March 03, 2016

Schumer, Gillibrand, Hanna Urge Secretary of the Army to Reveal AFMO Evaluation of Pilot Program which Directly Impacts Status of DFAS Employees in Rome

From last quarterly briefing with the Army, Schumer, Gillibrand and Hanna stress importance of clarifying the metrics the Army will use to assess the effectiveness and efficiency of the AFMO versus DFAS

Washington, D.C. – U.S. Senators Charles E. Schumer and Kirsten Gillibrand and Representative Richard Hanna today wrote to the Secretary of the Army urging the service to disclose evaluation criteria that will be utilized for the assessment of the current Army Financial Management Optimization (AFMO) pilot program scheduled to end on March 31st. The Members of Congress’ letter to the Acting Secretary of the Army, Patrick Murphy comes after the quarterly briefing on the current status of the AFMO pilot and its impact on tasks currently carried out by Defense Finance and Accounting Service (DFAS) employees in Rome, NY.

In 2014, approximately 1,000 DFAS employees in Rome became concerned that their largest customer, the U.S. Army, would be restructuring and internalizing a portion of DFAS’s functions. The concerns were related to the Army’s new enterprise management system that is intended to make financial management more auditable and efficient but could take job functions away from DFAS. The fiscal year 2015 National Defense Authorization Act (NDAA) required that no initiative proposed or pilot program aimed to transfer functions away from DFAS to anywhere else in the Defense Department be implemented until the Secretary of Defense certified that “the plan would reduce costs, increase efficiencies, maintain the timeline for auditability of financial statements, and maintain the roles and missions of the Defense Finance and Accounting Service.” The Office of Cost Assessment and Program Evaluation (CAPE) has been tasked with doing an independent review of the pilot and assess the impacts on cost, auditability, DFAS capabilities, and the ability of DFAS to maintain Defense Department services. The findings of the pilot program would have to be reported to the Congressional Defense Committees before any proposed transfer is implemented.

“The first-rate workforce at DFA Rome is efficient, cost-effective and productive and I am confident will stack up well against any other operation. But we need a clear explanation from the Army on the criteria they will use in the pilot program to evaluate them. DFAS Rome is highly efficient and I will do everything in my power to make sure its workforce is treated fairly and consistent with prior commitments we have secured in legislation, and that we preserve these jobs,” said Senator Schumer.

“The Army must make its criteria known so that we can reasonably assess the AFMO pilot’s efficiency and effectiveness compared to DFAS,” said Senator Gillibrand, a member of the Senate Armed Services Committee. “For the last two years I have fought to protect the work of DFAS employees in Rome because of their proven track record of doing their jobs efficiently and effectively. If the Army is considering taking any functions away from DFAS, it must very clearly show that the functions can be more effectively accomplished through AFMO and the only way to do that is to clearly articulate how it is comparing DFAS employees’ work versus AFMO.”

 

“Without knowing what criteria and methods the Army is using to compare its pilot program to the excellent track record of DFAS, we have no tangible way of assessing the productivity of the Army’s pilot program,” Rep. Hanna said. “What we do know is there is no better or more efficient workforce than DFAS Rome. The Army needs to demonstrate that it can do this work better and, for me, I will need to see this to believe it.  A key part of my evaluation will be knowing in advance how the Army plans on assessing itself throughout the pilot.”

The Defense Finance and Accounting Service was created in 1991 to standardize and improve accounting and financial operations for the Defense Department. It provides payroll services for military and civilian personnel, retirees and other major contractors and vendors. DFAS operates as a separate and unique entity in the Defense Department, to ensure transparency and accountability of financing and accounting.

Full text of the letter to the Armed Services Committee is included below.

 

Dear Acting Secretary Murphy,

 

Thank you for inviting our staff members to attend quarterly briefings on the progress of the Army’s Financial Management Optimization (AFMO) process and for working closely with our offices to monitor the impacts this process could have on the Defense Finance and Accounting Service (DFAS) and its 950-strong workforce in Rome, New York. As strong advocates of DFAS and its Rome facility we look forward to attending future briefings on this important topic.

 

We write today to follow up on concerns that have been expressed to us regarding the AFMO process and the metrics being utilized to determine the effectiveness of the Army’s Facility Management Support and Operations Center (FMSOC) pilot program at Fort Bragg.  As you know, this FMSOC is examining the feasibility of incorporating eight financial management tasks currently performed by DFAS into the Army’s internal financial management structure.

 

In gauging this pilot program’s effectiveness, we understand that data collection and analysis are critical and that after the pilot’s completion such information will be delivered to the Office of Cost Assessment and Program Evaluation (CAPE) for review.  As representatives of constituents who have equities in this process, we believe that it is critical that all parties understand the metrics that are being developed to assess the effectiveness of the pilot.

 

Therefore, prior to the termination of the pilot program and the delivery of this information to CAPE for further examination, we respectfully request that the Army provide our offices with a list of all `performance metrics and evaluation procedures that will be utilized.  We also seek clarification as to the role CAPE will play in determining the effectiveness of the pilot program and whether CAPE will be responsible for verifying, in accordance with Pub. L. 113-235, that the transfer of DFAS functions reduces costs, increases efficiencies, and maintains auditability.

 

As always, we thank you in advance for your attention to our concerns, and for the high levels of transparency and accountability you have sought to maintain throughout this process.  We look forward to continuing to work with you in the months and years ahead.