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Enclosure 1 - Purpose The Budget Productivity Indicator is a ---

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Enclosure 1 - Purpose The Budget Productivity Indicator is a ---

    Budget Productivity Indicator

    November 2007

    (Updates in blue text)

    Purpose: The Budget Productivity Indicator is a performance measure that is a part of the ASN(FM&C) strategic vision to measure and improve program performance. This initiative is aligned with the objectives of the Department of Navy senior leadership and the President’s Management Agenda.

    Scope: The goal is to measure budget formulation and to implement the indicator to all appropriate levels of financial organizations.

    Administration: The BPI was drafted by the ASN(FM&C) Office of Budget and will be maintained by the Program/Budget Coordination Division (FMB 3).

    Communication: BPI status, guidance, and reports will be maintained on the FMB web site at http://www.finance.hq.navy.mil/fmb/gpra/gpra_p_u.html#fmsppm. Data will be

    submitted using the Justification Management System (JMS).

    Definitions: The BPI is a composite performance measure, combining elements of timeliness, productivity and quality measured at the ASN(FM&C), Office of Budget level and the Budget Submitting Office level. The calculation includes a weighted average of four factors Budget Unit Timeliness (BT), Budget Productivity (BP), Budget Quality (BQ) and Budget Outcome (BO). BQ counts 40%, BT counts 30%, BP counts 20%, and BO counts 10%. Outcome is only 10% because there are many external drivers affecting it. Scores will be published after each submission, and an annual budget cycle composite score will be published each spring after budget outcome is determined.

Budget Timeliness - The measurement will be based on when the documents are

    submitted in JMS, and measured against the deadlines published in FMB guidance. To avoid any potential favoritism, FMB analysts will not be allowed to give extensions to published deadlines. If multiple submissions are made, the score will be based on the submission time of the document that the FMB analyst reviews.

    Page 1 of 5

     Enclosure 1

    Budget Productivity Indicator

    November 2007

    (Updates in blue text)

    Budget Productivity - This measurement will be based on average hours spent on a justification package when preparing the budget. It will divide the total number of hours worked by the number of justification packages submitted, as recorded in the JMS. Average hours per justification package will be compared to the same submission in the prior budget cycle. BSOs may not set an internal start date for

    recording/collecting labor hours. All hours contributing to the submission must be included regardless of when they occurred. Labor hours will be based on the following guidelines:

    1) BSOs must include:

    a. Time spent by military, civilian and contractor personnel.

    b. Time spent by comptroller staff, business financial managers in

    program offices, program managers or any others who develop

    spreadsheets or other information that directly feeds into exhibits

    supporting a line item must be included, so long as it is not more than

    one subordinate level below the BSO.

    c. Time spent preparing the exhibits themselves.

    2) Excluded:

    a. Time spent at levels lower than one subordinate level to the BSO.

    b. Time spent to develop requirements or acquisition documentation.

    c. Time spent supporting planning and programming phases that led up

    to the budget formulation process.

    d. Time spent in IPTs or auxiliary meetings leading up to the budget

    formulation, unless they expressly and solely deal with budget exhibits.

    e. Time spent preparing auxiliary or additional information for Flag or

    SES leadership use (i.e. presentations or leadership updates).

    Page 2 of 5

     Enclosure 1

    Budget Productivity Indicator

    November 2007

    (Updates in blue text)

    The focus will be on the primary justification package for each budget line item. A “package” is an electronic attachment that may contain more than a single exhibit or

    spreadsheet and which supports a particular line item in JMS. The hours reported should include the time spent on all parts of the package. For procurement and RDT&E the package is for each line item. For O&M line items the package will be the OP-5 and OP-32, and CIVPERS. The OP-32 labor hours should be included in the time recorded in JMS for the OP-5. For Civilian Personnel the package will be the CP-1, CP-2, AND PB-54. For Navy Working Capital Fund the package will be the Narrative, Fund-2, Fund-7B, Fund-13, and Fund-26. For construction and military personnel submissions the package is the book. The Budget Productivity labor hours should include all time spent preparing these primary justification packages.

    Budget Quality - Quality will be measured against guidance using the scale shown below. Analysts and supervisors will review the exhibits and assign points for each exhibit based on the scale below. FMB analysts must ensure that they rate various BSOs consistently and fairly. FMB 1, FMB 2 and FMB 4 will meet periodically to ensure that they are consistently following the guidance. FMB analysts have an obligation to communicate with BSOs regarding the quality of the exhibits in a timely manner. FMB analysts must remember that the same exhibits submitted for different budget submission cycles are not necessarily the same, and must adjust ratings to take this into account. Exhibits will be evaluated for consistency between exhibits, correctness of format, completion of all required exhibits and overall strength of justification. Total possible points for each BSO will be 5 times the number of budget line items. BSOs may appeal quality ratings through the FMB chain of command by contacting the FMB branch head. FMB Division Directors will make the final decision.

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     Enclosure 1

    Budget Productivity Indicator

    November 2007

    (Updates in blue text)

Points

    5 No changes are required. Exhibit is well written, complies with

    guidance, data is consistent between exhibits, all required exhibits are

    in correct formats.

    4 Only very minor changes are needed and can be made by the

    reviewer. No additional information is needed. Exhibits could be

    used as they are, but the reviewer makes slight improvements.

    3 Exhibit cannot be used as submitted. Additional information is

    needed and after a brief consultation with the analyst and additional

    information is received, corrections are simple to make by reviewer.

    2 Exhibit does not comply with guidance and must be returned for

    rework; exhibit is then reworked and resubmitted correctly. This

    score is also appropriate if the analyst failed to prepare an exhibit

    because guidance was not read or interpreted correctly and the

    reviewer has to ask for it. However, BSOs must not be penalized if

    FMB guidance is lacking or incorrect.

    1 Exhibit is deficient and must be repeatedly returned for rework.

    Budget Outcome - This will measure the outcome of the President's Budget Submission

    only, based on Congressional changes. Changes made during the OSD submission will

    not be considered.

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     Enclosure 1

    Budget Productivity Indicator

    November 2007

    (Updates in blue text)

Illustration of BPI Scoring Formula

    Budget Productivity Indicator (BPI)Budget Timeliness (BT)%Budget Productivity (BP)Budget Quality (BQ)Budget Outcome (BO)BPAverage Hrs per J. Package Number Units IBT BQ Prior Year Avg. Hours - Actual Avg Hours==0.3(BT)+ 0.2(BP)+ 0.4(BQ) + 0.1(BO)BP %=1 + =BO %=Total Points for all ExhibitsDON PB Submit - |Cong Changes|Submitted on Time %%DON PRESBUD Submit%Prior Year Avg. HoursTotal Units SubmittedTotal Possible Points

    Budget Timeliness (BT)Budget Outcome (BO)%Budget Productivity (BP)Budget Quality (BQ)45 BU$3.162B - |.100|40BT BQ =90%BO (%).3(0.90)+.2(1.04)+ .40(0.80) + 0.1(.97)BP (%)= (20.4 - (975/50))/20.4=80%==97%=B=50$3.162B1+(%)(%)P50 Total BUI104.41%=.27+ .208 + .32+ .097== %=91.0%=

    Page 5 of 5 Enclosure 1

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