1. Thoughts on Financial Management Civilian Workforce Stabilization American Society of Military Comptrollers Fort Meade Chapter Professional Development Institute (PDI) 17 November 2015 Chris Babcock, Director www.pwc.com Disclaimer: This presentation and all material herein represent the sole views and opinions of the author/presenter, and does not represent the views of ASMC and the Fort Meade Chapter, DoD, or PwC.

2. Background – We are currently operating in an environment of: Extreme Federal budget pressure: o Continued deficit spending o Debt ceiling concerns o Sequestration impacts After-effects from more than a decade of war o Declining defense budgets relative to overall federal spending (mandatory vs. discretionary spending) o “Reset” of war-torn equipment and materiel o Ongoing and new procurement programs o Declining military end strength Uncertain geopolitical environment o Russia (Ukraine and Syria) o Middle East (Syria/Iraq/ISIS, refugee crisis, Iran) o China (Man-made islands and defense modernization) o North Korea (nuclear testing) “The federal budget deficit, which has fallen sharply during the past few years, is projected to hold steady relative to the size of the economy through 2018. Beyond that point, however, the gap between spending and revenues is projected to grow, further increasing federal debt relative to the size of the economy—which is already historically high.” Congressional Budget Office, The Budget and Economic Outlook: 2015 to 2025 The information on this slide is subject to the disclaimer on the title slide of this presentation. 2

3. Current Workforce Challenges A large portion of our current FM workforce is retirement eligible or soon will be Millennials have been joining federal service, but are leaving in increasing numbers o Impacts of improving economy?? Current civilian workforce is not adequately staffed at all career levels Many perceive the lack of a clear civilian FM career path “...30 percent of all career permanent employees who were on board as of September 30, 2013, will be eligible to retire by 2018. (I)f turnover is not strategically managed and monitored and succession plans are not in place, gaps can develop in an agency’s institutional knowledge and leadership as experienced employees retire.” OPM and Agencies Need to Strengthen Efforts to Identify and Close Mission-Critical Skills Gaps, GAO-15-223, January 2015 3 The information on this slide is subject to the disclaimer on the title slide of this presentation.

4. “Filling the Bathtub” Personnel nearing retirement Millennials Age Staffing Levels 4 The information on this slide is subject to the disclaimer on the title slide of this presentation.

5. Current Training Challenges Training is vital to ensure overall professional competency given shift to ERPs and cost accounting, BUT... Professional development training has lacked consistency and availability Lack of funded training mechanism within DoD FM Certification Program Funding is traditionally cut during austere budgets Training is also cited as critical to job satisfaction for many employees, especially millennials 5 The information on this slide is subject to the disclaimer on the title slide of this presentation.

6. Recommended Solution #1: Institutionalized Comprehensive and Frequent Training Actions o Institutionalize and centrally fund Defense-wide FM training o Regional classes/courses o Distance learning (e.g. video-teleconference, webinar, computer-based training) Benefits o Leverages DoD FM Certification Program o Can help ensure funding stays “fenced” o Can help generate and take advantage of economies of scale (e.g. joint base structure) o Demonstrates “tone at the top” for the importance of FM training o Facilitates marketing of training events to larger FM workforce 6 The information on this slide is subject to the disclaimer on the title slide of this presentation.

7. Recommended Solution #2: Revising the Civilian Personnel Structure to Support a More Robust and Flexible Workforce Actions to “fill the bathtub” o Promote recruitment of qualified mid to senior level personnel from outside the civil service (e.g. the private sector) o Allow for greater flexibility in beginning step levels o Allow for comparable leave accrual rates Actions to promote a clear career path o Assess and rebalance FM positions on organizational personnel requirement and authorization documents o Document FM organizational career paths o Communicate career paths and opportunities across the entire DoD FM community Benefits o “Tours” by qualified individuals can help fill the bathtub o Facilitates “cross pollination” of both private sector and government best practices o Enhances complete visibility of FM career field to promote career progression 7 The information on this slide is subject to the disclaimer on the title slide of this presentation.

8. Questions? This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2015 PricewaterhouseCoopers LLP. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers LLP which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.