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Object Class: Building Blocks for Budget Preparation and Execution

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Presentation on theme: "Object Class: Building Blocks for Budget Preparation and Execution"— Presentation transcript:

1 Object Class: Building Blocks for Budget Preparation and Execution
2011 ASMC PDI Navy Workshop DN02 Object Class: Building Blocks for Budget Preparation and Execution June 1, 2011 Welcome to today’s workshop on Object Class Information My 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 perspective Before 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 Activities Lets get started, next slide.

2 Agenda DN02 Object Class: Building Blocks for Budget Preparation and Execution Overview – Object Class Information and Uses Object Data Submissions and Reviews during the typical Budget Cycle Object Data from the Echelon I/Departmental perspective Object Data from the Echelon II /BSO perspective Questions The 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

3 Or you can push some BOCS buttons…
BOCS Note of the Day Check 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: Some cartoons to wake you up after lunch…. BSO BSO BSO FMB FMB FMB

4 Building Blocks: Overview
Object Class Categories in a classification system that represent obligations by the items or services purchased by the Federal Government OMB Circular A-11 Object classes describe obligations according to their initial purpose, not the end product or service Example: A federal employee is paid to construct a building The obligation is under personnel compensation and benefits, not OCC 32.0 When categorizing other contracts, have to consider to purpose What if the government pays a contractor to construct the building Why report object class information – 31 USC 1104(b) requires the President’s Budget to present obligations by object class for each account Object Data is displayed in Appendix of the Budget of the United States of America at the front of each individual appropriation section The DON also submits Object Class information for OCO requests and Supplemental funding What is Object Class – the OMB Circular A-11 is the holy grail for Object Class Note 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

5 Building Blocks: Overview
Uses of Object Class Data Budget Submissions - President’s Budget/OSD BES/DON Budget Submission Budgetary data use for pricing Navy 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-5 OP-08 data is used to update CIVPERs object data (OCC 11 through 13) PB-15 Advisory and Assistance Services exhibit is derived from OCC 25.1 Fuel pricing in ICC’s 400, 401 and 937 reflective of the OP-26 exhibit OSD Interest in Object Class Information Trends for 25.1 and 25.2 through PB11 and PB12 – Contract Services In both years, significant Contract Services reductions have been developed from these trends OSD has stipulated (PB12) a 10% reduction in 25.1/25.2 across years OMB and Congress review Object Class Information for trends as well Uses 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.

6 Building Blocks: Overview
Submissions Object class submitted three times during the program/budget review DON 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 challenging OSD RMDs have typically been published later than previous years Final RMDs coupled with DON end game decisions to get to final balancing Scheduling rush to publish controls…needed for building budgets Results 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 BOCS Path ahead for FY 2013 budget cycle Object 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.

7 BOCS Submission Process
BSOs formulate and submit BOCS data by OCC, ICC, AIC FMB Analysts review for consistency with budget descriptions Once complete, FMB analysts approve records in Add = A,S,G FMB32 reviews for balance w/PBIS by BA and LI, and profiles FMB32 does check for 15% limit for OCC starting with 25XX where (2521 total / 25XX Total) < 15% Data is then loaded to PRCP and CIS OSD system diagnostics must be reviewed for any differences BSO Submit BOCS Wholecloth Delta FMB Analyst Review & Approve FMB32 Locks BOCS Records Add = A,S &G Status = L BSO FMB FMB BOCS Profile checks by FMB32 (BA & Supp) Q&A FMB BOCS 15% Checks by APPN & OCC Q&A This 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 Process OP-32 to O-1 Diagnostics OSD LOAD CIS OP-32 to CIS Diagnostics OSD FMB32 PRCP Diagnostics OSD LOAD PRCP OP 32 FMB32 OP-08 Diagnostics OSD LOAD PRCP OP 08 FMB32

8 Object Data Reviews - POM/DON Processes
OSD Ldrshp FMB FMB1/2/4 FMB3 Services BSOs Fiscal Guidance by CAPE (POM year) Integrated Program Budget Guidance from CAPE/OSD(C) POM to Budget Handoff DoN Budget Submission (Budgets, Issue Papers, PBIS, BOCS) Begin BES Budget PREP Blue/Green Split Database Rollup DoN Pricing Factors Gdnc BSO Budget Formulation Object Data Review FEB MAR APR MAY JUN JUL POM/PR Review by Navy and Marine Corps DoN Budget Review DoN PVT Reviews PBCGs This 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 Reviews SecNav Decisions and Balancing Ldrshp Updates DoN In-Sourcing Review Add new years to FYDP (POM year) Fxnl Xfr Budget Guidance and Controls for DoN Submission Budget Guidance and Controls for BES Submission New FMB Application Development Hill Staff Briefings, Committee Hearings HAC/SAC/HASC/SASC Committee Action HAC/SAC/HASC/SASC

FMB FMB1/2/4 FMB3 FMB/BSO BSO Requires GDNC # Issue Papers assigned to CAPE/OSD(C) Draft RMDs and PDMs Signed RMD Issued By OSD Inflation RMD 800 and RMD 426 Budget Controls # FMB J Book Review BSO Reclamas Load SDCS BSO J Books to FMB SNaP Due FMB Appeals 300 Series 3 D’s J Books to Hill Object Data Review AUG SEP OCT NOV DEC JAN FEB OSD BES Data Submit # OSD BES J Books # FMB/BSO FY10 EOY Clean-up # FMB/BSO RMD Clean-up # FMB/BSO Inflation Clean-up BSO BOCS Print J Books This slide shows the BOCS review window during the OSD Review and the host of other work occurring in conjunction with the PB. Final Budget Submission To OMB FMB23 Load R&D XML FMB/BSO FY10 Congr Action Clean-up # RMD = Resource Management Decision RMD 800 = OSD Issues RMD 802 = Inflation (Pay, Purchase, Fuel) RMD 426 = WCF Adjustments Security Review Highlights Book FMB/BSO Earmark Reporting Rollout Brief Prep

10 Object Data Challenges
Object Data Submissions Proficiency Handling the information only three times per year Command turnover and impact to corporate knowledge base Approach to Object Data System updates – Wholecloth versus Delta ERP enhancements and the drive for improved data fidelity End of Year Actuals reporting Object Class Information is starting to instill discipline in budgetary processes – natural carryover to execution Timing and Schedule Continued refinement of processes to improve product at the PB Automation and unintended tradeoffs A few specific challenges are observed that impact the Object Data work First, 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.

11 Headquarters Perspective
Object Data is now more important than ever DON focus areas Data accuracy paramount for standard budgetary work Contractor Services trends (25.1/25.2) must be consistent and decreasing across budget display years 15% checks ((25.2/Sum of 25) < 15%) New BOCS code has been deployed to reduce difficulty in loading data OSD trends Appetite for Object Data, trends, and perceived errors OSD is constantly using data trends to determine new areas in the budget to exploit for their review OSD is already looking at alternative methods to re-engage Contractor Services efforts – FPDSNG and other contract data sources The future Object Data, while limited in detail today, will evolve as we go forward to new levels of accuracy and detail Advances in Navy ERP and other automation In 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 Data OSD 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.

12 Object Data from the BSO perspective
Process Flow for budget formulation Connection between BOCs budget formulation and budget execution BSO Key Takeaways Thanks 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 perspective First 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

13 BSO Process Flow for update of BOCS
FMB Issues call to update BOCS Receives BSO upload FMB Coordinator APPN BSO Pull last BOCS submission Reconcile APPN level changes Receives final input for each program Consolidates BOCS Review for programmatic changes Review in concert with formulation changes Comptroller Analyst BSO For 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 APPN Program Analyst – reviews each program BLIs input Program Office – provides the breakdown of BOCS data by BLI After 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. BSO PMO Update for latest budget changes Data provided to NWCF activities to support A-11

14 Connection between BOCS and Execution
Designator Service Last Digit of Beginning FY Suballotment Authorized Accounting Activity Appropriation ACRN Object Class BCN Subhead All Zeroes Cost Code AA U5B D A Claimant/PEO Local Use Last 10 digits of the Cost Code are unique to each PR Budget Activity Transaction Type (normally 2D) Sequential two digit alpha numeric that changes with each unique chargeable object Every financial transaction executed is connected to OCC and BOCs via LOA4 APPN BA LI BSO PEO SUBLI OCC ICC AIC D/R ISSUE $2011 $2012 $2013 WPN 02 2101 19 C 00 2511 0932 XN D 70325 141 143 0934 ZN 4544 4415 2521 0989 2130 2164 2531 0987 1006 1094 2533 0610 N1 6278 5449 0611 N2 5426 4664 0612 N3 5233 4613 0614 NG 35 36 2601 0412 CO 266867 280883 Execution 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 LOA FY10, 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 610 Example of BOCS Data

15 BSO Key Takeaways Ensure Budget Adjustments reflect appropriate Object Class Codes CSS Efficiencies to OCC 251 etc. If actuals do not match plan…be prepared to explain Programmatic explanation is key Timely update of execution actuals BSOs utilize execution detail to monitor OCC execution vs. plan In 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&E OCC 311 matching H/W procurements for major end items

16 Questions?

Legacy Systems BSO PBDD ERP BSO Input EDS DFAS No direct link for budget info FMB Budgetary Data Must be at the appropriate level of detail Sub-LI coding is critical to the display APPN/BA/LI/PE/CT/SUBLI/SI/Constr Object Data Different Structure Critical for Annual Accounts APPN/BA/LI/OCC/ICC/AIC Used extensively in Inflation DON PBIS BOCS Object Data OP-32 OP-08 Manpower and RF TOA CIS is APPN, BA, SPC – Aggregate Control set here SDCS is feeder system, for FYDP PE driven APPN/RIC/SPC SDCS Both feed SDCS for TOA CIS PRCP OSD PRCP is same level of detail as PBIS The 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 Division The remainder of this slide are process topics planned to be reviewed today. Display only FYDP Dash 1’s MAX MAX is both TOA and Object Data used for creating the PB OMB

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