Bankrolling the Rebuilding of Iraq.

Al Runnels

Deputy Director

Military and Civilian Pay Services

Wesley Miller

Director, Management and Control

Office of the Assistant Secretary of the Army

(Financial Management and Comptroller)

In a dynamic workshop titled "Bankrolling the Rebuilding of Iraq," Messrs. Al Runnels and Wesley Miller teamed to highlight how the military services have supported the coalition to rebuild post-war Iraq. Mr. Runnels provided a perspective of financial management operations in the reconstruction of Iraq, and Mr. Miller focused on budget formulation and execution, legislative review, policy formulation, and management oversight.

Mr. Runnels served both as the chief financial officer, Coalition Provisional Authority (CPA), and as the chief of the Pentagon-CPA Management Liaison Cell. In these capacities, he was tasked with putting together a financial management team comprising Department of Defense (DoD) and CPA participants. He was charged with managing, budgeting, and disbursing $50 billion in a combination of U.S. appropriated funds, Iraqi funds, and donor funds (those pledged by other countries). His responsibilities included establishing the program review board to review requirements and prioritize them for the CPA administrator.

Lessons Learned

With the many challenges involved in developing this process, Mr. Runnels noted several successes and lessons learned upon which the coalition can build and sustain its financial management (FM) capabilities.

The key was to balance flexibility in a fluid wartime environment while maintaining internal controls. In a predominantly "cash economy," electronic funds transfer proved not to be a viable option; wire funds transfers were unreliable at best in that environment.

Currency exchange required printing new currency, overseeing the logistics of changing currency, and destroying old currency while closely monitoring the inherent risk of inflation. The Commander's Emergency Response Fund gave on-site commanders the flexibility and authority to enact positive and immediate change in local communities. Securing major cash movements was fundamental to the success of the overall operation.

The Way Ahead

While noting these successes, Mr. Runnels observed other lessons learned, from which processes can be improved. The FM organization and staffing continually needs to be adapted to create and maintain an effective operation. Differences in organizational climates across the services and among our coalition partners require leadership to develop effective personnel policies and to leverage emerging synergies.

To manage the development fund for Iraq, FM personnel had to "piece together" a system, relying on spreadsheets and considerable manual inputs in the absence of off-the-shelf software that would meet the unique requirements.

In the final analysis, Mr. Runnels' message was one of optimism, as he asserted, "You see the news every night, and you wonder if this [the rebuilding of Iraq] is going to be successful ... I really feel it is."

Mr. Wesley Miller, director of Management and Control in the Office of the Assistant Secretary of the Army (Financial Management and Comptroller), echoed Mr. Runnels' thoughts, noting, "Things are progressing well, despite the circumstances." This in itself is a testament to the superbly trained and highly motivated U.S. personnel in theater, with the Army serving as Executive Agent in the CPA's requirements process.

Interface Among DoD Organizations

The scope of work included budget formulation and execution, legislative review, policy formation, and management oversight. In the project management and contracting arena, one of Army's key goals was to be auditable. Staffing was formulated to reflect this goal. Personnel with the necessary skill sets were brought on board to complement the existing FM staff.

A top priority was to develop the accounting system. Special emphasis was placed on coordinating with the U.S. Treasury Department, the Defense Finance and Accounting Service, the Office of Management and Budget, and other agencies. To this end, staff members sought to release timely and value-added instructions to the field.

One notable example of the project management process involved Iraqi road construction. It is worth noting that Iraq had pre-existing road construction technology. To leverage this capability, the coalition developed an experimental program, allowing the Iraqis to perform projects for which the U.S. would reimburse them. Contingent on a final U.S. inspection, the U.S. would transfer the necessary funds to the Iraqis. This model has reaped dividends with respect to operations as well as goodwill between Iraq and the United States.

Tribute to the Troops

At the onset of the presentation, Mr. Runnels took the opportunity to recognize attendees who had deployed to Iraq or Kuwait or who had directly supported Operation Iraqi Freedom at home stations. Fittingly, our presenters culminated their presentation in the same service-minded fashion, thanking that group once again.

Fitting, indeed, for at the end of the day, it is on the shoulders of our dedicated service members, DoD civilians, and contractor personnel that rests the hope of a more promising future for the Iraqi people.

Reported by Captain Michael Kwasnoski

Captain Michael Kwasnoski is a core financial management officer currently instructing Air Force ROTC at Arizona State University. This father-to-be is a member of the ASMC Thunderbird Chapter.