With Congress appearing ready to consider a long-term continuing resolution (CR) well into next year (possibly until May 2017), Secretary of Defense Ash Carter warned of the detrimental effects on U.S. national security of such action.
In a letter to congressional leaders, Carter called the prospect of operating under a CR for nearly two-thirds of the fiscal year “unprecedented and unacceptable.” He stressed that DoD has never operated under a long-term CR during a transition to a new administration.
The longer the length of the CR the more damage will be done to DoD’s capabilities because DoD will be “locked into last year’s budget and last year’s priorities,” Carter said. He cited the most harm will be resulting shortfalls in operations and munitions accounts, especially those accounts funding counterterrorism operations.
Carter emphasized that operating under a CR means that DOD will not have the authority to begin new programs, increase program production rates, or start multi-year procurement projects. He said in FY2017 DOD will need 57 new starts and 87 increases in program production rates. Delaying these actions during a CR would undercut important programs (e.g., KC-46 Tanker, helicopter buys, and replacement of the Ohio submarine).
Carter said if Congress can’t complete action on the FY2017 DoD appropriations bill by the time the current CR runs out on December 9, it should at least keep the CR as short as possible to allow time to finish the bill.
Funding available for awards for federal non-Senior Executive Service (SES) employees is set to increase for FY2017.
Guidance issued to agency heads in a joint memorandum from the Office of Management and Budget (OMB) and the Office of Personnel Management (OPM) increased the amounts agencies can use to pay non-SES/Senior Level (SL)/Senior Professional and Scientific (ST) for the period October 1, 2016 to September 30, 2017.
Separate guidance on bonuses for SES/SL/ST employees was issued in August. The freeze on bonuses and awards to political appointees remains in effect.
The aggregate amount agencies can spend on bonuses for non-SES/SL/ST employees for FY2017 is 1.5 percent of the aggregate salaries. Agency spending on bonuses has been frozen at the FY2010 level since FY2011. This guidance lifts that freeze.
This guidance applies to individual money awards only, including individual rating-based performance awards and individual contribution awards (e.g., special act awards).
The guidance also lifts monetary caps (frozen at the FY2010 level) for other awards such as group awards, referral bonuses, suggestion/inventions awards, Quality Step Increases (QSIs), and recruitment, relocation, and retention incentives.
The OMB/OPM memo emphases that “awards programs are valuable tools to help agencies to reward employee performance excellence and reinforce a high performing culture that will help improve organizational effectiveness.” Agencies are encouraged “to review their awards policies to ensure they are operating awards programs that optimize employee engagement and recognition through appropriate use of the various awards authorities.”
The memo also directs agencies to honor all collective bargaining agreements before implementing this guidance.
The Office of Personnel Management (OPM) has announced a government-wide freeze on Senior Executive Service (SES) hires. that effective December 7, 2016.
Acting OPM Director Beth Colbert said in a memo issued last week that the freeze will “ensure the incoming head of the agency will have the full opportunity to exercise his or her prerogative to make or approve executive resources decisions.”
Colbert pointed out that this is normal procedure during transition to a new administration when the president requests letters of resignation form all non-term presidential appointees.
President Obama has asked all non-termed presidential appointees to submit a resignation letter by December 7, 2016. Exceptions to this request are U.S. Marshals; U.S. Attorneys; Inspectors General; Termed appointees; Appointees of independent and regulatory agencies that are led by termed appointees; and Appointees serving on part-time boards and commissions.
During the freeze (ending on Inauguration Day, January 20, 2017) OPM will not accept agency submissions of new SES Qualifications Review Board (QRB) cases. In addition, OPM will suspend the 90-day deadline for agency submissions of QRB cases. However, OPM will continue to process QRB cases that have been submitted before the effective date of the freeze. Agencies will be allowed to continue to conduct SES staffing actions up to the point submission to the QRB.
OPM identified some exceptions to the freeze on SES hiring. The freeze does not apply to agencies excepted from the president’s resignation letter request. The freeze also does not apply to submission of “Criterion B” cases covering those individuals who have “successfully completed an OPM-approved SES Candidate Development Program (CDP) and whose executive qualifications are then transmitted to OPM for QRB review and certification for general non-competitive SES appointment eligibility.”
OPM will consider exceptions to the freeze if necessary to “ensure the continuity of agency operations” during the transition to the new administration. The exception consideration will be based upon “critical need” in the agency. OPM will consider exceptions on a case-by-case basis.
Agencies will be able to request resumption of QRB processing of their SES cases when a new agency head is appointed.
FY2017 Military Construction/VA appropriations bill stands alone as Congress seen likely to extend CR into next year
With the end of the current FY2017 Continuing Resolution (CR) set to run out on December 9, Congress appears likely to pass an extension until March 2017.
Congressional Republicans, who now control both houses of Congress seem ready to defer action on the final 11 remaining FY2017 appropriations bills until March 2017. There had been movement in the House to propose an FY2017 Omnibus Appropriations bill. But, last week House Appropriations Committee Chairman Rep. Harold Rogers (R-KY) announced that his committee will start work on a CR that would keep the government operating until March 31, 2017.
“While I’m disappointed that the Congress is not going to be able to complete our annual funding work this year, I am extremely hopeful that the new Congress and the new Administration will finish these bills.” Rogers said. Rogers also said he hoped “regular order” would return to the appropriations process next year “so that the damaging process of Continuing Resolutions will no longer be necessary.”
Some Senate republicans, including Senate Armed Services Committee (SASC) chairman Sen. John McCain (R-AZ) pushed back against the House movement towards extending the CR into next year. McCain has been working with his House counterparts to try to complete a compromise version of the FY2017 Defense Authorization bill. However, without a completed FY2017 DoD Appropriations bill, final action on the defends policy bill will likely also be deferred until next year. Congressional Democrats have been pushing for a series of “minibus” appropriations bills, batching the remaining 11 bills.
If that the CR is extended into next year, the FY2017 Military Construction/Veterans Affairs appropriations bill would be the only appropriations bill to become law this year. The FY2017 MilCon/VA bill was passed and signed into law in September along with the CR extending FY2017 government funding until December 9.
The Military Construction portion of the FY2017 MilCon/VA Appropriations Act provides $7.75 billion for military construction projects, family housing, Base Realignment and Closure (BRAC), and the NATO Security Investment Program. This amount is $280 million above the president’s request. The Act also funds $172 million in the Military Construction Overseas Contingency Operations (OCO) appropriation.
Funding for specific active and reserve component military construction projects in the Act is set at $5.7 billion. In addition, the Act provides another $615 million in FY2017 for the Army ($41 million), Navy and Marine Corps ($316 million), Air Force ($150 million), Army national Guard ($67 million), Air National Guard ($11 million) and Army Reserve ($30 million) to be used for projects identified in unfunded priority lists identified by the military services and provided to Congress.
The Act fully funds the request for Family Housing projects ($1.3 billion) and the NATO Security Investment Program ($178 million) to support fixed and mobile infrastructure projects for NATO operations. The DoD Base realignment and Closure Account is provided $240 million for cleanup and disposal of property under the four closure rounds already approvedThe Act also rescinds $283 million from prior military construction appropriations Acts.
With fall in full swing, holidays are right around the corner and we have a lot happening at ASMC HQ. We wanted to take a moment to wish you a Happy Thanksgiving and share some news.
The Fall Edition of our Armed Forces Comptroller, “ASMC Chapters: Contributing to the Defense Financial Management Profession” is Out!
This issue is decorated with articles focusing on ASMC Chapter best practices. Articles from various chapters span topics from reviving chapters, to engagement of early careerists, to conducting a Mini-PDI. Check out the current issue online and don’t forget to take the quiz for an opportunity to earn a few extra CPE’s toward your recertification.
National Essay Competition
It’s time again for ASMC’s National Essay Competition. Due February 28, submissions must be written on the current topic for 2017: “If the President nominated you to serve as Comptroller/Chief Financial Officer for the Department of Defense, what would you target as your three most important financial management goals and why?” Read more information on submission specifics.
Become a CDFM!
While many defense financial managers have achieved their required DoD FM Certification (DFMCP), the CDFM and CDFM-A remain a valuable and prestigious test-based credential. As a reminder, the DFMCP recommends that DoD FMers obtain a test-based certification at Levels 2 and 3. Among test-based certifications, the CDFM is most closely aligned to defense FM competency areas. The CDFM and CDFM-A certifications set individuals apart from their peers, since they indicate that in general, an individual holding them possesses a broader understanding of all of the FM competency areas. It is also reflective of determination, drive, and initiative to take the extra step in enhancing their professional development and value to the overall defense FM community. Only 13% of the approximate 54,000 defense FMers possess the CDFM. CDFM or CDFM-A Exams are offered daily worldwide via computers located at installation Education Centers and at Pearson VUE testing centers. More info about CDFM Enrollment. For more info about testing. If you have additional questions please contact firstname.lastname@example.org.
ASMC CLASSROOM TRAINING IS AVAILABLE. PLEASE CIRCULATE WIDELY!!!
Enhanced Defense Financial Management Training Course (EDFMTC)
For DoD employees who wish to take advantage of the 5-Day government-funded EDFMTC, please visit bit.ly/EDFMcourses for the FY 2017 schedule to register for a course offered in your vicinity.
Chapter/Organization Course Registration
ASMC has licensed two vendors to deliver instructor-led courses at your organization. Learn and apply the latest developments in DoD Financial Management, Acquisition Business Management, and/or Fiscal Law while saving on tuition, travel cost, and time. To schedule a course, please contact Rich Arns of Archway Training or Amanda Alter of the Graduate School.
Individual Course Registration
To find out more about ASMC’s education opportunities, please visit:
- Enhanced Defense Financial Management Training (5-Day course)
- Acquisition Business Management (2-Day course)
- Fiscal Law
- Certifying Officials Overview (1-Day course)
- Purpose Overview (2-Day course)
- Purpose, Time and Amount Overview (3-Day course)
ASMC Membership Dues Increase
As a reminder, for those of you that may not have received our communication, effective 1 January 2017 annual membership dues will increase from $26 to $40 and three-year membership dues will increase from $75 to $114. If you have not already done so, you still have until the end of the year to make a one-time renewal of your membership, extending the period for an additional one or three years. To take advantage of this opportunity and renew your membership at the current rate. Read the full message.
National Awards Program
ASMC annually recognizes the outstanding accomplishments of its chapters, membership, and the defense financial management community through our National Awards Program. This program encompasses individual and team achievement awards, scholarships, educational grants, an essay contest, chapter recognition, and a variety of other individual based awards. Here you can find a list of awards and rules. Deadlines are quickly approaching, so don’t delay!
ASMC National PDI 2017 is May 31 – June 2, 2017 in San Diego! We expect to have registration available NLT mid-March 2017. The PDI 2017 theme is “Catching the Wave … Audit Ready” Michael Durant, pilot of Blackhawk Super 64 that was downed during the Battle of Mogadishu in Somalia will be one of our General Session speakers. He will speak about mission, leadership, and unity in dealing with challenging situations.
Virtual PDI can help you acquire some extra credits toward your CDFM, CDFM-A, or DoD FM recertification.
Update your member profile to provide us your current contact info, especially if you have recently relocated, so you continue to receive the Armed Forces Comptroller. Also, you can update your chapter designation when you move to a new location and associate with the chapter there. It’s no longer necessary to send a note to HQ asking us to change your chapter designation. Lastly, using your personal email address in your profile avoids lapses in ASMC HQ communication with you in the event you change jobs and your work email address changes.
Any questions? Contact Brian Gresham, Associate Director for Communications and Public Affairs at email@example.com.
We thank you for your service to our Nation and your ASMC membership.
President Obama sent Congress a FY2017 budget amendment request last week that would provide $5.8 billion in additional Overseas Contingency Operations (OCO). This funding will support U.S. military operations in Afghanistan and operations against the Islamic State of Iraq and the Levant (ISIL) in the Middle East
The FY 2017 OCO amendment of $5.8 billion brings the FY 2017 total Department of Defense (DoD) OCO request to $64.6 billion.
Congressional defense oversight committees have been pressing the administration to submit a request for additional funding to support increased operations since the president announced this summer that 8.400 military personnel would stay in Afghanistan and because of the increased pace of operations against ISIL.
Almost 50 percent ($2.8 billion) of the total $5.8 billion budget amendment request would be for operations and force protection including: special pays and subsistence for deployed personnel, operating tempo, communications, and deployment and redeployment costs. Base and installations support costs and support for forces located in other parts of the U.S. Central Command (CENTCOM) region account for 22 percent ($1.3 billion) of total costs. Funding for the Afghan National Defense and Security Forces Aviation Modernization program is 14 percent of the total ($0.8 billion).
Other costs include: classified programs ($0.4 billion); Iraq Train and Equip Fund to support Kurdish Peshmerga forces ($0.3 billion); equipment and reset ($0.2 billion); and Joint Improvised-Threat Defeat Fund ($0.1 billion).
Looking at the total request by operation, $3.4 billion would be for Operation FREEDOM’S SENTINEL (OFS) in Afghanistan. These additional funds would support the higher troop level (8,400) approved by the president ($2.5 billion) and provide for Afghan aviation modernization ($.8 billion).
An additional $2.4 billion would be for Operation INHERENT RESOLVE (OIR) in Iraq to support about 5,500 U.S personnel (2,000 more budgeted) deployed to the U.S. Central Command area of operations, support Kurdish Peshmerga forces, and address emergent force protection issues. The additional forces approved by the president are providing training and advice to coalition partner security forces in efforts to defeat ISIL.
The budget amendment would also provide $20 million for the incremental operational costs for Operation ODYSSEY LIGHTENING (OOL) in Libya.
Details of the DoD request are available on the DoD Comptroller’s website.
The president also requested an additional $5.8 billion for the State Department and the Agency for International Development (AID). These funds would be used to “implement the diplomatic engagement, governance, and stabilization components” of the administration’s strategy against ISIL, and humanitarian aid for areas in Iraq liberated from ISIL control.
Support included in this funding are: removal of unexploded ordnance; immediate stabilization needs in areas liberated from ISIL control; police training in the Northern Nigeria region and other areas affected by Boko Harem/ISIL; longer term stabilization needs for areas liberated from ISIL control; technical assistance to the transitional government in Libya and support for the political process in Yemen; humanitarian assistance; and increased embassy security.
Presidential transition teams open for business this week at federal agencies to provide for the transition of power to the new administration.
A prime subject during transition at the Department of Defense is usually how to make the department run more efficiently and effectively. Each new administration develops its own set of defense management and acquisition improvement reforms aimed at making the Office of the Secretary of Defense (OSD) and the Military Services operate better.
The Defense Business Board (DBB) has developed a set of recommendations for the DoD transition team directed at making DoD run more like a “modern business.” The DBB is an authoritative, advisory committee that provides independent advice to DoD’s senior leadership on the use of best business practices and management improvement programs for DoD.
In its report, Focusing a Transition: Challenges Facing the New Administration, the DBB opines that the defense department is “too costly, too slow and often unable to devote the resources necessary to enhance modernization and readiness.” The report further states that “without a disciplined effort to rein in costs and overhead, the Department will not only be unaffordable, it will be unable to swiftly and shrewdly adapt to maintain superiority over determined adversaries.” The goal, the report says, should be to free up more resources for readiness improvement and modernization efforts.
The DBB stresses that the department must develop and aggressively execute an “outcomes-based program of change to overcome bureaucratic inertia.” The Board argues that “organizations, contracts, activities, etc., must be eliminated.” It warns against only making marginal piecemeal cuts. Doing so, the report emphasizes, “leaves the door open for adding them back during the next budget cycle.” Change must come as a result of “major surgery,” the Board says.
To ensure that tough decisions are made and the whole department is focused on achieving the necessary changes, the DBB argues that the role of the Deputy Secretary of Defense must be redefined. The Deputy does not pay enough attention to the primary function—managing the department, the report states. The Deputy spends too much time away from the Pentagon representing the Secretary or attending to coordination with other agencies, allies, or the White House.
The DBB strongly recommends that the Deputy must become the department’s Chief Management Officer (CMO) in fact as well as in name because managing the department demands the full-time attention of the CMO.
To this end, the DBB recommends that the Deputy must “drive the Department to continue to shrink overhead.” As an active Chief Management Office, the report urges the Deputy to: 1) Exert “constant fiscal discipline;” 2) Streamline processes to be “more agile and responsive;” 3) Make speed and cost “valued commodities;” 4) Cut layers of decision making and increase accountability and track performance; 5) Address “an unaffordable health care system and pension benefits;” and 6) Establish metrics and track written goals and objectives for senior leaders.
In addition, the DBB recommends that the department engage in a “zero baseline” effort to identify and eliminate duplicate and redundant functions and capabilities, and the Service Secretaries become an executive committee to support the secretary’s priorities. The DBB stresses that the department’s civilian and military leaders must “collectively drive tradeoffs that support the Department’s National security priorities, often at cost to their individual organizational priorities.”
Today is the 241st celebration of the founding of the United States Marine Corps.
"On November 10, 1775, the Continental Congress approved the resolution to establish two battalions of Marines able to fight for independence at sea and on shore. This date marks the official formation of the Continental Marines."
1st Commandant: Major Samuel Nicholas (1775-1783)
Here here! Semper Fi!
Secretary of Defense Ash Carter announced a set of innovation practices that he said supports DoD’s aggressive move “toward a more innovative future.”
Speaking at a conference held by the Center for Strategic and International Studies (CSIS) conference (Assessing the Third Offset Strategy) last week, Carter said he will implement three of the recommendations made by the Defense Innovation Board.
Carter established the board earlier this year to “advise me and my successors on how the DoD can better connect to innovation and make better use of it—including by changing ourselves.”
The department’s wide-ranging effort to innovate technologically is to “plant the seeds for a number of different technologies that we think will give us a warfighting advantage in the future, but also to be more innovative and agile in all aspects of DoD,” Carter said.
The secretary cited the fast, relentless pace of change, competition with and between other nations, and competition with terrorists and other adversaries as reasons to innovate “to stay the best.” “Being more innovative in every way we can is critical to the future success of our military and our Defense Department,” he said.
The first Innovation Board recommendation Carter will implement is to “focus on recruiting talented computer scientists and software engineers” [military and civilian] into the force. DoD will use recruiting initiatives across a broad spectrum from Reserve Officer Training Corps (ROTC) programs to civilian “scholarship-for-service” programs, he said. The aim is to make computer sciences “a core competency” in DoD.
DoD will invest in “machine learning, through targeted challenges and prize competitions,” rather than investing in new “brick and mortar” institutions, Carter said. Using a “virtual center of excellence” model will establish stretch goals and incentives for academic and private-sector researchers. The initial challenges will target computer vision and machine learning.
Following another Innovation Board recommendation, Carter will create a DoD Chief Innovation Officer. This new post will serve as the Secretary’s senior advisor for innovation activities. Carter noted that many organizations have such a position, citing high tech companies IBM, Intel, and Google. He said that “it’s time we did as well, to help incentivize our people to come up with innovative ideas and approaches.”
Carter promised to continue to work on building the force of the future and said to watch for “more to come” in these efforts. “We must ensure that we keep leading the way, and keep disrupting, challenging, and inspiring all of us to change for the better,” he said.
The Department of Defense has recently released the fourth in a series of annual performance reviews of the DoD acquisition system.
Frank Kendall, who has been Under Secretary of Defense for Acquisition, Technology, and Logistics for five years said the report “continues my long-term effort to bring data-driven decision making to acquisition policy.”
Kendall said the report shows that DoD is making progress to improve acquisition and is “moving in the right direction with regard to the cost, schedule, and quality of the products we deliver.” He cited moderating program cost growth as an example. “The 5-year moving average of cost growth on our largest and highest-risk programs [is] at a 30-year low,” he emphasized.
The acquisition performance report complies with the Improve Acquisition Act of 2010 and the Weapon Systems Acquisition Reform Act of 2009 and Office of Management and Budget (OMB) requests on analytical studies on acquisition performance.
The report notes that analysis and data support the following improvements: 1) Cost control has improved significantly (as shown in fewer Nunn-McCurdy breaches and cost overruns) ; 2) Most programs deliver the original baseline quantity (planned at Milestone B); 3) Operation and support costs are largely driven by external inflation factors (which cannot always be controlled); 4) High-level requirements don’t usually change on major programs (85 percent of Major Defense Acquisition Programs-MDAPS-show no requirements changes); 5) DoD acquisition can be timely and responsive (development schedule growth is lower than cost growth); 6) Contracting processes are generally fair, rigorous, and objective (protests average about 2,5 percent of solicitations-GAO); and 7) Major defense companies remain profitable (cost performance improvement align industry and DoD goals).
The report stresses that budget constraints are leading to fewer programs in the “new product pipeline,” which could “put technological superiority at risk.” To mitigate this risk, DoD is adding early stage experimental prototyping efforts, but the report cautions that this does not add capability ready for production. Tight budgets also require realistic program baselines. If baselines are not realistic, the report states, higher cost growth could result.
There is also a need for a metric for weapons system design and performance O&S costs, according to the report. Many of these costs (e.g., compensation, health care, and fuel prices) are outside of acquisition control, but need to be addressed separately from acquisition program effects, the report advises.
The report underscores the importance of focusing on acquisition fundaments and cost control. “Proactive management and creative thinking contribute significantly and measurably to cost control.” “Should cost” management has proven successful and should become permanent in the acquisition culture, the report concludes.
Fixed-price contracting should be used “judiciously” during development, the report states. Study has shown that fixed-price contract during development can be risky and counterproductive. On the other hand, incentive contracts “can yield good cost control at lower risk and lower price,” according to the report.
Finally, the report identified changes that have improved acquisition management and performance including: the Defense Acquisition Workforce Development Fund and Force of the Future initiatives; implementation of Better Buying Power (BBP) 3.0; a new DoD Instruction (DoDI) 5000.74 that establishes a management structure for acquisition of contracted services; issuance of a new Risk, Issue, and Opportunity Management Guide, to identify and quantify risks; issuance of DDPAP, 2016b, a guidebook update providing guidance on “selection and negotiation of the most appropriate and effective contract type and incentives” for specific acquisitions; issuance of an O&S cost management guidebook with tools and best practices for cost analyses; and an update of the Performance-Based Logistics (PBL) Guidebook to include guidance on intellectual property issues.
The Treasury Department and the Office of Management and Budget (OMB) announced that the final FY2016 federal budget deficit was $587 billion, up $148 billion from FY2015 ($439 billion). The administration had estimated in the annual Mid-Session Review in July that the FY2016 deficit would be $616 billion.
This is the first increase in the deficit in five years.
The increase in the deficit came as higher government expenditures (+$166 billion) more than offset a small increase in revenues (+$18 billion). The administration does point out that part of the increase in outlays was due to the timing of benefit payments. Because October 1 fell on a weekend, benefit payments were made in September.
Data on government expenditures and receipts and the deficit are reported in the Monthly Statement of Receipts and Outlays of the United States Government (MTS) prepared by the Treasury Department.
When measured as a percent of Gross Domestic Product (GDP), the FY2016 deficit increased to 3.2 percent (from 2,5 percent in FY2015), about the average for the past 40 years. During the period FY2009 to FY2012 the deficit’s share of GDP averaged about 8.5 percent.
The modest revenue growth (+$18 billion) in 2016 was led by a 4.7 percent increase in social insurance and retirement receipts (+$49.8 billion). Miscellaneous receipts increased by 5.8 percent (+$8.4 billion), estate and gift taxes rose by 11 percent increase (+$2.1 billion), and individual income tax receipts increased by a very small 0.3 percent (+$5.3 billion). However, these increases were partially offset by an almost 13 percent decline in corporate income tax receipts (-$44.2 billion), a 3.3 percent decrease in excise taxes (-$3.2 billion), and a 0.6 percent drop in customs duties (-$0.2 billion).
Spending on health programs and Medicare increased by $77.5 billion in FY2016 (+7.5 percent). Social Security outlays rose $28.3 billion (+3.2 percent), and spending for veterans benefits and services rose by $14,8 billion (9.3 percent). Outlays for net interest payments increased by $17.4 billion (+7.8 percent). Spending on national defense increased by only $3.9 billion in FY2016 (0.7 percent).
Looking ahead, OMB projected in its Mid-Session Review that the FY2017 deficit would be $441 billion. However, both OMB and the Congressional Budget Office expect deficits to rise again by 2020.
Federal civilian retirees are set to receive a 0.3 percent cost-of-living adjustment (COLA) in 2017. Retirees covered under the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS) will see the increase reflected in their January 2017 payment.
This small increase results from continuing low inflation throughout the year, primarily due to the decline in gasoline prices. The annual retiree COLA is calculated as the change in the average Consumer Price Index for Wage Earners and Clerical Workers (CPI-W)—published by the Bureau of Labor Statistics (BLS)—from the third quarter of the previous year to the third quarter of the current year.
This is the same calculation for the Social Security COLA. Social Security recipients will also receive a 0.3 COLA in 2017.
Federal retirees received no COLA in 2016. The COLA was 1.7 percent in 2015. 1.5 percent in 2014, 1,7 percent in 2013 and 3.6 percent in 2012. No adjustment was paid to retirees in 201 and 2010.
In late August President Obama notified Congress that federal civilian employees should receive a 1.6 percent pay raise in 2017. The 1.6 percent pay raise is a combination of a 1.0 percent across-the-board raise announced in the letter and an increase in locality pay the president said he will announce by November 30, 2016. If Congress takes no action on the pay raise when it completes the FY2017 appropriations bills, the president can issue an executive order implementing the raise.
Thank you for your support of the American Society of Military Comptrollers and for your service to our nation. We are grateful for the opportunity to serve you and to support the advancement of the military comptrollership profession.
Over the past 68 years ASMC has provided resources and opportunities, enhancing the development and career progression of our membership. With over 35,000 financial managers achieving their DoD FM Certification, ASMC’s local chapter and national professional development opportunities provide added value to the Department and to our membership in providing opportunities to obtain Continuing Education and Training (CET) units, in meeting requirements to earn 40, 60, or 80 CETs every two years to maintain their DFMCP certification at Levels 1, 2, or 3. While maintaining a modest level of dues, we continue to focus on providing value to its members. In fact, while operating costs have increased year after year, ASMC has not increased its individual membership rates over the past 11 years.
Membership dues are a vital source of funding our operations toward achieving our strategic goals and initiatives. After careful consideration, the ASMC National Executive Committee (NEC) approved a recommendation from the Executive Director to increase membership dues as a means of maintaining our high-quality offerings, delivering important benefits, and supporting our strategic initiatives. This decision to ask for your additional support was carefully weighed and is a critical step in the growth of ASMC. Factors considered by the NEC included comparison of membership dues in other professional associations; the current costs of seminars, conferences, and individual college or university courses; and the timing and amount of past increases in membership dues.
To continue providing you with the level of quality service you expect and deserve, and to strengthen and expand the programs ASMC provides, effective 1 January 2017 annual membership dues will increase from $26 to $40 and three-year membership dues will increase from $75 to $114. If you recently joined ASMC or renewed your membership (for one or three years), your dues will not increase until your membership “paid thru” date. However, from now through the end of 31 December 2016, current members (as of 5 October 2016) may elect to purchase (at the current dues rate) a “one time” renewal of membership (for either one or three years), thus extending your membership paid thru date for 12 or 36 months. Prior to 1 January 2017, “non-members” of ASMC may join our Society for one or three years at current fees. Even with this increase in annual dues, ASMC will continue to have the lowest membership fees among professional associations that provide training, education, and certification programs.
Current Membership Value and Enhancements
We believe our members receive great value at the current dues rate and will continue to receive great value at the new rate. ASMC provides national, regional, and local chapter professional development and education offerings; CDFM (with Acquisition specialty) certification program; Defense News Highlights; quarterly Armed Forces Comptroller journal; and the National PDI (for those approved by their organizations to participate). We are currently working with a test developer to complete the CDFM and CDFM-A exam updates and we will also be revising the associated textbooks. We are redesigning and updating our ASMC National Website. As a member, you will continue to receive special registration rates for the National PDI and member rates for CDFM Program enrollment, textbooks, and recertification. To see the full list of member benefits, please visit www.asmconline.org/membership/benefits.
ASMC continues to further increase the value of membership. Members can look forward to the following enhancements that will provide additional value:
- ASMC member groups will be able to communicate, ask questions, and share best practices via a collaboration platform called “Engage.” We will establish groups (budgeteers, accountants, auditors, cost analysts, etc) wherein members of each group can share resources and collaborate on subjects of interest.
- From an internal perspective, we will establish groups (including Chapter Presidents; Treasurers; and Chairs of Programs, Membership, and Certification to better enable chapters to communicate internally and to connect with other chapters. Engage will enable chapters to share best practices in areas such as conducting Regional or Mini-PDIs, programs, growth and development, and certification.
- ASMC will have an Early Careerist group and we will fund some chapter-level early careerist engagement and outreach activities.
- Chapter Websites. As part of our Website redesign project, we will provide a new website template, enabling chapters that do not have a website to develop one.
- Association Management System (AMS). Originally installed in 2007, our AMS needs to be updated. Over the next few years, ASMC will conduct an analysis of alternatives, data cleansing, and upgrade or migration to a new AMS. The new system is essential to ASMC's future – not only from an operational standpoint in providing tools and functionality needed to more efficiently manage the organization, but most importantly, to support our ability to provide the best customer service possible for our members in the years ahead. With this major upgrade, members will have access to better membership renewal and recertification platforms, as well as an improved member profile function. The new system will also help us automate to serve members more effectively without sacrificing “personal” service.
- We thank our current and past chapter presidents and officers for your dedication and service to the profession of defense financial management. Chapter rebates for membership joins and renewals after 1 January 2017 will increase to 20 percent from current 19% and 16% levels for annual and three-year memberships, thus providing increased funding to enable chapters to provide additional benefits to members.
- ASMC will explore methods to expand its educational offerings and provide additional professional development opportunities and learning resources to our membership.
We greatly value your loyalty to ASMC and trust you appreciate the value of your membership. If you have any questions or comments, please don’t hesitate to reply. You may also visit www.asmconline.org/dues-increase-faq to view info regarding membership fees.
To renew your membership now, please visit www.asmconline.org/membership/renew.
I am confident you will find stronger value in the changes we are making and I look forward to your continuing loyalty and support of ASMC.
Al Runnels, CDFM-A
Executive Director, ASMC
Beginning in November, the probationary period for new civilian hires will be two years instead of one year, the Department of Defense announced this week.
In a memorandum to DoD human resources directors, Acting Assistant Secretary for Civilian Personnel Policy Julie Blanks said the change would affect personnel appointed to permanent positions in competitive service and SES appointments from November 26, 2015 forward. The change was required in Sec. 1105 of the FY2016 National Defense Authorization Act.
The policy change is necessary, DoD said, because one year may not be enough time to judge the performance of new employees, in the “increasingly complex nature” of DoD’s work. “The longer probationary period offers employees a greater opportunity to showcase their talents and for supervisor’s to properly asses their capabilities,” a DoD spokesperson said.
The new policy does not apply to personnel appointed prior to November 26, 2105 and those appointed in excepted service, a DOD spokesperson said.
The policy memorandum notes that DoD and the military services do have the discretion to extend a probationary period beyond two years. The policy for this discretionary extension is being prepared.
The two-year probationary period policy does not change the one-year probationary period for supervisors, DoD said. New employees appointed to a supervisory period will serve the one-year probationary period and the one-year supervisory probationary period concurrently.
A person transferring from another agency to DoD who has completed a probationary period in competitive service (and has full appeal rights under the Merit Systems Protection Board) does not have to serve another probationary period, DoD said. However, a person who transfers from another government agency and receives a career SES appointment in DoD after November 26, 2015 will serve a two-year probationary period.
A person who transfers from another agency into DoD who has not completed a probationary period could be required to complete a new probationary period, with possible credit for receive credit for prior probationary service.
Health Insurance premiums for employees covered under the Federal Employees Health Benefits (FEHB) Program will increase an overall average of 4.4 percent in 2016, the Office of Personnel Management (OPM) announced this week.
The increase is lower than the 6.4 percent increase registered in 2016, but higher than the increases in 2015 (3.2 percent), 2014 (3.7 percent) and 2013 (3.4 percent).
The FEHB program covers about 85 percent of all federal employees and 90 percent of federal retirees. According to OPM, FEHB is the largest employer-sponsored health benefits program in the United States. The federal government pays an average of 70 percent of total premium cost. Premiums for specific health plans and dental and vision plans are shown on the OPM website.
OPM announced that “all plans will offer clinically appropriate and medically necessary treatment for children diagnosed with Autism Spectrum Disorder in 2017.”
The Open Season for health, dental and vision, and tax-deferred Flexible Spending Accounts (federal employees only) will start on November 14, 2016 and end on December 12, 2016. Open season allows federal employees and retirees to make changes to their plans and eligible employees to enroll in the plan of their choice.
Yesterday, Congress approved a Continuing Resolution (CR) that will keep the government running until December 9, 2016. The House passed the CR (H.R. 5325) by a bipartisan vote of 342-85 as 170 Republicans and 172 Democrats voted for passage. Earlier in the day, the Senate passed the CR 72-26. The president is expected to sign the bill before the fiscal year begins on Saturday.
Final negotiations on the CR were stalled because Senate Democrats would not let the bill proceed without funding for the water contamination crisis in Flint, Michigan. They argued that just as the proposed CR includes assistance for flood damage in Louisiana and other states, the bill should also include assistance for Flint.
With the Senate deadlock continuing, and the possibility of a government shutdown rising as the Friday midnight deadline approached, House Democrat and Republican leaders agreed to a deal that would provide assistance to Flint. House Speaker Paul Ryan (R-WI) and Minority Leader Nancy Pelosi (D-CA) agreed to include funding for Flint assistance in the Water Resources Development Act. Flint assistance is already in the Senate version of the water resources bill. Senate leaders accepted the deal and the Senate and House passed the CR.
Commenting on the bill, House Appropriations Committee Chair Rep. Hal Rogers (R-KY) said “a continuing resolution is a last resort. But, it is what we must do to fulfill our congressional responsibility to keep the lights on in our government.” Senate Appropriations Committee chair Sen. Thad Cochran (R-MS) called the CR “a short-term fix that will allow the Senate and the House to complete work on the FY2017 appropriations bills later this year.”
The CR is included in the FY2017 Military Construction/Veterans Affairs appropriations bill, which funds DoD military construction and Veterans Affairs appropriations for the full year.
The CR essentially allows agencies to fund FY2017 programs at the FY2016 level ($1.067 trillion for the total government and $74.1 billion for Overseas Contingency Operations (OCO)) until December 9. During the CR period, no new starts are permitted nor are programs allowed to increase production rates above the FY2016 rate
The bill also includes $1.1 billion in emergency funding for preventing the spread of the Zika virus, funding to address the opioid crisis, and $500 million in rebuilding and recovery grants to families and communities affected by recent flooding.
Congress will be in recess until after the November elections, returning for a “lame duck” session beginning on November 14. They will work to pass 11 individual FY2017 appropriations bills, a series of “mini-buses that include some individual appropriations, or more likely an omnibus appropriations bill containing the 11 remaining appropriations bills.
Department of Defense (DoD) Secretary Ashton Carter urged Congress to end budget gridlock and achieve budget stability through bipartisanship.
Testifying before the Senate Armed Services Committee yesterday, Carter said budget stability is “critical in order for DoD and our people to address all the national security challenges we face.”
Carter identified three areas in the congressional review process that are of great concern to DoD: 1) budget gridlock and instability; 2) micromanagement; and 3) over-regulation. But at this hearing, he concentrated on budget stability saying he would work with congress on micromanagement and over-regulation when Congress finalizes the FY2017 National Defense Authorization bill. Congress is not expected to complete action on the FY2017 Defense Authorization bill until after the election.
Carter told the committee that budget instability is “one of the biggest strategic risks” to DoD’s enterprise. Such instability undercuts budget planning for warfighters and commanders, “baffles our friends and emboldens foes,” he said.
The inability for Congress to complete action on defense budget bills in a consistent, timely manner is “managerially and strategically unsound” and inhibits industry partners from operating efficiently on technology’s cutting edge, he stressed.
Carter lamented the ongoing use of continuing resolutions to fund defense damages readiness and modernization, as the Joint Chiefs told the committee last week. “Even a short-term CR slows our shipbuilding program,” Carter cited as an example.
He argued that and the possible return to sequestration would devastate military readiness and modernization efforts. Carter warned that the use of budget gimmickry, such as using Overseas Contingency Operations (OCO) funding to fund base budget requirements, could make the return to sequestration more likely. Not only that, Carter said, it “harms readiness of our troops in order to buy more force structure than we can afford.”
The House version of the FY2017 DoD Appropriations bill would provide only $42.9 billion through April 2017 and use $16 billion in OCO funding for base budget requirements. The Senate Appropriations Committee bill would provide the full requested amount ($58.6 billion) for OCO.
Carter also rejected congressional proposals that would cut DoD investment priorities to fund programs that were unrequested or of lower priority. These proposals could “seriously imperil our future strength,” he said.
With a little over a week remaining until the beginning of FY2017, Carter pressed Congress to complete action on the FY2017 defense budget and avoid a lengthy continuing resolution. Unless Congress acts, he said FY2017 will begin with another CR for the eighth year in a row. Carter decried this as “a deplorable state of affairs.”
Military leaders tell Congress budget uncertainty and funding constraints threaten readiness and modernization
Continuing budget uncertainty, constrained funding levels, and the threat of sequestration are threatening the military’s ability to achieve and sustain readiness levels necessary to meet current mission demands and build the forces capable of meeting future security threats, military leaders told Congress this week.
Testifying before the Senate Armed Services Committee (SASC), Gen. Mark A. Milley, Army Chief of Staff, Adm. John M. Richardson, Chief of Naval Operations, Gen. Robert B. Neller, Commandant of the Marine Corps, and Gen. Gen. David L. Goldfein, Air Force Chief of Staff, said budget caps and annual continuing resolutions are worsening already difficult readiness and modernization challenges.
Gen. Milley warned that the Army will not be able to meet its readiness needs or “build the Army our Nation needs in the future” if sequestration (automatic cuts) returns. The Army continues to make readiness its number one priority and has balanced competing needs to meet requirements, Milley said. However, he stressed years of reduced funding levels are beginning to have a serious impact on Army units and installations. The key to improving readiness is sustained, predictable funding levels, he said. “Predictable and consistent funding is absolutely essential for the Army to build and sustain current readiness and progress toward a modern, capable future force,” Milley told the committee. Without such funding the Army will have to “reduce funding future readiness in modernization and infrastructure maintenance, and continue programmed end-strength reductions.”
Adm. Richardson told the committee his main concern is that “the gap between the demands the Navy is facing and the solutions available to address them is growing.” The funding limitations established in the Budget Control Act (BCA) and the continuing threat of possible sequestration cuts are making it more difficult to balance current readiness and preparations for the future, he said. These funding cuts are occurring when mission demands are increasing Richardson said. The situation is worsened by continuing uncertainty caused by recurring continuing resolutions, he stated. “Our ability to achieve true effectiveness and efficiency has been undermined by budget instability, workforce limitation, and eight—now likely nine—straight years of budget uncertainty and continuing resolutions, he said. The result, he added, is “increased wear and tear on ships, aircraft, and people.”
Gen. Neller stressed that funding cuts and budget instability have had a negative effect on the Marine Corps’ current and future readiness. “As resources have diminished, the Marine Corps has protected the near-term operational readiness of its deployed and next-to-deploy units in order to meet operational readiness,” he said. However, he warned this action has come at the cost of increased operational risk. Continued constrained funding constraints are stretching the Marine Corps, he said. And, he stressed, “unstable fiscal environments prevent the deliberately planned, sustained effort needed to recover current readiness of our legacy equipment in the near term, and to modernize in the longer term.” The “harmful effects of ‘sequestration’ are well known and will continue to harm the Marine Corps if they continue,” he cautioned. “Without consistent sustained funding we cannot rebuild and capitalize our readiness, he said.
Gen. Goldfein warned that “the technology and capability gaps between America and our adversaries are closing dangerously fast,” and stressed that significant investment and sustained funding is required to ensure that forces remain “ready and credible” in the future. In the current fiscal environment, the Air Force is striving to balance the needs of current readiness and ongoing modernization with limited and uncertain resources. But, Goldfein stressed, “the Air Force will be challenged to sustain legacy fleets and simultaneously invest in developing and procuring systems required to counter threats in FY2018 and beyond.” Unstable funding levels “make it difficult to deliberately balance investments to modernize, recover readiness, right-size the force, win today’s fight, and fully execute the Defense Strategic Guidance,” Goldfein said. Predictable funding levels and an end to sequestration “is absolutely critical to rebuilding Air Force capability, capacity, and readiness,” he emphasized.
Congress returns this week (after a seven-week recess) with less than four weeks until the end of the fiscal year and nine weeks until the November elections.
Facing this time constraint on FY2017 funding and the desire by members to get back out on the campaign trail, House and Senate leaders will meet this week to decide on their strategy to address legislative priorities before recessing again in early October. Most of the discussions and negotiations will center around funding to fight the Zika virus and dealing with FY2017 appropriations to avoid a government shutdown. The FY2017 Defense Authorization bill (passed by both the House and Senate and now in conference) is also seen as pressing legislation, but the limited schedule and disagreement on defense funding levels makes movement doubtful at this time.
Zika virus funding. The House passed legislation providing $1.1 billion in funding to combat the Zika virus. However, Democrats blocked consideration of the bill in the Senate because of attached legislation that prohibited Zika funding from going to Planned Parenthood and weakened some environmental regulations. Senate Republican leaders look to bring up this funding bill again, but Democrats are determined to block another vote.
Continuing stalemate in the Senate could push consideration of Zika funding into the debate on the CR or a possible omnibus appropriations bill. Complicating the politics of this issue, the Center for Disease Control (CDC) has said that funding for Zika programs could run out by the end of the month. Nevertheless, supporters of Zika funding on both sides of the aisle are confident that the funding issue will be settled before congress adjourns.
FY2017 Appropriations. With only three and a half weeks left before the start of FY2017, the House and Senate will be forced to come up with a Continuing Resolution (CR) to keep the government from shutting down; an outcome that both Republicans and Democrats want to avoid. A CR is necessary because to date no FY2017 appropriations bills have been signed into law. The House has passed only six FY2017 appropriations bills (Defense, Energy and Water, Financial Services, Interior and Environment, Legislative, and Military Construction/Veterans Affairs) and the Senate has only passed three appropriations bills (Energy and Water, Military Construction/Veterans Affairs, and Transportation/HUD). The Senate Republican leadership will again try to pass the FY2017 DoD Appropriations bill (already passed in the House), but Democrat leaders will move to block action, just as they did in July.
Debate on a CR will be over content (whether the CR will be clean or will include legislation to address particular concerns) and time frame (short-or long term). Republicans and Democrats often push for legislation on their interests in a CR and the White House will surely weigh in as well. For example, Republicans will press for increased defense funding and restrictions on nondefense spending and Democrats will advocate for stronger environmental legislation, gun control, and health and safety issues. Zika funding could be included in a CR if an agreement is not reached and emergency funding for flood damage resulting from recent storms could be addressed. But, final decisions on what is in a CR or what will be included in an omnibus appropriations bill will not be made until the length of the CR is settled.
Conservative Republicans in the House are arguing for a six-month CR that would carry over into next year when a new president and congress are in place. They are concerned that a short-term CR will lead to an omnibus FY2017 appropriations bill in a lame duck session that will result in higher spending. Certainly supporters of higher defense funding (including Republicans and Democrats) see a time-pressed omnibus appropriations bill as the leverage for higher defense appropriations in FY2017. This is also true for other high interest issues on both sides of the aisle.
Democrats want a short-term CR, possibly up to mid-December, followed by an omnibus appropriations bill. Senate Democrat Leader Sen. Harry Reid (D-NV) has stated flatly the Democrats will not agree to a six-month CR, warning that any push for a long-term CR could lead to a government shutdown. Both Republican and Democrat leaders have expressed a strong desire to avoid a shutdown and the blame that would come with it right before the elections. And, House Republican leaders might see a short-term CR as the way to maintain control of the process in a lame duck session, especially if it appears that Democrats could control the Senate in the new Congress.
Survey of Defense FM Professionals Closes 9 September 2016
Many thanks to those of you that have completed this year’s survey of defense financial management professionals. If you’ve not had a chance to do so, I encourage you to take the time to provide your opinions. The survey closes on Friday, 9 September 2016. It only takes about 5 minutes to complete, and the results provide important information concerning the collective opinions of DoD FMers regarding status and trends in the defense financial management environment. ASMC values your opinion very much and encourages our member and non-member FMers to take the time to ensure their views are included in the results. ASMC HQ will award $300, $200, and $100 to the ASMC Chapters that have the highest, second highest, and third highest survey response rates, respectively, among their members. You may access the survey HERE.
The CDFM remains a prestigious credential, as only 14% of the 54,000 defense financial managers currently possess it; only 3% also possess the CDFM-A (Acquisition) credential. For those of you considering pursuit of the CDFM, I urge you to take the steps to achieve this goal now! The demands of the fiscal environment over the past few years certainly indicate that knowledge and analytical skills across the range of FM disciplines is beneficial. The CDFM certification is fundamental to establishing a broad set of financial management skills. It also enables DoD and USCG leaders to be confident in hiring CDFMs or CDFM-As, knowing they have demonstrated initiative and drive in achieving a certification focused upon knowledge and skills directly applicable to requirements of positions within our profession.
Now that the DoD FM Certification Program (DFMCP) has reached its first major milestone and over 32,000 FMers have achieved it, the shift from earning to maintaining the certification has begun. As a reminder, the DFMCP “recommends” and “strongly recommends” that FMers at Level 2 and Level 3 respectively, also obtain a “test-based” certification. The CDFM is among the group of test-based certifications recognized by the DFMCP, and, obviously it is the certification most closely related to the profession of defense financial management. Achieving a test-based certification and maintaining mandatory CPEs, are keystones of demonstrating professionalism and commitment to high standards.
Whether you are at the journeyman level or an experienced defense financial manager, the CDFM Certification Program offers the type of recognized and prestigious credential that remains relevant, provides a solid foundation supporting professional development, identifies you as an individual with the initiative to enhance your skills, distinguishes you as a respected professional with knowledge across all areas of defense financial management, and increases your employment opportunities within the public and private sector.
Organizational Email Domains Issue
Your agency may have changed email domains in the past 18 months. (For example, firstname.lastname@example.org may now be email@example.com, and firstname.lastname@example.org may now be email@example.com.) Until recently, you may not have been affected, but when your agency stops forwarding email from your old address, you may suddenly lose contact with us. Please be sure to log in to your member profile TODAY at www.asmconline.org/login to ensure your email address on file with ASMC is correct. Also, if you have moved from one location to another, you can update your chapter designation to that of the nearest chapter to your new location – no longer necessary to send a note to HQ asking us to change your chapter designation. Lastly, using your personal email address in your profile avoids lapses in ASMC HQ commo with you in the event you change jobs and your work email address changes. We also encourage you to update your address so you continue to receive the Armed Forces Comptroller, if you opt for the hard copy edition.
ASMC National PDI 2017 will be conducted May 31 – June 2, 2017 in San Diego! Many thanks to the San Diego and supporting chapters, who are assisting ASMC HQ in preparation for this great training event. We’re thinking “Catching the Wave: Audit Ready” will be the theme. Our Professional Development Committee is gearing up to meet on 4 October to start developing the program. We expect to open registration NLT March 2017.
Any questions – contact Brian Gresham, our Associate Director for Communications and Public Affairs at firstname.lastname@example.org.