WASHINGTON — The military deputy for the Army’s comptroller started down a road to set up the service to become better stewards of taxpayer dollars roughly eight months ago.
His predecessors worked to implement new financial management systems such as the General Fund Enterprise Business System as well as the Logistics Management Program and the Global Combat Support System-Army that will be used in supply rooms across every Army unit as the Army prepares for its first ever — and ongoing — audit.
While those new systems all have delivered more accurate reports about spending, Lt. Gen. Thomas Horlander and Army leadership are now attempting to take it a step further by not only increasing visibility on spending, but changing practices to ensure better spending.
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This isn’t the first time an attempt has been made to spend money more wisely, especially during times of severe budgetary restrictions, which the Army and the rest of the military have seen in recent years.
But this time, the effort — called the Command Accountability & Execution Review program — has not only the backing of leaders from the Army and the Office of the Secretary of Defense, but it also has oversight from the very top.
Defense Secretary Jim Mattis signed a directive earlier this year that focused specifically on being “peerless stewards of taxpayers’ dollars.”
Army Secretary Mark Esper, upon confirmation last fall, immediately directed Horlander and his staff to come up with an institutionalized way to improve spending practices within the service.
It would be easy to be complacent, as every branch of the military will receive a surplus of cash in the billions in fiscal years 2018 and 2019, but there’s also a recognition this surplus likely won’t last, and it’s important that the Army is prepared to make every dollar count.
The Army also has an ambitious plan to modernize the force and has even stood up a new four-star command — Army Futures Command — to guide the transformation.
“We recognize that we could definitely improve our stewardship of the resources that we have and certainly better optimize our purchasing power across the Army,” Horlander told Defense News in a recent interview in advance of the Association of the United States Army’s annual meeting.
For Horlander, a successful fiscal stewardship program doesn’t just reside in his office with his oversight, and that is what he credits to the success of the CAER program so far.
“The [Army] secretary, the chief of staff of the Army, the under [secretary] and vice are personally involved. They are in the room. They are sitting at the head of the table,” Horlander said.
The Army is approaching the effort from three echelons: the command level; the department of the Army level; and at the enterprise level — the Defense Department.
The service pushes money out to 34 Army commands, and each one has been given a set of eight key performance indicators to measure performance directly tied to fiscal stewardship.
These are reviewed monthly by commanders, with the Army under secretary and Army vice chief of staff presiding, according to Horlander.
At the Army headquarters level, the service is looking at policies and procedures tied to financial management that could be changed or improved, he said.
The Army also holds quarterly meetings where the Army chief and the secretary are briefed and weigh in on CAER program progress.
Additionally, Gen. Gus Perna, commander of Army Materiel Command, chairs a monthly meeting with the enterprise that consists of the commanding general or deputy commander of the Defense Logistics Agency, the Defense Contract Audit Agency, the Defense Contract Management Agency, Transportation Command, OSD’s acquisition, technology and logistics leads, as well the Defense Finance and Accounting Services leads and comptrollers from the other services.
Part of the program obviously involves meetings, lots of meetings, but Horlander said they are productive.
“Having those enterprise level organizations involved and having them work some of the solutions to these problems is just incredibly powerful,” Horlander said “And, quite frankly, we couldn’t do it without them.”
The CAER program sets out to solve three major problems hindering good fiscal management and decreasing purchasing power.
The first problem tackles the supply chain, from repair parts to fuel to other supplies. The sheer enormity of the supply chain makes it ripe for wasteful spending.
The Army’s second problem area resides with contract management, primarily service contracts.
The third problem area is getting after the transportation of people and equipment.
“We apply metrics to our problem sets, and we measure our performance against those metrics,” Horlander said. “We are looking at aged requisitions, we are looking at different types of financial instruments, we are looking at how databases reconcile between the sustainment community and the financial community. We are looking at things like that to make sure that we are really keeping our eye on the ball. This is all about discipline.”
The program has momentum now, but Horlander is also focused on how to ensure CAER is a lasting element to achieving fiscal responsibility within the Army.
The Army leadership now is gung-ho. Under Secretary Ryan McCarthy, in a recent interview with Defense News, was enthusiastic about the effort.
“There is nothing like producing results when leaders invest the time, and you really can account for that because you are measuring,” McCarthy said. “If leaders don’t get out and troop the lines and measure the productivity, it’s very difficult to maintain visibility and know how you are performing.”
The leadership is also focused, during the regular meetings with commanders, to make it about helping commanders get what they need to be successful rather than grill them for problems identified using the CAER program metrics, McCarthy said.
But what happens down the road when this group of leaders is replaced?
Horlander said one way is by institutionalizing the involvement of everyone across echelons, from the specialist in the motor pool who’s tracking particular repair parts all the way up to the top at OSD.
Another way is to make sure fiscal stewardship is drilled into curriculum at the schoolhouses. Horlander and Army leadership have directed that fiscal stewardship be an important part of key leadership courses across the Army starting with majors, field grade officers and all the way up through general officers.
“We’ve gone through a significant amount of work with [Army Training and Doctrine Command] and the Army War College to ensure, inculcated into the curriculum, is fiscal stewardship and giving them a measure of education on that front,” Horlander said.
McCarthy said Army leadership also is looking for ways to reward leaders who do well, so there’s incentive, such as promotion, when they come up with innovative ideas on how to better manage Army funds.
So far, Horlander said he has seen improvements, from ensuring that undelivered repair parts on order are canceled before the end of the fiscal year for which they were obligated, all the way to seeing more contracts move forward in the first half of the fiscal year as opposed to cramming them all into the second half.
There’s been a big improvement in reconciling inconsistencies in databases and work done within the program has even helped improve the Army’s GCSS system.
“This has become very powerful, and we’ve seen a lot of achievement here in the first year that we’ve started to implement, and we are really trying to mature ourselves so that we can do some really good trend analysis,” Horlander said. “We are trying to measure progress.”
Jen Judson is the land warfare reporter for Defense News. She has covered defense in the Washington area for 10 years. She was previously a reporter at Politico and Inside Defense. She won the National Press Club's best analytical reporting award in 2014 and was named the Defense Media Awards' best young defense journalist in 2018.