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Department Of The Navy,

Department Of The Navy,. Financial Management & Comptroller Financial Management Transformation. Message from ASN(FM&C).

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Department Of The Navy,

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  1. Department Of TheNavy, Financial Management &Comptroller Financial ManagementTransformation

  2. Message fromASN(FM&C) • “FY 2018 marks the first year where the entire Department of the Navy (DON) underwent a full financial statement audit. The audit was broken out into three parts: the Navy General Fund, Marine Corps General Fund and DON Working CapitalFund. • The results of all three audits were disclaimers of opinion. This is the outcome we expected, and we expect to continue to get disclaimers for several more years as we work to remediate the material weaknesses in internalcontrol. • It will be a multi-year effort. As we continue with annual audits, we will use the audit process as a tool to improve our financial management systems, processes andcontrols. • While the audit revealed numerous material weaknesses in internal control over financial reporting, more importantly, it highlighted several areas where the DON needs to improve operationally, in order to improve lethality and readiness. The financial statement audit forced us to look at our supply chain in a new light, and has caused us to challenge much of the thinking that existed over the last several decades. The audit identified business practices that are unacceptable and must change, to improve readiness, lethality andauditability.“ • Thomas W.Harker • Assistant Secretary of the Navy Financial Management andComptroller

  3. DON Financial ManagementTransformation VISION • By the Beginning of FY2023: • Operate one generalledger. • Standardize financial & other business processes with documented internal controls testedannually. • Include enterprise risk management & zero based budgeting in POMdevelopment. • Manage budget authority inside the general ledger--minimalreimbursables.

  4. DON Financial ManagementTransformation PrimaryGoals PrimaryGoals

  5. DON Financial ManagementTransformation Primary Goals & Respective FocusAreas FocusAreas 8)USMC AuditRemediation

  6. Overarching DON Case forChange Rooted in the National Defense Strategy (NDS) & DON Business Operations Plan(BOP). Reforms are essential to achieve DONs aggressive readiness & lethalitygoals. National DefenseStrategy Line of Effort3 Reform the Department’s Business Practices for Greater Performance andAffordability DON Business OperationsPlan Strategic Objective3.3 Undergo an Audit, and Improve the Quality of Budgetary and Financial Information that is Most Valuable in Managing theDoD

  7. DON’S CurrentReality 20-30%Inventory ErrorRates Lack of Integration WithinEnd- to-End Business Processes Redundant Financial Management Processes $ Billions inAnnual De-obligations Fragmented, LocalizedSystems

  8. Transformation WillBring: • The right part in the right place at the right time, everytime! • Clear accountability of property, plant & equipment leading to increased warfighter strength &sustainability. • Increased operational effectiveness & readiness. • Improved accuracy & reliability of asset information to make better-informed readiness & warfightingdecisions. • More accurate readiness & warfighting requirements. • Improved flexibility & speed in getting capability to the warfighter. • Enhanced workforce competency /training and budget savings throughreform.

  9. Primary Goal:Audit Focus Area 1: Inventory andOM&S The Right Part In The Right Place At The Right Time, EveryTime!

  10. Primary Goal:Audit Focus Area 2: RealProperty Better Support To TheWarfighter.

  11. Primary Goal:Audit Focus Area 3: FinancialReporting PROBLEM: The DON’s systems are not integrated and can not track dollars from point of origination throughexecution. Make Effective Financial Management An Enabler For theWarfighter.

  12. Primary Goal:Audit Focus Area 4: FBWTReconciliation DON does not know its cash balance withTreasury. Increased Operational Effectiveness Through More Effective Use OfMoney.

  13. Primary Goal: Budgetary Reform Focus Area 5: BudgetaryReform More Effective And Transparent Use Of Funding For WarfightingRequirements.

  14. Primary Goal: Consolidation ofSystems Focus Area 6: Business SystemsConsolidation Flexibility, Speed, And Efficiency In Getting Capability To The Warfighter As A Result Of IntegratedSystems.

  15. Primary Goal: Consolidation ofSystems Focus Area 7: IT GeneralControls Enhanced Systems Controls To Better Secure And Manage FinancialData.

  16. What’sNext?

  17. Audit Budgetary Reform Consolidation ofSystems Department of theNavy, FinancialManagement Financial ManagementTransformation BackupSlides

  18. Primary Goal:All Focus Area 8: USMC AuditRemediation PROBLEM: After of two years of full audit, USMC continues to have substantial weakness across several focusareas. Joint And Cross-functional Solutioning Of Identified Deficiencies Will Generate Modernized And Innovative Approaches Across USN AndUSMC.

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