Presentation on theme: "Object Class: Building Blocks for Budget Preparation and Execution"— Presentation transcript:
1Object Class: Building Blocks for Budget Preparation and Execution 2011 ASMC PDINavy Workshop DN02Object Class: Building Blocks for Budget Preparation and ExecutionJune 1, 2011Welcome to today’s workshop on Object Class InformationMy name is Bill Orton from the Navy Budget Office; I’m sure some of you have seen my name on various guidance and other FMB communications.Also presenting today is Mr Patrick Lowien from NAVAIR HQ’s; He will cover the second half of the presentation which is focused on the Budget Submitting Office perspectiveBefore we get started, what is general composition of our audience: (1) how many of you are from BSOs and Headquarters; (2) how many of you are from echelon 4 and below Field ActivitiesLets get started, next slide.
2AgendaDN02 Object Class: Building Blocks for Budget Preparation and ExecutionOverview – Object Class Information and UsesObject Data Submissions and Reviews during the typical Budget CycleObject Data from the Echelon I/Departmental perspectiveObject Data from the Echelon II /BSO perspectiveQuestionsThe purpose of today’s workshop is to have an open forum to discuss Object Data, current trends, challenges and the future.The GOAL of today’s workshop is to highlight different perspectives of Object Data to the audience in order to gain abetter appreciation of Object Class relative to the PPBE cycle.Next slide
3Or you can push some BOCS buttons… BOCS Note of the DayCheck out BG 11-1G guidance, Enclosure (4), BOCS processes and procedures:Or you can push some BOCS buttons…Check the Program Budget Information Center (PBIC) for the latest gouge at:https://fmbweb1.nmci.navy.mil/fmb32/PBIC.htmSome cartoons to wake you up after lunch….BSOBSOBSOFMBFMBFMB
4Building Blocks: Overview Object ClassCategories in a classification system that represent obligations by the items or services purchased by the Federal Government OMB Circular A-11Object classes describe obligations according to their initial purpose, not the end product or serviceExample: A federal employee is paid to construct a buildingThe obligation is under personnel compensation and benefits, not OCC 32.0When categorizing other contracts, have to consider to purposeWhat if the government pays a contractor to construct the buildingWhy report object class information – 31 USC 1104(b) requires the President’s Budget to present obligations by object class for each accountObject Data is displayed in Appendix of the Budget of the United States of America at the front of each individual appropriation sectionThe DON also submits Object Class information for OCO requests and Supplemental fundingWhat is Object Class – the OMB Circular A-11 is the holy grail for Object ClassNote that Object Class is a categorization of our Obligations and it is grouped by the types of activities being performed.But an amplification to this interpretation is required for Other Contracts…OCCs in the 25 group. Those contracts are categorized by the service or end item…not that the funds were paying a contractor’s salary to perform work, but rather the type of work being conducted.All too often, an item is put into the 25.2 object class, when the end product or service can be better classified in another OCC.Object Class information is submitted IAW USC
5Building Blocks: Overview Uses of Object Class DataBudget Submissions - President’s Budget/OSD BES/DON Budget SubmissionBudgetary data use for pricingNavy Working Capital Fund rates and pricing for WCF exhibits (25.3)O&M object class data makes up the OP-32 exhibit within the OP-5OP-08 data is used to update CIVPERs object data (OCC 11 through 13)PB-15 Advisory and Assistance Services exhibit is derived from OCC 25.1Fuel pricing in ICC’s 400, 401 and 937 reflective of the OP-26 exhibitOSD Interest in Object Class InformationTrends for 25.1 and 25.2 through PB11 and PB12 – Contract ServicesIn both years, significant Contract Services reductions have been developed from these trendsOSD has stipulated (PB12) a 10% reduction in 25.1/25.2 across yearsOMB and Congress review Object Class Information for trends as wellUses of Object Data are widely varied from Budget Formulation, Pricing, Exhibit Development, and in the Budget of the United States of America. A few examples are shown above.OSD(C) in recent budget cycles has started to use trends in the Object Data to conduct budget analysis and ultimately develop alternative budget estimates. Contract Services has been one of their focuses for the past two years.Of note, OSD has made adjustments to our budgets attempting to force the 25.1 and 25.2 combined profile to decrease by at least 10% per year.OMB also forward data cop questions on our Object Class information when any erratic profiles are detected.
6Building Blocks: Overview SubmissionsObject class submitted three times during the program/budget reviewDON Budget Submission (~June)OSD Budget Estimate Submission (BES) (~July)President’s Budget (~January)Time compression in recent years has made the Department’s PB submission for object data challengingOSD RMDs have typically been published later than previous yearsFinal RMDs coupled with DON end game decisions to get to final balancingScheduling rush to publish controls…needed for building budgetsResults in inadequate time to develop, submit and review Object Data in BOCS (generally takes about 2 weeks to build submit and review)Data bases are generally closed by the time object data is available in BOCSPath ahead for FY 2013 budget cycleObject class information is submitted 3 times per cycle.Note that schedule compression at the President’s budget, in recent years, has not afforded time to complete the Object Data update to BOCS and then forward that data to OSD prior to databases closing. The result is that FMB has had to make gross adjustments to the data to correct profiles in OSD systems, but informed BOCS data has not been available in time to make the update.For the FY 2013 cycle, FMB will attempt to update BOCS throughout the DON review. The result would be that BOCS would generally be in synch with PBIS for annual accounts through the DON end game. Then BSOs would get a very abbreviated window in which to make changes to the object data prior to the BES submission. Encl (4) to BG 11-1G refers.
7BOCS Submission Process BSOs formulate and submit BOCS data by OCC, ICC, AICFMB Analysts review for consistency with budget descriptionsOnce complete, FMB analysts approve records in Add = A,S,GFMB32 reviews for balance w/PBIS by BA and LI, and profilesFMB32 does check for 15% limit for OCC starting with 25XXwhere (2521 total / 25XX Total) < 15%Data is then loaded to PRCP and CISOSD system diagnostics must be reviewed for any differencesBSO SubmitBOCSWholeclothDeltaFMB AnalystReview &ApproveFMB32Locks BOCSRecordsAdd = A,S &GStatus = LBSOFMBFMBBOCS Profilechecks by FMB32(BA & Supp)Q&AFMBBOCS 15%Checks by APPN& OCCQ&AThis slide simplistically highlights the BOCS work flow necessary to complete a submission to OSD.In years where enacted Supplemental/OCO exist, that data must also be balanced against separate controls which adds complexity to the work.The standard process without problems takes about two weeks for BSO and FMB work to be completed. During the FY 2012 BES and PB data submissions, DON received criticism that our work takes too long and has to be done in conjunction with the original data submission.This is a serious challenge to our work processes and schedule.FMB~ 2 Week ProcessOP-32 to O-1DiagnosticsOSDLOADCISOP-32 to CISDiagnosticsOSDFMB32PRCPDiagnosticsOSDLOAD PRCPOP 32FMB32OP-08DiagnosticsOSDLOAD PRCPOP 08FMB32
8Object Data Reviews - POM/DON Processes OSDLdrshpFMBFMB1/2/4FMB3ServicesBSOsFiscal Guidance by CAPE (POM year)Integrated Program Budget Guidance from CAPE/OSD(C)POM to Budget HandoffDoN Budget Submission(Budgets, Issue Papers, PBIS, BOCS)BeginBESBudgetPREPBlue/Green SplitDatabaseRollupDoN Pricing Factors GdncBSO Budget FormulationObject Data ReviewFEBMARAPRMAYJUNJULPOM/PR Review by Navy and Marine CorpsDoN Budget ReviewDoN PVT ReviewsPBCGsThis slide shows the BOCS review window during the DON budget review amidst a myriad of other concurrent processes at the DON end game.DoN Mid Year ReviewsSecNavDecisions and BalancingLdrshpUpdatesDoN In-Sourcing ReviewAdd new yearsto FYDP (POM year)Fxnl XfrBudget Guidance and Controls for DoN SubmissionBudget Guidance and Controls for BES SubmissionNew FMB Application DevelopmentHill Staff Briefings, Committee Hearings HAC/SAC/HASC/SASCCommittee Action HAC/SAC/HASC/SASC
9OSD/OMB Review AUG SEP OCT NOV DEC JAN FEB # FMBFMB1/2/4FMB3FMB/BSO BSORequires GDNC#Issue Papersassigned toCAPE/OSD(C)Draft RMDsand PDMsSignedRMD IssuedBy OSDInflation RMD 800and RMD 426BudgetControls#FMBJ Book ReviewBSOReclamasLoad SDCSBSOJ Booksto FMBSNaPDueFMBAppeals300 Series3 D’sJ Booksto HillObject DataReviewAUGSEPOCTNOVDECJANFEBOSD BESData Submit#OSD BESJ Books#FMB/BSOFY10 EOYClean-up#FMB/BSORMDClean-up#FMB/BSOInflationClean-upBSOBOCSPrintJ BooksThis slide shows the BOCS review window during the OSD Review and the host of other work occurring in conjunction with the PB.Final BudgetSubmissionTo OMBFMB23LoadR&D XMLFMB/BSOFY10 CongrAction Clean-up#RMD = Resource Management DecisionRMD 800 = OSD IssuesRMD 802 = Inflation (Pay, Purchase, Fuel)RMD 426 = WCF AdjustmentsSecurity ReviewHighlights BookFMB/BSOEarmarkReportingRollout Brief Prep
10Object Data Challenges Object Data SubmissionsProficiencyHandling the information only three times per yearCommand turnover and impact to corporate knowledge baseApproach to Object DataSystem updates – Wholecloth versus DeltaERP enhancements and the drive for improved data fidelityEnd of Year Actuals reportingObject Class Information is starting to instill discipline in budgetary processes – natural carryover to executionTiming and ScheduleContinued refinement of processes to improve product at the PBAutomation and unintended tradeoffsA few specific challenges are observed that impact the Object Data workFirst, there has been a large turnover of analysts at the BSOs. I am not working with any analysts at the SYSCOMs that were there when I started as FMB32 7 years ago. This has degraded our corporate knowledge and because we only handle the Object Data a few time per cycle, we are not able to maintain proficiency.Second, Our approaches to the Object Data are slowly evolving. We have a small cadre of BSOs that still prefer to perform Wholecloth data imports (replacements of the BOCS data) versus importing Delta records to balance the data.Also, ERP is making strides in being able to report Object Data in conjunction with submissions. The End of Year Object Class data quality has been their key focus in working groups this year.Finally, continued refinement of processes at the PB is mandated to create more time to complete this work.Automation discussion – derived data while easier, is less able to be defended. But this is the Army and Air Force method today.
11Headquarters Perspective Object Data is now more important than everDON focus areasData accuracy paramount for standard budgetary workContractor Services trends (25.1/25.2) must be consistent and decreasing across budget display years15% checks ((25.2/Sum of 25) < 15%)New BOCS code has been deployed to reduce difficulty in loading dataOSD trendsAppetite for Object Data, trends, and perceived errorsOSD is constantly using data trends to determine new areas in the budget to exploit for their reviewOSD is already looking at alternative methods to re-engage Contractor Services efforts – FPDSNG and other contract data sourcesThe futureObject Data, while limited in detail today, will evolve as we go forward to new levels of accuracy and detailAdvances in Navy ERP and other automationIn closing, we have touched on several DON focus areas for both process and data. We have highlighted touchpoints that we have to keep in mind as we build and review Object DataOSD is becoming more involved with Object Data, and it has been the source for two successive years of contract services reductions.Finally, we may ultimately be forced to consider using automation to generate our Object Data as Army and Air Force do today…based on timelines in this austere budget environment. ERP is concurrently working solutions that may assist those BSOs in more rapid generation of Object Data to meet HWs requirements.I will now turn the floor over the Pat to bring you an entirely different perspective of Objective class information.
12Object Data from the BSO perspective Process Flow for budget formulationConnection between BOCs budget formulation and budget executionBSO Key TakeawaysThanks Bill for providing a detailed overview from the Department’s perspective.It’s truly important for Echelon II commands to understand how BOCs data is utilized to make decisions within the Pentagon.I will be covering a couple of key areas for the Echelon II command perspectiveFirst is the process flow of budget formulation as it relates to BOCS. Several key individuals need to provide input to the value stream for it to be accurate and useful data.Second is the connection between BOCS data and execution. This is critically important to consider since every dollar a command issues gets tagged with an object classification code.Finally, I’ll touch on a couple of key takeaways in building the BOCS data and budgets in general
13BSO Process Flow for update of BOCS FMB Issues call to update BOCSReceives BSO uploadFMBCoordinatorAPPNBSOPull last BOCS submissionReconcile APPN level changesReceives final input for each programConsolidates BOCSReview for programmatic changesReview in concert with formulation changesComptrollerAnalystBSOFor those of you familiar with swim lane charts this should look familiar.If you haven’t seen one before it essentially follows the budget formulation process for BOCS from FMB to the Echelon II command and back to FMB.3 key players at NAVAIR has inputs to the BOCS submission for each BLI.APPN coordinator – has responsibility for overall load by APPNProgram Analyst – reviews each program BLIs inputProgram Office – provides the breakdown of BOCS data by BLIAfter the process is completed this data is also shared with our NWCF Echelon III activities to ensure consistent buildup of the A-11 budget for workload.BSOPMOUpdate for latest budget changesData provided to NWCF activities to support A-11
14Connection between BOCS and Execution DesignatorServiceLast Digit ofBeginning FYSuballotmentAuthorized Accounting ActivityAppropriationACRNObject ClassBCNSubheadAll ZeroesCost CodeAA U5B D AClaimant/PEOLocal UseLast 10 digits of the Cost Code are unique to each PRBudget ActivityTransactionType (normally 2D)Sequential two digit alpha numeric that changes with each unique chargeable objectEvery financial transaction executed is connected to OCC and BOCs via LOA4APPNBALIBSOPEOSUBLIOCCICCAICD/RISSUE$2011$2012$2013WPN02210119C0025110932XND703251411430934ZN454444152521098921302164253109871006109425330610N1627854490611N2542646640612N3523346130614NG353626010412CO266867280883Execution data includes OCC references which allow us to track back to a comparison of plan in BOCS to actual execution.Additionally it is important to update for actuals as soon as possible to ensure a consistent picture is maintained in BOCS over time.Provided at the top of the chart is a typical NAVAIR Line of Accouting. As you can see object class is a key component in that financial data.You can glean a lot of information from a LOAFY10, APN, BA-5, Reimb. Workload to field activity.Additionally, we can determine form the BOCS load that the 253 is going to a Naval Air Warfare Center since ICC is 610Example of BOCS Data
15BSO Key TakeawaysEnsure Budget Adjustments reflect appropriate Object Class CodesCSS Efficiencies to OCC 251 etc.If actuals do not match plan…be prepared to explainProgrammatic explanation is keyTimely update of execution actualsBSOs utilize execution detail to monitor OCC execution vs. planIn closing it is important to understand the linkage between BOCS formulation and program execution.As the Department continues to review programs for efficiencies BOCS will be a tool utilized to apply these decisions. That makes it all the more important to ensure your data is accurate in formulation and refreshed for execution actuals at every available opportunity.As with all things in this business, sometimes changes occur on a program. The key to success is understanding those changes and communicating them in a timely manner.BSOs should utilize execution details to monitor OCC execution vs. plan. Major concern areas include.OCC 251 matching PB-15 formulation for A&AS.OCC 255 matching major SDD contracts in RDT&EOCC 311 matching H/W procurements for major end items
17The Data Systems PBDD ERP EDS PBIS BOCS SDCS CIS PRCP FYDP MAX BSO DON Legacy SystemsBSOPBDDERPBSO InputEDSDFASNo direct link for budget infoFMBBudgetary DataMust be at the appropriate level of detailSub-LI coding is critical to the displayAPPN/BA/LI/PE/CT/SUBLI/SI/ConstrObject DataDifferent StructureCritical for Annual AccountsAPPN/BA/LI/OCC/ICC/AICUsed extensively in InflationDONPBISBOCSObjectDataOP-32OP-08Manpower and RF TOACIS is APPN, BA, SPC – Aggregate Control set hereSDCS is feeder system, for FYDPPE drivenAPPN/RIC/SPCSDCSBoth feed SDCS for TOACISPRCPOSDPRCP is same level of detail as PBISThe purpose of the training is to familiarize junior analysts with overall procedures, terminology, and schedules.The GOAL of the training is to provide information, concepts, and resources that reduce the need for the analyst to have to talk to the control desk to perform basic work in PBIS.Divisions and Branches will establish local procedures for the prioritization, handling, review, processing, approval and disapproval of issues.Analysts must follow locally established procedures, especially within your DivisionThe remainder of this slide are process topics planned to be reviewed today.Display onlyFYDPDash 1’sMAXMAX is both TOA and Object Data used for creating the PBOMB