# Presentation: 444593

## Minerals Management Service

***Implementing Activity-Based***
***Costing***
***Management***
***Budget***
***February 2003***

**Notes:**
MMS Activity Based Costing/Management is a management tool that will:
Provide managers with cost and performance information to make better decisions about resource allocation and service delivery
Provide a cost and performance history to support future planning and budget initiatives.

The ABC system allows costs to be rolled up to the Bureau/DOI management level, and also at lower levels for use by field managers.

## Major Accomplishments and Key Tasks

- ABC – phase I – capturing cost by activities
- Implemented MMS-wide October 2002
- Captured through timesheets/requisitions
- ABC – phase II – linking cost to outputs, performance data, and DOI strategies
- Implementation by the end of March 2003
- Performance data capture and reporting tool

**Notes:**
Phase I, which was successfully implemented in October 2002, captures the costs of MMS work activities.
Input by timesheets - bi-weekly
We are currently developing Phase II, where program outputs will be fully costed and linked to the DOI Strategic Plan.
Output and strategy measures input quarterly
The system provides timely feedback for managers to make program and resource decisions and gives them better information to make resource decisions.

## Benefits of the MMS Model

- Links to the DOI Strategic Plan
- Maps outputs and measures based on business processes
- MMS employees see how they support the strategic plan
- Provides information that is helpful to field managers and can be rolled up to support Departmental needs
- Allows us to tell our story in ways that the public will understand

**Notes:**
Lease example

Provisions of the lease may support:
Accessresponsible use
Optimal value

## MMS ABC/M System Architecture

**INPUT**
- (timesheets/requisitions)

**FINANCIAL**
- (ABACIS)

**$$ ****/ ACTIVITY**

**OROS**

- $$  / OUTPUT

**Performance Data Gathering System**

- Performance Data
- (Web-based tool – March 03)

- Management
- Reports
- (OLAP TOOL –March 03)

**Notes:**
Activity costs are coded by each employee in ABACIS – MMS financial system
MMS uses the Oros ABC Software
We are currently beta testing our new performance data gathering tool
Biweekly, resource and activity costs are imported into the ABC model
Activity costs are driven by a causal relationship to cost objects for full costing of MMS outputs
Activities are attributed to provide other looks at the cost.
Performance data will be captured quarterly through a web-based reporting tool.
Reports are available through an OLAP reporting tool accessed through the MMS intranet.

## Consortium for Advanced Manufacturing International Cross

- Operational or Process View (ABM)

- Strategic or Cost Assignment View (ABC)

**Notes:**
CAM-I Cross (Consortium for Advanced Manufacturing International) became heavily involved in ABC/M, and the offshoots of ABB and performance budgeting.  Group of government, private industry and consultants. They continue to have working groups that meet quarterly to share knowledge.  ($25K/yr for DOI)
Vertical:  Resources (labor, contracts equip) driven by direct assignment to work activities.  Activities represent the actual work of the organization.  Activities are then driven or assigned to Cost Objects or the primary Bureau outputs.
Horizontal:  Cost drivers relate to activities because it is the work defined at the activity that drive costs.  Activities is where performance is measured as will be shown on the next slide.

## CAM-I Cross Applied to MMS

- Operational or Process View (ABM)

- Strategic or Cost Assignment View (ABC)

- Activity Drivers

- Acres Leased

- Leases Managed

- Adjudicate & Administer Leases TAA

- Enviro Impact Stment LAM

- SOO/ SOP Review TCR

- Conduct Lease Sales LAG

**Notes:**
This is an example of the CAM-I cross applied to MMS.  This is how we cost MMS outputs and drive costs to DOI Strategies.
Vertical:  Code activities into ABACIS.  MMS activities represent the business of the work in MMS.  Activity costs are pulled from ABACIS and assigned to the Bureau’s primary outputs in the ABC Model.
Horizontal.  We attribute activities to which DOI strategy we support.  Also shown on the Matrix which we will look at later.

## Assigning Activity Costs

***Assigning Activity Costs***

- Plans Approved

- Permit Applications Approved

- Environmental Consultations
- TAP/ $$$

- Compliance for Industry Proposals
-  TAQ/ $$$

**Activities**

**MMS Outputs**

- # Environmental Consultations (permits)

- # Environmental Consultations (plans)

- # Archeological Reviews (plans)

- # Archeological Reviews (permits)

**Activity Drivers**

**Notes:**
This example shows how we assign activity costs to multiple outputs.  This assignment is used for ~ 5% of MMS Activities.  Activity costs are assigned on a causal basis with the outputs.  Example shown includes the Section 7 and Section 106 consultation work.  The work supports Oil Gas Permits & Plans.  Costs are assigned in the same proportion as the number of consultation or reviews conducted.  The activity costs relate to Responsible Use (2) Strategy.  COSTS ARE ASSIGNED BASED ON A CAUSAL RELATIONSHIP, NOT ALLOCATED.

## Benefits for DOI

- The MMS ABC/M System is operational now
- It can provide the fully loaded costs for DOI activities
- Maps to strategies and outcomes in the draft DOI Strategic Plan representative of MMS program and business processes