1. In Tune with Army Financial Management Cost Awareness of Financial Operations in Theater Army Day 2010 June 2, 2010 June 2, 2010 Steve Bagby - MG Phil McGhee – COL Sawyers

2. In Tune with Army Financial Management AgendaAgenda Operationalizing Cost Management  Cost Education and Training  Cost Management - Policy / Guidance / GFEBS Support  Resource Informed Requirement Processes USARCENT Financial Management Operations Financial Management School  GFBES Sustainment Training Products  Cost Management and Cost Accounting Courses 1

3. In Tune with Army Financial Management Cost Culture - Cost Management Single Use Estimated Future Cost Cost Informed Decision Making Cost-Benefit Analysis Single Use Estimated Future Cost Cost Informed Decision Making Cost-Benefit Analysis Persistent Use Expected & Actual Cost Continuous Improvement Cost Managed Enterprise Persistent Use Expected & Actual Cost Continuous Improvement Cost Managed Enterprise Universal Use Planned & Actual Cost Role Based, Org Based, Output Based Control Cost Culture Universal Use Planned & Actual Cost Role Based, Org Based, Output Based Control Cost Culture Cost War Cost War High Cost War Full Spectrum Insurgency Intensity Conflict Operations Starting here TARGET (some work is being done) 2

4. In Tune with Army Financial Management Cost Management Cost Planning Cost Controlling Cost Analysis Cost Accounting Cost Management Process Full Cost Measurement –Accurate, timely and relevant data –Connecting operational output/performance data to financial data –Allocate Overhead, Unfunded Costs, Indirect Support Cost Analysis –Variances –Trends and forecasting –Product, service or activity cost by expense (labor, material, contracts, etc…) –Understanding full costs of organizations, operations, products and services –Comparison Analysis & Benchmarking Cost Planning –Operational managers set cost targets and efficiency goals –Plan cost based on outputs produced Resource Informed Decisions –Take action based on analysis and external demands –Change targets –Change resources –Change quantity / quality 3

5. In Tune with Army Financial Management Cost Management Enablers Cost Management 101 - Cost Management Overview - Cost Object (ERP) Definitions - Cost Flow Methods - Cost Analysis and Reporting GFEBS – Cost Management Training These courses are either computer-based or instructor-led training classes to learn how to operate within the GFEBS cost module. Cost Management Certificate Course The program of instruction (POI) is designed to teach the fundamentals of cost management with a view to developing a cadre of Army personnel who are professionally knowledgeable, analytically competent, and personally motivated to serve as proactive change agents within their respective Enterprise line and staff organizations. Self Study-Cost Management Community of Practice https://www.us.army.mil/suite/page/593701 Cost Management Courses in all Professional Development Programs Policy & Guidance Training (Operational & Resource Mgrs) Tools 4

6. In Tune with Army Financial Management Thinking Domains Decision Forums/ Approval Generate Capability Gaps / Require- ments Top Down InitiativesVarious Formal Force Design UpdateFD QDR/TAA/Portfolio – Business Area Reviews SA/CSA Army Campaign Plan ProcessVCSA Concept Plan (TDA Updates)SA/CSA JCIDS /AROC AROC /JROC Basis of Issue PlanORDAB AoA StudiesSAG/Other Acquisition ProcessMilestones Installation/MILCON/SustainMILCON IPT Unit/Institutional TrainingTrain’g Plan AMC/G4 Depot /Sustainment/AmmoAMC ONS/JUONS/Rapid Transition AR2B/AROC Costs Benefits Cost Informed Decisions Cost Benefit Analysis POM / BES Manning Equipping Training Sustaining Organizing Installation The Value of Cost Benefit Analysis:  Supplements professional experience and judgment with sound analytical techniques  Ability to make better resourced-informed decisions  Results in a strong “value proposition” Doctrine Organization Training Materiel Leadership Personnel Facilities 5

7. DoD Resources Materiel Enterprise Strategic Partners FM/Contract Systems Lean Six Sigma Team Cost Analyst Team Banking Team Mgmt/System Accts USARCENT Financial Management Operations Theater FM Initiatives FM/Contracting systems Cost culture Cost of war FM doctrine Imperatives Visibility Accountability Transparency Oversight Controls Specified Tasks Manage Title 10 funds Resource OEF/OIF Theater Army Financial Management Report Link end-to-end processes Effect major cost drivers Model and analysis Lean out inefficiencies Maximize e-commerce FY10 Monthly Disbursements $396M $714M Cost Avoidance $434M Cost Savings $1,148M 91% EFT Payments Credibility Confidence Trust 9% Cash Payments Exceptional Stewardship Performance metrics Resource informed Cost savings Cost avoidance Process efficiencies Near cashless Theater 1 % Goal v2 as of 18 APR10 6

8. In Tune with Army Financial Management Principles Cost Act/Mgmt (120 hrs) Intermediate Cost Act/Mgmt (120 hrs) Education Technical Training Non FM Roles GFEBS Sustainment Training Products The US Army Financial Management School will implement GFEBS financial management training products no later than 1 OCT 2011 in order to sustain FM Community knowledge and skills Reimbursables (20 hrs) Funds Management (24 hrs) Spending Chain (50.5 hrs) Project Systems (8 hrs) Cost Management (80 hrs) Financials (80 hrs) Instructor Led Training Distributed Learning (dL) GFEBS Essentials (20 hrs) Training Support Packages dL Products GFEBS Material w/in Legacy Courseware (AIT, NCOES, OES, Functional Courses) GFEBS Material w/in Legacy Courseware (AIT, NCOES, OES, Functional Courses) GFEBS PM Training (53 Courses) 14

9. In Tune with Army Financial Management Cost Management (CM) within Professional Military Education Course: FM BOLCFMCCC Purpose: Provide CM foundation. Introduce cost concepts and terms. Describe the Army’s cost culture. Relate CM to GFEBS capabilities. Introduce advanced Cost Accounting and CM concepts. Cost Benefit Analysis (CBA) case study. Develop communications skills to influence leaders decisions. Audience:2nd LieutenantsCaptains Length:8 Hours16 Hours Content: Cost Management (CM) Cost Culture within the Army Cost Terms and Concepts Cost Benefit Analysis (CBA) Practical Exercise Cost Management (CM) Cost Accounting (CA) Cost Benefit Analysis (CBA) Practical Exercise Cost Decision Briefings Intensive Group CBA Exercise 8

10. In Tune with Army Financial Management Cost Management (CM) Functional Courses Course: Principles of Cost Accounting & Management (PCAM) Intermediate Cost Accounting & Management (ICAM) Purpose: Offer a basic cost management and cost accounting functional course Provide underlying cost accounting (CA) and CM principles, theories, and application. Prepare military and DA civilians to leverage CM tools within GFEBS Build on the PCAM course and provide more advanced CA and CM concepts. Provide an increased focus on analysis, reporting, and communication skills. Provide the knowledge necessary to fully leverage the CM and analytic tools within GFEBS. Target Audience:SGT, LT, CPT, entry level CP 11 PersonnelSSG, SFC, CPT, mid level CP 11 Personnel Course Length:3 Weeks Prerequisites:Math dL Prep CourseMath dL Prep Course, PCAM Course Content: Cost Management Principles Cost Term/Concepts Cost Accounting Cost Benefit Analysis Variance Analysis Practical Exercises Cost Management Cost Accounting Cost Management Paper Cost Management Briefings Cost Benefit Analysis Intensive Case Studies/Exercises 9

11. In Tune with Army Financial Management ICAM Cost Flow Methods Analysis and Reporting Practical Exercises Complex Case Studies ICAM Cost Flow Methods Analysis and Reporting Practical Exercises Complex Case Studies End State: FM Community possesses the knowledge and skills necessary to leverage cost management and cost accounting End State: FM Community possesses the knowledge and skills necessary to leverage cost management and cost accounting Cost Management and Cost Accounting “Achieving Readiness at Best Value” PCAM Cost Terms Cost Concepts Fundamentals of Cost Acct. and Cost Mgmt Practical Exercises PCAM Cost Terms Cost Concepts Fundamentals of Cost Acct. and Cost Mgmt Practical Exercises CMCC Managerial Costing Operations Management Cost Control Organizational Development CMCC Managerial Costing Operations Management Cost Control Organizational Development Soldier Support InstituteNaval Postgraduate School LTCPTMAJLTC / COL Principles of Cost Accounting and Management Intermediate Cost Accounting and Management Cost Management Certificate Course SGTSSGSFCMSG / SGM 17