Chaos theory--execution management in a combat zone: adapting to financial management in a budgeting universe that had "gone mad".
Zero-based Budgeting a Challenge
Upon arriving in Afghanistan, the first thing I learned was that the budgeting universe had gone mad. We didn't have a budget. Instead, we developed monthly spend plans that were validated through a hybrid Program Budget Advisory Committee (PBAC) process and were forwarded to our higher headquarters for validation and funding. The goal of this process is to ensure that only valid requirements are funded while not fiscally constraining the commander's warfighting efforts. The result is a 30-day, zero-based budgeting cycle. A zero-based budget means starting the budget period with zero dollars and receiving funding only for planned requirements. In this system, spending in the prior period, while a potential indicator, is not a justification for funding in the succeeding period.
This process has both good points and bad points.
On the Positive Side
The process of developing a spend plan forces commanders to look at their resource requirements and gives resource managers (RMs) their best chance to ensure that the command's expenditures are fiscally responsible. This is a good first step because validating requirements is important.
On the Negative Side
First, requirements in a contingency environment tend to be fluid. What a commander considers mission essential today can be an afterthought tomorrow. Second, current financial management systems were not designed to tie unit spend plans to actual execution. Third, physically separated RMs and unreliable communications equipment can lead to miscommunication and imperfect fiscal situational awareness.
Fourth, getting your customers to recognize their resources and to justify their funding is exceedingly difficult and time-consuming. There is a reason why very few, if any, organizations actually perform zero-based budgeting.
Fifth, when commanders are told that their validated requirements will be funded, and then funding is not received, there may be an immediate impact on the warfighting mission. Last, in the midst of fighting a war, commanders have little time or inclination to prioritize a spend plan when anticipated funding is not received from their higher headquarters (HQ).
Understanding the positive and negative issues that complicate funds control is vital to your success. You can validate all the requirements you want, but if you divert the money to unapproved projects, you have wasted your time.
Succeeding Despite the Negatives
Be Involved with the Planning Process So how do you mitigate these factors? One way is to fund only those requirements that have been validated during monthly PBAC meetings. This will ensure that only validated requirements are funded. But there is a very fine line between being fiscally responsible and being a hindrance to your supported unit's mission. When trying to balance this fine line, I recall a piece of advice given to me a few years ago by Colonel Dave Coburn, USA: "Jeff, there ain't no money to be made from poking a division commander in the eye." While this is a blinding flash of the obvious, you disregard this pearl of wisdom at your own peril.
Anyone can be trained to process transactions. But the true art of execution management is interpreting your supported commander's guidance so that you understand when to stand firm on the spend plan and when to be flexible and fund high-priority requirements as they emerge. To give your commander flexibility, you will have to provide cash flow for unanticipated requirements.
You must understand, however, the risk you take by cash-flowing emerging requirements with resources identified to previously validated projects. The most successful RMs have the innate ability to adjust their use of resources to meet their commanders' intent without bankrupting any must-fund programs. If you have a doubt about your commander's priorities, you must ask for clarification. But don't ask too often because your commander is busy fighting a war--and what's the point of having an RM if he or she can't manage?
Lesson Learned: Zero-based budgeting is difficult. You must engage your supported units early and often if you have any chance of building a realistic budget that can be executed. Stay plugged into the planning process. Your commander's priorities will be evident in your unit's war plans. Ensure that you fund all requirements along the critical path of your mission plans.
Call on Your Creativity and Your Problem-Solving Skills
Another challenge facing deployed RMs is the antiquated automated financial management system. The current financial system used in Afghanistan is DbCAS "Jr." DbCAS is a Microsoft disk operating system-based commitment ledger. The system, as described here, comprises two separate and related modules: DbCAS (used by the command headquarters) and DbCAS Jr. (used by the forward-deployed RMs). The problem with this system is that it relies on only two pieces of information to track costs: Account Processing Code and Element of Resource.
As currently used in Afghanistan, this system is not functional. This is not to discredit the system; it just doesn't provide any way for RMs to tie budget execution to unit spend plans. As currently used, DbCAS Jr. users are unable to load funding targets into their system. This precludes RMs from easily reconciling actual and planned execution rates. To alleviate this problem, the CJTF-76 C J8 developed a program called the Database Accounting Support System (PASS). This program is a relational database with the following features:
* Produces funding documents for subordinate RMs (with the capability for handling multiple appropriations and management decision packages)
* Permits consolidation of multi-user input to a single ledger (or multiple DbCAS ledgers)
* Generates accounting classifications and prints accounting classifications both on DD Forms 1610 and on purchase requests and commitments
* Offers single-entry input; serves as a document register, temporary duty register, and commitment ledger (generates document numbers, prints lines of accounting on manual documents, and prints file labels)
* Uses an Army Standard Information Management System standard query to capture stock fund and expense data
* Offers various query capabilities
* Ties unit spend plans to budget execution
* Generates status of funds and other standard management reports
While this "home-grown" program is not a panacea for all resource management challenges, it has proven to be a key enabler for effective execution management within the Combined Joint Operating Area. The key advantage of DASS is that it enables RMs to reference spend plans quickly and to compare actual and planned expenses. This capability allows RMs to identify rapidly those requirements that have not been budgeted and those that are executing above or below expected levels. While this is a good tool for aiding execution management, it is useful only when it is taken out of the box and wielded with skill. When used to its full potential, DASS can help an RM reduce the risk associated with cash-flowing requirements and with adjusting unit budgets as priorities change.
Lesson Learned. If the tools you have aren't appropriate for the task at hand, get new tools--even if you have to build them yourself. It takes no initiative and creativity to sit back and complain that the system doesn't work. It isn't the mechanical transaction processing that makes you "value-added" to the command; it's your creativity and your problem-solving skills. Use them.
"Ground Truth" Varies, Depending on Your Point of View
The third major challenge facing RMs in Afghanistan is the varying perceptions of ground truth. So, then, how can the funding HQ and the forward RMs have vastly differing views of funding issues? There are many reasons.
In Afghanistan, the most notable issue is the lack of a reliable communications infrastructure and the time lag caused by processing times at various stages in the accounting process. As mentioned earlier, as Coalition Forces Land Component Command's forward-deployed RMs, we use DbCAS Jr. as our commitment ledger. This system, in itself, causes unique challenges for the forward-deployed RM, let alone the complications caused by the intermittent Internet access we experience in Afghanistan.
There are two key limitations to the DbCAS Jr. system. First, DbCAS relies on the deployed RM's ability to routinely send and receive commitment and obligation information to the parent system. This ability is not guaranteed in a combat zone, so communication between the "parent" and "Jr." systems quickly can become out of sync. This is a situation that must be constantly monitored.
Second, there is an inherent time lag in the DbCAS system caused by DbCAS batch processing and the Standard Finance System (STANFINS) processing times for posting obligation data. Once our parent system in Atlanta has the data, it in turn must forward consolidated data from each of the supported "Jr. boxes" to the Defense Finance and Accounting Service (DFAS). For this reason, all data is sent to the "split" in Fort Gordon, Georgia, and then to DFAS. Because of the delays built into this batch processing, as well as the intermittent communications outages, the funding HQ may vastly underestimate the actual execution rates of forward-deployed units. This can become a point of great frustration as both parent and subordinate RMs attempt to maximize their limited resources.
Processing delays within the DbCAS-STANFINS interface is not a trivial issue. The theory of relativity is alive and well in the resource management community. Perception is a funny thing: It is different depending on what foxhole you inhabit. I am sure that, during my tenure, the RMs at the Coalition Forces Land Component Command wondered if the members of the CJTF-76 CJ8 were mentally unbalanced because of some of the requirements we chose to resource. I am equally sure that I wondered how Coalition Forces Land Component Command RMs could sit in their comfortable offices thousands of miles away in Atlanta and pass judgment on CJTF requirements.
So what's my point? It's simply that your perception is skewed based upon your mission.
Lesson Learned: Ground truth has not only a date time group but also a zip code. Two people can look at the same system, in this case DbCAS, and see two different things. Additionally, two relatively intelligent people can see the same data and draw different conclusions. It is up to you to use your communication skills to resolve differences caused by your differing data and points of view.
Good Communication Skills Are Vital for Mission Accomplishment
So we have established that unreliable communications and incomplete information can help foster widely varying points of view on a given issue. These same limitations can inhibit interpersonal communication as well. It is critical that you use patience when trying to resolve difficult funding issues. If you do, things normally will work out in the long run. Remember, both you and your higher HQ are working on less-than-perfect knowledge of each other's situation, and you may not have the same short-term goals. For this reason, your higher HQ may not provide the necessary funding for your validated requirements
What to do? In garrison, you would convene a PBAC, prioritize your requirements, draw a funding cut line, and hope your unfinanced requirements get funded by fiscal year-end. Good luck with that plan in a combat zone!
If you think your customers have little patience for the funding game back home, wait until you are in a combat zone and ask them to divert their attention from the task at hand--warfighting. For the sake of this discussion, however, let's assume you have gotten your customers' attention. They are sitting in your hastily called PBAC, and you ask them what their priorities are--for example, plywood buildings (so they can get their soldiers out of tents before winter); morale, welfare, and recreation-related Internet access (so their soldiers can send an e-mail to their spouses after returning from patrol); or spotlights (so that the enemy cannot sneak up on the perimeter at night). Once you have gotten your customers to make a very easy choice among these requirements, ensure that you let them know that next week is the PBAC for the following month's requirements, which may or may not be funded by your higher HQ based on its availability of funds.
This example demonstrates the down side of developing 30-day spend plans to resource your unit. It takes commanders and their staffs away from their primary mission (fighting wars), and when the expected funding isn't received, RMs have very little ability to mitigate the effects of the shortfall because they have no warning of the situation. Additionally, since RMs are working on a 30-day budget, they have little fiscal flexibility to move funds between requirements. Thus, it is necessary for both forward-deployed RMs and their funding HQs to be mindful of the pressures each faces and the effect that unanticipated funding shortfalls have on all stakeholders.
Lesson Learned: Communicating ideas effectively via e-mail and phone conversations is difficult and takes a different skill set than face-to-face dialogue. It is easy to get frustrated and lose your temper because you can't convey your message effectively. Don't. Nobody comes to work in the morning with the goal of impeding the task at hand. Do your best to reach common ground.
A Final Word
The purpose of this article is to pass on the knowledge I gained during my time as an RM in Afghanistan. As you read this article,
I hope you gained some appreciation for the unique challenges faced by forward-deployed RMs. You will note that the skills and knowledge you have developed in garrison are directly applicable to the mission in a forward-deployed environment. Use the lessons learned to better support your Global War on Terrorism-related mission.
Lieutenant Colonel Jeffrey C. Powell, CDFM, served as the deputy director, CJ8, Combined Joint Task Force-76, Bagram, Afghanistan. He is a Certified Defense Financial Manager. He is a member of the Naples Chapter of ASMC.
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|Author:||Powell, Jeffrey C.|
|Publication:||Armed Forces Comptroller|
|Date:||Mar 22, 2006|
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