DFAS Transformation American Society of Military Comptrollers Regional

DFAS Transformation American Society of Military Comptrollers Regional Mini-PDI, NCR March 2006 Integrity - Service - Innovation

Agenda • DFAS – What We Do • DFAS Transformation Vision • Transformation Blueprint • People • Structure • Process • Technology • Information • Summary 1/4/2022 Integrity - Service - Innovation 2

DFAS – What We Do Mission: Provide accounting and finance services for the Military Departments and Defense Agencies. Sales & Service - $1. 62 B • • Military Pay Civilian Pay Retiree Pay Travel Pay Commercial Pay Accounting Services Others $190. 8 M $63. 8 M $52. 8 M $66. 3 M $178. 7 M $786. 6 M $280. 9 M People • 13, 830 employees * (Civilian and Military) • Located in: • 30 sites • 17 states • 3 countries Scope of Business • Processed 104 million pay transactions (5. 9 million people) • Made 6. 9 million travel payments • Paid 12. 6 million commercial invoices • Posted 127. 3 million general ledger transactions • Managed military retirement and health benefits funds ($234 billion) • Made an average of $455 billion in disbursements to pay recipients • Managed $13. 5 billion in foreign military sales (reimbursed by foreign governments) • Account for 282 active Do. D appropriations *Source: HR Flash Report December 2005 1/4/2022 Integrity - Service - Innovation 3

Transformation Vision VISION: Transforming Today To Be The Trusted Financial Partner For Tomorrow’s Warfighter 1/4/2022 Integrity - Service - Innovation 4

Transformation Vision • Human Capital Strategy People • Business Intelligence • Benchmarking • Information Security Information • Enterprise Transition Plans • e. Commerce 1/4/2022 Leadership & Vision Technology Integrity - Service - Innovation Structure Process • BRAC • Centers of Excellence • High-Performing Organizations • Lean 6 5

People - Human Capital Strategy • Succession Planning • Skills Inventory • National Security Personnel System (NSPS) ü Implementation is event driven ü Labor relations portions of NSPS delayed due to court ruling ü DOD proceeding with Implementation for 11, 000 non-bargaining unit employees in spiral 1. 1 in April ‘ 06. ü DOD intends to appeal decision and is currently reviewing options for further deployment in spiral 1. 2 and 1. 3. 1/4/2022 Integrity - Service - Innovation 6

Structure - 2005 BRAC Law Limestone Rome Cleveland Bratenahl Columbus Arlington (HQ Liaison) Rock Island Omaha Oakland Denver Seaside Indianapolis Kansas City St Louis Patuxent River Dayton Norfolk Lexington Lawton San Bernardino San Diego Charleston Texarkana Red River San Antonio Pensacola & Saufley Field Orlando • Grow the DFAS site at Cleveland, OH, to not less than 1, 500 Full Time Equivalents (FTEs) • Grow the DFAS site at Limestone, ME, to not less than 600 FTEs • Grow the DFAS site at Rome, NY, to not less than 1, 000 FTEs • Maintain not less than the current FTEs 1 at the DFAS sites at Columbus, OH (2, 064 FTEs), and Indianapolis, IN (2, 632 FTEs) Japan Honolulu 1 Site Closed by BRAC Remaining Site Not Affected by BRAC Europe FTEs effective EOM August 2005 (Geographic Location Report, Military Personnel Report) 1/4/2022 Integrity - Service - Innovation 7

Structure - Current DFAS Organization Functional Model As of Feb. 28, 2005 1/4/2022 Integrity - Service - Innovation 8

Organizational Structure - January 2006 Director Deputy Director Office of Strategic Management Client Executives Information Technology Corporate Resources Internal Review Acquisition Management Organization Office of General Counsel Chief of Staff Deputy for Strategic Business Management Deputy for Operations Director Standards & Compliance Director Policy & Performance Director Transformation Director Business Requirements & Integration 1/4/2022 Director Cleveland Site Corporate Accounting Mission Area Director Columbus Site Accounting Operations Mission Area Director Denver Site Finance Mission Area Director Indianapolis Site Disbursing Mission Area Director Kansas City Integrity - Service - Innovation Sites included: Charleston Pensacola Norfolk Japan Oakland San Diego Pacific Sites included: Dayton San Bernardino Omaha Limestone Sites included: Lawton Lexington Orlando Rome Rock Island Europe San Antonio Seaside Texarkana St Louis 9

Organizational Structure - FY 2009 Director Deputy Director Office of Strategic Management Client Executives Information Technology Corporate Resources Internal Review Acquisition Management Organization Office of General Counsel Chief of Staff Deputy for Operations Deputy for Strategic Business Management Director Standards & Compliance Director Policy & Performance Director Transformation Director Business Requirements & Integration Japan Corporate Accounting Mission Area Director Accounting Operations Mission Area Director Cleveland Site Director Columbus Site Oversight Limestone Finance Mission Area Director Indianapolis Site Disbursing Mission Area Director Rome Europe Texarkana 1/4/2022 Integrity - Service - Innovation 10

Process - FY 2009 End State - Operations Highlights Center of Excellence Limestone Center of Excellence Columbus Centers of Excellence Cleveland • Retired and Annuitant Pay • Garnishments Transportation Working Capital Fund Accounting Acquisition Accounting including Contract Pay Center of Excellence Indianapolis Security Assistance Accounting NOTES: 1. Redundant capability for Travel Pay will reside in Columbus until DTS is fully implemented 2. Arlington Liaison, Bratenahl, Texarkana and OCONUS locations also continue mission operations 1/4/2022 Integrity - Service - Innovation Centers of Excellence Rome • Medical Accounting • Special Ops Accounting 11

Technology • Enterprise Transition Plan ü Enterprise Priorities - Defense Travel System - Defense Integrated Military Human Resources System ü Service Enterprise Resource Planning Systems - General Fund Enterprise Business System - Defense Enterprise Accounting & Management System ü e. Commerce 1/4/2022 Integrity - Service - Innovation 12

Information • Business Intelligence (BI) • Benchmarking • Information Security 1/4/2022 Integrity - Service - Innovation 13

Information - Business Intelligence 1/4/2022 Integrity - Service - Innovation 14

Information - Benchmarking Accounting - Integrity - Service - Innovation

DFAS Summary FY 2005 FY 2011 • • Fewer locations: 101 9, 9152 employees 18 systems $1, 368 M operating costs 3 70% professional / 30% technicians Right employees with right skills Optimum number and mix of civilians/contractors • Pay for performance under NSPS • • • 30 locations 1 13, 8792 employees 92 systems $1, 615 M operating costs 3 70% technicians / 30% professional • Aging workforce • General Schedule Pay System Includes Europe & Japan Source: HR Flash Report September 2005 (civilian & military) 3 Current$ 1 2 People Information Leadership & Vision Technology 1/4/2022 Includes Europe & Japan Projected Civilian & Military 3 Current$ 1 2 Structure Process Integrity - Service - Innovation 16