RM

THIS ISSUE

INSIDE

Publication approved for public release; distribution unlimited

RESOURCE MANAGEMENT

1st Qtr 2002 PB-48-02-1

ï Message from the ASA (FM&C) 2

ï The Role of Managerial Accountants 10

ï TWI -- Six Sigma at General Electric 13

ï Perspectives -- Is Cost Analysis for Everyone? 29

ACP Class of 2001

(From left to right)

Back row: Maurice Ottinger, Wyllo Hanson, Dan Zorica, Dwayne Harris, Brian Martin, Tracy Gifford, Joe Myrda

Third row: Tom Willson, Mike Watson, Tim Flanagan, Busta Cates, Bill Bunting, Elizabeth Robinson, Robert Warden, Roger Casillas

Second row: Todd Calderwood, Brian Patterson, Brian Sporrer, Don Friend, Judy Sigel, Donald Petrich, Mark Towne, Kenneth Hubbard,

Lynda Abell

Front row: Brian Swiss, Sam Barnes, Francis Blas, Jeff Hendrix, Lawrence Stiller, Troy Schilling, Terry Boyd, Michael Nahas
2 First Quarter 2002

A Message from the Assistant Secretary

of the Army (FM&C)

Sandra L. Pack

Ladies and gentlemen, as I address you in this forum for the first time, I want to let

you know how proud and honored I am to be serving this great institution, The United

States Army, with such dedicated, competent and professional individuals as you. I truly

cannot think of a better job than that which I am in, and it is due to you. In my travels

throughout the United States and in Germany, I have met with many of you and your

colleagues and have been nothing but impressed with your work ethic and devotion to

duty. It is clear to me that you have the best interests of The Army at heart and will do

whatever it takes to ensure our soldiers are the best prepared and cared for in the world.

I am sure you agree that a requirement of any successful organization or business is

a competent and professional financial management staff. The larger and more complex

an organization is, the greater its reliance on financial management - and as the Army Vice

Chief of Staff, General Keane, emphasized to me recently, "You are now the CFO of the largest organization in the world."

Given this awesome responsibility, I am completely committed to ensuring that The Army's financial management

organization is tops in its class. To accomplish this, we must have the foundation of a strong three-legged stool, each

leg individually representing the systems, processes, and foremost, the workforce of Army financial management.

The success of Army financial management, and thus The Army as a whole, rests with the competence and

professionalism of our workforce. Our military and civilian financial managers must have three preeminent abilities:

revenue generation; cost analysis and control; and leveraging existing resources. To attract, develop and retain a

workforce with these skills we must continue to dedicate sufficient resources and attention to their training and

professional development and provide them the tools they need to be successful. I promise you that I am a staunch

champion of this cause and a true believer in the immense value of education. In fact, my favorite quote, by an anonymous

source, is: "Man's flight through life is sustained by the power of his knowledge." Moreover, I believe that life is enriched

by education. One can never learn enough!

Fortunately for us, military Functional Area 45 and civilian Career Program 11 provide many training and

development opportunities, as laid out in the FA 45 Professional Development Guide and the CP 11 Army Civilian

Training, Education and Development System (ACTEDS) Plan, for military and civilian careerists respectively. Both

of these documents currently are under revision and updates will be distributed within the next few months. As a CPA,

I understand the importance of skill maintenance, professional development and professional certification. I strongly

encourage each and every one of you to take advantage of these educational opportunities to enhance your skills and

to pursue professional certification.

The FA 45 Development Guide was last updated in 1999 when Officer Personnel Management System XXI (OPMS

XXI) was being formulated. We now have numerous lessons learned along with further developed OPMS XXI programs

such as Intermediate Level Education. FA 45 also has initiated new programs such as training with industry, a fellowship

with the Office of Management and Budget, and the Comptroller Accreditation Program. All of this information will

be added to the next update.

The Comptroller Civilian Career Program ACTEDS Plan also was rewritten in 1999 when the Comptroller

Accreditation Program and Multi-disciplined Financial Analyst Initiative were created. As Army financial management

changes, the tools we use to develop our workforce must keep pace. We now have specific intern master training plans

for accountants, auditors, and cost analysts. In addition, functional core competencies are being updated in the ACTEDS

Plan to reflect current changes and additional cost analyst courses will be added.

Through the overarching Comptroller Accreditation Program and other initiatives, we will prepare the Army

Comptroller workforce for the 21st century. This is a collective effort, and I encourage all careerists to study the

ACTEDS and FA 45 Development guides and to actively pursue the wealth of training and development opportunities

available to them. Your efforts will be rewarded through your professional gains and the pride of knowing we are better

serving our soldiers. Together we will ensure that we generate, control, use and leverage our resources in the most

efficient and effective ways to support the world's finest Army.
First Quarter 2002 3

Resource Management is an official professional bulletin published quarterly and sponsored

by the Assistant Secretary of the Army for Financial

Management and Comptroller. Unless otherwise

noted, material may be reprinted provided the author

and RM are credited. Views expressed herein are

those of the authors and not necessarily those of

the Department of the Army or any element thereof.

RM provides a forum for expression of mature,

professional ideas on the art and science of resource management. It is designed as a practical

vehicle for the continuing education and professional development of resource managers through

thought-provoking articles. Send all correspondence to: the Army Comptroller Proponency Office,

109 ARMY PENTAGON, Washington, D.C. 20310-

0109. Queries may be made by phone to DSN 224-

4409 or commercial (703) 614-4409. Please send a

copy of each submission to Wilett Bunton at the

above address.

POSTMASTER: Please send address changes to

DFAS - Indianapolis, Corporate Communications

Office, Editor, RM, ATTN: DFAS-IN/DDC, Col 207E

8899 E. 56th St., Indianapolis, IN 46249-0150.

RESOURCE

MANAGEMENT

This medium is approved for official dissemination

of material designed to keep individuals within the

Army knowledgeable of current and emerging

developments within their areas of expertise for the

purpose of professional development.

By order of the Secretary of the Army:

ERIC K. SHINSEKI

General, United States Army

Chief of Staff

Administrative Assistant to the

Secretary of the Army

JOEL B. HUDSON

021015

Official:

DISTRIBUTION: Special

Assistant Secretary of the Army

(Financial Management

and Comptroller):

Sandra L. Pack

Managing Editor,

the Pentagon:

Wilett Bunton

Editor,

DFAS - Indianapolis

Chuck Gordon

Periodical postage paid

at Indianapolis, Indiana

ISSN 0893-1828

First Quarter 2002 ìProfessional Developmentî PB48-02-1

Contents

Message from the ASA (FM&C) 2

Message from the Principal Deputy ASA (FM&C) 4

Individual Travel Card Delinquency 5

Communication: Key to Financial Management

Professional Development 8

The Role of Managerial Accountants 10

TWI -- Six Sigma at General Electric 13

Grooming New Financial Analysts for the Army 14

FA 45 Focus 17

TWI -- USAA Corporate Finance Operations 20

TWI -- Earned Value at Boeing and USACE 28

Perspectives 29

Professional development 33
4 First Quarter 2002

A message from the Principal Deputy

Assistant Secretary

of the Army (FM&C)

Ernest J. Gregory

The Chief of Staff of the Army recently tasked the Army Training and Leader

Development Panel to conduct a survey to assess the state of civilian training and

leader development. While the results have yet to be published, this effort highlights

the importance Army leadership places on the professional development of our

civilian workforce.

As I look back over the many changes that have taken place in the financial

management arena, none are more significant than the changes in our current

financial management professional development infrastructure. There is a lot going

on and information is constantly changing. Professional development opportunities for

financial management careerists are endless. Whether you are a brand new intern or a seasoned senior executive,

you can pursue graduate education programs, specialized training and certification. Basically, you can enhance your

current job experience at any grade level.

Many of the professional development opportunities are centrally funded, and the courses are so popular that

careerists must decide early in the year which courses to attend while training allocations are still available. Even

with the increase in demand, there are many opportunities for careerists to choose from, including these:

Army Comptrollership Program -- ACP is a professional development experience that provides students with the

essential tools of private and public sector business practices and the tools to analyze and develop public policy. ACP

is a 60 credit hour, 14-month program sponsored by ASA (FM&C), Syracuse University's School of Management

and Maxwell School of Citizenship & Public Affairs. The class graduating in August 2003 will receive masterís

degrees in business and public administration.

Professional Resource Management Course -- PRMC is a four-week management development program. This

course provides mid-level, upwardly oriented civilian (GS11-14) and military (major and lieutenant colonel) resource

managers with interpersonal communication, analytical, negotiation and consensus building skills. The course also

examines the planning, programming, budgeting and execution system along with current issues in financial

management. Classes are held three times each year at Syracuse University, New York.

Army Comptroller Course -- The ACC is a comprehensive training experience for journey-level Army civilian

careerists (GS 9-12), second-year Department of the Army interns and military officers entering FA 45 (major).

ACC focuses on federal budget challenges; strategic planning; planning, programming, budgeting and execution

system; fiscal law; activity and service-based costing; manpower management; contracting; management controls;

competitive sourcing; financial operations; the legislative process; and resource management. This four-week

course is taught three times each year at Syracuse University, New York.

Professional Military Comptroller School (PMCS) -- PMCS is a six-week professional development course for

Department of Defense RM personnel. The course develops careerists' capabilities to adapt the Comptroller's role

to the economic, political and social environment of the military organization. PMCS combines multi-service faculty

lectures and seminars with an extensive and prestigious guest-speaker program. Classes are taught five times each

year at the Center for Professional Development, Maxwell AFB, Ala.

The only constant about financial management is change: new business processes, emerging technologies, state

of the art financial systems and improved financial data repositories. Keep pace with our changing financial

management environment.

Carpe diem! Invest in your future by pursuing financial management professional development opportunities.
First Quarter 2002 5

by Frank Rago

The current task order for the DoD Travel

Card Program took effect on Nov. 30, 1998. We

had a pretty rocky start.

Units couldn't see delinquent cardholder accounts because they were linked to other units in

the bank's account structure; transportation offices couldn't make timely payments on centrallybilled accounts because they didn't receive proper

invoices. But eventually, things smoothed out.

Once the bank fully fielded its on-line system

(the Electronic Account Government Ledger System, called EAGLS) and Agency Program Coordinators (APCs) overcame various obstacles, we

began to clearly monitor card usage and account

status and begin taking charge of the program.

Has the delinquency battle been won? I guess

you could make a case that it's been won for our

centrally billed accounts, which we use to pay for

air and rail tickets at commercial travel offices.

Delinquency on these accounts once measured in

excess of 10 percent but it's now at 1 percent each

for both Army and DoD accounts. This success

is due to two things: diligence on the part of Army

accountholders and effective oversight by the

people at the Military Traffic Management Command who monitor centrally-billed Army accounts.

Individual travel card delinquency:

Itís time to reverse the trend

This is no small task. The Army spends in

excess of $40 million each month on travel and

transportation expenses using some 1,700 centrally billed accounts.

Because the balance due on these accounts is

a government liability, the laws and regulations

governing cash management and prompt payment

come into play. Bills not paid within 30 days of

receipt are subject to prompt payment interest

charges. The longer these amounts remain unpaid, the greater the penalties that are incurred.

You can imagine what this additional cost can

do to an organization's travel budget. We still pay

some interest penalties for late payment, but it's

now only a fraction of what it once was.

Individually billed accounts, the travel cards

that travelers carry in their pocket, are another

matter. In October 2000, with the Army's

cardholder delinquency rate exceeding 11 percent, the Vice Chief of Staff of the Army issued

strong guidance to commands to get their travel

card programs under control.

He established a goal of not more than 4

percent of accounts delinquent and challenged

commands to meet or exceed that goal by the end

of March 2001. Delinquency continued to rise to

over 12 percent through January 2001, but then

began a dramatic plunge to only 5.6 percent in

Figure 1
6 First Quarter 2002

May.

At that point in time, you could honestly say

that we had a program of over 400,000 cardholders,

with about 140,000 spending over $30 million in

any given month, and we were approaching 95

percent effectiveness in paying our bills on time.

In other words, you could argue that we had

a very successful program. Unfortunately, that

argument wouldn't hold water for long. Beginning

in June 2001, our delinquency rate began to rise

again and it's continued to its current level of 11

percent (see Figure 1).

Who are these delinquent cardholders? Where

are they? Analysis shows that the majority of

delinquent cardholders are soldiers in grades E-1

through E-6. They make up only 34 percent of the

Army's cardholder population, and spend only 19

percent of the dollars, but they account for 64

percent of our delinquent accounts and 73 percent

of the Army dollars that the Bank of America

charges off as uncollectable. A breakout by grade

is shown in Figure 2.

What's been done to work the delinquency

issue? In addition to letters from the Vice Chief of

Staff, Army, major commanders have echoed

their dissatisfaction with current delinquency levels to their subordinate commanders.

The Sergeant Major of the Army was briefed

on the issue and, in turn, has advised

command sergeants major of the problem and charged them to take action.

Aging Analysis Reports that summarize command delinquency statistics are supplied each month to APCs

at major command level, who forward them to their subordinate organizations for review and action.

Army senior leadership is aware of

the problem and senior commanders

have been energized, but ultimately

the solution will not come from the

top. It must come from the lowest

echelons in the Army, from the supervisors and commanders at unit level.

How can we do this?

More than anything else, we

must look at the span of control that

our APCs are coping with.

We have some APCs who are

responsible for administering programs

with thousands of cardholders. APCs

have some very effective tools at their disposal,

but with cardholder volume of this magnitude,

they have no real chance to effectively manage

their programs. Reducing the span of control,

breaking up these large accounts and pushing

administration down to lower levels, would make

APCs responsible for a manageable number of

cardholders (say, the size of an average company)

and would go a long way towards resolving the

delinquency problem.

APCs could then easily run their monthly

management reports, provide copies to the supervisors of their problem cardholders, with a summary report to the commander. In turn, this would

get supervisors and commanders involved earlier,

so they could take action before delinquency

occurs and accounts are suspended or cancelled.

A manageable span of control combined with

strong commander/supervisor involvement is essential to an effective program.

In addition, here are some guidelines that

commands can use to effectively manage their

travel card programs:

Make command expectations clear. Commanders should communicate very clearly that:

ï Card misuse, abuse and delinquency will not

be tolerated.

ï Use the card for official travel only -- not for

Figure 2
First Quarter 2002 7

personal, family or household purposes

ï File travel claims promptly and pay off card

balances promptly

ï Supervisors must review travel claims and

receipts for appropriateness prior to submission

for payment.

ï APCs must use EAGLS to identify card

misuse and delinquency and notify supervisors

promptly.

ï Supervisors and commanders must take action to prevent card misuse and delinquency or,

failing that, to respond with appropriate administrative/disciplinary action.

Second, emphasize training:

ï Train APCs using on-line or on-site training

and the Agency Program Coordinators Survival

Guide put out by the General Services Administration.

ï Train cardholders using materials provided

by HQDA or the Bank of America or develop local

training materials. Focus these training efforts on:

proper and prohibited uses of the travel card, the

need to pay bills on time, the benefits of split

disbursement and the consequences of card misuse or delinquency (e.g., fees for late payments or

returned checks, the collection of debt directly

from pay, the reporting of debt to national credit

bureaus, and administrative/disciplinary action).

ï Make use of basic personal financial management training offered by Army Community Services at Army installations.

Third, ensure that the travel cards that are

issued are needed and appropriate:

ï Commands should review usage annually and

either de-activate or cancel cards where the account has not been used or usage is so infrequent

the cardholder could be classified as an infrequent

traveler.

ï Commands should take action to cancel cards

where cardholders have been fiscally irresponsible.

Fourth, take appropriate action on arriving

and departing cardholders:

ï Ensure that in-and out-processing checklists

include the APC.

ï Initiate the transfer of cardholders' account

upon PCS.

Fifth, use existing tools to set the stage for

appropriate disciplinary action - require APCs to:

ï Have new cardholders sign the Statement of

Understanding and retain it on file.

ï Review records of current cardholders to

ensure that a signed Statement of Understanding

is on file.

ï Advise delinquent cardholders with a delinquency notice letter and inform supervisors of

cardholder misuse or delinquency.

Finally, take appropriate action with

cardholders that misuse their travel cards:

ï Counsel cardholders on card misuse or delinquency.

ï Encourage delinquent cardholders to arrange

a repayment schedule with the Bank of America.

ï Take appropriate administrative and disciplinary action on military members and civilian employees when warranted.

ï Refer suspected fraud to the appropriate

criminal investigative service.

The travel card process is relatively simple:

you're issued a travel charge card; you use the

card to pay your official travel expenses; you file

a settlement voucher upon your return and designate the amount of your charges for split disbursement; your travel pay office sends the amount you

indicated directly to the Bank of America and the

remainder to your bank account. It's simple - you

pay your bill in full and on time and there are NO

adverse consequences.

Responsibility and accountability are essential

for an effective travel card program. You can talk

about the travel card all day long (and with all the

emotion you like), but these facts remain: the

cardholder must use the card responsively; they

must be held accountable for its proper use and

payment of the amount due; and action must be

taken to deter - or resolve - misuse and delinquency.

So what's the answer? We must have commanders, supervisors, APCs and cardholders who

are committed to success. Command involvement, engaged supervisors, an empowered APC

with a manageable span of control, educated

cardholders, and use of split disbursement - these

will give us an effective travel card program that

supports our mission travel at a cost we can

afford.

About the Author

Frank Rago is the Army Travel Card Program

Manager and works for the Assistant Secretary of

the Army (Financial Management and Comptroller) on the Financial Operations staff.
8 First Quarter 2002

by James G. Auchter

Army Comptroller Proponency Office

Comptrollers make up less then 5 percent of

the Army civilian and military workforce, yet

they generally get more and better training and

career-growth opportunities than those in the

other professions.

Still, more can be done-not through creating

new classes or training opportunities but by

communicating needed essential information to

members about existing professional development opportunities.

The Army has between 10 and 11 thousand

careerists in military functional area 45 (Comptroller) and in its Comptroller civilian career

program, known as CP 11.

Unfortunately, fewer than half seem to be

aware of the broad range of training and career

development opportunities available in some

cases just for the taking.

The Army Comptroller Proponency Office

acts as a clearinghouse for financial management professional development, education, training and information. The office offers and manages centrally funded career enhancement programs.

It also communicates, in a variety of forums,

career information on training and education

events sponsored by DoD and other federal

entities for the Army financial community.

The enabling charter is the Army's 21stcentury strategic plan for development of its

comptroller career workforce.

The plan describes Assistant Secretary of

the Army (Financial Management and Comptroller) advocacy of a strong, multi-skilled and

fully competent financial management workforce

Communication: Key to financial

management professional development

through the Proponency Office, which keeps the

professional community informed in a number of

different ways. The office:

ï Distributes information about its mission,

functions, projects and services through a

coordinated program of printed pamphlets

and brochures, on-line documents, training

workshops, computer-based training products, instructional presentations and marketing exhibits in professional forums such

as annual national association meetings.

ï Maintains http://www.asafm.army.mil/

proponency/acpo.asp as the on-line repository of information on the complete range of

professionalism-enhancing Army financial

management programs and activities.

ï Publishes this magazine, Resource Management, an official quarterly professional

bulletin. Readers can access recent issues

on line at our website.

ï Provides individual professional development counseling.

ï Chairs a networking group of representatives from most Army commands and agencies called the Comptroller Junior Executive

Council or CJEC, which assists the office in

its communication role, among other missions and activities.

ï Maintains an electronic mailing list using

ListServ technology for pinpoint communication of specific programs to interested or

affected community members.

ï Uses forums such as this in AFC to

publicize new programs and initiatives-in

this case the new ListServ and several new

military FA 45 programs.

New ListServ to stand up June 2002

The electronic mailing list will serve both the

civilian CP 11 and the military FA 45 Army

Comptroller contingents.

The arrangement is similar to Army Knowledge Online (AKO) or The New York Times or

GAO on line, an e-mail address list of people

associated by certain specific interests.

Any readers who have visited Ebay, made

travel arrangements on Expedia.com or

The Army Comptroller

Proponency Office acts as a

clearinghouse for financial

management professional

development, education,

training and information
First Quarter 2002 9

Travelocity.com, or bought something from

Amazon.com, for example, have already added

themselves to one or more other "listserves" or

their equivalents.

The ListServ will be easy to register in and

should take anyone less than two minutes.

Registrants need to provide:

ï Name

ï Series or FA

ï Rank or grade

ï Title

ï MACOM

ï Installation

ï E-mail address

ï Second e-mail address (optional)

ï Current accreditation level.

Once military and civilian careerists register, the Comptroller Proponency Office can

begin sending information about everything from

short-term training courses to long-term training

opportunities such as developmental assignments

and fellowships.

By signing up for the ListServ, Army FM

careerists can stay aware of new training opportunities and changes in the Comptroller field.

The ListServ gives needed advance notice

for members to prepare and effectively compete

for training opportunities.

Another advantage of the new e-mail network is that it allows for two-way dialogue.

Anyone on the list can use it to communicate

with and network with anyone else also registered-including the Proponency staff who run it.

ListServ can become an effective means of

creating a dialogue within a team or the entire

comptroller community.

And there won't be any ëspamí or junk mail

to contend with, either.

The registration information helps

Proponency staffers to focus on registrants'

specific needs and to aim information most

pertinent to any individual at the most opportune

times.

Haystacks of irrelevant information should

be just about gone in this system.

The ListServ will have reminders of deadlines for various programs and keep members

informed of changes in systems like ACCES and

OPMS XXI. Through regular communication

with all Army careerists, we will routinely provide timely and valuable information essential to

Army financial management professional development.

The ListServ affords the Army an effective

means of communicating with its large financial

management community by providing timely and

vital information at low cost.

FA 45 Officers Strengthen Community

Comptroller Proponency staff has done several things in the last year to reach the FA 45

(Comptroller) audience.

The Deputy Assistant Secretary of the Army

for Budget, Maj. Gen. Sinn, has hosted a number

of bimonthly "brown-bag" sessions for officers

in the D.C. area.

The sessions have been well attended and

have proved a great opportunity to discuss items

of professional interest. Senior leaders in other

areas with densities of FA 45s may wish to

initiate similar programs. The military Proponency

Officer conducts briefings and work-group sessions with any organization having significant

numbers of FA 45s.

In the 3d Quarter 2000 edition of Resource

Management, we began a new section titled FA

45 Focus.

The section provides information and items

of interest from both the Proponency Office and

the Army Personnel Command career manager

to our military audience.

It is also a place for officers to place items

for discussion and debate in the professional

community. Back issues are available electronically at the Proponency website.

As this issue went to press, Sinn held an FA

45 conference at the Adams Mark hotel in

Columbia, S.C., in mid-May, in conjunction with

the U.S. Army Finance Corps' annual financial

managers' and leaders' meeting or FMLM.

Conference details are on the Proponency

website and will appear in the e-mail inboxes of

military ListServ registrants.

Beyond the information provided at the

Proponency Office website, officers should also

periodically view the FA 45 Assignment Officer

website at http://www.perscom.army.mil/

opfamis/fa45.htm.

The site shows available assignments, board

schedules and application procedures and other

critical information.
10 First Quarter 2002

by Gail Williamson

Today, as in recent years, the Army faces the

continuing challenge of constrained budgets to

perform its mission.

We can help the Army meet its mission by

establishing a goal to efficiently manage limited

resources available for modernization, training

and quality of life. In this context, each of us must

look at what we do that provides value to our

installations and the Army.

One way to assist the Army in meeting the

goal is to provide leaders information that results

in the best decisions possible. Managerial accountants, as key potential providers of information to

installation managers, should determine what role

they play in providing this data. Accountants

should ensure these roles are flexible and create

maximum benefit to the commanders and managers they serve. In the Army, use of managerial

accountants gained attention in the late 1980s with

the implementation of the "standard installation

accounting office" concept. An Army accountant's

handbook was provided describing what accountants should be doing at installation level.

Although it wasnít necessarily what was

being done, this was the beginning of a move from

an environment where accountants were utilized

mainly to perform fiduciary accounting to one of

performing analysis that provides utility to Army

management. The growing process has been

painful, since both education and training of many

accounting personnel were lacking. Resistance

and confusion within current structures occurred

as we struggled to determine how and what

analysis of data would prove useful and timely for

commanders in the decision-making process.

For many installations, the second round of

"pain" began in late 1991 with a Defense management report decision to consolidate the department's

accounting and finance operations. Virtually all

Army installation finance and accounting staffs

and the majority of their functions were surrendered to a new organization called the Defense

Finance and Accounting Service. Each installation

was left with sufficient resources to fund five

positions to perform tasks to be defined. As there

was no mandated method of managing the transiHelping the Army meet mission goals:

The role of managerial accountants

tion, each installation made isolated decisions.

Some managers left installation people working in the new but temporary Defense Accounting

Office; others moved their F&A staffs to the RM

office and still others kept the authorizations and

dollars but took no people and used the resulting

resources to pay other bills. Most installations did

keep personnel identified as accountants and/or

accounting technicians. It was some time before

any identification of expected functions occurred

between installation resources and DFAS.

It was not until June 1994 that the Army's

finance command published a finalized guideline

for accountants. Over the next few years, round

three resulted in DFAS consolidating resources to

centralized locations. Today, specific functions

for managerial accountants at installations remain

diverse from site to site.

This is in part due to a lack of established

structure and tasks from top down, mission and

commander needs at each installation, expertise

and availability of trained personnel, resources,

and the inherent overlap of task responsibility

between Army and DFAS.

Why do we need managerial accountants?

One legal driver for accountant skills is the

Chief Financial Officers or CFO Act of 1990. The

act mandates effective general and financial management practices through statutory provisions.

It focuses on improving accounting, financial

management and internal control systems to better deter fraud, waste and abuse of government

resources. Agencies must each appoint a CFO

who demonstrates abilities in financial management practices and produce compliant audited

financial statements, according to a 2000 statement from the Office of the Deputy Assistant

Secretary of the Army for Financial Operations.

During the mid-1990s, Congress enacted

several laws aimed at improving federal financial

management. Specifically, in:

ï 1993 the Government Performance and Results Act established strategic planning and performance measurements.

ï 1994 the Government Management Reform

Act required audited financial reports and consolidated government reporting.
First Quarter 2002 11

ï 1996 the Information Technology Management Reform (Clinger-Cohen) Act mandated performance- and results-based management.

ï 1996 the Federal Financial Improvement Act

required implementing and maintaining compliant

financial management systems.

Each plays a part in Army financial requirements. Simply put, these statutory provisions

require us to be accountable to taxpayers so they

can clearly see what they get for their tax dollars.

To accomplish this, the Army must identify and

utilize the right mix of accounting services. Across

all businesses, accountants and auditors help to

ensure that firms are run more efficiently, public

records kept accurately and taxes paid properly

and on time (U.S. Department of Labor, 2000).

Both financial and managerial accountants'

tasks rely on the same accounting database, but

there are important differences in what each

group does with the information.

Financial accounting is concerned with reports to owners, creditors and others outside the

firm (Garrison, 1997). In the government, our

audience is Congress and taxpayers. For this and

other feeder financial functions, the Army contracts with DFAS.

We expect that DFAS, as our financial accountant, will summarize financial activity and

provide verifiable reports for installations, major

commands and the Army as a whole.

On the other hand, managerial accounting is

concerned with information for the internal use of

management. The emphasis is on future, relevant

and flexible data, where timeliness is more important than precision. Information is derived for

segments of the total organization.

Management accounting is forward-looking,

making sure information is generated at the right

time and focusing on a specific situation.

There is no single right way to do things or

single formula that will always provide the best

answers. Managerial accountants may also perform budgeting, performance evaluation, cost

management and asset management functions

(Garrison, 1997). In summary, financial accounting tells us what we got for our money, whereas

managerial accounting tells us how to best spend

our money based on lessons learned from analysis

of information.

Where Are We Today?

Are we using accountants at installations

today to perform managerial accounting tasks?

Are they providing analysis for better decisions?

The answer is yes and no. A survey of

Training and Doctrine and Forces Command

installations indicates that the majority of managerial accountants have several key focuses in

common. Managerial accountants typically manage the prior-year funds, conduct joint reviews of

unliquidated obligations, provide accounting and

fiscal policy, field and administer various systems

(both financial and non-financial), and spend a

significant portion of their time working issues

with servicing DFAS field sites.

There is a broad range of office sizes, anywhere from one through 16 people, along with a

variety of expertise and job series performing the

work. Some provide limited analysis of accounting data for decision-making, but most work to

meet current goals and requirements. Many functions performed are directly related to the various

acts previously mentioned; however, most installation leaders are not concerned with compliance

with these acts. They are concerned with obtaining and efficiently utilizing the resources to do

their missions.

Others tasks continue in an effort to assist

DFAS through the growing pains and learning

curves experienced since the consolidations, as

well as to maintain a comfort zone with tasks

many of us are more familiar with than analysis.

What Should We Do?

The Corps of Engineers has begun blazing a

trail to develop its accountants while proactively

fine-tuning managerial accounting roles. A professional development guide is in draft form that

will direct personnel to the level of managerial

accounting skills needed in the future.

The handbook addresses specific training

required at various levels, certification levels expected and applicable resident and nonresident

course descriptions. The Army needs to address

these requirements at a service-wide level to

ensure that all accountants are prepared professionally to fulfill future needs.

Managerial accountants can benefit from the

approach taken by auditors to manage their function in the Army. The General Accounting Office

and The Auditor General establish specific auditing standards and guidelines for auditors. The

Army's Internal Review Office established a steering group to keep up to date with changes and
12 First Quarter 2002

trends in the business world in the audit arena, as

well as their applicability and suggestions to market their functions. Applicable Army regulations

have also been updated to include the changing

environment and functions for auditors.

Managerial accountants would benefit from

the approach by working with major commands

and installations to establish a strong foundation

with a proactive group serving as guideposts for

change. The goal is to increase the value of

managerial accountants. Current Army initiatives

will also help determine these roles. Standard

Levels of Service requires each of us to define our

tasks and the time we spend doing them. After

much work, eventually this data will be used to

determine the resources an installation receives to

provide those specific services.

However, commanders will still have some

latitude in the use of their resources, so providing

value for our cost continues to be key. The

certification and accreditation processes for resource managers will also affect accountants in

their professional development.

To establish the right mix of accounting skills

needed by the Army, involvement must begin with

our leadership, in the financial community and in

those classes that train leaders of our installations.

Our challenge is to establish a team of individuals

from across the Army that includes department,

major command and installation personnel to

develop tasks to be performed by installation

managerial accountants.

Aligning installation managerial accounting

functions with those performed at major command and department level in our field may be a

starting point. Also recommended is to work and

fine-tune these lists with DFAS, and gain agreement as to which functions are shared and which

are exclusive, as they must find efficiencies in

their operations too.

The Army and DFAS would benefit from

further developing performance standards for

managerial and financial accountants to ensure

that the Army overall obtains the required level of

expertise and knowledge.

Things that could be done are to update

position classification standards for accountants;

add a new title that reflects the combined knowledge needed by a managerial accountant; and

educate installation and RM leaders by sharing the

tools and information we can provide. Managerial

accountants at installations can be their own best

friends or worst enemies. It is our responsibility to

move our staffs from their comfort zones to the

world of analysis and value added. I urge all

managerial accountants to sell your skills to your

RM and command. One survey mentioned that the

familiarity of the manager or command with

accountants and what capabilities they possess

bore a direct relationship on how they were

utilized. How better to become familiar with the

value we provide than through efficient saving or

spending of resources through analysis?

We must be a part of the solution to obtain

efficiencies for our installations and the Army.

About the Author:

Gail Williamson is a Certified Defense Financial

Manager and Chief of Managerial Accounting in

the Directorate of Resource Management at the

Maneuver Support Center at Fort Leonard Wood,

Missouri.

References

ï Assistant Secretary for Financial Management

website. Available at www.asafm.army.mil.

ï DFAS Indianapolis. Transition Plan For the Consolidation of Army Accounting and Finance Operations. August 1992.

ï Garrison. 8th Ed. (1997). Managerial Accounting

and the Business

ï Environment. In Managerial Accounting. (On-Line)

Available at htts://online.santarosa.edu/bad2/

ch1.html.

ï Headquarters, Department of the Army (1988).

Army Accountant's Handbook. (Publication 542-

001-60136). Washington D.C. U.S. Government

Printing Office.

ï Keating, Edward G. Gates, Susan M., Pace, Jennifer E., Paul, Christopher,

ï Alles, Michael G., The Defense Finance and Accounting Service, the Chief Financial Officers Act,

and Improving Management of the Department of

Defense. Armed Forces Comptroller, Spring 2001.

Pp. 20-23.

ï Office of the Deputy Assistant Secretary of the Army

for Financial Operations.

ï Army Chief Financial Officers Strategic Plan (General Fund) Five Year Plan (FY1999 - FY 2003).

Second Edition. February 2000. Available at:

www.asafm.army.mil/financial.htm

ï U.S. Army Corps of Engineers, USACE Accountancy Professional Development Guide (Pre-Decisional Draft). Spring 2001.

ï U. S. Army Finance Command. Army Managerial

Accounting Guidance, Organizational and Functional

Requirements. June 1994.

ï U.S. Department of Labor Bureau of Labor Statistics. Occupational Outlook Handbook. 2000-01 Edition: www.stats.bls.gov/oco/ocos001.htm.
First Quarter 2002 13

by Maj. Scott D. Fabian

In mid-July I reported to General Electric

Global Exchange Services in Gaithersburg,

Maryland, for a one-year tour as a member of

the inaugural class of the Functional Area 45

(Comptroller) Training With Industry program. I

expected to find that civilian industry faced a

very different set of challenges than I saw during

my three-year stint on the Army Staff.

To my surprise, both GXS, one of GE's 24

global businesses, and the Army face many of

the same issues. Both must deal with issues such

as generating increased revenue (think total

obligation authority), increasing efficiency, and

driving down costs, while meeting customer

requirements.

What I found very different was the GXS

method for dealing with these issues and challenges. Like the rest of GE, GXS uses the Six

Sigma business process improvement strategy

to surpass customer expectations and maximize

business success. Six Sigma strategies, can be

adapted to improve almost any process. The

Army, like GE, can apply this rigorous methodology to improve products to both internal and

external customers.

Why Six Sigma?

GE adopted Motorola's Six Sigma strategy

in 1996 to improve business processes, design

new processes and products, improve productivity and lower costs. Six Sigma targets identifying and correcting the root causes of defects.

ëSix Sigmaí refers to the statistical term for

standard deviation represented by the Greek

letter . The goal of Six Sigma improvements is

to narrow the range of observed process outputs

so that the mean of the observations, ±3 standard

deviations (6), lies within the customer's specifications. A process performing at a Six Sigma

level experiences only 3.4 defects per million

opportunities.

GE proposes that businesses using only

experience and logic to improve their processes

can at best hope to achieve a 4.7 sigma performance level, about 680 defects per million opportunities. GE has, therefore institutionalized

this data-driven improvement and decision-making process to work as their competitive advantage over other companies.

Training and certification

At GXS, all employees receive Six Sigma

training and are required to lead and participate

in Six Sigma projects. Employees receive different levels of training in Six Sigma methods,

depending on assigned duties. The Six Sigma

hierarchy is based on martial arts ranking.

The basic level of training and certification

is Green Belt. Green Belt training and certification consists of an interactive CD course covering basic methodology followed by two days of

classroom training, a certification test, and leading a Six Sigma project. Green Belt is the

minimum level of certification that all employees

must meet. GXS reports the percentage of

Green Belts to GE quarterly. Black Belts are

employees who receive more extensive Six

Sigma training and are devoted to full time

process improvement.

They advise Green Belt project teams and

lead a minimum of two projects per year. Black

Belts serve throughout different functional departments at GXS. Each department is assigned

a Master Black Belt who coordinates efforts of

the department's Black Belts and serves as a

filter through which approval and completion of

Green and Black Belt projects must flow.

The DMAIC process

The Six Sigma strategy of process improvement has five phases; Define, Measure, Analyze, Improve and Control -- DMAIC. Every

process improvement project must pass through

each phase on its way to full implementation.

Teams representing all stakeholders, including

internal and external customers, initiate and

complete Six Sigma projects. Customer participation is particularly important in the DMAIC

process, as the goal is to meet customer requirements at least 99.99966 percent of the time.

Interestingly, the final process improvement

may not be the one that the team thought would

solve the problem. Rigorous analysis is the

strength of the DMAIC process.

Training with Industry:

The Six Sigma Strategy at General Electric
14 First Quarter 2002

Define

The Define phase is probably the most

important phase of the DMAIC process. During

Define, the goal is to define the key characteristics of success in meeting the customer's

requirement, develop a project charter and produce a high-level process map. Key characteristics or elements critical to quality are called

CTQs. Ultimately, CTQs are the customer's

definition of success. For example, the customer's

high-level goal may be to maintain a 98 percent

operational readiness rate on an equipment fleet.

The OR rate becomes a high-level CTQ and

the team determines how best to ensure the

process satisfies the CTQ. In the Measure

phase, the team will continue drilling down into

this CTQ to determine the single most important

factor in affecting the customer's OR rate.

At this stage the team will also develop its

charter. The charter describes the project including the participants (by name), the scope, the

goal and the expected duration.

Finally, the team generates a high-level

process map to assist them in focusing their

efforts as they continue to narrow the scope of

activities that produce defects and need improvement. At the end of Define, the team has

assigned member responsibilities and given the

project a general direction. The team continues

in this direction during Measure.

Measure

During the Measure phase, the team uses a

number of quality tools to determine the specific

part of the process on which to concentrate. A

number of statistical tools such as the Pareto

Chart (frequency diagram), the Fishbone Diagram (cause and effect diagram), process maps,

Quality Functional Deployment, and Failure

Modes and Effects Analysis are available to

help determine the improvement from which the

team can generate highest payoff.

Once the team determines which part of the

process they wish to improve, they must assess

the current capability of that part of the process.

While measuring sounds simple, the DMAIC

process requires extensive work to establish

common understanding of what the team will

measure and how. The team must develop

performance standards against which to measure the current process. The standards must be

understood and agreed to by all team members

and should include:

ï A definition of the subprocess to be improved

ï Performance target

ï Customer specification limits

ï Definition of a defect.

For example, if the standard for delivery of

replacement parts is twelve hours, does the

clock begin when the customer orders the part,

or when the vendor receives the order? Agreement on what the team will measure, and how,

is critical to identifying the root causes of the

defect. The team will use this definition as it

begins to measure the current process.

The team must also validate the measurement system and establish the data collection

plan during Measure. How the measurements

are taken and their accuracy and precision are

also important. Would two team members measuring the same process produce the same

result? If the results are different, are they

consistently different? Repeatability and reproducibility are key to the measurement system.

Finally, the team actually measures the process,

collecting the data that they will use in the

Analyze phase of the DMAIC process.

Analyze

The Analyze phase is the most statistically

intensive phase of the DMAIC process. During

Analyze, the team uses the data collected in

Measure to assess the capability of the current

process, establish an improvement goal for the

project, and determine the cause(s) of variation

in the process that they will more closely examine in the Improve phase.

The mean and standard deviation are two of

the more important statistics the team determines from data gathered during Measure. Comparing the amount of variation in the current

process and comparing that to the amount of

variation acceptable to the customer helps the

team assess the current process capability. The

current capability is also known as the baseline.

Naturally, the less variation, or more consistency, in the output of the process, the better.

Remember that the goal is to consistently produce a product that meets the customer's CTQs.

The team will also determine the process

entitlement. This describes how well the team

can expect the process to perform using current
First Quarter 2002 15

technology. Technology is a broad term used to

describe any additional or improved resource

that can be applied to the process. It may include

new tools, new computer software, additional

workers, or any other additional resource. New

technology may or may not be necessary to

improve the process to Six Sigma performance.

Once the team determines the process capability and entitlement, they must determine if improving to entitlement will be good enough.

If the process entitlement does not meet the

customer's CTQ, then the team will need to

change the process technology. If the entitlement does meet the CTQ, is that good enough?

The team should examine the performance

of competitors or other organizations that use

similar processes to see how well they perform.

This exercise, known as benchmarking, may

prompt the team to set a goal that exceeds the

customer's CTQ. If the team only matches the

competition, there still is no clear-cut reason for

other customers to change suppliers. GE's goal

is to reach the Six Sigma level of performance in

all processes. For this reason, the team must be

very open-minded in choosing organizations to

benchmark.

The best performers may be in other parts of

their business, competitors in their industry, or

companies or organizations that are not in the

industry, but use similar processes. When selecting companies to look at as benchmarks,

remember the old adage, "It's not really new; it's

just new to you." The final step in Analyze is

brainstorming to identify the sources of variation

and use hypothesis testing to determine if the

sources of variation are significant enough to

warrant further examination. These potentially

significant sources of variation are called "Vital

Xs." This comes from the notion that the output

of the process is the dependent variable, Y, and

is a function of the independent variables X1,

X2,etc. Determining Vital Xs through testing

that involves comparing data gathered during

benchmarking will focus the team's efforts during the Improve phase.

Improve

The Define, Measure, and Analyze phases

focus on defining the problem. In the Improve

phase the group concentrates its efforts on

solving the problem. During Improve, the team

will determine the root cause of the Vital Xs,

develop solution strategies, eliminate low payoff solutions, develop a pilot solution, including

the design of experiment, test the solution, and

document the new procedure or process.

To narrow the causes of variation to potential Vital Xs, the team must determine the Vital

Xs, or the root cause of the sources of variation.

A common method of determining the root

cause is to "Ask Why Five Times." In this

method, the group generates answers as to why

defects occur and assign a probability to each

reason. They then ask "Why?" again, pursuing

the answer that had the highest probability in the

previous round.

By the fifth time the group has answered the

"Why?" question, they should have identified a

root cause. The cause and effect, or "fishbone"

diagram can also be an effective tool for drilling

down to determine root causes of problems.

With root causes known, the group can

begin to develop solution strategies to remedy

the root causes of defects. During solution

development, the usual brainstorming rules apply -- no bad ideas, no judgement, fast moving

session, etc. The team should also look at the

benchmarked organizations; they may have

solved a similar problem before. The team should

discuss possible solutions with subject matter

experts to determine each solution's viability and

probability of success. The goal is to find a few

solutions, or combinations thereof, that the team

can test to determine the highest pay-off. The

team then designs statistical experiments to

determine the relationship between the solutions

and their potential outcomes. A strong positive

correlation indicates a high pay-off. Having

identified the best solution, the group prepares

for implementation. Depending on the scope of

the change that the solution entails, the group

may either conduct a pilot implementation or go

immediately to full implementation.

A pilot can be particularly effective if the

change is very large or if the full implementation

is expensive. Regardless of the method chosen,

the implementation requires an implementation

plan, and a communication plan. The team will

develop the control plan in the Control phase.

Each of these documents serves a particular

purpose. The implementation plan details the
16 First Quarter 2002

ëhowí of the changes. It includes purpose and

objectives, changes to the systems and structure, the implementation schedule, resource requirements, budget, roles and responsibilities,

and a risk management plan. The key to the plan

is that it effectively communicates the details of

the improvement. It may be necessary to adjust

the plan as implementation is executed, so the

team must continue to review and update the

plan during the implementation.

The focus of the communication plan is to

strengthen the commitment of stakeholders in

executing implementation. Stakeholders include

both internal and external customers. The team

must have their support to ensure effectiveness

of change. During development of the communication plan, the team must consider the audience, the medium, the message and the timing.

Each of these elements contributes to the effectiveness of the communication. The plan must

communicate the change in a way that will raise

the level of commitment of all affected parties.

Control

Upon full implementation, the process improvement enters the Control phase. The team

develops the control plan during this phase.

The control plan institutionalizes the change

and provides means for review to ensure that the

change is having desired consequences. It outlines items such as future process owners, monitoring mechanisms, process targets, audit plans,

and the process for addressing future "out of

control" states. The control plan is the standing

operating procedures on how to monitor and

correct problems arising after implementation.

At this point, full ownership of the process

reverts from the project team to the process

owner. The process owner is responsible for

monitoring the process in accordance with the

control plan to ensure it continues to perform at

the Six Sigma level. The goal is to hold the gain.

If the owner observes outputs that fall outside the control limits, the control plan specifies

actions to be taken to determine the reason for

the variation and incremental steps to be taken to

correct the reason for the variation. Control

continues throughout the life of the process.

Summary

The use of the DMAIC process is the

cornerstone of GXS's Six Sigma business success strategy. It is used throughout the business

to effect positive changes for both internal and

external customers. Through Define, Measure,

and Analyze, project teams composed of all

stakeholders, including customers, focus their

efforts on quantitatively identifying sources of

variation and setting improvement goals.

GE's goal is to improve every process to

perform at the Six Sigma level (3.4 DPMO).

During Improve, teams determine the root

causes of the variation, brainstorm solutions,

select and test high pay-off solutions, and develop implementation and communication plans.

Finally, during Control, the team develops

the control plan and returns the process to its

owner, who monitors the process according to

the plan. Should the process go out of control, the

control plan prescribes the methodology for

correcting the problem. This integrated, datadriven approach ensures GXS achieves maximum performance and meets customer CTQs.

For more information on Six Sigma, visit

http://www.ge.com/sixsigma/.

The potential impacts of the DMAIC process cannot be overstated. While most military

organizations focus on mission accomplishment,

we seldom take the time to analyze our own

business processes to get at the root cause of

systemic problems. The incremental improvement resulting from the Six Sigma strategy and

the DMAIC process can be significant. In 2001,

the Finance Department at GXS used Six Sigma

to save $3.3 million, while increasing the accuracy of its accounting and reporting systems.

Carefully identifying customer CTQs and

rigorously examining the current process pays

big dividends. The importance of streamlining

business practices and making them more economical cannot be overemphasized in an increasingly austere resource environment.

Note: The author would like to acknowledge

Heather Akins and Mike Godown, GE Global

eXchange Services, for their contributions to this

article.

About the Author

Maj. Scott Fabian is one of five FA 45

officers participating in the initial year of the

functional area's Training With Industry or

TWI program, in his case with General Electric Global Exchange Services.
First Quarter 2002 17

FA 45 FOCUS

For Professional Military Comptrollers

by Maj. Sean Hannah

Comptroller Proponency Officer:

FA 45 Conference

By the time this edition of Resource Management is mailed, the May 15-16 FA 45 Conference

will have concluded.

As FA 45's first conference in recent memory,

it was hailed as a great event to begin dialog on

issues of concern to the functional area. The

conference was held in conjunction with the

Finance School's Financial Management Leaders

Meeting in Columbia, S.C. For further information, see the Proponency Office website. To sign

up, go to the Finance School website: http://

www.finance.army.mil/fmlm2002/. A review of

the conference will be provided in the next RM.

TWI and Fellowship Update

It's official: the FA 45 TWI program is here to

stay. After the successes realized in this first year

of execution, we have secured five Comptroller

TWI slots for the outyears. General Electric,

Motorola, Boeing, and USAA have all found the

program extremely rewarding and have committed to continuing as our industry partners. Read

the articles from our current TWI officers in this

and the previous RM issue. The officers selected

to participate in TWI beginning the summer of

2002 are: Maj. Donald Cook, Maj. Michael

Naughton, Maj. Michael Sheaffer, Maj. Mark

Hladky, and Maj. Robert Johnson. We wish them

best of luck in this development opportunity. The

selection board for summer 2003 TWI rotation

will be held in November. Look for the application

announcement this summer or contact the

Proponency Office or Assignment Officer for

details. Additionally, Comptroller continues its

Fellowship with the Office of Management and

Budget (also piloted in 2001) based on that

programís success. We will finalize the selection

of the next officer.

Fiscal 2001 Colonels Board

The last colonel board results were released in

January. This was the Army's first board held

under Officer Personnel Management System

XXI guidelines. With a primary zone selection rate

of 30 percent, many expressed concern over the

results. Digging deeper shows that with an overall

70 percent selection opportunity, Comptroller

was one of the highest branches or functional

areas, well exceeding the Operations Career Field

(basic branches) and the Army average.

Functional Area 45 officers competed for

promotion only against other officers in the Institutional Support Career Field. There were four

separate selection panels, each looking at one of

the four career fields (Operations, Operations

Support, Institutional Support, Information Operations). The ISCF board was given a selection

target of seven Comptrollers.

The Army promotes based off Defense Officer Personnel Management Act standards, indiscriminate of year-group affiliation. Congressionally mandated DOPMA set a goal of a 50 percent

selection opportunity to colonel within each career field. DOPMA promotion opportunity is established by dividing the numbers of officers

selected in all three categories (AZ, PZ, and BZ) by

the number of officers eligible in the PZ category.

Using only the number of officers in the PZ as

the denominator is necessary, as all officers have

opportunity over all three years (assumes that year

group population remains constant as a YG moves

through the three promotion zones). Any other

equation would distort promotion opportunity.

Although overall DOPMA goals were well

exceeded, the low selection rate for Comptrollers

Above the Zone Primary Zone Below the Zone DOPMA %

Zone Sel % Zone Sel % Zone Sel % %

Comptroller 12 3 25 10 3 30 10 1 10 70

ISCF 95 12 136 71 28 39 87 1 1 58

OPCF 429 3 1 569 318 56 657 19 3 60

Armywide 648 23 4 785 423 54 909 25 3 60

Figure 1
18 First Quarter 2002

in the PZ category is of concern to some, but we

feel itís an anomaly. After discussions with G1

personnel, we determined the low PZ rate is a

simple matter of individual officer competitiveness, as the board rank orders all officers indiscriminate of their YG affiliation.

Twenty five percent of officers considered in

the AZ category were selected. When the board

rank ordered on a best-qualified basis, many AZ

officers were deemed more qualified than those in

the PZ. Itís likely that those Comptroller officers

who competed in the AZ category this year may

not have been competitive when they competed in

the PZ category last year, against former battalion

commanders and others traditionally favored on

boards under a pre-OPMS XXI board format.

Those officers were reviewed by a separate

board based solely on future potential as Comptrollers. Some were then deemed more qualified

than more junior PZ officers on this last board.

The unprecedented AZ rate may provide some

comfort to officers not selected in this year's PZ.

They have a competitive chance next year. FA 45

also had a 10 percent BZ rate, markedly exceeding

the 2.8 percent Army average.

The Comptroller selection rate would have

been higher had it not received many senior

colonels in the Career Field Designation board held

last year. This increase produced a corresponding

reduction in the number of lieutenant colonels

who could be promoted to the higher grade.

Without the increase of colonels, the minimum selection requirement sent to the board

would have been larger than the seven established

for Comptroller. The CFD process is complete for

all transition year groups, so better stability will be

reached (see article below by Maj. Brent Penny).

Stop Loss

FA 45 was included in Stop Loss #3, effective

Feb. 22. The end date of the Stop Loss is not

expected to end any time soon. Stop Loss actions

are normally maintained until the end of the

operation for which initiated, plus six months. As

the current war on terrorism is open-ended, itís

not prudent to estimate this time frame. G3

initiated the Stop Loss after commands were

unable to fill taskings for Comptrollers for the

Central Command area of responsibility.

Most FA 45 positions are one-deep, particularly at the lieutenant colonel and colonel levels,

preventing commands from meeting officer

taskings. Additionally, FA 45 had an existing

shortage of lieutenant colonels, with only 87 in the

inventory against 102 authorizations. Hopefully, a

matter which will be partially relieved by a high

promotion rate in the next board.

Another factor initiating the Stop Loss was

that the Army can not legally call up Individual

Ready Reserve Comptrollers until a Stop Loss is

initiated for that specialty on active duty. In most

cases, this wonít apply to officers being processed for involuntary administrative separation

for cause, pending legal action, facing mandatory

retirement, being processed for physical disability, etc.

The positive side of the Stop Loss, beyond

keeping qualified officers to fill critical Comptroller positions, is that it brings attention to the

criticality of our unique skills and competencies

and justification to increase FA 45 positions in

MTOE and TDA authorizations in ongoing force

structure reviews.

by Maj. Brent Penny

FA 45 Assignment Officer

The Army has structured officers in the Army

Competitive Category by grouping branches and

related functional areas into personnel management categories called Career Fields.

The four Career Fields in ACC are Operations, Operational Support, Institutional Support

and Information Operations. This initiative will

build an officer corps skilled in combined arms

operations in the joint and multinational environment and fully experienced in technical applications that support the Army's larger needs. Regardless of Career Field, all branches and functional areas in all Career Fields are found in both

ACC: Career Field Designation

the TOE and TDA Army. Under a Career Fieldbased management system, after promotion to

major, officers are managed, professionally developed, assigned and promoted according to

requirements of their branch or functional area

and career field.

FA 45 officers are designated into the Institutional Support Career Field immediately following

selection to major. Senior captains are designated

into the AAC (FA 51) earlier. The function of the

Career Field Designation Board is to meet Army

requirements by designating officers into a branch

or functional area in one of four Career Fields. The

CFDB considers the officer's preference, rater

and senior rater input, officer's experience and
First Quarter 2002 19

Basic Number Percentage

Branch Selected Selected

Air Defense 8 3 %

Adjutant General 10 4 %

Armor 16 6 %

Aviation 29 11%

Chemical 3 1 %

Engineer 10 4 %

Field Artillery 39 15%

Finance 44 17%

Infantry 40 16%

Military Intelligence 8 3 %

Military Police 11 4 %

Ordnance 7 3 %

Quartermaster 17 7 %

Signal 2 1 %

Special Forces 9 4 %

Transportation 2 1 %

TOTAL 255 100%

Figure 3

Cohort Year CFD Board Results

Group Met Released

75-79 May 01 Jun 01

80 Mar 99 May 99

81 Oct 99 Dec 99

82 Oct 00 Dec 00

83 Oct 00 Dec 00

84 Sep 01 Dec 01

85 Sep 01 Dec 01

86 Mar 99 May 99

87 Oct 99 Dec 99

88 Jun 00 Aug 00

89 Jun 99 Sep 99

90 Jun 00 Aug 00

91 May 01 Aug 01

Figure 2

the statistics are broken out by combat arms,

combat support arms and combat service support

arm that the combat arms are the biggest donor

branches to the functional area. The decreased

requirements for field grade officers and the

excess of company grade officers in the combat

arms branches accounts for the large number of

FA45 officers with combat arms basic branch

affiliation. Fifty five percent of the functional area

comes out of the CA followed by 31 percent from

CSS and only 14 percent from the CSA. See

Figure 4.

Figure 5 shows that 90 percent of officers

who selected FA45 as first preference received it.

The CFDSB forced very few officers into the

functional area as evidenced by the numbers. Only

two officers who selected FA45 as their third

preference received it and six officers who did not

select a preference received FA45.

In summary, the functional area is filled with

a cross section of highly motivated officers who

want to serve the Army as comptrollers as we

continue the transformation into the Objective

Force. Now more than ever it will take skilled

comptrollers to tackle the complex issues we will

encounter as we embark upon the 21st century.

Arm Number Percentage

Selected Selected

Combat Arms 141 55%

Combat Support Arms 34 14%

Combatt Svc Support 80 31%

Total 255 100%

Figure 4

qualifications and Army requirements. The results

of the CFDB may require a change in an officer's

functional area awarded during his or her fifth to

sixth years of service.

To date, all transition Year Groups have

completed the career field designation process.

Transition YG consisted of the more senior YG

that could not go before a CFDB after selection to

major since they were already field grade officers.

Specifically, the transition YG was officers

commissioned 1975-88. The first steady state YG

to undergo the CFDB in the sequence mentioned

above was YG 1989. Figure 2 outlines, by YG, the

dates the CFDB met and the results were released.

Note that beginning with YG89 and beyond the

CFDB was held in June almost immediately after

the major board convened.

Functional Area 45 CFD Demographics

The baseline data used to compute the CFD

statistics for FA45 includes all officers selected

within cohort YG 1975-2001 and does not include

career field transfers or appeals into or out of the

functional area. The number of officers originally

CFD'd into FA45 totals 255. The biggest donor

branch to the functional area was Finance Branch

-- 44 officers CFD'd to FA45. The two smallest

donor branches were Signal Branch and Transportation Branch who both gave up two officers.

Figure 3 gives the breakout by basic branches.

Based upon the basic branch information

above it should not come as a surprise that when

Figure 5

Preference Number Percentage

Selected Selected

1st Preference 230 90%

2nd Preference 17 7%

3rd Preference 2 1%

No Preference 6 2%

Total 255 100%
20 First Quarter 2002

Maj. Greg White

This article summarizes my observations

and experiences at United Services Automobile

Association in San Antonio participating in the

Training With Industry Program

My intent is to be as candid as possible and

encourage others to participate in the program,

while at the same time respect the organization's

confidentiality regarding specific operational

details and performance data.

Additionally, I hope to highlight some parallels or lack thereof, between USAA's financial

operations and those of the Army and Department of Defense.

TWI Orientation

My experiences in this program really began

on June 7, 2001, when the ASA FM&C Army

Comptroller Proponency Office hosted a Training With Industry Orientation for this year's five

participants.

Judging by the exceptional organization of

the briefings and the variety of well-spoken

presenters, it was difficult to imagine that we

were the first group of Army Comptrollers to go

through the program and its accompanying orientation.

Although only lasting one day, the orientation left me feeling as prepared for my future

assignment as I could ever hope to be. Two

sessions in particular were especially useful, our

meetings with the Deputy Assistant Secretary

of the Army for Budget, Maj. Gen. Jerry Sinn

and a panel of former TWI participants from

other branches and functional areas.

Sinn's comments provided us with a focus

for our future experiences. Specifically, he said

to pay attention to what drives prioritization and

resource allocation decisions, the risks that are

involved, and how these risks are articulated and

mitigated in our respective industries.

While Sinn provided the focus, the panel

provided a host of practical tips and "do's" and

"don'ts" they learned along the way. Listening to

their "war stories" about TWI gave us some

insight as to how we might be perceived by

others in the private sector and how we could

best overcome some of the inevitable stereotyping and assimilate quickly to become part of the

team.

Initial Contact, New Employee Orientation

and Corporate Culture Training

First impressions are important. It's a truism

in the Army and it's equally so at USAA. My first

contact with USAA was via e-mail from my

sponsor who would have also been my rater and

supervisor had things not worked out as they did

(more about that later).

His message was thorough and packed with

information, professional and yet very personable at the same time. It came as no surprise to

me when he revealed his background as a retired

senior military officer with a wide breadth of

experience leading organizations and developing

people.

Arriving on day one, my sponsor met me at

the main entrance to USAA's Headquarters

building and had me immediately escorted to the

new employee orientation class where I would

be fully immersed in USAA Corporate Culture

101 for the next four days.

While orientation served a variety of administrative purposes, there was little doubt that the

overriding reason we were all there was to grasp

the principles of customer service and how the

organization's unique corporate culture contributes to its ability to consistently exceed members' expectations.

The company takes a simple but effective

approach to teaching corporate culture by focusing on how the company, the employees and

its members all contribute to the continued successful operation of the company.

USAA, The Company

At the heart of the organization we find a

firmly entrenched set of core values that guides

its overall strategy and is an inherent part of its

most simple operational functions as well as its

most complex.

Never would I have imagined an organization outside of the Army so dedicated to inculcating its core values in its people, but that is exactly

what I experienced at USAA.

Training With Industry

USAA Corporate Finance Operations
First Quarter 2002 21

Figure 1

Figure 1 highlights the

point that USAA has

molded itself with a value

set that is not unlike that of

the armed forces. In so doing, they are better able to

deliver service to their customers in a manner that embodies the spirit of these

core values.

The result has been the

establishment of an intensely

loyal membership base, recognition as one of America's

most admired companies

and a 79-year history of

being the military's insurance and financial services

provider of choice.

USAA, The

Employees

Corporate culture instruction also entailed a focus on the YOU

aspect of the organization. As such, we spent a

significant amount of time working on communication skills, participating in self-awareness practical exercises and team building exercises.

Although many of us would liked to have

believed our "people skills" were advanced and

well conditioned, it was soon apparent that the

group dynamics exercises were having a way of

bringing out the best and worst in all of us.

While training does contribute to the quality

of employees, it is noteworthy to mention that

most new hires are exceptional people to begin

with and have already endured a rigorous prehire screening process before ever attending

day one of orientation.

USAA takes great pride in attracting, hiring

and retaining the highest quality applicants available.

The payoff has come in the form of unmatched customer service, employee commitment and ultimately a thriving diversified insurance and financial services company.

USAA, The Members

Members make up the third segment of

corporate culture education for new hires at

USAA. The company is special for a variety of

reasons, one of which is the unique population it

serves- the professional men and women of the

armed forces.

A moving and in-depth video presentation

on the lives of service men and women and what

they do and who they are, made everyone in the

class that much more proud of their new employer and the class of customer they serve.

I remembered thinking at the time about

how even those new hires in the room who had

never served, probably now felt an inextricable

link to our armed forces.

USAA's approach to developing new hires

is simple: Educate employees about the role of

the military, the unique challenges its members

face and the critical role employees play in

preserving and protecting quality of life and

financial security for the military community.

Coming out of the final day of orientation, I

knew we had all been the recipients of a sizable

investment in the company's time and resources.

Corporate culture training achieved its designed

purpose and answered some fundamental questions:

ï Who are we?

ï What's the mission?

ï How do we treat each other?

ï Who do we serve?

ï Why is it important?
22 First Quarter 2002

Just as important as the educational and

motivational aspects of orientation, the company

also clearly articulated its expectations of its

new people. In the end, I think most came away

from the experience inspired to do their best and

were proud of their new role in serving those that

serve the nation.

Orientation left no doubt that USAA is as

committed to its workforce as it is to its customers.

Positioning For The Future

USAA is a remarkable, unique and high

performing company in many ways, but that

does not make it immune from economic

conditions or financial

performance fundamentals. In spite of Federal Reserve Chair

Alan Greenspan's efforts to stimulate the

economy through interest rate cuts and President Bush's tax cut initiatives, the economy

at the time of this writing was still officially in

the midst of a significant recession.

If there was ever any doubt that poor economic performance was widespread, those

doubts vanished when I learned that my intended

supervisor/sponsor was no longer with the company.

His release, along with that of several hundred others across the company, was part of a

major restructuring effort aimed at improving

the financial performance of USAA.

The bottom line was that the prosperous

1990s led to the creation of an environment

where excessive overhead and unnecessary or

sub-optimized processes were unwittingly permitted to flourish.

The effects were now impacting the profitability of the company and proving to be a

potential obstacle to the organization's future

growth and stability.

Considering the additional pressures of an

intensely competitive insurance and financial

services industry, and a lackluster economic

outlook for the U.S. economy, it was apparent

that immediate action was required.

While it was disheartening to witness, I

could not help but appreciate the speed, agility

and even sensitivity demonstrated by USAA as

it restructured itself.

I also began to see some parallels between

USAA's predicament and that of the Army. Just

as USAA must increase capital to finance its

growth, likewise the Army understands that

modernizing the force comes with substantial

capital requirements as well.

In USAA's case, part of the bill payer will be

people, but more significantly, the efficiencies derived from improved processes and

the ability to leverage

the benefits of applied

technologies will enhance their ability to

achieve their performance objectives and

ultimately grow its assets.

In the Army's

case, the bill payer for

modernization may be

in part, people as well, although the events of

Sept. 11 seemed to have at least temporarily

sidetracked that course of action.

In all likelihood, the Army, just like USAA,

will have to invest in the design and implementation of better systems and processes. Additionally, in both organizations tough, risk weighted

decisions must be made in order to preserve the

quality of these products, whether they be finance and insurance services or national defense.

Often, though, such decisions are the impetus for inevitable change, change to organization

structure, function and strategy. Recognizing

change is consistently part of the environment

we operate in; thoughtful and prudent planning is

required.

Strategic and Operational

Financial Planning

If you don't know where you're going, why

make the journey? Resources are limited; customer expectations are high; time is short and the

Any other private sector

business would be paralyzed

and on life support if it neglected

this aspect of its financial

maintenance. Other competitors

in the marketplace would easily

and quite rightly take advantage

of the situation and exploit

it to their fullest.
First Quarter 2002 23

future is uncertain. The question illustrates the

reason world-class organizations, such as USAA,

invest heartily in strategic and operational planning.

My first assignment at USAA was with

Corporate Financial Reporting Planning and

Analysis. This element leads the near and long

term financial planning,

budgeting and performance evaluation efforts for the organization.

At the time of this

writing, we were nearing the completion of the

Operational Planning

Process, which sets performance objectives for

the next two years.

Rather than discuss the

myriad details of the process itself, I think it's

more important to understand how USAA intends to achieve and maintain their desired

operating state.

The CEO, Robert Davis, is a strong advocate for balancing USAA's three pillars of

strength and illustrates his point by using this

graphic featuring a three-legged stool in many of

his presentations.

USAA's leadership considers the

organization's strength to be derived from three

main sources: Members, Employees and Financial Strength.

These elements, when evenly arrayed, provide a firm, steady and balanced base for the

organization.

Similarly, when one or two legs of the stool

become over- or underdeveloped, the result is an

unbalanced, weakened platform, ill equipped for

its purpose.

Overall, the planning function at USAA

provides the roadmap for maintaining a wellbalanced organization supported by its unique

and valuable members, loyal and dedicated employees and substantial financial strength. The

operational plan approved for the next two years

does exactly that.

Accounting and Reporting

Once the operational planning process is

completed, USAA faces the unenviable task of

producing the annual financial statements.

This time of year differs from the public

sector in ways too numerous to mention; however, there are some predictable similarities.

They come in the form of detail-oriented work,

demanding time lines and a sense of overwhelming relief when the work is finished.

My role with the company was rapidly changing as I transitioned from

the planning and analysis

mode to the data and details driven world of financial statement production.

Again, my purpose is

not to attempt to describe

the way USAA closes its

books each year and how

it produces clean,

auditable financial statements, but to maybe

shed some light on why they are able to do so and

the DoD continues to struggle.

The Right Attitude, Not Just

Another Necessary Evil

Producing meaningful financials at USAA

and probably most other major organizations and

businesses goes far beyond the mindset of meeting a requirement or just "checking the block."

Without question, there are a number of

purposes served in generating the statements,

but most important, I think audited financial

statements provide a product that validates the

credibility and worthiness of the institution it

reflects.

While DoD might agree with this notion,

they also know that they are far less likely to

suffer any devastating consequences for not

producing an auditable financial statement.

Any other private sector business would be

paralyzed and on life support if it neglected this

aspect of its financial maintenance. Other competitors in the marketplace would easily and

quite rightly take advantage of the situation and

exploit it to their fullest.

Of course, DoD faces no such direct competitive threat or opposition other than the occasional congressional blast. A good example is a

comment made by Sen. Robert Byrd during

Secretary of Defense Donald Rumsfeld's con-
24 First Quarter 2002

firmation hearing:

ìHow can we seriously consider a $50

billion increase in the Defense Department's

budget when the DoD's own auditors say the

department can't account for $2.3 trillion in

transactions?î he asked.

With audited financials, the DoD might be in

a position to better refute such remarks.

The Right Tools

USAA has always invested in technology to

improve its business practices. Unlike DoD,

however, USAA

knows that it is just as

important to have the

best management tools

in place as it is to have

the best product on the

market.

For too long, DoD

has sought out the most

efficient battlefield

technologies at the

expense of superior financial management

tools and people.

Most Americans

are advocates for a strong defense, especially in

light of Sept. 11, but to stay strong and become

more capable during times of peace means

winning a sustained series of battles for taxpayer

dollars, a battle we are much more likely to win

if we have the right financial management tools

in place to help us support future $50 billion

requests and more.

Depth and Talent

From the CFO to the secretaries, USAA's

financial departments are brimming with talent,

including the Accounting and Reporting function

which is loaded with Certified Public Accountants and several others with major accounting

firm experience.

How can DoD attract and retain the best

and brightest for its financial community? I think

Dov S. Zakheim, Undersecretary of Defense

and DoDís CFO, may be on the right track when

he says that the difficulty in attracting finance

talent is yet another reason why financial management reform is so important.

He believes that if you get the government

to act more like business, you're more likely to

The bottom line is that

USAA produces auditable

financial statements because

their competitive and statutory

environments demand it; they

have the right tools that leverage

technology, and from top to

bottom effective, skilled and

experienced leadership to get

the job done.

attract finance talent from the private sector. He

also thinks business school graduates avoid the

public sector because their skills don't apply

there. In other words the perception (reality?) is

that the government is far from operating like a

business.

The bottom line is that USAA produces

auditable financial statements because their competitive and statutory environments demand it.

They have the right tools that leverage technology, and from top to bottom, they have effective,

skilled and experienced leadership to get

the job done.

DoD, on the other

hand, has a seemingly

toothless CFO Act

driving the process,

operates in a competition free environment

and is weighted down

by mixed bag of nonstandard, disjointed financial systems and

processes.

Making auditable

financial statements a reality in DoD requires

commitment in the form of dollars to invest in the

right architecture, enforced repercussions for

failure and strong leadership by DoD and military services.

Summary

Coming on board at USAA when I did has

given me a unique perspective into what other

organizations experience, sacrifice and risk in

order to accomplish a mission while maintaining

their desired operating state.

While my assignment is only half-way completed, I feel comfortable saying that future

Comptroller TWI participants will come away

from their experiences here with a renewed

sense of enthusiasm and commitment toward

improving all aspects of their organizations' performance.

About the Author

Maj. Greg White is one of five FA 45 officers

participating in the initial year of the functional area's Training With Industry or TWI

program, in his case with United Services

Automobile Association.
First Quarter 2002 25

(Editorís note: For an explanation of terms,

check the Glossary at the end of the article.)

by Maj. David Merrill Cannon

"You're in the Army; how did you get this

job?"

That is a question I answered often when I

first arrived at The Boeing Company as a participant in the Training With Industry Program.

Many folks were curious as to why the

Army would have an officer who ëgrew upí in

the Corps of Engineers working exclusively with

private industry. If you're wondering the same,

the TWI program allows the Army to expose

soldiers to the latest civilian business practices,

organizational structures and cultures, technology development processes and corporate management techniques.

Upon selection for the Training With Industry Program, I began asking myself, "What

practices will I bring back to the Army and

USACE?"

After being immersed in the corporate culture for just a couple of months, one practice

immediately emerged: Earned Value Management. I studied how Boeing was employing

EVM and the benefits it provided their resource

management and program management communities and thought EVM would be useful in

managing military construction projects.

Basically, EVM considers the amount of

work a company accomplished and provides an

objective measurement of that work. Using the

earned value process, members of management

can readily compare how much work has actually been completed against the amount of work

planned to be accomplished.

Earned Value requires the project manager

to plan, budget and schedule the authorized work

scope in a time-phased plan. The time phased

plan is the incremental "planned value" culminating into a performance measurement baseline.

As work is accomplished, it is "earned" using

the same selected budget term. Earned Value

compared with planned value provides a work

accomplished against plan. A variance to the

plan is noted as a schedule or cost deviation.

Earned value management is one of the

Boeing Company's 15 Best Practices, and Boeing

uses EVM for program management, or PM, of

all military contracts and many commercial contracts. They use EVM for both cost-plus and

fixed-price contracts ranging in price from several million dollars to several billion dollars. Both

the RM and PM communities use EVM to

assess a project's health, with the RM community processing and analyzing the data for the

PM community.

The PM can make timely, conscious and

informed decisions because EV facilitates both

a trend analysis of past performance and a

predictive analysis of future effort. Earned value

provides a mutual, beneficial management tool

to all members of the project delivery team.

Boeing defines Earned Value as a management technique that integrates work scope,

schedules and resource planning to meet the

technical, schedule and cost requirements. All

work is planned, budgeted and scheduled in

time-phased "planned value" increments constituting a cost and schedule performance measurement baseline. Boeing also lists two major

objectives for its earned value system:

ï To encourage program management to use

effective internal cost and schedule management control systems for decision making

ï To provide timely, accurate data produced

by those systems, to meet schedule and the

lowest practical cost.

Work, time and money, earned value answers the questions of performance planning

and management by integrating our considerations of these variables. By planning and managing work-time-money together, earned value

is the only management methodology that accomplishes this integration, and is the only approach to project management that recognizes

and accommodates the natural and necessary

relationships among work, time, and money.

Managing money (over time) with a financial management system ignores work. Managing work (over time) with a network analysis

system ignores money. Earned value performance management ties them together and

ignores neither work, nor time, nor money. Now,

Training with Industry

Earned value at Boeing and Corps of Engineers
26 First Quarter 2002

letís look at how USACE uses EVM in an

application much different from Boeingís.

USACE reviews an organization's Total

Labor Multiplier, Supervisory and Administrative rate, and Cost Management Factor to determine organizational health and considers percentage of work complete and percentage of

funds expended as an indicator of project health.

These are valid metrics; however, they

provide only a two-dimensional glimpse at project

health because they consider only the dimensions of work and money and overlook the third

dimension of time. A management tool that

relates all three dimensions: placement (work),

schedule (time), and money would be a more

objective measure.

This would allow management to identify

trends and issues early and would better illuminate the entire contract. In Earned Value Management, the USACE can find such a tool that

permits a true three-dimensional look at performance by providing an integrated analysis of

work, time, and money. Indeed the USACE has

recognized this and has posted listings on their

PM Website (http://www.pmcl.com/pmwd/

EVPM/default.htm).

Currently, Engineer Districts measure organizational performance by examining Supervisor

and Administrative percentage earned on a

particular project and the associated

organization's total labor multiplier.

For example, the desired S&A rate for

military construction is 5.7 percent and Construction Division's TLM is 2.33; if you are

meeting those rates the perception

may be that the organization is

healthy. However, these measures

do not necessarily reflect contractor performance or project health.

Examining only the USACE

project health metrics of percent

work complete and percent spent

would not necessarily provide information on whether we would

complete the project on time. Additionally, these metrics, by themselves, are fairly shallow and provide a rudimentary analysis of

project health.

For example, if we award a one

year, $10 million contract for a 100-room barracks, how far along is the contractor at month

six when he has completed 42 rooms and received $6 million?

If we consider percent work complete, the

answer is 42 percent (42 rooms/100 rooms) and

if we consider percent spent, the answer is 60

percent ($6 million/$10 million); we could even

consider time and say 50 percent (six months/12

months). Is this information sufficient to manage

the project?

Management could receive a more objective assessment by assessing all Earned Value

criteria. For the example above, if the contractor

provides an estimate of $100,000 per room, then

the percent complete is 42 percent [(42 rooms *

$100,000)/$10 million].

To complement percent complete we would

also want to examine the schedule variance --

the delta between work scheduled and work

performed. Schedule variance is equal to the

budgeted cost of work performed minus the

budgeted cost of work scheduled.

If the contractor were to build 54 rooms by

month six, his schedule variance would be $1.2

million. We get this by taking the budgeted cost

(42 rooms * $100,000 = $4.2 million) and then

subtracting the scheduled cost (54 rooms *

$100,000): $4.2 million - $5.4 million = -$1.2million. See figure 1.

So, where are we? We are 42 percent

complete and behind schedule by $1.2 million.

Management could get an even better picture by examining the cost variance. They would

Figure 1
First Quarter 2002 27

get this by subtracting the actual costs of work

performed from the BCWP. From our example,

the contractor received $6 million so the cost

variance is $1.8 million ($4.2 - $6 million).

Consideration of all Earned Value metrics

will provide an even better picture of what to

expect in the future and allow management to

make better, conscious, and informed decisions.

Some additional EVM metrics are:

CPI = BCWP/ACWP

$4.2m/$6m = 70%

SPI = BCWP/BCWS

$4.2m/$5.4m = 78%

% Spent = ACWP(CUM) /EAC

$6m/14.286m = 42%

TCPI = (BAC-BCWP(CUM))/

(BAC-ACWP(CUM))

($10m-$4.2m)/($10m-$6m) = 145%

VAC = BAC-EAC

$10m-$14.285m-$4.285m

EAC = ACWP+ETC

$6m+$8.286m = $14.286m

Management would realize that the contractor would need to perform at 145 percent of

his current effort to complete the project within

budget; or, at the current level of effort, he would

need an additional $4.3 million to complete the

project.

This would be very useful information for

the PDT and would greatly enhance their ability

to manage the project better. The earned value

management process also allows the PDT to

better describe what has been done and what

needs to be done to complete the project.

EVM really provides management with a

three-dimensional look at a project's health and

the contractor's performance. Earned Value

Management will allow the RM, PM, and all

members of the PDT to gain insight into whether

the project will finish on time and on budget. It

allows management to identify positive and negative trends early, which helps to minimize greatly

cost and schedule growth.

Earned Value Management System benefits include establishing a standard disciplined

process for authorizing work, budgeting, scheduling, and taking performance; establishing visibility to planned work and budgets; measuring

work accomplished against actual costs; integrating cost an schedule for roll-up reporting;

providing an early identification of cost and

schedule problems; and improving performance

forecasting.

Earned value management is a tool that

allows both government and contractor program

managers to have visibility into technical, cost,

and schedule progress on their contracts.

The implementation of an earned value

management system is a recognized function of

program management. It ensures that cost,

schedule, and technical aspects of the contract

are truly integrated. Earned Value Management

is a tool worth using to manage military construction.

It provides a three-dimensional look at performance and facilitates quality management of

a project vice merely statistical reporting.

If you would like an opportunity to ëdo what

you do bestí with private industry, apply for

TWI. All you will need is a resume and a letter

of recommendation along with two DA Forms:

1618 (Application for Detail as Officer Student

at a Civilian educational Institution or at Training

With Industry) and 4187 (Personnel Action).

About the Author

Maj. David Merrill Cannon is one of five

FA 45 officers participating in the initial year

of the functional area's Training With Industry or TWI program, in his case with The

Boeing Company, Military Aircraft and Missile Systems.

Glossary

Actual Cost: Costs actually incurred for specific work

accomplished and recorded in the accounting system. Actual cost is recorded in the accounting system

as labor hours and dollars.

Actual Cost of Work Performed (ACWP): A term

used to identify actual cost and/or estimated actual

cost in most earned value management systems.

Budget: Resources (measured in either labor hours or

dollars) authorized for the accomplishment of a task.

Budget at Completion (BAC): The sum of all budgets

established for the program.

Budgeted Cost For Work Performed (BCWP): The

sum of the budgets for completed work packages and

completed portions of open work packages, plus the

applicable portion of the budgets for level of effort

and apportioned effort. The terms Budgeted Cost For

Work Performed and Earned Value are synonyms.

Budgeted Cost For Work Scheduled (BCWS): The

sum of the budgets for all work packages, planning

packages, etc., scheduled to be accomplished, plus

amount of level of effort and apportioned effort
28 First Quarter 2002

scheduled to be accomplished within a given period.

Comprehensive Estimate At Completion: An estimate, of the total projected cost of a program based

on actual cost to date plus the best estimate of the cost

for all remaining authorized work.

Cost Performance Index (CPI): A relative percentage

indicator of cost efficiency determined by dividing

BCWP by ACWP. Values greater than 1.0 indicate

efficiency is greater than planned (e.g., CPI = 1.3

indicates work has been accomplished 30% more

efficiently than budgeted). Values less than 1.0 indicate efficiency is less than planned (e.g., CPI = .80

indicates work has been accomplished 20% less

efficiently than budgeted).

Cost Performance Report (CPR): A monthly report

submitted to the customer containing summary data

from the EVMS data integration system. The CPR has

five formats, which provide cost and schedule information by 1) product (work breakdown structure); 2)-

contractor organization; 3)-baseline information; 4)-

forecast versus actual staffing usage; and 5)-problem

analysis. It is always required by contracts with full

EVMS Criteria and may be requested on non-EVMS

Criteria contracts.

Cost Variance (CV): A measure of cost position at a

point in time. The difference between earned value for

work accomplished and actual costs for work accomplished (CV = earned value - actual cost). Positive

values for cost variance indicate accomplishment for

less cost than budgeted and negative values indicate

accomplishment for more cost than budgeted.

Earned Value: The value of work completed determined by the amount budgeted for that work. The

terms Earned Value and Budgeted Cost for Work

Performed are synonymous.

Earned Value Management System (EVMS): The

integrated policies, procedures, and processes by

which programs will authorize work, integrate schedule and budget requirements, and evaluate and report

program cost and schedule performance against a

baseline plan of operation.

Estimate At Completion (EAC): Actual cost to date

plus the best estimate of costs for authorized work

remaining to be accomplished. The EAC is expressed

in dollars or man-hours and developed to represent a

realistic appraisal of the final cost of a defined increment of work. EAC is synonymous with Latest Revised Estimate (LRE).

Estimate To Complete (ETC): The best estimate

expressed in hours or dollars developed to represent

a realistic appraisal of the cost of authorized work

remaining to be accomplished to complete a task, or

tasks. The estimate considers actual performance

achieved to date and expected future conditions.

Funding: Funding represents actual dollars available

to spend in accomplishing a program effort. Funds are

normally released by the customer on a fiscal year or

other periodic basis. Actual release of funds is frequently on an incremental basis within the fiscal year.

Management Reserve (MR): An amount of the total

allocated budget withheld for management control

purposes rather than designated for the accomplishment of a specific task or set of tasks. MR is budget

for internal scope changes within the program statement of work (SOW), production rate changes, differences in cost when effort is transferred from one

operating organization to another at unequal anticipated costs, and other work scope changes. It can not

be used to budget overruns in control accounts nor

can it be increased by transferring budget from control accounts experiencing underruns. MR is not part

of the performance measurement baseline.

Percent Complete: The ratio between the budget for

work accomplished and the budget for total work to

be accomplished. Earned value divided by total budget.

Schedule Performance Index (SPI): A relative percentage indicator of schedule efficiency determined

by dividing BCWP by BCWS. A value greater than 1.0

indicates efficiency better than planned (e.g., SPI = 1.3

indicates 30% more work has been accomplished than

was budgeted). A value less than 1.0 indicates that

schedule efficiency is less than planned (e.g., SPI = .80

indicates 20% less work has been accomplished than

budgeted).

Schedule Variance (SV): An indicator of equivalent

schedule position. It is the difference between the

budget for the work accomplished and the budget for

the work scheduled (SV = earned value - budget).

Negative values indicate a behind schedule condition and positive values indicate an ahead of schedule condition.

Statement of Work (SOW): A description of the

tasks and actions to be accomplished to satisfy the

terms and conditions of a contract.

To Complete Performance Index - Budget (TCPI-B):

The relative efficiency at which all future work must

be performed in order to complete the authorized work

within the budget at completion.

To Complete Performance Index - Estimate (TCPI-E

or TCPI): The relative efficiency at which all future

work must be performed in order to complete at the

projected estimate at completion.

Variance At Completion (VAC): A measure of the

cost position at completion. It is the difference between the budget at completion and the estimate at

completion. Positive values indicate an underrun and

negative values indicate an overrun.
First Quarter 2002 29

PERSPECTIVES

OFFICE, ASSISTANT SECRETARY OFTHE ARMY

(FINANCIAL MANAGEMENT & COMPTROLLER)

The following sections were written by different OASA(FM&C) deputies.

Not every deputy will provide input for this feature.

by Robert W. Young

Deputy for Cost Analysis

Yes, Cost Analysis IS for everyone -- at

least for everyone in the CP 11 Comptroller

Career Program.

All Comptroller personnel, including budget

analysts, program analysts, financial analysts,

accountants and auditors

should have some formal

education and some practical experience in cost

analysis.

Introductory education and experience in cost

analysis are good for the

Army and the careerist,

and they maintain the close

Comptroller-Acquisition

and Technology

Workforce (A&TW) relationship.

I'll discuss each of these points and then tell

you how to get the cost analysis training you may

have missed- or maybe, avoided. The Defense

Acquisition University has launched a couple of

cost analysis courses that are suitable for nearly

everyone in CP 11.

First, cost analysis training is good for the

Army. Comptroller personnel who participate in

cost analysis and other complementary training

become well-rounded careerists who can perform well in various jobs.

Multi-Disciplined Financial Analysts, personnel with training and experience in several

Comptroller Program career fields, provide

workforce flexibility and raise the level of professionalism of the workforce.

They can adjust to changes in requirements,

missions and workload caused by situations like

crises, emergencies, political adjustments and

workforce rightsizing. The roadmap for enhancing comptroller professional development, as

envisioned in the ASA(FM&C) strategic plan, is

outlined in the Army's Comptroller Accreditation Program Handbook.

The accreditation matrix listed in the latest

edition of the handbook

shows that cost analysis

courses and performance

enhancing job experiences

are required only for cost

analysts, but it provides

opportunities for employees in other comptroller

career fields to receive

complementary training

(such as cost analysis)

from other career fields.

The handbook is accessible online at http://

www.asafm.army.mil/proponency/acpo.asp.

Second, cost analysis training is good for

you. Introductory cost analysis training, particularly when reinforced with a cost analysis performance enhancing job experience, will make

you a better budget analyst, program analyst,

accountant or auditor.

The statistical tools, methodologies and analytical techniques used by cost analysts directly

relate to other comptroller tasks like budget

formulation, "POM" development and program

audits.

Careerists who have a broad range of technical and human skills, training and experience

can best adapt to new challenges. In recent

years, as the workforce has decreased, we have

had to adapt to performing a broader scope of

tasks and duties.

Is Cost Analysis for everyone?

Multi-Disciplined Financial

Analysts, personnel with

training and experience

in several Comptroller

Program career fields,

provide workforce flexibility

and raise the level of

professionalism of the

workforce.
30 First Quarter 2002

For example, a budget analyst accustomed

to working procurement appropriation issues,

suddenly finds herself matrixed to a recapitalization task force, analyzing total ownership costs;

or an operations and support cost analyst finds

himself detailed to a program manager's office

to prepare P-Forms and R-Forms in support of

the president's budget.

Often, when budget analysts, cost analysts,

program analysts, accountants and other CP 11

careerists are asked to

perform special projects,

they have little or no time

to learn new skills and

are expected to perform

as Comptroller generalists.

At times like these,

having attended courses

like the two new DAU

cost analysis courses can

make the difference between an on-the-spot

award and failing to

complete the project.

Finally, cost analysis is good for the cooperative, mutually beneficial relationship that has

evolved between the CP 11 Comptroller Career

Program and A&TW.

While implementing the Defense Acquisition Workforce Improvement Act to improve

the professionalism of acquisition personnel, the

Office of the Secretary of Defense and the

Services created several ìfunctional areasî that

require certification at three levels.

The "Business, Cost Estimating, and Financial Management" functional area has formal

education and professional development experience certification requirements similar to those

of the Comptroller Accreditation Program.

BCEFM functional managers acknowledge

the value of providing all BCEFM personnel cost

analysis training through the DAU.

Originally, all DAU cost analysis training

was designed for cost analysts, but recently, the

BCEFM functional advisory group approved

modifications to the introductory cost analysis

course and the creation of an Operations and

Support Cost Estimating course.

These changes may be the forerunners of

other Comptroller and BCEFM cooperative initiatives. They certainly should make cost analysis more student friendly and desirable for acquisition workforce and CP 11 personnel alike.

I've tried to provide some reasons why you

should consider attending a cost analysis course

and for trying a performance enhancing job

experience, but if you are like many other folks,

you probably have heard horror stories about

students failing cost analysis courses because

they didn't know calculus.

While it is true that cost analysis courses are

ìrealî math courses with ìrealî tests or application exercises, few people have failed any of

them, and high school algebra is the highest

mathematics required.

In the following paragraphs, I will describe

some alternatives for acquiring introductory cost

analysis skills.

The DAU, based at Fort Belvoir, Virginia is

the first, and preferred, source of cost analysis

training for new Army cost analysts.

 The university provides a full range of

A&TW certification training courses, offered

throughout the year at several facilities and onsite at Service installations.

Non-A&TW members can attend courses

on a space available basis and usually find seats

after a try or two.

The university developed two new introductory level courses suitable for a wide range of

A&TW and Comptroller personnel: BCF 101,

Fundamentals of Cost Analysis, required for

A&TW personnel seeking BCEFM certification, has been shortened from three to two

weeks.

Novice cost analysts and Comptroller generalists with high school algebra can readily

complete the course.

Students who complete the course gain a

significantly enhanced understanding of how life

cycle cost estimates are prepared, how they

relate to acquisition policies and procedures, and

how they relate to the Planning, Programming,

Perspectives

While it is true that cost

analysis courses are ìrealî

math courses with ìrealî

tests or application exercises,

few people have failed any

of them, and high school

algebra is the highest mathematics required
First Quarter 2002 31

Perspectives

Budgeting & Execution System.

BCF 215, on the other hand, is a totally new

course, designed as an "assignment specific"

course for anyone working in the operations and

support arena.

Students who complete this course gain an

enhanced understanding of the linkage between

O&S cost estimating and O&M budgeting, software maintenance costs, total ownership costs,

trade-off and economic analysis studies, and

related subjects.

Both courses not only fulfill BCEFM or jobrelated requirements, but also fulfill Comptroller

Accreditation requirements for either analysis

course training credit or continuing education

credit. Both courses will be available to nonA&TW personnel on a space available basis.

Are these new courses exciting?

The BCEFM and Comptroller students who

attended both pilot courses in October and November 2001 found them to be -- well, maybe not

exactly exciting -- but very enlightening, useful,

challenging, well-designed, comprehensive, fulfilling, and career broadening, just to name a few

adjectives.

The DAU courses and application procedures are described in the links provided in the

Acquisition Education, Training & Experience

catalog: http://dacm.rdaisa.army.mil/

Comptroller personnel who are not in the

A&TW may apply for cost analysis and other

DAU courses at the same web site that A&TW

personnel use: https://www.atrrs.army.mil/channels/aitas/.

There is no tuition cost for Comptroller

personnel, but if TDY is involved, the student's

organization must fund the travel expenses.

A complaint often heard is ìUnless you're

DAWIA (acquisition workforce) you can't get

in those acquisition courses.î

Indeed, Components are assigned quotas.

Quotas are in effect until 45 days before the

course is offered.

If there isn't a reservation against a quota by

then, it is released and open to anyone. So if you

tried to register for a course and were unable to

secure a seat, try again within the ì45 day

window.î

If the DAU does not have enough available

seats for you to attend one of these cost analysis

courses when it is convenient for you, there are

some other ways to obtain cost analysis training.

The U.S. Department of Agriculture Graduate School offers a variety of financial management, acquisition, statistics, and other business

courses, including cost analysis and activity

based costing. For more information about these

courses in one of their course catalogs or on the

USDA website: http://www.grad.usda.gov/.

Other sources of introductory cost analysis

training include the Professional Resource Management Course offered through the Comptroller Proponency Office and conducted by Syracuse University, and courses offered at various

colleges and universities.

You may obtain information about these,

and other, Comptroller professional development opportunities from the Comptroller

Proponency Office website: http://

www.asafm.army.mil/proponency/acpo.asp.

The Proponency Office can provide information

about central funding that may be available for

some of these opportunities.

Although formal classroom training is the

best way to learn the fundamentals of cost

analysis and to receive accreditation credit, you

can learn the essentials of cost analysis, economic analysis, and managerial and activity

based costing by teaching yourself. We provide

the Department of the Army Cost Analysis

Manual, the Department of the Army Economic

Analysis Manual, and a tutorial on Managerial

and Activity Based Costing on the CEAC web

site: http://www.ceac.army.mil/.

I encourage you to pursue your Comptroller

accreditation training and experiences as outlined on your Individual Development Plan (IDP),

but when you and your supervisor next update

your IDP, please consider adding one of these

new cost analysis courses.

You will make yourself a better Comptroller

and you will make yourself more valuable to the

Army. See if you don't agree that Cost Analysis

IS for everyone!
32 First Quarter 2002

Perspectives

by Dr. Robert W. Raynsford

In a previous issue, I addressed the new

Enhanced Use Leasing Authority, approved in

Public Law 106-398, National Defense Authorization Act for FY 2001, that amends Title 10

United Stated Code, Section 2667. The new

authority provides additional tools for managing

our real estate assets. The major improvements:

ï Allow the use of cash proceeds from leases

without specific authorization, (except congressional notification and wait for projects greater

than $500,000), for:

~ Maintenance, protection, alteration,

repair, improvement, or restoration (including environmental restoration) of property

or facilities;

~ Construction or acquisition of new

facilities;

~ Lease of facilities; and

~ Facilities operation and support.

ï Clarify that in-kind consideration may be

applied at any military installation and that it may

include the following:

~ Maintenance, protection, alteration,

repair, improvement, or restoration (including environmental restoration) of any

property or facilities;

~ Construction of new facilities;

~ Provision of facilities;

~ Facilities operation and support; and

~ Provision of such services relating to

activities that will occur on the leased property.

I am now happy to report that the Army and

Fort Sam Houston initiated a pilot project under

the new Enhanced Leasing Authority.

The Army selected Roy F. Weston, Inc. as

their private sector partner.

The principal goals of the project are to

preserve more than 500,000 square feet of

space in the historic Old Brooke Army Medical

Center and Beach Pavilion, find uses for the

property that are compatible with the requirements and mission of Fort Sam Houston, maintain positive relations with the community, successfully integrate development activities with

cultural resources and environmental policy, and

employ the best commercial practices to the

benefit of both the Army and the partner. Under

the pilot project, Fort Sam Houston, Weston, and

the Army Corps of Engineers created a business

and leasing plan for the property. The plan

included a strategy for rehabilitating the property, an approach for financing the project, and

a proposed methodology for distributing the

financial return from the project to the partner

and Army.

The highlights are: $43.6 million renovation

of the property, lease term of 50 years with

renewal options, and Army receipt of about 46

percent of the net revenue from the project or an

estimated $250 million, primarily as in-kind services. HQDA approved the business and leasing

plan in April 2001. A lease was signed for the

property in June 2001.

The property is currently being marketed.

We are confident the pilot project will be a major

success and a win-win situation for both the

Army and the partner.

Several other projects using the Enhanced

Use Lease Authority are underway.

Fort Leonard Wood entered into an agreement with the University of Missouri Systems in

September 2001 to develop a business park for

joint use. Picatinny Arsenal selected Weston as

their partner to develop four historical properties. The Army wants to expand its use of this

authority to gain private sector investment in

projects that will assist in accomplishing the

Army mission and provide added services for

our soldiers.

The Army also wants to increase the number traditional, smaller, single facility leases

under Section 2667. Guidance on the Enhanced

Use Lease Authority can be found at http://

www.hqda.army.mil/acsimweb/

hottopic117.shtml.

Guidance on 2667 authority can be found at

www.asafm.army.mil/rabp/info/SOP-gd/

sog.doc.

Enhanced Use Leasing Authority
First Quarter 2002 33

Professional Development

Office of the Administrative Assistant to the Secretary of the Army

Resource Services Recognition Ceremony -- March 11, 2002

Exerpt of remarks by Robert L. Jaworski

Director, Resource Services - Washington

Today is a day of recognition and reward, a

day to express gratitude, a day to give honor and

take pride, a day of reassurance. It is also a day for

ourselves and the Army resource management

family. Thank you for participating in our ceremony today, the 6-month anniversary of the

attack on the Pentagon.

September 11th changed America and all of

our lives in countless ways. It caused us to focus

more intently on our lives and what was important

in them. It even changed a term of hope and safety

(911) to a term of helplessness and tragedy

symbolized by a date that will be indelibly etched

in our memory.

The events that day broadened our understanding of the word "hero". Heroes in our lives

now include the 34 friends and colleagues who

lost their lives on that day, while at work in the

Pentagon, serving the Army and their country.

They were parents and relatives, brothers and

sisters, aunts and uncles, true professionals who

paid the ultimate price. Although they are not here

with us today, their memories are and will forever

remain with us.

Let me now recognize three individuals who

I feel are the unsung heroes of 911. Juan CruzSantiago, Louise Kurtz and Sheila Moody paid a

price that no one should have to bear. We admire

their courage and determination in the long and

painful process of recovery and that of their

families as they continue to progress in their return

to health. Sheila Moody is back at work full-time

and is present today. Juan and Louise are continuing to recover and were among the distinguished

guests at the White House earlier this week. They

are never far away in our thoughts and in our

prayers. And while we recognize the professional

and personal achievements of Juan, Louise and

Sheila, it is our affection that provides a sense of

recognition so richly deserved.

September 11 produced another group of

heroes. These individuals came from many different organizations and from many different places

around the country. They are military and civilian,

current employees, alumni, retirees and volunteers. These are the heroes who helped rebuild a

shattered organization. Joining together virtually

overnight, they formed a resource management

team whose accomplishments rival that of many

in existence for years. It is truly magnificent to see

that kind of team and teamwork in action, and it is

truly an honor to have been associated with it. It

is amazing what can be accomplished when a

sense of urgency is coupled with the spirit of

volunteerism and a "can do" attitude. That is the

true meaning of a professional resource management team. Their courage, competence and commitment are what we recognize.

Our own rebuilding process has been a slow

and often times painful one. It has taken us from

many emotional lows to a sense of pride and

accomplishment from numerous successes, both

big and small. It has taken us from a position of

virtually no remaining documents through a process where our customers helped to rebuild our

institutional memory. It took us from a room of

empty chairs to one where we need additional

space to house our analysts and accountants of

tomorrow.

Over time, fewer and fewer issues will be

exceptions, and more will become normal. It has

exacted a physical and emotional price as we

proceed on the journey, but one that we have paid

and gladly continue to pay.

Today's celebration is one that reflects the

past but more importantly focuses on the future.

It clearly is one of mixed emotions, fond memories of the past and those who were part of it,

coupled with optimism as we build the Resource

Services-Washington of the future.

The bricks and mortar of the Pentagon's

physical structure are rapidly being rebuilt, and

you have only to drive past the heliport side of the

building to see an entirely new facade. The psychological rebuild of Resource Services-Washington will take considerably longer, but with the

continued assistance of the many organizations

and individuals we recognize today, we continue

on our march to success.

As we rebuild the Resource Services - Wash-
34 First Quarter 2002

Defense of Freedom

Medal

Sheila Moody

Meritorious Civilian

Service Award

Anna Butler

Shirley Freelon

Superior Civilian

Service Award

Juanita Galbreath

Peter Langevin

Cynthia Shufflebarger

Commanders Award

for Civilian Service

Sonia Smith

Legion of Merit Award

Maj. Sean Hannah

Maj. Gordon Weed

Special Acts Award

(pending approval)

Santosh Arora

Anna Butler

Joanne Bryant

Shirley Freelon

Juanita Galbreath

Peter Langevin

Sandra Stillerman

Cynthia Shufflebarger

Distinguished Administrative Assistant

Award

Michael Cox

Melissa Herr

Roger Lee

Debbera Mendyk

Meritorious Administrative Assistant

Award

James Auchter

Moteshia Batts

Michael Bush

Inara Carey

Lora Clayborne

Yolanda Coe

Ronald Coleman

Dwight Fortune

Sam Friedman

Mary Galoci

Andy Guerrero

Roberta Jones

Barbara Kennedy

Donna Lawrence

Robert Leary

Col. James Leonard

Richard Malloy

William McDonald

Cynthia McElroy

Audrey Nelson

John Olson

Ursula Owens

Jeffrey Rubin

Audrey Schneider

Claude Thomas

Larry Thompson

Richard Wong

IIAC Staff - Charles

Colello and Brenda

Lyons

Iron Mike from Fort

Bragg RM Community

Sheila Moody

Cert. of Appreciation

with Army Commemorative Coin

Janet Borden

Nancy Boyd

Shirley Brown

Yolanda Burslie

Carolyn Debose

Ophelia Fair

Tom Fournier

Adham Hemdan

Charito Homoroc

Sherry Land

Quentlin Martin

Earl Nicks

Cheryl Reed

Cert. of Appreciation

Violet Griffin

Bettie Hargrove-Smith

Maggie O'Brien

Raquel Peterkin

Darlene Wright

Kuen M. Yu

Army Commemorative Coin

Lea Anderson

Roy Anderson

Santosh Arora

James Auchter

David Babineau

Motesia Batts

Rosalind Brevard

Joanne Bryant

Michael Bush

Anna Butler

Lucinda Clifford

Gayle Cooper

Juan Cruz

Tonya Easton

Shirley Freelon

Juanita Galbreath

Mary Galoci

Andy Guerrero

Maj. Sean Hannah

Melissa Herr

Karen Heinz

Carrie Horne

Patricia Johnson

Roberta Jones

Barbara Kennedy

Betty Kilday

Louise Kurtz

Peter Langevin

William McDonald

Donald Montgomery

Sheila Moody

Audrea Nelson

John Olson

Ursula Owens

Aino Pulles

Maj. William D. Price

Jeffrey Rubin

Cynthia Shufflebarger

Sonia Smith

Sandra Stillerman

Claude Thomas

Tony Turner

Sharon Weaver

Maj. Gordon Weed

Peggy Welter

Emma Williams

Joan Wilson

Richard Wong

Dianne Yancey

Antoinette Young

Secretary of the

Army Coin

Lea Anderson

Santosh Arora

James Auchter

Moteshia Batts

Nancy Boyd

Shirley Brown

Joanne Bryant

Yolanda Burslie

Michael Bush

Anna Butler

Carolyn Debose

Ophelia Fair

Shirley Freelon

Juanita Galbreath

Mary Galoci

Andy Guerrero

Maj. Sean Hannah

Adham Hemdan

Charito Homoroc

Robert L. Jaworski

Roberta Jones

Barbara Kennedy

Peter Langevin

Richard Malloy

Quentlin Martin

William McDonald

Audrey Nelson

Earl Nicks

John Olson

Ursula Owens

Cheryl Reed

Jeffrey Rubin

Cynthia Shufflebarger

Sonia Smith

Sandra Stillerman

Claude Thomas

Sharon Weaver

Maj. Gordon Weed

Richard Wong

ASA I&E Letter of

Appreciation

With ASA I&E Coin

Shirley Freelon

Juanita Galbreath

Maj. Sean Hannah

Earl Nicks

Sandra Stillerman

Sharon Weaver

Maj. Gordon Weed

Honorary Awards

Previously Presented

Defense of Freedom

Medal

Juan Cruz

Louise Kurtz

Meritorious Civilian

Service Award

Lea Anderson

Santosh Arora

Joanne Bryant

Robert L. Jaworski

Sharon Weaver

Superior Civilian

Service Award

Sandra Stillerman

Meritorious Service

Medal

Maj. William D. Price

ington of the future, we reverently remember our

departed colleagues. The faces have changed but

the spirit is alive and well. From tragedy and

adversity will come greatness. We will succeed,

we cannot be denied. Congratulations and thank

you to each of you!

Professional Development
First Quarter 2002 35

Professional Development

Professional Resource

Management Course

The Professional Resource Management

Course sponsored by the U.S. Army and conducted at Syracuse University has been incrementally implementing changes to ensure that

the curriculum meets the current and future

needs of resource management.

The purpose of the course is to provide midlevel military and civilian resource/financial managers a broad perspective of resource management.

The course is divided into three general

areas: the resource management environment;

budget and cost analysis; and accounting and

finance.

The core competencies of the Certified

Defense Financial Management Program are

addressed and applied to resource/financial

management. The course emphasizes the management of resource/financial management.

Students are required to actively participate in

discussion of key topics in business of managing

resources and managing the people and processes that enable the resources to be managed.

The implications of personnel management,

single stock fund, outsourcing, multi-disciplined

financial analyst, certification, OPMS XXI, auditing, accounting, finance, Activity Based Costing/Management, program and budget modeling, GPRA, working capital fund management,

CONOPS, management controls, and Business

Initiative Council initiatives are discussed.

In addition to seminars on PPBES, students

participate in simulations that involve federal

budget prioritization, congressional processes,

and decrements.

PPBES is examined not only from a process

perspective, but also from an interpersonal, crossfunctional, and organizational view. Students are

asked to both analyze data and to determine how

to market the results of the analysis to decisionmakers at various levels of the organization.

Throughout these simulations, consensus building is stressed -- both the difficulty and the

necessity of achieving it.

In addition to the seminars and simulations,

HQ Department of the Army, MACOM, installation and DFAS guest speakers add their operational perspective to financial/resource management processes and challenges. Emphasis is

placed on HQDA and MACOM lecturers.

In today's uncertain, volatile, ambiguous and

complex environment, PRMC is designed to

provide professional resource managers a 'box

of tools' to successfully operate.

PRMC is offered three times a year (fall,

winter and spring); it is one month in length; and

open to civilians (GS 11-13, with waiver to GS 9),

active and reserve military officers (major &

lieutenant colonel, with waiver to captain) and

enlisted (sergeant major, with waiver to master

sergeant). Graduates of the Army Comptrollership Program can attend three years after graduation. For info about PRMC, hotel accomodations,

see the end of the article on the Army Comptroller Course following.

Below is a list of recent PRMC graduates:

PRMC Class 01-II

Sarah M. Ankum OSC

James G. Auchter HQDA

Michael T. Barkett TRADOC

Melinda S. Bothe TRADOC

Paul H. Bringhurst USAAMCOM

Charles E. Cahill OSC

Pilar A. Camacho USARSO

Annie E. Choudhry INSCOM

Richard J. Coleman AAA

William S. DeCook EUSA

Gary M. Duncan EUSA

Gail S. Floyd USACE

Michael H. Garcia NGB

Aubrey Frank Hall AMC

Hardy, Stephen L. USASOC

Kathryn A. Herhusky HQ USAREUR

Barbara L. Jay USAREUR, 104th ASG

Aletha A. Lampkin SBCCOM

Howson Lau USARPAC

Ryan F. McCauley TRADOC

Patricia V. Nickell FORSCOM

Dane H. Owens USACE

Clifford L. Patterson, Jr. HQDA

Charles R. Pittman AAA

Margie R. Robinson MDW

Donna M. Rosen USMA

Margaret B. Rush FORSCOM

Donna J. Sargeant EUCOM

Forte' D. Ward EUSA

PRMC Class 01-III

Angela L. Amadeo ATEC
36 First Quarter 2002

Army Comptroller Course

The Army Comptroller Course is sponsored

by the U.S. Army and conducted at Syracuse

University. The purpose of ACC is to provide a

basic multi- disciplined financial and resource

management overview to officers newly assigned to the Comptroller Career field, Department of Army interns in the financial management career fields and to other personnel without a multi-disciplined background. The course

blends current DoD/Army management and the

latest in financial management techniques. It

provides graduates the ability to operate within

the current environment and give them the skills

necessary to be effective and efficient.

Students are required to actively participate

in discussion of key topics in the business of

managing resources and managing the people

and processes that enable the resources to be

managed. The implications of the personnel

management, single stock fund, fiscal law,

outsourcing, multi-disciplined financial analyst,

certification, OPMS XXI, Activity Based Costing/Management, program and budget modeling, working capital fund management, internal

controls, conflict resolution, team building, CFO,

and efficiencies are discussed.

In addition to seminars on PPBES, students

participate in simulations involving: budget and

fiscal controls, and DA installation prioritization.

PPBES is examined not only from a process

perspective, but also from an interpersonal, crossfunctional, and organizational view. Throughout

these simulations, consensus building is stressed

- both the difficulty and the necessity of achieving it.

In addition to the seminars and simulations,

speakers from HQ Department of the Army,

MACOM, installation and DFAS expose the

students to their operational perspective on financial/resource management processes and

challenges. Emphasis is placed on installation

speakers.

ACC is designed to provide entry-level professional resource managers a set of skills to

successfully operate in today's uncertain, volatile, ambiguous and complex environment

David Apodaca MEDCOM

Audrey L. Brown AAA

Vincent M. Brown USAPAC

Donald M. Cook USASOC

Florence A. Dewitt FORSCOM

Michael O. Ebiala USAREUR

Ophelia Fair HQDA

Beverly Ferguson AMC

Dolores R. Gahres AMC

Susan E. Goshea USAREUR

Jeffrey W. Green EUSA

Vicki J. Halley USACE

Lauren E. Hensley FORSCOM

Lillie Jackson-Carter INSCOM

Robert T. Jennings TRADOC

Sandra K. Johnson USASOC

Lelia Jones MEDCOM

Gregory L. Lucas INSCOM

Kathy J. Mansell MDW

Melvin C. Merritt MTMC

Chong In Paek EUSA

Benjamin F. Porter, III AMC

Jesus S. Reyes USACE

Gladys Dianne Robinson USAREUR

Vincent L. Small AAA

Joseph J. Vignali HQDA

Marlu Villarosa EUSA

Florian Mark Webster FORSCOM

PRMC Class 02-I

Shirley A. Allen FORSCOM

Daniel D. Berry DFAS

Karen Brackens TRADOC

Linda H. Brooks USACE

Brown-Thurman, Roberta USAREUR

Linda Bruneau EUCOM

Hang M. Chong EUSA

Sung A. Chung EUSA

Renate Damiano TRADOC

Violeta L. Din-Stover USARPAC

Judith A. Ericksen USAREUR

Michael A. Harris EUSA

Forest D. Haynes INSCOM

Gayle Helms TRADOC

Jerre S. Hubley MEDCOM

Bella R. Ibanez MEDCOM

Stephen J. Leonard FORSCOM

Charles R. Mason AMC

Helen J. McNeil FORSCOM

Carolyn M. Peterson AMC

Jeffrey T. Petty USACE

Renee F. Robinson FORSCOM

Mellie S. Rudzinski USAREUR

Beverly J. Smith FORSCOM

June K. Valdez USAREUR

Dwight D. Watkins HQDA

Robert W. Williamson USARPAC

Chong Yoi Yi EUSA

Professional Development
First Quarter 2002 37

ACC is offered three times a year (one

winter course and two summer courses); it is

one month in length; and open to civilians (GS 7-

12, with waiver to GS 5), active and reserve

military officers (captains and majors) and enlisted (master sergeant and sergeant first class)

Graduates of the Army Comptroller Course can

attend the Professional Resource Management

Course or the Army Comptrollership Program.

ACC and PRMC students are housed at the

Marriott Residence Inn, an extended stay hotel.

Each room consists of a kitchenette, living room

and sleeping area. The hotel has a classroom,

veranda for breakfast and lunch, exercise room,

indoor/outdoor swimming pool, and laundry facilities.

The Army Programs staff will help students

take fullest advantage of the resources at Syracuse University and provide classroom resources

to support the teaching assignments during the

program.

All accommodations are provided as singleoccupancy; any special needs should be requested prior to arrival. All breakfast and lunch

meals are provided at the Residence Inn Monday-Friday. All dinner and weekend meals are

the responsibility of the participant.

The hotel offers a free grocery delivery

service; guests pay only for the cost of groceries. Additionally, there are several restaurants

within walking distance of the hotel.

Below is a list of recent ACC graduates:

ACC Class 01-II

Eric C. Anderson USASOC

Luvenia S. Baker TRADOC

Jason Berry HQDA

John A. Cano USAREC

James E. Davis SHAPE

Christopher C. Dixon ATEC

John P. Farrell TRADOC

Chafik H. Fattouh USCENTCOM

Anthony A. Gilliam TRADOC

Amelia D. Harris USAREUR

Nicole M. Haydon TRADOC

Mary A. Henley TRADOC

Lynn S. Hughes MEDCOM

Peggy M. Kammen HQDA

David A. Kirby INSCOM

Brooke A. Larrabee HQ USARC

Peggy M. Merrell HQDA

Maria Pangelinan HQDA

Professional Development

Thelma Ponce AMC

Tomothy E. Prince USAREUR

William H. Ridenour TRADOC

Ira V. Smallwood AAA

Nancy M. Torres FORSCOM

Jacqueline A. Williams TRADOC

Robert J. Young OCAR

ACC Class 01-III

Chong-Nan An EUSA

Joel J. Atkins, Jr. USACE

Jacquelyn Connor FORSCOM

J. Denise Contreras-Williams AMC

Dorotherine Eaddy USACE

Annette Ford AR PERSCOM

Robert A. Golden AMC

Veronica M. Gonzalez AMC

Yvonna C. Guillory TRADOC

William A. Guptill AR PERSCOM

James Jack IV AAA

Gerri D. Jones FORSCOM

Kevin Keipp TRADOC

Walter M. Magruder FORSCOM

James P. Massa TRICARE

John W. Matthews III USARPAC

Sean D. McDonald USAREUR

Arie J. McSherry TRADOC

Hyon-Hui So EUSA

Tonya D. Spriggs AAA

Douglas L. Stratton MEDCOM

Jeffrey P. Weber USAREUR

Army Comptrollership

Program gives two degrees

The Assistant Secretary of the Army (Financial Management and Comptroller) and Syracuse University's School of Management and

Maxwell School of Citizenship and Public Affairs have developed a joint degree program to

replace the current Army Comptrollership

Programís Master of Business Administration

curriculum.

The goals of the new program are to provide

students essential tools of private and public

sector business practices and the ability to analyze and develop public policy. With the Department of Defense efforts to improve the efficiency and effective of its business practices

and processes, both skill sets are considered

essential.

The new ACP will provide essential educational skills for financial managers to assist the

Army's leadership in making the hard resource

decisions to transition the Army to a more
38 First Quarter 2002

efficient and effective organization.

Sandra Pack, Assistant Secretary of the

Army (Financial Management and Comptroller), approved the new program in January, and

the Class of 2003 will begin the new curriculum

in June. The new curriculum is 60 credit hours

that students will complete in 14 months.

Graduates will receive masterís degrees in

business and public administration. Students will

take 42 credits at the School of Management and

18 credits at the Maxwell School.

The School of Management's MBA program will consist of the following courses: Economics, Data Analysis, Management Information Systems, Financial Accounting, Marketing

Management, Strategic Human Resources, Operations Management, Activity Based Costing/

Management, Business Strategy, Business Law,

Entrepreneurship, and Comptrollership.

The Maxwell School's Master of Arts in

Public Administration, or MAPA, program will

include: Mid-Career Seminar: Managerial Leadership, Dispute Resolution for Public Managers,

National Security, Public Budgeting, Public Administration & Law, and a master's project. In

addition to the academic program, all students

will train for and take the Certified Defense

Financial Manager examination. Students will

also be required to participate in 24 hours of

community service.

The following is a breakout of the degree

programs for the 2002-2003 academic year,

with graduate semester hours or credits shown

in parentheses:

First Quarter -- Summer '02: 12 Credits

ï Orientation (1 Week w/ Math Camp)

ï ECON 604 - Economics for Managers (3)

ï MBC 638- Data Analysis (3)

ï MIS 646 - Management Information Systems

(3)

ï PPA 730 - Dispute Resolution for Public

Managers (3)

Second Quarter -- Fall '02: 15 Credits

ï MBC600 - Financial Accounting (3)

ï MBC 600 - Marketing Management (3)

ï MBC 600 - Strategic Human Resource Management (3)

ï PPA 706 - National Security Policy (3)

ï PPA 734 - Public Budgeting (3)

Winter '02/'03:

ï PPA 742- Public Administration & Law (3)

Third Quarter -- Spring '03: 18 Credits

ï MBC 600 - Operations Management (3)

ï ACC 600 - Activity Based Costing (3)

ï MBC 600 - Business Strategy (3)

ï MBC 633 - Managerial Finance (3)

ï MBC 600 - Business Law & Natural Environment (3)

ï PPA 895 - Mid-Career Seminar: Managerial

Leadership (3)

Fourth Quarter -- Summer '03: 12 Credits

ï MBC 600 - Entrepreneurship Project (3)

ï BUA 786 - Seminar in Comptrollership &

CDFM (3)

ï BUA 787 - Seminar in Resource Management

(3)

ï PPA 996 - Master's Project (3)

Professional Development

Army Management Staff

College 2001 graduates

Class SBLM01-1

Regina R. Adams USACE

Corlis J. Alexander MEDCOM

Cynthia R. Arnold USAREUR

Kathy J. Ash FORSCOM

Glenn L. Blondin TRADOC

Ronald L. Bowman EUSA

Leslie L. Christensen USARSO

Rodney R. Furby EUSA

George W. Hall NGB

Michael E. Hanson USAREUR

L. Lisa Hughes NGB

Deborah A. Manner HQDA

Krystal L. Nienaber HQDA

Leonard M. Pazur AMC

John G. Raisigel USAREUR

Linda M. Rosser SMDC

Dennis S. Taylor HQDA/AAA

Faith H. Teitelbaum AMC

Class SBLM01-3

Geraldine B. Anthony FORSCOM

Kevin J. Cunnion AMC

Justine M. Landrum HQDA

Vanessa T. Lee AAA

Angela M. Lewis AMC

Sylvester Lindsey FORSCOM

Martin E. Schroeder USAREUR

Yolonda L. Smith AMC

John J. Vietor AAA

Evelyn Wong-Herrmann USAREUR
First Quarter 2002 39

Professional Development

by Elizabeth Robinson

(Editorís note: On the cover are members of

last Augustís graduating class, including Elizabeth Robinson.)

First, I would like to thank my classmates

for selecting me as the Tosh award recipient.

While pondering what I would say today,

many thoughts came to mind.

I remember the class coming together to

help someone, the fear of forgetting an assignment and suffering

consequences for not

making the best use of

my time.

I consider the education I received at

Syracuse University to

be well rounded because learning took

place during all those

times.

The professors at this august institution

ensured that there was a lot, and I do mean a

lot, of book learning, but there were many

lessons that the books did not cover. I would

like to share some of those lessons with you

today.

ï Lesson I:

If the only voice I hear is mine, I have

ceased to learn.

ï Lesson II:

My ideas are not always the best ideas,

but if I don't listen to others, those ideas will

remain mysteries.

ï Lesson III:

A good leader was once a good follower.

ï Lesson IV:

Everyone has a role to play, and to ignore

or belittle anyone's role hinders us all.

ï Lesson V:

Decisions cannot be made in a vacuum

because even the most seemingly benign

decision can affect the lives of many.

ï Lesson VI:

Pick your battles carefully, but after you

pick them stand firm regardless of the consequences, because those battles define who

you are.

ï Lesson VII:

As you climb the ladder to success, be

kind to those you pass, because they will be

the same people who determine whether you

continue to climb that

ladder or you fall from

it.

For the Class of

2002, I leave these

thoughts.

The Army Comptrollership Program is

challenging but rewarding.

You will need each

other, so make it a point to bond, and leave out

no one.

Competition in a group setting is beneficial only when it motivates the other group

members to achieve their maximum potential.

Lastly, Syracuse University provides

more than book learning if you get out and

experience what Syracuse and the surrounding areas have to offer.

In conclusion, I would like to thank Col.

David Berg and the faculty of Syracuse

University for giving us the tools we need to

make a positive impact on the Army.

Class of 2001, go forth, do good, and let's

keep in touch. Thank You.

About the Author

Elizabeth Robinson is an auditor with

the Army Audit Agency. She received the

David E. Tosh Award for teamwork, high

standards, selflessness and compassion.

Commencement remarks:

Tosh award recipient discusses lessons learned

Pick your battles carefully,

but after you pick them stand

firm regardless of the

consequences, because those

battles define who you are.
DFAS- Indianapolis

Corporate Communications

Resource Management

Professional development bulletin

(ISSN 0893-1828)

Attn: DFAS-IN/DDC

8899 E. 56th St.

Indianapolis, IN 46249-0150

PIN: 0773580 000 1

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