1. Integrity - Service - Innovation DFAS Support and Outlook: Today and for the Future Terri McKay September 13 2007

2. Integrity - Service - Innovation 2 ASMC Session Agenda  DFAS BRAC Transformation.  Transformation (Video).  Support to the Warfighter & GWOT Reporting  Customer Support~  Wounded Warrior program.  Out of Country payments.  Applying expertise in a customer environment.  Lessons learned from our audit.  Driving toward standardized DoD capabilities~  ERP FM COE.  Shared services support initiatives.

3. Integrity - Service - Innovation 3 Why Transform? DFAS working (with the rest of the Department) to achieve results in these DOD identified high-priority areas:  Win the Global War on Terror.  Focus on People – Military and Civilian.  Increase Efficiency and Effectiveness Across the Board.  Transform Enterprise Management. DFAS results to date since 2001:  Productivity increases of 46%  Labor cost reductions of $285 million.

4. 4 Integrity - Service - Innovation Status of DFAS Site Closures Paxtuxent River Denver (Most Functions) Arlington (Realigned) Lawton Dayton Norfolk Pacific St. Louis Orlando Charleston Omaha San Diego Pensacola NAS Rock Island Kansas City Denver (Retire-in-Place) Lexington Oakland San Bernardino Seaside San Antonio FY 2006 FY 2008 FY 2009 FY 2007 FY 2010 Site Closure Highlight – Eleven sites have closed on-time and within budget. * Closed sites are in Red Sites not Included in BRAC: Bratenahl Europe Japan Texarkana Saufley Field ( Retire-in-Place) FY 2011

5. Integrity - Service - Innovation 5 Transformation Video

6. 6 Integrity - Service - Innovation DFAS Support to the Warfighter Financial Perspective Lead transformation of finance and accounting functions throughout DoD Perform the DFAS mission at best value for DoD Attract, develop, and retain a highly capable workforce with relevant skills and competencies Attain operational excellence in finance and accounting services Use DFAS resources efficiently and effectively to achieve expected results Achieve expected financial results from transformation initiatives Optimize processes to meet or exceed industry and government standards Increase productivity, reduce errors, and deliver products and services on time Identify and mitigate risks to improve processes and internal controls Raise the level of relevant skills and competencies to meet anticipated needs Attract and retain employees with needed skills and competencies Learning & Growth Perspective Internal Perspective Establish business requirements for DoD transformation initiatives related to finance and accounting activities Execute and/or support deployment of DoD transformation initiatives MISSION Direct, approve and perform finance and accounting activities for DoD VISION Transforming with the Warfighter to remain the trusted financial partner for DoD STRATEGIC OBJECTIVESSTRATEGIC GOALS Support DoD in winning the Global War on Terror Support Customers in the Global War on Terror Customer Perspective

7. Integrity - Service - Innovation 7 GWOT CoW - High Level Timeline Q4Q1Q2Q3Q4Q2Q3 FY 2008FY 2007 JANFEBMARAPRMAYJUNJULAUGSEPOCTNOVDECJANFEBMARAPRMAYJUNJULAUGSEP Identified Requirements for Documenting “Current” GWOT CoW Process Complete Current Business Process Assessment – Components Integrate Current Assessment Design To Be Process State Produced GWOT CoW Status of Funds Report for Internal Customers Created Definitive CoW Report for all Prior Years In-Theater Support Audit & Review Developed Joint Transition POAM Identified Comprehensive Set of Audit and Review Activities Implemented Monthly Summary Reporting Process Implemented process to monitor GWOT CoW Audits Establish Joint Training/Transition Teams as required Complete Retrograde Commercial Vendor Services for Kuwait & Qatar Business Processes Information Delivery Systems Engineering Complete Software Development Complete Systems Testing & Acceptance Complete Fully Operational Systems for Improved Information Delivery Finalize Plan for Additional Retrogrades to CONUS Standup Conus Retrograde Support Office Completed Milestone Develop Initial GWOT CoW Funds Application Standard Operating Procedure Implemented Quick Hit Process Implemented Compliance/Accuracy Review Plan Publish GWOT CoW Funds Application Standard Operating Procedure GWOT CoW Status of Funds Report Ready for External Customers Brown Out Legacy Monthly GWOT CoW Report Provide GWOT CoW To Be Process Training Complete Retrograde of Back-Office Functions Planned Milestone

8. Integrity - Service - Innovation 8 Wounded Warrior Pay Management Program Mission Statement: To improve the accuracy and the timeliness of pay to Wounded Warriors and their families and ensure the critical human dimension of pay support (face-to- face contact and educating the customer) occurs at all critical patient flow locations. Our Customer The brave Wounded Warrior, who, without fanfare or desire for personal gain, selflessly places his or her life in grave danger in order to promote freedom and democracy--adhering to American values, executing his or her mission with the business end of a bayonet. Our Challenge Know the customer – educating and interacting with Warrior and family Ensure visibility and accountability across spectrum of support Enhance customer services by improving policies, procedures, and systems improvements Without the customer, we would be without a mission!

9. Integrity - Service - Innovation 9 MEDEVAC LRMC Face-to-face contact Stop Combat Zone entitlements Annotate WIA database WRAMC Face-to-face contact Monitor/stop entitlements Assist soldier/family in filing travel claim Assist in filing remission or waiver Annotate WIA database TRANSCOM CIC Flight Manifest Home Station (example: Ft. Hood) Face-to-face contact Monitor/stop entitlements Assist soldier/family in filing travel claim Assist in filing remission or waiver Annotate WIA database System Feeds Medical Operational Data System (RC) Global War on Terrorism Defense Casualty Processing System System Feed Joint Patient Tracking Application Landstuhl Regional Med Center Landstuhl Regional Med Center System Feed Patient Accountability and Real-time Tracking System Step 1 Step 2 Step 3 Step 4 VA Hospital WRAMC Family Travel Permane nt Duty Station

10. Integrity - Service - Innovation 10 Prior to the Wounded Warrior Program Lack of visibility and accountability of a medically evacuated (MEDEVAC) Warrior resulted in:  Wounded Warriors with pay problems highlighted by media in late 2004  Reduced command oversight of wounded Soldiers’ duty status  Combat-related entitlements not stopped timely

11. Integrity - Service - Innovation 11 Improvements/Accomplishments since 2005 Improved visibility and accountability with centrally managed database. Reviewed 67,032 accounts for accuracy of combat-related entitlements. Placed Wounded Warrior pay teams world-wide to provide face-to-face, world-class fiscal support & s topped appropriate combat entitlements since October 2005. Established Project Management for Wounded Warrior Pay Management Program.  Conduct full scope review of all processes, procedures and legislation for Wounded Warriors  Expanded pay and entitlements education to Wounded Warriors and family members.

12. Integrity - Service - Innovation 12 Wounded Warrior Member Debt Management Reduced instances of new debt for MEDEVAC Warriors since 2005. Remitted $12.6 million of debt for over 13,453 Wounded Warriors:  On July 31, 2007, the Army Human Resources Command approved a mass remission for 5,834 Soldiers totaling $6.8 million. Input will be complete by August 31, 2007.  The mass remission ensures the Wounded Warriors do not endure any financial hardship while on their way to recovery. Established Project Management for Wounded Warrior Pay Management Program:  Conduct full scope review of all processes, procedures and legislation for Wounded Warriors.  Expanded pay and entitlements education to Wounded Warriors and family members. Wounded Service member is Evacuated to Landstuhl Medical System populates Service member’s data into WW Database Service member’s pay account is flagged to notify Finance Office of WW status DFAS/ Army Finance suspends Soldier’s debt Finance Office makes face-to-face contact with Soldier to ensure accuracy of pay Responsibility of account management picked up at follow- on Hospital and Finance Office

13. Integrity - Service - Innovation 13 Out-of-Country Payments Out-of-country payments process includes:  Proactive steps to ensure internal controls over GWOT provide reasonable assurance that payments are properly supported and recorded. Proactive steps include:  Modified document verification process to ensure 100% compliance.  Implemented improved checklist.  Improved procedures for follow-up with DOs (daily calls, emails, accelerate timeframes for turnaround).  Incorporated measures in balanced scorecard to track compliance

14. Integrity - Service - Innovation 14 Applying expertise in a customer environment Implementing document imagining capabilities for Commands in Kuwait and Iraq and DFAS Rome. Moving payments when possible from Theater to CONUS. Establishing a DFAS support cell in Theater:  4 member teams on long-term TDY.  Training and assistance in real-time.  On-site awareness of challenges and opportunities for improvements. Updating OUSD(C) Policy governing documentation requirements for payments and accounting for funds and property in a contingency environment. Providing training on enhanced internal controls for Army finance units in Theater, at Ft. McCoy (units to deploy this fall) and atRome.

15. Integrity - Service - Innovation 15 Lessons Learned on Audits Now proactively working audits by:  Not only addressing the auditor issues.  Looking for other management improvements that can be made to enhance the operating environment of the area and staff being audited. Out-of country payments~  Take proactive steps to ensure internal controls over GWOT provide reasonable assurance that payments are properly supported and recorded.  Steps include:  Modified document verification process to ensure 100% compliance.  Implemented improved checklist and improved procedures for follow-up with DOs (daily calls, emails, accelerate timeframes for turnaround).  Incorporated measures in balanced scorecard to track compliance

16. Integrity - Service - Innovation 16 Finance & Accounting (F&A) Core Requirements: A Driver for Standardizing DoD Capabilities Core Financial System Requirements OMB OFFM-NO-0106 January 2006 “Core Financial System Requirements” Framework for Federal Financial Management Systems OMB OFFM-NO-0106 January 2006 “Core Financial System Requirements”

17. Integrity - Service - Innovation 17 ERP Implementation: Functions & Products Current ERP Assessment SAP Technical Support Oracle Technical Support Progress Assessments Assess level of standardization in current in LMP and BSM Supply independent advice to corporate and customer teams Supply independent advice to corporate and custom teams Routinely assess systems progress toward standard F&A capabilities Specialized Support Impact Assessments Build “DFAS After…..” proposals, Forecast human capital needs Architecture & Requirements Standard Interfaces Standard Testing Training & Implementation AP, AR, SGL, Reporting, Disbursing, Cash Accountability, Intragovernmental ADS, DDRS, DCAS, BEIS, DTS, IATS, CAPS, WAWF, PowerTrack, Etc. Scenarios for: core F&A requirements, FFMIA testing, compliance Testing Standard training doctrine, Standard procedures for core F&A tasks Standard Corporate Support Unique Requirements Unique Interfaces Conversion & Cleansing Unique Testing Training & Implementation Customer specific requirements Customer interfaces with legacy systems Cleansing of customer data Scnerios for customer specific requirements Specialized training and procedures for customer requirements Direct Customer Support Liaison & Project Mgmt. Coordinate planning and support with customer

18. Integrity - Service - Innovation 18 Center of Excellence: Services & Support Concept

19. Integrity - Service - Innovation 19 FM COE Mission and Goals Mission Develop and integrate DoD standard Finance and Accounting business practices Goals 1. Accelerate System Delivery 2. Reduce Risks Associated with System Delivery 3. Standardize Finance and Accounting Practices in DoD 4. Optimize Costs of Providing Finance & Accounting Services 5. Improve Financial Management

20. Integrity - Service - Innovation 20 Summary Continued DFAS focus to provide: More accurate, consistent, and reliable data to support decision making. More efficient business operations, with cost savings redeployed to support the warfighter. ● Continued DFAS Strategy and Customer Focus to:  Resolve material weaknesses.  Improve financial practices, including appropriate metrics to better support the warfighter.  Strengthen internal controls.  Modernize business systems and integrate all processes. :

21. Integrity - Service - Innovation 21 Questions