Brig Gen (Ret), USAF 8 May 2012 America Society of Military Comptrollers

2. 2 Booz Allen Hamilton Proprietary America Society of Military Comptrollers Book Review …  Who’s at the pointy end of the spear today …

3. 3 Booz Allen Hamilton Proprietary America Society of Military Comptrollers Book Review …  Who’s at the pointy end of the spear today …

4. 4 Booz Allen Hamilton Proprietary America Society of Military Comptrollers DOD Funding Trend … $83B $115B $518B (-5.6%) $524B (1.1%) $533B (1.8%) $546B (2.3%) $556B (1.9%) $567B (2.2%) $472B $514B Source(s): OMB, Budget Control Act of 2011, The Heritage Foundation Estimated DoD funding level if sequestration continues thru FYDP $ Billions

5. 5 Booz Allen Hamilton Proprietary America Society of Military Comptrollers FY13 Way Ahead …  FY13 budget enactment … CRA?  National election on 6 Nov  Lame-duck Congress  Sequestration required on 2 Jan  Mid-year budget cut of ~$52B for DOD  Rules of engagement are unknown  Professional comptrollers will be left to figure it out …

6. 6 Booz Allen Hamilton Proprietary America Society of Military Comptrollers Process Challenges …  There are systemic barriers to budget decision making –Budget timeline often works against thoughtful decision making –Ad hoc process for prioritizing requirements –Weak enterprise governance process –Missing right tools to frame the alternatives –Programmatic dependencies are not well understood –No mechanism for surgically decrementing programs –Wrong incentives in place for effective decision making –Resistance to change  Many initiatives require investments to achieve savings  Focus on quick wins can distract from the long-term goals

7. 7 Booz Allen Hamilton Proprietary America Society of Military Comptrollers Budget Toolkit …  Who’s at the pointy end of the spear today …  Cutting the Budget –Peanut butter spread

8. 8 Booz Allen Hamilton Proprietary America Society of Military Comptrollers Budget Toolkit …  Who’s at the pointy end of the spear today …  Cutting the Budget –Peanut butter spread –Focus on administrative costs

9. 9 Booz Allen Hamilton Proprietary America Society of Military Comptrollers Budget Toolkit …  Who’s at the pointy end of the spear today …  Cutting the Budget –Peanut butter spread –Focus on administrative costs –Reduce manpower

10. 10 Booz Allen Hamilton Proprietary America Society of Military Comptrollers Budget Toolkit …  Who’s at the pointy end of the spear today …  Cutting the Budget –Peanut butter spread –Focus on administrative costs –Reduce manpower –Outsource tasks

11. 11 Booz Allen Hamilton Proprietary America Society of Military Comptrollers Budget Toolkit …  Who’s at the pointy end of the spear today …  Cutting the Budget –Peanut butter spread –Focus on administrative costs –Reduce manpower –Outsource tasks –Invest in information technology

12. 12 Booz Allen Hamilton Proprietary America Society of Military Comptrollers Budget Toolkit …  Who’s at the pointy end of the spear today …  Cutting the Budget –Peanut butter spread –Focus on administrative costs –Reduce manpower –Outsource tasks –Invest in information technology –Consolidate and centralize activities

13. 13 Booz Allen Hamilton Proprietary America Society of Military Comptrollers Budget Toolkit …  Who’s at the pointy end of the spear today …  Cutting the Budget –Peanut butter spread –Focus on administrative costs –Reduce manpower –Outsource tasks –Invest in information technology –Consolidate and centralize activities –Process re-engineering

14. 14 Booz Allen Hamilton Proprietary America Society of Military Comptrollers Budget Toolkit …  Who’s at the pointy end of the spear today …  Cutting the Budget –Peanut butter spread –Focus on administrative costs –Reduce manpower –Outsource tasks –Invest in information technology –Consolidate and centralize activities –Process re-engineering –Programmatic cuts

15. 15 Booz Allen Hamilton Proprietary America Society of Military Comptrollers Making Smart Cuts …  Carefully assess the budget environment  Prepare for budget cuts now by updating strategic plans and make leadership priorities clear to everyone  Measurable goals provide mechanism for budget accountability  Establish a transparent decision making process  Leaders need to consider alternative ways of performing functions  Understand the links and dependencies between programs  Substantial across-the-board cuts can be severe and penalize the most efficient operations  Allow field to determine the best way to meet reduction targets based on strategic plans, performance measures, and leadership priorities

16. 16 Booz Allen Hamilton Proprietary America Society of Military Comptrollers Bottom Line …  Comptrollers have a new high profile role …  Understand how to use the budget toolkit …  Know the real-world constraints …  Think and plan ahead …  Be flexible …  Remember you are doing important work for our Nation … Contact me at: price_david2@bah.com

17. 17 Booz Allen Hamilton Proprietary America Society of Military Comptrollers Questions … Contact me at: price_david2@bah.com AIM-120D being loaded on F-22 in preparation for vibration test at Eglin Air Force Base