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Friday, June 27, 2008

Defense financial managers cite human capital issues as top concern

Workforce issues again dominate the concerns of Defense Department accounting and finance personnel, according to the 2008 American Society of Military Comptrollers survey.

The annual study, conducted with accounting firm Grant Thornton LLP, surveyed 575 members of the Defense financial workforce, including 61 executives from within the department and its component services. As in 2007, human capital issues "dominate the list of risks that keep executives and workforce alike awake at night."

Specifically, respondents named proper recognition and pay for individual performance, quality of work life, training, career management and succession planning, as areas of concern. The most frequently mentioned human capital risk, however, was the implementation of the department's National Security Personnel System. The rollout of NSPS, the system designed to manage more than 700,000 civilian Defense employees, has been not been smooth, and the ASMC survey showed it has mixed support. While executives overall were positive, the general workforce was far less so, but both groups acknowledged executing NSPS was a major challenge.

The survey also addressed the Planning, Programming, Budget and Execution System, another key program. The system, a revamped version of its similarly named predecessor, was rolled out in 2002 and was designed to reinforce the links among budgets, execution and performance. If implemented, proponents say it would allow the Defense secretary to assess the allocation of resources and to determine whether departments and programs were aligned with budget estimates.

Respondents expressed almost universal agreement that PPBES was the best method to achieve performance-based budgeting, and they felt strongly that the system would be effective and should be implemented.

All respondents agreed on the other primary areas of focus: departmentwide business enterprise architecture, enterprise resource planning systems development, and program efficiency and effectiveness.

This year's report highlighted the Defense financial community concerns about the upcoming budgetary realities and restrictions. An end to conflicts in Iraq and Afghanistan could lead to a sizable reduction in funding just as all agencies now feel the squeeze of massive federal deficit and debt.

In this fiscal transition, financial leaders will be expected to assess the effectiveness of their programs and target necessities and potential cuts.

-Elizabeth Newell, GovExec.com

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