Defense Finance and Accounting Service

According to the Defense Finance and Accounting manual (2005), Defense Finance and Accounting Service has been formed in 1991 to decrease the cost of Department of Defense finance and other federal agencies accounting operations. The formation of DFAS has strengthened financial management in the Department of defense through consolidation of finance and accounting activities across the Department of Defense.

According to the Assistant of Secretary of Defense Manual, the Defense Finance and Accounting Service is financed by its customers rather than through direct appropriations. This service-provider relationship with its customers pushes Defense Finance and Accounting Service to seek continues innovation and improvement in the quality of services it provides. Defense Finance and Accounting Service has steadily reduced it operating costs and has returned these savings to customers in the form of decreased bills.

The Defense Finance and Accounting Service organization is making every effort to improve business practices within each department such as Finance, Accounting, Resource Management, Human Resources and Information Technology services in order to stay competitive in this rapidly changing environment. The Strategic Plan depicts for the next 10 years how the organization will influence the people and technology, not only to meet and surpass expectations, but also to stand out as the world’s leading finance and accounting firm.

The 2007-2017 Defense Finance and Accounting Service (DFAS) Strategic Plan will be to keep the organization focused on its key mission of delivering professional finance and accounting services in support of the Department of Defense and other federal government agencies. As technology moves from an emphasis on information to intelligence, DFAS is discovering new opportunities for providing services faster, better and cheaper through intelligent system. The technology has enabled the organization to perform logical and analytical tasks faster and with fewer mistakes.

Mission The strategic plan falls directly in line with goals and vision that the agency has established. The agency mission statement reads, “The Defense Finance and Accounting Service (DFAS) is to provide Accounting and Finance services for the Department of Defense and other federal government agencies. The mission is to deliver responsive accounting and finance services to the Department of Defense (to the men and women in uniform) as well as to those who support the war fighters defending the United States of America”. It is about providing timely and useful business intelligence to decision makers who, with the right information, can more effectively manage their resources in support of our troops at home and abroad (https://dfas.eportal.mil).

DFAS is the world’s largest finance and accounting operation and much more. The mission will be expanded from providing what the customer needs today to anticipating how these needs will evolve for tomorrow. Developing and maintaining close relationships with the customers is how DFAS meets client needs with integrity, service, and innovation. DFAS is an agency supporting the OUSD(C), the Principal advisor to the Secretary of Defense for budgetary and fiscal matters. It is the responsibility of DFAS to coordinate and collaborate with all other federal agencies, the military services, and the combatant commands that provide war-fighting capabilities for America’s defense.

Vision The vision of DFAS is about future. DFAS focuses on being a trusted partner and a center of excellence for the entire federal government finance and accounting services. To achieve this vision, DFAS is pursuing continues improvement in the delivery of finance and accounting services in support of the men and women in uniform and other federal government agencies. Strategic goals that support this vision align with those in the federal government strategic plan, and focus on achieving measurable outcomes that result in: operational excellence in the delivery of finance and accounting services, trusted partnership with the customers and on-demand business intelligence, agile organization with fully integrated and automated systems, and be known as the employer of choice: right people, right skills, and right jobs.

Values The DFAS core values from the essential character of each individual within the agency. They are the guiding principles for each plan, project or action. These are the beliefs that must be a part of everything each staff member does, has withstood the test of time, and will see the firm into the future. They are the foundation of the trust the customers have given the firm. The values are:

Integrity- doing what is right such as accountability, dependability and commitment and rewards linked to performance. Service-This means striving to be a trusted financial partner such as collaboration within and across government organizations, commitment to financial stewardship, timely and accurate information and world-class performance. Innovation-creating new ways to do business such as state of art technology to become a trusted financial partner, advanced enterprise system and business intelligence.

Environmental Analysis The Defense Finance and Accounting Service (DFAS) strategy links directly with the Office of the Under Secretary of Defense (Comptroller) [OUSD(C) strategy which provides a roadmap for the change that translates this ambitious vision for the future into tangible actions for accomplishment within the next ten years. This FY 2007-2017 roadmap includes overarching strategic goals, corporate objectives, and key initiatives important at all levels of the organization in accomplishing the DFAS strategy.

Corporate-level performance measures will track progress as the agency moves confidently forward in transforming DFAS from a geographically-dispersed, transaction-dependent organization to a smaller, more agile organization providing effective financial analysis and world-class pay and accounting services. The DFAS strategy uses a variety of sources of information, trends, and direction. Information on finance and accounting best practices from government agencies and commercial enterprises was reviewed to form this plan’s foundation. Technology advances, political initiatives, and financial realities have been used in setting agency objectives.

DFAS also collaborated across the Department of Defense (DoD) financial community and listened to customers, stakeholders, and most importantly, agency employees on the front lines of service delivery. According to Norton (2007), the front line employee is the key to successful strategy execution. Successful organizations know that; that’s why they put resources into communicating strategy to employees- over and over, through different channels and in different formats. Private industry case studies have shown that crisis can be an effective catalyst for change. Several factors are now creating the kind of crisis climate appropriate to affect fundamental changes.

According Gaddy (2007), DFAS team members has been playing important roles in supporting the mobilization and demobilization of more than 195,000 military members. Many DFAS members deployed to provide support to commanders in theater. Meanwhile, other DFAS personnel contributed finance and accounting expertise to help rebuild the Iraqi nation by establishing control, disbursing and pay processes.

According to DFAS manual, DFAS’ workload continues to grow year in and year out. Currently, the team processes an average more than 104 million pay transactions for about 5.9 million military members, civilian employees, and military retirees and annuitants per year. The team also process an average of 6.9 million travel payments, 12.6 million commercial invoices, 127.3 million general ledger postings, $455 billion disbursements. The DFAS team also helps make money for the department by managing military and health benefit funds worth approximately $234 billion. The trend seems continue to grow because the war on terrorism does not seem short lived, and DFAS’ customers also demand more and accurate and timely information.

Furthermore, the government agencies are traditional bureaucratic, and rooted in the 200-plus old foundations, and DFAS is not an exception. Moreover, since DoD accounts for the biggest discretionary portion of the federal budget, Defense and the army in particular are prime targets by the public for any potential abuse of tax payers’ money. Nowadays, getting better government at less cost, has been the theme of the National Performance Review and Government Performance and Results Act, which emphasize process improvement and performance measurement by the Congresses. While improving the overall performance measurement is essential, but every step has to be approved by customers. According to the DFAS website (2007), some of the comments from across the spectrum called for.