Influencing and optimizing budgets and spending.

Author:Dyson, Karen E.

The forecasted budget trend and anticipated reductions challenge resource managers to adapt plans to available funding levels. MG Karen E. Dyson and Morteza Anvari describe how successful resource managers implement value decisions in order to meet competing demands and optimize spending towards priority requirements.

Today's budget environment is challenging for Resource Managers (RM), given the uncertainty in appropriations and the continuing complexity of funding for a Nation at war while we adapt to shrinking budgets. Fiscal Year (FY) 2014 began with a government shutdown and Continuing Resolutions into January, achieving certainty only with the passing of the Bipartisan Budget Act, which established budget top-lines at levels less than what the Services requested. The declining budget trend is expected to continue into FY 2015, challenging RMs to work with operational commanders to adapt plans to available funding levels. This environment forces value decisions to meet competing demands and optimize spending toward priority requirements. Successful RMs are able to distill requirements and account for their true costs as a first step in understanding how funding can be optimized and how savings can be generated to fund more mission requirements.

Optimizing available funds for building capacity and capabilities that achieve readiness is not only an overarching goal for the Army Budget Office (ABO), but a priority goal for the Army. To approach the endeavor, the model below follows the collaborative continuum between RMs and commanders/operational managers to perform cost planning, cost accounting, cost analysis, and cost control (as seen in the graphic).

When choosing a place to start in the process, a good plan sets the stage and primes for the acquisition of funds. The acquisition of funds depends on many variables, from clear requirement definition, to an understanding of program costs, to linking funding to strategy. The desire to spend funds toward outcomes that achieve strategy and readiness goals is shared by commanders and leaders across the Army. The quest for optimizing spending is also shared by commanders and leaders, but is enabled by RMs who leverage tools to better link costs to budget. There are many resources to strengthen RMs' "toolkits." This article addresses the tools and concepts available to RMs in order to highlight what should or could be added to the cost management "toolkit."


The Army began to train leaders and RMs on cost management...

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