DoD Comptroller Cites Troubled Federal Budget Process - 12/5/2011

DoD Comptroller Cites Troubled Federal Budget Process-12/5/2011

By PAT MALIN

Managing the trillions of dollars in the U.S. budget, especially the amounts spent on the nation’s defense, compared to the mere millions — a trickle by comparison — of general spending in the Oneida County budget, were topics of discussion at an informational seminar held by two local accountants groups at Daniele’s in New Hartford on November 16.
Robert Hale, Under Secretary of Defense and Comptroller, came here from Washington and spent an hour discussing the fiscal year 2012 budget during an address to the Rome Chapter Association of Government Accountants and the Central New York Chapter American Society of Military Comptrollers.
Hale is a certified defense financial manager (CDFM). From his office in the Pentagon, he serves as the principal advisor to Secretary of Defense Robert Gates on all budgetary and fiscal matters affecting the Department of Defense.
Oneida County Executive Anthony Picente then followed up with a brief talk about the county’s upcoming budget. Interestingly, the county’s 2012 budget of $360.5 million was passed by the county Board of Legislators that evening, a few hours after Picente’s appearance.
The eight-hour seminar drew 230 participants from the Defense Finance and Accounting Service (DFAS) and the Air Force Research Lab at Griffiss Park in Rome, plus accounting professionals from Fort Drum in Watertown and from Albany.
First, Hale stressed to the DFAS workers the importance of their work to some of the nation’s three-million military and their families. DFAS Rome’s nearly 1,200 employees handle military and civilian pay for the U.S. Army, including active duty and retirees, in addition to issuing travel vouchers.
In addition, DFAS is responsible for paying the bills for work done by major DoD contractors and vendors. Rome also serves as the DFAS Accounting Center of Excellence for Army and Navy medical support, and the U.S. Special Operations Command.
Rome also has the oversight on the DFAS Europe operation, the Southwest Asia Army Retrograde of Vendor Payments in Theater, and the accounting support and cash balancing for the Contingency Disbursing Station Symbol Numbers.
Hale discussed how the 2012 DoD budget directly impacts DFAS. The federal government’s total budget for 2012 — the fiscal year (FY) began Oct. 1, is approximately $3.7 trillion, while the defense department’s own budget is around $707 billion.
“For two decades, we have been working to hold down our federal deficit, but at the same time we need national security and for the last 10 years, fighting a war in Afghanistan,” he said.
Meanwhile, the U.S. deficit has ballooned to $450 million, equivalent to eight percent of the total budget, he pointed out.
He asked rhetorically how the government can reduce such a deficit. “By focusing on inefficiencies,” he replied. “We have to take on the difficult challenge of military compensation and look at our options for reducing forces.”
Cutting the budget is complicated, he added, by the fact that there are constitutional restrictions on discretionary spending, which in-cludes the defense budget. And Congress has been unwilling thus far to tackle mandatory spending cuts.
Recently, a specially-appointed deficit “supercommittee” of 12 members of Congress refused to enact $1.2 trillion in required budget cuts. The Congress has until Dec. 23 to come up with the cuts before “sequestration” or automatic across-the-board cuts take effect.
“It’s a pretty crazy period,” said Hale, referring to the uncertainty of the budget process. “We’re heading into troubled budgetary times.”
Most economic experts agree that the Defense Department could take the biggest hit if there are mandated cuts.
Will Budget Cuts Affect DFAS System-Wide and Locally?
“What does this mean to us?” Hale asked his audience.
“This is the 20th anniversary of DFAS, an organization I’ve been affiliated with since it started. DFAS proves that you can provide accounting assistance even in a wartime economy while gradually improving the way you operate — more efficiently.”
It has helped that DFAS received more customer orders than it projected in its previous budget, while also re-ducing operating ex-penses by “in-sourcing” its information technology costs, he added.
Hale said a DFAS logistics team is trying to implement cuts throughout the organization through “further consolidation,” projecting as much as $178 billion savings over five years.
Everyone knows that the entire DFAS structure has undergone significant streamlining over the past decade.
When it started in 1991, DFAS had more than 300 installation-level finance and ac-counting offices with 27,000 personnel around the world. It now has 10 sites with 13,000 personnel.
In 2005, Rome faced closure under a base realignment (BRAC) plan. It not only survived, it has flourished and become one of five major DFAS centers in the U.S.
Since then, it has integrated about 200 personnel from other sites that were closed or modified. In October, 80 new employees were transferred from DFAS headquarters in Indianapolis to Rome’s call center.
“Rome is doing its part to increase efficiencies by consolidating call centers,” said Hale.
“We’re grateful for your work. Please keep it up.”
He talked about the importance of DoD and the Department of Homeland Security filing regular financial statements to Congress. “It’s the law, but it also forces us to improve our financial standing,” he said.
“Most of all, it convinces the American public,” of the importance of DFAS. To put it in another context, he said, DFAS employees process 140 million transactions a year.
Hale spent about 15 minutes taking questions from the audience, including one from a man in Army fatigues, though everyone else wore civilian clothing. Hale asked how many in the audience had served in Afghanistan and about one-quarter raised their hands.
Hale flew in to Griffiss International Airport on a military plane earlier that morning, accompanied by Theresa McKay, director of DFAS Washington.
They toured the DFAS Rome facility with Rome’s new director Chet Boutelle, former Rome director Roy Higgins, Ed Abounader, president of the local union of the American Federation of Govern-ment Employees, and others before heading to the seminar. He left immediately after his presentation.
This was the first time the two local chapters of the accounting organizations, the Association of Government Account-ants and the American Society of Military Comptrollers, came together to sponsor a Professional Develop-ment Institute session, which is used to improve the training of local employees, usually while on company time and/or for educational credits.
Speakers in the afternoon session were Capt. Kelly Padden, PhD, CDFM, USAF Chief, Economics & Strategic Studies Defense Fin-ancial Management & Comptroller School (Ala-bama); Andrew San-Filippo, Executive De-puty Comptroller for State and Local Govern-ment Accountability (New York State), and Richard Byrnes, Esq., DFAS Office of General Counsel (Washington).
McKay, who had escorted Hale from Rome to New Hartford and back, returned to Daniele’s later that afternoon to wrap up the seminar and give a talk on leadership skills for financial managers.
Just before lunch, Picente discussed the difficulties of formulating a county budget that means painful cuts in vital public services, such as the health care clinic, reductions in the county workforce, and less support for local libraries.
The county executive traced the problem to mandates imposed by New York State on county governments to provide more public services, while at the same time limiting property tax increases to two percent.