1. Intermediate Cost Analysis and Management
Prepare Forecasts, Variances and a Reconciliation Briefing --Childcare Case Ft. Riley--
Intermediate Cost Analysis
and Management
9.3

2. What Makes a Good AAR Brief?
What does your Senior Leader want to know?
How should you present the information?
What are your presentation pet peeves?
What should you avoid?

3. Terminal Learning Objective
Action: Prepare Forecasts, Variances and a Reconciliation Briefing
Condition: You are training to become an ACE with access to ICAM course handouts, readings, spreadsheet tools, and awareness of Operational Environment (OE) variables and actors
Standard: With at least 80% accuracy:
Use scenario information to prepare forecast, variance and reconciliation briefing.

4. Child Care Centers
Part of The Family and Morale, Welfare and Recreation Command (FMWRC or simply MWR)

5. MWR’s Mission
FMWRC, The Family and Morale, Welfare and Recreation Command serves the needs, interests and responsibilities of each individual in the Army community: -for as long as they are associated with the Army - no matter where they are -provides the Army Family with the same quality of life afforded the society they protect.

6. MWR & Leadership
MWR is a comprehensive network of support and leisure services designed to enhance the lives of soldiers (active, Reserve, and Guard), their families, civilian employees, military retirees and other eligible participants
Over 37,000 MWR employees worldwide
A 2-star general leads the FMWRC

7. MWR Program Categories
Categories A - Mission Sustaining Activities (Appropriated Funds APF) B - Basic Community Support Activities (Combination - APF/NAF) C - Business Activities (User paid - Non Appropriated Funds)
Examples Sports, Libraries Child Care centers, youth programs Golf courses, clubs, bowling, travel

8. Child Development Center at Ft. Riley
Part of Community Activities Directorate (Morale, Welfare, Recreation) that reports to Garrison Commander
Looks at cost in two categories
Appropriated funds are supplied from Congress
Non appropriated funds are received from user fees that parents pay based on rank
The following brief was presented by the center supervisor to the Garrison Commander

9. Directorate of Community Activities

10. Directorate of Community Activities
Note these math errors

11. Group Activity Divide into six groups
Each group will have an assignment to prepare information from the data on the previous slides
After preparing your information you will brief the CO (class)

12. Group 1 Activity
Group 1: Prepare a graph with two lines: total cost (both APF and NAF) and revenue. Interpret the graph for the CO.
APF
NAF

13. Group 2 Activity Simplify Data
Fewer Categories, Fewer Numbers
Group 2: Prepare one page that shows Jan Plan, Feb Plan, and the change between them. What questions should the CO ask when looking at this analysis?

14. Group 3 Activity Simplify Data
Fewer Categories, Fewer Numbers
Group 3: Prepare one page that shows Dec Actual, Jan Plan, Feb Plan, and the change between them. What questions should the CO ask when comparing future plans to Dec’s results?

15. Group 4 Activity Simplify Data
Fewer Categories, Fewer Numbers
Group 4: Prepare one page that shows Dec Plan, Dec Actual, and the change between them. What Questions should the CO ask when comparing performance to plan?

16. Groups 5 & 6 Activity Simplify Data
Fewer Categories, Fewer Numbers
Groups 5&6: Prepare one page that shows all the relevant information of the original brief plus the variances of the Jan Plan to Dec Actual and Feb Plan to Jan Plan. Highlight issues raised.

17. Instructor Materials

18. Group 1 Graph 160.0 140.0 Total Cost 120.0 100.0 80.0 60.0 Revenue
DEC
ACT
JAN
PLAN
FEB
PLAN

19. Group 2 Analysis Jan Plan Feb Plan Var Jan Appropriated Funds
Pay and Benefits
64.4
68.1
(3.7)
Special Payment
6.7
0.0
Supplies
4.5
9.9
(5.4)
Total APF Cost
75.5
78.0
(2.5)
Non Appropriated Funds
Revenue
60.9
59.2
(1.7)
70.2
56.3
13.9
1.0
Other
1.6
Total NAF Cost
72.8
58.9
Net Income
-11.9
0.4
12.3

20. Group 3 Analysis Dec Actual Jan Plan Var Dec Feb Plan
Appropriated Funds
Pay and Benefits
54.1
64.4
(10.3)
68.1
(14.0)
Special Payment
6.7
(6.7)
0.0
Supplies
3.5
4.5
(1.0)
9.9
(6.4)
Total APF Cost
57.6
75.5
(17.9)
78.0
(20.4)
Non Appropriated Funds
Revenue
42.8
60.9
18.1
59.2
16.4
53.1
70.2
(17.1)
56.3
(3.2)
0.8
1.0
(0.2)
Other
1.6
Total NAF Cost
55.4
72.8
(17.4)
58.9
(3.5)
Net Income
-12.6
-11.9
0.7
0.4
13.0

21. Group 3 Analysis Dec Plan Dec Actual Delta Plan Appropriated Funds
Pay and Benefits
58.8
54.1
4.7
Special Payment
6.7
Supplies
4.2
3.5
0.8
Total APF Cost
69.6
57.6
12.1
Non Appropriated Funds
Revenue
59.0
42.8
(16.2)
52.8
53.1
(0.3)
1.0
0.2
Other
1.6
0.0
Total NAF Cost
55.4
Net Income
3.7
-12.6
(16.3)

22. Directorate of Community Activities

23. What’s the Story? Why is APF so favorable in December?
Can we annualize and reprogram?
Story:
$6.7K special payment delayed until Jan
$5.0K new hire delayed until Jan
Conclusion: cannot annualize and reprogram

24. Directorate of Community Activities

25. What’s the Story? Why was revenue/profit down $16K? Story:
($10K) December slow month for day care
Why was this a surprise?
Why didn’t we anticipate and reduce staffing?
($6k) Increased proportion of low rates
Will this annualize and create a major problem for the year?

26. Directorate of Community Activities

27. What’s the Story? Why are we adding so much payroll?
Is this an opportunity?
Can we avoid or defer?
Can we shift people from other areas where their job is no longer needed?
Story
Unknown
Action item for follow up

28. Directorate of Community Activities

29. What’s the Story?
What’s the risk of cost happening and revenue not happening?
Does revenue rate problem go away?
Why are we adding payroll?
Story
Unknown
Action items taken to review rates and consider increase

30. Reconciliation December Revenue Cost Actual 42.8 112.9 Plan 59.0 124.9
Variance (16.2)
Explanation
Low Attendance (10.0)
Low Rates (6.2)
Delayed Hire
Delayed Special Payment
All Other

31. TLO Summary
Action: Prepare Forecasts, Variances and a Reconciliation Briefing
Condition: You are training to become an ACE with access to ICAM course handouts, readings, spreadsheet tools, and awareness of Operational Environment (OE) variables and actors
Standard: With at least 80% accuracy:
Use scenario information to prepare forecast, variance and reconciliation briefing.