A Navy escrow account: increasing financial flexibility
Pritchard, Marcus Allen
Mutty, John E.
McCaffery, Jerry L.
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Effective execution of the Department of the Navy's (DoN) budget is critical for national defense. However, political instability and the evolving demands placed upon the Navy and Marine Corps team present challenges in the execution and future planning of DoN budgets. In the current budgetary system, shortfalls are typically funded through targeted cuts while the methodologies for recapitalizing cost savings are non-existent. The proposed Navy escrow account provides a buffer for rapidly shifting requirements and budgetary shortfalls. It creates an incentive for generating cost savings and the means to redistribute those savings toward emergent financial demands or unfunded requirements. This study outlines critical factors in creating and maintaining a Navy escrow account. Specifically, it addresses: 1) the proposed operation and functioning of the Navy escrow account 2) barriers to implementation including legal restrictions and potential congressional and Department of Defense (DoD) resistance; and 3) proposed implementation strategies including the required cultural modifications and techniques for effectively managing the change process associated with the creation of an escrow account mechanism.
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