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Capt. Mark Murphy
Within the NAVSUP Enterprise, there are three primary funding mechanisms, which provide spending authority … Direct Appropriation, Working Capital Fund (WCF), and Non-Appropriated Fund (NAF). You may also include Reimbursable as a means of funding, but Reimbursable documents will normally come in one of the three funding methods mentioned.
The Comptroller Directorate at NAVSUP WSS is a dual-sited code encompassing all personnel, financial and inventory accuracy functions at NAVSUP WSS locations in Mechanicsburg, Pa., Norfolk, Va. and Philadelphia. Consisting of nearly 300 civilian personnel and two military members, the “Comptroller Shop” oversees the staffing of a 2,200-person organization, accounts for the obligation of $5.6 billion in NWCF Obligation Authority (OA), tracks and records more than $6.3 billion in sales, and ensures the proper inventory accuracy of more than 411,000 line items of inventory valued at nearly $20 billion.
The Basics of the NWCF
Revolving funds, of which the NWCF is one, have been around since the late 1800s. The National Security Act Amendment of 1949 authorized the establishment of revolving funds in the Department of Defense (DoD). A revolving fund is a fund in which all income is derived from its operations and is available to finance the fund’s continuing operations without a fiscal year limitation.
A revolving fund operates on a break-even basis over time; that is it neither makes a profit nor incurs a loss. Simply stated, a revolving fund activity finances the cost of its operation using its own “working capital,” then bills the customer who reimburses the fund. A WCF typically does not get direct annual appropriations. Key terms one will learn in the WCF are, Obligation Authority, Sale, Expenditure, Collection, Unit Cost and Solvency. This article could get in the weeds on all of this, but I invite you to learn the WCF and potentially pursue positions in the revolving funds arena to become experts … it is a major part of the NAVSUP Enterprise business.
The “Other” Business Lines of the NAVSUP WSS Comptroller
While the basics above constitute the core business a WCF Comptroller requires, the position at NAVSUP WSS entails more. As personnel director, the key aspects are position management and the functions of hire, train and retain for a 2,200-person workforce. Completing for people is a key function of building and maintaining a world-class workforce to deliver sustainable logistics capabilities to the Navy and Joint Warfighter.
One of the key activities as Personnel Director is to monitor Affordable Full-Time Equivalent (FTE) ceilings for personnel staffing, while executing in a manage to payroll environment. In addition, as Inventory Accuracy Manager, the Comptroller of NAVSUP WSS is responsible for the accurate in-transit and location position of all WCF material, be it at a Commercial or Organic Repair Facility, in inventory at an WCF activity or somewhere in the repair or transportation pipelines. Requiring accurate inventory reporting from a myriad of activities using various systems is challenging, but is constantly improving as we single up systems and work out differences across system interfaces.
The primary functions in the Inventory Accuracy Department are what we refer to as Exception Transaction Processing. These functions include Commercial and Organic Asset Visibility (CAV and CAVORM); Carcass Tracking; Stock in Transit (SIT); Billing, and Failed Intermediate Document (IDOC) Processing. All of these functions come together to ensure the actual, physical state of the WCF’s inventory assets matches what we show on the books for audit purposes.
My Three Years
The expected … Annual budgets for WCF operations and material repair/procurement budgeting; accounting for funds received and executed including tri-annual reviews of proper accounting and Management Internal Control (MIC) programs; managing the hiring and attrition process to ensure maximum staffing for customer support; Managing carcass tracking, SIT and billing. All of the “expected” took place during my tour, but in a more challenging and rewarding manner.
The expected, with a twist … Arriving at the command on March 20, 2010, I began turnover three days following the NAVSUP “Go Live” of Navy ERP 1.1. Over the course of 30 months, Navy ERP rolled out via Material Groups 1, 2 and 3 for the Wholesale Inventory sites; Regional Go Lives 1, 2, 3 and 4 for Retail Inventory Sites and finally those Fleet assets in the WCF were implemented.
A not-to-be understated achievement, the folks who pulled this off are some of the most professional, talented personnel in the Navy. Quite a feat! With any major information technology system implementation, there are going to be bugs to work through, and the need to bring the workforce up to speed via training, and change management communications. NAVSUP, NAVSUP WSS, and NAVSUP Global Logistics Support (GLS) personnel have diligently worked through implementation and collaborated on best business practices to handle manual workarounds while awaiting system correction and enhancement. In the world of the Comptroller, financial, repairable process, and inventory accuracy have been the key areas of pursuit.
A major area of focus has been “Failed IDOC Correction.” I liken failed IDOCs to the scraps of paper on the back shop floors of Wall Street after the trades are complete. The customer need is satisfied, but all the paper has to be matched and properly closed to keep the books in order and ready for audit. We’re not at the point of “working today’s business today,” but the backlog of failed IDOCs has been managed and reduced over time to where the light at the end of the tunnel is in sight. As we get to the last documents in the backlog, there may be some “sludgy” tough ones, but the staff of Exception Document processors is up to the challenge.
Focus in a particular area, in this case failed IDOCs, created the unintended consequence of growth in unmatched SIT. Quickly engaging in this area, the WSS Team made sure to balance resources in order to keep focus on the numerous metrics and to bring more balance to “the attack.” Over the course of three years, I have become much more knowledgeable in the world of Navy ERP and the SAP software suite, as well as learning much about the financial and inventory accuracy sides of “the business.” This is another reason to pursue positions in the revolving funds arena to become experts … it is a major part of the NAVSUP Enterprise business.
The unexpected … A very challenging fiscal environment in which to operate. While the WCF does not receive direct appropriations, it relies on the direct funded customer accounts to put together the budget for NAVSUP WSS Operations and Material. In short, uncertainties in customer funding provided uncertainty in what and how much WSS should invest for future sale, and how much operations funding it will receive from sales.
During my three years, each year has begun under a Continuing Resolution (CR). As I write this article, the President has signed the Sequester language to reduce spending across government, including DoD. In these areas, the comptroller must keep close eye on daily sales, how much our customers are buying as these sales generate the operations funding required for making payroll and funding the WCF operations across the NAVSUP Enterprise. Uncertainty to an accounting trained professional is a tough one. In addition to the funding ramifications mentioned above, in Fiscal Year (FY) 2011, we were within 24 hours of a Government shutdown, and in FY13, the word furlough is hanging heavily. To the combined functions of Comptroller and Personnel Director, this all leads to the challenge of execution monitoring and providing well-educated advice to senior leadership on where to invest, when to hire, etc … I think I speak for all when I say I hope CRs, sequester, shutdown and furlough are not the “new norm.” Although, my theme throughout this article … another reason to pursue positions in the revolving funds arena to become experts … is a major part of the NAVSUP Enterprise business.
The Future … Some terms you will begin to hear more frequently are Business Process Improvement, Business Process Standardization, Financial Improvement Audit Readiness (FIAR), and Big Sustainment for Navy ERP.
There are many big things in progress and coming down the path for the financial community. Business Process Improvement is a deliberate process of looking at how we, the NAVSUP Enterprise, do business. Following implementation of Navy ERP, we need to look internally to ensure we are conducting business in the most proficient, efficient manner utilizing the software invested in while taking care of our customers. We should always be looking at how we can “do it better.”
Likewise, now that the major System Commands (SYSCOMs) as well as other activities are in Navy ERP, the opportunity now presents itself for Navy Business Process Standardization. For many years, the different “pieces” of the Navy have been conducting business differently and in different systems. Now is the time to standardize. Some time back, we tossed the NAVCOMPT Manual away stating the Financial Management Regulation (FMR) was all that was needed. As a loosely interpreted and at times contradictory document, Navy Business Process Standardization can lead to republishing of a new Navy Comptroller Manuel (NAVCOMPT) with standardized business rules in the Navy ERP environment. But why standardize? Besides the fact that it makes smart business sense, Financial Improvement Audit Readiness (FIAR) is coming fast. The first assertions of Navy financial statements are ongoing, and in FY14, the Navy has signed up to an auditable Statement of Budgetary Resources for the appropriated side of the house. WCFs will quickly follow. Another reason to pursue positions in the revolving funds arena to become experts…it is a major part of the NAVSUP Enterprise business.
My intent of this article was to talk a little about my three years at NAVSUP WSS, and hopefully to spur some interest in junior and midgrade officers to pursue tours to learn more about the NWCF and how the business works. If it does peak some interest, I am always available at, firstname.lastname@example.org to answer questions. I am passionate about Financial Management, and the opportunities available in the Supply Corps.
By Capt. Mark Murphy, SC, USN, Comptroller, NAVSUP Weapon Systems Support