|Transformation of Finance Operations
|by Major Thomas A. Buchholz, Captain Nicole M. Ward, and Staff Sergeant James R. Bakie
With Army transformation, finance operations have become a sustainment function. When the 1st Sustainment Brigade deployed to Iraq in 2007, it was in the process
of learning how best to provide financial support in a modular organization.
Faced with the challenge of transforming into an expeditionary, campaign-quality force, the Army replaced division support commands and other support brigades with sustainment brigades. For the logistician, this involved not only streamlining traditional systems for command and control, theater opening, and theater distribution but also integrating financial management operations as a new sustainment function. Within the sustainment brigade, a financial management support operations (FM SPO) section was added to the table of organization and equipment. This section was created to help the sustainment brigade command and control a financial management company (FMCO).
The financial management community transformed in order to adapt to Army modularity. Finance transformation was designed to help support and serve the Army and the Nation, provide modular, capabilities-based organizations, and increase the relevance and responsiveness of finance units to commanders. Financial management transformation eliminated finance commands, finance groups, and finance battalions. In their place, the Army created financial management centers (FMCs) that provide financial operations, theater policy, and technical oversight. The FMC is the theater link to financial management national providers such as the Defense Finance and Accounting Service (DFAS) and the Department of the Treasury.
The elimination of finance battalions resourced a total of 23 FMCOs (12 in the Active component) and 90 financial management detachments (33 in the Active component). FMCOs and financial management detachments have the same missions as the legacy finance structures, but provide greater disbursing capability at the detachment level and only limited military pay support because of the fielding of the Defense Integrated Military Human Resources System.
The 1st Sustainment Brigade, formerly the 1st Infantry Division Support Command, was activated on 15 February 2007. Soon after the activation, we were notified of our deployment to Operation Iraqi Freedom (OIF) 07–09 to support Multi-National Division-
Baghdad (MND–B). The 1st Sustainment Brigade was the second sustainment brigade to employ finance formations in combat operations.
The brigade commander decided to reorganize key staff positions for OIF 07–09. This decision was based on an earlier action that attached the 24th FMCO to the special troops battalion (STB) during its deployment. The logic was to give the STB commander the tools and resources needed to successfully provide command and control and technical oversight for financial management operations in his area of operations. Because of this reorganization, the FM SPO section was shifted from the brigade SPO section to the STB’s as primary staff.
Planning and Preparation
Before deploying, the FM SPO established communication with several financial management units—the 24th FMCO at Fort Stewart, Georgia, the 13th Finance Group (deployed to Camp Arifjan, Kuwait), and the 336th FMC from Lake Charles, Louisiana—with the intent of building relationships with nonaligned units before the deployment. Relationship building was key to our successful integration in theater.
Our initial contact with a unit that was in theater was with the 13th Finance Group. We contacted the group to gather information, theater policies, and the finance support matrix for the theater of operations. We sought to develop a better understanding of the working relationship between FM SPO and the finance group. We also gleaned this type of information from the 336th FMC, which visited us at Fort Riley, Kansas, and briefed the 1st Infantry Division and 1st Sustainment Brigade leaders on the financial management concept of support and modularity.
The 24th FMCO was task-organized under the 1st Sustainment Brigade for OIF 07–09. The FM SPO and the 24th FMCO discussed personnel and equipment issues and the company’s predeployment training. The FM SPO began to integrate this information into STB training meetings, and a video teleconference was conducted to discuss current and future issues, working relationships between the FMCO and FM SPO, finance support in Iraq, and individual detachment strengths and locations.
The battalion commander, the FM SPO section, and the 24th FMCO commander and sergeant major went to Fort McCoy, Wisconsin, to observe Army Reserve finance predeployment training and to meet two Army Reserve detachments that would deploy with the 24th FMCO. The 336th FMC was still training at Fort McCoy, allowing the FM SPO section to meet its leaders and discuss theater finance policies, roles, responsibilities, and relationships. We also met the officer-in-charge of the Army Reserve finance training at Fort McCoy and his staff to discuss the training and tasks that all Reserve finance units must conduct before deploying. The visit also allowed us to meet the two detachment commanders who would be attached to the 24th FMCO in Iraq. We based our discussions on their training, Soldier and equipment strength, and the future concept of support to operations in Iraq.
The FM SPO section also initiated communication with the 15th Finance Battalion in Iraq to learn about reporting procedures and requirements, customer service workload, locations of detachments and their finance support teams’ missions, the financial impact of the surge, guidance for the FM SPO section, and the transition process between the 15th Finance Battalion and the 24th FMCO.
Understanding Roles and Responsibilities
The 1st Sustainment Brigade deployed to Iraq with a finance battalion instead of a FMCO. This allowed the FM SPO within the STB to develop its internal standing operating procedures (SOPs), identify its roles and responsibilities, and learn everything it could from the finance battalion before the FMCO arrived. The FM SPO section quickly learned and understood the unique finance focuses, such as the merged accountability funds report, analysis of unmatched transactions, and assignment incentive pay. We also began to learn how finance operations work in a deployed environment.
Functions of the FM SPO Section
By the time the FMCO arrived, the FM SPO section was operational and understood its tasks, roles, and responsibilities. We took the functions of an FM SPO found in Field Manual 1–06, Financial Management Operations, and used them as a guide to create the specific tasks the section would conduct. We noted that, in the sustainment community, receiving timely and relevant data is important. In the finance community, that translates to tracking all Soldier and commander support statistics, including casual pay, check cashing, EagleCash card activity, paying-agent funding, and commercial vendor service payments.
These statistics quickly turned into tasks. The FM SPO section had to—
- Monitor and compile finance data through Diamond 2 reports.
- Develop trend and review-and-analysis briefs monthly.
- Monitor software and equipment—kiosks, the deployable disbursing system, paperless check conversion, point-of-sale devices, vaults, and cash counters.
- Plan finance support to respond to changes in the theater. As maneuver brigades shift throughout the battlefield, they can request finance support at remote combat outposts.
- Ensure that the brigade plans and coordinates with the brigade SPO and S–3.
- Resolve FMCO issues. This task became necessary when the FM SPO section began supporting the FMCO.
Each task had associated subtasks, and over time, we saw them changing as other priorities changed. These tasks were merely what we identified as our priorities during the first 5 months in Iraq.
When we arrived in theater, the FM SPO quickly coordinated with outside agencies and units. These included the 316th FM SPO section (the 1st Sustainment Brigade FM SPO’s higher headquarters); 336th FMC; 3d, 7th, and 640th Sustainment Brigade FM SPOs; 1st Sustainment Brigade staff (specifically the brigade SPO section); and 24th FMCO.
The FM SPO section communicated daily with the 336th FMC for policy and technical guidance. The 336th FMC served as the higher finance unit. Although it was not a command, the 336th FMC served as the financial management adviser for the theater. It provided technical oversight and coordinated with national providers, such as DFAS, the Department of the Treasury, and the U.S. Army Finance Command (USAFINCOM). The 336th FMC was responsible for sending daily technical finance reports, chairing weekly technical update meetings, and publishing finance directives and policies to FM SPOs. The 336th FMC also served as the theater program manager for Federal Reserve System programs, EagleCash cards, and paperless check conversion.
DFAS, USAFINCOM, the Federal Reserve System, and the Department of the Treasury were important assets and force multipliers for us. They served as our technical experts and program managers and were a source for historical information. They were always responsive to our questions and concerns about operations and procedures. We communicated with all of the agencies regularly in either monthly or bimonthly teleconferences that served as a forum for us to convey our concerns.
|This diagram shows all of the agencies that the financial management support operations section works with or coordinates with on a regular basis.
In addition to our teleconferences with outside agencies, representatives from DFAS and the Treasury Department visited Iraq to provide assistance and implement new software. DFAS sent a Corporate Electronic Document Management System (CEDMS) team to set up a web-based CEDMS application and a central repository for permanent storage of documents. CEDMS provides online access to disbursing vouchers and supporting documents to reduce the risk of lost documents and the time needed to access supporting documents for research and audits and work problem disbursements.
Another helpful visit was conducted by the EagleCash card team, which provided retraining to finance, postal, and exchange workers on end-user equipment relating to the EagleCash program.
The FM SPO section collaborated with other FM SPOs from the 3d, 7th, and 640th Sustainment Brigades. We shared ideas and SOPs and worked together to resolve finance issues as a group. We resolved cross-boundary finance support concerns before they became 316th Expeditionary Sustainment Command (ESC) issues. An example of coordination among all the FM SPOs occurred in December 2007, when the 336th FMC hosted a planning conference to realign finance support boundaries and missions throughout Iraq. After the 2-day planning conference, the FM SPOs briefed their FMCO, battalion, and brigade commanders on the draft courses of action (COAs). Each commander provided his input to his FM SPO, and the finance community reconvened via Breeze (Adobe Acrobat Connect Pro Web-conferencing software). The changes were briefed, agreed on, and merged, resulting in an approved COA. The 316th ESC published a fragmentary order directing the sustainment brigades to execute the boundary shifts and mission changes.
Although the FM SPO section was located at the battalion level, we were closely linked with the brigade SPO. We participated in the brigade SPO weekly collaborative sessions (a forum with all of the subordinate brigade support battalion SPOs), coordinated and integrated our plans with the brigade SPO plans section, and participated in brigade operational planning groups. The brigade served as our link to future support requirements and operational plans for Iraq.
Rules, Tools, and Procedures
The FM SPO section improved the reporting system by implementing the Diamond 2 report from the 336th FMC. This report was a consolidation of all finance data from the detachments and the FMCO. The type of data collected included customers served, casual pay, checks cashed, EagleCash card activity, paying agent activity, Commander’s Emergency Response Program payment, and commercial vendor service activity. With these data, we were able to brief accurate review-and-analysis and trend information to the 1st Sustainment Brigade commander. Some key information collected included customer numbers for disbursing, paying agents, commercial vendor services, and military pay.
The automation tracker was used by tracking automation that belonged to the Federal Reserve System. The type of equipment tracked included kiosks, point-of-sale devices, paperless check conversion, and EagleCash cards. This ensured that the automation equipment was repaired or replaced as needed. Ensuring that the right equipment was at the right location was mission essential.
In an effort to track the more than 700 paying agents that supported the commanders on the battlefield, the FM SPO developed a paying-agent tracker. The system tracked paying agents by unit, assigned location, and fund-clearing status. This helped ensure that we knew who our customers were and how we could help them. It also helped us plan for future missions and the placement of financial management support.
We tracked our forward operating bases, combat outposts, joint security stations, and patrol bases by which financial management detachments directly supported them, what units were being supported, and population size. As the number of units in theater increased, we used this information to adjust where support was needed.
Financial Management Briefings
The development of our trackers and consistent monitoring of financial data evolved into the development of numerous finance briefs. The FM SPO
prepared many financial management information papers for higher-level discussions and meetings. The FM SPO section attended monthly collaborative G–1 meetings for MND–B and Multi-National Division-Central (MND–C) and completed mission analyses and COA analyses for both MND–B and MND–C.
We developed monthly trends briefings that were shared among the brigade leaders to identify how to sustain and improve finance operations. The trends briefings covered vendor payments, EagleCash card loads versus cashier disbursements, paying agent support, and Soldier support disbursement.
In synchronization with the brigade SPO, we also developed a review-and-analysis briefing that showed all of the FMCO’s technical statistics. The briefing covered the case management system, merged accountability funds report, analysis of unmatched transactions, the military pay accuracy rate, and Soldier support disbursements. This allowed the 1st Sustainment Brigade, STB, and FMCO commanders to see the macro-to-micro view of financial management support in our area of operations.
Challenges of Modularity
The financial management community has faced some challenges during the modularity conversion, the biggest being the transformation of financial management battalions to companies. This shift put FMCOs under the command and control of STBs. Reorganizing the financial management unit into a company has had some negative impacts on how the company is perceived and how assets, such as housing and workspace, are allocated. The STB has been very careful not to remove power from the detachment commanders and has even aligned their rating scheme with that of all other company-level commanders, having the FMCO commander as their rater, the battalion commander as their intermediate rater, and the 1st Sustainment Brigade commander as their senior rater
It was an educational process for both the sustainment community and the financial management community to understand each others’ technical requirements and methods of thinking. The sustainment community did not understand financial
management processes, regulations, and business rules, and the financial management units learned how the logistics community is a numbers-based organization that uses statistical data to analyze workflow, workload capacity, customer service satisfaction, and proficiency. The FM SPO and the subordinate financial management units learned to analyze the data and use them to improve processes and procedures.
The 1st Sustainment Brigade’s STB and FM SPO have embraced financial management modularity. We see the potential in applying modularity to the financial management structure throughout Iraq. Finance Soldiers are no longer administrative overhead; they are now increasingly critical warfighting enablers and should be considered as such by all. Finance functions are now in the fight, with a tighter link to operational and support planning in conjunction with the battlespace management that the sustainment brigade provides. The sustainment brigade and the FM SPO have only begun to scratch the surface on exploiting the opportunities for the positive synergy that merging financial management into the sustainment community provides.
Major Thomas A. Buchholz is the executive officer of the 1st Sustainment Brigade Special Troops Battalion at Fort Riley, Kansas. He holds a B.A. degree from the Citadel and is a graduate of the Infantry Officer Basic and Advanced Courses and the Comptroller Intermediate Level Education Phase II.
Captain Nicole M. Ward is the financial management support operations officer for the 1st Sustainment Brigade Special Troops Battalion. She holds a bachelor’s degree from Xavier University and is a graduate of the Finance Officer Basic Course and Finance Captains Career Course.
Staff Sergeant James R. Bakie is the noncommissioned officer-in-charge of the Financial Management Support Operations Section, 1st Sustainment Brigade, at Fort Riley, Kansas. He is a graduate of the Warrior Leader Course and Basic Noncommissioned Officer Course.