U S Army Finance and Comptroller School You

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Prepare a Budget U. S. ARMY SOLDIER SUPPORT INSTITUTE NONCOMMISSIONED OFFICER ACADEMY 1

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Your Own Budget Process (Concrete Experience) Scenario: You have decided to buy a new car since your current car has been giving you problems. After deciding on a car to buy, you estimate that you will incur an additional $700/yr in expenses for the insurance and property taxes and will have a $500 monthly car payment; your current car is paid off. You do some calculations on your budget and conclude that it is viable to purchase the new car but only if you make cuts to discretionary expenses such as cable. 1. What is the purpose of a budget? 2. How is this scenario related to the DA’s budgeting process? 3. Who has experienced something similar to the scenario? 2

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Terminal Learning Objective Action: Prepare a Budget Conditions: FM Leaders in a classroom environment working individually and as a member of a small group, using doctrinal and administrative publications, self-study exercises, personal experiences, practical exercises, handouts, and discussion. Standard: With at least 80% accuracy learners must show proficiency with: • Identify the process of budget development • Identify key personnel in the budgeting process • Identify the six budgeting steps 3

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Problems with Financial Resources q There never seems to be enough. q Many restrictions and directives attached to the use of public funds: • Cannot exceed ceilings, limitations, targets, etc. • Cannot shift funds between programs. • Cannot use an appropriation for other than its stated purpose. 4

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Installation Financial Management Constrained Resources Mission Requirements 5

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Budget • A formal, written, detailed statement of resources required and activities planned for the entire command to accomplish its mission. 6

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Ways of Looking at a Budget • • • Series of goals with price tags. Plan of work for the budget year(s). Instrument for ensuring efficiency by comparing planned work with actual execution data. Contract with the boss i. e. , “This is what I will accomplish with allocated resources. ” Expectation that the budget is only an estimate of resources allotted to the activity. Precedent to use historical data to develop the budget estimate, figuring in inflation. 7

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Developing the Installation Command Budget Estimate (CBE) HQDA PBG ACOM INSTALLATION CBE ACOM CDR BMG PBAC MADs DRM ACTIVITIES MADs DRM PBAC CDR DRM 8

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Financial Management Levels MAD CDR DPCA FSD DPTM DPW CRD LIBRARY ACTIVITY PHYSICAL ACTIVITIES DOL TRANS DIV TMP SUPPLY HHG SUB ACTIVITY 9

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! LSA #1 Check on Learning True or False Q 1: Budget is an agreement between you and your boss on how much it costs your activity to do its mission for the entire year. Q 2: Instrument for insuring efficiency comparing planned work with actual execution data is a way to perceive a budget. 10

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! LSA #1 Summary • During the first part of the lesson dealing with preparing a budget, we had discussions on being able to write and process a detailed budget statement of resources required, and activities planned for the command. 11

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Activity Chief q. Limited scope/responsibility. q. One program/BASOPS account. q. No budget expert. 12

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Major Activity Director (MAD) q Broader scope/responsibilities. q Generally more than one program or BASOPS account. q DRM provides assistance through budget analyst. q Competing for resources with other diverse missions. 13

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! DPCA Accounts AMS CODE 208018. 33 814731. 225 878751. 11 87875. 32 879732 951214 BASE OPNS: 815796. G 1. G 2. G 3. G 9. N 1. N 3. N 5 ACTIVITY ADMINISTRATIVE CENTER INSTITUTE FOR ADMINISTRATION HQDA INTERN TRAINING ACOM AND ACTIVITY EXECUTIVE PGRM ARMY CONTINUING EDUCATION PUBLIC AFFAIRS CHAPLAIN ACTIVITIES COMMAND INFORMATION ALCOHOL AND DRUG ABUSE REENLISTMENT ACTIVITIES COMPTROLLER SERVICES/FAO INSTALLATION HQ ADMINISTRATION PERSONNEL MANAGEMENT 14

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! LSA #2 Check on Learning True of False Q 1: Activity Chief - the responsible official who supervises the development and execution of an activity segment of the installation’s operating budget. Q 2: Major Activity Director (MAD, also known as the Program Administrator Chief. 15

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! LSA #2 Summary During the second part of the lesson on preparing a budget we discussed and identified the Activity Chiefs responsibilities and who supervises the development and execution of an activity segment of an installations operating budget. We identified the Major Activity Directors (MAD) responsibilities and who supervises the development and execution of major functional segments of the installation’s Combined Budget Estimate (CBE). 16

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Budgeting Process q Receive guidance. q Determine total requirements by Commitment Items (CIs). q Determine financed requirements. q Prioritize unfinanced requirements and develop decrement list. q Phasing. q Prepare supporting schedules. 17

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Step 1: Receive Guidance q Dollar Guidance. q Manpower Guidance. q Workload Guidance. q Administrative Guidance. 18

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Dollar Guidance q. Tentative dollar amount the installation can expect to receive. q. Must budget within this dollar amount. q. Consider funding limitations. q. Specific purpose. q. Floors. q. Fences. 19

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Manpower Guidance q Limitations on number, grade, and type of personnel authorized. q Military labor expense is not budgeted by the installation. 20

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Workload Guidance q Estimate of the amount of work performance expected by the installation, major activities and activities. 21

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Administrative Guidance q Budget format. q Rounding instructions. q Special schedule preparations. 22

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Step 2: Determine Total Requirements by CIs Commitment Item (CI): A code for classifying the type of services, goods and/or other items being procured or consumed according to its nature rather than its purpose. 23

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Sample Commitment Items 1100 1200 2100 2200 2300 2400 2500 2600 3100 4300 Personnel Compensation Personnel Benefits Travel & Transportation of Persons Transportation of Things Rent, Communications, Utilities Printing & Reproduction Contractual Services Supplies & Materials- Equipment Interest & Dividends 24

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Two Methods to Determine CI 1100, Personnel Compensation q. Salary table. q. Average. 25

U. S. Army Finance and Comptroller School Salary Table You Can’t Afford to go to War Without us! TDA LINE/PARA JOB TITLE 010 A 00 010 A 01 010 A 02 010 A 03 P&B DIV BUD OFF BUD ANA BUD TEC GS 560 12 11 07 6 1 2 010 B 00 010 B 01 010 B 02 010 B 03 010 B 04 010 B 05 FORCE M MGT ANA SUPV MPR DEV TOE INST MGT ANA GS 343 75 Z 71 L GS 343 12 12 E 7 E 6 11 3 3 SERIES GRADE HR ANN STEP RATE 1 26

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Average Method Current year CI costs: Divided by the number of employees Equals average cost per employee $240, 000 12 $ 20, 000 Budget year cost estimate for CI 1100: 11 Employees times average cost Equals $220, 000 Estimated base pay cost used for budget Estimated premium pay would be added 27

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Computation of CI 1200, Personnel Benefits q. Base pay times (x) a stated percentage. q. Example: $220, 000 X 15% = $33, 000. 28

U. S. Army Finance and Comptroller School LSA 3 Check on Learning (Midway) (Four Corners Questions) You Can’t Afford to go to War Without us! 1. The _____ has a broad scope of responsibilities, manages multiple programs, and is a voting member of the Senior Program Budget and Advisory Committee (PBAC). A. Activity Chief B. Director of Resource Management C. Commander D. Major Activity Director 2. Which of the following is/are steps in the budgeting process: A. Phasing B. Determining financed requirements C. Determine total requirements by CIs D. All of the above 3. Which of the four types of guidance is concerned with the number of personnel in the workforce? A. Manpower Guidance B. Workload Guidance C. Administrative Guidance D. Dollar Guidance 4. When determining the estimated amount for Personnel Compensation, which method is the more accurate method? A. Salary Table B. Mean Method C. Average Method D. None of the above 29

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Computation of CI 2100, Travel of Persons - TDY q To determine the total costs for CI 2100 determine the cost of each individual TDY trip planned. q For each trip you need the following information: q. Number of personnel traveling. q. Place traveling to (per diem rate). q. Number of days TDY. q. Estimated cost of travel (airfare, POV. . . ). 30

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Computation of Other CIs Base figures on historical data plus known changes for CIs: 2300 - Rent, Utilities, Communication 2400 - Printing, Reproduction 2500 - Contracts 2600 - Supplies and Materials 3100 - Equipment 31

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Step 3: Determine the Financed Requirements q First, finance the directed requirements. q Then, prioritize the remaining requirements using the following as guidelines: -Mission essential requirements. -The training plan. -Any new initiatives. -Less important requirements should be financed last. 32

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! When Determining Financed Requirements q Is this subjective? q Who acts as the honest broker? DRM 33

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Step 4: Prioritize Requirements q. Unfinanced requirements: -Establish priorities for the unfinanced requirements. - When total requirements exceed dollar guidance there are unfinanced requirements (UFRs). q. Financed requirements: - If there is a funding shortfall go to the decrement list to determine what gets cut. 34

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Guidance $$ vs. Total Requirements Relationship between total requirements, dollar guidance (financed requirements) and unfinanced requirements (UFRs): Total Requirements - $$ Guidance (financed requirements) = UFRs = Funding Shortfall = Less Important Remaining Requirements 35

U. S. Army Finance and Comptroller School Unfinanced Requirements (UFR) List You Can’t Afford to go to War Without us! q List of total requirements which remain unfinanced due to the limited amount of dollar guidance. q Unfinanced requirement list is prioritized from most important to least important. q Supported by impact statements. 36

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Decrement List q List of financed requirements which will be eliminated if the activity’s funding is reduced. q Decrement lists are prioritized from least important to most important. q Usually a percentage of the total dollar guidance. 37

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Decrement List and UFR List Relationship T O T A L #1 #2 #3 #4 #5 Budget Decrement List 5 th on list (Highest Priority) 4 th on list 3 rd on list 2 nd on list 1 st on list ----------------Funding Line ----------------R Q T S #6 #7 #8 #9 UFRs List 1 st on list 2 nd on list 3 rd on list 4 th on list (Lowest Priority) 38

U. S. Army Finance and Comptroller School Considerations When Developing UFRs and Decrement Lists You Can’t Afford to go to War Without us! q Regulatory requirements. q Command directives and special interests. q Major activity directors priorities and special interests. q Mission of the installation, major activity and activity. 39

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Step 5: Phasing q Purpose of phasing: To accurately identify when funds must be available to meet obligations. q Financed requirements: -Phased into quarterly increments. -Phased cumulatively. 40

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Phasing CI 1100 and 1200 Phase based on paid days, i. e. , the number of days in each quarter that the civilian employees will be paid (includes holidays and leave). 41

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Civilians Paid for 260 Days per Year DAYS % CUM 1 ST QTR 2 ND QTR 3 RD QTR 4 TH QTR TOTAL 65 64 65 66 260 25% 49. 6% 74. 6% 100% 65/260= 65+64/260=

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Phasing CI 2100, TDY Based on when travel is scheduled to begin according to the information submitted by the activity chief. 43

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Phasing CI 2500, Other Contracts Phase based on the contractual requirements for the payment. 44

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Phasing CI 2600, Supplies Can be phased different ways, such as: -Productive (work) days. -Workload. -Calendar days. 45

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Productive Days ROUND TO THE NEAREST 10 46

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Workload Historical/ Seasonal Data 47

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Phasing CI 3100, Equipment q. Phase based on replacement schedules and known requirements for new equipment using the quarter in which the equipment will be issued or back ordered. 48

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Step 6: Prepare Supporting Schedules q. Activity budget schedule. q. UFR lists. q. Decrement lists. q. Supply requirements schedules. q. Schedule of Contracts. q. Phasing. 49

U. S. Army Finance and Comptroller School Steps in Consolidation of a Major Activity Budget (MAB) You Can’t Afford to go to War Without us! q Accuracy - mathematical. q Balance - between CIs. q Completeness - adherence to guidance. q Validity - bonafide need for budget year (BY). 50

U. S. Army Finance and Comptroller School LSA #3 Check on Learning You Can’t Afford to go to War Without us! List and number the Steps of the budgeting process: 1. Determine total requirements by Commitment Items (CIs). 2. Prepare supporting schedules. 3. Determine financed requirements. 4. Receive guidance. 5. Prioritize unfinanced requirements and develop decrement list. 6. Phasing. 51

U. S. Army Finance and Comptroller School LSA #3 Summary You Can’t Afford to go to War Without us! During the final part of this lesson on preparing a budget we went over the six budgeting steps and identified what a budget is and how it’s used at an installation. We identified the functions of an activity chief and major activity director in the formulation of the Command Budget Estimate (CBE). We learned how to prepare an activity budget and identify the Major Activity Director’s (MAD’s) decision authority in finalizing the major activity budget. 52

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! Prepare A Budget Estimate PEs 53

U. S. Army Finance and Comptroller School You Can’t Afford to go to War Without us! TLO Check On Learning Ask It Basket 54

U. S. Army Finance and Comptroller School TLO Summary You Can’t Afford to go to War Without us! Action: Prepare a Budget Conditions: FM Leaders in a classroom environment working individually and as a member of a small group, using doctrinal and administrative publications, self-study exercises, personal experiences, practical exercises, handouts, and discussion. Standard: With at least 80% accuracy learners must show proficiency with: • Identify the process of budget development • Identify key personnel in the budgeting process • Identify the six budgeting steps 55