In this era of budgetary belt-tightening, the Defense community faces a stark challenge—how to satisfy increasing demands with declining budgets. Recent surveys show that concerns about adequate funding and the related impact on workforce and auditability are growing among those who manage Defense fiscal operations. Something needs to change, and soon.
As a former civilian member of the Defense Financial Management community, with more than 20 years of Executive experience in the Navy, Marine Corps, Pacific Command and the Office of the Secretary of Defense, I’ve seen first-hand the vastness and complexity of our national security operations. Defense financial management professionals manage billion-dollar annual budgets, play a critical role in ensuring our national security operations run smoothly, and ensure our military remains a good steward of the taxpayer’s dollars.
However, the Defense Financial Management community is showing strain. A recent annual survey of financial managers from all sectors of the Defense community, conducted jointly by the American Society of Military Comptrollers and Grant Thornton Public Sector, shows the community’s top three concerns are budgetary constraints; attracting new talent; and sustaining auditability. The three are intertwined.
The overwhelming concern of respondents in the ASMC-Grant Thornton survey was the shrinking budget for Defense operations with the strong suggestion we lack adequate resources needed to sustain the readiness of the current operational force. Secondarily, there was high-level concern that given other budgetary pressures, funding for the financial management workforce is becoming inadequate to support the best people and systems.
Different, but certainly connected, the challenge of recruiting and retaining top-tier talent for the Defense financial management community was the second top concern. The past few ASMC-Grant Thornton surveys have highlighted the aging workforce and the inability to attract new, fresh talent to the financial management community as major problems that need to be addressed. However, this concern has never been so clearly articulated as in this year’s survey.
Auditability remains a top issue for Defense financial managers, however, concern has shifted from “attaining auditability” to “sustaining auditability.” Many respondents to the ASMC-Grant Thornton survey believe reductions in personnel and funding, coupled with increasing time demands on Defense financial managers, will overshadow the push to obtain auditability. Consequently, they are extremely concerned that leadership’s focus on auditability will wane and will be overtaken by operational necessities.
While the survey has been conducted annually for the past 13 years, concerns around budget constraints and fiscal uncertainty; attracting and retaining talent; and auditability have risen to the top for the past five surveys. I think we’re at a tipping point where these concerns must effectively become a call to action for Defense financial management leaders. The survey represents key information on what the path forward should look like.
The survey results, while clearly profiling the challenges at hand, also make the case that the Defense financial management community needs to start seizing opportunities for innovation and improvements. And the time to start is now.
Yes, the Department of Defense absolutely needs greater resources and funding in order to effectively meet increasing demands in an ever-evolving, complex national security environment. In my experience as a Defense financial management leader for the past two decades, those demands are unlikely to recede. Therefore, the Department needs to be proactive. In the absence of more resources, it needs to innovate, improve processes, and leverage technology.
Having recently transitioned from the Department of Defense to the private sector, I see significant opportunity for the department to adopt innovative private sector practices and technologies. Defense Secretary Ash Carter has begun reaching out to firms in Silicon Valley and Seattle to spur greater technology innovation on behalf of warfighters; it is time for the financial management community to do the same. For instance, the Defense budget for 2017 includes a 25 percent reduction in headquarters personnel (including financial managers) with no apparent reduction in workload. Defense financial managers could start now to accelerate process improvement, technology insertion, virtual meetings, and increased telework.
The ASMC-Grant Thornton survey provides vital information for Defense planners. While the current fiscal and national security environments create challenges, there are also significant opportunities for innovation and improvement. The survey shows that many financial managers are optimistic about the future; and about developments in the Defense financial management profession. It’s time to embrace this opportunity and optimism to accelerate innovation to achieve a more effective and cost efficient Department.
Ariane Whittemore is Director of Security and Defense for Grant Thornton Public Sector, and the former Assistant Deputy Commandant for Programs and Resources for the U.S. Marine Corps.