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Time for a Real Financial Management Quizz

  • 1.  Time for a Real Financial Management Quizz

    Posted 01-24-2020 02:10



    My Background:  My name is John O. King, I'm a member of the Washington DC chapter and I'm a retired senior budget analyst for the Assistant Secretary of the Navy (Financial Management & Comptroller)(1982 through 2006) and the Under Secretary of Defense (Comptroller)(2006-2008).  During that span, I handled hundreds of programs across the following type appropriations as the lead analyst: research and development; weapon, other and Marine Corps procurement; military construction and family housing, BRAC; operation and maintenance; contingency budgets (both war budgets and disaster assistance).  As part of that departmental-level management, I worked with OMB, GAO and congressional staff.  After I retired I returned to Navy as a reemployed annuitant and wrote the Budget Formulation and Budget Execution courses for the Navy website that are used today.  (I suggested instead of yes/no type answers to questions, an answer may actually be partly right and partly wrong, and that the answer scoring should allow for that to test your real, experienced-based knowledge.  Example answers: yes, mainly yes, mixed answer, mainly no, no.)  After that, being a taxpayer and worrying about the annual federal budget deficits and national debt (an dhow they can impact DoD and you personally), I volunteered on the defense budget team for the President's National Commission on Fiscal Responsibility and Reform (known as the Simpson/Bowles Deficit Commission) and wrote a few of the $100 billion a year cuts to the defense budget.  After that I was a consultant providing program and budget support the Naval History and Heritage Command (I love military and naval history).  For the last three years I've concurrently been teaching the Chief of Naval Operations (OPNAV) staff about the Planning, Programming, Budgeting and Execution (PPBE) process.


    Your Challenge:  I've used all of my experience in teaching the next generation of program, budget and financial analysts on a limited scale and want to put all of you across the FM community to the real test.  Part of what I teach is (1) the key part of being a good analyst is to analyze; (2) an analyst needs to separate fact from fiction (that is, fact vs the party line); and (3) it's never black or white, but always shades of gray.  There's a lot of current DoD-related Financial Management training programs I'd like to change (both government and private) because they contain half-truths or misrepresentations of reality on some subjects.  I'd always bring up a few of these contentious issues in my PPBE class to challenge the attendees operating assumptions or paradigms.  So, I'll pose one every couple of weeks to test your skills.  Most of the answers are not in any course you've taken because most of those course answers follow the party line.  As analysts, I expect better of you.  There is no prize for being first to answer or getting the "right" answer.  If you have a source citation, quote it.  If you have data, explain it.  So let's see how you do.  Here's your first question.


    Question 101:  Given that over the last 25 years or so the Congress has not passed the budget on time (30 September), federal departments like DoD have typically been funded under a Continuing Resolution (CR).  Over the last couple of years, Pentagon leadership has been very vocal about how funding under a CR is disruptive and detrimental to the effective execution of DoD budgets and programs, even to the point of publicly chastising the Congress for not doing it's job.  It is my opinion, based on experience, that the position that CR's are disruptive to the successful execution of DoD programs is either (1) NOT true or (2) mostly NOT true.  Why?


    John O. King



  • 2.  RE: Time for a Real Financial Management Quizz

    Posted 01-25-2020 10:20
    Mostly NOT true. I've been preaching in my appropriations law and EDFMT classes that, generally speaking, CRs are exactly as disruptive as the agency executing under a CR lets them be. Too many agencies take an extremely conservative approach to operating under a CR because they are afraid of "getting into trouble." Thus, they don't take advantage of the considerable discretion they have available to them under a CR. For example, many agencies operating under, for example, a 30-day CR, will issue contracts for only 30 days -- creating considerable workload to reissue contracts corresponding to each CR. That is unnecessary under a CR (unless, of course, a particular CR had language requiring it -- but I've never seen one that did).

    There are occasions, however, when a CR hamstrings the agency, particularly when the CRs drag on for an extended period -- or for the entire fiscal year (which would result in no program growth to compensate for inflation). Also, programs operating with multi-year appropriations that have low obligation rates in Year 1, might also get squeezed in Year 2 under a CR, but again, only if the CR is in place for a protracted period.

    By and large, however, it is the agencies who shoot themselves in the foot by not operating to the full extent allowed under the CR. Disruptions caused by a CR should be minimal if only agencies would use their full discretion.

    William Arnold CDFM-A
    Heath OH

  • 3.  RE: Time for a Real Financial Management Quizz

    Posted 01-27-2020 05:29
    Good point Bill.  However, you are limited on transfers between certain SAGs and MDEPS during a CR which can present limitations.  You are also limited on allotment received since allotment generally covers you up to the CR expiration date.  That allotment is generally based on previous years' execution.

  • 4.  RE: Time for a Real Financial Management Quizz

    Posted 01-29-2020 08:06
    "Depends" is a frequent answer to many financial questions.  I would agree with  Bill on this one - CRs are generally not disruptive (or shouldn't be), except for a few areas where mitigation isn't possible.  When Congress passed the DoD appropriations on time in 2019, our agency had a hard time dealing with THAT because we were so used to rolling on with a CR.  We have a program called Innovative Readiness Training that has special transfer authority (from O&M DW to RC Personnel) to cover training events and we need to cover some of the personnel costs for reservists.  Under a CR, we can immediately initiate the transfer of funding using the previous year's transfer authority.  When the Appropriation was passed on time, we had to wait an extra month or so for the DD1414 to be transmitted before we could transfer under the new authority.  This put October and November military personnel orders in jeopardy as the reserve components has to cash-flow that expense through the entire first quarter.

    Stephen Beller CDFM-A
    Woodbridge VA

  • 5.  RE: Time for a Real Financial Management Quizz

    Posted 01-25-2020 12:35

    Great challenges. Keep them coming. In the interest of keeping our FM community sharp, up-to-date, and thinking, this is a great initiative.

    #1. 1997 was actually the last time all appropriations bills were passed on time, with no Continuing Resolutions enacted for that fiscal year, so the statement of "the last 25 years" is incorrect (it is actually 23 years). I have found that Congressional Research Service and Congressional Budget Office reports are actually pretty good sources:

    #2. I would say that "CR's are disruptive to the successful execution of DoD programs is mostly true​​"... not one of the choices. While they are no doubt disruptive to modernization programs in that DoD is prohibited in the use of procurement funds for new starts, rate of funding obligation/expenditures typically is based on prior year's appropriation, and block buy/multi-year contracts are limited, the department has adjusted regular practices to avoid contracting actions in the first part of the fiscal year. While CRs are no doubt disruptive, especially in this era of great power competition where speed of acquisition and modernization is often key, financial management under continuing resolutions has become the norm, rather than the exception.

    Jeremiah Ragadio CDFM
    San Diego CA

  • 6.  RE: Time for a Real Financial Management Quizz

    Posted 01-27-2020 09:48
    This is a really good discussion point! I would love to see more questions.  Although, I am not a budget analyst, the more information we gain about our financial community the more powerful we can be! Thank you!​

    Anning Muña, CDFM
    Air Force Security Assistance Training
    Div Chief, FMA

  • 7.  RE: Time for a Real Financial Management Quizz

    Posted 01-27-2020 10:46

    For the Community,


    In response to Anning's point, I've mentioned to the ASMC Community monitor that I wanted to trigger a discussion of real learning and felt the shotgun approach the first time out was necessary, but would like to set up a separate community to pass along some of my knowledge and experience and have an exchange of real experiences with other members, basically through a question.  Thinking of a community name I like "The Contrarian" because so much of what is necessary to learn is not really taught in any class or no one wants to talk about them as to how they really work or could be revised to work/work better.


    Not to get any responses to you now, here is what I propose as an initial short list of question topics.  Was thinking about the following question order, about ten days apart:


    (101) Continuing Resolutions – Why Are the Impacts Overstated?  (our current question)

    (102) Reprogrammings – Why Do We Bother?

    (103) Anti-Deficiency Act –  Is It Really Necessary?

    (204) Multiyear Contracting – Why Isn't It Standard Practice?

    (305) Lowest Priced, Technically Acceptable (LPTA) – Or You Get What You Pay For?


    If any of you have some suggestions, please forward.


    I also was thinking about the question numbering sequence.  A single running series but with 101 etc. for basic knowledge (freshman), 201 for advanced (senior), and 301 for really hard stuff (graduate).


    I'm a believer that WE are the change and I'm tired of bogus answers from our political and senior leaders.  They'd rather whine about the current process and rules than get stuff done.  My attitude here is that unless it's one of the commandments, you can change it.  Especially if it's only a "policy."  Over the years I've proposed changes and written legislation.  I helped drive Congress to raise the expense/investment unit cost threshold (because many of these types of items were in my appropriations) from $5,000 (when I started) to $250,000 (when I retired).  And, after losing $300 million one year to Congress in a rescission, I proposed and got Navy, then OSD, then Congress to agree to a third exception to the "full funding" policy (which is still not included in the DoD FMR) for equipment installation funding because the deliveries and installation schedules often fell outside the original appropriation, three-year availability.  (While the installation costs became funded lead-time away, it immediately freed-up $1 billion in cash, which was basically used to fund LHD-6, USS Bon Homme Richard.  Not bad for a budget clerk!)


    I'm taking this approach on our website because I've mentioned to the ASMC leaders (I usually personally know the presidents having worked with them at some point in my career) that ASMC magazine articles are too straight and lack a "contrarian" discussion element about how they really work or how they can be revised to be useful.  I also mentioned there's no "letters to the editor" page in the magazine so readers/members can comment in respond to issues about the reality of certain articles or any inaccuracies.


    So, here's hoping to see if members really want to learn.


    Just a thought, if enough of you participate in this community, maybe we can get a session at the PDI on the importance and need for analysts to think analytically.


    John O. King





  • 8.  RE: Time for a Real Financial Management Quizz

    Posted 01-28-2020 08:44
    Good Morning from the Middle!  (Scott AFB, IL)

    I am very interested in the information and expertise that you are willing to offer.  I am fairly new to the budget analyst world. What I mean to say is I am so green that a lot of what is talked about is a tad over my head.  I'd say I'm a 101 beginner.

    The problem is that I am at the directorate level HQ AMC IG Budget Analyst/RA. I am waiting out my time to get my Level 2 certificate.  I have a degree in business accounting but that in no way has prepared me for the enormity of Governmental Accounting.  I do plan to work on my Masters in the next year. But for the time being I enjoy learning about how all this analyst stuff works!

    I'm very much looking forward to learning from you  and thank you for taking the initiative to teach the community.

    Jamie Arsaga

    Jamie Arsaga
    Mascoutah IL

  • 9.  RE: Time for a Real Financial Management Quizz

    Posted 01-29-2020 14:29
    Edited by Amanda Parrish 01-29-2020 14:30

    Wow! How did you get promoted to the directorate level? You must have excellent soft skills, confidence, and leadership skills to be promoted so high while you're learning while doing. I have a Distinguished Toastmasters (advanced speechmaking credential) and sometimes people assume that I am willing to do things that are actually out of my comfort zone. One time I casually mentioned my membership to my manager, then she told me ONE day in advance that I was going to be doing introductions in a crowded auditorium.

    Good luck!

    Amanda Meeker, DTM
    Technical Support Staff
    BAFB, CO