Thoughts on Budgeting

  • The concern should be to make the budget as realistic and accurate as possible because a reasonable budget based on a reasonable plan encourages reasonable performance
  • A budget is a measurement tool; accountability, discipline and reviews are necessary for control
  • A budget requires complete participation by all levels of management
  • Large variances between planned performance and budget objectives indicate a weakness in one or multiple areas:
    • Poor estimates
    • Poor feedback and lack of timely, corrective action
    • Ineffective management policies concerning budget maintenance
  • Know your operation. Know the people in your operation. Seek feedback. Experience your mission hands-on.
    • Don’t gloss over this. Get to know each of your missions intimately
      • How many supplies does each unit have available?
      • Where are the supplies stored? Are they controlled? Are folks scraping by unnecessarily?
      • Do you have excess between units that could be shared?
      • Who is actually watching the cable TV? Are we driving every vehicle on the GSA lease? Who is using the MiFi and why?
      • How many people are under each cost center? Have you done a cost per person analysis on things like TDY or GPC? Are there outliers? Why might that be (rank, job, special equipment, specific conferences/training)?
      • Is your unit deploying this year? If so, when? Will that cause your requirements to increase or decrease? Both scenarios are plausible, but not possible.
  • Do you know how your budget was determined? Could you explain it to the Wing Commander?
  • How are you evaluating performance? What is the benchmark?
  • Have you created a feedback loop with your managers? Periodic budget reports should generate feedback on performance variance against budgets
    • For feedback to work properly, it should be regular, expected, consistent and timely.
    • The best feedback loop is to sit down monthly with each cost center manager to review the budget-to-actual variance report.
    • Constantly incorporate changes. Budgets are living, breathing documents.
  • Find the right balance. Generic or vague estimates are worthless. But the cost benefit analysis must be reasonable. Commanders can’t know every single detail months in advance, but should be able to provide enough of an outline to “frame out” a budget.
  • Initiate Responsibility Accounting. Responsibility accounting means structuring systems and reports to highlight the accountability of specific people (cost center managers). Individuals within each organization must be empowered with both the budget and authority to execute their mission. One without the other is pointless.
  • Separate your budget into fixed versus variable costs. This greatly reduces the number of lines to review.
    • Unfortunately, fixed costs, because of their apparent static behavior, are not always reviewed regularly and critically to determine reasonableness. These are your biggest cost drivers; give them the attention they deserve each year.
    • Variable costs like GPC and travel are the areas to scrutinize most closely. Rarely does a “copy/paste” budget hold up to close scrutiny.
    • One major concern of relying upon historical budgets as a basis for future prediction is that a unit may be perpetuating past inefficiencies.
  • Relationship of Cost to Review Frequency (insert graph)

Fiscal Calendar Checklist

Every Month

Week 1

  • Update CSR/VOCO reports
  • Review prior month variance reports

Week 2

Week 3

  • Check on DJMS Access if >30 days between UTAs
  • QA meeting
  • c

Week 4

  • Review MORD balances
    • Specifically PY balances to see what hasn’t billed and can be closed
      • Take away: Don’t make the same mistake twice
  • Work CivPay PEC mismatch report (Reg Ref)
  • c

October

  • Certify DBT
  • Submit Economic Impact Analysis (EIA)
  • CSR reviews AF3821 is on file for each employee (Reg Ref)

November

  • LDTA briefing on DTS health
  • Check on PRA Audit
  • Review Support Agreements

December

  • Check Civ PCS reimbursement number
  • b
  • c

January

  • a
  • b
  • c

February

  • a
  • b
  • c

March

  • a
  • b
  • c

April

  • LDTA briefing on DTS health
  • Check on PRA Audit
  • c

May

  • Review Support Agreements
  • b
  • c

August

  • Develop CR plan
  • b
  • c

September

  • Sign QA Plan for next FY
  • Submit AROWS-R OWA Review Report to AFRC
  • Prepare Economic Impact Analysis (EIA)

Resource Advisor Questionnaire

RPA

  • Always be able to answer the 5 W’s
    • Who – Who is going? How many PAX? What are the ranks?
    • What – What is the mission? What does it accomplish? Be able to justify
    • When – What month? How many days? Do you have the quarterly authority?
    • Where – Where are they going? Decent required? Per Diem rates? MilAir? On base?
    • Why – Is there a cheaper way to accomplish the mission, e.g. VTC? Why some many people?

O&M

  • Ask the similar 5W questions as above but put your O&M thinking cap on. Questions are slightly different, but critical thinking remains the same.
  • What are your main cashflow drivers (quarterly authority)?
    • Large contracts (IDT lodging)
    • MIPRs (utilities)
    • Civilian Pay

PowerTrack/Syncada MORDs

Commercial (Syncada, C-MORD)

Legacy – NP in 11th and 12th position in SDN.  PC Code ST. Base obligates.

DEAMS – MP in the 11th and 12th position in SDN. Planned PO. Requisition (PR) Amendment will have Purpose code “0” (zero). Original PO with Purpose code P auto obligates. Approved PR Amendments must be associated to Original PO.  Do not intermix EEIC/OCs on Transportation MORDS.

See Object Classes/EEICs below to use for the HHG/NTS

See below for the acceptable Object Classes/EEICs available

Processed via US Bank – Syncada, https://portal.syncada.com/USBank/Login.aspx

Training audio file and slides for Syncada BI Funds Manager reports is located in the Syncada folder at : https://usaf.dps.mil/sites/10194/Knowledge_Base/Shared_Documents/DCBS_and_Syncada_Training/

Organic (AMC/DCBS/OCONUS, G-MORD)

Legacy – MM in 11th and 12th position in SDN.   PC Code G. Base Obligates

DEAMS – MM in the 11th and 12th position in SDN. Standard PO. Base manually obligates.  Check IPROC to ensure the MORD is listed in the Order Column

Charges Processed by AMC via DCBS to DFAS, https://dcbs.transport.mil/.  Email DCBS.Helpdesk@us.af.mil for DCBS access instructions Sign up for TAC Monitor Role on your DD 2875

See below for the acceptable Object Classes/EEICs available

Preval in the 1st 6 business days of the month.   Training video for DCBS pre-val is located in the DCBS folder at :

https://usaf.dps.mil/sites/10194/Knowledge_Base/Shared_Documents/DCBS_and_Syncada_Training

  • OCONUS PCS Shipment, OCONUS Cargo (Freight) require both a commercial and an organic MORD
  • MTA/PAX Organic Accounting (G-MORD) must be sent to the DCBS.Helpdesk@us.af.mil.  The subject line should include MTA/PAX MORD, CAER account #, and CIC. 

  • Freight/CARGO (Commercial/Organic) cannot use the EEIC/Objects classes designated for Commercial HHG and NTS:
    • For HHG, HHG Prog Code,  HC = 46200 or 220.1101, 46203 or 220.1103, 46250 or 220.1104 , 55792 or 257.2292, 55793 or 257.2293
    • For NTS HHG Program Code,  HS = 55791 or 257.2291
    • All others OC/EEICs allowed will be coded Freight and the HHG program field should be blank
    • HHG Prog Code in TGET is the driver to the Syncada Chart of Accounts (COA) for invoicing
  • Commercial MP MORDS cannot use EEICs for Organic MM MORDs
  • Organic MM MORDS cannot use OCs that crosswalk to EEICs that begin with 462% (those are for Commercial purposes)
    • Please review OCs in the 253 category to select the best OC/EEIC  
    • MM MORDS need to be manually obligated at base level.  Please double check to be sure both the requisition and purchase order are approved
  • The Purchase Order/MORDS must be obligated for the document to flow to TGET

You must check TGET to ensure your MORD/LOA is properly loaded to TGET (this usually occurs 3-5 days after obligation):

For how to check TGET Review the audio or video files located in the DCBS or Syncada folder at: https://usaf.dps.mil/sites/10194/Knowledge_Base/Shared_Documents/DCBS_and_Syncada_Training

Misc Payments MORDS Purpose Codes

Link

Favorite Quotes

“Things that have never happened before happen all the time,” says Stanford professor Scott Sagan.


Anthropologist Ashley Montagu on aging well:

“The goal of life is to die young — as late as possible!”

Source: Growing Young


Novelist Jeanette Winterson on the value of darkness:

“I have noticed that when all the lights are on, people tend to talk about what they are doing — their outer lives. Sitting round in candlelight or firelight, people start to talk about how they are feeling – their inner lives. They speak subjectively, they argue less, there are longer pauses.

To sit alone without any electric light is curiously creative. I have my best ideas at dawn or at nightfall, but not if I switch on the lights — then I start thinking about projects, deadlines, demands, and the shadows and shapes of the house become objects, not suggestions, things that need to done, not a background to thought.”

Source: Why I Adore the Night


“Deconstruct the cool things you see.

If you’d like to become a better musician and you see an amazing performance, start paying attention to how they do it. How did they promote the event? What happens in the first ten seconds of each song? How frequently are they engaging directly with the audience? Is there a progression of energy throughout the show?

When something fascinates you, pay attention to the details. The person who thinks, “That was cool” is a consumer. The person who thinks, “How did they make something that cool?” is on the path to being a creator.

Don’t just taste the recipe, look for the ingredients.”


“The hard way is the fast way.

Do it right the first time and you won’t have to do it over the next time.”


Treat every experience as though it is the last time you will have it

“There will be a last time that you visit your childhood home, or swim in the ocean, or make love, or have a deep conversation with a certain close friend. Yet usually there’ll be no way to know, in the moment itself, that you’re doing it for the last time. Harris’s point is that we should therefore try to treat every such experience with the reverence we’d show if it were the final instance of it. And indeed there’s a sense in which every moment of life is a “last time.” It arrives; you’ll never get it again—and once it’s passed, your remaining supply of moments will be one smaller than before. To treat all these moments solely as stepping-stones to some future moment is to demonstrate a level of obliviousness to our real situation that would be jaw-dropping if it weren’t for the fact that we all do it, all the time.”


David Brooks makes the distinction between “resume virtues” and “eulogy virtues.”

Resume virtues are things like income, job title, and the size of your house. Eulogy virtues are things like being helpful, being loved, being honest, and being remembered.

An irony is that many people aspire for the latter, but put all their effort into the former. (Link)


I had a professor in college who used to work for Adobe. He said the engineers who built Photoshop had no clue how users would use every filter and tool in the software. They just tried to develop every imaginable way to manipulate an image and had faith that artists and designers would discover a creative use for it.

A lot of things work like that – their value to the world isn’t entirely known, or predicted, by their creator.

Visa founder Dee Hock said, “A book is far more than what the author wrote; it is everything you can imagine and read into it as well.”

Author James Patterson said, “One of the best things about reading is that you’ll always have something to think about when you’re not reading.”

Mark Twain, as he does, put it best when he said: “Wagoner’s music is better than it sounds.”


Investor Howard Marks once told the story of an investor whose performance was never in the top half of his peers in any given year. But, cumulatively, over a 14-year period, he ranked in the top 4% of his peers.

Bond giant PIMCO has an idea called “strategic mediocrity”: You’re never the best in the short run, but you stick around long enough to outlive the competition and come out on top.

My thoughts: I think this is what made Tiger Woods so prolific. He rarely shot a 63, but also rarely shot a 73. That’s not to imply he was mediocre. He just knew that 3 or 4 under for four days was going to win a lot of tournaments.


Henry Ford had a rule for his factories: No one could keep a record of the experiments that were tried and failed.

Ford wrote in his book My Life and Work:

I am not particularly anxious for the men to remember what someone else has tried to do in the past, for then we might quickly accumulate far too many things that could not be done.

That is one of the troubles with extensive records. If you keep on recording all of your failures you will shortly have a list showing that there is nothing left for you to try – whereas it by no means follows because one man has failed in a certain method that another man will not succeed.

That was Ford’s experience. “We get some of our best results from letting fools rush in where angels fear to tread.” He wrote: “Hardly a week passes without some improvement being made somewhere in machine or process, and sometimes this is made in defiance of what is called “the best shop practice.”

The important thing is that when something that previously didn’t work suddenly does, it doesn’t necessarily mean the people who tried it first were wrong. It usually means other parts of the system have evolved in a way that allows what was once impossible to now become practical.


Novelist Paulo Coelho on taking action:

“One day you will wake up and there won’t be any more time to do the things you’ve always wanted. Do it now.”


Growth and comfort cannot coexist

When you run a knowledge business. You manage hearts; not parts


From start to finish, I put my thumbprint on this process in my own unique way. It’s a twist on what’s expected and executed in my own language. The deeper you look, the more you find.

My shop neighbor here in Fortuna works on old custom cars. Just beautiful stuff. He said to me once when we were talking shop on a Friday looking at one of his cars, “If you see this drive by, it needs to look like a Mustang. It has to be instantly recognizable. But when I park it, and you really can take a moment, every single line on this car is different. No piece of this is what it used to be. It’s still a Mustang, but it doesn’t share a single curve, sweep, part or component of what it came in here with. I’ve left my mark on every single part of this car I’ve touched. The people who truly appreciate what it is, and truly understand, those are the people that I make this car for.”

For me, that car is the putters I am creating. And the car gear heads who really appreciate the difference? Well, that’s the No. 1 golfer in the world. LINK

Favorite Ideas

If you find something that is true in more than one field, you’ve probably uncovered something particularly important. The more fields it shows up in, the more likely it is to be a fundamental and recurring driver of how the world works.

John Muir once said, “When we try to pick out anything by itself we find it hitched to everything else in the universe.” Fields are studied individually, but there are so many common denominators across topics. The more fields a lesson applies to, and the more disparate those fields are, the more powerful and important the lesson becomes. @morganhousel


Leibniz’s Worlds (philosophy): There are infinite possible worlds; we just happen to live in this one. Some ideas hold true in all possible worlds, while others would only work in this specific iteration. Naval put it this way: “In 1,000 parallel universes, you want to be wealthy in 999 of them. You don’t want to be wealthy in the fifty of them where you got lucky, so we want to factor luck out of it … I want to live in a way that if my life played out 1,000 times, Naval is successful 999 times.”

Liebig’s law of the minimum (agriculture): A plant’s growth is limited by the single scarcest nutrient, not total nutrients – if you have everything except nitrogen, a plant goes nowhere. Liebig wrote, “The availability of the most abundant nutrient in the soil is only as good as the availability of the least abundant nutrient in the soil.” Most complex systems are the same, which makes them more fragile than we assume. One bad bank, one stuck container ship, or one broken supply line can ruin an entire system’s trajectory.