DoD Financial Management Regulation Volume 1, Definitions

DEFINITIONS

1. Purpose

The purpose of this listing is to provide

definitions for terms used in the Regulation,

which are unique to the Federal Government or

the Department of Defense. This list does not

define terms when the normal dictionary defini-

tions are applicable.

2. Basic Concepts

This is by no means an exhaustive list of all

accounting terms. Unique terms that are of

significance or importance in accounting process-

es discussed in various Volumes of this Regula-

tion have been included. Suggestions for the

definition of additional terms may be submitted

directly to the Director, Defense Finance and

Accounting Service, Washington, D.C. 20376-5-

001.

3. List of Definitions:

Acceptance (Contract) - A formal certification

that the goods or services have been received

and that they conform to the terms of the con-

tract.

Accessorial Charges - Costs incurred for packing,

crating, and handling related to sales or ship-

ments of property.

Accounting Classification Code - A series of

alpha and numeric characters appearing on

accounting source documents. The characters

provide the information necessary to enter

transactions into DoD accounting systems.

Accounting Entity - In the Department of De-

fense the accounting entity is the DoD Compo-

nent; that is, the Department of the Army, the

Department of the Navy, the Department of the

Air Force, and the OSD and/or the Defense

Agencies, regardless of appropriation of fund.

Accounting Objectives - Goals toward which

accounting efforts are directed. The goals are

derived directly from legal and regulatory re-

quirements and the needs of intended users.

Accounting System Design Documentation -

Documentation supporting the design of an

accounting system that assures all relevant

accounting principles, standards, and related

requirements have been addressed. It consists of

three distinct documentation packages: (1) the

functional accounting system concept design, (2)

the functional detailed design, and (3) various

automated data processing documentation

packages which track functional user require-

ments to specific computer programs. See

Chapter 3 of this Volume for specific documen-

tation requirements.

Accounts Payable - Amounts owed by the ac-

counting entity for goods and services received.

(Also see "Accrued Expenditures - Unpaid.")

Accounts Receivable from the Government -

Amounts due from U.S. Government organiza-

tions or funds. It also includes amounts due

from U.S. Government sources that are deposited

into U.S. Treasury general fund receipt accounts

when collected.

Accounts Receivable from the Public - All ac-

counts receivable arising from the sale of goods

and services and from operations involving other

than Federal Government organizations. It

includes amounts from public sources that are

deposited into U.S. Treasury general fund receipt

accounts when collected. Examples are debts

owed by military personnel, civilian employees,

contractors, and nonappropriated fund instru-

mentalities.

Accrued Expenditures - The 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, carri-

ers, grantees, lessors, etc.; (2) goods and other

tangible property received; and (3) items such as

annuities or insurance claims for which no

current service is required. Accrued expendi-

tures are categorized as either paid or unpaid.

Accrued Expenditure-Paid - The budgetary

account which matches the proprietary account

"funds disbursed." It represents the dollar value

Volume 1, Definitions DoD Financial Management Regulation

of goods and services received for which pay-

ment has been made.

Accrued Expenditure-Unpaid - The budgetary

account which matches the proprietary account

"accounts payable." It represents the dollar value

of goods and services received for which pay-

ment has not been made. (Also see "Accounts

Payable.")

Accrued Variance (Foreign Currency Fluctua-

tions) - The difference between unliquidated

obligations at the budget rate (approved execu-

tion rate) and the foreign exchange rate current

at the time of payment.

Acquisition Cost - Consists of the amount, net of

both trade and cash discounts, paid for the

property, plus the transportation costs. (See

"Discount (Cash)" and "Discount (Trade).")

Administrative Subdivision of Funds - Any

subdivision or legal restriction of an appropria-

tion or fund that makes funds available in a

specified amount for incurring obligations.

Frequently used subdivisions include apportion-

ments, OSD release documents, allocations,

suballocations, allotments and suballotments.

Advance of Pay - A prepayment made available

to an employee in a pay status.

Advances - Disbursements of funds from Depart-

ment of Treasury accounts before performance

has been certified by an authorized DoD receiv-

ing official. It differs from a financing payment

in that no performance has occurred.

Agency Financial Management System. The total

of agency financial systems, both manual and

automated, for planning, budget formulation and

execution, program and administrative account-

ing; as well as all other systems for recording

and classifying financial data and reporting

financial management information, including

purchasing, property, and inventory.

1. Financial Management Information.

All information that is expressed in dollar terms

on federal spending, collections, assets, liabilities,

equity, and related budgetary and accounting

transactions and balances.

2. Accounting System. The structure

of methods and procedures used to record,

classify, accumulate, analyze, summarize, and

report information on the financial condition and

operating position. It is comprised of the vari-

ous functional operations involved in autho-

rizing, recording, classifying, analyzing, and

reporting financial information related to financ-

ing sources, gains, expenses, losses, transfers,

assets, liabilities, equity, and internal controls. It

encompasses the procedures and processes from

the point a transaction is authorized through

processing the data, either manually or automati-

cally, to issuance of financial and management

information statements and reports.

a. Primary Accounting Systems.

The aggregation and consummation of like

financial management information aligned by the

major operational areas and summarized to

support financial and management information

needs. There are five Primary accounting sys-

tems made up of the single, standard integrated

Departmental accounting systems which controls

all financial management information. The

Primary accounting systems are General, Busi-

ness Operations Fund (Stock Fund and Industrial

Fund), Trust Fund, Civilian Pay, and Military

Pay.

b. Administrative Accounting

Systems:

1. Accounting Support

Systems. The manual or automated programs,

procedures and processes which authorize,

record, classify, analyze, and report on financial

management information for one of the Primary

accounting systems. Accounting Support sys-

tems provide general ledger control and financial

information on operations for consolidation to

the Primary accounting systems.

2. Subsidiary Accounting

Systems. The manual or automated programs,

procedures and processes for one of the various

functional operations involved with revenues,

expenses, assets, liabilities, and equity. The

Subsidiary accounting systems form the founda-

tion and audit trail for the Primary accounting

systems and the Accounting Support systems.

DoD Financial Management Regulation Volume 1, Definitions

c. Accounting System Modules.

Modules are distinguished by the fact that their

functions and systems of internal controls are

embodied in the accounting system. As such,

modules are fully integrated subsystems of an

accounting system, and they are inventoried and

evaluated in conjunction with the accounting

system.

d. Feeder Systems. The manual

or automated programs, procedures and process-

es which develop data required to initiate an ac-

counting or financial transaction but do not

perform an accounting operation (e.g., personnel,

property, or logistics systems).

Allocation and Suballocation - An authorization

by a designated official of a DoD Component

making funds available within a prescribed

amount to an operating Agency for the purpose

of making allotments and incurring obligations.

Allocations - Departmental-level accounting

entity distributions of apportionments, or funds

that do not require apportionment, to an operat-

ing Agency or other intermediate level account-

ing entity.

Allotment and Suballotment - An authorization

by the Head of an operating Agency, or desig-

nee, to the Head of any organizational unit to

incur obligations within a specified amount; a

formal distribution of an allocation or suballoca-

tion and must contain at least the same legal and

other limitations applicable to the allocation or

suballocation. A distribution of budget authority

to an installation-level accounting entity.

Annual (1-Year) Authority - Budget authority

that is available for obligation only during a

specified fiscal year and expires at the end of

that time.

Anticipated Reimbursements - The dollar value

of orders expected to be received during the

forthcoming fiscal year. Anticipated reimburse-

ments do not create obligational authority until

an actual order is received and accepted. There

is an exception to this rule for business operation

funds.

Antideficiency Act - Legislation enacted by

Congress to prevent the incurring of obligations

or the making of expenditures (outlays) in excess

of amounts available in appropriations or funds;

to fix responsibility within an agency for the

creation of any obligation or the making of any

expenditure in excess of apportionment or

reapportionment or in excess of other subdivi-

sions established pursuant to sections 1341 and

1517 of 31 U.S.C.; and to assist in bringing about

the most effective and economical use of appro-

priations and funds.

Apportionment and Reapportionment - A distri-

bution made by Office of Management and

Budget (OMB) of amounts available for obliga-

tion in an appropriation or fund account into

amounts available for specified time periods,

activities, projects, objects, or combinations

thereof. The amounts so apportioned limit the

obligations that may be incurred.

Appropriation Limitations - Statutory and other

special restrictions which impose a restriction on

the availability of funds or the authority to

obligate or expend appropriations for certain

objects or purposes; such as, family housing.

Appropriation Warrant - An official U.S. Trea-

sury document that provides the dollar amounts

established in the general and detailed appropri-

ation accounts of the U.S. Treasury pursuant to

Appropriation Acts authorized by law. It serves

as a convenient source document for entries into

accounts that establish the amount of money

authorized to be withdrawn from the U.S. Trea-

sury.

Appropriations - Statutory authority to incur

obligations and to make payments out of the

U.S. Treasury for specified purposes. For pur-

poses of the Antideficiency Act Sections 1341

and 1517 of 31 U.S.C.), "appropriations" is de-

fined as appropriations, funds, and authority to

create obligations in advance of appropriations

or any other authority making funds available

for obligation or expenditure. (See "Contract

Authority" and "Continuing Resolution.")

Asset Use Charge - A charge for the use of DoD

assets (facilities and/or equipment) to recoup

depreciation and interest on investment.

Volume 1, Definitions DoD Financial Management Regulation

Bench Stock (Also Shop Stock) - Inventory held

by a cost center for use as indirect material and

used in support of numerous small projects or

activities carried out by the cost center. Small

items such as screws, washers, and lubricants

characterize this type of stock.

Book Value - The original acquisition cost of a

capital asset less the total recorded accumulated

depreciation.

Borrowing Authority - Statutory authority to

incur obligations and to make payments for

specified purposes out of borrowed money.

Within the Department of Defense, borrowing

authority is used for mortgage assumptions

under the Homeowners Assistance Program and

for loans from the Federal Financing Bank.

Budget Authority - Authority provided by law to

enter into obligations that will result in immedi-

ate or future outlays involving Federal Govern-

ment funds. The basic forms of budget authority

are appropriations, authority to borrow, and

contract authority. Budget authority relates to

direct programs. (Also see "Obligational Author-

ity.")

Budget Rate - A foreign currency exchange rate

provided to DoD Components for use in prepar-

ing budget submissions during budget formula-

tion and for recording obligations during budget

execution. Budget rates are provided by the

DoD Comptroller and may be modified by the

Congress. During execution, foreign currency

obligations are recorded using the budget rate

(rates approved for execution). Also see Foreign

Currency Fluctuations.

Budgetary Resources - For purposes of budget

execution, budgetary resources include new

budget authority, available unobligated balances

at the beginning of the year, reimbursements and

other income (also known as offsetting collec-

tions credited to an appropriation or fund ac-

count), recoveries of prior year obligations from

unexpired accounts, and restorations. In the case

of reimbursable work, budgetary resources

available for obligation are comprised of earned

reimbursements and unfilled customer orders

(limited by the amounts collected in advance for

orders from the public). In the case of loan

programs, budgetary resources available for

obligation from loan repayments and interest on

loans are comprised of actual collections when

authorized to be used.

Business Concern - Any person or organization

engaged in a profession, trade, or business, and

nonprofit entities (including State and local

governments, but excluding Federal entities)

operating as contractors.

Cash-Flow Process - Each process of collecting or

disbursing moneys for Agency programs or

operations, and for balances held outside of the

U.S. Treasury.

Cash-Flow Report - A document summarizing

each unique cash-flow process and correspond-

ing opportunities for new cash management

improvements.

Cash Held at Personal Risk - Cash held by

authorized disbursing officers, their cashiers, and

their agent officers, including alternates, for

making miscellaneous cash payments, meeting

cash payrolls or making change; funds estab-

lished for making small purchases; imprest

funds; cash held pending delivery to other

disbursing officers; and for other purposes

specifically authorized by law.

Cashier - An officer or employee of a Federal

Department, Agency or Corporation who, having

been recommended by the head of the activity,

has been designated as a cashier by the officer

responsible for making disbursements and is

authorized to perform limited cash disbursing

functions or other cash operations.

Cash Management - Practices and techniques

designed to accelerate and control collections,

ensure prompt deposit of receipts, improve

control over disbursement methods, and mini-

mize idle cash balances.

Cash Management Review - An ongoing study

of an Agency’s cash-flows and corresponding

cash management processes or mechanisms

conducted to identify implementable improve-

ment opportunities in an Agency’s cash manage-

ment practices.

xii

DoD Financial Management Regulation Volume 1, Definitions

Centrally Managed Allotment - Authority issued

by the holder of an allocation for incurring

obligations for a specific purpose and in a specif-

ic amount. It is administered by publishing a

centrally-managed allotment account number

that permits authorized officials to charge the

account for authorized purposes without further

determination or certification of fund availability

for individual transactions.

Clearing Accounts - Accounts established solely

to temporarily hold general, special, or trust

fund collections or disbursements pending

clearance to the applicable receipt or expenditure

budgetary account. Except for clearance to the

applicable receipt or expenditure budgetary

account, clearing accounts are not available for

obligation or expenditure.

Collections - Amounts received during the fiscal

year. Collections are classified into two major

categories: budget receipts and offsetting collec-

tions. Offsetting collections are classified into

two major categories: offsetting receipts and

collections credited to appropriation or fund

accounts.

Commitment - An administrative reservation of

funds based on firm procurement requests,

unaccepted customer orders, Directives, and

equivalent instruments.

Compensated Absence - An employee absence

for vacation, illness, jury duty, or military leave

for which the employee is paid.

Component Debt - Debt incurred by DoD Com-

ponents and generally associated with housing

programs determined to be necessary to carry

out the DoD mission.

Component Liaison Office - When DFAS was

established, each Military Department and the

Defense Logistics Agency (DLA) formed finan-

cial management liaison offices in their Head-

quarters. The primary purpose of these staffs

was to provide adequate communication among

DFAS, and its larger customers; ensure the

adequate dissemination of information; and help

coordinate DoD finance and accounting policy

and other issues.

Some of the liaison functions at the Depart-

mental level are still required to ensure adequate

communications and coordination of finance and

accounting issues among DFAS and DoD Com-

ponents. DoD Agencies may establish a liaison

focal point to interface with DFAS on an as

required basis.

Conceptual Design of Accounting System -

Documentation of the process that leads to a

decision to develop a new accounting system or

system segment, or to initiate a major upgrade

effort. Documentation reveals the deficiencies in

the current system, the accounting entities in-

volved, the parameters of the accounting system,

the accounting structure, security considerations,

the alternatives considered, and the economic

analysis developed to support a decision.

Consolidated Working Fund Accounts - Ac-

counts established to hold funds transferred

from other Agencies, DoD Components, or

accounts until transferred to an appropriate

account authorized by provisions of law. Appli-

cable funds are not available for obligation or

expenditure.

Contingent Liability - The term has two mean-

ings. As a budgetary term, it represents vari-

ables that cannot be recorded as valid obliga-

tions. Such variables include (1) outstanding

fixed price contracts containing escalation, price

redetermination, or incentive clauses, or (2)

contracts authorizing variations on quantities to

be delivered, or (3) contracts where allowable

interest may become payable by the U.S. Govern-

ment on contractor claims supported by written

appeals pursuant to the "DISPUTES" clause

contained in the contract. As a proprietary

accounting term, it represents an obligation,

relating to a past transaction or other event or

condition that may arise in consequence, as a

future event now deemed possible but not

probable. When the liability is determined to be

possible, but not probable, the potential liability

is disclosed as a footnote to the financial state-

ments. When the potential liability become

probable, it is recorded in the accounts as a

current liability or a reduction of an asset. The

budget definition is the preferred usage.

xiii

Volume 1, Definitions DoD Financial Management Regulation

Continuing Resolution - The Congressional

resolution, in the absence of an appropriation

act, providing authority for Agencies to continue

current operations. Such continuing resolutions

are subject to OMB apportionment in the same

manner as appropriations.

Contract. Any enforceable agreement, including

rental and lease agreements and purchase orders,

between an Agency and a business concern for

the acquisition of property or services.

Contract Authority - Statutory authority to incur

obligations but with liquidation of obligations

dependent upon future actions of the Congress.

Contract Financing Payment - A Government

disbursement of monies to a contractor under a

contract clause or other authorization before

physical delivery and the acceptance of supplies

or services by the Government.

Contract Liquidating Authority - An appropria-

tion, or reappropriation, enacted to pay the

obligations incurred under the contract authority.

Contractor-Acquired Property - Property pro-

cured or otherwise provided by a contractor for

the performance of a contract. It does not in-

clude government furnished material or equip-

ment.

Cost - A monetary measure of the amount of

resources applied to a cost objective. Within the

Department of Defense, "costs" are identified

following General Accounting Office accounting

principles and standards as implemented in this

Regulation. The fact that collections for some

cost elements are deposited into Miscellaneous

Receipts of the Treasury does not make those

costs "extraneous." It simply means the Con-

gress has not authorized such amounts to be

retained by appropriation accounts. After costs

have been identified, following Comptroller

General cost accounting rules, a DoD Component

may proceed to eliminate cost elements, or

process waivers, in accordance with legal author-

ities.

Cost Center - A logical or physical grouping of

one or more similar services for the purpose of

identifying obligations or developing the cost

identification for the services. Services are

grouped into cost centers in order to (1) normal-

ize between services that use similar resources

with different capabilities, (2) apply surcharges

and discounts to services, (3) identify costs for

different classes of the same service, or (4)

identify obligations. This is the lowest level (that

is, unit) or activity that is used to identify obliga-

tions or expend resources to produce a unit of

work, and the lowest level of activity to segre-

gate costs for management in order to assess

efficiency, usage, examine trends, etc.

Cost Clearing Account - An account used when

standard rates are employed. The actual expens-

es are debited to the cost clearing account and

the amounts billed to customers are credited to

the account. At the end of the fiscal year, the

account is closed with analysis performed to

determine if rates require adjustment.

Cost Finding - Procedures designed to accom-

plish an end result that would approximate the

results that would have been obtained if a

formal cost accounting system was in operation.

Cost Objective - An activity, operation, or com-

pletion of a unit of work to complete a specific

job for which management decides to identify,

measure, and accumulate costs. The cost objec-

tive must be discrete enough and described in

writing to such a level of detail to form a basis

to establish cost centers and output products.

Current Receivable - All receivables that will be

due within the 12 months following the report-

ing period.

Current Value of Funds Rate - The average

investment rate for the U.S. Treasury Tax and

Loan accounts expressed as an annual rate and

published by the U.S. Treasury in the "Federal

Customer Order - An order received and accept-

ed by the performing activity from a customer.

It is written evidence that a meeting of the

minds has taken place and that certain goods

and services will be provided to the tenderer of

the order for payment of a dollar amount. The

order must contain an original signature or

equivalent of both the ordering activity and the

xiv

DoD Financial Management Regulation Volume 1, Definitions

receiving activity and must specify a dollar

amount. The specified dollar amount cannot be

exceeded.

Cutoff Time - A time prescribed by a financial

institution beyond which transactions presented

or actions requested will be deferred to the next

banking day’s business.

Day - A calendar day, unless otherwise noted.

If the day on which an action is required falls on

a nonworking day, then day means the next

working day.

Default - Failure to meet any obligation or term

of a credit, grant, or other agreement.

Defense Business Operations Fund - The Defense

Business Operations Fund, or the Fund, operates

with financial principles that provide improved

cost visibility and accountability to ensure busi-

ness management and improve the decision

making process. The Fund builds on revolving

fund principles previously used for industrial

and commercial-type activities. Successful

implementation of the Fund is essential to

achieve the following Defense Management

Report initiatives: 1) consolidating like func-

tions, 2) increasing cost visibility, and 3) realiz-

ing significant monetary savings through better

business practices.

Deferrals - Budgetary resources which have been

deferred as reserves to provide for contingencies

to achieve savings made possible by or through

changes in requirements or greater efficiency of

operations or as specifically provided by law.

Definite Authority - Authority that is stated as a

specific sum at the time it is granted. This

includes authority stated as not to exceed a

specified amount. Most DoD appropriations are

for definite amounts of authority.

Delinquent - Billed amounts which are not paid

within 30 days of the date of the initial demand

or as of the due date specified in the contract or

agreement.

Demand Cash Withdrawal - Commercial checks

made payable to cash for withdrawal by the

cashier.

Deposit - When used as a noun, means money

that is being or has been presented for credit to

the U.S. Treasury. Such transfers may be made

by Agencies or directly by the remitter. All such

transfers are effected through a Federal Reserve

bank or other financial institution. When used

as a verb, means the act of presenting moneys

for credit to the U.S. Treasury by an official of an

Agency.

Deposit Funds - Receipts held in suspense

temporarily and later refunded or paid into some

other Treasury fund or other entity held by the

Department of Defense as banker or agent for

others and paid out at the direction of the own-

er.

Deposit Fund Accounts - Expenditure accounts

established to account for receipts (1) held in

suspense temporarily and later refunded or paid

into some other fund of the Government, or

other entity, or (2) held by the Government as

banker or agent for others and paid out at the

direction of the owner. Such funds are not

available for paying salaries, grants, or other

expenses of the Government. Expenditures are

often offset by receipts within this type of fund.

Depositary Account - Interest or non-interest

bearing checking account.

Deposit (Next Day) - A deposit made before the

cutoff time on the day following the day on

which the funds were received by the Agency.

For example, if an Agency receives funds for

deposit at 3 p.m. on Monday, and transmits the

deposits to the bank by 2 p.m. on Tuesday (the

depositary’s cutoff time) then next day deposit

requirements are met.

Deposit (Same Day) - A deposit made before the

cutoff time on the day on which the funds were

received by the Agency. For example, if an

Agency receives funds for deposit at 10 a.m. on

Monday and transmits the deposits by 2 p.m. on

Monday (the depositary’s cutoff time) then same

day deposit has been achieved.

Volume 1, Definitions DoD Financial Management Regulation

Depreciation - Depreciation recognizes the

allocation of cost of depreciable physical plant,

property, or equipment as an operating expense

over the periods in which the assets are expected

to provide benefits.

Direct Cite - Citation of customer funds as the

financing source on documents leaving the DoD

system, that is, contracts with commercial firms,

General Services Administration, or Department

of Transportation. The term direct cite is not

valid if any DoD organization establishes a

reimbursable order to a DoD appropriation

account, or business operation fund. When

direct cite is used, all accounting is accomplished

by the ordering activity. The source documents

are returned to the allotment holder who accom-

plishes all required accounting. In the case of

the Foreign Military Sales program, it specifically

refers to documents that result in a disbursement

to other than a DoD organization (a contractor,

other Federal Agency, or employee).

Direct Delivery - Items shipped directly from a

contractor to a customer, whether from a consoli-

dated military services procurement or a contract

solely for that customer.

Direct Loan - An obligation created when the

Government disburses the funds and contracts

with the debtor for repayment, with or without

interest, or when the Government acquires a

guaranteed private loan in satisfaction of default

or other claim.

Direct Program - The budget authority in an

appropriation act. (See "Budget Authority".)

Disbursements (Net of Refunds) - The amount of

checks issued, cash payments made, and "no--

check-issued" disbursement transactions (charges

to an appropriation or fund account that were

initially charged to another appropriation or

fund account with reimbursement effected

without a check issuance) processed that were

reported to the Treasury during the reporting

period, including amounts reported on DD

Forms 1400, "Statement of Interfund Transac-

tions" and Statements of Intra-Governmental

Transactions. It includes amounts of mortgages

assumed, but does not include amounts of

principal payments. Amount reported is net of

refunds collected and reported to the Treasury

and does not include nonexpenditure transac-

tions such as appropriation transfers or invest-

ments in U.S. government securities.

Disbursing Officer - An officer or employee of a

Federal Department, Agency or Corporation

designated to disburse moneys and render

accounts according to laws and regulations

governing the disbursement of public moneys.

Discount (Cash) - A reduction in the amount due

on an account payable if paid within a stated

period.

Discount (Trade) - A reduction in price, usually

varying in percentage with volume of transac-

tions, made by vendors to those engaged in

certain businesses and allowable irrespective of

the time when the account is paid.

DoD Component - For purposes of this Regula-

tion, "DoD Component" refers to the following

organizations: the Office of the Secretary of

(OSD), the Military Departments, the Joint Staff,

the Defense Agencies, Washington Headquarters

Services (WHS), and the Uniformed Services

University of the Health Sciences (USUHS).

DoD Education Benefits Trust Fund - A fund

established for education assistance purposes for

active and reserve force personnel. It derives its

resources through transfers from military person-

nel accounts and from interest earned from

investments in Federal Government securities.

Earned Reimbursement - The amount recognized

when a performing organization renders actual

or constructive performance on a reimbursable

order.

"Economy Act" Order - An order for goods or

services placed by a Federal Agency or Depart-

ment to another governmental agency under the

provisions of Section 1535, Title 31, United States

Code.

Electronic Funds Transfer (EFT) - The act of

debiting or crediting accounts in financial institu-

tions by wire rather than source documents, such

as, paper checks. Processing typically occurs

through the Federal Reserve Bank clearing houses.

xvi

DoD Financial Management Regulation Volume 1, Definitions

Entitlements - Legally established benefits avail-

able to any person or unit of Government meet-

ing eligibility requirements established by law.

Executory Costs - Those costs associated with

ownership of an asset such as insurance, taxes,

and normal maintenance. In the case of a capital

lease, the portion of the lease payment that

represents executory costs is not capitalized, but

is expensed.

Expense - As a budget term, expense is generally

any charge to an operation and maintenance

appropriation account. Some appropriation

accounts, such as the Military Construction and

the Research, Development, Test and Evaluation

appropriations accounts, provide authority to

charge both expense and capital investments to

the account. As an accounting term, expense is

the value of resources consumed during current

period operations.

Expired Account - An account in which budget

authority to incur original obligations has ceased

to be available. However, the account is avail-

able to fund upward within scope adjustments of

original obligations.

Facilities - Industrial property (other than materi-

al, special tooling, special test equipment, and

military property) for production, maintenance,

research, development, or test including real

property (other than land) and rights therein,

buildings, structures, improvements, and plant

equipment, (including capital leases.)

Fast Pay - Disbursement to a contractor based on

the contractor’s certification that delivery has

been made at the time an invoice is presented for

payment.

Federal Agency. This has the same meaning as

the term "Agency" in Section 551(1) of Title 5,

U.S.C., and also includes any entity that is

operated exclusively as an instrumentality of

such an Agency for administering one or more

programs of that Agency. DoD nonappropriated

fund activities are included under this definition.

Financial Institution - Bank, Savings Association,

or Credit Union eligible under 31 CFR 202 to

serve as a Government depositary.

Financial Management System - The DoD Finan-

cial Management System consists of a triad

architecture. The three segments of the triad are

as follows: Planning, Programing, and Budget-

ing System (PPBS); Army, Navy, Air Force and

Defense Agency accounting systems; and all

other systems that provide financial information

to management.

Financing Interest - Interest charged as a cost of

extending credit as distinguished from interest

charged because of delinquency.

Financing Payment - Disbursement of funds

from Department of Treasury accounts after

performance has occurred but before physical

delivery. The most common type of financing

payment is the progress payment made to DoD

contractors in reimbursement for incurred cost

before ordered items or material are delivered.

Foreign Currency Fluctuations - The difference

between budget rates approved for execution

and actual foreign currency exchange rates in

effect at time of payment that cause changes in

obligations or contractual liabilities. Obligations

are recorded using the budget rate, and pay-

ments are made using the current foreign curren-

cy exchange rate.

Foreign Currency Unliquidated or Liquidated

Obligations - Foreign currency unliquidated

obligations are derived by taking obligations at

the budget rate less the disbursements at the

budget rate. Foreign currency liquidated obliga-

tions is the actual disbursement at the budget

rate.

Funded Carryover - The incomplete portion of a

job order for goods or services to be provided by

a business operation fund activity. Usually,

funded carryover is measured at the end of a

fiscal period, that is, a fiscal year.

Fund Groups - The range of numeric or alpha

and/or numeric account symbols assigned by the

Treasury to identify groups of accounts; such as,

0000 to 3799 = General Funds.

General Fund Accounts - These consist of (1)

receipt accounts used to account for collections

not dedicated to specific purposes and (2) expen-

xvii

Volume 1, Definitions DoD Financial Management Regulation

diture accounts used to record financial transac-

tions arising under congressional appropriations

or other authorizations to spend general reve-

nues.

General Fund Receipt Accounts - Accounts

established for receipts of the Federal Govern-

ment that are not earmarked by law for specific

purpose and that are not available for obligation

and expenditure.

General Management Computer - A computer

that is used for any purpose other than as a part

of a process control system, space system, mobile

system, or equipment that is an integral part of

a weapon or weapons system. It also excludes

equipment involved with intelligence activities

and cryptologic national security activities.

Government-Furnished Equipment (GFE) -

Property provided to a contractor by DoD. It is

used in producing an end product. It is not

consumed, but is returned in the same form at

the end of the contract.

Government-Furnished Material (GFM) - Proper-

ty provided to a contractor by the Department of

Defense. It may be incorporated into an end

item (a change in form) or may be consumed in

the performance of a contract.

Grants - Assistance awards for which no sub-

stantial involvement is anticipated between the

Department of Defense and the recipient during

performance of the contemplated activity.

Guaranteed Loan - A contingent liability created

when the Government insures the private lender

who disbursed the funds that the lender will be

repaid to the extent of the amount or percentage

guaranteed in the event of default by the debtor;

a DoD Component pledge to pay part or all of

the loan principal and interest to a lender, or

holder, of a security in the event of default by a

third party borrower.

Holdback - The amount withheld from progress

payments to contractors to assure compliance

with contract terms. Usually the amount to be

withheld is expressed as a percentage in the

contract provisions.

Imprest Fund - A fixed-cash or petty-cash fund

in the form of currency or coin for cash pay-

ments specifically authorized. The fund may be

a revolving type, replenished to the fixed

amount as spent or used, or of a stationary

nature, such as a changemaking fund.

Indefinite Appropriations - Appropriations of a

current or permanent nature in which a definite

amount is not stated.

Indefinite Authority - Authority for which a

specific sum is not stated, but is determined by

other factors such as the receipts from a certain

source or obligations incurred.

Information Technology Facility (ITF) -An

organizationally defined set of personnel, hard-

ware, software, and physical facilities, operated

within or on behalf of the Department of De-

fense, a primary function of which is the opera-

tion of information technology. An ITF includes:

(1) The personnel who operate computers

or telecommunications systems; develop or

maintain software; provide user liaison and

training; schedule computers; prepare and con-

trol input data; control, reproduce, and distribute

output data; maintain tape and disk libraries;

provide security; and provide direct administra-

tive support to personnel engaged in these

activities.

(2) The owned or leased computer and

telecommunications hardware, including central

processing units; associated peripheral equip-

ment such as disk drives, tape drives, printers,

and consoles; data entry equipment; telecommu-

nications equipment including control units,

terminals, modems, and dedicated telephone and

satellite links provided by the facility to enable

data transfer and access to users. Hardware

acquired and maintained by users of the facility

is excluded.

(3) The software, including operating

system software, utilities, sorts, language proces-

sors, access methods, data base processors, and

similar multi-user software required by the

facility for support of the facility and/or general

use by users of the facility. All software ac-

xviii

DoD Financial Management Regulation Volume 1, Definitions

quired or maintained by users of the facility is

excluded.

(4) The physical facilities, including com-

puter rooms, tape and disk libraries, stockrooms

and warehouse space, office space, and physical

fixtures.

Initiation - An administrative reservation of

funds based on procurement directives, requests,

or equivalent instruments that authorize prelimi-

nary negotiations, but require that funds be

certified by the official responsible for the ad-

ministrative control of funds before incurrence of

the obligation. Initiations are entered into mem-

orandum accounts to help keep precommitment

actions, such as approved procurement programs

and procurement directives, within the available

subdivision of funds.

Intangible Assets - Amortizable investment that

costs $15,000 or more; have projected pay-back

periods; have economic value but lack physical

substance which is to be used over some period

(useful life), the length of which is estimated to

be 2 years or greater; and have no residual value

at the end of the estimated useful life. Examples

of intangible assets are management initiatives,

organization of new functions, or reorganization

of old functions, strategic planning, future sys-

tem requirement development, and dedicated

training initiatives.

Interagency Allocations - Distributions of an

Agency’s budgetary resources to another Agen-

cy, separately identified in the accounts to ensure

that the recipient Agency is responsive to the

allocating Agency. Such allocations may be

non-expenditure transfers, which establish trans-

fer appropriation accounts, or subdivisions of a

DoD Component’s funds to another DoD Com-

ponent to cite directly.

Internal Control Documentation - Written poli-

cies, organization charts, procedural write-ups,

Manuals, memoranda, flow charts, decision

tables, completed questionnaires, software, and

related written materials used to describe the

internal control methods and measures, to com-

municate responsibilities and authorities for

operating such methods and measures, and to

serve as a reference for persons reviewing the

internal controls.

Internal Controls - The manner in which finan-

cial, manpower, and property resources are to be

controlled and safeguarded by the regular autho-

rization, approval, documentation, recording,

reconciling, reporting, and related accounting

processes.

Internal Control Standards - The standards

issued by the Comptroller General for use in

establishing and maintaining systems of internal

control. Those standards are applicable to all

operations and administrative functions, but are

not intended to limit or interfere with duly

granted authority for the development of legisla-

tion, rulemaking, or other discretionary policy-

making in an Agency.

Internal Control Techniques - The application of

prescribed processes and documents to efficient-

ly and effectively accomplish an internal control

objective and to help safeguard an activity from

waste, loss, unauthorized use, or misappropria-

tion.

Inventory Price - For non-stock fund items the

inventory price is the acquisition cost. For stock

fund items the inventory price is acquisition cost

plus prescribed surcharges. (See "Acquisition

Cost".)

Investment - As a budget term, investment refers

to equipment financed with procurement appro-

priation accounts. As an accounting term,

investment is an asset that meets prescribed

capitalization criteria established by the Comp-

troller General.

Invoice Payment - A Government disbursement

of monies to a contractor under a contract or

other authorization for supplies or services

accepted by the Government.

Leave and Earnings Statement - A document

provided to each employee or service member

showing gross pay, deductions, and net pay for

a pay period and cumulative totals for the

calendar year to date, along with leave balances

at the end of the pay period.

xix

Volume 1, Definitions DoD Financial Management Regulation

Leave Record - A record showing the amounts of

leave earned and used, and the balance available.

Letter Contract - An offer and acceptance that is

specific and definitive enough to show the

purpose and scope of the final contract to be

executed. When accepted in writing by the

contractor, documentary evidence exists to

support the recording of an obligation.

Loan Guarantees - Agreements by which a DoD

Component pledges to pay part or all of the loan

principal and interest to lenders or holders of

securities in the event of default by third-party

borrowers.

"M" Account - A successor account into which

obligated balances under an appropriation are

transferred (merged) at the end of the second

full fiscal year following expiration. The "M"

account remains available for the payment of

obligations and liabilities incurred by the ac-

counts that have been merged. Due to Public

Law 101-510, the "M" Account will be canceled

in its entirety as of September 30, 1993.

Management Fund Accounts - Working fund

accounts authorized by law to facilitate account-

ing for collections from two or more appropria-

tions or funds to finance an activity not involv-

ing a continuing cycle of business-type opera-

tions and that are available for obligation and

expenditure. Those are combined receipt and

expenditure accounts established by law, with

receipts derived from such operations usually

available in their entirety for use by the fund

without further action by the Congress.

Meat, Poultry Meat, Meat Food Products Poultry

Meat Food Products, Eggs, or Egg Food Prod-

ucts. Perishable (fresh, chilled, or frozen) meat

and poultry meat, including processed meat and

poultry meat food products, such as luncheon

slices, frankfurters, bacon and ham, fresh eggs,

and perishable egg products. It excludes non-

perishable meats and poultry meats, all perish-

able and nonperishable mixed products (meat

and/or poultry meat combined with other food

ingredients), seafood, and game.

A. Eggs. Fresh whole shell eggs of

the domesticated chicken, turkey, duck, goose, or

guinea.

B. Egg food products. Only frozen

whole eggs, egg whites, and/or egg yolks.

Military Interdepartmental Purchase Request

(MIPR) - An order issued by one military service

to another to procure services, supplies, or

equipment for the requiring service. The MIPR

(DD Form 448) may be accepted on a direct

citation or reimbursable basis. It is an "Economy

Act" (31 U.S.C. 1535) order subject to downward

adjustment when the obligated appropriation is

no longer valid for obligation.

Military Property - All property owned by the

Department of Defense. In regard to Govern-

ment-provided property, this is Government--

owned personal property designed for military

operations.

Military Retired Pay - (A reduced pay entitle-

ment for reduced services.) The gross monthly

entitlement for a retired member of the Uni-

formed Services based on terms and conditions

of law, pay grade, years of service, percentage of

disability (if applicable), and date of retirement.

Military Retirement Trust Fund - A trust fund

established for the purpose of financing the

retirement cost of active and reserve military

personnel. An accrual amount is transferred

monthly from the military personnel accounts to

the Fund based on a fixed percentage of basic

pay for full-time and part-time personnel. The

accrual amounts are determined by the DoD

Board of Actuaries who are appointed by the

President for 15 year terms. In addition,

amounts are deposited into the Fund to liquidate

the unfunded liability of retired pay earned prior

to establishment of the Fund. Interest on invest-

ments of the Fund assets in Federal Government

securities are also transferred into the Fund.

Minimum Lease Payments - The payments that

the lessee is obligated to make or may be re-

quired to make in connection with leased prop-

erty. (Contingent rentals are excluded from the

minimum lease payments.)

DoD Financial Management Regulation Volume 1, Definitions

Moneys - All currency and negotiable instru-

ments which are as follows: (1) held by an

Agency (imprest funds), (2) paid out by an

Agency, (3) owed to an Agency, or (4) collected

by an Agency.

Multiple-Year Authority - Budget authority that

is available for original obligation for a specified

period of time in excess of 1 fiscal year.

Noncurrent Receivable - A receivable that will

not be due within 12 months following the

reporting period.

Nonexpenditure Transfers - A redistribution of

either unobligated balances of budget authority

provided in a previous year, or budget authority

provided in the current year between appropria-

tions or funds for the benefit of the gaining

appropriation or fund. Transfers of obligated

balances and sometimes reappropriations also

require nonexpenditure transfers.

No-Year Authority - Budget authority that

remains available for obligation for an indefinite

period of time.

Obligational Authority - The sum of (1) budget

authority provided for a given fiscal year, (2)

balances of amounts brought forward from prior

years that remain available for obligation, and (3)

amounts authorized to be credited to a specific

fund or account during that year, including

transfers between funds or accounts. (See "Bud-

get Authority.")

Obligations - Amounts of orders placed, con-

tracts awarded, services received, and similar

transactions during an accounting period that

will require payment during the same, or a

future, period. Such amounts include payments

for which obligations previously have not been

recorded, and adjustments for differences be-

tween obligations previously recorded and actual

payments to liquidate those obligations. The

amount of obligations incurred is segregated into

undelivered orders and accrued expenditures -

paid or unpaid.

Offsetting Collections - Collections from Govern-

ment accounts or from transactions with the

public. The two major categories of offsetting

collections are offsetting receipts (amounts

deposited to receipt accounts) and offsetting

collections credited to appropriation or fund

accounts.

Offsetting Receipts - Collections that are deposit-

ed into proprietary Miscellaneous Receipt Ac-

counts of the Department of the Treasury.

Applicable deposits offset the collecting Agency’s

budget authority and outlays.

Operating Agency - A major organizational unit

within a Military Department or Defense Agency

that is responsible for (1) the active planning,

direction, and control of a program or segment,

thereof; and (2) the control of the funds allocated

to it.

Outlays - The amount of checks issued or other

payments made (including advances to others),

net of refunds and reimbursements. Outlays are

net of amounts that are adjustments to obliga-

tional authority. The terms "expenditure" and

"net disbursement" are frequently used inter-

changeably with the term "outlay". Gross out-

lays are disbursements and net outlays are

disbursements (net of refunds) minus reimburse-

ments collected.

Overhead Rate - The rate determined by per-

forming organizations to allocate operating costs

not directly identifiable to the work order.

Includes supervisory and general and adminis-

trative expenses as well as miscellaneous materi-

al and supplies.

Packing, Crating, and Handling (PCH) Costs -A

subset of accessorial costs that are incurred for

sales, or shipments, of property. (See "accessori-

al charges.")

Participation Loan - A loan that consists of both

direct and guaranteed portions.

Passthroughs (Current Year) - Revolving fund

revenues received during the current fiscal year

which: (1) are in addition to amounts provided

for in the customer stabilized rate structure and

(2) represent reimbursement for current year

costs or amounts in excess of amounts budgeted,

or otherwise provided for, in the President’s

xxi

Volume 1, Definitions DoD Financial Management Regulation

budget on which approved customer stabilized

rates for the [current] year were based.

Passthroughs (Prior Year) - Revolving fund

revenues which provide for the recoupment of

amounts associated with prior year efforts or

sales. These amounts represent the recoupment

of amounts beyond those contained in the DoD

stabilized rate structure for the applicable prior

fiscal year for which the efforts were performed.

These amounts are generally intended to offset

prior year losses and/or amounts in excess of

amounts previously budgeted.

Pay Account - The part of each individual civil-

ian and Military Service member’s master pay

record that contains all transaction information

on payments and deductions with an audit trail

to the authorizing documents. The pay account

includes information such as pay grade, record

of payments, all earnings separately identified by

type (basic pay, bonuses, danger pay, etc.);

allowances; allotments; year-to-date gross earn-

ings; taxable earnings, taxes withheld, and leave

data (amount earned, taken, lost, forfeited,

advanced, or used).

Pay and Allowances - Payment to active duty,

Reserve, National Guard, and retired members

and their surviving annuitants, other than travel

and transportation reimbursements, and to all

civilian employees and direct hire employees in

foreign locations, other than travel and transpor-

tation expenses.

Paying Office - A disbursing office. In the case

of contracts, the place named in the contract for

forwarding invoices for payment.

Payment Due Date - The date by which payment

must be made as specified in Volume 4, table

2-3.

Period of Availability - The period of time in

which budget authority is available for original

obligation.

Political Subdivision of Local Government -A

local unit of government, including specifically

a county, municipality, city, town, township,

school district, or other special district created by

State law, or combination of these units.

Port Loading and Unloading Costs - A subset of

accessorial costs. The costs incurred for loading,

unloading, and handling at the ports of embar-

kation and debarkation.

Pre-positioning Costs - The accessorial costs

incurred to store items at locations outside the

United States in anticipation of support to other

authorized customers.

PPBES - The Planning, Programing, Budgeting,

and Execution System (PPBES) is a cyclic process

containing three distinct, but interrelated phases:

planning, programing, and budgeting. In addi-

tion to establishing the framework and process

for decision making on future programs, the

process permits prior decisions to be examined

and analyzed from the viewpoint of the current

environment (threat, political, economic, techno-

logical, and resources) and for the time period

being addressed. The ultimate objective of PPBS

is to provide operational commanders the best

mix of forces, equipment, and support attainable

within fiscal constraints.

Predetermined Rate - The rate established by

appropriate authority for use in computing

recoverable amounts.

Private Parties - Consists of non-U.S. Govern-

ment activities; foreign governments, firms, and

organizations; and international organizations,

other than Foreign Military Sales (FMS) custom-

ers and FMS/International Military Education

and Training Program (IMET) recipients.

Progress Payments - See "Financing Payment."

Project Order - An order for goods or services

issued under the authority in 41 U.S.C. 23 to a

separately managed and financed Government-

owned and operated establishment.

Proper Invoice - A bill or written request for

payment provided by a business concern for

property or services rendered. It must include

all of the information required by the terms of

the procurement document, be accompanied by

such substantiating documentation as required

by regulation or the contract, and be received in

the designated paying office. Supplemental

billings shall include all information required for

xxii

DoD Financial Management Regulation Volume 1, Definitions

original billings. A proper invoice must include

the following:

(1) Name and address of the business

concern and the invoice date.

(2) Contract number or other authorization

for delivery of property and/or services (includ-

ing order number and contract line item num-

ber).

(3) Description, price, and quantity of

property and services actually delivered or

rendered.

(4) Shipping and payment terms.

(5) Other substantiating documentation or

information as required by the contract.

(6) Name (where practicable) title, tele-

phone number, and complete mailing address of

the responsible official to whom payment is to

be sent.

(7) Name (where practicable) title, tele-

phone number, and mailing address of person to

be notified in event of a defective invoice.

Property Book - A documentary record of every

item on a "Table of Organization and Equipment

List", or other type of allowance list, showing

that a unit is prepared to accomplish its assigned

mission. The property book lists both capitalized

and expensed assets, shows quantities on hand,

items due in, open requisitions, unit prices, hand

receipts, etc.

Realized Variance (Foreign Currency Fluctua-

tions) - The difference between actual obligations

at the budget rate (approved execution rate) and

the foreign exchange rate in effect at the time of

payment (liquidation of the obligation). The

variance is equal to the amount disbursed from

the applicable centrally managed allotments.

Real Property - Fixed assets that are comprised

of land and the rights to land; buildings to

include capitalized additions, alterations, im-

provements, and rehabilitations; and other

structures and facilities. Real property does not

include personal property (weapons systems and

other military equipment).

Reappropriation - Statutory authority to restore

or extend the obligational availability, whether

for the same or different purpose, of all or part

of the unobligated balance of budget authority

that has expired or otherwise would expire in an

annual or multiple-year appropriation. Reappro-

priation transactions require non-expenditure

transfer of the funds involved from the expired

or otherwise expiring account to the designated

current account when the unobligated balance

has not been withdrawn to the surplus fund of

the U.S. Treasury. If the unobligated balance has

been withdrawn, then the transaction requires a

warrant. Reappropriations that provide funds to

a fiscal year for which they were not previously

available constitute new budget authority in the

receiving account.

Refunds - Recoveries of overpayments that result

from errors in paying invoices or from items

returned to vendors. (Also see "Refunds and/or

Transfers (Current Year)" and "Refunds and/or

Transfers (Prior Year).")

Refunds and/or Transfers (Current Year) -

Industrial fund amounts transferred on a non-

expenditure basis which represent the transfer of

revenue collected through stabilized rates which:

(1) is in excess of current year costs or (2) other-

wise exceeds the purpose for which initially

intended in the current year. (The latter case, for

example, may include the collection of Asset

Capitalization Program surcharges in excess of

amounts ultimately approved by the Congress

for the Asset Capitalization Program.) These

transfers are generally made to appropriated

funds and provided for in a general provision

contained in the applicable annual appropriation

act.

Refunds and/or Transfers (Prior Year) - Industri-

al fund amounts transferred on a nonexpenditure

basis which represent the transfer of amounts

associated with prior year efforts or sales. These

amounts usually represent the transfer of reve-

nue collected through stabilized rates which: (1)

were in excess of [then] current year costs or (2)

otherwise exceeded the purpose for which

initially intended. These transfers are generally

xxiii

Volume 1, Definitions DoD Financial Management Regulation

made to appropriated funds and provided for in

a general provision contained in the applicable

annual appropriation act.

Reimbursable Order - An order accepted into a

DoD appropriation or fund.

Reimbursements - Amounts earned and collected

for property sold or services furnished either to

the public or another Federal accounting entity.

To be an appropriation reimbursement, the

collection must be authorized by law for credit

to the specific appropriation or fund account.

Replacement Cost - Obligations to be incurred at

a future time to procure equipment or material

in place of items which have been sold or trans-

ferred. There are two methods used to deter-

mine replacement cost: (1) Replacement cost

may be determined by applying the OSD pre-

scribed inflation factor to the most recent con-

tract price of the item to be replaced. The infla-

tion factor is applied to each fiscal year between

the year the item sold or transferred was ac-

quired and the fiscal year in which the replace-

ment item will be delivered. (2) Replacement

cost may also be determined by obtaining a

current contractor quote for the replacement

item. Normally the second method is the most

accurate method.

Reportable Accounting System or Segments -A

system or segment that satisfies the definition of

an accounting system.

Reprograming - Realignment of budget authority

from the purpose for which appropriated to

finance another (usually emergent, unfunded)

requirement. A necessary, desirable, and timely

device during execution of Defense programs for

achieving flexibility in the use of DoD funds

provided in appropriation acts.

Reschedule - (Restructure, refinance, forbear,

reamortize, or defer) To establish new terms or

conditions in order to facilitate the repayment of

debt. For example, stretching out or extending

into the future such payments.

Rescission - Legislation that cancels budget

authority previously provided by Congress

before the time when the authority would other-

wise lapse, that is, cease to be available for

obligation.

Reserves - Portions of budgetary resources set

aside by OMB to (1) provide for contingencies,

or (2) effect savings made possible by or through

changes in requirements or greater efficiency of

operations.

Residual Value - Residual value is the estimated

value remaining at the end of a capital asset’s

useful like to the Department of Defense or the

Amount that can be expected to be recovered

from the asset’s disposal when it is removed

from service.

Restoration - An unobligated amount previously

withdrawn by administrative action to the

merged surplus balances that is again made

available to fund within scope increases to

original obligations or to fund other Congressio-

nally approved programs pursuant to law.

Revolving Fund Accounts - Accounts authorized

by specific provisions of law to finance a contin-

uing cycle of business-type operations, and

which are authorized to incur obligations and

expenditures that generate receipts.

Special Defense Acquisition Fund (SDAF) -A

fund established to provide the Foreign Military

Assistance and Sales Programs the inventory

determined necessary to meet anticipated future

sales requirements for those military items being

phased out of DoD inventory.

Special Fund Accounts - Separate receipt and

expenditure accounts established to account for

receipts of the Government that are earmarked

by law for a specific purpose but are not gener-

ated by a cycle of operations for which there is

continuing authority to reuse such receipts.

Special Fund - Expenditure Accounts - Accounts

established to record amounts appropriated, or

otherwise made available by transfers from a

special fund receipt account to be obligated and

expended for special programs in accordance

with specific provisions of law.

Special Funds - Receipt Accounts - Accounts

credited with receipts from specific sources that

xxiv

DoD Financial Management Regulation Volume 1, Definitions

are earmarked by law for a specific purpose, but

which are not generated from a continuing cycle

of operations.

Specialized or Technical Services - Statistical and

other studies and compilations, developmental

projects, technical tests and evaluations, technical

information, training activities, surveys, reports,

documents, and any other similar service func-

tions that any Federal Agency is especially

equipped and authorized by law to perform.

Specific Due Date - A payment due date includ-

ed in a contract or determinable from contractual

language. If a contract has payment and financ-

ing terms such as "promptly," "payable upon

receipt," or "net;" payment shall be made as

specified in Volume 4 table 2-3.

State - Any of the several States of the United

States, the District of Columbia, the Common-

wealth of Puerto Rico, any territory or posses-

sion of the United States, or any agency or

instrumentality of a state. Does not include the

governments of the political subdivisions of a

State.

Suspense Accounts - (See Deposit Funds.)

Tangible Assets - Tangible capital assets are

depreciable property, plant, equipment, and

software developed, manufactured, transferred

or acquired at a specific point in time for a

determinable cost of $15,000 or more; are used

over some period (useful life), the length of

which is estimated to be 2 years or greater; and

generally, become economically worthless,

(except for residual value) at the end of their

estimated useful lives.

Transfer of Funds - When specifically authorized

by law, all or part of the budget authority or

prior year unobligated balances in one account

may be transferred to another account.

Transportation Costs - The costs incurred for

shipment of material.

Treasury Financial Communications System

(TFCS) - The computer-to-computer link between

the U.S. Treasury and the Federal Reserve Bank

of New York.

Trust Fund Accounts - Accounts established to

account for receipts that are held in trust for use

in carrying out specific purposes and programs

in accordance with an agreement or statute.

Trust Fund Expenditure Accounts - Accounts

that are established to record amounts appropri-

ated, or otherwise made available by transfer

from a trust fund receipt account to be obligated

and expended in carrying out the specific pur-

poses, or programs, in accordance with the terms

of the trust agreement or statute.

Trust Fund Receipt Accounts - Accounts that are

credited with receipts generated by the terms of

a trust agreement or statute.

Trust Revolving Fund - The name given to a

fund entity when a trust fund corpus is estab-

lished to perform a continuing cycle of business--

type operations in accordance with the trust

agreement or statute, in which case a combined

receipt and expenditure account is used.

Undelivered Orders - Contracts or orders issued

by the ordering accounting entity for goods and

services for which the liability has not yet been

accrued.

Unearned Revenue - Revenue from DoD custom-

ers collected in advance of earnings and prior to

delivery of goods or services.

Unfilled Customer Orders - The amount of

orders accepted from ordering accounting enti-

ties within the U. S. Government for goods and

services to be furnished on a reimbursable basis;

or, in the case of transactions with the public,

amounts collected in advance for which the

accounting entity has not yet performed as

requested.

Unfunded Cost - Costs not financed by the

performing activity’s current appropriations or

fund accounts. Applicable types of cost include

depreciation, interest on investment, and civilian

retirement amounts funded by Office of Person-

nel Management.

Unified Combatant Command - A unified com-

batant command is a military command which

has broad, continuing missions and which is

xxv

Volume 1, Definitions DoD Financial Management Regulation

composed of forces from two or more Military

Departments. Unified combatant commands are

established by the President, through the Secre-

tary of Defense, with the advice and assistance of

the Chairman, Joint Chiefs of Staff.

User - An individual, organization, or accounting

entity that receives services. A user may be

internal or external to the DoD Component.

Warehousing - Costs normally incurred for labor,

materiel, or services in packing item(s) that are

removed from DoD storage, preparing item(s)

for shipment, and processing related materiel

release documents.

Withdrawal - The transfer of the unobligated

balance from an expired annual or multiple-year

appropriation to the surplus account of the U.S.

Treasury’s general fund, or, if appropriate, to the

special fund or trust fund from which derived.

Writeoff - As a budgetary term, writeoff means

the withdrawal from availability for obligation of

an unobligated balance from a no-year appropri-

ation. It excludes amounts withdrawn from

expired accounts and amounts rescinded by the

Congress. As an accounting term, writeoff refers

to the removal of a delinquent accounts receiv-

able that is considered not collectible or not cost

effective to pursue further collection efforts. A

writeoff is not a correction to the accounting

records resulting from an accounting error.

Work in Process - Costs of the materials, labor,

and indirect costs used in producing an end item

(real or personal property) or service, whether

fabricated by a DoD business operation fund, or

by a non-DoD organization under contract.

Year-end Adjustments for Reimbursements -

Accounting entries made to eliminate anticipated

reimbursements for orders not accepted, elimi-

nate those unobligated accepted orders that are

no longer valid obligations of the ordering

activity, and transfer valid unobligated reimburs-

able balances from expiring and non-expiring

accounts to the most current ensuing fiscal year

accounts. The exception is for unobligated

balances resulting from earned reimbursements

(that is, sales from inventory or performance of

in-house services), which must be retained in

nonexpiring accounts until account expiration.

xxvi