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1-06 | 80 | Chapter 2
HOST NATION SUPPORT REIMBURSEMENT PROCEDURES
2-212. Once the host nation support (HNS) agreement is established, the battalion or brigade logistics
staff officer (S-4)/assistant chief of staff, logistics (G-4)/ logistics directorate of a joint staff (J-4) provides a
detailed statement of requirements to the HN and begins the negotiations for logistic support. The use of
OMA funds are normally used to support HN requirements. Specific procedures for cost capturing and
billing must be negotiated with the HN and the United States. This will prevent locally negotiated
agreements that may not be legal or authorized. The financial manager must submit the SF 1080 to DFAS
with sufficient detailed documentation and a certified CONOPs cost report to support the request for
reimbursement.
FOREIGN NATION SUPPORT REIMBURSEMENT PROCEDURES
2-213. Financial managers must advice commanders of the importance of dealing with foreign authorities
during the reimbursement of funds. Each instance must be review carefully and discuss with legal experts
during the fiscal triad process to corroborate the authenticity and legality of the claims.
CIRCUMSTANCES FOR SUPPORT
2-214. Foreign nation support (FNS) is support provided to foreign forces from countries other than the
country in which the contingency operation is occurring. This support is generally provided under one of
three circumstances:
* Support can be provided under the existing rules of a parent organization controlling the
operation (for example, NATO, or the UN). Billing procedures under these circumstances should
follow standing agreements for support. See chapter 2, Section IV for a detailed discussion of
several legal authorities for reimbursement.
* Support may be provided if the United States and the supported country have a bilateral
agreement in place prior to the operation. The United States has many of these cooperative
agreements with allies. The financial manager must consult with the legal advisor for a copy of
any existing bilateral agreements and follow the procedures outlined in the agreement for
reimbursement.
* Support can be provided based upon an agreement negotiated expressly for the operation. Any
negotiated agreement for support should include billing and reimbursement instructions.
BILLING
2-215. Bills prepared for support during a UN or NATO operation should follow procedures established
by those organizations. Bills prepared for either standing or negotiated bilateral support agreements should
be processed as set out in the agreement. The financial manager must send these bills as required through
Service funding channels.
ASSISTANCE IN KIND
2-216. AIK operations, which deal directly with the governments of eligible countries, provide material
and services for a NGO logistic exchange of materials and services of equal value. These items are
accountable as future reimbursements to the country that initially provides them on a gratis basis. Costs for
these items have a current value that is captured as future reimbursements. The JTF financial manager
develops and implements procedures, in coordination with sustainment elements, to track the value of
support provided to ensure an equal exchange of valued materials and services throughout the operation.
Particular care must be taken in accounting for these authorized exchanges due to the political sensitivity
inherent in multinational operations. Ideally, these in kind reimbursements should derive no monetary gain
and should provide mutual benefit and equity between the participating countries. |
1-06 | 81 | Fund the Force
NON-GOVERNMENTAL ORGANIZATION REIMBURSEMENT
PROCEDURES
2-217. NGOs do not operate within the military or governmental hierarchy. However, because NGOs
operate in remote areas of high risk, they may need the logistic, communication, and security support that
military forces can provide. Expectations of military support (including supplies, services, and assistance)
must be reviewed with the organizations. Financial managers must consult with a legal advisor to
determine the authority to provide support on a reimbursable or nonreimbursable basis. Each organization
normally has some type of financial control officer. Military activities should provide support only after
they receive approval. Financial managers should ensure all supply activities, especially fuel, maintain a
status of what is provided. Financial managers should submit bills to supported organizations, as required,
and if the organization is not authorized to make payment locally, should forward the documentation
(signed by both organizations) through Service funding channels.
NON-DEPARTMENT OF DEFENSE (DOD) GOVERNMENTAL
AGENCIES REIMBURSEMENT PROCEDURES
2-218. Congress provides the DOD with funds for very specific needs. Therefore, support directly to other
U.S. Government agencies can be complex. When presented with a request for support by a U.S.
Government agency, financial managers should consult with the legal advisor. An MOA or letter
requesting support should form the basis for any reimbursable relationship with non-DOD governmental
agencies. This agreement can be used to ensure only authorized support is provided, and supply and service
activities capture the cost of support. Bills should be compiled as required, using a manual SF 1080,
Voucher for Transfers Between Appropriations and/or Funds, through the supported agency. The SF 1080
must have a copy of the agreement with attached substantiating documents. |
1-06 | 83 | Chapter 3
Banking and Disbursing Support
Providing currency on the battlefield has been a Finance Operations, now Financial
Management, responsibility for over 200 years. FM technology has redefined the
method of providing “physical currency” on the battlefield. Currency, as a medium of
exchange, is also provided through financial platforms such as mobile banking,
stored value cards, and electronic funds transfer. Disbursing is the act of distributing
funds from a specific account. A Disbursing Section makes payments (e.g., currency,
electronic funds transfer (EFT), checks) on properly prepared and certified vouchers,
receives collections, receives and controls currencies, maintains accountable records,
cashes negotiable instruments, manages established LDAs, makes foreign currency
conversions, determines the need for currency and its replenishment. Disbursing is
the arm within FM that ensures all payments are made IAW DOD regulations. It is
strongly recommended that all elements of the Fiscal Triad are co-located to facilitate
fiscal communication, accuracy of documentation, and timely payment of goods and
services.
Banking support encompasses a wide spectrum of FM activities ranging from cash
management/currency support of U.S. military operations to liaison with host nation
banking officials to strengthen local financial institutions. Other FM activities within
banking support include LD selection and LDA establishment, coordination with U.S.
embassies, USAFMCOM, DFAS, and Treasury in order to integrate all agencies in
support of banking initiatives.
Disbursing is the paying of public funds to entities in which the U.S. Government is
indebted; the collection and deposit of monies; the safeguarding of public funds; and
the documenting, recording, and reporting of such transactions. Disbursements are
cash, check, EFT, Intra-Governmental Payment and Collection System, or interfund
payments that liquidate established obligations, disburse amounts previously
collected into a deposit fund account, or provide payment in advance of performance.
The disbursing office ensures that only transactions that have been certified for
payment by certifying officials are processed for payment. The Disbursing Officer is
a military member designated to disburse monies and render accounts according to
laws and regulations governing the disbursement of public monies. DOs safeguard
public funds they collect or otherwise have in their custody or control. DOs may have
pecuniary liability for the loss of these funds. DOs will not lend, use, deposit in
banks, or exchange public funds in their possession for other funds except as
specifically allowed by law. They secure public funds until ordered by proper
authority to transfer or pay out the funds. When DOs receive orders for transfer or
payment, they faithfully and promptly execute the directed transactions, and perform
all other duties as fiscal agents of the Treasury imposed by law or regulations.
While providing the theater with cash (physical or electronic), FM officers are
expected to implement initiatives to minimize cash usage in theater and develop E-
commerce solutions that reduce cash usage while supporting the theater commander’s |
1-06 | 84 | Chapter 3
mission requirements. As a theater matures and operations allow, FM officers should
transition the theater to a near cashless environment. An inverse relationship exists
between the duration of a conflict and the usage of physical cash. It is incumbent on
FM officers to continuously leverage technology and national providers to reduce
cash on the battlefield.
SECTION I – BANKING SUPPORT
3-1. As a core competency of financial management banking support has become an integral part of
financial management operations. The successful and rapid implementation of e-Commerce into
contracting and financial management operations will assuredly enable the warfighter to protect the force
and bring stability to a host nation by strengthening that nation’s banking system, legitimizing the
government by increasing the confidence on the host nation’s economy.
BANKING AND HOST NATION SUPPORT
3-2. In order to ensure banking success, a partnering of national providers such as the DOD, the Treasury,
the DOS, USAID, the Federal Reserve Bank (FRB) and DFAS should occur. These institutions are the
cornerstones for providing the instrument of economic power during military operations. The interagency
partnership among these agencies yields the synchronization of banking and E-commerce initiatives across
the range of military operations. These agencies must be integrated early in the planning process and given
the opportunity to deploy assets forward early in support of unified land operations and to plan for the
establishment of a national banking system. In the early stages of operations financial managers play an
important role in the integration of national providers.
3-3. The FMSC Director, working in consultation with the Theater G-8, will develop an assessment of the
theater and host nation banking requirements. The FMSC assessment will consider infrastructure
requirements necessary to increase stability of the host nation financial systems, to include central and
wholesale banking processes and procedures, and correspondent banking relationships. The assessment
centers on identifying and understanding the impact on the affected host nation’s economy and of the U.S.
presence in the diplomatic, informational, military, and economic domains. The host nation’s banking laws,
the Status of Forces Agreement, or other host nation agreements require review to determine what the
banking rules are for foreign customers and which banking entities are permitted to operate within the
country; a foreign bank, U.S. bank, Credit Union (CU) or a military banking facility (MBF). Additionally,
if the establishment of any type of bank on a DOD Installation (e.g., contingency operating base, forward
operating base (FOB) is required, the FMSC will facilitate the process; however the base commander is the
signing authority for the operating agreement of a bank is the area. Follow the rules set forth in DODFMR
Volume 5, Chapter 34 and DODI 1000.11 for DOD banking policy.
3-4. The U.S. Embassy of the host nation (a subset of the DOS) may be able to provide significant
support to FM operations through its economic officer, finance officer and Treasury attaché. U.S.
embassies maintain LDA with host nation banks to facilitate procurement of funds. The FMSC analyzes the
host nation banking sector in order to leverage the U.S. country team’s expertise and determines where to
open an LDA. Until the establishment of an LDA, FM units can procure funds from U.S. embassies
through its already established LDA. Additionally, the DOS, in coordination with Treasury, is able to
provide detailed information about a country’s banking sector, which will assist FM units in the
development of a banking plan/initiative early in the operation. Where there is not an established U.S.
Embassy, the FMSC Banking section procures funds until the theater matures, and an LDA is established.
3-5. Banking and disbursing support are complementary. A sound banking system promotes economic
growth and development, as well as employment opportunities for the local populace in an immature
theater. Therefore, reestablishing or improving the host nation banking infrastructure is critical to the
transition from a U.S. dollar-based operation to one backed on local currency. FM disbursing operations
serve as the catalyst for such a transition with an ultimate goal of leveraging technology to make payments
electronically. This system promotes efficiency and decreases the opportunities for fraud and corruption.
This essential process also promotes a healthy relationship between the Army and the host nation. |
1-06 | 85 | Banking and Disbursing Support
3-6. In order to strengthen host nation banking within the combatant commander’s AOR, Army financial
managers must:
* Develop a working knowledge of Army banking policies and procedures.
* Understand the relationships among the Treasury, DOD, FRB, DOS, and other governmental
agencies as they relate to FM.
* Acquire knowledge of the global banking system and attain the financial tools available to the
Department of Defense for global finance and banking engagement.
* Understand the regulatory, legal and cultural differences in host nation banking systems.
ECONOMIC IMPACT
3-7. FM units analyze the economic impact of the use of currency (U.S. and foreign) on the local
economy. The analysis includes, but is not limited to, the cost of acquisition of foreign currency, the cost-
benefit of using ITS.gov versus an LDA, the availability of banking services and banking infrastructure,
acceptance of local currency by vendors, the impact of U.S. currency on the local economy, and review of
Treasury and other U.S. Government agencies reports on the local economy. Close coordination with CA,
U.S. Embassy, Treasury and DOS officials will ensure accurate assessments.
3-8. Economic analysis is a detailed report provided to a commander in order to make decisions on
applying the economic instrument of power, identifying all the financial aspects of a specific
geographical area and the effect that United States forces’ presence will have on that area.
REDUCTION OF CASH ON THE BATTLEFIELD
3-9. A stable and growing economy requires low inflation and stabilization of purchasing power.
Conflict, large budgetary deficits, lack of public confidence in the government, and other factors may add
to inflation instability, and may cause a host nation’s residents to resist the national currency and convert
their funds to U.S. Dollars, Euros, or other currencies. The mere presence of U.S. forces and unified action
partners will also directly and immediately affect the local economy. Without careful planning, U.S. forces
and unified action partners’ demand on local resources may create inflationary pressure. To minimize the
potential for inflationary pressure, FM units should make all payments for goods and services in the local
currency, pay wages for local services at an appropriate wage-rate and determine appropriate pricing levels
for local goods and services. Using the local currency helps put cash in the hands of the local populace,
stimulates the economy and demonstrates confidence in the host nation’s government.
MILITARY BANKING PROGRAM
3-10. Theater Financial Management will leverage existing programs and technology to identify and
implement new technologies and other resources to reduce U.S. Dollars off the battlefield, improving the
FMSU’s disbursing mission, improving the local banking system, and strengthening the economy across
the theater of operations to create an overall exit strategy. The various initiatives propose methods to
strengthen the host nation banking system and fortify the local economies throughout the theater of
operations. The banking team supports the FMSC in forging a strong partnership between the U.S. Army
and the U. S. Treasury, the Department of State, and the Federal Reserve Bank network. This effort should
promote the identification and elimination of capability gaps in the U. S. Army’s support of the Department
of State’s economic goals within the theater pertaining to banking and E-commerce.
3-11. The MBF main function during contingency operations is to provide cash management/currency
support. Overseas and domestic MBFs can provide foreign and U.S. currency to directly assist disbursing
operations on payments other than electronic funds or checks payments (exchange, cash transactions, etc.).
All compliance and regulatory guidance on proper procedures process thoroughly in accordance with
DODFMR Vol. 5, Chapter 34, and all corporate compliance rules (such as that of the Office of the
Comptroller of the Currency and Federal Deposit Insurance Corporation) that apply with the MBFs.
Banking liaison officers should have all proper points of contacts and operating agreements in place so that
they can properly provide guidance to the DO on the MBF’s capabilities. |
1-06 | 86 | Chapter 3
3-12. The following are banking tasks:
* Identify Unified Action Partners.
* Perform and document economic analysis of host nation.
* Establish TA banking policy and procedures.
* Coordinate for E-commerce and supporting technology.
* Coordinate for host nation banking capability.
SECTION II – DISBURSING
3-13. Financial managers acting under formal appointment are required to perform duties relating to public
funds. During disbursing operations each function helps establish the relationship between the
accountability of the funds and the disbursement of the funds.
DISBURSING STATION SYMBOL NUMBER (DSSN)
3-14. The FMSC and each FMSU may deploy with a contingency DSSN. The DSSN is assigned to a DO
by Treasury and indicates authority to receive and disburse public funds and issue checks on the Treasury’s
behalf. The accountholder (i.e., DO) within the FMSC and FMSU is accountable for the funds within their
respective AOR. The FMSC provides currency to the FMSUs in order to support the FMSU’s financial
operations. This decentralized approach allows for greater accountability and direct oversight of cash. See
DODFMR volume 5 for more information on disbursing policy and procedures.
3-15. The DO, Deputy Disbursing Officer (DDO) and Disbursing Agent must be appointed by a
commander to maintain the DSSN. The establishment of the DSSN is requested through DFAS. Treasury
approval must also be requested through DFAS. Once the activation letter is submitted to DFAS the
following must occur:
* Order initial U.S. Treasury Checks.
* Obtain Employee Identification Number (EIN).
* Establish routing transit number.
* Identify and access systems (e.g., Collections Information Repository (CIR) and Payment
Information Repository (PIR) application, OTCnet, ITS.gov, etc.).
* Acquire/transfer Computerized Accounts Payable System-Windows test files to ITS.gov prior to
going live.
* Obtain user identification for all systems.
* Establish Cost Centers.
* Establish suspense account for DSSN.
* Reroute analysis unmatched transactions, suspense account reconciliation, etc.
* Establish Army Disbursing Symbol Number, Defense Military Pay Office, and Company Code.
* Establish new fiscal station number (if required).
CASH HOLDING AUTHORITY
3-16. DOs are responsible for currency support, which includes CHA, within their area of responsibility
and direct all currency operations. These operations include acquiring, accounting and safeguarding of
currency and U.S. Treasury checks; collecting and redistributing surplus currency; and disposing of
mutilated and contaminated currency. The DO requests to hold currency at personal risk from the
appropriate approving authority. The CHA is used to make miscellaneous cash payments, make change,
conduct accommodation exchanges, and other specifically authorized transactions. The approving authority
ensures the amount of the request is within established guidelines, and that management controls exist to
ensure that routine reviews of cash requirements are conducted. When special circumstances require DOs
to increase their CHA beyond stated amounts, the approving authority may authorize holding amounts
temporarily in excess of the limits based on the circumstances. See DODFMR volume 5, chapter 2 for
additional information on CHA. |
1-06 | 87 | Banking and Disbursing Support
3-17. Establish cash holding authority. The following is done to establish cash holding authority:
* Request cash holding authority.
* Coordinate with supporting units to determine currency requirements.
* Determine the number of customers and funding requirements from unified action partners.
* Utilize the cash holding template to determine the type and amount of cash (USD and Foreign
Currency (FC)).
3-18. Maintain cash holding authority. The DO should continue the use of the cash holding template in
order to determine the type and amount of cash (USD and FC) needed for disbursing operations per DSSN,
and must coordinate with unified action partners (e.g., contracting, banking officer, G-8, and DFAS) to
determine their requirements.
CASH MANAGEMENT/CURRENCY SUPPORT
3-19. The FMSC provides cash management/currency support (U.S. and foreign) to a theater of operations.
Coordination with the host nation, U.S. banks, credit unions (CU) and military banking facilities (MBFs)
provides currency to the FMSUs and other Services or multinational forces IAW interservice and
intergovernmental agreements. The FMSC and FMSUs maintains the disbursing station symbol number
(DSSN), and may be designated to provide currency to all components of a joint and/or multinational force.
The DO is the central funding account holder and coordinates the establishment of any LDA in theater.
3-20. Generally, the FMSC provides the primary source of currency in the operational theater. Deployed
FMSUs and sister service FM organizations will draw and return cash through the FMSC. In contingency
operations where there is no FMSC deployed, FMSUs must be prepared to resource cash requirements in
support of theater operations. In this instance, pre-deployment coordination with national providers,
agreements with approved funding sources, and establishments of LDAs, are critical in support of funding
requirements.
3-21. Cash management/currency support is the act of supplying foreign currencies, U.S. Treasury checks
and local currency checks, available E-commerce (e.g., Eagle Cash Cards, Over the Counter-Net,
Government Purchase Cards, U.S. Debit Cards and mobile payments) and, in some operations, precious
metals (gold, silver) to U.S. and multinational forces in the operational area. Additionally, FM units
provide currency and coins to Army and Air Force Exchange Service facilities; tactical field exchanges
(TFEs); postal units; and companies serving as in-theater defense contractors; as operational considerations
permit. FM units provide kiosks and point of sale devices that enable Eagle Cash Card transactions. This
service is a form of Mobile banking. Mobile banking is a portable solution that uses mobile phone
networks and incorporates existing prepaid debit card, internet, and mobile phone technology to transmit
instructions to financial networks that facilitate funds transfers (i.e., Payments) to concession vendors.
FOREIGN CURRENCY
3-22. Financial managers must work with the State Department and Treasury Department to determine
whether the use of U.S. currency will be beneficial or detrimental to the host nation in conjunction with
military/security requirements IAW METT-TC. When a foreign currency payment is required, the
preferred method of payment is via EFT using the International Treasury Services website (ITS.gov).
ITS.gov is the Department of the Treasury’s comprehensive international payment and collection system.
The establishment of an LDA enables FM units to disburse checks and conduct EFT payments in local
currency when the infrastructure or mission does not support ITS.gov. The FMSC Banking Officer will
confer with the local U.S. Embassy for assistance in determining which banks meet the selection criteria
established by the Treasury. The Banking Officer will then provide those recommendations to the DO to
establish an LDA.
3-23. Once the DO selects an LD, they must formally request approval and designation of that institution
as an authorized LDA from the Treasury. Chapter 14 of DODFMR Volume 5 provides specific guidelines
on the establishment of an LDA. LDAs are not limited to the Banking Section of the FMSC. FMSU
accountholders are encouraged to establish an LDA to facilitate foreign currency cash operations in their
respective AOR. All transactions involving foreign currency are treated as cash transactions and follow the |
1-06 | 88 | Chapter 3
same principles and guidelines established for controlling U.S. currency. All DOs, deputy DOs, pay agents,
and cashiers who engage in foreign currency transactions will maintain a record of such transactions on DD
Form 2663 (Foreign Currency Control Record). As required for each account, the DO will solicit
competitive proposals from local financial institutions in the area to secure the most beneficial banking
agreement in conjunction with the FMSC banking section.
CURRENCY EXCHANGE
3-24. FM units maintain an important role in currency exchange and currency control. Currency exchange
plans must consider all members of the uniformed Services, DOD civilians, authorized U.S. contractor
personnel, other U.S. Government personnel, NGO personnel, and Pay Agents. All currency exchanges
from U.S. to foreign currency or from foreign currency to U.S. must comply with currency control
standards to discourage black market activities. Currency exchange, when done in large amounts, is very
time consuming. FM units may perform conversions due to a number of circumstances. They include:
* Movement of forces from one country to another.
* Upon initial deployment to and final departure from the AO.
* Prevent and control black market activities.
* Assist in controlling inflation.
3-25. FM units will exercise caution when exchanging U.S. currency to alleviate laundering points for
enemy currency, counterfeit currency, black market operations, and currency arbitrage. FM units may
process EFTs or issue U.S. Treasury checks in exchange for excess currency accumulated by Service
Members. Additionally, military banking facilities (MBFs), tactical field exchanges (TFEs), and
nonappropriated fund (NAF) custodians may need to deposit their holdings of currency and coins with the
nearest FM unit. U.S. currency and coins may be turned in to the servicing FM unit in exchange for an EFT
transaction or a U.S. Treasury check.
MULTINATIONAL FORCES CURRENCY SUPPORT
3-26. When an agreement has been negotiated between the United States and a multinational nation, DOs
may be authorized to advance currency on an emergency basis to cashiers or members of the multinational
nation’s armed forces. Such agreements may require multinational forces to provide reciprocal support to
U.S. forces. FM commanders must be aware of agreements with allies or HNs, which include reciprocal
financial support as authorized by DOD Directive 5530.3. The FMSC director or account holder is
responsible for obtaining copies of these agreements and disseminating them to lower elements. These
agreements will be coordinated with the SJA for legal sufficiency prior to implementation. See DODFMR
Volume 5 for additional information.
SUPPORTING TASKS
3-27. The following are performed under cash management/currency support:
* Perform cash acquisition and cost analysis.
* Perform cash holding analysis authority (USD and FC).
* Document the applicable foreign currency market rates (e.g., Spot Rate is the price that is
quoted for immediate settlement on a commodity, a security or a currency).
* Determine the process and cost associated with acquisition and delivery of USD and local
currency.
* Obtain the budget rate for contracts paid in local currency.
* Determine the availability of a foreign currency fluctuation account for local currency payments.
* Determine the history, evaluation and inflation of U.S. currency in relation to the local currency.
* Determine which mechanism can acquire foreign currency at a better rate: ITS.gov or an LDA.
* Acquire and account for currency (USD and FC)/checks.
* Dispose and report mutilated or damaged currency/checks.
* Maintain and control agreements that support multinational forces, contractors, DA Civilians. |
1-06 | 89 | Banking and Disbursing Support
* Account for captured currency.
* Investigate or request investigation of loss of funds.
* Receive collections (e.g., postal, Moral, Welfare and Recreation).
* Perform cash verifications IAW DODFMR Vol. 5, Chapter 2.
* Review stateside bank operating agreement for Annex to support contingency funding
requirements.
* Safeguard currency/checks.
All funds must be safeguarded IAW DODFMR volume 5, chapter 3
REPORTING AND ANALYSIS
3-28. All DOs are accountable to the Treasury for the cash items in their possession. The DOs will
officially record and report accountability of funds to the Treasury on a monthly basis. In addition to the
monthly reporting, DOs maintain documents representing cash for which they are accountable in their vault
or safe and account for them daily (e.g., DD Form 2657 (Daily Statement of Accountability), DD Form
2665 (Daily Agent Accountability Summary), DD Form 1081 (Statement of Agent Officer’s Account), SF
1219 (Statement of Accountability)).
3-29. The analysis of unmatched transactions (AUT) is a tool that provides DOs the ability to evaluate the
accuracy of their disbursing operations. When properly used, the AUT prevents losses of funds and
prevents fraud. To ensure account reconciliation, tools are available to the DOs. DFAS provides a report by
DSSN on a monthly basis that includes DSSN reported deposit tickets and debit vouchers that do not match
the Treasury’s report. The discrepancies listed in the report lend to the accuracy of the DOs monthly SF
1219. Immediate action is required to research and reconcile all unmatched transactions. See DODFMR
volume 5, chapter 19 for additional information on DO accountability reports.
3-30. The following are report requirements:
* Account for funds/checks.
* Treasury reports.
* Daily accountability.
* Monthly accountability.
* EagleCash store value cards.
* AUT report.
* Report and/or investigate loss of funds.
* Report and/or investigate erroneous payments.
* Cash verification report.
LIMITED DEPOSITARY ACCOUNT (LDA)
3-31. Limited depositary account is a checking account in a U.S. or foreign commercial bank that is
designated by the Treasury Department to receive deposits from Disbursing Officers for credit to
their official limited depositary checking accounts. Disbursing Officers are responsible for the
maintenance and management of an LDA. They will ensure the amount of foreign currency purchased with
U.S. dollars, together with the balance on hand, is commensurate with immediate disbursing requirements
based on METT-TC, but normally would not exceed a 5 to 7 day supply. This requirement minimizes local
currency operating bank balances and losses due to rate devaluations, and avoids premature drawdown on
the U.S. Treasury’s General Account. The DO maintains a record of every LDA transaction to include
payee names, voucher numbers, amounts (in the currency of the check), check serial numbers, check dates,
and the activity name under which the account is established. Periodic statements from the depositary are
used to reconcile the disbursing records. See DODFMR volume 5, chapter 14 for more information on
LDA.
3-32. Disbursing Officers review the LDA on a continuing basis to ensure that: |
1-06 | 90 | Chapter 3
* Maintenance of account balances are at the minimum necessary to meet immediate disbursement
needs (checks issued and in process) commensurate with the activity in the LDA.
* Balances in excess of immediate needs (typically a 5 to 7 business days supply) are promptly
withdrawn and deposited with the Treasury.
* The terms negotiated with the depositary are favorable to the government, including interest on
the account at the highest possible rate.
3-33. The Disbursing Officers are responsible for accounting for all funds expended while performing
disbursing duties. Transfer of disbursing records only relieves them of the administrative requirement for
documentation pursuant to the settlement of the account. Accountability for illegal, incorrect, or improper
payments that cannot be adjusted despite the diligence of the settlement by the incoming DO remains with
the DO that made the payments. The outgoing DO will keep the incoming DO informed of their current
mailing address at all times. The outgoing DO is required to answer inquiries related to settlement of
outstanding items and will furnish any advice or suggestions that may assist prompt and complete clearance
of the discrepancy. If a deficiency exists in the account of an outgoing DO (and it appears that no action
was taken to remove it from the accountability and no relief request is pending), the incoming DO shall
initiate collection action against the accountable DO.
3-34. LDA supporting tasks:
* Open an LDA.
* Prepare letter of authorization.
* Request bank acknowledge and accept letter by endorsement.
* Order LDA checks.
* Obtain Treasury approval.
* Maintain an LDA.
* Conduct analysis of existing LDA(s).
* Reconcile the LDA.
* Meet three (3) year Treasury review requirement.
* Perform transfer of accountability.
* Close an LDA.
SECTION III – PROCUREMENT SUPPORT
3-35. Procurement Support is the critical role financial management plays in acquiring, certifying,
accounting and disbursing the funding required for operational contracting support (OCS).
CONTRACTED GOODS AND SERVICES
3-36. As a critical component of the Fiscal Triad, FM provides both funding for validated requirements and
makes payment for contracted goods and services. Figure 3-1 illustrates FM’s role in the procurement
process. Once the goods or services have been received and accepted by the government representative, the
documents are forwarded to the CVS section. CVS then ensures that all required documents are available
and accurate prior to submitting for payment to the disbursing section. The CVS certifying officer prepares,
certifies, and forwards the documents to the disbursing section for payment. These requisite conditions
include:
* A legal obligation to pay exists (typically a contract).
* The payee has fulfilled any prerequisites for payment (typically an invoice).
* The amount of the payment and identity of the payee are correct.
* The payment is legal under the appropriation or fund involved (typically the correct fiscal year
and appropriation).
3-37. Maintain paid documents. Internal controls are incorporated into the operations to maintain complete,
consistent, and accurate data for contract files and related entitlement and accounting records throughout
the life of the contract. Theater policy dictates document disposition. |
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3-38. Post payment review. After payment, reconciliation is performed with contracting and G-8 or S-8.
This review ensures proper payments occur and accounting records are correct. Financial managers are
responsible for identifying differences, conducting research, performing reconciliations, approving
recommended adjustments, processing corrections timely, and maintaining appropriate supporting records.
See DODFMR volume 10 for information on contract payment policy and procedures and DODFMR
volume 5 for disbursing policy and procedures.
Figure 3-1. Procure to pay process (FM procurement support)
LOCAL PROCUREMENT
3-39. The DO appoints personnel to perform duties related to the local procurement. Each appointment
has a purpose in matters involving disbursing functions and the capabilities to procure local goods and
services.
PAY AGENT (PA) SUPPORT
3-40. For local procurement support, the commander appoints a PA on an additional duty appointment
order. This appointment authorizes the PA to disburse public currency IAW the special instructions stated
in the appointment and the written instructions provided by the FMSU commander. The ordering officer
whom the PA supports receives separate instructions from contracting officials. FOO and PAs train and
work as a team; the PA should participate with their FOO in training provided by the contracting officer.
3-41. The PA or FOO is held personally liable for any payment not IAW the appointment orders or
prescribed instructions. The PA cannot simultaneously serve as either a certifying or FOO. The PA uses an
official credit/debit card to make payments whenever possible. When it is not possible to use an official
credit/debit card to make payments, the PA takes the following actions:
* Reviews SF 44, Purchase Order–Invoice–Voucher, prepared by the ordering officer.
* Disburses currency for the goods or services as stated on the SF 44 (Purchase Order-Invoice-
Voucher), but only after the SF 44 has been approved by a the FOO.
* Pays for purchases not to exceed established limits. (An agent may not split purchases between
two or more vouchers in order to circumvent the established limit.)
* Clears the account with the DA that advanced the funds.
3-42. A PA is a U.S. military member or Department of Defense civilian employee appointed by the
commander to act as an agent of a DO. The purpose of a PA is to make specific payments, currency
conversions, or check cashing transactions from funds temporarily advanced to the agent by the DA. PAs
are individuals whose regular duties do not involve disbursing functions and who are not organizationally
located in the disbursing office. They are appointed to the position of PA as a collateral duty and will be
under the exclusive supervision of the DA in all matters concerning custody and disposition of funds
advanced to them. Funds advanced to a PA are held at personal risk by the agent. Immediately upon |
1-06 | 92 | Chapter 3
completion of the transaction(s) for which funds were advanced, the PA must clear accountability with the
DA. PAs provide the warfighting commander with a capability to procure local goods and services. DAs
must provide PAs with detailed instructions on FM policies regarding the expenditure of cash.
DISBURSING OFFICER/ACCOUNT HOLDER RESPONSIBILITIES
3-43. The DO or designee briefs new PAs to inform them of their responsibilities. They also provide PAs
detailed written instructions regarding the specific functions they are to perform, procedures for the
safeguarding and expeditious return of currency, and other instructions deemed necessary. Although the
unit commander appoints the agent, the DO or designee retains the right to refuse funding the PA because
of the DO inherent duty to properly safeguard government funds.
Method of Appointment
3-44. A PA is appointed by the commander and approved by the FMSU commander IAW DODFMR,
Volume 5 and the applicable theater policy. The appointment order specifies the FMSU commander to
whom the agent is appointed, the types of payments to be made, the unit to be paid, the duration of
appointment, and the maximum amount to be advanced.
3-45. The PA checks the appointment order for correctness and maintains a copy in possession while
performing duties as a PA. The PA forwards a copy of the appointment order to the DO or designee to
which the PA is appointed. The DO or designee keeps a copy of the appointment order until the order
expires or is revoked.
3-46. Newly appointed PAs will immediately contact the DO or designee to receive a detailed briefing
before they are advanced currency. PAs receive from the DO or designee a copy of the current PA
instructions and must become thoroughly familiar with all responsibilities. PAs sign a written statement
acknowledging understanding and receipt of the oral and written instructions. The statement will be
permanently filed with the DO or designee.
Appointing Official’s Responsibilities
3-47. The appointing official ensures that every individual entrusted with public funds is supplied with a
vault, safe or other adequate secure facility (e.g., a strong box) for exclusive use and accessible only to that
individual. If it is not possible to provide separate safes, then furnish separate locked compartments in one
safe or several strong boxes stored in one safe or vault. Never merge public funds with any other funds.
Additional responsibilities include:
* Develop and publish a security program IAW command directions. The program must provide
instructions on adequate protection for funds, the maximum amount of public funds and related
documents and instruments that must be on hand at any given time.
* Ensure protection of funds is included in the overall disbursing security program. This includes
requirements for periodic review of the adequacy of the security measures being used and for
testing security equipment for proper operation on a semiannual basis.
* Ensure (when applicable) armed guards are made available to escort government funds to and
from the disbursing office when funds are being transported. The appointing official makes this
determination based on a risk assessment of the OE.
* Provide fire protection of government facilities and funds.
Safeguarding Public Funds
3-48. PAs must acknowledge the receipt of funds by signing DD Form 1081, Statement of Agent Officer’s
Account (advance funds). The safeguarding of these funds is a personal responsibility of the PA until the
funds are returned to the FM unit. Failure to safeguard funds may result in an agent being held personally
liable if any funds are lost. A PA may not entrust funds or accountable instruments to any other person for
any reason. All funds must be safeguarded IAW DODFMR Vol. 5. |
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Clearing Pay Agents
3-49. PAs will make every effort to complete all payments and return funds and payment documents as
quickly as possible. The agent should return the funds and receipts as soon as tactically feasible after
providing the specified support, but no later than 30 days after the advance or as the DO directs. All agents
must clear their accounts with the funding DO or Disbursing Agent prior to departing the theater of
operations, regardless of circumstances. Upon final clearance of funds, both the funding DO or
Disbursement Agent and PA will sign a DD Form 1081 (clear funds). It is recommended that the PA
maintain a copy of the signed DD Form 1081.
Types of Support
3-50. The PA is an extension of the DO. PAs provide both local procurement support and individual
support. Local procurement support is the purchase of supplies and services from the local economy in
order to meet logistic shortfalls. Individual support entails making payments, cashing checks, and making
foreign currency conversions for individual service members based on PA appointment orders and the
approval of the FMSU Commander/DO.
PAY AGENT CHALLENGES
3-51. There are several players involved in field ordering operations besides FOOs and PAs. The Fiscal
Triad and the unit commander are all part of the “team” that enables the effectiveness of this triad.
Successfully navigating through a maze of personnel and bureaucracy roadblocks can be a daunting task.
Proper training of PAs and separation of duties between PA and FOO are crucial to deterring and
preventing fraud, waste, or abuse of funds. Whenever possible, the PAs and FOOs should receive combined
briefings and training on their respective duties and responsibilities. Patience, flexibility, and creativity are
required to reach the ultimate goal of supporting Soldiers. The following list includes just a few of the
challenges FOOs and PAs may encounter:
* Corruption (number one threat).
* Customs and culture differences.
* Trafficking in persons.
* Enemy threats against vendors.
* Information security and operations security (vendors can provide intelligence to the enemy).
* Language barriers.
* Time-management challenges.
* Unauthorized commitments by PA or by someone speaking for the PA.
* Chain of command and conflicting responsibilities.
* Contingency/combat environment.
SPECIAL PAYMENTS
3-52. Financial management supports several special payment programs and carefully follows the
principles and standards prescribed by the Comptroller General of the United States. Special payments are
classified based on their characteristics and the nature of the transactions they support.
SOLATIA PAYMENT
3-53. A solatia payment is monetary compensation given to indigenous personnel to provide relief from
grief, suffering, and anxiety resulting from injury, property, or personal loss. Occasionally, solatia
payments are made in order to meet cultural expectations. A solatia payment is nominal in amount, and is
not an admission of liability by the U.S. The commander, in whose area of responsibility the incident
occurred, is responsible for determining entitlement to solatia payment. FM units are responsible for the
disbursing and accounting of a solatia payment. AR 27-20, Claims, contains more information on solatia
payment. |
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REWARDS PROGRAMS
3-54. The Secretary of Defense may pay rewards to persons for providing U.S. Government personnel or
government personnel of multinational forces participating in a combined operation with U.S. armed forces
with information or assistance that is beneficial to:
* An operation or activity of the armed forces or of multinational forces participating in a
combined operation with multinational forces conducted outside of the United States against
international terrorism.
* Personnel protection of the armed forces or multinational forces participating in a combined
operation with U.S. armed forces.
3-55. This authority is useful to encourage the local citizens of foreign countries to provide information
and other assistance, including the delivery of dangerous personnel and weapons, to U.S. Government
personnel or government personnel of multinational forces. See DODFMR volume 12 for more on the
DOD rewards programs.
BOUNTY PROGRAMS
3-56. Bounty programs facilitate the purchase of weapons, radios, information, and other items from local
nationals. The most common example of this type of program is Weapons for Cash. The Secretary of
Defense must approve Weapons for Cash program with the senior operational commander providing the
funding authorization. PAs are used to ensure successful execution of the program. The DA advances cash
to a PA who, together with a FOO, transacts the business regarding weapons for cash, and then clears the
PA account with the funding DA.
COMMANDER’S EMERGENCY RESPONSE PROGRAM (CERP)
3-57. The CERP enables commanders to respond with a means for urgent, small-scale humanitarian relief
and reconstruction projects and services that immediately assist the indigenous populace. FM units are
responsible for disbursing these funds within their AOR. Commanders are responsible for tracking
utilization of their respective CERP funds.
ENEMY PRISONER OF WAR (EPW)/CIVILIAN INTERNEE (CI) PAY
3-58. FM units are responsible for processing deposits to and payments from deposit, trust, or other special
fund accounts. They are also responsible for ensuring disbursements from these accounts are not made
without specific authority. The FMSC develops policies and advises the EPW camp commander on EPW
and CI operations that relate to pay and accounting. Upon request, FM units provide training to personnel
assigned to the camp or EPW unit. DFAS Regulation 37-1, Chapter 26 outlines associated finance
operations procedures used for in and out processing of EPWs and/or CIs.
OTHER PROGRAMS
3-59. Procedures need to be in place to address handling of captured currency, worn and mutilated
currency. Counterfeit currency or coinage accepted in conjunction with official disbursing office business
transactions are processed as physical losses of funds. Any Department of Defense DO acquiring captured
foreign currency shall ensure the funds are safeguarded and delivered to the Treasury through FM channels.
Captured foreign currency shall not be collected into the DOs accountability. See DODFMR, volume 5,
chapter 12, for additional information.
MISCELLANEOUS DISBURSING SUPPORT
3-60. In many instances, disbursing operations support programs and operations requiring funds, including
cash, checks, and electronic funds transfers. |
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CURRENCY FOUND IN PERSONAL EFFECTS
3-61. Appointed officials inventory all currency (paper, coin, precious metals), U.S. or foreign, found
among the personal effects of Soldiers and civilians captured, killed, or medically evacuated, and turn in all
currency to the nearest FM unit. These funds are either taken into the DOs accountability and placed in a
suspense/deposit account or exchanged for a U. S. Treasury check when a Special Courts Martial Order
Officer has been assigned. See DODFMR volume 5, chapter 27 for more information.
SAVINGS DEPOSIT PROGRAM (SDP)
3-62. Military members deployed to combat zones, qualified hazardous duty areas, or certain contingency
operations as designated by the Secretary of Defense may be eligible to deposit all or part of their
unallotted pay into a DOD savings account up to $10,000 during a single deployment. Interest accrues on
the account at an annual rate of 10% compounded quarterly. FM units enable this program via cash deposit
with the servicing FM unit or by allotment for Soldiers desiring to participate in this program. See
DODFMR volume 7A chapter 51 for eligibility, limitations and more information on SDP.
CHECK CASHING (ACCOMMODATION EXCHANGE)
3-63. The negotiable instruments that a DO is authorized to cash are: U.S. Treasury Checks; Traveler's
Checks; Money Orders; third-party checks; state and local government checks; credit card checks; business
checks; and personal checks, payable in U.S. currency. The definition of a third party check is a check on
which the drawer, the drawee, and the payee are all different parties. The payee must be eligible for check
cashing services. The DO has the right to deny check cashing privileges to anyone based on the non
availability of cash or personnel resources. The FMSC develops and recommends to the ASCC/theater G-8
theater policy to establish check cashing amount thresholds that may be cashed by authorized personnel.
All authorized personnel who request check cashing privileges shall consent, in writing, to immediate
collection against their pay for the total of any dishonored check. The use of stored value card technology
should be the primary method to provide authorized personnel with access to their funds. The FMSC
develops and recommends to the ASCC/theater G-8 theater policy on local and partial payment limits and
frequency for authorized personnel. See DODFMR, volume 5, chapter 4, and Treasury Financial Manual
Part 4, for more information.
ADVANCE OF PAY AND ALLOWANCES
3-64. The purpose of an advance of pay is to ease hardships imposed by the lack of regular payments when
a member is mobilized, ordered to duty at distant stations, or deployed for more than 30 days to locations
where the Soldier does not have means of withdrawing funds from their personal bank account. The use of
stored value card technology should be the primary method to provide authorized personnel with access to
their funds. The FMSC develops and recommends to the ASCC/theater G-8 theater policy on local and
partial payment limits and frequency for authorized personnel. See DODFMR, volume 7A for more
information.
NONCOMBATANT EVACUATION OPERATIONS (NEO)
3-65. Noncombatant evacuation operations are conducted to assist the DOS in evacuating U.S. citizens,
DOD civilian personnel, and designated host nation (HN) and third country nationals whose lives are in
danger from locations in a foreign nation to an appropriate safe haven. Although normally considered in
connection with hostile action, evacuation may also be conducted in anticipation of, or in response to, any
natural or manmade disaster. During NEOs the U.S. ambassador is ultimately responsible for the successful
completion of the NEO and the safety of the evacuees. In support of a NEO, FM units make advances of
pay, dislocation allowance payments and travel entitlement pay. Evacuation payments would be made at
the designated safe haven. If the situation warrants, minimum payments may be made in theater and this
would preclude an outflow of U.S. currency in the theater of operation. |
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DISBURSING ROLES
3-66. Each financial management organization has a determined role during disbursing operations. The
relationship between one organization and the other involves coordination, responsibilities, execution and
management of each procedure.
FINANCIAL MANAGEMENT SUPPORT CENTER
3-67. The FMSC serves as the conduit for banking and disbursing operations between the theater of
operations, national providers and the theater’s FM assets. Generally, the FMSC coordinates for the
establishment of LDAs, establishes a central funding capability, and publishes the theater’s Finance
Operation’s policies and procedures. These policies must be nested with theater operations orders and
promulgated throughout the area of operation. This ensures consistent execution of theater policies across
the theater. Theater disbursing support is synchronized at every level of FM operations.
3-68. The FMSC works closely with the FM SPO at the ESC to ensure cash requirements are meeting
commanders’ objectives. The FM SPO provides the FMSC with immediate notification of changing cash
requirements and ensures dissemination of FM policies. In coordination with the FM SPO, the FMSC
establishes reporting procedures to monitor currency usage throughout theater.
3-69. The FMSC Director recommends policies and procedures regarding currency use on local and
partial payments and check cashing amounts. However, the senior geographic combatant commander
retains final authority on these policies and procedures and may establish controls on the amounts of U.S.
and foreign currency available and the type of currency used. This is necessary to control black market
activities, secure the money of individual Service Members, and help control problems related to currency
inflation of either U.S. or the host nation currency. If appointed the Executive Agent for FM, the FMSC
serves as the theater central funding proponent for all U.S. branches of Services in theater. Restrictions may
be imposed to prevent disruption of the local economy and to prevent and control black market operations
and counterfeiting.
FINANCIAL MANAGEMENT SUPPORT UNIT
3-70. Generally, the FMSU receives funding for its operations from the FMSC. In cases where the FMSC
is absent from theater, the FMSU assumes central funding responsibilities. As the theater matures, and an
FMSC deploys, the FMSU transfers its central funding responsibilities to the FMSC. The FMSU provides
the FMSC with estimates of currency requirements weekly. Once funded, the DO maintains full
accountability of funds entrusted to them. The Disbursing Section maintains the day to day execution and
management of disbursing operations. The FMSU has responsibility for funding subordinate FM
Detachments assigned to the FMSU task organization. FMSUs ensure procedures are in place for daily
account balancing by all assigned FMSDs.
FINANCIAL MANAGEMENT SUPPORT DETACHMENT
3-71. The FMSD provides cash management/currency support to its subordinate FMSTs and PAs.
Generally, the FMSD conducts disbursing support autonomously from the FMSU. As such, the FMSD
must be prepared to conduct a full range of financial operations and will require the necessary expertise in
manual and automated disbursing operations as well as proliferating E-commerce operations in the FMSDs
AO.
IRREGULARITIES IN DISBURSING OFFICER ACCOUNTS
3-72. Irregularities are categorized as physical losses of funds; illegal, incorrect, or improper payments; or
overages of funds. Physical losses of funds are segregated further by major losses and minor losses. A
major physical loss of funds is a loss of $750 or more, or any physical loss where there is evidence of fraud
within the disbursing office, regardless of dollar amount. A minor physical loss of funds is a loss of less
than $750 without any evidence of fraud internal to the disbursing office. All agents (e.g., DOs, pay agents,
deputy agents, cashiers) entrusted with funds have pecuniary liability. Also, all persons not formally |
1-06 | 97 | Banking and Disbursing Support
appointed as an agent (but having Government funds in their possession or control) become accountable for
those funds as a part of their assigned duties and are subject to the same personal liability for the funds as if
they had been formally appointed.
SECTION IV - FISCAL TRIAD SYNCHRONIZATION
3-73. The Fiscal Triad, as depicted in chapter 1, figure 1-3 on page 1-7, represents the synchronized
functions of distinct activities – contracting, FM, legal counsel, and the requiring activity – in order to
ensure the effective and efficient execution of theater procurement support of Army forces. Each activity
reinforces the procurement process with respect to acquisition management, internal controls, contract
payment, funds disbursement and accounting and compliance with administrative and fiscal law.
3-74. FM support begins with the certification of funds for valid requirements generated by supported
units. Financial managers not only certify funds but also track expenditures throughout all phases of the
process. These requirements, depending on the dollar amounts or particular nature, are vetted IAW
applicable theater policies and, if appropriate, receive legal reviews by the SJA. The SJA ensures that
contracting actions are IAW existing contract law and regulations such as the Federal Acquisition
Regulation (FAR) and the Defense Federal Acquisition Regulation Supplement (DFARS). The supporting
contracting activity legally contracts for the requested supplies or services and provides contract
administration. FM support within the Fiscal Triad continues with obligation validation, ensuring the
presence of a corresponding valid contract, monitoring contract execution to stay within spending threshold
receiving report and invoice prior to payment of the vendor. Finally, financial managers provide accounting
information to the supported contracting office to close out contracts and obligations.
3-75. At the center of the Fiscal Triad is the unit commander. The commander is the focal point of the
procurement process. Every effort and activity in the procurement process is directed toward generating,
sustaining and preserving combat power using the most cost effective means. Units generate requirements
using cost management and established theater and local SOPs. Financial managers assist commanders in
developing these SOPs in close coordination with the other members of the Fiscal Triad as well as the
sustainment community. Special attention should be paid to the appointment and training of contracting
officer representatives (COR). CORs ensure that in no event, the contractor furnishes materials or services
in addition to, less than, or different from those required by the contract prior to certifying the receiving
report. Contracting officers appoint CORs to provide contract surveillance. Commanders and their staff, in
the procurement process, are the requirement owners and are responsible for the following tasks:
* Defining the requirement (no other step has greater bearing on success).
* Writing the performance of work statement for the requirement.
* Developing and coordinating the requirements validation package IAW established SOP.
* Submitting funding requests for the requirement through the supporting G-8 to the designated
approving authority.
* Working with the supporting contracting office or program office to support contract award and
contract oversight activities.
* Maintaining oversight of the requirement, to include the requisite funding, as long as the
requirement exists.
3-76. Synchronization of all elements of the Fiscal Triad requires constant coordination. This coordination
is facilitated by the following actions:
* Co-locate regional contracting personnel, G-8 personnel, fiscal lawyers, and supporting FM units
whenever possible.
* Conduct weekly Fiscal Triad meetings to discuss on-going procurement operations and
emerging issues and trends.
* Leverage theater communication and network technologies to facilitate data and information
sharing between all elements of the Fiscal Triad.
* All activities participate in any Pre-Deployment Site Survey to a new theater of operations to
establish initial procurement support capabilities. |
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* All activities should maintain visibility of supported unit relief in place and transfer of authority
in order to ensure existing contracts are still properly managed and closed out as necessary. This
would also include ensuring the training of new FOOs, pay agents and CORs.
3-77. As part of the fiscal triad, Financial Management plays a key role in helping contracting officers
establish Operational Contract Support Plans. FMs role in support of the Operational Contract Support
Plans includes—
* Planning payment for contract requirements established by the unit (or units) supported under
various contingencies.
* Designating, deploying, and augmenting FM units.
* Defining operating procedures and responsibilities of FOOs, FM personnel, and pay agents.
* Participating in site surveys and deployment exercises.
* Identifying funding and cash requirements.
* Providing a theater economic assessment. |
1-06 | 99 | Chapter 4
Pay Support
FM units perform Pay support functions in a theater of operations. These units ensure
that all joint forces personnel, regardless of component (active duty and reserves)
within the theater, receive accurate and timely pay support. The impact of quality pay
support on Soldiers’ morale cannot be understated. Thereby, Pay support remains a
vital FM core competency.
SECTION I – ACTIVE DUTY PAY
4-1. Pay Support is provided to all personnel assigned or attached within the FMSC area of responsibility
(AOR). This support ensures proper pay entitlements are received for the particular area. FM elements will
provide continuous Pay Support service in an effective and efficient manner. Prevention of backlogs and
late pay transactions are key to providing timely pay.
4-2. Brigade and Battalion S-1s are the central link between Soldiers and changes to their pay
entitlements. S-1s are responsible for resolving routine pay inquiries through the timely submission of
documents to the FMSD and distribution of supporting documentation affecting Soldiers’ pay.
4-3. The FMSC provides policy and technical guidance to all FM units in theater. Responsibilities and
procedures are prescribed IAW current regulations and directives. Separation of duties and adherence to
required internal controls are strictly enforced to prevent fraud and collusion. The Internal Control (IC)
section in the FMSCs and FMSUs ensures that a high state of technical proficiency is maintained in all
functional sections of the FMSCs, FMSUs, and FMSDs.
4-4. Under the FMSU command and control, FMSDs provide a wide variety of Pay Support functions
through their FMSTs to all units and Soldiers in their AOR. The FMSDs perform the following Pay
Support functions:
* Theater In and Out Processing.
Start/Stop/Change deployment entitlements (normally automated at theater entry/exit
location).
Entitlement verification/certification.
* Customer Service.
Debt management.
Bonus processing.
Start/Stop/Change entitlements.
Pay inquiry
Case Management System (CMS).
* Reports production
Pay inquiry analysis.
Reject/recycle report.
Merged Accountability & Fund Reporting (MAFR) reconciliation.
Unit Commander's Finance Report (UCFR).
Monthly entitlement verification.
* Pay Support transaction processing.
Review, coding and verification of documents.
Upload data into respective FM systems.
|
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KEY FM REPORTS
4-5. Unit Commander’s Finance Report (UCFR) – The UCFR is issued to unit commanders on a monthly
basis. This report provides a one line roll-up of each Soldier’s pay account and status. Unit commanders
must review the report and annotate, update, change, correct, add, or delete information as necessary,
providing additional and necessary documentation as required. The unit should maintain a copy of the
UCFR for its records and return the certified copy to the FM unit IAW its established procedures but not
later than ten days of issuance and receipt.
4-6. Daily Register of Transactions (DROT) – The DROT provides information to the FM units on the
actions taken on the requests submitted. It gives the unit a record of transactions pertaining to assigned
Soldiers. The report consists of transactions that are processed, rejected, and/or recycled and is available
each time the FM system updates.
4-7. Merged Accountability & Fund Reporting (MAFR) reconciliation - The MAFR is one of the most
important tools used to track all cash payments. It verifies that payments have been processed through the
Military Pay and Accounting systems. The report provides a list of all payments, canceled or returned
checks, and cash collections by specific ADSN/DSSN.
SEPARATION OF DUTIES
4-8. Each FMSD is required to identify the following Pay Support positions in order to maintain strict
separation of duties and proper internal controls.
CODER
4-9. The coder responsibilities include:
* Verify the validity of pay change documents to include researching the Master Military Pay
Account (MMPA).
* Code all valid pay change transactions.
* Annotate the substantiating document number on each document.
VERIFIER/AUDITOR
4-10. The verifier/auditor responsibilities include:
* Verify the validity of each pay change document received from coders. The percentage/method
of verification is determined by the section leader based upon local needs and conditions but
cannot be less than 10 percent. There should be a 100% verification of documents for all FM
personnel (use Pay Record Accessibility indicator [PRA]), and high visibility accounts as
determined by FMSU Commander.
* Ensure coders have annotated the substantiating document number on each document.
SECTION LEADER
4-11. The section leader responsibilities include:
* Assign all cycle numbers to coders and maintain the Cycle Number Control Log. All cycle
numbers will consist of two characters. The first character must be an alpha character (A - Z
with the exception of X), and the second character must be numeric (0-9).
* Monitor Cycle Number Control Log to ensure that all cycles are returned in a timely manner.
* Ensure separation of duties between the coding and verifying functions are maintained.
* Monitor and ensure all documents received via Unit Transmittal Memorandum (UTM) are
processed within three working days.
* Monitor and ensure all management notices are returned promptly by the established suspense
date.
* Ensure all rejects/recycles have been processed. |
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4-12. All Pay Support actions initiated by the Service Member (SM) have to be routed through the proper
channels in order to receive the appropriate level of approvals and verification for accuracy of
substantiating documents. Figure 4-1 reflects the Pay Support document flow that affects the SMs pay
starting with the SMs pay action until intended pay transactions are posted to the SM’s MMPA and
feedback is provided back to the unit for SM notification. Additional information on Pay Support
entitlements and procedures can be found in Volume 7A, DODFMR, Military Pay Policy and Procedures -
Active Duty and Reserve Pay, Army Regulation 37-104-4, Military Pay and Allowances, and military pay
messages. As indicated in figure 4-1, pay support changes also arise from actions such as congressionally
approved pay raises, promotions, changes to allowances (e.g., cost of living allowances, basic allowance
for housing), and other actions initiated external to the SM.
Figure 4-1. Pay support changes document flow
SECTION II – RESERVE COMPONENT PAY
4-13. Reserve Soldiers serve under a statutory or contractual obligation and are mobilized under Title 10
United States Code. The Defense Joint Military Pay System (DJMS) – Reserve Component – is the system
used to pay Ready Reserve Soldiers for weekend training, Annual Training and all other periods of active
duty to include mobilization. Unlike DJMS-AC (Active Component), some type of transaction must be
input in order for the system to generate pay. This system does not support allotments of pay. There are
multiple pay dates (up to eight possible) each month. Each payment generates a separate Leave and Earning
Statement (LES) that contains the information that applies to the specific payment. Unlike DJMS-AC, the
end of month LES is not a summary LES for the month. Under mobilization, there will typically be a mid-
month and end-of-month LES generated for the 1st and 15th pay dates. If a new entitlement begins, or a
one-time payment or adjustment is entered for a pay date other than the 1st or 15th of the month, there will
be another LES generated for that payment alone.
4-14. There are several stages to the mobilization/demobilization process. It is essential to know what the
phases are, what pay actions take place, and who is responsible for each phase. |
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HOME STATION PROCESSING
4-15. Units conduct a Soldier Readiness Processing (SRP) check for each Soldier mobilized from their unit
at home station. During the SRP, RC Soldiers will be in-processed onto active duty. One station will have
FM personnel review the pay account and ensure entitlements are being properly paid based upon the
Soldier’s supporting documentation.
MOBILIZATION STATION PROCESSING
4-16. Soldiers continue in-processing at the mobilization station. Finance records are reviewed again by
FM personnel. The pay account is checked to make sure the United States Army Reserve Pay Center has
started all entitlements and for Army National Guard Soldiers, their state affiliated United States Property
and Fiscal Office will start their pay and entitlements. If it is determined that the Soldier will not deploy,
the mobilization order must be rescinded or a new order releasing the Soldier from active duty must be
generated to stop payment of active duty pay.
DEPLOYMENT SITE
4-17. The deployment site is where the RC Soldier performs his mission. Military members may move to
more than one deployment site while mobilized. While at the deployment site, if there is any pay problem,
a representative from the unit S-1 will contact the FM unit on site. The FMSD is responsible for monitoring
RC/NG Soldiers pay to ensure all authorized entitlements are paid in a timely manner, to include theater
specific entitlements
DEMOBILIZATION STATION PROCESSING
4-18. Soldiers will be released from active duty and reassessed back into an Army Reserve Troop Program
Unit (TPU) status or ARNG M-Day status, as appropriate, at the demobilization station. The Soldier’s pay
account will be reviewed for accuracy, and any required adjustments will be made, if there is any
unresolved pay problem, it should be resolved at this time.
SECTION III – CASE MANAGEMENT SYSTEM (CMS)
4-19. Case Management System (CMS) provides an all-service, fully-integrated, single-source system for
monitoring pay problems; uploading and tracking cases at all levels; providing visibility at all levels for
immediate feedback to service members; timeliness, efficiency, and identification of problem trends; and
focused training. It provides supervisors oversight for prioritizing and identifying cases that require
attention and provides consolidated reporting capability for all organizational levels. CMS provides the
capability for FM personnel, in coordination with DFAS, to work cases and identify trends to assist in
applying resources and training appropriately. Additional information on CMS may be found in the latest
DFAS Case Management System User’s Guide.
4-20. Pay Support inquiries that cannot be resolved locally by the FM unit are entered as a case into CMS
and referred to the organization responsible for resolution. CMS accepts manual input from the user and
system-generated cases from DJMS interface. There are two types of CMS cases:
* System Generated Cases. These are cases that are created from rejected transactions that pass
through the Automated Case Control System tables in DJMS, and interfaced into CMS. The
majority of these cases will be “Opened”, “Action Completed” or “Closed” at the DFAS or local
level.
* Manual Cases. Manual cases are created by the FM system user for cases that cannot be
corrected on site.
4-21. Units are encouraged to institute personnel/pay teams that meet periodically to review problem cases
and identify solutions. CMS provides data for managers of all organizations responsible for action, which
allows oversight on the resolution of problem cases within their command. Managers have access to a wide
variety of reports that can be used to prioritize, manage timeliness, and develop training for re-occurring
problem types. |
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4-22. CMS embeds the processing timeline, established by DFAS, of 30 days from the day the case was
initiated until the day the case is resolved. Cases are identified as overdue when they exceed 30 days.
Cases will show as “overdue” in the organization responsible for action inbox 5 days prior to the 30-day
time limit in order to provide early warning that the case needs to be worked. |
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Accounting Support and Cost Management
The financial manager’s role is critical to meeting the expectations of Congress, the
public, and the Army in demonstrating effectiveness and efficiency in the application
of resources necessary to conduct military operations in pursuit of national security.
The Army relies on the FM community to ensure fiscal stewardship of the public
funds entrusted to execute its assigned missions. Financial managers meet this
expectation by providing expert fiscal analysis based on accurate financial data.
DFAS Regulation 37-1 defines “accounting” as the act of receiving, controlling,
validating, recording, classifying, and summarizing transactions in terms of money,
analyzing and interpreting those transactions, and reporting the operating results and
related resource management information to higher headquarters. The financial
manager must know that this simple definition is not all inclusive of the varied types
of accounting practiced within the accounting domain and the FM core competency,
accounting support and cost management.
The DFAS regulation goes on to define other types of accounting pertinent to FM
such as budgetary accounting, proprietary, and managerial cost accounting.
Budgetary accounting is the accounting necessary to support and control the budget
execution process as distinguished from that required to report on financial
conditions and operations (proprietary accounting). For example, this includes
commitments, obligations, expenditures, and conditions such as appropriations
realized, contract authority, anticipated reimbursements, and so forth. In contrast to
budgetary accounting, proprietary accounting involves those accounting functions
and operations necessary to report on financial conditions and financial results of an
activity’s operations. Proprietary accounting may include accounting for inventory,
accounts receivable, accounts payable, and accrued expenditures. Finally, managerial
cost accounting is the process of accumulating, measuring, analyzing, interpreting,
and reporting cost information useful to both internal and external groups concerned
with the way in which the organization uses, accounts for, safeguards, and controls its
resources to meet its objectives. Accounting support entails execution of all three
types of accounting in the provision of theater FM support to unified land operations.
Details on the particular procedures and processes related to federal budgetary,
proprietary, and managerial cost accounting are described in DODFMRs, DFAS-IN
Regulation 37-1, and published Statement of Federal Financial Accounting
Standards.
Accounting support necessitates establishing financial control, from time of
acquisition to time of disposal, over all assets provided to or acquired by the Army in
support of Army missions. Additionally, accounting support provides the requisite
information to financial managers and decision makers at all levels of the Army -
strategic to tactical. Accounting support reinforces internal control over the U.S.
government’s funds, collections, expenditures, property and other assets. |
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Cost management is one of the key capabilities of funding. Cost management
depends significantly on timely and accurate reporting of accounting information
resulting from financial transactions recorded in the Army’s Financial Management
Information Systems (FMIS). Cost management is a force multiplier to the
commander by enabling resource informed decisions.
This chapter describes the key tasks associated with accounting and the basic
concepts and principles of cost management and how these concepts and principles
are employed by financial managers in support of contingency operations. The
chapter also describes the shift from the “budget” culture to the “cost” culture and the
importance of cost management to decision-making and the proper allocation of
resources.
SECTION I – ACCOUNTING SUPPORT
5-1. Accounting support requires the close participation of ASCC/corps/Division G-8, FMSC, and FMSU
personnel and supporting DFAS activities in ensuring the proper recording, analyzing, verifying and
reporting of financial data associated with Army activities. Most important, effective financial data
capturing is achieved through a joint effort between the FM community, the contracting personnel, and the
use of applicable FMIS.
5-2. The DFAS and other national providers issue guidance and provide support back at the home station
or within the AO that helps the commander maintain control and achieve accountability over resources.
The DOD Financial Management Regulation, Volume 4, provides the policy and standards by which the
Component should establish financial control over its assets. Financial control is a main objective of
accounting and helps ensure proper and authorized use of all assets, as well as adequate care and
preservation.
5-3. The status of funds is determined by using a variety of FMIS. Reports generated from these systems
assist in determining funding balance, commitments, obligations, and disbursements. A description of the
software and tools required to support the accounting competency can be found in chapter 8, Information
Management. Financial managers provide timely, accurate, relevant, and reliable financial information that
enables leaders and managers to incorporate cost considerations into their decision-making process.
5-4. Financial managers establish and implement financial reporting procedures for their command and
subordinate units. Accurate account reporting is critical to the commander; the ability to sustain operations
in theater is dependent upon the availability of funds. The request for funding to support current and future
operations requires historical and projected financial data. This section describes the stages of a transaction
and accounting tasks performed at the strategic, operational and tactical levels of support.
STAGES OF A TRANSACTION
5-5. A commander must know the status of funds (funding balance, state of financial execution) to make
informed resourcing and operational decisions. The financial manager obtains this information for the
commander by tracking commitments, obligations, accrued expenditures/expenses, and disbursements
daily. Figure 5-1 depicts the stages of a transaction. |
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Figure 5-1. Stages of a transaction
AUTHORIZATION STAGE
5-6. The accounting process begins with an authorization as discussed in Chapter 2, Section I. Financial
managers receive their Fund Authorization Document, DD Form 448, Resource Allocation Documents, and
Resource Distribution Documents via the PBAS or GFEBS. The supported unit will request funds for
services or goods; however, only the financial manager validates availability of those funds by funds
certification.
COMMITMENT STAGE
5-7. A commitment is an administrative reservation of funds where the funds certifying official certifies
funds are available for an approved requirement. The funds certifying official ensures funds are available
and sets them aside for the requirement. Varied accounting systems are used to track commitments. These
accounting systems track costs (by event, program, unit, MDEP, and Army Management Structure Code
for each transaction) based on the fiscal code. Financial managers—who must keep their commander
informed on a daily basis of all aspects of FM –use the fiscal code for two main purposes. First, the fiscal
code helps track expenditures at a detailed level. Second, the fiscal code helps prepare and present fiscal
information to the command and staff, including the status of funds, mission or event cost, status of
unfinanced requirements, and obligation rates.
5-8. A cost center is a locally established data element that allows the financial manager the ability to
capture costs and track commitments, obligations, accrued expenditures/expenses, and disbursements in
accounting systems. It is a tool used to answer the question of who spent how much for what. Cost centers
may be assigned to specific units, staff sections, events, or functions. Cost centers link MDEPs and Army
management structure code (AMSCO) with the purpose of the funding.
Example: The commander might ask the Division G-8, “What did 2d Brigade spend on class IX
last year?” Instead of researching historical requisition records and manually calculating each
supply request obligated, the financial manager uses the accounting system to search for 2d
Brigade’s cost center and retrieves all element of resource 26** (supplies) for the year. The
answer to the commander’s question can be found easily if the cost center is established
correctly and properly annotated on all applicable orders.
OBLIGATION STAGE
5-9. The obligation stage begins when the obligation is recorded into the accounting system of record.
Obligations must be recorded in the official accounting records at the time a legal obligation is incurred or
as soon as the situation permits following the time of incurrence. Several actions may lead to the incurrence
of a legal obligation. For instance, the financial manager records an obligation as a result of a signed
contract, the acceptance of a DD Form 448, or the issuance of a travel order. An obligation is a legal
(binding) reservation of funds. Once the obligation is recorded in the accounting system, the financial |
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manager ensures the accounting records will accurately reflect the accrued expenditure/expense and
disbursement of payment to the obligation.
ACCRUED EXPENDITURES/EXPENSE STATE
5-10. Accrued expenditures is a term used for the credits entered into the budgetary accounts to recognize
liabilities incurred for (1) services performed by employees, contractors, other government accounting
entities, vendors, carriers; (2) goods and other tangible property received; and (3) items such as annuities or
insurance claims for which no current service is required. Accrued expenditures are categorized as either
paid or unpaid. Expenses are the value of goods or services actually used or consumed during the current
period. Expenses are recognized in the period in which they occur even if payment for them is made in a
different period. Expenses are recorded when incurred (goods are received and services performed even
though the payment of the expense may take place, in whole or part, in another accounting period).
5-11. To illustrate, consider the activities that occur during this stage in terms of a transaction tied to a
contracting action. Following contract award, the vendor performs the requested service or delivers the
requested supplies to the receiving activity. The receiving activity is the unit or activity that first receives
the goods or services. In many instances, the receiving activity may be the same as the activity originating
the request. The receiving activity is responsible for inspecting and accepting the delivered goods or
services and submitting a receiving/acceptance report to the supporting FM unit responsible for vendor
payment. This acceptance of goods or services represents the accrued expenditure/expense stage in the
accounting system. The receiving report is written evidence that indicates government acceptance of
supplies delivered or services performed and may be submitted electronically IAW DODFMR vol. 4
chapter 8.
DISBURSEMENT STAGE
5-12. A disbursement is the payment for goods and services received. Continuing from the previous
illustration, the disbursement stage begins with the vendor submitting an invoice to the billing or paying
office designated in the contract once the goods or services are delivered. The vendor is responsible for
providing the goods and/or services as specified in the contract. The FM unit serving as the billing or
paying office processes the invoice for payment by reviewing the contract, the receiving/acceptance report,
and the invoice to certify that the payment is appropriate and correct for payment. The FM unit then pays
the vendor for the delivered goods and/or services IAW the terms of the contract. Disbursement of the
vendor payment may occur simultaneously along with the delivery of the requested goods and/or services
when employing a FOO and PA to satisfy a local procurement using an SF44. Disbursing operations were
previously discussed in chapter 3.
OBLIGATION MANAGEMENT
5-13. Obligation management is a basic function of financial management operations and provides
fiscal controls to protect against Anti-Deficiency Act (ADA) violations. Obligation management is
described in greater detail due to the ADA and its importance to prevention. Tracking obligations enable
financial managers to —
* Calculate and report available funding.
* Determine if commitment accounting systems interface issues are occurring.
* Monitor non-stock orders and payables to determine obligation adjustments.
* Locate obligations in excess of disbursement and de-obligate the balance for other funding needs
or those that require increase.
* Identify undelivered or delayed orders.
* Determine cancellations.
* Identify patterns in obligation estimates versus actual expenses.
* Identify increased or decreased obligation performance in programs, AMSCOs or cost centers.
* Calculate the obligation rate at year-end closeout.
* Review obligation documents for compliance. |
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* Ensure the accounting classification cited on the obligation document is appropriate for the
stated purpose of the obligation.
* Ensure the amount obligated meets statutory and regulatory provisions.
* Ensure the obligation is recorded accurately and in a timely manner.
* Review on a continual basis unliquidated obligations and unobligated commitments.
* Prepare for mandated formal joint reviews.
5-14. Each MDEP, budget activity group, or functional cost account (FCA) enables financial managers to
monitor obligations. In some cases, special program codes are designated by the CJCS at the operational or
strategic level to capture and report costs for specific contingencies, programs, or exercises. Financial
accounts require maintenance to ensure accuracy within the information systems. A key tool used to
perform maintenance on accounts is the non-stock fund orders and payables (NSFOP) report. Financial
managers must continuously monitor the NSFOP to find obligations in excess of disbursements, duplicated
obligations, negative un-liquidated obligations (NULOs), credits, and accounting or ordering mistakes.
Management of this report assists in the identification of available unused funds.
5-15. Obligations must be recorded no later than 10 calendar days following the day that an obligation is
incurred (to include obligations incurred when invoices are overpaid or duplicate payments are made).
Every effort shall be made to record an obligation in the month incurred. DODFMR Vol. 3, chapter 8 and
DFAS Reg. 37-1 chapter 8 contain procedures and policy governing obligation management and should be
consulted continuously as changes to these regulations are common.
RECORDING OBLIGATIONS
5-16. When recording obligations —
* Record obligations in the accounting classification cited on the obligating document. If the
accounting classification is in error, request an amendment or contract modification.
* Record obligation adjustments for the difference between actual and original amounts.
* Adjust obligations for written changes if they are binding on the contractor without further
action.
* Record obligations providing for a discount at the net price unless doing so is not cost effective,
according to Treasury guidelines. If the servicing accounting system automatically de-obligates
the amount of the discount when the discount is taken, then record the obligation at the gross
amount.
* If the contract provides for annual terms with options to extend the terms in subsequent years,
obligate for the amount required to be procured by the U.S. Government in the first year. Record
the obligation for each option year when the option is exercised.
* Adjust obligations to amounts shown on travel authorizations or validated orders when
documents are received.
ESTIMATED OBLIGATIONS
5-17. Obligations may be recorded based on estimates. When actual obligation amounts become known,
reverse and replace estimated obligations with actual obligations. The estimates and reversals are
accomplished using DD Form 2406, Miscellaneous Obligation Document. Serviced activities and
accounting activities will jointly ensure the actual obligation document is received to replace the DD Form
2406.
OBLIGATION DOCUMENTATION
5-18. Documentary requirements for recording obligations are provided in 31 USC 1501(a). When
signatures are required to validate obligations, sign the documents before the cited funds expire. Show the
actual date of each signature. When more than one signature is required, record the obligation on the date
of the last required signature. For additional guidance on rules of obligation see DFAS Regulation 37-1,
chapter 8. |
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EXPIRED/CLOSED/CANCELED APPROPRIATIONS
5-19. Expired appropriations are not available for new obligations. Adjustments may be made to expired
appropriations up to five years provided the transaction being adjusted occurred prior to the cancellation of
the appropriation. The closure or cancellation of an appropriation does not eliminate the Government's legal
obligation to pay contractors for services rendered or products delivered. Nor does it nullify the need for
the accounting activity to maintain an audit trail supporting the existing contingent liability to future
appropriations. Use unexpired funds available for the same general purpose to pay for obligations that
would have been charged to the closed/canceled account if done before account closure/cancellation. See
DFAS Regulation 37-1, Finance and Accounting Policy Implementation, chapter 16 and the DODFMR,
volume 3, chapter 10 for limitations and additional guidance.
JOINT REVIEW AND RECONCILIATION
5-20. 31 U.S.C. 1554(c) requires establishing internal controls to ensure an adequate review of obligated
balances to support the year-end certification required by law. DOD requires that commitment and
obligation transactions recorded in the official accounting systems be reviewed for accuracy, completeness,
and timeliness at least three times each fiscal year. The requirement for reviews of commitments and
obligations applies to all appropriations and funds of all DOD appropriations. This requirement applies not
only to direct appropriations, but also to all reimbursable transactions, as well as the Department's
revolving and trust funds. See the DODFMR, volume 3, chapter 8, section 0804 for more information on
the requirements for these reviews.
STRATEGIC LEVEL ACCOUNTING SUPPORT
5-21. Accounting support during financial disbursements and military expenditures at the strategic level
helps keep responsive and reliable accounting measures that help strategic level commanders make sound
and adequate decisions.
ASSISTANT SECRETARY OF THE ARMY, FINANCIAL MANAGEMENT AND COMPTROLLER
(ASA[FM&C]))
5-22. ASA (FM&C) mission is to formulate, submit, and defend the Army budget to Congress and the
American people; oversee the proper and effective use of appropriated resources to accomplish the Army's
assigned missions; provide timely, accurate, and reliable financial information to enable leaders and
managers to incorporate cost considerations into their decision-making; provide transparent reporting to
Congress and the American people on the use of appropriated resources and the achievement of established
Army-wide performance objectives; and manage and coordinate programs for the accession, training, and
professional development of Army resource managers. Support provided may include:
* Develop Army financial strategy that includes the goals, objectives, and tasks that must be
completed in order for the Army to provide its commanders, leaders, and managers with quality
financial information for decision making on a consistent and routine basis.
* Implement and provide FM systems that meet congressional mandated FM requirements for FM
systems.
* Track and report budget execution (obligations) to OSD and Congress as required, normally
monthly and quarterly.
* Develop requirements for bridge supplemental in order to meet funding requirements until the
supplemental is approved.
* Develop reporting requirements of costs that support OSD and congressional reporting
requirements.
* With support from DFAS, develop financial statements that meet GAO standards with an
unqualified opinion.
* Provide timely and accurate (reliable) cost reports with support from DFAS and other financial
information required by HQDA decision makers. |
1-06 | 111 | Accounting Support and Cost Management
* IAW congressional mandate to provide annual assurance statement, ensure management controls
are in place.
DEFENSE FINANCE AND ACCOUNTING SERVICE (DFAS)
5-23. In coordination with the Assistant Secretary of the ASA (FM&C), DFAS establishes procedures for
accounting, reporting, and fund management. DFAS is the principal DOD organization for finance and
accounting requirements, systems, and functions under the authority and direction of the Under Secretary
of Defense (Comptroller). As such, they provide professional finance and accounting services for DOD
Components and other Federal Agencies. The agency directs the consolidation, standardization, and
integration of finance and accounting requirements, functions, procedures, operations, and systems and
ensures their proper relationship with other DOD functional areas (e.g., budget, personnel, logistics,
acquisition, civil engineering). It is also responsible for executing statutory and regulatory financial
reporting requirements and rendering financial statements.
OPERATIONAL LEVEL ACCOUNTING SUPPORT
5-24. Leaders at the operational level have the responsibility to account for funds and expenditures using
the proper accounting channels with accurate financial information to aid in sound and prudent decisions
affecting military readiness.
THEATER ARMY G-8 (CORPS G-8 WHEN ASSIGNED AS A JTF)
5-25. Accounting support crosses all echelons. Although capability may be limited at the BCT or more
robust at the ASCC, the accounting requirement still exists. The TA G-8 is singularly responsible for all
FM and provides all theater accounting support. Accounting support tasks at the operational level may
include:
* Utilize approved FM systems provided by HQDA to meet congressional mandated FM
requirements for FM systems.
* Capture costs using approved FM systems, disbursing systems, and contractor and pay systems.
* Track and report cost of battlefield operations to support reimbursement of costs initially funded
with training accounts.
* Track and report costs for specific operations to support requests to HQDA, OSD, OMB, and
Congress.
* Establish requirements to become a fund certifier and set funding levels for fund certifiers, in
writing by name.
* Establish funds control and monitor funds execution to ensure no ADA violations.
* Track and report budget execution (obligations) to HQDA monthly, quarterly, or as required.
* Provide financial oversight for all major cost drivers and establish and report daily burn rates
and run out dates.
* IAW congressional mandate to provide annual assurance statement, ensure management controls
are in place.
* Develop and provide theater accounting policy.
* Reconcile all types of funding by performing joint reviews with the applicable program
manager.
* Monitor fund control procedures.
* Review financial transactions to ensure data is timely, accurate and complete.
* Identify replacement (current year) funds for bills citing expired/closed/canceled accounts, then
coordinate with DFAS to record correct fund citation and with the supporting contracting
activity for modification of the contact.
* Execute year-end closeout.
* Track, adjust, reconcile and close prior year funding.
* Assist in resolving/correcting contract (reimbursable)/vendor payment issues. |
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* Monitor accounts payable and liabilities balances.
* Assist in resolving/correcting accounts receivable, travel advances and debt.
* Provide advice/assistance on Interservice Support Agreements (ISSAs), DD Form 448s, and
ACSA.
* Review reimbursable transactions to ensure data is timely, accurate and complete.
* Receive, interpret and implement appropriated funds accounting policies/guidance for financial
issues.
* Receive, interpret and implement NAF policies and guidance IAW AR 215-1.
* Prepare ad hoc and recurring financial reports for supported activities as required.
* Analyze financial processes for possible improvement.
* Support performance measurement/cost management programs.
* Coordinate and monitor DFAS finance and accounting services provided.
* Coordinate FM accounting cycle system schedules (i.e., Non-Stock Funds, End of Year
Reports).
* Participate in FM accounting system updates or changes.
* Track commitments and obligations that support the maintenance of regulatory accountable
records.
* Evaluate, certify, and report the execution of funds.
* Ensure the general ledger accurately reflects the financial posture of the represented echelon.
FINANCIAL MANAGEMENT SUPPORT CENTER
5-26. Accounting support provided by the FMSC complements the resource management function within
supported G-8 staffs. The FMSC participates in joint reviews, as required, to ensure accounting records are
accurate and updated in a timely manner. The FMSC has an accounting section that is responsible for
providing requested accounting support to theater units. These activities include:
* Ensure data integrity of collections and disbursements to Central Funding.
* Reconcile the AUT with Treasury deposits.
* Account for cash and other negotiable instruments.
* Reconcile ADSN and DSSN transactions with the FMSU (s) (i.e., Merged Accountability and
Fund Reporting (MAFR)).
* Ensure Collections Information Repository (CIR) and Payment Information Repository (PIR)
transactions are accurate.
* Reconcile SF 215, Deposit Ticket and SF 5515, Debit Voucher with FRB.
* Assist FMSU(s) with reconciliation of SVC transactions.
TACTICAL LEVEL ACCOUNTING SUPPORT
5-27. To eliminate weaknesses in financial management accounting, is imperative to practice accurate
accounting at the tactical level where expenditures occur and where they are reconcile with official
accounting records. At the tactical level, significant accounting data is provided to commanders to assist in
the military decision process.
CORPS, DIVISION, TSC/ESC G-8S, AND BRIGADE S-8
5-28. Accounting support at the corps and division may include:
* Utilize approved FM systems provided by HQDA to meet congressional mandated FM
requirements for FM systems.
* Capture costs using approved FM systems, disbursing systems, and contractor and pay systems.
* Track and report costs for specific operations to support requests to theater command. |
1-06 | 113 | Accounting Support and Cost Management
* Establish requirements to become a fund certifier and set funding levels for fund certifiers, in
writing by name.
* Establish funds control and monitor funds execution to ensure no ADA violations.
* Track and report budget execution (obligations) to theater command monthly, quarterly, or as
required.
* Ensure management controls are in place and subordinate commanders meet program objectives
of providing reasonable assurance that obligations and costs are in compliance with applicable
laws.
* Reconcile all types of funding by performing joint reviews with the applicable program
manager.
* Provide advice/assistance on ISSAs, DD Form 448s, and ACSAs.
FINANCIAL MANAGEMENT SUPPORT UNIT
5-29. The FMSU accounting function may be limited in scope, and dependent upon METT-TC. These
capabilities may include:
* Process deposits to and payments from, appropriated, deposit, trust, or other special fund
accounts and ensure disbursements from these accounts are not made without specific authority.
* Advise the internment facility commander on internment and resettlement (I/R) operations that
relate to pay and accounting. Upon request, FM units provide training to personnel assigned to
the camp or I/R unit.
* Reconcile the MAFR mismatches.
* Assist in the daily accounting recorded in the DD Form 2657 and monthly balancing of SF 1219,
Statement of Accountability.
* Develop simple accounting code structures to support the Field Ordering Officer (FOO).
* Maintain timely receipt and accuracy of cost data.
* Maintain all accounting records until shipment to DFAS.
* Account for solatia payment.
* Ensure all FEDLINK data requirements are timely and accurate.
GENERAL FUND ENTERPRISE BUSINESS SYSTEM (GFEBS)
5-30. The General Fund Enterprise Business System (GFEBS) is the Army’s financial accounting system.
It is also much more than that. It is an enterprise-level solution that enables the Army to link financial
accounting, funds control, logistics, asset accounting, and cost management information across the
enterprise. It provides accurate, reliable, cost information and makes the information available to all users
on a real-time basis. Operational and tactical FM elements use GFEBS to provide accounting support.
GFEBS enables the Army to comply with current statutory and regulatory requirements including the Chief
Financial Officers (CFO) Act, the Federal Financial Management Improvement Act, the Government
Performance and Results Act, the Government Management Reform Act, the applicable accounting
standards of the U.S. Standard General Ledger (USSGL), Federal Accounting Standards Advisory Board
requirements, the DOD Financial Management Regulation, multiple Office of Management and Budget
(OMB) Circulars, DOD’s Business Enterprise Architecture, and the Guide to Federal Requirements for
Financial Management Systems (a.k.a. the Blue Book). Additional information on GFEBS can be found in
Chapter 8, Information Management.
SECTION II – COST MANAGEMENT
5-31. Financial managers must find the balance between funds allocations, procurement process and
disbursement of funds being mindful of the new fiscal realities of the Army. Army efforts to practice cost
effective analysis and procure efficient use of resources should be part of every action involving financial
resources. |
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COST CULTURE
5-32. Cost Culture is a culture where all leaders and managers factor cost into their decision-making
and understand both the near and long-term cost implications of their decisions. Cost, as defined by
the Statement of Federal Financial Accounting Concepts No. 1, 1993, is the monetary value or resources
used or sacrificed or liabilities incurred to achieve an objective, such as to acquire or produce a product or
to perform an activity or service. Costs incurred may benefit current or future periods. The cost of running
the Army is a concern to the public as well as to Army leadership. As opposed to a business entity, Army
efforts and performance cannot be measured solely in financial terms; however, financial measures such as
cost are integral in measuring the efficient and effective use of fiscal resources to accomplish Army
missions and activities.
5-33. The broad goal of the Cost Management Program is to change the way Army leaders and managers
have historically thought about money. To achieve this goal, the Army must adopt a “cost culture.”
“Culture” describes how the people in an organization behave and the underlying principles that drive their
behavior. Thus, culture helps form the foundation for everything the organization does. For example, the
military culture places high value on patriotism, service, and valor. Army leaders expect their Soldiers to
be guided by these principles in all their actions. Inculcation of a cost culture similarly affects the behavior
of Army leaders and managers. Rather than trying to achieve “readiness at any cost,” decision makers
strive for “readiness at best value”. Cost considerations do not take precedence over mission
accomplishment, but these considerations are incorporated into every decision that is made. Resource
informed decision making must be the norm. The basic principles and requirements of the Cost
Management Program apply to both the Operating Force and the Generating Force.
5-34. FM is leading this cultural change, a key element of which is the shift from a focus on budget
execution – with its emphasis on the expenditure of available funding – to outcome-based decision making,
where the emphasis is on outcomes and their associated costs. In a cost culture. all leaders and managers
incorporate cost into their decision-making and day-to-day management. They routinely ask the following
types of questions:
* What capabilities is my organization responsible for producing, and what does it cost to produce
them?
* What are the key cost drivers in my organization?
* How can I generate the required capabilities more effectively and efficiently?
* What are the cost implications of my decisions not only for my organization but also for the
entire Army, both now and in the future?
* How can I use cost information to make better decisions?
5-35. By asking these and similar questions, leaders and managers equip themselves with the information
needed to make effective trade-off decisions and achieve the best possible use of limited resources. A cost
culture requires FMIS that provide decision makers with timely, accurate, and reliable cost information.
With the adoption of a cost culture, the Army’s external stakeholders, Congress, and the American people
have the assurance that the Army is a good steward of the resources entrusted to its care.
CRITICAL SUCCESS FACTORS
5-36. In any organization, from battalion level to Headquarters, Department of the Army (HQDA), there
are four factors that are critical to the success of the Cost Management Program. These are senior leader
commitment, use of cost-benefit analysis, availability of cost data, and a formalized process for planning
and performance assessment.
SENIOR LEADER COMMITMENT
5-37. Commanders and other managers recognize that while their subordinates will listen to what they say,
the subordinates will emulate what the boss actually does. Thus, effective cost management requires
leadership by example. Commanders and managers should establish policies requiring the use of cost-
benefit analysis (see below) to support decision making, and must back this up by routinely demanding to |
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see robust cost analyses before making any significant decision. This will help to ensure that cost becomes
part of the dialogue among all decision makers, not just financial managers.
USE OF COST-BENEFIT ANALYSIS
5-38. Cost-benefit analysis is a structured methodology for projecting and comparing the anticipated
costs and benefits of alternative courses of action in order to identify the optimum solution for
achieving a stated goal or objective. Cost-benefit analysis (CBA) is not a new term, and conceptually is
not new to the Army. With few differences, the eight-step CBA process is identical to the Military
Decision-Making Process prescribed in Army Doctrinal Reference Publication 5-0. CBA has previously
been used to a limited extent in various functional communities in the Army, but is now being used to
support all resource decision-making. The requirement for CBA has been incorporated into resource
decision-making processes at HQDA, and should also be incorporated into decision processes in
subordinate organizations.
5-39. The concepts that underlie cost-benefit analysis are straightforward. The goal of CBA is to help a
decision-maker choose from competing alternatives by identifying the benefits and costs of each
alternative and then applying analytical techniques to evaluate the alternatives against relevant criteria.
CBA doesn’t attempt to remove professional experience and military judgment from the decision process,
but rather supplements these important factors with information that is based on solid data and sound
analytical techniques. For detailed guidance on the development and use of CBA, see the Army CBA
Guide.
AVAILABILITY OF COST DATA
5-40. As explained in greater detail elsewhere in this FM, the General Fund Enterprise Business System
(GFEBS) is an enterprise-level solution that enables the Army to link financial accounting, funds control,
logistics, asset accounting, and cost management information across the enterprise. It provides accurate,
reliable cost information and makes the information available to all users on a real-time basis.
5-41. A key feature of GFEBS is its cost center hierarchy, which captures cost data where the work is
performed and identifies all the resources consumed to produce products and services at every level. The
cost data includes not only costs that are budgeted locally, but also the so-called “free issue” of
infrastructure, military labor, depreciation, and overhead. To gain the full benefit of GFEBS, leaders and
managers must ensure that their personnel are adequately trained on its complete range of capabilities.
PLANNING AND PERFORMANCE ASSESSMENT PROCESS
5-42. Regularly scheduled planning meetings, followed up by formal performance reviews, provide a
structured managerial process to ensure leaders are presented with analysis and recommendations from
their subordinates, to make cost-informed decisions, and then to oversee implementation and adjustment
during execution. When used effectively, planning and performance assessment meetings can also serve as
a means of disseminating lessons learned throughout an organization.
5-43. For maximum effectiveness, planning and performance assessment meetings should be led by the
commander. Immediate subordinates should be responsible for presenting the analyses related to their
functional areas.
COST MANAGEMENT SUPPORT
5-44. Cost management is a critical FM enabler to the decision-making process because it collects and
links financial (cost) data with non-financial (output and performance) data and presents information in a
way directly related to the major mission objectives of the unit or organization. Cost management provides
Army leaders and managers at all levels with real-time cost data linked to operations and functions. This
will enable leaders and managers to make decisions that directly benefit the mission and Soldiers. The
efficient use of resources achieved through cost management, in combination with auditable financial
statements, enables the Army to gain public trust and understanding of Army programs. Cost management |
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is not a one-time event but a continuous process that controls cost while improving operational
performance. For a more detailed discussion of cost management, see the Deputy Assistant Secretary of the
Army (Cost and Economics) Cost Management Handbook.
THE COST MANAGEMENT PROCESS
5-45. As depicted in figure 5-2, the cost management process encompasses four components that support
the commander’s decision making and improve fiscal stewardship. These components are cost planning,
cost accounting, cost analysis, and cost control.
* Cost planning involves forecasting future costs of a particular operation or activity.
Organizations establish cost targets and efficiency goals to continually improve operational
efficiency and effectiveness.
* Cost accounting requires capturing and valuating data that is relevant, accurate, and timely, and
identifying the relationship between cost and operational output and performance data.
* Cost analysis is the assessment of cost to enable the decision-making process. Cost analysis
gives financial managers an understanding of the full cost of operations, products, and services.
Some of this analysis includes calculating variances, reviewing depreciation, tracking cost
trends, and forecasting costs.
* Cost control entails taking action based on the analysis. This includes revising targets,
reallocating resources, and adjusting output to maximize value of the desired outcome.
5-46. The cost management process is the accurate measurement and thorough understanding of the full
cost of an activity‘s processes, products & services in order to support leaders’ decision-making and fiscal
stewardship, thereby maximizing the effectiveness and efficiency of the unit/organization operations. Cost
management considers all key quantitative aspects of the consumption of resources and enables Army
leaders and financial managers to identify, quantify, and value the economic benefits and related costs of
alternatives, resulting in better stewardship of Army dollars. With full cost visibility, the Army can execute
operations optimizing the use of resources and ultimately maximizing value for all internal and external
stakeholders (e.g., U.S. tax payers). |
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Figure 5-2. Cost management process
5-47. Implementing the cost management process will accrue numerous benefits to leaders and their units.
The process makes it easier for commanders to:
* Understand both near and long-term cost implications of their decisions.
* Make effective trade-off decisions to achieve optimal use of limited resources.
* Hold subordinates accountable for improving the efficiency and effectiveness of their operations.
5-48. Financial managers continually monitor the execution of each component of the cost management
process and adjust the process as needed based on new information from either internal or external sources.
Each component is described in more detail in the following paragraphs.
COST PLANNING
5-49. Cost planning is the use of a cost model for “should-cost” forecasting to make informed decisions.
Should-cost represents an estimate of the resources required to produce a measured outcome (product or
service) to a specified standard. The approximate cost relies on identified cost drivers, standard rates, and
historical trends, and can reflect other variables (e.g., inefficiencies or economies of scale). There are
several methodologies for developing a should-cost estimate, to include engineered estimates, parametric
estimates, and estimates produced by analogy. Financial managers incorporate cost planning when
preparing budget requirements requests, developing cost estimates, determining output quantities and their
associated costs, managing capacity, and conducting risk analysis. Cost planning occurs over various
periods from monthly projections to the current and out years. The time frame applied depends on the
planning requirements of the organization. Successful cost planning depends on the use of reliable and
consistent standard rates embedded in cost models to predict future costs based on a set level of output or
activity. Financial managers rely on standard rates embedded in their cost models to estimate and project
costs to assist commanders in making informed operational and cost decisions. Standard rates provide a |
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tool for developing estimates of current and future costs. Financial managers should define cost targets in
their cost planning to measure the efficiency and effectiveness of their organization, processes, or projects
under evaluation.
COST ACCOUNTING
5-50. Cost accounting is the dollar valuation of the cost measurements resulting from the organization’s
operations. The goal of cost accounting is to accumulate and record all the elements of cost incurred to
accomplish a cost objective (i.e., To conduct an operation or activity, operate a unit, or to complete a unit
of work of a specific job). The cost objective must be discrete to the extent and singularly identifiable level
of detail that enables the establishment of cost centers and output products. Financial managers rely on
FMIS to capture and record cost data from one or several systems that feed financial and non-financial
transactions into the FMIS. In most organizations, the General Fund Enterprise Business System (GFEBS),
an enterprise resource planning (ERP) solution, has become the primary accounting system of record and
links financial data with logistics, asset accounting and other critical information. GFEBS provides a robust
cost module that is directly linked to the financial data contained in the system‘s financial module and
given its common cost structure will provide a powerful cost analysis capability to support internal cost
management initiatives. Whatever accounting system is in place, the resulting cost data must be accurate,
timely, and relevant to the end user‘s purpose and intent. Financial managers must be able to connect
financial data to operational output and performance data to provide useful cost analysis to support the
commander‘s decision-making. In addition to GFEBS, two other ERPs – the Logistics Modernization
Program (LMP) and the Global Combat Support System-Army (GCSS-Army) – also provide essential
information to financial and functional managers.
COST ANALYSIS
5-51. Cost analysis is the integration of functional outcome data with cost data to produce valid and
verifiable information to conduct various forms of analysis. Examples of cost analysis include
organizational performance, cost-benefit analysis, analysis of alternatives, variance analysis, economic
analysis, cost/risk assessments, and trend analysis. Cost analysis serves many purposes and provides useful
insight regarding costs to commanders as they make resource decisions.
5-52. FM planners use cost models, such as the Force Costing Model (FCM) and the Army Contingency
Operations Cost Model (ACM) (both developed by the Office of the Deputy Assistant Secretary of the
Army for Cost and Economics) to assist commanders in understanding the full cost of their decisions. Cost
models enhance cost analysis by providing the logic behind the calculated cost. The logic, assumptions, and
business rules required to build a model help commanders understand the drivers of cost. When existing
models do not meet the specific circumstance, local models can be developed.
5-53. For example, a division commander may be contemplating raising the operational readiness (OR) of
his BCTs to posture them for future missions. His decision to increase the OR rate from 90% to 95% will
have operational benefits, but will also reduce the resources available for other missions or requirements,
thus also producing an operational cost. To address this question analytically, the commander will begin
by determining whether the requirement is a valid objective to be pursued. A candidate requirement might
be rejected because it is clearly unaffordable, and in other cases a requirement might be rejected because it
provides a capability or capacity that goes beyond what is needed. If the requirement is validated, the
commander will direct that a team, led by the financial manager, identify courses of action (COA) that
satisfy the requirement, estimate the costs and benefits of each COA, identify the criteria – both cost and
non-cost – that will be used to compare the COAs, and then evaluate them to identify the COA that delivers
the optimum balance between cost and benefit. To ensure that all aspects of an issue are considered, this
must be a team effort. Exclusion of key stakeholders can result in incomplete cost estimates, inaccurate
identification of benefits, or any number of errors that invalidate the analysis and contribute to poor
decision making.
5-54. The cost analysis process is depicted graphically in figure 5-3. The process includes the use of
models and accounting data to play a key role in developing the cost estimate. |
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Figure 5-3. Cost informed decision making
5-55. Figure 5-4, indicates accounting (financial) data combined with non-financial information such as
performance, products, processes, or services, results in a cost metric. The non-financial information brings
meaning to the accounting data. The cost metric is an expression of the accounting and non-financial data
that is used in the estimation process.
Figure 5-4. Developing the cost metric
COST CONTROL
5-56. Cost control is the development and implementation of policies and procedures that take “best value”
and/or “best practice” actions to assist as needed in the reallocation of the organization’s resources to
achieve defined objectives. These objectives usually combine cost goals and targets with organizational
mission goals to ensure that the organization operates efficiently while still accomplishing its assigned
mission. Cost control procedures and policy are based on information provided from detailed cost analysis.
The methods of cost control are varied and range from the reallocation of resources between activities or
outputs to improve efficiency to execution of a trade-off decision, (e.g., deciding to use overtime versus
contracting for external support). |
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COST MANAGEMENT CONCEPTS
5-57. The Army cost management process is designed to apply continuously cost controls and strategies to
use efficiently the available financial resources to achieve the best results preserving a culture of cost
awareness into the organizational operations.
5-58. The concept of full cost, as described in the following section, requires an understanding of the
various cost types involved in cost accounting. Full cost encompasses all types of costs: direct, indirect,
funded, unfunded, variable, fixed, sunk, incremental, avoidable, and unavoidable. All costs needed to
produce a unit of output (product or service) require allocation to an output regardless of the classification
of the cost. The following costs are encompassed in full cost, but full cost is not limited to these costs.
Refer to this manual‘s glossary for definitions of these costs.
COST CENTER
5-59. Cost Center serves as a base for a management optimization model utilized to reflect the
business, its inputs, conversions, and outputs in order to support management decisions. A Cost
Center is a responsibility center that incurs costs and has a manager who is accountable for those costs.
This definition allows multiple and varied levels of cost centers within an organization in order to capture
all costs associated with the organization. The purpose of the cost center is to serve as a base for a
management optimization model – a model that reflects the business, its inputs, conversions, and outputs in
order to support management decisions. The cost center is the first cost object defined when developing a
cost model.
RESPONSIBILITY SEGMENT
5-60. A responsibility segment is a component of a reporting entity that is responsible for carrying out
a mission, conducting a major line of activity, or producing one or a group of related products or
services. Responsibility segments usually possess the following characteristics:
* Commanders or managers of responsibility segments report directly to the reporting entity’s top
leadership, such as in the reporting relationship between a BCT commander and a division
commander.
* The responsibility segment’s resources and operational results can be clearly distinguished from
those of other segments.
REPORTING ENTITIES
5-61. Reporting entities issue general purpose financial statements to communicate financial and related
information about the entity. For an entity to be a reporting entity, as defined by the Statement of Federal
Financial Accounting Concepts, it would need to meet all of the following criteria: There is management
responsible for controlling and deploying resources, producing outputs and outcomes; executing the budget
or a portion thereof (assuming that the entity is included in the budget); and held accountable for the
entity's performance.
5-62. The designation of a cost center, responsibility segment, and/or reporting entity requires analysis of
the organization, activity, project, or program in question. The financial manager must consider the
requirement for the cost analysis or cost management initiative when developing the cost model and
identifying cost centers, responsibility segments, and reporting entities. The level of cost capturing,
reporting, and the supported decision-maker can also determine whether an organization is a cost center,
segment, or entity. In many cases, higher headquarters will identify the reporting entity for the subordinate
units.
FULL COST
5-63. Full cost is the sum of all costs, regardless of funding source, required by a cost object - to
include all direct materials, direct labor, and support activity costs – to produce or provide a
product, service, customer, or outcome. Full cost includes the costs of resources consumed that |
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contribute directly or indirectly to the output, such as direct labor, direct materials, and support activity
costs.
5-64. Full cost information helps users determine relevant costs of specific activities, goods and services.
Full cost should incorporate the full cost of goods and services that it receives from other entities even if
the receiver who benefits may not have paid for or funded the goods and services.
5-65. Costing is the expensing of budgetary resources in its basic form. Cost accounting is the central
concept of managerial accounting and analysis. In most cases, it represents units of work or goods
consumed in a process and producing outcome data. A full cost approach will be applied in collecting costs
associated with a cost object. A cost object is an activity, output, or item whose cost is to be measured as
defined by management. For instance, a brigade combat team or a combined arms battalion could be a cost
object for a corps or division. For application within a BCT or division, a cost object could also represent a
one-time event such as a CERP project.
5-66. Full cost ensures that leaders consider all relevant cost information in order to make resource-
informed decisions. The Army relies on cost data to program future needs and to justify and defend budget
submissions to the Office of the Secretary of Defense (OSD) and Congress. Failure to properly capture and
report full costs jeopardizes operations. Additionally, many Army organizations charge other commands or
government and commercial entities standard rates for work performed. It is imperative that these rates
include all the components of the full cost incurred by these organizations when performing work for
customers. Without full cost information, it is difficult to accurately manage capacity and identify the
causes of cost savings or overruns. All these factors detract from the ability of the leader or manager to
make resource-informed decisions.
5-67. Full cost analysis shall be used in all situations requiring a cost estimate. Examples include cost-
benefit analysis, capital/lease analysis, make vs. buy decisions, and benchmarking or comparative analysis.
5-68. Figure 5-5 on page 5-18 illustrates the full cost of maintaining the OR of a BCT at 90%. In this
example, the BCT is the responsibility segment to the higher headquarters since the BCT commander
reports directly to the corps or division commander. The BCT’s resources (funds, personnel, and
equipment) and operational results can be clearly distinguished from those of other BCTs within the higher
headquarters task organization. The higher headquarters (corps or division) is the reporting entity in this
example. Battalions subordinate to the BCT could represent subordinate cost centers when developing this
OR cost model. In this illustration, the financial manager designed the cost models to derive the full cost of
readiness for the command and used this information to provide valuable cost advice to the BCT
commander. If the BCT commander wants to raise his unit’s OR above 90%, he requires information on the
cost consequence of his decision. The cost model can predict the increase costs for each incremental
increase to OR and inform the commander on the concomitant impact on resources of each change in OR.
The financial manager develops the cost model and interprets the data from the cost model to develop
useful and relevant information to improve the commander‘s decision-making and fiscal stewardship. This
scenario is just one example of the application of cost management |
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Figure 5-5. Example of full cost concept for a BCTs operational readiness
5-69. As the model suggests the full cost of OR for a BCT considers all costs involved to include direct
costs, indirect costs, and the costs of Army and Non Army activity support provided to the BCT. In this
example, the BCT is the responsibility segment to the higher headquarters since the BCT commander
reports directly to the corps/div commander, the BCTs resources (funds, personnel, and equipment) and
results of operations can be clearly distinguished from those of other BCTs within the higher headquarters
task organization. The higher headquarters (corps or div) is the reporting entity in this example.
Subordinate battalions to the BCT could represent subordinate cost centers when developing this OR cost
model. In this illustration, the financial manager designed the cost models to derive the full cost of
readiness for the command and use this information to provide valuable cost advice to the BCT
commander. If the BCT commander wants to raise the unit’s OR above 90%, the commander requires
information on the cost consequence of decisions. The cost model can predict the increase costs for each
incremental increase to OR and inform the commander on the concomitant impact on resources of each
change in OR. The financial manager develops the cost model and interprets the data from the cost model
to develop useful and relevant information to improve the commander’s decision-making and fiscal
stewardship. This scenario is just one example of the application of cost management.
COST MANAGEMENT DURING CONTINGENCY OPERATIONS
5-70. Contingency missions include both overseas contingency operations (OCO) and CONUS missions
such as disaster relief and humanitarian assistance. In contingency operations, cost management acquires a
heightened importance given that costs are funded initially from existing available funds, and Army units
and activities must capture and report costs through their headquarter elements to the Department of the
Army to seek reimbursement and additional funding. Financial managers must comply with reporting
requirements prescribed by DOD FMR 7000.14-R, Volume 12, chapter 23, Contingency Operations (under
revision).
5-71. At the strategic level, the Under Secretary of Defense (Comptroller) (USD[C]) is responsible for
overall financial policy concerning contingency operations and works with the Under Secretary of Defense
(Policy) (USD(P)) to determine the most responsive method of financing contingency operations. In
addition, USD(C) is responsible for pursuing prompt reimbursement as appropriate from multinational
organizations, other nations, and other U.S. agencies for support given to those agencies. The Chairman of |
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the Joint Chiefs of Staff (CJCS) is responsible for communicating the Secretary of Defense’s order, either
through a deployment order or execute order, to the cognizant Commander of a Combatant Command
ordering the execution of a CONOP. Those orders will include a funding paragraph outlining financial
guidance as directed by the USD(C) and USD(P).
5-72. The Defense Finance and Accounting Service (DFAS) is responsible for centralized cost
consolidation; billing, and reimbursement distribution functions in support of OCO; and issuing to the
military departments and other reporting activities the necessary reporting and coding instructions,
transmission links, points of contact, and other related information necessary to ensure accurate and timely
reporting of costs. DFAS shall assist DOD components, as required, in the identification and accumulation
of costs. DFAS is responsible within DOD for all contingency cost consolidations and billings.
5-73. The Army is responsible for preparing cost estimates and submitting Army budget justifications to
the USD(C), and providing monthly incremental cost reports to DFAS IAW USD(C) policy. In addition,
HQDA will provide DFAS monthly cost statements, supporting documentation, and completed billing
documents (i.e., SF 1080, Voucher for Transfers Between Appropriations and/or Funds) for each United
Nations Letter of Assist (LOA) or incurred cost for which payment is requested. HQDA provides guidance
detailing the required cost collection and reporting procedures and methodology for contingency operations
and ensures that the guidance is disseminated to the appropriate unit level.
COST ESTIMATES FOR CONTINGENCY OPERATIONS
5-74. Army financial managers develop and use three different types of estimates during contingency
operations. These estimates are usually produced by strategic level FM personnel within HQDA; however,
the estimates rely on information provided by subordinate commands and activities. The three different
types of estimates are the pre-deployment estimate, the budget estimate, and the working estimate. The pre-
deployment estimate is used to assess various operational assumptions and to inform the go/no-go decision-
making process; the budget estimate is used to define and defend requests for reprogramming or additional
appropriations; and the working estimate is used during execution of the operation against which the
military departments measure actual costs, and which can be used as the base for determining the changes
in cost that would result from changes to the operational plan. All three types of estimates are important to
ensure that senior leaders have the latest and most accurate information available for use in the resource
allocation process.
PRE-DEPLOYMENT ESTIMATE
5-75. The pre-deployment cost estimate is a short notice estimate required to support operational
assumptions and decision-making processes, and defines and supports requests for reprogramming
or additional appropriations. It supports operational assumptions and decision-making processes. This
estimate usually is required on short notice, sometimes within hours of notification. This estimate is the
most difficult and unreliable of the three estimates due to the lack of supporting information. The
preliminary estimate is prepared by the Office of the Under Secretary of Defense (Comptroller) (OUSD(C))
and the Joint Staff J-8, using a cost model that incorporates major incremental cost drivers such as modes
of transportation, operation duration, force deployment/phasing, and environmental conditions to project a
rough order of magnitude cost estimate.
BUDGET ESTIMATE
5-76. Budget estimate is based on specific command operational plans, requirements, troop levels,
location, and operating circumstances. The FM and logistics staffs at HQDA use data provided by the
responsible CCDR and the theater ASCC to derive a projected incremental cost estimate for submission to
OUSD(C). As a standard procedure in developing cost estimates, the ASCC shall utilize all available
sources of relevant information and ensure that the field commands and headquarters personnel have
applied the lessons learned from cost estimates associated with previous operations. |
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WORKING ESTIMATE
5-77. HQDA formulates the working estimate that builds on the budget estimates centered on actual
execution of the operational plan based on data provided by the respective component commands.
These estimates are revised/updated formally on a quarterly basis (through the Quarterly Contingency Cost
Estimate Report) and reported to OUSD(C). Senior FM planners within HQDA developed cost models
such as the Army Contingency Operations Cost Model (ACM) and the FCM to support their cost estimate
development and can tailor these models to specific theater conditions in order to better align requirements
to costs. DOD FMR Volume 12, Chapter 23 contains more information on all three estimates.
CONTINGENCY COST REPORTING
5-78. Cost reporting is an integral part of the Army‘s stewardship. Financial managers throughout all levels
of FM operations – from strategic to tactical – must diligently capture and accurately report the cost of the
contingency operation. The Army is required to report the obligation of all funds (regardless of source) to
cover the incremental costs of the contingency, including funds received in a supplemental appropriation.
HQDA will publish guidance to cover Army-specific items for cost reporting, under DOD FMR Vol. 12
chapter 23, and validating monthly reporting. The guidance will include information regarding the cost data
source, validation requirements, and variance analysis procedures.
5-79. Costs related to a contingency operation may be incurred both in the area of responsibility and in
other locations. At the operational and tactical levels, it is the responsibility of the unit or activity that
directly or indirectly incurs costs in support of the operation to ensure that information on all costs is
transmitted to the appropriate HQDA senior financial manager. The ASCC prepares and submits to HQDA
the Major Command Monthly Contingency Cost Estimate Report. These monthly reports identify changes
to cost estimates. The reports facilitate regular communication between the ASCC headquarters and its
subordinate commands that have responsibility for execution during various contingency operations. The
ASCC headquarters staff use the data submitted to prepare the Quarterly Contingency Cost Estimate Report
in accordance with the DODFMR Volume 12, page 23-12.
5-80. In developing contingency cost estimates and for contingency cost reporting, financial managers
consider and report only the incremental costs of the operation. Incremental costs are those costs that are
beyond baseline training, operations, and personnel costs. Incremental costs do not include the cost of
property or services acquired by the Army that was paid for by a source outside the department or out of
funds contributed by such a source. The costs of investment items, construction costs, and costs incurred to
fix existing shortcomings can be categorized as incremental cost if the expenditures were necessary to
support a contingency operation and would not have been incurred in that fiscal year in the absence of the
CONOP. Costs incurred beyond what is reasonably necessary to support a CONOP cannot be deemed
reimbursable incremental expenses, since such costs are not directly attributable to support of the operation.
Incremental costs may be recorded against supplemental funding, baseline funding, or any source of funds.
Base budget funding diverted to pay incremental costs in support of contingency operations are not the
same as baseline costs. The following are examples of allowable incremental costs:
* Military entitlements such as premium pay, hazardous duty pay, family separation allowance, or
other payments made over and above the normal monthly payroll costs.
* Increases for allowances due to changes in geographic assignment area due to a contingency
(i.e., Basic allowance for subsistence (BAS) or basic allowance for housing (BAH)).
* Travel and per diem of active military personnel and costs of Reserve Component personnel,
called to active duty by a federal official, who are assigned solely to support the contingency.
* Overtime, travel, and per diem of permanent DOD civilian personnel in support of a
contingency.
* Wages, travel, and per diem of temporary DOD civilian personnel hired or assigned solely to
perform services supporting the operation.
* Transportation costs of moving personnel, material, equipment, and supplies to the contingency
or contingency staging area, including such things as port handling charges; packing, crating and
handling charges; first and second destination charges. |
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* Cost of rents, communications, and utilities that is attributable to the contingency. Examples of
such incremental costs include telephone service, computer time, satellite time, and crypto-
traffic support of the contingency.
* Cost of work, services, training, and material procured under contract for the specific purpose of
providing assistance in a contingency.
* Cost of material, equipment, and supplies from regular stocks used in providing directed
assistance. Material, equipment, and supplies from stock shall be priced at the standard prices
that are used for issues to the DOD activities. Included in this category will be consumables such
as field rations, medical supplies, office supplies, chemicals, cleaning and toilet supplies,
petroleum, and items ordinarily consumed or expended within 1 year after they are put into use.
Material, equipment, and supplies determined to be excess to the departmental requirements may
be made available for transfer under excess property disposal authority without reimbursement.
In these instances, however, accessorial charges for packing, crating, handling, and
transportation shall be added where applicable.
5-81. Baseline costs are the continuing annual costs of military operations funded by the operations and
maintenance and military personnel appropriations (JP 1-06). Baseline costs are those costs that would be
incurred whether or not the unit is participating in a contingency operation. Examples include scheduled
flying hours, training days, and exercises. Reported incremental costs shall reflect, as closely as possible,
the actual incremental costs incurred by the unit involved in the specific operation, using cost factors for
the specific command or geographic area, when available, as compared to composite cost factors for the
overall Army.
5-82. In some instances, costs for which funds have been appropriated may not be incurred because of a
contingency operation. These costs are categorized as cost offsets. Examples include basic allowance for
subsistence not paid; training not conducted, and base operations support not provided. In other situations,
identified incremental costs may be offset in various ways, such as supply turn-ins for items not used or
placed in inventory, and non-monetary contributions, such as free fuel.
COST COLLECTION
5-83. Upon being alerted of an impending contingency operation, HQDA will establish a unique special
program code to capture costs. Additionally, the Joint Staff shall issue a three-digit CJCS Project Code,
which provides precedence for supply requisitions and facilitates cost capturing and reporting. Each unit
that supports a contingency operation shall capture related obligations and disbursements in its accounting
system(s) at the lowest possible level of the organization. This provides tracking of obligations and
disbursements for affected appropriations. Organizations shall not establish cost accounting systems solely
for determining costs for contingency operations but shall use the data from existing FMIS. |
1-06 | 127 | Chapter 6
Operational Art and Planning
Effective FM relies on comprehensive planning and preparation. FM leaders and
commanders apply the operations process in the conduct of FM operations. The
operations process consists of the major command and control activities performed
during operations: planning, preparing, executing and continuously assessing the
operations (ADP 3-0) as illustrated in figure 6-1 on page 6-2.
Employment of the operations process is vital to the successful execution of FM
operations. Continuous assessment of plans and operations enable FM leaders within
theater Army, corps, division staffs and FM commanders to be responsive to changes
in the OE that impact FM operations. Planning, preparation, execution, and
assessment of FM must be deliberate and integrated into the command’s operations
plan (OPLAN). Effective FM plans and operations require FM planners with the
requisite technical and tactical expertise in FM capabilities and systems,
understanding of the commander’s intent and a keen awareness of the relationships
between FM organizations and their supported units and activities. FM planning and
operations are performed by FM staff personnel at every level from the Brigade S-8
to the theater Army G-8 and FMSC. FMSU commanders and their subordinate
detachment commanders conduct tactical level FM planning and operations in close
coordination with both the S-8 and the FMSC. When planning and executing FM
operations, FM leaders must assess the current situation and forecast FM
requirements based on changing conditions as the operation progresses; make timely
decisions to exploit opportunities or address unforeseen requirements; and direct
actions to apply FM resources and support at decisive points in the operations.
FM planners must weigh and integrate FM considerations into their planning efforts
to ensure the seamless provision of FM support to Army operations. This chapter
discusses the essential elements of FM planning and operations that apply to FM
planners within a headquarters staff (theater Army, corps, Div. G-8), the FM SPO
within the ESC, BDE S-8, the FMSC, and the FMSU. |
1-06 | 128 | Chapter 6
Figure 6-1. Operations Process
SECTION I – PLANNING
6-1. Army commanders and their staffs use two doctrinal planning processes to integrate activities during
planning: the Military Decision Making Process (MDMP) and troop leading procedures (TLP). Units and
headquarter elements with a formally organized staff employ MDMP to provide structure to help
commanders and staffs develop estimates, plans, and orders. At the lowest tactical echelons of FM, FMSUs
and FMSDS use TLP to plan and execute FM missions. These planning processes are a means to an end
and depend heavily on the commander’s ability to visualize and describe the operation.
6-2. FM planners at all levels and organizations will ensure the composite risk management (CRM)
process is included as part of each phase of the operations planning process. Risk is a function of the
probability of an event occurring and the severity of the event expressed in terms of the degree to which the
incident impacts combat power or mission capability. CRM is the Army’s primary decision making process
for identifying hazards and controlling risks across all Army missions, functions, operations, and activities.
CRM serves as an integrating process for the sustainment warfighting function in Army operations. See
Field Manual 5-19, Composite Risk Management, for more information.
6-3. Planning is the process by which commanders (and the staff, if available) translate the commander’s
visualization into a specific course of action for preparation and execution, focusing on the expected results
(ADP 3-0). Planning involves understanding and framing the problem and envisioning the set of conditions
that represent the desired end state. FM planners (ASCC G-8, ESC FM SPO, FMSC, corps/Division G-8)
must understand the commander’s intent and the sets of conditions that describe the desired end state. FM
operations must be planned, prepared and executed in order to achieve the commander’s end state. FM
commanders and staff members consider the consequences and implications of each course of action
(COA) with respect to FM. Upon COA selection, FM planners will:
* Formulate specific FM tasks that support the commander’s intent.
* Formulate FM running estimates.
* Identify required FM staff actions.
* Develop assessment framework.
6-4. FM planning develops the detailed and relevant FM information required during execution in order
to set initial conditions, assign support relationships, and establish priorities of FM support. FM planning
continues after order issuance as the OE develops and changes requiring orders and plans refinement and
the issuance of branches and sequels. |
1-06 | 129 | Operational Art and Planning
FM PLANNING USING THE MILITARY DECISION MAKING
PROCESS (MDMP)
6-5. FM planners must be thoroughly familiar with the MDMP depicted in figure 6-2 on page 6-4.
Throughout the MDMP, FM planners should consider how the COAs being developed require FM support
for the operation. FM planners must tailor FM support to the particular phase of an operation. For example,
during stability operations, the primary FM focus may shift to expanding special program funding to
support theater Army efforts to improve infrastructure development and improve monetary institutions and
programs. Whereas, during offensive tasks FM support focuses primarily on procurement support to
operational forces. Each operational element of unified land operations needs to be considered throughout
the MDMP process. See ADP 3-0, Operations, for additional information on unified land operations. ADP
5-0 contains additional information on MDMP not included in the contents of this manual. |
1-06 | 130 | Chapter 6
Figure 6-2. Military decision making process |
1-06 | 131 | Operational Art and Planning
6-6. FM planning sets the conditions for the effective and decentralized provision of FM support to
theater forces within the AO. Planning activities typically associated with MDMP initially focus on
gathering information and mission analysis followed by COA development, COA assessment, and
ultimately results in a COA recommendation to the commander. FM planners perform the following critical
tasks during the planning process:
* Understand the unit mission and the mission of supported and supporting units to include
location of each element.
* Determine FM resources required to support the operation by COA (to include special funding
authorities to support the COA – refer to Chapter 2, Section IV for a list of existing authorities).
* Formulate the concept of FM support in line with the overall concept of operation and the
commander’s intent.
* Develop and maintain the FM running estimate.
* Identify specified and implied tasks to include identification of mission essential tasks for
subordinate FM units and FM staff elements. These tasks apply across all FM operations.
* Identify constraints and limitations that impact FM operations.
* Identify key facts and assumptions that impact FM support to the operation.
* Prepare, authenticate, and distribute the FM plan in the form of approved annexes, estimates, and
OPLANS.
* Formulate and recommend Commander’s Critical Information Requirements (CCIR). Possible
FM CCIR include the following:
Major loss of funds equal to or in excess of $750. Any loss of funds equal to or greater than
$750 or losses resulting from a theft or losses with evidence of fraudulent acts by disbursing
personnel require reporting and formal investigations. Procedures are outlined in the DODFMR
7000.14-R Volume 5. The major loss of funds investigation is NOT a 15-6 investigation, but
findings from a 15-6 investigation may be used as supporting evidence for the major loss of
funds investigation. Your regional FMSC can assist you with these investigations.
Less than 3 days’ supply of U.S./Foreign Currency available to support operations.
Unauthorized commitments and/or possible ADA violations.
Critical shortage of available special program funding (e.g., CERP, Small Rewards
Program, Train and Equip).
Critical FM systems outages that significantly degrade FM operations.
6-7. Building and maintaining running estimates is a primary task staff sections perform to support the
commander. A running estimate is a staff section’s continuous assessment of current and future operations
to determine if the current operation is proceeding according to the commander’s intent and if future
operations are supportable (ADP 3-0). FM staff within operational and tactical units, maintain FM running
estimates between operations, even when not deployed. At a minimum, the staff maintains situational
awareness of friendly force capabilities within their area of expertise. During planning, the FM running
estimate is a key source of FM information that enables mission analysis. FM planners maintain and update
the running estimate throughout MDMP in order to provide the best possible FM information available at
the time to support the commander’s decision. The FM running estimate serves as the initial assessment of
the current readiness of equipment and personnel and how the factors considered in the estimate affect FM
support to the mission. Figure 6-3 on page 6-6 provides a basic template for an FM running estimate. The
format can be modified to suit the organization’s planning requirements. More information regarding the
preparation of a running estimate is contained in ADP 5-0. |
1-06 | 132 | Chapter 6
Figure 6-3. Example of FM running estimate template
6-8. FM planners at all levels must be proactive in gathering information to develop running estimates
and plans. There are several sources of information from which an FM planner can extract the necessary
material to develop planning documents. Below are possible sources of information that can aid FM
planners:
* State Department: The State Department has a worldwide network of embassies. These
embassies are excellent sources of detailed information on banking and economic support for a |
1-06 | 133 | Operational Art and Planning
particular country. Embassy staffs routinely do country studies that, if current, can provide the
bulk of the information you may need to conduct an economic analysis or survey. A good library
is another excellent source of information.
* Useful web-sites such as:
Central Intelligence Agency (CIA) World Fact Book.
World Bank Data and Research Site.
* Intelligence preparation of the battlefield related data: The intelligence preparation in the
battlefield with its overlays, can provide excellent current information regarding information on
possible enemy COAs, terrain, possible main supply routes, and sites for sustainment facilities.
Staff FM planners (G-8s and ESC FM SPO) rely on their military intelligence counterparts on
the headquarters staff for this information. FM small unit leaders rely on the Brigade S-8 for
intelligence preparation in the battlefield material.
* Civil affairs data: CA units within the civil military operations center can provide information
and knowledge of the OE to U.S. and multinational forces when directed. CA with its unique
interaction and continuous dialogue with indigenous populations, institutions, intergovernmental
organizations, NGOs, and U.S. agencies and organizations can provide valuable information in
support of the sustainment mission and overall geographic combatant commander’s plan. Much
of this information is relevant to FM operations as well, especially during stability operations.
6-9. Throughout the planning process, FM planners prepare recommendations within their functional
area, such as:
* FM unit and systems capabilities, limitations, and employment. This includes the ability to
access communication and automation systems for FM and mission command.
* Risk identification and mitigation.
* FM support relationships between subordinate FM units and supported units.
* Resource allocation and employment synchronization of organic and supporting units (including
other joint assets).
* General locations and movement of FM units.
* Current and near-term (future) execution of the planned FM support.
* Types and uses of funding available in support of the operation.
6-10. FM planners employ the following planning factors in determining the minimum number of FM units
required to provide the necessary FM support:
* FMSC – One per TSC.
* FMSU-- One per SUST BDE.
3 to 7 FMSDs during Shape, Deter, Seize Initiative, and Dominate.
3 to 5 FMSDs during Stabilize and Enable Civil Authority.
* FMSD – 1 per BCT or brigade-sized element.
6-11. The exact number of FMSDs to support an operation requires detailed analysis of the geographic
dispersion, composition, and number of units and organizations supported. Additional factors for
consideration include the number and location of OCS units and pay agents located in the AO. Based on
METT-TC analysis, FMSUs may embed an FMSD or FMST within the BCT.
6-12. During the orders production step of MDMP, FM planners are responsible for developing the FM tab
for the OPLAN or OPORD. The FM tab is Tab B (FM Operations) to Appendix 2 (Personnel Services
Support) to Annex F (Sustainment) where the majority of FM direction is located in the completed OPLAN
or OPORD which results from the MDMP (See Chapter 6, Section V of this manual for a suggested
template of the FM tab). Through the FM tab FM planners describe the concept of FM support and
communicate directives to subordinate FM commanders and staffs. The tab should also be synchronized
with the Operational Contract Support Plan of the base OPLAN or OPORD. The FM tab should contain
information that provides guidance on FM support to the mission. Chapter 6, Section VI of this manual
provides a checklist of related FM activities that FM leaders, whether commanders or staff personnel,
should consider in planning and executing FM operations. |
1-06 | 134 | Chapter 6
6-13. FM units employing the MDMP to conduct FM mission planning should tailor and modify the actual
steps of MDMP to suit the unique nature of FM operations. For example, step 4 of the MDMP, “War
Game”, can be modified to analyze the impact of possible enemy COAs on each proposed FM COA.
Evaluation criteria used for FM COA comparison can be derived from the principles of FM established in
chapter one, the principles of war, commander’s guidance, or measures of effectiveness (MOE) and/or
measures of performance (MOP) established to evaluate FM operations. The key point is that MDMP must
be tailored to suit the needs of the commander in an effort to determine and devise the best possible plan
most likely to accomplish the mission.
SECTION II – PREPARATION
6-14. During the preparation of the plans and orders the financial manager must be cognizant of the full
mission and the financial management responsibilities in order to support commanders.
TROOP LEADING PROCEDURES (TLP)
6-15. Leaders of FMSCs, FMSUs, and FMSDs use TLP to develop plans and orders. This framework
applies to all Army small units regardless of unit type and extends the MDMP to the small unit level. Both
TLP and the MDMP are linked by the basic Army problem solving methodology explained in ADRP 6-0,
Mission Command. Commanders with a coordinating staff (theater Army to battalion level commands) use
the MDMP for their primary planning process while small units, such as FMSUs and FMSDs, lack a formal
staff and rely on TLP to plan and prepare for operations.
6-16. Troop leading procedures are a dynamic process used by FM leaders to analyze a mission received
from their respective higher headquarters (SUST BDE), Special Troops Battalion (STB), or FMSU,
develop a plan, and prepare for operations. These procedures enable FM leaders to maximize available
planning time while developing effective plans and adequately preparing their units for an operation. This
process places the primary responsibility for planning primarily on the commander or small-unit leader. See
ADP 5-0 for more information on TLP.
6-17. FM planners within the FM SPO cells at the ESC and S-8 sections in the brigades are integral
participants in the tactical planning process. They must integrate FM operations within the respective AOs
of their organizations to ensure that direction issued to FM units in the form of WARNOs and OPORDs
contain clear and concise guidance that enables FM leaders of FMSUs and FMSDs to plan, prepare and
execute FM operations that support the commander’s mission. FM efforts at the FMSU and detachment
level must be nested with theater Army FM operations and initiatives. Planners at the BCT and ESC and
sustainment brigades coordinate closely with the theater FMSC to ensure this critical nesting of FM plans
and orders at the operational and tactical level occurs.
6-18. FM leaders within the FMSUs and FMSDs rely on information contained in higher headquarters
orders, plans, and staff running estimates to develop their METT-TC analysis. The ESC FM SPO, in
coordination with the FMSC, should assist when possible in providing additional information to the
subordinate FM units to include country studies, host nation support agreements, and theater Army
Operational Contract Support Plan.
SECTION III – EXECUTION
6-19. During the execution of any plan, there must be a total understanding of the principles that will help
achieve success during any mission. A clear and concise order will keep all elements involved
synchronized and well informed about the objective of the operation.
MISSION COMMAND
6-20. The Army’s primary method of command is mission command. Mission command is the exercise of
authority and direction by the commander using mission orders to enable disciplined initiative within the
commander’s intent to empower agile and adaptive leaders in the conduct of unified land operations. (ADP
6-0). |
1-06 | 135 | Operational Art and Planning
6-21. The exercise of mission command is based on mutual trust, shared understanding, and purpose.
Commanders understand that some decisions must be made quickly at the point of action. Therefore, they
concentrate on the objectives of an operation, not how to achieve it. Commanders provide subordinates
with their intent, the purpose of the operation, the key tasks, the desired end state, and resources.
Subordinates then exercise disciplined initiative to respond to unanticipated problems. Every Soldier must
be prepared to assume responsibility, maintain unity of effort, take prudent action, and act resourcefully
within the commander’s intent. Successful mission command of FM operations hinges on subordinate FM
leaders at all echelons exercising disciplined initiative within the commander’s intent to accomplish
missions. Mission command requires a command atmosphere of knowledge sharing, trust and mutual
understanding. Mission command consists of six principles:
* Build cohesive teams through mutual trust.
* Create shared understanding.
* Provide a clear commander’s intent.
* Exercise disciplined initiative.
* Use mission orders.
* Accept prudent risk.
6-22. Mission command of FM organization and functions, like command of land forces, rarely fall
directly under the direct control of any one commander or FM leader. The senior FM leader within theater,
the ASCC G-8 or JTF C-8 (corps or Div G-8), relies on the independent actions of subordinate sustainment
and FM leaders in the planning and execution of FM operations.
6-23. As previously depicted in figure 1-6 on page 1-14, FM theater operations are commanded and
controlled through a network of explicit command and staff relationships and implicit coordination between
staffs that exist from the TA G-8 down to the lowest tactical FM unit – the FMSD. In between these levels
of command, various FM unit and staff personnel within multiple organizations (e.g., TSC, FMSC, ESC,
SUST BDE and FMSUs) integrate, synchronize, coordinate and manage FM operations throughout the
theater in order to provide full spectrum FM support to the theater commander’s mission. Tactical FM units
fall under the command and control of the theater sustainment command. The FMSC is a subordinate
operational element of the TSC and provides technical oversight of all theater tactical FM units executed by
tactical FMSUs and FMSDs. This coordination includes providing technical FM policy and guidance on
FM procedures, systems and FM reporting requirements.
6-24. The SUST BDE has mission command over the FMSUs and FMSDs. It relies on the ESC FM SPO
to integrate and coordinate its FM operations. The SUST BDE also ensures the provision of requisite FM
support to units within the SUST BDE’s AO. The Sustainment Brigade Commander (SUST BDE CDR)
may place the FMSU under the mission command of the STB. The ESC FM SPO communicates directly
with the FMSC when coordinating FM operations. Regardless of where the FM units are placed within the
SUST BDE, the SUST BDE CDR bears overall responsibility for compliance of FM units with established
internal controls and works with the FMSC to ensure that those FM units under his or her command and
control do in fact comply with all applicable laws and regulations governing FM operations.
EXPEDITIONARY SUSTAINMENT COMMAND (ESC) FINANCIAL
MANAGEMENT SUPPORT OPERATIONS (FM SPO)
6-25. As stated earlier, the FM SPO section has undergone significant structural changes since the previous
edition of this manual. Now, FM SPO personnel are only at the ESC level. The ESC FM SPO is critical to
the successful execution of tactical FM operations within theater as this staff section plans, coordinates, and
synchronizes FM disbursing support for all units within an entire ESC’s assigned AO. The FM SPO must
possess the necessary experience and knowledge in FM operations in order to be a principal FM asset to the
ESC commander.
6-26. The ESC FM SPO is key to the successful integration of FM operations and FM capabilities. FM
support must remain responsive and retain the necessary flexibility to meet the ever-changing requirements
of U.S. forces in the ESC AO. The ESC FM SPO evaluates the adequacy of support throughout the AO by
analyzing workload data, supporting population size, and making recommendations to maximize efficiency |
1-06 | 136 | Chapter 6
of limited FM resources throughout the supported AO. It monitors the use of cash or instruments
representing cash on the battlefield to attain military objectives. In close coordination with the FMSC and
the supported G-8 staff, and ESC FM SPO coordinate for the execution of FM initiatives within the ESC
AO such as E-commerce program, banking, and conversion to EFT payments. Coordinating for these
initiatives requires working directly with the FMSC and when appropriate, national providers such as the
U.S. Treasury, Federal Reserve Bank, DFAS and USAFMCOM. The FM SPO will ensure that supported
G-8 staffs remain fully informed of activities such as FM initiatives, programs, and policies impacting FM
operations.
FINANCIAL MANAGEMENT STAFF OFFICER (S-8)
6-27. The SUST BDE S-8 has a sustainment vantage point that allows it to provide additional FM
oversight and expertise. For example, the SUST BDE S-8 should monitor supply ordering and the turn-in
of Class IX recoverable parts to prevent wasteful spending. In addition, the SUST BDE’s LOGCAP
mission can benefit from the S-8’s FM cost analysis expertise to prevent fraud, waste, and abuse in
contracting. Additionally, since the SUST BDE has mission command of the FM units in its AO, the SUST
BDE S-8 can support in planning, monitoring, and synchronizing the SUST BDE’s FM mission.
FINANCIAL MANAGEMENT SUPPORT CENTER
6-28. With the elimination of an FM SPO within the Sustainment BDE, many of these FM SPO
capabilities are found at the FMSC. These tasks include:
* Assists in the integration of all FM operations within the AO. In order to remain responsive
and retain the necessary flexibility to meet the ever-changing requirements of U.S. forces in the
AO, the FMSC must evaluate the adequacy of support throughout the theater by analyzing
workload data, population size, and scheduling of support at forward operating bases (FOBs);
and by making recommendations to maximize efficiency of limited FM resources throughout the
supported AO. It monitors the use of cash or instruments representing cash on the battlefield to
attain military objectives. In addition, coordinates for the execution of FM initiatives within their
unit’s AO such as E-commerce program, banking, and conversion to EFT payments. The FMSU
will request support from national providers through the FM SPO, who in turn will coordinate
the request through senior FM channels and ultimately the FMSC for the necessary support. The
FMSC will ensure that supported G-8 staffs remain fully informed of activities such as FM
initiatives, programs and policies impacting FM operations.
* Synchronize FM network. The FMSC coordinates FM efforts for the sustainment brigade
across all supporting FMSUs, contracting offices, and CA units. It synchronizes FM support
with other sustainment elements and supported organizations for commercial vendor services,
pay agent services, Soldier disbursing services, SVC program and other FM services.
Synchronization also requires the FMSC to ensure that the subordinate FMSUs and FMSDs
support local funding support to include reducing errors in the accounting systems such as
negative un-liquidated obligations (NULO) and other accounting discrepancies. In support of the
procurement process, the FMSC ensures the FMSU is providing commercial vendor services and
contracting support through the accurate and timely payment of contracts.
* Monitor all FM systems. In coordination with the G-8 and the FMSU, the FMSC monitors the
employment and update of FMIS used for disbursing, pay support, travel pay, vendor pay and
resource management. Tasks may include coordination for assistance when systems fail and
scheduling system upgrades. Planning would include coordinating communication support for
expanding electronic banking initiatives. Coordination with the DFAS Expeditionary Support
Organization, through the FMSC, is essential in acquiring support for FM systems such as
Deployable Disbursing System (DDS), Commercial Accounts Processing Systems Windows
(CAPSW), and other FMTP software platforms. These systems are updated continuously and
require extensive technical network support from both organic signal units and external
organizations. The FM SPO should possess a familiarity with FM systems employed in theater
and system support requirements. FMSUs and their subordinate detachments request FM
systems support through the Brigade S-8. |
1-06 | 137 | Operational Art and Planning
* Coordinate FM requirements. The FMSC works closely with supported units to determine FM
requirements and prioritize delivery of FM support. The FMSC must maintain continuous
visibility on the location, number, and composition of supported units within the AO in order to
anticipate changes in FM requirements and adjust existing FM support plans to address the
changes. In coordination with G-8 and FMSUs, the FMSC monitors and reports cash
requirements for special funding sources such as CERP, for Soldier support (check cashing,
local and partial payments, and exchange transactions), and vendor payments. The FMSC also
supports quarterly cash verification requirements for subordinate FM units IAW DODFMR
Volume 5.
* Coordinate operations and FM support. The FMSC establishes mutually supporting flow of
information among the G-8, contracting, and FM units enabling responsive FM support on the
battlefield. The FMSC provides technical FM guidance to supported units and activities.
CONSIDERATIONS IN SUPPORT OF THE PROCUREMENT
PROCESS
6-29. Throughout U.S. history, contractors have been employed to provide capabilities or skills not
included in the available uniformed force structure. During the last two decades of operations in the
Balkans, Iraq, and Afghanistan, the military’s dependence on contractors was unprecedented. Between
2001 to 2012, the U.S. government spent almost $200 billion in contracts and employed more than 250,000
contractors in support of the wars in Iraq and Afghanistan. With capabilities running the gamut of support
functions from security, distribution, and base operations to linguists and trainers, the number of
contractors has often exceeded the uniformed military force. Contracting support is an essential part of the
Army’s force projection capability and must be included in all OPLANs. Effective OCS requires close
coordination between contingency contracting officers, FM, Legal, and the supported command or activity.
6-30. The FM mission plays a critical role in the OCS end-to-end procurement process by acquiring and
certifying funds, accounting for expenditures and disbursements, and providing oversight to prevent losses
from fraud, waste, abuse, improper or illegal payments, thievery, and lapses in security. By coordinating
with supporting contracting activities and the SJA regarding local business practices, financial managers
greatly reduce the probability of improper or illegal payments. FM and contracting planners closely
coordinate to ensure FM plans and the Operational Contract Support Plan support one another to best
support the Army and JFCs.
6-31. Contracting is a key source of support for deployed armed forces across unified land operations.
Because of the importance and the associated challenges of FM support to OCS actions, financial mangers
throughout all FM units and staffs need a basic understanding of OCS. Current doctrine describes three
broad types of contracted support: theater support, external support, and system support.
* Theater Support Contracts: Typically associated with the term contingency contracting, these
contracts are awarded by contracting officers in the operational area serving under the direct
contracting authority of the ECC or designated joint Head of Contracting Agency for the
designated contingency operation. During an OCO, these contracts are normally executed under
expedited contracting authority and provide supplies, services, and construction generally from
local commercial sources.
* External Support Contracts: External support contracts are contracts awarded by contracting
organizations whose contracting authority does not derive directly from the theater Head of
Contracting Agency or from systems support contracting authorities. These contracts provide a
variety of logistic and other noncombat related services and supply support. Most familiar to the
Army is the LOGCAP. External support contracts may be prearranged contracts or contracts
awarded during the contingency itself to support the mission and may include a mix of U.S.
citizens, third-country nationals, and local national subcontractor employees. The Defense
Logistics’ Agency’s Prime Vendor contract for Class I represents another example of an external
support contract. More detailed information on LOGCAP can be found in ATTP 4-10, Field
Manual 4-92, and AR 700-137. |
1-06 | 138 | Chapter 6
* System Support Contracts: System support contracts are contracts, awarded and funded by a
military department acquisition program management (PM) office, that provide technical
support, maintenance and, in some cases, repair parts for selected military weapon and support
systems. System support contracts are routinely put in place to provide support to newly fielded
weapons systems, including aircraft, land combat vehicles, and automated mission command
systems.
6-32. The CSB and its subordinate unit's primary missions include:
* Provide theater support contracting capabilities to deployed Army forces, as well as other
military forces, governmental agencies, and/or nongovernmental agencies as directed.
* Develop contracting support plans, normally at the Army forces level. These plans will include
mission specific LOGCAP support information.
* Coordinate execution of LOGCAP support to ensure it is not in competition with existing or
planned theater support contracts.
6-33. The Operational Contract Support Plan is the mechanism for planning contracting support to military
operations. It ensures contracting solutions are considered for all contingency operations. The Operational
Contract Support Plan required elements include:
* Theater support contracting organization responsibilities.
* Boards and/or center information.
* Operational specific contracting policies and procedures to include Service civil augmentation
program (e.g., LOGCAP).
* Contract administration services delegations.
6-34. Prior to deployment, Operational Contract Support Plans are normally established at the joint force
commander (JFC), ASCC levels and other lower levels as deemed necessary. Units with requirements for
contracting support must communicate these requirements when developing the Operational Contract
Support Plan. These units assist the contracting element by developing procedures and plans to cover
contingencies. Contracting organizations, in turn, provide copies of approved Operational Contract Support
Plans to their supporting FM units and FM elements within headquarters staffs.
SECTION IV – ASSESSMENT
6-35. Financial managers must make effort to improve every aspect of their mission. By receiving
feedback and conducting assessments, the FM commander can identify areas where capability gaps exist
and begin the mitigation process.
6-36. Assessment is the continuous monitoring and evaluation of the current situation, particularly the
enemy, and progress of an operation (ADP 3-0). FM leaders constantly monitor and analyze relevant
information to help them judge how FM operations are supporting the desired end state. FM personnel at
all levels must be able to articulate how FM operations support the commander’s mission and achieve
intended effects. In order to articulate progress, FM commanders and staff personnel must design and
implement an assessment framework that assesses the progress of FM operations and provides relevant
feedback on the operations effectiveness and efficiency. For FM, assessment includes:
* Continuously monitoring the situation and progress of FM operations towards supporting the
commander’s desired end state.
* Determining how well FM delivers support to ongoing operations while optimizing the use of
limited financial resources.
* Evaluating FM operations against measures of effectiveness and measures of performance.
6-37. The focus of assessment differs during planning, preparation, and execution of FM operations.
During planning, assessment focuses on developing and maintaining an understanding of the current
situation and developing the assessment plan. During preparation and execution, financial managers focus
assessment on monitoring the current situation and evaluating FM operations progress toward stated
objectives. FM leaders build their assessments from personal observations, the common operational picture,
the FM running estimate, input from subordinate FM units and feedback from supported units and/or |
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activities. Collaboration with higher, subordinate and adjacent commanders and staff personnel, supported
by qualitative and quantitative data, contribute to the ultimate usefulness of the assessment plan. For more
information on the design and construction of assessment plans refer to ADP 5-0.
6-38. The assessment process is comprised of three activities:
* Monitoring the current situation to collect relevant information.
* Evaluating progress toward attaining end state conditions, achieving objectives, and performing
tasks.
* Recommending directing action for improvement.
6-39. These activities occur continuously throughout the assessment process and are logically sequenced
during the operations process. All levels of FM units and/or activities (strategic through tactical), conduct
assessments of its operations. The extent, depth, and rigor of the assessment is commensurate with the
availability of expertise, personnel, and systems support to perform assessments.
6-40. In theater, FM leaders and staff monitor conditions associated with FM operations to collect relevant
information that can be compared to the forecasted situation described in the commander’s intent and
concept of the operations. FM systems provide quantitative data that when analyzed and interpreted can
produce meaningful feedback on the progress of FM operations. Monitoring procedures are outlined in the
assessment plan and IAW established SOPs. Many of the FM systems possess management report
functions that generate statistics useful in assessing section, activity, or unit performances especially within
the commercial vendor services. Financial managers must not solely rely on FM systems for their
assessment data. Liaison with other activities (e.g., OCS, and supported units) and higher headquarters can
provide meaningful information that would provide a better assessment of FM operations. Customer
feedback is always relevant in developing statistics on FM operations effectiveness and efficiency.
6-41. Evaluating progress of FM operations requires the comparison of those conditions pertinent to the
operation against MOEs and MOPs to judge progress toward desired conditions. Evaluation is the heart of
the assessment process and informs FM personnel on operational successes and deficiencies. Evaluation
also provides insight on how operations may be improved to better accomplish the mission. Criteria in the
form of MOEs and MOPs aid in determining how well FM operations perform desired tasks, achieve
mission objectives, and attain a desired end state. A MOE is a criterion used to assess changes in system
behavior, capability, or OE that is tied to measuring the attainment of an end state, achievement of an
objective, or creation of an effect (JP 3-0). MOEs focus on the question of “Are we doing the right thing?”
Examples: An FM MOE for the objective of reducing physical U.S. cash in theater may be the
dollar amount of physical U.S. cash circulating in theater or the total number of contract
payments made via EFT. A MOP is a criterion used to assess friendly actions that are tied to
measuring task accomplishment (JP 3-0). A MOP assists in determining how well FM activities
are performing FM tasks. These measures are easier to define, develop and track using FM
systems or other feedback mechanisms. Examples of FM MOPs are obligation rates, pay support
accuracy reports, AUT, Merged Accountability and Fund Reporting (MAFR), contract payment
timeliness and accuracy reports, and case management system statistics.
6-42. FM personnel develop MOPs and MOEs ICW other elements of the Fiscal Triad in order to ensure
that operational objectives are properly supported by FM operations. Financial managers develop MOP and
MOE benchmarks to determine whether FM operations are progressing, regressing or require adjustment.
These benchmarks are based on FM standards prescribed in regulations, statute, theater policy or
established FM best practices.
6-43. Monitoring and evaluating are critical activities in the assessment process; however, FM personnel
must use the information gleaned from monitoring and evaluating activities to develop and implement
adjustments and improvements to FM operations. Based on the evaluation of progress, FM leaders and staff
personnel recommend to the commander or make adjustments within their delegated authority. Assessment
diagnoses threats, suggests improvements to effectiveness, and reveals opportunities. FM staff personnel
present the assessment results, their conclusions, and recommendations to the commander as an operation
develops. As improvements are made, the assessment process continues monitoring and evaluating the |
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adjustments in FM operations. FM personnel should refer to ADP 5-0 for specific instruction on the
assessment process and development of an assessment plan.
SECTION V– OPERATION PLAN AND ORDER DEVELOPMENT
6-44. This is an administrative guide, instructions, and format for developing the FM Appendix to the
Service Support Annex of an operation plan (OPLAN) or operations orders (OPORD). Refer to ADP 5-0
for further guidance in the preparation of plans and orders.
6-45. The FM Appendix to the Service Support Annex of the OPLAN or OPORD, table 6-1, is developed
in conjunction with—and in support of—the FM running estimate and operational planning process. The
FM Appendix identifies and resolves FM support problems and funding responsibilities in advance of plan
implementation. Command responsibilities and functional alignments for providing FM support should be
described and defined in the Appendix and in sufficient detail to ensure that provisions are made to support
all mission essential tasks. Furthermore, the Appendix should outline special program funding and
procedures unique to the operations (e.g., CERP, DOD Small Rewards Program, Train and Equip
programs). Requirements validation and funding procedures are essential elements of an FM Appendix. FM
planners should specify all spending thresholds that require approval by commanders and/or acquisition
review boards (Joint Acquisition Review Board, Combined Acquisition Review Board). Finally, any
reporting requirements and formats should be identified and explained in the FM Appendix.
Note: Providing entitlement information to financial managers and DFAS is critical to ensuring
accurate payment of personnel deploying to support joint force operations; hence, the
information should be communicated as soon as possible.
Table 6-1. FM appendix to the service support annex of the OPLAN and OPOR
(Change from verbal orders, if any)
Copy ## of ## copies
Issuing headquarters
Place of issue
Date-time group of signature
Message reference number
Include heading if attachment is distributed separately from the base order or higher-level
attachment.
Tab B (Financial Management Operations TO Appendix 2 (Personnel Services Support)
TO Annex F (Sustainment) TO OPERATION PLAN/ORDER [number] [(code name)]
[(classification of title)]
References: Field Manual 1-06, ADP 4-0
Time Zone Used Throughout the Order:
1. (U) Situation. Include information affecting Financial Management (FM) Operations that
paragraph 1 of the OPLAN/OPORD does not cover or that needs to be expanded.
a. (U) Area of Interest. Refer to Annex B (Intelligence) as required.
b. (U) Area of Operations. Refer to Appendix 2 (Operation Overlay) to Annex C
(Operations).
(1) (U) Terrain. List all critical terrain aspects that impact FM operations. Refer to
Tab A (Terrain) to Appendix 1 (Intelligence Estimate) to Annex B (Intelligence) as required.
(2) (U) Weather. List all critical weather aspects that impact FM operations. Refer to
Tab B (Weather) to Appendix 1 (Intelligence Estimate) to Annex B (Intelligence) as required. |
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Table 6-1. FM appendix to the service support annex of the OPLAN and OPOR
c. (U) Enemy Forces. List known and templated locations and activities of enemy
functional area units for one echelon up and two echelons down. List enemy maneuver and
other area capabilities that will impact FM operations. State expected enemy courses of action
and employment of enemy functional area assets.
d. (U) Friendly Forces. Outline the higher headquarters’ plan as it pertains to FM. List
designation, location, and outline of plan of higher, adjacent, and other FM assets that support
or impact the issuing headquarters or require coordination and additional support. List the
component FM organizations and the specific tasks each is assigned to support the FM
operations of the plan. Summarize their capabilities. Include non-U.S. military forces and U.S.
civilian agencies, such as banking institutions or embassies, which may help provide FM
support (or may themselves require support).
e. (U) Unified Action Partners. Identify and describe organizations in the area of operation
that may be entitled to or receive some level of FM support. Identify and describe other
organizations in the area of operation that may impact the conduct of FM operations or
implementation of FM initiatives.
f. (U) Civil Considerations. Refer to Annex K (Civil Affairs Operations) as required.
g. (U) Attachments and Detachments. List units attached or detached only as necessary to
clarify task organization.
h. (U) Assumptions. List any FM-specific assumptions that support the annex development.
State realistic assumptions and consider the effect of current operations on FM operations.
These could be similar assumptions used by the components when developing cost estimates for
the operation.
2. (U) Mission. State the FM mission in support of the base plan or order.
3. (U) Execution.
a. (U) Scheme of Support. Describe how financial management operations supports the
commander’s intent and concept of operations. Establish the priorities of support to units for
each phase of the operation. Identify and provide key tasks and specific guidance for Pre-
Deployment and Mobilization Operations, Deployment and unified Land operations and
Redeployment and Demobilization Operations. Refer to Annex C (Operations) as required.
(1) (U) Financial Management Operations. Identify key tasks (specified and implied)
and requirements to support current and future operations throughout the assigned area.
Remain flexible and responsive to constant changes to the operating environment. Identify
areas that will impact FM such as transportation, communication and contracting.
(a) (U) Disbursing Support. Describe all information to support efficient
disbursing operations and require significant logistics and planning capabilities such as air
and ground transportation, specialized equipment, secured facilities, armed escort and
hardware/software requirements. Include limitations established by DOD, DA and theater
policies for local and partial payments, special requirements for pay agents and field ordering
officer appointments, currency conversion, funding of subordinate FM units and its
replenishment, execution of E-commerce initiatives, and other issues that impact disbursing
operations. Identify key components and participants of the procurement process and the
coordination that needs to take place in order to reduce the probability of improper or illegal
payments. Specify reporting procedures and lines of communication among all parties involved
in the process. |
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Table 6-1. FM appendix to the service support annex of the OPLAN and OPOR
(b) (U) Accounting Support and Cost Management. Describe accounting support
related to FM. Procedures to reconcile, analyze, and account for transactions affecting
disbursing, pay support, and commercial vendor services (CVS).
(c) (U) Banking Support. Describe all information that affects the selection of a
limited depositary (LD) and the establishment of a limited depositary checking account (LDA).
Describe currency resupply process and include limitations established by DOD, DA and
theater policies. Provide information on any E-commerce initiatives that affect banking
support within the assigned area. Determine the laws and regulations of local banks by
establishing a relationship with the local embassy and the Central Bank of the host country.
Determine what banks are within the AOR and conduct an analysis to determine feasibility of
establishing a bank.
(d) (U) Internal Control. Describe all information included in the Managers’
Internal Control Program (MICP). Establish specific responsibilities and timelines in the form
of written guidance/policy. Provide direct instructions on key actions, training requirements,
evaluations, quality assurance and internal review inspections, and any other requirement that
supports the MICP. Also describe metrics use to evaluate performance.
(e) (U) Fund the Force. Identify the sources of funds available from various DOD
and other Federal agencies. Acquire the funds and distribute funds to subordinate elements to
support the mission and commander’s intent. Describe information on what resources are
required and available to support the mission and commander’s intent. Information includes,
but is not limited to, contracting, transportation, multinational support, support to other
agencies and international organizations, foreign humanitarian assistance, and force
sustainment.
(f) (U) Accounting Support and Cost Management. Describe the accounting
support to ensure that proper financial resources are available in order for the commander to
make resource informed decisions. Describe procedures to track costs in order to determine
obligation rates and conduct analysis on use of funds in support of the mission and to identify
trends to foresee resourcing challenges.
(g) (U) Internal Control. Describe all information included in the Manager’s
Internal Control Program (MICP). Establish specific responsibilities and timelines in the form
of written guidance/policy. Provide direct instructions on key actions, training requirements,
evaluations, quality assurance and internal review inspections, and any other requirement that
supports the MICP. Also describe metrics use to evaluate performance.
(h)(U) Tasks to Subordinate Units. List FM tasks assigned to specific FM
components not contained in the base order.
(i). (U) Coordinating Instructions. List only instructions applicable to two or more
components not covered in the base order. Identify and highlight any FM-specifics such as
timing; information; agreements with the host country, multinational forces, and U.S.
Government and nongovernmental agencies; DFAS Crisis Coordination Center and
Expeditionary Support Organization (ESO) responsibilities; guidance on special programs and
OMA funding, validation, funding and procedures.
4. (U) Sustainment. Identify priorities of sustainment for FM key tasks and specify additional
instructions as required. Include guidance on contracting requirements, logistic support
relationships, reporting requirements, and any particular personnel or augmentation
requirements. Refer to Annex F (Sustainment) as required. |
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Table 6-1. FM appendix to the service support annex of the OPLAN and OPOR
5. (U) Mission Command.
a. (U) Command. State the location of key FM leaders and command relationships.
b. (U) Liaison Requirements. State the FM liaison requirements not covered in the base
order.
c. (U) Signal. Address any FM-specific communications requirements such as connectivity
(secure internet protocol router or nonsecure internet protocol router), bandwidth, port
accessibility, hardware setup and systems vulnerabilities. Refer to Annex H (Signal) as
required.
ACKNOWLEDGE: Include only if attachment is distributed separately from the base order.
[Commander’s last name]
[Commander’s rank]
The commander or authorized representative signs the original copy of the attachment. If the
representative signs the original, add the phrase “For the Commander.” The signed copy is the
historical copy and remains in the headquarters’ files.
OFFICIAL:
[Authenticator’s name]
[Authenticator’s position]
ATTACHMENTS: List lower level attachment (e.g. appendices, tabs, and exhibits).
DISTRIBUTION: Show only if distributed separately from the base order or higher-level
attachments.
[page number]
SECTION VI – PLANNING AND OPERATIONS ACTIVITIES
6-46. The following is a checklist of related FM activities that should be considered in planning and
executing FM operations. These activities are not necessarily limited to a single phase. The following list is
not all inclusive and the categorizations are for organizational purposes. FM personnel such as FM staff
members (theater Army through BCT S-8, FMSC, FMSU, FMSD and ESC FM SPO) and FM unit
leadership (FMSU through FMSD) should review these activities and determine which activities are
applicable to their mission and organizational level.
PRE-DEPLOYMENT OPERATIONS
6-47. As part of Financial Management operations conducted during mobilization and pre-deployment, the
financial manager should—
* Deploy as a member of the Pre-Deployment Site Survey team.
* Provide advice and assistance to command and staff.
* Determine specified, implied, and essential tasks for unit(s) and agencies to accomplish the
mission.
* Determine unit preparation, packing, and crating costs.
* Determine method of deployment/redeployment and begin initial coordination with the
transportation officer. |
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* Develop cost capturing methods, cost centers, FCA, fund cite, etc. Obtain the correct cost
reporting codes and formats from higher headquarters’ G-8.
* Ensure the lead Service has been designated, when appropriate.
* Develop and maintain the FM running estimate and participate in headquarters planning process.
Participation should begin during pre-deployment and continue throughout the operations until
redeployment is complete.
* Prepare the FM Appendix of the unit OPORD and review OPLANs, to include the concept of
support. Coordinate with FMSC and/or ESC FM SPO for information regarding financial
management operations as needed to develop the FM appendix. The appendix should include
FM tasks and guidance for subordinate commanders and FM units.
* Review requirements to the establishment of funding responsibility, to include contracting and
procurement.
* Coordinate and understand requirements of Unified Action Partners.
* Establish and identify resourcing processes and approval authorities for requirement
development, validation and funding (all levels, BCT – ASCC).
* Review interagency financial support agreements.
* Determine if support is required for other agencies, such as morale, welfare, and recreation, the
American Red Cross, NGOs, and public affairs.
* In coordination with the G-4, determine availability of HNS, coalition, and/or AIK support, and
establish reporting and reimbursement requirements. In coordination with the G-4 and staff
engineer, initiate wartime military construction requests or reprogramming action.
* Determine any unique reimbursement procedures, if necessary, to capture incremental costs.
* Request special appropriations, if required.
* Identify and understand the various appropriations, authorities, and agreements associated with
the deployment.
* Implement procedures to track multinational support costs and review billing procedures.
* Review cost estimates, when required.
* Coordinate with the SJA to ensure legal considerations are reviewed.
* Provide fund certification.
* Determine the commitment accounting automation plan.
* Identify fiscal year-end closeout plan.
* Identify and determine management control requirements.
* Prepare the FM Appendix of the unit OPORD and review OPLANs to develop the concept of
support.
* Consolidate and analyze the economic assessment for the AO.
* Provide financial advice and assistance.
* Determine if foreign currencies are to be used and their exchange rates.
* Develop requirements for check cashing; emergency payments; currency conversion; funding of
pay agents; foreign currency conversion; solatia payment; recording of cost data; travel; civilian
pay; and funds disbursement.
* Determine what duty conditions have been designated for the operation by the commander.
* Determine if group travel has been declared.
* Coordinate entitlements, if required, for Reserve Component (RC) participation.
* Coordinate with the G-1 to ensure consistency of entitlements and level of support. If required,
request determination of hostile fire pay, imminent danger pay, hardship duty pay, family
separation allowance, special leave accrual, and combat zone tax exclusion.
* Publish guidance, when required, on UN entitlements, leave, and observers to peacekeeping
organizations.
* Determine appropriate check cashing limits and recommend approval by the commander.
* Coordinate with the DFAS crisis coordination center. |
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* Coordinate with USAFMCOM for E-commerce (e.g., SVC, OTCnet, ITS.gov) requirements.
* Determine accounting and central funding support needed for the operation.
* Determine banking laws, regulations, and banking support requirements.
* Determine appropriate quantities of foreign currencies and formalize resupply procedures.
* Determine NEO support requirements.
* Prepare to provide currency funding support to other U.S. and multinational organizations in the
AO.
* Determine the requirement for LDAs.
* Prepare for solatia payment and payments for other claims.
* Coordinate with the SJA to ensure legal considerations are reviewed.
* When possible, deploying FMSU leadership, SUST BDE, FM SPO and STB leadership should
conduct predeployment coordination (preferably face-to-face) in order to begin building
essential working relationships and integrating the FM unit and personnel into the Sustainment
Brigade.
* Coordinate with signal support assets to ensure adequate bandwidth and other communication
support is sufficient to support FMIS.
DEPLOYMENT AND UNIFIED LAND OPERATIONS
6-48. As part of FM operations in deployment and unified land operations, the financial manager should—
* Co-locate and conduct funding with logistic, contract, and disbursing/pay agent assets.
* Coordinate FM aspects of HNS and AIK.
* Plan for handling battlefield effects and identify the funding source for anticipated requirements.
* Capture and track costs IAW DFAS published guidelines and higher headquarters policy.
* Implement the cost management process in budget execution.
* Provide reports as required, including those needed for reimbursement by a HN, a foreign
nation, NGOs, or other Federal agencies.
* Coordinate with the SJA (co-locate if possible) to ensure that legal considerations are reviewed.
* Provide fund certification.
* Establish and monitor commitment accounting automation system(s).
* Monitor established management controls.
* Participate as required in contract review process and requirements boards.
* Perform central funding and accounting (both appropriated and nonappropriated) support, if
necessary.
* Support contracting and local procurement requirements.
* Control currency.
* Provide EPW and/or CI pay support, if necessary.
* Support NEO, if necessary.
* Provide pay support to joint and multinational forces, as well as designated civilians.
* Coordinate with the SJA to ensure availability of legal reviews.
STABILITY OPERATIONS
6-49. As part of FM operations in stability operations, the financial manager should—
* Identify and request additional sources of funds (by FY, if needed) in order to continue
sustainment of the operation.
* Enforce and adjust resourcing processes and approval authorities for requirement development,
validation and funding (all levels, BCT – ASCC).
* Continue to capture and track costs.
* Determine requirements, when necessary, for civil assistance funding. |
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* Coordinate with the SJA to ensure that legal considerations are reviewed.
* Provide fund certification.
* Monitor the commitment accounting automation system.
* Prepare for year-end closeout, if necessary.
* Prepare for internal and external audits.
* Monitor established management controls.
* Provide banking and cash management/currency support.
* Provide pay support to joint and multinational forces, as well as designated civilians.
* Provide CVS support.
* Establish pay support procedures for the remaining forces in-theater.
* Coordinate with USAFMCOM E-commerce directorate for E-commerce initiatives
implementation.
* Coordinate with the SJA to ensure that legal considerations are reviewed.
REDEPLOYMENT
6-50. During redeployment the financial manager should—
* Coordinate and develop FM requirements for redeployment support.
* Close out contingency funding operations and conduct hand-off procedures with the responsible
component.
* Coordinate cost capturing for recovery operations.
* Coordinate for reconstitution estimates/costs to repair equipment.
* Provide fund certification.
* Seek reimbursement for cost offset or incremental costs.
* Submit final cost report using SF 1080 in accordance with DODFMR Volume 12.
* Submit after action review.
* Close out the accounts of pay agents.
* Ensure Service Members’ deployment related entitlements are stopped.
* Audit pay accounts.
* Close contingency disbursing station symbol numbers (DSSNs).
* Convert from contingency cost centers back to home station cost centers.
* Request additional obligation authority to replace or repair damaged or destroyed equipment. |
1-06 | 147 | Chapter 7
Management Internal Controls
We are all accountable for managing the Army’s dollars and resources. Whether
involved in Financial Management, logistics, acquisition, contracting, payroll, or
other business functions everyone has an impact on the Army's financial statement.
Everyone must know their role as the Army strengthens its financial operations.
Accountability leads to a stronger Army and a clean audit opinion, which proves we
are responsible stewards of taxpayer dollars and justifies funds we request from
Congress. Ultimately, accountability and audit readiness are inherent to the Army’s
mission because they allow us to better support the warfighter through better
management of Army resources.
The Army must transform itself to meet the financial and managerial requirements of
the digital age, producing timely, accurate, and relevant information that is
consistently auditable. To achieve this, the Army has created a Financial
Improvement Plan (FIP) to reach audit readiness. The FIP is aligned with the Office
of the Under Secretary of Defense (Comptroller) (OUSD(C)) Financial Improvement
and Audit Readiness (FIAR) Plan to improve financial management, prioritize
improvement activities, strengthen internal controls, and ultimately achieve
auditability. To achieve the OUSD(C) FIAR Plan objectives, the Under Secretary of
Defense (Comptroller) has identified two major financial improvement priorities: The
Department’s budgetary information, as contained in the Statement of Budgetary
Resources (SBR) and information regarding the Existence & Completeness (E&C) of
mission critical assets.
SECTION I – MANAGEMENT RESPONSIBILITES
7-1. Management Internal Controls must be embedded in everything the Army does and must be a
priority for every leader, commander, manager, and financial manager. Management Internal Controls is
not simply an adherence to a series of checklists but more importantly, a continuous process that ensures
the effective and efficient use of entrusted resources in mission execution across all areas of operations.
Continuous development and review of internal controls ensures that what should happen in our daily
operations does happen. Promoting the wise use of resources, deter fraud, waste, and abuse, and protect
resources – our dollars, our equipment, and most importantly, our people. Rooted in the professional
military ethic, the Army is a trusted institution with leaders committed to doing what is right in all aspects
of operations, which includes enforcing management internal controls.
7-2. The Army management internal controls are designed to ensure that programs operate as intended,
areas needing improvement are identified and reported, and that timely corrective action is taken.
Management internal controls promote these goals through periodic evaluation of key controls and full
disclosure of any shortcomings that are detected. Commanders and managers at all levels should
understand the importance of evaluating controls in an objective manner and disclosing the results. The
Army must have management controls that add value and demonstrate a commitment to effective
stewardship of resources entrusted to the Army by the American people. |
1-06 | 148 | Chapter 7
ARMY MANAGEMENT RESPONSIBILITY FOR INTERNAL CONTROLS
7-3. The Army is required to develop and maintain effective internal controls over all its programs.
Commanders and managers at all levels must understand the importance of evaluating their internal
controls in an objective manner and sharing the results with others. Internal controls are the policies and
procedures used every day to ensure the Army achieves its planned objectives of effective and efficient
operations, reliable financial reporting, and compliance with applicable laws and regulations. Internal
control standards encourage appropriate use of Army resources and deter fraud, waste, and abuse. Army
commanders and managers are responsible for ensuring that effective internal controls are developed,
implemented, documented, and assessed for all programs. Additionally, Army commanders and managers
must identify required improvements, take corrective actions, and report internal control issues through the
annual management assurance statement.
7-4. Leadership is crucial to implementing management controls. Leaders must stress the importance of
effective and efficient internal controls to their mission, ensure their staffs understand their responsibilities
in the process and demand integrity in the reporting of internal control problems and the corrective actions
taken to resolve them. An overarching aspect of management responsibilities is for the Army to take
prompt and effective actions to correct weaknesses.
KEY MANAGERS’ INTERNAL CONTROLS CONCEPTS
7-5. Each FM manager should be aware of the different concepts that relate to the managers’ internal
control program. The understanding of each area will improve the application of controls and monitor tools.
Stewardship
7-6. Stewardship is the Army’s responsibility to the American people to manage and properly utilize the
resources provided to the Army in a manner that reflects and matches the trust and confidence in which
those resources are given. Stewardship is a principle of FM and is further defined in chapter 1.
Internal Controls
7-7. Internal controls are an integral component of an organization’s management that provides
reasonable assurance that the following objectives are being achieved:
* Effectiveness and efficiency of operations.
* Reliability of financial reporting.
* Compliance with applicable laws and regulations.
* Prevention and deterrence of fraud, waste, and abuse.
7-8. Internal controls are an inherent component of operations. It is not a onetime event, but a continuous
process of actions and activities that occur throughout an organization’s operations. People are a key
component of an effective internal controls program. The responsibility for good internal controls rests with
commanders and managers. Commanders and managers set the objectives, put controls in place, and
monitor and evaluate the controls. All personnel in the organization play important roles in making it
happen.
Reasonable Assurance
7-9. Reasonable assurance refers to a satisfactory level of confidence that management controls are
adequate and are operating as intended. Reasonable assurance recognizes that there are acceptable levels of
risk that cannot be avoided because the cost of absolute assurance would exceed the benefits derived.
Material Weaknesses
7-10. The absence or ineffectiveness of management controls constitutes a management control weakness
that must be corrected. Whether the weakness is serious enough to be considered and reported to the next
level of command is a management decision based on criteria established in applicable Army regulations. |
1-06 | 149 | Management Internal Controls
The ability of commanders and managers at all levels to detect, or be aware of, management control
weaknesses and take corrective action is a fundamental principle of the Federal Managers Financial
Integrity Act (FMFIA) and Management Control.
Key Management Controls
7-11. Key management controls are those controls that are absolutely essential to ensuring that critical
processes operate as intended and that resources are safeguarded from fraud, waste, and misuse. HQDA
functional proponents are responsible for identifying key management controls based on risk.
Separation of Duties
7-12. To reduce the risk of error, waste, or wrongful acts, or to reduce the risk of those acts going
undetected, no one individual should control all key aspects of a transaction or event cycle. Rather, duties
and responsibilities (e.g., authorizing; approving and recording transactions; making payments; preparing
checks and check payments; certification of funding; reviewing and audition) should be assigned to
separate individuals to ensure that effective checks and balances exist to minimize risk of loss to the
government to the greatest extent possible. Appropriate separation of duties is not always practical or
possible due to time constraints, manpower shortages, or the use of automated systems. The commander
shall be aware of situations where valid, long-standing separation of duties cannot be achieved, recognize
that internal controls have been weakened as a result of such, and make every effort to compensate for loss
of the internal control. Unique situations resulting in an inability to separate appropriate responsibilities
shall be reported to the applicable DFAS or Service commander, together with a request for a waiver and
recommendations for compensating for the loss of the internal control.
ESTABLISHING ACCOUNTABILITY AND STEWARDSHIP
7-13. Since the enactment of key FM reforms, the Army has made substantial progress in improving FM
practices. The FM community has to address the following requirements for establishing critical
accountability and fiscal stewardship for the Army:
* Transforming FM to embrace an enterprise mindset.
* Transforming FM staffs and units and their business practices.
* Improving financial reporting to achieve auditable financial statements.
* Modernizing FM systems.
* Monitoring remaining internal control weaknesses until corrected.
* Building a competent and trained FM workforce for the future.
7-14. As indicated by the DODIG report of internal controls over payments made in Iraq, Kuwait, and
Egypt, the Army and the FM community must make improvements in checking high risk areas. The
vignette below describes the impact of weak internal controls on theater financial management operations.
Vignette: DODIG Report of Internal Controls Over Payments Made in Iraq, Kuwait, and Egypt
(May 2008)
Background. Between April 2001 and June 2006, the Army made 183,486 commercial and
miscellaneous payments, totaling $10.7 billion from seven (7) Army contingency disbursing
stations in Iraq, Kuwait, and Egypt. The Defense Criminal Investigative Service determined that
there had been only a limited review of completeness, accuracy, and propriety of these payment
vouchers and that the potential existed for fraud, waste, and abuse. As a result, DODIG reviewed
the payment vouchers to determine whether internal controls over the payments supporting
Global War on Terror provided reasonable assurance that payments were properly supported and
recorded.
Results and Management Comments. Department of Defense (DOD) did not have adequate
guidance to support financial operations in supporting military finance operations. DOD did not
have adequate internal controls over funds disbursed by contingency disbursing stations. |
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Commercial Payments Findings. The Army did not maintain adequate internal controls over
commercial payments to ensure that they were properly supported. DODIG estimates that the
Army made $1.4B in commercial payments that lacked the minimum supporting documentation
and information for a valid payment, such as certified vouchers, proper receiving reports, and
invoices.
Payments to Foreign Governments Findings. DOD did not maintain a complete audit trail to
facilitate transparency regarding $1.8 billion of seized and vested assets payments made to Iraqi
representatives to ensure that the funds were accounted for, audited, and used to assist the Iraqi
people. In addition, the DOD did not maintain a complete audit trail over $134.8 million in
Commander’s Emergency Response Program (CERP) payments made to representatives of
foreign governments and therefore unable to provide reasonable assurance that the seized and
vested assets funds disbursed were fully used to assist the Iraqi people.
AUTHORITY
7-15. The Federal Managers’ Financial Integrity Act (FMFIA) of 1982 (commonly referred to as the
Integrity Act) requires the head of each executive agency to:
* Establish internal controls to provide reasonable assurance that obligations and cost are in
compliance with applicable laws.
* Ensure funds, property, and other assets are safeguarded against waste, loss, unauthorized use or
misappropriation.
* Ensure revenues and expenditures are properly accounted for and recorded.
* Ensure programs are effectively and efficiently carried out according to applicable law and
management policy.
* Report annually to the President and Congress on whether these internal controls comply with
requirements of the Integrity Act.
7-16. Army Regulation 11-2, Managers’ Internal Control Program, prescribes policies and responsibilities
for the Army’s Managers’ Internal Control Program. This regulation applies to all Army organizations and
programs; reinforces the accountability of Army commanders and managers for establishing and
maintaining effective internal controls; and provides greater flexibility in their evaluations of internal
controls.
“No Army activity or program is exempt from the requirements of the Integrity Act. This
includes all personnel assigned to Army organizations and reporting organizations for which the
Army is executive agent.” – AR 11-2
RESPONSIBILITIES
7-17. The Deputy Assistant Secretary of the Army (Financial Operations) (DASA-(FO)) is designated the
executive agent for internal controls and is the office the Army uses to manage the Managers’ Internal
Control Program (MICP) to meet the requirements of the FMFIA which includes the financial reporting
requirements.
7-18. The DASA-(FO) will publish annual guidance that includes OMB focus areas for the year;
instructions for preparation of individual statements of assurance; information to support assessments; how
well the organization complied with applicable laws and regulations for internal controls and financial
reporting; reporting new material weaknesses; and update the status of prior-year weaknesses.
7-19. The senior responsible official of the reporting organization has overall responsibility for ensuring
the implementation of an effective management control process with that organization and to:
* Provide leadership and support needed to ensure that internal controls are in place and operating
effectively. |
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* Submit an annual statement of assurance that accurately describes the status of internal controls
within their organization to include any material weaknesses and plans for corrective action.
* Designate an internal control administrator (ICA) to administer the internal control process
within the reporting organization and to serve as a focal point for all internal control matters.
7-20. Assessable unit manager (AUM). This is the focal point of the internal control program for all
control evaluations and where the Army relies on its leaders to make the most significant impact in terms of
having quality internal control programs. Leaders at this level should provide adequate controls over all its
programs to ensure effective use of resources. As weaknesses are identified, the AUM takes immediate
corrective action to fix the weakness and report them to the higher commander. The AUM is designated by
the head of the reporting organization and must be at least a Colonel or General Schedule 15. The AUM
provides leadership and support; executes an internal control plan; conducts evaluations; maintains required
documentation; and certifies the results of evaluations.
7-21. Internal Control Administrator (ICA). The ICA is designated by the senior responsible official to
administer the management control process within the reporting organization. The ICA is the critical
position that ensures the command is meeting the objectives of the management control program on behalf
of the AUM. The ICA will:
* Advise the senior responsible official.
* Keep commanders and managers informed on management control matters.
* Identify requirements and provide training.
* Maintain the Internal Control Evaluation Plan (ICEP).
* Coordinate and assist with the preparation of the organization’s annual assurance statement.
* Ensure material weaknesses are tracked until corrected.
INTERNAL CONTROL PROCESS
7-22. A common misconception exists that internal controls require less attention during OCO. Intense
congressional scrutiny of contracting and procurement operations in Operation Iraqi Freedom and
Operation Enduring Freedom, as well as media accounts documenting lapses of internal controls in both
theaters, demonstrate the significant importance internal controls play in Army operations, not only in
peacetime but during OCO as well. To prevent fraud, waste, and abuse, internal controls should be in place
for high-risk areas such as cash, fuel, ammo, and rations. Without proper management controls,
commanders are placing their units and mission accomplishment at risk. This section covers the essential
elements of the internal control process.
ESTABLISHING MANAGERS’ INTERNAL CONTROL PROGRAM
(MICP)
7-23. Units deploying to a theater of operation must establish internal controls. The senior FM leader in the
AO establishes the MICP. The program establishes specific responsibilities and timelines in the form of
written guidance/policy. The guidance/policy directs key actions, like appointing ICAs, training
requirements, conduct of the evaluations through the ICEP, and the requirement to submit material
weaknesses and annual assurance statements. Use of existing reviews and inspections should be
emphasized as an alternative to the use of checklists.
ESTABLISHING FINANCE OPERATIONS INTERNAL REVIEW
PROGRAM AND QUALITY ASSURANCE (QA) PROGRAM
7-24. FM units deploying to a theater of operations must establish an internal review program and QA
program. Regardless of where the FM units are placed within the SUST BDE, the SUST BDE CDR bears
overall responsibility for compliance of FM units with established internal controls and works with the
FMSC to ensure that those FM units under his or her command and control do in fact comply with all
applicable laws and regulations governing FM operations. The senior FM unit (FMSC or FMSU) in the AO |
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establishes the internal review and quality assurance program. The internal review and quality assurance
program establishes specific responsibilities, checklists, and inspection schedules in the form of written
guidance/policy. As part of the internal review and QA program, it is important to establish and track
metrics to evaluate performance, develop incentives, and use evaluation results to identify training
deficiencies. Accurate payments and prudent cash management practices are areas of emphasis for FM
operations.
7-25. Figure 7-1 illustrates how management control is the overarching theme that encompasses Army
programs such as the MICP, financial management unit’s internal review, and Army quality assurance
programs and how all three are charged with deterring fraud, waste and abuse.
Figure 7-1. Management control
7-26. Internal controls are not just about checklists. The management control program allows and
encourages commanders and managers to use their existing reviews and inspections in lieu of using a
standard checklist. The use of checklists leads to the perception that internal controls are a one-time task
done to fill an annual requirement.
7-27. In order to be effective, the internal control process must be a continuous process. One way to
ensure a continuous process is by using existing command programs already in place that allows
commanders and managers to continuously assess their controls and take corrective action immediately.
Another method to ensure a continuous process is to schedule monthly internal reviews of programs versus
conducting annual reviews. This will ensure a twelve month visibility of the programs and give internal
control personnel year round experience with reporting findings and weaknesses. The use of an existing
checklist will meet the minimum requirements of assessing controls, however, if a checklist is used, the
management control administrator should attempt to augment the checklist with additional justification
from the functional proponent responsible for the assessment. |
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Financial Liability Investigations of Property Loss, AR 15-6, Investigations, and Command
Inspection Program results are potential sources of information that could identify control
weaknesses. Established meetings with the SJA and Inspector General should take place with the
sole purpose of identifying internal control areas of concern and emerging trends that warrant
additional review.
7-28. In order to support their commands in identifying weaknesses and taking corrective action, it is
imperative that all FM Soldiers are well versed in the Integrity Act, internal controls, and the MICP. The
Army relies on FM Soldiers to lead the effort and promote effective controls.
CONSOLIDATING THE FINANCIAL MANAGEMENT UNITS
INTERNAL REVIEW PROGRAM WITH THE MICP FUNCTIONAL
REVIEW
7-29. As the single point of entry for all FM in theater, the TA G-8 consolidates all internal control
weaknesses to include the financial management units internal control findings and weaknesses. With the
merger of RM and FO as FM operations, all findings will be included in the theater Army MICP annual
statement of assurance. The MICP functional findings/weaknesses work through the normal G-8 staffs (i.e.,
corps, div, BCT). The FMSC is responsible for ensuring all FM (i.e., FMSU and FMSDs) findings and
weaknesses are reported to the TA G-8. The FMSU reports its FMSD findings to the SUST BDE and the
FMSC. The FMSC will maintain coordinating efforts with DFAS. The FMSC will ensure any external
audit agency (i.e., GAO, DODIG, AAA) audit/review of any FM unit is included in the ASCC G-8MICP.
See figure 7-2 for a full representation of this process.
Figure 7-2. ASCC G-8 Management Internal Control Program (MICP) |
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ASSESSMENTS AND CORRECTIVE ACTIONS
7-30. Key aspects of management internal controls are the actual assessments and the necessary corrective
actions that need to take place. The Integrity Act and all applicable laws and regulations require
commanders and managers to identify weaknesses through continuous assessments, document any
weakness, and most importantly, take the necessary steps to ensure the weakness is corrected.
7-31. Another required aspect of the program is the sharing and reporting of information. As weaknesses
are reported through higher headquarters, commands are encouraged to share results of the reviews with
other subordinate units and commands to determine if similar weaknesses apply to their operations. Ideally,
the Army will develop management controls that will significantly reduce the findings and
recommendations from external reviews and audits. In order to accomplish this, the Army must approach
management controls aggressively and conduct thorough assessments. This section will give an overview
of the principles associated with assessments and the required corrective actions.
RISK ASSESSMENT AND CONTROL ACTIVITIES
7-32. In order to perform the required assessments, a determination of risk and a review of the control
activities in place have to be made.
Risk Assessment
7-33. Risk assessment is the identification and analysis of relevant risks of the functional area in order to
form a basis for determining how risks should be managed. Commanders and managers have to assess the
risk associated with the function and determine an appropriate level of control to ensure the function
operates as intended. The higher the level of risk, the more controls are required to ensure a level of
reasonable assurance. PAs and disbursing operations have a high level of risk that requires a high level of
control, as compared to routine supply requisitions that do not warrant as much control. In the ICEP five
year plan, higher risk areas are assessed more frequently.
Control Activities
7-34. Control activities are the policies, procedures, techniques, and mechanisms that enforce management
directives. Control activities help ensure that actions are taken to address or reduce risks. Control activities
include a wide range of activities such as approvals, authorizations, verifications, reconciliations, physical
security, and performance reviews. Records that document evidence of executing these activities need to be
created and maintained. Examples of control activities are:
* Reviews of performance by management.
* Information processing controls.
* Physical control of assets.
* Establishing and review of performance measures and indicators.
* Separation of duties.
* Complete, accurate, and timely execution of transactions and events.
Internal control evaluations
7-35. Internal control evaluations are detailed, systematic, and comprehensive reviews of management
controls to determine whether or not controls are in place, being used as intended, and effective in
achieving its purpose.
7-36. Formal control evaluations of key management controls must be conducted at least once every five
years. Any identified “high risk” area requires more frequent evaluations. The Assistant Secretary of the
Army (Financial Management & Comptroller) (ASA [FM&C]) through the DASA-(FO) will publish an
annual listing of areas that are to be reviewed that year along with a suggested or required method of
conducting the evaluation. The AUM certification will be documented on DA Form 11-2 (Internal Control
Evaluation Certification). |
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Methods for evaluating controls
7-37. There are two ways to evaluate controls:
* Use of the checklist. HQDA functional proponents publish checklists as an appendix in the
governing Army regulation.
* Use of existing management review process (alternative method). Existing reviews/inspections
meet, or can be modified to meet, the requirements of an internal control evaluation. These either
can be specific functional reviews/inspections (i.e. Information Assurance) or can be generic
(use of Inspector General inspection or a command inspection program).
7-38. Scope of the evaluation must be determined in terms of number of records and timeframe. Testing
methods can be an observation, interview, documentation review, or a simulation. The evaluation must
include the functional proponent conducting the evaluation, the method used to conduct the evaluation,
describe any internal control deficiencies that are detected, and the corrective actions that are to be taken.
All evaluations must be certified by the AUM.
REPORTING, CORRECTING, AND TRACKING MATERIAL WEAKNESSES
7-39. After assessments are performed and corrective actions are in place, the importance of keeping track
of the weaknesses found and the understanding of the many reports during the different processes, has a
major impact on the financial manager capability to inform the commander of the organization status and
responsibilities.
Reporting
7-40. Once a weakness is identified, a determination of whether or not it is a material weakness has to be
made. Material weaknesses are the absence or ineffectiveness of controls that must be corrected and
warrants the attention of the next level of command. Detailed guidance on reporting requirements is
provided in the DASA-(FO) instructions for the annual assurance statement. Factors that should be
considered in the determination of material weaknesses:
* Actual or potential loss.
* Sensitivity of the resources involved.
* Magnitude of personnel, funds, property, or other resources involved.
* Media interest or adverse publicity.
* Congressional interest.
* Diminished credibility or reputation of the command.
* Impairment of mission.
* Violation of statutory or regulatory requirements.
Correcting And Tracking Weaknesses
7-41. Each material weakness reported must include a plan of corrective action, which includes verification
that the weakness is corrected. Reporting commands are responsible for tracking weaknesses to ensure that
corrective actions are completed and the weakness is resolved.
Annual Statement of Assurance
7-42. The ASA (FM&C) is required to prepare an annual statement of assurance on internal control over
financial reporting. The annual statement of assurance provides an objective assessment of internal
controls. The statement is supported by annual feeder statements received from subordinate commanders.
These statements represent a personal certification of the commander on the effectiveness of internal
controls within their respective organizations. At a minimum, the assurance statement will consist of a
cover memorandum that includes:
* The operational and administrative statement of assurance required by the FMFIA.
* The internal controls statement must take one of three forms: |
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An unqualified statement of assurance where no material weaknesses are being reported:
I am able to provide an unqualified statement of reasonable assurance that my organization
internal controls meet the objectives of FMFIA overall programs, administrative, and
operations.
A qualified statement of assurance in which one or more material weakness is reported:
I am able to provide a qualified statement of assurance that internal controls meet the
objectives of FMFIA overall programs, administrative and operations with the exception of (the
number) material weaknesses.
A statement of no assurance in which no processes are in place to assess the internal
controls or there exist a pervasive amount of material weaknesses that cannot be assessed:
I can provide no assurance that my organization’s internal controls meet the objectives of
FMFIA overall programs, administrative, and operations.
* Additional supporting information required.
How the assessment was conducted to include the basis for reasonable assurance and any
other pertinent information and internal control program accomplishments.
Listing of any corrected or uncorrected material weaknesses being reported.
Use of Audit and Inspection Reports
7-43. Commanders are required to take corrective or preventive action based on the results of external
audits and inspections. Due to the amount of resources required to conduct operations, commanders must
expect Congressional interest in the form of GAO or other external audit agencies to report on the use of
resources during deployed operations. These outside audits provide valuable assessments of management
controls and are distributed to the organizations being audited. Commanders have to respond with their
action plan to correct the deficiencies.
SECTION II – AUDIT READINESS
7-44. Congress requires the Department of Defense to obtain an unqualified audit opinion of all financial
statements. Department of assured Congress that all of the services will have an auditable SBR.
7-45. The Under Secretary of the Army (USA), directed the Office of the Assistant Secretary of the Army
(Financial Management & Comptroller) (OASA(FM&C)) to develop a plan to address the Office of the
Under Secretary of Defense (Comptroller) (OUSD(C)) audit readiness requirements. OUSD(C) Financial
Improvement and Audit Readiness (FIAR) Guidance, (http://comptroller.defense.gov/fiar) was developed
to improve financial management, prioritize improvement activities, strengthen internal controls, and
ultimately achieve auditability. To achieve the FIAR Guidance objectives, the OUSD(C) has identified
three major financial improvement priorities:
* Improving the budget execution processes that affect the SBR.
* Verifying the E&C of mission critical assets and asset records.
* Maximizing the investment in enterprise resource planning (ERP) systems (e.g., the Global
Combat Support System—Army).
7-46. Army commands and installations can become audit ready by providing the following:
* An overview of audit readiness
* A description of key supporting resources available to commands and installations for becoming
audit ready
* A description of key internal control activities identified for each command and installation,
including authoritative guidance and/or policies related to the internal control activities and
internal control deviations discovered by Army audit readiness teams during testing.
7-47. One of the tools available to assist commanders is the Audit Readiness Checklist that provides
questions Commanders should ask leaders within their organization to ensure they have the records needed
to make sound resource decisions and the Department has the records needed to succeed in coming audits.
The checklist provides Commanders with the basic actions their organization should take to determine |
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whether they are audit ready and, if not, identify areas for improvement. The checklist helps Commanders
assess the efficiency of their organization and validate how well each function performs.
7-48. Under the leadership of the Assistant Secretary of the Army (Financial Management and
Comptroller), the Army is focusing on the following three priorities to achieve an auditable state:
* Improving the budget execution processes that affect the statement of budgetary resources.
* Verifying the existence and completeness (E&C) of mission-critical assets and asset records.
* Maximizing the investment in enterprise resource planning systems, such as the Global Combat
Support System–Army.
7-49. Financial managers maintain supporting documentation that satisfies the requirements of each
attribute for key controls within identified business processes in the GFEBS environment. The following
business processes are examples of areas where FM should establish mechanisms to promote stewardship
throughout the Army to achieve audit readiness:
* Army-wide Controls
* Contracts via Standard Procurement System
* Reimbursable Inbound
* Reimbursable Outbound
* Temporary Duty Travel
* Permanent Change of Station Travel
* Civilian Payroll
* Single Charge Card Solution
* Miscellaneous Payments
* Supply Procurement |
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Information Management
Information management is the science of using procedures and information systems
to collect, process, store, display, disseminate, and protect knowledge products, data,
and information. Its components are relevant information and information systems.
Relevant information is all information of importance to commanders and staffs in
the exercise of command and control. Information systems are the equipment and
facilities that collect, process, store, display, and disseminate information. These
include computers—hardware and software—and communications, as well as
policies and procedures for their use (ADP 3-0).
FM operations depend heavily on Financial Management Information Systems
(FMIS) as well as the interfacing information systems with which they share. The
processing and dissemination of timely and accurate FM information is critical to the
success of Army missions worldwide. Successful FM relies on FMIS coupled with
advanced communications networks. It is critical to FM that these systems are
thoroughly supported by a network that is dependable and can accommodate their
particular network requirements. However, even with the ideal system, FM units are
always prepared to resort to alternative processes in the event of major systems
failures or insufficient automation infrastructure. This chapter discusses the FM
hardware and software systems used to support FM operations.
SECTION I – SOFTWARE USED IN SUPPORT OF THE FM MISSION
8-1. FM unit commanders and staffs are responsible for FMIS within their units and sections. The
automation sections or designated automation personnel are responsible for executing information
management. The FMSU automation section provides support to assigned or attached subordinate FMSDs
as required in order to implement theater FM initiatives and support.
8-2. For projected and ongoing operations, coordination with the responsible supporting signal personnel
is the first step in ensuring proper communication requirements to support FMIS throughout the assigned
AO. FM personnel must be familiar with the requirements of each one of the FMIS. The supporting signal
personnel will provide the necessary signal support to satisfy the specific communication requirements for
FMIS (i.e., Secure internet protocol router or nonsecure internet protocol router connectivity), bandwidth,
port accessibility, hardware setup and systems vulnerabilities. Additional support specific to FMIS
operation and maintenance will be provided by the system proponent.
8-3. Figure 8-1 shows legacy systems in the FMIS that support or supported unified land operations in an
automated theater and how they connect with each other through the different functions of FM support. The
following paragraphs provide a brief description of all FMIS illustrated in figure 8-1 on page 8-2. |
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Figure 8-1. Financial Management Information Systems (FMIS)
RESOURCE MANAGEMENT SOFTWARE
8-4. During the funding process several systems are in place to allow the proper distribution and
execution of funds. Many of the legacy systems have been replaced by Enterprise Resource Planning
(ERP) solutions that help achieve more quantifiable and auditable results.
GENERAL FUND ENTERPRISE BUSINESS SYSTEM (GFEBS)
8-5. GFEBS is the Army’s integrated financial management system for funds distribution, execution and
reporting. The system provides real-time visibility of transactions as well as historical data; and the
availability of these data provides the analytic foundation for better-informed decision-making. GFEBS
standardizes business processes and transactions across the active Army, the Army National Guard and the
Army Reserve, and the Defense Financial and Accounting Service (DFAS).
8-6. GFEBS is not an update of existing legacy systems; but rather, a replacement of legacy systems with
a single integrated, web-based solution. GFEBS employs a commercial-off-the-shelf Enterprise Resource
Planning (ERP) solution. GFEBS complies with statutory and regulatory requirements, enforces internal
controls and is the Army’s centerpiece for achieving unqualified financial audit opinions. Consequently,
GFEBS and all ERPs require changes in business processes.
8-7. GFEBS is one of a small group of Army ERPs and interfaces (i.e., Exchanges data) with each of
them. Perhaps the most significant interface in a theater of operations is with the Global Combat Support
System-Army (GCSS-Army). GCSS-Army is primarily a logistics--but also a financial--system that is
tightly integrated with GFEBS. GCSS-Army provides logistics sustainment support in both tactical and
installation environments. GCSS-Army receives funds only from GFEBS, shares the financial management
module of GFEBS, and provides execution data to GFEBS for consolidation. |
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8-8. The GFEBS functional scope and processes include the General Ledger, Accounts Payable, Accounts
Receivable, Funds Management, Cost Management, Financial Reporting, and Property, Plant and
Equipment Management. GFEBS has the ability to empower leaders to make strategic business decisions
that have a direct and positive impact on America’s fighting force.
ENTERPRISE FUNDS DISTRIBUTION (EFD)
8-9. Currently in process of full implementation, EFD is the new Department of Defense system for
managing and distributing funds to the military Departments. EFD capabilities include distributing budget
authority to the military Departments, managing rescissions and continuing resolutions, and
reprogramming/transferring budget authority as needed to support changes in funding priorities throughout
the year. GFEBS interfaces with the EFD system and distributes allocable funds within the Army.
OPERATION DATA STORE (ODS)
8-10. ODS translates legacy data formats into modernized data and Standard Financial Information
Structure (SFIS) outputs that can be consumed by GFEBS; thus, ODS serves as a bridging solution in
enabling the incremental modernization of the information environment as legacy systems are sunset.
FUNDS CONTROL MODULE (FCM)
8-11. FCM is a transaction processing system designed to take output from logistics and financial systems
and bridge the two arenas of supply and financial management. Input is received from the Standard Army
Retail Supply System (SARSS) and through a series of processing logic provided to GFEBS for financial
obligation recognition. With the implementation of GCSS-Army’s supply functionality currently underway,
FCM no longer be required to facilitate financial recognition of standard stock procurement. FCM
continue to support legacy logistics integration with GFEBS in a number of process areas (e.g., fuels,
subsistence) as a bridging solution until those processes and/or legacy systems are modernized.
CONTRACTING SOFTWARE
8-12. In addition to ERPs the procurement process uses other systems that are focused on the contracting
arena. Financial managers interact with some of these systems as part of the fiscal triad process.
STANDARD PROCUREMENT SYSTEM (SPS)
8-13. SPS is a standardized, automated procurement system used by the DOD acquisition community. SPS
is linked to logistics and financial systems to enable accurate tracking and reporting of financial data
through the budgeting, requisition, contracting, contract administration, payment and contract close-out
processes. This integration of acquisition, logistics and FM on a single procurement system is a key
element in realizing the Army fiscal triad concept which governs the critical path between contracting and
FM. It expedites contract creation and provides electronic contract information for later use in payment and
contract research.
ELECTRONIC DOCUMENT ACCESS (EDA)
8-14. EDA is one of the Department’s sourcing environment programs. EDA is intended to simplify and
standardize the methods that DOD uses to interact with commercial and government suppliers in the
acquisition of catalog, stock, as well as made-to-order and engineer-to-order goods and services. EDA is a
web-based system that provides secure online access, storage, and retrieval of contracts, contract
modifications, Government Bills of Lading (GBLs), DFAS Transactions for Others (E110), vouchers, and
Contract Deficiency Reports to authorized users throughout the DOD. EDA provides for the online creation
of Contract Deficiency Reports and the Contract Deficiency Reports Workflow. |
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WIDE AREA WORK FLOW (WAWF)
8-15. WAWF is a secure web-based system for electronic invoicing, receipt and acceptance. WAWF
allows access to other systems that contain the three documents required to pay a vendor—the contract, the
invoice and the receiving report. The WAWF application enables users to submit electronically documents
related and required to pay vendors, government inspections, and the acceptance of documents to support
the Defense Department’s goal of moving to a paperless acquisition process. It provides the technology for
government contractors and authorized DOD personnel to generate, capture and process receipt and
payment-related documentation, via interactive web-based applications. Authorized DOD users are notified
of pending actions by e-mail and are presented with a collection of documents required to process
contracting or financial actions. WAWF helps to mitigate interest penalty payments due to lost or
misplaced documents and highlights vendor offered discounts, in addition to streamlining the process from
weeks to days or minutes.
LOGISTICS SOFTWARE
8-16. The Army continues to modernize every aspect of its operations. Many systems now are deployed to
interact with financial management systems to help the mission be more cost responsible.
THE STANDARD ARMY RETAIL SUPPLY SYSTEM (SARSS)
8-17. SARSS is a combat service peacetime and wartime logistics system that enables standard stock
supply procurement. FCM facilitates supply management by converting SARSS transactions into financial
data that is formatted for proper financial recognition. This allows financial transactions to be routed to the
FMIS regardless of the SARSS-1 system the supply order was initiated in; thus, the customer order
(financial transaction) will pass through FCM to GFEBS. GCSS-Army is in the process of a deployment
intended to subsume SARSS functionality by FY 2015.
GLOBAL COMBAT SUPPORT SYSTEM-ARMY (GCSS-ARMY)
8-18. GCSS-Army is a logistics and financial system that is tightly integrated with GFEBS. GCSS-Army
provides a logistics sustainment and support system for both tactical and installation operations. GCSS-
Army utilizes a web-based, ERP solution to provide access to and the exchange of operational data related
to maintenance, materiel management, property accountability, standard stock supply procurement and the
associated financial execution information. GCSS-A is transforming Army logistics processes by
integrating/subsuming nine legacy logistics systems and various sustainment functions into a single
repository to receive, store, issue, maintain, and account for materiel.
8-19. While GCSS-Army and GFEBS are two separate systems, the two systems are fully integrated; and
together, GCSS-Army and GFEBS revolutionize mission command by providing staffs and commanders
with reliable data in real time on the status of funds and the disposition of supplies and equipment. GCSS-
Army and GFEBS integrate key capabilities such as centralized funds distribution and retraction,
consolidated status of funds and trial balance reporting, centralized reimbursable execution, and
comprehensive managerial cost accounting and reporting.
SUSTAINMENT SYSTEM MISSION COMMAND (S2MC)
8-20. Sustainment System Mission Command (S2MC) is the primary component within the Mission
Command Collapse framework that provides near-real-time tracking and status of military and commercial
assets at sea, in the air and on the ground, conveying significant military cargo. As part of the Mission
Command Collapse Strategy, S2MC merges and migrates existing critical logistics/sustainment capabilities
from Battle Command Support and Sustainment System (BCS3) and Battle Command Sustainment Support
System-Node Management (BCS3-NM) onto the collaborative environment of the mission command
workstation, including logistics reporting, commander's dashboard, in-transit visibility and asset visibility.
In addition, S2MC is leveraging the flexibility of Mission Command Web to expand user access to an
enhanced set of S2MC capabilities. |
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OTHER SOFTWARE IN SUPPORT OF FM
8-21. By using other systems available, the financial manager improves the accuracy of all transactions.
These systems have been identified as resourceful tools that complement the many FM systems in use.
OVER THE COUNTER NET (OTCNET)
8-22. OTCnet is a web-based application that integrates Check Capture and Deposit Reporting
functionalities into one system. It is created from two legacy systems — Paper Check Conversion Over the
Counter and Treasury General Account Deposit Reporting Network. OTCnet's design accommodates check
capture and deposit reporting using electronic collection mechanisms instead of paper based processing.
check capture activities are primarily performed online; however, there is an offline check capture
capability for agencies operating in locations where internet connectivity and bandwidth are intermittent or
unavailable. Reporting transactions and associated accounting data "the Central Accounting Reporting
System way" will be required under the Government wide Accounting or Central Accounting Reporting
Systems Modernization initiative and serve as the standard for all government agencies. supports Central
Accounting Reporting System functionalities.
EAGLECASH STORED VALUE CARD (EC SVC)
8-23. The primary goals of the EC SVC Program include supporting mission readiness and increasing
security by providing a strategic alternative to traditional cash management by improving efficiencies and
reducing high risk and costly U.S. currency transportation in deployed environments. EC SVC replaces or
reduces cash in locations characterized by highly restricted physical access, poor telecommunication
infrastructure, and limited or no access to commercial banking services. The application consists of
encrypted smart cards and specially configured hardware devices. This enable cardholders to add value to
the card from designated bank accounts and use the funds on it to make purchases at the base exchange
stores, Military Post Office, dining facilities, Moral, Welfare, and Recreation facilities, local
concessionaries, or use it to purchase local currency from FM units. In addition, the service is used to
convert cash deposits from Army and Air Force Exchange Service, Postal, dining facilities, and Morale,
Welfare, and Recreation, to electronic (Deposit Card), and to fund missions of specially designated Pay
Agents (EagleCash Agent Stored Value Card). Deployment of EC SVC should be coordinated with the
Theater FMSC and USAFMCOM.
INTERNATIONAL TREASURY SERVICES.GOV (ITS.GOV)
8-24. ITS.gov is a comprehensive global payment and collection system used for processing foreign
vendor, payroll, and miscellaneous payments. ITS.gov offers a government-wide common solution for
issuing international payments in established and emerging markets. Payments supported by ITS.gov
include Automated Clearing House (ACH), Wire, Society for Worldwide Interbank Financial
Telecommunication, Check, Western Union and Pay Upon Proper Identification. Federal agencies may
either manually create payments online or send a file to ITS.gov. ITS.gov accepts a variety of file formats,
including most produced by DOD disbursing systems. ITS.gov is a Treasury system that is supported by a
fiscal agent, the Federal Reserve Bank of New York. The Federal Reserve Bank of New York is
responsible for daily operations while the U.S. Treasury Kansas City Regional Financial Center administer
user and access to the program and provides customer support. Deployment of ITS.gov should be
coordinated with the Theater FMSC and USAFMCOM.
8-25. Payment Information Repository and Collection Information Repository. CA$H-LINK is a web-
based system used to research Treasury deposits and debit transactions. It receives deposit information,
initiates fund transfers, and concentrates daily deposits made through multiple collection mechanisms into
the Treasury's account at the Federal Reserve Bank. This reduces the time spent on researching and
correcting erroneous or disputed EFT transactions. CA$H-LINK provides federal agencies with
information, via the Internet, to verify deposits, ACH and Fedwire transfers, as well as adjustment
information used to reconcile its accounts, and assists the Treasury in managing depository services
provided by financial institutions and monitoring the cash position of the U.S. government. |
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8-26. Financial Management Service is seeking to optimize its information technology infrastructure and
re-align it with core business functions. The implications for CA$H-LINK are that processes in that system
will be migrating to successor systems in the near future. In particular, the deposit reporting and
reconciliation processes now in CA$H-LINK will be incrementally assumed by the new Transaction
Reporting System (TRS). TRS will be a centralized repository of detailed collection transaction
information that will simplify Federal agency revenue management and accounting processes. As such,
TRS will provide a single touch point from which an agency can obtain transaction data and standard
reports integrating information across all collection channels and settlement mechanisms.
TREASURY CASH MANAGEMENT SYSTEM (TCMS)
8-27. Treasury Cash Management System has assumed cash concentration functionality for all deposits
reported/processed through Treasury. CA$HLINK was discontinued December 31, 2012. Financial
institutions must now use the Federal Reserve Bank’s National Settlement Service (NSS) for all transfers in
place of CA$HLINK II’s ACH and Fedwires.
8-28. TCMS, as one of the critical elements within the Collections and Cash Management architecture, is
the application managing the settlement of inflows to and outflows from the Treasury’s operating cash
account at the FRB. TCMS is the sole provider of cash concentration from Depository Financial
Institutions and FRBs. TCMS modernizes, streamlines, and improves the processes and IT systems
currently supporting collections business line by eliminating the duplicative cash concentration processes
within the current systems.
DEFENSE TRAVEL SYSTEM (DTS)
8-29. DTS is a fully integrated, web-based, electronic, end-to-end travel management system that
automates temporary duty travel for the Department of Defense. DTS meets unique DOD mission, security
and financial system requirements within the guidelines of Federal and DOD travel policies and
regulations. It increases visibility of travel expenditures and reduces both voucher settlement time and
processing costs to the Army.
SECTION II – FINANCIAL MANAGEMENT HARDWARE
8-30. Financial managers can now rely on the different automation systems that provide the capability to
support deployed financial management operations. This hardware is designed for users to have FM
applications necessary to perform mission tasks.
8-31. The AN/TYQ-132(V)1 and AN/TYG-132(V)2, Financial Management Tactical Platform (FMTP) is
a deployable, modular, local area network (LAN) configured hardware platform, supporting deployed ESC
FM SPO, FMSU, FMSD, G-8 and S-8 operations equivalent to systems used at home station/garrison. The
FMTP system is a modular design with FM applications necessary to perform mission tasks at the deployed
location. FMTP operates on standard tactical networks/LANs as well as on LandWarNet and Non-
classified Internet Protocol Router Network (NIPRNET) through the Global Information Grid (GIG) using
the Very Small Aptitude Terminal (VSAT). FMTP functionality includes Commercial Vendor Services,
Pay Support, Disbursing, Accounting, Travel, Resource Management, and can provide access to GCSS-
Army and GFEBS via a browser. FMTP improves internal controls, reducing loss of fund and
accountability risk, and complies with congressional/DOD mandated FM reporting requirements.
8-32. Figure 8-2 showcases the FMTP expanded system designed to support FMSCs, FMSUs, and ASCC
G-8s. Figure 8-3 showcases the FMTP basic system designed to support FMSDs, corps and DIV G-8s, and
BCT and SUST BDE S-8s. |
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Figure 8-2. AN/TYQ-132 V (2), FMTP Expanded System
Figure 8-3. AN/TYQ-132 V (1), FMTP Basic System |
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8-33. The following steps are required to access the training:
* 1. login from the menu on the left using CAC.
* 2. In the left column select training courses.
* 3. Click on SEC-Lee TLD and select, FMTP.
* 4. Click on any course title to select it.
8-34. As shown in Figure 8-4 , the Financial Management Tactical Platform and Financial Management
Training Database (FMTP/FMTDb), provides access to critical financial management systems not
programmed to interfaced or subsumed by GFEBS or GCSS-A. FMTP interfaces with GFEBS through the
deployable disbursing systems it provides the critical link to generate an auditable financial statements
acceptable to DOD and Congress. It also provides financial management units a portable and manageable
system that can be deploy for early entry operations and the capability to connect to multiple
communication network in the global information grid. It contains a unified FM training system for Army
financial management units that FMTDb enables standardized end-to-end training for FM Soldiers.
Figure 8-4. FMTP within financial management operations
COMMUNICATION REQUIREMENTS
8-35. All organizations with FMTP are issued Combat Service Support Automated Information Systems
Interface (CAISI) as an associated item of equipment. The purpose of the CAISI is to provide the backbone
for a secure wireless LAN for Unclassified – Sensitive Information, For Official Use Only (FOUO) data.
This allows FMTP to electronically exchange information within the supported area via tactical networks.
Using CAISI will allow LandWarNet and NIPRNET access to the GIG through the VSAT.
8-36. FM units with FMTP depend on supporting organizations to provide them with connectivity to the
military network. FM units should make arrangements with supporting organizations prior to deployment.
If not possible, the unit’s Automation Section should make the arrangements once on site with the Brigade
S-8. |
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8-37. Financial Management Training Database (FMTDb): FMTDb is housed in a split partition of the
hard drive on the FMTP. It is comprised of the full suite of FM applications and U.S. Treasury peripherals,
Deployable Disbursing System (DDS), Computerized Accounts Payable System Windows (CAPSW),
International Treasury Services (ITS.gov), Over The Counter-Channel Application (OTCnet), Eagle Cash
Card, RMT, Operational Data Store (ODS), and the Standard Finance System (STANFINS). This database
provides our FM Soldiers the optimum platform allowing them to “train as they fight”.
8-38. The technical nature of our business coupled with the continuous proliferation of technology
requires the Financial Management community to know how to work these systems and our corresponding
applications. Prior to the deployment of the FMTDb Currently, FM Soldiers are trained by using a
disjointed training methodology with different agencies (Defense Finance and Accounting Services, United
States Army Forces Central Command, United States Army Financial Management Command, National
Providers, Financial Management School & units) all providing various levels of training to deploying
personnel. This method of training has provided some familiarity, but it has did not allowed our Soldiers
us to take full advantage of the systems and their capabilities and more importantly provide them the
means for FM soldiers to sustain their knowledge and proficiency on these systems/applications. The
sustainment of the Financial Management Training Database platform will mitigate this challenge while at
the same time providing our FM Soldiers in all components the optimum platform that allows them to
“train as we fight” while at home station.
SECTION III - FINANCIAL MANAGEMENT SOFTWARE
8-39. Besides the essential hardware needed to establish all the financial management information systems,
the interface between those systems is done using different types of software specialized on different areas
of information management to process financial management capabilities on time and accurately.
THE DEPLOYABLE DISBURSING SYSTEM (DDS)
8-40. DDS provides automated disbursing support. The system provides the capability to write Treasury or
LDA checks, plus the daily accountability and reconciliation for all transactions. DDS receives information
from the commercial vendor support and travel modules, which allows the writing of checks to pay vendors
and travel claimants. It is capable of being used in remote military operations within contingency locations
with foreign currency. DDS integrates with GFEBS to enable deployed disbursing functions. DDS creates
pay vouchers and formatted output for upload to the military pay system for payment. The electronic funds
transfer interface in DDS requires an upload to FedLine (Federal Reserve Software) to place payments in
the Federal Reserve Bank (FRB). In situations where the Department of the Treasury’s international
payment system (ITS.gov) will not support mission requirements, DOs may maintain official LDAs for
check or EFT payments in foreign currency with banks designated as “Depositaries of Public Money of the
U.S.” by the Treasury. Except for LDAs in U.S. dollars established under Title 10, United States Code,
Section 127 for Intelligence Contingency Fund (ICF) purposes. LDAs in U.S. dollars may not be
established unless specific authority is first obtained from the Director for Accounting and Finance Policy,
Office of the Under Secretary of Defense (Comptroller), through the Director, Defense Finance and
Accounting Service-Indianapolis (DFAS-IN).
INTEGRATED AUTOMATED TRAVEL SYSTEM (IATS)
8-41. The Integrated Automated Travel System (IATS) provides automated travel support. IATS provides
the capability to process all types of travel payments (except civilian overseas permanent change of station
payments, which must be computed manually). IATS also maintains a travel record on every individual
receiving a payment processed by that server, and interfaces with DDS to facilitate payments. DTS is also
available and can be accessed via the internet.
THE DEFENSE MILITARY PAY OFFICE (DMO) SOFTWARE SUITE
8-42. Defense Military Pay Office (DMO) software suite provides processing access to the military pay
system to facilitate pay support. This software is provided for all components (AC, NG and RC), IAW |
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DFAS policies and procedures for contingency operations. Access to the military pay system of record
(currently DJMS) depends on the availability of dedicated communications. If online query capability is not
available, a batch process DMO download provides near-time query capability. In addition, the DMO
Standard Inquiry System (DSIS) provides the capability to download and archive pay data for an
individual, or an entire unit, to facilitate offline pay support. The Evaluation and Reporting System (EARS)
is a stand-alone system capable of providing various reports and files (for example, leave and earnings
statements (LESs), via DMO batch download.
COMPUTERIZED ACCOUNTS PAYABLE SYSTEM WINDOWS
(CAPSW)
8-43. The Computerized Accounts Payable System Window (CAPSW) provides most commercial vendor
payments. Input can be received electronically through the internet via WAWF or manually based upon
submitted contracts and invoices. Computerized accounts payable system window produces vouchers for
standard contracts and maintains the bills register for each contract, and interfaces with DDS to facilitate
contract payments. It links EFT vendor payments to DDS and subsequently to FRB. It also receives from
DDS the disbursing information to maintain historical records.
SECTION IV – COMMUNICATIONS NETWORKS
8-44. An FM unit’s ability to provide timely and critical support depends greatly on its ability to
communicate. Widely dispersed FM units must rely on communications with their headquarters to
accomplish their mission. Although FM units use wire communications, they also need to possess and be
able to utilize mobile and secure communications equipment. They must be able to use reach-back
communications to range from forward in BCT areas, through division, corps or theater areas, to FM
elements in distant supporting theaters, and back to national providers in CONUS.
8-45. FM units use organic and non-organic voice and data transmission equipment to support internal
fixed site, mobile base station, and mobile tactical communications requirements. The automation section
coordinates external communications requirements through the higher FM units, ESC FM SPO and/or
supporting signal organization. The signal organization provides commercial or military communications
assets, as available and appropriate to the requirement. CAISI is the communications tool of choice for FM
units. FMTP is designed to utilize CAISI for its communications. CAISI is a logistics communications
package designed and fielded by logisticians to facilitate Standard Army Management Information Systems
(SAMIS) computer systems’ connections to the tactical network. With CAISI, commanders have
instantaneous access to the most up-to-date FM information. CAISI provides an interface into tactical radio
or satellite communications systems.
COMBAT SERVICE SUPPORT VERY SMALL APERTURE TERMINAL
8-46. Combat Service Support Very Small Aperture Terminal (CSS VSAT) is a portable satellite
communications system designed to provide worldwide data and voice communications connectivity to
U.S. military forces. CSS VSAT has two primary supported models: AN/TSC-183 Terminal, Satellite
Communication (1.2 Meter) and AN/TSC-183A Satellite Communications Terminal (1.2 Meter-Enhanced).
The AN/TSC-183 is the first 1.2M terminal and is green in color. The AN/TSC-183A is an enhanced
version of the same terminal and is very similar in design and function, but is tan in color.
8-47. As part of system setup and initialization, the antenna pedestal automatically finds the desired
satellite and brings up the desired circuit to the distant end within minutes. CSS VSAT operations have
been greatly simplified by the incorporation of this auto-acquire antenna system. The CSS VSAT is
designed to provide Sustainment Warfighters and other users possessing little or no satellite
communications training, the resources necessary to establish connectivity to the LANDWARNET via
satellite. The LANDWARNET is the combination of info-structure and services available across the Army.
It provides the sustainment community the capability to process, store, and transport information over a
seamless network. |
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8-48. The CSS VSAT also allows access to the NIPRNET, the Army’s version of the Internet, and Voice
over Internet Protocol (VoIP) from any location in the world where a satellite signal can be transmitted and
received. The CSS VSAT will have a direct impact on the successful transmission of data via satellite
throughout the LANDWARNET.
8-49. Each FMSU is authorized one CSS VSAT on its Table of Organization and Equipment. As of FY13
all Financial Management Support Units have been issued CSS VSAT. New requirements have been
identified and sent to the CSS VSAT Program Manager for approval.
WARFIGHTER INFORMATION NETWORK (WIN-T)
8-50. WIN-T provides the communications network (satellite and terrestrial) and services that allow the
Soldier to send and receive information to execute the mission. Information is the element of combat power
that allows commanders to magnify the effects of maneuver, firepower and protection. WIN-T is the
transformational command and control system that manages tactical information transport at theater
through company echelons in support of unified land operations. WIN-T will be fielded in three (3)
increments.
8-51. WIN-T Increment 1is similar to a home Internet connection, WIN-T Increment 1 provides a full
range of data, voice and video communications at-the-quick-halt, allowing Soldiers to simply pull over on
the side of the road to communicate without wasting valuable time setting up complicated infrastructure.
WIN-T Increment 1a upgrades allow the former Joint Network Node (JNN) satellite capability to access the
Ka-band defense Wideband Global SATCOM (WGS) satellites, reducing reliance on expensive
commercial Ku-band satellites. The new WIN-T Increment 1 Colorless Core upgrade enhances the security
and interoperability with future WIN-T Increments; takes advantage of the Network Centric Waveform, a
dynamic waveform that optimizes bandwidth and satellite utilization; and allows WIN-T Increment 1 and
Increment 2 to share the same baseline set of Network Operations tools used by communications officers to
manage the network.
8-52. WIN-T Increment 2 supports operations while on-the-move and pushes that integrated on-the-move
capability down to the company level for the first time. It also introduces networking radios and enhances
Network Operations (NetOps) for network planning and monitoring. Tactical Communication Nodes
(TCNs) in WIN-T Increment 2 are the first step to providing a mobile infrastructure on the battlefield.
When the TCNs are combined with the Points of Presence, Vehicle Wireless Packages, and Soldier
Network Extensions, WIN-T Increment 2 enables mobile mission command from division to company in a
mobile, ad-hoc, self-forming, self-healing network. WIN-T Increment 2 embeds communications
equipment into select combat vehicles, bringing Secure Internet Protocol Router Network (SIPRNET)
connectivity to the platform. WIN-T equipped staffs have the ability to maneuver on the battlefield and
maintain connectivity to the network to ensure situational awareness and maintain command and control of
forces. With WIN-T Increment 2, Soldiers can utilize applications for maneuver, fires and intelligence from
inside vehicles, enabling commanders to make decisions on-the-move rather than being tied down to a
fixed command post and ensuring effective and unpredictable offensive and defensive tasks.
8-53. WIN-T Increment 3 currently in development and testing and will provide the “full” on-the-move
networking capability by improving the line-of-sight capability fielded under Increment 2, by providing an
air tier to the existing WIN-T architecture, refining the network architecture and building the next
generation of Network Operations (NetOps) for network planning and monitoring the network. These
improvements will provide a leap forward in network capacity as well as improve the overall reliability and
robustness of the network. The air tier will offload network traffic from overburdened and expensive
satellites. With the addition of the air tier, the Army will have a three-tiered WIN-T communication
network -- terrestrial, aerial and celestial. The key component of WIN-T Increment 3 is the Joint
Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (JC4ISR)
radio combined with the Highband Networking Waveform (HNW), which significantly improves line-of-
sight communications throughput capacity and extends ranges. WIN-T Increment 3 continues to improve
the management, planning and defense of the network by providing additional NetOps capabilities used by
communication officers |
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WIRE
8-54. Wire is the primary means used for internal communications. Use of wire communications prevents
hostile forces from using radio direction finding (RDF) equipment to locate the unit. Wire use is restricted
mainly by mobility requirements, distance between users, installation and recovery time, and maintenance.
Wire requires care in installation to preclude damage. Internal wire may be integrated with radio means to
increase the capability of communications with outside units. Network radio interface (NRI) permits voice
communications between radio users and telephone system subscribers, either from radio to telephone or
vice versa, so long as the radio user is within range of the NRI station.
8-55. The Army now has one network that is LandWarNet, the Army's portion of the Global GIG. Signal
doctrine is now focused to the capabilities provided in meeting the LandWarNet (LWN) requirements.
Warfighter Information Network Tactical and Joint Tactical Radio Systems are programs of record that
enable LWN network transport and services. The joint network node (JNN) is the core enabler right now
and is the replacement for the mobile subscriber equipment (MSE). LWN is a digital network that is
Internet Protocol based, provides Voice Over Internet Protocol capabilities and better services than under
MSE. There will be four increments to Warfigther Information Network Tactical capabilities. Increment 1
is the JNN, Increment 2 will be limited on the move capability, (meaning data network capabilities while
on the move much like what we can do with cell phones accessing internet now), Increment 3 will be a full
on the move capability and Increment 4 is a protected Satellite Communications on the move capability.
All BCTs have an embedded Signal Company that supports each of their command posts and are provided
a Command Post Node in the battalion HQ that provides a network connection from the battalion to the
BCT or BDE level. Approximately 49% of the force do not have any embedded capability and must resort
to requesting network capabilities from the Expeditionary Signal Battalion.
RADIO
8-56. An FM unit’s communications cannot depend on wire communication only. Each FM unit must also
use radio communications systems in lieu of and as a supplement to wire communications.
Communications must be available at all times to accomplish various and concurrent missions. FM support
is not static—radio communication must be available at all levels down to FMSTs to maintain constant
communications with higher command levels as well as supported units. These communication
requirements include data transmission as well as voice capability.
8-57. Radio systems are easier to use and quicker to install than wire, but are susceptible to detection by
enemy RDF equipment, which can locate receivers and transmitters. The enemy can monitor transmissions,
jam communications, or bring direct or indirect fire weapons to bear on the position of the
transmitter/receiver.
8-58. FM units receive AN\VRC-90 radio sets, which are part of the single-channel ground and airborne
radio system (SINCGARS). The SINCGARS is capable of processing voice, analog, and digital data in
either the frequency hopping or single-channel mode, allowing the FM unit to communicate wirelessly with
other FM units, and with supported units.
INTERNAL FIXED SITE COMMUNICATIONS
8-59. Various communications means are available to support fixed site operations at the tactical
operations centers (TOCs) of FM units. Most communication requirements are met by using MSE, which
can be set up in either permanent or temporary shelters. This equipment provides commanders with
multiple means of communicating with outlying units. Headquarters elements send and receive financial
and position-reporting data from subordinate units utilizing Enhanced Position Location Reporting System
(EPLRS) when available.
BASE AND REMOTE SUPPORT OPERATIONS
8-60. FM units have the responsibility to provide support anywhere in the AO via mobile FMSTs. This
requires a mobile capability and a means to locate and communicate with the FMSTs. The FMSTs transmit |
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information via voice and data means. Communications modes necessary to support this mission include
the SINCGARS for voice and EPLRS for data and position reporting.
TACTICAL OPERATIONS INTERFACE
8-61. Headquarters at all levels have access to the JNN to pass command and control information
throughout the AO. The appropriate automation section is responsible for coordinating this connectivity
and for the maintenance of the node server, when required. Transfer of data from dispersed FM units to its
next higher level occurs via the tactical network, when capabilities permit.
COMMUNICATIONS SECURITY
8-62. Security of FM information is a high priority; safeguarding information is the responsibility of all
FM personnel. Most electronic information systems and information networks are interconnected.
Passwords and system protocols are highly valuable pieces of information that, if in the wrong hands, can
cause the compromise of entire systems. Commanders must implement information security and
communications security (COMSEC) policies and procedures to prevent hostile forces from accessing
systems via the Internet or other means. FM systems are also subject to virus and worm infections.
Commanders must ensure that proper measures are in place to protect against this threat. Personnel
engaged in preparing and transmitting messages, whether by telephone, radio, or messenger, must know
and comply with all COMSEC procedures. COMSEC measures include physical, cryptographic, and
transmission security. These procedures are included in AR 25-2, Information Assurance.
SIGNAL OPERATING INSTRUCTIONS (SOI)
8-63. FM units currently operate the simple key loader, AN/PYQ-10, receiving necessary SOI extracts
from their parent headquarters. These extracts include information on major supported units in the AO.
COMMUNICATION NETWORKS
8-64. A communication network is an organization of stations capable of directly communicating with
other users on a common frequency or channel. FM units communicate with each other primarily on the
FM operations network. FM units may enter supported units’ networks, such as the following:
* Command network.
* Operations and intelligence network.
* Administrative network.
COMMAND NETWORK
8-65. The commander uses the command network for tactical control. Types of messages commonly
passed over this network include orders, coordination, and information of immediate value.
OPERATIONS AND INTELLIGENCE NETWORK
8-66. Commanders and operations sections use the operations and intelligence network for command and
control purposes. This network is used to control operations and pass intelligence information within
commands. The network control station is located at higher headquarters. FMSTs use this network when
deployed from the parent FM Detachments. Unit automation sections disseminate specific procedures for
use of this network.
ADMINISTRATIVE NETWORK
8-67. The administrative network is used for personnel matters and for supply information and
requirements. Battalion or brigade manpower and personnel staff officers, S-4s, and battalion or brigade
signal staff officers at all levels of command use this network. |
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THEATER SERVICES
8-68. Many information technology services are provided by signal and communication elements in
theater. FM systems use both the non-secure internet protocol and secret internet protocol router networks.
NON-SECURE INTERNET PROTOCOL ROUTER NETWORK
8-69. NIPRNET is a network of government-owned internet protocol routers used to exchange sensitive
unclassified information. It provides access to specific DOD network services and supports a wide variety
of applications such as electronic mail, web-based collaboration, information dissemination, and
connectivity to the internet. Access to the NIPRNET is obtained through a standardized tactical entry point
site or teleport and is then distributed through an unclassified theater network. NIPRNET enables a myriad
of other reach functions from deployed forces to the sustaining base and lateral collaboration among
deployed elements.
SECRET INTERNET PROTOCOL ROUTER NETWORK (SIPRNET)
8-70. The SIPRNET supports critical mission command applications and intelligence functions. It operates
in a manner similar to the NIPRNET, but as a secure network. As with the NIPRNET, the SIPRNET
provides access to many web-based applications, as well as the ability to send and receive classified
information up to secret. These applications and capabilities enable the effective planning and execution of
plans in a secure environment. The SIPRNET also enables a myriad of reach logistics functions from
deployed forces to the sustaining base and lateral collaboration among deployed elements.
SECTION V – ORGANIZATIONAL INFORMATION TECHNOLOGY (IT)
CAPABILITIES
8-71. The FMSC can provide substantial organic information technology (IT) support to FM units in its
area of operation. Below is a list of IT capabilities the FMSCs Automation Section can bring to the
battlefield:
* Full Help Desk support.
* Defense Information Assurance Certification and Accreditation Process (DIACAP) accreditation
and submission.
* Certification to connect and approval to operate in the network.
* Active Directory Management of Finance Organization Unit (OU). (Note: the OU is a computer
container that lists the inventory of computers, employees, printers, digital senders, and servers.)
* Install approved Army operating systems.
* Install applications and FMIS software.
* Troubleshoot configuration problems.
* Establish, deploy and administer a standard Federal Desktop Core Configuration / Army image
IAW the National Institute of Standards and Technology – Computer Security Division.
* Request (through appropriate Signal channels) for setup of new user and email accounts.
* Terminal Access Security Officer (TASO) functions at ADSN and DSSN level.
* Establish and administer Telephone Control Officer (TCO) functions (divisional level).
* Define requirements for IT purchase.
* Establish and manage a life cycle replacement program.
* Deploy tactical communications and FMTP.
* Design and administer disaster recovery procedures, backups, and archives.
* Decommission sites and systems.
* Proper destruction of data drives.
* Personal Identifiable Information protection.
* Reach-back to FMSC Rear or other IT supporting organizations. |
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* Provide/coordinate communication requirements (i.e., Commercial telephone line, Defense
Switch Network and LAN) for EagleCash Kiosks.
8-72. The FMSU possess limited organic IT capabilities to support itself and FM detachments under its
command and control. Below is a list of IT capabilities the FMSU can bring to the battlefield:
* Basic Help Desk support.
* Troubleshoot individual computer problems.
* Install basic hardware.
* Submit and manage help desk tickets.
* Image personal computers.
* Load software (including FM specific software).
* Install network drops.
* Cable runs.
* Network layer 1 troubleshooting.
* Request (through appropriate Signal channels) for setup of new user and email accounts.
* Conduct TASO functions at their direct level or DSSN department level.
* Deploy tactical communications and FMTP.
* Maintain and perform disaster recovery procedures, backups, and archiving.
* Decommission sites and systems.
* Proper destruction of data drives.
* Personal Identifiable Information protection.
SECTION VI – E-COMMERCE
8-73. Transitioning the theater from cash to a cashless battlefield is a principal aim of FM during a
contingency operation. How quickly this transition occurs is operationally dependent on local banking
infrastructure, vendors’ capability to accept EFT payment, and HN communication infrastructure. E-
commerce applications are the conduit for removing cash from the battlefield. FM leaders must continually
assess their operations to promote E-commerce initiatives. The FMSC in conjunction with USAFMCOM
and the Department of Treasury can proliferate the theater with E-commerce technology. E-commerce
technology and its usage must be considered in all operational planning. The U.S. Department of the
Treasury has developed Stored Valued Cards (SVC) (electronic money) , International Treasury Services
(ITS.gov) (vendor payments), and Over The Counter Channel Application (OTCnet) (check capture
processing) applications designed to improve financial controls and cash management, streamline
administrative processes, improve internal controls and improve quality of life for Soldiers. Theater
policies must be developed and tailored to expand the use of these applications within a theater of
operations early on. The FM community and the Army recognizes that in order to improve accuracy and
timeliness of transaction processing, a paper-based environment must be replaced by electronic processing
to provide single-source entry, electronic transmission of data and electronic storage of data.
8-74. FM units are also equipped with the Deployable Disbursing System (DDS) and must maximize its
capability. DDS provides automated accounting and disbursing documentation to mobile and remote
military operations within contingency locations requiring foreign currency operations. DDS also interacts
with SVC, ITS.gov and OTCnet.
8-75. The following FMIS comprise the E-commerce initiative:
* EagleCash SVC, kiosks and POSs.
* OTCnet.
* ITS.gov |
1-06 | 175 | Glossary
SECTION I – ACRONYMS AND ABBREVIATIONS
AAA Army Audit Agency
ABO Army Budget Office
ACOM Army Command
ACSA acquisition and cross-servicing agreement
ADA Anti-Deficiency Act
ADCON administrative control
ADP Army doctrine publication
ADRP Army doctrine reference publication
AIK assistance in kind
AMSCO Army management structure code
AO area of operation
AOR area of responsibility
AR Army regulation
AR2B The Army Requirements and Resourcing Board
ASA(ALT) Assistant Secretary of the Army (Acquisition, Logistics and
Technology)
ASA(FM&C) Assistant Secretary of the Army (Financial Management and
Comptroller)
ASCC Army Service component command
ASOS Army support to other Services
AUM assessable unit manager
AUT analysis of unmatched transactions
BAH basic allowance for housing
BAS basic allowance for subsistence
BCT brigade combat team
BDE brigade
BES Budget Estimate Submission
C-7 Coalition Forces Land Component Command Engineers
CAISI Combat Service Support Automated Information Systems Interface
CAPSW Computerized Accounts Payable System Window
CBA cost-benefit analysis
CCBN contingency contracting battalion
CCDR combatant commander
CCP contingency command post
CCT contingency contracting teams
CDR commander
CERP commander's emergency response program
CHA cash holding authority |
1-06 | 176 | Glossary
CI civilian internee
CIA Central Intelligence Agency
CIR Collections Information Repository
CJCS Chairman of the Joint Chiefs of Staff
CJCSI Chairman of the Joint Chiefs of Staff Instruction
CMS Case Management System
COA course of action
COMSEC communications security
COR contracting officer's representative
CR continuing resolution
CSB contracting support brigade
CU Credit Union
CVS commercial vendor services
DA Department of the Army
DASA-(FO) Deputy Assistance Secretary of the Army (Financial Operations)
DARB Defense Acquisition Review Board
DD Department of Defense Form
DDO Deputy Disbursing Officer
DDS Deployable Disbursing System
DFARS Defense Federal Acquisition Regulation Supplement
DFAS Defense Finance and Accounting Service
DFAS-IN Defense Finance and Accounting Service-Indianapolis
DIACAP Defense Information Assurance Certification and Accreditation
Process
DIV division
DJMS Defense Joint Military Pay System
DJMS-AC Defense Joint Military Pay System-Active Component
DMO Defense Military Pay Office
DO Disbursing Officer
DOD Department of Defense
DODD Department of Defense Directive
DODFMR Department of Defense Financial Management Regulation
DODIG Department of Defense Inspector General
DOS Department of State
DROT Daily Register of Transactions
DSCA Defense Security Cooperation Agency
DSSN disbursing station symbol number
DTS Defense Travel System
EA executive agent
ECC expeditionary contracting command
EC SVC EagleCash Stored Value Card |
1-06 | 177 | Glossary
EDA electronic document access
EEE Emergency and Extraordinary Expense
EFD Enterprise Funds Distribution
EFT electronic funds transfer
EIN Employee Identification Number
EPLRS Enhanced Position Location Reporting System
EPW enemy prisoner of war
ERP Enterprise Resource Planning
ESC Expeditionary Sustainment Command
EVE equal value exchange
FAA Foreign Assistance Act
FAR Federal Acquisition Regulation
FC Foreign Currency
FCA functional cost account
FCM Force Costing Model
FEMA Federal Emergency Management Agency (DHS)
FIAR Financial Improvement and Audit Readiness
FMIS Financial Management Information Systems
FMSC Financial Management Support Center
FMSD Financial Management Support Detachment
FMST Financial Management Support Team
FMSU Financial Management Support Unit
FM SPO Financial Management Support Operations
FMTP Financial Management Tactical Platform
FMTPDb financial management training database
FNS foreign nation support
FOB forward operating base
FOO Field Ordering Officer
FRAGO fragmentary order
FRB Federal Reserve Bank
FY fiscal year
G-4 Assistant Chief of Staff Logistics
G-8 Assistant Chief of Staff, Financial Management
G-9 Assistant Chief of Staff, Civil Affairs
GAO General Accounting Office
GCSS-A Global Combat Support System-Army
GFEBS General Fund Enterprise Business System
HN host nation
HNS host nation support
HNW Highband Networking Waveform
HQ headquarters |
1-06 | 178 | Glossary
HQDA Headquarters Department of the Army
IATS Integrated Automated Travel System
IAW in accordance with
IC internal control
ICA internal control administrator
ICEP internal control evaluation plan
ICF Intelligence Contingency Fund
IMET international military education and training
I/R internment and resettlement
ISSA Interservice Support Agreements
IT Information Technology
IPL integrated priority list
J-4 Logistics Directorate of a Joint Staff
J-8 Joint Staff Directorate for Force Structure, Resource, and Assesment
JC4ISR Joint Command, Control, Communications, Computers, Intelligence,
Surveillance and Reconnaissance
JFC Joint Forces Commander
JFLCC Joint Forces Land Component Command
JOA joint operations area
JNN Joint Network Node
JP joint publication
JTF joint task force
LES Leave and Earning Statement
LD limited depositary
LDA limited depositary account
LOA letter of assist
LOGCAP logistics civil augmentation program
MAFR Merged Accountability and Fund Reporting
MBF military banking facility
MDEP management decision package
MDMP military decision making process
METT-TC mission, enemy, terrain and weather, troops and support available,
time available and civil considerations (mission variables)
MICP Managers’ Internal Control Program
MILCON military construction
MMPA Master Military Pay Account
MOA memorandum of agreement
MOE measures of effectiveness
MOP measures of performance
MPA Military Personnel Army
NAF nonappropriated fund |
1-06 | 179 | Glossary
NATO North Atlantic Treaty Organization
NEO noncombatant evacuation operation
NGO nongovernmental organization
NIPRNET Non-classified Internet Protocol Router Network
NSFOP non-stock fund orders and payables
NULO negative unliquidated obligations
OCO overseas contingency operations
OCS operational contract support
ODS operational data store
OE operational environment
OMA Operation and Maintenance, Army
OMANG Operation and Maintenance, Army National Guard
OMAR Operation and Maintenance, Army Reserve
OMB Office of Management and Budget
OPLAN operational plan
OPORD operation order
OR operational readiness
OSD Office of the Secretary of Defense
OTCnet Over the Counter Net
OU Organization Unit
OUSD(C) Office of the Undersecretary of Defense (Comptroller)
PA pay agent
PARC principle assistant responsible for contracting
PBAS Program Budget Accounting System
PBD program budget decision
PDM program decision memorandum
PIR Payment Information Repository
PKO peace keeping operations
PM program management
POM Program Objective Memorandum
PPBE planning, programming and budget execution
PRA Pay Record Accessibility
PRT provisional reconstruction teams
QA quality assurance
RDT&E Research, Development, Test and Evaluation
RIK replacement in kind
RMT Resource Management Tool
RPA Reserve Personnel, Army
RSOI reception, staging, onward movement and integration
S-8 battalion or brigade financial manager officer
S2MC Sustainment System Mission Command |
1-06 | 180 | Glossary
SARSS Standard Army Retail Supply Sytem
SDP Savings Deposit Program
SJA staff judge advocate
SM Service Member
SOI signal operating instructions
SPS Standard Procurement System
SRP Soldier Readiness Processing
STANFINS Standard Finance System
STB Special Troops Battalion
STRATLIFT strategic lift
SUST BDE sustainment brigade
SVC Stored Value Card
TA theater Army
TASO Terminal Access Security Officer
TCA Theater Commander Activity
TCO Telephone Control Officer
TCMS Treasury Cash Management System
TLP troop leading procedures
TPU Troop Program Unit
TSC theater sustainment command
UCFR Unit Commander's Finance Report
UN United Nations
U.S. United States
USAFMCOM United States Army Financial Management Command
USAID United States Agency for International Development
USC United States Code
USD(C) Under Secretary of Defense (Comptroller)
USD(P) Under Secretary of Defense for Policy
WAWF wide area work flow
WIN-T Warfighter Information Network
WGS Wideband Global SATCOM |
1-06 | 181 | Glossary
SECTION II – TERMS
*accounting support
The accurate and complete recording of financial transactions within the Army Financial Management
Information Systems and the review and reconciliation of these financial transactions to ensure the
proper expenditure of entrusted funds in support of unified land operations.
administrative control
(joint) Direction or exercise of authority over subordinate or other organizations in respect to
administration and support. Also called ADCON. (JP 1)
area of operation
(joint) An operational area defined by the joint force commander for land and maritime that should be
large enough to accomplish their missions and protect their forces. Also called AO. (JP 3-0)
Army Service component command
(joint) Command responsible for recommendations to the joint force commander on the allocation and
employment of Army forces within a combatant command. Also called ASCC. (JP 3-31)
*banking support
The provision of cash, non-cash and E-commerce mechanisms necessary to support the theater
procurement process and host nation banking infrastructure.
baseline costs
(joint) The continuing annual costs of military operations funded by the operations and maintenance
and military personnel appropriations. (JP 1-06)
*budget estimate
Based on specific command operational plans, requirements, troop levels, location, and operating
circumstances.
combatant commander
(joint) A commander of one of the unified or specified combatant commands established by the
President. (JP 3-0)
contracting officer
(joint) The Service member or Department of Defense civilian with the legal authority to enter into,
administer, modify, and/or terminate contracts. (JP 4-10)
*cost-benefit analysis
A structured methodology for projecting and comparing the anticipated costs and benefits of
alternative courses of action in order to identify the optimum solution for achieving a stated goal or
objective.
*cost center
Serves as a base for a management optimization model utilized to reflect the business, its inputs,
conversions, and outputs in order to support management decisions.
*cost culture
A culture where all leaders and managers factor cost into their decision-making and understand both
the near and long-term cost implications of their decisions.
*cost management
Collects and links financial (cost) data with non-financial output and performance data, presenting the
information in a way directly related to major mission objectives.
*direct cost
Cost such as labor, material or supplies that can be directly attributed to producing a specific output of
an organization, product or service. |
1-06 | 182 | Glossary
*disbursing support
The paying of public funds to entities in which the United States Government is indebted; the
collection and deposit of monies; the safeguarding of public funds; and the documenting, recording,
and reporting of such transactions.
*economic analysis
A detailed report provided to a commander in order to make decisions on applying the economic
instrument of power, identifying all the financial aspects of a specific geographical area and the effect
that United States forces’ presence will have on that area.
executive agent
(joint) A term used to indicate a delegation of authority by the Secretary of Defense or Deputy
Secretary of Defense to a subordinate to act on behalf of the Secretary of Defense. Also called EA. (JP
1-06)
*financial management
(Army) The sustainment of the U.S. Army and its unified action partners through the execution of
Fund the Force, Banking and Disbursing, Accounting Support and Cost Management, Pay Support and
Management Internal Controls . Also called FM.
*fiscal triad
The legally binding process that governs the critical path between contracting and financial
management for acquisition management, internal controls, and fiscal law prescribed for the
procurement process.
foreign nation support
(joint) Civil and/or military assistance rendered to a nation when operating outside its national
boundaries during military operations based on agreements mutually concluded between nations or on
behalf of intergovernmental organizations. Also called FNS. See also host-nation support. (JP 1-06)
*full cost
The sum of all costs, regardless of funding source, required by a cost object - to include all direct
materials, direct labor, and support activity costs – to produce or provide a product, service, customer,
or outcome.
*fund the force
The critical capability that matches legal and appropriate sources of funds with thoroughly vetted and
validated requirements.
host nation
(joint) A nation that receives the forces and/or supplies of allied nations, coalition partners, and/or
NATO organizations to be located on, to operate in, or to transit through its territory. Also called HN.
(JP 3-57)
host-nation support
(joint) Civil and/or military assistance rendered by a nation to foreign forces within its territory during
peacetime, crises or emergencies, or war based on agreements mutually concluded between nations.
Also called HNS. See also host nation. (JP 4-0)
humanitarian and civic assistance
(joint) Assistance to the local populace provided by predominantly U.S. forces in conjunction with
military operations and exercises. This assistance is specifically authorized by title 10, United States
Code, section 401, and funded under separate authorities. Also called HCA. (JP 3-29)
incremental costs
(joint) Costs which are additional costs to the Service appropriations that would not have been incurred
absent support of the contingency operation. See also financial management. (JP 1-06). |
1-06 | 183 | Glossary
joint force commander
(joint) A general term applied to a combatant commander, sub-unified commander, or joint task force
commander authorized to exercise combatant command (command authority) or operational control
over a joint force. Also called JFC. (JP 1)
joint operations area
(joint) An area of land, sea, and airspace, defined by a geographic combatant commander or
subordinate unified commander, in which a joint force commander (normally a joint task force
commander) conducts military operations to accomplish a specific mission. Also called JOA. (JP 3-0)
joint task force
(joint) A joint force that is constituted and so designated by the Secretary of Defense, a combatant
commander, a sub-unified commander, or an existing joint task force commander. Also called JTF. (JP
1)
letter of assist
A contractual document issued by the United Nations to a government authorizing it to provide goods
or services to a peacekeeping operation. Also called LOA. (JP 1-06)
*limited depositary account
A checking account in a U.S. or foreign commercial bank that is designated by the Treasury
Department to receive deposits from Disbursing Officers for credit to their official limited depositary
checking accounts.
*managers’ internal control program
Provides reasonable assurance that establishes accountability and control procedures to comply with
applicable laws and regulations.
mission command
(Army) The exercise of authority and direction by the commander using mission orders to enable
discipline initiative within the commander’s intend to empower agile and adaptive leaders in the
conduct of unified land operations. (ADP 6-0)
multinational operations
(joint) A collective term to describe military actions conducted by forces of two or more nations,
usually undertaken within the structure of a coalition or alliance. (JP 3-16)
nation assistance
(joint) Assistance rendered to a nation by foreign forces within that nation’s territory based on
agreements mutually concluded between nations. (JP 3-0)
noncombatant evacuation operations
(joint) Operations directed by the Department of State, or other appropriate authority, in conjuction
with the Department of Defense, whereby noncombatants are evacuated from foreign countries when
their lives are endangered by war, civil unrest, or natural disaster to safe havens as designated by the
Department of State. Also called NEOs. (JP 3-68)
nongovernmental organizations
(joint) A private, self-governing, not-for-profit organization dedicated to alleviating human suffering;
and/or promoting education, health care, economic development, environmental protection, human
rights, and conflict resolution; and/or encouraging the establishment of democratic institutions and
civil society. Also called NGOs. (JP 3-08)
*obligation management |
1-06 | 184 | Glossary
Is a basic function of financial management operations and provides fiscal controls to protect against
Anti Deficiency Act (ADA) violations.
operational contract support
(joint) Process of obtaining goods, services and construction from commercial sources via contracting
means in support of contingency operations. (JP 4-10)
operational control
(joint) The authority to perform those functions of command over subordinate forces involving
organizing and employing commands and forces, assigning tasks, designating objectives, and giving
authoritative direction necessary to accomplish the mission. Also called OPCON. (JP 1)
*pre-deployment cost estimate
A short notice estimate required to support operational assumptions and decision-making processes,
and defines and supports requests for reprogramming or additional appropriations.
*procurement support
The critical role financial management plays in acquiring, certifying, accounting and disbursing the
funding required for operational contracting support (OCS).
*responsibility segment
A component of a reporting entity that is responsible for carrying out a mission, conducting a major
line of activity, or producing one or a group of related products or services.
responsiveness
The ability to react to changing requirements and respond to meet the needs to maintain support. (ADP
4-0)
simplicity
Relates to processes and procedures to minimize the complexity of sustainment. (ADP 4-0)
stability operations
(joint) An overarching term encompassing various military missions, tasks, and activities conducted
outside the United States in coordination with other instruments of national power to maintain or
reestablish a safe and secure environment; provide essential governmental services, emergency
infrastructure reconstruction, and humanitarian relief. (JP 3-0)
*spot rate
The price that is quoted for immediate settlement on a commodity, a security or a currency.
*technical oversight
Encompasses the provision of recommendations and advice to theater commanders regarding the
employment, integration, direction, and control of financial management forces for the
accomplishment of assigned missions.
unified action
(joint) The synchronization, coordination, and/or integration of the activities of governmental and
nongovernmental entities with military operations to achieve unity of effort. (JP 1)
unified action partners
Those military forces, governmental and nongovernmental organizations, and elements of the private
sector with whom Army forces plan, coordinate, synchronize, and integrate during the conduct of
operations. (ADRP 3-0)
warfighting function
A group of tasks and systems (people, organizations, information, and processes) united by a common
purpose that commanders use to accomplish missions and training objectives. (ADP 3-0)
*working estimate |
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