Ms. Rebecca Beck Deputy Site Director DFAS Columbus March 18, 2016

 Customer Service Needs  DOD PPBE Process  Spending Authorities  DFAS WCF  Outputs and Workcounts  Cost Accumulation/Rates  Billing  Accounts Receivable  Summary

KC 46 and 135 Apache/Blackhawk Bradley Fighter Hurricane Cleanup Efforts

4 PlanningProgramming ExecutionBudgeting PPBE

5 PlanningProgramming ExecutionBudgeting PPBE Planning – Articulates strategy

6 PlanningProgramming ExecutionBudgeting PPBE Programming – Identifies size, structure and equipment for military forces and sets programming polices

7 PlanningProgramming ExecutionBudgeting PPBE Budgeting – Allocates resources to approved programs

8 PlanningProgramming ExecutionBudgeting PPBE Execution – Evaluates actual output vs. planned performance and adjusts resources as needed

9 Army Air Force Navy Marines Other DA DFAS Congress Office of the Secretary of Defense (OSD) Products & Services Payment Bill Office of Management and Budget (OMB) CUSTOMERS (Buyer) OSD allocates Budget Authority (Funding provided to pay for DFAS work and services) DFAS (Seller) OSD allocates Cost Authority (Authority to incur costs (expenses) and to bill customers to generate revenue to offset those costs) Key Concepts (Spending Authorities)  Congress appropriates funding to OMB  OMB apportions the authority to OSD.  OSD allocates the apportionment to DFAS and customers.

10 Budget Billing Rates (Revenue) Actual Costs (Expense) 1) Customers provide funded orders for work at break-even rates 2) DFAS incurs costs to deliver customer request 3) DFAS bills customers for actual work at budgeted rates 4) DFAS realizes gain or loss and incorporates into AOR planning (Budget) NOR: Net Operating Results (Revenue – Expense) The DFAS Working Capital Fund Cycle

11  Outputs are types of DFAS work and services o Primarily grouped into mission area suites  Primary sources of cost are eBiz timekeeping (labor) and the eBiz Purchasing module (non-labor)  Workcount: An individual sales unit o Estimated by managers in collaboration with customers o Examples:  Civilian Pay - active pay accounts after each pay period end date  Contract Pay – LOA’s used to pay contract invoices, reported at month end  Accounting – Productive hours for performing accounting services, from eBiz People Pay Suite Civilian Pay (OP 01/21/41/51) Garnishments (OP 40) Military Pay ‐ Active (OP 03) Military Pay ‐ DMPO (OP 23) Military Pay ‐ Retired (OP 04) Military Pay ‐ Reserve (OP 05) Travel Pay (OP 07/27) Commercial Pay Suite Contract Pay MOCAS (OP 06/26/36) Contract Pay MOCAS DBH (OP 16) Vendor Pay (OP 09/28/29/39/49) DLA EBS/Fuel Payments (OP 19/30) DITCO Contract Pay (OP 32/42) DECA Vendor Pay (OP 31) Commercial Pay ERP (OP 59/69/79) Accounting Suite Accounting DBH (OP 11) FMS DBH (OP 14) I&T DBH (OP 24) DECA Commissary (OP 12) Out‐of‐Service Debt ‐ People (OP 10) Out‐of‐Service Debt ‐ CTR (OP 20) Cost Reimbursable Support to Others (OP 18) Direct Systems Reimbursement (OP 61)

12  Costs may be incurred ONLY after authority is allocated by OSD Authority received from Annual Operating Budget (AOB) which outlines limitations and consequences for exceeding approved cost authority target  Authority covers expenses throughout the FY Payroll, Supplies & Equipment, Contracts, Travel & Training  Customers provide funded orders Documents that provide funding for work and services Most commonly Military Interdepartmental Purchase Requests (MIPR) Based on workcounts (sales) and billing rates (prices) per workcount Billed monthly Could be for Support-to-Others (STO) EXPENSE REVENUE COSTS

13 What is cost allocation? The distribution of DFAS costs to systems, outputs and client Used primarily for indirect and G&A costs that must be spread among multiple projects, outputs, and/or customers Why do we do it? To identify how much it costs DFAS to do business To recover costs for some outputs (OP18 and 61) To learn about our spending habits to develop better budgets for future years Who does it? Resource Management is responsible for managing the budget formulation and execution programs for DFAS. Part of that role includes managing cost allocations and coordinating input from all organizations defining how costs should be allocated. How do DFAS EMPLOYEES have a role? By charging your time in timekeeping to the right accounting template and project codes Ensuring purchase documents have the right lines of accounting Supporting the review of cost allocation business rules How often are cost allocations updated? Rules are defined during budget build and most rules are reviewed and updated during execution on a quarterly basis. When cost allocations are applied, they are applied to all costs, "Year to Date."

14 Total  eBiz time & accounting system captures all costs associated with DFAS work  Correct time-keeping and project codes ensure accurate allocation of costs to specific customers and outputs. Project code samples: o Direct: o Indirect: 16IN o G&A: 16GA Key Concepts (Other Cost Element Definitions) MCLO: A code identifying a DFAS organization FLO: A code identifying a location SubFLO: A code identifying an office DWCF: A code identifying type of cost (labor, materials, contracts, etc. Vendor Code: A code identifying the specific DFAS customer Allocation ID: A code identifying a business rule logic in cost allocation SID: A code identifying a specific system Fiscal Year Indicator * 0000 for non- systems costs OutputIdentifier