Fiscal Law Proposal Mary Margaret Evans Director DRAFT

Change Management Center 2 DRAFT Fiscal Law Background Fiscal law is the body of law that governs the availability and use of federal funds Only Congress has the ability to appropriate funds to be spent by federal agencies, and can dictate: –Purposes for which the money is spent –Length of time the funds may be available –Maximum amount an agency may spend on particular elements of a program Strict limitations are imposed on managers flexibility to spend or allocate funds

Change Management Center 3 DRAFT Assumptions: Impacts on Federal Agencies Current fiscal law represents a set of cumbersome laws, regulations, and policies that are perceived by federal agencies as excessively: –Complicated –Legislated –Regulated –Audited –Ambiguous A wall-to-wall review of fiscal law has not occurred

Change Management Center 4 DRAFT Challenge: Addressing Fiscal Law Impediments in DoD Altering the perception of and making improvements to the current DoD fiscal environment requires assembling the justification necessary to prompt reform, through: –Regulation changes –Process improvements –Statutory changes DoD IG Audits –Limited integration of DoD financial systems create and perpetuate inefficiencies –Six year backlog of contract closure actions –DFAS has 148 debt collection cases worth $12.6 million GAO –Contractors refunded $488 million in overpayments in FY 2001 –DoD business practices remain ineffective

Change Management Center 5 DRAFT Approach: The Section 800 Model Creation of an Advisory Panel to identify, justify, and recommend legal and structural changes to complex DoD issues –Consensus for change by utilizing appropriate subject matter and support resources Section 800 Panel focused on streamlining DoD procurement –Panel Membership: recognized public/private experts in the law –Final Report: Analysis of each law, including: Legislative history Description of current role of the statue Recommendation to retain, repeal, or modify 800 Panel Results –600 statute changes/300 repeals –Enactment of FASA, FARA(Clinger-Cohen)

Change Management Center 6 DRAFT Approach: Advisory Panel Approach for Fiscal Law Modernization Executive Sponsor – project champion Appointed Advisory Panel –Membership Sources include: –Comptroller (Modernization, Audit, Budget, Policy) –DoD Financial Community (DFAS, DCMA, etc.) –Service Branches –DoD Agencies –General Counsel –Legislative Affairs –Private Sector Trade Associations –Other DoD/non-DoD members determined by Executive Sponsor Change Management Center –Contractor support staff –DoD Technical Experts (current/retired) –Subject Matter Experts – DoD and private sector

Change Management Center 7 DRAFT Approach: Advisory Panel Approach for Fiscal Law Modernization Project Organization DoD Executive Sponsor Fiscal Law Advisory Panel Change Management Center Team

Change Management Center 8 DRAFT Approach: Project Activities & Timeframe Phase I – Scope Identification (10/1/02 – 12/31/02) Identify issues for review - examples: –Prompt Payment –Debt Collection –Financial Modernization Support Process Conduct interviews to understand the current fiscal environment –DoD managers –Congressional staff –Private sector experts Conduct research and analysis of applicable and most critical areas of statute, regulation and process Define scope of analysis

Change Management Center 9 DRAFT Approach: Project Activities & Timeframe Phase II –Recommendation Development (1/1/03 – 3/1/03) Establish Advisory Panel Establish Staff, SME, Technical Expert Working Groups –Review and validate project scope –Identify issues –Propose recommendations for change Process or policy Regulatory Legislative Provide IPRs to Advisory Panel on Working Group progress Finalize Working Group recommendations

Change Management Center 10 DRAFT Approach: Project Activities & Timeframe Phase III – Final Report & Action Model Implementation Plan (3/1/03 – 8/31/03) Conduct Advisory Panel review Prepare final report –Background –Analysis and justification –Recommendations –Outreach and Communications Plan –Draft Legislative/Regulatory Language –Implementation Plan Submit recommendations for FY05 Presidents Budget

Change Management Center 11 DRAFT Next Steps Executive Sponsor Drives Change –Establish Executive Sponsor/CMC Partnership –Identify Scope –Identify DoD Technical Resources –Identify/Establish Advisory Panel