Revision to the Financial Management Regulation on the Horizon - Department of Defense

DISAM Journal, Summer, 2001 by Gregory W. Sutton

Despite numerous efforts over the past several years, there have been few significant updates to the DoD Financial Management Regulation DoD 7000.14 R, Volume 15, Security Assistance Policy and Procedures since the original publication date of March 1993. This trend took a dramatic change beginning in December 2000. Under the chairmanship of Tom Hafer, Office of the Under Secretary of Defense (0USD) Comptroller, Business Policy, and David Rude, Defense Security Cooperation Agency (DSCA) Comptroller, Financial Policy, a team with members from all three military departments, DFAS deputate for security assistance, DSCA, Defense Institute of Security Assistance Management (DISAM) and the 0USD comptroller have been meeting monthly to revise the entire Volume 15 of the Financial Management Regulation, chapter by chapter, paragraph by paragraph. Some joint membership on the financial integrated process review team has also had a synergistic effect and several new topic areas are being incorporated in the Financial M anagement Regulation. A summary of major proposed changes is included below. These changes have not been formally coordinated and thus are not final, and therefore significant detail is not provided in this article. It is anticipated that those less complex chapters will be formally coordinated through the DoD comptroller and military departments in a thirty day period beginning in mid July. Each chapter will be posted after a complete review. You should expect to see this occur in late August. More complex chapters, i.e., chapters 7 and S will likely take longer in coordination with anticipated release in the early fall September through October timeframe. The Financial Management Regulation is available, on-line, in several locations including Deskbook, DoD comptroller, DSCA, and DISAM web pages disam.osd.mil.

The following is a summary of proposed major changes to the Financial Management Regulation Volume 15.

* Global Changes

** Identified placeholders for future financial policy emphases.

** Removed fiscal year 2001 start date previously proposed for change in policy regarding CAS, LSC, PC&H and Transportation. (Instead, a surcharge assessment team is being formed.)

** Reflected new DFAS symbol (DFAS-AY/DE vice DFAS-DE/I).

** Updated DoD component responsibilities.

** Inserted hyperlinks to non-financial management regulation sites relevant to FMS.

** Added requirements announced in Department of the Secretary of Defense 13 Dec 99 memo.

* Foreword through Chapter 1

** Updated abbreviations and acronyms.

** Updated existing definitions and defined newly established terms.

** Updated references and inserted web site linkages.

** Clarified OUSD(C)/DSCA relationship.

** Emphasized DoD FMR is now maintained electronically.

** Refined the process by which suggested changes to Financial Management Regulation are staffed.

* Chapter 2

** Added new section 020107 (FMS Admin "safety" level).

** Updated admin/LSC/CAS budget processes.

** Revised 2060/2061 process.

** Updated pricing element codes (PECs).

** Overhauled case closure policy section.

** Rewrote the section on Anti-Deficiency Act and adverse financial condition.

* Chapter 3

** Reinstated special billing arrangements as a second form of U.S. government official payment claim.

** Clarified accounting for attrition charges.

** Updated object class codes and list of activities.

** Overhauled Administration/LSC/CAS section.

** Updated chart of accounts and related definitions and illustrations.

** Revised management control section.

* Chapter 4

** Clarified cash management characteristics.

** Reiterated proper usage of Table 4-1.

** Revised extensively the payment schedule section.

** Updated wire transfer and check instructions and LOA signed copy distribution.

** Reiterated requirement for EA to precede disbursement.

* Chapter 5

** Revised payment schedule review requirements.

** Clarified legal and policy definitions of debt, late payments, averages and applicability of interest.

** Added interest illustrations.

* Chapter 6

** Updated case file documentation requirements.

** Clarified file retention guidelines.

** Changed case planning milestones and case closure checklist.

* Chapter 7

** Rewrote reduced pricing section (e.g., EDA).

** Revised pricing methodology for calculating accessorials.

** Updated policy on what price and cost information that can be shared with FMS customers.

** Ensured consistency with DWCF and revolving fund policies.

** Updated cost elements.

** Revised tables throughout.

** Reiterated CLSSA progress payment reporting policy.

** Updated training pricing matrix and related policies.

** Added policy on distance learning pricing.

** Updated publications pricing policy.

** Included software pricing policy.

** Reduced SDAF section considerably.

** Moved case funding matrix and LSC table to SAMM.

** Overhauled draw down policy section.

** Inserted sections 607 and 632 policy.