Slides 15 1 prepare a forecast breifing

DIRECTORATE OF COMMUNITY ACTIVITIESCost Based Management Review Organizational Element: CHILD DEVELOPMENT CENTER... Note these math errorsNote these math errors 6 DIRECTORATE OF COMMUNIT

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Organization Based Control – Childcare Case Ft Riley

Principles of Cost Analysis and Management

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What Makes a Good AAR Brief?

• What does your Senior Leader want to know?

• How should you present the information?

• What are your presentation pet peeves?

• What should you avoid?

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Terminal Learning Objective

• Task: Prepare a forecasts, variances and reconciliation briefing

• Condition: You are a cost advisor technician with access to all

regulations/course handouts, and awareness of Operational Environment (OE)/Contemporary Operational Environment (COE) variables and actors

• Standard: with at least 80% accuracy

• Use scenario information to prepare forecast, variance and reconciliation briefing

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Child Development Center

Background

• Part of Community Activities Directorate (Morale, Welfare, Recreation) that reports to Garrison Commander

• Looks at cost in two categories

• Appropriated funds are supplied from Congress

• Non appropriated funds are received from user fees that parents pay based on rank

• The following brief was presented by the center supervisor to the Garrison Commander

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DIRECTORATE OF COMMUNITY ACTIVITIES

Cost Based Management Review Organizational Element: CHILD DEVELOPMENT CENTER

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Note these math errors

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Group Activity

• Divide into six groups

• Each group will have an assignment to prepare information from the data on the previous slides

• After preparing your information you will brief the CO (class)

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Group 1 Activity

• Group 1: Prepare a graph with two lines: total cost (both APF and NAF) and revenue Interpret the graph for the CO.

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Group 2 Activity

• Simplify Data

• Fewer Categories, Fewer Numbers

• Group 2: Prepare one page that shows Jan Plan, Feb Plan, and the change between them What questions should the CO ask when looking at this analysis?

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Group 3 Activity

• Simplify Data

• Group 3: Prepare one page that shows Dec Actual, Jan Plan, Feb Plan, and the change between them What questions should the CO ask when comparing future plans to Dec’s results?

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Group 4 Activity

• Simplify Data

• Group 4: Prepare one page that shows Dec Plan, Dec Actual, and the change between them What Questions should the CO ask when comparing

performance to plan?

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Groups 5&6 Activity

• Simplify Data

• Groups 5&6: Prepare one page that shows all the relevant information of the original brief plus the variances of the Jan Plan to Dec Actual and Feb Plan to Jan Plan Highlight issues raised.

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Instructor Materials

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Group 1 Graph

0.0 20.0

JAN PLAN

FEB PLAN

Total Cost

Revenue

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Total APF Cost 75.5 78.0 (2.5)

Non Appropriated Funds

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Total APF Cost 57.6 75.5 (17.9) 78.0 (20.4)

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What’s the Story?

• Why is APF so favorable in December?

• Can we annualize and reprogram?

• Story:

• $6.7K special payment delayed until Jan

• $5.0K new hire delayed until Jan

• Conclusion: cannot annualize and reprogram

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What’s the Story?

• Why was revenue/profit down $16K?

• Story:

• ($10K) December slow month for day care

• Why was this a surprise?

• Why didn’t we anticipate and reduce staffing?

• ($6k) Increased proportion of low rates

• Will this annualize and create a major problem for the year?

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What’s the Story?

• Why are we adding so much payroll?

• Is this an opportunity?

• Can we avoid or defer?

• Can we shift people from other areas where their job is no longer needed?

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What’s the Story?

• What’s the risk of cost happening and revenue not happening?

• Does revenue rate problem go away?

• Why are we adding payroll?

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