Interview of The Honorable Mike McCord, Under Secretary of Defense (Comptroller and Chief Financial Officer).

Author:Runnels, Al

The Honorable Mike McCord was sworn in as the Under Secretary of Defense (Comptroller/Chief Financial Officer on June 27, 2014 and serves as the principal advisor to Secretary of Defense Chuck Hagel on all budgetary and financial matters, including the development and execution of the Department's annual base budget of $500 billion.

Mr. Runnels: Thank you for spending this time with us to share your perspectives on Defense financial management. Please tell us about your vision and strategy--your philosophy of financial management in support of the Department's mission.

Mr. McCord: We had a Town Hall meeting about six to eight weeks ago, so I'm going to share with you some of the same things I told our own folks. There, I was speaking mainly to the 150 or so government and 50-75 contractors in my office, but this is true for the Department as well. Here in the Comptroller office we have the strategic plan that Bob Hale and I worked on--the things we had been working on--trying to get the resources we need for our nation's security, and then the audit, and then the new workforce development program, still make good sense, so we're going to stick with those. There will probably be some tweaks at the margins, changes in emphasis, and as always changes in circumstances, as things like Ebola come up that take your time and move things in directions you didn't anticipate. But the basic plan concerning the things we're focusing on isn't going to change that much. In terms of how we operate, in particular when the Secretary interviewed me, he told me he wanted a Comptroller, and a new Deputy, and a new Undersecretary for Policy, all of whom he was interviewing at the time--this was a year ago now. He wanted people that could work together. I would say he is a pragmatist, and certainly if you had a chance to observe the Deputy, I think he got the kind of people he was looking for; people who are problem-solvers, who work well together without much drama involved. Part of my requirement and commitment is to live up to what he thought he was getting when he selected me for the job; that is someone who is going to be part of a good team with his other direct reports and someone who's going to get stuff done for him. Of course that applies to whatever issues arise.

My vision is not necessarily that everybody loves the Comptroller, that's not possible. Certainly you can't make everybody happy and give him or her all the money they want every time they come and ask. But I do want people to feel like they were treated professionally and that we knew what we were talking about. I sort of tongue-in-cheek call that a Mick Jagger standard: people aren't always going to get what they want here, that's not what I'm expecting of people. But we do want to try to get the "Department" what it needs, and we do want people to feel like they were dealt with professionally.

One of my big priorities, and I've said this to the Congressional Committees as well, is that I want to get more flexibility, where we can, for the Department. This is really a big concern of mine. I'm no expert, but in what free time I have, I'm a little bit of a student of history. I've always been fascinated by the Colonial Period in particular, and how our structure was set up. It's a great system, but it really was not built for the pace of the 21st century. I just see more and more of a disconnect as we operate in a world that moves at cyber-speed now, and with our system of checks and balances, it really is a challenge sometimes to get things done as quickly as we need to get them done, especially considering trying to get it done within the Congressional process and timelines involved. I'm not saying it's their fault or our fault, but our system was meant for inclusiveness and requiring cooperation--speed is not one of its leading attributes and the speed at which we need to operate in this century is just a challenge. So where I can be of help to the Department, while still of course respecting the constitutional prerogatives, I want to see where we can get more flexibility in working with Congress. That's been a challenge. Even to get them to understand our major muscle moves has been a challenge, and certainly as somebody who worked there a long time, I know there is a natural reluctance to give us too much leeway. The Department is an immense organization and the Congress can't always anticipate how an authority that they provide us today for one thing might be used in the future. But we really do I think have a challenge where we need more flexibility than we've had. You'll hear this from USSOCOM, you'll hear it from regional combatant commanders, and you'll hear it from the Services at times, so I want to do what I can to move forward there.

It's not really public yet in a big way, but our new Deputy Secretary has us looking at the PPBS process, and doing what we call a reboot. We're not blowing up the process and creating whole new things that you wouldn't recognize, but we do want to make some changes that we think will help us operate more efficiently and get a better product. One of my priorities inside my own organization here is to have our folks step up. To the extent that there is maybe going to be a little more emphasis on the budget review phase than there has been in the past--from when I got here when there was the combined program budget review. It's a chance for our folks to demonstrate that they're value added, and to show what they bring to the table. So one of the things that's important to me is for our people in Comptroller to step up, not in competition with anyone else, but if there's going to be more of a budget review, there's an expectation that we're going to help answer some of the complaints from our customers on the Hill that our product is not as polished as it could be. We need to deliver on that part that we're being called on to improve.

I want to mention some things that touch our appropriations liaison shop. As you know we have our own legislative affairs group here in Comptroller that by law reports to the Appropriations Committees separately from the OSD legislative affairs folks. I think both in the authorizing world and in our world--and of course we talk to all the committees about money and the OSD legislative affairs people talk to all the committees about other things as well--but, within both channels, I see a sort of generational change occurring that we're almost through the end of now. We'll probably see not the last part, but the second to last act, when two Committee Chairmen (Senator Levin and Congressman McKeon) retire at the end of this term. For many of the years--going on 30 years in another couple of weeks--that I've worked in this area--we've had some of the same faces; people that knew the Department and the Department knew them--these were longstanding relationships--people you knew you could go see to work something out. I'm talking about Ted Stevens, Ike Skelton, John Warner; the appropriations committee had the same leadership for a long time--Bill Young, John Murtha, Dan Inouye, etc. Within a few years all of those folks have passed on, on the appropriations side, as well as folks like Jerry Lewis and Norm Dicks leaving; and then similarly on the authorizing side, not so many people passing away--although some like Mr. Skelton have. So we've got a whole new batch of people on the Hill with whom we don't have that previous deep level of relationship and maybe trust--and I think that's a challenge for us. It's not just a challenge for Mike McCord or our appropriations liaison folks to solve, but it's a larger challenge for Secretary Hagel and quite a few of us in the senior levels to build relationships with new people. So Mr. Thornberry, Senator Reed, and Senator Durbin who are coming in and Congressman Frelinghuysen (who took over just about a year ago). You can't replace people with whom you've worked for 25 years at that deep level and develop that same level of relationship...

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