Flying Hour Program cash management at commander Naval Air Forces Pacific
Philips, William E.
Jones, Lawrence R.
Mutty, John E.
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The FY 2000 Flying Hour Program (FHP) comprised $3.2 billion of the Operations and Maintenance, Navy (OandM, N) appropriation, nearly half of which was allocated to the Commander Naval Air Forces Pacific (CNAP) for flight operations and aircraft maintenance. Insufficient funding has made it impossible to execute the FHP to the Navy Primary Mission Readiness standard of 83 percent. This thesis analyzed CNAP FHP cash management for fiscal years 1998, 1999, and 2000, including techniques used by managers to execute the under-funded FHP. It concluded that CNAP managers use risk contingent cash management strategies and techniques to fund requirements while carefully avoiding Anti-deficiency Act violations. These techniques include delaying required aviation repairs to future years, reducing at home squadron flying hours and using Unfilled Customer Orders. Navy budgeting does not recognize valid liabilities for some FHP related programs. The FHP is treated as discretionary and used annually as a source to pay these recurring liabilities, causing CNAP to be reactive in cash deficit control, always in need of fiscal rescue. CNAP transaction costs are increased by constant management of funding shortfalls. The risk of failing to meet fleet readiness requirements has grown as a consequence.
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