Category: Defense Contract Accounting

Posted in Defense Contract Accounting

Your Money is Touching My Money

Posted on by JS Lavender

October and half of November got away from me without a post, which isn’t surprising.  As is often the case at this time of year, I have been swamped at work.  Government contract accounting isn’t quite as seasonal as public accounting, but there are certain points when everything is more than a little crazy.  September 30th is the fiscal year end for the federal government, so October is spent in pursuit of the following:

1) Figuring out where the money was spent

2) Figuring out how to spend money in the upcoming year

3) Making sure you were the only one spending last year’s money

4) Trying to spend any leftover money from last year

Yes, it’s all the taxpayers’ money, but one of the things that sets government accounting apart from private industry is the use of fund accounting.  You are given a pot of gold for a specific program or purpose, and this pot is surrounded by cherubim with flaming swords, leprechaun optional.  Only those holding the holy password get to spend this money, and they certainly don’t want you touching their Foreign Military Sales money with your icky old F-35 expenditures.  (Should you wish to sell those same F-35’s to a foreign government, well, that’s a completely different program.)  If you fail to spend the pot of gold in a specified amount of time, it disappears.

Think I’m exaggerating?  Talk to an active duty Air Force doctor who spends a third of his day trying to convince the powers-that-be to authorize the use of prescriptions not carried in the base pharmacy.  The funds that pay for prescriptions filled through non-military pharmacies come from a different pot of money than the funds that stock the base pharmacy.  One set of funds is controlled by Godzilla, and the other is managed by King Kong, leaving the doctor scrambling to avoid getting trampled during the fight.

On second thought, that might not be the best example, because civilian physicians encounter much the same when dealing with the insurance companies.  A better explanation might be found on the runway, where the aircraft and the weapons it carries belong to separate programs.  One program is flush with cash because it resides in a district that just happens to belong to a prominent member of the House Armed Services Committee, and the other program is underfunded because it just isn’t sexy enough to attract attention.  The end result is the [REDACTED], with the losers being the pilot who has to fly the un-friendly skies and, of course, the taxpayer.  The winner is the accounting profession, because tracking all of these millions of pots of gold will keep us bean-counters employed for a very long time.

Creative types are also the winners, since all of this provides an endless source of plot material:

WARNING: EXTREME CYNICISM AHEAD.  THE FOLLOWING IS UTTERLY RIDICULOUS AND BASED VERY, VERY LOOSELY ON REAL LIFE EVENTS, SOME OF WHICH HAVE BEEN MADE INTO MOVIES.

    1. Executive Hotshot at Defense contractor Ginormous Aerospace, Inc. plays a round of golf with soon-to-be-retired General Armchair.  Executive casually mentions likelihood of a possible impending disaster, and wonders aloud if there shouldn’t be some sort of disaster preparedness measures taken, complete with an ARK (Agile Rescue Kayak).
    2. General Armchair has dinner with Representative Bringhomethebacon, currently serving on the House Armed Services Committee.
    3. Congress passes the Impending Disaster Act, which calls for the building of a fleet of 20,000 National Defense ARKs.  Buried in the Impending Disaster Act is an unfunded mandate demanding state and local government agencies also purchase ARKs, as well as a pig-feed subsidy.
    4. Funding appropriations are granted for a contract to design and build the ARKs.  The contract is written to precise specifications, which happen to utilize a process used only by Ginormous Aerospace.
    5. Contract is awarded to Ginormous Aerospace, but the competing defense contractors immediately file a protest against the award.
    6. Three years later, the protests are discontinued and the contract award stands as is.
    7. Retired General Armchair is hired as a consultant by Ginormous Aerospace.
    8. Within a year of the actual contract production start date, seventeen contract modifications have been issued.  One of the mods increases the number of ARKs to be delivered from 20,000 to 50,000.  Twelve of the mods are to add functional variations to accommodate the differing needs of the Army and Marine Corps.  The Navy is happy with the design, but wants to add Individual Collection Units, or ICUs, built specifically to attach to the ARK and deploy in the event of someone falling overboard.  This additional work becomes a direct award/non-competitive set-aside to a small/disabled veteran/woman-owned/minority business from Representative Bringhomethebacon’s district.  The business is on record as being owned by Jojo Attagirl, but her husband financed the business and makes all operational decisions.
    9. Significant design flaws are uncovered when the prototype ARK sinks during its maiden voyage.  The contractor blames the Navy, claiming the last-minute modifications have altered the stability of the craft.  The Navy claims Ginormous Aerospace used faulty parts in the construction.  Both sides lawyer-up while work continues.
    10. The Air Force decides they need their own ARKs, so further modifications are made to the design.  In the interim, the ICU contract has received seven contract mods, each increasing the size and capabilities of the individual craft.  The two companies neglect to inform each other of the design changes.  The first manufactured ICU, which is now almost as large as the ARK, falls off during testing, claiming the lives of three engineers and causing an electrician to stub his left toe.  The United Brotherhood of Defense Contract Electricians promptly calls a strike, citing unsafe working conditions.  The deceased engineers are replaced by foreign nationals, who used to work for their country’s Department of Military Acquisitions.
    11. Ten years, 302 modifications and 878 million dollars later, the first 200 ARKs are delivered to the military.  The Air Force decides they want their model ready for outer-space deployment, and the contract is extended another five years.
    12. The troops in the field quickly discover the ICU is more useful than the ARK.  The military cancels their remaining orders, but the state and local governments are still required to purchase the units.  The military passes their existing units down to the National Guard and Reserve.
    13. The foreign workers return to their country’s Department of Military Acquisitions.  They’ve found no military or trade secrets worth stealing, but they did take the opportunity to visit Disney World.  One of the workers stays in America, because he’s already committed to coaching his daughter’s soccer team.
    14. Both the ARK and the ICU programs are cancelled in the next round of budget cuts.  The engineers are hired for other contracts, and the accountants spend the next twelve years untangling the money.  Both groups continue to pay their taxes, some of which go to fund the new Orbiting Strategic Naval Armed Paddleboard, or O-SNAP.
    15. Rinse and repeat.

    I’d write more, but I have to come up with some kind of a cover story in case my boss reads this.  I think I’ll use the ‘aliens invaded and took over all of the accountants’ brains’ excuse, which makes sense if you think about it.  We don’t have a world leader, so why not go after the ones who handle the money?

 

Posted in Defense Contract Accounting, Writing

The Accidental Accountant

Posted on by JS Lavender

Ever since I was a little girl, I always knew what I wanted to be when I grew up.  Every morning, I’d take out my 10-key calculator, sharpen my pencils, and start filling in ledger entries.  I’d spend hours reading books about revenue standards and the best method of inventory valuations, and then I’d review the tax code for possible loopholes.  And just when I reached a new discovery –

I’d wake up from my nightmare because I had to get ready for work.

OF COURSE I never thought I’d become an accountant.  Who does?  Are there seriously kids out there who fantasize about debits and credits?

After numerous discussions with others in my profession, I’ve come to the conclusion that we all sort of fell into it by accident.  There’s no shortage of business schools or bankers, so I can only guess that at some point in our early adulthood, something led us over to the Dark Side.  We ventured into a world where everything must be sorted and matched to its proper time frame, and we discovered we were really, really good at playing ‘one of these things is not like the other’.

Since the Dark Side has snacks in the break room, most of us stayed.

Non-accountants usually say they could never do our job because they aren’t good at math, which shows how little outsiders know about the profession.  Accountants don’t do math; we organize piles of numbers and tell the CEO whether or not she can afford that new Lexus.  In fact, a lot of us can’t do simple addition without a calculator.

CEO:  “What’s 1 and 1?”

Intern:  “2”

Accounting Dept:  “11”

IT Dept:  “3”

Proposals Dept:  “What do you want it to be?”

 

I personally wound up in the accounting profession because I wanted to be an engineer.  Allow me to connect the dots:

  • Enters college eight years after graduating high school.
  • Decides it would be fun to be an engineer.
  • Secretly wants to be a writer, but doesn’t think it’s possible.
  • Learns most engineering degrees take five years to complete.
  • Decides to work as an accounts-payable clerk to help put food on the table while pursuing engineering degree.
  • Decides to pick up a two-year degree in accounting in order to get promoted at company while pursuing engineering degree.
  • After a fifteen-year absence, rediscovers joy in writing fiction.
  • Fails chemistry class three times.
  • Wonders why engineering seemed like a good idea.
  • Really wants to be a writer.
  • Keeps getting promoted in accounting.
  • Stops and starts college multiple times over the next two decades, because several other degrees seem way more interesting than accounting.
  • Sucks it up and finishes four-year degree in accounting in order to find a new job.
  • Gets promoted into management.
  • Still dreams of being a writer.

 

As a child, you are asked, “What do you want to be when you grow up?”  As an adult, you discover the question really should have been, “How do you plan on paying your bills?”  You find that your dreams are replaced with practicalities, and you trade youth and passion for responsibility and security.  Your dreams fall into a dark corner, and after a few years, you start to believe you should just give up on them because it’s frustrating to want something that seems so far out of reach.

After a while you decide to give up your dream and it seems like the right decision; especially when you come home after a 10-hour work day and you can’t sit down to write because you’re exhausted and your vision is blurry and you need to go to the grocery store or you’ll be eating cold cereal for the third night in a row.  But while you’re grabbing a frozen pizza, you notice everyone around you is in swimsuits and shorts and you’re standing there in a skirt and heels, so you wonder what all these tourists do when they go back home.  By the time you get to the check-out, you decide that the couple behind you came down here from Ohio in order to murder his rich great-uncle, and you load your groceries into the car while contemplating ways to kill someone at the beach.  “Death By Sand Spurs” seems like a good working title, and the first chapter is written in your head by the time you fall asleep that night.

Then in the morning, you get back up, dust off your dreams, and throw your personal laptop in your work bag.  You’re going to write during your lunch hour, because you can no more quit dreaming than you can quit accounting.  And maybe by the time you finish the first page, the break room will have more snacks.

Posted in Business Travel, Defense Contract Accounting

Business Trippin’ – Denver, CO

Posted on by JS Lavender

Like many professionals, I maintain my certification status with continuing education.  I’ve made a habit of trying to attend one or two conferences a year, which, along with a couple of lunch seminars, usually covers the necessary credit hours.  As I’ve progressed in my career, I’ve found it easier to convince my boss to send me to national conferences.  As I’ve progressed in my career, I’ve also found that it’s a lot harder to arrange the time to leave the office.

This year, I planned to attend the Institute of Management Accountants’ annual conference in Denver.  Lovely time of year to travel to Colorado, but a few things were going on in the background.

1 – Two of my key staff members are out of the office on vacation.

2 – The colleague who was supposed to attend with me dropped out at the last minute.

3 – We are in the middle stages of a major financial software conversion, and I’m the project lead.

4 – We just instituted new banking protocols, and all of the company members who could access the accounts were going to be out of the office, including me.

5 – My ICE is due by June 30th, and it isn’t finished.

For those who don’t recognize the acronym, the ICE (or ICS) is the Incurred Cost Exhibit/Submission.  This is a multi-tab spreadsheet monster designed by masochists in order to train defense contractors to submit to the coming reign of the alien overlords.

Just kidding.  It really demonstrates to the government auditors exactly how you spent $500 making a hammer:  $2 for parts, $3 for the administrative burden, $245 in overhead costs from the secure facility that was built to protect the secret hammer, and $250 for the government’s requested design changes.

Most of my professional colleagues would look at the above list and immediately see the biggest problem.  Numbers 1 and 3 will survive a temporary absence, and someone else might surprise you by doing some work for a change.  Numbers 4 and 5 can be worked from the road; because we all love doing office work after hours.

Number 2, however, was almost enough to make me stay home.  Who wants to go to a place full of strangers without a wingman?  I went anyway, because even though I’m terminally shy, the class sessions looked interesting.  The previously unmentioned fact that my son and his wife live 45 minutes from Denver and had a Taekwondo tournament in the city that weekend had no influence on my decisions whatsoever.

No travelogue, just a few notes from the trip:

  • The speakers at the conference were incredible and inspiring. Some would suggest a direction connection between the speakers’ engaging, informative dialogue and the fact that they aren’t accountants.
  • Altitude sickness is real. I grew up in a mountain valley at 3300 feet altitude, but I’ve lived on the Gulf Coast of Florida for a couple of decades, where the biggest drop in altitude comes from stepping off the front porch.  This wasn’t my first case of altitude sickness, but it was by far the worst.  After a few days and several gallons of water, I recovered – right about the time my plane touched down in Florida.
  • Weed.  It’s legal in Colorado, but not if you’re a DoD government contractor.  Denver is jam-packed with people who don’t fall under these restrictions, and there were times when I was getting a pretty good contact buzz out on the 16th Street mall.
  • This is not a good food city when you have a pepper allergy. The local cuisine has chili pepper in places you’d never expect.  After finding it in my quiche, my mashed potatoes, and my blue cheese dressing, I decided Denver was trying to kill me.
  • A tropical storm was zeroing in on the Gulf Coast while I was at the conference. I wasn’t worried about my house – we don’t even bring in the lawn chairs for anything less than a Category 2 hurricane – but I was worried about getting stuck in the Atlanta airport.  I have spent so many nights in that airport that I’m surprised they don’t charge me a bed tax when I buy a ticket.

There was a lot of talk at the conference about setting goals and doing what you love, but I went back to the office and my overflowing inbox anyway.  I haven’t given up on my dreams, but I’ve also committed to a five-year plan for my employer.

And yeah, I’m also committed to making money.  Let’s not even pretend.