Leaning the Antideficiency Act process: borrowing a process from the private sector to improve the Antideficiency Act process, with expectations of a dramatic cycle time reduction.

Introduction

Lean Six Sigma (LSS) is a business process reengineering method being used widely by the private sector to streamline processes, improve quality, and gain efficiencies in practices. LSS is project-driven and results-oriented. There are several types of LSS projects: black belt projects (approximately three months), Kaizen Events (less than one week), and Just Do Its (one to two days). The principles of LSS are being implemented throughout the government. The Office of the Under Secretary of Defense (Comptroller) (OUSD(C)) recently spearheaded LSS process reviews for several major Department of Defense (DoD) financial management processes. This article describes how the principles of LSS were applied to the process of investigating and reporting formal Antideficiency Act (ADA) violations.

The Old ADA Process

The ADA is a series of statutes in Title 31 of the United States Code designed to bind the executive branch to limits on the expenditures of funds. Each agency is required to have a process for identifying, investigating, and reporting potential violations of the ADA. For the DoD, these procedures are specified in the DoD Financial Management Regulation, or DoDFMR (DoD 7000.14-R), Volume 14.

The formal ADA investigation process is rather involved and requires numerous signatures and movement of information between offices within and outside a DoD component (that is, military departments and Defense agencies). Although each component may have some unique aspects of the formal investigation process, the foundation of the process is the same.

Once it is determined that an ADA requires a formal investigation, the component assigns an investigator to the case as an additional duty. The investigator conducts interviews, gathers information, solicits legal opinions, and submits his or her report back to the component headquarters. There, the report is reviewed, legal opinion is sought, and a determination is made about the nature of the violation and the responsible parties.

A formal request for concurrence on the determination is then submitted to the OUSD(C). If concurrence from OUSD(C) is received, the component requests the command of the responsible party to administer discipline for the ADA violation. When discipline has been completed, the component sends a final report to the OUSD(C). As required by law, the OUSD(C) then prepares a final report for submission to the Office of Management and Budget, the Congress, and the President.

The Problem

Inherent in the preceding process is time--time to do a complete and accurate investigation, to reach a determination, and to receive concurrence on that decision. Additionally, the old process produced a paper trail that was often cumbersome and time-consuming, requiring a number of "chops" and signatures on memorandums. These issues result in a lag in closing out ADA violations. According to the DoDFMR, the components have nine months to submit their final report to OUSD(C), and OUSD(C) has an additional three months to submit the report to the Congress and the President.

Thus, the metric for completing the entire ADA process is 12 months. It is evident in the ADA monthly metric reports that, under the old process, the metric is not being attained. The calculation, from a review of all ADA cases from 2002 to 2005, produced a median cycle time between 15 and 37 months. This is due to several factors, including delays in obtaining signatures, investigators who had to balance their regular job with additional ADA investigation duties, redundant legal reviews, redundant reporting requirements, and other component-specific problems.

The military departments (MILDEPs) were very interested in reducing the ADA cycle time and, at the behest of the Assistant Secretary of the Navy (Financial Management and Comptroller), got together to brainstorm ideas. After all, less time spent on ADAs could yield higher productivity on other financial management issues. At the same time, the OUSD(C) became interested in alternatives that would help attain the currently established 12-month metric.

Solution

The OUSD(C) determined that the best solution to improve the ADA cycle time was to engage the MILDEPs in a week-long LSS session. The goals were to improve the ADA cycle time to achieve 12 months or fewer and to identify process commonalities among the MILDFPs. The OUSD(C) partnered with the Defense Finance and Accounting Service (DFAS) and brought in two DFAS employees who are specially trained as LSS "black belts" [experts on LSS principles and tools]. They were tasked to facilitate the LSS meetings and give follow-on briefs to the OUSD(C). In July 2005, an LSS team was formed that included representatives from OUSD(C), DFAS, the black belts, and the MILDEPs. The team members were responsible for the following deliverables: flowcharts; current process data; analysis of data including value-added and non-value-added steps; identification of triggers and events; recommendation of projects, Kaizens, and Just Do Its; prioritizing the list of recommended projects; and outbriefing.

Once the team's roles and responsibilities were cemented, the brainstorming began. Team members developed flowcharts of the current ADA processes, along with "swim-lane" matrices to identify commonalities between OUSD(C) and the MILDEPs. The team mapped the "to-be" process, which included flow charts by MILDEP and data links to processes, and determined LSS project opportunities. As a result, the team determined that the primary drivers of the long cycle time seemed to be the same across the board. The principal drivers follow:

* The additional duty (ADDU) nature of the assignment to conduct the ADA investigation, thereby causing delays when regular duties superceded ADDU

* The need to obtain legal opinions at various levels within a component

* The requirement to ascertain who is allowed to sign official ADA correspondence and the correct format

* Involvement of DFAS in reviewing ADA packages

* Monthly reporting requirements to OUSD(C)

* OUSD(C) coordination

* Contracting out investigations

* Web-based ADA investigator training

The team focused on the items that could reduce cycle time, as well as those items where there was no value added. As a result of all the data gathering and analysis, Lean Six projects, Kaizens, and Just Do Its were proposed.

Results

Figure 1 (page 36) reports the current results of the LSS review of the DoD ADA process. Bottom line: The LSS team expects, at a minimum, a 40-day cycle time reduction. The new processes took effect in November 2005, and the LSS team will perform a six-month follow-up review.

Figure 2 offers a macro-level look at the new DoD ADA process that takes into account the Kaizens and Just Do Its noted in Figure 2. As with any process change, validation of the outcome will be required over time. With more standard processes and procedures across MILDEPs, however, the likelihood of achieving success will certainly be much higher. In addition, the communication and teamwork among the MILDEPs and OUSD(C) was of great benefit and should certainly help in achieving the ultimate goal--cycle time reduction.

Kathleen Cohen works for the ASN(FM&C) in the Policy and Procedures Division (FMB-5). She is a Certified Defense Financial Manager.

Lauren Firer, a 2002 graduate of the Department of the Navy Centralized Financial Management Trainee Program, works for the ASN (FM&C) in both the Investment and Policy Divisions.

                          IMPLEMENTATION
KAIZEN PROJECT            DATE             IMPACT

(1) Move ADA              Complete         20-day cycle
    administrative                         time reduction
    reporting function
    from DFAS to OSD

(2) Provide advanced      Complete         10-day cycle
    DoD Legal Review                       time reduction

(3) Eliminate             Complete         Reduces OUSD(C)
    45-day memo time                       GC cycle time

(4) Contract out          Complete         Reduces resource
    preliminary ADA                        requirements
    investigations

(5) Implement DoD         Complete
    Web-based or other

JUST DO IT PROJECT                IMPLEMENTATION   IMPACT
                                  DATE

(1) Eliminate monthly redundant   Complete         Minimally impacts
    reporting requirements                         ADA processing time

(2) Reduce quantity               Complete         Minimally impacts
    of monthly charts                              ADA processing time

(3) Discontinue need for          Complete         Minimally impacts
    MILDEPs to update                              ADA processing time
    DFAS e-portal

(4) Determine necessity for       Complete         Reduces cycle time
    OUSD(C) program budget
    coordination

(5) Move "forty-five-day"         Complete         5-day cycle
    memo from OUSD(C) signature                    time reduction
    to Deputy Chief Financial
    Officer signature

(6) Convert "signed OSD           Complete         5-day cycle
    taskers" into electronic                       time reduction
    format for quick
    distribution

(7) Letter format consistent      Complete         Reduces review
    across MILDEPs                                 cycle time

(8) MILDEPs reduce formal         Complete         Reduces
    investigation time from                        waiting time
    nine months to four months

(9) Use the same Investigator     Optional         Reduces
    for prelim and formal                          rework
    ADAs (option)