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Human capital improvement: a way to leverage air force financial management transformation: advanced education and training for Air Force financial managers are key to combating significant reductions in force.

The Air Force is undergoing an unprecedented transformation in the way it does business. The methodology driving this transformation, Air Force Smart Operations for the 21st Century, asks members of the Air Force community to look at all of the processes we undertake to assess their value (or lack thereof) and make any changes necessary. This emphasis on smart operations is essential in order to increase productivity throughout the Air Force in the face of impending changes in force structure.

Significant Downsizing Will Create a Need for Human Capital Improvement

Secretary of the Air Force Michael W. Wynne's Letter to Airmen, released December 6, 2005, advised that the Air Force will cut a significant portion of its support contractors. Stated another way, Air Force active duty personnel and civilian employees will have to perform more work once the support contractors are released. Beyond the work volume, we will lose the wealth of knowledge and private sector experience that these contractors have brought to the table, as well as the continuity and technical expertise many of them exercise. In addition, the Air Force plans to cut more than 40,000 active duty and civilian personnel, accelerated to fiscal years 2007 and 2008, thereby further increasing the demands on those personnel remaining--our human capital.

Efforts made now to improve our human capital will help answer those demands. While it has not necessarily tied these efforts to transformation and downsizing at the front end, the Air Force is moving toward human capital improvement. Specifically, the Air Force has recognized the importance of advanced education. In their April 13, 2006, Letter to Airmen, Secretary Wynne and Air Force Chief of Staff General T. Michael Moseley stressed the importance of advanced education in furthering the Air Force mission. As one example, our senior leaders have decided that officer promotion boards will no longer mask advanced degrees in the files under review. The Air Force also has begun sending officers to graduate school to get master's or doctoral-level degrees in lieu of attending a full year-long course at the Air Command and Staff College, has continued to increase the variety of sources where senior developmental education requirements can be satisfied, and has directed culture and language training for the entire force.

How Do We Get There?

Along with other disciplines, financial management is caught up in Air Force transformation. Air Force financial management transformation will usher in tremendous change in the way decision support is provided throughout the Air Force. For example, financial services increasingly will be administered by centralized processing centers and call centers and less by financial services personnel at the bases. The Financial Management Center of Expertise will handle increasingly complex cost analysis issues. Transformation will enhance the role of financial advisors located in the operational groups and squadrons--and eventually will change the composition of comptroller squadrons Air Force-wide. In fact, because of the increased emphasis on decision support and transformation, the Defense Financial Management & Comptroller School (Maxwell Air Force Base, Alabama) offered its inaugural Senior Decision Support Workshop in April 2006.

On another front, the plethora of financial management systems also creates challenges for any financial manager. Comptroller squadrons, resource advisors, major commands, and the air staff all have their own distinct financial management systems. To make matters worse, these systems constantly change--for example, the change in Air Force funds control systems from Command Budget Automated System to Automated Funds Management.

Changes in the Air Force financial management landscape will increase the need for flexible, problem-solving financial management personnel, both military and civilian, who are creative thinkers. To become flexible, problem-solving financial managers, we--like the Air Force as a whole--must improve our human capital, which is the measure of the economic value of an employee's skill set. An employer certainly can increase the value of his or her employees either by increasing their education level or increasing their training through formal, informal, or on-the-job training.

Financial managers themselves need to seek opportunities for formal education like earning advanced degrees in the financial or management arenas (such as economics, finance, management, and management information systems); attending financial management education courses (such as the Financial Management Squadron Officers Course and the Defense Financial Management & Comptroller course); attending financial management short courses (such as the Enhanced Defense Financial Management Training Course, Senior Decision Support Workshop, fiscal law courses, and the Planning, Programming, Budgeting, and Execution course); attending professional military education for both active duty personnel and civilian employees; attending professional conferences (such as the American Society of Military Comptroller's Professional Development Institutes and regional professional development symposia); and developing lasting relationships with mentors.

It is incumbent upon Department of Defense and Coast Guard financial managers to be well versed in all aspects of decision support. A key ingredient of decision support in the financial management arena is knowledge and use of quantitative tools. To maximize his or her value to senior leaders, the progressive financial manager needs at least a working knowledge of various quantitative tools, such as economic analysis, business case analysis, present value analysis, and econometric analysis.

Furthermore, financial managers should think analytically when it comes to budget issues. Taking a page from economics, managers should think in terms of costs and benefits: monetary and nonmonetary, direct and incidental. All costs and benefits must be considered when making a decision or giving advice to the commanders and other senior leaders whom they support. More exposure to these concepts will enhance the value of Defense financial managers and, more importantly, improve the quality of decisions made throughout the military services and Defense agencies.

Now more than ever, Air Force financial managers need to have a depth and breadth of knowledge in order to help the Air Force meet its goals under transformation and Air Force Smart Operations for the 21st Century.

Financial Management Operation and Maintenance Center of Expertise Open

Richard Hartley, Deputy Assistant Secretary for Cost and Economics, Office of the Assistant Secretary of the Air Force for Financial Management and Comptroller, has issued the following information. The Secretary of the Air Force Financial Management Transformation Office announced on April 18, 2006, that the Financial Management Operation and Management Center of Expertise (CoE) has reached initial operational capability. The center, located at Buckley Air Force Base Annex in Denver, Colorado, will support base-level and major command financial managers for complex or uncommon analyses focused on base support and O&M issues. Such analyses initially include economic analysis, business case analysis, and base realignment and closure implementation.

An Air Force-wide survey determined the need for these services; other services will be added as warranted by demand and staff size. Services will be available via CoE staff assistance offered on a temporary duty basis, as well as via supplementary training, phone and e-mail guidance, and a self-help Web site. By the time of full operational capability in fiscal year 2008, the small initial cadre of CoE experts will grow to more than 50 active duty, civilian, reserve, and contractor personnel. In establishing this CoE, the Air Force financial management community has shown tangible progress within the larger financial management transformation initiative that is designed to reduce labor-intensive transactions and deliver more decision support to Air Force leaders.

Major John C. Hansen, CDFM

Major John Hansen, holder of a doctorate in economics from Purdue University, is a financial management and leadership intern at Headquarters Air Education and Training Command, Randolph Air Force Base, Texas. He is a member of ASMC's Alamo City Chapter.
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Author:Hansen, John C.
Publication:Armed Forces Comptroller
Date:Jun 22, 2006
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