The Fiscal Flyer

The Fiscal Flyer

by Bill & Penny

DODFMR Vol. 15 - Global Reach, Global Ledger

Department of Defense Financial Management Regulation (DoD FMR) Volume 15, titled “Security Cooperation Policy,” establishes the comprehensive financial management, accounting, and pricing framework for Security Cooperation and Security Assistance programs, primarily focusing on Foreign Military Sales (FMS) and Building Partner Capacity (BPC) activities. The volume dictates the rigorous procedures for managing the FMS Trust Fund and the Special Defense Acquisition Fund (SDAF), detailing the processes for recognizing budget and obligational authority, as well as strict cash management practices to ensure sufficient purchaser funds are collected in advance to liquidate obligations. Furthermore, it mandates precise pricing methodologies for defense articles, services, and international training to ensure the Department accurately recoups all applicable costs, including nonrecurring research and development expenses, administrative surcharges, and transportation accessorials. Finally, Volume 15 governs the complete lifecycle of case financial execution by prescribing standardized billing and reimbursement procedures, detailed case file documentation requirements, and rigorous accounting controls to facilitate timely case closure and prevent Antideficiency Act (ADA) violations

DODFMR Vol. 14 - Crime and Punishment and Understanding Purpose, Time, and Amount

Department of Defense Financial Management Regulation (DoD FMR) Volume 14, titled “Administrative Control of Funds and Antideficiency Act Violations,” establishes the comprehensive statutory and regulatory framework governing the proper execution of DoD funds and the strict prohibition of financial overreach. The volume dictates the administrative control of funds by requiring DoD Components to maintain rigorous systems for managing apportionments, allotments, and allocations to ensure obligations and expenditures never exceed currently available amounts. It details the provisions of the Antideficiency Act (ADA), which explicitly prohibits government officials from authorizing obligations or expenditures in excess of an appropriation, obligating funds before they are authorized, or accepting unauthorized voluntary services. To enforce these financial boundaries, the regulation outlines specific causes of and preventive measures against common ADA violations, such as exceeding statutory limitations on construction or improperly obligating Operation and Maintenance (O&M) funds. Furthermore, Volume 14 prescribes the extensive, multi-phased investigation and reporting process required when a potential ADA violation is discovered. This process includes conducting preliminary reviews and formal investigations to identify the root causes and the responsible officials, ultimately dictating the administration of disciplinary actions—which can range from administrative penalties to criminal charges—and mandating formal notification to external authorities, including the President, Congress, and the Government Accountability Office

DODFMR Vol. 13 - Categories A, B, and C: The Architecture of NAF Policy

Department of Defense Financial Management Regulation (DoD FMR) Volume 13, titled “Nonappropriated Funds Policy,” establishes the comprehensive financial management, accounting, and reporting framework for all DoD Nonappropriated Fund Instrumentalities (NAFIs). Operating independently from the Treasury's appropriated funds, NAFIs are required by this volume to adhere to Financial Accounting Standards Board (FASB) Generally Accepted Accounting Principles (GAAP) and utilize accrual accounting. The regulation mandates the use of the NAF Standard General Ledger (NAFSGL) and provides detailed guidance on the classification, valuation, and recording of assets, liabilities, net worth, income, and expenses. It outlines rigorous financial reporting standards, including the preparation of standard financial statements (such as the Balance Sheet, Statement of Income and Expense, and Statement of Cash Flows), analytical ratios, and IRS reporting requirements. Furthermore, Volume 13 provides extensive policies for specialized NAF operations, including the administration of NAF payroll, employee deductions, and benefits portability, the integration of Appropriated Fund (APF) support mechanisms like Uniform Funding and Management (UFM), and the complex accounting requirements for measuring and disclosing defined benefit pensions and postretirement plans

DODFMR Vol. 12 - Special Accounts and Foreign Amounts

Department of Defense Financial Management Regulation (DoD FMR) Volume 12, titled “Special Accounts, Funds and Programs,” establishes the comprehensive financial management policies, reporting requirements, and accounting procedures for a highly diverse array of specialized DoD activities. The volume begins by defining and classifying foundational federal fund groups—such as general, revolving, trust, special, and deposit accounts—to ensure proper recording and reporting of financial transactions,. It then provides detailed guidance for the administration of specific financial operations, including the management of direct loans and loan guarantees, grants and cooperative agreements, international agreements and foreign burdensharing,, base closures and realignments (BRAC), and the fiscal execution of contingency operations, which encompasses the handling of seized and vested funds as well as the DoD Rewards Program,,. Furthermore, Volume 12 governs the financial aspects of property and infrastructure management, detailing policies for determining liability for lost or damaged government property, the privatization of utility systems, and the leasing, transferring, and disposal of real and personal property,. The regulation also establishes rigorous controls for personnel-related financial programs—such as civilian separation incentives, educational assistance programs, and major military entitlements like the Military Retirement Fund and Medicare-Eligible Retiree Health Care Fund,—while outlining precise procedures for managing specialized revenues, gift funds, trademark licensing, energy conservation savings, food service and academy dining operations, and the oversight of on-base financial institutions and credit unions

DODFMR Vol. 11B - Getting Paid Back (By Us)

Department of Defense Financial Management Regulation (DoD FMR) Volume 11B, titled “Reimbursable Operations Policy - Working Capital Funds (WCF),” establishes the comprehensive financial management, accounting, and budgetary framework for all Defense Working Capital Fund (DWCF) activities. The volume details the lifecycle of DWCF entities, prescribing the strict criteria and chartering processes required for their establishment, as well as the procedures for transferring functions or closing activities, including the handling of Base Realignment and Closure (BRAC) impacts. It dictates that DWCFs are initially capitalized through appropriations or transfers but are designed to be self-sustaining by fulfilling reimbursable customer orders, operating on a break-even basis by utilizing stabilized rates and prices. Furthermore, the regulation mandates rigorous managerial cost accounting standards—such as specific job order costing procedures for depot maintenance—to accurately capture direct, indirect, and general and administrative (G&A) costs, including the treatment of military personnel expenses and depreciation. Volume 11B also governs the strict rules for revenue recognition and timely billing based on the percentage of completion or delivery, while providing specialized financial guidance for Supply Management Activities regarding inventory pricing and contract authority. Finally, it explicitly separates Mobilization Costs (such as maintaining surge capacity and war reserve materiel), requiring that these contingency readiness capabilities be funded by direct appropriations rather than being passed on to regular DWCF customers

DODFMR Vol. 11A - The Buck Comes Back : How the DoD gets paid for its work

Department of Defense Financial Management Regulation (DoD FMR) Volume 11A, titled “Reimbursable Operations Policy,” establishes the comprehensive financial guidelines for how DoD Components calculate, bill, and collect reimbursements for goods, services, and property provided to other DoD entities, federal agencies, foreign partners, and the public. The volume outlines the specific statutory authorities, documentation standards, and accounting procedures for executing inter- and intra-governmental transactions through mechanisms like Project Orders, Economy Act Orders, and Non-Economy Act Orders. It provides rigorous methodologies for establishing annual reimbursable rates (including military and civilian labor) and assessing user fees to ensure the Department accurately recovers full costs or fair market value. Furthermore, Volume 11A governs the disposition of proceeds and specialized financial procedures for diverse activities, such as the sale of surplus personal property and forest products, the use of the Major Range and Test Facility Base (MRTFB), and support for U.S. commercial space activities. Finally, it dictates the pricing, billing, and reimbursement rules for international and civil support missions—including International Acquisition and Cross-Servicing Agreements (ACSA), the International Narcotics Control Program, training with friendly foreign forces, and Defense Support of Civil Authorities (DSCA)—ensuring the proper recording of offsetting receipts across the Department's vast operational landscape

DODFMR Vol. 10 - Cleared for Purchase - Keeping the Mission Funded

Department of Defense Financial Management Regulation (DoD FMR) Volume 10, titled “Contract Payment Policy,” establishes the comprehensive framework and internal controls governing the entitlement, certification, and disbursement of vendor and contract payments. The volume mandates rigorous standards for prevalidation—the process of matching a planned disbursement with a recorded obligation before payment—and strict adherence to the Prompt Payment Act, ensuring that payments are made timely to avoid interest penalties while taking advantage of economically justified discount offers and rebates. It prescribes the required supporting documentation for commercial payment vouchers, including proper invoices and receiving reports, heavily emphasizing the use of electronic submission systems like Wide Area Workflow (WAWF). Furthermore, Volume 10 provides extensive guidance on a wide array of specialized financial scenarios, including miscellaneous advance payments, intra-governmental transactions, contract financing, commercial transportation, and reimbursements for personal expenditures. The regulation also dictates strict compliance procedures for handling Federal, state, local, and foreign taxes and their associated IRS reporting. Finally, it ensures ongoing financial integrity and accountability through detailed policies on contract reconciliation, the execution of payment recovery audits to identify and recapture overpayments, and the rigorous management and oversight of Government Purchase Card (GPC) programs and convenience checks

DODFMR Vol. 9 - Surviving DTS - A Survival Guide

Department of Defense Financial Management Regulation (DoD FMR) Volume 9, titled “Travel Policy,” establishes the comprehensive financial management guidelines and procedures governing official travel for DoD military members, civilian employees, and their dependents. Acting as a supplement to the Joint Travel Regulations (JTR) and Federal Travel Regulation (FTR), this volume dictates the rules for authorizing, processing, and settling travel claims across various categories, including Temporary Duty (TDY), Permanent Duty Travel (PDT), and Evacuation Allowances. It outlines specific transportation allowances, such as the use of rental cars and privately owned vehicles (POV), and establishes strict limits and procedures for issuing travel advances. Furthermore, Volume 9 details the administration of specialized PDT benefits, including the shipment of Household Goods (HHG), Dislocation Allowances (DLA), and the Relocation Income Tax Allowance (RITA). Finally, it mandates rigorous accountability standards for processing travel claims, defining the critical responsibilities of travelers, Authorizing Officials (AOs), and Certifying Officers to ensure the legal and accurate reimbursement of expenses using systems like the Defense Travel System (DTS) and forms like the DD 1351-2

DODFMR Vol. 8 - The Civilian Equation

Department of Defense Financial Management Regulation (DoD FMR) Volume 8, titled “Civilian Pay Policy,” establishes the comprehensive framework and procedures for administering civilian employee compensation, leave, and payroll operations within the Department. It mandates the use of the Defense Civilian Pay System (DCPS) and outlines rigorous internal controls for establishing pay records, processing electronic funds transfers, and certifying time and attendance (T&A) across various regular and alternative work schedules. The volume details the computation of basic and premium pay, statutory pay caps, and the administration of foreign and non-foreign allowances, while prescribing the strict order of precedence for mandatory deductions like taxes, retirement contributions, and garnishments. Furthermore, it provides extensive guidance on all categories of leave—including annual, sick, Family and Medical Leave Act (FMLA), and military leave—alongside procedures for processing voluntary allotments, managing back pay and injury compensation, and collecting non-DoD debts, bankruptcies, or tax levies. Finally, Volume 8 governs specialized payroll requirements for special category employees, such as firefighters, law enforcement officers, and Department of Defense Education Activity (DoDEA) educators, while ensuring all payroll activities are meticulously documented and reported to the appropriate external agencies and taxing authorities

DODFMR Vol. 7B - Wheels Down, Wallets Ready - The Strategy of Military Pensions

Department of Defense Financial Management Regulation (DoD FMR) Volume 7B, titled “Military Pay Policy - Retired Pay,” establishes the comprehensive policies and procedures governing the compensation of military retirees, former members, and their beneficiaries. It details the requirements for initial entitlements, including voluntary, mandatory, non-regular, and disability retirements, as well as transfers to the Fleet Reserve and Fleet Marine Corps Reserve,,. The volume prescribes the methods for gross pay computation based on various retirement systems (e.g., Final Pay, High-3, REDUX, and the Blended Retirement System) and governs the application of cost-of-living adjustments (COLA),,. Furthermore, the regulation provides extensive guidance on post-retirement circumstances that affect pay, such as active or reserve duty after retirement, foreign citizenship or government employment, physical or mental incapacitation, and convictions or misconduct,,,,. It mandates the specific rules for administering deductions, withholdings, and allotments, covering areas like Federal and State Income Tax Withholding, garnishments for child support and alimony, bankruptcies, and the recoupment of separation pay,,,,,,. A significant portion of the volume is dedicated to survivor and dependent programs, detailing elections, beneficiary eligibility, premiums, and annuity calculations for the Survivor Benefit Plan (SBP) and the Reserve Component Survivor Benefit Plan (RCSBP),,,,,. Finally, it governs specialized payment programs, such as Combat-Related Special Compensation (CRSC), Concurrent Military Retirement Pay and Department of Veterans Affairs (DVA) Disability Compensation, and the division of retired pay for former spouses under the Uniformed Services Former Spouses’ Protection Act

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