Department of the Army Historical Summary: FY 1972


Management, Budget, and Funds

Organizational Developments

There were several changes in the Department of the Army's organizational structure in fiscal year 1972.

Since March 31, 1964, responsibility for civil defense has been assigned to the Secretary of the Army and has resided in the Office of Civil Defense, Department of the Army. On May 5, 1972, the Secretary of Defense established the Defense Civil Preparedness Agency to carry on the civil defense role delegated to him by Executive Order 10952. At the same time, the Office of Civil Defense, Department of the Army, was disestablished and its funds, personnel, manpower spaces, and other resources transferred to the Defense Civil Preparedness Agency.

On October 28, 1970, the Army Chief of Staff designated a Special Assistant for the Modern Volunteer Army (SAMVA) to centralize in a single office, at the upper levels of the Army, control over the broad range of activities related to achieving a volunteer force. The Office of the SAMVA developed a program for the Modern Volunteer Army outlining actions, incentives, priorities, requirements, experiments, funding, and goals for fiscal years 1971 and 1972. As fiscal year 1972 closed, the SAMVA had completed the principal tasks assigned to the office by the Secretary of the Army and the Chief of Staff. On June 30, 1972, the office and position of the Special Assistant for the Modern Volunteer Army were disestablished. Responsibility for the volunteer Army program was left in traditional staff channels with monitorship and central control in a Volunteer Army Office in the Office of the Deputy Chief of Staff for Personnel.

An Office of the Project Manager for Reorganization was established on April 24, 1972, in the Office of the Chief of Staff, to manage a series of plans for major reorganization and realignment actions to modernize, reorient, and streamline the Army's organization within the continental United States. Although improved efficiency was the main purpose of the realignments, the effort was designed to improve readiness, training, the materiel and equipment acquisition process, and the quality and responsiveness of management.

To respond to a growing need in recent years for more centralized direction and control of criminal investigative resources, and to provide more effective support to the departmental headquarters and the field


in this important area, the U.S. Army Criminal Investigation Command was established on September 17, 1971. The command, under the direct supervision of the Army Chief of Staff and the general staff supervision of the Deputy Chief of Staff for Personnel, exercises command, authority, direction, and control over Army criminal investigative activities around the world. It provides criminal investigative support to Army elements on a geographic basis and performs other functions in this field of specialization for the Department of the Army. The command is headquartered in Washington, D.C.

On July 1, 1971, the U.S. Army Intelligence Systems Support Detachment was formed at Washington, D.C., to support automatic data processing life cycle actions and Army management information systems objectives. The action responds to the Chief of Staff's instruction to Army staff agencies to establish Class II activities for this purpose. The Intelligence agency will provide guidance to the field in the subject area, produce standard software products for Intelligence systems, and develop and operate a Department of the Army Intelligence Data Handling System to meet the Intelligence requirements of the Secretary of the Army and the Chief of Staff. The central departmental system is scheduled to become operational during the second quarter of fiscal year 1973.

Also on July 1, 1971, as provided in plans outlined in last year's report, the Military District of Washington became a major field command reporting directly to Headquarters, Department of the Army.

For the past decade the Office of the Chief of Support Services has supervised the operation of the National Cemetery System and has been responsible for a number of other Army-wide logistical support services encompassing food, clothing, commissary, and surplus property activities. On May 15, 1972, the Office of - the Chief of Support Services was disestablished and its functions assumed by two new Class II activities under the Deputy Chief of Staff for Logistics; a U.S. Army Memorial Affairs Agency to handle cemeterial affairs and a Troop Support Agency to handle logistical services.

Management Programs, Systems, and Techniques

The complexity and dispersion of modern military forces, coupled with competing demands for national resources, all require that our military money, manpower, and materiel be managed as efficiently and effectively as possible. Management programs, systems, and techniques have had to keep pace with advances in computer technology and automatic data processing. Numerous programs have been developed covering every conceivable phase of operations. Some of the more


important appear in this chapter; others are covered in a functional context in other sections of the report.

The Department of the Army Management Review and Improvement Program (DAMRIP) was created in fiscal year 1972 to energize Army management and solve a long-standing problem in Army management organization. The problem developed during the 1960s when a number of management improvement programs were established across the Army General Staff' to respond to both internal and external requirements for improved resource management. Over-all Army management improvement efforts were fragmented and less than fully efficient.

The Comptroller of the Army was made responsible in fiscal year 1971 for implementing the Army portion of a government-wide management improvement program established by the Office of Management and Budget (OMB), and most existing Army management improvement programs were assigned or transferred to the Comptroller. The DAMRIP was created to integrate these elements into a unified program. It has two major goals: to insure that management programs in subordinate commands help the commander meet his management responsibilities and solve his management problems and to provide a commander with maximum latitude in conducting his management program. The DAMRIP stresses the need for a core of trained and skilled management experts to help identify and solve management problems and moves the Comptroller of the Army away from concern for the formal operation of programs and to a role of providing broad policy guidance and monitorship in the management improvement area.

Some modifications were made during the past year in the Worldwide Military Command and Control System (WWMCCS), which comprises the National Military Command System, the command systems of unified and specified commands, service and service component command headquarters, and the command and control support systems of Department of Defense agencies. The National Military Command System is the primary element of the WWMCCS and directly supports national command authorities and the Joint Chiefs of Staff. The controlling directive was revised in several respects. The definition of the term National Command Authority was revised to mean the President and the Secretary of Defense only. The channel of communications for Single Integrated Operations Plan execution and crisis management was designated as from the National Command Authority through the Chairman of the Joint Chiefs of Staff and to the executing commanders; the National Military Command System was designated as the priority subsystem of the WWMCCS, and the primary mission of the WWMCCS was to support the National Command Authority; a


WWMCCS Council chaired by the Deputy Secretary of Defense, was established to provide policy guidance and direction over system details; and the Chairman of the Joint Chiefs of Staff was assigned additional system management responsibilities and directed to develop a system objective plan covering the period 1973-1992. The Army expended $3.5 million for the WWMCCS in 1972, and $4 million was budgeted for fiscal year 1973. (See also command and control matters in Chapter II.)

During the report year, development and testing continued on standardized automated logistics, personnel, and administrative subsystems of the Combat Service Support System (CS3). Testing continued at Fort Hood, Texas. The Corps Support Command (COSCOM) portion was deferred to permit U.S. Army Computer Systems Command resources to be concentrated upon the Division Supply System (DISUP). As the year closed the Standard Installation/ Division Personnel System (SIDPERS) was being prototyped to replace the personnel and administrative subsystem; a total systems integration test was in progress to validate the interoperability of all functional subsystems as well as the teleprocessing function. Deficiencies that surfaced during the year were corrected and the test plan was updated to reflect changes in hardware systems and testing, and preparation was begun on manuals, training texts, lesson plans, and instruction programs required to extend CS3. Eventually it will replace the DLOGS and PERMACAP systems.

As a result of recommendations of a special departmental review panel, the Comptroller of the Army was directed to establish procedures for the periodic review and assessment of departmental responsibilities, to see which could be delegated to major commands. A number were identified, and actions were in progress to transfer them from Department of the Army to the commands so that managerial efficiency will be improved, resources will be used more effectively, costs will be reduced, and response time between commands and field activities will be expedited.

The Base Operating Information System (BASOPS) is an installation management system approved for thirty-three Class I installations in the United States and at two oversea commands-Alaska and Panama. It is the installation-level operating system of the Army Management Information System, designed to assist the installation commander in his roles of planning and executing departmental objectives. Three initial applications comprise BASOPS: military personnel accounting subsystem, supply and management subsystem, and financial management subsystem. As fiscal year 1972 closed, BASOPS had been fully installed at twenty-four installations; the remaining eleven including


those in Alaska and Panama are planned to be installed during fiscal year 1973.

On September 30, 1971, the Secretary of the Army delegated authority to make decisions on the method of performance of commercial and industrial-type functions to levels authorized by the Department of Defense. The Assistant Secretary of the Army (Installations and Logistics) was authorized to make decisions to establish or expand activities involving new starts for all functions except automatic data processing, which was assigned to the Assistant Secretary of the Army (Financial Management). Commanding generals of major commands and heads of departmental staff agencies were authorized to make decisions in behalf of the Secretary of the Army to continue, discontinue, or curtail activities at Class II installations and activities under their jurisdiction. This latter action eliminated cyclic reviews at departmental level and reduced the time required to reach decisions on installation recommendations.

Renewed emphasis on the Commercial and Industrial Activities Program during the year increased the number of new start actions processed by installations for departmental approval; the majority stemmed from proposals to invest additional capital in facilities and equipment for existing activities. At Department of Defense request, the Army Logistics Management Center conducted a series of executive seminars in the spring of 1972 to acquaint commanding officers and senior staff officials of all services with the requirements of the Commercial and Industrial Activities Program. Approximately 600 senior Army officials attended seminars at 21 locations throughout the United States.

The Department of the Army participated during the year in a multiservice effort to revise joint policy for the Department of Defense interservice support program. The resulting policy establishes the program in command channels, reduces reporting requirements, requires that interservice support be conducted on a reimbursable basis, redefines the program goal of economy to the federal government, and sets up a means of determining that the goal is being attained.

The Logistics Performance Measurement and Evaluation System (LPMES) was revised by the Department of Defense to make quarterly reporting more useful. Primary emphasis was redirected from problem solving to a broad overview of logistics performance. The revised concept reduces the number of supply functional areas; adds coverage on materiel maintenance; and expands coverage on procurement. The functional areas designed to represent the most significant aspects of logistics management were increased from 17 to 21. This management document depicts performance in units, percentage, dollars, items, and


other valid criteria applicable to an area under consideration, with comparisons made against a base period, area objectives, and established goals. By combining trend charts, brief analyses, and statistical data with intensive management, significant accomplishments were achieved. Within the 21 functional areas, 30 indicators with concomitant goals were developed for attainment in fiscal year 1972; 87 percent of these goals were achieved or performance was within acceptable levels.

During fiscal year 1972, the systems supporting computer equipment were upgraded for the U.S. Army, Pacific, Standard Supply System (3S)-the theater depot and inventory control center for supply and related financial data processing. The 3S system will eventually be integrated into the Standard Army Intermediate Level Supply Subsystem (SAILS).

An Army-wide review of the logistics system indicated that a greater standardization could be achieved in materiel support operations at the intermediate level. Accordingly, an effort was undertaken to develop SAILS, a subsystem that would encompass all logistic support operations between the wholesale system in the continental United States and the direct support and user levels in the United States and overseas. The initial objective was to develop, by June 30, 1972, a standard supply subsystem for management of supply at the theater and Continental Army Command level. A general functional description was approved and responsibilities assigned for concept development. By June 30, 1972, the functional requirements had been identified.

In December 1970, action was initiated to design a standard base level personnel system to support corps, division, and installation commanders. This Standard Installation/Division Personnel System (SIDPERS) will replace the automated personnel and administration functions presently performed under the Combat Service Support System (CS3), Base Operating Information System (BASOPS), the Personnel Management and Accounting Card Processor System (PERMACAP), and unique systems in Alaska and the Canal Zone. As the year closed, a software and prototype test of SIDPERS was being conducted at Fort Riley, Kansas, with extension to follow commencing in November 1972.

A major Department-of Defense project to reduce the costs of computerization was begun in February 1972 with the concept of regional computer sharing. The automatic data processing equipment in defense activities in the Philadelphia-Central New Jersey area provided the basis for a three-phase plan. ADP facilities would be consolidated for installation management applications at the U.S. Army Electronic Command, Fort Monmouth, New Jersey, embracing also its Philadel-


phia office and the Frankford Arsenal, Pennsylvania, and Picatinny Arsenal, New Jersey, in a Northeast Center Computer System. This remote terminal concept would then be extended to a larger number of facilities in the region. Based upon the efficiency and economy of this initial demonstration, similar regional computer sharing will follow in various parts of the country, involving numerous installations and activities.

The Corps of Engineers Management Information System (COEMIS) consists of standard applications in the functional areas of comptroller, personnel, real estate, and resource allocation for civil works and military construction project management. Finance and accounting standard applications and varied engineering applications are operating in engineer divisions and districts in the continental United States. The next standard application of the over-all system, that of personnel administration, was installed in the first location-Lower Mississippi Valley Division, Vicksburg; six of nine division centers were operational with Honeywell G-437 computers, and one was also to be installed in September 1972 in the Office of the Chief of Engineers to handle program testing and maintenance as well as to process headquarters applications.

Separate scientific and engineering data processing systems (hardware) have been acquired to support the Army Materiel Command's research and development activities; complex scientific and engineering as well as business applications related to installation management are processed. This network of systems is designed to support the research and development community within the Army Materiel Command in processing scientific and engineering applications, and to provide data processing support for installation management and business applications not provided by standard systems such as the AMC Logistics Program Hardcore Automated (ALPHA). In February 1972 a program was approved under which ADP equipment will be relocated, augmented, or procured in order to consolidate data processing facilities for research and development purposes.

During fiscal year 1972 the Comptroller of the Army conducted analyses of major commands and of all Army small installations, subinstallations, and off-post activities in selected geographical regions to evaluate the use of resources in the light of assigned missions, and to make recommendations for consolidation or elimination of activities and reduction or curtailment of operating funds. A major command (U.S. Army, Europe) and a regional element (Metropolitan New York City) were surveyed, with estimated annual savings in excess of $15 million.

One of the Army's key programs to improve professionalism and


enhance and enrich the standing of junior officers and noncommissioned officers gathered momentum in fiscal year 1972. Titled Management Practices in TOE Units (MAP-TOE), it is a program under which junior officers, warrant officers, and noncommissioned officers are taught techniques that a first-line manager can use to improve production and the working environment at his level. Included are methods improvement, work measurement, quality assurance, soldier motivation, and the management process. To the soldier engaged in a support role in tactical units, these techniques give his job a new dimension. He sharpens his skill in the techniques of administration, supply, or maintenance, is challenged to be a manager, and is given the background to meet the challenge.

The MAP-TOE program was given high level support throughout the Army, and by the end of the year divisional units had started their training, while planning had begun to extend it to nondivisional tactical units, the Reserve Components, and many nontactical post, camp, and station Army support units. Orientation courses were also introduced into Army schools and the recruiting service.

Budget and Funds

The Army's budget request for regular appropriations for fiscal year 1972 totaled $22,811.8 million in new budget authority. Following reviews by the Office of the Secretary of Defense and the Office of Management and Budget, the President requested $22,207.1 million for the Army, and the Congress appropriated $21,183.4 million. In the following charts the chronological development of the fiscal year 1972 budget is traced and fiscal year outlays are compared with those of the two prior years. (See pages 123 and 124.)

Financial Management

In fiscal year 1972, the concept of critical independent analysis of Army appropriations as part of the departmental review process was introduced into the Department of the Army Budget/Program System. The Assistant Director of the Army Budget (Resources) performs this function to support the Budget Review Committee, the Program Guidance and Review Committee, and the Select Committee.

Significant progress was made during the year in the Department of the Army Financial Information System (DARFIS) to establish a central financial data bank at Headquarters, Department of the Army, for use by all financial managers. Through integrated computer systems, DARFIS will automate major budget and accounting reports and inte-


(In thousands of dollars)

   Fiscal year 1970    Fiscal year 1971    Fiscal year 1972
Military personnel, Army    9,017,713    8,605,458    8,093,665
Reserve personnel, Army   303,531    353,295    404,079
National Guard Personnel, Army   379,718    440,379    506,815
Operation and maintenance, Army    7,570,197    7,124,324    7,179,537
Operation and maintenance, ARNG    308,913    318,640    374,238
National Board for the Promotion of Rifle Practice     41    73    111
Procurement of Equipment and Missiles, Army    5,206,121    4,357,073    2,973,076
Aircraft procurement, Army    -    -    61,400
Missile procurement, Army    -    -    176,652
Procurement of weapons and tracked combat vehicles, Army    -    -    32,623
Procurement of ammunition, Army    -    -    587,395
Other procurement, Army    -    -    63,286
Research, development, test and evaluation, Army   1,665,477    1,568,893    1,778,730
Military construction, Army    438,908    484,146    390,263
Military construction, AR   7,993    4,850    13,376
Military construction, ARNG   10,993    13,179    19,409
Defense production guarantee    -22    -2    -0-
Army Stock Fund     -131,183    -129,469    -134,074
Army Industrial Fund   12,713    -20,592    116,231
Army Management Fund    5,178    4,447    1,300
Subtotal   24,796,291    23,124,694    22,638,812
Army Trust Fund    108    137    1,432
Trust revolving fund    -732    -2,790   -
Applicable receipts    -46,592    -45,226    -42,037
Total Budget Outlays    24,749,075    23,076,815    22,597,507

grate the major management processes of program and budget formulation and execution.

Development of a new concept of reporting financial information to Army headquarters using electrical transmission of information and advanced computer processing continued within the Office of the Comptroller of the Army. The new reporting system involves the direct transmission of elements of information from installation level to Headquarters, Department of the Army, with the primary objective of reducing installation reporting requirements while also improving the accuracy and timeliness of reporting financial data.

The Army Study System was modified this year to synchronize study planning and programing with the budget cycle. Based on projected requirements for studies as derived from the Secretary of the Army's identification of major areas of concern to the Army, funds for studies are estimated and programed early in the budget process. Through successive review by Army staff agencies, by working groups of the Army Study Advisory Committee, and the committee itself, study programs are defined in sufficient detail to permit evaluation of a study's value in comparison to its cost. The scope of the Army Study System has been expanded to include the most important commands located in the United States.

The Joint Uniform Military Pay System (JUMPS) was implemented in the Army in fiscal year 1972, 18 months earlier than had


(In millions of dollars)

Appropriation DA
to OSD
Amended President's
Budget a
by Congress
Supplemental b Approved
by Congress
Total c
by Congress
Military personnel, Army   7,069.1    7,483.1    7,315.6    761.7    8,172.4
Reserve personnel, Army   372.8    386.1    385.1    62.2    476.0
National Guard Personnel, Army    446.9    486.4    486.0    111.1    597.0
Operation and maintenance, Army    6,545.2    6,864.6    6,661.2    105.3    6,904.7
Operation and maintenance, Army National Guard    352.0    366.0    370.0    10.1    380.1
National Board for the Promotion of Rifle Practice    .1    .1    .1    -    .1
Procurement of Equipment and Missiles, Army    4,653.3    3,819.4    (3,524.3) d    -    (3,502.5)
Aircraft procurement, Army    -    -    107.4     106.6
Missile procurement, Army    -    -    1,040.8    -   1,033.3
Procurement of weapons and tracked combat vehicles, Army    -    -    145.5    -    145.5
Procurement of ammunition,   -    -    1,718.3    -    1,718.3
Other procurement, Army    -    -    512.3    -   498.8
Research, development, test and evaluation, Army    1,841.6    1,951.5    1,839.6    11.1    1,850.7
Subtotal, excluding Construction    (21,280.9)    (21,357.3)    (20,581.8)    (1,061.6)    (21,883.5)
Military construction, Army    1,151.6    642.2    539.0   -    539.0
Military  Army Reserve    33.5    33.5    33.5   -    33.5
Military construction Army National Guard     29.0    29.0    29.0   -    29.0
Subtotal construction Accounts   (1,214.1)    (704.7)    (601.5)    (-)    (601.5)
Total Direct Budget Plan (TOA)    22,495.0    22,062.0    21,183.4    (1,061.6)    22,485.0

a Includes April and June 1971 amendments.
b Consists of military, wage grade, and foreign nationals pay raises, and Supplemental for January 1972 pay raise
c Fiscal year 1972 column of Fiscal Year 1973 President's Budget (includes transfers, reprograming, and other adjustments with Supplemental).
d  Procurement of Equipment and Missiles, Army, was appropriated in five separate accounts in January 1972.


been planned. The pay accounts of all active duty military personnel were converted and placed on a central automated pay file located at the U.S. Army Finance Support Agency, Fort Benjamin Harrison, Indiana. Implementation of the system in the Army actually began in June 1971 when the accounts of the finance office serving Army departmental headquarters personnel were placed on the system for the first payday in July 1971. Remaining active Army pay accounts were converted in geographical increments as follows:

Continental United States    July 1971    August 1971
Europe    September 1971    October 1971
Pacific. Panama. Alaska    October 1971    November 1971

Notwithstanding the fact that the basic system proved to be effective, as demonstrated by a lack of significant system design and programing problems and by the flexibility to absorb the wage and price freeze and the first mid-month pay raise in the Army's history during the critical implementation phase, field components were unable to implement the system effectively. One of the principal problems was the troop withdrawal from Vietnam, with the acceleration in redeployment and the early release of personnel. The loss of trained personnel and high personnel turbulence created a situation in which pay actions were not forwarded to field finance offices in a timely or accurate manner by unit commanders and personnel officers. Field finance officers were unable to maintain document control and quality edits, and a breakdown in operational management led to pay complaints and raised doubts in commanders' minds that their soldiers would be paid accurately and on schedule.

To correct the problems, Department of the Army restructuring teams were constituted and prototype finance offices were established at U.S. troop locations around the world to assist major commanders in the task of reorganizing field finance offices under their jurisdiction to meet JUMPS requirements. Management and procedural training was provided, with emphasis on document control, pay transaction input, and effective use of personnel resources. To offset losses in experienced personnel, a special correspondence course was developed to provide field finance officers with an on-site training capability. Training of new personnel in JUMPS pay procedures was furthered by the use of mobile training, teams from the U.S. Army Finance School.

Fiscal year 1972 was thus an important year in military pay history. The Army was the first of the armed services to field a centralized automated military pay system; that system has proved to be both efficient and effective. Further refinements will be made in 1973.

There were developments in the civilian pay area as well during the


year. General functional requirements were developed for a standardized Army Civilian Pay System, a sophisticated, computerized system that will eventually replace over 60 heterogeneous civilian pay systems currently in use at 110 installations throughout the Department of the Army.

In recent years the Army's utilization of its resources has come under closer scrutiny by the Department of Defense and the Congress. To help meet the advanced financial management requirements that are necessary for economical defense spending, the Army developed a Force Cost Information System (FCIS), a computerized financial management tool for war gamers and decision makers, one that supports all phases of the Army's planning, programing, and budgeting system. An Army analyst, seated on a combination television-and-typewriter-like console, can ask the computer a variety of complicated cost questions. Within moments, the computer performs the required calculations and flashes the answer on the screen.

This quick response capability is indispensable in replying promptly to the complex questions that must be answered for the Army's decision makers. For example, if the world situation were to be altered to the extent that the President felt it necessary to increase or decrease the number of armored divisions in Europe, the FCIS could answer a key question in the executive deliberation-how much money the Army would spend or save to change the troop commitment.

The FCIS's costing capability extends to 1,302 typical Army units ranging in size from a one- or two-man team to a full Army division. The computerized FCIS is used in co-operation with many other computerized models employed by Army planners to project the Army of the future. It was created and is maintained entirely with Army resources; no commercial contracts have been necessary. The model is updated frequently, and special updates are performed to reflect military pay raises and new budgeting requirements established by the Secretary of Defense and the President's Office of Management and Budget.

In the future, the budget-oriented data of the FCIS will be refined and the number and types of units costed by the model will be increased. The comprehensive cost information provided by the Force Cost Information System will help the Army prepare for the world of the 1980s.

Until July 1971, the Army had no dependable method through which to relate fully the cost of operating a specific unit to its readiness or ability to perform its mission. Many attempts had been made to solve this problem, but with little success. Thus, as a portion of a larger Army staff study, the U.S. Army Field Operating Cost Agency conducted a study to develop a means of forecasting cost at different levels of readi-


ness for major Army units (divisions). Historical cost data, collected in the normal course of agency operation, were used as basic information for the study; major factors that contribute to a unit's ability to perform its mission were also analyzed. Personnel strength, turnover, training, and equipment, facilities, morale, and funds were analyzed. Mathematical techniques were used to develop an equation which could be used to forecast the cost of maintaining a unit at a certain level of readiness. While all of these factors played a part in the cost and readiness, personnel strength and people to perform the task were the dominant considerations both in the capability to perform and the cost to perform.

The mathematical equation or cost model was further modified and improved in early 1972 to include smaller-type units and reserve components. In its present form, the model does have certain limitations: all costs cannot be estimated, nor can the time lag associated with a change in readiness be estimated. And it is still not accurate for small units. Nevertheless, the study is an innovative tool to estimate costs associated with different levels of unit readiness, and a distinct step forward in the Army's efforts to insure that the taxpayer is provided the best possible defense for a dollar spent.

During the year a Uniform Depot Maintenance Cost Accounting and Production Reporting System was developed and published. It established a worldwide uniform method of cost accounting to be used in the preparation of budgets and cost analyses. It also provides a basis for determining quantities of items restored to serviceability by depot maintenance shops and total maintenance costs by weapons systems. This is done on an accrual accounting basis, and identifies and records both direct and indirect costs to the lowest functional work level. Worldwide implementation was initiated during the fourth quarter of the fiscal year.

In June 1970, a study entitled "Analysis of the Operation and Maintenance (OMA) Appropriation," an element of the Army budget, was completed, comprising an analysis of program elements. A product of the study was a handbook of OMA cost factors. The average strength of baseline Army forces (military man-years) was selected as a broad measure of output. The study established relationships between military man-years and costs in seventy-eight OMA mission and base operating program elements. This effort was continued when, in July 1970, a Special Assistant to the Comptroller of the Army was designated by the Chief of Staff to compare costs of base operations at installations within the Continental Army Command (CONARC) to determine reasons for variances and to establish cost relationships that assure funding levels in keeping with an adequate standard of living. The analysis (Maroun Study) covered cost, workforce, and output data for forty-two


CONARC installations over the fiscal years 1965-1970 and resulted in cost estimating equations for major base operation functions. The equations were based upon military man-years supported by the installation. After the study was approved in March 1971, the analysis was extended to both mission and base operation costs in commands worldwide; analysis of OMA costs were begun in CONARC, U.S. Army, Europe, U.S. Army, Pacific, Army Materiel Command, Strategic Communications Command, and the Office of The Surgeon General in fiscal year 1972. The ultimate objective is to establish standard resource estimating relationships for each OMA functional area. A continuing management challenge is to relate the many and diverse OMA activities to a common measure of Army mission output in order to determine adequate and balanced resource requirements.

Advanced managerial techniques were applied during fiscal year 1972 to develop a concept for a modern multipurpose computer system that would automate the Army's managerial chart of accounts as reflected in a series of regulations referred to as the Army Management Structure (AMS). This automated system will include the printing of AMS regulations through modern photocomposition processes, remote applications for updating master files, automated production of reporting files and tables, and automatic updating of data bank indexes.

Significant changes have been implemented in the Army Report of Survey System that substantially reduce the survey work load by eliminating the need for reports regarding property appearing on Tables of Organization and Equipment and Tables of Distribution and Allowances. Property, other than the loss or damage to personal arms and equipment, is now dropped from accountability by the use of a modified Inventory Adjustment Report, when approved by the commanding officer. Proof of negligence or willful misconduct is no longer required to impose monetary liability during deliberate unauthorized use of government property. In addition, previous monetary limitations in this area have been raised so that greater latitude now exists in the monetary liability areas for imposition and collection by a commanding officer.

Following hearings by the Permanent Investigating Subcommittee of the Senate Committee on Government Operations into alleged irregularities in Army open messes, a commercial management consultant firm conducted a comprehensive study for the Army of the nonappropriated fund system. One of the firm's many recommendations was that nonappropriated fund accounting regulations be completely revised, updated, consolidated, and standardized. A comprehensive chart of accounts was prepared that will consolidate six -existing regulations into one. Accounting, budget, and report forms are being standardized so that all installa-


tions will be consistent; these regulations will be promulgated in fiscal year 1973.

The U.S. Army's Field Operating Cost Agency's mission is to determine the operating costs of military units in the field. In July 1971, the agency was directed to conduct a study of the operating cost of a Republic of Korea army division. Interest in the subject was high in the light of the announced withdrawal of selected U.S. units from Korea.

The study had a twofold purpose: to provide the Korean Ministry of National Defense and U.S. Army representatives in Korea with meaningful figures on unit operating costs; and to assist the Korean Army to develop a cost analysis capability. A joint American-Korean team visited the 21st Division to assess the unit's records. The information collected was analyzed by U.S. and Korean teams and the resulting report has been useful to Korea as a tool of Army administration and to the United States as an aid in estimating future financial support to an ally.

In fiscal year 1972, Army strength continued to dip and funding became increasingly austere; as a result, Army management's task was to achieve programed objectives with reduced resources. Audit efforts were directed toward assisting the Army to make the most effective use of available resources. The Army Audit Agency issued 571 reports during the year, containing recommendations on 1,350 conditions pertaining to appropriated fund activities; another 209 reports were issued containing recommendations on 982 conditions pertaining to open mess activities. Fiscal year 1972 audit efforts included the expenditure of 33 man-years in Vietnam.



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Last updated 27 August 2004