Claunch.cathy

Finding the Balance Between Programs and

Institutions

Cathy ClaunchSid Schmidt

PM Challenge February, 2011

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Need to balance Agency portfolio within tight budgets

◦ Successful Programs

◦ Robust Institutional Base

Are they really competing priorities?

Is a competitive environment healthy?

Can the Agency succeed with one or the other?

Common Agency Conundrum

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11/12/2010 report from the Inspector General listed “Infrastructure and Facilities

Management” as a top Agency challenge.

“NASA is the ninth largest Federal Government property holder, controlling a network of

approximately 5,400 buildings and structures that support Agency research, development, and flight activities. NASA’s ability to effectively manage the necessary maintenance and renovation of this large and aging portfolio of facilities is a critical challenge

facing the Agency.”

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Can the budget process help bridge the apparent competition for scarce resources?

What is the content of these two budgets?

What activities are underway to improve these efforts?

How are these two entities linked? Can the synergy be improved?

Today’s Discussion

Budget Process

NASA Budget Process

Lengthy budget formulation process

Small window of time for integration of program and institution budgets

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M A M J J A S O N D J F M A M J/J A S

18 MONTHS

PRESIDENT

CONGRESS • Budget Resolution • Authorization Acts • Appropriation ActsOMB

OMB

AGENCIES

AGENCIES Internal determination of requirements

and authorities Formation of budget recommendations

• Midyear update / sequester report • Apportionment of appropriated funds

• Operating Plans • Implementation of program • Obligations • Costs • Outlays

• Final budget approval • Budget message to Congress

Review and integrate agency recommendations Markup and

reclama process Secure final

determinations by President

O

FY13 Appropriation

Appropriation Process Takes ~18 Months

Start PPBE-13

~March 2011

FY11 Execution FY12 Execution

Agency Budget

Formulation

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Nominal Budget Formulation Process Diagram

OctFeb March April May June July Aug Sept

Budget Development

Office of the Chief Financial Officer

Mission Directorates

Programs/Projects & Centers

Leadership Governance/Decisions

President’s Budget Request

Program Budgets

Submitted

Issues Book

Final Budget Decisions

Agency Decisions

Made

Budgets Amended

as Necessary

Agency Guidance

Program Guidance

Agency Request to OMB

Program Budget

Reviews

Agency Budget Reviews

Program & Center Budgets

Integrated

Issues Book

UpdateHQ

Work actions as necessary based on decisions

Budget Content

NASA Budget Elements

Agency budget is understandably mission oriented

Center institutional component of budget

◦ Relatively small

◦ More than “overhead”

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$19,148

$M

NASA FY10 Budget by Theme

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$M

$19,148

FY10 Cross-Agency Support Budget

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Programmatic$483 22%

Institutional$1,679 78%

Engineering Technical Authority$122M, 25%Engineering Leadership &Program/Project Chief Engineers

$M

$19,148

FY10 Center M&O Budget

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Center Investments$65M, 13%Independent Research & DevelopmentBid and Proposal

SMA Technical Authority$52M, 11%Safety and Mission Assurance Support

Science & Engineering$244M, 51%Ensure core science and engineering capabilities are available to support program activities at a Center

Center DirectorCenter Multi-Media Support

Equal Opportunity & Diversity

Other Center ManagementStrategic Communications

Chief CounselProcurement

Human ResourcesFinancial Management

Occupational HealthLogistics

$M

$19,148

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UtilitiesOperationsInactive Buildings & StructuresRoads & Grounds MaintenanceScheduled (proactive) MaintenanceUnscheduled (reactive) MaintenanceNew CapabilityOther Facilities ServicesFacility Management

FY10 CMO Institutional Budget

Institutional Budget Process Activities

FY 2007

FY 2008

FY 2009

FY 2005

FY 2006

FY 2004

CMO History

Center G&A – with CoF

Center G&A – no CoF

Center G&A

CMO - Center G&A, Facilities & IT Service

Pools, Eng & SMA Technical Authority

CMO – Added Indirect portion of remaining

Service Pools

CMO

Profiles Vary Widely By Center• Focus on budget year knowing that out-year budgets could be adjusted in next cycle• Some Centers anticipating reduced workforce

Profiles Vary Widely By Center

Existing G&A Out-yr budgets transferred to CMO as fixed budget

Profiles Consistent Across Agency• Reallocated budget among Centers•Reallocated some funds (FY09) from Corporate G&A

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During recent years, the institutional budget portfolio has seen several process changes all seeking to improve efficiencies

◦ Baseline Services Level Review

◦ Institutional Gap Review

◦ Corporate Portfolio Management Review

Institutional Portfolio Activities

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Goal:

◦ Define content of Center Management & Ops budget for ease of explanation to stakeholders

◦ Minimize or eliminate the variation in service levels provided across the Agency

◦ Minimize or eliminate variation in charging practices

Conclusions

◦ City Management functions – goals met

◦ Technical Capability functions – more work to be done

Baseline Services Level Review

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Began as review of facilities require decision as Shuttle Program ended

◦ Continue operations – fund with next Program with requirement? Mothball – until needed by future Program? Abandon – not needed in foreseeable future?

Acknowledges need to maintain minimum critical skills for the Agency during a changing environment

Review of all facilities and technical capabilities – focus is Human Spaceflight (ESMD/SOMD)

◦ What will be needed by future programs?

Excellent example of ongoing debate that links infrastructure, capabilities, and Programmatic requirements

Institutional Gap Reviews

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NASA Agency management proposed that a process be instituted to manage Agency strategic capabilities as corporate portfolios

◦ Study underway

◦ Promotes increased collaboration across NASA

Corporate Portfolio Management

Anecdotal Examples

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Mission Directorate example

Center example

Civil Service budgeting

Summary

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A healthy institutional base enables Programmatic success

Tension between two competing budget entities can be healthy – if kept in check

Real-life budget pressures require both to be efficiently managed