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UNCLASSIFIED

UNCLASSIFIED

Commander, Navy Installations Command Commander, Navy Installations Command Financial Management Process Financial Management Process

ImprovementsImprovements

Presentation to:American Society of Military Comptrollers - Washington Chapter

Mr. Ric Voigt, CNIC ComptrollerAugust 17, 2011

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PurposePurpose

Provide an overview of the depth/breadth of Commander, Navy Installations Command (CNIC)

Present CNIC N8’s approach to process improvement and development of standardized, repeatable and auditable financial management processes

Demonstrate ProcessQuik, our online process document repository

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Commander’s GuidanceCommander’s Guidance

Mission:

Deliver effective and efficient readiness from the shore

Vision:

Be the sole provider of shore capability, to sustain the Fleet, enable the Fighter, and support the Family

Guiding Principles

Collaborate through teamworkPractice transparency Deliver best value to our customersBe accountable Develop our peopleEmbrace changeImprove continuallyFoster innovation

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Navy Shore Domain TodayNavy Shore Domain Today

JOINT REGIONJOINT REGIONMARIANASMARIANAS

SWA MERGED SWA MERGED WITH CNRE WITH CNRE DEC 2008 TO DEC 2008 TO FORMFORMEURAFSWAEURAFSWA

63.3K pers.: military 24.1K, civilians 34.6K, KTRs 4.6K

13 Flags / 7 SES Direct Reports

$135B PRV (Structures, Utilities)31.6K Bldgs, 24.7K Structures, 13.1K Utilities

$12B resources (appropriations, NAF) - FY10 @ 9/30/10

POPULATION SERVED328K Active Duty65K Active Reserves (SELRES)425K Family Members575K Navy Retirees

11 Regions…72 Bases…1.9 Million Acres125 Runways… 358 Piers/Wharves…$135B Plant Replacement Value

$12B Resources: Fortune 200 in Size

11 Regions…72 Bases…1.9 Million Acres125 Runways… 358 Piers/Wharves…$135B Plant Replacement Value

$12B Resources: Fortune 200 in Size

5/9/11

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Shore FactsShore Facts

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Shore Readiness Funding ProfileShore Readiness Funding Profile

Primary drivers of increased requirements: Energy, Joint Basing, Child Care, and Collateral Equipment

$- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000

FY08 FY09 FY10 FY11 FY12Baseline (OMN and OMNR) Suplemental Housing Reimburse BRAC Other ARRA

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CNIC N8’s Process Improvement LandscapeCNIC N8’s Process Improvement Landscape

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MIC(Risk Management

Tool)

FIP(Auditability Tool)

ProcessQuik(Documentation

Tool)

LSS(Analysis Tool)

Driver: OUSD(C), CNIC N8, CNIC IG

Scope: Identify, document, and test Managers’ Internal Control points

Approach: Process owners develop MIC Plans to assess internal controls on an annual basis

Driver: FMO

Scope: Identify, document, and test financial internal control points for key end-to-end CNIC N8 financial management processes

Approach: Process discovery and validation, SBR Segment Control Testing, Business Segment Analysis, and Financial Impact Statement

Driver: CNIC N8

Scope: High level re-engineering of key end-to-end CNIC financial management processes (current focus is on HQ)

Approach: Conduct As-Is &To-Be focus groups to re-engineer processes, identify risks & control points, post products to ProcessQuik, develop & implement process change plans & internal controls test plans

Driver: ASN, CMO, CNIC N8

Scope: Targeted improvement for specific portions or steps within key end-to-end CNIC N8 financial management processes

Approach: Value Stream mapping & analysis, develop & execute Improvement plan using scalable DMAIC processes

Process ImprovementsContinuous Process

Improvement Board (CPIB)Implement

Process Improvements

Controls

Continuous Process Improvement

Results

Auditability/SBR Standardization Operational

Efficiency Statement of

Assurance Testing Results and

Command-level FIP progress reports

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ProcessQuikProcessQuik

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ProcessQuik is:– An online central repository that houses CNIC N8’s standardized process information– Accessible to CNIC employees enterprise-wide via CNIC’s Portal– A SharePoint application

ProcessQuik provides:– Interactive process documentation eliminating the need to update paper-based processes or

procedure binders– Standard forms and templates in one repository– A standardized method for training staff– A mechanism for continuous process improvement and encourages employee involvement– One location for internal controls information– Desk guides and Standard Operating Procedures that support transactional level activities

Each posted process includes:

– A process narrative that contains: a process definition, timeline of key events, SIPOC model, outline of roles and responsibilities of each process performer, and links to applicable systems / desk guides / rules / policies / regulations

– An interactive, MS Visio process map diagram that contains: process steps with control points indicated, “clickable” details behind each process step to include descriptions of the control activity, links to test plans, and links to applicable systems/desk guides/rules/policies/regulations

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CNIC N8’s Reengineering MethodologyCNIC N8’s Reengineering Methodology

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ScopeScope Document Current StateDocument Current State Design Future StateDesign Future State Validate Re-Engineered ProcessValidate Re-Engineered Process

Implement the New ProcessImplement the New Process

Determine the Scopeof the Process

Conduct Focus Groupsto Capture the As-Is

Process

Conduct Focus Groups to Re-engineer the

Process

Assess To-Be Process, Define Controls, and

Validate

ManageImplementation

Define the scope of the process (purpose of process, boundaries, process performers, stakeholders)

Collect relevant documentation (instructions, policies, existing process maps, etc.)

Conduct collaborative interviews/focus groups with Subject Matter Experts (SMEs) to:

– Define the process (definition, SIPOC model, process measures)

– Develop As-Is process map and dictionary (if needed)

– Identify process improvement opportunities

Evaluate and select process improvements

Conduct collaborative focus groups with SMEs to:

– Develop To-Be process maps, dictionaries, and narratives

– Document process change items

Obtain buy-in and approval from leadership on the re-engineered process

Define measurement criteria

Conduct collaborative risk assessment on To-Be Process from an internal controls perspective

Integrate MIC internal controls; add additional controls if needed

Develop process change implementation plan

Develop control test plans

Establish deployment approach and address process impacts

Post to ProcessQuik

Create Educational briefing for Process Owners to educate staff on process changes

Deliver Training

Complete Implementation Items

Rollout new policies/procedures

Test controls & document results

Conduct CPIB meetings to ensure processes are operating effectively, internal controls are being tested, and process documentation is current

Leadership, Process Owner, and Subject Matter Expert involvementLeadership, Process Owner, and Subject Matter Expert involvement

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CNIC N8’s Maturing Process CNIC N8’s Maturing Process Improvement Effort: 2008-2010Improvement Effort: 2008-2010

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2011:

– Expanded to the Regions, now doing enterprise-wide process improvement

– Employed the integrated approach to reengineer three additional processes

– Developed and implemented a holistic strategy to prepare CNIC to attain auditability of Statement of Budgetary Resources (SBR) by the end of CY12

• Matured the MIC Program

• Are incorporating FMO FIP controls and MIC controls into our processes

• Are developing transactional-level SOPs and Desk Guides

• Are developing an Internal Controls and Testing Page on the ProcessQuik site

• Began to explore financial control points with CNIC’s supplying partners (NAVFAC, etc.)

– Established the CPIB to provide governance of process improvement/standardization efforts and ensure integration of FIP/MIC program requirements

– Implemented an improved Civilian Labor budgeting process

• Used actual execution data as basis for projecting requirements to derive the budget (pricing, etc.) from actual accounting data at the Installation and Program level

– Began aligning ProcessQuik with workforce development initiatives

CNIC N8’s Maturing Process CNIC N8’s Maturing Process Improvement Effort: 2011Improvement Effort: 2011

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Leadership & Workforce InvolvementLeadership & Workforce Involvement

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Live Demonstration of ProcessQuikLive Demonstration of ProcessQuik

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ProcessQuik is accessed from the “Tools Menu” found on the CNIC Portal homepage under

“My Workspace”

ProcessQuik is found under the “Accounting and Financial” section of

the Tools page

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Reimbursable ManagementReimbursable Management

FY06 Roles and responsibilities were defined, but process was not standardized

FY06-FY08 FIP effort expanded scope to include Grantor side; however, a lot of effort spent in “discovery” with minimal effort to reengineer process

FY08-FY09 Audit Findings required CNIC to include mechanisms to validate reimbursables against Interservice Support Agreements (ISA’s) and Memorandums of Understanding (MOU’s)

FY11 CNIC N8 integrated efforts of BPR, LSS, FIP and MIC into one consolidated approach; recent guidance to attain auditability has been included

FY11 FMO issued a “system agnostic” version of reimbursable processes (pure process steps without specifics like STARS-FL or ERP); CNIC N8 ensured alignment

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Overview of ChangesOverview of Changes

Incoming Reimbursable Management Process (RWO-P)

Outgoing Reimbursable Management Process (RWO-G)

Old New

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Integration of FIP and MIC ControlsIntegration of FIP and MIC Controls

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Outgoing Reimbursable Process Map

Internal Controls Template

Internal Controls and Testing Page on ProcessQuik

Process Dictionary

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Key DiscoveriesKey Discoveries

Started out as more of a Lean Six Sigma approach to improve processes, but then learned that it is an excellent vehicle to document internal controls for FIP and MIC auditability

Robust vehicle to discover process improvements and to document standardized processes across the enterprise

Bringing all of the SMEs together enhances communications and improves each group member’s understanding of the entire process, not just their piece while building camaraderie amongst the participants

Integrates the FIP and MIC with improved financial management processes

Clarifies and documents the path toward auditability

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Way ForwardWay Forward

Achieve auditability of Statement of Budgetary Resources

Continue to reengineer and standardize processes enterprise-wide in coordination with Region N8s

Provide our employees with new workforce development tools and resources

Continue to promote the use of ProcessQuik throughout the Command