Department of the Army Historical Summary: FY 1974


Management, Budget, and Funds

Management Programs, Systems, and Techniques

During the 1960s several programs to improve resource management within the Army were established under the auspices of different Army staff agencies. This diversification of effort was confusing and difficult to control. In fiscal year 1974 the Army centralized its direction of these multiple management improvement programs, which included management reviews, improvement incentives, training priority improvement projects, productivity measurement, reports management, cost reduction, zero defects, and the Defense Integrated Management Engineering System. The Comptroller of the Army and comptrollers throughout the Army now serve as the principal staff directors of the Department of Army Management Review and Improvement Program Army Regulation 5-4, published in September 1973, established overall policy for this program. Seven supplementary pamphlets on management techniques were also published, and a management training program for first-line military and civilian supervisors was developed.

There were a number of significant developments relating to the component systems of the Army Management Information System (AMIS). The Base Operating Information System (BASOPS), the Army's first multicommand and multifunctional computer system, was extended to three additional locations during the year. Forty-two installations now have a Base Operating Information System. Automatic data processing equipment was improved at BASOPS posts to support new, more sophisticated and complex functional software systems. At small- and medium-size posts the capacity of IBM 360/30 computers was increased, and at large installations the IBM 360/30's were replaced with IBM 306/40 computers.

The worldwide extension of the Standard Army Intermediate Level Supply (SAILS) Subsystem was approved. SAILS, which replaces the original BASOPS supply management system, was set up at seventeen of the forty-two BASOPS installations during the year. A SAILS package was completed and installed at the 1st Corps Support Command, Fort Bragg, North Carolina. The initial increment of the SAILS selective management package was developed, tested, and installed at Headquarters, U.S. Army,


Pacific. The development of an expanded SAILS package to replace the supply systems presently used at the intermediate support levels in overseas commands is under way.

The Standard Installation/ Division Personnel System (SIDPERS) was approved for implementation worldwide. The system is now operational at twenty-eight BASOPS installations. In addition to replacing the original BASOPS personnel subsystem, SIDPERS supersedes the Personnel Management and Accounting Card Processing System and a manual system that had heretofore serviced approximately 50 percent of the Army. Worldwide conversion to the new system, which will be adapted for use by the Reserve Components, was approximately 55 percent complete by the end of fiscal year 1974.

The Standard Finance System, which is the BASOPS financial management subsystems, was operational at forty-four installations as of 30 June 1974. During the past year the system was extended to 4 installations of the Health Services Command, 1 Forces Command installation, and 2 USARPAC commands-U.S. Army Support Command, Hawaii, and U.S. Army, Japan.

A prototype of a standard civilian pay system underwent testing at Fort Sam Houston, Texas, during the year. Approval to extend this system to all BASOPS stations is expected early in fiscal year 1975. Prototype testing of the Military Police Management Information System was begun at Fort Bragg, North Carolina.

Following successful testing of the Combat Service Support System (CS.;) by the 2d Armored, 1st Cavalry, and 101st Airborne Divisions, U.S. Army Forces Command recommended that the system be extended to all Regular Army divisions. The division system consists of an IBM 360/30 computer housed in a mobile two-van complex with input terminals located at each brigade. The software packages are the Standard Installation/ Division Personnel System, the Division Logistics System (DLOGS), and the Maintenance Reporting and Management System. DLOGS is an interim supply system and will be replaced by the Standard Army Division Level Supply System after development and testing. At year's end preparations were under way to test CS, at corps level.

The Army's Commercial and Industrial Type Activities (CITA) Program, a response to government policy that federal agencies rely primarily on private enterprise for products and services, was emphasized by the Department of Defense and the Office of Management and Budget during fiscal year 1974. The CITA training program at Fort Lee, Virginia, was expanded and 269 persons


were trained. Additionally, 2,800 persons received CITA instruction at their installations. The field elements were provided a booklet for developing and forwarding CITA proposals to the Department of the Army. More than 3,000 functions are now carried in the CITA inventory, and the program is expected to expand during fiscal years 1975 and 1976.

Plans developed over the past few years to improve computer support for personnel and manpower managers came to fruition during 1974. In Project 70X, the Army replaced nine IBM and Control Data Corporation computers located at three sites in the District of Columbia and Virginia with six large UNIVAC 1108 computer systems at the Military Personnel Center. Subsequent phases of the plan will see two older computers replaced by two UNIVAC 1108 systems. The computers support the enlisted, officer, and civilian data bases, which produce on a monthly basis 2,000 different reports, 68,000 responses to remote terminal queries, and 50,000 personnel record summaries. The data bases are maintained through a monthly average of 6.5 million change transactions. The bulk of converting old computer programs to new ones was completed between May 1973 and 1 July 1974 at a cost of over forty-three man-years.

U.S. Army Forces Command and U.S. Army Training and Doctrine Command took part in a test designed to establish major command participation in the development of the Army Program Objective Memorandum (POM).1 The test commands developed three-year resource programs, which were contained in a Resource Allocation Document (RAD). The RAD's were submitted to the Department of the Army for review, and some elements were incorporated into the Army POM. The success of the experiment led to a decision to make programming in the field a part of the Army's Planning, Programming, and Budgeting System (PPBS). To this end, the best characteristics of the RAD and the Budget and Manpower Guidance document were combined to form the Program and Budget Guidance (PBG) document. Program and budget guidance for the POM will be provided for an additional year beyond the budget year to six commands-U.S. Army Training and Doctrine Command; U.S. Army Forces Command; U.S. Army, Europe; U.S. Army Health- Services Command; U.S. Army Communications Command; and U.S. Army Materiel Command.

Also to improve the POM, work continued on the automated

1 A document that contains the proposed Army portion of the Department of Defense Five-Year Defense Program. It covers the five years subsequent to the year for which the budget is being developed.


Program Optimization and Budget Evaluation (PROBE) System. In the second year of a four-year development program, PROBE will assist in developing staff guidance for the POM, evaluating proposed program variations from the approved Five-Year Defense Program, monitoring budget formulation, determining the effects of new program proposals on the budget, and providing data and reports to analyze information requests throughout the PPBS cycle.

Central to the current POM, which covers fiscal year 1976 through fiscal year 1980, is the management of scarce resources in the post-Vietnam era. The POM emphasizes recruiting to maintain Army strength, keeping materiel and training readiness at a high level, increasing the number of Army combat divisions while reducing headquarters size and strengths, and fully using the Army's Reserve Components in keeping with the total force concept.

The automated Recruit Quota System (REQUEST) is used to allocate and manage over 300,000 training spaces in the Army. Started in August 1972 with a limited number of subscribers, the system has expanded to a network of 120 terminals, including the Armed Forces Examining and Entrance stations, U.S. Army Reception stations, U.S. Army Recruiting Command and its regional commands, Training and Doctrine Command, Forces Command, and Department of the Army. Before 1972 the Army managed training spaces by handposting, which was time-consuming but adequate as long as the Army determined what training a new enlisted man would receive. For the volunteer Army, however, with choice of job and training as part of an enlistment option, the recruiter and guidance counselor must know quickly what training courses are open to reserve space for his prospective recruit. The REQUEST data base supplies this information within minutes.

In recent years Army managers have looked upon word processing techniques as a means of producing written communications with speed, accuracy, and economy. During fiscal year 1974 the Army made The Adjutant General responsible for the centralized management of word processing. CSM 73-1-99, dated 6 September 1973, provides The Adjutant General with authority to determine how to manage, standardize, and integrate word processing at various levels in the Army. In November 1973 a Word Processing Branch was created in the Directorate of Administrative Management of the U.S. Army Adjutant General Center to manage the Army word processing program. AR 340-8, published 1 April


1974, outlines the program. It requires documentation from organizations requesting word processing and also guides managers in determining economic feasibility, equipment requirements, personnel requirements, and alternative word processing systems.

Increasing information requirements, the growth of computer printouts, and the advent of modern technology capable of rapidly creating and reproducing paper documents have led the Army to seek better and less expensive alternatives to paper systems for recording, communicating, storing, and retrieving information. In April 1973, The Adjutant General expressed concern to the Chief of Staff that the Army's management of document and information miniaturization was inadequate. Management methods and controls did not encompass all the microform systems and projects in the Army. Organizations were proceeding on their own, and their disparate miniaturization programs were not compatible. Micrographics offered cost savings and benefits higher than the Army was achieving. Approving the recommendation of The Adjutant General, the Chief of Staff designated him as the Army program manager for microforms and document/ information miniaturization. The Army microforms program went into effect on 1 November 1973, with the establishment of a microforms management element within the U.S. Army Adjutant General Center.

The program's five primary objectives are to (1) develop better and less costly alternatives to paper systems; (2) reduce the amount of paper generated and retained in the Army; (3) develop microform systems that meet user requirements; (4) promote compatible microform systems and establish necessary standardization; and (5) take maximum advantage of microform technology. Since the program began, forty-nine microform proposals have been evaluated, over 350 requests for technological advice and systems development guidance have been processed, and organizations using microforms have saved over $108,000.

In an Army-wide inventory of microform systems and equipment, over $35 million of microform equipment was reported. An evaluation of the reports and examination of alternate sources, however, revealed that costs were more than double this figure. The inventory indicated a considerable lack of knowledge about micrographics within the Army, even among personnel involved in microforms. An Army microforms seminar was held in Boston on 9 May 1974 to help bridge this knowledge gap and to develop concepts for both short- and long-range training in micrographics.

Of the many systems under development in the Army micro-


forms program, two are particularly noteworthy. The first involves the conversion of computer paper, estimated at 200 million pages annually, to microform at forty-two BASOPS installations. The other has to do with the conversion of Headquarters, Department of the Army, official military personnel files to microfiche. This project is named RAM2, for Records Administration in Microform Mode. Under the auspices of The Adjutant General, a prototype test was conducted from 4 September 1973 to 25 January 1974, with additional testing, data gathering, and records conversion continuing through the end of the fiscal year.

Budget and Funds

The Army's budget request for fiscal year 1974 totaled $22; 593.1 million in total obligation authority (TOA). Following reviews by the Office of the Secretary of Defense and the Office of Management and Budget, the President requested $21,047.1 million for the Army, and Congress appropriated $20,180 million. The Second Supplemental Appropriations bill for fiscal year 1974 and reprogramming approved by Congress increased the Army's TOA to $21,654.2 million. Table 2 and Chart 1 trace the chronological development of the fiscal year 1974 budget and compare budget authorizations for selected years in the past.

Financial Management

A number of changes in Operation and Maintenance, Army (OMA), budgeting procedures were made during the past year to simplify the management of this major account, reduce reporting requirements, and improve the budgeting relationship between field commands and Headquarters, Department of the Army.

Three major changes were incorporated into the Program and Budget Guidance (PBG) procedure. The PBG document now reflects the most recent data on field units. Funding changes are recorded whenever manpower changes occur. As noted earlier, program and budget guidance is now provided for an additional year beyond the budget year.

In work load reporting, data required from the major commands for the fiscal year 1974 budget execution review was again reduced-this time by about 80 percent. Data for fiscal year 1975 command operating budgets was similarly reduced. As noted in last year's report, additional relief from burdensome reporting requirements is expected when the Data Element Management/ Accounting Reporting (DELMAR) system becomes operational.


(In millions of dollars)

Appropriation DA
Submission to OSD
Amended President's
by Congress
Approved by Congress
Approved by Congress
Approved by Congress
Military Personnel, Army  7,328.8    7,211.4    7,110.0    626.1    -    7,736.0
Reserve Personnel, Army  491.5    463.7    452.4    23.1    -10.0    465.5
National Guard Personnel, Army  608.8    587.1    555.9    69.6    -    625.5
Operation & Maintenance, Army  6,784.9    6,401.7    6,214.7    376.5    - 3.3    6,587.9
Operation & Maintenance, Army Reserve  246.5    260.4    253.9    -    -    253.9
Operation & Maintenance, Army National Guard  570.6    540.0    524.4    .8    -    525.2
National Board for the Promotion of Rifle Practice  .1    .2    .2    -    -    .2
Aircraft Procurement, Army  233.3    181.0    164.8    16.0    -    180.8
Missile Procurement, Army  694.5    569.5    557.1    76.6    -3.0    630.7
Procurement of Weapons & Tracked Combat Vehicles, Army  383.3    238.0    229.3    71.1    -    300.4
Procurement of Ammunition, Army  1,338.9    1,138.9    940.4    150.0    - 2.0    1,088.4
Other Procurement, Army  787.0    551.9    506.2    35.5    - .9    540.8
Research, Development, Test, and Evaluation, Army  2,153.2    2,095.2    1,915.6    26.9    - .2    1,942.3
Subtotal, excluding Construction  (21,621.5)    (20,239.0)    (19,424.8)    (1,472.2)    (- 19.4)    (20,877.6)
Military Construction, Army  895.7    732.2    679.3    -    +21.4    700.7
Military Construction, Army Reserve  40.7    40.7    40.7    -    -    40.7
Military Construction, Army National Guard  35.2    35.2    35.2    -    -    35.2
Subtotal, Construction Accounts  ( 971.6)    ( 808.1)    ( 755.2)    -    (+21.4)    ( 776.6)
Total Direct Budget Plan (TOA)  22,593.1    21,047.1    20,180.0    1,472.2    +2.0    21,654.2


(TOA in billions)



Testing is under way and should be completed in the coming fiscal year.

Progress continued on the development of the Comptroller of the Army data base. One of the three associated modules was tested in the last quarter of the fiscal year and is expected to be ready to accept installation expenditure data by late fiscal year 1975. Design and development of the remaining two modules of the data base was started this year.

The automated Civilian Budgeting System became operational. It provides an automatic update of civilian end strengths, man years, and associated dollars. It can also handle increased costs such as pay raises, health benefits, and extra pay.

The Army Force Cost Information System was revised twice during fiscal year 1974. The first revision in November 1973 incorporated the new military pay rates of 1 October 1973 into the Military Personnel, Army, computations of the system and its associated 2000-unit table of organization and equipment (TOE) data bank. The second revision in May 1974 involved the review and updating of all computation factors to produce costs in fiscal year 1974 constant dollars.

Public Law 93-238, signed by the President on 2 January 1974, called for phasing out the Uniformed Services Savings Deposit




Program by 30 June 1974. The program was terminated on schedule, except for the accounts of servicemen carried as missing in the Vietnam conflict. Also discontinued, effective 19 November 1973, was the use of military payment certificates in Korea. They were replaced by U.S. currency.

The 20 May 1974 reorganization of the Army staff affected the Office, Comptroller of the Army (OCA), and the responsibility of staff agencies for budget and financial management. Previous fiscal year 1974 manpower reductions had reduced OCA authorized strength from 371 to 319, and the May reorganization lowered it to 285. The accompanying charts show OCA's structure before and after the May reorganization, and the following narrative highlights the principal changes.

The Directorate of Management, Review, and Analysis was eliminated. Its functional responsibilities for broad Army management policy, organization studies, and reports control were transferred to the newly established Director of the Army Staff. The Audit Compliance Office and control of the Army Audit Agency were transferred to The Inspector General and Auditor General; the statistical clearance and Army Status Report functions were given to The Adjutant General. The Office of the Assistant Comp-




troller for Economic Policy and International Programs was also eliminated. Its functions were absorbed by other offices in OCA.

A Productivity and Value Improvement Office was established to manage the DA Management, Review, and Improvement Program and to oversee Army programs relating to productivity, value engineering, and value improvement techniques and standards. This office also provides technical advice and guidance to the DCSPER on the Comptroller Civilian Career Program. The Directorate of Operations and Maintenance, formerly under the Director of Army Budget, moved to OCA and took over responsibility for Base Operations (Program 11), Administration and Associated Activities (Program 9), and manpower pricing from ODCSLOG, ODCSPER, and OACSFOR, respectively.

Departmental accounting, which deals with maintaining the status of Army funds, receiving and summarizing accounting data from Army activities worldwide, and submitting consolidated reports to the Army staff and other government agencies, was moved to the U.S. Army Finance and Accounting Center (USAFAC) on 15 February 1974. On the same date USAFAC also assumed responsibility for Operating Agency 32, a fund control activity that budgets and finances several commands and agencies which report directly to Headquarters, Department of the Army, on financial matters instead of through major commands.

Internal Audit

As noted in Chapter IV, The Inspector General and Auditor General was assigned responsibility for audits, the Army's decentralized internal review program, and supervision of the U.S. Army Audit Agency. Within the Office of The Inspector General and the Auditor General, the Audit Compliance and Inspection Evaluation Division oversees audit compliance. It develops Army policy on audit compliance and internal review, maintains liaison with the General Accounting Office and the Office of the Deputy Secretary of Defense for Audit Operations, and evaluates and follows up IG inspection reports. The Coordination and Staff Action Division coordinates inspections and audits and determines priorities and jurisdiction for both.

During fiscal year 1974, the U.S. Army Audit Agency issued over 466 reports with some 1,260 statements of conditions and recommendations pertaining to appropriated fund activities. The estimated savings from acting on these recommendations were approximately $360 million. In addition, the agency issued 253 nonappropriated fund audit reports containing 789 statements of


conditions and recommendations. All the Army's open messes were audited in fiscal year 1974, 75 percent by Army auditors and 25 percent by public accountants. To accomplish this work load, Army Audit Agency had an average authorized strength of 965; 798 were professional auditors and 167 were administrative personnel.

An automatic data processing retrieval and analyzer system, known as the Army Uniform Data Inquiry Technique (AUDIT), was fielded on 1 December 1973. AUDIT features an easy-to-use specification language and COBOL implementing software. It enables the manager-auditor to retrieve selected information from computer files inexpensively and expeditiously. It features a simple, standard method for performing mathematical computations, requesting routine statistics, and generating reports from machine-readable data.



Go to:

Previous Chapter

Next Chapter

Return to Table of Contents

Search CMH Online
Return to CMH Online
Last updated 27 August 2004