June 1, 2017

Office of the Under Secretary of Defense (Comptroller)

Office of the Deputy Chief Financial Officer

DAI Success with

Shared Services PPBE

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OUSD(C) Business Integration Office (BIO)

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BIO’s Mission Statement

DoD Financial Management community lead for creating and sustaining

modern, effective, and cost conscience financial management

processes, data, systems, policies, and work-force.

$5.2 BillionCost of FM Line of Business

270FM IT Systems

2,000 +Point to Point Interfaces

BIO’s Alignment to DoD FM Vision & Goals

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GOAL 1 – Achieve audit

readiness and sustain an

auditable business

environment

GOAL 2 – Enhance and

implement financial policies

and processes to improve,

standardize, and simplify the

FM business and systems

environment

GOAL 3 – Develop and

maintain a well-trained

financial workforce that

has the knowledge, skills,

and abilities to provide

decision support and

analysis as well as achieve

and sustain an auditable

business environment

GOAL 4 – Develop a

standardized PPBE

process that enables end-

to-end (E2E) funds

traceability and data

linkage between planning,

budgeting, and execution

BIO

BIO’s mission best aligns with Goal 2

DoD’s FM Vision

To achieve a DoD FM environment that is standard,

simplified, affordable, auditable and secure

FM Strategy Framework = Improved

Decision Making and Business Outcomes

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• OMB A-123

• FISCAM

• SSAE-16

• MICP

• OMB A-136

• FFMIA

• P2P

• SFIS

• USSGL

• IGT

• SV-8 (reduce legacy systems)

• ERPs

• GEX

Data standards improve decision making, information

reliability, and make for a more interoperable environment

Agenda

• DAI Overview

• Implementation of DAI

• PPBE and DAI

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Problem Statement

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• Congress has consistently criticized DoD for

its inability to produce auditable financial

statements - the largest Federal Agency unable to produce

auditable statements

• DAI supports two major solutions for audit

readiness:– Financial Improvement and Audit Readiness (FIAR) – drives

process standardization, creation of internal controls, and a support

framework that is system agnostic

– Enterprise Resource Planning (ERP) Systems – drive integrated

financial management processes and deliver full visibility to financial

data, with key reporting and reconciliation tools to support audits

Sec. 1005. FINANCIAL MANAGEMENT

TRANSFORMATION INITIATIVE FOR THE

DEFENSE AGENCIES

(b) Purposes – The purpose of the initiative shall

be as follows.

(1) To eliminate or replace financial

management systems of the Defense

Agencies that are duplicative, redundant, or

fail to comply with the standards set forth in

subsection (d).

(2) To transform the budget, finance, and

accounting operations of the Defense

Agencies to enable the Defense Agencies to

achieve accurate and reliable financial

information needed to support financial

accountability and effective and efficient

management decisions.

FY 2008 NDAA, 110th Congress

Mission:

To transform the budget, finance, and accounting operations of the Defense Agencies to

achieve accurate and reliable financial information in support of financial accountability

and effective and efficient decision making throughout the Defense Agencies in support

of the missions of the warfighter. Common business processes are: procure to pay; order

to cash; acquire to retire; budget to report; cost accounting; time and labor. Full

deployment capability will include budget formulation; grants financial management; and

re-sale accounting.

DAI Strategic Alignment Capability Heat Map

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Strategic Initiative Capabilities Next Step

Universe of

Transactions

• 98% of DAI general ledger details are reconciled to

the Unadjusted Trial Balance

• Feeder recons and financial statement recons

available

• Automate the QDD as interface that can

be sent via GEX

FBWT – Cash

Accountability

• Deployed USU on direct treasury disbursing (DTD) • Schedule remaining Agencies to DTD

• Foreign currency DTD will be available

summer timeframe

SFIS/SLOA/USSGL

Compliance

• DAI is over 95% compliant with SFIS/USSGL

• SLOA complaint (P2P and O2C)

• Finish JITC assessment and review

results for any SCRs

Property • Implemented DPAS at 5 Agencies • Tririga implementation

• Review future capability needs (e.g.

calculate depreciation in DAI)

Audit/IT Controls • DAI received a qualified SSAE-16 opinion with low

risk findings

• Implemented GRC

• Continue audits

• Further roll out GRC capabilities

Journal Vouchers • < 3% of journal vouchers input into DAI • Tracking recommendations from JV

working group

Cost Management • Implemented cost management structure for all DAI

agencies

• DCMO is creating cost management

framework. May impact DAI Agencies

PPBE Standards • Implemented P2P handshakes 1, 3, 4, 7 & 8

• Implemented budget formulation at DSS and DCMA

• Further capabilities around additional

appropriations and exhibits

• Deploy additional Agencies

Funds Distribution • Complies with USSGL funds distribution posting logic • EFD

Aligned Moderately Aligned Not Aligned

DAI Capabilities

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Budget to Report (B2R)• Enter funds from Treasury• Allocate funds to organizations• DWFC• Update general ledger• Update reports

Order to Cash (O2C)• Set up agreements• Collect cost and calculate bill• DWCF• Billing and collection• Update general ledger• Update reports

Procure to Pay (P2P)• Create commitment• Create obligation• Perform receipt & acceptance• DWCF• Update general ledger• Update reports• Advanced Procurement System• Contract Lifecycle Management• Direct Treasury Disbursing

Acquire to Retire (A2R)• Define asset• Determine in service date• Determine depreciation• Update general ledger• CIP Reporting• Update reports• Retirement of asset

Cost Management (CM) (Cost Accounting)

• Collection of all costs such as: Activity Based Cost, Job Order Number, Process costs and Standard costs

• Allocation of indirect costs• DWCF• Update general ledger • Update reports

Hire to Retire (H2R) (Time and Labor only)

• Automated individual or timekeeper input into system

• Time allocation for Cost Accounting purposes• Automatic generation of time cards• Automated Absence Management

Proposal to Reward (P2R) (Grants Financial Management)

• Award a Grant• Apportion and allotment funding• Track and close grant• Oversight and reporting

Budget Formulation(additional B2R process capabilities)

• Develop budget for out year and POM

• Support forecasting, and “what if” scenarios

• Generate required documents

Re-Sales Accounting (DeCA Unique)• Non-Appropriated Fund FFMIA requirements• Perform accounting for the DECA inventory and any other

Agencies that have inventory for sale

Legend: BEA E2E Business ProcessesIncrement 2 Business ProcessesDelivered capabilitiesIncrement 2 capabilities

Initial General Fund Capability

Telecom

Working Capital of Revolving Funds

Order to

Cash

Procureto

Pay

Acquire to

Retire

Time &

LaborRe-sale Accounting

GrantsFinancial Management

Budget Formulation

CostAccounting

Initial General Fund

and Defense Working

Capital Fund (DWCF)

Capabilities

Budget to

Report

Agenda

• DAI Overview

• Implementation of DAI

• PPBE and DAI

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We have come a long way!

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DAI – Shared Service Provider

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DAI User Growth

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326

Users

40,000 +

Users

Deployed to 20 Agencies

Providing Value

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DAI Business Case Capabilities

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Business Case Gets Realized When Everyone Starts Using the Full Suite

of Capabilities

Initiative Deployed Scheduled Not Scheduled

PRDS/PDS DHRA

DoDIG

DoDEA

DARPA

WHS

DSS

DMA

DAU

DMEA

Direct Treasury

Disbursing

USU WHS DMA

DAU

DMEA

DTRA

DARPA

Budget

Formulation

DCMA

DSS

WHS DMA

DAU

DMEA

DTRA

DARPA

Absence

Management

DAU

DCMA

DHA

DHRA

DMA

DCAA

WHS

DARPA

DTRA

USU

DCMA

DSCA

MDA

DTRA

DTIC

OEA

USU

DHA

DTIC

OEA

DHA

DCMA

DCAA

DHRA

DoDIG

DoDEA

MDA

DTIC

OEA

DHA

DCAA

DHRA

DHRA

DoDIG

DoDEA

MDA

DoDEA

DoDIG

DOT&E

DPAA

DSCA

DSS

MDA

OEA

BPR Process for DAI(Inc 1, R3.0 Example)

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DAI Success Factors

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Agenda

• DAI Overview

• Implementation of DAI

• PPBE and DAI

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PPBE Problem Statement

• Disparate technology used across each agency to include COTS, Excel, and custom development– Significant costs to support system (IT, O&M, Training, etc.)

– Agencies working repeated effort to integrate DAI actuals into individual systems

– Staff need to learn new technology as they move positions

• Agencies have varying capabilities based on investment– POM/BES/PB

– Spend Planning

– Revolving Fund

• Agencies performing similar functions using different methods– Civilian Pay Planning and Forecasting

– RMDs and Issues

– Exhibits and Reporting

• Limitations on extending to larger user base due to capabilities

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PPBE Solution Benefits

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Alignment of Programming and Budgeting with Execution

Master Data Structure & Actuals Integrated from DAI Financials

• Drives alignment of master data structures to support POM/Budget and not just execution.

• Direct actuals integration aligns budget with actuals.

• Reduces costs for needing to perform time-consuming data work to translate DAI data into legacy systems and then validate.

Establishment of Common Business Practices

Agency stakeholders work together to establish best practices

Global model concept provides common baseline for each agency

• Single technical platform but segmented by agency to support flexibility in processes and security

Common mappings of DAI master data to OSD structures

PPBE Solution Benefits (Cont.)

Full set of PPBE capabilities available every agency

– Agencies can chose from a list of capabilities POM Issues, Budget, Spend Plan, reports and exhibits.

Single Technical Commercial Software Solution

– Out-of-the-box capabilities speed delivery of capability

• MS Office Integration, What-if Analysis, Planning Forms, & Reporting

• Pilot capability delivered within the 1st year of PPBE Work-stream

– Solution reduces training and development costs

• MS Office interface brings quick adoption

• Ability to produce reports and templates reduces reporting development and drives reporting management to the agency.

– Significant IT cost reduction over individual agency systems

• Leverages DAI platform for hosting, maintenance, and support

• Removes the need for independent systems and associated costs.

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Agency Feedback on Improved Capabilities

1. DAI integration of actuals and structure

▪ Plan, forecast, and manage PPBE using DAI structures

▪ Provides ability to adjust to match 1002 reports and use actuals for exhibits.

▪ Ability to run OP-32, CIS Code, and other views on budget during build.

2. Common menu of capabilities for all agencies

▪ Existing agencies had only a subset of capabilities and now have ability to leverage all components (e.g. some agencies only have Budget or SP today)

3. Brings strong capabilities over using MS Excel manual build

▪ Repository where everyone can tap into instead of trying to find the last version of the spreadsheet. Helps small agencies that would not be able to invest in a system.

▪ Allows for user expansion driving PPBE planning to a more granular level.

4. Strong technical capabilities

▪ MS Office integration, user-friendly interface, what-if scenarios, etc.23

Lessons Learned

• DAI SMEs were key to understanding data structures

– Master data alignments and actuals integration

• Reviewed lessons learned from other implementations

– Applied USSOCOM techniques to accelerated delivery of DAI capabilities

• Identified wide variation in agency PPBE business practices

– Agencies with more labor vs investment plan detail accordingly

– Spend plans with/without actuals

– Alignment of organizations and security requirements

– Use of master data structures in DAI Financials

– Utilized stakeholder agency updates to have SMEs present and bridge gaps

• Agency SMEs commonly burdened by agency tasking

– Established weekly meetings with each agency and worked around schedules

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DAI PPBE Capability Overview

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Oracle Hyperion (PPBE Software)

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Status of Deployments & Capabilities

• PPBE (Budget Formulation) is New to DAI

– R3.0 Initial Release Completed in 1 year (2016)

• BES/PB Build & Spend Plan Build

– R4.0 Release to be Deployed in 1 year (2017)

• POM (Issues Process), Rent Estimation, Additional Appropriations, Reports and Exhibits

– Multiple Agencies Requesting R4.0 Onboarding:

• DAU

• DPAA

• DCAA

• DHRA

• DODEA

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PPBE Release Snapshot

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R3.0 (Pilot): Establishing Global Model

• Developed from agency workshops, questionnaires, and pilot prototypes

• Standard modeling of core data structure

– Agencies have flexibility to model business using the DAI Financials hierarchies

– Budget elements to support submission requirements and aggregated planning

• Standardization of Core Mappings

– OSD Line Code to Object Class with Labor Category

– Standard loading OSD Line inflation rates

– OP-8 Mapping

• Actuals Integration (Monthly)

– Sub-ledger Obligations, Commitments, and Expenditures

– GL Adjustments

• Multiple Scenarios

– Cycle Snapshots and What-if Drills

– Actuals and 1002 Adjustments

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R3.0 (Pilot) Capabilities

• Global Model Foundation

• BES/PB Capability (Inputs & RMDs)

– Detailed Civilian Pay Costing Module & Options (Gains, Losses, & Transfers)

– RMD tracking, Global reductions and additions, and multiple scenarios

– OP-32 Price and Program Growth Calculations and exporting

• Spend Planning Capability

– Ability to execute a spend plan with or without DAI Actuals integration

– Allows for monthly forecasting of labor and expenses

– Supports detailed planning to wide user-base

– Average Annual Rate metrics

• Agencies Deployed: DCMA & DSS

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Release 4.0 Capabilities

• R4.0 Capabilities added to R3.0 Baseline:

• POM (Issues & Zero Sum Transfers)

– Extension and inflation.

– Delta-based planning capability to support 1 – N list Issues and ZSTs

– Issue acceptance and rejection.

– Capability to develop reports to support ICT briefings and roundtables

• Revolving Fund Capability

– Development of rent estimation model with rate calculations

• BES/PB Additional Capabilities

– Civilian Authorizations and Contractor Personnel Tracking

– Expansion of Fiscal Guidance controls

– Allotment Accounts

– Management reports and additional exhibits

• Agencies Deployed: WHS & OSD

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DAI PPBE Onboarding Process

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Activities for Onboarding

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Hyperion Capability Onboarding Schedule

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